8/3/2019 Business Ethics - Session 5
1/12
Business Ethics
What are ethics?
Why does business need to be ethical?
How can business become ethical ?
8/3/2019 Business Ethics - Session 5
2/12
Business Ethics
In the business world, ethics is the
study of morally appropriate
behaviors and decisions, examining
what "should be done.
Ethics are the standards by which
behaviours are evaluated for their
morality - their rightness or
wrongness.
8/3/2019 Business Ethics - Session 5
3/12
Business interact with civil society -
1) Accountability to investors and lenders- thefinancial domain (corporate accounting,
auditing, corporate law & stock market
regulators, corporate governance)
2 Accountability to direct participants in
corporate value creation- customers,
employees, vendors; the domain of consumerprotection, labour laws, commercial contracts
(this is the direct focus of corporate
management).
8/3/2019 Business Ethics - Session 5
4/12
Business interact with civil society -
3) Accountability for the effect of their operations on the physical environment
(domain of environental regulations)
4) Accountability for the human condition
around their operations health, education,
employment, and cultural needs in the
community (here corporate responsibility isnot much regulated and this factor is the
focus of most corporate philanthropy)
8/3/2019 Business Ethics - Session 5
5/12
Business interact with civil society -
5) Accountability for the political health of thesocieties where they operate- human rights,
fair democratic process
These five domains are like steps of a ladder for
Business ethics and CSR.
8/3/2019 Business Ethics - Session 5
6/12
Business Ethics
Development The cultural context influences
organizational ethics
Top managers also influence ethics
The combined influence of culture and
top management influence
organizational ethics and ethicalbehaviors
8/3/2019 Business Ethics - Session 5
7/12
The Evolving Context for
Ethics From domestic where ethics are
shared
To international where ethics are notshared when companies:
Make assumptions that ethics are thesame
Ethical absolutismthey adapt to us Ethical relativismwe adapt to them
To global which requires an integrativeapproach to ethics
8/3/2019 Business Ethics - Session 5
8/12
Emergence of a Global
Business Ethic
Growing sense that responsibility for rightingsocial wrongs belongs to all organizations
Growing business need for integrativemechanisms such as ethics Ethics reduce operating uncertainties
Voluntary guidelines avoid governmentimpositions
Ethical conduct is needed in an increasinglyinterdependent worldeveryone in the samegame
Companies wish to avoid problems and/or
be good public citizens
8/3/2019 Business Ethics - Session 5
9/12
Ways Companies Integrate
Ethics
Top management commitment in word
and deed
Company codes of ethics
Supply chain codes
Develop, monitor, enforce ethicalbehavior
Seek external assistance
8/3/2019 Business Ethics - Session 5
10/12
External Assistance with
Ethics
ndustry or professional codes
Certification programs, e.g., ISO 9000
Adopt/follow global codes
Caux Round Table Principles
8/3/2019 Business Ethics - Session 5
11/12
Reasons for Businesses to
Engage in Development of a
Global Code of Business Ethics
Create the same opportunity for all
businesses if there are common rules
Level the playing field
They are needed in an interconnected world
They reduce operating uncertainties
If businesses dont collaborate, they may not
like what others develop
8/3/2019 Business Ethics - Session 5
12/12
Four Challenges to a Global
EthicGlobal rules emerge from negotiations and
will reflect values of the strong
Global rules may be viewed as an endrather than a beginning
Rules can depress innovation and creativity
Rules are static but globalization is dynamic
Top Related