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Business Ethics Ppt

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BUSINESS ETHICS
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Page 1: Business Ethics Ppt

BUSINESS ETHICS

Page 2: Business Ethics Ppt

Moral principles of duty and virtue that prescribe how we should behavebehave; the foundation of our internal control.

IntegrityResponsibilityRespectFairness Excellence

Page 3: Business Ethics Ppt

Objectives of Ethics

Study of human behaviour and makes evaluative assessment about that as moral or immoral.

Establishes moral standards and norms of behaviour.

Makes judgment upon human behavior based on these standards and norms.

Prescribes moral behaviour and makes recommendations about how to or how not to behave.

Page 4: Business Ethics Ppt

Ethics will be different at different levels At the basic level, it is about

discipline, i.e.. to maintain punctuality, coming to work on time, behaving properly with superiors, colleagues and subordinates and not wasting time during working hours.

At the top level, it is about commitment and Protecting the interests of the organization.

Page 5: Business Ethics Ppt

Factors Influencing Ethics

IndividualIndividual OrganizationalOrganizational EnvironmentalEnvironmental

o ValuesValues

o Work Work BackgroundBackground

o Family StatusFamily Status

o PersonalityPersonality

oTop Level Mgmt. Top Level Mgmt. PhilosophyPhilosophy

oThe Firm’s Reward The Firm’s Reward SystemSystem

oJob DimensionsJob Dimensions

oCompetitionCompetition

oEconomic Economic

ConditionsConditions

oSocial/Cultural Social/Cultural

InstitutionsInstitutions

Page 6: Business Ethics Ppt

Sources of Ethics

1. Genetic Inheritance : the qualities of goodness is a product of genetic traits strengthened over time by the evolutionary process.

2. Religion : religious morality is clearly a primary focus in shaping our societal ethics.

3. Cultural Experience : individual values are shaped in large measure by the norms of the society.

4. The legal system : laws represent a rough approximation of society’s ethical standards.

5. Codes of Conduct : three primary categories of codes, a) company codes, b) company operating policies, c) codes of ethics.

Page 7: Business Ethics Ppt

Code of Ethics – American Marketing Association

• Responsibilities of Marketer : a) not to do harm knowingly, b) to adhere all applicable laws and regulations, c) the accurate representation of their education,

training and experience, • Honesty and Fairness : a) being honest in serving consumers, clients,

employees, suppliers, distributors and the public. b) no knowingly participating in conflict of interest

without prior notice to all parties involved, c) establishing equitable fee schedules including the

payment or receipt of usual, customary and/or legal compensation for marketing exchange.

Page 8: Business Ethics Ppt

Code of Ethics – American Marketing Association

Rights and Duties of parties :

a) products and service offered are safe and fit for their intended use,

b) communications about offered product and services are not deceptive,

c) all parties intend to discharge their obligations, financial and otherwise, in good faith,

Page 9: Business Ethics Ppt

Rights

There is a big

difference between what you

have a right to do and

what is right to do.

Page 10: Business Ethics Ppt

•It’s not about what we say, or intend, nor is it simply a written code or a framed

credo.

Page 11: Business Ethics Ppt

FAIRNESSFAIRNESS• ProcessProcess• ImpartialityImpartiality• EquityEquity

CARINGCARING• The heart of ethicsThe heart of ethics• It is scarcely possible to be It is scarcely possible to be

truly ethical and yet truly ethical and yet unconcerned with the unconcerned with the welfare of otherswelfare of others

CITIZENSHIPCITIZENSHIP• Duties that prescribe how Duties that prescribe how

we ought to behave as part we ought to behave as part of a community.of a community.

FAIRNESSFAIRNESS• ProcessProcess• ImpartialityImpartiality• EquityEquity

CARINGCARING• The heart of ethicsThe heart of ethics• It is scarcely possible to be It is scarcely possible to be

truly ethical and yet truly ethical and yet unconcerned with the unconcerned with the welfare of otherswelfare of others

CITIZENSHIPCITIZENSHIP• Duties that prescribe how Duties that prescribe how

we ought to behave as part we ought to behave as part of a community.of a community.

Page 12: Business Ethics Ppt

Foundations of Ethical Behavior

Treat others as you would be treated :-

Respect

Honesty

Trust

Page 13: Business Ethics Ppt

Taught in All Cultures

Judaism: What you hate, do not do to anyone.Islam: No one of you is a believer until he loves for his

brother what he loves for himself.Hinduism: Do nothing to thy neighbor which thou wouldst

not have him do to thee.Sikhism: Treat others as you would be treated yourself.Buddhism: Hurt not others with that which pains thyself.Confucius: What you do not want done to yourself, do not do

to others.Aristotle: We should behave to our friends as we wish our

friends to behave to us.Plato: May I do to others as I would that they should do unto

me.

TREAT PEOPLE THE WAY YOU WANT THEM TO TREAT YOU

Page 14: Business Ethics Ppt

Ethical Issues Relating to Business

Honesty—communication and behavior consistent with facts

Disclosure of information Promises/commitments Laws and professional standards Representation of others like shareholders

Unfair competition Refrain from bribes and excessive gifts Comply with “anti-trust” laws

Just compensation Respect intellectual property Treat employees fairly

Respecting rights of others Treat others with fairness and respect regardless of age,

religion, ethnic group, sex, economic status, etc., especially children, women, and subordinates

Respect others and future generations by treating the environment well

Page 15: Business Ethics Ppt

Values are important beliefs and desires that shape attitudes and motivate actions.

2000 Josephson Institute, Ethics in the Workplace

Page 16: Business Ethics Ppt

Values are general terms referring to those things which people regard as good, bad, right, wrong, desirable, justifiable etc.

Business is driven by values.

Managerial values are e.g. importance of good in organizations (like productivity, profit maximisation, employee welfare, industry leadership, organisational stability, organisational efficiency, organisational growth, social welfare etc.), groups within organisations ( like employees, customers, co-workers, superiors, subordinates, stock-holders etc.) and the personal goals of individuals.

ValuesValues

Page 17: Business Ethics Ppt

Core ValuesCore Values HonestyHonesty Being straightforward, sincere, truthful, free of Being straightforward, sincere, truthful, free of

fraud, deception or misrepresentationfraud, deception or misrepresentation

RespectRespect To give particular attention to, show To give particular attention to, show consideration for, or hold in high or special regardconsideration for, or hold in high or special regard

ResponsibilityResponsibility Moral Moral Leaders take responsibility for Leaders take responsibility for their own actions/failures . Involves a commitment to give their own actions/failures . Involves a commitment to give a quality performance and not making promises that a quality performance and not making promises that cannot be kept, such as committing to unrealistic delivery cannot be kept, such as committing to unrealistic delivery dates. Also calls for acknowledgment of implicit dates. Also calls for acknowledgment of implicit commitments, such as the protection of confidencescommitments, such as the protection of confidences

FairnessFairness Involves a elimination (or at least a Involves a elimination (or at least a minimization) of one's own feelings, prejudices and minimization) of one's own feelings, prejudices and desires, so as to achieve a proper balance of conflicting desires, so as to achieve a proper balance of conflicting interests. interests.

Page 18: Business Ethics Ppt

Relevance of Values in Managers1.1. Knowledge of business ethics will help managers in resolving ethical Knowledge of business ethics will help managers in resolving ethical issues/dilemmas as they arise.issues/dilemmas as they arise.

2.2. Knowledge of values will help managers in setting highly responsible Knowledge of values will help managers in setting highly responsible tone for the organization - in individual judgments and decisions tone for the organization - in individual judgments and decisions whether ethical or not.whether ethical or not.

3.3. It helps manager to realize their social responsibility. Many It helps manager to realize their social responsibility. Many organizations find it wise to go beyond their primary mission and organizations find it wise to go beyond their primary mission and take into the needs of the community. Business ethics make take into the needs of the community. Business ethics make managers more accountable for social responsibility.managers more accountable for social responsibility.

4.4. Knowledge and awareness of the concept and practices of business Knowledge and awareness of the concept and practices of business ethics is equally helpful to practicing managers in managerial ethics is equally helpful to practicing managers in managerial conduct and decision-making. conduct and decision-making.

Page 19: Business Ethics Ppt

Types of Values

VALUES

TERMINAL INSTRUMENTAL

refers to desirable end-states of existence, the goals that a person would like to achieve during his/her lifetime.

refers to preferable modes of behavior, or means of achieving the terminal values.

Page 20: Business Ethics Ppt

Importance of Values

1. Values lay the foundation for the understanding of attitudes and motivation because they influence our perceptions.

2. Individuals enter organizations with notions of what is right and wrong with which they interpret behaviors or outcomes

3. Values generally influence attitudes and behavior. Does your values match with your Job/Organization? How you will react?

Page 21: Business Ethics Ppt

Professional Values

Working within

the laws of India

Serving with competenceexcellenceefficiencyobjectivityimpartiality

Continual improvement of

quality of service,Respecting all stakeholders

Upholding transparency in

functioning while respecting

confidentiality

Ensuringproper,

effective use of

company money

Ensuring the means are

as important as the

ends

Page 22: Business Ethics Ppt

Ethical Values

Conserving,public trust inthe integrity, objectivity and

impartialityof government

Acting at all times in such a way as to

uphold the public trust

Resolving official duties vsprivate interest

conflicts in favour of the public interest

Taking all decisions

in the public interest

Page 23: Business Ethics Ppt

People Values

Exercising authority

and responsibility with

respect for human dignity

Demonstrating respect, fairness

courtesy in alldealings with citizens

and fellow public servants

Leading by participation, openness and

communication, with respect for

diversity

Treating people with fairness and

civility at all times

Fundamental inrecruitmentevaluationpromotion

Basing appointment decisions on merit

Page 24: Business Ethics Ppt

Drivers of Values & Ethics Performance

Achieving High Levels of Values and Ethics

Performance

Preventing and

Managing Values and

Ethics Problems

RESULTS

Leadership

People

Organizational Culture

Risk Assessment,Controls

Standards

Drivers

Page 25: Business Ethics Ppt

Achieving high levels of positive values and ethics performance for an organization involves three foundation pillars:

Leadership

Organizational Culture

People Management

Achieving high levels of ethics and values performance can lead to higher levels of public trust and confidence.

The Three Pillars of High Performance

Page 26: Business Ethics Ppt

Integrity

Doing the right thing when no one is looking

Fairness(Safety & Trust)

Individual & CollectiveAccountability

To ourselves & our professionTo each otherTo managementTo the Laboratory

Respect and Appreciation for the individual

One’s expertiseOne’s opinionA person’s uniqueness Reciprocal generosity -We encourage responsible & informed risk taking (judgment)

Shared Values

Page 27: Business Ethics Ppt

Why Ethical Behavior Adds Value Better information

Trust from investors Better allocation of resources Customers will be more loyal

Fair competition Lowers cost of business in economy Leads to better decision-making (do what’s

best for firm, not one individual) Improves competitive nature of a country’s

economy

Page 28: Business Ethics Ppt

Why Ethical Behavior Adds Value Just compensation

Attracts and retains better employees

Rights of others Draws upon talents of wider set of individuals Develops long-term respect from the

community Maintains the environment for long-term

value to all

It’s the right thing to do!

Page 29: Business Ethics Ppt

Can Ethical Values be Taught?Level 1: The Foundation

Personal Ethical UnderstandingRight/wrong, Fairness, Honesty, Personal Integrity, Respect for Others

Personal Ethical UnderstandingRight/wrong, Fairness, Honesty, Personal Integrity, Respect for Others

Page 30: Business Ethics Ppt

Personal Ethical Understanding

Concepts of right and wrong, fair play, respect for rights of others, honesty, personal integrity

Best learned in the home at an early age—and follow-up is needed throughout life

Institutions (churches, schools, etc.) can help

Page 31: Business Ethics Ppt

Application of Ethics to Business SituationsFraudulent Practices, Misleading Advertising, Unfairness

Application of Ethics to Business SituationsFraudulent Practices, Misleading Advertising, Unfairness

Level 2: Application to Business

Personal Ethical UnderstandingRight/wrong, Fairness, Honesty, Personal Integrity, Respect for Others

Personal Ethical UnderstandingRight/wrong, Fairness, Honesty, Personal Integrity, Respect for Others

Page 32: Business Ethics Ppt

Application of Ethics to Business Situations

Fraudulent practices, misleading advertising, unfairness

Can be taught in management education and organizations—provided students have a personal understanding of ethics

Can be reinforced by policies, codes of ethics, training

Page 33: Business Ethics Ppt

Application of Ethics to Business Situations

“Companies also have to further strengthen ethics management and social responsibility activities to improve their public image’’

Page 34: Business Ethics Ppt

Ethical CourageWillingness to Pay the Price for Ethics

Ethical CourageWillingness to Pay the Price for Ethics

Application of Ethics to Business SituationsFraudulent Practices, Misleading Advertising, Unfairness

Application of Ethics to Business SituationsFraudulent Practices, Misleading Advertising, Unfairness

Level 3: Ethical Courage

Personal Ethical UnderstandingRight/wrong, Fairness, Honesty, Personal Integrity, Respect for Others

Personal Ethical UnderstandingRight/wrong, Fairness, Honesty, Personal Integrity, Respect for Others

Page 35: Business Ethics Ppt

Ethical Courage

It is not sufficient to simply understand ethical principles

One must have the courage to pay a price for being ethical

Examples can be helpful—case studies showing people willing to stand up for ethical principles

Page 36: Business Ethics Ppt

Ethical LeadershipHelping Others to be Ethical

Ethical LeadershipHelping Others to be Ethical

Ethical CourageWillingness to Pay the Price for Ethics

Ethical CourageWillingness to Pay the Price for Ethics

Application of Ethics to Business SituationsFraudulent Practices, Misleading Advertising, Unfairness

Application of Ethics to Business SituationsFraudulent Practices, Misleading Advertising, Unfairness

Level 4: Ethical Leadership

Personal Ethical UnderstandingRight/wrong, Fairness, Honesty, Personal Integrity, Respect for Others

Personal Ethical UnderstandingRight/wrong, Fairness, Honesty, Personal Integrity, Respect for Others

Page 37: Business Ethics Ppt

Ethical Leadership

The ability and willingness to encourage others to behave ethically

Includes Developing an organizational climate that

fosters ethical behavior Structuring policies that encourages ethics Behaving ethically while facing the

pressures of leadership

Page 38: Business Ethics Ppt

The Importance of Ethical Leadership

Swing GroupCould Go Either Way

Swing GroupCould Go Either Way

Dishonest EmployeesPolicies Won’t Help Much

Dishonest EmployeesPolicies Won’t Help Much

Honest EmployeesWill be Honest Always

Honest EmployeesWill be Honest Always

Ethical Leadership will significantly impact an organization since the vast majority, in this view, can be influenced to behave ethically.

Page 39: Business Ethics Ppt

Importance of Ethical Leadership

Swing GroupCould Go Either Way

Swing GroupCould Go Either Way

Dishonest EmployeesPolicies Won’t Help Much

Dishonest EmployeesPolicies Won’t Help Much

Honest EmployeesWill be Honest Always

Honest EmployeesWill be Honest Always

Strong Ethical Leadership—induces the group to behave as if they were the honest employees.

Page 40: Business Ethics Ppt

Importance of Ethical Leadership

Swing GroupCould Go Either Way

Swing GroupCould Go Either Way

Dishonest EmployeesPolicies Won’t Help Much

Dishonest EmployeesPolicies Won’t Help Much

Honest EmployeesWill be Honest Always

Honest EmployeesWill be Honest Always

Weak Ethical Leadership—permits group to behave as if they were the dishonest employees.

Page 41: Business Ethics Ppt

The work ethos is the prevalent

outlook towards work or the value system with regard to the working environment and community’s value system, whether it is of an individual or a work group.

Page 42: Business Ethics Ppt

NEED AND IMPORTANCE OF BUSINESS ETHICS

I. Protection of Consumer rights:

Consumer is the centre of all business activities. In fact, business is essentially meant for satisfaction of consumer wants. Unfortunately, consumers are the most neglected and

exploited group. The application of business ethics will help to confer and implement

consumer rights. Business ethics can be used to check malpractices like adulteration, unfair

trade practices and to make the working of business consumer oriented.

II. Social Responsibility:

Business ethics is a means of making business socially responsible for its actions.

Exploitation of consumers, employees, discriminate use of natural resources, etc; is quite

common in all types of business. Compliance to ethical standards will ensure (a) protection of

consumer rights, (b) public accountability, (c) protection of worker’s interests, and (d) proper

utilization of natural resources.

III. Concept of Socialism:

The concept of socialism in business states that gains of a business must be shared

by all and just by the owner of business. Profit is a sing of business skill and talent. Profit is

also a result of group efforts. Employees, shareholders, consumers, Suppliers and others

contribute to the success of the business. Therefore, success should be shared by all concerned.

Page 43: Business Ethics Ppt

Contd……

IV..Consumer Movement:

The growth in consumer movement is also another important factor that has necessitated the need for business ethics. The spread of education and awareness among consumers about their rights has made the business community to conduct business on ethical principles.

V. Better Relations With the Society:

Business ethics is needed to develop good relations between business and society. The relationship of business with society has various dimensions such as its relations with shareholder, employees, consumers, distributors, competitors and government. Business ethics will help to promote and protect the interest to various groups.

Page 44: Business Ethics Ppt

CONCEPT OF BUSINESS ETHICS

1. Business Ethics towards Employees:• Payment of right wages and salaries.• Provision of proper facilities.• Proper personnel policies relating to promotion, performance appraisal,

transfers etc;

2. Business Ethics Towards Customers:• Right pricing.• Ethical promotion including advertising.• Provision of proper information about products etc.

3. Business Ethics Towards Competitors:• Fair competitive practices.• Restraining from instigating employees, suppliers or dealers or competitors

etc.

Page 45: Business Ethics Ppt

Contd…….

4. Business Ethics Towards Government:• Timely filing returns and other records.• Payment of proper dues including taxes.• Supporting Government in social development activities, etc;

5. .Business Ethics Towards Suppliers:• Proper supply contact.• Timely payment of dues.

6. Business Ethics Towards Dealers:• Timely delivery of products.• Proper dealer’ contact.

Page 46: Business Ethics Ppt

Contd…..

7. Business Ethics Towards Shareholders or Stakeholders:

• Provision of proper information.• Timely payment of dividend.• Restraining form insider trading on the stock

markets, etc;

8. Business Ethics Towards Financial Institutions:• Proper information about firm’s financial position.• Timely repayment of advances and interest, etc.

Page 47: Business Ethics Ppt

Ethics @ Workplace

Ethics in the workplace in its simplest terms means doing the right things that guide your behavior at work.

Page 48: Business Ethics Ppt

On-the-Job Ethical Dilemmas

Situation in which a business decision may be influenced for personal gain.

Telling the truth and adhering to deeply felt ethical principles in business decisions.

Businesspeople expect employees to be loyal and truthful, but ethical conflicts may arise.

Employee’s disclosure of illegal, immoral, or unethical practices in the organization.

Page 49: Business Ethics Ppt

Golden Rules of Ethics @ Workplace

Avoid Creating Disturbance Trust & Respect for Others Work Don’t Interfere In Others Work Respect the Privacy of your Co-workers Avoid Gender Biasness No/Least Personal Work During Work Hours

Page 50: Business Ethics Ppt

Five P’s of Ethical Decision-making

Perspective

PridePurpose

Pers

iste

nce

Patience

Page 51: Business Ethics Ppt

Five P’s of Ethical Power

PURPOSE:

I see myself as being an ethically sound person.

I let my conscience be my guide.

N o matter what happens, I am always able toface the mirror, look straight in the eye, andfeel good about myself.

Page 52: Business Ethics Ppt

Five P’s of Ethical Power

PRIDE:

I feel good about myself.

I don’t need the acceptance of other peopleto feel important.

A balanced self-esteem keeps my egoand my desire to be accepted frominfluencing my decisions.

Page 53: Business Ethics Ppt

Five P’s of Ethical Power

PATIENCE:

I believe that things will eventually work out well.

I don’t need everything to happen right now.

I am at peace with what comes my way!

Page 54: Business Ethics Ppt

Five P’s of Ethical Power

PERSISTENCE:

I stick to my purpose, especially when itseems inconvenient to do so.

My behaviour is consistent with my intentions.

As Winston Churchill said,“Never! Never! Never! Never! Give up!”

Page 55: Business Ethics Ppt

Five P’s of Ethical Power

PERSPECTIVE:

I take time to enter each day quietlyin a mood of self-reflection.

This helps me to get myself focused andallows me to listen to my inner self andto see things more clearly.

Page 56: Business Ethics Ppt

Decision-MakingDecision-Making

Ethical decision-making involves the ability to Ethical decision-making involves the ability to separate right from wrong along with the separate right from wrong along with the commitment to do what is rightcommitment to do what is right

Decision-Maker’s Personal Moral Philosophy (Moral Decision-Maker’s Personal Moral Philosophy (Moral philosophy involves systematizing, defending, and philosophy involves systematizing, defending, and recommending concepts of right and wrong recommending concepts of right and wrong behavior)behavior)

Page 57: Business Ethics Ppt

Ethical Decision Making Process

1 Recognizing a Problem & Define the problem

2 Identify the underlying principles, legislation and policies

3 Identify and consider the options4 Choosing a Solution 5 Implementation6 Evaluating the Solution

Page 58: Business Ethics Ppt

Define the problemGather as much information as you can that will

illuminate the situation. In doing so, it is important to be as specific and objective as possible. Writing ideas on paper may help you gain clarity. Outline the facts, separating out assumptions, hypotheses, or suspicions. There are several questions you can ask yourself:

What is difficult about the situation? What other factors are involved (e.g. whole of

government policy)? Who else is involved and what are their points

of view on the matter? Is there a need to work cooperatively?

What effect does your behaviour have on them

Page 59: Business Ethics Ppt

Identify the underlying principles

After you have clarified the problem, refer to the Code of Ethics to see if the issue is addressed there. If there is an applicable standard or several standards and they are specific and clear, following the course of action indicated should lead to a resolution of the problem. To be able to apply the ethical standards, it is essential that you have read them carefully and that you understand their implications.

If the problem is more complex and a resolution does not seem apparent, then you probably have a true ethical dilemma and need to proceed with further steps in the ethical decision making process. The following area can help to understand the Underlying Principles

Do your personal interests conflict, or reasonably appear to conflict, with the public interest?

What are your duties as a public sector employee? Does the Code of Conduct require you to behave in a certain way? Is there a relevant guideline, determination or policy? Are there any legal implications? Where necessary, seek legal

advice.

Page 60: Business Ethics Ppt

Identify and consider the optionsList all alternative options. For each option

apply risk management principles to identify the impact on different stakeholders, the legal implications and the relevant principles of the Code of Conduct.

For decisions that could have a large impact, or if you are still unsure as to the preferred action, get a second opinion from an independent, trusted person.

Where necessary, seek advice from manager, organisation’s human resources unit or ethics advisor, or other agencies.

Page 61: Business Ethics Ppt

Choosing a Solution Considering the information you have gathered and the

priorities you have set, evaluate each option and assess the potential consequences for all the parties involved. Ponder the implications of each course of action for the client, for others who will be effected, and for yourself as a counsellor. Eliminate the options that clearly do not give the desired results or cause even more problematic consequences. Review the remaining options to determine which option or combination of options best fits the situation and addresses the priorities you have identified.

What would your family or chief executive say if your actions were reported on the front page of a newspaper?

How will this decision be viewed by future generations? Would you be happy if this action was performed on you?

Page 62: Business Ethics Ppt

Implementation

Create a detailed, step-by-step plan for implementing the solutions you choose

Who will do what, when, how?

This should include a means of evaluating the solutions effectiveness by following ways

Your choice of action must be within the legislation, policies and guidelines both for your organisation and the whole of government.

Your behaviour must reflect the Code of Conduct. You must be able to justify your course of action.

Page 63: Business Ethics Ppt

Evaluating the Solution

This is done after the solution has been implemented and involves comparing the results of what happened to what you expected to happen.

In addition, you would want to consider what you might do differently if the situation were to occur again.

Page 64: Business Ethics Ppt

Benefits of Ethics

The list of potential benefits:

Fostering a more satisfying and productive working environment

Building and sustaining Organisation reputation Maintaining the trust of staff to ensure continued self-

regulation Providing ethical guidance for employees prior to

making difficult decisions Increased employee loyalty, higher commitment and

morale as well as lower staff turnover Reputation benefits (customers and suppliers) More open and innovative culture Generation of good-will in the communities in which the

business operates

Page 65: Business Ethics Ppt

HOW ORGANIZATIONS SHAPE ETHICAL CONDUCT

Page 66: Business Ethics Ppt

Ethical Awareness

Code of Conduct Formal statement that defines how the organization expects and requires employees to resolve ethical questions.

Ethical Reasoning

Codes of conduct cannot detail a solution for every ethical situation, so corporations provide training in ethical reasoning.

Ethical Action

Helping employees recognize and reason through ethical problems and turning them into ethical actions.

Ethical Leadership

Executives must demonstrate ethical behavior in their actions.

Page 67: Business Ethics Ppt

Personal Traits

Three personal traits act as moderators of an individuals personal values in decision making activities. They are

Ego strength Field dependence and Locus of control

Page 68: Business Ethics Ppt

Ego Strength

Ego strength is actually another term for self-confidences. Ego strength is associated with personal beliefs.

A person with high ego strength would be expected to rely more on his own personal values and beliefs of what is right and what is wrong and be less influenced by others.

Page 69: Business Ethics Ppt

Field dependence

The tendency to rely on oneself or the field as the primary referent for behavior is field dependence. People who have a tendency to rely on self as a primary referent for their behavior are field-independent people.

They are relatively cold and distant in relations with others, and more able to separate themselves from others and the environment. However, they have greater accuracy in personal perception, have a more articulated body concept, and have higher restructuring ability.

Page 70: Business Ethics Ppt

Locus of ControlThe degree to which people believe they are masters of their own fate.

Internals (Internal locus of control) Individuals who believe that they control what happens to them. Externals (External locus of control)Individuals who believe that what happens to them is controlled by outside forces such as luck or chance.

Page 71: Business Ethics Ppt

MoralityMorality can be explained in all these ways:

Morality can be defined as the standards that an individual or a group has about what is right and wrong, or good and evil.

Moral quality or character; rightness or wrongness, as of an action; the character of being in accord with the principles or standards of right conduct.

Morality is an informal public system applying to all rational persons, governing behavior that affects others, and has the lessening of evil or harm as its goal.

Page 72: Business Ethics Ppt

Stages of Moral DevelopmentThere are six stages of moral development and an

individual develops sequentially through the stages.

Stage one: actions that avoid punishment. Stage two: actions that serve one‘s needs Stage three: actions that gain approval from

others; Stage four: actions that abide laws and authority; Stage Five: actions taken to abide by social

contracts and Stage six actions supported by universal

principles. All six stages provide a rational moral Action

Page 73: Business Ethics Ppt

Moral JudgmentsThe Moral judgments should be

(i) logical, ( Moral judgments should be able to support our Moral judgments with reason and evidence. ) (ii) based on facts. ( Moral judgments should be based on facts. Adequate moral judgments cannot be made in a vacuum. We must collect as much relevant information as possible for making them.)

(iii) based on acceptable moral principles.

Page 74: Business Ethics Ppt

Global Ethical Issues

Wages and hours

Child labour

Discrimination

Legal and ethical business practices

Product safety and quality

Environment

Page 75: Business Ethics Ppt

What causes unethical behaviour Stress

Confusion

Pressure to perform at expected levels

Competition within the industry

No knowledge

Page 76: Business Ethics Ppt

Some of the Unethical Business practices are : Cutting corners on quality Covering up incidents Abusing or lying Lying customers Stealing from the company Taking credits from co-workers

ideas/work Taking or giving bribe

Page 77: Business Ethics Ppt

Unethical business practices (contd)

Government corruption Financial scandals Product safety Discrimination

Page 78: Business Ethics Ppt

“What’s in it for me to be ethical?”

-A more accurate perception of the world around you, follow your conscience.

-Have the courage to do what is right and do try new things even when it is hard or costly.

-Don’t loose heart if you fail or don’t get what you want

-A stronger personality, and greater likelihood of being happy in life

Page 79: Business Ethics Ppt

CONSIDER CONSEQUENCES

IS IT ETHICAL ?

IS IT LEGAL ?

IS IT OK ?

IS IT RIGHT ?

Is it fair ?

Does it hurt anyone ?

Have I been honest with those affected?

Can my conscience live with this decision ?

Page 80: Business Ethics Ppt

5 Part Structure of Business Ethics

Specifications of moral judgment Moral judgments and moral

standards Justification of moral judgement Logical reasoning and moral

judgement Moral judgement and moral

responsibility

Page 81: Business Ethics Ppt

ETHICAL RELATIVISM

The theory that suggest what is

right is determined by what a culture or society says what is right.

Page 82: Business Ethics Ppt

CONCLUSION

In the last few years we have seen a drastic change in society as well as in all facets of the business world. The consumer, today, is more aware of his rights and his requirements. He demands the best quality at the regular prices. Companies today need to incorporate a strong or responsible culture to face the instance reaction of the consumer.

Today’s market calls for stringent business ethics to be imposed in the corporate world.

Page 83: Business Ethics Ppt

Which Way Will Your Organization Swing?

Page 84: Business Ethics Ppt

“Good Ethics Means Good Business”


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