Unit 1: Business ethics fundamentals
Business Ethics and Corporate Social Responsibility notes · PTU syllabus (BBASEC 401-18)
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Unit summary
Ethics is about knowing right from wrong and acting on it. Business ethics applies this to decisions in markets, finance, people management and the environment. This unit covers the nature, scope and purpose of ethics, moral standards, ethical principles across business areas, and the link between science and human values.
After this unit you can
- Define ethics and business ethics and explain their nature and purpose
- Explain the importance of ethics and moral standards
- Apply ethical principles in markets, environment, trade, finance and HR
- Discuss science and human values
PTU syllabus topics
- Nature
- scope and purpose of ethics
- importance of ethics and moral standards
- ethical principles in markets
- environment
- trade
- finance and HR
- science and human values
Marketing
Truthful advertising, fair pricing
Finance
Honest accounts, no insider trading
HR
Fair pay, no discrimination
Environment
Sustainable use of resources
Trade
Fair competition, no cartels
Topic 1
Nature, scope and purpose of ethics
Ethics is the study of moral principles that govern a person's behaviour. Business ethics applies these principles to business conduct — honesty, fairness, integrity and responsibility. Nature: based on moral values, relative to society and time, voluntary yet expected, and wider than law. Purpose: build trust, guide decisions, protect stakeholders and sustain long-term success.
Source
Moral values and conscience
Government and courts
Enforcement
Self and society
Penalties
Scope
Wider: what is right
Narrower: what is legal
Example
Not exaggerating product claims
Not selling expired goods
Topic 2
Importance and moral standards
Ethical business builds customer trust and loyalty, attracts and keeps good employees, avoids legal trouble, improves reputation and supports sustainable profit. Moral standards are norms about actions believed to be morally right or wrong — they involve serious harm or benefit, are not set by authority, are preferred over self-interest, and are judged impartially.
Topic 3
Ethical principles across business areas
Markets
Fair pricing, honest advertising, no cartels
Environment
Prevent pollution, conserve resources
Trade
Fair competition, honour contracts
Finance
True accounts, no insider trading or fraud
HR
Fair hiring, equal pay, safety, no harassment
Topic 4
Science and human values
Scientific and technological progress raises ethical questions: AI and privacy, genetic engineering, automation and jobs, and environmental damage. Science tells us what can be done; human values guide what should be done. Responsible innovation balances progress with human welfare.
Key terms
- Ethics
- Moral principles governing behaviour
- Business ethics
- Moral principles applied to business
- Moral standards
- Norms about morally right and wrong actions
- Insider trading
- Trading on confidential price-sensitive information
- Responsible innovation
- Technology guided by human values
Quick revision
- Ethics is wider than law.
- Ethical business = trust + reputation + sustainability.
- Apply ethics in marketing, environment, trade, finance and HR.
- Science shows what can be done; values guide what should be done.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.Define business ethics.
- Q2.Differentiate between ethics and law.
- Q3.State two features of moral standards.
- Q4.Give one example of unethical practice in finance.
- Q5.Why is ethics important for HR?
Long-answer questions
- Q1.Explain the nature, scope and importance of business ethics.
- Q2.Discuss ethical principles in different functional areas of business.
- Q3.Discuss the relationship between science and human values.
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