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BUSINESS ETHICS

BUSINESS ETHICS

Field of study since 1990s due to the excesses


of 1980s.(Financial scandals, environment
damage etc)
Business ethics: Human activity directed
towards producing or acquiring wealth
through buying & selling of goods.
Code of standard by which one determine
what is right & wrong for business enterprise.
Fairness, integrity,commiting to agreements,
broad mindedness,considerateness,importance
to human esteem & self respect.

CONCEPTS & IMPORTANCE OF


BUSINESS ETHICS

Concept distinguishes right from


wrong/good from bad & what
constitutes desirable conduct in a particular
set of social circumstances.

Enables leaders & employees to act in times


of crisis & confusion in business ;method of
dealing with unclear business problems.

3 APPROACHES TO STUDYING
BUSINESS ETHICS

Descriptive Study: Describing practices,


moral codes & beliefs

Prescriptive Study :Attempt to formulate&


defend basic moral normal.

Conceptual Study :Analyse central ethical


terms such as right
,good,justice,virtue,attempt to distinguish
moral & immoral.

FIVE PART STRUCTURE OF


BUSINESS ETHICS

Specification of moral judgement


Moral judgement & moral standards
Justification of moral judgement
Logical reasoning & moral judgement
Moral judgement & moral responsibility.

IMPORTANCE OF ETHICS IN BUSINESS

Ethical behaviour needed for long term


success in business.
Idea of Macro argument & Micro argument in
line with ethical behaviour.
Macro Argument :Unethical behaviour
distorts market system ,leading to
inefficient allocation of resources.
Micro Argument: Highlights importance of
ethics to the individual firm.
Unethical behaviour :decreased long term
performance.

Presence of a proper market system in society.


Conditions for efficient working of market
system:
1. The right to own & control private property:
necessary for exchange to take place .
2. Freedom of buying & selling goods & services
-freedom of choice in exchange allows market
to operate freely
3. Availability of perfect information regarding
goods & services.
Problems arise when market system doesnt work
properly.

UNETHICAL PROBLEMS IN
BUSINESS
Managerial Misbehaviour:
illegal & unethical practices involved in
management of organization.
Moral Mazes:
Includes ethical problems like conflicts of interests
,misconduct of contracts & agreements & illegal
use of resources.
Social responsibility movements of 1960:tried to
solve social issues as poverty, crime & illeteracy
using finance from business class.
Business Ethics Managed by following ethical
code & code of conduct set by organisation.

MYTHS REGARDING BUSINESS


ETHICS
1.
2.
3.

4.

BE is a matter of belief than management.


Organisations believe their employees are ethical,
so no need to pay attention to business ethics.
BE consists of theological principles &
philosphy.Its believed BE has little to do with day
to day organisation.B E is a management
discipline that need planned approach & several
management programmes
BE states the obivious do good
situations.importance should be given to ethical
values of organisation.code of ethics changes with
change in society.

5.BE is an opinion. Employees should help


each other to remain ethical & work together
in stressful ethical dilemas.
6.BE is an old phenomenon which gained
attention recently.
7.BE is unmanageable by an organization.
Behaviour of leader influence the employees.
Business Ethics have impact on Objectives of
organization Maximum profit with less cost.
Laws,rules & regulations have impact on
ethical values of organisation.

BE is a social responsibility: determine


business responsibilities ,identify business
issues.
BE is not needed if organisatin is not in
trouble with rules.
BE has little practical significance in
business.Helps identify &practice values that
guide employee behaviour.