Lesson 3 Flashcards
Role of ethics in business
governance.
Ethical theories and
decision-making frameworks.
Ethics is a guide that helps people and organizations decide what is right and
wrong. It affects how businesses interact with customers, employees, and
society.
Understanding Ethics in Business
There are three levels of ethical issues in business:
*Systemic Ethics
*Corporate Ethics
*Individual Ethics
– These are big-picture issues, like corruption or unfair
laws, that affect entire industries or societies.
Systemic Ethics
– These focus on a company’s behavior, like fair
treatment of employees and ethical decision-making in policies.
Corporate Ethics
– This involves personal choices and actions of
employees within a company.
Individual Ethics
refers to the big-picture ethical issues that exist within an entire system, such as society, industries, or government policies. It looks at how laws, regulations, economic systems, and cultural norms can create
ethical or unethical environments.
Systemic Ethics
Example of Systemic Ethics
Corruption in Government
Unfair Labor Practices
Environmental Pollution
In some countries, bribery is a common practice for getting business
licenses or government contracts. Even if a company wants to act ethically,
it may struggle because the system encourages corruption.
Corruption in Government
If an industry relies on cheap labor from underdeveloped countries where wages are very low and working conditions are poor, businesses may face pressure to exploit workers to stay competitive.
Unfair Labor Practices
Some industries, like oil and mining, operate in ways that harm the
environment. If regulations are weak, businesses might prioritize profits
over sustainability, leading to long-term harm to nature and public health.
Environmental Pollution
is about how a company behaves in a fair, honest, and responsible way. It’s the rules and values a business follows to do what’s right — not just what’s profitable. Corporate ethics
guide how companies treat their employees, customers, partners, and the environment.
Corporate Ethics (Business Ethics)
Examples of Corporate Ethics:
1.Honesty and Transparency
2.Fair Treatment of Employees 3.Environmental Responsibility
4.Avoiding Conflicts of Interest
5.Corporate Social Responsibility (CSR)
A company clearly tells customers about product quality, pricing, and
policies — no hidden fees or false claims.
Example: A clothing brand admits there was a mistake in pricing on their
website and honors the lower price for customers who already ordered.
1.Honesty and Transparency
Providing fair wages, safe working conditions, and equal opportunities for all.
Example: A tech company offers flexible working hours and fair pay for
everyone, regardless of gender or background.
2.Fair Treatment of Employees:
Reducing pollution, recycling, and using sustainable resources.
Example: A coffee shop uses biodegradable cups and sources coffee
beans from fair-trade farms.
3.Environmental Responsibility:
Making decisions that benefit the company and customers — not
personal relationships.
Example: A manager doesn’t hire their friend if there’s a more
qualified candidate for the job.
4.Avoiding Conflicts of Interest:
Giving back to the community through charity, education, or
environmental efforts.
Example: A business donates part of its profits to local schools or
organizes tree-planting events.
5.Corporate Social Responsibility (CSR):
— are the personal rules and values that
guide how a person behaves and makes decisions in life. It’s
about knowing what’s right and wrong and choosing to do the right thing, even when no one is watching.
Individual Ethics
Aspects of Individual Ethics:
Honesty
Integrity
Responsibility
Fairness
Respect
Compassion
help people and businesses decide what is right and wrong.
Ethical theories
Four main theories:
1.Utilitarian Ethics (Result-Based Thinking)
2. Deontological Ethics (Rule-Based Thinking)
3. Virtue Ethics (Character-Based Thinking)
4.Ethical Relativism (Culture-Based Thinking)
-This theory says that an action is right if it produces the most good for the most people. It focuses on the results or consequences of actions.
Example: A company decides to cut costs by automating jobs. Some employees lose
their jobs, but the company survives and provides affordable products to many
customers.
1.Utilitarian Ethics (Result-Based Thinking)
-This theory says that people should follow moral rules, no matter the outcome. It
focuses on duties and principles rather than results.
Example: A company refuses to use cheap child labor, even if it would reduce costs
and increase profits, because it believes child labor is morally wrong.
- Deontological Ethics (Rule-Based Thinking)
-This theory focuses on being a good person rather than just following
rules or looking at results. It emphasizes honesty, kindness, and integrity.
Example: A manager treats employees with respect and fairness, not just
because it benefits the company but because they believe in being a good
leader.
- Virtue Ethics (Character-Based Thinking)
-This theory says that what is right or wrong depends on cultural beliefs
and traditions. There are no universal moral rules; ethics vary from one
society to another.
Example: In some countries, giving gifts to business partners is normal,
while in others, it is seen as bribery. Ethical relativism suggests that what is
acceptable depends on the culture.
4.Ethical Relativism (Culture-Based Thinking)
Ethical Theories
1.Utilitarian Ethics (Consequence-Based Ethics)
2.Deontological Ethics (Duty-Based Ethics)
3.Virtue Ethics (Character-Based Ethics)
4.Ethical Relativism (Culture-Based Ethics)
