Importance of

Business Ethics
“
"I don't think it's money that
corrupts people, I really don't. I
think it's the idea that when you
make monety without having a
tangible creation attached to that
money, it has not value.“
-Jordan Belfort
The Wolf of Wall Street

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1.
Busines Ethics
Introduction to
Business Ethics
Ethics Business Ethics Definition of Business
is a set of standards or code means the application of Ethics
or value system, worked out ethics in business. is a specialized study of
from human reason & moral right and wrong. It
experience by which free concentrates on moral
human actions are standards as they apply
determined as ultimately particularly to business
right or wrong, good or evil. policies, institutions and
behavior.
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The Relationship
Between Law and
Ethics
The law is an expression of the ethical beliefs of
our society.
Law and ethics are not the same thing. The
question, “Is an act legal?” is different from the
question, “Is an act ethical?” The law cannot
codify all ethical requirements. Therefore, an
action might be unethical, yet not necessarily
illegal. For example, it might be unethical to lie
to your family, but it is not necessary illegal.

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From where does
society derive
sense of right or
wrong ?
Law Religion

Tradition Education
Why study
business ethics
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Why study business
ethics
● Business decisions under great scrutiny
-Global financial crisis created
______diminished stakeholder trust
● Deals with questions about whether
practices are acceptable
● No universally-accepted approach for
resolving issues

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Kinds of Ethical Issues
● Systemic – Social Systems or institutions
within which business operate.
● Corporate – An Individual Company
taken as a whole
● Individual – A Particular individual or
individuals within a company and their
behaviours and decisions.

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Most unethical behavior,
surveyed in the ff areas

Government Media Sales Manufacturing

Law Medicine Banking Finance 11

11
Biggest
Business Place your screenshot here

Scandal of
2017

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 Characteristic of Business
Ethics
1. Differ with persons: ethical questions do not have a unique solution
but a multitude of alternatives
2. Ethical decisions are not limited to them, but affect a wide range of
other situations as well.
3. Ethical decisions involve a trade-off between cost incurred and
benefits received.
4. Consequences are not clear
5. Every person is individually responsible for the ethical or unethical
decision and action that he or she takes
6. Ethical actions are voluntary human actions
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Benefits of Business
Ethics
1. Business ethics helps in improving society by
establishing government agencies, unions, laws and
regulations in the society.
2. Business ethics makes sure that the right activities are
performed in an organization
3. Strengthens organizational culture, ethical values
improve relationships between an organization and its
customers. They strengthen the organization by ensuring
consistency in the standard and quality of the product.

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 Benefits of Business
Ethics
4. Business ethics helps employees behave according to the ethical
values that are preferred by the top management of an organization.
5. Ethics supports employee growth. When an employee pays attention
to ethics, it induces confidence in the employee to deal with reality
and face both good and bad circumstances.
6. Business ethics helps to avoid criminal acts of ‘omission’ and it also
helps in lowering the fines. Ethics helps in ascertaining the violation
of ethical issues and helps in rectifying the violation that is
committed by the organization.

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16
A Timeline of Ethical and Socially
Responsible Concerns
1960s 1970s 1980s 1990s 2000s

Sweatshops and
Bribes and illegal
Environmental Employee unsafe working
contracting Cybercrime
issues militancy conditions in 3rd
practices
world

Rising corporate
Human rights Financial
Civil rights issues Influence peddling liability for
issues misconduct
personal damages

Increased Covering up Financial Global issues,

Deceptive
employee-emploter rather than mismanagement Chinese product
advertising
tension correcting issues and fraud safety

Changing work Disadvantaged Organizational

Financial fraud Sustainability
ethic consumer ethical misconduct

Transparency Intellectual
Rising drug use
issues property theft

Source: Adapted from "Business Ethics Timeline," Ethics Resource Center, https://www.ethics.org/resources/free-toolkit/ethics-timeline/ 17
 International Level

Societal Level

Association Level Business Ethics

Level
Organizational Level

Individual Level Because ethical problems are not only an

individual or personal matter, it is helpful
to see the different levels at which issues
originate and how they move to other
levels.

18 Source: Carroll, Archie B. (1978). Linking business ethics to behavior in organizations. 18

Importance of Business
Ethics
5. Employee Retention: The loss of valuable experience and development of
new personnel is a cost companies can control. Seldom is pay the primary
factor in losing an employee. A successful Business Ethics program
establishes a culture that rewards making the right decision
6. Prevention and Reduction of Criminal Penalties: a company must have
"an effective program to detect and prevent violations of the law".
Executives cannot always be aware of everything done in a company’s
name
7. Preventing civil lawsuits: Many times employees that experience issues in
the workplacefirst try to resolve these issues internally.
8. Market Leadership: When a company fully integrates its values into its
culture, qualityrises due to the employees focus on values.

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Importance of Business
Ethics
1. Ethical motivation: It protects or improves reputation of the
organization by creating an efficient and productive work
environment.
2. Balance the needs and wishes of stakeholders: There is pressure on
business to recognize its responsibilities to society. Business ethics
requires businesses to think about the impact of its decisions on
people or stakeholders who are directly or indirectly affected by
those decisions.
3. Global challenges: Business must become aware of the ethical
diversity of this worldbecause of increasing globalization of the
economy.
4. Ethical pay-off: They serve to protect the organization from
significant risks, and tosome degree help grow the business.

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 A Framework for Classifying Ethical Issues and
Levels
Descriptive Normative Analytical
1. Descriptive: People tend to make
Ethics of the system decisions which bring pleasure or avoid
pain.
2. Normative: The moral decision is that
Ethics of the
which enhances wellbeing and limits
organization
suffering.
3. Analytic: Morality is simply a system
Ethics of the person for helping humans stay happy and alive

Source: Matthews, John B., Goodpaster, Kenneth E., and Laura L. Nash. (1985). Policies and persons: A
casebook in business ethics, 509. New York: McGraw-Hill. 21
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 10 Myths About Business
Ethics
BUSINESS BUSINESS ETHICS IS OUR
ETHICS IS MORE A DISCIPLINE BEST BUSINESS ETHICS ORGANIZATION
ETHICS
A MATTER OF LED BY IS A MATTER OF IS NOT IN
CAN’T BE
RELIGION THAN PHILOSOPHERS, THE GOOD GUYS TROUBLE WITH
MANAGED.
MANAGEMENT. ACADEMICS AND PREACHING TO THE LAW, SO
THEOLOGIANS. THE BAD GUYS. WE’RE ETHICAL.
OUR STAFF
MEMBERS ARE BUSINESS ETHICS
BUSINESS MANAGING
ETHICAL SO WE IS SUPERFLUOUS BUSINESS
ETHICS AND ETHICS IN THE
DON’T NEED — IT ONLY ETHICS IS THE
SOCIAL WORKPLACE
ATTENTION TO ASSERTS THE NEW
RESPONSIBILIT HAS LITTLE
BUSINESS OBVIOUS:“DO POLICEPERSON
Y ARE THE PRACTICAL
ETHICS. GOOD!” ON THE BLOCK
SAME THING RELEVANCE.
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http://siteresources.worldbank.org/INTETHICS/Resources/10Myths.pdf
Can Business Ethics Be Taught
or Learned
Teaching business ethics and training people to use them
does not promise to provide answers to complex moral
dilemmas. However, thoughtful and resourceful business
ethics educators can facilitate the development of
awareness of what is ethical, help individuals and groups
realize that their ethical tolerance and decision-making
styles decrease unethical blind spots, and enhance
discussion of moral problems openly in the workplace.

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References
Ethics Org. (n.d.). Business Ethics and Compliance Timeline. Retrieved January 4, 2019, from

https://www.ethics.org/resources/free-toolkit/ethics-timeline/

Ferrell, O. C., Fraedrich, J., & Ferrell. (2016). Business Ethics: Ethical Decision Making & Cases. Boston, MA: Cengage

Learning.

Management Innovation. (2008, November 28). Business Ethics – Various Definitions and Theories. Retrieved January 4,

2019, from https://managementinnovations.wordpress.com/2008/11/28/business-ethics-various-definitions-and-

theories/

Vasava. (2012, March 14). BUSINESS ETHICS & CORPORATE GOVERNANCE (BE & CG)-SEM IV-GTU.

Retrieved January 4, 2019, from https://www.scribd.com/doc/86536977/BUSINESS-ETHICS-CORPORATE-

GOVERNANCE-BE-CG-SEM-IV-GTU

World Bank.Retrieved January 4, 2019, from http://siteresources.worldbank.org/INTETHICS/Resources/10Myths.pdf

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Thanks!
Any questions?

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