Book Reference: Ghillyer, A.W. (2010). Business ethics: A real world approach.

McGraw Hill International Edition

Part I: Ethics, Business Ethics and Organizational like to be treated. This is simple and very clear rule shared by different
Culture religions in the world:

Learning Objectives: Buddhism: “Hurt not others in ways that you yourself would find
At the end of this lecture, the students should be able to: hurtful.” – Udana-Varga 5:18
 Define ethics and its underlying nature; Christianity: “Therefore all things whatsoever ye would that men
 Examine the concept of business ethics; and, should do to you, do ye even so to them.” – Matthew 7:12
 Analyze the differentiation of business ethics and organizational
Hinduism: “This is the sum of duty: do naught unto others which
culture.
would cause you pain if done to you.” – Mahabharata 5:15:17
What is ethics?
Ethics is the study of how individuals try to live according to a standard of However, individuals must always be reminded with the danger of the
‘right’ and ‘wrong’ behavior – in both how they think and behave towards Golden Rule. Not everyone thinks like you, acts like you, or believes in the
others and how they would like them to think and behave towards them. same principles that you do.

However, for others, ethics is a conscious choice to follow a set of moral Ethical Theories
standards that provide guidance on how people should conduct their selves It is divided into three categories: virtue ethics, ethics for the greater good,
in their daily lives. While for others, ethics is not clear as they look to the and universal ethics.
behavior of others to determine an acceptable standard of right and wrong
or good and bad behavior. a. Virtue Ethics
According to Aristotle’s belief, an individual character and
Moral standards are principles based on religious, cultural or philosophical integrity is established with a concept of living the life according
beliefs by which judgment are made about good or bad behavior. These to a commitment to the achievement of a clear ideal – what sort
standards can come from different sources such as friends, family, ethnic of person would I like to become and how do I go about
background, religion, school, personal role models, and the media itself. becoming that person?

When people try to formalize these principles into a code of behavior, it is b. Ethics for the Greater Good
now adapting a value system. However, the greatest test of any value Originally proposed by a David Hume and also referred as
system come when people are presented with a situation that places those utilitarianism which is more focused on ethical choices that offer
values in direct conflict with an action. People now are having a value the greatest good for the greatest number of people. It focused
conflict. on the outcome of the actions rather that the virtue of the
actions themselves.
The Golden Rule c. Universal Ethics
The goal of living an ethical life is expressed by the Golden Rule: Do unto Originally attributed to Immanuel Kant that argues that there
others as you would have them do unto you or treat others as you would are certain and universal principles that should apply to all
Book Reference: Ghillyer, A.W. (2010). Business ethics: A real world approach. McGraw Hill International Edition
Ferrell, O.C., et a. (2014). Social Responsibility & Business: Philippine Edition – Fourth Edition. CENGAGE Learning

ethical judgments. Actions that are taken out of duty and Code of ethics is defined as a central guide to support day-to-day making
obligation to a purely moral ideal rather than based on the needs at work. It clarified the cornerstones of an organization – its vision,
of the situation. mission, values and principles – helping stakeholders understand how
these cornerstones translate into everyday decisions, behaviors, and
As people applied these theories, ethical principles are most likely to be actions.
tested when we face a situation in which there is no obvious right and
wrong decision, rather a right or right answer. These situations are referred Other people believes that code of ethics are designed to limit one’s action,
as ethical dilemmas. but it is actually structured to liberate and empower people to make more
effective decisions with greater confidence.
What is business ethics?
Business ethics involves the application of standards of moral behavior to What is organizational culture?
business situations. There are two perspectives that we can see in business An organizational culture can be defined as the values, beliefs, and norms
ethics: shared by all the employees of an organization. It represents the sum of
1. A descriptive summation of the customs, attitudes, and rules that all the policies and procedures – both written and informal. Each
are observed within a business. department in an organization has its own culture.
2. A normative or prescriptive evaluation of the degree to which the
observed customs, attitudes, and rules can be said to be ethical. With this, stakeholders are in a situation where one relationship or
obligation places an individual in direct conflict with an existing relationship
Question: Is business ethics should be part of the general ethics? or obligation or referred as conflict of interest.

Ethical behavior is being argued that it should be the same both inside and To address conflicts of interest, companies can prompted by making
outside a business situation. Nevertheless, business ethics should NOT be internal strategic policy decisions or formulating campaigns targeted to
applied as a separate set of moral standards or ethical concepts from customers and special interest group.
general ethics. By recognizing this challenge, we acknowledge the identity
of the stakeholders that could be impacted by any potentially unethical
behavior.

However, some stakeholders would believe that the business world lacks
the sense of ethical behavior that has already succeeded in bringing this
issue to the forefront of public awareness. It became a wake-up call for
many organization to take more proactive role in establishing standards of
ethical conduct in their daily operation. One of the key indicators in this
process is formulating a formal code of ethics.