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    IBM-Business Ethics

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    Padma Kannan
    Business ethics refers to applying ethical standards to business decisions and actions. There are two main theories on the nature of ethics in business - the theory of moral unity, which says there is one universal ethical standard, and the theory of amorality, which argues business can be amoral. Sources of business ethics include religion, culture, legal systems, and organizational culture and leadership. Factors like an organization's culture, leadership, policies, and individual characteristics can shape whether ethics are elevated or compromised within a company.

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    IBM-Business Ethics

    Uploaded by

    Padma Kannan
    603 views23 pages
    Business ethics refers to applying ethical standards to business decisions and actions. There are two main theories on the nature of ethics in business - the theory of moral unity, which says there is one universal ethical standard, and the theory of amorality, which argues business can be amoral. Sources of business ethics include religion, culture, legal systems, and organizational culture and leadership. Factors like an organization's culture, leadership, policies, and individual characteristics can shape whether ethics are elevated or compromised within a company.

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    Business ethics refers to applying ethical standards to business decisions and actions. There are two main theories on the nature of ethics in business - the theory of moral unity, which says there is one universal ethical standard, and the theory of amorality, which argues business can be amoral. Sources of business ethics include religion, culture, legal systems, and organizational culture and leadership. Factors like an organization's culture, leadership, policies, and individual characteristics can shape whether ethics are elevated or compromised within a company.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    603 views23 pages

    IBM-Business Ethics

    Uploaded by

    Padma Kannan
    Business ethics refers to applying ethical standards to business decisions and actions. There are two main theories on the nature of ethics in business - the theory of moral unity, which says there is one universal ethical standard, and the theory of amorality, which argues business can be amoral. Sources of business ethics include religion, culture, legal systems, and organizational culture and leadership. Factors like an organization's culture, leadership, policies, and individual characteristics can shape whether ethics are elevated or compromised within a company.

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    Business Ethics

    Ethics refers to a system of moral principles a sense of right and wrong and goodness and badness of actions, and their motives and consequences. Business ethics refers to the application of ethics to business. To be more specific, business ethics is the study of good and evil, right and wrong, and just and unjust actions of business.
    Padmavathi. K

    Two theories of related about the nature of ethics


    The theory of moral unity: Advocates the principle that business actions should be judged by the general ethical standards of society. There exists only one ethical standard that applies to business and to non-business situations. Theory of amorality: Which argues that business can be amoral, and the actions of businesses need not be guided by general ethical standards?
    Padmavathi. K

    Sources of Business Ethics

    Religion
    Legal System Business Ethics Culture

    Padmavathi. K

    Religion
    One of the oldest sources of ethical inspiration is religion. The worlds great religions are also in agreement on fundamental principles, which are similar to the building blocks of secular ethical doctrine. The great religions preach the necessity for an orderly social system and emphasis social responsibility in such a way as to contribute to the general welfare. Built upon such varieties are many other rules of conduct.
    Padmavathi. K

    Cultural Experience
    Culture refers to a set of values rules and standards transmitted among generation and acted upon to produce behaviours that fall within acceptable limits. These rules and standards always play an important part in determining values, because individuals anchor their conduct in the culture of the group. Ethical systems began evolving to reflect the changing physical, cultural, institutional and intellectual environment.
    Padmavathi. K

    Starting from Hunting & Gathering stage

    Agricultural Stage

    Industrial Stage
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    The Legal System


    Laws are rules of Conduct, approved by legislatures that guide human behaviour in any society. They codify ethical expectations in any changing as new evils emerge. Law is reactive, new statutes and enforcement always lags behind the opportunity for corporate expediency. Whatever ethics that law confides, it is binding on business. Society expects business to abide by law and obeying law is presumed to be ethical behaviour.
    Padmavathi. K

    Why is Ethics Important?


    Ethics corresponds to the basic Human needs. Values create credibility with the public. Values give management credibility with employees. Values help better decision making. Ethics and profits. Law cannot protect society, ethics can.
    Padmavathi. K

    Factors Determining Ethics:


    Four factors are responsible for encouraging ethical behaviour or depressing standards of conduct. They are Leadership Strategies and Policies Organizational Culture Individual Characteristics.

    Padmavathi. K

    Factors shaping corporate ethics


    Leaders example strategies / Policies.

    Elevated

    Ethical Performance Organization Culture individual characteristics.

    Average
    Compromised

    Padmavathi. K

    Ways of managing ethics


    Top Management Corporate Culture Ethical Behaviour Legal System Training programmes Others Ethics Hotline Codes of Ethics Ethics Committees

    Padmavathi. K

    Industrial Business and Ethics


    Two ethical issues are prominent in International Business; bribery and corruption and work practices and worker remuneration.
    Bribery and Corruption Work Practices and Work Remuneration

    Bribery is a deliberate attempt to persuade someone (Usually in position of power and authority) to act improperly in favour of the briber by offering money or gifts or any other material gain. Bribery has been at the root of Corruption in many countries.
    Padmavathi. K

    Two ethical issues Cont


    Malign Bribery leads to a widespread corruption and decline in public morals. Benign Bribe is one which benefits an economy by expending and simplifying procedures, reducing bureaucracy and reducing or eliminating unnecessary costs, thereby reducing prices and improving societys welfare. Corruption is understood as the abuse of public office for private gain. The issue of bribery is defined and practiced. In some middle east countries, it would be host as a token of appreciation for the time and consideration given. In Britain and U.S, however, such an act might be considered as an attempt to bribe for personal gain and might therefore be considered unlawful.
    Padmavathi. K

    Roots of Corruption
    Where the legal framework and other anticorrupt institutions are weak or non-existent. High level and scope of government involvement in and regulation of economic activities make the officials become corrupt, particularly when their salaries are low. High levels of confidentially prevailing with regulatory agencies leads to unethical practices.
    Padmavathi. K

    Areas of ethical and social responsibility concerns for the multinational


    Stakeholders Affected Ethical or Social Responsibility Issue
    Product safety, Fair price, Proper disclosures and Informations.

    Customers

    Stock Holders Employees

    Fair return on investment Fair Wages, Safety of working conditions, Child labour, Discrimination by sex, race, colours or creed. Impact on local economies, Following Local Laws, Impact on local social institutions. Environmental Protection, Raw material depletion.

    Host Country

    Society in General

    Padmavathi. K

    Work Practices and workers Remuneration


    One of the main reasons for international firms to invest in production facilities abroad is to take advantage of the availability of relatively low cost labour in order to remain competitive in international markets. Ex: Child labour Low Wage Exploiting workers in Third World Countries.
    Padmavathi. K

    Corporate strategy of the MNC must contain ethical orientation. An ethics-centered strategy requires a firm to do the following

    Pursue business goals within the bounds set by societys values and moral principles. Business policies and decisions that show disrespect for these cherished beliefs are generally condemned by most members of general public. Respect human value diversity that is found among people and groups at home and abroad, in the workplace, and the community. Peoples notions of right and wrong vary considerably among societies, religions, historical periods and ethnic groups. The wise corporation knows this and acts with care and understanding. Accept responsibility for nurturing ethical attitudes caused by the company. Business pressures that lead employees into unethical practices are a common problem. Ways exist for reducing these episodes.
    Padmavathi. K

    National differences in Ethics and Social Responsibility

    Cultural differences affect the social and ethical practices of MNCs considerably. The figure gives a single model of the relationships among national culture, social institutions and business ethics.

    Padmavathi. K

    Institutional and Cultural effects on Ethics and Management

    Key social institutions (Religion, Laws and Legal Systems)

    Important ethical issues for Business (Equal rights for women)

    Management practices to monitor & control ethical behaviour in organizations (Code of ethics)

    Cultural norms and values (norms for gift giving)

    Padmavathi. K

    Ethical Relativism or Ethical Universalism


    Ethical Relativism means that each societys view of ethics must be considered legitimate and ethical. This implies, if bribery is not unethical in a society, it is okay for an MNC to follow local practices, even if it is illegal at home. Ethical relativism means that when doing business in a country, international managers need only follow local ethical conventions. Ethical Universalism This principle holds that there are basic moral principles that transcend cultural and political boundaries. Business actions should be judged by the general ethical standards of society. There exists only one ethical standard that applies to business and non business situations in a given society. Ethical Convergence Cultural differences notwithstanding there are growing pressures on international businesses to follow the same rules in managing ethical behaviour and social responsibility. This is called ethical convergence.
    Padmavathi. K

    Code of conduct for an MNC


    Respect Basic Human Rights and freedom. Minimize any negative impact on local economic policies. Maintain High standards of local political environment. Transfer Technology. Protect the Environment. Consumer protection. Employment Practices.
    Padmavathi. K

    Decision Flowchart for an MNC

    International Manager, like his or her counterpart in domestic business faces ethical dilemmas.

    Padmavathi. K

    Decision Flowchart for an MNC.Is the Behaviour or its Consequences


    In violation of Host or Home Country Laws?
    Legal Analysis No In violation of international Agreements? No In violation of the Companys ethical code? Organisational ethical analysis No Consistent with company culture? Yes Yes

    Stop

    Stop
    Yes

    Yes

    Stop

    Stop

    Yes Cultural sensitivity ethical analysis Consistent with local culture norms? No

    Stop

    Personal ethical analysis

    Yes Consistent with personal moral beliefs? Yes

    No

    Stop

    Do it?

    No

    Stop

    Padmavathi. K

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