-A moral philosophy which affect how people make decisions and lead their lives.

-A system of moral principles

-Business ethics are moral principles that guide the way a business behaves.
-The same principles that determine an individual”s actions also apply to business.
-Acting in an ethical way involves distinguishing between “right” and “wrong” and then
making the “right” choice.
-It is relatively easy to identify unethical business practices. For example, companies
should not use child labour. They should not unlawfully use copyrighted materials and
processes. They should not engage in bribery.
-A company also has wider responsibilities. It should minimise any harm to the
environment and work in ways that do not damage the communities in which it
operates. This is known as corporate social responsibility.

-Business ethical norms reflect the norms of each historical period. As time passes norms evolve,
causing accepted behaviors to become objectionable. Business ethics and the resulting behavior
evolved as well.
-The term 'business ethics' came into common use in the United States in the early 1970s. By the
mid-1980s at least 500 courses in business ethics reached 40,000 students, using some twenty
textbooks and at least ten casebooks along supported by professional societies, centers and
journals of business ethics. The Society for Business Ethics was started in 1980. European
business schools adopted business ethics after 1987 commencing with the European Business
Ethics Network (EBEN).( Their mission is to promote ethics and excellence in
businesses, to increase awareness about ethical challenges in the global
marketplace and to enable dialogue on the role of business in society.)
-Thirukural, a book said to be written by Thiruvalluvar some 2000 years ago in Tamil Literature,
speaks of the business ethics, in many of its verses.

3 models of managament ethics

• Moral managament- conforms to high standards of ethical behaviour
• Immoral managament – A style devoid of ethical principles and active
opposition to what is ethical
• Amoral managament:
-Intentional: does not consider ethical factors
-Unintentional:casual or careless about ethical
considerations in business
Several factors play a role in the success of a company that are beyond
the scope of financial statements alone. Organizational culture,
management philosophy and ethics in business each have an impact on
how well a business performs in the long term. No matter the size,
industry or level of profitability of an organization, business ethics are
one of the most important aspects of long-term success.

Business ethics has normative and descriptive dimensions.

Normative ethics is about intrinsic value, right and wrong, and/or virtues.

examples:

1. It is wrong to kill people just because they make you angry.

2. We should fight to free slaves when necessary, even when doing so is illegal.

3. Pain is intrinsically bad—we ought not cause pain without a good reason to do so.

4. It is reasonable for a person to give charity to those in need, even if no reciprocation

should be expected.

Normative ethics is about what actually has overriding importance for determining how we

ought to act. Even if you want a million dollars, you ought not kill innocent people in order to

get a million dollars in return. Etiquette is often said to be similar to normative ethics, except

etiquette is not of overriding importance. Burping is considered to be rude, but it is not that

big of a deal.

We know that empathy helps motivate pro-social behavior (such as giving to charity) and we know
that our beliefs about what has overriding importance is somewhat based on the culture we live in.

Ethics concern an individual's moral judgements about right and wrong. Decisions
taken within an organisation may be made by individuals or groups, but whoever
makes them will be influenced by the culture of the company. The decision to behave
ethically is a moral one; employees must decide what they think is the right course of
action. This may involve rejecting the route that would lead to the biggest short-term
profit.
 Ethical behaviour and corporate social responsibility can bring significant benefits to
a business. For example, they may:
 attract customers to the firm's products, thereby boosting sales and profits
 make employees want to stay with the business, reduce labour turnover and
therefore increase productivity
 attract more employees wanting to work for the business, reduce recruitment
costs and enable the company to get the most talented employees
 attract investors and keep the company's share price high, thereby protecting
the business from takeover.
Unethical behaviour or a lack of corporate social responsibility, by comparison, may
damage a firm's reputation and make it less appealing to stakeholders. Profits could
fall as a result.
Along with good corporate governance, ethical behaviour is an integral part of
everything that Cadbury Schweppes does. Treating stakeholders fairly is seen as an
essential part of the company's success, as described here: 'A creative and well
managed corporate and social responsibility programme is in the best interests of all
our stakeholders - not just our consumers - but also our shareowners, employees,
customers, suppliers and other business partners who work together with us. *'
Ensuring that employees understand the company's

Se veral factors play a role in the success of a company that

are beyond the scope of financial statements alone.
Organizational culture, management philosophy and ethics in
business each have an impact on how well a business performs
in the long term. No matter the size, industry or level of
profitability of an organization, business ethics are one of the
most important aspects of long-term success.
Ethics in Leadership
The management team sets the tone for how the entire
company runs on a day-to-day basis. When the prevailing
management philosophy is based on ethical practices and
behavior, leaders within an organization can direct employees
by example and guide them in making decisions that are not
only beneficial to them as individuals, but also to the
organization as a whole. Building on a foundation of ethical
behavior helps create long lasting positive effects for a
company, including the ability to attract and retain highly
talented individuals and building and maintaining a positive
reputation within the community. Running a business in a
ethical manner from the top down builds a stronger bond
between individuals on the management team, further creating
stability within the company.

Employee Ethics
When management is leading an organization in an ethical
manner, employees follow in those footsteps. Employees make
better decisions in less time with business ethics as a guiding
principle; this increases productivity and overall employee
morale. When employees complete work in a way that is based
on honesty and integrity, the whole organization benefits.
Employees who work for a corporation that demands a high
standard of business ethics in all facets of operations are more
likely to perform their job duties at a higher level and are also
more inclined to stay loyal to that organization.

 Winning at someone else's expense - Although there will inevitably be both winners and
losers in a free market economy, the issue of how a company wins is a concern to some.
Companies that have monopolies in a market or industry can function very efficiently in many
respects, but they also effectively prevent any form of healthy business competition, and some
investors consider this to be unethical.
 Environmental Responsibility - Heavy industry such as energy and manufacturing have
long been perceived as destroyers of nature and wildlife with their pollution and decimation
of forests, oceans, lakes and rivers. Ethical investors favor companies that replace what they
take from the earth and adhere to governmental standards for emissions.
 Abortion and Stem-Cell Research - Companies that profit from certain medical procedures
or types of research are often considered to be unethical or even criminal by those in the
Judeo-Christian community.
 "Sin" Industries - Although the concept of an industry being sinful is obviously somewhat
subjective, a proportion of the investing public still considers makers of alcoholic beverages,
tobacco companies and the pornography industry to be at least somewhat taboo. The products
that these industries produce have been proved to be clearly harmful in one respect or another,
at least under certain circumstances. The tobacco industry has long been accused of targeting
teenagers as customers and making its products as addictive as possible in order to fuel sales,
while the dangers of alcoholism and drunk driving stem from the production and distribution
of liquor. The effects of pornography are perhaps less tangible, although more than one study
has linked the use of porn to various types of sex crimes. Of course, these industries have
made efforts to raise public awareness of the dangers of misusing their products and services.
Business Ethics Benefits
The importance of business ethics reaches far beyond
employee loyalty and morale or the strength of a management
team bond. As with all business initiatives, the ethical
operation of a company is directly related to profitability in
both the short and long term. The reputation of a business from
the surrounding community, other businesses and individual
investors is paramount in determining whether a company is a
worthwhile investment. If a company's reputation is less than
perfect based on the perception that it does not operate
ethically, investors are less inclined to buy stock or otherwise
support its operations.

With consistent ethical behavior comes increasingly positive

public image, and there are few other considerations as
important to potential investors and current shareholders. To
retain a positive image, businesses must be committed to
operating on an ethical foundation as it relates to treatment of
employees, respect to the surrounding environment and fair
market practices in terms of price and consumer treatment.

Conclusion

Ethics are morally subjective by nature, and there is no absolute

standard for what is or is not an ethical investment. Investors must
ultimately decide for themselves what they consider to be ethical and
then try to apply that to their investment choices