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Unit 1 Moral Philosophy and Business

WHAT IS ETHICS
The word ETHICS has its origin in Greek word Ethikos means Ethikos character, norms, morals and ideals prevailing in a group and society. Ethics may be referred to some standardized form of conduct or behavior of individuals understood and accepted in a particular field of activity Ethics is a mass of moral principles or set of values about what conduct ought to be. They give an idea what is right or wrong, true of false, fair or unfair, just or unjust, proper or improper, e.g. Honesty, obedience, equality, fairness, etc and respect and then doing the right thing Simply stated, ethics refers to standards of behavior that tell us how human beings ought to act in the many situations in which they find themselvesthemselves-as friends, parents, children, citizens, businesspeople, teachers, professionals, and so on.

Ethics is a branch of philosophy and is considered a normative science because it is concerned with the norms of human conduct, as distinguished from formal sciences such as mathematics and logic, physical sciences such as chemistry and physics, and empirical sciences such as economics and psychology. Ethics, as a science, involves systemizing, defending and recommending concepts of right and wrong behaviour. The principles of ethical reasoning are useful tools for sorting out the good and bad components within complex human interactions. For this reason, the study of ethics has been at the heart of intellectual thought and its ongoing contribution to the advancement of knowledge and science makes ethics a relevant, if not vital, aspect of management theory.

Principles of Personal Ethics


 Personal values are the conception of what an individual or a group

regards as desirable.
 Personal ethics refer to the application of these values in everything one

does.
 Personal ethics might also be called morality, since they reflect general

expectation of any person in any society, acting in any capacity. The principles of personal ethics are:
1. 2. 3. 4.

Concern and respect for the autonomy of others. Honesty and the willingness to comply with the law. Fairness and the ability not to take any undue advantage of others. Benevolence and preventing harm to any creature.

Principles of Professional Ethics


 A profession is a vocation founded upon specialised educational

training, the purpose of which is to supply disinterested counsel and service to others, for a direct and definite compensation, for example, the profession of a doctor, advocate, professor, scientist or a business manager.
 A professional is a person who prosecutes anything professionally, or

for a livelihood.
 Professional behavior in a work place means you conduct yourself in a

way that represents your company at all times. Proper attire, respect for co-workers as well as management, speaking without bad language and comanagement, keep personal conversations, phone calls and emails to a minimum. In other words.. Work is not the place for Fun..

Principles of Professional Ethics


 There are certain basic principles people are expected to follow in

their professional career. These are the following;


 Impartiality; objectivity  Openness: full disclosure;  Confidentiality: trust;  Due diligence/ duty of care;  Fidelity to professional responsibilities.

Even when not written into a code, principles of professional ethics are usually expected of people in business, employees, volunteers, elected representatives and so on.

WHEN AND WHERE DO WE DEVELOP ETHICAL VALUES?


According to those who study the history and philosophy of ethics, infants would not survive without a nurturer who teaches them about right and wrong behavior. In human society, a series of nurturer and teachers influence the ethical views of each individual.

Business Ethics
Business ethics means the scale where you measure the do's or don't for the purpose of the future of business. Ethical business behavior is expected by the public, it facilitates and promotes good to society, improves profitability, fosters business relations and employee productivity, reduces criminal penalties from public authority and regulators, protects business against unscrupulous employees and competitors, protect employees from harmful actions by their employer, and allows people in business to act consistently with their personal ethical beliefs.  Business ethics is based on the principle of integrity and fairness and concentrates on the benefits to the stakeholders, both internal and external.  Stakeholders include those individuals and groups without which the organisation does not have existence.  It includes shareholders, creditors, employees, customers, dealers, vendors, government and the society.

 Carter McNamara has defined: Business ethics is generally coming to

know what is right and wrong in the workplace and doing what is rightrightthis is in regard to efforts of products/ services and in relationships with stakeholders. Business ethics set the standard for how your business is conducted. They define the value system of how your operate in the marketplace and within your business. With legal scandals concerning insider trading and employee theft making the news, it is no wonder that businesses are increasingly giving attention to the ethical basis of their business and how to lead in an ethical way. While the examples above seem to be clear cut breaches of ethics, many ethical dilemmas that not so clear cut are faced on a daily basis in business. In fact, there may not even be a "right" or "wrong" answer to the dilemma, but how you deal with it will say much about you and your business. These decisions are often referred to as being in the "gray" area. They are not black-or-white, but could be argued appropriately black-oreither way.

     

 

Top 10 Principles for Positive Business Ethics Business ethics are the key to profits. If clients and customers don't trust you, and your business ethics, they will not do business with you. Would you buy from a company you didn't trust? Of course not! Business ethics have become a hot-button topic. hotThere are often ethical conflicts between making money, and doing what is right. There can be dilemmas about doing what is best for your employer, what's best for your own career, and what's best for the customer. Business ethics is about negotiating these mine-fields. mineHere are Top 10 Principles for Positive Business Ethics:

1. Business Ethics are built on Personal Ethics. There is no real separation between doing what is right in business, and playing fair, telling the truth and being ethical in your personal life. 2. Business Ethics are based on Fairness. 3. Business Ethics require Integrity.  Integrity refers to whole-ness, reliability and consistency. whole-ness,  Ethical businesses treat people with respect, honesty and integrity.  They back up their promises, and they keep their commitments. 4. Business Ethics require Truth-telling. Truth The days when a business could sell a defective product are long gone.

5. Business Ethics require Dependability. If your company is new, unstable, about to be sold, or going out of business, ethics requires that you let clients and customers know this. Ethical businesses can be relied upon to be available to solve problems, answer questions and provide support. 6. Business Ethics require a Business Plan. A company's ethics are built on its image of itself and its vision of the future and its role in the community. Business ethics do not happen in a vacuum. The clearer the company's plan for growth, stability, profits and service, the stronger its commitment to ethical business practices.

7. Business Ethics apply Internally and Externally. Ethical businesses treat both customers and employees with respect and fairness. Ethics is about respect in the conference room, negotiating in good faith, keeping promises and meeting obligations to staff, employers, vendors and customers. The scope is universal. 8. Business Ethics require a Profit.  Ethical businesses are well-run, well-managed, have wellwelleffective internal controls, and clear expectations of growth.  Ethics is about how we live in the present to prepare for the future, and a business without profits (or a plan to create them) is not meeting its ethical obligations to prepare for the future well-being of the company, its employees and wellcustomers.

9. Business Ethics are values-based. valuesThe law, and professional organizations, must produce written standards that are inflexible and universal. While they may talk about "ethics", these documents are usually prescriptive and refer to minimal standards. Ethics are about values, ideals and aspirations. Ethical businesses may not always live up to their ideals, but they are clear about their intent.

10. Business Ethics come from the Boss.


 Leadership sets the tone, in every area of a business.  Ethics are either central to the way a company functions, or they are not.  The executives and managers either lead the way, or they communicate

that cutting corners, deception and dis-respect are acceptable. dis Line staff will always rise, or sink, to the level of performance they see modeled above them. Business ethics starts at the top.

 Ethics is about the quality of our lives, the quality of our

service, and ultimately, about the bottom line.


 An unhappy customer complains to an average of 16

people.
 Treating employees, customers, vendors and the public in

an ethical, fair and open way is not only the right thing, in the long run, it's the only way to stay in business.

How To Resolve Ethical Dilemmas In Business  An ethical dilemma exists when one is faced with having to make a choice among these alternatives.
In todays business, the workforce comprises of people who are diverse in their nationality, religion, caste, race, age, education and even socioeconomic status. They are all expected to work together as a team towards the success of the organization. Dilemmas are bound to rise in issues such as downsizing the staff, pollution control, toxic waste disposal, utilization of resources, changes in law and technology, issues related to discrimination, employee rights and even on product quality. All these issues are relatively complex and are difficult to resolve. Entrepreneurial managers have to rely on their individual judgment while resolving all these different dilemmas related to business.

 

 

Real-toReal-to-Life Examples of Complex Ethical Dilemmas


"A customer (or client) asked for a product (or service) from us today. After telling him our price, he said he couldn't afford it. I know he could get it cheaper from a competitor. Should I tell him about the competitor -- or let him go without getting what he needs? What should I do?" "My boss told me that one of my employees is among several others to be laid off soon, and that I'm not to tell my employee yet or he might tell the whole organization which would soon be in an uproar. Meanwhile, I heard from my employee that he plans to buy braces for his daughter and a new carpet for his house. What should I do? "My computer operator told me he'd noticed several personal letters printed from a computer that I was responsible to manage. While we had no specific policies then against personal use of company facilities, I was concerned. I approached the letter writer to discuss the situation. She told me she'd written the letters on her own time to practice using our word processor. What should I do?"

Real-toReal-to-Life Examples of Complex Ethical Dilemmas "A fellow employee told me that he plans to quit the company in two months and start a new job which has been guaranteed to him. Meanwhile, my boss told me that he wasn't going to give me a new opportunity in our company because he was going to give it to my fellow employee now. What should I do?" Before making any decision, one has to analyze all the positive and negative consequences that are connected with the issue.

Here is an example. Real-to-Life Examples of Complex Ethical Real-toDilemmas Ritu has been operating a consulting business for about a year and has been doing very well. About a month ago, she decided she needed to hire someone to help her.

After interviewing several candidates, she decided to hire the best one of the group, Gita. Gita. She called Gita on Monday to tell her she had gotten the job. They both agreed that she would start the following Monday and that Gita could come in and fill out all of the hiring paperwork at that time. On Tuesday, of the same week, a friend of Ritu's called her to say that she had found the perfect person for Ritu. Ritu. Ritu explained that she had already hired someone, but the friend insisted. "Just meet Pooja. Pooja. Who knows, maybe you might want to hire her in the future!" Rather reluctantly, Ritu consented. "All right, if she can come in tomorrow, I'll meet with her, but that's all." "Oh, I'm so glad. I just know you're going to like her!" Ritu's friend exclaimed.

And Ritu did like her. She like her a lot. Ritu had met with Pooja on Wednesday morning. She was everything that Ritu had been looking for and more. In terms of experience, Pooja far surpassed any of the candidates Ritu had previously interviewed, including Gita. Gita. On top of that, she was willing to bring in clients of her own which would only increase business. All in all, Ritu knew this was a win-win situation. But what about Gita? winGita? She had already given her word to Gita that she could start work on Monday. And yet she only had the resources to hire one person at this point. Clearly, the best business decision was to hire Pooja. Pooja. But what about the ethical decision? If her business did poorly or Gita couldn't provide enough support, the business would suffer. As a result, her family would suffer. Money was already tight, what with two boys in college. And yet she knew Gita also had a family she was supporting. Plus, she had been so enthusiastic about starting to work.

Obviously, Ritu had a problem - an ethical problem. Should she hire Gita (whom she'd already given her word) or Pooja (who was obviously the best person for the job)? Questions like these touch on our deepest values. Depending on who you would ask, you would get strong arguments for both decisions. This is what we mean when we talk about "gray" area. So what is the answer?

According to Kenneth Blanchard and Norman Vincent Peale, authors of The Power of Ethical Management, there are three questions you should Management, ask yourself whenever you are faced with an ethical dilemma. Is it legal? In other words, will you be violating any criminal laws, civil laws or company policies by engaging in this activity?

Is it balanced? Is it fair to all parties concerned both in the short-term as well as the shortlonglong-term? Is this a win-win situation for those directly as well as winindirectly involved? Is it right? Most of us know the difference between right and wrong, but when push comes to shove, how does this decision make you feel about yourself? Are you proud of yourself for making this decision? Would you like others to know you made the decision you did? Most of the time, when dealing with "gray decisions", just one of these questions is not enough. But by taking the time to reflect on all three, you will often times find that the answer becomes very clear.

What is not Business Ethics? Ethics Is Different From Religion  Though all religions preach high ethical/moral standards generally, they do not address all the types of problems people confront today.  For instance, cyber crimes and environment-related issues are totally environmentnew in the context of most religions.  Moreover, many persons today do not subscribe to religious beliefs and have turned agnostics.  But ethics applies to all people, irrespective of their religious affiliations.

Ethics Is not synonymous With Law


 Ethics is not following the law.  A good system of law does incorporate many ethical standards, but law

can deviate from what is ethical.


 Law can be a function of power alone and designed to serve the

interests of narrow groups.


 No - although the law should reflect the ethical views of society there

are certain activities permitted by law which some individual or groups in society or individual might regard as unethical. - Ethical considerations are about what is right and what is wrong - The law is about what is lawful and what is unlawful

The following business activities are legal but might pose ethical dilemmas for individuals: Profiting from gambling Selling goods manufactured by low wage in developing countries Engaging in the fur trade Experimenting on animals

Ethics is not following culturally accepted norms.


 Some cultures are quite ethical, but others become corrupt -or blind to

certain ethical concerns (as the United States was to slavery before the Civil War).  "When in Rome, do as the Romans do" is not a satisfactory ethical standard.  For instance, our system of castes reflects an unethical streak in as much as it tends to take for granted that some people are superior to others in Gods creation.

Ethics is not the same as feelings.


Feelings provide important information for our ethical choices. Some people have highly developed habits that make them feel bad when they do something wrong, but many people feel good even though they are doing something wrong. And often our feelings will tell us it is uncomfortable to do the right thing if it is hard.

Ethics is not science.


 Social and natural science can provide important data to help us make better ethical choices.  But science alone does not tell us what we ought to do.  Science may provide an explanation for what humans are like.  But ethics provides reasons for how humans ought to act.  And just because something is scientifically or technologically possible, it may not be ethical to do it.

Code of Conduct and Ethics for Managers


Managers must observe the following ethical values: Responsiveness to the public interest Accountability Honesty Transparency Integrity Impartiality

Global Ethical Issues


Wages and hours Child labour Discrimination Legal and ethical business practices Product safety and quality Environment

FACTORS THAT AFFECT ETHICAL BEHAVIOUR


INDIVIDUAL CHRACTERECTICS

ISSUE INTENSITY

ETHICAL DILEMA

STAGES OF MORAL DEVELOPMENT

MODERATORS

ETHICAL / UNETHICAL BEHAVIOUR

STRUCTURAL CHARECTERISTICS OF ORGANIZATION

ORGNIZATIONAL CULTURE

What causes unethical behaviour


Stress Confusion Pressure to perform at expected levels Competition within the industry No knowledge

Some of the Unethical Business practices are :


 Cutting corners on quality  Covering up incidents  Abusing or lying  Lying customers  Stealing from the company  Taking credits from co-workers ideas/work co Taking or giving bribe

Unethical business practices (contd) contd)


      

Government corruption Financial scandals Product safety discrimination Sexual harassment Firing an employee for whistle blowing Divulging confidential information

Whats in it for me to be ethical?


-

A more accurate perception of the world around you, follow your conscience. when it is hard or costly.

-Have the courage to do what is right and do try new things even

-Dont loose heart if you fail or dont get what you want

-A stronger personality, and greater likelihood of being happy in

life

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