Business Ethics

Business Ethics Business Ethics  Business Ethics is about:    DecisionDecision-Making By People in Business According to Moral Principles or Values DecisionDecision-Making  Ethical decision-making involves the ability to decisionseparate right from wrong along with the commitment to do what is right Some factors affecting decision-making : decision Issue Intensity    (i.e. how important does the decision-maker decisionperceive the issue to be? Can be influenced by company/management emphasis)   DecisionDecision-Maker’s Personal Moral Philosophy (Moral philosophy involves systematizing, defending, and recommending concepts of right and wrong behavior) Organizational Culture DecisionDecision-Making 8 Steps to Sound, Ethical Decision-Making Decision 1. Gather as many relevant & material facts as circumstances permit.  2. Identify the relevant ethical issues (consider alt. viewpoints)  3. Identify, weigh & prioritize all the affected parties (i.e. stakeholders) (see Johnson & Johnson Credo, Taking Sides, p.25)  4. Identify your existing commitments/obligations.  5. Identify various courses of action (dare to think creatively)  6. Identify the possible/probable consequences of same (both short & long-term) long 7. Consider the practicality of same.  8. Consider the dictates and impacts upon your character & integrity. By People in Business DecisionDecision-Maker (Managers) The moral foundation of the decision-maker matters. If decisionhe thinks that by giving punishments he can take his work out but punishment and fear is only effective in the short-run. Organizations that have a clear vision, shortand support individual integrity are attractive places of employment. Moral Principles or Values  Values: Values: guiding ideas, representing deeply held generalized behaviors, which are considered by the holder, to be of great significance. Morals: Morals: a system or set of beliefs or principles, based on values, which constitute an individual or group’s perception of human duty, and therefore which act as an influence or control over their behavior. Morals are typically concerned with behaviors that have potentially serious consequences or profound impacts. The word “morals” is derived from the Latin mores (character, custom or habit) Ethics: the study and assessment of morals. The word "ethics" is derived from the Greek word, ethos (character or custom). Ethics means working in such manner which is morally right.   Objectives of Ethics  Study of human behaviour and makes evaluative assessment about that as moral or immoral (A diagnostic goal). Establishes moral standards and norms of behaviour. Makes judgment upon human behavior based on these standards and norms. Prescribes moral behaviour and makes recommendations about how to or how not to behave. Expresses an opinion or attitude about human contact in general.     Nature of Ethics  Concepts of ethics deals with human beings only. Human beings can distinguish right or wrong, good or evil. The Study of ethics is a set of systematic knowledge about moral behaviour and conduct. Study of ethics is a science – a social science. Science of ethics (Normative Science) : it judges the value of the facts in terms of ideal situation. Deals with human conduct which is voluntary, not forced or coerced by persons or circumstances.    Code of Ethics in Business  Responsibilities of Business : a) not to do harm knowingly, b) to adhere all applicable laws and regulations, c) the accurate representation of their education, training and experience, d) active support, practice and promotion of this code of ethics. Honesty and Fairness : a) being honest in serving consumers, clients, employees, suppliers, distributors and the public. b) no knowingly participating in conflict of interest without prior notice to all parties involved.   Rights and Duties of parties : a) products and service offered are safe and fit for their intended use, b) communications about offered product and services are not deceptive, c) all parties intend to discharge their obligations, financial and otherwise, in good faith, Characteristics of Business Ethics    Ethical decisions differ with individual perspective of different persons. Each person views the ethical question in terms of his or her own frame of reference. And this frame of reference is the person’s own unique value system. Ethical decisions are not limited only to themselves, but affects a wide range of other situations as well. Similarly, unethical decisions do not end in themselves, but have widespread ramifications. Most ethical decisions involve a tradeoff between cost incurred and benefits received. Cost and benefits, profits and social responsibilities are different ends of a single spectrum. All cannot be maximized simultaneously. Characteristics of Business Ethics    The consequences of most ethical or unethical decisions are not clear. The only certainty is that somewhere, sometime, somehow, something positive will result from an ethical decision and something negative from unethical one. Every person is individually responsible for the ethical or unethical decision and action that he or she takes. Taking an ethical decision cannot be an impersonal activity as it involves the person’s individual unique value system along with his moral standards. Ethical decisions are voluntary human actions. A person cannot escape his personal liability for his crimes citing force of circumstances or pressure. Ethics will be different at different levels  At the basic level, it is about discipline, i.e.. to maintain punctuality, coming to work on time, behaving properly with superiors, colleagues and subordinates and not wasting time during working hours. At the top level, it is about commitment and Protecting the interests of the organization.  Sources of Ethics 1. Genetic Inheritance : the qualities of goodness is a product of genetic traits strengthened over time by the evolutionary process. Religion : religious morality is clearly a primary focus in shaping our societal ethics. Philosophical Systems : the quality of pleasure to be derived from an act was the essential measure of its goodness. Cultural Experience : individual values are shaped in large measure by the norms of the society. The legal system : laws represent a rough approximation of society’s ethical standards. 2. 3. 4. 5. Factors Influencing Ethics Individual o Values o Work Background o Family Status o Personality Organizational oTop Level Mgmt. Philosophy oThe Firm’s Reward System oJob Dimensions Environmental oCompetition oEconomic Conditions oSocial/Cultural Institutions Ethical Issues in Business Many of the ethical issues and dilemmas in business are rooted in the fact that political systems, law, economic development, and culture vary significantly from nation to nation The most common ethical issues involve in businesses are:    Employment practices Human rights Environmental regulations Ethics @ Workplace  Ethics in the workplace in its simplest terms means doing the right things that guide your behavior at work. On-the-Job Ethical Dilemmas Situation in which a business decision may be influenced for personal gain. Telling the truth and adhering to deeply felt ethical principles in business decisions. Employee’s disclosure of illegal, immoral, or unethical practices in the organization. Businesspeople expect employees to be loyal and truthful, but ethical conflicts may arise. Golden Rules of Ethics @ Workplace           Body Language Avoid Creating Disturbance Trust & Respect for Others Work Don’t Interfere In Others Work Respect the Privacy of your Co-workers Avoid Ethnic & Gender Biasness Improve Your Self Presentation Avoid Lobbying No/Least Personal Work During Work Hours Maintain the balance between transparency/openness and confidentiality Benefits of Ethics The list of potential benefits:            Fostering a more satisfying and productive working environment Building and sustaining Organisation reputation Maintaining the trust of staff to ensure continued self-regulation Providing ethical guidance for employees prior to making difficult decisions Aligning the work efforts of employees with the Organisation’s broader mission and vision Increased employee loyalty, higher commitment and morale as well as lower staff turnover Attraction of ‘high-quality’ staff Reputation benefits (customers and suppliers) More open and innovative culture Decreased cost of borrowing and insurance Generation of good-will in the communities in which the business operates HOW ORGANIZATIONS SHAPE ETHICAL CONDUCT  Ethical Awareness Code of Conduct Formal statement that defines how the organization expects and requires employees to resolve ethical questions.  Ethical Reasoning Codes of conduct cannot detail a solution for every ethical situation, so corporations provide training in ethical reasoning.  Ethical Action Helping employees recognize and reason through ethical problems and turning them into ethical actions.  Ethical Leadership Executives must demonstrate ethical behavior in their actions. FOR MORE USEFUL EDUCATIONAL PRESENTATIONS AND TECHNOLOGICAL DOCUMENTATIONS LIKE THESE VISIT WWW.THECODEXPERT.COM