Business EnvironmentBusiness Ethics

Introduction To Business Ethics

• Ethics refers to study of principles relating to right and wrong conduct.

• Business Ethics are also know as Corporate Ethics.

• Business Ethics is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment.

•  It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations

WHAT ARE BUSINESS ETHICS ?

• Business ethics are implemented in order to ensure that a certain required level of trust exists between consumers and various forms of market participants with businesses. 

• Making business decision that are counter to what is right may result in short term profit but will lead to a huge loss on the long term or even demise of the organization.

• Organizations that are committed to long term success recognize and realize that creating a culture where ethical behaviors are rewarded and encouraged is the ultimate key to survival today and growth in the future.

WHY BUSINESS ETHICS ?

IMPORTANCE OF BUSINESS ETHICS

1. Cost and Risk Reduction : Companies which recognize the importance of business ethics will need to spend less protecting themselves from internal and external behavioral risks.

2. Long term Growth :Sustainable-growth comes from an ethical long-term vision which takes into account all stakeholders. It leads to smaller but sustainable long term profits rather than higher risks and short-lived profits.

3. Public Image :A company with good ethical background usually has a good public image in the market and vice versa.

4. Investments : Ethics of a business is responsibility to the investor and for that reason companies with strong reputations in the field of ethical business behavior are also companies that tend to attract more investment from people.

Sources of Business Ethics

1. RELEGION :It is one of the oldest foundations of ethical standards. Religion wields varying influences across various sects of people. It is believed that ethics is a manifestation of the divine and so it draws a line between the good and the bad in the society.

2. Culture :Culture is a pattern of behaviors and values that are transferred from one generation to another, those that are considered as ideal or within the acceptable limits. It is the culture that predominantly determines what is wrong and what is right.

3. Law : Laws are procedures and code of conduct that are laid down by the legal system of the state. They are meant to guide human behavior within the social fabric. The major problem with the law is that all the ethical expectations cannot be covered by the law.

Ethical And NON-Ethical

ETHICAL QUALITIES :

Honest

y

Caring Respec

t

Excellence

MoraleIntegrit

y

LoyaltyFairness

Accountable

Leaders

hip

Law Abiding

Promise Keeping

Top 3 most ethical Examples

1. The company has donated over $1 billion to renewable energy projects, and has decreased its own footprint by using energy efficient buildings and public transportation. The company is also a staunch advocate of free speech, which can be observed from its frequent conflicts with the Chinese government. Google is also an open supporter of gay rights. Yet all this pales in comparison to Google's status as a paragon for employee benefits. Just to name a few, Google employees have access to free health care and treatment from on-site doctors, free legal advice with discounted legal services

2. Given the fact that it was started by Bill Gates, one of America's most generous philanthropists, it follows that Microsoft would do well in following his example. The tech company and its employees donate over $1 billion yearly to charities and non-profit organizations. If that wasn't enough, Microsoft's management and employee's have also decided to tackle America's IT professionals shortage through its TEALS program. Through the TEALS program, Microsoft employees are encouraged to volunteer at local schools to instruct students in computer science, in the hopes that it will inspire them to enter the technology industry.

3.

Since 1988, the computer chip manufacturer Intel has been trying to bolster its reputation through its efforts to strengthen technological education. Through the Intel Foundation, the company hosts the Intel Science Talent Search and the international Science and Engineering Fair to help encourage STEM (science, technology, engineering, and mathematics) education for young people. Intel is also interested in making these areas more diverse; the company has many donation funds and programs to encourage girls and underprivileged minorities to study in these fields

NON – ETHICAL QUALITIES :

Corru

pt

ion

Time misuse Stealin

g

Disrega

rd

Cheating Dish

one

st

Bullying

Unfair

Irresponsible

V

iole

nce

of

Consc

ience

Unlawful conduct

Promise breaking

Top 3 most Unethical Examples

1. The Missouri based agricultural company has been named world's most unethical company. The company leads the world's production of genetically modified foods. Monsanto is infamous for unfairly suing farmers who try to grow foods both ethically and organically. If the lawsuit is not ruled in Monsanto’s favour, they still achieve their desired results as the small-scale farms become bankrupt due to legal costs. The company is also the creator of the highly poisonous herbicide named Roundup ( a weed killer). This weed killer is both damaging to ecology as well as humans. A 2008 scientific study found Roundup can cause the death of unborn children.

2.

The world's second largest oilfield services corporation, Halliburton was granted a no-bid contract to restore Iraqi oil during the invasion of Iraq. This contract was no doubt given to Halliburton thanks to the influence of Former Vice President Dick Cheney, who just so happened to be the former CEO of Halliburton Corp. Whilst in Iraq, Halliburton's subsidiary, KBR, was found to have unfairly overcharged for it’s operations by approximately $1.3 billion. On top of the Iraqi corruption, the company was fined for the bribery of Nigerian officials in order to secure oil and gas deals in Nigeria. Halliburton was forced to pay a fine of $559 million.

3.

The oil and gas company has been criticised for a variety of environmental and human rights abuses. Chevron has been accused of dumping 18 billion gallons of toxic waste into the Ecuadorian Amazon. Amazonian activists have claimed Chevron ran a campaign of intimidation against them to halt a pollution trial focused on the company. The oil giant has also been involved in human rights abuses with a group of Nigerian protestors campaigning against the company. Two of the protestors were shot by the Nigerian Army who had been transported to the scene by Chevron.

Conclusion

• Company leaders and employees can take genuine pride in their accomplishments knowing they didn’t bend rules, cut corners, or hurt people to accomplish their goals

• People produce best in an open, creative, ethical environment

• Quality, cost, availability, and other factors are not enough to maintain customer loyalty. Customers are also looking at the reputation of the company.

• Today’s investors will avoid a company that is not responsible and ethical. Recent market declines have partly resulted from concerns about unethical accounting practices.

• Without strong ethical values companies easily drift to the legal edges— dangerous territory where bending and breaking the law leads to lawsuits and indictments

• Companies that tolerate unethical practices in today’s transparent era, will almost certainly be exposed, then boycotted and punished in the marketplace