L 8 business ethics

1. Business
Ethics
SHIFALI GARG
MBA

2. Meaning
• The term “ethics” is generally used to mean “the
discipline (area of learning) dealing with what is
good and bad.” The term encompasses the
“study concerned with the principles of human
duty that moral principles or system of a
particular: the moral principles by which a
person is guided: the rules of conduct recognized
in certain association or department of human
life.”

3. • Acc. to Steiner, “Business ethics is the study of good
and evil, right and wrong, just and unjust actions of
business”
• Acc. to Peter F Drucker, “Ethics deals with the right
actions of individuals”.

4. • Examples of ethical practices
• 1. To charge fair price
• 2. To make fair advertisement
• 3. To pay regular tax
• 4. To earn reasonable profit
• 5. To pay timely wages and salary to the
employees
• 6. To control pollution
• 7. To produce good quality products.

5. • Examples of Unethical practices
• To charge unfair prices
• To give false advertisements
• To evade taxes
• To provide adulterated products
• To offer bribe to govt .
• To pollute env t.
• To exploit employees
•

6. Characteristics:
• 1. Good Intentions: Business ethics are
related with good opinions, good ideas, good
expectations, good performances etc.
• 2. Ethics can Protect Society: Where law
fails, ethics can succeed, i.e. the things which
are not covered by law, can be governed by
business ethics.
• 3. Study of Human Aspect: Business ethics are

7. • 4. Self-imposed Discipline: The important feature of business
ethics is the self-imposed discipline. In other words, nobody tells us
to observe discipline, but the people having faith in ethics are self-
disciplined. Ethics have moral binding.
• 5. Honesty: Business ethics stress on honesty on the part of
businessman. In other words, business ethics believe that every
businessman will behave honestly with all the parties concerned.

8. • 6. Equality: Equality has a significant place in business ethics.
According to this, everybody should be given equal treatment in
business. It means that there should be no differences on the basis of
riches, poverty, caste or religion.
• 7. Guiding Force: Business ethics guide the business unit
regarding what is to be done and what is not to be done; what is
right and what is wrong.

9. Significance of Business Ethics
• (1) Long term Interest: It is in the long term
interest of the business to observe business
ethics. By following moral principles, business
unit will create favorable environment for the
long term prosperity of the business.
Moreover, long run success of business
depends on fair and honest dealings with the
public.

10. • 2. Protect Society: Business ethics are important because
government cannot protect society only with the help of legal
framework. Where law fails, ethics can succeed. An ethically-
oriented business unit takes number of steps to protect society,
like protecting environmental quality, not to adopt unfair trade
practices to cheat consumers, to pay fair wages to workers, etc.
• 3. Avoid Government Intervention: If business is ethical, it is
following moral principles, is not adopting unethical business
practices like adulteration of goods, sale of duplicate products,
misleading advertisements etc., then government intervention is
avoided. It improves the public image of the business.
Government usually does not interfere much in the business
activities, if it is fulfilling its social responsibility.

11. • 4. Avoid Confrontation with Different
Interest Groups: If business is following
ethical practices then it enjoys clean and
honest image among different interest
groups like customers, employees,
suppliers, society, government etc. It helps
to avoid confrontation with these interest
groups. Rather these interest groups
extend full support to such business, as is
following ethical practices.
• 5. Satisfaction: If businessman is

12. • 6. Business Ethics Create Credibility with the Public: If business
is following ethics, then it is honored and respected by the public,
since people believe that the business unit will not cheat them and
the business will offer value for the money spent by them.
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