Business Ethics and Corporate Governance
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Chapter 2 : Importance of Ethics in Business
Ethical theories
Metaethics
Normative theory
Market system
Impact of unethical behavior in the market system
Bribery
Coercion
Deception
Theft
Discrimination
Trust and ethics
Supplier relations
Customers
Employees
Integrative social contract theory
Hypernorms
Macro social contract
Micro social contract.
Chapter Summary
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In this chapter we first discussed the three
categories of ethical theories: metaethics, normative ethics and applied
ethics. Metaethics is the study of the origin and meaning of ethical
concepts. Broadly, it deals with metaphysical, psychological
and linguistic issues. While normative ethics establishes certain
moral standards for human behavior. Normative ethics is further classified
as: teleogical, deontological and virtue ethics.
According to teleogical ethical theory, an action is considered morally
correct if the consequences of that action are more favorable than
unfavorable. Deontological ethical theory focuses on certain fundamental
duties such as duties to God, duties to oneself and duties to others.
Applied ethics deals with specific controversial issues like capital
punishment, abortion and nuclear war. |
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In the second part of the chapter, we examined the
effect of unethical practices on the market system. Unethical practices like
coercion, deceptive information, theft and bribery hamper the effective
functioning of the market system. For business to be successful in the long
run, it must build up relationships of trust with its suppliers, customers
and employees.
The chapter ends with a discussion of the Integrative Social Contract
Theory. Social contract theory is an informal agreement concerning
behavioral norms. It comprises of three elements: hypernorms, macro
social contract and micro social contract. Hypernorms are
universal norms that apply to all individuals. Macro social norms provide
global norms while micro social norms are developed for community.
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Short Case Studies / Caselets