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BUSINESS ETHICS

The Predictor of Success

INTRODUCTION
1. Aim of this handout is give an idea of ETHICS and ethical behavior in day to day life of mankind. Ethics are closely associated with the norms of human conduct. Presence and utilization of good ethics ensures the positive approach of a professional toward his / her working.
2. Religious preaching also envisages on

the ethical practices. Let us examine the stature of the lecture in detail.

INTRODUCTION
1. Philosophers sometimes call it Science of Morality, whereas professional usually use or interpret ethics to refer to element of professional practice that are part of dispute resolution.

2. There is no direct meaning of ethic or ethical behavior from an Islamic point of view. The term most closely related to ethics in Quran is KHULUQ. Depending on the translation this could be interpreted as Character.

INTRODUCTION
Quran uses many times to describe the concept of Goodness or good behavior all of which contribute to formation of character. Some are being listed below:
Khayer (Goodness) Maruf (Know and approved) Taqwa Adl (Justice)

Science or study of Morality


In philosophy ethical behavior is that which is good or right. Ethics is a Greek word comes from ETHIKA from ethos meaning character. Morality comes from morals the principles or standards of human conduct.

Morals are a complex of principles based on culture, religious or philosophical concepts or beliefs, by which an individual determines whether his/her actions are right or wrong.

These concepts and beliefs are often generalized by a culture and serve to regulate the behavior of its member.

WHAT IS BUSINESS ETHICS


Business ethics is the application of general ethical rules to business behavior. It sensitizes managers and staff to how they should act so that they retain a strong moral compass.

They give an idea what is right or wrong, true of false, fair or unfair, just or unjust, proper or improper, e.g. Honesty, obedience, equality, fairness, respect etc and then doing the right things for the betterment of mankind.

TO SUMMARIZE.
Ethics is a set of rules that define right and
wrong conduct. Ethical rules tell us when our behavior is acceptable and when it is disapproved and considered to be wrong. Ethical rules are guides to moral behavior. For many, religious beliefs and organizations are a major source of ethical guidance and moral meaning.

HISTORY OF THE CONCEPT

CAN ETHICS BE LEGISLATED?



Constitution of Pakistan Civil Servant Act Factory Act 1934 Compensation Act 1923 Wages Act Industrial Relations Act EOBI NIRC Labor Courts

UNETHICAL BUSINESS PRACTICES



Cutting corners on quality Covering up incidents Abusing or lying Lying customers Stealing from the company Taking credits from co-workers ideas/work Taking or giving bribe

UNETHICAL BUSINESS PRACTICES



Government corruption Financial scandals Product safety Discrimination Sexual harassment Firing an employee for WHISTLE BLOWING Divulging confidential information

ETHICS START WITH VALUES


VALUES
Ethical Behavior

Corporate Policy

LAW

THE STAKEHOLDERS
Customers

Shareholders

Employees

Neighbors

Partners

CREATE A MODEL COMPANY



Trust and Integrity
Leadership Teamwork and Synergy Simplicity Go Beyond

Get Things Done!

BUSINESS ETHICS APPLIED


Values

Business Results

Law

BUSINESS ETHICS APPLIED


Values

Business Results

Law

ETHICS, ECONOMICS & LAW

SOURCES OF ETHICAL NORMS


Fellow Workers Fellow Workers

Regions of Country

Family

Profession

INDIVIDUAL
Friends Employer

The Law

Religious Beliefs

Society at Large

ETHICS & LAW


Law often represents an ethical minimum. Ethics often represents a standard that
exceeds the legal minimum
Frequent Overlap

Ethics

Law

CONVENTIONAL APPROACH
Conventional approach to business ethics involves a comparison of a decision or practice to prevailing societal norms
Pitfall: Ethical relativism Decision / Practice Prevailing Norms

3 Models of Management Ethics


Three Types Of Management Ethics

Consumer Problems with Business

The high prices and poor quality of many products and after-sales service The failure of many companies to live up to advertising claims Too many products breaking or going wrong after you bring them home Misleading packaging The feeling that it is a waste of time to complain about consumer problems because nothing substantial will be achieved Inadequate guarantees and warranties Failure of companies to handle complaints properly Too many products that are dangerous The absence of reliable information about various products and services Not knowing what to do if something is wrong with a product

GLOBAL ETHICAL ISSUES


Wages and hours Child labor Discrimination

Legal and ethical business practices


Product safety and quality

Environment

WHAT CAUSES UNETHICAL BEHAVIOR



Stress Confusion Pressure to perform at expected levels

Competition within the industry


No knowledge

Dubious character

WHAT CAUSES UNETHICAL BEHAVIOR Individual values in conflict with


organizational goals

Managers attitudes and values

Competitive pressures
Cross-cultural contradictions

PERSONAL GAINS

CONSIDER CONSEQUENCES


IS IT ETHICAL ? IS IT LEGAL ? IS IT OK ? Is it fair ? Does it hurt anyone ?

Have I been honest with those affected?


Can my conscience live with this decision ?

IS IT RIGHT ?

AN ANALYTICAL APPROACH TO ETHICAL PROBLEMS

STEP 1

ASK

UTILITY Do benefits exceed costs?

RIGHTS Are human rights


respected?

JUSTICE Are benefits and costs


fairly distributed?

AN ANALYTICAL APPROACH TO ETHICAL PROBLEMS

STEP 2 Compare Results

If yes is the answer to all three questions, it is

probably ethical.

If yes and no are mixed, it could be either ethical or unethical.

If no is the answer to all three questions, it is probably unethical.

AN ANALYTICAL APPROACH TO ETHICAL PROBLEMS

STEP 3 ASSIGN PRIORITIES TO

UTILITY

RIGHTS

JUSTICE

Leaders Must Walk the Talk



Communicate the values.
Build a shared understanding.

Build and maintain the organizations culture.


Model the behavior you expect from the organization. responsibility.

Remember that with rights, you also have

Ethics in BusinessROBERT.B. MADDUX DOROTHY MADDUX

BIBLIOGRAPHY

Business Ethics and Managerial Values


S.K. BHATIA

Engineering Ethics
M GOVINDARAJAN, S. NATARAJAN

http://www.mapnp.org/library/ethics/ http://www.uwm.edu/People/andrewk/

THANK YOU THANK YOU

The weakest part of the relations comes when one of the persons has to give explanation to prove the trust