intro to business ethics part 2

7/28/2019 Intro to Business Ethics Part 2

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Business Ethics .. is a study of..

Our moral standards insofar as theseapply to business.

How reasonable or unreasonable these moralstandards in our society

Implication of moral standards to ourbusiness activities


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KIND OF ETHICAL ISSUES

SYSTEMIC

CORPORATE

INDIVIDUAL


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SYSTEMIC

Ethical questions

about the social,

political, legal, oreconomic systems

within whichoperates


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CORPORATE

Ethical questions about a

particular corporations

And its policies, culture,

climate ,impact, or actions


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Individuals

Ethical questions about a

particular individuals

decision, behaviour orcharacter


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Should ethics qualities be

attributed only to people or alsoof corporation?


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One view says

Corporation like people , act intentionally

And have moral rights, and obligations and aremorally responsible..


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One view says

It make no sense to attribute people ethical

qualities to corporations since they are not

like people but more like machines , only

human can have ethical qualities


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One view says

Human carry out the corporations actions , so

they are morally responsible for what they do

And ethical qualities apply to them.!


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Arguments against Business inethics


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In a free market economy..

The pursuit of profitwill ensure maximum

social benefit .. Soethics is not needed.

A manager most

important obligation isloyalty to the companyregardless of ethics.

So long ascompanies obey

the law they willdo all that ethics

requires


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Law of Agency

A Law that specifies the

duties of persons who

agree to act on behalfof another party and

who are authorized by

an agreement so to act .

- Person accepts legal

(and moral) duty to

serve the client loyally ,

obediently and inconfidential manner as

specified in the law


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Arguments SUPPORTING ETHICS inBusiness


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Ethics ..

Applies to all human

activities

Business Can notsurvive without ethics

Ethics is consistent

with profit seeking Customer ,

Studies suggest

Ethics does notdetract from

profits and it

contribute toprofit !!!


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CORPORATE SOCIAL

RESPONSIBILITY ..

Is business socialobligations


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Business Ethics and Corporate Social

Responsibility (CSR)

They are related to each other

They are also different


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CORPORATE SOCIALRESPONSIBILITY ..

REFERS TO A CORPORATION

RESPONSIBILITY OR OBLIGATIONTOWARD SOCIETY


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CSR ARGUMENTS

SHAREHOLDERS Theory

ONLY RESPONSIBILITY IS TO

LEGALLY AND ETHICALLY MAKE AS MUCH MONEY as

possible for its owner

( Milton Friedman )

CEO must operate within the

rules of the society.. Rules

of law and ethical custom.

STAKEHOLDERS theory

Corporation should be run for the

benefit of All stakeholders .

Managers should give stockholders a fair share of profits ,

BUT in a way that allows all

stakeholders to also get their

FAIR SHARE.

( working conditions, safer products ,

reducing pollution, even if this

reduce profits )


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Is Business Ethics and CSR related?

Being Ethical is one obligation companies owe to the Society.

Business ethics is part of Corporate Responsibility.

Social responsibility of business encompasses the economic, legal, , ethical, and

Discretionary expectations that society has of organizations .( A. Caroll)

Fairness implies, (normative arguments ) implies that business has obligations

To all stakeholders.


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Some Ethical

Problems

PRICE - IS PURELY

AN ECONOMIC

DECISION BASED

UPON COST ANDDEMAND. But the

price level selected

can have harmful

effects upon some

consumers.


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Truth in

advertising

Is complex and emotional;. A

rigidly truthful television or

magazine ad, every statement of

which is supported by a

reference to a scientific study ,

would be incredibly dull and

probably ineffective .

A tottaly untruthful television or

magazine ad, wiith wildy

exaggerated claims would be

illegal and probably equally in

effective.


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Product promotion

Use of free gifts

and price rebate to

attract business


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Working condition

Temperature,

humidity, or noise

levels maybe too

high, ventilationand lightings may

be too low and

fumes and dust

may be excessive in

some workplaces


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Quality of Products

Quality of products may be

a declining order ., with

increase in the cost of

materials.

Regular maintenance and

strict check and review of

quality control is

necessary from time to

time.


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Work force reduction

reduce the size and over

head cost of many

organizations .

Downsizing operations ,merger are generally a

response to an increase in

competitive pressure, but

there is an obvious human

cost to the people who areforced to leave.


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Ethical issues


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Ethical Relativism

The theory that there are

no ethical standards

that are absolutely orshould be applied to

the companies and

people of all societies

intro to business ethics part 2

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