Business ethics deals with determining rules

or behavior of business enterprise.

It determines rightness or wrongness of

actions of businessmen. It is the study of ethically permissible and is positively virtuous, in regard to business activity. Management Ethics is a concept closely related to the concept of social responsiveness of a firm. It is The discipline of dealing with what is good and bad, or right and wrong or with moral duty and obligation.

Cont

it is the set of moral principles that

governs the actions of an individual or a group. Business ethics is the application of ethical principles to business relationships and activities. It governs the way a business runs and carries its operations. It determines the standard of behavior that guides managers in their work.

Features of Business Ethics

1. It determines issues that business houses 2. 3.

4.

5.

face in operating their activities. It distinguishes between right or wrong, fair or unfair, just or unjust. It is an important component corporate social responsibility that demands business houses to engage in socially responsible behaviors. It demands that corporate houses should not only be profit-making units, they should be good corporate citizens also. It demands that corporate houses should obey the law. Legal obedience is an ethical content that ensures long -run survival and prosperity of business houses.

Cont

6. It defines not just what business

managers do but also why they should be doing so. 7. It is broader than law. There may be business activities that are ethical but illegal or unethical but legal.

Ethical Business Activities

The foremost(first) goal of managers is to

make their organizations. Effective (good). Profit maximization and stakeholders interest is not the central goal of managers. Attending to customer is important. Integrity(moral soundness) was the characteristics most highly rated by managers at all levels. Pressure to confirm to organizational standards was seen a high. Most managers seek the advice of others in handling ethical dilemmas(adhering to

Unethical Behavior
Which does not follow the moral rights(concerned with principles of right and wrong), obligations(the social force that binds you to the courses of action demanded by that force) and duties . The following factors contribute to unethical business behavior : Environmental competition : Inter-organizational dependence : a) Bribery- is a payment or remuneration for performing an act which is inconsistent with the nature of the work or for which one has been hired to perform. It is in the form of personal payment, gift or special favors to an official to get the work done. b) Kickback- is different in terms of mode of payment from bribery. In this, the payment is given after the favors gets completed.

Cont

Pressure for high performance : Poor financial performance : Labour dissatisfaction :

Guidelines for Ethical Behaviour

Obey the law Tell the truth Respect for people The golden rule : Treat others as you

would want to be treated". this will always result in ethical behavior. Above all do not harm : if the law does not prohibit use of chemicals in producing certain products, managers must avoid using them if they pollute the environment.

Cont

Practice participation : Not

paternalism(the attitude (of a person or a government) that subordinates should be controlled in a fatherly way for their own good). Act when you have responsibility

Factors influencing business ethics

Legal concern Govt regulations Industry & company ethical codes Social pressures Tension between standards and needs

of the organization.