Business Ethics

Business Ethic & Ethical Behavior Ethics is the analysis of right and wrong, and its associated responsibility. Approaches for Right & Wrong Decision:  The Consequences  The motivation of the parties concerned  Guiding Principles – Treat others as you would

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like to be treated Duties – Based on the religious code Key Values – The importance of human right

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Ethical Areas Ethics can be divided in to three categories  Meta Ethics The study of what is ethical behavior  Normative Ethics How to arrive at practical standards of ethical behavior  Applied Ethics Applying ethical ideas to specific controversial issues 2

Importance of the Business Ethics FOR ORGANIZATION FOR INDIVIDUAL Good ethics should be seen as a driver of profitability  An ethical framework is part of good corporate governance and suggest well run business  Investor are re assured about company approach to risk management  Employees will be motivated in the knowledge they operate in env of good corporate behavior 

 Consumer & employee

has evolved in the recent years  Consumer may choose to purchase ethical items  Employees will not blindly accept orders to act in a manner which unethical

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Criteria for Ethical Decision Making Is it legal  Is it contrary to our company’s adopted code of ethics  Is it contrary to any other legal code of ethics like ACCA code of ethics  Would you mind other people knowing what you have decided – for example if it was tomorrow news paper or you have justify the decision of your mother  Who is effected by the decision  Would the decision be regarded as fair 

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Codes of Ethics & Code of Conduct Most companies especially large companies have approached business ethics issue by formulating a set of internal policy and instructing employees to follow them. Often ethic officers (compliance officers) are appointed to monitor the application of the policies and to be able to discus the ethical dilemma with employees who approached them. The policy can either be the broad generalizations ( corporate ethics statement) of contains specific detailed rules (corporate ethics code)

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IFAC Code of Ethics Fundamental Principles

Integrity Objectivity Confidentiality Professional Behavior Professional Competence & Due Care 6

ACCA Code of Ethics & Conduct Fundamental Principles

Integrity Objectivity Confidentiality Professional Behavior Professional Competence & Due Care 7