This is for basic Handout for relevent topic

1. 1
SLIATE - Labuduwa
Department of Business Administration
Programme : Higher National Diploma in Business Administration
Course Title : Business Ethics and Corporate Social Responsibility
Course Code : BA 2206
Handout : 01: Introduction to Ethics
Prepared by : Dr. Vidura Perera
Issued on : 17 Agust , 2021
1.1 Definition of Ethics
At its simplest, ethics is a system of moral principles. ... Ethics is concerned with what is good for
individuals and society and is also described as moral philosophy. The term is derived from the
Greek word ethos which can mean custom, habit, character or disposition.
Nature of Ethics:
Ethics refer to guide what human ought to do, usually in terms of right, obligations, fairness and
specific virtue. It is related to issues of propriety –rightness and wrongness, what is right in ethical,
what is wrong in unethical. Sometimes the word ‘proper’ , ‘fair’ and ‘just’ are also used in the
place of right and ethical. A layman might remark that ‘pleasure is good’ or prosperity of nation
is good. The gravity of the problem arises when we equate pleasure or prosperity with good. It
may be agreed upon that pleasure or prosperity is one of the good things of life. But no man with
a sane head on his shoulder would assert that good is nothing 4 but pleasure or prosperity is the
Learning outcomes
After reading this lesson, you should be able to,
o Definition of Ethics
o Definition of Business Ethics
o Definition of Philosophical Ethics
o An overview of Ethics and Business Ethics
o Objectives of Business Ethics
o Difference between ethics and law

2. 2
definition of good. At the time of Plato and Aristotle a good man or ethical man was the one who
was a good citizen So far as the practical aspects of the study of ethics is concerned, it may be
urged that if ethics is a theoretical study of moral problems. Such declaration might not have any
practical value for the man in the street. It is said that experience alone enrich the ethical aspect of
human mind that no amount of theoretical knowledge can possibly raise man’s ethical standard.
Socrates declared long ago that virtue is knowledge. What he was trying to point out that no one
could be moral by accident or without true knowledge of the nature of moral act. In Jaina ethics
which is known to be the practical application of non-violence as the highest virtue, it has been
stated that ‘knowledge must precede compassion’. These statements are themselves enough to
indicate that knowledge of virtue is the foundation of the practice of virtue.
Benefits of Studying Ethics:
Ethics is a very important subject for the individual as well as the society. It is with the help of
this subject that we attain the ideals and virtues of life. There are certain directions for good
behavior and development of character in the subject for the individual as well as the society. The
importance of ethics lies in telling us the difference between good and bad, right and wrong. In
backward countries, like India, ethics is all the more important because it dispels the darkness of
evil and helps in establishing the higher values and virtues of life. The importance of ethics is
twofold. First is its constructive value by virtue of which it develops a critical and moral attitude
in man. Moral sense is an important asset of human personality. Ethics must help us in overall
development of personality. Second aspect of the importance of ethics is destructive. It is by virtue
of this aspect that it removes and destroys the evils and ills of humanity. In short the following are
the uses of the study of ethics.
1) Development of character:
Ethics is greatly helpful to us in the development of character and personality. It is through this
subject that we learn various values and virtues of life. It is the basis of all good conduct.
Character also depends upon our desire, wish and will.

3. 3
2) Knowledge of ideals, values and virtues:
In every society certain ideals and virtues are laid down for the individuals. A comprehensive
knowledge about these ideals and virtues is given to us by ethics. Ethics deals directly with
these ideals and virtues. In their absence, morality will come to an end. Ethics helps us to lead
a virtuous life. The prime value of life as per ethics is self realization. The character of
individual depends upon values of life.
3) Responsibility and Duty:
Ethics is helpful to us in another way. It is with the help of moral rules that we come to know
about our duties and responsibilities. We have duties towards ourselves as well as towards
society. Every individual must have a code of personality. This is what we call the principles
of life. Such a code should be self- imposed. Ethics can help us in framing this code. Secondly
there are certain duties and responsibilities towards society also. Ethics can make us conscious
of them.
4) Social problems:
There is no society in the world where social problems are not found. Every society faces social
problems. The evils and problems such as crime, unemployment, drug addiction, over-
population, child marriage, dowry system and women's oppression are found everywhere,
more so in backward countries. In such circumstances, ethics as a subject can help us a lot in
solving these problems. According to Prof. Dewey, "Ethics can go a long way in removing
evils of humanity."
5) Law, Justice and Order:
In modern times, justice has acquired social and economic dimensions. Ethics is quite helpful
in understanding the real meaning of the concept of justice as well as the maintenance of law
and order.
6) Utility in Religious,
Political and Economic fields: Ethics teaches an individual to adopt the just means of earning.
It discourages corruption. Ethics and religion are closely connected. Ethics checks religious

4. 4
dogmatism and purges it of impurities. It preaches morality and aims at bringing fine virtues
in the political, economic and religious field.
7) Ultimate end:
The most important aim of ethics is that it makes one aware of the ultimate end or the summum
bonum of life. It is the end which ultimately gives direction to all the activities of man.
8) Utility in the psychological field:
Ethics analysis mental phenomena like desire, wish and will etc. Evaluation of the modes of
the mind helps in the assessment of personality.
1.2 Definition of Business Ethics
business ethics refers to the standards for morally right and wrong conduct in business. Law
partially defines the conduct, but “legal” and “ethical” aren't necessarily the same. Business ethics
enhances the law by outlining acceptable behaviors beyond government control.
Understanding Business Ethics
Business ethics ensure that a certain basic level of trust exists between consumers and various
forms of market participants with businesses. For example, a portfolio manager must give the same
consideration to the portfolios of family members and small individual investors. These kinds of
practices ensure the public receives fair treatment.
The concept of business ethics began in the 1960s as corporations became more aware of a rising
consumer-based society that showed concerns regarding the environment, social causes, and
corporate responsibility. The increased focus on so-called social issues was a hallmark of the
decade.
1. Business ethics is an essential skill.
Almost every company now has a business ethics program. In part, that’s because technology and
digital communication have made it easier to identify and publicize ethical missteps. To avoid the
negative implications, companies are devoting more resources to business ethics. In one survey of
accountants, for example, 55 percent said they believe the importance of business ethics will
continue to grow in the next three years. In addition to establishing formal programs, companies
are creating ethical workplaces by hiring the right talent. “High integrity and honesty” is the
second-most important skill for business leaders, according to a recent survey. Today’s business
professionals must understand the link between business ethics and business success.

5. 5
2. Business ethics drives employee behavior.
According to the 2018 Global Business Ethics survey, employees are more likely to apply ethical
reasoning when their company clearly demonstrates why business ethics is important. Ninety-nine
percent of U.S. employees who experience a strong ethics culture said they’re prepared to handle
ethical issues. Companies that advocate for business ethics motivate their employees to perform
their roles with integrity.
1.3 Definition of Philosophical Ethics
The term ethics may refer to the philosophical study of the concepts of moral right and wrong
and moral good and bad, to any philosophical theory of what is morally right and wrong or
morally good and bad, and to any system or code of moral rules, principles, or values.
Ethics, also called moral philosophy, the discipline concerned with what is morally good and bad
and morally right and wrong. The term is also applied to any system or theory of moral values or
principles.
How should we live? Shall we aim at happiness or at knowledge, virtue, or the creation of beautiful
objects? If we choose happiness, will it be our own or the happiness of all? And what of the more
particular questions that face us: is it right to be dishonest in a good cause? Can we justify living
in opulence while elsewhere in the world people are starving? Is going to war justified in cases
where it is likely that innocent people will be killed? Is it wrong to clone a human being or to
destroy human embryos in medical research? What are our obligations, if any, to the generations
of humans who will come after us and to the nonhuman animals with whom we share the planet?
Ethics deals with such questions at all levels. Its subject consists of the fundamental issues of
practical decision making, and its major concerns include the nature of ultimate value and the
standards by which human actions can be judged right or wrong.
Although ethics has always been viewed as a branch of philosophy, its all-embracing practical
nature links it with many other areas of study, including anthropology, biology, economics,
history, politics, sociology, and theology. Yet, ethics remains distinct from such disciplines
because it is not a matter of factual knowledge in the way that the sciences and other branches of

6. 6
inquiry are. Rather, it has to do with determining the nature of normative theories and applying
these sets of principles to practical moral problems.
This article, then, will deal with ethics as a field of philosophy, especially as it has developed in
the West. For coverage of religious conceptions of ethics and the ethical systems associated with
world religions, see Buddhism; Christianity; Confucianism; Hinduism; Jainism; Judaism; Sikhism.
1.4An overview of Ethics and Business Ethics
What Are the Types of Business Ethics?
Business ethics as a field of study is incredibly diverse, but many concepts can be divided into a
few basic principles. Every business should strive to follow these guidelines in the pursuit of
success.
Trustworthiness
Achieving trustworthiness typically involves being transparent and honest in all actions and
communications. Being trustworthy can have a positive impact both internally and externally.
Consumers appreciate openness, as it provides them with insight into how a business operates and
conceptualizes the work that they do. Employees also appreciate this quality in a business that they
work for.
Respect
Showing respect for employees and customers involves following through on all promises -- and
providing sincere apologies and appropriate compensation if anything falls through. Showing a
lack of respect will deter customers from engaging with a business and lower a business'
reputation. It will also do significant damage to employee morale and increase turnover.
Fairness
Treating customers and employees with a sense of fairness and justice is a key type of ethics.
Manipulative behaviors aren't just unethical, but they are also unhelpful -- and the top priority of
any business should be to be helpful to its customers and employees. It is also important to treat
all people equally.

7. 7
Caring
Businesses, at the end of the day, are composed of human beings. There are human beings that
consume goods or services from the business, and then there are human beings that work to
produce those goods or services. Being open to their struggles and coming to the table with
solutions will show empathy -- a valuable tool for any business to utilize. Showing a sense of
caring and keeping the lines of communication is not just the ethical thing to do, but can also boost
internal and external perceptions of the business.
Examples of Unethical Behavior in the Workplace
Just as it is important to understand how to practically apply ethical behavior, it is equally
important to understand what qualifies as unethical behavior. Here are some examples of what
unethical situations can look like in the workplace.
Taking Sides in an Employee Argument
It is not uncommon for conflicts to arise between employees in the workplace. Ethically, it is the
job of company leadership and management to remain impartial during these conflicts. For
example, if two of a manager's employees are in conflict, it is important for the manager to remain
as neutral as possible. When a manager gives preference to a favorite or senior employee or
provides a solution that only works in favor of one party, they are participating in unethical
behavior. They must allow both employees to speak their piece and then come to a solution that
works best for both parties, as well as the business itself.
Lying
Lying to your employees or customers is the biggest way to break trust. Trust is the best source of
dedication and loyalty that any business has. Once that trust is broken, it is extremely difficult to
get it back. For example, if a company has a high-performing employee who is asking for a
promotion, they may say that there is no room in the budget for a promotion this year. A few
months later, another employee may receive a promotion. Telling obvious lies isn't just unethical
-- it will drive people away from your business.
Misusing Company Time
This is a common ethical dilemma that many businesses face. Many employees misuse company
time in a variety of ways, whether it's surfing the internet during business hours, taking extended
breaks, altering time sheets, or similar. Misusing company time is unethical because the employee
is being paid a salary for work that they did not complete or time they did not dedicate to their job.
Cultivating a Hostile Workplace

8. 8
While there is bound to be some conflict in the workplace, it is important to make the workplace
a safe environment for everyone. Some companies unintentionally cultivate a hostile or overly
competitive company culture. For example, employers may encourage an unhealthily competitive
environment among employees to drive productivity and innovation. However, cultivating this
kind of environment can tax employee mental health, and even encourage unethical, sabotaging
behavior among employees who want to get ahead at work.
Ignoring Conflicts of Interest
Conflicts of interest encourage businesses to act in ways that do not benefit their customers or
employees. For example, if a manager has a relative as their direct report, that manager may treat
that employee differently than their other reports. It is the duty of the business to address this
situation. Removing conflicts of interest can become more complex when a business is publicly
traded, non-profit, or receives funds from a government entity.
1.3 Objectives of Business Ethics
Ethics are the moral principles and values that underpin human behaviour. Morals are concerned
with what is 'right' or 'wrong'.Business ethics are, therefore, the moral principles that underpin
business behaviour. Whether actions carried out by organisations and their employees are morally
acceptable must, however, be judged in the context of the society and the times in which they
operate.
An ethical business is one which applies a set of moral principles to all interactions with
stakeholders, such as its treatment of employees, customers, suppliers and shareholders. Being
ethical means a business goes beyond merely complying with laws and regulations, but makes
choices about what it is prepared to do, and what it will not. Therefore, an ethical business strategy
may exclude behaviour, which is legal, but conflicts with the businesses ethical policy.
Setting ethical objectives is the process by which organisations apply ethical values to their targets
and the actions by which they will achieve them. These ethical values should cover all the actions
of the organisation from tactical to strategic.
Businesses may be faced with some of the following issues, which have ethical dimensions:
 Should we produce in a low-cost developing economy?
 Should we promote products that might damage health?
 Should we seek to undermine our competitors?
 Should we pay minimum wage rates to our employees?
 Should we employ migrant labour to cut costs?

9. 9
 Should we transfer our production units to countries with less strict health and safety laws?
1.4 Difference between ethics and law
In simple terms, the law may be understood as the systematic set of universally accepted rules and
regulation created by an appropriate authority such as government, which may be regional,
national, international, etc. It is used to govern the action and behavior of the members and can be
enforced, by imposing penalties.
Many times the term law is juxtaposed with the term ethics, but there is a difference, as ethics are
the principles that guide a person or society, created to decide what is good or bad, right or wrong,
in a given situation. It regulates a person’s behavior or conduct and helps an individual in living a
good life, by applying the moral rules and guidelines.
For a layman, these two terms are same, but the fact is that there is a difference between law and
ethics. Read the article carefully, to overcome your ambiguities.

10. 10
BASIS FOR
COMPARISON
LAW ETHICS
Meaning The law refers to a systematic body of
rules that governs the whole society
and the actions of its individual
members.
Ethics is a branch of moral
philosophy that guides people
about the basic human conduct.
What is it? Set of rules and regulations Set of guidelines
Governed By Government Individual, Legal and
Professional norms
Expression Expressed and published in writing. They are abstract.
Violation Violation of law is not permissible
which may result in punishment like
imprisonment or fine or both.
There is no punishment for
violation of ethics.
Objective Law is created with an intent to
maintain social order and peace in the
society and provide protection to all the
citizens.
Ethics are made to help people
to decide what is right or
wrong and how to act.
Binding Law has a legal binding. Ethics do not have a binding
nature.
Lecturer,
Dr. Vidura Perera
B.B.A (Special in Financial Management)
Dip in Banking and Finance (DBF)
PGEDBM (IBSL)
Ph.D.
LLB. (Reading)
+94771937218 /0715828547
Ireshperera15@gmail.com