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Lectures notes in Diploma in economics
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- Diploma in economics
- Institution
- Tshwane University Of Technology (TUT)
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ETHICS TEST 4 NOTESEthical Decision-Making Approach
1. Core Goal of Business Ethics
The core goal of business ethics is to avoid unnecessary harm and ensure responsible
business practices that benefit all stakeholders, including customers, employees,
investors, and society at large. Business ethics aims to guide organizations to act not
only within the boundaries of law but also in a morally responsible way that considers
the impact of their actions on stakeholders.
Significance in Ensuring Responsible Business Practices:
• Business ethics helps establish norms and principles that lead to sustainable
operations and a positive reputation.
• It encourages transparency, accountability, and fairness, which are vital in
fostering trust among stakeholders and maintaining long-term relationships.
• Ethical business practices lead to more loyal customers, motivated employees,
and reduced regulatory penalties, ultimately resulting in a competitive
advantage.
2. Relationship Between Ethical Decision-Making and Business Ethics
• Ethical decision-making is a key component of business ethics. It involves the
process of identifying and choosing among alternatives in a manner consistent
with ethical principles.
• Ethical decision-making and business ethics are interlinked because decision-
making is the operational aspect where ethical theories and principles are
applied to actual business situations.
This relationship is crucial because:
• The ethical decision-making process helps individuals recognize and evaluate
the consequences of their actions, making it easier to align business practices
with ethical standards.
• Business ethics provides the framework and normative standards that guide
decision-making processes, ensuring that businesses consider the broader
implications of their actions on society.
Ethical decision-making helps bridge the gap between theory and practice, making
ethical values an integral part of daily business operations.
, 3. Role of Trust Between Business Parties
Trust is a foundational element in sustaining business relationships, and it is inherently
tied to ethical practices. In the context of business ethics, trust is built when parties
consistently demonstrate integrity, transparency, and reliability.
Trust plays a vital role in:
• Reducing Transaction Costs: Trust between business partners can reduce the
need for complex contracts and monitoring mechanisms, making business
processes smoother and more cost-efficient.
• Facilitating Long-term Partnerships: When trust exists, business relationships
are more likely to become long-term partnerships, which can be beneficial for
both parties in terms of stability and growth.
• Enhancing Reputation: Organizations known for their ethical practices and
trustworthy behavior often attract better partners, clients, and talent, resulting in
a positive feedback loop that strengthens the business over time.
2. Moral Character and Ethical Behavior
Analyzing a Scenario: Moral Dilemma for a Manager
Imagine a scenario where a manager, Sarah, is faced with a moral dilemma at work. She
discovers that her company's newly developed product, which is about to be launched,
has a minor defect that could lead to inconvenience for customers. Fixing the defect will
delay the launch and increase costs, but not disclosing it could lead to negative
customer experiences and potential reputational damage in the future.
Distinguishing Between Two Dimensions of Moral Character:
1. Capability (Ability to Determine What is Morally Right):
Capability refers to Sarah's ability to recognize and evaluate the ethical aspects of
her decision. In this case, she must assess whether launching the product with the
known defect is the right action.
To determine what is morally right, Sarah needs to consider various ethical factors, such
as customer well-being and transparency. She realizes that the defect, although minor,
could inconvenience customers and harm their trust in the company. Therefore, she
understands that the morally correct action is to disclose the defect and delay the
launch until it is resolved.
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