Business Ethics

Business ethics is a set of laws about how a business

should conduct itself.

Right or wrong in the

workplace

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Ethics The study of moral obligation

involving the distinction between right and wrong.

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Common Misconduct in Organizations Misrepresenting hours worked Employees lying to supervisors Management lying to employees,

customers, vendors or the public Misuse of organizational assets Lying on reports/falsifying records

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(Cont’d)

Sexual harassment Stealing/theft Accepting or giving bribes or

kickbacks Withholding needed information

from employees, customers, vendors or public

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Common Causes of Unethical Behavior

Pressure Fear Greed Convenience

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Ethics as Good Ethics as Good Business Business

Unethical business practices can affect your business indirectly.

The amount you make in profits from one unhappy customer can translate into a lot more lost because of missed repeat business.

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Mistreating employees leads to a high turnover rate. This increases the cost of hiring and training new employees.

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Benefits of Managing Ethics in the Workplace

Improves society.

Farm employee teamwork, productivity, morale and development.

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Benefits of Managing Ethics in the Workplace

Establishes values for quality management, strategic planning and diversity management.

Promotes strong public image.

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Business Ethics - Issues

A business cannot claim to be ethical firm if it ignores unethical practices by its suppliers – e.g.

Use of child labor and forced laborViolation of the basic rights of workers

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Pressure for businesses to act ethically Pressure groups are external

stakeholders they: Tend to focus on activities &

ethical practice of industries with ethical issues

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Direct consumer action

Consumers may take action against:

Businesses they consider to be unethical in some ways

Business acting irresponsibly

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Advantages of ethical behavior: Higher revenues-demand for

positive customers/consumer support

Improved brand and business awareness and recognition

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Business Ethics in Islam

Freedom of Enterprise: Each individual in an Islamic

society enjoys complete freedom in the earning of his livelihood.

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Islamic Doctrine Concerning Business Transactions:

Keenness to Earn Legitimate (Halal) Earnings Trade through Mutual Consent Trustworthiness in Business Transactions Generosity and Leniency in Business

Transactions

Honouring and fulfilling Business Obligations Fair Treatment of Workers

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Prohibited Matters in Business Transactions:

Dealing in Prohibited (Haram) Items Hoarding of Foodstuff is not allowed Exploitation of one’s Ignorance of Market

Conditions Cheating and Fraud in Business Transactions  Giving Short Measures Dealing in Stolen Goods

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Thank You

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