Business ethics

I. Lead-in.

1. Discuss in groups is making money the only purpose of a business.

2. Using the following words & word combinations try to give the definition of business ethics:

as they apply to; business; the application of; moral standards; ethics; in; concentrates on; business policies, institutions and behavior.

3. Rank the professions below according to how ethical you think they are.

accountant; militiaman; banker; shop-assistant; lawyer; teacher; plumber; doctor; taxi driver; civil servant; estate agent; journalist; judge

4. Discuss this list of unethical behavior. In your opinion, which are the most / the less serious? What are common in this country?

a) Avoiding paying taxes; b) using work facilities for private purposes; c) accepting praise for someone else’s ideas or work; d) selling a defective product; e) using your influence to get jobs for relatives (nepotism); f) ringing in sick when you are not ill; g) taking extended lunch breaks; h) being often late for work; i) employing people illegally.

II. Pre-reading task. Match the halves of the sentences to get a brief idea what the text “Business Ethics” is about.

1.	Ethics is the science	the application of ethics in business.	A
2.	Business ethics is	causing unethical behavior in business.	B
3.	Business ethics	are some of the most wide-spread unethical practices in business.	C
4.	Competition is one of the major factors	unless it follows good ethics.	D
5.	Besides, nowadays people want to become rich in a short time	dealing with certain standard of human conduct and morals.	E
6.	Encouraging practices of corruption; discrimination in pricing; ignoring the social interests; creating artificial1 scarcity; making political donations; not producing quality product; misleading2 advertisement	concentrates on moral standards as they apply to business policies, institutions and behavior.	F
7.	In the era of global economy management cannot become a profession	even by doing unethical acts.	G

Introduction to Ethics. Ethics is not a recent discovery. Over the centuries philosophers in their struggle with human behavior have developed different approaches to ethics, each leading to different conclusion.

Ethics is the science dealing with certain standard of human conduct and morals. It is a collection of moral principles or set of values about what is right or wrong, true or false, fair or unfair, proper or improper; what is right is ethical and what is wrong is unethical. All societies have ethical rules forbidding lying, stealing, deceiving, and harming others, just as they also have ethical rules that approve of honesty, keeping promises, helping others, and respecting the rights of others. Such basic rules of behavior are thought to be essential for the preservation and continuation of organized life. Thus, the field of ethics involves systematizing, defending and recommending concepts of right and wrong behaviour.

Introduction to Business Ethics. Business ethics is nothing but the application of ethics in business. It concentrates on moral standards as they apply to business policies, institutions and behavior. According to John Donaldson, business ethics in short can be described as the systematic study of ethical matters pertaining to business industry or related activities, institutions and beliefs.

The 3 C's of Business ethics are:

1. Compliance (the need for compliance of rules including laws; morality principles; company’s policy)

2. The Contribution (that business can make to the society, e.g. quality of products / services; employment; usefulness of activities to surrounding activities)

3. The Consequences of business activity (toward environment inside and outside the organization; social responsibility toward shareholders, bankers, customers and employees of organization; good public image).

According to P. Pratley, business ethics has a two fold objective - it evaluates human practices by calling upon moral standards; also it may give prescription advice on how to act morally in a specific kind of situation.

The major factors causing unethical behavior in business are:

1. Competition - when managers try to meet goals and have to cut corners³ at that moment this acute competition at national as well as international level becomes an unavoidable reason for unethical conduct.

2. There is an increasing pressure to earn more profit and to cope with the enlarged requirements and expectations of shareholders, customers, employees or all the categories of its stakeholders⁴.

3. Nowadays people want to become rich in a short while even by doing unethical acts. Money and success becomes the important motivator behind any activity.

4. Political corruption has also become a big issue nowadays, as business cannot be aloof⁵ from politics and most of the political parties demand gifts, donations and bribes from the businessmen for their political gain.

5. Social values and customs are not followed by new generation.

6. People neglect the social responsibility, lack of integrity and discipline in the social values.

Common unethical practices include: encouraging practices of corruption; false representation of returns and income statements; discrimination in pricing; ignoring the social interests; creating acute competition and artificial scarcity; making political donations; exploiting the consumer; not producing quality product; unauthorized manufacturing of hazardous products; misleading and deceptive advertisement; exploiting scare natural resources; illegal trade with enemy countries. Many of the business activities, which involve unethical activities, are objectionable, exploitative and create big problems to innocent people.

There are some important factors of building an ethical infrastructure in the organization:

1. Ethical behaviour should be fully supported by the top management. They must set some examples in front of the employees from their own level if committed to ethics.

2. To establish and to encourage ethical conduct formal codes of ethics for organization members must be framed.

3. A proper well-designed communication network is needed. This can be accomplished in 3 ways: by establishing appropriate company policy and ethical rules; by using a formally appointed ethics committee; by teaching ethics in management development program.

In the era of global economy, new principles are required in new management. Management cannot become a profession so far as it does not follow good ethics. An important feature of a profession is that it has a laid down code of conduct, which remains on all the principles of "service to humanity." Business can be and have been ethical and still make profits. Today more and more interest is being given to the application of ethical practices in business dealings and the ethical implications of business. So to run the good business in modern scenario one has to develop and follow ethics.