Introduction to business ethics

What is meant by ethics? - Consists of moral principles governing the right and wrongs of human conduct - Is about the principles of right and wrong accepted by individuals or social groups - A code of behaviour considered morally correct - Code of moral principles that guide the action of people and groups - Ethical behaviour is doing what is morally right Business ethics Business ethics are the principles and standards that: - Define acceptable conduct in business - Should underpin decision ma ing An alternative definition is: !the moral values which govern business behaviour and restrains companies from pursuing the interest of the shareholder at the e"pense of all other considerations! - Some activities might be profitable and legal but nevertheless are considered to be unethical - An ethical decision is one that is both legal and meets the shared ethical standards of the community Is ethics the same as the law? - #o - although the law should reflect the ethical views of society there are certain activities permitted by law which some individual or groups in society or individual might regard as unethical$ - Ethical considerations are about what is right and what is wrong - %he law is about what is lawful and what is unlawful %he following business activities are legal but might pose ethical dilemmas for individuals:

&rofiting from gambling Selling goods manufactured by low wage in developing countries Engaging in the fur trade E"perimenting on animals

Is it the same as corporate social responsibility? - %here is clearly an overlap between CS' and business ethics - A socially responsible firm should be an ethical firm - An ethical firm should be socially responsible (owever there is a distinction:

- CS' is about responsibility to all sta eholders and not )ust shareholders - Ethics is about morally correct behaviour Ethics - decision models - *hen faced with an ethical +uestion, what guides our decision ma ing- %here are different ways of loo ing at the issue: Moral principles - Evaluate decisions on whether it is consistent with accepted moral principles Utilitarianism - .oo s at decisions from the perspective of who gains - *hat is good for the greatest number is right - %he test is whether or not it is consistent with the greatest happiness of the greatest numberJustice model - %he test is does it distribute benefits and penalties in a fair and e+uitable wayHuman rights - &eople have fundamental human rights and liberties - consent, privacy, conscience, free speech, fair treatment, life, safety - %he test is: does it violate human rights- An ethically correct decision is one that best maintains the human rights of those affected - Decisions that violate human rights are unethical Individualism - Is it in the individual/s best interest- %his is the ethics of self interest pectrum o! !irms - It would be na0ve to believe that all business organisations behave in an ethical, moral way - *e can classify firms in terms of their ethical stance in the following ways: "he amoral !irm - See s to win at all costs - Anything is acceptable "he legalistic !irm - *ill obey the law but no more than that "he responsive !irm - Accepts that being ethical can pay off - Ethical behaviour is enlightened self interest

"he ethically engaged !irm - *ants to do the right thing - (as a code of ethics - But ethical behaviour is not fully integrated into the culture "he ethical !irm - Ethics are a core value and permeate the whole organisation