2. EthicsEthics
word meaning- character
Set of standards or code or value system,
worked out from human reason &
experience by which free human actions
are determined as ultimately right or
wrong, good or evil.
Business ethics-appl. of ethics in business
3. Nature of ethics in businessNature of ethics in business
In busi. 2 types of ethical problem
>overt- bribary, theft, sabotage etc
>covert- complex and not transparent,
defy ethical solutions
4.
5. 3 Models of Management Ethics3 Models of Management Ethics
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Three Types Of Management Ethics
6. 3 Models of Management Ethics3 Models of Management Ethics
1. Moral Management—Conforms to high
standards of ethical behavior.
2. Immoral Management—A style devoid of ethical
principles and active opposition to what is ethical.
3. Amoral Management—
◦ Intentional - does not consider ethical factors
◦ Unintentional - casual or careless about ethical
considerations in business
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7. Stages of Ethical Consciousness in BusinessStages of Ethical Consciousness in Business
First Stage
Law of Jungle: business Decisions are driven by
“might is right”
Business ills are common at this stage
Second Stage
Anything for Profit: believe “anything goes as long
as one does not get caught by the law”
Bribery to government, tax evasion etc are common
8. Third Stage
Profit maximizing in short term: Believe that “good business is good ethics”-
to maximize profits within constraints of law
Fourth Stage
Profit maximizing in Long term: Shift in focus from business to ethics-
“sound ethics is good business” in long run. Here firms create post of ethics
officer to supervise ethical aspect of business
Fifth Stage
Stakeholder concept- Companies concentrate on social and economic mission
Focus on philanthropy
Focus is to create mutual relationships between companies and society
9. Sixth Stage
Corporate Citizenship: Higher level of ethical
consciousness
Belief that business can be healthy only if society
around it is healthy and no other institution
including government has resources to bring this
transformation except Business Organizations
Entrepreneurs seek to achieve social objectives
such as promoting community health, employing
handicapped people, etc
10. Factors Affecting Ethical ChoicesFactors Affecting Ethical Choices
The ManagerThe Manager
Level or stage of moral development
Learned Ethics
The OrganizationThe Organization
Systems
Culture
11. Moral DevelopmentMoral Development
PreconventionalPreconventional Level = concernedLevel = concerned
with external rewards andwith external rewards and
punishmentspunishments
ConventionalConventional Level = conform to theLevel = conform to the
expectations of peers and societyexpectations of peers and society
(consistent with practical approach to(consistent with practical approach to
ethical decision making)ethical decision making)
PostconventionalPostconventional (Principled) Level =(Principled) Level =
individuals develop a personal,individuals develop a personal,
internal set of standards and values.internal set of standards and values.
(About 20% of adults)(About 20% of adults)
13. Characteristics of BECharacteristics of BE
Differ with persons
ethical questions do not have a unique
soln but a multitude of alternatives
Ethical decisions are not limited to
themselves, but affects a wide range of
other situations as well.
ED involves a trade off between cost
incurred and benefits received.
14. Consequences are not clear
Every person is individually responsible for
the ethical or unethical decision and action
that he or she takes
Ethical actions are voluntary human actions
15. Morality and ethicsMorality and ethics
Morality is the std an individual or community
keeps about what is right and wrong or good
and evil.
Morality
Moral norms deals with topics that either
seriously harm or benefit human beings
Moral stds are not dependent on or changed
by the decision of authoritative bodies
16. Moral demands enjoys a self-driven force
Expressed through the medium of special
emotions.
Ethics
Ethics helps one to address questions
such as what do moral principles mean in
a given situation
Ethics offers certain moral stds to judge a
particular human behaviour or situation
17.
18. Why is ethics impo. in business?Why is ethics impo. in business?
Ethics corresponds to basic human needs
Values create credibility with the public
Values give mgmt credibility with
employees
Values help better decision making
Ethics and profit
Law cannot protect society, ethics can.
19. Why Ethical problems occur?Why Ethical problems occur?
Personal gain
Individual values widely differ with organizational
goals
Managers values and attitudes
Competitive pressures
Cross-Cultural contradictions
20. Benefits of Business EthicsBenefits of Business Ethics
Better ethical climate
Employee commitment and trust
Investor loyalty and trust
Customer satisfaction and trust
Long term profits
21. Criteria ForCriteria For
Ethical Decision MakingEthical Decision Making
Most ethical dilemmas involve
Conflict between needs of the part & whole
- Individual versus the organization
- Organization versus society as a whole
Managers use normative strategies to guide their
decision making - norms and values
22. Ethical Decision Making ApproachesEthical Decision Making Approaches
Utilitarian Approach
Individualism Approach
Moral-Rights Approach
Justice Approach
23. Utilitarian ApproachUtilitarian Approach
● Moral behavior produces the greatest
good for the greatest number
● Criticise fear a “Big Brother” approach
and ask if the common good is squeezing
the life out of the individual
24. Individualism ApproachIndividualism Approach
● Acts are moral when they promote the
individual's best long-term interests,
which ultimately leads to the greater
good
● Individual self-direction paramount
● Individualism is believed to lead to
honesty & integrity since that works best
in the long run
25. Moral-Rights ApproachMoral-Rights Approach
Moral decisions are those that best
maintain the rights of those people
affected by them.
An ethical decision is one that avoids
interfering with the fundamental rights of
others
26. Six Moral RightsSix Moral Rights
1. The right of free consent1. The right of free consent
2. The right to privacy2. The right to privacy
3. The right of freedom of
conscience
3. The right of freedom of
conscience
4. The right of free speech4. The right of free speech
5. The right to due process5. The right to due process
6. The right to life & safety6. The right to life & safety
27. Justice ApproachJustice Approach
Moral Decisions must be based on
standards of equity, fairness, impartiality
Three types of Justice Approaches:
Distributive Justice
Procedural Justice
Compensatory Justice
28. Distributive JusticeDistributive Justice
Different treatment of people should not
be based on arbitrary characteristics
In case of substantive differences, people
should be treated differently in
proportion to the differences among
them
