BUSINESS ETHICS Prince Dudhatra 9724949948

8/7/2019 BUSINESS ETHICS Prince Dudhatra 9724949948

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prince dudhatra-9724949948


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Introduction to business ethics



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Ethics

Derived from the Latin word ethicus

and Greek word ethikos which means

character or manners.

It is the science of moral, moral

principle and recognized rules of

conduct.



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Business ethics

It is defined as the normative study of

moral standards as they apply to

business policies, institutions andhuman behavior.

It becomes a part of study in 90s due to

certain factors like financial scandals.



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Approach for studying business ethics

Descriptive

Prescriptive

The conceptual study of ethics



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Importance of ethics in business

Essential for long-term success in

business.

True from both a macro and microperspective.

The market system leads to a more

efficient way of allocating resourcesthan any command system.



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Market system

It includes:

1.The right to own and control private

property.2.Freedom of choice in buying and

selling goods and services.

3.Accesses to quick, reliable, andprecise market information.



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Unethical behavior from a macro

perspective

Bribery

Coercive acts

Deceptive information

Theft

Unfair discrimination



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Macro perspective-Ethics and Trust

Trust in supplier relations

Trust in customer relations

Trust in employee relations



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Nature of business ethics

Business ethics has a five-part structure:

1. The specification of moral judgement.

2. Moral judgment and the moral standard.

3. Justification of moral judgement.

4. Logical reasoning and moral judgement.

5. Moral judgment and moral responsibility.



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Requirements for moral judgments

Moral judgements should be logical.

Moral judgements should be based onfacts.

Moral judgements should be based onacceptable moral principles.



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Scope of ethics

The scope of ethics is very wide.

A theory of moral ideal.

Principle of human behavior.



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Need for ethics

It is important to keep a check on the

corrupt management.

To determine the moral value of a conduct

not nearly by the motive but also by the

means adopted .

Ethics is needed in the fields of trade,

commerce and finance.



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The need to go beyond ethics

To get rid of phenomena like corruptionand dishonesty.

To maintain the mental and moralpowers with the external powers.

The two ways to go beyond ethics are1) science and technology .

2) spiritually.



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Values are guiding constructs or ideas,

representing deeply held generalized

behaviors, which are considered by the holder

to be of great significant.

To ensure that employees can and will act with

integrity .. Organization need a strong andconsistent set of values that dictate appropriate

individual actions.



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Values

What are the core values that are fundamentalto the success of any individual or organization?



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VALUES

Honesty

Respect

Responsibility

Fairness

Compassion

Perseverance

Courage



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Values - Honesty

Honesty

Being straightforward, sincere, truthful, free of fraud,deception or misrepresentation.

Transparency

To be open, honest and available, to provide clear,accurate, and understandable information(e.g. in thecontext of financial disclosures). Some ethicists haveargued that ethical business practices are bestmeasured by a companys character and commitmentto transparency than by their social vision.



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Values - Honesty

Honesty-

- Builds/Maintains Trust

- Fosters Community

- Makes Communication more efficient & effective

- Demonstrates Respect for the Dignity of others

Honesty & Transparency make you vulnerable. Be

honest and transparent anyway. Mother Teresa



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Values - Honesty

RICHARD SEARS

Founder of Sears Roebuck &Co.

Honesty is the best policy. I

know because Ive tried it bothways



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Values - Respect

Every man is to be respected as an absolute in

himself, and it is a crime against the dignity that

belongs to him as a human being, to use him as a

mere means for some external purpose.

Civilizations should be measured by "the degree of

diversity attained and the degree of unity

retained.

Never look down on anybody unless you're

helping him up.



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Values - Respect -- Tolerance

"Our culture has fallen into a kind of moral vertigo

we value tolerance so much that we don't know

how to talk to each other about what is right and

good.

Tolerance: Demonstrating sympathy for

indulging, or making allowances for beliefs orpractices differing from, or conflicting with one's

own.



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Values - Compassion

"Men are only great as they are kind. - Elbert

Hubbard, American entrepreneur and philosopher

(founder of Roycroft) (1856-1915).

"No act of kindness, no matter how small, is ever

wasted." - Aesop, 6th Century B.C. Writer of Greek

fables.

"If the world seems cold to you, kindly fires to

warm it. - Lucy Larcom, American poet (1826-

1893)



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Values - Responsibility

I am only one, but still, I am one. I cannot do everything

but I can do something. And, because I cannot do

everything, I will not refuse to do what I can. -E

dwardEverett Hale, American clergyman and writer (1822-

1909).

Any mans life will be filled with constant and unexpected

encouragement if he makes up his mind to do his level

best each day. - Booker T. Washington, American

educator (1856-1915).



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Values - Fairness

Fair is just equitable, impartial, unbiased objective,

Involves a elimination of one's own feelings,

prejudices and desires, so as to achieve a properbalance of conflicting interests. Implies an

equitable distribution of burdens and benefits.

Justice is demonstrating fairness, equity,

impartiality, righteous action, to some justice isabout conformity to truth to others, its aboutconformity to law.



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Values - Perseverance

Perseverance/Fortitude - steadfast determination

to continue on despite adversity usually over a

long period of time.

Nothing in the world can take the place of

perseverance. Talent will not; nothing is more

common than unsuccessful men with talent.

Education will not; the world is full of educated

derelicts. Genius will not; unrewarded genius isalmost a proverb. Persistence and determination

alone are omnipotent.



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Values - Courage

Courage is strength of mind, capable of

conquering whatever threatens the attainment of

the highest good.

Courage is a perfect sensibility of the measure of

danger and a mental willingness to endure it.

Whenever you see a successful business,

someone once made a courageous decision. -

PeterDrucker



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According to Ethical or Moral, Values,

Principles or Standards

Whose Values?

y Personal

y Family

y Peers

y Religious

y Company

y Community, Regional, National, International



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According to Ethical or Moral, Values,

Principles or Standards

Learned Where?

y Home

y Schooly Church (or other place of worship)

y Life Experience

y Work Experience

y

Booksy News Media

y Entertainment Media



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Morals

Moral is a system or set of beliefs or principles

based on values, which constitute an individual or

groups perception of human duty, and thereforewhich act as an influence or control over their

behavior.

Morals are typically concerned with behaviors that

have potentially serious consequences or

profound impacts. The word morals is derived

from the Latin mores (character, custom or habit).



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Morality

The most important human endeavor is

the striving for morality in our actions. Our

inner balance and even our very existencedepend on it. Only morality in our actions

can give beauty and dignity to life. - Albert

Einstein.



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Absolutism vs. Relativism

Ethical Absolutism: What is right or wrong isconsistent in all places or circumstances. There are

universally valid moral principles. ( only by obedience

to universal moral norms does man find full confirmation

of his personal uniqueness and the possibility ofauthentic moral growth.

Ethical Relativism (also called Situational Ethics):

What is right or wrong varies according to the

individual/society/culture or set of circumstances. There

are no universally valid moral principles.



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Code of conduct

Meaning

Codes of conduct specify actions in the

workplace and codes of ethics are

general guides to decisions about those

actions.



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Self-Regulation ofBusiness Ethics

Types of Codes ofEthics/Conduct

y Compliance Oriented: Statement of business

standards or practices.

y Visionary: Statement of beliefs, core values,

mission, principles (e.g. Johnson and JohnsonCredo) or corporate philosophy (e.g. the HP

Way)



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Types of Codes

Forbes 500 Companies (237 respondents):

Source: Patrick E. Murphy, Corporate Ethics Statements: Current Status and Future Prospects,Journal of Business Ethics 14: 727-740 (1995).

Code of Ethics

Values Statement

Corporate Credo

All Three Documents

82%

83%

81%

91%

53%

34%

49 cos.

Revised in 90s

15.5%

8.0%

22.0%

18.5%

51.0%

41.0%

Date Introduced

>20 yrs.< 5 yrs.



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Self-Regulation ofBusiness

Ethics

Why have a Code ofEthics?

y to define accepted/acceptable behaviors;

y to promote high standards of practice;

y to provide a benchmark for members to use

for self evaluation;

y

to establish a framework for professionalbehavior and responsibilities;



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Ethics


y as a vehicle for occupational identity &

maturity;

y to increase ethical sensitivity & judgement;

y to enhance the sense of community among

members, of belonging to a group withcommon values and a common mission;



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Ethics


y to discourage corruption, fraud and other

malfeasance

y to enhance credibility with stakeholders

y to provide a guidepost for addressing

potential problems such as potentialconflicts of interest



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Ethics

Some Elements of Best Codes

y Clear, Coherent, Understandable Language

y Involves sanctions and rewards

y Is more about values than compliance

y Involves Ownership (i.e. People from every

level of the company should be involved inits development.



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Ethics


y Provides a set framework for making ethical

decisions

y Demonstrates respect for all employees as

unique, valuable individuals

y

Supports each individual employee'sfreedom, growth, and development

y Promotes a balanced life & respect for

employee family concerns



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Ethics


y Promotes employee health & safety

y Promotes tolerance & an atmosphere free of

harassment

y Promotes honesty

y

Promotes fairness?y Cultivates a positive attitude/outlook



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Ethics


y Promotes openness/transparency (no cover-

ups)

y Promotes accountability/personal

responsibility

y

Promotes risk-taking, within limitsy Promotes excellence



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Ethics


y Promotes tolerance of errors & learning from

same

y Promotes unquestioned integrity

y Promotes consistency

y

Promotes cooperation/collaborationy Promotes courage & persistence



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Ethics



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Ethics

Some Implementation Methods

y Training (Role-Playing) (including outside

specialty firms, e.g. Baker Hughes signed a 3-year contract renewal and extension with LRN

, The Legal Knowledge Company to provide

online education, training and testing in ethics,

legal and compliance issues to its global

workforce through the LRN Legal Compliance

and Ethics Center)



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Ethics

Some Implementation Methods

y Translation (e.g. Merck & Co.s code has

been translated into 22 languages)

y Distribution (Pamphlets, On-Line, etc.)

y Annual Report

y

Ethics Officer/Department



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Self-Regulation ofBusiness Ethics

Set your expectations high; find

men and women whose

integrity and values yourespect; get their agreement on

a course of action; and give

them your ultimate trust.

By John Fellows Akers

Chairman of IBM



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Managerial Ethics

This include the examine of ethical

dimensions of managerial decisions.

The decisions make by the managers

get affected in terms of the result as well

as the process.



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Factors that affects employee ethics

This topic includes the following

characteristics-

1. Stage of moral development

2. Individual characteristics

3. Structural variables

4. Organizations culture

5. Issue intensity



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Moderators

Issue intensityIndividualcharacteristics

Ethical/UnethicalBehavior

Stage of

Moral

Development

Structural

Variables

Organizational

Culture

Ethical

Dilemma

Fig :Managerial Ethics



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Ethics in international context

Important in foreign culture to recognize

the various social, cultural and political-

legal influences.

The goal must include the global

economy.



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Issue Intensity

Proximity to

Victim (s)

Greatness of harm

ConcentrationOfEffect

Immediacy ofConsequences

Probability of Harm

Consensus of

wrong

How much agreement

is there that this action

is wrong?

How close are the

potential victims

How concentrated is

the effect of the action

on the victim (s) ?

How many people

will be harmed?

Will harm be felt

immediately ?

How likely is it that this

action will cause harm ?

Fig : Determinants of

issue intensity



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How to improve ethical behavior?

(cont..)

4. Provide ethical training.

5. Conduct social audits.

6. Provide support to individuals facing

ethical dilemmas.



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Bibliography

Books referred

Cherunilam Francis/ Business Environment/

Himalaya Publishing House/ Eighteenth

Edition.

Coulter Mary & Robbins Stephen.P/

Management/ Prentice Hall of India Pvt Ltd/

Ninth Edition.

Ghosh Biswanath/ Ethics in management &

Indian Ethos



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Bibliography (cont.)

ICFAI/ Business Ethics & Corporate

Governance.

PoirierDean.R/ Business Ethics &

Professional Responsibility.

Link : [email protected]



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Thank You

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