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Learning Objectives

An Overview of Business Ethics

Ethics & Conduct

Nature of Ethics

Objectives of ethics

Business Ethics

Managerial Dilemmas

Business Ethics & Profits

Relationship between business & ethics

Nature of ethics in business

Characteristics of Business Ethics Ethical Decision Making

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Ethics..

Latin term is ethicus

Greek term is ethikos

Means character or manner

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Ethics..

Is said to be - the science of morals, moral

principals or recognized rules of conduct.

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Conduct..

Is a series of actions that, when taken together,

can be termed as good or bad, right or wrong,

moral or immoral.

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Ethics.

Can also be termed as the science of character

of a person expressed as right or wrong

conduct or action.

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Nature of Ethics:

Deals with

human beings

only.

Is a field of

social science.

Is a normativescience.

Deals with

human conductwhich is

voluntary andnot forced by

persons or

circumstances.

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Objectives of ethics

Ethics establish moral standards and norms of

behaviour.

Make judgments on human behaviour based onthese standards and norms.

Prescribes moral behaviour and makes

recommendations on how to or how not to behave.

Expresses opinion or attitude about human conduct

in general.

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Business Ethics

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Business Ethics

Is the

application of

ethics inbusiness.

It proves that

business can be

ethical & stillgenerate profits.

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Managerial Dilemmas

At times profit maximization & discharging of social

responsibilities at the maximum limit cannot be carried

out simultaneously.

One is bound to affect the other adversely.

A conflict arises between profit concern & social concern.

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A business is considered ethical if it tries to

reach a trade off between pursuing its

economic objectives & its social obligations

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Business ethics & profits

Then.. Profit is a dirty word..

Jawarharlal Nehru ( 1950)

Now.. It is unethical for a company to make losses.

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Business ethics & profits

Business ethics dictates that the first

responsibility of business is to remain

profitable & generate revenue for its

shareholders and the society.

It is unethical for a company to make lossess.

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Relationship between business & ethics

The only objective of

business is to reap profits &

it has got nothing to do with

ethics

Church had taken upon itself

the moral responsibility ofbusiness, taking moral

decisions like business must

remain closed on Sundays..

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Relationship between Business & Ethics

The Unitarian View1

The Separatist View2

The Integration View3

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The Unitarian view

Was

emphasized

by the

church

Business is a

subset of

the moral

structure of

the society.

Business &

morality

cannot be

separated .

Business

must play

by the rules

of morality

set by thesociety.

Profit was a

dirty word.

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The Unitarian view

MORAL STRUCTURE

MORAL ETHICS

BUSINESS

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The Separatist view Was put forth by Adam

Smith and Milton Friedman

Asserted that the only goal

of business should be profitmaximization.

Ethics & morality play no

part in business conduct.

Business should go on with thebusiness of producing goods &

services efficiently & leave thesolution of social problems to

governmental agencies &

concerned individuals.

Th S ti t i

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The Separatist view

SOCIETY

BUSINESS ETHICS

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The Integration View

Was proposed by TalcottParsons,

Sought to integrate ethicalbehaviour & business into a

new area called BUSINESS

ETHICS.

The view states that business

is an economic entity & has

the right & the need to make

profits, but it must also

discharge its obligations to

the society where it exists &

operates. Profits is certainlynot a dirty word, but neither

is morality & ethics in

business.

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The Integration view

GOVT. LAW

MORALITY & ETHICS

BUSINESS

MARKET SYSTEM SOCIETY

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Nature of ethics in business

Overt ethical problems

Bribery, theft, Sabotage

etc

Clear for every one to see

Most business take care

not to be so overt

Covert ethical problems

Market wars, acquisitions,

personnel policies etc.

Are more complex

Not so transparent

Defy ethical solutions

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For a decision to be ethical, it should

possess the following:

That which is morally correctRIGHT

That which is just and equalEQUITABLE

That which brings in the highest good for all

concerned.GOOD

That which is appropriate & acceptablePROPER

That which is honest & due.FAIR

That justice is not only done but also seen

to have been done.JUST

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Ethics is unstructured & abstract in

concept.

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If an ethical decision merely results in benefit

to oneself, then it is not an ethical decision.

The very concept of being ethical means, that

it results in some good for the larger societyand not just for oneself.

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Characteristics of business ethics

1. Ethical decisions vary with the individual

perspective of different persons.

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2. Ethical decisions are not limited to

themselves but affect a wide range of other

situations as well.

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3. Most ethical decisions involve a trade off

between costs incurred & benefits received.

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4. The consequences of most ethical decisions

are not clear.

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5. Every person is individually responsible for

the ethical or unethical decision & action that

he or she takes

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6. Ethical decisions are voluntary human

actions.

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Group Discussion

For & against business ethics

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Group Activity

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THANK YOU