PBMF - Business Ethics

Business Ethics

Understanding Ethical Practices in Business

This Photo by Unknown Author is licensed under CC BY-SA

What Are Ethics?

► Ethics are rules of behavior based on ideas about

right and wrong.

► Ethics in business help define appropriate behavior

in a business setting.

Example: Google’s decision to uphold user privacy by
refusing to hand over search data to the U.S.
government in 2006 exemplifies ethical behavior
rooted in protecting individual rights.

Multiple Choice

What are Ethics?

• Good behavior

• Bad Behavior

• behavior based on ideas about right and wrong.

• all of the above

Integrity and Morals

► Integrity: The honesty of (and behind) a person’s

actions.

► Morals: An individual’s idea of right and wrong,

guiding personal behavior.

This Photo by Unknown Author is licensed under CC BY-SA-NC

Definitions: Ethics, Integrity, and
Morals

► Ethics: Rules of behavior based on right and

wrong ideas.

► Integrity: The quality of being honest and having

strong moral principles.

► Morals: An individual's ideas of right and wrong,

guiding overall behavior.

Multiple Choice

What is the difference between integrity and morals?

• Integrity is sticking to ethical rules, while morals are personal beliefs about right and wrong.

• Integrity is about following laws, but morals are only about culture.

• Morals are rules everyone follows, while integrity is about personal beliefs.

• Integrity and morals are the same, both are about following rules.

Business Ethics in Action

► Ethical actions result from applying ethics and moral

behavior.

► Many businesses establish a code of ethics to guide

behavior.

Real Example: Johnson & Johnson’s quick response during
the Tylenol crisis in 1982, where they recalled products and
prioritized customer safety, is a model of strong business
ethics in action.

Code of Ethics

A. A document guiding how business
should be conducted.

B. Questions to analyze decisions:

❑

1. Is the action legal?

❑

2. Will privacy and confidentiality be protected?

❑

3. Who is affected by the action?

❑

4. Is the information factual and honest?

Code of Conduct

Outlines expected employee behavior both in and outside the
workplace.

• Examples include:

- No personal use of office equipment.

- No gifts from vendors to avoid conflicts of interest.

- Internet access should be for business purposes only.

Multiple Choice

What is the main difference between a code of conduct and a code of ethics?

• The main difference is that a code of conduct focuses on specific rules and behaviors, whereas a code of ethics emphasizes overarching principles and values.
• A code of ethics is only for non-profit organizations.
• A code of conduct is a legal document, while a code of ethics is not.
• A code of conduct is more flexible than a code of ethics.

Confidentiality and Proprietary
Information

► Confidentiality: Keeping sensitive company information private.

► Proprietary information: Work created by employees that

belongs to the company (trade secrets).

Example: Coca-Cola’s closely guarded recipe is an example of
proprietary information that employees must keep confidential to
maintain the company’s competitive advantage.

Insider Trading

► Using private company information to make stock

trades is illegal and unethical.

► Managers with insider information should not exploit it

for personal gain.

Example: The infamous case of Martha Stewart's insider
trading scandal highlights the severe consequences of
using confidential company information for personal stock
market gains.

Open Ended

Research an example of Insider Trading (not including the one given previously) and very briefly describe what happened in your own words

False Advertising and Lying

► False advertising: Overstating product features or

making false claims.

► Lying: Making untrue statements, which damages trust

and integrity.

Example: Volkswagen's emissions scandal, where the
company falsely advertised its cars as environmentally
friendly, damaged its reputation and led to legal penalties.

Social Responsibility and Corporate
Social Responsibility

► Social Responsibility: Acting with awareness of social,

environmental, and economic issues.

► Corporate Social Responsibility (CSR): Business actions

that promote social good beyond profit motives.

Example: Starbucks shows corporate social responsibility by
making sure its coffee beans are bought from farms that
follow ethical practices, encouraging recycling, and working
to lower its impact on the environment.

Corporate Culture and
Philanthropy

► Corporate Culture: How a company's employees

and management interact and behave.

► Philanthropy: The promotion of welfare for

others, often through donations or volunteer
work.

Conclusion

► Ethical practices are essential for trust,

legality, and social responsibility.

► Businesses benefit by adhering to ethical and

social standards.