attached to in its daily dealings with the world. The ethics of a particular business can be
diverse. Many businesses have gained a bad reputation just by being in business. For
some people, businesses are just making money, and that is only the bottom line. Making
money is not wrong at all.
Business ethics
Business ethics are the principles and standards that:
- Define acceptable conduct in business
- Should underpin decision making
An alternative definition is: ”the moral values which govern business behaviour and
restrains companies from pursuing the interest of the shareholder at the expense of all
other considerations”
- Some activities might be profitable and legal but nevertheless are considered to be
unethical
- An ethical decision is one that is both legal and meets the shared ethical standards of
the community
The following business activities are legal but might pose ethical dilemmas for
individuals:
Profiting from gambling
Selling goods manufactured by low wage in developing countries
Engaging in the fur trade
Experimenting on animals
Moral principles
- Evaluate decisions on whether it is consistent with accepted moral principles
Utilitarianism
- Looks at decisions from the perspective of who gains
- What is good for the greatest number is right
- The test is whether or not it is consistent with the greatest happiness of the greatest
number?
Justice model
- The test is does it distribute benefits and penalties in a fair and equitable way?
Human rights
- People have fundamental human rights and liberties - consent, privacy, conscience, free
speech, fair treatment, life, safety
- The test is: does it violate human rights?
- An ethically correct decision is one that best maintains the human rights of those
affected
- Decisions that violate human rights are unethical
Individualism
- Is it in the individual’s best interest?
- This is the ethics of self interest
Spectrum of firms
- It would be naïve to believe that all business organisations behave in an ethical, moral
way
- We can classify firms in terms of their ethical stance in the following ways: