Jamshaid 59 4438 2 BE Session 4

Session 4
Chapter 5
Emerging Business Ethics Issues
The Saying of Prophet (P.B.U.H)
"None of you is a believer (Momin) until he

desires for his brother what he desires for
himself."
And do not mix the truth with falsehood or
conceal the truth while you know [it].
Surah Baqara (Chapter 2, Verse 42)

The Prophet (P.B.U.H) also emphasized
the importance of truthfulness when
conducting business transactions.
He said, "The buyer and the seller have

the option of canceling or confirming the
bargain unless they separate, and if they
spoke the truth and made clear the defects
of the goods, then they would be blessed in
their bargain, and if they told lies and hid
some facts, their bargain would be
deprived of Allah's blessings."
(Sahih al-Bukhari)
Stakeholder concerns determine in large part
whether specific business actions or decisions are
perceived as right or wrong, which drives what the
organization defines as ethical or unethical.
In the case of the government, community, and

society, what was merely an issue to the firm can
become an ethical issue and later law.
People make decisions and then recognize that a
particular issue or situation has an ethical component;
therefore, a first step toward understanding business
ethics is to develop ethical issue awareness.
Data manipulation!
Ethical issues typically arise
because of conflicts among
individuals’ morals and the core
values and culture of the
organizations where they work
The business environment presents many
potential ethical conflicts. Organizational
objectives can clash with its employees’
attempts to fulfill their own personal goals.
An employee wants to pursue his/her further

education after office hours but organizational
working environment contradicts!
Similarly, consumers’ need for safe, quality, and
competitively priced products may create a
demand for consumer regulation such as the
Consumer Product Safety Commission’s
proposal to ban infant inclined sleepers after the
deaths of more than 64 babies.
Recognizing an
Ethical Issue
(Ethical Awareness)
!
In practice, it can be difficult to recognize Ethical issues
Some issues are difficult to recognize because they

are gray areas that are hard to navigate. For
example, when does a small gift become a bribe?
Employees may engage in questionable behaviors
because they are trying to achieve firm objectives
related to sales or earnings.
Failure to acknowledge or be aware of such issues is a great

danger to any organization
Our personal morals or values are easier
to define and control
BUT!
the complexity of the work environment

makes it harder to define and reduce
ethical business issues
Business decisions, like personal decisions,
may involve a dilemma
In a dilemma, all of the alternatives have

negative consequences, so the less harmful
choice is made
Not a WIN WIN situation!

Misuse of company time, abusive behavior, and
lying to employees are personal in nature but are
committed in the belief that the action is furthering
organizational goals
Falsifying time or expenses, safety violations, and

abuse of company resources are issues that directly
relate to an ethical conflict that could damage the
firm
Collusion is a secret agreement between two or
more parties for a fraudulent, illegal, or deceitful
purpose
Deceitful purpose is the relevant phrase in regard

to business ethics, as it suggests trickery,
misrepresentation, or a strategy designed to lead
others to believe something less than the whole
truth
Foundational Values
for Identifying
Ethical Issues
Integrity, honesty, and
fairness are widely used values
for evaluating activities that
could become Ethical Issues
Integrity is one of the most important and often cited elements of virtue
and refers to being whole, sound, and in an unimpaired condition.
٥١ ‫َو ِإن َيَك اُد ٱَّلِذ يَن َك َفُرو۟ا َلُيْز ِلُقوَنَك ِبَأْبَص ٰـ ِرِهْم َلَّم ا َسِم ُعو۟ا ٱلِّذ ْك َر َو َيُقوُلوَن ِإَّن ۥُه َلَم ْج ُنوٌۭن‬
The disbelievers would almost cut you down with their eyes when they
hear ˹you recite˺ the Reminder, and say, “He is certainly a madman.”
١ ‫ٓن ۚ َو ٱْلَقَلِم َو َم ا َيْس ُطُروَن‬

Nũn. By the pen and what everyone writes!
٢ ‫َم ٓا َأنَت ِبِنْع َم ِة َر ِّبَك ِبَم ْج ُنوٍۢن‬

By the grace of your Lord, you ˹O Prophet˺ are not insane.
Integrity is a global value that relates to all
activities, not just business
Integrity relates to product quality, open

communication, transparency, and
relationships.
Therefore, it is a foundational value for

managers to build an ethical internal
An organization’s integrity usually rests on its enduring
values and unwillingness to deviate from standards of
behavior as defined by the firm and industry
At a minimum, businesses are expected to follow laws and

regulations
In addition, organizations should not knowingly harm

customers, clients, employees, or even other competitors
through deception, misrepresentation, or coercion
Honesty refers to truthfulness or trustworthiness. To be
honest is to tell the truth to the best of your knowledge
without hiding anything.
Do you think Randy could retain his

honesty by following what Cheryl asked
him to do?
Honesty
Issues related to honesty also arise because business is sometimes regarded as a game governed by
its own rules rather than those of society as a whole
Business relationships are a subset of human relationships governed by their own rules that in a
market society involve competition, profit maximization, and personal advancement within the
organization
Business can therefore be considered a game people play, comparable in certain respects to
competitive sports such as boxing.
Ordinary ethics rules and morality do not hold in games like basketball or boxing.
Logically, then, if business is a game like basketball or boxing, ordinary ethical rules do not apply
This type of reasoning leads many to conclude that anything is acceptable in

business!
Dishonesty
A lack or absence of integrity, incomplete disclosure,

and an unwillingness to tell the truth
The causes of dishonesty are complex and relate to

both individual and organizational pressures.
Many employees lie to help achieve performance
objectives.
Fairness is the quality of being just,
equitable, and impartial
There are three fundamental elements that

motivate people to be fair: equality,
reciprocity, and optimization.
Emerging Ethical Issues and
Dilemmas in Business
Misuse of Company Time and Resources
Abusive or Intimidating Behavior
Lying
Conflicts of Interest
Bribery
Corporate Intelligence
Discrimination (equal employment opportunity)

Sexual Harassment (Lift incident, School scandal)
Fraud
Consumer Fraud
Financial Misconduct
Insider Trading (The buying or selling of stocks by insiders who
possess
Challenges of
Determining an
Ethical Issue in
Business
Most ethical issues concerning a business will become
visible through stakeholder concerns about an event,
activity, or the results of a business decision
Another way to determine if a specific behavior or
situation has an ethical component is to ask other
individuals in the business how they feel about it and
whether they view it as ethically challenging
An activity approved by most members of an organization, if it is
also customary in the industry, is probably ethical.
An issue, activity, or situation that can withstand open discussion

between many stakeholders, both inside and outside the
organization, probably does not pose ethical problems
However, over time, problems can become ethical issues as a result of changing societal values.
In the last few years, changes in societal values and technology are creating new ethical issues.
The disruption of traditional business activities is occurring as we are in a decade of rapid

technology advances. For example, big data and marketing analytics have presented new ethical
issues as they can reduce employees and consumers to quantitative measurements.
While this has profound implications for business, some critics believe it is unacceptable to
replace humans with a computer in personnel decisions.
The underlying sentiment is that certain aspects of personnel decisions, which involve
human qualities such as judgment, empathy, and contextual understanding, should not be
entirely delegated to machines.
Assessing employee integrity and ability to make ethical decisions is an area that is hard to
quantify
artificial intelligence (AI) is providing a platform for processing big
data sets utilizing predictive analytics to make decisions and interact
with employees and customers.
This technology is being used to create audio and visual as well as

senses beyond most human abilities.
Ethics issues exist because AI allows employees and consumers to make

autonomous decisions. AI systems are complex and will require ethical
codes to identify risks and issues. Humans will have to provide
oversight with principles, values, and codes to create AI ethical
compliance.

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Session 4

"None of you is a believer (Momin) until he

Surah Baqara (Chapter 2, Verse 42)

He said, "The buyer and the seller have

In the case of the government, community, and

An employee wants to pursue his/her further

Some issues are difficult to recognize because they

Failure to acknowledge or be aware of such issues is a great

the complexity of the work environment

In a dilemma, all of the alternatives have

Not a WIN WIN situation!

Falsifying time or expenses, safety violations, and

Deceitful purpose is the relevant phrase in regard

١ ‫ٓن ۚ َو ٱْلَقَلِم َو َم ا َيْس ُطُروَن‬

٢ ‫َم ٓا َأنَت ِبِنْع َم ِة َر ِّبَك ِبَم ْج ُنوٍۢن‬

Integrity relates to product quality, open

Therefore, it is a foundational value for

At a minimum, businesses are expected to follow laws and

In addition, organizations should not knowingly harm

Do you think Randy could retain his

This type of reasoning leads many to conclude that anything is acceptable in

A lack or absence of integrity, incomplete disclosure,

The causes of dishonesty are complex and relate to

There are three fundamental elements that

Discrimination (equal employment opportunity)

An issue, activity, or situation that can withstand open discussion

The disruption of traditional business activities is occurring as we are in a decade of rapid

This technology is being used to create audio and visual as well as

Ethics issues exist because AI allows employees and consumers to make

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