SCHOOL OF BUSINESS MANAGEMENT

COLLEGE OF BUSINESS

BPMN 3123
ETIKA PENGURUSAN
 LECTURE 1

1.0 Introduction
2.0 Ethical Theory & Moral Principles
2.1 Ethics and Moral Philosophy
2.2 Morality and Moral Standard
2.3 Moral Standards & Nonmoral Standards
2.4 Definition, Concept & Purpose of Ethics
2.5 Descriptive & Normative Ethics
2.6 Ethical Theories
3.0 Business Ethics
3.1 The Nature of Business Ethics
3.2 Definition & Concepts of Business Ethics
3.3 Issues in Business Ethics
Systemic Issues
Individual Issues
Corporate Issues
INTRODUCTION

What is ethics?
 Ethics and Moral Philosophy

Ethical/moral questions/problems deal with

anything related to basic principles hold in an
individual life
determined the behavior and actions of an
individual & society

the norms and values hold by an individual or

members of a society
determined the criteria that to be used to
measure the behaviors/actions of an
individual or members of a society
 Ethics and Moral Philosophy

Ethics

the study of morality (Velasquez, 2012)

explained the moral system of a
society or a group of people
made critical evaluation or judgment
on moral system
 Ethics and Moral Philosophy

Ethical/moral philosophy questioned

what is the moral system ought to be?

what are the standard of the good or

bad values & accepted by all people?

is the moral system hold by an

individual same with those hold by
other people?
 Ethics and Moral Philosophy

Morality
discussed the questions of right or
wrong, true or false, or good or evil
deals with things to be sought and
things to be avoided
way to see and question the issues
related to human action and behavior
 Morality and Moral Standard

Definition of Morality
The standards that an individual
or a group has about what is
right and wrong or good and evil
Velasquez - 2012
 Morality and Moral Standard
Moral Standards
the norms about the kinds of actions
believed to be morally right and wrong
- moral norms can be expressed as general rules or
statements about our action

(as well) the values placed on what we

believed to be morally good and morally bad
- moral values can be expressed with statements
about objects or features of objects describing
objects or features of objects that have worth
Velasquez - 2012
 Morality and Moral Standard
Sources of an individuals moral standards

children stage
learned or absorbed as a child from family, friends
and various societal influences

a persons growing stage

experience, learning & intellectual development may
lead the maturing person to revise these standards
discarded some and adopted new ones

a persons maturing stage

the person will develop standards that are more
rational (and intellectually adequate) and suited for
dealing with the moral issues of adult life
Morality and Moral Standard

Nonmoral Standards

the standard by which we

judge what is good or bad
and right or wrong in a non
moral way

Velasquez - 2012
 Morality and Moral Standard

Nonmoral Standards

the standard of etiquette judge peoples

manners as good or bad
the standard of law judge legal right or
wrong
the standard of language judge what is
grammatically right or wrong
 Moral Standards & Nonmoral Standards

Characteristics distinguish moral standards

from nonmoral standards
1. Moral standards deal with matters that can
seriously injure (wrong) or significantly
benefit human beings
2. Moral standards should be preferred to
other values, including self-interest
3. Moral standards are not established or
changed by the decisions of particular
authority figures or authoritative bodies
4. Moral standards are felt to be universal

5. Moral standards are based on impartial

considerations

6. Moral standards are associated with special

emotions and a special vocabulary (guilt,
shame, remorse, etc.)
Definition, Concept & Purpose of Ethics

Ethics
Greek word ethos
meaning character
Latin word mores
meaning moral or character
 Definition, Concept & Purpose of Ethics
Definition of Ethics
The principles of conduct governing an individual or a
group
The study of morality or a kind of investigation on
morality Velasquez, 2012
The discipline that examines ones moral standards or
the moral standards of a society to evaluate their
reasonableness and their implications for ones life
Velasquez, 2012
Deals with things to be sought and things to be
avoided, with ways of life and with telos Epicurus

Standards of right conduct Hartley, 2005

 Definition, Concept & Purpose of Ethics
The Concept of Ethics
Ethics involves judgments as to good and bad, right
and wrong and what ought to be
Ethics consists the standards hold by an individual or
a group concerning what is right and wrong or good
and bad
Ethics asks question of how moral standard is applied
in human life whether this standard is justified or not
Ethics is the study of moral standards the process of
examining the moral standard of a person or society to
determine whether these standards are reasonable or
unreasonable in order to apply them to concrete
situations and issues
 Definition, Concept & Purpose of Ethics
The Purpose of Ethics
to develop a body of moral standard that
people feel are reasonable to hold

Ethical standards
are generally accepted rules of conduct
that govern society
Ethical rules
are both standards and expectations for
behavior
 Descriptive & Normative Ethics
ETHICAL STUDY OF MORALITY
VS
SOCIAL SCIENCE STUDY OF
MORALITY

Ethics a way to study morality

Social sciences (anthropology, sociology &

psychology) also study morality
 Ethics study of morality
Ethics is the study of moral standards the process
of examining the moral standards of a person or
society to determine whether these standards are
reasonable or unreasonable in order to apply them
to concrete situations and issues.
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
Ethics itself is being normative Ethics is a
normative study of morality attempts to
determine whether or not standards are correct
 Descriptive & Normative Ethics

Ethics study of morality

A normative study is an investigation that

attempts to reach normative conclusions
that is, conclusions about what things are
good or bad or about what actions are right
or wrong
In short a normative study aims to
discover what ought to be
 Descriptive & Normative Ethics

Normative Ethics
Ethics is a normative study of ethics
Normative study is an investigation that
attempts to reach normative conclusions
what things are good or bad
what actions are right or wrong
 Normative Ethics

A normative study aims to discover what

should be
Evaluate, criticize and make decision on
the moral system
Suggests the moral laws that considered as
good and should be
Suggests the standard moral system which
based on the existing system
 Descriptive & Normative Ethics
Social sciences also study morality
Social sciences also study ethics
Social sciences engage in a descriptive study
of morality They explain the world but without
reaching conclusions about whether it ought to be
the way it is
A descriptive study is one that does not try to
reach any conclusions about what things are truly
good or bad or right or wrong
A descriptive study attempts to describe or explain
the world without reaching any conclusions about
whether the world is as it ought to be
 Descriptive ethics
evaluation of moral is sometimes differ,
based on differences in time, places and
situations what has been considered as moral
by certain groups might be considered as immoral
by others

does not try to reach any conclusions about

what things are truly good or bad, or right or
wrong
attempts to describe or explain the world
without reaching any conclusions about
whether the world is as it should be
 Conclusions

Ethics is the study of moral standards

Purpose to determine which standards are
correct or supported by the best reasons
Attempts to reach conclusions
about moral right and wrong
about moral good and evil
 Ethical Theories

Teleological Ethics
(Consequentialist)

Category

Deontological Ethics
(Nonconsequentialist)
 Ethical Theories
Teleological Ethical Theories
(Consequentialist Principle)

Is the method that determines the peoples

ethics from the consequences point of view,
either benefit or harm
An ethics approach that determine an act
based on how good or bad is the outcome
- Thomas White, 1992
 Ethical Theories
Teleological Theory
determines the ethics of an act by looking
to the probable outcome or consequences
of the decision (the ends)
Good or bad such act depends on;
- outcomes or consequences of an act
- not on the act itself
 Ethical Theories
Teleological Ethical Theories
(Consequentialist Principle)

i. Utilitarianism Approach
Directs individual to make decisions based
on the greatest good / utility / happiness for
the greatest number as the end result
Jeremy Benttham (1784-1832) and John
Stuart Mill (1806 1873)
 i. Utilitarianism Approach

Cost-benefit Analysis

Tally the cost and benefits of a given

decision
Follow the decision that provides for the
greatest overall gain
Weaknesses of the Utilitarianism Approach

There is a possibility of injustice

regarding the distribution of goods
The rights of any one person are not
taken into account no rights have
any greater weight than others
When the majority rules
who protects the minority?
who ensures that a minority voice is
heard?
 Teleological Ethical Theories

ii. Distributive Justice Approach

A teleological approach to ethical

decision making
Based on a concept of fairness
 ii. Distributive Justice Approach

John Rawls
Distributive justice holds that
ethical acts or decisions are those that
lead to an equitable distribution of
goods and services

It is critical to determine a fair method for

distributing goods and services
 Ethical Theories
Deontological Ethical Theories
(Nonconsequentialist Principle)

an approach that determines the ethics of

an act by looking to the process of the
decision
ethics is measured by the rightness of rules
and intrinsic values, rather than by
consequences
 Ethical Theories
Deontological Theory
(Nonconsequentialist Principle)
Holds that the ends do not justify
the means of an action
the rights things must always be
done, even if doing the wrong
thing would do the most good for
the most people
 Ethical Theories
Deontological Theory
(Nonconsequentialist Principle)

i. Universalism

Immmanuel Kant developed the concept

of categorical imperative in Grounding for
the Metaphysics of Morals
 i. Universalism
Categorical imperative
- the notion that every person should act
on only those principles that she or he,
as rational person, would prescribe as
universal laws to be applied to the
whole mankind
An act is right or wrong depends on either it
follows the rules in the ethical law
 i. Universalism
Immmanuel Kant
what is right for one is right for all
each of us can discover that right by
exercising our rational faculties
recognized universal rights (freedom
of speech, freedom of consent, the
right to privacy @ freedom of
conscience)
 Deontological Ethical Theories

ii. Religious Perspective

Evaluation of the peoples actions is more
rule-based i.e regulations
Deitys laws absolutely must shape the
whole of ones life
Religious thought is viewed as the basis
principle of an ethical behavior
Religion determines peoples action good
or bad of such action
 Deontological Ethical Theories

iii. Virtue Ethics

the key to good ethics lies not in rules,
rights and responsibilities, but in the
character
Plato & Aristotle - attention should be
given to strategies for encouraging
desirable character traits (honesty, fairness,
compassion and generosity)
 iii. Virtue Ethics
The primary question in virtue ethics
is not what actions are universally right?
but what is the best sort of life for human
beings to live
One should make decisions that a virtuous
person would
Aristotle believed that a person of good
character enjoys being good & doing right
things
 iii. Virtue Ethics
St. Thomas Aquinas divided virtue ethics
into
the religious or theological virtues of faith,
hope and charity
the intellectual virtues of prudence
(wisdom), justice, temperance and
fortitude
 iii. Virtue Ethics

Aristotle & Aquinas

believed that any individual had
the potential for virtue
as virtue was learned or
acquired, rather than innate
BUSINESS ETHICS

Merck and Company

Issue of River Blindness

Refer to Velasquez,2006
 INTRODUCTION
Relationship between ethics and business
What happen if there is conflict between
ethics and the self-interested pursuit of
profits?
When ethics conflicts with profits do
businesses choose profits over
ethics???
 BUSINESS ETHICS

Introduction
Business plays an important role in the
success and growth of one society &
nation
Business should be based on the ethics
that encourages cooperation between the
business organizations and their
stakeholders
 BUSINESS ETHICS
Introduction
Business organization
apply the business ethics in business
will bring benefits to entire society
neglect the business ethics will cause
harm to employees & other stakeholders,
pollutions, and hard for government to
collect the real numbers of business tax

It is important for businesses to apply and

practice good ethics
 BUSINESS ETHICS

B. F. Goodrich Case
Firm - B. F. Goodrich
Contract
- government of America
- supply the airplane brake for A7D (US
Airforce)
Responsibility worker Kermit Vandivier
However, a series of the brake tests were
failed
 BUSINESS ETHICS
B. F. Goodrich Case

Question
What should Vandivier do?
report the truth?
write up false report?
WHY????
 BUSINESS ETHICS
B. F. Goodrich Case

Vandivier ???
write the false report that against his
principle of ethics
report the truth but be fired by the
company or faced the economic suffer
Write the false report even though his
moral standard conflicts with his action
Definition & Concepts of Business Ethics
Business Ethics (definition/concept)
What is business ethics?
A specialized study of moral right and
wrong that concentrates on moral
standards as they apply to business
institutions, organizations and behavior
Velasquez, 2012
Refers to the values, standards and
principles that operate within business
Desjardins, 2006
 Definition & Concepts of Business Ethics
Business Ethics (definition/concept)
Business ethics
is a study of moral standards &
how moral standards apply
to social systems and organizations
that produce and distribute goods and
services &
to the behaviors of the people who
work within these organizations
 Issues in Business Ethics

Systemic Issues
ethical questions raised about the
economic, political, legal and other social
systems or institutions within which
businesses operate
include the question on morality of capitalism or
of the laws and regulation, industrial structures
and moral practices in business operation
example

The questions about the morality of the

government contracting system through
which B. F. Goodrich was allowed to test
the adequacy of its own brake design for
the A7D

The questions about the morality of the

international economic system with which
Merck was forced to deal
 Issues in Business Ethics

Corporate Issues
ethical questions raised about a particular
company (company itself)

include questions about the morality of the

activities, policies, practices and
organizational structure of an individual
company taken as a whole to give us the
overall perspective of the organization
example

The questions about the morality of B. F.

Goodrich corporate culture

The questions about the companys corporate

decision to qualify the A7D brake

The questions about the morality of Mercks

corporate decision to invest so many millions of
dollars in a project that the company knew would
probably not generate any profits.
 Issues in Business Ethics
Individual Issues
ethical questions raised about a
particular individual or particular
individuals within a company and their
behaviors and decisions

include questions of morality about the

morality of the decisions, actions or
character of an individual in one
company
example

The questions of whether Vandiviers

decision to participate in writing a report on
the A7D brake, which he believed to be
false, was morally justified

The question of whether it was moral for

Mercks chairman, Dr. P. Roy Vagelos, to
allow his researchers to develop a drug that
would probably generate any profits.
 Ethical Issues in Business
Technology & Business Ethics

Technology

Consists of all those methods, processes,

and tools that human invent to manipulate
and control their environment

New technologies transforming society

and business and creating the potential for
the new ethical problems
i. Information technology
related to the use of extremely powerful
computer internet, etc. to help us capture,
manipulate and move information in new
and innovative ways. It raises new ethical
issues in relation to risk, privacy and
property rights.

ii. Cyberspace
a term used to denote the existence of
information on an electronic network of
linked computer system. Risk of scam
(penipuan) and privacy issues.
iii. Nanotechnology
is a new field that encompasses the
development of tiny artificial structures
only nanometers in size. It raises issues
in relation to harming humans and
environment.

iv. Biotechnology
In the field of genetic engineering where
techniques are available to make
changes in the genes of the cells of
human, plants, etc. might create
creatures that can destroy life on earth.