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BBA 200
Dr. Salma Chad
2–1
 Ethics
is a code of moral principles and
values that governs the behaviours of a
person or group with respect to what is
right or wrong.
 Ethics sets standards as to what is good
or bad in conduct or decision-making.
 Ethical issues occur when the action of a
person may harm or benefit others.
1.
2.
3.
4.
Utilitarian approach
Individualism
Moral rights view approach
Justice approach
 Utilitarian
approach – the ethical concept
that moral behaviours produce the
greatest good for the greatest number.
 This approach views decision-making as
selecting alternatives that optimizes the
satisfaction for the greatest number of
people.
 This
view contends that acts are moral
and ethical when they promote the
individual’s long-term interest, which
leads to the greatest good.
 The
ethical concept or rights view is
concerned with respecting and
protecting individual liberties, and
privileges, including the right to privacy,
freedom of conscience, free speech, and
due process.
 The
ethical concept that moral decisions
must be based on standards of equity,
fairness, and impartiality.

Managers
• Ethical choices of a manager are determined by
the manager’s level of moral development. There
are three level of moral development:-
i.
Preconventional level – concerned with external
rewards and punishment and obeying authority to
avoid detrimental personal consequences.
ii. Conventional level – focus is on good behaviour as
defined by colleagues, family, friends, and society.
iii. Postconvetional level – concerned with individual
set of values and standards to the point of
disregarding rules or laws that violate principles .
 The
organization
• The corporate culture of the organization can
establish and engender ethical behaviour.
Culture is a major force that defines the
company’s values. If ethical behaviour is
encouraged, it becomes routine.
The code of moral principles and
values that govern the behaviors
of a person or group with respect
to what is right or wrong.
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 Ethics
can be difficult to define
 Ethical issues are exceedingly complex
 Managers face a variety of difficult
situations
 Ethics fall between law and free choice
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 An
ethical dilemma arises in a situation
concerning right or wrong when values
are in conflict
 Managers
and employees are the moral
agents who must make ethical choices
 Decisions
about advertising, operations,
and Internet usage are all dilemmas YOU
might face
Copyright ©2010 by South-Western, a division of
Cengage Learning. All rights reserved.
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




Utilitarian approach – moral behaviors should produce
the greatest good for the greatest number
Individualism approach – acts are moral when they
promote the individual’s best long-term interests
Moral Rights Approach – moral decisions are those that
best maintains the rights of those affected
Justice Approach – decisions must be based on standards
of equity, fairness, and impartiality
Distributive Approach – different treatment of people
should not be based on arbitrary characteristics
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Cengage Learning. All rights reserved.
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Distributive Justice – different treatment of
people should not be based on arbitrary
characteristics.
Compensatory Justice – individuals
should be compensated for the cost of
their injuries by the party responsible.
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Cengage Learning. All rights reserved.
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An important personal trait that mangers poses is their
stage of moral development
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15

Globalization makes ethical issues more complex

Bribes are common practice in many countries

Transparency International ranks countries based on
Bribe Payers Index
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Cengage Learning. All rights reserved.
16
Corporate Social
Responsibility (CSR) is the
obligation of organization
management to make
decisions and take actions
that will enhance the
welfare and interests of
society as well as the
organization
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Cengage Learning. All rights reserved.
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Stakeholders are any group within or outside the organization
that has a stake in the organization’s performance.
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





Sometimes called base of the pyramid
Alleviate poverty and social ills while making
profits
Selling to the world’s poorest people
4 Billion people make up the lowest level of the
world’s economic pyramid
These people have traditionally been underserved
Companies can make money while addressing
global poverty, environmental destruction, social
decay and political instability
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 Sustainable
Development
• Economic Development that generates wealth
• Meets the needs of current generation
• Saving the environment for future generations
 Managers
are weaving sustainability into
strategic decisions
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Cengage Learning. All rights reserved.
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Copyright ©2010 by South-Western, a division of
Cengage Learning. All rights reserved.
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Code of Ethics – formal statement of the
organization’s values regarding ethics and
social issues
Ethical Structures – systems, positions and
programs to implement ethical behavior
Whistle-Blowing – employee disclosure of
illegal, immoral, or illegitimate practices
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Copyright ©2010 by South-Western, a division of
Cengage Learning. All rights reserved.
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 Paying
attention to ethics and social
responsibility is as important as profits
and costs
 Ethical and social actions impact
financial performance
 Companies are beginning to measure
nonfinancial factors that create value
 Customers pay attention to a company’s
ethics and social responsibility
Copyright ©2010 by South-Western, a division of
Cengage Learning. All rights reserved.
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What is social responsibility?
A
firm’s obligation, beyond that required
by law and economics, to pursue longterm goals that will enhance the welfare
and interest of the society and the
organization as well.
Discretionary
responsibilities
Ethical
responsibilities
Legal
responsibilities
Economic
responsibilities
A
business is first an economic unit
in society, its economic
responsibility is to make a profit.
 Businesses
must play by the rules and
obey government laws. Government can
affect businesses through legislation,
judicial action, and agency
administration.
 Demonstrating
behaviour that fit within
the norms of society, the organization, the
individual, and the profession that have
not been made by law.
 Discretional
responsibilities are the
highest form of social responsibilities
because they are voluntary.
 Discretionary responsibilities are those
for which there are no societal laws,
rules, or ethical statements, but for which
expectations might exist.