Introduction:

Genesis of Ethics:

The society in the past, in its collective wisdom, formed various

rules and regulations, just as today’s associations, clubs, political
parties, and business corporations form constitutions with bylaws
to govern their members. It (Society) developed its own ethos or
culture, a sum total of its practices that formed into customs and
became tradition. A scientific study of the above is called ethics,
which studies not only the code but also its foundation.

It seeks to know the underlying of human action in society. The

study of ethics helps us understand our social nature better. It
helps us solve the problems of conflict and form new ways and
strategies to improve our social life.

We observe that in nature, things come into being,

develop and grow, and find a natural end. We also observe that
each of these beings live in an environment suitable to its nature.
The social-ethical environment is to us what the water is to fish.
It is our ethos and it makes us ethical. Thus, our social nature is
ethical.
Ethics:

The study of ethics is a systematic science. It scope encompasses

all humans relationship in a society. Ethical behavior in business
is an economic relationship with the people within a society.
Hence, it is also called political economy.

What is Ethics?

Ethics are rules that help us tell the difference between rights
and wrong. They encourage us to do the right thing
 What is Ethical Behavior?

Ethical behavior is conduct that conforms to ethics—

individual beliefs and social standards about what is right and
good.

Values tell us what is important. They help us make

decisions about right and wrong.

Morals are rules we use to decide what is good or bad.

Business ethics deals with the study of the problems arising in the
relationship between the field of business and its management.
A concept is a mental model or mental construct. With the mental
model of ethics, we can understand the various other concepts
that go into its making. Once the complex structure of this model
is ready, we can execute it just the way architectural engineers
execute blueprints. The task of business ethics is to enable
managers to execute these mental models consistently,
contingent on business management situations.
Ethics and Morals:
Generally, ethics and morals are used as synonyms. There
is nothing wrong in such a usage, for after all, the meaning of all
words depends on their common usage. However, in formal
study, we need to understand the meaning of the terms in a
qualified way so as to make our subject of study precise and well
defined.

What does “morality” mean?

Morality involves what we should do, right and wrong, good

and bad, values, justice, and virtues.

Morality is taken to be important; moral(ethical) actions are

often taken to merit praise and rewards, and
immoral(unethical) actions are often taken to merit blame
and punishment.

What we should do – What we morally should do is what's

principally correct.

Right and wrong – Somethings are morally right if it's

morally permissible and morally wrong if it's morally
impermissible.

Eg: Its principally right to guide students, however guiding

them in unethical practices(like copying ) is not morally right.

Good and bad – “Good” and “bad” refer to positive and

negative value. Somethings are ethically good if it helps
people attain positive values, avoids something of negative
vale, or has a positive value that merits being a goal.
Meaning:
The word moral(s) is derived from the Latin root moralis,
which implies custom. In other words, it refers to a behavior that
is accepted or rejected due to an accepted social custom. The
word ethics stem from the Geek word ethike, which attribute to
a social environment, referred to as ethos or milieu. This latter
meaning embraces mush more than mere custom. It refers to
everything that is part and parcel of society and not just what is
allowed or forbidden.
Another point of difference between the two refers to
their usage in ordinary language. A committee that is formed to
probe the behavior of the members of parliament would be called
‘ethics committee’, not ‘moral committee’. The meaning of the
word is in its usage. Thus, both these terms have their unique
characteristics.

Ethics , Morality and Law are inter-linked.

Usage:
It may be true that the terms (ethics and morals) sound different
but they refer to the same social reality wherein a certain body of
accepted norms forms a code of conduct in society. The actions of
the members are described as ‘moral’ or ‘ethical’ depending on
the linguistic touch of the meaning in a particular case as well as
on the conventional use of the terms. It is in the use of the words
in a given context that the meaning becomes clear.

In academic usage, however, moral behavior refers to a concrete

behavior such as showing respect to elders. Ethics, on the other
hand, is used to mean a discipline or a systematic study of moral
behavior such as justice.
People’s behavior in a society can be morally characterized in
their day-to-day actions. It is in the classroom that we analyses
the ethical significance of these actions.
Evolution of Ethics:
Social conduct has evolved along with evolution of society. When
your elders tell you ‘Do not cheat’, they are referring to a social
code of conduct. Social conduct has developed in society over
hundreds of years. The codes of conduct have been passed down
from generation to generation, and there is a pattern to the
evolution of such codes. Acceptable behavior is promoted and
elevated as a social value, and unacceptable behavior is rejected
and condemned.
The laws of a country are based on the customs or moral codes
of its society. Penalties are prescribed for bad actions-actions that
contradict the established laws. The laws are a measure against
those people who cross the limits of the code of social conduct,
and ensure that good citizens are protected from the negative
consequences of the law-breakers.
The object of the social codes of the conduct is to maintain,
promote, and elevate harmonious relationships.
‘Honour your parents’ is one such code. It maintains a
peaceful relationship between parents and children and promotes
respect for each other in the family. Because of its salutary
effects, it is considered as one of the fundamental values to be
cultivated.
Classification of Ethics:

To have a clear picture of the structure of the concept

of ethics, the above discussion can be brought under three
heading: normative ethics, applied ethics, and mental ethics.
 Ethics
Systematic study of moral conduct

Normative ethics Applied ethics Meta-ethics

Study of moral study of special cognitive study of the
Standards to business ethics ultimate principle of
Determine right scope: specified ethics, their origin &
And wrong human action meaning
Scope: General conceptual scope:
Moral science Philosophy

Classification of ethics
Normative ethics:

Norms or standards are also known as values or codes. Norms set

clear guidelines for social interaction in a community. Normative
ethics is a subject of study wherein students study moral
standards. These moral standards can be applied to human
actions to judge their moral character, that is, whether they are
right or wrong. Example of some of the moral standards are
utility, duty, conscience, use of right means for right ends,
justice, prudence and stewardship. Just as there are several
standards to measure distance, such as meter, yard, mile, etc. so
also there are several standards to judge an action right or
wrong. We shall study more about these standards in the
chapters that follow.
Applied ethics: Business ethics comes under the classification of
applied ethics because it concerns itself with the special
application of ethics to problems relating to s definite filed of
human relationships. Normative standards of moral judgment are
applied by business managers to the business decisions they
take. The ethical element is part and parcel of the integral
process of decision making on a business management problem.
Business ethics, therefore, deals with the application of normative
standards to specified business experiences. The study of
business ethics is as essential for businessman as the study of
professional norms for a medical practitioner. A client places trust
on a businessman for a transaction and hopes that the latter does
not deceived. Thus, applied ethics is strictly professional ethics.
Meta-ethics: The Greek word meta stands for beyond. Thus,
meta-ethics literally means beyond ethics, suggesting an in-depth
study of the discipline. In other words, it is a scientific study of
the concepts of ethics in itself. You may not find these concepts
practical, because nowhere in the world will you find a perfect
human being who is perfectly good, perfectly happy, perfectly
duty-bound, and so on. These are abstract ideas that are
considered as supra-standards, and are concepts that can be
conceived as perfectly as perfection itself.
Business Ethics:
Business ethics concerns itself with adhering to the social
principles of the situations in which business takes place. The
analysis of this definition leads us to the following discussion.
Business for Profit: It would seem that business ethics does not
come within the confines of ethics. As Adam smith (1779), the
father of modern economics says: ‘People of the same trade
seldom come together, even for merriment and diversion, but the
conversation ends in a conspiracy against the public, or in some
contrivance to raise prices.’ People find mechanisms to generate
the highest possible returns when conducting business. No one
holds it against a worker for demanding higher wages, or a
landlord for increasing the net. Their actions are not considered
illegal or unethical. Profits are the just wages for invested capital
and entrepreneurship. Hence, these should not be resented and
should be left alone outside the boundaries of ethics. Business is
for profit; the just reward for doing business lies in the excess
returns received on the investment.
Again, as Goethe (1809) said: ‘Everything which is
properly business, we must carefully separate from life.’ This is
because business requires definite strategies; life must be led in
freedom.
Business with Ethics:
No matter how hard one tries, it is impossible to
separate life from business. For a businessman, business is life.
Mahatma Gandhi (1948) said, ‘It is difficult but not impossible to
conduct strictly honest business. What is true is that honesty is
incompatible with amassing of large fortune.’ The business world
is an important part of society, as it concerned with the
livelihoods of people. Business activity too is subjected to the
code of conduct without any exception. People expect
businessman to possess the rationality as any other citizen. As
ethics applies to all the activities of people. Consequently, we
have to keep business within the bounds of ethics.
Professional Ethics: Just as a society functions on the social
codes of conduct and a country is governed by its constitution, a
business is run on corporate codes. In other words, there is a
professional code of conduct for any business. These codes keep
evolving as other things around evolve and develop. Therefore,
not only should business be defined within the confines of ethics,
but it should be practiced strictly under its professional code of
conduct. This distinction helps to orient the general principles of
ethics and business to a particular activity. The principles,
however, do not change. For instance, there is a manager who is
doing very well in his career because he is both efficient and
honest. To his neighbours and friends, he is not only a very
successful businessman, but also a very good family man.

Compensation
Compensation

Character

Professional characteristics

Business ethics, thus, professionally adheres to a code of conduct

that is in accordance with the normative principles. Further, it
may be concretely stated that professionals bear the following
marked characteristics:

(1) Competency of educational qualification

(2) Professional skills
(3) Compensation (salary/remuneration, etc).

Human Relations: Ethics is another name for human

relationships Business relationships is indeed a type of human
relationship. Further, it is ethically not adverse to have self-
interests involved. It becomes unethical when such an activity is
an outright exploitation of one’s personal interests. Being ethical
and unethical is a part of human nature and therefore it is the
subject of a systematic study called ethics.

Business Ethics as Professional Code: Business ethics is not a

pure science but a professional practice, and society expects
businessman to abide by the principles of a civil society, just as it
expects professionals from other areas such as medicine
bureaucracy, politics and sports to do so.

Good
manager

Good The idea Good

father of good teacher

Good
customer
Ethics as the principal cause of Law

Business punching : when business ethics is mentioned, it is

assumed that its purpose is to discipline those who are doing
business. So now, in the name of ethics, cumbersome laws and
regulations have been enacted by the legislature and government
machinery, codes by the corporations, directives by the chambers
of commerce, recommendations by the non-governmental
agencies, and edicts by the religious leaders. These regulations
and several other norms now contribute to the burdens of the
businessman. It is no wonder that may businessman see these as
the irritation of a businessman!