1. Business Ethics

2.  Suggested Readings
 Murthy C V S, Business Ethics,
Himalaya Publishing House
 Banerjee R P, Ethics in Business and
Management, Himalaya Publishing
House
 Business Ethics- Principles &
Practices- Daniel Albuquerque
 Indian Ethos and Values in
Management- R Nandagopal & Ajith
Sankar R N

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3.  Syllabus in Prescribed book-
 Business Ethics- Author -CSV Murthy
 Unit I:- Introduction
 Meaning of Ethics- 1.3
 Definition of ethics and Business Ethics-
1.4
 Objectives-1.9,
 Nature- 1.10
 and sources of ethics- 1.11
 Types of ethics – 1.16
 Need for Business Ethics-1.17
 Importance and nature of Business
Ethics – 1.18
 Factors influencing Business Ethics- 1.20
 Business and Ethical Responsibility-1.21
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4. Meaning of Ethics
In Latin language-Ethics is called
Ethicus
In Greek it is called as Ethicos.
Ethos means Character or manners.
Ethics is said to be the source of
morals
-recognized rules of conduct.

5.  Business ethics are moral principles
that define right and wrong behaviour in
the world of business.
 What constitutes right and wrong
behaviour in business is determined by
the public interest groups, and business
organisations,as well as an individual’s
personal morals and values
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6.  Three tests used for
understanding business ethics in
organisations
 1. Test of agreement with the
evidence
 2. Test of internal coherence
 3. Test of its compatibility
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7. Ethical Performance
 Ethical business performance means
adhering to society’s basic rules that
define right and wrong behaviour.
 Major Social challenges faced by business
is to balance ethics and economics.
 Society wants business to be ethical and
economically profitable at the same time
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8.  Three terms used to define ethics are
 1. Right
 2. Proper
 3. Just
 Terms – bribery, theft and collusion
in business unethical practices.
 Collusion is a secret agreement to
deceive
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9.  Sources of Ethics
 1. General Inheritance
 2. Religion
 3. Philosophical Systems
 4.Legal System
 5. Codes of Conduct
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10.  Ethics & Business
 Ethics conflicts with profits,
whereas
 Business always choose profits
over ethics
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11.  Types of Ethics
 There are three different types
 1. Transactional Ethics
 2. Participatory Ethics
 3. Recognitional Ethics
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12.  1. Transactional Ethics
 The domain of ethics covering
transactions that are performed on the
basis of simultaneous or connected
interests and that are general by the
principles of
 Equality,
 Honesty and,
 Reciprocity is indicated as the domain
of transactional ethics.
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13.  2. Participatory Ethics
 It is about the shape of solidarity in an
age of individualisation.
 It is the ethics of the civil society,
recently rediscovered as a solid ground
for collective arrangements where both
the marked and the state fail.
 By participating on a regular basis, in
common projects on behalf of general
welfare, a corporation demonstrates
that it can take seriously its corporate
citizenship. 16-01-2015 S.B.Seshadri,Asst. Prof,NERIM 13

14.  Participation voluntary, guided by the
social relations and on two particular
moral principles
 Principle of Decency-A real opportunity
to contribute to the general welfare
presents itself and no insurmontable
obstacles arise, one should have solid
moral reasons not to go for it.
 Principle of Emancipation- Special
attention is given to the least powerful
in order to defend those, who,by
themselves, are defenceless.16-01-2015 S.B.Seshadri,Asst. Prof,NERIM 14

15.  3. Recognitional Ethics
 The domain of recognitional ethics
covers a large part of traditional
ethical interventions.
 Ethics in fact is about asymmetrical
relations about the rights of interests of
the one generating a duty for another.
 Principle of Recognition
 Principle of beneficence or
nonmalificence
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16.  Need for Business Ethics
 1. Business operates within the
society
 2. Every business irrespective of size
exists more on ethics means or in
total regard to its social concern to
survive long
 Business needs to function as
responsible corporate citizens in the
country
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17.  Importance of Business Ethics
 1. Personal gain
 2. Individual values vis a vis
organisational goals- whistle blowing
 3. Managers values and attitudes
 4. Competitive pressures
 5. Cross-cultural contradictions
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18.  Five Factors influencing Business
Ethics
 A) Leadership
 B) Strategy and Performance
 C) Environment
 D) Corporate Culture
 E) Individual Characteristics
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19.  Unit II:-
 (Chapter 2)
 Values, Norms and standards
 Values-
 Norms-
 Beliefs-
 Moral Standards, Beliefs and their role-
 Ethical codes-
 (Chapter 3)
 Theories of ethics-
 Ethical reasoning-
 Ethical decisions-
 Normative ethics in Management-
 Ethical theories
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20.  Unit II
 Values ,Norms, Beliefs and
Moral standards
 Values are a general term referring to those
things which people regard as
good,bad,right,wrong,desirable,justifiable
etc.
 Business is driven by values. Values
determine
 What business people do?
 How others react?
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21.  Values are potent sources of conflict
as well as of co-operation, control
and self-control.
 Through Values, business can and does
create value in the form
goods,services,employment, etc.
 Some values prevent this process from
working properly or at all.
 Ex:- Liquor trade, unethical trades etc.
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22.  Types of Values
 1. Cultural –represent the expectations
of stakeholders and set of standards of
technical skills in business .
 2. Moral-Important ones which are deep-
seated ideas and feelings that manifest
themselves as behaviour or conduct.
Difficult to measure or express in words.
 3.General & Control Values- capable of
judging the acceptability of the prudential
and technical value.
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23.  Managerial Values
 In 1975, An international study was
done by George from England with
focused approach on importance of
Goods of organisations like
 - productivity
 - profit maximization
 - employee welfare
 - organisational
growth,stability,efficiency
 - industry leadership,
 - Social welfare
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24.  The Study categorises the primary
orientation of the managers are:-
 Pragmatic- It is pertaining to public
business or skilled in affairs
 Moralistic(Ethical –moral code).
Evaluative frame work consisting of ethical
considerations influencing behaviour towards
actions and decisions, judged to be “right”
and away from those judged to be wrong.
 Affective(Feeling)- Suggests an evaluative
framework guided by hedonism- one
behaves in ways that increase pleasure and
decrease pain.Hedorism is the doctrine that
tells happiness is the highest good.
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25.  Features of Values-( DNA)
 1. Descriptive – (Something like using
‘is’ of ethics)
 2. Normative- ( Something like using
‘ought to be ‘ of ethics)
 3. Analytical- ( Something like using
‘why’ of ethics)
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26.  Norms
 Norms are expectations of proper
behaviour, not requirements for that
behaviour, a major difference between a
norm and law.
 Each individual within the society has a
set of norms,beliefs, and values that
together form his or her moral standards.
 Norms are the ways an individual
expects all people to act, when faced
with a given situation.
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27.  The norm is not published , may not be
obeyed and cannot be enforced- except
by the sactions of a small group whose
members hold similar norms and use such
penalities as disapproval or exclusion.
 It is not consistent nor universal.
 Norms are just the way we feel about
behaviour. They are neither logically
consistent nor universally applied because we
have never thought through the reasons we
hold them.
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28.  Beliefs
 The beliefs in an ethical code are
standards of thought.
 Beliefs are criteria of thought. They
are the ways an individual expects people
to think about given concepts.
 Beliefs are different from norms,
since we do not find any action- only
an abstract way of thinking, no untoward
behaviour with others. It tends to support
an individual norms.
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29.  Moral standards
 Law is a dynamic entity since the rules
prevalent now will change after some
period.
 Moral standards- it includes the norms
we have about the kinds of actions we
believe are morally right and wrong as
well as the values we place on the kind of
objects we believe are morally good and
morally bad.
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30.  Ethics of Business competition vs.
competition in sports
 To win or gain financially , sportspersons
take drugs, practice unethical means etc
 It is very difficult to win but easy to loose
indulging in wrong means – even at
conscience level if not caught.
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