Business Ethics .. is a study of..

Our moral standards insofar as these apply to business.

How reasonable or unreasonable these moral standards in our society Implication of moral standards to our business activities

KIND OF ETHICAL ISSUES

SYSTEMIC CORPORATE INDIVIDUAL

SYSTEMIC

Ethical questions about the social, political, legal, or economic systems within which operates

CORPORATE Ethical questions about a particular corporations And its policies, culture, climate ,impact, or actions

Individuals
Ethical questions about a particular individuals decision, behaviour or character

Should ethics qualities be attributed only to people or also of corporation?

One view says

Corporation like people , act intentionally And have moral rights, and obligations and are morally responsible..

One view says

It make no sense to attribute people ethical qualities to corporations since they are not like people but more like machines , only human can have ethical qualities

One view says

Human carry out the corporations actions , so they are morally responsible for what they do And ethical qualities apply to them.!

Arguments against Business in ethics

In a free market economy..

The pursuit of profit will ensure maximum social benefit .. So ethics is not needed.
A manager most important obligation is loyalty to the company regardless of ethics.

So long as companies obey the law they will do all that ethics requires

Law of Agency
A Law that specifies the duties of persons who agree to act on behalf of another party and who are authorized by an agreement so to act .
- Person accepts legal (and moral) duty to serve the client loyally , obediently and in confidential manner as specified in the law

Arguments SUPPORTING ETHICS in Business

Ethics ..
Applies to all human activities Business Can not survive without ethics Ethics is consistent with profit seeking Customer ,

Studies suggest Ethics does not detract from profits and it contribute to profit !!!

CORPORATE SOCIAL RESPONSIBILITY .. Is business social obligations

Business Ethics and Corporate Social Responsibility (CSR)

They are related to each other They are also different

CORPORATE SOCIAL RESPONSIBILITY ..

REFERS TO A CORPORATION RESPONSIBILITY OR OBLIGATION TOWARD SOCIETY

CSR ARGUMENTS
SHAREHOLDERS Theory
ONLY RESPONSIBILITY IS TO LEGALLY AND ETHICALLY MAKE AS MUCH MONEY as possible for its owner ( Milton Friedman ) CEO must operate within the rules of the society.. Rules of law and ethical custom.

STAKEHOLDERS theory
Corporation should be run for the benefit of All stakeholders . Managers should give stock holders a fair share of profits , BUT in a way that allows all stakeholders to also get their FAIR SHARE. ( working conditions, safer products ,
reducing pollution, even if this reduce profits )

Is Business Ethics and CSR related?

Being Ethical is one obligation companies owe to the Society. Business ethics is part of Corporate Responsibility.

Social responsibility of business encompasses the economic, legal, , ethical, and Discretionary expectations that society has of organizations .( A. Caroll)
Fairness implies, (normative arguments ) implies that business has obligations To all stakeholders.

Some Ethical Problems

PRICE - IS PURELY AN ECONOMIC DECISION BASED UPON COST AND DEMAND. But the price level selected can have harmful effects upon some consumers.

Truth in advertising
Is complex and emotional;. A rigidly truthful television or magazine ad, every statement of which is supported by a reference to a scientific study , would be incredibly dull and probably ineffective . A tottaly untruthful television or magazine ad, wiith wildy exaggerated claims would be illegal and probably equally in effective.

Product promotion Use of free gifts and price rebate to attract business

Working condition Temperature, humidity, or noise levels maybe too high, ventilation and lightings may be too low and fumes and dust may be excessive in some workplaces

Quality of Products Quality of products may be a declining order ., with increase in the cost of materials. Regular maintenance and strict check and review of quality control is necessary from time to time.

Work force reduction reduce the size and over head cost of many organizations .

Downsizing operations , merger are generally a response to an increase in competitive pressure, but there is an obvious human cost to the people who are forced to leave.

Environment Pollution Improper disposal of toxic waste is clearly illegal. Some companies continue to dump chemicals, despite possible. Harm to the environment and probable conflict with the law. Air pollution , water pollution and noise pollution are harmful to people.

Ethical issues

Ethical Relativism
The theory that there are no ethical standards that are absolutely or should be applied to the companies and people of all societies