Business Ethics and Corporate Governance
INTRODUCTION TO BUSINESS ETHICS
What is Business??
Business is a legally recognized organizational entity existing within an economically free country designed to sell goods and/or services to consumers or other businesses, usually in an effort to generate profit. It is a commercial activity engaged in as a means of livelihood or profit, or an entity which engages in such activities.
What is Ethics?
Ethics are standards of conduct that indicate how one should behave based on moral duties and virtues. Ethics means •character or manner
•Science of morals
•Recognized rules of conduct
Objectives of Ethics
•Studies human behaviour
•Establishes moral standards & norms of behaviour
•Makes judgement on human behaviour
•Prescribes moral behaviour
•Expresses an opinion
What is Business Ethics??
Business Ethics is simply- an application of ethics in business. When business people speak about “business ethics” they usually mean one of three things: (1) avoid breaking the criminal law in one’s work-related activity; (2) avoid action that may result in civil law suits against the company; and (3) avoid actions that are bad for the company image. Businesses are especially concerned with these three things since they involve loss of money and company reputation.
In theory, a business could address these three concerns by assigning corporate attorneys and public relations experts to escort employees on their daily activities. Anytime an employee might stray from the straight and narrow path of acceptable conduct, the experts would guide him back. Obviously this solution would be a financial disaster if carried out in practice since it would cost a business more in attorney and public relations fees than they would save from proper employee conduct. Perhaps reluctantly, businesses turn to philosophers to instruct employees on becoming “moral.” For over 2,000 years philosophers have systematically addressed the issue of right and wrong conduct. Presumably, then, philosophers can teach employees a basic understanding of morality will keep them out of trouble.
Although being moral may save a company from some legal and public relations nightmares, morality in business is also costly. A morally responsible company must pay special attention to product safety, environmental impact, truthful advertising, scrupulous marketing, and humane working conditions. This may be more than a tight-budgeted business bargained for.
What is Morality?
Ethics is the study of morality and that a person begins to do ethics when he or she turns to look at the moral standards that have been absorbed from family, church, friends and society, and begin asking whether these standards are reasonable or unreasonable and what these standards imply for situations and issues.
Morality refers to ethical issues — principles of right and wrong conduct — as well as instances of real behaviour — the manner in which individuals comply more or less fully with such standards. To encourage moral conduct, early theological representations of sin and evil highlighted the body's capacity for suffering. In the medieval and early modern ages, morality referred to a religious framework; through diet and bodily maintenance, the individual was expected to defend himself against the temptation of the flesh. Codes of morality have evolved in keeping with larger cultural, historical, and economic currents. The only definition which can be given to morality is “That which is selfish is immoral and that which is unselfish is moral”. The natural tendency of every human being; taking everything from everywhere and heaping it around one centre, that centre being mans own individual self. When this tendency begins to break, then begins morality. This is fundamental basis of all morality.
We find that as knowledge comes, man...