THE ETHICAL ENVIRONMENT
OF THE FIRM
Business Ethics and Management
Ethical Issue – refers to a concern on which an
individual must decide based on several alternatives
of what is morally right or wrong
Business Ethics – are moral principles and
standards that guide businesspeople in their
transactions
Perspective on Ethics
Universalism – the principle which states that all
people should have certain values like honesty,
respect, and cooperation
Egoism – the principle which promotes the greatest
good to oneself; people ultimately act for self-
advancement, no matter how good their intentions
are
Perspective on Ethics
Utilitarianism – the principle which focuses on the
greatest good for the greatest number of people
Relativism - the principle which states that ethical
behavior is based on a person’s own and other
relevant people’s opinions and viewpoint; different
standards for each culture
Perspective on Ethics
Virtue Ethics – the principle which states that
morality depends on the maturity of a person with
good moral character
Corporate Integrity
Corporate Integrity refers to that sense of
“wholeness” created by the right relationships among
the members of the corporation.
Five Dimensions of Corporate Integrity:
Cultural Dimension – cultural aspects as
language, rituals, behavioral patterns, and beliefs
form the framework that determines the manner by
which people relate with one another
Corporate Integrity
Interpersonal Dimension – focuses on the
relationships among people; includes family
relations, civic life, and work relations
Organizational Dimension – considers the main
purposes of the business particularly: economic and
financial, managerial, and civic purposes
Corporate Integrity
Social Dimension – views the organizations as
actively engaging with society
Natural Dimension – looks into how
organizations relates to nature
Corporate Social Responsibility
Corporate Social Responsibility refers to business
operations and activities that have the welfare of society
in mind
Long-term goals that will benefit the society
Social obligation refers to complying with legal and
ethical standards to uphold social welfare
Social Responsiveness goes beyond prescribed
standards and implement actions that aim to make an
impact on society
Corporate Social Responsibility
Economic Responsibility - the company should
produce goods and services with reasonable prices
Legal Responsibility – the organization should
comply with local and international laws that apply
to its business operations
Ethical Responsibility – include establishing
norms, standards, mores, and practices that reflect
fairness to the customers, employees, shareholders,
and the community
Corporate Social Responsibility
Philanthropic Responsibility – include
initiation of volutantary activities such as
establishing corporate programs, donating to
charitable institutions, and other similar charitable
causes.
