Chapter 1.
Introduction to Ethics and Business fundamental idea of what is good and what is bad in
our human conduct.
✓ It provides us of the common understanding of
Good people do not need law to tell them to act
justly, while bad people will find a way around the
laws. the universal, objective and irreversible moral
principles that should govern our human behavior
-Plato and guide our moral decisions.
Ethics –it is derived from Greek word “ethikos”, Importance of Business Ethics, cont’d.
✓ It opens a novel way of resolving moral
meaning “arising from habit”, or character. - it is a
branch of social science that deals with moral
principles and social values. problems and ethical dilemmas affecting business
transactions and the interactions of people in the
Business ethics – is a study of proper business corporate world
✓ The study of business ethics enhances the human
policies and performs regarding possibly
controversial issues, such as corporate governance,
insider trading, bribery, discrimination, corporate and interpersonal skills of managers so they can be
social responsibility and fiduciary responsibilities. more effective in managing the human side of
organization.
Businesses must stand by some principles. It should
offer quality goods and services at sensible prices to Businessman's Myths About Business Ethics
✓ Businessmen are not immoral, and it would be
consumers.
It must also evade adulteration, misleading disastrous to judge and conclude that business
advertisements and other unfair malpractices. people commit unethical act in doing business
A business must also implement other duties such ✓ Business, certainly is a good and productive
as allocating fair wages, providing good working human activity. However, it is the businessman’s
situations, not abusing the workers, encouraging wrong perception about the role that ethics plays in
competition, etc. the business world that affects the moral judgment
✓ According to Andrew Crane, “Business ethics is
and decision making.
the study of business situations, activities and The Relationship Between Ethics and Business
decisions where issues of right and wrong are
addressed”. Ethics plays an important role in business. Without
✓ Raymond C. Bauhmart defines, “The ethics of
morality, business will be a chaotic human activity.
The concern of ethics as a philosophical science is
business is the ethics of responsibility. The to discover that there are unwritten laws, written in
businessman must promise that he will not harm the heart of man that should govern our human
knowingly”. conduct where positive law may be absent, and in
some cases are not clear.
Nature of Business Ethics
✓ Contains rules and principles
The following are arguments that justify the
✓ Voluntary
significant role ethics plays in the business
✓ Avoids cheating and frauds
world:
✓ Education and training required ✓ Business is an integral part of human society.
✓ Dynamic concept
✓ Social welfare
Therefore, the actions of individuals and institutions
✓ New concept
in business must be subjected to moral rules and
moral evaluation.
Importance of Business Ethics Samples arguments that justify the significant
✓ The study of business ethics paves the way for a
role ethics plays in the business world: cont’d.
common ground in our understanding of the
✓ In business, as in any other human endeavor, ✓ It motivates people to do something
✓ It promotes ingenuity and cleverness
“what is legal may not necessarily be moral”. meaningful.
People tend to be confused with legality and
✓ It makes people productive.
morality. An action may be legal but not necessarily in running business.
✓ It generates potential capital for the
moral.
✓ Law is insufficient. business.
Moral Reasoning in Business The Bad Side of Profit Motive
✓ It promotes rivalry among competitors
✓ It makes people focus only on making
The essence of studying business ethics is to
provide the manager as a decisionmaker with a
✓ It turns the businessman from being a
framework for the resolution of moral issues and money
problems affecting business activities and the
organization itself. reflective to a questioning person
because he only focuses his attention on
✓ It promotes self-interest rather than
Moral reasoning is a process in which ethics issues the practical activity of making money
and problems are bench marked against moral
standard so hat a moral judgment is made possible common good
Characteristics of a Good Moral Ethical Considerations of Profit
Standard Motive Business
✓ It is one that looks at the issue as ✓ Earning profit is a good and valid
✓ It must be grounded on good moral
something that is very serious.
✓ Making excessive profits is totally
activity in business
✓ It should be objective.
judgment.
✓ Profit is not the “be all” and “end all”
wrong.
✓ A good standard, when violated,
✓ Pope Pius XI, was once quoted, “the
of doing business.
brings about feelings of guilt, shame and
remorse of conscience. Catholic Church does not prohibit the
producer from profiting provided, one
Requirements for a Good Moral respects the law of God, does not
Judgment prejudice the right of others, and work
✓ It must be logical.
accordingly to faith and right reason”.
✓ It must be based on facts and solid The Concept of Moral Responsibility
✓ It must be based on sound and
evidence.
Moral responsibility – accountability for
defensible moral principle. the actions one performs and the
consequences they bring about, for
The Morality of Profit Motive
or rewarded. ✓ It involves evaluation ✓
which a person could be justly punished
✓ Most people go to business to earn a it is incurred only when a person
✓ Some people go to business for
living
way or fails to act in moral way. ✓
knowingly and freely acts in an immoral
✓ Other people go to business because
personal satisfaction Examples: helping a friend, support a
parent in old age.
they want to serve the society through
the goods and services they offer to
✓ Other people go to business to make a
customers
profit
The Good Side of Profit Motive