An Overview of Business Ethics. Chapter 1... An Overview of Business Ethics.
Business Ethics... Comprises principles and standards that guide behavior in the world of business. What is right or wrong, acceptable or unacceptable behavior within the organization. It is determined by key stakeholders.
Definitions….. Business Ethics are morals applied in business where standards are decided by the society/ organizations. Business require to maintain balance between ethics and economics. Society wants business to be profitable and ethical too. Balancing this is difficult exercise.
Objectives & Nature of Ethics Primary objective is to set highest goal of manhood & to set standard for the same. To study the human behavior and make assessment of moral –immoral.
Objectives….. Prescribe norms for moral behavior. Establish moral standard of behavior. Make judgment on human behavior and standard base.
Nature of Ethics. It deals with human conduct. It judge the values of facts in ideal situation. It can distinguish between good /bad. It is a set of systematic knowledge about behavior/conduct.
Business purpose & social Responsibility 1. Business purpose is profit at any cost even through unfair trade practices. Profit maximization is impossible without co-op of the society, therefore business has social responsibility / accountability .
Social accountability in business Business is accountable to all associate factors for just/ fair distribution of profit. Salary- workers, dividend- shareholders, good quality & reasonable cost –consumer taxes- govt, left-over balance is for the organization.
Two aspects of action 1. Aretaic action means expressing inner nature , revealing certain habits good/bad. 2. Deontic action means expressing the effect of our Action. How our actions influence our own relationships with others and change the world around.
Two aspects of action Thus in business term Aretaic means culture of organization and Deontic means interest of stakeholders. Thus two paths can be derived: 1) Virtue-based thinking. 2) Stake holder based thinking.
Virtue-based thinking Virtue based thinking focuses on developing habits of the heart, character traits and acting on them.
Stake holder based thinking 1) Interest based- its moral based assessment depending on end results. Interest of one group may go against the other.
Stake holder based thinking 2) Rights based – fair distribution of opportunities & basic freedom to stakeholders. Problem arises when minority protected against majority, individual protected against community.
Stake holder based thinking 3. Duty based- Responsibility is directed towards community rather than individual.