BUSINESS ETHICS: ETHICS AND MEANING BUSINESS ETHICS HOW BUSINESS AFFECTS PROFITS CONTRIBUTION OF ETHICS TO DIFFERENT ECONOMIC GROUPS TATA COMPANY STUDY: ABOUT TATA ETHICAL BEHAVIOUR CSR ACTIVITIES

1. ETHICS
The term Ethics is derived from the Greek word ‘Ethos’ which means
‘Character’.
Ethics is a social science which deals with concepts such as right and
wrong, moral and immoral, good and bad etc. Ethics is concerned with
an individual’s moral judgment about right and wrong. Moral principles
that govern a person's behavior or the conducting of an activity are
called ethics.
The study of moral obligation involving the distinction between right
and wrong.
There are many types of ethics:

2. BUSINESS ETHICS
Business ethics can be defined as written and unwritten codes of
principles and values that govern decisions and actions within a
company.
It is a system of moral principles and values applied to business
activities.
Definition:
According to wheeler, Business Ethics is an art or science of
maintaining harmonious relationship with society, its various groups and
institutions as well as reorganizing for right or wrong of business
conduct.
Need for Business Ethics:
 Checking business malpractices
 Improving consumer confidence
 Businessmen to be conscious of social responsibilities
 Protect consumer rights
 Create good image of business

3. HOW DOES BUSINESS ETHICS AFFECT
PROFIT?
A number of factors play a part in making a business profitable,
including expert management teams, dedicated and productive
employees, consistent consumer demand and careful watch over the
bottom line. Business ethics is an important catalyst to the success of a
company.
Ethical behavior and corporate social responsibility can bring significant
benefits to a business. For example, they may:
 Attract customers to the firms products
 Attract more employees wanting to work for the business
 Attract investors and keep the company’s share price high
All of this will thereby boost sales and profits which will make
employees want to stay with the business, reduce labour turnover and
therefore increase productivity. It will also reduce recruitment costs and
enable the company to get the most talented employees.
Unethical behavior or a lack of corporate social responsibility, by
comparison, may damage a firm’s reputation and make it less appealing
to stakeholders. Profits could fall as a result.

4. Ethics Contributes to Employee Commitment:
This type of contribution comes from employees who believe their
future is tied to the organizations
The more dedication on the part of the company, the greater the
employee dedication. Concerns include a safe work environment,
competitive salaries and benefit packages, and fulfillment of contractual
obligations. They will be willing to make personal sacrifices for the
organization
Ethics Contributes to Investor Loyalty:
Companies perceived by their employees as having a high level of
honesty and integrity are more profitable than companies with a low
level of honesty and integrity
• Ethical climates in organizations provide platform for:
– Efficiency
– Productivity
– Profitability
When the company does not delay in paying dividends and be honest in
their dividend sharing of the profits, the investors will remain satisfied
and this would attract more investors to invest in the company. This
ultimately leads to profit.

5. Ethics Contributes to Customer Satisfaction:
Consumers respond positively to socially concerned businesses– Being
good can be extremely profitable.
 Customer satisfaction dictates business success
 A strong organizational ethical climate places customers’ interests
first
 Research shows a strong relationship between ethical behavior and
customer satisfaction.
 If a customer is satisfied and happy with the company they would
recommend the company and become a regular customer and it
would help the company in indirect marketing and ultimately the
public image and profits would rise.

6. EXAMPLE COMPANY- TATA
About:
Tata Group is an Indian multinational conglomerate holding company
headquartered in Mumbai, Maharashtra. Founded in 1868 by Jamshetji
Tata.
Type: Public
Industry: Conglomerate
Founded: 1868 (150 years ago)
Founder: Jamshetji Tata
Headquarters: Bombay House, Mumbai, Maharashtra, India
Area served: Worldwide
Products: Airlines, Automotive, Chemicals, Defense, FMCG, Electric
utility, Finance, Home appliances, Healthcare, Hospitality, IT Services,
Locomotives, Retail, Real estate, Steel, Telecommunications
Owner: Tata Sons
TATA’s business ethics:
 National interest:
Committed to benefit the economic development of the countries in
which it operates.

7.  Financial reporting and records:
Prepare and maintain its accounts fairly and accurately and in
accordance with the accounting and financial of the country
 Competition:
Fully support the development and operation of competitive open
markets
 Equal opportunities employer:
Provide equal opportunities to all its employees and all qualified
applicants for employment
 Gifts and donations:
Its employees shall neither receive nor offer or make, directly or
indirectly, any illegal payments, remuneration, gifts, donations or
comparable benefits
 Government agencies:
A Tata company and its employees shall not, unless mandated under
applicable laws, offer or give any company funds or property as
donation to any government agency or its representative
 Political non-alignment:
Be committed to and support the constitution and governance systems
of the country in which it operates.
 Health, safety and environment

8. A Tata company shall strive to provide a safe, healthy, clean and
ergonomic working environment for its people
 Quality of products and services
Be committed to supply goods and services of world class quality
standards, backed by after-sales services consistent with the
requirements of its customers
 Corporate citizenship
Committed to good corporate citizenship, not only in the compliance of
all relevant laws and regulations but also by actively assisting in the
improvement of quality of life of the people in the communities in
which it operates
 Cooperation of Tata companies
Cooperate with other Tata companies including applicable joint
ventures, by sharing knowledge and physical, human and management
resources.
 Ethical conduct
Every employee of a Tata company shall preserve the human rights of
every individual and the community, and shall strive to honor
commitments.
 Regulatory compliance
Employees of a Tata company, in their business conduct, shall comply
with all applicable laws and regulations, in letter and spirit

9.  Concurrent employment
Consistent with applicable laws, an employee of a Tata company shall
not, without the requisite, officially written approval of the company,
accept employment or a position of responsibility with any other
company
 Conflict of interest
Employees act in the interest of the company, and ensure that any
business or personal association which he / she may have does not
involve a conflict of interest with the operations of the company
 Securities transactions and confidential information
An employee of a Tata company and his / her immediate family shall
not derive any benefit or counsel, or assist others to derive any benefit,
from access to and possession of information about the company
 Protecting company assets
The assets of a Tata company shall not be misused
 Citizenship
The involvement of a Tata employee in civic or public affairs shall be
with express approval from the chief executive of his / her company
 Integrity of data furnished
Every employee of a Tata company shall ensure, at all times, the
integrity of data or information furnished by him/her to the company.

10. TATA’s CSR activities:
 Dedicates around 10-12% of its net profit to CSR
 Special provision for training and employing the local women at
all its facilities
 Technical and Vocational Training for Youth Members
 Partnering with the Public and the Social Sector
 Sports training center at Jamshedpur
 Runs a hospital in Mumbai
Result of ethical behavior:
 India’s largest business house
 India’s largest private employer
 India’s first “Glocal” company
 India’s most employee friendly company
 India’s largest investor in CSR
Awards and Recognition:
TATA motors most valued brand of India
CII Award for Corporate Sustainability Reporting
Golden Peacock Global Award for Corporate Social Responsibility
Hellen Keller Award for CSR
Bombay Natural History Award for Green Governance

11. CONCLUSION
 Business Ethics cultivate strong teamwork and productivity.
 It supports employee’s growth.
 It helps to ensure policies are legal.
 It promotes strong public image.
 It improves trust and relationships.
 It cultivates a greater sensitivity towards the impact of the
enterprise’s values and messages.
 Due to all these ethics plays an important role in the firm’s
profitability, sustainability and growth.
 It is also very evident from the example given above, TATA group
of companies, being very strict in their policies, values and ethical
behavior has to lead to their immense growth and continue to be
the best among all the rest.
Gifts and donations