Business Ethics

By Nitika Sharma
ETHICS
 ’Ethos’ (Greek word meaning character)
 It is concerned with what is right and what is wrong in
human behavior

ETHICS IS THE STUDY OF WHAT WE UNDERSTAND

TO BE GOOD AND RIGHT BEHAVIOR AND HOW
PEOPLE MAKE THOSE JUDGEMENTS
FEATURES OF ETHICS
THEY CONTAIN
PRINCIPLES OF
PERSONAL AND PRINCIPLES, NOT
PROFESSIONAL FEELINGS GIVE
CONDUCT RISE TO ETHICS

ETHICS IS ETHICAL BEHAVIOR

BROADER THAN CHANGES FROM ONE
LAW SOCIETY TO
ANOTHER

IT IS INVOLVED IN ALL
HUMAN ACTIVITIES,
INCLUDING BUSINESS
 BUSINESS ETHICS

BUSINESS ETHICS REFER TO THE MORAL

PRINCIPLES WHICH SHOULD GOVERN
BUSINESS ACTIVITIES

Ethical/ Unethical activities ???

To charge fair price To use manipulative weights To pay taxes to the

from the customers while measurement government honestly

To give fair
To have two books
treatment to the
of account
workers
 FEATURES OF BUSINESS ETHICS

IT IS AN UMBRELLA TERM
COVERING AL BUSINESS
ACTIVITIES DESIRABLE TO
THE SOCETY IT IS BROADER
THAN LAW

CONCEPT OF
‘EQUITY’ IS
IMPLIED IN
ETHICS

IT EMPHASIZES
MAKING A
BUSINESSMAN
HONEST, JUST AND
RESPONSIBLE
Principles of BUSINESS ETHICS
(IBE)
 Be trustful
 Keep an open mind
 Meet obligations
 Have clear documents
 Become community involved
 Maintain accounting control
 Be respectful
LEVELS OF ETHICAL DECISIONS IN BUSINESS

SOCIETAL LEVEL

STAKEHOLDERS LEVEL

INTERNAL POLICY
LEVEL

PERSONAL LEVEL
Determinants of Business Ethics

Social

Contemporary
Economic
codes

Business
Ethics

Organisational Cultural

Political
ETHICAL DECISION MAKING ???
 DECISION MAKING

DECISION MAKING IS A PROCESS OF SELECTION FROM

A SET OF ALTERNATIVE COURSES OF ACTION WHICH
IS THOUGHT TO FULFIL THE OBJECTIVES OF THE
DECISION PROBLEM MORE SATISFACTORILY THAN
OTHERS
STAGES OF DECISION MAKING

DEFINING THE
PROBLEM

DEVELOPING
ALTERNATIVES

EVALUATION OF
ALTERNATIVES

CHOICE OF THE BEST

ALTERNATIVE

IMPLEMENTING THE
DECISION

FOLLOW UP
 ETHICAL DECISION MAKING

“PLUS” approach

P L U S
Policies Legal Universal Self
POLICIES LEGAL UNIVERSAL SELF
HOW TO PROMOTE ETHICAL PRACTICES

ESTABLISH LAY DOWN

MISSION CORE VALUES
STATEMENT

FORMULATE
CODE OF
FORMULATE CONDUCT FOR
BUSINESS POLICIES BUSINESS
AND PROCEDURES

ETHICAL DILEMMA
ESTABLISH GRIEVANCE RESOLUTION
HANDLING MECHANISM WORKSHOPS
Ethical Dilemma
 An ethical dilemma is a problem where a person has to
choose between a moral and an immoral act.
 Also, the toughest choices are between right versus right.
 Truth vs Loyalty
 Individual vs Community
 Short-term vs Long Term
 Justice vs Mercy

Moral myopia is a distortion of moral vision that keeps ethical

issues from coming clearly into focus.
Case Study-Dealing with staff performance
issues
 A junior member of staff has just returned to work after
taking special leave to care for her elderly mother. For financial
reasons she needs to work full-time. She has been having
difficulties with her mother’s home care arrangements, causing
her to miss a number of team meetings (which usually take
place at the beginning of each day) and to leave work early. She
is very competent in her work but her absences are putting
pressure on her and her overworked colleagues.You are her
manager, and you are aware that the flow of work through the
practice is coming under pressure. One of her male colleagues
is beginning to make comments such as “a woman’s place is in
the home”, and is undermining her at every opportunity,
putting her under even greater stress.
 Professional behaviour: How should you proceed so as not to
discredit yourself, your profession or the practice for which you
work?
Considerations
 Identify relevant facts
 Identify affected parties:
 Who should be involved in the resolution
 Possible course of action
 Check the relevant facts. If necessary, clarify staff procedures with the
personnel department. Take legal advice if required.
 Discuss the matter with the junior member of staff. Possible solutions may
include suggesting a more flexible approach to team meetings. Do these
always have to be in the morning? At times, working from home may be an
option for the junior member of staff.
 You also need to deal with the other member of staff, who needs to be
reminded about proper conduct and how such behaviour may amount to
harassment and be in breach of the practice’s code of conduct.

 You should document, in detail, the steps that you take in resolving your
dilemma, in case your ethical judgement is challenged in the future.
Steps in resolving Ethical dilemma
 Rushworth Kidder suggested 9 steps
1. Define the problem/moral issues correctly
2. Determine the people who will be affected by the decision
3. Analyse how events happened
4. Test for the right or wrong
5. Test right versus right paradigms
6. Apply approaches to resolves the dilemma
7. Investigate, if there is any other way out of the situation
8. Make decisions and take action
9. Revisit and reflect on the decisions
What is spirituality in business?
 It is to embody the personal values of honesty, integrity,
and good quality work.
 It’s treating their co-workers and employees in a
responsible, caring way.
 It’s participating in spiritual study groups or using prayer,
meditation, or intuitive guidance at work.
 It’s making their business socially responsible in how it
impacts the environment, serves the community or helps
create a better world.
Spiritual Values
 Key spiritual values embraced in a business context
include
 Integrity,
 Honesty,
 Accountability,
 Quality,
 Cooperation,
 Service,
 Intuition,
 Trustworthiness,
 Respect,
 Justice, and
 Service.
ETHICS AS DESCRIBED BY THE VEDAS

VEDAS (Indian ancient wisdom)

VALUE BASED HOLISTIC

APPROACH

VEDANTA
Salient features of Indian ethos

 Each soul is potentially divine

 Character is the real power and wealth
 Individual is the central focus by indian ethos
 Emphasis is on duties and responsibilities, not of rights
and priviledges
 ‘Balance’ – focus; between desire and desirelessness
 Character is based on divine values
 Indian thought deals with 2 things– knowledge of creation
and creator
PRINCIPLES OF MANAGEMNET BASED ON
INDIAN ETHOS

 Each soul is potentially divine

 Holistic approach (divine, self, universe)
 Cooperation vs competition
 Combining subjective and objective
 Karma yoga
 Excellence of work
Basis for Comparison Knowledge Wisdom

The collection of
information and facts about Wisdom is the ability to
Meaning something or someone by judge and make right
learning and experience is choices in life.
knowledge.

What is it? Organized information Applied knowledge

Nature Selective Comprehensive

Process Deterministic Non-deterministic

Outcome Understanding Judgement

Approach Theoretical Spiritual

Acquisition It is obtained or learned. It is developed.

Associated with Mind Soul

WORK ETHICS

WORK ETHICS REPRESENTS THE ATITUDES OF

MEMBERS OF AN ORGANIZATION TOWARDS THE JOBS
AND THE ORGANIZATION

 Striving for excellence

 Motivation for service
 Abiding sense of responsibility
 Professional integrity
Benefits of Work Ethics
 Team work and productivity
 Freedom from legal problems
 Employee development
 Commitment and accountability
 Handling crisis situation
 Public Image
HIERARCHY – An organizational value

A hierarchy is a system of ranking and organizing people

wherein each lower position or element is subordinate to
the higher position or element
 Pyramidal power structure

A
C
C
A TOP MANAGERS O
U U
T N
H MIDDLE MANAGERS T
O A
R B
I I
T LOWER MANAGERS
L
Y I
T
Y
 ANALYSIS OF HIERARCHISM –
Advantages vs Disadvantages ???

Advantages :
 Chain of command
 Clear flow of authority
 Fixation of responsibility
 Order and discipline
 Communication
 Conflict resolution
Disadvantages :
 Centralization of authority
 Work overload
 Lack of specialization
 Ineffective communication
 Difficulty in coordination
 Unsuitable
 OTHER ISSUES

 Should hierarchies be continued

 Hierarchies across cultures
Management by values
 Managing by values can be defined as both a philosophy and
practice of management, it focuses on the key values of the
organization and their consistency with the objectives.
 System values are motivators that shape the behaviour of
individuals, organizations and society.

 Managing by values uses following tools:

 company mission,
 vision,
 values important to the company - core values,
 code of conducts,
 identification and analysis of various ethical factors affecting business.
Thank You