Business Ethics

What we will learn today

• Define and discuss what business ethics means

• Draw a mind map, diagram or list of the ethical issues faced in business

• Answer questions on the ethical decisions of three companies

What is meant by ethics?

An ethic is a moral principle or set of moral values held by an individual or a group.

Ethical behaviour is behaviour which is considered to be right and moral.

Business ethics are the values and principles which operate in the world of business. They form the moral

framework of the organisation.

Business ethics help firms decide what actions are right or wrong in certain circumstances.

E.g. Should a firm relocate to a country paying lower level of wages?

Should a firm release a life-saving drug after limited testing?

Should advertising aimed at children be restrained?

Comparing Working Conditions

Bangladesh The UK

Wage per month: £12 £813

Wage per week: £3 £203

Wage per hour: 33p £5.35

Hours per week: 90hrs 38hrs

What ethical issues are faced by business?

• Should firms use child labour?

• Is animal testing needed in products and ingredients?

• What wages should firms pay to poor countries?

• To what extent should firms seek to be environmentally friendly?

• Should firms get involved in certain activities?

e.g making weapons

Who cares about business ethics?

• Customers• Managers/Owners/Shareholders• Pressure Groups/Activists• Workforce• The Community• Trading Partners

Why be ethical?

•Create good image and good press•To act within the law•Because the owners want to be •It is one of their unique selling points•To attract customers/employees/investors•To be socially responsible

Two sides to every story

• Companies often find it difficult to please all of its stakeholders, as they have different interests.

• Being ethical depends on an individual view of what is right and wrong. What might be considered

good behaviour to one individual, may seem bad to another.

• Ultimately companies aim to make a profit and sometimes this can conflict with acting in a responsible way.

• Larger, global companies can often find it difficult to regulate their activities in other countries.

The worst offenders

The Fraser 2006 rating on ethical reputation (1st being regarded as least ethical), based on interviews with 1,300 adults:

1)McDonald's 2)Nike 3)Shell 4)Adidas 5)Barclays 6)Coca-Cola 7)BP 8)Camelot (National Lottery) 9)American Express

True or False?

Is the following statement true or false?

“Ethics has to do with whether my feelings are right or wrong.”

True – but we must realise that sometimes our feelings can

cloud are judgement and make it difficult to see both sides.

True or False?

Is the following statement true or false?

“Ethics has to do with my religious beliefs.”

True – it can be linked to religious beliefs, but remember it is much

more than this.

True or False?

Is the following statement true or false?

“Being ethical is doing what the law always requires.”

True – people and business have to follow law, but remember that

some laws may be unethical.

True or False?

Is the following statement true or false?

“Ethics consists of the standards of behaviour our society expects.”

True – but remember that society is sometimes

unpredictable and cruel.