1) DEFINITION OF ETHICS

Ethics is defined as a set of principles of right conduct, a system of moral

values or the rules or standards governing the conduct of a person or
the members of a profession (American Heritage Dictionary of the English
Language, 2000).
In modern society, ethics define how
individuals, professionals, and corporations choose to interact with
one another.
BUSINESS ETHICS =principles and standards that determine acceptable
conduct in business organizations

Ethics in business refers to the application of dayt o - d a y m o r a l o r e t h i c a l norms to business. Business Ethics are the
principles and standards that determine acceptable conduct in business organizations.
2) ETHICS IN THE BUSINESS CONTEXT
Giving and Receiving Gifts
Under illegal circumstances and where the nature of gift is not
nominal in value and where the gift is given as an inducement or
in return for a favourV. (unethical and illegal)
Giving and receiving of gifts amount to the practice of corruption.
Examples of Malaysian statutes prohibiting and combating such
practices include :
section 16-23, Malaysian Anti-Corruption Commission Act
2009;
Section 118, Development Financial Institutions Act 2002;
Insider Trading
Example of white-collar crime.
Striking example of insider trading was seen in Enron Scandal
Part V, Division 1, Subdivision 2 (sections 183 to 198), Capital
Markets & Services Act 2007 (Act 671) (previously, section 89E of
the Securities Industry Act 1983) prohibits insider trading.

Conflict of Interest
Arises when an individual is in position where they cannot act
fairly and properly in the interest of one party without prejudicing
the rights and interest of another party for whom they also act.
Misuse of Limited Liability of a Company
Under the doctrine of separate legal entity, a company is
regarded as a legal person, separate and distinct from its
shareholders and directors.
The right and obligations (including debts incurred by the
company) of a company belong to the company and not to the
shareholder or the directors.

HOW IMPORTANT ETHICS IN TODAYS SOCIETY ?

1.

Satisfying Basic Human Needs: Being fair, honest and ethical is one the basic human needs. Every
employee desires to be such himself and to work for an organization that is fair and ethical in its
practices.

2.

Creating Credibility: An organization that is believed to be driven by moral values is respected in the
society even by those who may have no information about the working and the businesses or an
organization.

3.

Uniting People and Leadership: An organization driven by values is revered by its employees also.
They are the common thread that brings the employees and the decision makers on a common
platform. This goes a long way in aligning behaviors within the organization towards achievement of one
common goal or mission.

4.

Long Term Gains: Organizations guided by ethics and values are profitable in the long run, though in
the short run they may seem to lose money. Tata group, one of the largest business conglomerates in
India was seen on the verge of decline at the beginning of 1990s, which soon turned out to be
otherwise. The same companys Tata NANO car was predicted as a failure, and failed to do well but the
same is picking up fast now.

5.

Securing the Society: Often ethics succeeds law in safeguarding the society. The law machinery is
often found acting as a mute spectator, unable to save the society and the environment. Technology, for
example is growing at such a fast pace that the by the time law comes up with a regulation we have a
newer technology with new threats replacing the older one. Lawyers and public interest litigations may
not help a great deal but ethics can.

(Sources : managementstudyguide.com.my)

IMPORTANCE OF ETHICS TO OUR BUSINESS

1) Attract customers to the firm's products, thereby boosting sales and profits make
employees want to stay with the business, reduce labor turnover and therefore
increase productivity
2) Attract more employees wanting to work for the business, reduce recruitment costs
and enable the company to get the most talented employees
3) Attract investors and keep the company's share price high, thereby protecting the
business from takeover
THEORIES OF ETHICS
Consequentialism
The class of normative ethical theories holding that the consequences of one's conduct
are the ultimate basis for any judgment about the rightness or wrongness of that
conduct.

Rule Utilitarianism
It maintains that the correct principles of right and wrong are those that would
maximize happiness if society adopted them. Rule utilitarianism applies the utilitarian
standard not directly to individual actions but rather to the choice of the moral
principles that are to guide individual action.
(Shaw,2011)
Virtue Ethics
virtue ethics focuses on having a good character tells you what kind of person you
ought to be
It is action-guiding in the sense that it recommends that you become the kind of
person that will do what is right perhaps instinctively
2016s Most Ethical Companies List
COMPANY
National Australia Bank
Teachers Mutual Bank
The Rezidor Hotel Group
Natura Cosmeticos
Covenant Health
Empresa de Desarrollo Urbano
Capgem ini
LOREAL
Schneider Electric SE
Henkel AG & Co. KG aA
(Sources: www.forbes.com)

INDUSTRY
banks
banks
Lodging & Hospitality
Health & Beauty
Healthcare providers
Government services
Consulting Services
Health & beauty
Diversified machinery
Consumer products

COMPANIES practising ethical business practices are more likely to attract and retain talent in the
Asia-Pacific region, a survey by consulting firm EY has found.
Almost 80 per cent of respondents in the region, including Singapore, say they would be unwilling to
work for companies involved in bribery and corruption.
Additionally, 67 per cent of respondents in the region - and 70 per cent in Singapore - see a strong
reputation for ethical behaviour as a commercial advantage. The online survey was carried out in
February in 14 Asia-Pacific economies. The findings were based on 1,508 interviews, 90 of them in
Singapore.
Companies used to comply with the laws for the sake of their reputation and to prevent financial loss,
but these days, they have to toe the line if they want to retain staff or recruit employees, EY said.
"This is something that has never appeared before. It is a wake-up call for executives and board
members," said Mr Reuben Khoo, a partner and regional leader for fraud investigation and dispute
services at EY.
More organisations established a code of conduct (up 23 percentage points); training increased (by 20
percentage points); there were more anti-bribery and anti-corruption policies (up 16 percentage
points); and more whistle-blowing hotlines (up 2 percentage points).
Said Mr Chris Fordham, Asia-Pacific managing partner of EY Fraud Investigation & Dispute
Services: "Only 5 per cent of (Asia-Pacific) respondents said it would make no difference to their
willingness to work for an employer if it was found to have been involved in bribery and corruption."
The survey also pointed out risk stemming from third parties, such as joint-venture partners,
distributors, agents and vendors, as their operations are beyond the control of companies.
"Companies entering into a business relationship with a third party should conduct as much due
diligence as for an acquisition, and extend their ethical framework to monitoring third-party
behaviour," said Mr Khoo.
He commended the ethical culture that the Government has inculcated. "In Singapore's environment
where both the public and private sectors co-exist as part of an ecosystem, the Government's tone on
zero tolerance and the emphasis on corporate ethical leadership have created a more robust (anticorruption) culture."
However, he stressed the need for stronger enforcement mechanisms to ensure compliance with codes
of conduct.
The poll also noted that 55 per cent of employees in the region believe their organisations are fully
prepared to protect themselves against cyber threats. The level is 59 per cent in Singapore.

"Companies are no longer thinking, 'What if we get hit?' but rather 'What do we do when we get hit?'"
said Mr Khoo.
( business.asiaone.com, 11 june 2015)