1
Chapter
Introduction
What is Ethics?

Ethics comes from a Greek word ethe’ which means character.

A set of theories of value, virtue or of right action

A set of theories to provide general rules/principles to be used
in making moral decisions
- to provide justification for those rules

Every human action is judged to be good/bad based on these
theories
What is Ethics? …

Moral code
o Set of rules
o Establishes boundaries of generally accepted behaviour
o Different rules often have contradictions

Morality
o Social conventions about right and wrong
o Widely shared
What is Ethics? …

Morality may vary by –
o Age
o Cultural group
o Ethnic background
o Religion
o Gender
Definition

Ethics is a set of beliefs about right and wrong behaviour

Ethical behaviour conforms to generally accepted social norms

Virtues
o Habits that incline people to do what is acceptable

Vices
o Habits of unacceptable behavior

Value system
o Scheme of moral values
Importance of Integrity

Integrity is a cornerstone of ethical behaviour

People with integrity
o Act in accordance with a personal code of principles
o Extend to all people the same respect and consideration that
you desire
o Apply the same moral standards in all situations
Ethics in the Business World

Risk is the product of multiplying the likelihood of an event by
the impact of its occurrence

Risks associated with inappropriate behaviour have increased due
to
o Globalization
o Heightened vigilance (more careful attention) by
• Employees
• Shareholders
• Regulatory agencies
Ethics in the Business World …

Risks associated with inappropriate behaviour have increased
due to
o WorldCom
o Qwest Communications International Inc.
o Adelphia Communications Corp.
o Computer Associates (CA)
Ethics in the Business World …

Recent scandals in IT companies
o WorldCom
o Qwest Communications International Inc.
o Adelphia Communications Corp.
o Computer Associates (CA)
Why Fostering Good Business Ethics is Important

To gain the goodwill of the community

To create an organization that operates consistently

To produce good business

To protect the organization and its employees from illegal
action

To avoid unfavourable publicity
Good Ethics Can Mean Good Business

Produce safe and effective products
o

Provide excellent service
o

Avoid costly recalls and lawsuits
Maintain customers
Develop and maintain strong employee relations
o
o
Suffer less turnover
Enjoy better employee morale

Suppliers and other business partners prefer companies that
operate in a fair and ethical manner

Bad ethics can lead to bad business results
Appointing a Corporate Ethics Officer

Corporate ethics definition includes
o
o
o

Ethical conduct
Legal compliance
Corporate social responsibility
Corporate ethics officer
o
o
o
Is a senior-level manager
Provides vision and direction in the area of business conduct
Tries to establish an environment that encourages ethical decision
making
Appointing a Corporate Ethics Officer ...

Responsibilities include:
o
o
o
o
o
Complete oversight of the ethics function
Collecting and analyzing data
Developing and interpreting ethics policy
Developing and administering ethics education and training
Overseeing ethics investigations