BUS 302: BUSINESS ETHICS
Nicos Rodosthenous PhD
Lecture 1
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Dr Nicos Rodosthenous
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Perspectives on business ethics and
values
• 1. Objectives
Give an account of the various arguments
about the moral status of business,
organizations and management.
Distinguish between values and ethics
Define traditional, modernist, neo-traditional,
postmodern and pragmatic perspectives on
values.
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Perspectives on business ethics and
values
• 2. Definitions
• Ethics is meant the study of the means by which
the morality of human actions can be appraised
or evaluated.
• Business ethics are principles of right or wrong
governing the conduct of business people
– The text says, “the accepted principles of right
and wrong”
– But there are many differences of opinion among
highly ethical business people
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Perspectives on business ethics and
values
• Moral agency within organizations is the
ability of people to exercise freely moral
judgment and behavior without the fear of
their employment and/or promotional
prospects.
• Different assumptions are made about the
relationships between:
 Organizations and state;
 Organizations and their staff
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Perspectives on business ethics and
values
 Organizations and their various stakeholder
groups (beyond the staff group)
3. Business and organizational values
• The main distinction is that ethics is a branch
of philosophy and is concerned with formal
academic reasoning about right and wrong,
but values are the commonsense, often taken
for granted, beliefs about right and wrong that
guide us in our daily life.
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Perspectives on business ethics and
values
• Ethics and values have different sources.
Ethics are drawn from the books and debates
where theories about right and wrong are
proposed and tested.
• Ethics have to be studied. Values are acquired
through socialization and interactions with our
friends, family and colleagues. Values are
learned, not studied.
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Perspectives on business ethics and
values
 3.1 Perceptions of values
• Values express a potential tension and people’s
responses to this tension can be classified under
five headings:
 Traditionalist
 Modernist
 Neo-traditionalist
 Postmodernist
 Pragmatist
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Perspectives on business ethics and
values
• The position they take will influence their
responses to ethical issues at work.
 Right and wrong and legal and illegal
 Legality and illegality are defined by the civil or
criminal law to protect the people and the
society. There are four categories:
1. Actions that are good and legal but not a legal
obligation (may raise ethical issues)
2. Actions that are wrong and illegal (double
whammy)
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Perspectives on business ethics and
values
• 3. Actions that are legal but bad (tourism and
sustainability)
• 4. Actions that are good but illegal. Political
obligation does not exhaust moral obligation.
• Discuss the case study of British Airways and
Virgin Atlantic –Case study 2.18 page 60.
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Perspectives on business ethics and
values
• For example: Accountants and medical
doctors have organizations that try to
establish agreement in the profession.
– And still there are major disagreements
• No one tries to establish agreement among
general managers and marketers.
• 4. Religion, ethics and global diversity
• The world has many different ethical systems
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Perspectives on business ethics and
values
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which mostly derived from different religions.
Different systems can lead to different
opinions about what is ethical or not.
5. Don’t start business with anyone unless
you believe they have strong ethics.
Work hard to understand your own ethics
Work hard to apply them
Work hard to understand others’ ethics
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Perspectives on business ethics and
values
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Perspectives on business ethics and
values
• 6. Ethical Issues in International Business
• Many ethical issues and dilemmas are rooted
in differences in political systems, law,
economic development, and culture.
• Some key ethical issues in international
business
• Employment Practices
– When work conditions in a host nation are
clearly inferior to those in a
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Perspectives on business ethics and
values
•
•
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multinational’s home nation.
what standards should be applied?
How much divergence is acceptable?
Human Rights
– Basic rights are not respected in many
nations
– ‘What is the responsibility of a foreign firm
in a country where human rights are
trampled
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Perspectives on business ethics and
values
• Environmental Pollution
– Environmental regulations (or enforcement)
in host nations may be inferior to those at
home
• Multinationals can produce more
pollution than at home
• The tragedy of the commons occurs
- The water in Mekong River
• Mekong River Basin - A Study of Water
Management and ...Article in the Internet.
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Perspectives on business ethics and
values
• Corruption
– International businesses can, and have,
gained economic advantages by making
payments to government officials.
– US passed the Foreign Corrupt Practices Act
– Organization for Economic Cooperation and
Development (OECD) adopted the
Convention on Combating Bribery of
Foreign Public Officials in International
Business Transactions
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Perspectives on business ethics and
values
• OECD Recommendation for Further
Combating Bribery of Foreign Public Officials
in International Business Transactions.
• Good Practice Guidance on Internal Controls,
Ethics and Compliance
• Social responsibility
– Multinational firms have power, wealth
from control over resources and ability to
move production
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Perspectives on business ethics and
values
– Moral philosophers argue that with power
comes the responsibility to give something
back to the societies that enable them to
prosper
• Advocates argue that businesses
need to recognize their noblesse
oblige (benevolent behavior that is the
responsibility of successful people
and enterprises)
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Perspectives on business ethics and
values
• 7. The Roots of Unethical Behavior
• Why do managers behave in a manner
that is unethical?
– Business ethics are not divorced from
personal ethics
– Business people sometimes do not
realize that they are behaving unethical
because they fail to ask if the decision
is ethical.
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Perspectives on business ethics and
values
– The climate in some businesses does not
encourage people to think through the
ethical consequences of business
decisions.
– Pressure to meet unrealistic performance
goals that can be attained only by cutting
corners or acting in an unethical manner.
– Leaders help to establish the culture of
an organization and they set the example
that others follow.
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