Lecture3.3

Question 1

What is Business Ethics?

Answer 1

Business ethics is about business activities and decisions that could be evaluated as morally right or wrong.

• Begins where the law ends: the grey area with no legal consensus.
• Decisions vary across geographies and time.

Question 2

Why is Business Ethics important?

Answer 2

• To conduct business with high moral standards.
• Stakeholders demand accountability for ethical behavior.
• Societal and media pressures drive ethical practices.

Question 3

Steps in Ethical Decision Making - Step 1

Answer 3

Recognizing a moral issue:
- Morality defines norms, values, and beliefs of right and wrong.
- for a specific individual or group in a certain situation.
- If unrecognized, only non-ethical (economical rationality, technical aspects) criteria are considered.

Question 4

Steps in Ethical Decision Making - Step 2

Answer 4

Making a moral judgment:
- Based on everyday common sense and societal norms.
- Use ethical principles and guidelines for further guidance.
Ideally, decisions should be aligned to the norms of society

Question 5

Steps in Ethical Decision Making - Step 3

Answer 5

Establishing intent and deciding what to do:
- Moral judgment may not always align with actions.
- Intent must lead to moral behavior.
The outcome of the moral judgement may not match with the intended action, as
the individual may fail to establish a moral intent. (internal conflict, fear, external pressure, lack of clarity, emotions, ..)
The individual decides what to do, but it is independent of any further decision to act. (lack of commitment, changing circumstances, ..) = die Entscheidung ist unabhängig davon ob dann auch wirklich gehandelt wird

Question 6

Steps in Ethical Decision Making - Step 4

Answer 6

Acting according to intentions:
- Distinction between knowing and acting on moral intent.
- Good intentions require action to be meaningful.
This last phase is critical as it is shows if moral behaviour is practiced or not.

Question 7

Management Activities for an Ethical Environment

Answer 7

Manage though: policies, practices, programs.
- Develop a Code of Ethics and protocol for violations.
- Establish formal communication channels. (ethics hotline)
- Provide formal training.
- Implement an ethics committee.
Ethics extent internal operations and are also relevant in external operations, e.g.,
marketing, sourcing etc.

Question 8

Relation between Business Ethics and Sustainability

Answer 8

• Business ethics evaluates moral right and wrong. -> normative decisions
• Sustainability focuses on creating shared economic value while preserving the environment and society.
• Ethical issues arise in sustainability-related decisions.

Question 9

4 Steps of ethical decision-making

Answer 9

1. recognize moral issue
2. make moral judgement
3. establish intent and decide what to do
4. act according to those intentions