Business Ethics Lecture # 1

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Business EthicsLecture # 1

Aisha Malik



Course Administration

Consultation Method:

Best through e-mail address : [email protected]

OR

After/bef ore lectures on lecture day ( if available)

OR Announced Timings in case of Reports, exams papersdiscussions.

Marks Distribution:

Mid-Term Exam ± 25

Assignments & Quiz ± 10 Presentation & report - 15

Finals - 50



Course Administration

RULES Assignments & project should be handed in by the due

date in class.

University policies on Regularity, cheating , plagiarism

and academic misconduct apply to this course. Avoid coming late to the class, not appreciated at all.

Three Late¶s will be marked as 1 absence.

Class participation is a must.

Overall positive class attitude is a requirement.

Exams ± Questions will be f ormulated in a way to examine both theoretical and conceptual thinking.

Assignments can be case studies based, reports orresearch work. Will be decided in the up coming classes.

Focus will be topics rather than on any chapters.



Text & References

³Business Ethics³, by Joseph W. Weiss .

³ Perspective in Business Ethics´ by Luara

Hartman



What is Ethics ?

Ethics is a set of moral principles or values which isconcerned with the righteousness or wrongness of human behavior and which guides your conduct inrelation to others (for individuals and

organizations).

Ethics is the activity of examining the moralstandards of a society, and asking how these

standards apply to our lives and whether thesestandards are reasonable or unreasonable, that is,whether they are supported by good reasons orpoor ones.



What is Business Ethics?

Moral conduct is behavior that is right or wrong

A specialized study of moral right and wrong. Itconcentrates on moral standards as they applyparticularly to business policies, institutions, andbehavior.

Business Ethics guide people in dealings withstakeholders and others, to determine appropriateactions.



Why do we need to study Business

Ethics? Ethical motivation:

Balance the needs and wishes of stakeholders:

Global challenges: Ethical pay-off:

Employee Retention:

Preventing civil lawsuits

Market Leadership:



Stakeholders

The

Firm

Employee

s

Local

communities

Customer

s

Distributor

s

Creditors Suppliers

Shareholders



Ethical Rights of Stakeholders

Shareholders ± right to timely and accurate information

about their investments

Customers ± right to be fully informed about the products

and services they purchase

Employees ± right to safe working conditions, fair

compensation, and to be treated in a just manner

Suppliers ± right to expect contracts to be respected

Competitors ± right to expect that a firm will abide by the

rules of competition and not violate antitrust laws

Communities ± right to expect companies will not violate

the basic expectations of society



Ethical OriginsEthical Origins

It is difficult to know when a decision isethical. Below is to find out:

Managerial ethics:

If a manager makes a decision falling withinusual standards, is willing to personallycommunicate the decision to stakeholders,and believes they would approve, then it islikely an ethical decision.




Societal Ethics: standards that members of society use when dealing with each other.

Based on values and standards found insociety¶s legal rules, norm, and mores.

C odified in the form of law and societycustoms.

Norms dictate how people should behave.

Societal ethics vary based on a given society.

Strong beliefs in one country may differelsewhere.

Example: bribes are an accepted businesspractice in some countries.




P rofessional ethics: values and standards usedby groups of managers in the workplace.

Applied when decisions are not clear-cutethically.

Example: physicians and lawyers haveprofessional associations that enforce these.

I ndividual ethics: values of an individual

resulting from their family& upbringing. If behavior is not illegal, people will often

disagree on if it is ethical.

Ethics of top managers set the tone for firms.



Ethical ModelsEthical Models

Social Ethics:

Legal rules, customs

Pr of essional Ethics:Pr of essional Ethics:

Values in workplaceValues in workplaceIndividual Ethics:Individual Ethics:

Family inf luenceFamily inf luence

Organization¶sOrganization¶s

Code of EthicsCode of Ethics



14

Inventor y of Ethical Issues in Business

Employee-Employer Relations

Employer-Employee Relations

Company-Customer Relations Company-Shareholder Relations

Company-Community/Public Interest



15

Ethics and the Law

Law often represents an ethical minimum

Ethics often represents a standard that

exceeds the legal minimum

Ethics Law

Frequent Overlap



16

Making Ethical Judgments

Behavior or act

that has been

committed

Prevailing norms

of acceptability

Value judgments

and perceptions of the observer

compared with



Ethics, Economics, and Law

6-14



18

Four Important Ethical Questions

What is?

What ought to be?

How to we get from what is to what ought to

be?

What is our motivation for acting ethically?



19

3 Models of Management Ethics

1. Immoral Management²A style devoid of

ethical principles and active opposition to

what is ethical.

2. Moral Management²Conforms to highstandards of ethical behavior.

3. Amoral Management

I

ntentional - does not consider ethical factors Unintentional - casual or careless about ethical

considerations in business



20

3 Models of Management Ethics

Three Types Of Management Ethics



Three Approaches to Management Ethics

6-18



ThreeModels of Management

Morality and Emphasis on CSR

6-19



Moral ManagementModels and

Acceptable Stakeholder T

hinking

6-20



24

MakingMoral Management

ActionableImportant Factors

Senior management

Ethics training

Self-analysis



DevelopingMoral Judgment

6-22




6-23



27


External Sources of a

Manager¶s Values Religious values

Philosophical values

Cultural values

Legal values

Professional values



28


Internal Sources of a Manager¶s

Values

Respect for the authority structure Loyalty

Conformity

Performance

Results



29

Elements of Moral Judgment

Moral imagination

Moral identification and ordering

Moral evaluation

Tolerance of moral disagreement andambiguity

Integration of managerial and moralcompetence

A sense of moral obligation



30

Elements of Moral Judgment

Amoral Managers Moral Managers

Moral Imagination

Moral IdentificationMoral Evaluation

Tolerance of Moral Disagreement

and Ambiguity

Integration of Managerial and MoralCompetence

A Senses of Moral Obligation



QUESTIONS ??

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Business Ethics Lecture # 1

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