Business ethics
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Business Ethics. “it’s nothing personal, it’s just business ”. Collect the following sheet from the wiki. Business Ethics Worksheet. What do businesses need from:. Other businesses Customers The Government. Besides Money. What do businesses need from:.

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Business ethics

Business Ethics

“it’s nothing personal, it’s just business”



What do businesses need from
What do businesses need from:

  • Other businesses

  • Customers

  • The Government

Besides Money


What do businesses need from:

  • Other businesses – respect and honesty

  • Customers - respect and honesty

  • The Government – protection, respect and honesty


Australian competition consumer commission
Australian Competition & Consumer Commission

  • Promotes competition and fair trade to benefit consumers, businesses and the community.

  • To ensure individuals and businesses comply with the competition, fair trade and consumer protection laws.


What do businesses owe
What do businesses owe:

  • Other businesses

  • Customers

  • The Government

Besides Money


What do businesses owe:

  • Other businesses - respect and honesty

  • Customers - respect and honesty

  • The Government - respect and honesty



Ethics
Ethics

• Can be defined as a “system of right and

wrong”

• Assists individuals decide whether an act is:

– Moral or immoral

– Socially desirable or undesirable



Ethics1
Ethics

• Many sources:

– Religious beliefs

– National and ethnic beliefs

– Community standards

– Family practices

– Educational experiences

– Friends



Business ethics1
Business ethics

• Principles and standards which guide behaviour in the world of business.

• “Right” or “wrong”, “acceptable” or “unacceptable” behaviour within the organisation.

• Determined by key stakeholders – the people affected by any decision.


Business ethics2
Business ethics

  • Behaving ethically in business is widely regarded as good business practice.


Ethical versus lawful
Ethical versus lawful

  • An important distinction to remember is that behaving ethically is not quite the same thing as behaving lawfully:

  • Ethics are about what is right and what is wrong

  • Law is about what is lawful and what is unlawful. Lawful is obeying the laws.

  • An ethical decision is one that is both legal and meets the shared ethical standards of the community


Some myths about business ethics
Some myths about business ethics

  • It’s easy to be ethical

  • Unethical behaviour is part of business

  • There are no rewards for being ethical

  • Ethical behaviour will prevent me from being successful

  • Business is like sport – push the rules and try not to get caught

  • Business ethics is about character education and teaching moral philosophy


Ethical issues for business
Ethical issues for business

  • Product safety standards

  • Advertising contents

  • Working environment

  • Unauthorised payments

  • Employee privacy

  • Environmental issues


Common unethical acts reported by employees
Common unethical acts(reported by employees)

  • Lying to supervisors

  • Falsifying records

  • Alcohol and drug abuse

  • Conflict of interest

  • Stealing

  • Receiving a gift/entertainment in violation of company policy

  • Improper accounting procedures

  • Sexual harassment

  • Discrimination

  • Violation of environmental laws


Ethical decisions
Ethical decisions

  • Should businesses profit from problem gambling?

  • Should supermarkets sell beer cheaper than bottled water?

  • Is ethical shopping a luxury we can’t afford?

  • Should businesses buy good made by cheap foreign workers over long standing Australian workers?


Ethical decisions1
Ethical decisions

  • Should Australian mines be sold to foreign Governments?

  • Should pollution be covered-up?

  • Is insider tradingethical?

  • Should local Government councillors take bribes to approve developments that are not in the interests of the communities they represent?


Ethical decisions2
Ethical decisions

  • Should businesses be allowed to double the prices of goods just before Christmas?

  • Should telemarketers be allowed to ring just on meal time?


Why do people behave unethically
Why do people behave unethically?

  • Meeting overly aggressive financial or business objectives

  • Meeting schedule pressures (“deadlines”)

  • Helping the organisation survive

  • Rationalising that others do it

  • Resisting competitive threats

  • Saving jobs


What stops unethical behaviour
What stops unethical behaviour?

  • Personal values

  • Supervisor influence

  • Senior management influence

  • Internal drive to succeed

  • Friends/co-worker influence (peer pressure)


Why misconduct is not reported
Why misconduct is not reported

  • Fear of not being considered a team player

  • Did not think that corrective action would be taken

  • Fear of retribution – from management

  • “No-one else cares – why should I?”

  • Did not trust the organisation to keep the report confidential


Conflict of interest
Conflict of interest

  • Exists when an individual must choose whether to advance his/her own interests, the organisation’s or others’

    • Examples: Bribes/personal payments, gifts, or special favours intended to influence decision making

    • Do auditor actual or alleged conflicts of interest represent unethical behaviour?


Honesty and fairness
Honesty and fairness

  • Following applicable laws and regulations and not knowingly harming stakeholders

    – Is advertising cigarettes at the cricket fair? Why was it phased out?

    – Are mobile phone ads that ‘mask’ the effective cost of the call, especially if the limit is exceeded, fair?


Communications
Communications

  • Refers to the transmission of information and the sharing of meaning

    – e.g.: deceptive advertising, product safety information, product composition

    – Financial Statements – is this not simply a means of communication to stakeholders?

    – Continuous disclosure obligations for ASX

    companies?


So what does this mean to you and me
So what does this mean toyou and me?

  • We have a personal obligation to ourselves to act ethically in our business dealings

    – The risk to our personal reputation

    – The risk to our businesses reputation





References
References

  • University of Notre Dame

  • Chartered Accountants

  • http://business-ethics.com/2012/10/05/1036-arbitrage-when-there-is-never-enough/

  • www.accc.gov.au

  • http://business-ethics.com/2012/10/05/1036-arbitrage-when-there-is-never-enough/

  • http://www.tutor2u.net/business/strategy/business-ethics-introduction.html

  • http://toolkit.smallbiz.nsw.gov.au/chapter/17/85


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