Q.1. WHAT DO YOU UNDERSTAND BY THE TERM ETHICS?

Ans. Ethics is a set of standards, or a code, or a value system, by which free human actions
are determined as ultimately right or wrong, good or evil.

Q.2. EXPLAIN THE CONCEPT OF BUSINESS ETHICS. OR WHAT IS BUSINESS ETHIC.

“Business ethics refers to the application of ethics to business operations. To be more

specific, business ethics is the study of good and evil, right and wrong, just and unjust
actions of a businessman”.

In other words, business ethics maybe defined as a set of moral standards which people
owning and managing business are expected to follow. These standards are the means to
govern the conduct of business persons: Business ethics indicates what the right conduct in
business matter is;

Q.3 WHAT ARE THE FACTORS BUSINESS ETHICS SHOULD TAKE INTO CONSIDERATION?
 A business should aim to have fair dealing with everyone dealing with it.
 Ethics should be fixed for everyone working in the organization at any level and their
implementation should be linked with reward- punishment system.
 Any violation of ethics should be detected at the earliest and remedial measures
taken immediately.
 Business ethics should be based on broad guidelines of what should be done and
what should be avoided.
 The ethics should be based on the perception of what is right.

Q.4. WHY IS BUSINESS ETHICS NEEDED IN BUSINESS?

To fulfil the following obligations business ethics is needed in business:

 To give fair and equitable treatment to the employees

 To enhance credibility of business in public
 To charge fair prices from the customers.
 To use fair weights for measurement of commodities.
 To pay taxes to government and other bodies honestly.
 To earn reasonable profit.
 To improve decision making
 To protect the society, even better than government and legal system
 To become a good corporate citizen.
Q.5. WHAT ARE THE MAIN ELEMENTS OF BUSINESS ETHICS? EXPLAIN WITH SUITABLE
EXAMPLES.
Following are the main elements of business ethics:

 VALUES: These are the moral beliefs held by an individual, an organisations and a
society. Values represent moral convictions and are relatively permanent. For
Example: A company may charge reasonable prices due to its value systems in spite
of its monopoly position in the industry.
 RIGHTS: These are the claims of an individual or organization. For Example: Every
citizen of Pakistan enjoys certain rights enumerated in the country’s constitution.
 DUTIES: These are the obligations of a person or an organization. For Example; Every
citizen has the duty to follow the country’s law.

Q.6. WHAT ARE THE DIFFERENT SOURCES OF BUSINESS ETHICS?

As in every aspect of life, the business also requires ethics in order to survive. Ethics are
nothing other but codes of behaviour. Ever since we were kids, our parents were teaching
us to distinguish right from wrong. Once again, the business ethics include a lot of general
ethics such as fairness, integrity or law abiding.

Q. 7. WHY IS BUSINESS ETHICS IMPORTANT?

Business ethics ensure that companies operate according to all applicable laws. This
maintains the company's respect among its peers and customers and protects it from legal
liability. A company's ethics also help it attract quality team members. Businesses that care
for their teams according to the highest ethical standards are often attractive to job seekers.
Ethical treatment can also increase employee retention and reduce hiring and training costs.

A business that treats its customers or clients ethically can build trust and create
longstanding relationships. These customers are likely to return and may recommend the
business to people within their sphere of influence. Also, a business known for its effective
ethical principles can gain respect and elevate the quality of its brand.

Q. 8. WHAT ARE THE MAIN TYPES OF BUSINESS ETHCIS? /WHAT ARE THE KEY PRINIPLES
OF ETHICS IN BUSINESS?
 Honesty
 Integrity
 Fairness
 Promise-keeping
 Loyalty
  Caring
 Law Abiding
Q. 9. WHAT IS MEANT BY ETHICAL BEHABIOR IN BUSINESS ENVIRONMNT?
Ethical behaviors tends to be good for business and organization someone is working with,
and involves demonstrating respect for key principles that include Honesty, Integrity,
Fairness, Equality, Dignity, Diversity and Individual Rights.

Q. 9. WHAT IS MYTHS OF A BUSINESSMAN ABOUT BUSINESS ETHICS?

A myth is a belief given uncritical acceptance by members of a group, especially in support
of existing or traditional practices and institutions. It is also used to designate a story, belief
or notion commonly held to be true but utterly without factual basis.

1) Ethics is personal
2) Our employees are ethical so we don’t need attention to business ethics
3) Business ethics is more a matter of religion than management.
4) It’s easy to be ethical
5) Good business means good ethics
6) Business ethics is relative.
7) Hire only ethical people, so further time on business ethics is not needed.
8) Information is neutral and amoral.
9) Ethics can’t be managed.
10) We’ve never broken the law so we must be ethical
11) Unethical behavior in business is just due to a few “bad apples.”
12) Business ethics is superfluous. It only asserts the obvious—”Do Good!”
13) Business ethics is a matter of the good guys preaching to the bad guys.
14) Business ethics is just a matter of laws and regulation.
15) Managing ethics in the workplace has little practical relevance
16) Our organization is not in trouble with the law, so we’re ethical
17) Business ethics and social responsibility are the same thing
18) Our employees are ethical so we don’t need attention to business ethics
Q. 10. WHAT IS MORAL REASONING? WHAT IS ITS ROLE IN BUSINESS?
In a broad sense, morality is a set of rules that shapes our behavior in various social
situations. Moral reasoning refers to the logical process of determining whether an action is
right or wrong. Often, one engages in moral reasoning when faced with a decision over what
to do. While some choices are a simple matter of right and wrong, difficult decisions often
require more complex work and logic to reach a choice and take moral action.

Business morality largely depends on business relationships. Our rights and obligations
spring largely from relationships. These include our relationships with shareholders,
customers, and general stakeholders. These relationships can offer moral reasons for
particular actions. For example, relationship with your shareholder means moral duties to
them (such as to offer profits and be transparent) which you do not have for non-
stakeholders.

Q. 11. WHAT IS THE PROFIT MOTIVE? WHAT ARE ETHICAL PROFIT MOTIVE
CONSIDERATIONS IN BUSINESS?

PROFIT is considered as a form of anticipated reward or compensation for the efforts they
spend, skills they apply and returns for the capital they invested in putting up and organizing
business.

People go into business for a number of reasons:

 Personal satisfaction
 To earn a livelihood
 To serve the society through the goods and services they offer to the customers
 To make a profit

Milton Friedman, a noted economist, reflects this sentiment. He says that the only
responsibility of business is to make profit so long as one stays within the rules of the
game and engages in open and free competition without deception or fraud.

Peter Drucker, an equally famous management guru on the other hand, disagrees
with this view and says that, “the primary responsibility of business is to look for
customers and satisfy their needs and wants”

Ethical Considerations of Profit-Motive in Business:

 1. Earning profit is a good and valid activity in business. However, in the process of
generating profit, an ethical discernment is required for the businessman: Is my
profit fair enough for me and my customers? Did I consider important factors
and parameters in making profit such as the costs of goods sold, overhead, mark-
ups, profit margins, and the like?
2. Making excessive profits is totally wrong. It leads to greed, avarice and manipulation
of the customers.
3. Profit is not the “be-all and end-all” of doing business. Certainly, there are other
factors to be considered in business such as, customers satisfaction, respect for
environment, enhancement of the quality of life and the preservation of the society.
4. The teachings of the Holy Quran do not totally condemn profit as part of
business activity.

Q. 12. WHAT IS THE ADVANTAGSE AND DISADVANTAGES OF PROFIT-MOTIVE?

ADVANTAGES

 Profit-motive motivates people to do something meaningful.

 Profit-motive promotes ingenuity and cleverness in running a business.
 Profit-motive makes people productive.
 Profit-motive generates potential capital for the business.

DISADVANTAGES

 Profit-motive promotes rivalry among competitors.

 Profit-Motive makes people focus only on making money
 Profit-motive turns the businessman from being a reflective and a questioning
person because he focuses his attention only on the practical activity of making
money
 Profit-motive promotes self-interest rather than the common good.

Q.13. WHAT ARE THE DIFFERENT SOURCES OF BUSINESS ETHICS?

In every society there are three sources of business ethics-Religion, Culture and Law. The HR

manager in every organization, thus, has to be well versed with the unique system of values

developed by these three sources. These sources are discussed as follows:

 RELIGION:
 Religion is the oldest source of ethical inspiration. There are more than 1, 00,000

religions which exist across the whole world, but all of them are in agreement on the

fundamental principles. Every religion gives an expression of what is wrong and right

in business and other walks of life. Great religions preach the necessity for an orderly

social system and emphasize upon social responsibility with an objective to

contribute to the general welfare. With these fundamentals, every religion creates

its own code of conduct.

 CULTURE:

Culture is the set of important understandings that members of a community share

in common. It consists of a basic set of values, ideas, perceptions, preferences,

concept of morality, code of conduct etc. which creates distinctiveness among

human groups.

Culture encourages the members of the organization to give priority to

organizational goals over and above their personal interests. Culture also serves as a

sense making and control mechanism that guides and shapes the attitudes and

behaviour of people.
 LAW:

The legal system of any country, guide the human behaviour in the society.

Whatever, ethics the law defines are binding on the society. The society expects the

business to abide by the law. Although it is expected that every business should be

law abiding, seldom do the businesses adhere to the rules and regulations. Law

breaking in business is common eg. Tax evasion, hoarding, adulteration, poor quality

& high priced products, environment pollution etc.

Q. 14. WHAT IS THE STUDY OF ETHICS IN PHILOSOPHY?

Ethics is a body of study that focuses on the moral principles that influence human behavior.
Philosophy is the study of knowledge, truth, and meaning. The two disciplines are
intertwined, as philosophy often considers ethical questions, and ethics often use
philosophical ideas to better explain phenomena.

Ethics or Moral philosophy is the branch of philosophy that considers what is right and
wrong, or good or bad. It explores the nature of morality and examines how people should
live their lives in relation to others. It asks question like:
 • What is the good?
• What should I do?
• What is a good life?
• Is morality objective or subjective?
• Is it absolute or relative?
• Why should I be moral?
• What is the relationship between self-interest and morality?
• Where does morality come from?
• What, if anything, provides the ultimate justification for morality?
• Should one emphasize duty, happiness, or pleasure in moral judgments?

Q. 15. WHAT ARE DIFFERENT ETHICAL THEORIES?

We may conveniently divide contemporary philosophical ethics into at least four parts.

• Normative ethics
• Descriptive ethics
• Applied ethics
• Meta ethics

Ethical Theories Example:

• "How should people act?" (Normative or Prescriptive Ethics)

• "What do people think is right?" (Descriptive Ethics)
• "How do we take moral knowledge and put it into practice?" (Applied Ethics)
• "What does 'right' even mean?" (Meta-Ethics).

Q. 15. WHAT IS THE DIFFERENCE BETWEEN NORMATIVE AND DESCRIPTIVE THEORIE OF

ETHICS?

DESCRIPTIVE ETHICS, also known as comparative ethics, is the study of people's beliefs
about morality. It simply involves describing how people behave and/or what sorts of moral
standards they claim to follow.

NORMATIVE ETHICS (or Prescriptive Ethics) is the branch of ethics concerned with
establishing how things should or ought to be, how to value them, which things are good or
bad, and which actions are right or wrong. It attempts to develop a set of rules governing
human conduct, or a set of norms for action.

The difference between descriptive and normative is that descriptive describes how things
are (people work 8 hours a day), where normative describes how things should be (working
less than 8 hours is a bad thing (because…))

Q. 16. NAME THEORIES RELATED TO NORMATIVE ETHICS?

Normative ethical theories are usually split into three main categories:

 Consequentialism
 Deontology
 Virtue Ethics
Q. 17. WRITE A DETAILED NOTE ON CONSEQUENTIALISM (TEOLOGY) THEORY OF ETHICS?
Consequentialism (or Teleological Ethics) argues that the morality of an action depends
upon the action's outcome or result. Thus, a morally right action is one that produces a good
outcome or consequence.

Consequentialist theories must consider questions like "What sort of consequences count
as good consequences?", "Who is the primary beneficiary of moral action?" Some
consequentialist theories include:

 UTILITARIANISM (public interest), which holds that an action is right if it leads to the
most happiness for the greatest number of people ("happiness" here is defined as
the maximization of pleasure and the minimization of pain) or works in public
interest.
 EGOISM (self-interest), which holds that an action is right if it maximizes good for
the self. Thus, Egoism may license actions which are good for the individuals.
o Individual Personal Egoism holds that each person should act in his own self-
interest.
o Universal Egoism holds that everyone should act in ways that are in their
own interest.
 ALTRUISM (Live for Others) theory prescribes that an individual take actions that
have the best consequences for everyone except for himself, according to Auguste
Comte's dictum, "Live for others". Thus, individuals have a moral obligation to help,
serve or benefit others, if necessary at the sacrifice of self-interest.
 RULE CONSEQUENTIALISM explains that moral behavior involves certain rules, but
the rules should be chosen based on the consequences that the selection of those
rules have.
 NEGATIVE CONSEQUENTIALISM focuses on minimizing bad consequences rather
than promoting good consequences. This may actually require active intervention (to
prevent harm from being done), or may only require passive avoidance of bad
outcomes
Q. 18. EXLAIN THE THEORY OF DEONTOLOGY WITH SUITABLE EXAMPLES?

Deontology is an approach to ethics that focuses on the rightness or wrongness of actions

themselves, as opposed to the rightness or wrongness of the consequences of those actions.
It argues that decisions should be made considering the factors of one's duties and other's
rights. “Deon” means obligation or duty in Greek. Some deontological theories include:

 Divine Command Theory: It states that an action is right if God has decreed that it is
right, and that an act is obligatory if and only if (and because) it is commanded by
God.
 Natural Rights Theory holds that humans have absolute, natural rights, this IS
eventually developed into what we today call human rights.
 Duty-based Ethics (Pluralistic Deontology) is a description of the deontological
ethics propounded by W.D. Ross (1877 - 1971). He argues that there are seven duties
which need to be considered when deciding which duty should be acted upon:
o beneficence (help others increase their pleasure, improve character, etc);
o non-maleficence (to avoid harming other people);
o justice (to ensure people get what they deserve);
o self-improvement (to improve ourselves);
o reparation (compensate someone if you have acted wrongly with them);
o gratitude (to benefit people who have benefited us);
o promise-keeping (to act according to explicit and implicit promises)
 Right-based Ethics (or the Moral Theory of Contractarianism) focuses on moral
principle instead of consequences. A right can be defined as entitlement to
something.
 The right to know
 The right to privacy
 The right to property

Q. 19. EXLAIN VIRTUE ETHICS WITH SUITABLE EXAMPLES?

Virtue Ethics, focuses on the inherent character of a person rather than on the nature or
consequences of specific actions performed. The system identifies virtues (those habits and
behaviors that will allow a person to achieve "eudaimonia", or well being or a good life) and
claims that a lifetime of practicing these virtues leads to, or in effect constitutes, happiness
and the good life.
Q. 20. WHAT IS MEANT BY APPLIED ETHICS?

Applied Ethics refers to the practical application of moral considerations. It

is ethics with respect to real-world actions and their moral considerations in the
areas of private and public life, the professions, health, technology, law, and
leadership.

 Legal Ethics:

Principles of conduct that members of the legal profession are expected to observe
in their practice. Respect of client confidences, truthfulness in statements to others,
and professional independence are some of the defining features of legal ethics.

 Business Ethics:

Business ethics is a form of applied ethics or professional ethics. Business ethics is

the set of moral rules that govern:

o how businesses operate

o how business decisions are made
o how people are treated

In business, there are many different people you have to answer to: customers,
shareholders and clients.

 Environmental Ethics

Environmental ethics is a branch of ethics that studies the relation of human beings
and the environment and how ethics play a role in this. Environmental ethics believe
that humans are a part of society as well as other living creatures, which includes
plants and animals.

 Media Ethics:

It deals with the specific ethical principles and standards of media in general,
including the ethical issues relating to journalism, advertising and marketing, and
entertainment media.

Q. 21. DEFINE AND EXPLAIN META-ETHICS IN DETAIL?

Meta-Ethics is a branch of ethics that seeks to understand the nature of ethical properties,
statements, attitudes, and judgments and how they may be supported or defended.

A meta-ethical theory, unlike a normative ethical theory (see below), does not attempt to
evaluate specific choices as being better, worse, good, bad or evil; rather it tries to define
the essential meaning and nature of the problem being discussed. It concerns itself with
second order questions, specifically the semantics of ethics.

For example while Normative ethics addresses questions as

“what Should I do” or

“Whether it is good or bad”,

Meta ethics addresses questions such as “what is goodness” and “how can we tell
what is good from bad”.

Q. 22. DEFINE AND EXPLAIN SOCIAL CONTRACT THEORY?

Social contract theory is another descriptive theory about society and the relationship
between rules and laws, and why society needs them. Thomas Hobbes (1588-1689)
proposed that a society without rules and laws to govern our actions would be a dreadful
place to live. Hobbes described a society without rules as living in a “state of nature.”
In such a state, people would act on their own accord, without any responsibility to their
community. Life in a state of nature would be Darwinian, where the strongest survive and
the weak perish. The society would have:

 No place for commerce

 Little or no culture
 No knowledge
 No leisure
 No security and continual fear
 No arts
 Little language

Q. 23. DEFINE AND EXPLAIN ETHICAL RELATIVISM THEORY?

Ethical relativism is the theory that holds that morality is relative to the norms of one's
culture. That is, whether an action is right or wrong depends on the moral norms of the
society in which it is practiced.

The same action may be morally right in one society but be morally wrong in another. An
appropriate example of ethical relativism is one where premarital sex is considered morally
unacceptable in many cultures across South-Asia, for instance in India. Girls are expected to
be virgins when they get married. Whereas premarital sex in western world is the norm, and
it is totally acceptable for women to date and have sex if they choose to before they ever
think of getting married.