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Assignment
Business Law and Corporate Social Responsibility
Course Code: 01401
A S S I G N M E N T

O N

Submitted to
R
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Sen
Course Instructor
Business Law and Corporate Social Responsibility
Department of Business Administration

Submitted by
Monirul Islam
S
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Benzir Ahmed
Anowar Umme Arfina
Mahbub Alom

Id: 00-00000-0
Id: 00-00000-0
Id: 00-00000-0
Id: 00-00000-0

Sec: F4
Semester: Summer 2009-2010
MBA Program
Department of Business Administration

Submission Date: 4 August 2010
American International University-Bangladesh, Dhaka
Ethics of Business | 2

Preface

Ethics of Business | 3

Index
Page
Acknowledgement --------------------------------------Summary ---------------------------------------------------

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04

Introduction --------------------------------------------------Definition -----------------------------------------------------History --------------------------------------------------------Ethical Behavior --------------------------------------------Factors that Affect Business Ethics --------------------The 9 Theories of Ethics ----------------------------------Importance of Ethics ---------------------------------------The Corporation in Business Ethics --------------------The Employment Relation in Business Ethics -------International Business Ethics -----------------------------Criticism --------------------------------------------------------Business Ethics and Social Responsibility ------------Ethics of Sales and Marketing ----------------------------Ethics of Production -----------------------------------------Ethics and Technology -------------------------------------Law and Business Ethics ----------------------------------Corporate Ethics Policies ----------------------------------Business Ethics As An Academic Discipline ----------Conclusion ------------------------------------------------------

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Reference -------------------------------------------------------- 16

Ethics of Business | 4

Acknowledgement

Ethics of Business | 5

Summary

Ethics of Business | 6

Introduction
Business ethics is the behavior that a business adheres to in its daily dealings with
the world
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They apply not only to
how the business interacts with the world at large, but also to their one-on-one
dealings with a single customer
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To some
people, businesses are interested in making money, and that is the bottom line
...
Making money is not wrong in itself
...


Definition
Business ethics can be defined as written and unwritten codes of principles and
values that govern decisions and actions within a company
...

In the most basic terms, a definition for business ethics boils down to knowing the
difference between right and wrong and choosing to do what is right
...
In other words, they are the moral values that guide the way
corporations or other business make decisions
...
For example, the Securities and Exchange Commission governs the way
investment bankers and stock brokers do business, and court rules dealing with
attorney client privilege dictate some ethical decisions for attorneys
...

In concept, business ethics is the applied ethics discipline that addresses the moral
features of commercial activity
...
Programs of legal compliance, empirical studies into the
moral beliefs and attitudes of business people, a panoply of best-practices claims (in
the name of their moral merit or their contribution to business success), arguments for
(or against) mandatory worker participation in management, and attempts at applying
traditional ethical theories, theories of justice, or theories of the state to firms or to the
functional areas of business are all advanced as contributions to business ethics—
even and especially in its academic literature
...

Almost everyone wants to live an ethical life, but knowing what that means is not as
simple as it sounds! That's where the phrase “ethical dilemma” comes from
...
Some common ethical
dilemmas have little consequence: for example, is it right to tell a fib when someone
asks you if they look fat or if their bad tasting dinner is delicious? The ethical dilemma
there: which is more ethical, lying or being unkind? Other ethical dilemmas become a
big more complex: for example, is it right to steal from the rich to give to the poor? Is
it right to fight wars in the name of a good cause, even if innocent people are injured?
The answers to these ethical questions depend on your definition of ethics!

History
Construed broadly as moral reflection on commerce, business ethics is probably as
old as trade itself
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Aristotle's Politics addresses
explicitly commercial relations in its discussion of household management
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S
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In
1987, in the midst of the insider trading scandal on Wall Street, former Securities and
Exchange Commission head John Shad gave the Harvard Business School over $30
million for the purpose of starting a business ethics program there
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g
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But despite the wide range of
questions pursued, the bulk of the academic literature and discussion is focused
more closely on (and much of the function-specific work is connected closely to) the
large corporation whose ownership shares are traded on public exchanges
...
At different epochs of the world, people, especially the elates of
the world, were blind to ethics and morality, which were obviously unethical to the
succeeding epoch
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The
law defines what is and is not legal, but the distinctions between moral right and
wrong are not always so clear
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Such situations can lead to ethical dilemmas
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One way of dealing with ethical dilemmas is by using the
four way test to evaluate decisions
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Is my decision a truthful one?
2
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Will it build goodwill for the organization?
4
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Another way of making sure decisions are truly ethical is by using the publicity test
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If you would be comfortable having your parents, grade school teachers,
and other people find out what you did, chances are that your decision is an ethical
one
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Factors that Affect Business Ethics
Ethical codes that govern businesses often address certain main areas
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S
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For example,
accounting ethics- especially for accountants of publicly held corporations- depends
upon complete honesty and transparency
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For
example, the accountants at Arthur Anderson did not behave with honesty, openness
and responsible publication when auditing Enron
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Ethics of Business | 9

On the other hand, confidentiality is most important when it comes to attorney ethics
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Human subjects protection, on the other hand, is most important when it comes to
those in medicine or those conducting experiments on others such as psychologists
...


The 9 Theories of Ethics
Because of the difficulty in defining ethics, which we've already begun to see,
philosophers have given a lot of thought to this question
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Consequentionalism: An action is ethical, or not, depending on the
consequences of the action
2
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Utilitarianism: The action that has the best result for the most people is the
ethical action
4
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Situation Ethics: The ethical nature of an action is dependent on the situation,
and decisions must be made out of love and helpfulness in the particular moment
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Ethical Realism: The ethical choice is the choice that is the lesser of two evils
7
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Principle Ethics: The ethical decision should be based on an underlying set of
logical principles
9
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If an individual has no ethics, he will do the wrong thing
whenever he believes it will benefit him and that he can get away with it
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While something that is unethical might be illegal, there is not
necessarily a perfect overlap
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If a person had no code of ethics, he could steal, as long as no one was watching
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He could engage in all sorts of things that were "wrong" and "bad" as
long as he didn't get caught
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The Corporation in Business Ethics
Although self-conscious, academic business ethics is of recent vintage, its intellectual
roots are found in the corporate social responsibility (CSR) and business-and-society
literatures originating in law and in business in the early and middle 20th century
...
The corporate focus is evident in the titles of early
works of academic business ethics that have done much to shape the subsequent
discussion in the field
...
These questions, taken up by the
field and continuing to inform its main conversation, are said to surround the “moral
status of the corporation,” by which is meant typically one or both of: (1) Is the
corporation a moral agent, distinct from the persons who compose it? (2) Morally,
how or in whose interests ought the corporation to be managed?

The Employment Relation in Business Ethics
Falling neatly out of concern about the power of large, publicly traded corporations is
a concern about the terms of employment they afford
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At-will employment thus constitutes a default contract—it is the agreement that
obtains between employers and employees absent an agreement to the contrary
(e
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, a union contract)
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Thus, the at-will doctrine will not protect
an employer who uses the power of termination to engage in racial discrimination,
punish an employee for refusing to violate the law, and so forth
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S
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Indeed, the debate
makes little sense outside the public policy context
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Argument may depend on an equivocation between giving employees reasons and
giving employees reasons on the merits
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g
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The at-will doctrine supplies a reason
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That, coupled with exercise of one's discretion, is sufficient reason to terminate the
arrangement
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At law, for example, a plaintiff's case may
be dismissed because the statute of limitations has run, because it was filed in the
wrong jurisdiction, because the court is not competent to hear the case, etc
...

Arguments advanced in defense of the at-will doctrine lean heavily on
consequentiality Proponents attribute the vibrant labor market of the United States
and the stagnant labor markets of Europe to the prevalence of the at-will doctrine in
the United States and the prevalence of mandatory just cause employment rules in
Europe
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The point is that employees
can be protected from the ill-effects of arbitrary dismissal in two ways
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International Business Ethics
Doing business transnational raises a number of issues that have no analogue in
business dealings done within a single country or legal jurisdiction
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Where ethical norms are in conflict,
owing to different cultural practices, which ethical norms ought to guide one's
business conduct in other nations and cultures? Some discussions of international
business ethics conceive this home country/host country question as central
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Thus, busyness persons are advised that when in Rome they ought to do
as the Romans do—as in etiquette, so too in ethics
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Therein
lies the rub
...
Thus, for example,
the United Nations' Universal Declaration of Human Rights or, more recently, the
United Nations Global Compact, is advanced as a guide to conduct
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Employment, support a precautionary approach to environmental challenges,
promote greater environmental responsibility, encourage the development of
environmentally friendly technologies, and work against corruption in all its forms,
including extortion and bribery
...
These guidelines call for the avoiding
harm, doing good, respecting human rights, respecting the local culture, cooperating
with just governments and institutions, accepting ethical responsibility for one's
actions, and making hazardous plants and technologies safe
...
First, they tend to
minimize or ignore competitive reality
...
We do business in a less developed country with longstanding
environmental and corruption problems
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If we refuse to pay bribes,
we will be unable to implement our initiative and, moreover, we will lose market share
and our economic rationale for locating operations in this country to competitors who
have no compunction about paying such bribes
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Second, these approaches serve mainly to reduplicate the home country/host country
question they are intended to help answer
...

Moreover, the more interesting home country/host country cases are those where
home country norms are explicitly extraterritorial and incompatible with host country
norms
...
American
securities regulations, accounting principles, and conceptions of commercial integrity
require firms to account for their tax liability (including foreign tax liability) fully and
correctly, with that liability matching what appears on their tax returns
...

A firm's final tax liability is settled through negotiation between the tax authorities and
the firm
...
General principles of good conduct and hypothetical social contracts seem not
to speak to what tax accountants and auditors ought to do, given the institutions and
norms that actually confront them
...
Low transaction and communication costs, driven by advances in
computer and telecommunication technologies, have made the global market, once a
metaphor (and at least for some, an aspiration), truly global
...
Nowhere has this urgency
been felt more acutely than in the debate over so-called sweatshop labor—the hiring
of workers in less developed countries, usually at wages and under work conditions
prevailing in those countries, to manufacture products for the developed world
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It owes its prescriptions mainly to normative political philosophy,
rather than moral theory
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e
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This criticism comes in milder and stronger variants
...
Criticisms are mild because he endorses generally the large, publicly
traded corporate and organizational focus, seeking only to make the subject matter
more practical and pitched more to the middle and less to the top-level manager
...
In its place, he favors a
methodological approach that sees unregulated market failures, rather than clashes
of stakeholder interests, as the principal occasion for ethical deliberation and
restraint
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That majority works
neither for nor with (and certainly doesn't lead) large, publicly traded corporations, yet
they surely engage in business
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Although conceptually the
micro level business ethics of which Solomon writes speaks to the circumstances of
that worldwide majority, in practice that micro ethics is little developed by and
commands scant attention from academic business ethicists
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Generally speaking, business ethics is a normative discipline,
whereby particular ethical standards are advocated and then applied
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While there are
some exceptions, business ethicists are usually less concerned with the foundations
of ethics or with justifying the most basic ethical principles, and are more concerned
with practical problems and applications, and any specific duties that might apply to
business relationships
...
Very
often, situations arise in which there is conflict between one and more of the parties,
such that serving the interest of one party is a detriment to the other(s)
...
Some ethicists see the principal role of ethics as
the harmonization and reconciliation of conflicting interests
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The question arises, for example, ought a
company obey the laws of its home country, or should it follow the less stringent laws
of the developing country in which it does business
...
Similar problems can occur with regard to child
labor, employee safety, work hours, wages, discrimination, and environmental
protection laws
...
Business ethics operates on the premise, for example, that
the ethical operation of a private business is possible -- those who dispute that
premise, such as libertarian socialists, (who contend that "business ethics" is an
oxymoron) do so by definition outside of the domain of business ethics proper
...
Political economy deals with the distributive
consequences of economic actions
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Ethics of Business | 15

Ethics of Sales and Marketing
Marketing Ethics is a subset of business ethics
...
Discussions of
marketing ethics are focused around two major concerns: one is the concern from
political philosophy and the other is from the transaction-focused business practice
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On the other side it is argued that market is responsible to the
consumers and other proximate as well as remote stakeholders as much as, if not
less, it is responsible to its shareholders
...
Some of the more acute
dilemmas in this area arise out of the fact that there is usually a degree of danger in
any product or production process and it is difficult to define a degree of
permissibility, or the degree of permissibility may depend on the changing state of
preventative technologies or changing social perceptions of acceptable risk
...
There are many ethical issues that arise from this technology
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This leads to data mining, workplace
monitoring, and privacy invasion
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Pharmaceutical companies have the
technology to produce life saving drugs
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This raises many ethical questions

Law and Business Ethics
Very often it is held that business is not bound by any ethics other than abiding by the
law
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He held that corporations have the
obligation to make a profit within the framework of the legal system, nothing more
...
Ethics for Friedman is
nothing more than abiding by 'customs' and 'laws'
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Counter to Friedman's logic it is observed that legal procedures are technocratic,
bureaucratic, rigid and obligatory where as ethical act is conscientious, voluntary
choice beyond normatively
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Crime precedes law
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Laws are blind to the crimes
Ethics of Business | 16

undefined in it Further, as per law, “conduct is not criminal unless forbidden by law
which gives advance warning that such conduct is criminal’’
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As per liberal laws followed in most of the
democracies, until the government prosecutor proves the firm guilty with the limited
resources available to her, the accused is considered to be innocent
...


Corporate Ethics Policies
As part of more comprehensive compliance and ethics programs, many companies
have formulated internal policies pertaining to the ethical conduct of employees
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They are generally meant to identify the company's expectations of workers and to
offer guidance on handling some of the more common ethical problems that might
arise in the course of doing business
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Business Ethics As An Academic Discipline
As an academic discipline, business ethics emerged in the 1970s
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Over time, several peer-reviewed journals appeared, and
more researchers entered the field
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As of 2009, sixteen academic journals devoted to various business ethics
issues existed
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If the company is making large amounts of money, they may not
wish to pay too close attention to their ethical behavior
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Ethics of Business | 17

Reference
* Arnold, Denis G
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Bowie
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* Baumhart, Raymond
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* Baumhart, Raymond
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* Baumhart, Raymond
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* Berle, Adolf and Gardiner Means
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• Boatright, John R
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Ethics of Business | 18



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