MGT3533

Sessi 1 2023/ 2024 DBS

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BUSINESS
ETHICS
At the end of this chapter, you should be able to:

● Define and differentiate between ethics and morality

● Describe how ethics is developed in an individual
● List and explain the various factors that influence ethical values of an
individual
● Compare and contrast ethics and legality
● Compare and contrast Western and Eastern perspectives on ethics critically
● Relate the role of religion as a key contributing factor in shaping ethical
values in individuals
● Identify universally accepted moral values
● Recognize ethics and its importance in the global business world

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INTRODUCTION
>Ethics as a concept is different from morality.
>Ethics is important in life, what more in business.
>We can compare and contrast the concept of ethics from Western
and Eastern perspectives, and discuss the role of religion in shaping
one’s values.
>We often reflect and ask ourselves some basic questions:
>How should I lead my life?
>What type of person should I strive to be?
>What values are critical for me to lead a rewarding life?
>What standards or principles should I follow to conduct my life?
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CONTINUE…..
> Our self-reflection and conscience in addressing these
personal issues immerses us in the study of right and wrong
or moral reasoning. Moral reasoning leads us to the study of
morality, i.e. ethics.

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ETHICS IN DEFINITION Velasquez (2012) and Nickels (2008)
Ethics can be described as a set of regard ethics as a ‘discipline that
‘principles that contains behavioural codes examines one’s moral behaviour or the
to determine what is right or wrong’ moral standards of a society’.
(Khalidah et al., 2012). According to Abdullah and Zainol
‘The term ethics is derived from the Greek Abidin (2011), ethics ‘concerns itself
word, ethos, which means character, spirit with what is good or right in human
and attitudes of a group of people or interaction’. It revolves around three
culture’ (Rahman, 2003). central concepts: ‘self’, ‘good’ and
‘other’.
Ethics outlines the moral duty and
obligations that any human being should Ethics is also defined as ‘a critical
practice analysis of human acts to determine
their rightness or wrongness in terms of
The values an individual uses to interpret
two major criteria truth and justice’
whether any particular action or behaviour
(Mauro et al., 1999).
is considered acceptable and appropriate’
(Stanwick and Stanwick, 2009). 6
◈ To conceptualize ethics as a field of study, we are trying
to rationale what actions are right or wrong and assess
whether they are just or fair from different perspective –
individual, organizational and societal levels.

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Normative Ethics
Normative ethics is concerned
largely with the possibility of
justification. It takes morality as
its subject matter and asks such
questions.
It is concerned not with what
people believe we ought to do
but with what we really ought to
do and is determined by
reasoning or moral arguments.
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 Morality vs Ethics
Morality refers to norms, values and beliefs embedded in social processes
which define right or wrong for an individual or a community.

Eg. All religions and cultures view strongly that lying, cheating and
manipulation are wrong. These are sub-values of dishonesty.
The society’s acceptance/recognition that these values are morally wrong is
termed as morality. In addition, applying Islamic ethics and principles, these
three values are immoral based on the verses stated in the Al-Quran and
Sunnah.

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 Continue…..
Ethics is the study of moral standards whose explicit purpose to
determine as far as possible, whether a given moral standards
or
judgement based on that standards is more or less correct.
Eg.
When we apply specific theory or principle to explain lying,
cheating and manipulation are wrongful acts. This demands for
analytical thought and application of reason to determine
specific rules, principles or ethical theories that determine right
or wrong for a given situation.
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Ethical principles
Example of ethical theory views.

Based on Rule Utilitarian Theory, lying, cheating and manipulation

are unethical after assessing the bad consequences against the good
consequences of such actions.

Based on Kant’s Ethics of Duty will also share the same view since
These values do not promote goodwill among fellow humans and
they do not follow the universal law.
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Origin of Ethics
‘It comes from our inner feelings which subsequently translate into our moral
behaviour’ (Khalidah et al., 2012).
Ethics thus begins with each one of us.
According to Shaw (2011), rationally, we learn and adapt to the ethics and
moral principles through our:
> Upbringing
>Socialization (i.e. the behaviour around those around us)
>Experiences and our critical reflections on those experiences (self-
reflection)
>The explicit and implicit standards of our culture
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The contrast between Ethics & Legality
◈ Ethics covers a broader scope. It relates to questions of right and
wrongdoing, rights and justice. Ethics reflects people’s relations
with one another.
◈ Legality refers to a narrower scope of ethics. It refers to laws
that we have written to protect ourselves from fraud, theft and
violence.
◈ An ethical person is someone who obeys the law, however,
obeying the law need not necessarily justify that a person is
ethical. Many immoral and unethical acts fall well within our
laws (Nickels et al., 2008).
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Continue……
◈ Legality need not necessarily drive one’s self-conscience
to internalize good values, reflective of an ethical person.
◈ Ethics is above the law. It requires a sincere conscience on
how we should treat others and the impact of our actions
on others.
◈ Ethics thus rests upon one’s conscience and commitment
to do good deeds as a social responsibility under all
circumstances.
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Religion and Ethics
◈ Religion is one of the critical factors influencing an
individual’s ethical values. Most religions have an ethical
component. The Golden Rule of Life, ‘do to others what
you want others to do to you’, is found in all religions. ‘
◈ In fact, ‘For many people, ethics is not only tied up with
religion, but is completely settled by it. Such people do
not think too much about ethics, because there is an
authoritative code of instructions, a handbook of how to
live.’ (Blackburn, 2001:9).
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Continue..
◈ Religion is regarded as the most important driver of an
individual’s sense of ethics. People who were raised in a
religion, even if they no longer believe or practice it, often
have the teachings of that religion as part of their sense of
ethics.
◈ People who do believe in and practice religion typically
find the moral rules or dictates of their religion the most
meaningful way to answer questions about right and
wrong behaviour.
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 Islamic Ethics: Ethics of the Soul
(cont.)

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

© Oxford Fajar Sdn. Bhd. (008974-T), 2018 1–17
Refers to the above slide
◈ Values and ethical components in Islamic management.
◈ It shows the religious, professional and quality values and
ethics components in Islamic management to be
internalized by all Muslims in striving for a rewarding
life.

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 Ethical Principles (cont.)

 Universality of the
Golden Rule in the World
Religions

BUSINESS ETHICS (SECOND EDITION) All Rights Reserved

© Oxford Fajar Sdn. Bhd. (008974-T), 2018 1–19
Eastern and Western Perspectives on Ethics
◈ The West has somewhat compromised religion as a factor
influencing ethics in support of secularism and universalism.
The East still sees religion as an important contributing factor to
shape one’s ethical values.
◈ The West has placed emphasis on secularism and universalism
as ideologies to shape not only individual ethical values but to
construct the state. These form the foundation of human rights,
freedom of thought and rational thinking of the West.

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Eastern and Western Perspectives on Ethics
◈ In resolving ethical issues, the East has been seen to fall back
more on religious and cultural principles, much as the East
respects the ‘liberal/universalistic’ views of the West.
◈ Man-made ethical theories and principles which are practically
based on rational thinking and objectivity seem to be applied
more by the West compared to the East.
◈ Religion may have a greater influence in shaping the ethical
values of the East compared to the West due to the difference in
God centered vs Secular world views.
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Importance of Ethics in Life
◈ Although we value individual privacy, freedom of speech
and material wealth, we also value happiness by sharing
and complementing others. We value compassion, respect,
fairness and gratitude.
◈ If these values, among others, become the standards for a
society’s quality of life and well-being, we will arrive at a
consensus that ethics is integral in life.

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Importance of Ethics in Life
◈ Ethics deal with individual character and moral values
that govern and limit one’s conduct.
◈ Only ethical societies will sustain economic growth,
prosperity and well-being. Without doubt, only ethical
societies will sustain civilization and the dignity of
humans as guardians of the universe.

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Importance of Ethics in Business
 The Business Environment in a Global Context
– There are a lot of challenges in the global business world.
– Apart from fulfilling the profit maximization objective which drives
aggressive competition in a free market system, businesses have
to face another challenge–managing the global workforce.
– Society is undergoing dramatic change in values and societal
norms.
– There has been concerns on the decadence of moral values
among the younger generation, especially Generation Y.
– Generation Y employees who grew up in the ICT era and represent
the bulk of today’s workforce are more likely to see unethical
behaviour as justifiable in pursuit of their goals. 24
Importance of Ethics in Business
 Importance of Managing Businesses Ethically
– Managing a business ethically is related to being socially responsible,
as businesses are a part of society.
– Any unethical business conduct will have negative impacts on society.
Although businesses are set up to generate profit, they must be
responsible and accountable in their undertakings while serving the
society.
– It is necessary to manage businesses ethically in order to:
• Keep existing customers
• Attract new customers
• Avoid lawsuits
• Reduce employee turnover
• Please customers, employees and the society
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THANK
S!