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Business Ethics and Ethical Decision Making

In: Business and Management

Submitted By ccheruiyot
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Chapter 5 – Business Ethics and Ethical Decision Making – Summary

Business ethics comprises principles and standards that guide individual and work group behavior in the world of business. Stakeholders determine these conventions, and they may change over time. The most basic of these standards have been codified as laws and regulations. Business ethics goes beyond legal issues. Because individuals and groups within a company may not have embraced the same set of values, ethical conflict may occur. Questionable decisions and actions may result in disputes that must be resolved through some type of negotiation or even litigation. Codifying ethical standards into meaningful policies that spell out what is and is not acceptable gives businesspeople an opportunity to reduce the possibility of behavior that could create legal problems. Business decisions involve complex and detailed discussions in which correctness may not be clear-cut. It is important that a shared vision of acceptable behavior develop from an organizational perspective to create consistent and reliable relationships with all concerned stakeholders. Understanding the ethical decision-making process can help individuals and businesses design strategies to prevent misconduct. Three of the important components of ethical decision making are individual factors, organizational relationships, and opportunity. Significant individual factors that affect the ethical decision-making process include personal moral philosophy, stage of moral development, motivation, and other personal factors such as gender, age, and experience. Moral philosophies are the principles or rules that individuals apply in deciding what is right or wrong. Most moral philosophies can be classified as consequentialism, ethical formalism, or justice. Consequentialist philosophies consider a decision to be right or acceptable if it

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