BUSINESS ETHICS, MBA 4002, SP-2014

Dr. A. Hans

BASIC CONCEPTS
Business Ethics is an applied ethics. It is the application of our understanding of what is good and right to that assortment of institutions, Technology, transactions, activities and pursuit that we call business. Ethics: Principles of conduct governing an individual or a group. Ethics: It is also defined as study of Morality, It is an investigation and include both activity of investigating as well as results of that investigation.

MBA 4002, SP2014

WHAT IS MORALITY?
Morality is the subject matter that ethics investigates. Morality: The standards that an individual or a group has about what is right and wrong or good or evil. Moral standards: The norms about the kinds of actions believed to be morally right and wrong as well as the values placed on what we believe to be morally good and morally bad Non moral Standards: The standards by which we judge what is good or bad and right or wrong in a non moral way

MBA 4002, SP2014

From age of three we can distinguish moral norms from non moral norms From the age of three we tend to think that moral norms are more serious that non moral norms and apply everywhere independent of what authorities says The ability to distinguish moral form non moral norms is innate and univarsal

MBA 4002, SP2014

CHARACTERISTICS OF MORAL STANDARDS

Involve serious wrongs or significant benefits Should be preferred to other values including selfinterest Not established by authority Felt to be universal Based on impartial consideration Associated with special emotions and vocabulary

MBA 4002, SP2014

ETHICS
The discipline that examines ones moral standards or the moral standards of society to evaluate their reasonableness and their implications for ones life. Ethics is a normative study of morality, where as social sciences engage in a descriptive study of morality

MBA 4002, SP2014

BUSINESS ETHICS
Definition: It is defined as a specialized study of moral right and wrong that concentrates on moral standards as they apply to business institutions and behaviour. It can be inferred that Business Ethics is the study of 1. Our moral standards insofar as these apply to business 2. How reasonable or unreasonable these moral standards we have absorbed from society 3. The Implications our moral standards have for business activities.

MBA 4002, SP2014

KINDS OF ETHICAL ISSUES

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Systemic Issue: Ethical questions about the social , political, legal, or economic system within which company operates. Corporate Issue: Ethical questions about a particular organization and its polices, culture, climate, impact or action. Individual Issue: Ethical questions about a particular individuals decisions, behaviour or character.

MBA 4002, SP2014

SHOULD ETHICAL QUALITIES BE ATTRIBUTED

ONLY TO PEOPLE OR ALSO TO CORPORATION?
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Corporations , like people act intentionally and have moral rights and obligations , and morally responsible. It doesnt make any sense to attribute ethical qualities to corporations since they are not like people but more like machine . Only human can have ethical qualities. A middle view says that human carry out corporations action so they are morally responsible for what they do and ethical qualities apply in a primary sense to them; corporations have ethical qualities only in a derivative sense.

MBA 4002, SP2014

OBJECTION(ARGUMENTS AGAINST ETHICS IN BUSINESS) TO BUSINESS ETHICS

In a free market economy, the pursuit of profit will ensure so business ethics is not needed. A manager's most important obligations is loyalty to the company regardless of ethics. So long as companies obey the law they will do all that ethics requires

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MBA 4002, SP2014

ARGUMENTS SUPPORTING ETHICS IS

BUSINESS Ethics applies to all human activities Business cannot survive without ethics Ethics is consistent with profit seeking Customer, employees and people in general care about ethics. Studies suggest ethics does not detract from profit and seems to contribute to profits.

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MBA 4002, SP2014

ETHICAL ISSUES IN BUSINESS

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New technologies raise new ethical issues for business The agricultural and industrial revolutions introduced new ethical issues IT raises new ethical issues related to risk, privacy and property rights. Nanotechnology and biotechnology raise new ethical issues related to risk and to the spread of dangerous products. Globalization has brought great benefits to developing countries It also includes rising inequality, cultural losses and introducing inappropriate technologies into developing countries

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MBA 4002, SP2014

BUSINESS & ETHICAL RELATIVISM

Ethical or moral relativism: The Theory that there are no ethical standards that are absolutely true and that apply or should be applied to the companies and people of all societies. Objection: 1. Some moral standards are found in all societies 2. Moral difference do not logically imply relativism 3. Relativism has incoherent consequences 4. It privileges whatever moral standards are widely accepted in a society

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MBA 4002, SP2014

MORAL REASONING
Moral Development: 1. Level One: Pre conventional stages Stage one: punishment and obedience orientation Instrumental and relative orientation 2. Level Two: Conventional Stages Stage three: Interpersonal concordance orientation Stage four: Law and order orientation 3. Level Three: Post Conventional Stages Stage Five: Social contract orientation Stage Six: Universal moral orientation

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MBA 4002, SP2014