BUSINESS ETHICS

Moral principles of duty and virtue that prescribe how we should behave; the foundation of our internal control.

Integrity Responsibility Respect Fairness Excellence

Objectives of Ethics Study of human behaviour and makes evaluative assessment

about that as moral or immoral. Establishes moral standards and norms of behaviour. Makes judgment upon human behavior based on these

standards and norms. Prescribes moral behaviour and makes recommendations

about how to or how not to behave.

Ethics will be different at different levels At the basic level, it is about discipline, i.e.. to maintain punctuality, coming to work on time, behaving properly with superiors,

colleagues and subordinates and not wasting time during working hours. At the top level, it is about commitment and Protecting the interests of the organization.

Factors Influencing Ethics

Individualo Values o Work Background o Family Status o Personality

OrganizationaloTop Level Mgmt. Philosophy oThe Firms Reward System oJob Dimensions

EnvironmentaloCompetition oEconomic Conditions oSocial/Cultural Institutions

Sources of Ethics

1.2.

Genetic Inheritance : the qualities of goodness is a product of genetic traits strengthened over time by the evolutionary process.Religion : religious morality is clearly a primary focus in shaping our societal ethics.

3.4. 5.

Cultural Experience : individual values are shaped in large measure by the norms of the society.The legal system : laws represent a rough approximation of societys ethical standards. Codes of Conduct : three primary categories of codes, a) company codes, b) company operating policies, c) codes of ethics.

Code of Ethics American Marketing Association

Responsibilities of Marketer : a) not to do harm knowingly, b) to adhere all applicable laws and regulations, c) the accurate representation of their education, training and experience, Honesty and Fairness : a) being honest in serving consumers, clients, employees, suppliers, distributors and the public. b) no knowingly participating in conflict of interest without prior notice to all parties involved, c) establishing equitable fee schedules including the payment or receipt of usual, customary and/or legal compensation for marketing exchange.

Code of Ethics American Marketing Association

Rights and Duties of parties :

a) products and service offered are safe and fit for their intended use, b) communications about offered product and services are not deceptive, c) all parties intend to discharge their obligations, financial and otherwise, in good faith,

There is a big difference between what you have a right to do and what is right to do.

Its not about what we say, or intend, nor is it simply a written code or a framed credo.

FAIRNESS Process Impartiality Equity CARING The heart of ethics It is scarcely possible to be truly ethical and yet unconcerned with the welfare of others

CITIZENSHIP Duties that prescribe how we ought to behave as part of a community.

Foundations of Ethical Behavior

Treat others as you would be treated : Respect Honesty Trust

Taught in All CulturesJudaism: What you hate, do not do to anyone. Islam: No one of you is a believer until he loves for his brother what he loves for himself. Hinduism: Do nothing to thy neighbor which thou wouldst not have him do to thee. Sikhism: Treat others as you would be treated yourself. Buddhism: Hurt not others with that which pains thyself. Confucius: What you do not want done to yourself, do not do to others. Aristotle: We should behave to our friends as we wish our friends to behave to us. Plato: May I do to others as I would that they should do unto me.

TREAT PEOPLE THE WAY YOU WANT THEM TO TREAT YOU

Ethical Issues Relating to Business

Honestycommunication and behavior consistent with factsDisclosure of information Promises/commitments Laws and professional standards Representation of others like shareholders

Unfair competitionRefrain from bribes and excessive gifts Comply with anti-trust laws

Just compensationRespect intellectual property Treat employees fairly

Respecting rights of othersTreat others with fairness and respect regardless of age, religion, ethnic group, sex, economic status, etc., especially children, women, and subordinates Respect others and future generations by treating the environment well

Values are important beliefs and desires that shape attitudes and motivate actions.

2000 Josephson Institute, Ethics in the Workplace

Values

Values are general terms referring to those things which people regard as good, bad, right, wrong, desirable, justifiable etc. Business is driven by values. Managerial values are e.g. importance of good in organizations (like productivity, profit maximisation, employee welfare, industry leadership, organisational stability, organisational efficiency, organisational growth, social welfare etc.), groups within organisations ( like employees, customers, co-workers, superiors, subordinates, stock-holders etc.) and the personal goals of individuals.

Core Values Honesty Being straightforward, sincere, truthful, free of fraud,

deception or misrepresentation

Respect To give particular attention to, show consideration for, or

hold in high or special regard Responsibility Moral Leaders take responsibility for their own

actions/failures . Involves a commitment to give a quality performance and not making promises that cannot be kept, such as committing to unrealistic delivery dates. Also calls for acknowledgment of implicit commitments, such as the protection of confidences Fairness Involves a elimination (or at least a minimization) of one's

own feelings, prejudices and desires, so as to achieve a proper balance of conflicting interests.

Relevance of Values in Managers1. Knowledge of business ethics will help managers in resolving ethical issues/dilemmas as they arise.

2. Knowledge of values will help managers in setting highly responsible tone for the organization - in individual judgments and decisions whether ethical or not.3. It helps manager to realize their social responsibility. Many organizations find it wise to go beyond their primary mission and take into the needs of the community. Business ethics make managers more accountable for social responsibility. 4. Knowledge and awareness of the concept and practices of business ethics is equally helpful to practicing managers in managerial conduct and decision-making.

Types of ValuesVALUESTERMINAL INSTRUMENTAL

refers to desirable end-states of existence, the goals that a person would like to achieve during his/her lifetime.

refers to preferable modes of behavior, or means of achieving the terminal values.

Importance of Values1. Values lay the foundation for the understanding of attitudes and motivation because they influence our perceptions. 2. Individuals enter organizations with notions of what is right and wrong with which they interpret behaviors or outcomes 3. Values generally influence attitudes and behavior. Does your values match with your Job/Organization? How you will react?

Professional ValuesWorking within the laws of India Serving with competence excellence efficiency objectivity impartiality Continual improvement of quality of service, Respecting all stakeholders

Ensuring proper, effective use of company money

Ensuring the means are as important as the ends

Upholding transparency in functioning while respecting confidentiality

Ethical ValuesConserving, public trust in the integrity, objectivity and impartiality of government Resolving official duties vs private interest conflicts in favour of the public interest

Acting at all times in such a way as to uphold the public trust

Taking all decisions in the public interest

People ValuesExercising authority and responsibility with respect for human dignity Demonstrating respect, fairness courtesy in all dealings with citizens and fellow public servants Leading by participation, openness and communication, with respect for diversity

Treating people with fairness and civility at all times

Basing appointment decisions on merit

Fundamental in recruitment evaluation promotion

Drivers of Values & Ethics PerformanceRESULTS Leadership People

Achieving High Levels of Values and Ethics Performance

Drivers

Organizational Culture Risk Assessment,Controls Standards Preventing and Managing Values and Ethics Problems

The Three Pillars of High PerformanceAchieving high levels of positive values and ethics performance for an organization involves three foundation pillars:Leadership

Organizational CulturePeople Management

Achieving high levels of ethics and values performance can lead to higher levels of public trust and confidence.

Shared Values

Integrity

Doing the right thing when no one is looking

Fairness (Safety & Trust)

Individual & Collective AccountabilityTo ourselves & our profession To each other To management To the Laboratory

Respect and Appreciation for the individualOnes expertise Ones opinion A persons uniqueness Reciprocal generosity -We encourage responsible & informed risk taking (judgment)

Why Ethical Behavior Adds Value Better information Trust from investors Better allocation of resources Customers will be more loyal

Fair competition Lowers cost of business in economy Leads to better decision-making (do whats best for

firm, not one individual) Improves competitive nature of a coun