The Ethical Environment of the Firm

Business ethic and Management

• Ethical Issue : refers to concern on which an individual must decide based on several
alternatives of what is morally right or wrong .
• Business ethics : which are moral principles and standards that guide business people in their
transactions

Perspective on Ethics
1. Universalism : This is the principle which states that all people should have certain values like
honesty,respect, cooperation
2. Egoism : This principle promotes the greatest good to oneself . Focused for self advancement
3. Utilitarianism : Principle that focuses on the greatest good for the greatest number of people
4. Relativism : Principle which states the ethical behavior. is based on a persons own and other
relevant people’s opinions and viewpoints
5. Virtue ethics: Primciple states that morality depends on the maturity of a person with good
moral character

Corporate Integrity : refers to the sense of wholeness created by right relationships among
memebers of the corporation

5 Dimensions
1. Cultural Dimension : has the most impact on the internal relationships in the company. Culture
unites employees and cultural aspects such as language , rituals , behavioural , beliefs
2. Interpersonal Dimension : focuses on the relationship among people, civic life work relations
family relations
3. Organizational Dimension : considers the main purpose of the business . Economic financial
purposes , managerial purpose, civic purpose.
4. Social Dimension : organization engaging with society
5. Natural Dimension : organization relates to nature

Corporate social Responsibility : refers to business operations and activities that have the
welfare of society in mind, pursue long term goals and economic goals for welfare of
society
• Social Obligation : refers to complying with legal and ethical standards to uphold social welfare
• Social Responsiveness : goes beyond prescribed standards and implements actions to aim
make an impact on society .
• Economic responsibility : the company should produce goods and services with reasonable price
• Legal Responsibility : the organization should comply with local and international laws that apply
business operations
• Ethical responsibilities : include norms , standards , mores and practices that reflect fairness to
consumers....
• Philanthropic Responsibilities : initiation of voluntary activities such as establishing corporate
programs , donating to charitable institutions