Unit 1A Introductio

n to
Business
Ethics
 Unit 1A
￮ Chapter 1 – “Key

“ concepts and
distinctions in ethics”
Textbook
Business Ethics
6th Edition
Deon Rossouw & Leon van Vuuren
Unit 1A – Learning
Outcomes
￮ Define ethics and business ethics
￮ Indicate why ethics should be addressed at both the
personal and organisational levels (apple vs. barrel)
￮ Explain the relationship between ethics and values
￮ Explain the dimensions of business ethics
￮ Distinguish between personal and social moral
dilemmas
￮ Make a clear distinction between morality and
legality
￮ Demonstrate why professionals need both
professional ethics and professional virtues
The terms Ethics and Morality
￮ What do you understand under “ethical
behaviour” or “moral behaviour”?

￮ Think of your own definition of “ethical

behaviour” or “moral behaviour”.

5
The terms Ethics and Morality

o Refer to character (manner of a person)

o Thus in current day English unacceptable
and irresponsible behaviour is referred to
as- unethical, immoral behaviour

6
 GOOD
What is “Ethics”? Class discussion:
Exclude each of the
components and
discuss the results.

SELF OTHER

Definition: Ethics is about what is good/right in human interaction.

Revolves around 3 central concepts: self, good and other. Ethical
behavior is when one considers not only what is good for self, but
also what is good for others. 7
Business Ethics

o Business = Organisations or economic activities

o Voluntarily enter into transactions of
economic exchange of goods or services for
compensation
o Broad definition of economic activity
 including the state
o Business Ethics = refers to the principles, norms
and standards that guide an organisation’s
conduct of its activities, internal relations and 8
interactions with external stakeholders
Personal & Organisational Ethics

Apples (individuals) vs Barrels

(organization)
Warehouse (society)

￮ Factors that Affect Ethical Behavior in the Workplace - Video & Lesson Transcript | Stu
dy.com
What are “Values”?
o Values = What is good and desirable.
Stable convictions about what is desirable
o People do not share the same values
o Values are influenced by:
o Culture
o Religion
o Climate
o Social and economic status
o Personal experiences
o Age
o Gender etc.
10
Ethics and values Class discussion:
Give examples
where values are
not ethical.

These two concepts are not identical:

o Values are your own convictions about what is right
o All values are therefore not necessarily ethical

11
Ethics and values
Organization

Strategic values Ethical values Work values

Shared convictions Ensure good Punctuality,

of organization interaction excellence,
about desired between all e.g. innovation
objectives e.g. respect, honesty,
vision & mission fairness 12
Dimensions of Business Ethics
All 3 dimensions
interact!

Macro/Economic
Meso/Institutional
Framework within
Relationships
which economic
between
exchange takes
organizations
place

Micro/Intra-organizational
Relationships between
individuals

13
Macro-economic dimension:
economics and ethics
￮ Determined at national level by political decisions, laws
and social norms. Determines to a large extent the
freedom and responsibilities of businesses.
o Economic system = framework to achieve:
o economic growth
o efficiency
o productivity
o To achieve: well-being of humans
o Capitalism and socialism resulted from a concern about
what would be GOOD for the citizens (OTHER)
o Government policy 14
o The best for the majority
Meso-economic dimension:
business and society Class discussion:
Should the
o Business’ moral responsibility towards: business sector
o organisations, society, government and take responsibility
for its impact on
consumers society?
o wide web of relationships
o affects and affected by others

o Ethics play an essential role in relations between:

o business and society
o ethics is implied in business
o ethics confers legitimacy
o business survival and success depends on
ethics 15
Micro-economic dimension:
work and ethics

o Relationship within the organization such as employer

and employees
o Job performance is affected by how the employee is
treated
o Personal fulfillment can be found in a job

16
 Ethics
A grey area? Or a black and
white situation?

o Murder?
o Monitoring of employees’ email?
o Abortion?
o Honesty vs loyalty?
Moral dilemmas
o When an ethical consideration of a situation produces
conflicting judgements (more than one outcome).
Thus competing ethical/unethical options.
o Can be interpersonal (social) or intrapersonal (personal)
o Social moral dilemmas:
o Groups of people
o Conflicting ethical judgment
o Can divide people
o Organisations need to be as clear as possible on what is
considered ethically right and acceptable behaviour.
o Organisations must accept that ethical dilemmas will
18
arise, provide guidance on how these dilemmas must
Moral dilemmas
REMEMBER: Not every situation results in a “moral
dilemma”

Certain ethical considerations are just “right” or

“wrong”

Examples:
o Cheating on tests
o Plagiarism
o Falsifying a sick note 19
Example of a moral dilemma
A brilliant transplant surgeon has five patients, each in need
of a different organ, each of whom will die without that
organ. Unfortunately, there are no organs available to
perform any of these five transplant operations. A healthy
young traveller, just passing through the city the doctor
works in, comes in for a routine check-up. In the course of
doing the check-up, the doctor discovers that his organs are
compatible with all five of his dying patients. Suppose
further that if the young man were to disappear, no one
would suspect the doctor.
(example accredited to Judith Jarvis Thomson)

20
Ethical/moral dilemmas:

√ ? X

Right Dilemma Wrong

o Protect life o Gray area o Kill/Lie
o Tell the truth o Abortion o Theft of
o Respect o Privacy in e- company
mail property
company
property o Complex
business
issues

21
 Let’s discuss
this
Ethics and the Law
o Obvious similarities between the two but also significant
differences
o Both strive towards what is acceptable and responsible in
human interaction and society
o Law uses power of state – external pressure
o Ethics come from personal values – internal pressure

Legal Illegal

Ethical Accurate AFS Speeding?

Unethical Dumping toxic waste? Bribing?

22
Virtues

o Character trait – predisposes one to do the

right thing
o Can improve on them

Virtues of the accounting profession:

￮ Independence
￮ Integrity
￮ Objectivity

23