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The Requirements for this Course are Simple

COURSE TITLE : BUSINESS ETHICS

Read before you come to class
Participate during class
Take quizzes
Complete homework assignments on time
Take the exams

TRIMESTER : Spring/2016
MODULE 1: An Overview of Business Ethics
Instructor: Dr. Md. Shariful Alam

Learning Outcomes

Define
Morality,
Moral
Standard,
Nonmoral/Conventional Standards and Norms
Identify Sources of Moral Standards, Ethics,
Normative and Descriptive Study of Morality
Explain Three Different Kinds of Issues that Business
Ethics Investigates
Differentiate between Rules/Policies/Law & Ethics
Identify Framework for Studying Business Ethics

Business Ethics and Its Issues

Baumharts (1968) Question:
What does ethical mean to you?

50% - what my feelings tell me is right

25% - defined it according to religious beliefs
18% - defined it as conformance to the golden rule

ALL OF WHICH PROVIDES INADEQUATE

FOUNDATIONS FOR JUDGING THE ETHICS OF
BUSINESS COMPANIES

Business Ethics and Its Issues

Dictionary Definition:
1.

2.

The principles of conduct governing an

individual or a group (e.g. personal ethics
or accounting ethics)
The study of morality

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Standards of what is right and wrong, good and evil

(e.g. Case Goodrich)

Business Ethics and Its Issues

Ethics and Morality are different:

Ethics a kind of investigation and includes both

the activity of investigating and the results of that
investigation.
Morality is the subject matter that ethics
investigates.

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Morality (1)

Morality (2)

Case: B.F. Good rich manufacturer of vehicle parts.

Won a military contract to design, test and manufacture aircraft brakes

Specification of the brake given

Vandivier, was given the responsibility to write a report on the test runs

The brakes did not comply with the specifications

Superiors wanted him to falsify the test data and the reports.

Vandiviers Beliefs

Vandiver agreed to co-operate due to personal and financial

commitments

Morality (3)
Moral Standards

The norms about the kinds of actions believed to be morally

right and wrong
Values placed on the kinds of objects believed to be good and
bad (e.g. always tell the truth, honesty is good, injustice is
bad)
Moral standards come from:

Family
Friends
School
T.V.
Music

Morality (5)
5 Characteristics of Moral Standards
1.

2.

3.

Involved with serious injuries or benefits. Eg. theft,

rape, murder, child abuse, assault, fraud, slander.
Not established by law or legislative. Moral
standards rest on the adequacy of the reasons that
are taken to support and justify them.
Should be preferred to other interests. Eg if a
person has a moral obligation to do something, then
he or she is supposed to do it even if this conflicts
with other nonmoral values or self-interest. Eg.
Vandiviers case

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moral values of honesty and respect for lives

nonmoral values of keeping his well paid job

The right to tell the truth

Wrong to endanger lives of others
Integrity is good
Dishonesty is bad

Moral
Standards

Morality (4)
Nonmoral Standards

Moral standards contrasted with standards we hold about

things that are not moral

Examples of Nonmoral standards include:

Standards of etiquette by which we judge manners as good or bad.

Standards we call the law by which we judge legally right and wrong.

Standards of aesthetics good or bad art.

The athletic standards how well a game is being played

Morality (6)
5 Characteristics of Moral Standards

4. Based on impartial considerations:

Does not evaluate the interest of a particular individual or group

universal standpoint in which everyones interests are impartially

counted as equal

5. Associated with special emotions and a special

vocabulary

Eg. If you act contrary to a moral standard, you will normally feel
guilty, ashamed, remorseful.
You characterize yourself as immoral or wrong
Feel bad about yourself
Experience loss of self-esteem

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Ethics

Ethics is the discipline that examines ones moral

standards or the moral standards of the society.

Business Ethics (1)

how these standards apply to our lives

whether the standards are reasonable or unreasonable

Other fields, such as social science, also study ethics

A specialized study of right and wrong applied to

business policies, institutions and behaviors
How moral standards apply to social systems and
organizations that produce and distribute goods
and services.

Normative Study: attempts to reach normative conclusions

Descriptive Study: attempts to describe or explain the world without
reaching conclusions.

Business Ethics (2)

Business Ethics: Today vs. Earlier Period

Three basic topics covered:

Systemic Issues

Societys
Expectations of
Business Ethics

Corporate Issues

Raised questions about economic, political, legal or other social systems

within which business operate
Raised questions about a particular company
E.g. Goodrichs decision to qualify the brakes

Ethical
Problem

Individual Issues

Questions about a particular individual within an organization, their

behavior and decisions
E.g. Vandiviers decision in writing a report on the brake which he
believed to be false, was morally justified

1950s

WHY?

Actual Business
Ethics

Ethical Problem

Time

2000s

Morals, Principles and Values

Morals refer to a persons personal philosophies about what is
right or wrong. The important point is that when one speaks of
morals, it is personal or singular. Morals, your philosophies or
sets of values of right and wrong, relate to you and you alone.
You may use your personal moral convictions in making ethical
decisions in any context.
Principles are specific and pervasive boundaries for behavior
that should not be violated. Principles often become the basis for
rules. Some examples of principles could include human rights,
freedom of speech, and fundamentals of justice.
Values are enduring beliefs and ideals that are socially enforced.
Several desirable or ethical values for business today are
teamwork, trust, and integrity. Such values are often based on
organizational or industry best practices.

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Ethics and the Law

Why differentiate between rules/policies/law & ethics?

the difference between an ordinary decision &

an ethical one is the point where rules no
longer serve
values & judgment play a key role in ethics
decisions

Law often represents an ethical minimum

Ethics often represents a standard that exceeds
the legal minimum

Frequent Overlap

Ethics

Law

Business ethics...

Ethics, Economics, and Law

comprises principles, values & standards

that guide behavior in the world of business
Right or wrong, acceptable or unacceptable
behavior within the organization
whether a specific behavior is ethical or
unethical
is
often
determined
by
stakeholders

investors
customers
the community
employees

the legal system

Ethics
&
social
meanings...

responsibility

have

distinct

The Pyramid of Social Responsibility

social responsibility is the obligation a

business assumes to maximize its positive
effect while minimizing its negative effect
on society
social responsibility consists of
the
following responsibilities:

economic (satisfy investors)

legal (obey the law)
ethical (expected activities & behaviors)
philanthropic (desired activities & behaviors)

Exhibit 1.1

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Thank you !

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