1. What is business ethics?

a. Ethics is the principle of a person to know what is good and what is bad and that which
governs the actions of a person. Ethics describe the principles that a person adheres in
life, whether he or she is inclined subconsciously to be good or bad.
b. Ethics is important in business because it provides the assurance that a company
upholding high ethical standards and social responsibility is serving the interest of the
common good and for the public. This may result in preventing harm to come to the
society, protecting the employees following high ethical standards promoted by the
company from those who stray from ethical values, attract customers to the firm’s
product and services which leads to an increase in sales and profit, increase the morale
of the employees thus reducing labour turnover and increasing productivity of workers,
and may attract investors for further growth and expansion of the company, keeping
the share price high of the company in the stock market.
c. Yes, ethical behaviours must be grounded on ethical values. Ethical values are defined as
a set of established principles governing virtuous behaviour like honesty, compassion,
integrity etc. With this, what is ethically good is defined by the adherence of the person
through his behaviour to the ethical values.
A business

2.
a. utilitarianism - An ethical theory that tells us that we can determine the ethical
significance of any action by looking to the consequences of that act. Utilitarianism is
typically identified with the policy of “maximizing the overall good” or, in a slightly
different version, of producing “the greatest good for the greatest number.”
Utilitarianism is an ethical tradition that directs us to decide based on overall
consequences of our acts.
b. The deontological class of ethical theories states that people should adhere to their
obligations and duties when engaged in decision making when ethics are in play. This
means that a person will follow his or her obligations to another individual or society
because upholding one’s duty is what is considered ethically correct. For instance, a
deontologist will always keep his promises to a friend and will follow the law. A person
who adheres to deontological theory will produce very consistent decisions since they
will be based on the individual’s set duties.
c. Beneficence - The principle of beneficence guides the decision maker to do what is right
and good. This priority to “do good” makes an ethical perspective and possible solution
to an ethical dilemma acceptable. This principle is also related to the principle of utility,
which states that we should attempt to generate the largest ratio of good over evil
possible in the world. This principle stipulates that ethical theories should strive to
achieve the greatest amount of good because people benefit from the most good. This
 principle is mainly associated with the utilitarian ethical theory discussed later in this set
of notes.
d. Least Harm - similar to beneficence, least harm deals with situations in which no choice
appears beneficial. In such cases, decision makers seek to choose to do the least harm
possible and to do harm to the fewest people. Students might argue that people have a
greater responsibility to “do no harm” than to take steps to benefit others. For example,
a student has a larger responsibility to simply walk past a teacher in the hallway rather
than to make derogatory remarks about that teacher as he/she walks past even though
the student had failed that teacher’s class.
e. Respect for autonomy - This principle states that decision making should focus on
allowing people to be autonomous—to be able to make decisions that apply to their
lives. Thus, people should have control over their lives as much as possible because they
are the only people who completely understand their chosen type of lifestyle
f. Justice - The justice ethical principle states that decision makers should focus on actions
that are fair to those involved. This means that ethical decisions should be consistent
with the ethical theory unless extenuating circumstances that can be justified exist in
the case. This also means that cases with extenuating circumstances must contain a
significant and vital difference from similar cases that justify the inconsistent decision.
3. A. List of Corporate Responsibilities

a. Environmental sustainability initiatives enacted by businesses generally focus on

two main areas: limiting pollution and reducing greenhouse gases. As the
awareness of environmental issues grows, businesses that take steps to reduce air,
land and water pollution can increase their standing as good corporate citizens
while also benefiting society as a whole. For example, Cisco Systems, a
multinational technology company, has taken a variety of steps to reduce its
carbon footprint, including the installation of photovoltaic systems at production
facilities and developing platforms that allow employees to work from remote
locations rather than commuting to the office.
b. Direct Philanthropic Giving
Philanthropic initiatives include the donation of time, money or resources to charities and
organizations at local, national or international levels. These donations can be directed to
a variety of worthy causes including human rights, national disaster relief, clean water and
education programs in underdeveloped countries. For example, Microsoft co-founder Bill
Gates has donated billions of dollars to the Bill and Melinda Gates Foundation, which
supports numerous causes including education, the eradication of malaria and agricultural
development. In 2014, Bill Gates was the single largest giver in the world, donating $1.5
billion in Microsoft stock to the Bill and Melinda Gates Foundation.
c. Ethical Business Practices
The primary focus on ethics is to provide fair labor practices for businesses’ employees as
well as the employees of their suppliers. Fair business practices for employees include
equal pay for equal work and living wage compensation initiatives. Ethical labor practices
for suppliers include the use of products that have been certified as meeting fair trade
 standards. For example, Ben and Jerry’s Ice Cream uses fair trade-certified ingredients like
sugar, cocoa, vanilla, coffee and bananas.
d. Focus on Economic Responsibility
Economic responsibility focuses on practices that facilitate the long-term growth of the
business, while also meeting the standards set for ethical, environmental and
philanthropic practices. By balancing economic decisions with their overall effects on
society, businesses can improve their operations while also engaging in sustainable
practices. An example of economic responsibility is when a company modifies its
manufacturing processes to include recycled products, which could benefit the company
by potentially lowering the cost of materials and also benefit society by consuming fewer
resources.

a. Social Responsibilities

Economic Responsibilities - What

is a business? The business itself is an
economic activity. Its main function is to earn profits. To earn profits
means to understand the needs and demands of consumers whether it be
regarding the quality of the product or its price.

While understanding the perspective of the consumer and meeting their

needs and demand to earn a profit is the economic responsibility of a
business. When a business earns a profit, it also means that the
employees earn the profit in terms of incentives. The economic growth
of a business is not restricted to itself but affects the society as a whole.

Legal Responsibilities Legal

responsibilities are not only liable to the
individuals in the society but also to the businesses in the society. As
business is an entity itself, it must also follow laws and rules. Every
business has a responsibility to operate within the boundaries set by the
various commissions and agencies at every level of the government.
These rules and regulations are set for maintaining balance and the
greater good of the society.

A law-abiding enterprise is a socially responsible enterprise as well. The

business is free to do business however it wants but only within the
boundaries of regulations of various laws such as labour law,
environmental law and criminal law. For example, it’s a business’s duty
to pay taxes to the government and keep its account books clean as it
helps the government to track the economic state of the company.

Ethical Responsibilities - Ethical responsibilities include the behaviour of

the
firm that is expected by the society but not codified in law. The factors
of ethical responsibility include that the business must be
environmentally friendly. The business should always be aware of its
activities and how do they affect the environment. It is the moral and
ethical responsibility of every human and every business.
Philanthropic Responsibilities - Business
is one the most important pillar of the
society. And therefore it should support and improve the society
whenever it can. If a business is making significant profits it is the
business responsibility that it should be philanthropic towards the
society by donating funds or its goods and services.

It’s the philanthropic responsibility of the business to help different

groups of the society. It should also work towards providing free
education by opening educational institutes and training institutes or
helping the people affected by natural calamities such as floods and
earthquakes. It is the responsibility of the company management to
safeguard the capital investment by avoiding speculative activity and
undertaking only healthy business ventures which give good returns on
investment.

Responsibility towards Consumers or Customers

So, how can an organization extend CSR to customers? Talking about responsibilities, a company’s obligation
to the consumers are broader compared to other stakeholders; it may even take into account giving good value
for money. The primary expectation of consumers towards the corporations is a stable supply of goods and
services. So, companies must meet that expectation by delivering the right product or service with desirable
quality at the right time, right place, and fair price.

Other responsibilities that companies have towards consumers are improving the standard of living through
delivery of high quality products as well as treating the customers equally in the different aspects of the
business interaction. And of course, customer satisfaction is no longer a plain objective of companies but it has
now turned into a responsibility as an important factor for a firm to succeed. The powerful “word of mouth”
advertisement of a company product or brand is proven to be effective in increasing product sales and revenue.
Customer satisfaction, simply put, is how the customers are properly dealt if, for example, they have
complaints and queries. Companies are obliged to deliver prompt and courteous attention to such issues. They
must keep a fair advertising and trading standards and not mislead the consumers into something that is not
true. Firms are also responsible for providing the buying public with complete product, service, and company
information to both existing and potential customers.

Community
Such responsibilities extend beyond the business to the lives of the
people and the community and as such they should endeavor to:

a. play their proper role in civil affairs within the goals of the
business;
b. promote amenities and help, create better living conditions;
c. help in making people law-abiding and improving legislation and
administration in municipal and industrial affairs; and
d. set up socially desirable standards of living, themselves avoiding
ostentatious, wasteful expenditure, and improvident display in
weddings, festivities and parties.
Environment
Under the Environmental Responsibility of the Corporates, it is expected to operate in a manner
that protects the environment. Going beyond business activities and taking care of the
environment can bring business benefits. Now corporate companies have realized that business
activity in an environmentally responsible way is not only a legal duty but also a responsibility.
Over the past few years, stakeholders increasingly require corporate organizations to become
more environmentally aware and responsible. CSR activities of corporate organizations affect
their bottom line and the long-term success of their business.

The environmental aspect of Corporate Social Responsibility had been debated over the past few
decades and it’s a hot matter of any business house. Earlier in the traditional business model,
environmental protection has been considered only in relation to the “public interest”, but now
it’s a part of business. Governments of all over the world have maintained the principle of
environmental responsibility for ensuring environmental conservation and management as well.