Chapter 2 Ethical Issues In Business

Ethics can be defined as follows:

Ethics is focused on doing good and it deals with doing good for human kind.
Ethics is a thought of development while morality is judgemental
A firm's concern towards the community, workers, and environment in which it
operates is known as corporate social responsibility.
Ethics deals with decisions made at an individual level.
International business ethics can be defined as Business conduct or
morals of MNCs in their relationships to all individuals and entities in
contact when conducting business overseas.
Firms with operations overseas are most likely to deal effectively with crosscultural CSR dilemmas by establishing labor standards for suppliers.
MNCs concern themselves about social and economic effects of their
decisions regarding activities in other countries.

The map of business ethic issues consists of the following:

1) CSR corporate social responsibility which is controlled by social policy and
environmentalists.
2) Corporate governance controlled by lawyers and accountants
3) Sustainability controlled by environmentalists
4) Ethical investments controlled by market analysts
5) Employment rights and human rights HRM and lawyers
6) Fair trade and international trade by economists
7) Risk management - accountants
The semiotic square
It is also known as square of opposition and it is used as a tool for logical analysis.
It is now used to measure business ethic matters.
There are 4 areas in it which are called:
1)
2)
3)
4)

The good
Benign-ness (good)
Indifference (bad)
the bad

DOING GOOD

Social development

Social development is between ethics and mortality but more towards ethics.
Social development is defined as actions taken by an organisation or
company that are designed to improve the social, economic, cultural and
environmental conditions of a society.
Corporate citizenship is used as an alternative term for social development.
For example, British Airways.

Social responsibility

SR can be defined as conducting the business or an organisation in a manner

than meets high social and environmental standards.
It is different from Social development as SR excludes (removes) the social
and cultural good works.
For example: British petroleum Company

ACTING BENIGHLY

Reciprocity (be fair in exchange)

Fairness

While being ethical it is important not to lie and not to be dishonest. Cheating and
selfishness is also not allowed. If this is done then it is ignoring harm done to
others.
Doing harm is also linked to bullying and social irresponsibility and doing social
environmental damage.
Criminal law and civil law are all linked to legality and illegality. Four combinations
are:

Actions that are good and legal but not a legal obligation (duty)
Actions that are wrong and illegal
Actions that are legal but not necessarily just (fair)
o The bottom line approach is known as the Aristotelian approach to
business ethics. For example SHELL company uses triple bottom line
reporting system.
Actions that are just but illegal