? ? ? ?

?
? ?
? ?
? ?
Ethics has to do"
with what my
feelings tell me is
".right or wrong
Ethics has to"
do with my
religious
".beliefs
Being ethical"
is doing what
the law
".requires
 Ethics consists
"

of the standards
of behavior our
".society accepts
FIRSTLY
Well founded
standards
 Study and
development
of one's ethical
.standards
ETHICAL
MORAL SOCIAL
BELEIVES NORMS LAWS
ETHICAL ETHICAL

MORAL
CONDUCT FEELINGS

ETHICAL ETHICAL
 BUSSINESS ETHICS

•Business ethics is the behavior that a business

adheres to in its daily dealings with the world.

•The ethics of a particular business can be

diverse.
BUSINESS
If a company does not adhere to business
ethics and breaks the laws, they usually end
.up being fined

BUSINESS COMPANY’S DON’T BOTHER ABOUT

FINES BECAUSE:

P F
R I
N
O
E
F
I
T
FINE
Why should a company be concerned about
business ethics…………..????

•people are usually willing to pay premium prices to feel good

about the products they buy.

•people often are willing to work harder with less compensation

 :Ethics Issue 1
Shareholder Wealth

SHARE
EMPLOYEES

SHARE
CORPORATE
STAKE-HOLDERS

SHARE
SHARE
HOLDERS
 :Ethics Issue 2
Profit Maximization

PRIMARY PURPOSE OF BUSINESS

HEALTHY
PROFIT
MAXIMIZATION OF PROFIT

ENDLESS DRIVE
TO PROFIT
PROFIT COST OF SUPPLY CHAIN

PROFIT QUALITY

PROFIT OPERATIONAL COST

DECREASING EMPLOYEE
PROFIT
BENEFIT

PROFIT TAX PAID

 :Ethics Issue 3
Return on Investment (ROI)

:Ethics Issue 4
Externalities

:Ethics Issue 5
Fiduciary Responsibility
?……Internal and External Influences

Management

Location

Product

Resources
Business
culture
?……Internal and External Influences

Government

Product diversity Economy

Market conditions

Compititors
Multicultralism
geographic and
social
A SLEPTanalysis is often carried out by business planners which
.enables them to develop more informed strategies

SOCIAL

LEGAL

ECONOMIC

POLITICAL

TECHNOLOGICAL
 Social
Factors

Legal Technological
Factors Factors

SLEPT

Economic Political
Factors Factors
 STAKEHOLDERS

•Shareholders: – Generate profits and pay dividends

•Customers – provide good quality products at reasonable prices.

•Employees – health and safety at work,fair pay

•Suppliers – pay on time, pay fair rates for the work done, provide

element of security
•Local Community – provide employment, safe working environment,
minimise pollution and negative externalities

•Government – abide by the law, abide by regulations, pay taxes

•Environment – limit pollution, disposal of waste safely

 ETHICAL AUDIT

An Ethical Audit:

•Potential ethical problem.

•To check the extent to which actions are consistent with the
organisation’s stated ethical intentions.

•Suggests ways of improving the working environmeny.

•Report on the ethical performance of the organization.

•Provides assurance to the board.

 SOCIAL AUDIT

“Social Audit is a systematic

assessment of a firm’s objectives,
strategies, and performance in
the domain of social
responsibilities”
 ENVIRONMENTAL AUDIT

•To identify the presence of hazards.

•To estimate the cost of remediation

or clean up.
 DEFINITION OF EXTERNALITY

“The side effect on an individual or entity due to the

action of another individual or entity.”

RADIO
NUCLEAR POWER Leads to ACTIVE
PLANT WASTE
 POSITIVE
Benefit the Society
EXTERNALITY

Example: Environmental Clean-up & research

NEGATIVE
Harm the Society
EXTERNALITY

Example
a) Hazards of Chemical Industry
b) Hazards of Pollution (such as destruction of ozone layer)
 Externality & Corporate World

”????Where does all wealth go“

•Externalities are the financial liabilities that don’t appearon

the financialstatement

•Externalities allow corporations to damage environmental habitats

or cause human health problems.
Add
In business, it’s very easy to talk about ethics, but it’s very hard
.to be ethics

”Do No Harm“