Business Ethics Ppts

8/2/2019 Business Ethics Ppts

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BUSINESS ETHICS

&SOCIAL

RESPONSIBILITY



DEFINING ETHICS

• Understanding of right and wrong

• Ability to distinguish between the

right and the wrong.

• Integral part of life • Running a business is a part of life



WHAT IS ETHICS?

Ethics

Right or wrong, good or bad, in actions that affect othersBusiness ethics

Ethical or unethical behavior by employees of organizations.

“Ethics refers to a set of moral principles which should play

a very significant role in guiding the conduct of managersand employees in the operation of any enterprise.”



BUSINESS ETHICS

• Focuses on - Stakeholders, and employees

• Quality of product and services

• Customer satisfaction.

• Community and environment



BUSINESS ETHICS ARE IMPLEMENTED TO….

• Define the framework of the acceptable

behavior.

• Follow high standards of practice.

• Create benchmarks for self evaluation.

• Enhance sense of community.

• Create transparency in the business

activities. • Foster higher standards of business

ethics.

• Comply with government laws and norms.



BEHAVIORS IN AREAS (FROM A WALL STREET JOURNAL SURVEY):

– Government: 66%

– Sales 51%

– Law 40% – Media 38%

– Finance 33%

– Medicine 21%

– Banking 18%

– Manufacturing 14%



WHO IS RESPONSIBLE FOR ETHICS IN THE COMPANY?

“Everyone”



COMMON APPROACHES TO BUSINESS ETHICS

Utilitarianism – basic premise is that anaction

is judged as right or wrong depending onthe

consequences of the action

Universalism – the means justify the ends

of anaction, not the consequences

Rights – based on entitlements and

unquestionable claims



NEED FOR ETHICS IN MANAGEMENT

Environmental Pressure

Credibility

Moral Consciousness

Legal Pressure



STEPS IN MAKING ETHICAL DECISIONS



TOOLS OF ETHICS It is for improving our ethical reasoning.

Values: Relatively permanent desires that seemto be good in themselves. Values lead to qualityimprovement.

“Value represent basic conviction that a specificmode of conduct is personally or sociallypreferable to an opposite mode of conduct.”

Characteristics of Value: Part of culture, LearnedResponse, Inculcated, Social phenomenon,Gratifying Responses, Adaptive Process



Rights: Claims that entitle a person to take aparticular decision.

Duties: Obligation to take specific steps or obey thelaw.

Moral Rules: Rules for behavior that often becomeinternalized as moral values.

Human Relationships

Morality of care: primacy of relationship, Attachment &Interdependence



Common morality: The body of moral rules governingordinary ethical problems.

Promise keeping

No malevolence

Mutual aid

Respect for a person Respect for property



INSTITUTIONALIZING ETHICS

Social Audit : Report describing a company‟s activities in a given area of social interest, such asenvironmental protection, workplace safety, orcommunity involvement.



THE CHALLENGE OF RELATIVISM

Moral Relativism : The idea that we can not decidematters of right and wrong, good and evil, in anyrational way.

Naïve Relativism : The idea that all human beingsare themselves the standard by which their actionsshould be judged.

Cultural Relativism : The idea that morality isrelative to a particular culture, society or community.



CASE: INFOSYS TECHNOLOGIES

• Have a distinctive work culture and valuesystem.

• Great importance on customer delight,leadership, integrity, transparency,

fairness and pursuit of excellence. • Open door policy. • Value employees and encourage them to

make decisions about their own work. •

Treated as a flat organization when itcomes to communication and informationsharing



SHIFT TO ETHICS BECAUSE OF FOLLOWING TYPE OF FRAUDS…

Does Satyam‟s story tell

the myth

and reality of Indiancorporate

ethics?



CORPORATE ETHICS: INDIVIDUAL’S PERSPECTIVE

Signs of ethical deterioration.

In business, people have made

immoral millions

In government, public officialsare involved in bribery.

In education, cheating scandals

among students are common.

under-the-table payments for

admission

People believe that they have to

cheat to win.



CORPORATE ETHICS: MANAGEMENT PERSPECTIVE

Accountable for corruption in a company.

Board‟s decisions on resource allocation,

Performance targets or promotions

Always trump official statements of ethicalvalues.

Whistleblowers are to be given protection

Influence the „pressures‟ which the CEOs

handle in managing ethics.



PRINCIPALS FOR ETHICALLY RUN BUSINESS

• Principle 1 – Productivity Is Much MoreImportant Than Profitability

• Principle 2 – The Customer Is Not Sheep That Can

Be Sheared • Principle 3 – The Buyer's Domain Is More

Important Than the Middlemen's Domain

• Principle 4 – Be Diplomatic With Your Competitors



RESPONSIBILITY Social Responsibility has been defined by Davis as

follows:

“Social Responsibilities refer to the businessman‟s decisions and actions taken to reasons at leastpartially beyond the firm‟s direct economic ortechnical interest.”



DIFFERENCE BETWEEN ETHICS AND SOCIAL RESPONSIBILITY

Ethics provides guidelines for human behaviorin every field, whether organizational or non-organizational. Social responsibility works inorganizational context.

Ethics is concerned with micro aspect, that isrelating to daily operating decisions withlimited social impact. Social responsibility is

concerned with macro aspect relating todecisions with broad implications for a largesegment of the society.



Why corporate responsibility is needed?

Business is using the resources from thesociety like material, manpower and

many the other things which it need to

return it back.Business is with the people, of thepeople and for the people.



RESPONSIBILITY TOWARD CUSTOMERS

Consumer Rights

Fair Pricing

Ethics in Advertising



RESPONSIBILITY TOWARD EMPLOYEES

Legal and Social Commitments

Safe work environment Equal pay

no discrimination Good human relations Freedom, Self Respect & Self- Realization Increase in productivity and efficiency by

recognition on merit, by providing opportunities forcreative talents and incentives.



RESPONSIBILITY TOWARD INVESTORS

1. NO improper financialmanagement

2. NO insider trading

3. NO misrepresentation offinances on financialstatements



RESPONSIBILITY TOWARD LOCAL COMMUNITIES

EnvironmentAir pollution

Water pollutionLand pollutionClean up toxic wasteUse recycling

Growth / infrastructure Social well-being of all members of

the community



WHICH THEORY SHOULD BE USED FOR BUSINESS ETHICS?

Each approach has strengths

and weaknesses

Need to look at situation andapply best analysis/judgment



SR BY McDonalds

McDonalds having long chain of food chains in many countries & they do some CSR practices there

McDonald now using the recyclable paper in food packaginginstead of plastic

They are using less light during day hours

They process their waste & then dispose it & have differentdust bins for different wastes



Advantages of SR

Ethical thing to do. Improves the firms Image

Avoids Excessive regulation



An improved social environment

will be beneficial to the firm.

It can increase employee

motivation.

Helps to correct social problemscaused by the business.



Disadvantages of SR

It will reduce economic efficiency and

profit.SR behavior imposes additional costs

which reduce competitiveness.



The only social responsibility of businessis to create shareholder wealth.

The pursuit of social goals dilutesbusinesses 'primary purpose.Costs will be passed on to customers.



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Business Ethics Ppts

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