ADMS 3660 Chapter Notes - Chapter 6: Tax Deduction, Moral Relativism, Oxymoron

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Jagjeet Kaur Dhawan
Business ethics and corporate social responsibility
Chapter 6: Business Ethics Fundamental
In regard to public interest in business ethics during the modern business period – approx. the
past 30 to 40 years- two conclusions may be drawn:
a. Interest in business ethics has heightened during each of the past four decades
b. Interest in business ethics seems to have been spurred by major headline grabbing
scandals, particularly within the last several years.
The public’s opinion of business ethics:
The public’s view of business ethics has never been very high.
Anecdotal evidence suggests that many citizens see business as essentially a
contradiction in terms, an oxymoron, and think that there is only a fine line between a
business executive and a crook.
The Gallup Poll Ranks Business Ethics:
Perhaps the most reliable expression of public attitudes on business ethics may be
found in the Gallup Poll, which regularly surveys public opinion of social and political
Gallup poll periodically quizzes the public on its perceptions about the ethics of
business executives and other professionals.
It is safe to conclude that that public thinks business ethics is at least somewhat suspect
and that it would like to see improvements. There is the opinion that business is only one
of the major institutions that have questionable ethics today; business is the focus of
Has business ethics really deteriorated?
Unfortunately, there is no scientific way to determine whether or not business ethics has really
Max Way’s description of a statistical analysis aimed at answering the question, “How
widespread is corporate misconduct?” is enlightening. He argues that the researcher
would have to count the transgression publicly exposed in a certain period of time.
Public opinion polls might be out best way to gather data about the current state
of business ethics, but such polls are hardly definitive.
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Are the media reporting ethics more vigorously?
There is no doubt that the media are reporting ethical problems more frequently and fervently.
The media have found business ethics and indeed ethics questions among all
institutions to be subjects of growing and sustaining interest during the past three
Is it society that is actually changing?
- Many business managers subscribe to the belief that is it society that is actually
W. Michael argued: It seems to me that the root causes of the questionable and illegal
corporate activities that have come to light recently.. can be traced to the sweeping changes
that have taken place in our society and throughout the world and to the unwillingness of many
in business to adjust to these changes.
He goes on to say, “people in business have not suddenly become immoral. What has changed
are the contexts in which corporate decisions are made, the demands that are being made on
business, and the nature of what is considered proper corporate conduct.
Business Ethics what does it really mean?
** To understand business ethics, it is useful to comment on the relationship between ethics and
- Is the discipline that deals with what is good and bad and with moral duty and obligation.
- Ethics can also be regarded as a set of moral principles or values.
- Is a doctrine or system of moral conduct.
-Moral conduct refers to that which relates to principles of right and wrong in
Ethics and morality as being so similar to one another that we may use the terms
interchangeably to refer to the study of fairness, justice, and right and wrong behaviour in
Business ethics:
- Business ethics is concerned with good and bad or right and wrong behaviour and
practices that take place within a business context. [Concepts of right and wrong are
increasingly being interpreted today to include the more difficult and subtle
questions of fairness, justice, and equity.
Two branches of moral philosophy or ethics are:
a) descriptive ethics
b) normative ethics
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Descriptive ethics: concerned with describing, characterizing, and studying the morality of a
people, a culture, or a society.
Descriptive ethics also compares and contrast different moral codes, systems, practices,
beliefs, and value.
Focus in descriptive ethics is on learning what is occurring in the realm of behaviour,
actions, decisions, policies, and practices of business firms, managers, or perhaps, specific
Descriptive ethics focuses on “what is” the prevailing set of ethical standards in the business
community, specific organizations, or on the part of specific managers.
Normative ethics: is concerned with supplying and justifying a coherent moral system of
thinking and judging.
-Normative ethics seeks to uncover, develop, and justify basic moral principles
that are intended to guide behaviour, actions, and decisions
- Normative ethics seeks to propose some principle or principles for distinguishing ethical
from unethical in the business context.
Normative ethics deals with “what ought to be “or “what ought not to be” s in terms of business
- Normative ethics would insist that a practice be justified on the basis of some ethical
principle, argument, or rationale before being considered acceptable.
Three major approaches to thinking about business ethics:
1. Conventional approach (chapter 6)
2. Principles approach (chapter 7)
3. Ethical tests approach (chapter 7)
The conventional approach to business ethics:
Conventional approach to business ethics is essentially an approach whereby we compare a
decision or practice with prevailing norms of acceptability.
We call it conventional approach because it is believed that this is the way conventional
or general society thinks.
Decision or practice  Prevailing Norms of Acceptability.
In many circumstances, the conventional approach to ethics may be useful and applicable.
What does a person do, however, if norms from one source conflict with norms from other
source? Also, how can we be sure that societal norms are really appropriate or defensible?
Our society’s culture sends us many and often conflicting messages about what is
appropriate behaviour. We get these messages from television, movies, music, and
other sources in culture.
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