Course : Business Strategy

Effective Period : February 2023

BUSINESS ETHICS:
Ethics and Business

Session 1
Thank you
 Acknowledgement
These slides have been adapted from:

Hartman, L., DesJardins, J. & MacDonald, C. (2021).

Business Ethics: Decision Making for Personal
Integrity & Social Responsibility. 5th Edition. New
York, USA. McGraw Hill Publisher. ISBN:
9781260260496.

Chapter 1
 Learning Outcomes

LO 1: Identify the context of Business Ethics for personal and

professional.
 Learning Outcomes

After studying this chapter, the students should be able to

define and explain:
Chapter-1:
Ethics and Business
• Ethics and The Law
• Business Ethics as Ethical Decision Making
• Business Ethics as Personal Integrity and Social
Responsibility
 Business Ethics
• From the Greek word ethos, which refers to cultural values,
norms, beliefs, and expectations. Ethics considers how
people should live and act, not how they do. Ethics is how
we act and live.
• Following this original Greek usage, ethics can refer to both
personal and community standards (see also morality).
• Business ethics investigates ethical questions that arise at
the individual, organizational, and social/political level.
• As ethically responsible people, each of us should consider
how we interact with business as individual consumers,
individual employees, managers, executives, and citizens.
 Business Ethics
• A business ethics class therefore has many goals, including
helping us to:
1. Develop the knowledge base and skills needed to
identify ethical issues.
2. Understand how and why people behave unethically.
3. Decide how we should act, what we should do, and the
type of person we should be as individuals.
4. Create ethical organizations.
5. Think through the social, economic, and political policies
that we should support as citizens.
 Ethics and Law
• In business ethics, it is undeniably true that deciding what
to do in business necessitates taking into account what
the law requires, expects, or permits.
• The law does serve as an important guide in making
ethical decisions, and this text will incorporate legal
considerations throughout. However, legal and ethical
norms are not identical, and they do not always agree.
Some ethical requirements, such as treating employees
with respect, are not legally required, despite being
ethically justified.
• On the other hand, some legally permissible actions, such
as firing an employee for no reason, would violate
ordinary ethical standards.
 Ethics and Law
• Many corporations have established ethics programs and
hired ethics officers to manage corporate ethics programs
over the last two decades.
• While ethics officers perform valuable and effective work,
it is fair to say that much of their time is spent on legal
compliance issues. Of course, the environment differs
significantly from one company to another and from one
industry to another.
 Ethics and Law
• Legal compliance is insufficient for several reasons:
1. Believing that obeying the law fulfills ethical duties raises
the question of whether the law is ethical.
2. Personal freedom-loving societies will enforce only the
ethical minimum.
3. A company that thinks ethical responsibilities end with
legal compliance invites legal challenges.
4. Because the law can't anticipate every new ethical issue,
there may be no regulation for a business leader's
dilemma.
5. The idea that compliance is enough is based on a
misunderstanding of law.
 Ethics and Law
• Most of the corporate scandals at the beginning of this
chapter involved attorneys and accountants who told their
clients or bosses their actions could be defended in court.
• In business, this strategy falls under organizational risk
assessment, defined as "a process to identify potential events
that may affect the entity and manage risk to be within its risk
appetite“.
• Using this model, decision-makers might consider before
acting:  Court challenge likelihood, Loss probability,
Settlement likelihood, Cost comparison, Action's financial
benefits, and Options' ethical implications.
 Business Ethics and
Ethical Decision Making

• No book can magically create ethically responsible people or

directly change behavior, and that is not our goal here.
Students, on the other hand, can learn and practice
responsible and accountable thinking and deliberation.
• We believe that decisions that are the result of careful and
conscientious deliberation will be more responsible and
ethical. In other words, making and deliberating responsible
decisions will lead to more responsible behavior.
• Ethics is a centuries-old academic discipline; we might
expect a class to focus on its history. Many believe a
business ethics class should focus on ethical behavior rather
than knowledge.
 Business Ethics and
Ethical Decision Making
• Ethics involves how we act, choose, behave, and do things.
• Ethics is normative, meaning it deals with how we should act,
say philosophers. Psychology and sociology also study human
decision making and actions, but they are descriptive, not
normative.
Normative Ethics Descriptive Ethics
As a normative discipline, ethics Many social scientists practice
deals with proper (normal) descriptive ethics, which
behavior norms. Norms provides a descriptive and
determine what we should do, empirical account of the
how we should act, and who we standards that actually guide
should be. behavior, as opposed to those
that should. Normative ethics vs.
 Business Ethics as Personal
Integrity and Social Responsibility
Morality Personal Integrity Social Ethics
When referring to Integrity means Social ethics How we
ethical phenomena. wholeness. Personal should live with others
This text refers to integrity is the and structure social
morality as personal, consistency or organizations. Social
individual decision- alignment of actions ethics involves
making. "How should I with deeply held promoting human well-
live?" or "What kind of beliefs. being through political,
person should I be?" economic, civic, and
are moral questions. cultural norms.
Morality differs from
social justice, which
focuses on structuring
communities and social
organizations.
 Business Ethics as Personal
Integrity and Social Responsibility

Norms
• Proper behavior standards or guidelines. Economics, etiquette, or
ethics can establish norms.
Values
• Beliefs that influence our actions or choices. Financial, religious,
legal, historical, nutritional, political, scientific, and aesthetic values
exist. Ethical values are impartial and promote human well-being.
Ethical Values
• Life qualities that promote well-being and a good life. Happy,
respectful, dignified, honest, free, companionable, and healthy are
ethical values.
 Business Ethics as Personal
Integrity and Social Responsibility

• Ethics is practical and normative, involving actions, choices,

decisions, and reasoning about how to act.
• Practical reasoning (reasoning about what we should do)
includes ethics, while theoretical reasoning (reasoning about
what we should believe) does not.
• Practical reasoning.  Practical reasoning is about what to
do, while theoretical reasoning is about what to believe.
Reason includes ethics.
• Theoretical reasoning.  Theoretical reasoning seeks truth
and what we should believe. Practical reasoning determines
what's reasonable.
 Assignment

1. Why are legal laws insufficient for ethical responsibility?

2. What are some business ethics benefits and costs? Separate
individual and firm advantages and harms.
3. Google recent oil spill news. Do these stories describe oil
firms' wise or poor behavior?
4. "Ethical" activities must be based on ethical beliefs, right?
Has a business acted unethically if it does a socially helpful
act for publicity or establishes an ethical culture as a
business strategy? Ethics as "good for business": deceptive
or practical?
 References
Hartman, L., DesJardins, J. & MacDonald, C. (2021). Business
Ethics: Decision Making for Personal Integrity & Social
Responsibility. 5th Edition. New York, USA. McGraw Hill
Publisher. ISBN: 9781260260496.
Thank You