 Looping

Business Ethics
Outline
• Principles of personal ethics
• Professional ethics
• Principles of professional ethics
• Evolution of ethics over the years
• Honesty, integrity and transparency are the touchstones of business ethics
• Distinction between values and ethics
• Roots of unethical behavior
• Ethical decision – making process
• PLUS ethical decision-making model
Principles of Personal Ethics
 Personal ethics sometimes called as morality. it includes your personal Values And moral qualities.
 It is influenced by family, friends, culture, religion, education and many other factors.
 Personal ethics are chosen by an individual & can change by them.
 personal ethics can vary from person to person, but these principles provide a general guideline for ethical
behavior in personal and business interactions.
 Respect others: Treat others with respect and allow them to make their own choices.
 Be Caring: Show kindness towards others.
 Practice Empathy: Try to understand and relate to the feelings and perspectives of others.
 Follow the Six Pillars of Character:
 Trustworthiness: Be reliable and honest.
 Respect: Treat others with respect.
 Responsibility: Take ownership of your responsibility.
 Fairness: Treat everyone equally.
 Caring: Show concern for the well-being of others.
 Citizenship: Be a responsible member of your community.
 Follow the Law: Obey the rules and laws that govern society.
 Prevent Harm: Avoid actions that could cause harm to others
Professional Ethics
 In life, our behavior is governed by different norm systems.
 professional ethics are rules created by groups of professionals, to guide their behavior in
their specific work. Ex : doctor and lawyer
 The norm systems governing the behavior of a professional are:
 Individual morality (personal sense of right and wrong)
 Refers to individual values of a specific person & what they believe to be right.
 Individual morality is influenced by how a person was raised.
 It is their personal value system.
 When someone goes against their individual morality, they often feel guilty.
 Positive morality (what society considers right)
 This set of norms represents what is considered “right” in society at a particular time.
 If you don't follow positive morality, you might face social disapproval
Professional Ethics (Cont…)
 Law (Legal Norms) (laws are rules set by the government)
 Laws protect society & regulating behavior.
 Public Law – also referred to as criminal law: between the state and individual.
 Private Law – Focuses on relationship between individuals, often related to contracts
and personal rights.
 Formal Law and Common Law - judgments of courts.
 Professional Ethics
 Professionals create their own rules, like a code of conduct, more specific to their
field.
 Breaking these ethical rules can have serious problems within their profession.
 Ex : doctor, lawyer, government officers
* Principles of Professional Ethics
 Most of profession have common fundamental principles like:
1. Respect People’s privacy and Rights
 Respect the client’s personal integrity (privacy, confidentiality)
 Keep their personal information private and never judge them based on factors like age,
behavior, culture, gender, race, or religion.
 If you can't handle a task, refer it to someone who can.
 Respect the knowledge skills and experience of your team members and other professionals
 Don't share confidential information without proper authorization.
2. Responsible Practice
 Get the necessary training, stay updated, and seek guidance when trying something new.
 Always work within your expertise.
 Always have the right knowledge and skills before you start.
 If you're doing something new, get the right training and guidance.
 Keep learning and stay updated.
 If you're trying a new technique, do it under the guidance of someone experienced.
Principles of Professional Ethics (Cont…)
3. Integrity in Relationships
• Professionals hold more knowledge and power than clients, making clients vulnerable.
• Trust is crucial for professionals to succeed.
• In this relationship, always act to client with loyalty and honesty.
• Always be honest and truthful in your work. Act with strong moral character.
4. Responsibility towards society
• Clients come first, but professionals also have a duty to society.
• Share information to improve the profession.
• Speak up against unprofessional behavior to maintain trust.
• Help people who can't afford services.
• protect society from dangerous practices
• Conduct yourself in a manner that reflects positively on your profession.
• Follow ethical guidelines and principles consistently.
• Be unbiased in your decisions and advice.
• Don't let personal interests or external pressures influence your professional judgment .
Evolution of Ethics over the Years
 business ethics has a long history rooted in the principles of fairness and equality.
 Business ethics can be traced back to early bartering systems, where the principle of equal
exchange was foundational.
 The modern concept of business ethics took shape in the 1970s in the United States,
response to social protests
 Business ethics evolved into an academic field with philosophical branches.
 Businesses started incorporating ethics into their practice. This included the adoption of
corporate social responsibility strategies and codes of conduct. Government played a huge
role in this.
 Business ethics spread to Europe and Japan in the 1980s, with variations due to socio-
political-economic differences.
 It expanded globally with different local emphases and histories.
 The UN Global Compact, launched in 2000, further promoted ethical business practices
worldwide.
Evolution of Ethics over the Years (Cont…)
 Ethics is something that all humans share.
 People have their own moral values that determine what they consider right or wrong, good or
bad.
 These values might differ between individuals and cultures, but the idea of judging human
behavior morally is universal.
 Business ethics has developed over time.
 It helps define what it means to be a responsible and ethical individual in business.
 It's an essential tool for effective leadership
 It's relevant in all organizations, from top management to all employees.
 Ethics is seen as everyone's concern, and it's essential not just for financial success but also for
addressing societal challenges.
 Businesses should achieve both economic success & address important social issues. Ethics
plays a huge role in this.
Need for business ethics
 Business ethics can impact company's profitability and reputation.
 Business ethics can differ depending on the industry and the country.
 Ethical operations are directly linked to a company's profit, both short-term and long-term.
 Customers, suppliers, and employees won't support a company, that engaged in fraud or unethical
practices.
 Maintaining high standards in business relationships earns trust from customers and the public.
 Business ethics involve more than just obeying the law.
 It means that every activity a company does should be based on strong integrity.
 Benefits of Business Ethics:
 Attract investors and customers.
 Build and maintain a good reputation.
 Increase productivity.
 employee and customer loyalty.
 Reduce business risks.
* Honesty, Integrity & Transparency are the Touchstones of Business Ethics
Honesty: Honesty means telling the truth and being truthful not only to others but also to
yourself.
 It's a fundamental part of a person's character, based on moral values, and helps to build
trust.
 Honesty can change over time based on experiences and cultural background.
 Ethical corporate behavior is really just a reminder of the age-old saying that "honesty is the
best policy.“
Transparency: Transparency is about providing full access to information, even when it's
uncomfortable.
 Businesses should be transparent with customers, employees, and stakeholders about
their actions and values.
Integrity: Integrity involves consistent moral values and conduct in morally justified
actions.
 It's a touchstone of business ethics and shapes a person's character.
 Integrity is shaped by personal concepts of responsibility, respect, and lessons learned.
Honesty, Integrity & Transparency are the Touchstones of Business Ethics
 Advantages of Ethical Behavior:
 positive consumer support and increased demand.
 brand recognition and business awareness.
 attract motivated employees.
 attract investments from ethical investors.
 Disadvantages of Ethical Behavior:
 Ethical sourcing might have higher costs than choosing the cheapest option.
 There's a risk of creating false expectations if ethical behavior is not consistent.
Building Trust: Trustworthy businesses are transparent and honest in their actions and
communications.
 This builds trust with consumers, employees, and stakeholders.
 Trustworthiness impacts both internal and external perceptions of a business.
Fairness:
 Treating customers and employees fairly is a key aspect of business ethics.
Values and Ethics
Values: Values are a set of moral and ethical principles that form the foundation of an individual's character.
 They are like building blocks, shaping a person's moral structure.
 Values are often inherited from one's environment, culture, and other influencing factors.
 Values reflect one's orientations towards what is considered desirable in society.
 They are essential for living in a society.
 Ethics and values are important in every aspect of life, when we have to make a choice between two things,
wherein ethics determine what is right, values determine what is important.
Moral Values: Moral values focus on matters of right and wrong.
 They help individuals distinguish between right and wrong actions.
 Moral values are constant and unchanging.
 They are primarily for self-development and self-discipline.
Human Values: Human values focus on how individuals treat others in society.
 They can vary from person to person and change over time.
 Human values focus on interactions and relationships with others.
 They can be taught and learned.
* Values and Ethics
 Ethics and values are important in decision-making. Ethics determine what is right, while values determine what
is important.
 guide individuals in making choices. Ethics serve as a measure of the rightness or wrongness of choices.
 Values are influenced by various factors, including family background, culture, religion, community, and
profession.
ETHICS: VALUES:
guidelines that help us decide what's morally right or personal beliefs that help us decide what's important.
wrong.

They are a set of moral principles we follow They are what drive our thoughts.

Most people follow similar ethical rules Values vary from person to person.
Ethics tell us what's right or wrong in different situations. Values tell us what we care about and want to achieve.

They help us judge how right or wrong our choices are. They decide how much something matters to us.

Ethics keep our behavior in check. Values push us to act based on what's important to us as
individuals.
Roots of Unethical Behavior
 Unethical behavior at work doesn't have to be a huge and costly. small, everyday actions by employees and
managers can add up to significant damage.
 Nearly half of all U.S. workers have seen unethical behavior in their workplaces.
 This includes things like wasting company time, mistreating others, lying, stealing, or breaking company
internet rules.
 Examples of Unethical Behavior in the Workplace:
 Wasting Company Time: This is when employees use work hours for personal activities, like browsing the
internet or taking long breaks. It's unethical because they're getting paid for work they're not doing.
 Mistreating Others: include behaviors like bullying, harassment, discrimination, or disrespectful treatment
of others. Such actions can lead to emotional distress, and decreased productivity among employees.
 Lying: Lying to employees or customers breaks trust, which is important for any business. Lying not only
damages trust but can also drive people away from the business
 Stealing: Theft in the workplace can involve various forms, such as stealing office supplies, equipment, or
intellectual property (like trade secrets or important information).
 Breaking Company Internet Rules: Many companies have policies in place regarding internet and computer
usage. Breaking these rules can involve activities like, downloading unauthorized software, sharing
confidential information online
*Roots of Unethical Behavior (Cont…)
 Unethical behavior is actions that go against what is considered right or proper in a person's life,
profession, or industry. It can happen with individuals, businesses, professionals, or politicians. Some
factors that can lead to unethical behavior include:
 Pressure to balance work and family life. , Poor communication. , Bad leadership. , Long working
hours. , Heavy workloads. , Lack of support from management. , Pressure to meet sales or profit
targets. , Lack of recognition for achievements. , Company politics. , Personal financial worries.
Root Causes of Unethical Behavior:
 1. No Code of Ethics: When there's no clear ethical code in place, employees might not know what's right
or wrong.
 Having a code of ethics sets the organization's values and creates rules for everyone to follow.
 2. Fear of career: People often don't report unethical behavior because they're afraid of negative
effects. They worry about damaging their careers
 Sometimes, they don't know how to report or think their report will be ignored.
 3. Peer Influence: People tend to follow the crowd. If others are doing something unethical, they
might think it's okay.
 This is especially true if it's similar to what their co-workers are doing. People may find unethical
actions more acceptable when they see others like them doing them.
Roots of Unethical Behavior (Cont…)
 4. it start with small: Unethical behavior often starts small, and than make bigger and bigger.
 If unchecked, it can turn into bigger and more serious offenses
 5. Setting a Bad Example: (Leadership Matters:)
 Ethical behavior starts with the leaders of an organization.
 Employees follow their leaders, and a leader's personal character is crucial in this.
 Leaders who demonstrate strong personal character are more likely to set a positive ethical tone.
 When employees see their leaders behaving unethically, like leaving work early every day,
they might copy that behavior.
 Leaders play a significant role in shaping the ethical culture of a company.
 However, if these small ethical issues are left unchecked, they can become costly problems.
 It's important for leaders to set a good example of ethical behavior.
 Addressing small ethical problems can prevent larger issues and save company.
 Making Ethical Decisions ( Ethical Decision – Making Process )

 thinking about what's right and good.

 doing things in a way that is responsible, fair, trustworthy, and respectful of others. This
helps avoid problems and failures.

 it can reduce risks, protect a company's reputation, and attract people who care about
doing the right thing.

 To Do Business Ethically: Is It Allowed and Is It Fair?

 Is It Allowed? This question is about checking that, what you want to do follows the rules.
You should think about not just the law but also the rules your company has. If the answer is
"no," then you probably shouldn't do it.
 Is It Fair? This question is about being fair and balanced. Will your decision treat everyone
fairly, both now and in the future? Decisions that make some people very happy while making
others very unhappy can cause problems later. It's not always possible to make everyone happy,
but leaders should try to avoid making things very unfair.
PLUS Ethical Decision-Making Model
 popular way to help leaders make ethical decisions. It's like having filters to ensure decisions are ethical.
 P - Policies and Procedures: Check if the decision follows the company's rules.
 L - Legal: Make sure it doesn't break any laws or regulations.
 U - Universal: Think about how it fits with the organization's values and culture.
 S - Self: Ask if it's fair & according to your own standards.
 You can use these filters at each step of the decision-making process to create a clear ethical path.

Corporate Governance Ethics

 Ethical corporate governance means having clear rules and policies in place for how a company is run and
conducts its daily business.
 Companies are meant to provide services and make profits, but they must do so while following rules to
prevent unethical behavior.
 These rules should apply to everyone in the company, including top executives .
 Corporate governance also involves accountability, responsibility, and checking that everything is being done
right.
Corporate Governance Ethics
 Creating an ethical atmosphere in a company is crucial. This is done through clear rules and practices.
It's something that needs constant attention.
 Managers play a big role in solving problems and creating a good atmosphere in the company.
 The ethical climate in a company is influenced by how it's structured, who it hires, how it measures
performance, and how it controls things internally.
 Managers need to make it easy for everyone in the company to do the right thing, not the wrong thing.
 Conflicts can happen at different levels in a company, and how they're handled can also different.
 How Ethics Improve Corporate Governance:
 Be honest and act with integrity. Avoid conflicts of interest in both personal and professional
relationships.
 Provide accurate, complete, and understandable information in reports and documents that the company
shares with regulators and the public.
 Follow the laws and regulations of the country, region, and local governments where the company
operates.
 Protect confidential information acquired at work and don't use it for personal gain.
 Keep your skills up-to-date and share knowledge to benefit the company, peers, and the community.