becg lec 1-2013
TRANSCRIPT
What is Ethics??
• The word ethics is derived from Latin word ethicus and Greek word ethikos.
• Ethics are moral guidelines which govern good behaviourSo behaving ethically is doing what is morally right
• A system of moral principles • Our Ethical compass
Concepts of Ethics• Ethical subjectivism – the morally correct decision often
depends on the circumstances of a person making it.
• Ethical relativism – there is no universal set of principles by which morality may be judged.
• Consequentialism – it consists of two ideas: • the concept of value • maximization of value.
• Ethics of virtue – it emphasizes the role of individual traits.
Relationship between business & ethics • Unitarian view of ethics – business is a part of moral ethics. If
businesses want to exist, survive and flourish in the log run, morality and ethics cannot be separated from the operation of business.
• Separatist view of ethics – Adam Smith proposed that businesses in order to flourish, should concentrate on its goal, i.e.; profit maximization.
• Integration view of ethics – Talcott Parsons proposed that ethical behavior and business should be integrated or combined in a new area called Business Ethics. Business has right to make profit but at the same time, it should discharge social obligations.
Ethical theories
• Metaethics
• Normative ethics – Teleological ethical theory– Deontological ethical theory– Virtue ethics
• Applied ethics
Ethical theories• Metaethics –
– it deals with the gamut of ethical issues.
– It is defined as the study of the origin and meaning of ethical concepts. It questions whether the moral values exist independently of humans or they are simply human conventions
– Psychological issues that deal with psychological basis of the moral action
– Linguistic issue that deal with the meaning of key moral terms we use.
‘Axe’ – even angels will fall !!!
Ethical theories• Normative ethics –
• It implies something that ‘guides’ or ‘controls’
• It guides human conduct. • We should treat others the same way
we want others to treat us.
Livon Hair Gain
Three normative theories
• Teleological ethical theories –thinking rationally about ends. An action is morally correct if the consequence of the action are more favorable. It is also called as Consequentialist theories.
• Deontological ethical theory – focuses on certain fundamental duties that we have as human being
• Virtue ethics – focuses on character development
Ethical nature of an organization
• Theory of corporate moral excellence – ethical companies are based on moral values.
• Ethics and stakeholder theory - ethical companies pay attention to the needs and rights of stakeholders
• Ethics and corporate governance - ethical companies adopt governance practices
Theory of corporate moral excellence
• Culture is based on values • Espoused values• Values in practice
• Espoused values refer to a company’s statements, credos and code of ethics.
• They describe the organizations purpose and ethical perspective.
• Espoused values may differ from values in practice, depending on situations.
• Hoffman classified corporate culture into three types:
• Basic values attitudes and beliefs of the organization
• Organizational goals, policies, structure, strategies that are shaped by the values and beliefs prevalent in the organization
• Organizational procedures and processes
Ethics and Corporate Code
• It referred to the policy statements that lay down a company’s ethical standards. They are designed to govern the conduct of the employees, clarify the strategy, clearer communication, etc.
• CEO, board of directors, legal department,
consultants and top management formulate the code.
Common format for Corporate Code
• Compliance code • corporate credos• Management philosophy statements• Special documents• Circulated letters• Compliance certificate• Purchase orders
• Johnson and Johnson credo says, "We believe our primary responsibility is to the doctors, nurses and patients, mothers and all others who use our products and services“
• Tata credo says 'give back to the people what you have earned from them'.
• Wal-Mart, established the “Three Basic Beliefs” as the company's credo: - Respect for the Individual - Service to our Customers - Strive for Excellence