Introduction to Business Ethics
MODULE 2
▪ Business Ethics
▪ principles & philosophies concerned with moral judgment & good conduct
applicable to business solution
▪ Application of normative ethics to business behavior.
▪ Set of principles or reasons which should govern the conduct of business whether at
the individual or collective level.
▪ Based on the principle of integrity and fairness focusing on the benefits to the
stakeholders,internal and external.
WHY CORPORATE ETHICS??
▪ To protect its own interest
▪ To protect the interest of business community
▪ To keep commitment to society
▪ To meet stakeholders’ expectations
▪ To prevent harm to general public
▪ To build trust
▪ To protect their own reputation
▪ To protect their own employees
▪ To create a conducive work environment
Stakeholder theory
Stakeholder theory looks at the relationships between an organization and others
in its internal and external environment.
It also looks at how these connections influence how the business conducts its
activities.
Modified to Social Contract theory
Gandhian Principle of Trusteeship
Ethical Principles in Business
• THE PRINCIPLE OF FIDELITY (TRUSTWORTHINESS)
Honesty and reliability in conduct - with the company and co-workers
• THE PRINCIPLE OF AUTONOMY(RESPONSIBILITY)
Taking responsibility and pride in your work and strive for excellence.-
• THE PRINCIPLE OF PATERNALISM-FAIRNESS
• Do your share of work and guide others to best interest
• THE PRINCIPLE OF BENEFICENCE
[Link] kindness to others-CARING
• THE PRINCIPLE OF JUSTICE
• Courtesy ,tolerance and acceptance of the differences , adhere to corporate policies and
procedures -RESPECT,CITIZENSHIP
The Josephson Institute of Ethics has compiled the Six Pillars of Character, which explain the way a
company should embrace and display values in its everyday actions.
APPROACHES TO ETHICS/ETHICAL THEORIES
[Link]
• Greek ‘telos’ which means end or purpose
• Actions are judged based upon their consequences
• Also known as consequentialist ethics
EGOISM
• consequences to one’s self define actions as ethical or unethical
• UTILITARIANISM
• the greatest good for the greatest number
• Proponent-Jeremy bentham
[Link]
• Greek ’deon’, duty
• Actions are judged based on duty or the intentions of an actor
• MAXIMS-Consistency,Human dignity,Universality
• Proponent-Immanual Kant
ETHICS/
▪ ETHICAL DILEMMA
▪ a complex situation where ethical principles or values are in conflict.
▪ decision maker faces a choice between equally undesirable options
▪ Can affect organisation,employees and society at large
▪ SOURCES OF ETHICAL DILEMMA IN BUSINESS
• Failure of personal character
• Conflict of personal values and organisational goals
• Organisational goals vs Social values
• Hazardous but popular products
• Other ethical challenges-exploitation,discrimination,price fixing..
-(Keith Davis and William Fredrick)
▪ CONSIDERATIONS FOR MANAGERS
▪ RELATIVISM
▪ Theory that each society’s view of ethics must be considered legitimate and ethical.
▪ This implies that when doing business in a country managers need only follow local
ethical conventions.
▪ UNIVERSALISM
▪ Theory that basic moral principles transcends cultural and national boundaries.
▪ May be difficult in MNCs as it may lead to ethnocentrism
Implicit Bias
▪ includes the subconscious feelings, attitudes, prejudices, and stereotypes an individual
has developed due to prior influences and imprints throughout their lives.
1. Confirmation Bias- tendency of people to favor information that confirms or strengthens
their beliefs
2. Cognitive dissonance- a psychological state of discomfort that occurs when a person's
beliefs or actions are inconsistent
3. Fundamental Attribution Error- attribute others' actions to their personality or character,
while attributing their own actions to external factors.
Case Analysis Outline
▪ Actor-Action(ethical stance)
▪ Identify dilemma-(compare with ideal)
▪ What options -(Information needed)
▪ Alternatives-(list down all)
▪ Arguments-(evaluate based on theory)
▪ Decision-(with justification)
▪ Implementation-(How could the dilemma be dealt with)
▪ Review-(period,method)