Corporate Ethics: The Moral element of business
- Understanding of right and wrong
- Ability to distinguish between the right and the wrong.
- Running a business is a part of life
- Based on principles of integrity and fairness
- Stakeholders, and employees.
- Quality of product and services
- Community and environment
Corporate Ethics are implemented to-
- Define the framework of the acceptable behavior.
- Follow high standards of practice.
- Create benchmarks for self evaluation.
- Enhance sense of community.
- Create transparency in the business activities.
- Foster higher standards of business ethics.
- Comply with government laws and norms.
Who is responsible for ethics in the company? “ Everyone”
An ethical problem can’t be resolved unless it’s first recognized as a ‘ dilemma’ Reward or punishment to ethical integrity and moral courage decide the act of an individual
Corporate ethics: The global perspective
- Study by Columbia University 1990
- Half of 1,000 business executives admitted being rewarded for taking action on the job that they considered unethical.
- One in three reported that refusing to take unethical action resulted in penalties.
- Overemphasis on immediate gains can cascade down the organization.
- Sending message to staff to generate cash flow, supersedes all other objectives, including personal integrity.
- This message carries more weight than official proclamations of values, and codes of ethics
- Corporate directors need to minimize a company’s ethical liabilities and maximize its ethical assets
How to maximize the ethical assets?
- Recognizing the company’s need to manage corporate ethics
- The dangers of taking it for granted.
- Supporting management to prevent or protect against unethical activities
- Developing strategies to raise the ethical standard in the organization.
- Build trust as a competitive lead.
Approaches to Bring a Code of Corporate Ethics to Life
- Emphasize values, in creating the code of corporate ethics supported by rules.
- Employees should be Educated about the corporate ethics code to make it relevant and real.
- Reinforce the code within and beyond the organization.
- Encourage employees to become active participants in upholding the corporate. ethics code and its values.
- Gather feedback, measure effectiveness and continually improve the code of conduct.
Case: Infosys Technologies
- Have a distinctive work culture and value system.
- Great importance on customer delight, leadership, integrity, transparency, fairness and pursuit of excellence.
- Value employees and encourage them to make decisions about their own work.
- Treated as a flat organization when it comes to communication and information sharing
Does Satyam’s story tell the myth and reality of Indian corporate ethics?
Corporate Ethics: Individual’s Perspective
- Signs of ethical deterioration.
- In business, people have made immoral millions
- In government, public officials are involved in bribery.
- In education, cheating scandals among students are common.
- under-the-table payments for admission
- People believe that they have to cheat to win.
- They believe that nice guys finish last.
Ethics in Curriculum
USA teaches ethics or corporate ethics! Ethics or business ethics should be made compulsory for all students.
Corporate ethics: Management perspective
- What is included in corporate ethics?
- Factors to be kept in mind
- Involvement of The Senior Management
- Involvement of The Employee
- Picking The Well Tested Model
Management of ethics; an important function of the board
- Accountable for corruption or impropriety in a company.
- Board’s decisions on resource allocation, performance targets or promotions always trump official statements of ethical values.
- Whistleblowers are to be given protection
- Influence the ‘pressures’ which the CEOs handle in managing ethics
Principals for ethically run Business
- Principle 1 – Productivity Is Much More Important Than Profitability
- Principle 2 – The Customer Is Not Sheep That Can Be Sheared
- Principle 3 – The Buyer's Domain Is More Important Than the Middlemen's Domain
- Principle 4 – Be Diplomatic With Your Competitors
- Institute of Business Ethics: www.ibe.org
- Business in the Community : www.bitc.ie
- ACCA (includes Ireland news): WWW. ACCAGLOBAL.COM
- Institute of Chartered Accountants in England & Wales: www.iceaw.com/bettermarkets
- Hermes Pension Management Ltd: www.hermes.com
- Dow Jones Sustainability Index: www.sustainability-indexes.com
- FTSE4 GOOD Index: www.ftse4good.com
- Ethical Research Services: www.eiris.org
- Ethics Resource Centre: www.ethics.org
- Wikipedia: www.wikipedia.org/wiki/business_ethics
- Spitzer Centre for Ethical Leadership: www. spitzercentre.org
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