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Intro BE

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14 views5 pages

Intro BE

Uploaded by

devilsanket1341
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Comprehensive Study Guide on

Business Ethics
1. Introduction to Business Ethics (Based on Intro
BE.pdf)
1.1 Definition of Ethics

●​ Ethics is a branch of philosophy that deals with moral principles governing human
conduct.
●​ It is a normative science, meaning it sets standards for what is right and wrong.
●​ Ethics involves logical reasoning, just like other sciences, but focuses on values and
principles.
●​ It is concerned with systematizing, defending, and recommending right and wrong
behavior in society.

Example:

In business, deciding whether to lay off employees during a financial crisis requires ethical
considerations, balancing profitability and employee well-being.

1.2 Principles of Personal Ethics

Personal ethics guide an individual’s behavior in daily life and professional settings. They
include:

1.​ Concern for others’ well-being – Businesses should prioritize employee safety and
customer welfare.
2.​ Respect for autonomy – Employees and customers should be free to make informed
decisions.
3.​ Trustworthiness and honesty – Companies should not engage in misleading
advertisements.
4.​ Willing compliance with laws – Following labor laws and environmental regulations.
5.​ Basic justice and fairness – Treating employees fairly in promotions and rewards.
6.​ Refusing unfair advantage – Not using insider information to manipulate markets.
7.​ Benevolence (Doing good) – Engaging in corporate social responsibility (CSR)
initiatives.
8.​ Preventing harm – Ensuring products meet safety standards.
Real-World Example:

●​ Tata Steel is known for ethical labor policies, ensuring worker safety and fair wages.
●​ Infosys follows corporate governance to maintain ethical transparency in business
operations.

1.3 Principles of Professional Ethics

Professional ethics define how individuals should conduct themselves in a work environment:

●​ Impartiality – Avoiding favoritism in recruitment and promotions.


●​ Trustworthiness and honesty – Being transparent in financial reporting.
●​ Openness (Full Disclosure) – Revealing potential risks in investment plans.
●​ Confidentiality – Not leaking sensitive business data.
●​ Due diligence (Duty of Care) – Conducting proper research before making business
decisions.
●​ Fidelity to responsibilities – Meeting deadlines and commitments.
●​ Avoiding conflicts of interest – Not allowing personal relationships to affect business
decisions.

1.4 Business Ethics: Meaning and Scope

●​ Business ethics refers to the application of ethical principles in business decisions


and operations.
●​ It is based on integrity, fairness, and responsibility.
●​ Business ethics extends to stakeholders, including employees, customers, suppliers,
and the community.

Example:

●​ A company engaging in fair trade practices ensures fair wages for workers in
developing countries.

1.5 What is Not Business Ethics?

Ethics is not the same as:

1.​ Religion – Religion provides moral guidance but does not define business ethics.
2.​ Law – Laws set minimum standards, while ethics go beyond legal obligations.
3.​ Culture – Ethical standards are universal, while culture varies by region.
4.​ Feelings – Emotions can influence decisions, but ethics are based on logic.
5.​ Science – Ethics do not rely on empirical data but on moral reasoning.

Example:

●​ Child labor may be legal in some countries but is unethical by global business standards.

1.6 Values and Ethics in Business

●​ Values represent individual beliefs, while ethics guide collective behavior.


●​ Ethics ensure that business values align with moral responsibilities toward
stakeholders.

Example:

●​ A business valuing customer satisfaction will ensure high product quality and
ethical marketing.

1.7 Evolution of Business Ethics

Business ethics have evolved over time due to academic research, corporate responsibility, and
societal expectations.

●​ 1970s – Ethical concerns gained importance in business.


●​ 1974 – First conference on business ethics held at the University of Kansas.
●​ 1979 – Key publications established business ethics as an academic discipline:
○​ Ethical Theory and Business (Beauchamp & Bowie)
○​ Ethical Issues in Business (Donaldson & Werhane)
○​ Moral Issues in Business (Vincent Berry)
●​ 1980s-1990s – Ethics became a management discipline.
●​ 2000s-Present – Focus on corporate social responsibility (CSR) and sustainability.

1.8 Importance of Business Ethics

●​ Creates a positive business reputation.


●​ Ensures compliance with legal and ethical standards.
●​ Helps in building long-term stakeholder relationships.
2. Theories and Concepts of Business Ethics (Based
on Concepts and Theories BE.pdf)
2.1 Two Branches of Ethics

●​ Descriptive Ethics – Studies how people behave ethically ("What is")


●​ Normative Ethics – Defines how people should behave ("What should be")

2.2 Ethical Theories in Business

Ethical theories explain how businesses make moral decisions.

1. Consequentialist Theories (Focus on Outcomes)

●​ Egoism – Self-interest guides decisions.


●​ Utilitarianism – Actions should maximize overall happiness.

2. Non-Consequentialist Theories (Focus on Duties)

●​ Kantian Ethics – Decisions should follow universal moral principles.


●​ Moral Rights & Duties – Ethical actions respect individual rights.

2.3 Key Ethical Theories in Business

1. Egoism

●​ Decisions are ethical if they serve self-interest.


●​ Two types:
○​ Personal Egoism – Individuals act in their self-interest.
○​ Impersonal Egoism – Everyone should act in their self-interest.

2. Utilitarianism

●​ Founded by Jeremy Bentham and John Stuart Mill.


●​ An action is ethical if it produces the greatest good for the greatest number.

2.4 Ethical Issues in Business

Ethical challenges arise in:


●​ Employer-Employee Relations – Equal pay, workplace safety.
●​ Company-Customer Relations – Truthful advertising, fair pricing.
●​ Company-Shareholder Relations – Transparency in financial reports.

2.5 Normative Theories of Business Ethics

1. Stockholder Theory

●​ A business exists to maximize shareholder profit, following legal and ethical means.

2. Stakeholder Theory

●​ A business must consider the interests of all stakeholders.

3. Social Contract Theory

●​ A company has an implicit agreement with society to act in a socially responsible


manner.

2.6 Ethics and Religion

●​ Religious beliefs influence honesty, integrity, and fairness in business.


●​

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