bUSINESS Ethics.ppt1111

8/7/2019 bUSINESS Ethics.ppt1111

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BUSINESS ETHICS &BUSINESS ETHICS &

CORPORATES GOVERNANCECORPORATES GOVERNANCE


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PREPARED BY:


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BUSINESS ETHICS: INTRODUCTIONBUSINESS ETHICS: INTRODUCTION


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BUSINESS ETHICS: INTRODUCTIONBUSINESS ETHICS: INTRODUCTION

Avoid breaking the criminal law in ones work-

related activity

Avoid action that may result in civil law suits against

the company

Avoid actions that are bad for the company image


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Different ways of deriving standards ofDifferent ways of deriving standards of

Business Ethics:Business Ethics:

1. Deriving Business Ethics from the Profit Motive

y Weak version

y Strong version2. Business Ethics Restricted to Following the Law

3. Deriving Business Ethics from General Moral

Obligations


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The ormative Theories of si essThe ormative Theories of si ess

thicsthics

A normative theory of business ethics is an attemptto focus the general theory exclusively upon thoseaspects of human life that involve businessrelationships

Three leading normative theories of business ethicsare:

y The Stockholder Theory

y The Stakeholder Theory

y Social Contract Theory


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The Stockholder TheoryThe Stockholder Theory

Businesses are merely arrangements by which one

group of people, the stockholders, advance capital to

another group, the managers, to be used to realize

specified ends and for which the stockholders receive

an ownership interest in the venture

Managers are obligated to pursue profit by all legal,no deceptive means


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Stakeholders TheoryStakeholders Theory


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y It is a theory of organizationalmanagement and business ethics

y This theory identifies the groups ofstakeholders and their interests

y Business firms converts the inputs ofinvestors..

y Stakeholders include many differentgroups e.g.

y Resource based view and market basedview


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Social Contract theorySocial Contract theory


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y Theory based on traditional concept

y Fundamental purpose of social contracty All businesses ethically obligated to

enhance welfarey This theory tries to explain the ways in

which people form states to maintainsocial ordery It employs number of important

assumptionsy

Useful model for evaluating existing andideal systems of social rules andregulations


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Moral reasoning theoriesMoral reasoning theories

y Deals with determining rightness ofthe act

y Tells about the what individual or

institutions ought to do.

It deals with two components

y Theory of values or theory of good

y Theory of right


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ContConty Based on these two components there are

two kind of moral theories

y

Teleological theory or consequentialisttheory

It is the ethics of ends and consequences

y Deontological theory or nonconsequentialist theory

It is the ethics of duty and obligations


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Teleological theoryTeleological theory

The word Teleological is derived from twoGreek words telos meaning end, goal andlogos meaning logic or reason.

This theory proposed by John Mill

Teleological means thinking rationally aboutends.

These theories hold that an actions consideredmorally correct if the consequences of thataction are more favorable than unfavorable.


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Cont..Cont..y a cost-benefit analysis of an actions

consequences

y

we first tally both the good and badconsequences of an action

y Second, we then determine whether the

total good consequences outweigh thetotal bad consequences


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Forms of consequentialismForms of consequentialism

Theory of egoism Long term self interest is important while making

moral decisions

Short term self interest should be sacrificed forsake of long term self interest

the consequences of that action are morefavorable than unfavorable only to the agent

performing the action.

e.g. Road accident victim


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Cont.Cont.

UtilitarianismIn this desired end is not long term self

interest of the individual it is greatesthappiness to the greatest number.

Greatest Happiness Principle

Own happiness have no priority

It should be the part of sum

e.g. CSR


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Cont..Cont..

Altruism

An action is morally right if theconsequences of that action are more

favorable than unfavorable to everyoneexcept the individual.

y e.g. oil companies


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Deontological theoryDeontological theory


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Deontological theoryDeontological theory

The word deontological is derived from theGreek word deno meaning duty orobligation.

Deontological theories focus on certainfundamental duties that we have as humanbeing, such as not committing murder ortheft.


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Deontological Ethical theoryDeontological Ethical theory

cont.cont.The duties upheld by deontological theory may

be classified as

Duties to God, including honoring him andpraying to him

Duties to Oneself includes preserving ones lifeand sharing happiness.

Duties to Others, including family duties, socialduties and political duties.


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Problems with DeontologicalProblems with Deontological

EthicsEthicsy How does one decide what to

do when there are conflictingduties?

y All this theory says is act onduty, therefore you have noclear way of choosing whichduty to follow

y

If people are following differentduties, then there is noconsensus.


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Virtue ethicsVirtue ethics

y Right and wrong are determinedaccording to acting in certain waysconsidered to be good or virtuous

y Morality consists in forming good habitsofcharacter that is, in developing thevirtues.

y

Virtue theory is an approach to ethicswhich emphasizes the character of themoral agent, rather than rules orconsequences, as the key element ofethical thinking.


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Virtue ethicsVirtue ethicsy Virtue ethics is concerned with attaining the

dispositions (character or personality). Thetheory emphasizes character development rather

than the articulation of abstract moral principlesthat guide actions.

y Virtue-based ethical theories place less emphasisthat on which rules people should follow andinstead focus on helping people to develop goodcharacter traits, such as kindness and generosity.


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bUSINESS Ethics.ppt1111

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