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Business Ethics and

Environmental Management

Dr. Ameeta Motwani

October 2009
What is Ethics
Ethics is the discipline that examines one's moral standards or the
moral standards of a society. It asks how these standards apply to
our lives and whether these standards are reasonable or
unreasonable—that is, whether they are supported by good reasons
or poor ones. Therefore, a person starts to do ethics when he or she
takes the moral standards absorbed from family, church, and friends
and asks: What do these standards imply for the situations in which
I find myself? Do these standards really make sense? What are the
reasons for or against these standards? Why should I continue to
believe in them? What can be said in their favor and what can be
said against them? Are they really reasonable for me to hold? Are
their implications in this or that particular situation reasonable?
The ultimate aim of ethics is to develop a body of moral standards
that we feel are reasonable to hold—standards that we have
thought about carefully and have decided are justified standards for
us to accept and apply to the choices that fill our lives.
What is Business Ethics
Business ethics is a specialized study of right and wrong applied to
business policies, institutions, and behaviors. This is an important study
since businesses are some of the most influential institutions within
modern society. Business organizations are the primary economic
institutions through which people in modern societies carry on the tasks
of producing and distributing goods and services. They provide the
fundamental structures within which the members of society combine
their scarce resources—land, labor, capital, and technology—into usable
goods, and they provide the channels through which these goods are
distributed in the form of consumer products, employee salaries,
investors' return, and government taxes. Today large corporate
organizations dominate our economies. In 2003, General Motors, the
world's largest automobile company, had revenues of $195.6 billion and
employed more than 325,000 workers; Wal-Mart, the world's largest
retailer, had sales of $258.7 billion and 1,400,000 employees; General
Electric, the world's largest maker of electrical equipment, had sales of
$134 billion and 305,000 employees; and IBM, the world's largest
computer company, had revenues of $89 billion and 319,000
Why Business should bother about
• Self Interest: unethical conduct may cost
fines, loss of business and reputation
• Business has moral duty that extends
beyond serving the interests of owners
• Social Contract Theory: conflicting
interests are best resolved by formulating
a ‘fair agreement’ between the parties
Ethical Issues
• General Business Ethics
• Business Ethics and Accounting
• Ethics of Human Resource Management
• Ethics of Sales and Marketing
• Ethics of Production
• Ethics of Intellectual property, knowledge
and skills
• International Business ethics
General Business Ethics
• Moral rights and duties between a company and
its shareholders
• Ethical issues concerning relations between
different companies e.g. hostile take-overs,
industrial espionage
• Corporate Social Responsibility
• Leadership issues such as transparency,
democratisation and good corporate governance
• Environmental Accountability
Business Ethics and Accounting
• Creative Accounting and Earnings
Case Study: Enron

• Fallout of unethical accounting practices

Ethics of Human Resource
• Rights and duties owed between employers and
• Discriminations Issues
• Democratisation of the work place
• Privacy of the employees: workplace
surveillance, drug testing
• Privacy of the employer: Whistle Blowing
• Fairness of the employment contract
• Occupational safety and health
Ethics of Sales and Marketing
• Manipulation of values and behaviour: where do
we draw the line?
• Anti-competitive practices: manipulation of loyalty
and supply chains, foreclosure of raw materials
and critical inputs e.g. Cola companies
• Pricing Strategies: price discrimination,
cartelization e.g. OPEC
• Social Issues: content of Advertisement, black
markets and grey markets
Ethics of Production
• Harmful products and production
processes e.g. environmental pollution
Case Studies: Pesticides in colas, Bhopal
Gas, Plachimada
• Defective, addictive and inherently
dangerous products: tobacco, guns
• New techonologies e.g. GM foods, mobile
• Product testing: animal testing
Ethics of Intellectual property,
knowledge and skills
• Ethical disputes over ownership: company
who trains vs. employee, country of origin
vs. company discovering medicinal plants
• Patent, copyright and trademark
• Employee Poaching
• Biopiracy e.g. neem, haldi
International Business Ethics
• Cultural relativity of ethical values
• Fair trade: farmers in developing countries
• Sweat shops
• Local laws vs. domestic laws