Business Ethics Class 1

Introduction to
Business Ethics
The relevance of Business Ethics &
Corporate Governance
Importance of Indian Ethics and Values
• Ethics are integral part of Indian culture.
• Indian mythology represents Indian ethics and values in most precise
manner. It help us to learn about Indian culture, faith, language, and
ethical beliefs.
Ethics
• Ethics is the branch of philosophy that focuses on morality and the way in
which moral principles are applied to everyday life.
• Ethics has to do with fundamental questions such as “What is fair?”
“What is just?” “What is the right thing to do in this situation?”.
• Ethics involves an active process of applying values, which may range
from religious principles to customs and traditions.
• Value- learned from parents and surrounding
• Moral- Intrinsic belief developed from the value system
• These moral values governs an individual’s behaviour and choices.
• Ethics- Ethics is a branch of philosophy dealing with values relating to
human conduct.
Business Ethics
• Business ethics includes principles and standards that determine
acceptable conduct in business.
• It focuses on what constitutes right or wrong behavior in the world of
business. Corporate business executives have a responsibility to their
shareholders and employees to make decisions that will help their
business make a profit. But in doing so, business people also have a
responsibility to the public and themselves to maintain ethical
principles.
Business Ethics
• Although ethics provides moral guidelines, individuals must apply these
guidelines in making decisions.
• Ethics that applies to business (business ethics) is not a separate theory
of ethics; rather, it is an application of ethics to business situations.
• Although all people have ethical responsibilities, higher ethical
standards are imposed upon professionals who serve as social models,
such as physicians, attorneys, and business people.
• Business ethics help firms decide what actions are right or wrong in
certain circumstances.
• Examples:
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?
• In a nut shell:
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.
• Types of Ethics issues:
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.
• 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
MORALITY V/S ETHICS
• Both morality and ethics loosely have to do with distinguishing the difference
between “good and bad” or “right and wrong.”
• Many people think of morality as something that's personal and normative,
whereas ethics is the standards of “good and bad” distinguished by a certain
community or social setting.
• Nature of Business ethics are as follows:
• 1) The rate of publicity
• 2) The rate of equivalent price
• 3) The rule of conscience in business
• 4) The rule of spirit of service
• Need for Business Ethics are as follows:
• 1) Social contract
• 2) Principles for business conduct
• 3) Stressing the business responsibilities
• 4) Developing socially responsible and conscious business
• 5) Reconcile conflicting interest
Thank You

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Introduction to

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.

• The law is an expression of the ethical beliefs of our society.

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