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Business Ethics

Business ethics examines ethical principles and moral problems in a business environment, applying to both individuals and organizations. Key elements include a formal code of conduct, ethics committees, ethical communication systems, and ethics training programs, all aimed at promoting ethical behavior and compliance. Principles of business ethics encompass various values such as transparency, commitment, and cooperation, guiding organizations in their ethical conduct.

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Kartik Sharma
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7 views23 pages

Business Ethics

Business ethics examines ethical principles and moral problems in a business environment, applying to both individuals and organizations. Key elements include a formal code of conduct, ethics committees, ethical communication systems, and ethics training programs, all aimed at promoting ethical behavior and compliance. Principles of business ethics encompass various values such as transparency, commitment, and cooperation, guiding organizations in their ethical conduct.

Uploaded by

Kartik Sharma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Business Ethics

Definition/Meaning
Importance of Business
ethics
Elements of business ethics
Principles of Business Ethics
Business Ethics

Business ethics (also corporate ethics) is


a form of applied ethics or professional
ethics that examines ethical principles
and moral or ethical problems that arise
in a business environment. It applies to
all aspects of business conduct and is
relevant to the conduct of individuals
and entire organizations
Elements of Business
ethics
Elements of Business
Ethics are:

(i) A Formal Code of Conduct


(ii) Ethics Committee
(iii) Ethical Communication System
(iv) An Ethics Office with Ethical
Officers
(v) Ethics Training Programme
(vi) A Disciplinary System
(vii) Establishing an Ombudsperson
(viii) Monitoring
A Formal Code of Conduct

Code of conduct is statements of


organizational values. The Sarbanes-Oxley
Act, 2002 made it important for businesses
to have an ethics code, something in
writing which will help the employees know
– with both ease and clarity
– what is expected of them on the job.
The code should reflect the managements
desire to incorporate the values and
policies of the organization.
Code of Ethics:

 For every new business incorporated, it is


important for the management to have a code
of ethics for his business.
 It is usually unwritten for small businesses. It
is basically a buzzword for the employees to
observe ethical norms and form the basic rules
of conduct.
 It usually specifies methods for reporting
violations, disciplinary action for violation and
a structure of the due process to be followed.
Contd..

 A code of ethics must summarize the


beliefs and values of the organization.
 For a large business empire, it is
important to hire talent to assist
existing personnel with regards to
integrity, understanding, responsibility,
and cultural norms of the country.
(ii) Ethics Committee:

 Ethics committees can rise concerns of ethical


nature; prepare or update code of conduct,
and resolve ethical dilemma in organization.
 They formulate ethical policies and develop
ethical standards.
 They evaluate the compliances of the
organisation with these ethical standards.
 The committee members should be conscious
about the corporate culture and ethical
concise of the organisation.
The following committees are to be
formed:

a. Ethics committee at the board level- The


committee would be charged to oversee
development and operation of the ethics
management programme.
b. Ethics management committee – It will be
charged with implementing and administrating
an ethics management programme, including
administrating and training about policies and
procedures, and resolving ethical dilemmas.
(iii) Ethical Communication
System:

Ethical communication system


helps the employees in making
enquiries, getting advice if needed
and reporting all the wrong done in
the organisation.
Objectives of ethical communication
system are:

 To communicate the organizations values and


standards of ethical conduct or business to
employees.
 To provide information to employees on the
company’s policies and procedures regarding ethical
code of conduct.
 To help employees get guidance and resolve queries.
 To set up means of enquiries such as hotlines,
suggestion boxes and e-mail facilities.
Top management can communicate the ethical
standards to the lower management which can be
further transferred to the operational level.
(iv) An Ethics Office with
Ethical Officers:

The job of an ethics officer is to


communicate and implement ethical
policies amongst employees of the
organisation. Ethics officer should
develop a reputation for credibility,
integrity, honesty and responsibility.
Func­tions of ethics officer are:

 Assessing the needs and risks that an


ethical programme must address.
 Develop and distribute code of
conduct.
 Conduct ethical training programme.
 Maintain confidential service to answer
employee’s questions about ethical
issues.
Contd..

 To ensure that organisation is in


compliance with governmental
regulations.
 To monitor and audit ethical
conduct.
 To take action on possible violation
of company’s code.
 To review and update code in time.
(v) Ethics Training Programme:

Some companies have an in-house training


department while others may opt for an out-
source expert.
To ensure ethical behaviour, a corporate
training programme is established which deals
in assisting employees to understand the
ethical issues that are likely to arise in their
workplace.
(vi) A Disciplinary System:

A disciplinary system should be established in


the organisation to deal with ethical violations
promptly and severely.
If unethical behavior is not properly dealt
with, it will result in threatening the entire
social system.
A company should adopt fair attitude towards
everyone without any discrimination.
(vii) Establishing an
Ombudsperson:

An ombudsperson is responsible to
help coordinate development of
policies and procedures to
institutionalize moral values in the
workplace.
(viii) Monitoring:

To make an ethical programme, a


successful monitoring programme
needs to be developed.
A monitoring committee is formed.
Monitoring can be done by keen
observation by ethics officer, surveys
and supporting systems.
Principles of Business Ethics

1. Principle of Conscience
2. Principle of Wish less Work
3. Principle of Esprit
4. Principle of Publicity .
5. Principle of Purity
6. Principle of Humanity
7. Principle of Universal Values
8. Principle of Commitment
Contd..

9. Principle of Rationality
10. Principle of Communicability
11. Principle of non-Cooperation in Evils
12. Principle of Cooperation with Other
13. Principle of Satisfaction
14. Principle of Coordinate Ends and
Means.
15. Principle of Due Process
16. Principle of Liking in Expectations
17. Principle of Transparency

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