ETHICS AND BUSINESS

WEEK 1

RESTIE E. TORRES, MBA

BUS 1 – Good Governance and Corporate Social

Responsibility
ETHICS
 Ethics – a kind of investigation and includes both the
activity of investigating and the results of that
investigation.

 Morality is the subject matter that ethics investigates.

ETHICS
Discipline dealing with what is good and bad and with
moral duty and obligation. “ a set of moral principle or
value or theory or system of moral values.
Assist individuals in deciding when an act is moral or
immoral, right or wrong.
The behavioral norm that human being are supposed to
follow when faced with different life situations.
It is what you ought to do when you are playing different
roles like, parents, citizens, employees and as
businessmen.
MORALITY
 Case: B.F. Good rich – manufacturer of vehicle parts.
 Won a military contract to design, test and manufacture aircraft
brakes
 Specification of the brake given
 Vandivier, was given the responsibility to write a report on the
test runs
 The brakes did not comply with the specifications
 Superiors wanted him to falsify the test data and the reports.
 Vandiver agreed to co-operate due to personal and financial
commitments
MORALITY
Vandivier’s Beliefs

 The right to tell the truth

MORAL
 Wrong to endanger lives of others
STANDARDS
 Integrity is good

 Dishonesty is bad
MORALITY
MORAL STANDARDS
 The norms about the kinds of actions believed to be
morally right and wrong

 Values placed on the kinds of objects believed to be good

and bad (e.g. “always tell the truth”, “honesty is good”,
“injustice is bad”)

 Moral standards come from:-

 Family
 Friends
 School
 T.V.
 Music
MORALITY
NON-MORAL STANDARDS
 Moral standards contrasted with standards we hold about
things that are not moral

 Examples of Non-moral standards include:

 Standards of etiquette by which we judge manners as good or
bad.
 Standards we call the law by which we judge legal right and
wrong.
 Standards of aesthetics – good or bad art.
 The athletic standards – how well a game is being played
ETHICS
 Ethicsis the discipline that examines one’s
moral standards or the moral standards of the
society.
 how these standards apply to our lives
 whether the standards are reasonable or unreasonable

 Other fields, such as social science, also study

ethics
 Normative Study: attempts to reach normative conclusions
 Descriptive Study: attempts to describe or explain the world
without reaching conclusions.
NORMATIVE ETHICS
Is concerned with how people ought to act, what sort of
person one ought to be or what sort of policies ought to be
implemented.
 in others words – it is normative in the sense that it
identifies the norms and or standards of right and wrong
actions and behavior
 how people ought to act is the question of normative ethics

Eg. It is wrong to kill people just because they make you

angry.
Behavior being judge by the normative are actions that have
already occurred and are then being interpreted by the
observer to be “honesty, lying and stealing.
DESCRIPTIVE ETHICS
 Is concerned with how people behave.

 What do people think is right is the question of

descriptive ethics.
ETHICS IN BUSINESS
Often called business ethics, is the application of
discipline, principles, and theories of ethics to
the organizational context.
Business ethics have been defined as “principle
and standards that guide behavior in the world of
business.
BUSINESS ETHICS
 A specialized study of right and wrong applied to
business policies, institutions and behaviors
 How moral standards apply to social systems
and organizations that produce and distribute
goods and services.
ETHICAL BEHAVIOR IN BUSINESS IS
CRITICAL
Ethics in business has been an issues for
academics, practitioners, and government
regulators for decades, some believe that
unethical, immoral, and / or illegal behavior is
widespread in the business world.
BUSINESS ETHICS
Three basic topics covered:
 Systemic Issues
 Raised questions about economic, political, legal or other social
systems within which production and distribution activities
carried out in business operate.

 Corporate Issues
 Raised questions about a particular company and corporate
social responsibility.
E.g. Goodrich’s decision to ‘qualify’ the brakes
 Individual Issues
 Questions about a particular individual within an organization,
their behavior and decisions
E.g. Vandivier’s decision in writing a report on the brake which
he believed to be false, was morally justified
ETHICS DECISION MAKING
 refers to the process of evaluating and choosing
among alternatives in a manner consistent with
ethical principles. In making ethical decisions, it
is necessary to perceive and eliminate unethical
options and select the best ethical alternative.
ETHICS DECISION MAKING
 The process of making ethical decisions requires:

Commitment – the desire to do the right thing regardless of

the cost.

Consciousness – the awareness to act consistently and

apply moral convictions to daily behavior.

Competency – the ability to collect and evaluate

information, develop alternatives, and foresee potential
consequences and risks.
ETHICS DECISION MAKING
Good decisions are both ethical and effective:

Ethical decision generates and sustain trust; demonstrate

respect, responsibility, fairness and caring, and are
consistent with good citizenship.

These behaviors provide a foundation for making better

decisions by setting the ground rules for our behavior.
ETHICS DECISION MAKING
Good decisions are both ethical and effective:

Effective decision are effective if they accomplish what

we want accomplished and if they advance our purpose.
A choice that produces unintended and undesirable
results is ineffective. The key to making effective
decisions is to think about choices in terms of their
ability to accomplish our most important goals. This
means we have to understand the difference between
immediate and short-term and long-range goals.
ETHICS DECISION MAKING
Addressing ethics in decision making :
It is our intent to focus on the practical application of
ethics in decision. We need to start by creating some
clarifying distinctions to facilitate our purpose:

1. We must acknowledge the vast amount of research and

study on the topic, and recognize that our application of
ethics within business decision making, only addresses a
portion of much broader topic.
2. Our goals is to address decision making ethics in view of
our decision making model in a way that will enable a
consistent application of ethics in the decision making.
ETHICS DECISION MAKING
Distinguishing morals from ethics in decision making:
In research an overwhelming amount of information just to
address the meaning or distinction between “ morals”
and “ethics”. There are a large range of views that
include the words being synonyms and the word ethics
being “moral philosophy” or the study of moral
principles. Both relate to determination of right conduct.
ETHICS DECISION MAKING
For our purpose we will reserve the term “moral” for use in
a personal decision making context. This mean that we
will use “ moral” when dealing with personal or life
decisions with a focus on “ right conduct” as the result of
a personal choice.
Ethical decision making will reserved for use in a group
decision making context. Specially, we will address
ethical decision making in business as providing the
guiding requirement s or goals for right conduct .
These requirement often comes as result of organizational
definition, agreement, or long-standing custom.
ETHICS DECISION MAKING
There is clear recognition that ultimately a personal choice
must be made with respect to right conduct, but business
ethics will provide the assessment for correct behavior in
the business organization.
ETHICS DECISION MAKING
Ethics in decision making impact the choices for words and
actions.

Clearly our thoughts affect our words and deeds, and in a

group context, ethics in decision making can be evaluate
through the tangible evidence and outcomes from words
and actions. Thoughts and motivation are left to personal
realm. As a consequence, evaluation of appropriate
ethical behavior will have limitations.
ETHICS DECISION MAKING
In our outcomes there are the following possibilities:

Right motivation with right action

Right motivation with wrong action
Wrong motivation with right action
Wrong motivation with wrong action
ETHICS DECISION MAKING
Role of individuals and organizations in the ethical
decision process:
The role of various organization in ethical making are
considered. Such organizations includes local and
national ethical committees, professional organizations,
religious organizations and governments, and their
respective strengths and limitations.
 ETHICS
LAW 2
PRACTICE
REASON 0
UNIVERSITY OF 1
MINDANAO
Davao City, Philippines
7
 OBJECTIVES:
1) To define and differentiate ethics, law and
practice reason
2) To propose a good approach on policy study
of practical reasoning
3) To recognize practical reason versus ethics
 DEFINITION

ETHI LAW
CS
- set of standards for
- Is the system of rules
behavior of conduct established
- are the means for by a government of a
determining what a society to maintain
society’s values ought stability and justice
to be
- Defines the legal rights
- sometimes conflated and duties of the
or confused with people
other ways of making
- Provides a means of
choices enforcing these rights
and duties
 WHAT SHOULD
WE DO?
Deciding what one should do in business situations often
requires reflection on what the law requires, expects, or
permits.

The law provides a very important guide to ethical decision

making, and this text will integrate legal considerations
throughout.
 GUIDEPOST
FO R
ETHICS: DECISION
MAKING.
1
Obedience to the law is sufficient to fulfill
one’s ethical duties begs the question of
whether or not the law itself is ethical.
• ethical responsibility may run counter to the
law

•you do not forgo your ethical responsibilities by

a blind obedience to the law

•Examples:
- Some countries make child labor or sexual
discrimination legal, but businesses that choose
to adopt such practices do not escape ethical
responsibility for doing so.
2
Societies that value individual freedom will be
reluctant to legally require more than just an
ethical minimum.

* The law can be an efficient mechanism to prevent

serious harms, but it is not very effective at
promoting goods.
3
Ethical responsibilities end with
obedience to the law is just inviting more
and more legal regulation.
* The law can be an efficient mechanism to prevent

serious harms, but it is not very effective at

promoting goods.

*The failure of personal ethics among such

companies led
to the creation of the Sarbanes-Oxley Act and
other legal reforms.
4
The law cannot possibly anticipate every
new dilemma businesses might face.
* there may no regulation for the particular dilemma
confronting a business leader

*one had no choice but to rely on the ethical

decision-
making processes since the law might not yet—or
might
never—provide a solution.
5
Compliance is enough relies on a
misleading understanding of law.
* all a business needs to do is obey the law suggests
that
laws are clear-cut, unambiguous rules that can be
easily applied.

*If the law was clear and unambiguous, there

wouldn’t
be much of a role for lawyers and courts.
 ETHICS and
PRACTICE

REASON
 Personal
Responsibility vs.
Social Responsibility?
There will be many times within a business setting
where an individual will need to step back and ask:
What should I do? How
should I act?

This aspect of business ethics asks us to examine

business institutions from a social rather than an
individual perspective.
We refer to this broader social aspect of ethics as
decision-making for social responsibility.
In essence, managerial decision-making will always
involve both aspects of ethics.
PRACTICAL REASON

Practical reason is the general

human capacity for resolving,
through reflection, the
question of what one is to do.
Deliberation of this kind is
practical in at least two
 Practical reason defines a
distinctive standpoint of
reflection.

Practical reason, by contrast,

takes a distinctively
normative question as its
starting point. It typically
asks, of a set of alternatives
for action none of which has
yet been performed, what
one ought to do, or what it
would be best to do.
 First, the contrast just drawn
Two might suggest that there is a
observations categorical difference in the
should be consequences of theoretical and
made about practical reason
this way of
understandin
g practical Second, it is important to be
reason.  clear that in neither case do the
characteristic modifications of
attitude occur infallibly.
 PRACTICE
REASON and

THEORETICAL
REASON
PRACTICE Five basic THEORETICA
REASON components:
L REASON
a. Basic Human
“what we should Needs “what we should
do” b. Quality World believe”
c. Perceived World
d. Comparing Place
e. Total Behavior
 Relationship between
Theoretical and Practical
Reason
SECOND

FIRST Five basic Theoretical

components: Reasoning is a form
Both are only of practice, judged
a. Basic Human
superficially Needs by practical
standards of
distinct. b. Quality World
effectiveness,
c. Perceived World
appropriateness,
d. Comparing Place
productivity.
e. Total Behavior
 Relationship between
Theoretical and Practical
Reason
THIRD
Practical Reason FOURTH
is the application Five basic
of theoretical components: Practical and
reasoning and its a. Basic HumanTheoretical
conclusions to Needs Reasoning are
b. Quality distinct forms of
World
concrete, reasoning.
practical c. Perceived World
situations. d. Comparing Place
e. Total Behavior
REFERENCE:
https://www.gotquestions.org/do-
unto-others.html

Science.jrank.org/pages/109
Thank You