Business Ethics

Ethics is a branch of social science. It deals with moral principles and social values. It helps us to classify, what is good and what is bad? It tells us to do good things and avoid doing bad things. * So, ethics separate, good and bad, right and wrong, fair and unfair, moral and immoral and proper and improper human action. In short, ethics means a code of conduct. It is like the 10 commandments of holy Bible. It tells a person how to behave with another person. * So, the businessmen must give a regular supply of good quality goods and services at reasonable prices to their consumers.

They must avoid indulging in unfair trade practices like adulteration, promoting misleading advertisements, cheating in weights and measures, black marketing, etc. They must give fair wages and provide good working conditions to their workers. They must not exploit the workers. They must encourage competition in the market. They must protect the interest of small businessmen. They must avoid unfair competition. They must avoid monopolies. They must pay all their taxes regularly to the government. * In short, business ethics means to conduct business with a human touch in order to give welfare to the society. * * * Definition of Business Ethics * According to Andrew Crane, * “Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed. ” * According to Raymond C. Baumhart, * “The ethics of business is the ethics of responsibility. The business man must promise that he will not harm knowingly. ” * * * * * * * * * * * Features of Business Ethics * * * Code of Conduct: Business ethics is a code of conduct. It tells what to do and what not to do for the welfare of the society.

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All businessmen must follow this code of conduct. * * Based on Moral and Social Values: Business ethics is based on moral and social values. It contains moral and social principles (rules) for doing business. This includes self-control, consumer protection and welfare, service to society, fair treatment to social groups, not to exploit others, etc. * * Gives Protection to Social Groups: Business ethics give protection to different social groups such as consumers, employees, small businessmen, government, shareholders, creditors, etc. * Provides Basic Framework: Business ethics provide a basic framework for doing business. It gives the social cultural, economic, legal and other limits of business. Business must be conducted within these limits. * * Voluntary: Business ethics must be voluntary. The businessmen must accept business ethics on their own. Business ethics must be like self-discipline. It must not be enforced by law. * * * * Requires Education and Guidance: Businessmen must be given proper education and guidance before introducing business ethics. The businessmen must be motivated to use business ethics.

They must be informed about the advantages of using business ethics. Trade Associations and Chambers of Commerce must also play an active role in this matter. * * Relative Term: Business ethics is a relative term. That is, it changes from one business to another. It also changes from one country to another. What is considered as good in one country may be taboo in another country. * * New Concept: Business ethics is a newer concept. It is strictly followed only in developed countries. It is not followed properly in poor and developing countries. * * * * * * * * Need of Business Ethics * * Stop Business Malpractices: Some unscrupulous businessmen do malpractices business by indulging in unfair trade practices like black-marketing, artificial high pricing, adulteration, cheating in weights and measures, selling of duplicate and harmful products, hoarding, etc. These business malpractices are harmful to the consumers. Business ethics help to stop these business malpractices. * * Improve Customers’ Confidence: Business ethics are needed to improve the customers’ confidence about the quality, quantity, price, etc. of the products. The customers have more trust and confidence in the businessmen who follow ethical rules.

They feel that such businessmen will not cheat them. * * Survival of Business: Business ethics are mandatory for the survival of business. The businessmen who do not follow it will have short-term success, but they will fail in the long run. This is because they can cheat a consumer only once. After that, the consumer will not buy goods from that businessman. He will also tell others not to buy from that businessman. So this will defame his image and provoke a negative publicity. This will result in failure of the business. Therefore, if the businessmen do not follow ethical rules, he will fail in the market.

So, it is always better to follow appropriate code of conduct to survive in the market. * Safeguarding Consumers’ Rights: The consumer has many rights such as right to health and safety, right to be informed, right to choose, right to be heard, right to redress, etc. But many businessmen do not respect and protect these rights. Business ethics are must to safeguard these rights of the consumers. * * Protecting Employees and Shareholders: Business ethics are required to protect the interest of employees, shareholders, competitors, dealers, suppliers, etc.

It protects them from exploitation through unfair trade practices. * * Develops Good Relations: Business ethics are important to develop good and friendly relations between business and society. This will result in a regular supply of good quality goods and services at low prices to the society. It will also result in profits for the businesses thereby resulting in growth of economy. * * Creates Good Image: Business ethics create a good image for the business and businessmen. If the businessmen follow all ethical rules, then they will be fully accepted and not criticised by the society.

The society will always support those businessmen who follow this necessary code of conduct. * * * * Smooth Functioning: If the business follows all the business ethics, then the employees, shareholders, consumers, dealers and suppliers will all be happy. So they will give full cooperation to the business. This will result in smooth functioning of the business. So, the business will grow, expand and diversify easily and quickly. It will have more sales and more profits. * * Consumer Movement: Business ethics are gaining importance because of the growth of the consumer movement.

Today, the consumers are aware of their rights. Now they are more organised and hence cannot be cheated easily. They take actions against those businessmen who indulge in bad business practices. They boycott poor quality, harmful, high-priced and counterfeit (duplicate) goods. Therefore, the only way to survive in business is to be honest and fair. * * Consumer Satisfaction: Today, the consumer is the king of the market. Any business simply cannot survive without the consumers. Therefore, the main aim or objective of business is consumer satisfaction.

If the consumer is not satisfied, then there will be no sales and thus no profits too. Consumer will be satisfied only if the business follows all the business ethics, and hence are highly needed. * * * * * Importance of labour: Labour, i. e. employees or workers play a very crucial role in the success of a business. Therefore, business must use business ethics while dealing with the employees. The business must give them proper wages and salaries and provide them with better working conditions. There must be good relations between employer and employees. The employees must also be given proper welfare facilities. * Healthy Competition: The business must use business ethics while dealing with the competitors. They must have healthy competition with the competitors. They must not do cut-throat competition. Similarly, they must give equal opportunities to small-scale business. They must avoid monopoly. This is because a monopoly is harmful to the consumers. * * * * * * * Course Aims and Objectives * The aim of this course is to give a basic understanding of the major theories of ethics – including deontology utilitarianism and virtue theory and their application in the relevant fields of business and information technology.

One of the main course objectives is to encourage independent critical thought and develop an individual system of ethics. * Course Format * The class group is quite a large one, however the course will include group exercises and discussion. Each session (generally speaking) will have two parts. The first part will be informational, when we will go through the basics of theory/issue, and the second will be participatory, involving debates, discussion groups, votes and questionnaires (not part of assessment).

This will be an opportunity for you to further develop your communication skills and also to gain experience in articulating your views before your peers. It is often the case that unethical decisions activities go without criticism due to a failure of courage rather than moral judgment. But moral courage is not an innate characteristic it can be learnt through practice, and this will be an integral part of our classes. * Course Outline * See separate sheet with course outline. * Please note that the course has been prepared in such a way that it remains * flexible.

If there are any issues/topics you would like to include, please contact me as early in the course as possible and I will try to accommodate it. The course although the subject matter is serious, this course is meant to be enjoyable so don’t let the prospect of the essay discourage you. * Background to Ethics * The purpose is to give certainly normative as well, virtue ethics conduct. Philosophers generally distinguish consists mostly of an examination of the good society and constructive rather than descriptive (environmental ethics andDuring this course we will be concerned with an area of applied ethics meta-ethics).

Deontological ethics, normative ethical theories that can ethical principles and theories to ethics are all normative. Ethics is the area of philosophy concerned with the evaluation of human focus is on the grounds used to justify and wrong. It is evaluative and good life generally as opposed to evaluating actions alone. Guidance on a specific issue such as between four or five major branches in form our examination of dilemmas in business is concerned with the meaning of philosophical language and is distinguished form other forms of is often viewed as a separate breaking moral judgments. Meta-ethics moral judgments rather than on moral propositions. This means that the normative ethics because it is concerned Normative ethics is the branch of philosophyof ethics: meta-ethics, ethics and politics concerned with developing theories * Political ethics Practical (or applied) ethics practical disciplines – this includes methat determine which human actions are the origins and forms of political power (government). utilitarian ethics and virtue ethics and practical philosophy. * * * The History of Business Ethics * Business ethics has only existed as an academic field since the 1970s. During the 1960s, corporations found themselves increasingly under attack over unethical conduct. As a response to this, corporations – most notably in the US – developed social responsibility programmes which usually involved charitable donations and funding local community projects. This practice was mostly adhoc and unorganised varying from industry to industry and company to company. Business schools in large universities began to incorporate ‘social responsibility’ courses into their syllabi around this time but it was mostly focused on the law and management strategy.

Social responsibility has been described as being a pyramid with four types of responsibility involved- economic (on the bottom level), then legal, ethical and finally philanthropic. Ethical issues were dealt with in social issues courses However, and were not considered in their own right until the 1970s when philosophers began to write on the subject of business ethics. Previous to this development, only management professionals, theologians and journalists had been highlighting problems of this nature on a regular basis.

When philosophers became involved they brought ethical theory to bear on the relevant ethical issues and business ethics became a more institutionalised, organised and integral part of education in business. Thereafter annual conferences, case books, journal sand text books were more regular and established. This new aspect of business ethics differentiated it from social issues * * * * Courses in three ways: * 1) Business ethics provided an ethical framework for evaluating business and the corporate world. * 2) It allowed critical analysis of business and development of new and different methods. (This also made business ethicists unpopular in certain circles. ) * * 3) Business ethics fused personal and social responsibility together and gave it a theoretical foundation. In this way, business ethics had a somewhat broader remit than its predecessor (the social issues course) and was a good deal more systematic and constructive. Business ethics also recognised that the world of business raised new and unprecedented moral problems not covered by personal systems of morality.

Common-sense morality is sufficient to govern judgments about stealing from your employer, cheating customers and tax fraud. It could not provide all the necessary tools for evaluating moral justification of affirmative action, the right to strike and whistle-blowing. * * * * * * The Role of Business Ethics Today * Business and IT students spend the majority of their time at university learning about economics, business development, software engineering and computer programming. This is all valuable and necessary knowledge to prepare them for the demands of employment in the business/IT sector.

However, running or working in a business will raise many difficulties that a completely unrelated to the skills or knowledge gained in university. How do you evaluate such problems aspiring the more qualified candidate for a job when she has a disability requiring costly adaptations to the work environment, outsourcing production materials from countries where child labour and sweatshops are prevalent etc.? In recent years there have been several business scandals that caused serious damage to the credibility of the companies involved, occasionally the entire industry in which they operate, and the numerous stakeholders of the business. At this stage in your course, you are well equipped with knowledge of your subject, and this will be built on when you go into the workplace due to on-going training and other such practices. But it is fair to say that some of you may have never had the chance to think of the ethical issues entailed in business and IT. During this course on business ethics it is hoped that you will be given such an opportunity and attain a working knowledge of the different theoretical frameworks that can be applied to business. * * * Small Business Six Characteristics of an Ethical Business * * * * * Leadership: The culture of an ethical business is defined starting from the very top of the organizational chart. For a business to be ethical, its leaders must demonstrate ethical practices in any situation. The true test of this leadership is in the decision-making process when there is a choice between what is ethically responsible and what will result in profit or gain. Leaders who can consciously choose the path that is ethically correct, as opposed to one that is purely financially driven, have successfully created an ethical culture in the business.

When the culture is solid at the top of the organization, it trickles down to all areas and employees * Values: An ethical business has a core value statement that describes its mission. Any business can create a value statement, but an ethical business lives by it. It communicates this mission to every employee within the structure and ensures that it is followed. The ethical business will institute a code of conduct that supports its mission. This code of conduct is the guideline for each employee to follow as he carries out the company’s mission. Integrity: Integrity is an all-encompassing characteristic of an ethical business. The ethical business adheres to laws and regulations at the local, state and federal levels. It treats its employees fairly, communicating with them honestly and openly. It demonstrates fair dealings with customers and vendors including competitive pricing, timely payments and the highest quality standards in the manufacture of its products. * * Respect: Ethics and respect go hand in hand. An ethical business demonstrates respect for its employees by valuing opinions and treating each employee as an equal.

The business shows respect for its customers by listening to feedback and assessing needs. An ethical business respects its vendors, paying on time and utilizing fair buying practices. And an ethical business respects its community by being environmentally responsible, showing concern and giving back as it sees fit. * Loyalty: Solid relationships are a cornerstone of an ethical business. Loyal relationships are mutually beneficial and both parties reap benefits. Employees who work for a loyal employer want to maintain the relationship and will work harder toward that end.

Vendors and customers will remain loyal to a business that is reliable and dependable in all situations. An ethical business stays loyal to its partnerships even in challenging times. The result is a stronger relationship when emerging from the challenge. * Concern: An ethical business has concern for anyone and anything impacted by the business. This includes customers, employees, vendors and the public. Every decision made by the business is based on the effect it may have on any one of these groups of people, or the environment surrounding it. * * * Business Ethical Barriers * By Walter Johnson, e How Contributor When we speak of “barriers” in business ethics, we speak of those situations built into the system of competition that cause ethical dilemmas. In other words, the free market, based on competition and profit-seeking, contains inherent ethical problems. Since all firms in a competitive market seek to protect themselves from competitors while still maintaining their market share, firms are under constant pressure to adapt or die. This is nherent to the system of market capitalism. * Sales: Salesmen in retail are under constant pressure. Often, their pay check derives from commission, which means they must sell or suffer financial hardship and even lose a job. The problem here is that salesmen must constantly promote products to everyone and anyone who will listen. Since sales is always under pressure to perform, salesmen can find themselves exaggerating the usefulness of a product to make a quick sale. They might even lie for the sake of a sale.

In other words, pressure from managers, as well as other incentives, can force an otherwise decent man to lie about a product in order to make a sale * * * * Profits: Both board members and managers need to deal with the question of profits. In modern capitalism, many stockholders want quick returns or substantial capital gains. There is pressure to create quick profits over the long term with steady growth. Quick profits can get media attention, market attention and keep customers loyal by receiving substantial dividends on their stock holdings.

The ethical issue here is that there is great pressure on managers to squeeze more out of employees to increase productivity and make their own management techniques look good. At its worst, the ethical barrier here is to use quick profits to feather one’s own managerial nest at the expense of the long-term stability of the firm or the safety or welfare of the employees. * Communications: Another major ethical barrier is employee privacy. Few will deny that employees often waste time surfing the web, emailing friends or playing on Facebook. The barrier refers to the response of management.

If there is a grounded suspicion that employees are wasting time online, then the decision to install surveillance software on their computers might make some sense. Yet, there is an issue of privacy, as well as the possibility of employee distrust of management if this is done. In this case, employees are clearly not given the proper incentives to work, and rather, find it rational to waste time on YouTube. * * * * Local Business: Local, small business struggles to compete with the large chains. The larger chains are often cheaper, yet small business can be an integral part of the local economy.

Again, here is a barrier built into the system of competition: a firm can buy supplies from a big chain, hence forcing smaller firms to go out of business. On the other hand, the firm can pay a little more to support local suppliers and businesses. The market mentality would demand that one simply buy from the cheapest supplier. Business ethics, however, sees a barrier thrown up by the system of competition and might well suggest that the firm buy from local businesses for the sake of local employment and economic stability. * * * * * * * * * * ACKNOWLEDGEMENT * I would like to express my special thanks and gratitude to my learned teacher guide,—————– and to the worthy principal,————————who provided me not only motivation but valuable guidance to complete this challenging project on the topic “Role of Ethics in Business” In the process , I got ample opportunity to do research, which enriched and broadened my knowledge and understanding of this area.

I am sincerely indebted to them * Secondly, I would also like to thank my parents and friends who always inspired and helped me in finishing the project in time * THANKS AGAIN TO ALL WHO HELPED ME. * * * Place——————— * Date——————— * ———————————– * (Name and signature of the Student) * * * * * * * * *