Be Notes Mod 4

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Business Ethics and Corporate Governance

KSOM notes by Dr. Sneha

Bangalore University

Notes Module 4

Business Ethics

Semester III

Q. Write in brief about job discrimination (nature & extent, utility, rights & justice) (12 marks)

Developing Workplace Ethics is a challenge not only to implement but also to continue and create a

culture at workplace. Before a company can develop a standard of ethics, it should look at all aspects of

its organization, its employees and management personnel. Knowing the diversity of its employees,

including their skills and training can provide the foundation for comprehensive standard of ethics.

disproportionate to the number of workers that they actually employ. This is because they together with

morally innovative indigenous employers will be setting the standard, against which other employers

must be measured.

The result will be substantially improved quality of life for the growing ranks of workers in the formal

sector. Ethics in customer Service emphasis that customers and their suppliers can be expected to enjoy

the most productive and loyal indigenous just as important as a company's employees are, and

businesses should keep this in mind. Furthermore, as while developing its ethics standards. Respect and

honesty in all customer interactions show creasing numbers of workers leave the informal sector in

pursuit of better opportunities in also be part of an ethics guideline.

Considering ethical Choices, some employees have strengthen the formal sector; less pressure will be

exerted on the scarce productive resources of the informal moral behavior and such people usually do

not hesitate when faced with a difficulties . This should permit an enhanced standard of living for those

remaining in the informal choice. Also, when faced with such a situation most people hesitate before

making a choice of the sector. Far from causing a decrease in overall social welfare by spurring

unemployment management should listen to employee complaints carefully and graciously. Failure to

that demonstrate respect for workers rights are well positioned to enhance the welfare of upon

information can be viewed as a poor ethical choice at the management level and citizens in developing

nation.

To state a few instances, manufacturer of generic goods with crucial requirement towards laying down

of strong basic values on organizational front. While low profit margins may find it difficult to simply

absorb the cost of increased labor expenses employee complaints and concerns are dismissed,

dangerous and inappropriate behaviors can crop up. In such cases the added cost of labor may instead

be balanced by internal cost cutting measures. It also leads to shaking the grounds or it may be passed

on to customers via higher prices, or it may be passed on to the owners of beliefs and values of the


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employees towards the organization because in many instance the business enterprise via lower return

on equity.

In such cases the cost of respecting human employees know more and better about what goes on inside

a company than do management rights must be regarded as a necessary condition of doing business. Itis by acting in a manner or owners. Management that fails to act upon employee information or who

fails in having that respects basic human rights that we raise ourselves above other species strong hold

on the grapevine communication may find themselves in difficult situations because of their in-action

towards the organization.

The central economic question related to employment discrimination against women always existed

explaining the persistent] higher average wage of men compared to women.

In an event consider what the consequence will be if comparable worth is implemented. If wages in jobs

now dominated by women an raised, the number of jobs available will shrink, as employers seek to

substitute other and nor cheaper and as customers substitute other products for those made by firms

whose wage b and hence prices have risen because of comparable worth. Everyone has a right to a

stand.

Discrimination in employment involves three basic elements:

It is a decision against one or more employees that is not based on individual merit such as the ability

to perform a given job, seniority or other morally legitimate qualifications.

The decision derives solely or in part from racial or sexual prejudice, from false stereotypesor from

some other kind of morally unjustified attitude against members of the class to which the employee

belongs.

The decision has a harmful or negative impact on the interest of the employees, perhaps costing them

their jobs, promotions or better pay.

Q. Explain different Forms of Discrimination (2 marks)

A helpful framework for analyzing different forms of discrimination can be constructed by distinguishing

the extent to which a discriminatory act is intentional and isolated and the extent to which it is

unintentional and institutionalized.

Isolated and Intentional Discrimination.

An act of discrimination may be apart of the isolated behavior of a single individual who unintentionally

and unknowingly discriminates out of personal prejudice.

Institutionalized and Intentionalised discrimination


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A discriminatory act may be part of the routine behavior of an institutionalized grown which

intentionally and knowingly discriminates out of the personal prejudices of it members.

Isolated and unintentional discrimination an act of discrimination may be unthinkingly adopts the

traditional practices and stereotypes of their society part of the isolated behavior of a single individualunintentionally and unknowingly discriminates against someone because he or she unthinkingly adopts

the traditional practices and stereotypes of their society.

Institutionalized and Unintentional Discrimination

A discriminatory act may be part of the systematic routine of a corporate organization of group that

unintentionally incorporates into its formal institutionalized procedures, practice that discriminate

against women or minorities.

Q What Is Job Discrimination? (2 marks)

Job discrimination is when an employer treats his employee in a negative and illegal manner. There are

laws in place to protect an employee from discrimination, so it is a major deal when an employer's

actions run against such laws. Basically, an employee cannot physically or verbally harassed, denied a

job, fired, promoted, or have his salary decreased, increased because of these anti-discrimination laws.

An employer can even be brought in court for allowing job discrimination to occur in the workplace.

Anti-Discrimination Laws

Anti-discrimination laws protect employees from job discrimination. Disobeying such Iasi is illegal. Title

VII of the Civil Right Act of 1964 states that there should be no employment discrimination based on

color, race, religion, sex or national origin. The Age Discrimination Employment Act of 1967 stipulates

that there should be no age discrimination for individual who are 40 years old or older. There are many

other laws that exist to protect employees.

Q. Who is protected against job discrimination? (2 marks)

Employers are not allowed to treat an employee unfairly or differently based on the employee's sex,

age, race, color, religion, national origin, mental disability, sexual orientation or pregnancy. Examples of

Job Discrimination There are many examples of job discrimination, such as when a woman gets fired

because she tells her boss she is pregnant.

Another example would be when a boss makes a sexual advance, and the person on the receiving end

gets fired for turning the boss down. In addition, when a supervisor promotes a less-qualified person

simply because of his color and race over another person who is more qualified, this too is considered

job discrimination.

Q. What is the remedy for Job discrimination? (2 marks)


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If you truly think there is job discrimination in your workplace, you can report it to a supervisor if you

trust him or her. You can also make a written statement about the incident. Make a copy for yourself,

and have another copy put in your personnel file at work. Make copies of any documents that deal with

the situation. You can contact the U.S. Equal Employment Opportunity Commission (EEOC), whose task

is to enforce all anti-discrimination laws. Their phone number is 1-800-669-4000. One might also consult

a lawyer.

Q. What are the Penalties for Job Discrimination (2 marks)

When job discrimination happens in the workplace, penalties may follow against the employer or

supervisor. In order for this to happen, a person usually goes to court to formally complain against her

company or whoever is personally harassing her. If it is proven that there has been job discrimination,

there are usually compensatory and punitive damages. An employee usually is rewarded monetary

means, and the employer will typically institute stronger policies to make sure that job discrimination

does not happen again.

Q. Describe the affirmative actions against unethical behavior? (12 marks)

Affirmative action is a federal agenda initiated in the 1960's that designed to counteract historic

discriminations faced by ethnic minorities, women and other under-represented groups. To foster

diversity and compensate for the ways such groups have historically been excluded. Institutions with

affirmative action programs prioritize the inclusion of minority groups the employment, education and

government sectors.

The debate on affirmative action in India is long and not always geared to the desired aim and creation

of equality of opportunity. Just like Indian secularism, reservation system in India has always had a

different political aim to make the system more unequal than what it is. Indian secularism, rather than

making the state independent of religion is intended to provide special privileges to certain religious

groups. Similarly it is politically designed to provide restricted rights and not equal rights to some chosen

people.

Then is affirmative action really necessary? Or is reverse discrimination an actual problem? Indian Law

now provides a quota system whereby a percentage of posts are reserved in employment in

Government and in the public sector units, and in all public and Private educational institutions, except

in the religious/linguistic minority educational institutions, in order to mitigate backwardness of the

socially communities who do not have adequate representation also in institutions, to an extent that it is

also seen in the Parliament of India. The central government of India reserves 27% of higher education,

and individual states may legislate further reservations.

Reservation cannot be exceeded 50%, as per the rulings given by the Supreme Court, but in certain

Indian states like Rajasthan which have proposed a 68 % reservation which includes a 14% reservation

for forward castes. The current scope of affirmative action programs is best understood as an outgrowth


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and continuation of our national effort to remedy subjugation of racial and ethnic minorities and of

women.

Affirmative action refers to policies that take gender, race or ethnicity into account in an attempt to

promote equal opportunity. The focus of such policies ranges from employment and public contractingto educational outreach and health programs. The impetus towards affirmative action is twofold; to

maximize benefits of diversity in all levels of society and to redress disadvantages due to overt,

institutional involuntary discrimination.

Classifications in the company in nine categories are: officials and managers, professionals, technicians,

sales: workers office and clerical workers, skilled craft workers, semi-skilled operatives, unskilled

laborers and service workers. Affirmative action policies combat the continuing the continuing effects

through positive measures to achieve more representative distributions of minorities and women within

firms by giving preferences to women and minorities, in hiring, promotions, lay-offs, etc. Reservations

are intended to increase the social diversity in campuses and workplaces by lowering the entry criteria

for certain identifiable groups that are grossly under, represented like gender (women are under

represented), state of domicile (North Eastern States as Bihar and Uttar Pradesh are under-

represented), rural people, etc as revealed by the Government of India sponsored National Family

Health and National Sample surveys.

Some Scheduled Castes do better than others with the system, raising the demand in some quarters for

"quotas within the quota". A particular case in point is the Chamars, historically a leather-working (and

therefore untouchable) caste. In the state of Maharashtra, the Chamars are among the most prosperous

of the scheduled castes. A study found that they were 17 percent of the state's population and 35

percent of its medical students.

Affirmative action is not just quota and reservation but to provide incentive for the poor to stand on

their own feet. Affirmative actions are needed to create equal opportunity and remove discriminations,

but caste and tribe based reservation system cannot do that job.

Reservation system based on caste and tribes cannot provide money to the poor students of the

backward castes to travel to schools or colleges or to buy books or to have a space to study. Severe

poverty exists even among the higher castes and among those who are not qualified to receive the

benefits.

Q. What are the gender issues? (12 marks)

The composition of workforce from the dimension of gender is changing as more women have entered

the workforce over the past decades and percentage of women have taking up supervisory and

managerial ranks have been increased.


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Contrary as a matter of fact, both men and women play a vital role in the development of an

organization. We really cannot emphasize the need or power of any one of the them at a cost of

ignoring the other. It has been seen from times that men have taken over the battle and pulled the

home and work cart alone and effectively, but when there was a need for a woman to shoulder and

partner man with his day to day activities in both the fronts we see that she has definitely proven herself

efficiently. At the same time there is considerable controversy over the "glass ceiling" which is an issue

for women to reach the highest levels of management.

Today women have now a commonplace in many organizations at lower and middle levels of

management. The increased numbers of women in management has focused attention on the

differences between the way that men and women manage, and the differences in which men and

women respond to being managed.

When we speak about modernization: equality, rights, thinking, opportunities etc, gender BUSINESS

Various observations made by studies conducted on Women executives are; in the workplace comes in

as a question that whether it still exists as an issue?

The studies show that women executives, when rated by their peers, underlings, and century it is

increasingly easier for women to work, manage, and take positions of high bosses, score higher than

their male counterparts on a wide variety of measures from responsibility in business, there have been

studies revealing that female managers perform better than their male counterparts in almost every

field. Men and women seem to be doing producing high-quality work to goal-setting to mentoring

employees roughly equally effective jobs, but they approach their jobs differently.

Using elaborate performance evaluations, researchers found that women got higher Women are seen

as only glorified office facilitators and not more tough-minded risk-takers, ratings than men on almostevery skill measured often seen held back from the CEO and such higher job profiles. Male CEOs and

senior vice-

Though men sometimes earned higher marks in some critical areas, such as strategic presidents get

high marks from their bosses when they are seen forceful and assertive and ability and technical

analysis, but overall, female executives were judged more effective lower scored if they were

cooperative and empathic. The gender differences are often small, than their male counterparts and

men sometimes earn higher marks in some critical areas, such as strategic ability and

If option is to choose between equally qualified male and female candidates for a top-technical

analysis. But overall, female executives were judged more effective than their male level job; they say

they often pick the womannot because of affirmative action or counterparts. 'Women are scoring

higher on almost everything we look at," Reasons are many, any particular desire to give the female a

chance but because they believe she will do it might be due to the urge of a woman to prove herself or

that men have taken their works a better job. It's no surprise, then, that some executives


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A CEO of a well known foot-care chain, in one of his discussions says he would choose say they're

beginning to develop a new hiring bias. If forced to choose between equally qualified a woman over a

man, too. Women are more stable, he says, less turf-conscious, and male and female candidates for a

top-level job, they say they often pick a woman candidate, better at "all sorts of intangibles that can

help an organization." Turf guarding implies not because of affirmative action or any particular desire to

give the female a chance but hoarding resources and control. Because they believe she will do a better

job in equal comparisons, they have been continuing.

Most women get stuck in jobs that involve human resources or public relationsposts evidences on

discrimination based on gender in organizations. Sex discriminations may also have a lot of legal

consequences. It is an adverse action taken by one person against another that rarely lead to the top. At

the same time, female managers' strengths have long person that would not have occurred had the

person been of the other sex. Discrimination of been undervalued, and their contributions in the

workplace have gone largely unnoticed that nature in certain enumerated circumstances is illegal in

many countries. Discrimination and unrewarded, based on sex is defined as adverse action againstanother person been of another sex.

Female managers were graded more effective by peers and subordinates, but bosses his or her gender,

or employers pay unequally based on gender. there are alleged non-physical P still judged men and

women equally competent as leaders. "Men and women seem to differences between men and women,

major reviews of the academic literature on gender i be doing roughly equally effective jobs, but they

approach their jobs differently," difference finding a small minority of characteristics where there are

consistent psychological Gender has become an issue due to its varied comparison and the serious and

lethargic differences between men and women, and these relate directly experiences grounded in

approach by the women and the men respectively at each step of their critical assessments.

Q. Explain employees obligation to the firm (8 marks)

Business values are changing and that moral and social responsibilities are now viewed most statistically

significant determinant of malnutrition among young children al by many business managers as

important corporate concerns.

The argument that 'ethics pays' outwardly appears be a plausible position and certainly constitutes an

attractive one, here the explanation as why the economics of ethicsthe apparent shift in managerial

attitudes from 'ethics costs' 'ethics pays' have changed to this extent in recent years.

Business organizations will have established goals to drive the business. To fulfill their goals both

employers and employees will have duties or obligations towards each other as we as towards the

organization. There are many conflicts that arise between interest of the fin, and the interest of the

employees.


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But in the rationale view of the company the employees, main moral duty is to work towards the goals

of the firm and to avoid any activities which might affect the organizational goals. There are various

ways in which the employees might fail to live up to the duty and obligation to achieve of the goals of

the firm.

There are possibilities that employee might act on a conflict of interest. That is, employees might misuse

his or he position for self interest, employees might misuse the organization's funds or employee might

engage himself or herself into commercial bribery. When an employee accepts the employment offer

from an organization he or she generally agrees to perform certain tasks, during certain specified hours

in exchange for financial remuneration.

So this understanding and contract provides basic framework for reciprocate obligations between the

employee and the employer. The intangible side of such understand and employment contract also

demands for the following obligations by an employee to the organization:

1. Act with integrity and high ethical standards at all times,

2. Arrive at work on time

3. Serve client first, firm the second and themselves last,

4. Dress suitably,

5. Preserve the reputation of the firm,

6. Work to the best of your ability,

7. Take additional responsibility and initiation,

8. Respect your employer, colleagues and customers,

9. Help subordinates who report to you so that they can succeed,

10. Take care of your employers property,

11. Work hard and be a team player,

12. Know what your employer expects you to do if you cant be at work for any reason air not

discriminate or harass others in workplace.

13. Treat all people as valuable members of the team,

14. Do not act in a way that puts you or others at risk of injury in workplace.

15. Co-operate with everyone,


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16. Delegate work to the appropriate level.

Q. Express the most important obligation as an employee (8 marks)

a. Loyalty to the company: The employment contract governs employer and employee relationship and

provides a framework for the respective obligations of the employer and the employee. Although some

writers deny that employees owe loyalty to the company, most people find company loyalty as the

important concept. So loyalty requires reciprocity and workers commonly believe that it is up to the

company to earn and retain their loyalty. This compliments the responsibility at both the ends of the

company and the workers to consider loyalty and benefit towards each other.

b. Conflict of interest: There are many instances where the most loyal employees can find that their

interests collide with the organizational interest. In spite of putting efforts to align employees and

organizational interests there are possibilities that the perspectives differ. So this difference ad clash of

goals and desire can take a serious shape of conflict of interest. So conflict of interest arises when

employees have personal connection in the issue. So conflict of interest is a morally risky situation that

is why employees should avoid them in the first place.

c. Financial Investments: Conflict of interest may arise and exist when employees have financial

transactions with suppliers, customers or distributors with whom their organization does business.

Company policy usually determines the permissible limits of such financial investments. There are two

examples which can evidence the situation: Stuti, purchasing agent for trans-con trucking owns a

substantial amount of shares with Timberline Office Works. When ordering office supplies, Stuti buys,

exclusively from Timberline, even though she could get supplies cheaper from another supplier. In this

case Stuti has acted against Trans-cons interest. During Dot Com boom, executives at Hi-tech companies

owned shares from younger companies in the same or related fields. For example, 8 executives at EMCheavily invested in the startup storage networks. They recommended it to their clients and those

referrals quickly grew to 40% of younger companies business. Bus as storage networks got larger and as

EMC expanded its own service division, the two companies found themselves competing. Today EMC

says that the impact of business was negligible. But a former board member says that the 8 executives

were recommending Storage Networks when they should have been pushing EMC equipments.

d. Abuse of Official Position: There are various instances where employees misuse company resources

by billing the company for unnecessary travel, and also misusing subordinates for their self interest. The

use ofones official position for personal advantage creates moral concerns and questions because of

the chance that one is violating the others obligation to the firm. One of the ways by which the positioncan be misused is by Insider trading. The insider trading is buying and selling of shares based on the

information that has not yet been made public and is likely to affect the price of the shares. Inside

traders defend their actions by claiming that they don't injure anyone. It is true that trading by insiders

on the basis of non-public information will not affect directly anyone but moral concerns arise from such


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action. There are also various issues in the abuse of official position like Safety of propriety data,

patented or copy-write information and trade secrets.

e. Bribes & Kickbacks: Business values are changing and that moral and so one expert's Definition: A

practice in which employees inform the responsibilities are now viewed by many business managers asimportant agency about certain organization activities might that concerns.

Bribe: A remuneration for the performance of an act that is inconsistent with the Pat contract or the

nature of assigned task can be money, entertainment, gifts preferential treatment.

Kickback: A form of bribery that involves a percentage payment to a person who is able to influence or

control source of income.

Gifts & Entertainment: Gifts and entertainment are familiar in business practice and customer relations

worldwide.

Offering gift or taking person out for part: entertainment no doubt build better relationships but the

moral issue is questionable and also they can raise conflict-of-interest problems So knowing where to

draw line is not always easy to differentiate bribe and gift.

Seven factors that a conscientious businessperson should consider while offering receiving gift;

1. The value of the gift (or entertainment).

2. Its purpose.

3. The circumstances under which it is given.

4. The position and sensitivity to influence of the person receiving the gift.

5. Accepted business practices in the industry.

6. Company policy.

7. What the law says.

So it is always important to understand the above factors and check whether it falls off the track of

organizational code of conduct.

Q. What is Whistle-Blowing (2 marks?)

An employee's informing the public about the illegal or immoral behavior an employer or an

organization. Whistle blowing in an organization refers to disclosure by former or current employee any

illegal, immoral or illegitimate practices involving the employees.


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Often, whistle-blowers are motivated by a sense of professional responsibility. able to influence or

control a source of income. Hence companies should have establish when is it justified? I. standards to

control these practices. -

Whistle blowers are defined as persons who sound an alarm from within the very Above all, these canaffect- the business performance in the competition. organization in which they work aiming to

spotlight, neglect or abuses that threaten the public interest. e.

Q. Explain the Employment Law and Duties to One's Former Employer (8 marks)

When starting a company, many entrepreneurs believe that the end justifies the means, and may relax

bout fulfilling obligations to former employers. However, the fastest way to put startup out of business

is to sue it for violating duties to a former employer.

Even if no duties ere breached, such a lawsuit could result in over $100,000 as legal fees. There are two

types of duties to former employers; those that arise from tort law and those at arise from contract law.

Under agency law (tort law) there are three duties that an employee owes the employer

1. Duty of loyalty - the obligation to act only in the interest of one's employer and not to compete with

one's employer. Even if one is working on one's own project at home in the evening using one's own

computer and equipment, the project may constitute a breach of loyalty if it competes in the same line

of business as that of the employer.

2. Duty of obedience - the obligation to obey all reasonable orders of one's employer. An act of

insubordination is a violation of this duty.

3. Duty of care - lack of performance is a violation of this duty.

Q. Explain the firms duties to the employees & rights of the employees (8 marks)

An employer's main responsibility is to make sure that the workplace is safe and that anyone

working in or visiting the workplace is not exposed to hazards or harmed by the work.

For example, the employer must:

make sure that work areas, machinery and equipment are kept in a safe condition.

organize ways of working safely.

provide information, instruction, training and supervision of employees so they can work safely.

Duties of Employers:


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a. Timely and regular payment of wages and salaries or compensation. The non-competition clause is

enforceable, and its one-year duration is reasonable.

b. Proper working conditions and welfare amenities considering better job satisfaction Reasoning and

working environment. In the presentation of the employment contract on September 9, while it mayhave

d. Opportunity for better career prospects.

e. Job security as well as social security like facilities of provident fund, group insurance, pension,

retirement benefits, etc.

f. Better living conditions like housing, transport, canteen, crches etc. with adequate health and safety

measures.

g. In order to avoid job dissatisfaction and boredom, jobs must be expanded with ski' diversity, task

identity, task significance, autonomy and feedback.

h. Timely training and development thus enriching the employee job profile and creative better growth

prospects.

Q. Explain need for organizational ethics programs (8 marks)

Employee rights are any rights which refer to the status of being an employee. These rights may be

moral or legal. The employee's rights are broadly classified as follows;

It's not all about winning the game but it's about playing it well. Organization have certain Professional

rights such as the right to disobey the unethical instructions and dues, principles, code of conduct,

ethical behavior, short and long run objectives etc which rights to express their dissatisfaction on the

company policies without any bad effect to be met effectively and efficiently by each employee of the

organization.

The employee is from the employer side. It also implies all the basic human rights which are reasonable

to consider both the individual and the organizational interests in mind before taking any action or

decision.

This decision making ability is not an instant process. It is highly influenced to the employment situation

such as the right of not to be discriminated against, by one's background, environment, thinking style,

schooling, colleagues, atmosphere, likes Institutional rights which occur safely out of an employee's

contracts created and dislikes, tastes and habits and above all his view towards future and aim in life.

For this organizational policies or contracts. These rights are considered as "Contract it having a

unanimous thought and system of work is very essential.


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The style of work of their previous organization is usually "Non Contractual Employee Rights". These

rights can occur even if not formal seen influencing the new work also. It is not always wrong but cannot

be right also all the recognized in the specific contracts or company policies.

For this an organization needs to have an ethics program for its employees so that a right to chooseoutside activities, right to employer confidentiality, right to due prom common culture is floated and

updated gradually and timely

Business ethics implies the application of general ethical rules to the behavior of business which

functions and operates Within the society and should contribute to its welfare in order to survive, excel

and have a loyal customer base. In this era of increasing competition and profit maximization,

businesses Sick leave, annual leave, public holidays, family leave and long service leave.

The rights of employees can also be represented as; Employees are entitled to:

Be paid the right wage for the job they do;

Protection from unfair dismissals;

Freedom to belong to or not belong to a union.

Duties of employees can be represented as;

Employees are expected to:

Arrive at work on time

Dress suitably for the job (wear safety equipment if required);

Work to the best of their ability throughout their work day;

Respect their employers, colleagues and customers;

Take care of employer's property;

Follow the employer's 'reasonable and lawful' instructions;

Obey safety rules;

Ask for help if they need it;

Know what the employer expects the employee to do if the employee can't be at work for any reason;

Not discriminate or harass others in the workplace; and

Not act in a way that puts the employee or others at risk of injury in the workplace.


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Q: Managing Ethics is a Program in itselfComment (8 marks)

Managing Ethics is thus quite beneficial towards individual and organization development. The ladder

towards the achievement of the desired objectives is worked out implemented in uniformity both in

terms of thoughts and actions by the organization. Organization is incorporated with an objective ofprofit making and success.

1. Managing ethics is a process: Ethics is a matter of values and associated behaviors where values are

discerned through the process of ongoing reflection. Therefore, ethics programs may seem more

process-oriented than most management practices. It is a continuous process which needs to be

identified and rectified at each step and each time rather being a one which is laid down once for all and

left at the option of individuals for any further R&D. Managers tend to be skeptical of process-oriented

activities, and instead prefer processes focused on deliverables with measurements. However,

experienced managers realize that the deliverables of standard management practices i.e... planning,

organizing, motivating, controlling, are only tangible representations of the very process-oriented

practices. For example, the process of strategic planning is much more important than the plan

produced by the process. The same is true for ethics management. Ethics programs do produce

deliverables, e.g., codes, policies and procedures, budget items, meeting minutes, authorization forms,

newsletters, etc. However, the most important aspect from an ethics management program is the

process of reflection and dialogue that produces these deliverables. It needs a minute and a critical eye

of inspection at each step to make the process gradual and successful.

2. The bottom line is to accomplish preferred behaviors in workplace. As with any management practice,

the most important outcome is individual behavior which is expected and preferred by the organization.

The best of ethical values and intentions are relatively meaningless unless they generate fair and just

behaviors in the workplace. That's why practices that generate lists of ethical values, or codes of ethics,

must also generate policies, procedures keeping would be obtained, the time duration or the course

tenure and the ways of achieving the not only lay down what is to be achieved by an employee or

expected of him but also how it and training that translate those values to appropriate behaviors.

It is to be understood that mere teaching is not enough, same.

3. Avoiding repeated occurrences is the best way to avoid dilemmas: That's why Practices such as

developing codes of ethics and codes of conduct are so important.

4. Make ethics decisions in groups, and make decisions public, as appropriate It is always ideal to make

decision related to ethics and principles or the organization in group unanimously considering the key

members and valuing the experiences and contributions individuals towards the organization.

. 5. Integrate ethics management with other management practices: There has to be a perfect match

between laying of the ethics management and the other management practices in the organization.

Once what is to be achieved is cleared.


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6. Cross-functional teams can develop and implement the program better: the process of developing the

ethical management program and implementing it in organization its vital that the organization's

employees feel a sense of participation ownership in the program if they are to adhere to its ethical

values

7. Value forgiveness: This may sound rather religious or preachy to some, but it's probably-the most

important component of any management practice. An ethics management progress, may at first

actually increase the number of ethical issues to be dealt with because people a' more sensitive to their

occurrence.

8. Trying to operate ethically and making mistakes is better than not trying at all Some organizations

have become widely known as operating in a highly ethical manner, e.g., Ben and Jerrys, Johnson and

Johnson, Aveda, Hewlett Packard, Infosys, Tata etc can be named as a few. Unfortunately, it seems that

when an organization achieves this strong public image, it is placed on a pedestal by the critics and

competitors

Q. Explain the Importance of ethics in an organization (8 marks)

Ethics programs cultivate strong teamwork and productivity as they align employee behavior with

those top priority ethical values preferred by leaders of the organization.

Attention to business ethics has substantially led to an improved society.

Ethics programs help maintain a moral code in turbulent times.

Ethics programs protect and lead to improvement in reputation of the organization by creating an

efficient and productive work environment.

In times of mass corporate downsizing one of the most effective ways to appeal to the fragile loyalty of

in secured employees is to promote an ethical culture which gives employees a greater sense of control

and appreciation.

Ethical Decision Dilemmas Managers on many occasions come to a crossroad regarding ethical issues

and available Choices. The dilemmas come in the areas of clash of interests, choice of ethical line,

conflicting interpretations or view points and legal boundaries.

To solve ethical dilemmas of this type a few suggested steps could be

See the facts from birds eye view: Collect appropriate data and see from top how the pattern emerges.

Do not see from any one side or with coloured glasses.

Keep track of company vision: Set norms and values, winning strategies away from company. Plan and

follow strategies of economic survival and growth in line with the company's ethical vision and integrity.


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Calm and composed: Use enough force to any unethical situation. Over reaction or more force may

not give desired results bringing reaction and more unethical acts.

Punish the unethical practices: The guilty are given due punishment so that it becomes deterrent to

others.

Preventive Measures: Educate the good returns of the ethical behavior and encourage ethical acts.

Publicity: Unethical practices should be located and punished. Give publicity of such punishments of

unethical activities. Advertisement brings pressure on people of doubtful integrity.

Q. What is Code of Conduct (8 marks)

There is always debate that whether honest business is good business and most of the organizations

spend lot of resources on crafting code of conduct for the organization. Code of conduct is also known

as "Code of Ethics" which is a formal document which establishes behavioral expectations for the

company and the employees working in the organization

Code of conduct is statements of rules. They are typically comprisal of a list of rules stated either

affirmatively or as prohibitions. The companies with a set of values aspire to operate under ethical rules

of operation which helps the companies to manage complex issues and crisis.

Code of Conduct are statements or rules given about what one must do one must not do in a company.

It states 'this is how we expect an employee to behave or conduct himself'. D be well defined and in

simple words so that all in the organization understand, follow and there' 1 is no confusions or space for

ethical behavior to evaporate.

Values, ethics and moral principles are essential in a work place. Each organization adopts or follows a

set of these which should

Typical codes of conduct is a set of rules listed as laws of the company prohibiting some actions.

Penalties for violation of rules are detailed. Potential conflicts or resolutions are given with guidance.

It is a view of ethics showing what is not to be done and consequences of wrong work. An ethical

culture can develop with mutual trust, mass contact and popularity of Top leaders in a company

The sincerity of the top management in its declared ethical codes is seen by all employees.

Employees do not believe in what is written on the papers. An ethical team can be built in e; company

where all the members dream together, work together and progress together ill changing times.

Parameter for professional conduct which comprise the ideology and honest values of an organization

or profession.

Set of guidelines that aim to uphold a fair and positive behavior.


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Standards channeling workers when they encounter moral dilemmas and crisis.

Integrity of the profession which inculcates rational and responsible practices.

Codes of conduct are actions in the workplace and contain examples of appropriate behavior to be

meaningful.

Business guiding principles portraying ethical paradigm an employee's conduct.

Created to control actions in consistency to what is deemed by the company as blameless according

to their ethical standards.

Organizations establish their Code of Conduct but mere creation and implementation of the corporate

code of conduct do not assure the efficiency and usefulness of the codes.

The corporate code of conduct must be part of integrity. It is only through complete understanding of

the purpose of following the code of conduct is taken seriously and respected by the employees,

consumers, and the government and the industry as a whole.

Q: Explain the benefits and Importance of Code of Conduct (8 marks)

Benefits & importance of Code of Ethics: Business organizations face enormous challenges as business

environment is dynamics

Organizations emphasizing on ethical culture are helping to protect the company and its employees

from various challenges and scandals which can affect employee morale. Much recent studies show that

majority of people want to work for an ethical organization and eve they are willing to accept lower

salaries as long as the company is ethical.

Organizations are under scrutiny from both industry and government regulations. There are many

reasons explaining why organizations should have code of conduct

To define accepted/acceptable behaviors;

To promote high standards of practice;

To provide a benchmark for members to use for self-evaluation;

To establish a framework for professional behavior and responsibilities;

As a vehicle for occupational identity;

As a mark of occupational maturity;

Companies which are committed to a code of ethics will enjoy key benefits like:


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1. Less Risk - With more focus on ethical behavior, companies will not have to won. about falling out of

compliance. Their culture will ensure that violations of the code of ethic are reported, and issues are

identified and managed before they turn into major problems.

2. Less Fraud - With the appropriate code, enforcement and training in place, companies can help todetermine fraud and stop it before it turns into major scandals.

3. Less Litigation -By creating an ethical culture, there will be few situations whet issues or problems will

lead to litigation.

4. Happier Employees help to improve Bottom Line- Happy employees add to the bottom line, are more

productive, more loyal to the organization and are more investment personally in helping the company

to be successful.

Q How to develop a Code of Conduct? (8 marks)

The nature and size of the organization differ and if organization is large with many departments and

various business profiles it is challenging to develop code of conduct. The organization has to develop an

overall corporate code of conduct, and then a separate code to guide each department. Following

guidelines can be followed while developing code of conduct:

1. Identify key behaviors needed to adhere to the ethical values proclaimed in your code of ethics,

including ethical values derived from review of key laws and regulations,{ ethical behaviors needed in

your product or service area, behaviors to address current issues in your workplace, and behaviors

needed to reach strategic goals.

2. Include wording that indicates all employees are expected to conform to the behaviors specified inthe code of conduct. Add wording that indicates where employees can go if they have any questions.

3. Obtain review from key members of the organization.

Be sure your legal department reviews the drafted code of conduct.

4. Announce and distribute the new code of conduct (unless you are waiting to announce it along with

any associated policies and procedures). Ensure each employee has a copy and post codes in each

employee's bay or office.

5. (Note that you cannot include preferred behaviors for every possible ethical dilemma that might

arise.)

6. Examples of topics typically addressed by codes of conduct include: preferred style of dress, avoiding

illegal drugs, following instructions of superiors, being reliable and prompt, maintaining confidentiality,

not accepting personal gifts from stakeholders as a result of company role, avoiding racial or sexual

discrimination, avoiding conflict of interest, complying with laws and regulations, not using


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organization's property for personal use, not discriminating against race or age or sexual orientation,

and reporting illegal or questionable activity.

Go beyond these traditional legalistic expectations in your codes adhere to what's ethically sensitive

in your organization, as well. (Note that, as with codes of ethics, you may be better off to generate yourown code of conduct from scratch rather than reviewing examples from other organizations.)

Q: How to resolve Resolving Ethical Dilemmas? (2 marks)

Perhaps too often, business ethics is portrayed as a matter of resolving conflicts in which one option

appears to be the clear choice. For example, case studies are often presented in which an employee is

faced with whether or not to lie, steal, cheat, abuse another, break terms of a contract, etc. However,

ethical dilemmas faced by managers are often more real-to-life and highly complex with no clear

guidelines, whether in law or often in religion.

As noted earlier in this document, Doug Wallace, Twin Cities-based consultant, explains that one knowswhen they have a significant ethical conflict when there is presence of a) significant value conflicts

among differing interests, b) real alternatives that are equality Justifiable, and c) significant

consequences on "stakeholders" in the situation.

An ethical dilemma exists when one is faced with having to make a choice among these alternatives.

Real-to-Life Examples of Complex Ethical Dilemmas: "A customer (or client) asked for a product (or

service) from us today. After telling him our price, he said he couldnt afford it. I know he could get it

cheaper from a competitor

Q: Give an account of ethics training and communication (12 marks)

In this chapter we have already discussed about what code of conduct is and why the code of conduct is

important. Creating code of conduct is one dimension and implement code of conduct is other

dimension for success of its expected result.

Code of ethics training is the most important way of implementing the ethics guidelines in an

organization and great organizations give lot of emphasis on training employees on its ethical practices.

code of conduct, which is a standard, is extremely necessary in order for the business to survive Because

of which most companies assign budget built primarily to create a feasible code conduct training in

order to teach the employees the right and moral thing to do within context of professionalism and

corporate rules and regulations.

Exclusive and focus departments are established in order to carry out this training. The training is

offered everyone in the company, irrespective of their grade has to undergo the ethics training. All of

the times it is carried out once in a year and every manager keeps a track of its employees

Following are the characters and benefits:


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It provides an important means for achieving needed consensus and structured, it increases employee

awareness of ethical issues.

Expands the scope of their personal awareness, and sparks their imagination of the consequences of

non-compliance. Ethics training is beneficial for instilling the continual application of the organization'scode of ethics in an everyday business environment.

Ethics training offers a mechanism for communication and problem solving to lead workers through

the resolution of complex issues that may emerge from conflicts of interest.

Ethics training should help cement the guidelines and parameters for employees and management to

follow when exercising discretion, while clearly defining boundaries, limitations and expectations within

the walls of an organization. or any mishaps by the company, either the company or its employees are

responsible. Ifemployees are well trained on the ethics training the chances of mistakes will reduce.

So duce such errors and enhance effectiveness of training company must follow the points ted below;

Train all employees on the code of ethics.

Ensure 100 % compliance to the process

Penalize employees for not attending the training when properly

Identify ways of investigating why was the training not taken by employees (if they miss it)

Last, and the important part is to handle employee complaints with seriousness.

The company needs believe that an every employee that they recruit in their company is e real image ofthe company. The Ethics Resource Center's (ERC) 2007 National Business Ethics employees. Some

advantages of undergoing the ethics training: than 40 percent of employees are aware of

comprehensive ethics and

The employees will get a clear message reducing ethical violations.

The same behavior which is harmful will not be repeated again. It will encourage the reporting of

the violation if any.

It will instill positive ethics and values on employees.

Develop positive relationships by training employees and owners of the comp& on the codes of

conduct which will definitely inspire all employee and employ relationships.

Promotes industrial peace with fair treatment promoting not only equity also goodwill and harmony. If

all parties accept their respective responsibility and duties with open kindness and generosity gaining

absence of conflicts disputes in labor-management relations.


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Be realistic in setting values and goals regarding employment relationship ' competitiveness. What is

needed in today's complicated times is for more organizations to step forward and operate with strong,

Insure that a whistle-blowing and/or ethical concerns procedure is establish

Do not promise what the organization cannot deliver.

Communicating with employees on a more personal level may be more effective whether directly to a

specific department, to a project team or to an individual. O The goal of communications is to make

ethics a live, ongoing conversation.

Ethics is something that is constantly addressed, referenced frequently in company meetings and in

personal conversations among managers and employees, then people are more aware and more willing

to defend the company's policies when they see or hear of problems.

Q: Explain the considerations while enforcing the code of conduct (8 marks)

A few Instructions to consider while enforcing ethical standards: When the Enron scandal exploded

there were murmurs about a link between declining business ethics in Blue chip companies and the

ascendancy of MBA's. Now a management

Policies should clearly and thoroughly explain ethics and a worker's obligations a guru has gone on

record that the word excesses of business practices have emerged from B how a worker could resolve

moral dilemmas is an important part of establishing the Schools. Fallout of the simplistic models of

human behavior based on self maximizing utility code. a creation of a morale vacuum in corporate

houses, which has lead to a proliferation of i Discuss situations with employees and issues centered on

ethical issues that might bi, Enron type scandals. Anyone familiar with business goals would be aware of

their overt reliance encountered and how employees should address them. ! on jargon and models. This

means that E-School graduates come armed with a bag full of

Inform the workers the sanctions that will be imposed for violating the code ofethics: smart ideas but

little knowledge of ground reality. When this callow MBA's are recruited for . ., astronomical salaries and

asked to run entire departments, it is quite natural that they give Depending on the violation, these

sanctions can include a letter of reprimand, dismiss/ . and possible criminal chargers or civil lawsuits.

The only thing that motivates these young MBA's is the profit curve. Already some top American B-

Schools like Harvard and Stanford have introduced

Post the code of ethics in the workplace to serve as a constant reminder of a personal ethics classes

into their MBA courses. There is also a move to make business ethics compulsory ethical obligations and

the repercussions that come along with violating the rules. in all accredited US B Schools. Along with this

cosmetic changes in the syllabus there must


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Form a code of ethics committee that will meet with executive-level staff who have also be a

fundamental rethink in the content of MBA courses. Only then can one expect an exemplary

performance records and explain to them the group's Purpose.

Explain the employees on protocol for reporting questionable ethical behavior.

Conduct a hearing before the ethics committee and rule complaints of unethical and ethical

evaluation so that a careful analysis reveals an underlying dilemma

Engaging students mind in ethical issues is a powerful way to build an ethical character and there can be

no place more appropriate than the universities so that students become actively aware of the ethical

nature and the decision making process. They also learn and understand that they no longer acceptable

to bend the rules in order to succeed. The creation of this ethical culture will produce graduates with

higher ethical standards as they enter public and private professions. In the workplace these dilemmas

are complicated and require re-decision making. Hence a strong ethical base has to be developed prior

to entering the professional lives. A well formed strong moral foundation with ethical frame work along

with ethical theories, case studies, discussions and different perspectives of ethics has to be developed

in the classroom environment.

Q. What is Ethics Audit (12 marks)

In business ethics is the behavioral expression of the company's values. These values always exist,

irrespective of whether the business consciously recognizes them or not. Public statements of corporate

values are gaining popularity, but such documents are not always reflected in organization behavior.

Publishing an organization's values is a first stage of process which ensures that values are promoted,

embedded and integrated into everyday activities and organizational behavior. Yet rarely do we find an

organizations ethical performance monitored to provide feedback on its progress. But the actual values

of business determine ethical performance. Exploring the gap between rhetoric and reality can highlight

ethics dilemmas and unethical conduct. An organization benefits from understanding this gap. Ethical

audit is a new technology which is coming to limelight and developed gradually

Ethical auditing is a process which measures the internal and external consistency of organization's

values base. The key points are that it is value-linked, and that it incorporates: a stakeholder approach.

Its objectives are two-fold, Accountability and Transparency toward stakeholders and it is intended for

internal control, to meet the ethical objectives of the organization. Of late many companies have

appointed a senior manager with dedicate responsibility for promoting ethical behavior throughout the

company to examine the state of company's ethics and conduct. They include external societal

pressures, risk management stakeholder obligations, and identifying a baseline to measure future

improvements. In soul cases, companies are driven to it by a gross failure in ethics, which may have

resulted in costly, legal action or stricter government regulation.


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More often, however, companies choose to do simply because it is right, it is important, and because it

is likely to bring business benefits Through ethical audit it enables the company to see itself through a

variety of lenses an captures the company's ethical profile. Companies recognize the importance of their

finance profile for their investors of their service profile for their customers and of their profile as

employer for their current and potential employees. An ethical profile brings together all the factors

which affect a company's reputation by examining the way in which it does and intend to do business.

By taking a picture of the value system at a given point in time it can:

Clarify the actual values to which the company operates - Provide a baseline by which to measure future

improvement - Learn how to meet any societal expectations which are not currently being met

Give stakeholders opportunity to clarify their expectations of the company's behavior - Identify specific

problem areas within the company - Learn about the issues which motivate employees - Identify general

areas of vulnerability, particularly related to lack of openness

An audit is an evaluation and assessment of procedures and documentary records in order to find out

whether certain norms are followed or not. An audit thus makes a post-fact analysis and examination of

the actions, decision and working. Ethics audit is the audit of ethical practices. It is conducted to check

whether the business practices and functions of the organization are in tune with the ethical principles

and norms of conduct. It traces the ethical awareness, enlightenment and behavior of the organization.

Ethical audit is conducted in respect of internal as well as external factors. Internal ethical audit checks

out the ethical impact of the decisions and actions of the managerial and other personnel on the

employees, shareholders of the company and ethical standards and norms.

External ethical audit checks out the impact of the working of the company on natural environment.

Ethical audit thus makes the company to introspect and inspect its ethical sensibility andresponsiveness. We use the term 'ethical accounting' to refer to the process in which data is gathered

with regard to the organizational values.

Multinational companies face special issues in relation to ethical auditing. Executives of such companies

are well aware of the added complications while operating across a number of cultures. One of the

issues which most concerns multinationals is that of corruption. How to do business in countries where

backhanders are expected in the common course of events? This is an area where executives might like

to set themselves the publicity test - how would I feel if my behavior were headlined in my city's local

newspaper? How would I feel if my family knew about it?

Working practices and human rights are other major areas of concern. Some companies make a

principled withdrawal from countries where they could otherwise manufacture profitably, because they

are not prepared to work within that regime.

Companies alone cannot right all the evils of society. Many of the decisions they have to take are not

ideally right or ideally good answers. What matters is that they should have a clearly thought out


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framework of values and that these values should be consistent wherever they operate. A multinational

company must test its values across all its areas of operation, if it wants the findings of its ethical audit

to be comprehensive and provide the greatest Payback in terms of identifying potential areas of

vulnerability to consumer pressure. This is also giving rise to Pressure groups, which are growing more

professional and more vociferous.

If the past unethical behavior by a company might have been kept quiet by Skilled public relations

people, there is now greater likelihood that someone within a company will alert the relevant pressure

group (loyalty to employers being lessened, and concern for y the public good being greater) and that

the pressure group will succeed in generating significant Publicity about the incident. One of the

greatest benefits of the ethical audit is that it assists the company to scan the environment to identify

the issues which are most likely to provoke action by pressure groups, and in turn gives the company the

opportunity to encourage such groups to participate in the decision making process, or at the very least

to inform them fully of the company's position.

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