Ethics in business
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The document discusses the significance of ethics in business, defining business ethics as the principles governing decision-making and actions within a company, which are essential for fostering trust with consumers. It outlines the relationship between ethical behavior and business success, emphasizing that ethical practices can enhance reputation, employee retention, and customer loyalty. Furthermore, it highlights the importance of ethical leadership and organizational culture in promoting and upholding ethical standards within a business.
Ethics in business
- 1. Ethics in Business Electrical Department Bahria University, Islamabad
- 2. Contents • Definitions • Relationship between business and ethics • Need for business ethics • Importance of ethics in business • 3 Models of Management Ethics • Developing Moral Judgment • Ethical behavior • Factors impacting organizational ethics • 7 Principles of Admirable Business Ethics • conclusion
- 3. Definition: First of all we need to know what is actually ethics Ethics (also moral philosophy) is the branch of philosophy that involves systematizing(to plan a system for something), defending, and recommending concepts of right and wrong conduct.
- 4. Definition Business ethics can be defined as written and unwritten codes of principles and values that govern decisions and actions within a company. In the business world, the organization’s culture sets standards for determining the difference between good and bad decision making and behavior.
- 5. Introduction • Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and ethical problems that arise in a business environment. • Business ethics are implemented in order to ensure that a certain required level of trust exists between consumers and various forms of market participants with businesses • Decisions taken within an organization may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. • A business is considered to be ethical only if it tries to reach a tradeoff between pursuing economic objective and its social obligations.
- 6. Relationship between business and ethics Ethical relationships concerning your company's interaction with customers can have a direct impact on the success of your company. Ethical customer relationships should include honesty with customers, delivering a good product or service and backing the product or service. A company policy that encourages positive relationships with customers can help position your company as a trusted one. While unethical behavior, such as making false claims, may gain you immediate customers, this same behavior will lose those customers for you in the long run.
- 7. Need for business ethics •Every responsible business understands the need of business ethics. Company is a legal person; therefore it needs to work in a socially responsible manner. •It should be implemented and observed by the management, followed by the employees, and with proper consideration of the customers. • A business can achieve long term success with business ethics. The more inclined a business is towards ethics, the more trust of the customer, and more durability of the business.
- 8. Importance of ethics in business They may: • Attract customers to the firms products, thereby boosting sales and profits make employees want to stay with the business, reduce labor turnover and therefore increase productivity(zahiri bat hai jitney zayada customers hongay utni productivity increase hogi …) • Attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees(employee rate zayada ho jaye ga ) • Attract investors and keep the company’s share price high, thereby protecting the business from takeover.(jitney zayada investors hongay business take over se bach jaye gi) Unethical behavior or a lack of corporate social responsibility, by comparison, may damage a firm’s reputation and make it less appealing to stakeholders. Profits could fall as a result.
- 9. 3 Models of Management Ethics • Three Types Of Management Ethics
- 10. 3 Models of Management Ethics Moral Management Conforms to high standards of ethical behavior. Immoral Management A style devoid of ethical principles and active opposition to what is ethical. Amoral Management Intentional - does not consider ethical factors Unintentional - casual or careless about ethical considerations in business
- 13. ETHICAL BEHAVIOUR • WHAT IS ETHICAL BEHAVIOUR? Ethical behavior is that which is morally accepted as "good" and "right" as opposed to "bad" or "wrong“ • Advantages Higher revenues – demand from positive consumer support Improved brand and business awareness and recognition Better employee motivation and recruitment New sources of finance – e.g. from ethical investors
- 14. ETHICAL BEHAVIOUR One way of dealing with ethical dilemmas is by using the four way test to evaluate decisions. This test involves asking four questions: •Is my decision a truthful one? •Is my decision fair to everyone affected? •Will it build goodwill for the organization? •Is the decision beneficial to all parties who have avested interest in the outcome?
- 15. WHO IS RESPONSIBLE FOR CREATING ETHICS IN AN ORGANIZATION ? A company’s managers play an important role in establishing its ethical tone. If managers behave as if the only thing that matters is profit, employees are likely to act in a like manner. A company’s leaders are responsible for setting standards for what is and is not acceptable employee behavior. It’s vital for managers to play an active role in creating a working environment where employees are encouraged and rewarded for acting in an ethical manner.
- 16. OTHER FACTORS IMPACTING ORGANIZATIONAL ETHICS • Corporate culture • Existence and application of a written code of ethics • Formal and informal policies and rules • Norms for acceptable behavior • Financial reward system • System for recognizing accomplishment • Company attitude toward employees • How employees are selected for promotions • Hiring practices • Applications of legal behavior • Degree to which professionalism is emphasized • The company’s decision making processes • Behaviors and attitudes of the organization’s leaders
- 17. 7 Principles of Admirable Business Ethics 1. Be Trustful 2. Keep An Open Mind 3. Meet Obligations 4. Have Clear Documents 5. Become Community Involved 6. Maintain Accounting Control 7. Be Respectful
- 18. Coke & Pepsi in Pakistan Today, more from the world of product safety. This time the story is about Coke and Pepsi, and allegations that the versions of their products manufactured in Pakistan contain unacceptably high levels of pesticides. world’s biggest brand names, known for wooing customers around the world, are facing a credibility crisis in one of their crucial emerging markets.
- 19. Conclusion Ethics are important not only in business but in all aspects of life because it is an essential part of the foundation on which of a civilized society is build. A business or society that lacks ethical principles is bound to fail sooner or later.