Doing the Right Thing

Business Ethics

• Ethics is the study of moral obligation involving the distinction between right and wrong.
• The ethical behavior required of entrepreneurs is determined by the following
  • The public
  • Interest Groups
    • Animal Welfare Society
    • Food and Drug Administration (FDA)
    • Equal Pay ACT
    • Environmental Protection Agency.
  • Business Organizations
  • Individual’s morals and values.
• Business ethics establishes trust between buyers and sellers and between lenders and borrowers.
• The values and morals that entrepreneurs draw on to guide their ethical behaviors come from a variety of sources
  • Including their family upbringing
  • Their faith traditions
  • Mentors who have shaped their lives, and
  • the communities they grew up in

Three Levels of Ethical Standards

• The law → How to follow society's rules
• Organizational Policies and Procedures → How to live your life
• The Moral Stance → How to differentiate right from wrong

You get a good adult by teaching a child to do the right thing. — Aristotle

Reasons to Run a Business Ethically

1. Protect brand and Company reputation
2. It is the right thing to do
3. Maintain customers’ trust and loyalty
4. Maintain investors’ confidence
5. Earn public acceptance and recognition

Factors that Drive Business Ethics

1. Corporate Scandals
2. Marketplace Competition