Business Ethics

An Indian Perspective

Ronald D Francis Mukti Mishra

CHAPTER 3

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In-house It promotes the use of a common standard and, thereby, diminishes debilitating disputes Moral is improved Absenteeism is reduced Good staff are easier to recruit and to be retained

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Within the market: It enhances the corporate reputation Improves the prospects of raising venture capital Boosts market share and share price Generates sustained profit Establishes credibility in the eyes of the business media

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Within the wider community: It is a proactive strategy for dealing with the media Acts as a defence in hostile forums Gains customers with least promotional expenses Improves the quality of life of all

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Remoteness of relationship makes it easier to behave unethically. Ideally, ethics should reflect social values and be responsive to them, but be above particular instances. They should not be at the whim of a particular pressure group or a political movement or ideology.

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Erickson points out, that relationships are under constant test, the limits being special challenged by social deviants who do us a services by offering continuous challenges to accepted standards; thus not all deviant acts are harmful to group life.
One of the unintended downside effects of antidiscrimination legislation is that it deprives us of the cultural debate that might so readily enhance our wider understanding of cultural issues.

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EQUITY OF RELATIONSHIPS AND ETHICAL BEHAVIOUR

The dissonance of relationships is the basis of unethical behaviour. Our notion of justice is essentially one of equity. There can be little justice where power is unequal.

ETHICS AND THE VULNERABLE

One of the basic tenets of ethics is the principle of equity. The exploitation of the vulnerable is a particular expression of the breach of that principle. If in doubt about an ethical course of action, choosing the solution that leads to restoration of balance of power is as good a guide as any.

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DEFENCES IN PRODUCT LIABILITY

The recording of decisions and information about suppliers is important to defences in product liability actions. It also requires an insight into the more complex aspects of product liability legislation.

INTERESTS OF THE SMALLER SHAREHOLDER There should be a mechanism that makes boards accountable to their smaller shareholders: boards of directors should be signalled as having failed to heed the concerns of smaller shareholders.

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The groups who may exercise or misuse power are the professionals, the unions, social control agencies and quasigovernmental bodies that control business.
In the near future, it is predicted that the strictures and product controls that apply in the commercial world, will be applied to professionals. Preferences, prohibitions, non-democratic decisions and special privileges may become the subject of legal scrutiny and control.

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A succinct typology in deciding who is the victim might be:

Primary victims are those persons suffering directly. Those individuals financially or psychologically dependent on primary victim. Those individuals whose lifestyles are greatly inconvenienced. All income tax payers, ratepayers, insurers, consumers and the like who have to pay higher charges. The wider society for whom it has a generally debilitating effect.

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Relationships within organisations may be formal or personal.

Where they are personal there may be a conflict of interest in that personal interests may be at variance with those that benefit the organisation. Some organisations have a corporate culture so strong that it resists changes by individuals who wish to subvert it; other organisations have so evanescent a culture as to be readily subverted.

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DIFFICULTIES IN SOCIAL-BUSINESS RELATIONSHIPS

Difficulties in the relationships of key players Nepotism

GOODWILL

Goodwill is critical in relationships. Friendliness is highly rated by many companies because it evokes self-confidence, openness and co-operation. One form of friendliness is that of being environmentalfriendly, another is that of being approachable, another is that of the friendliness of ease of setting up and running a business, another is that of being tax-friendly.

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Leaders are highly visible, otherwise they are not leaders; thus prudence demands higher standards of them.
Leaders must give clear and unambiguous messages to subordinates. They must work with others within the organisation:
To understand the organisations strength, weakness, opportunity and threat; To understand the organisations prevailing culture; To create a vision of the desirable future and obtain buy-in; To design a strategy that moves the organisation toward the envisioned future; To integrate the various business and functional units in implementation of the strategy and to monitor and evaluate progress; To institutionalise achieved changes and make continuous change an integral part of the organisations process of functioning.

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INDUSTRIAL RELATIONS Industrial relations are a significant feature of employee issues. These include intangible issues, specific material issues and issues of tribal and religious allegiance.
ORGANISATIONS AND ETHICS Whyte argued that the modern corporation now minds its believers in a manner that emulates the medieval Christian church. Anthony Jay has applied the principles of Niccolo Machiavelli to this area.
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CORPORATE CLIMATE Corporate climate refers to the values, ideals and assumptions that permeate the organisations.
CORPORATE CLIMATE AUDITS Corporate climate audit examines both the organisational processes themselves and the individuals role within the organisation.

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ADVANTAGES OF CORPORATE CLIMATE AUDITS

- enhances the understanding of the general climate in which an organisation operates; - develops some concrete proposals for the improvement of company functioning.

EXPERTS AND THE CORPORATE CLIMATE AUDITS

Different consultants with various backgrounds Particular staff members

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A national or regional parliament may become involved in business that may intrude into areas in which it may not be an expert.
A government may legislate for a business but it may not follow its own principles.

Political promises may be legislative sanctions applied.

broken

without

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Casuistry becomes an apologia for the powerful, the financial status quo and the primacy of political values.
The notion of the over-use of casuistry is inimical to the development of business ethics.

Nothing should stand in the way of the intention of a code.

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Public service ethics- has been defined as principles and standards of right conduct in the administrative sphere of government. Public servants are enjoined to pay proper deference and respect to superiors. Sometimes, they may be required to carry out instructions from a superior even when they believe the actions to be improper or illegal. An ideal code would be one that sets out the basic values, and then moves to specific precepts.
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Here there are two principles to consider:

First, who is bound by a code. Second, if a person is bound by a code is that binding restricted to what they do professionally.

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