Mgt07 Report

8/6/2019 Mgt07 Report

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FUNDAMENTAL PRINCIPLEOF BUSINESS ETHICSThe Role of Business Ethics


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What is Business Ethics?

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 isrelevant to the conduct of individuals and entire

organizations.

also known as corporate ethics. Business ethics has both normative and descriptive

dimensions.


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Are Business Ethics Important?

Ethics are important to firms for a variety of

reasons, including the legal responsibilities of the

executives, costs of violations, and reputation.

Executives and managers are often held liable forviolations that occurred below them even if they did

not know about or condone the situation. This is a

major incentive for directors and top management

to see that their organization keeps ethical

considerations in perspective while making

decisions.


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BUSINESS ETHICS AND ITSBUSINESS ETHICS AND ITSISSUEISSUEThe Role of Business Ethics


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What does ethical mean to you?

50 percent defined ethical as what my feelings tell

me right.

25 percent defined it in religious terms as what is

in accord with my religious beliefs.

18 percent defined it as what conforms to the

golden rule.


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What is ethics?

The principles of conduct governing an individual or

a group.

The study of morality


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What is Morality?

The standard that an individual or a group has

about what is right and wrong, or good and evil.


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What is moral standards?

The norms about the kinds of actions believed to be

morally right and wrong as well as the values

placed on the kinds of objects believed to be

morally good and morally bad.

Moral norms can usually be expressed as general

rules or statements, such as always tell the truth, it

is wrong to kill innocent people, or actions areright to the extent that they produce happiness.


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According to Vandivier

We do not always live up to the moral standards we

hold; that is, we do not always do what we believe is

morally right nor do we always pursue what we

believe is morally good.


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What is Nonmoral Standards?

The standards by which we judge what is good or

bad and right or wrong in a nonmoral way.

Examples:

The standards of etiquette by which we judge manners

as good or bad

The standards of law by which we judge legal right

and wrong.


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Five Characteristics of Moral Standards

Involved with serious injuries or benefits

Not established by law or legislature

Should be preferred to other values including self-interest

Based on impartial considerations

Associated with special emotions and vocabulary


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What is Ethics?

The discipline that examines ones moral standards

or the moral standards of a society.

It is asks how these standards apply to or lives and

whether these standards are reasonable or

unreasonable.

A person starts to do ethics when he or she takes the

moral standards absorbed from family, church, andfriends.


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A specialized study of moral right and wrong. It

concentrates on moral standards as they apply to

business institutions, organizations, and behavior.


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Business organizations are the primary economic

institutions through which people in modern societies

carry on the tasks of producing and distributing

goods and services.

They provide the fundamental structures within

which the members of society combine their scarce

resources-land, labor, capital, technology-intousable goods.


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The most significant kinds of modern business

organizations are corporations.

Modern corporations are organizations that the law

treats immortal fictitious persons, who have the

right to sue and be sued, own and sell property,

and enter into contracts, all in their own name.


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Kinds of Ethical Issues

Systematic- social systems or institutions within which

businesses operate.

Corporate- an individual company taken as a

whole.

Individual- a particular individual or individuals

within a company and their behaviors and decisions.


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MORAL DEVELOPMENTAND REASONING


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Six identifiable stages of Morality

LEVEL ONE: PRECONVENTIONAL STAGES

Stage One: Punishment and Obedience Orientation

Stage Two: Instrumental and Relative Orientation


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LEVEL TWO: CONVENTIONAL STAGES

Stage Three: Interpersonal Concordance Orientation

Stage Four: Law and Order Orientation


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LEVEL THREE: POSTCONVENTIONAL, AUTONOMOUS,

OR PRINCIPLED STAGES

Stage Five: Social Contract Orientation

Stage Six: Universal Ethical Principles Orientation


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Criticisms to Kohlbergs Theory

- First, Kohlberg has been criticized for claiming that

the higher stages are morally preferable to the

lower stages.

- Second criticism of Kohlberg is one that arises from

the work of Carol Gilligan


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Carol Gilligans Theory

- Claimed two different ways to approach moral

issues.

- First, there is a male approach that kohlbergs

theory emphasizes

- Second, there is a female approach


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Moral Reasoning

Moral reasoning- the reasoning process by which

human behaviors, institutions, or policies are judged

to be in accordance with or in violation of moral

standards.

- Always involves two essential components:


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Two essential components of Moral

Reasoning

an understanding of what reasonable moral

standards require, prohibit, value, or condemn.

evidence or information that shows that a

particular person, policy, institution, or behavior hasthe kinds of features that these moral standards

require, prohibit, value, or condemn.


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The nonwhite live in America society, fight for

American society in disproportionate numbers, and

contribute cheap labor to American society, thereby

enabling others to live disproportionately well. But

the nonwhite do not share in the benefits of the

American Society in w/c they live and for w/c they

fight and to w/c they contribute.


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Analyzing Moral Reasoning

Moral reasoning must be logical

The factual evidence cited in support of a persons

judgment must be accurate, relevant, and complete.

Moral standards involved in a persons moral

reasoning must be consistent


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Objections to Bringing Ethics into

Business

Perfectly competitive free markets alone ensures

that the members of the society in the most

beneficial way.

Loyal Agents Argument

The manager has a duty to serve the employer in

whatever ways to advance the employers self-interest.

To be ethical, it is enough for business people tomerely obey the rules


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Questionable Assumptions on the

Second Objection

Again, it follows an unproved moral standards the

belief that managers should devote themselves to

the single-minded pursuit of profits

Assumption that there are no limits in the duties ofthe manager to its employer

It assumes that every action of the manager, as long

as its for the employer, is automatically justifiable


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Questionable Assumptions on the

Third Objection

It implies that ethics and laws are the same

Moral laws are sometimes incorporated into the law

however, law and morality do not always coincide. (E.g.

laws of Nazi Germany, pre-Civil War slavery laws)


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Case for Ethics in Business

Ethics SHOULD govern all voluntary human activities

business is a voluntary activity, thus it should be

governed by ethics

Business is a cooperative activity whose veryexistence requires ethical behavior

Ethics is consistent with the business pursuits, in

particular with the profit. Argument of the Prisoners Dilemma

Ethics is the key component of effective

management


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MORAL RESPONSIBILITYAND BLAME


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Moral Responsibility Requirements:

The person caused or helped cause I, or failed to

prevent it when he could and should have; and

The person did so knowing what he or she was

doing; and

The person did so of his own free will

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