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Business Ethics

The need for a company to behave ethically is
described in terms of a companys need to
interact productively with its stakeholders.

Business Ethics means conducting all

aspects of business and dealing with all
stakeholders in an ethical manner.

Business Ethics


Ethics is the study of our relationships with others.

Companies do not operate in a vacuum but rather

are plunged in a universe of relationships with
multiple stakeholders.

With the globalization the scenario in which

companies operate has become even more complex,
given the emergence of global groups of

Business Ethics

The quality of the individual is truly enhanced only when

the quality of life of the society in which he/she lives, is
Professional fulfillment for any institute is attainable only
when it accepts public accountability for its contribution
to social/national causes.
A business mission can be worthwhile and enduring only
if it is in line with national goals and priorities.


l. Ethics corresponds to basic human needs. Man desires to be
ethical not only in his private life but also in his business affairs.

2. Most people want to be part of an organization which they

can respect and be proud of, because they perceive its purpose
and activities to be honest and beneficial to all society. These
basic ethical needs compel the organisation to be ethically

3. Values give management credibility with employees. They

are a common language to bring leadership and its people

4. Organizational ethics, when perceived as genuine,

create common goals, values and languages.

5. Values help in better decision making, An ethical

attitude helps the management to take various aspects -.
economic, social, and ethical in decision making.

6. Ethics and profit go hand in hand. Cornpones driven

by ethical values are sure to be successful and profitable
in the long run.

7. Laws cannot protect society. This means where law

fails, ethics succeed.


Business must maintain the highest standards of behaviour

for the benefit of industry, employees ,customers,
shareholders and the society.

Goods and services must conform to the commitment

promised to customers.

Business must be truthful in stating claims

Customers must be given best possible service and treated

with respect and fairness.

Business must understand and respect the needs, concerns

and welfare of the community and society. It should use
knowledge and experience for upgrading the quality of

All business endeavors must combine the qualities of

private excellence for public good.

Truthfulness and honesty in claims and representation and

no indiscriminate advertising of products which are
hazardous to society or individuals.

Globalization, Business Ethics &

Competitive Advantage

Globalization has brought about greater involvement

with ethical considerations and most importantly
achieving competitive advantage through business
Globalization and business ethics are linked as they
affect a companys ability to commit to its
shareholders, in particular to external investors, and
preserve the trust needed for further investment and

Ethics of Scandal Versus

Ethics of Strategy

It is increasingly important for companies to deal with

ethics as a corporate strategy that, if uniquely
implemented, could achieve competitive advantage
for the company rather than waiting to react to possible
ethical issues of importance to the targeted
It is the necessity of being ethically proactive
company rather than being ethically reactive company.

Business Ethics as
Competitive Advantage

As the speed of comparable tangible assets acquisition

accelerates and the pace of imitation quickens, firms
that want to sustain distinctive global competitive
advantages need to protect, exploit and enhance their
unique intangible assets, particularly integrity
(building firms of integrity is the hidden logic of
business ethics).

Business Ethics as
Competitive Advantage (Cont.)
behavior that is trusting, trustworthy, and cooperative, not
opportunistic, will give the firm a competitive advantage.
Sustainable global competitive advantage occurs when a
company implements a value-creating strategy which other
companies are unable to imitate.
For example, a company with superior business leadership
skills in enhancing integrity capacity increases its
reputation capital with multiple stakeholders and positions
itself for competitive advantage

Business Ethics as
Competitive Advantage (Cont.)

Business ethics as competitive advantage

involves effective building of relationships with a
companys stakeholders based on its integrity that
maintains such relationships.