This revision presentation introduces the concept of business ethics. The distinction between ethical and legal behaviour is examined as are the potential benefits and drawbacks of ethical behaviour. Some topical examples of business ethics in action are also provided.

1. Business
Ethics
Business
Ethics

2. What are “ethics”?
Moral guidelines
which govern good
behaviour
Moral guidelines
which govern good
behaviour

3. Ethics considers what is right and
wrong
What do you consider right or wrong?
Selling arms to countries with unstable political
environments?
Advertising products that are high in saturated fat or
sugar?
Encouraging consumers to borrow large amounts to fund
their spending?
Employing private investigators to check the private lives of
employees?

4. What is “behaving ethically”?
Ethical behaviour
is doing what is
morally right
Ethical behaviour
is doing what is
morally right

5. Quotes on business ethics (1)
“Being good
is good
business”
Dame Anita Roddick
(1942-2007)

6. Quotes on business ethics (2)
“A business that
makes nothing but
money is a poor
kind of business”
Henry Ford

7. Quotes on business ethics (3)
“The higher
the buildings,
the lower the
morals” Noel Coward

8. Ethical principles & standards
• Used by individuals to make choices
about how to behave
• Define acceptable conduct in business
• Should underpin decision making
• An ethical decision is one that is both
legal and meets the shared ethical
standards of the community

9. Is ethics the same as being lawful?
About what
is right and
what is
wrong
About what
is right and
what is
wrong
EthicsEthics
About what
is lawful
and what is
unlawful
About what
is lawful
and what is
unlawful
LawLaw

10. So a business may be acting lawfully
but, potentially, unethically
You view on the ethics of the above examples
depends on your moral code
You view on the ethics of the above examples
depends on your moral code

11. Ethical dilemmas (1)
Should businesses
profit from
problem
(addictive)
gambling?
Should businesses
profit from
problem
(addictive)
gambling?

12. Ethical dilemmas (2)
Should
supermarkets
sell lager
cheaper than
bottled
water?
Should
supermarkets
sell lager
cheaper than
bottled
water?
http://www.timesonline.co.uk/tol/news/uk/health/article5264677.ece

13. Ethical dilemmas (3)
Is ethical
shopping a
luxury we
can’t afford?
Is ethical
shopping a
luxury we
can’t afford?
http://www.mirror.co.uk/news/top-stories/2008/06/23/primark-child-labour-is-ethical-shopping-a-lux

14. Ethical dilemmas (4)
Should soft drinks
manufacturers do
more to help
tackle childhood
obesity?
Should soft drinks
manufacturers do
more to help
tackle childhood
obesity?
http://www.theguardian.com/commentisfree/2014/mar/16/big-food-in-denial-about-harm-of-sugar

15. Bad ethics – firms caught out (1)

16. Bad ethics – firms caught out (2)

17. Bad ethics – firms caught out (3)

18. Bad ethics – firms caught out (4)

19. Bad ethics – firms caught out (5)

20. Bad ethics – firms caught out (6)

21. Two key influences on business ethics
IndividualsIndividuals CultureCulture

22. Business ethics and CSR
• There is clearly an overlap between CSR
and business ethics
• A socially responsible firm should be an
ethical firm
• An ethical firm should be socially
responsible
• However there is a distinction:
– CSR is about responsibility to all stakeholders and
not just shareholders
– Ethics is about morally correct behaviour

23. Approaches to business ethics
• The amoral business
– Seeks to win at all costs
– Anything is acceptable
• The legalistic business
– Will obey the law but no more than that
• The responsive business
– Accepts that being ethical can pay off
• The ethical business
– Ethical practice is at the core of the business

24. Common areas where ethics are tested
AdvertisingAdvertising
ContractsContracts
Personal SellingPersonal Selling
PricingPricing
SuppliersSuppliers

25. Ethics and the supply chain
• A business cannot claim to be ethical firm if it ignores
unethical practices by its suppliers – e.g.
– Use of child labour and forced labour
– Production in sweatshops
– Violation of the basic rights of workers
– Ignoring health, safety and environmental standards
• An ethical business has to be concerned with the
behaviour of all businesses that operate in the
supply chain – i.e.
– Suppliers
– Contractors
– Distributors
– Sales agent

26. An example of an unethical supply
chain?

27. Brands that have been caught outBrands that have been caught out
using child labour or sweatshopsusing child labour or sweatshops

28. Ethical codes of practice
• Increasingly popular – particularly
with larger businesses
• Typical cover:
–Corporate social responsibility
–Dealings with customers and supply chain
–Environmental policy & actions
–Rules for personal and corporate integrity

29. Influence of pressure groups
• Pressure groups – external stakeholders
• Tend to focus on activities & ethical
practice of multinationals or industries
with ethical issues
• Combination of direct and indirect
action can damage the target business
or industry

30. Pressure Group Example (1)

31. Pressure Group Example (2)

32. Pressure Group Example (3)

33. Consumer action
• Another way in which business ethics can be
challenged. Consumers may take action
against:
– Businesses they consider to be unethical in some
ways (e.g. animal furs)
– Business acting irresponsibly
– Businesses who use business practices they find
unacceptable
• Consumer action can also be positive –
supporting businesses with a strong ethical
stance & record

34. Positive consumer action -
example

35. Benefits and drawbacks of behaving
ethically

36. Potential significant costs from being
found to have acted unethically

37. Multinationals have to be particularly
sensitive to the potential damage
Tax avoidance by multinationals is legal – but is it
ethical?
Tax avoidance by multinationals is legal – but is it
ethical?

38. Look through more study
resource on the topic of
Business Ethics on the
tutor2u website

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