Ethics is a general term for what is often Ethics is a general term for what is often described as the "science (study) of described as the "science (study) of morality".morality".

In other words, ethical behaviour is that In other words, ethical behaviour is that which is "good" or "right.“which is "good" or "right.“

Ethics is about behaviour.Ethics is about behaviour.

Behaviour is determined by Behaviour is determined by accountability.accountability.

Drivers of Unethical Business Behavior:Drivers of Unethical Business Behavior:

Faulty internal oversight allows self-Faulty internal oversight allows self-dealing in the pursuit of personal gain, dealing in the pursuit of personal gain, wealth, and self-interest.wealth, and self-interest.

Short-termism pressure to meet or beat Short-termism pressure to meet or beat short-term performance targets.short-term performance targets.

A culture that puts profitability and A culture that puts profitability and business performance ahead of ethical business performance ahead of ethical behaviorbehavior..

PERSONAL VERSUS BUSINESS ETHICS…PERSONAL VERSUS BUSINESS ETHICS…

Firstly, the economic nature of Firstly, the economic nature of business distinguishes it from normal business distinguishes it from normal day to day activity.day to day activity.

Employment also has its own Employment also has its own standards of right and wrongstandards of right and wrong

Secondly, another distinguishing Secondly, another distinguishing factor is that business takes place factor is that business takes place essentially in organisationsessentially in organisations

DECISION MAKING IN BUSINESSDECISION MAKING IN BUSINESS

Decision making takes place on Decision making takes place on three (3) levels:three (3) levels:1) Individual1) Individual

2) Organisational2) Organisational

3) Sector/business practice3) Sector/business practice

IDENTIFICATION OF THE REQUIRED LEVEL FOR A IDENTIFICATION OF THE REQUIRED LEVEL FOR A DECISION IS KEYDECISION IS KEY

•At the individual level, a person At the individual level, a person decides what he or she will do. decides what he or she will do.

•At the organizational level, decisions At the organizational level, decisions involve an individual acting within his involve an individual acting within his or her organizational role and are or her organizational role and are often expressed in procedures and often expressed in procedures and policies, policies,

•Whereas the business system level Whereas the business system level involves systemic problems that involves systemic problems that concern industry practices and the concern industry practices and the economic system.economic system.

Ethics is just one aspect of Ethics is just one aspect of decision making. Generally, decision making. Generally, there are three points of view to there are three points of view to be considered:be considered:

Moral, Economic and Legal Moral, Economic and Legal

Morality is a key issue. Three Morality is a key issue. Three issues must be considered when issues must be considered when faced with decision making.faced with decision making.

What are the moral issues to What are the moral issues to consider when making consider when making decisions/telling the truth:decisions/telling the truth:

Potential harm to the Potential harm to the customercustomer

Misrepresentation/ManipulationMisrepresentation/ManipulationFairness- Golden RuleFairness- Golden Rule

How should we be guided when taking How should we be guided when taking the moral point of view?the moral point of view?

Seek out and act on Seek out and act on reasons/rationale:reasons/rationale:One should try to justify rules set by One should try to justify rules set by good reasons. good reasons.

Impartiality:Impartiality:One should think about the interests One should think about the interests of others as worthy of consideration of others as worthy of consideration and ascribe all interests equal weight and ascribe all interests equal weight in deciding what to do.in deciding what to do.

People discount the moral aspect of People discount the moral aspect of business, arguing that the key business, arguing that the key consideration in business is profit consideration in business is profit generation and efficiency. The legal generation and efficiency. The legal perspective must also be considered, perspective must also be considered, but this approach is seen as a but this approach is seen as a constraint on the economic position. constraint on the economic position.

THERE SHOULD BE AN INTEGRATED THERE SHOULD BE AN INTEGRATED APPROACH TO DECISION MAKINGAPPROACH TO DECISION MAKING

Ethics is in part an attempt to think Ethics is in part an attempt to think clearly and deeply about ethical issues clearly and deeply about ethical issues in business and to arrive at a in business and to arrive at a conclusion supported by the strongest conclusion supported by the strongest possible arguments ie a moral point of possible arguments ie a moral point of view. view.

However, one should consider However, one should consider economic factors as well as the law.economic factors as well as the law.

THERE SHOULD BE AN INTEGRATED THERE SHOULD BE AN INTEGRATED APPROACH TO DECISION MAKINGAPPROACH TO DECISION MAKING

Ethics and EconomicsEthics and Economics

Economics teaches that businesses Economics teaches that businesses should operate with only should operate with only profitprofit in mind. in mind.

However, there is a relationship between However, there is a relationship between economics and ethicseconomics and ethics

THERE SHOULD BE AN INTEGRATED THERE SHOULD BE AN INTEGRATED APPROACH TO DECISION MAKINGAPPROACH TO DECISION MAKING

Ethics and LawEthics and Law

Business decisions must also Business decisions must also include the legal point of view include the legal point of view because the law is a significant because the law is a significant influence on business activity. influence on business activity. Some argue that law is the only Some argue that law is the only moral standard necessary to follow. moral standard necessary to follow. (If it’s legal, then it’s morally (If it’s legal, then it’s morally okay.)okay.)

Ethics and LawEthics and Law

The previous position is supported The previous position is supported by two schools of thought: (1) that by two schools of thought: (1) that ethics is a matter of personal ethics is a matter of personal conduct, whereas law applies to conduct, whereas law applies to public matters like business, and public matters like business, and (2) that all unethical conduct in (2) that all unethical conduct in business has already been business has already been addressed by the law. addressed by the law.

However, the Law is not enough:However, the Law is not enough:

1) The law is not equipped to 1) The law is not equipped to regulate certain aspects of regulate certain aspects of businessbusiness

2) Slow to develop in new areas2) Slow to develop in new areas

3) The law embodies certain 3) The law embodies certain moral concepts that are not moral concepts that are not properly defined properly defined

The Law is not enough…The Law is not enough…

4) In many cases, the law is 4) In many cases, the law is unsettledunsettled

5) With the inefficiency of the 5) With the inefficiency of the law, additional legislation is law, additional legislation is required and there is increased required and there is increased litigation litigation

AREA Code of EthicsAREA Code of Ethics

A code of corporate conduct is an A code of corporate conduct is an important management tool. It is important management tool. It is the primary documentation for the primary documentation for moving business ethics from the moving business ethics from the area of ideas to that of action at the area of ideas to that of action at the various levels of an organized various levels of an organized enterprise.enterprise.

AREA Code of EthicsAREA Code of Ethics

However, the conduct patterns of However, the conduct patterns of business ethics are not limited to business ethics are not limited to those that arethose that areassembled in the statements of a assembled in the statements of a formal code. As stated previously, formal code. As stated previously, there are principles, practices etc, there are principles, practices etc, all of which provide guidelines for all of which provide guidelines for ethical conduct in business ethical conduct in business situations.situations.

Roles and the AgentRoles and the Agent

A role is a structured set of A role is a structured set of relationships with accompanying relationships with accompanying rights and obligationsrights and obligations

Obligations of a particular role are Obligations of a particular role are sometimes added to those of sometimes added to those of ordinary morality ie someone who ordinary morality ie someone who occupies a role assumes obligations occupies a role assumes obligations above those of everyday life.above those of everyday life.

Roles and ManagersRoles and Managers

Role Morality is specific to a particular role Role Morality is specific to a particular role for professionals. In this case, the Real for professionals. In this case, the Real Estate AgentEstate Agenthas responsibilities to different groups and has responsibilities to different groups and should consider various interests.should consider various interests.

Also, roles are created to serve society Also, roles are created to serve society better. A proper system ensures better. A proper system ensures advancement of society and benefits all. advancement of society and benefits all.

Ethical Theory and Business EthicsEthical Theory and Business Ethics

Ethics as a philosophical endeavour is the Ethics as a philosophical endeavour is the study of moralitystudy of morality

It can be either Normative or DescriptiveIt can be either Normative or Descriptive

•Normative refers to the possibility of Normative refers to the possibility of justificationjustification•Descriptive involves an empirical research Descriptive involves an empirical research the actual rules or standards of a particular the actual rules or standards of a particular group or simply an appreciation of the group or simply an appreciation of the ethical reasoning processethical reasoning process

Theories include:Theories include:

Teleological theoriesTeleological theories

Deontological theoriesDeontological theories

Concept of VirtueConcept of Virtue

In Conclusion….In Conclusion….

This should be our goal:This should be our goal:

Ethical ManagementEthical Management Acting ethically as a Acting ethically as a

managermanager

Management of EthicsManagement of EthicsActing effectively in Acting effectively in

situations that situations that have an ethical have an ethical aspectaspect

THANK YOU FOR THANK YOU FOR YOUR ATTENTIONYOUR ATTENTION