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Ethics IIIrd sem MBA

As per the Kannur Univercity

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Ethics IIIrd sem MBA

  1. 1. 3rd semester MBABusiness Ethics
  2. 2. CHAPTER 1Ethics Ethics is the branch of study dealing with what is the proper course of action for man.It answers the question, "What do I do?".It is the study of right and wrong in humanendeavours. At a more fundamental level, it is the method by which we categorize our valuesand pursue them. Do we pursue our own happiness, or do we sacrifice ourselves to a greatercause? Is that foundation of ethics based on the Bible, or on the very nature of man him, orneither?Why is Ethics important? Ethics is a requirement for human life. It is our means of deciding a course of action.Without it, our actions would be random and aimless. There would be no way to worktowards a goal because there would be no way to pick between a limitless numbers of goals.Even with an ethical standard, we may be unable to pursue our goals with the possibility ofsuccess. To the degree which a rational ethical standard is taken, we are able to correctlyorganize our goals and actions to accomplish our most important values. Any flaw in ourethics will reduce our ability to be successful in our endeavours.What are the key elements of a proper Ethics? A proper foundation of ethics requires a standard of value to which all goals andactions can be compared to. This standard is our own lives, and the happiness which makesthem liveable. This is our ultimate standard of value, the goal in which an ethical man mustalways aim. It is arrived at by an examination of mans nature, and recognizing his peculiarneeds. A system of ethics must further consist of not only emergency situations, but the dayto day choices we make constantly. It must include our relations to others, and recognize theirimportance not only to our physical survival, but to our well-being and happiness. It mustrecognize that our lives are an end in themselves, and that sacrifice is not only not necessary,but destructive.What is Ethics A few years ago, sociologist Raymond Baumhart asked business people, "What doethics mean to you?" Among their replies were the following: "Ethics has to do with what my feelings tell me is right or wrong.""Ethics has to do with my religious beliefs.""Being ethical is doing what the law requires.""Ethics consists of the standards of behaviour our society accepts.""I dont know what the word means." These replies might be typical of our own. The meaning of "ethics" is hard to pindown, and the views many people have about ethics are shaky. Like Baumharts first respondent, many people tend to equate ethics with theirfeelings. But being ethical is clearly not a matter of following ones feelings. A personfollowing his or her feelings may recoil from doing what is right. In fact, feelings frequentlydeviate from what is ethical. Nor should one identify ethics with religion. Most religions, of course, advocate highethical standards. Yet if ethics were confined to religion, then ethics would apply only toreligious people. But ethics applies as much to the behaviour of the atheist as to that of thesaint. Religion can set high ethical standards and can provide intense motivations for ethicalbehaviour. Ethics, however, cannot be confined to religion nor is it the same as religion. Being ethical is also not the same as following the law. The law often incorporatesethical standards to which most citizens subscribe. But laws, like feelings, can deviate from
  3. 3. what is ethical. Our own pre-Civil War slavery laws and the apartheid laws of present-daySouth Africa are grotesquely obvious examples of laws that deviate from what is ethical. Finally, being ethical is not the same as doing "whatever society accepts." In anysociety, most people accept standards that are, in fact, ethical. But standards of behaviour insociety can deviate from what is ethical. An entire society can become ethically corrupt. NaziGermany is a good example of a morally corrupt society. Moreover, if being ethical were doing "whatever society accepts," then to find outwhat is ethical, one would have to find out what society accepts. To decide what I shouldthink about abortion, for example, I would have to take a survey of American society andthen conform my beliefs to whatever society accepts. But no one ever tries to decide anethical issue by doing a survey. Further, the lack of social consensus on many issues makes itimpossible to equate ethics with whatever society accepts. Some people accept abortion butmany others do not. If being ethical were doing whatever society accepts, one would have tofind an agreement on issues which does not, in fact, exist. What, then, is ethics? Ethics is two things. First, ethics refers to well based standardsof right and wrong that prescribe what humans ought to do, usually in terms of rights,obligations, benefits to society, fairness, or specific virtues. Ethics, for example, refers tothose standards that impose the reasonable obligations to refrain from rape, stealing, murder,assault, slander, and fraud. Ethical standards also include those that enjoin virtues of honesty,compassion, and loyalty. And, ethical standards include standards relating to rights, such asthe right to life, the right to freedom from injury, and the right to privacy. Such standards areadequate standards of ethics because they are supported by consistent and well foundedreasons. Secondly, ethics refers to the study and development of ones ethical standards. Asmentioned above, feelings, laws, and social norms can deviate from what is ethical. So it isnecessary to constantly examine ones standards to ensure that they are reasonable and well-founded. Ethics also means, then, the continuous effort of studying our own moral beliefs andour moral conduct, and striving to ensure that we, and the institutions we help to shape, liveup to standards that are reasonable and solidly-basedBusiness ethics Ethics in business are nothing but the do’s and don’ts by the business users in thebusiness. In other words it could be referred as set of principles a business man ought tofollow. ”There should be business ethics” means that the business should be conductedaccording to certain self recognized moral standards. Few unethical elements in the presentday business are cheating, stealing, lying, bribing, corrupting etc. A business man should be aware of the ethics in the business and should follow themin order to maintain ecological balance in the society.Definition: The study and examination of moral and social responsibility in relation to businesspractice and decision making in business is known as “Business Ethics”. The term “business” is commonly referred to the commercial activities achieved atmaking profit. But gradually there is a substantial change in the way in which people viewedthe business. In the past primary objective of a business was profit maximization but the presentperspectives on business objectives are not maximization. It is profit maximization in long run besides fulfilling the ethics in the business. Abusiness is regarded as social institution forming integral part of social systems .The businessis viewed as subsystem to the social system. This is because any type of social system is influenced by
  4. 4. 1. The way the business functions 2. The organization of the business 3. Innovations 4. Transmission and diffusion of information. 5. New ideas etc.Need and Importance of Business Ethics: The following points explain the need for and importance of business ethics:I. Protection of Consumer rights: Consumer is the centre of all business activities. In fact, business is essentially meantfor satisfaction of consumer wants. Unfortunately, consumers are the most neglected andexploited group. The application of business ethics will help to confer and implementconsumer rights. Business ethics can be used to check malpractices like adulteration, unfairtrade practices and to make the working of business consumer oriented.II. Social Responsibility: Business ethics is a means of making business socially responsible for its actions.Exploitation of consumers, employees, discriminate use of natural resources, etc; is quitecommon in all types of business. Compliance to ethical standards will ensure (a) protection ofconsumer rights, (b) public accountability, (c) protection of worker’s interests, and (d) properutilization of natural resources.III. Concept of Socialism: The concept of socialism in business states that gains of a business must be shared byall and just by the owner of business. Profit is a sing of business skill and talent. Profit is alsoa result of group efforts. Employees, shareholders, consumers, Suppliers and otherscontribute to the success of the business. Therefore, success should be shared by allconcerned.IV. Interest of Industry: Business ethics are necessary to safeguard the interests of small scale business firms.The tendency of big business firms is always to dominate the market and drive away thesmall scale industries out of the market. Small scale units can establish their position andfight for their rights if the industry follows a code of ethics.V. Consumer Movement: The growth in consumer movement is also another important factor that hasnecessitated the need for business ethics. The spread of education and awareness amongconsumers about their rights has made the business community to conduct business on ethicalprinciples.VI. Better Relations with the Society: Business ethics is needed to develop good relations between business and society. Therelationship of business with society has various dimensions such as its relations withsshareholder, employees, consumers, distributors, competitors and government. Businessethics will help to promote and protect the interest to various groups.VII. Buyer’s Market:There has been a structural change in the concept of business. The concept of profit has beengradually taken over by consumer satisfaction. The large scale production and increasedcompetition in the market has changed the business scene from a seller’s market to a buyer’smarket. In a changed situation, business ethics is needed to redefine the traditional concept ofprofit and replace it by a balance between profit and consumer satisfaction.VIII. Beneficial to Business and Society: Ethics suggests what is good and bad, right and wrong, ethical and unethical, etc; tobusinessmen. It also brings an element of honesty, sincerity, fairness, and human touch to
  5. 5. business activities. Society is also benefited by the introduction of business ethics. It ensureshealthy and competitive business atmosphere, consumer and labor welfare, and improvementin social, economic and cultural values of the society. They have either direct or indirecteffect on the society.Social Responsibilities of Business:A firm expresses its responsibility to the society by reacting in either or both of the followingtwo ways.1. The manner in which it carries out its own business activities2. The welfare activities it takes upon itself as an additional functionResponsibility to Share Holders:1. To make the shareholders feel secured by protecting their investments2. To be transparent3. To allow them to participate in decision making4. To ensure them good dividendsResponsibility to Employees:1. To offer employees fair wages2. To establish better working conditions3. To provide them fair work standards and norms.4. To provide labour welfare activities5. To educate the employees by adopting proper training methods.6. To recognize and appreciate the work of the employees and reward them or to promotethem.7. To install grievance handling cell.8. To enable them to involve in decision making.Responsibility to ConsumersTo improve the efficiency of the business bya) Increasing productivity.b) Improving quality.c) Smoothening distribution system.1. To offer the products at reasonable prices.2. To provide pre-purchase and post purchase service to the consumers.3. To facilitate research and development to meet the customer requirements.4. To maximize imperfections in distribution systems5. To provide sufficient and unnecessary information about the product.Responsibility to Community:1. To be pollution free and maintain ecological balance.2. To invest more in research and development so as to improve the standard of living of thesociety.3. To develop alternative recourses thereby preventing current resources being used fromexhaustion.4. To improve the efficiency of business operations.5. To include in social welfare activities6. To contribute to national effort to build up a better societyIf a firm full fills all the above mentioned responsibilities then it is said to be following thebusiness ethics. But in practice such an ideal business doesn’t exist.FEW ENVIRONMENTAL CONCERNS:One important factor a business man must not neglect is his responsibility to environment.The abundant natural resources are getting exhausted after 19th century due to rapidindustrialization.
  6. 6. LAND:The worst effected are as their cattle starve and they travel even increasing distance forgrazing due to industrialization and urbanization.WATER:Through people are keen in this issue by constructing dams and reservoirs the bi products andindustry waste couldn’t find a better discharge channel than this. Hence sure measure must betake in this context to keep the water free from pollution.DEFORESTATION:The results of deforestation for industrialization and urbanization are vulnerable. It isresulting in destruction of wild life, increase in price of wood, air production etc.HABITAT:The people who are living in forests and remote areas love their shelter and livelihood in thevent of industrialization.HEALTH:The business users must be conscious about the health of the society and behaveresponsibility for their health.IMPORTANT ETHICAL PRICIPLES THAT A BUSINESS SHOULD FOLLOW: 1. Do not deceive or cheat the customers by selling substandard or defective products by under measurement or any other means. EXAMPLE: Textile merchants in general clear the defective stock under the guise of discounts. 2. Do not report to hoarding, black marketing or profiteering. EXAMPLE: Management of theatres sell the tickets for higher prices during the initial days of release of a film starred by a crazy hero and heroine. 3. Do not destroy or distort competition. 4. Treasure sincerity and accuracy in advertising, labelling and packaging. EXAMPLE: Ads of automobiles in general provide false details in every aspect. 5. Do not furnish the image of competitors by unfair practices. EXAMPLE: Publishing false information about competitors, bribing the retailers etc. 6. Make accurate business records so that transparency to the share holders can be achieved. 7. Pay taxes and discharge other obligation promptly. 8. Do not form castle agreements, even informal, to control production, prices etc to the common detriment. EXAMPLE: cellular network providers will be in informal castle agreements to control the traffic. 9. Refrain from secret kick backs or pay logs to customers, suppliers, administrators, politicians etc. 10. Ensure payment of fair wages and fair treatment to the internal customers as well as external customers and share holders.HOW TO IMPLEMENT BUSINESS ETHICS:Trade associations can be formed by the business users which should bolsters efforts ofrunning any business with ethics. Trade association can promote business ethics in businessuser by–Educating the members of the association and by consistent persuasion.–Formulation a code of conduct for their members which should contain code of ethics.
  7. 7. –Praising and rewarding those firms and business users who keep up the ethics in business &by publishing.Another fact which the business user must realize is the management and ownership must beseparated because the owners always tend for profit maximization where as the managerscase for ethics as they work for fixed salaries.Managers must be a professional who possesses systematic knowledge and skill to performcertain responsible functions with authority and who is bound by certain ethics in the use ofhis knowledge and skill.A professional has to have autonomy.He/she has enormous responsibilities and shall not use his/her knowledge skill and authorityunscrupulously shall not knowingly do distribute to his/her customers.BUSINESS ETHICS AND PROFIT:Frequently the impression of most people is that ethics and profits are mutual, opposed to oneanother and that if a company is ethical, it may forget about making profits. People alsofrequently seem to believe that a profitable company must necessarily be unethical. This islike saying that a company can make profits only through unethical means. Nothing can bemore have ethical companies made profits, but more importantly it is, only ethical companieswhich discharged its social responsibilities, that have survived competition and turbulentchanges through the years and have contributed to social welfare and have contributed toflourished undiminished.In fact, considered from all angles, it is unethical, NOT to make profit. It is unethical, for acompany, to make losses. Because, a company which can not make profits and makes losses,misutilises scarce national resources can not pay back creditors, does not make wealth for itsshareholders, make huge liabilities, upsets the economy, promotes inefficiency and mostimportantly, can not, at any cost discharge its social responsibility, meet its welfarecommitments and jeopardises the future of its employees. Such a loss- making companybecomes a nuisance and a burden to the economy and has not right to exist in the marketplace. Moreover, it has no business to force its employees into economic insecurity, which ishighly unethical.Thus instead of profits being contradictory to ethics, business ethics dictates that the firstresponsibility of business is to remain profitable and generate revenue fro the shareholdersand the society. Rather, it is unethical, not to make profits. Hence, the first and foremostethical obligation of every business is to make profits for its shareholders, for its employees,for its creditors and most importantly, for itself, so that it can discharge its socialresponsibilities and welfare commitments. But how much profits to make, the means andmethods of making it, and at what cost- that is the ethical question.No business, however great or strong or wealthy it may be at present, can exist on unethicalmeans, or in total disregards to its social concern, for very long. Resorting to unethicalbehaviour or disregarding social welfare is like calling for its own doom. Thus businessneeds, in its own interest, to remain ethical and socially responsible. As V.B. Dyes in "TheSocial Relevance of Business” had stated-"As a Statement of purpose, maximising of profit is not only unsatisfying, it is not evenaccurate. A more realistic statement has to be more complicated. The corporation is a creationof society whose purpose is the production and distribution of needed if the whole is to beaccurate: you cannot drop one element without doing violence to facts."Business needs to remain ethical for its own good. Unethical actions and decisions may yieldresults only in the very short run. For the long existence and sustained profitability of thefirm, business is required to conduct itself ethically and to run activities on ethical lines.Doing so would lay a strong foundation for the business for continued and sustainedexistence. All over the world, again and again, it has been demonstrated that it is only ethical
  8. 8. organisations that have continued to survive and grow, whereas unethical ones have shownresults only as flash in the pan, quickly growing and even more quickly dying and forgotten.Business needs to function as responsible corporate citizens of the country. It is that organ ofthe society that creates wealth for the country. Hence, business can play a very significantrole in the modernisation and development of the country, if it chooses to do so. But this willfirst require it to come out from its narrow mentality and even narrower goals and motives.3D OF ETHICS: • UNITARIAN VIEW OF ETHICS; business is a part of moral structure and moral ethics. • SEPARATISTS VIEWS OF ETHICS; Adam smith, Milton Friedman, says business in order to flourish should concentrate on its goals of profit maximization; it is influence by the government and market systems. Morality and ethics has no role in business. Society and law deals with ethics and morality. • INTEGRATED VIEW OF ETHICS; ethical behavior and business should be integrated in a new era called business ethics. Intersection of business and morality and ethics. Talbot parsons views are that Business and morality are interrelated and are guided by factors such government and market system and law and society. The interrelated dimensions enhance the sense of belongingnessNATURE OF ETHICS IN BUSINESS:Most businesses encounter two types of ethical problems known as overt and covert ethicalproblems.  Over ethical problems deal with bribery, theft, collusion, etc. They are clear and reprehensible.  Whereas covert ethical situations occur in corporate acquisitions, marketing and personnel policies, capital investment etc. They are complex, clear and have deft ethical solutions. Characteristics of Ethical Decisions in Business  Ethical decisions differ according to an individuals perspective. Individual views the ethical decision in his or her frame of reference or value system. Hence, ethical decision does not have a unique solution, but a multitude of alternatives.  Decisions either ethical or unethical have wide ramifications, hence affect the other situations.  The consequences of most unethical decisions are ambiguous in nature. For instance, an individual seeking employment in government office bribes the officials. But the individual is uncertain whether he will be provided with the employment.  Ethical or unethical decisions depend upon individual actions. Need for Business Ethics  All businesses exist and operate within society and therefore they should contribute to welfare of society.  To survive in the market, businesses should gain loyal customers and perform social responsibility.  According to George A Steiner, “the managers of the biggest companies know as a business gets larger, the public takes more interest in it because it has a greater impact on the community. The antennae of these managers are tuned to public opinion and they react to it. They seek to maintain a proper image of their company in the public mind. This leads to the assumptions of greater social responsibilities”.
  9. 9.  Thus, business either big or small, much operate on ethical grounds and discharge their social obligations to survive in the long-run. Milton Friedman was of the view that the aim of the business is to earn profits by utilizing the resources and engaging in open and free competition, without deception or fraud. Another philosopher Theodore Levitt was of the view that social values would dominate business values if business concerned themselves with ethics.
  10. 10. CHAPTER 2INDIAN ETHOS FOR MANAGEMENT: Cambridge Advanced Learner’s Dictionary defines Ethos as “the set of beliefs, ideas,etc. about social behaviour and relationship of a person or group” while Oxford AdvancedLearner’s Dictionary defines it as “the moral ideas and attitudes that belong to a particulargroup or society”. Indian Ethos is all about what can be termed as “national ethos”.Formally, the body of knowledge which derives its solutions from the rich and huge Indiansystem of ethics (moral philosophy) is known as Indian Ethos in Management (IEM).The salient ideas and thoughts of Indian Ethos in Management revealed by our ancientscriptures are:1. Atmano Mokshartham, Jagat hitaya cha: All work is an opportunity for doing good to theworld and thus gaining materially and spiritually in our lives2. Archet dana manabhyam: Worship people not only with material things but also byshowing respect to their enterprising divinity within.3. Atmana Vindyate Viryam: Strength and inspiration for excelling in work comes from theDivine, God within, through prayer, spiritual readings and unselfish work.4. Yogah karmashu Kaushalam, Samatvam yoga uchyate: He who works with calm and evenmind achieves the most.5. Yadishi bhavana yasya siddhi bhavati tadrishi: As we think, so we succeed, so we become.Attention to means ensures the end.6. Parasparam bhavayantah shreyah param bhavapsyathah: By mutual cooperation, respectand fellow feeling, all of us enjoy the highest good both material and spiritual.7. Tesham sukhm tesham shanti shaswati: Infinite happiness and infinite peace come to themwho see the Divine in all beings.8. Paraspar Devo Bhav: Regard the other person as a divine being. All of us have the sameconsciousness though our packages and containers are different.BASIC PRINCIPLES OF MANAGEMENT AS PER ANCIENT INDIANWISDOM AND INSIGHT:There are 6 basic principles, which come to light in the holy books applicable in today’smanagement world. They are:  Each soul is a potential God  Holistic approach  Equal importance to Subjectivity/Objectivity  Karma yoga  Yogah Karmasu Kaushalam  Co – operationEach Soul is a potential God: A human being has a soul, a spark of the Divine. The divine resides in theheart of a person. The Divine means perfection in knowledge, wisdom and power. Thereforea human being has immense potential power or energy for self – development. Thus humanefforts can achieve even an apparently impossible goal and convert the impossible into areality. The partnership of God and Man can bring about extraordinary or miraculous results;only if man chooses willingly to collaborate with God and actively participates in the affairsof the society by right action under his guidance and grace. He can bring about not onlypersonal development, harmony, happiness but also prosperity of his own organization and
  11. 11. the society without injustice to others. Of course here, also, God helps those who helpthemselves.Holistic Approach: Holistic approach in Management is based on spiritual principle of unity,oneness, non-dual or Advaita concept. Under this principle of unity, the universe in anundivided whole where each and every particle is connected with every other particle. Thus,entire Humanity is ONE.Such an integrated human personality of self-developed manager and worker can assure bestand competent management of any enterprise, involving collective works and efforts. It willachieve perfection or excellence in whatever sector you work. This is the ideal of Indianethos : ‘Atmano Mokshartham Jagat Hitya Cha.’ (For gaining perfection in individual life, aswell as for the welfare of the world.). This is the message for all managers and workers givenby the Indian ethos for management.Equal Importance to Subjectivity / Objectivity: Indian ethos for management distinguishes between subject and object.Subject is subtle and intangible. Object is concrete and tangible or visible.We have the concept of the third eye, the eye of wisdom. It can see even that which thenormal two eyes cannot. It can see the intangible i.e. invisible.Human and ethical values or qualities such as courage, vision, social awareness, fearlessness,integrity, pure and clear mind, truth, etc. are subjective, subtle and intangible concepts. Thesesubjective or subtle qualities are as important as money, materials, machines, information ordata as well as human skills. Inner resources of human beings are more powerful thanexternal resources.Creator is subjective. Creation is objective. Insight i.e., creator is more important thanOutsight i.e., creation. Our body, senses, intellect, mind, etc., are objective, seen, tangible.But our soul atman is unseen, intangible, subtlest and subjective. Hence, wisdom manager/worker are much more important and valuable than knowledge manager/ worker.Therefore, manager must develop his third eye, ‘Jnana Chakhu’ , the eye of Vision intution,insight, foresight and such other divine qualities or values. This is the essence of Indian ethosfor management.Karma Yoga: It is yoga of selfless service to others. Karma Yoga is all about identifying yourpriorities and trying to achieve them. Also, a person should have accountability i.e. he shouldalways hold only himself responsible for whatever goes right or wrong. This brings about theunion of human being with the Divine.Gita says that do your duty without ego and without calculations of gain or loss. One shouldbelieve in Nishkama Karma i.e. fruits of work should not be thought of while performing theduty.The memorable words of Gita are “To work only you have the right and you have no right tothe fruits of work”. However, this does not mean that one should work day and night and thereturns that he gets should be almost negligible. What the Gita tries to say is that let not thefruits of action motivate you as they might just divert your attention from work. When youare doing a job, put your heart and soul in to it. One has no control over the future hencenever waste your present in useless dreams of future hopes and fears of present actions.WHY DO I WORK? 1. For my own salvation and personal growth. 2. For the good of the world.
  12. 12. The inner joy of doing something gives the doer a sense of achievement and also helps him inrespecting himself more than he used to. Money is important but running behind money allthe time leads to tension, stress and total loss of peace. Self-motivation can assure self-development. When work is performed without passion, hatred, arrogance and desire we haveindividual development and social good.Indians always had two great truths of successful, harmonious and happy life: 1. Divinity of life can be used through self-development for personal growth and also for social welfare. 2. I cannot cheat you and nature without cheating myself. Working for harmony and peace results in a sense of fulfilment.It is becoming clear that a chapter, which had a Western beginning in business management,will have to have an Indian ending. Karma Yoga is not just meant for the common man butalso for leaders and managers who if act responsibly will in turn influence the behaviour of anumber of people.Karma Yoga thus is a good pathway for: 1. Self-purification and Self-development. 2. Individual growth and welfare. 3. Collective growth and welfare. 4. Minimum play of passion, jealousy, hatred. 5. Team spirit and Teamwork. 6. Autonomous management, minimum control and supervision. 7. Manager acts as a Mentor. 8. Self-motivation. 9. Perfection. 10. All round happiness and prosperity. 11. Skills and values united. 12. Conflicts resolved by integration.Yogah Karmasu Kaushalam: Yoga means excellence at work. Seek to perform your assigned duty or workin an excellent manner. Kaushalam denotes doing work with devotion and withoutattachment i.e. without being a work-a-holic. Such detached attitude enhances its values andimproves the concentration and skill of the worker. You work with smartness, determinationand ability. Your head, heart and soul co-operate with your hands. You do not hanker overthe fruits of action. You have no anticipation of reward, or personal gain. You become a toolof God to perform the work. Any work carried out with full concentration, dedication andwith all abilities that a person has, becomes valuable and the person also becomes valuable toothers as well as to society. In total quality management (TQM) Karma Yoga and YogahKarmasu Kaushalam provide valuable contributions. Under this slogan we have one hundredpercent concentration coming from within. The extrinsic incentives e.g., money, other perks,etc. play a very minor role as motivators.Co – Operation: Healthy competition is a powerful motivator for excellence and success,especially business success. The idea of cut-throat competition is founded on the concept of‘struggle for existence’ and survival of the fittest.Indian ethos says that for human beings the royal road is co-operation as a powerful motivefor team work. We are human beings having mind and power of discrimination.The Gita says: “By co – operation and mutual help all shall achieve the highest humanwelfare.” Unity is strength. Even in the holistic approach, we stress the co-operation
  13. 13. integration, synthesis and team – spirit for extraordinary performance, for enduring harmonyand peace, because in our hearts chamber is living the pure consciousness of the Divine, i.e.,Purnatman. Peaceful co-existence, harmony, not struggle is the rule. Indian insight endorsesthis in the management of any enterprise.Excessive competition at work can destroy many young people and our social life. Co-operation, united efforts and striving for success leads to all round prosperity and successleads to all round prosperity and success in any field of human enterprise.INDIAN ETHOS FOR THE WORKLIFE 1. Man’s Unique Inner Source: Indian ethos states that all human beings and indeed, all creatures, are but aspark of the divine. For example Indian ritual of praying to animals of various kinds as also tonumerous plants, specially the tulsi plant and papal tree. This divinity in man can lead him toperfection in knowledge, wisdom, and power. Due to this divinity man has immense potentialcapacity for self development and self improvement. With this capacity, human beings canachieve all seemingly impossible goals and overcome even monumental obstacles anddifficulties. This philosophy of Indian wisdom provides an excellent incentive to people toperform one’s duty to the best of one’s capacity and capability. It motivates people tofunction, by reinforcing that he is not working alone. 2. Holistic Relationship Between Man And Nature: According to this philosophy there is an intimate relationship between man andthe universe, between man and nature. This view states that all human beings and nature areinterconnected and interdependent. Thus the only law (dharma) of life is service to eachother. We can see that everything in this universe depends upon somebody else for theirsurvival.Indian ethos places emphasis on both spirit and matter. Both these are interlinked in theholistic approach. This means that man is permitted to enjoy both the internal as well as theexternal quality of life. 3. Cooperation With Each Other: Indian ethos stress upon cooperation amongst others at work and otherwise;integration, synthesis and team spirit for peaceful co-existence and mutual interdependence.Excessive competition, intra-organisation and inter-organisation, which is experienced byeverybody in the workplace at present, have destroyed many a young mind and family lives,besides giving rise to stress, tension and frustration leading to alcoholism, excessivesocialising, frightening loneliness, drug and sexual abuse and even suicide.Cooperation, mutual trust and respect, joint efforts and team spirit can lead to all roundprosperity and success for everyone concerned, due to the synergistic effect of combinedeffort. Close interdependence, interconnection and integration of human beings, society,nature and business, can only lead to universal good of all concerned. 4. Self Management: Indian ethos prescribes that a man should be able to control himself first, beforehe can control anybody else. Every manager must manage himself first, before he can eventry to manage anybody else. He must know himself first – his strengths, weaknesses, hisdreams and desires, his goals and ambitions, before he can be an effective manager. Propercontrol, harmony and integration between the body, mind, emotions, intellect and soul are theessence of self management.Self analysis through introspection is essential to know and discover oneself. Only when onehas self knowledge, can he undertake to manage himself. Introspection involves selfexamination of one’s own thoughts, feelings, emotions, sensations and passions, as well asone’s dreams and desires, goals and ambitions, strength and weaknesses.
  14. 14. 5. Yoga And Meditation: Yoga basically stands for excellence. Excellence at work can also be achievedthrough yoga. Similarly meditation stands for concentration. Meditation means to reflectupon deeply on anything, or to contemplate upon something. This method has provedimmensely beneficial to people in the workplace. Meditation helps to solve many complexproblems of the organisation demanding higher consciousness. Meditation results in a calmmind which helps one’s to focus on problems in a more clear frame of mind. In a calm mind,one can have flashes of intuition and creativity. 6. Dharma: Dharma in Indian philosophy means ‘duty’ and is almost synonymous withintegrity and righteousness. Dharma stands for all those ideals, philosophies, purposes,influences, teachings and experiences that shape our character. Each organisation in Indianethos is considered to be a living entity, having its own dharma and character. Thus anorganisation is supposed to inculcate within itself, all essential human and ethical values, likecourage, fairness, justice, righteousness, self discipline etc. Only when an organisation keepswithin its own dharma, and does not violate it, does the organization flourishes and grows.Dharma is different and specific for everyone in the organisation. The dharma of thechairman of the company would be different from the dharma of the office clerk. 7. The Spirit Of Renunciation (The Spirit Of Sacrifice): The spirit of renunciation of worldly goods and all material possessions isadvocated by Indian philosophy and ethos. The spirit of ‘tyaga’is epitomised in Indianphilosophy as a very great virtue. One is called upon to renounce all inner cravings andsensual enjoyment of outer objects. The tyaga philosophy is based on the belief that there isgreater joy in overcoming a desire than in satisfying it.’ renounce all so that you may enjoyall’- this is the message of isha Upanishad. The Bhagavat Gita, also advices one to renouncethe attachment to the fruits of action, the rewards of work. Renunciation results in mentalpeace, inner growth and spiritual progress.INDIAN VALUES FOR THE WORKPLACE: 1. The Importance Of Relationships In The Work Place: From birth, the Indian child is exposed to numerous relations, often sharingwarm and close personal relationships with them. Given the close physical contact, alongwith overwhelming care and inordinate amount of love and concern from elders, emotionallinks with others becomes the core characteristic of the Indian personality profile.The individual comes to the workplace with a strong need to relate to others. Due to poorhandling of this need for relationship of the Indian worker by the organisation, the workerfaces an identity crisis in the absence of intimate relationships both vertically as well ashorizontally. Ultimately it can lead to poor team spirit and poor team performance. So theorganization should try to develop relationship amongst the individuals within the workplacewhich will help in team building and emotional support. 2. Respect For Elders: Indian culture puts a high value on experience and age. Indian culture teachesthe individual to admire, respect and obey elders. In the organisational context, theconjunction of the abilities of older and younger people should result in corporate excellence,where the older person offers his experience and guidance to the younger and the mistakes ofthe younger person gets converted into learning experiences. Such a relationship within theorganization proves to be of immense value. 3. Respect For Hierarchy And Status: In the Indian joint family system, a child learns very early in life, respect for hierarchical layers of people, their status within the family and their varying degree of authority. Having come through a number of strict codes of behaviour in his family, the
  15. 15. individual. In his work life too, conforms to the rules and regulations of the organization, displays high support for his superiors and low deviance and rebellion. If this value of tolerance and respect for seniors is well utilized in the workplace, then it results in smooth maintenance of organizational power and mutually supporting and empowering superior- subordinate relationship. 4. Need For Security: The Indian system of joint family and the early parent-child relationships are soprotection oriented, that the Indian worker puts a very high premium on security, even in theworkplace, especially in his job. Though it does tend to make many individuals timid and riskavoiders, and leads to bureaucratic and delayed decision makings, it also results in smoothacceptance and implementation of decision taken as well as conformity with organisationalnorms and smooth functioning of the organisation.In the workplace, such a need for security results in unquestioning acceptance of superior’sauthority and mutual superior subordinate dependence. Such a sense of mutuality has manypositive outcomes and much more work gets done without any disruption. When organisationmakes employees feel safe and secure on the job, then employees are much more motivatedto put in their best efforts. 5. Rights And Duties: Rights have no place in the Indian philosophy. This however does not imply thatthe rights of individuals are neglected or ignored. When everyone discharges their duties asprescribed, everyone’s rights too get automatically fulfilled. With the correct performance ofduties, with the emphasis on internal attributes of the worker, rather than on the externalitiesof the work situation, a wiser worker is developed where the quality of work life gets fulfilledwithin the mind of the worker and not from external factors.QUALITY OF WORKLIFE IN INDIAN PHILOSOPHY: Quality of work life does not only depend on one’s position in the organisation, noron the trappings of power and prestige that comes with the job. Quality of work life is moreof a mental attitude; the inner satisfaction of having done one’s work according to the best ofone’s ability and capacity, of not having to fulfil one’s ego or false sense of pride by resortingto petty office politics and power manipulations, by achieving a sense of joy from a job welldone.According to Indian philosophy, the quality of one’s work life does not depend on theexternal environment or on the incentives of the job but depends on the internal environment.Quality of work life is much more a deeper feeling that provides one with the motivation notonly to perform the job well, but also to excel at it - to achieve self actualization and to growand develop on the job. It is to become in the process of doing one’s job, a better person – abetter human being. When the opportunities for achieving all these are present on the job andin the workplace, then one’s quality of work life is said to be high.Quality of work life provides one with a deep and satisfying feeling that one is doingsomething worthwhile, that one is creating value and excellence for one’s company, one iscontributing to the general welfare of humanity, and that one is making some changes to thelives of those within one’s area of influence, and that one’s presence in the company ismaking some difference to the company.THE CONCEPT OF ETHICS IN WORKLIFE ACCORDING TO BHAGAVATGITA: Arjuna got mentally depressed when he saw his relatives with whom he has tofight. (Mental health has become a major international public health concern now). Tomotivate him the Bhagavad Gita is preached in the battle field Kurukshetra by Lord Krishna
  16. 16. to Arjuna as counseling to do his duty while multitudes of men stood by waiting. It has got allthe management tactics to achieve the mental equilibrium and to overcome any crisissituation. The Bhagavad Gita can be experienced as a powerful catalyst for transformation.Bhagavad gita means song of the Spirit, song of the Lord. The Holy Gita has become a secretdriving force behind the unfoldment of ones life. In this modern world the art ofManagement has become a part and parcel of everyday life, be it at home, in the office orfactory and in Government. In all organizations, where a group of human beings assemble fora common purpose irrespective of caste, creed, and religion, management principles comeinto play through the management of resources, finance and planning, priorities, policies andpractice. Management is a systematic way of carrying out activities in any field of humaneffort.Its task is to make people capable of joint performance, to make their weaknesses irrelevant,says the Management Guru Peter Drucker. It creates harmony in working together -equilibrium in thoughts and actions, goals and achievements, plans and performance,products and markets. It resolves situations of scarcity, be they in the physical, technical orhuman fields, through maximum utilization with the minimum available processes to achievethe goal. Lack of management causes disorder, confusion, wastage, delay, destruction andeven depression. Managing men, money and materials in the best possible way, according tocircumstances and environment, is the most important and essential factor for a successfulmanagement.Management guidelines from the Bhagavad Gita: There is an important distinction between effectiveness and efficiency in managing. * Effectiveness is doing the right things. * Efficiency is doing things right.The general principles of effective management can be applied in every field, the differencesbeing more in application than in principle. The Managers functions can be summed up as: * Forming a vision. * Planning the strategy to realize the vision. * Cultivating the art of leadership. * Establishing institutional excellence. * Building an innovative organization. * Developing human resources. * Building teams and teamwork. * Delegation, motivation, and communication. * Reviewing performance and taking corrective steps when called for. Thus, management is a process of aligning people and getting them committed towork for a common goal to the maximum social benefit - in search of excellence.The critical question in all managers minds is how to be effective in their job. The answer tothis fundamental question is found in the Bhagavad Gita, which repeatedly proclaims that"you must try to manage yourself." The reason is that unless a manager reaches a level ofexcellence and effectiveness, he or she will be merely a face in the crowd.Old truths in a new context. The Bhagavad Gita, written thousands of years ago, enlightens us on all managerialtechniques leading us towards a harmonious and blissful state of affairs in place of theconflict, tensions, poor productivity, and absence of motivation and so on, common in mostof Indian enterprises today – and probably in enterprises in many other countries.The modern (Western) management concepts of vision, leadership, motivation, excellence inwork, achieving goals, giving work meaning, decision making and planning, are all discussedin the Bhagavad Gita. There is one major difference. While Western management thought too
  17. 17. often deals with problems at material, external and peripheral levels, the Bhagavad Gitatackles the issues from the grass roots level of human thinking. Once the basic thinking ofman is improved, it will automatically enhance the quality of his actions and their results.The management philosophy emanating from the West is based on the lure of materialismand on a perennial thirst for profit, irrespective of the quality of the means adopted to achievethat goal. This phenomenon has its source in the abundant wealth of the West and somanagement by materialism has caught the fancy of all the countries the world over, Indiabeing no exception to this trend. My country, India, has been in the forefront in importingthese ideas mainly because of its centuries old indoctrination by colonial rulers, which hasinculcated in us a feeling that anything Western is good and anything Indian, is inferior.The result is that, while huge funds have been invested in building temples of modemmanagement
  18. 18. CHAPTER 3VALUE ORIENTED HOLISTIC MANAGEMENT: The most valuable human possessions are health, harmony, happiness, wisdom, andabove all character reflecting ethical and human values. When these values are manifested inyour thoughts, speech and actions, you are called a noble and enlightened person. As wethink sincerely and constantly we become. Our actions and behaviour reflect our ideas andfeelings. We work not for name, fame, money, power and status but for greater worth, forcultivating values, for building up strong character, for wisdom so that our intrinsic valuesenhances. True greatness is not measured by tangible or extrinsic values such as name fame,etc. but always greatness in life is to be pure, kind, true, selfless. Health is more importantthan wealth. Character is most important than money.VALUES:Human and ethical values constitute the wealth of characters. Values express dharma ordivine nature as understood in the East, particularly in the Indian ethos and insight and theideas of integrity as understood in the West.Integrity: Integrity is wholeness, goodness, courage, and self-discipline to live by your innertruth.Wholeness: Wholeness implies totality, soundness, perfection and completeness. In the West,spirit in Wholeness is given only a slight reference. It is nearly forgotten. In all of ours heart’schamber lives the unworshipped God. We are not aware of the divine presence withinthought the divine is constantly looking at the person. Our ego has become the pretendedruler. Ego is the false notion of our mind, because it is ignorant of the reality.Goodness: It covers all essential values such as honesty, morality, kindness, fairness, charity,truthfulness, generosity etc. we need goodness in our thoughts, our speeches, and our actions.‘Be Good. Do Good’ leads to purification of thoughts, talks and actions associated with goodthoughts. Good things do not happen easily. You have to make them happen.Courage: In the world of management, courage points out acts of bravery, e.g. deciding notto conceal something one knows, and needs to be expressed openly. Courage is telling thetruth in the face of danger. You have the guts to go ahead, do something which is risky.Self-discipline: Self-discipline and self-control indicates that the soul is the boss who takescontrol of the mind and directs the mind and the senses to move on the journey to reach thegoal known to the master. When the soul, the individual consciousness, wakes up, we haveself-discipline and self-control to deal with life. The quality of life will now be different. Thatquality of life will give you greater harmony, happiness and moderation. Please rememberthat we need discipline and courage together to reach our objectives in time.Living by Inner Truth: Living by inner truth or by inner mind, which is the right instrumentwithin us but which is not known to us unless we go within, may be regarded as the lastingredient of integrity. It is the most important of all.Inner mind or truth communicates through faint whispers, intuitive thoughts, feeling burieddeep within us. Each one of us possesses this fine instrument and has the capacity to call itforth. We need practice to tap this cache. It is rediscovery of one’s subtle but true awarenesswhich generally lies in the secret hiding place. We must turn inwards to interact with our
  19. 19. inner mind and live by inner truth as per its direction. The voice of inner mind can be heardonly in silence.To live by inner truth at work amounts to remain yourself incorruptible, clean and inviolablein this world, which at present is invaded by total crisis oh human and ethical values. In thebusiness world we have kickbacks, double dealings, shady behavior and all forms ofcorruption and fraudulent dealings. Corruption is world-wide. Let your mind be ruled andguided by your Conscience.DHARMA: Dharma is the law of right living the observance of which secures the double object ofhappiness in your own life and also the happiness in life of others. It stands for all thoseideals, purposes, influences, institutions, and the ways of life and conduct that shapes thecharacter and evolution of man both as an individual and as member of the society. Dharma is the Indian Concept almost synonymous with integrity. However it has awider scope. It includes openly spirit, righteousness (godliness) and fearlessness. Let usreview these three divine elements. Spirit: Man is the soul. He is essentially divine. Dharma directly evolves from spirit.Integrity seems to shy away from it. There is no shyness regarding spirituality in dharma.Dharma is spirit in Indian Ethos. The Western society is secularized. Indian society has ahappy union between spiritualism and materialism. Although integrity honors all moralvalues, it gives only lips sympathy to the spirit through the notion of wholeness. Integritydefines wholeness leaving out spirit. It is the spirit which can bring out a true sense ofwholeness. It is the spirit which makes us whole (Poornatva). The inclusion of dharma is likerediscovering a vacant upstairs’ room in one’s heart chamber. The spirit, our boss, lives there.We imagine that spirit is not within us and the upper floor seems to be empty. . Indian ethosopenly recognizes the spirit as our boss and declares ‘Do right, do good, and be good’ and thewhole chamber of our heart shines with the Light of Consciousness. Righteousness: Dharma demands right action. Do the right thing. In dharma, notmere action but rightness is given great emphasis. Fearlessness: integrity means courage. Dharma stresses fearlessness. When the divineis present within you and you experience his presence, what is there that can touch you orwhom you need fear when He is offering His protection to you? Even a little of Hisawareness will carry you through all risks and uncertainties. Remember that the Divine Touch is enough to convert difficulties into opportunities.Of course, you should know the truth about yourself. Dharma is the inner law of one’s life.Follow your Dharma and it will protect you or stand by you. We have to comply with ourown dharma. Nobody has ever violated dharma without ultimately courting disaster.Adharma ultimately brings certain irremediable fall. Each one has his/her own Dharma.The idea of an individual’s own dharma is the insight that shines through Indian insight. Themoment we are unconscious or ignore that inner law, our life is paralyzed. We feel isolated.Or degeneration is sure. No wonder we feel missing and incomplete. Dharma is ethics andspiritualism combined.Moral and Ethical Values:The mental contents of a good person are called moral and ethical values. This is also calledDaivi sampati or divine qualities. Values are also called gunas. Some of the values are:  Fearlessness
  20. 20.  Courage  Purity of mind and heart  Integration of thought, action and behaviour  Generosity  Non-violence  Modesty  Humility  Integrity  Charity  Loyalty  Calmness A manager/worker with these values can mobilize his energies as well as of thosearound him and canalize in to productive purposes to accomplish greater tasks. The proof of sincerity and seriousness is a strong emphasis on integrity of character ina job. A man might have too little knowledge, perform poorly, lack judgement or analyticalability and yet may not do much harm. But a man who lacks character and integrity maycause much greater harm. E.g. A salesman who does not possess good communication/ negotiating skills may atthe most cause low sales. But a salesman who makes tall claims, false promises with regardsto the product will cause disrepute the organization; which will be fatal to the company in thelong run.Significance of Values: Our effectiveness at work depends on our moral and ethical values. These humanvalues support established business values such as service, communication, excellence,credibility, and innovation etc. these human values help self-development. Even themanagerial functions of direction, control, supervision etc become much easier, thus leadingto goodwill and harmony in the organization. We need to look at success with a holistic view. Outer fulfilment must be combinedwith inner fulfilment. Inner fulfilment relates to our spiritual, mental and emotionalenrichment. While the outer achievement concerns meeting set targets, using your talents tothe fullest extent etc. One would be very pleased at being appointed as the CEO or MD of a company but ifyou cannot spare time for your family or can’t enjoy a peaceful Sunday with your kids thenyour success is not complete.Golden Rule of Ethics:Earlier, the business community and society at large neglected ethics. But over the yearspeople have realized its importance for the welfare of an organization.The golden rules, which find its mention in the Bible, are:  Everything you want others to do to you, you shall do to others.  Do not do to others that which you do not wish them to do to you.  Do not do anything that if done to you, would cause harm to you.In a nutshell, treat others, as you would like to be treated. So if you do not want to be spokento rudely then you must not speak rudely. So if don’t want to use flawed goods you must alsorefrain from adulteration.Values and Skills:  Values help us to ‘become’ while we need skills to ‘do’.
  21. 21.  Values act as a base for the skills and hence proceed skills in their importance.  Values are internal –deal with purity of mind and soul. While skills are external – deal with functioning well at job.  Values bring about universal good (software aspect). Skills bring about achievement of tasks (hardware aspect).  Values are enduring and do not change with time. But skills have to be updated regularly and change with passage of time.E.g. excellent service to the customer may be a value of the company. Personal visits may bethe method used by the company. With the advent of technology, the company may usepersonalized e-mails etc. here the skill is changing but the service orientation (value) remainsconstant.Values and the Work Place: The modern world has brought about many developments at the workplace. This haslead to a lot of comforts, luxuries and money in the hands of people. But it has also lead tomoral, ethical and spiritual degeneration. Enterprises worldwide have been disregarding the importance of values. Cheating,corruption and malpractices are rampant in the companies. Fortunately we are graduallyawakening to redeem ourselves. More and more corporate are awakening to the fact that it isnot necessary to indulge in malpractices to make money. Illustrious men like Narayan Murthyare setting examples that ethical management practices can yield results. Infact, even todaywhen we think of great people like Jamshedji Tata we do not associate him only with his steelplant but the entire township of Jamshednagar and the various Tata hospitals. Values and ethics must be an integral part of management and work culture. We havecreated unwanted stress and unrest in the society. An organization that cares for its peoplecannot ignore such unhealthy developments and must take steps to see to it that our valuesystem is in place.Human Response Management: People constitute the greatest dynamic inputs in any organization. They are the centerand must be regarded as the vital and integral part of organization. Every individual is therepresentation of a divine essence. People should be developed not only in skills but also inmoral, ethical and spiritual values. Morality and rationality are combined at the same time inHRD.Why do we need value-based holistic management?Let us see two examples to prove that value-based holistic management is essential and thereis no choice: 1. Man machine equation: In the earlier times man was treated as any machine in the organisation, who could behired and fired whenever the owners felt. Their feelings and emotions were nil for theorganisation. It is due to Behavioral Scientists that this situation has considerably improved.Today there are various concepts like Performance Appraisal, Motivation, Job Satisfaction,Job Rotation, etc which draw a line of difference between a man and a machine. Value-oriented management will recognize the divine model of man. This will surely help ineliminating the man machine equation. Human values for managers will honour the core ofhumanness and bring about harmony and balance between values as ends. We will evolve ajudicious combination between values and skills. 2. Prevention of exploitation of mother nature: Science and technology brought about phenomenal industrialization at the cost ofindiscriminate and ruthless exploitation of Nature. It is wrongly assumed that man is having a
  22. 22. birthright to draw on resources supplied by nature at his will. Under the holistic approachman and Nature are deeply interconnected and interdependent. Hence, there is no right toexploit Nature for purely selfish motives. As one man exploiting another man is bad so is exploiting Mother Nature bad. Manyorganisations knowingly and unknowingly pollute the environment. Value-based holisticmanagement alone can prevent this exploitation of Mother Nature.Value driven management: Effectiveness in performance of managers and workers is a function of values andskills together. A good manager has strength in both values and skills. We have managementby consciousness. The purity of mind and heart guides the reasoning and intellect in allmanagerial functions particularly in HRM. Every effort must be made by the top management in the organization to inculcatevalues. Values relate to the internal domain of business i.e. interactions with employees,customers, suppliers, creditors, public, etc. In the corporate mission or creed we describevalues, vision, goals and objectives cherished by the organization. Values should be an integral part of corporate mission, objectives. They should beexpressly mentioned in the mission document. Value- orientation must be a program-basedactivity. It is a long-term activity with the constant follow-up and motivation throughmanagement support. The members of the management team and the union leaders of workers must beregularly exposed to spiritualization, satsang of spiritual leaders, seminars and workshops,meditation, introspection, common prayers, etc. the organization should inculcate the spirit ofgiving rather than taking in the work life. The individuals are encouraged to subdue their ego,overcome to some extent selfishness, anger, jealousy, greediness, hatred, partiality and suchother undivine elements. The employees must strive internal developments rather than only specialize in skillsand proficiency. They should sharpen their mind and intellect. Purer heart and mind wouldinfluence and sustain enduring values as a basis for improved effectiveness in theorganization. Let us note that success of Japan is based on values familiar to Indians, using spiritualeducation and practices, example concentration, meditation, lectures of spiritual leaders, mindstilling, intuition, etc., to neutralize the evil effects of reckless industrialization and tosynthesize the human values into management and organization. Japan has combinedspiritualism and materialism and adopted value driven holistic approach in management andorganization. Let the global management adopt this.Indian Culture and Wisdom: The long term viability and progress or the sustainable all round development of anation depend not so much on its material, ecological or technological resources but primarilyin its human resources having ample potential energies- spiritual and psychological resourcesof our people. The greatest of the spiritual and psychological resources of any nation are itspeople who are conveniently forgotten or ignored. The essential and enduring part of acollective being or a nation is not its economics, commerce, ecology or politics which formonly its outer body but its Insight, Ethos and Culture, which are the expression of its Mindand Soul. Just as the outer material and economic progress and well-being of a nation dependson a scientific preservation and harnessing of the material and biological resources of itsecological heritage; the inner evolution and progress of a nation depends on the enlightenedpreservation and harnessing of its human and cultural heritage. Fortunately, in India we have
  23. 23. the immense potential of our insight, and culture for motivating, managing and leading ourabundant human resources.THE ETHICAL AND SPIRITUAL VALUES: the Driving force for Achieving Excellence:There are two levels of human consciousness: Lower consciousness operating through our five senses in contact with the external world. This is also called the lower mind. Higher consciousness or higher mind which is the door to get the vision of the spirit or pure consciousness. This is also called the inner mind. We are in touch with this inner mind only in silence. It can commune with the Divine within us. It can hear the small voice in the form of inspiration, or intuitive purified mind.Traditional methods of purification of mind/heart are: Karma Yoga Bhakti Yoga Jnan Yoga Raja YogaMETHODS OF HEART/MIND PURIFICATION Managerial Effectiveness Value Orientation Pure Mind Jnana Raja Bhakti Karma Yoga Yoga Yoga YogaThe above chart indicates the four traditional methods of mind purification.Jnan Yoga- Path of knowledgeRaja Yoga- Path of Mind ControlBhakti Yoga- Path of DevotionKarma Yoga- Path of ActionAll these help to develop a pure mind. Pure mind is the origin of all values. Values emergeonly from a purified mind i.e. from the inner mind or higher consciousness. This is a keyfactor for managerial effectiveness. ]
  24. 24. CHAPTER 4The Legislation of Ethics: Numerous laws have been enacted to protect employees against what societyperceives as unethical behavior in the workplace. These laws are administered by the UnitedStates Department of Labor. Generally, these laws reflect the ethical standards of the majorityof society. An example is the Americans with Disabilities Act of 1990 (ADA). According tothe ADA:"No covered entity shall discriminate against a qualified individual with a disability becauseof the disability of such individual in regard to job application procedures, the hiring,advancement, or discharge of employees, employee compensation, job training, and otherterms, conditions, and privileges of employment." Most citizens would agree that it would be unethical to deny employment orpromotion to a disabled applicant, solely on the basis of that disability, especially when thatdisability would not affect their work performance. Legislators reacted and have enacted theADA in order to make it illegal to engage in such discrimination. Yet even with thislegislation, the Supreme Court continues to evaluate provisions of the ADA and its definitionof disability.Ethics Regulations for Federal Employees:Executive branch employees are subject to statutes and regulations commonly referred to as"ethics" standards. Through these statutes, the government has established legally enforceablerules on ethical behavior. The two basic sources of these standards are the criminal conflict ofinterest statutes and the administrative standards of ethical conduct.Chapter 11 of Title 18, United States Code is an example of a Criminal Conflict of InterestStatute. The conflict of interest statutes prohibit a Federal employee from engaging in certaintypes of activities that would place the employee’s own personal interests above the FederalGovernment’s interests. According to this Statute, a Federal employee: • Is prohibited from acting in an official capacity on a matter in which the employee (or certain others) has a financial interest; • May not represent the interests of private parties in matters in which the United States is a party or has an interest; • Is prohibited after leaving the Government from engaging in certain activities on behalf of other persons or entities; • May not accept private compensation for performing official duties.The Code of Federal Regulations Part 2635 is an example of Administrative Standards ofEthical Conduct Regulation. The standards of conduct regulation establish principles ofethical conduct for employees within the executive branch. The regulation not only identifiesthe principles but also provides easy to understand examples of how the principles apply. Thestandards of conduct cover such topics as:
  25. 25. • gifts from outside sources • gifts between employees • conflicting financial interests • impartiality in performing official duties • seeking other employment • misuse of position • outside activities RELATIONSHIP BETWEEN LAW AND ETHICS: INTRODUCTION: A relationship exists between law and ethics. In some instances, law and ethics overlapand what is perceived as unethical is also illegal. In other situations, they do not overlap. In somecases, what is perceived as unethical is still legal, and in others, what is illegal is perceived asethical. A behavior may be perceived as ethical to one person or group but might not be perceived asethical by another. Further complicating this dichotomy of behavior, laws may have been legislated,effectively stating the government’s position, and presumably the majority opinion, on the behavior.As a result, in today’s diverse business environment, one must consider that law and ethics are notnecessarily the same thing. Law can be defined as a consistent set of universal rules that are widely published,generally accepted, and usually enforced. These rules describe the ways in which people arerequired to act in their relationships with others in a society. They are requirements to act in a givenway, not just expectations or suggestions to act in that way. Since the government establishes law,the government can use police powers to enforce laws. The following chart defines the terms in thedefinition of law above. Consistent – If two requirements contradict each other, both cannot be termed a law, because people cannot obey both. Universal – The requirements must be applicable to everyone with similar characteristics facing the same set of circumstances. Published – The requirements have to be published, in written form, so that they are accessible to everyone within the society. Accepted – The requirements have to be generally obeyed. Enforced – Members of society must be compelled to obey the law if they do not choose to do so voluntarily. The word ethics is derived from the Greek word ethos (character), and from the Latin word mores (customs). Together they combine to define how individuals choose to interact with one another. In philosophy, ethics defines what is good for the individual and for society and
  26. 26. establishes the nature of duties that people owe themselves and one another. The followingitems are characteristics of ethics:Ethics involves learning what is right and wrong, and then doing the right thing.Most ethical decisions have extended consequences.Most ethical decisions have multiple alternatives.Most ethical decisions have mixed outcomes.Most ethical decisions have uncertain consequences.Most ethical decisions have personal implications.It is important to note that there is also a difference between ethics and morality. Moralityrefers both to the standards of behavior by which individuals are judged, and to the standardsof behavior by which people in general are judged in their relationships with others. Ethics,on the other hand, encompasses the system of beliefs that supports a particular view ofmorality.The Relation between Law and Ethics Ethical values and legal principles are usually closely related, but ethical obligationstypically exceed legal duties. In some cases, the law mandates ethical conduct. Examples ofthe application of law or policy to ethics include employment law, federal regulations, andcodes of ethics. Though law often embodies ethical principles, law and ethics are far from co-extensive. The law does not prohibit many acts that would be widely condemned as unethical.And the contrary is true as well. The law also prohibits acts that some groups would perceiveas ethical. For example lying or betraying the confidence of a friend is not illegal, but mostpeople would consider it unethical. Yet, speeding is illegal, but many people do not have anethical conflict with exceeding the speed limit. Law is more than simply codifying ethicalnorms.Establishing a set of ethical guidelines for detecting, resolving, and forestalling ethicalbreaches often prevents a company from getting into subsequent legal conflicts. Havingdemonstrated a more positive approach to the problem may also ensure that punishment forlegal violations will be less severe. Federal sentencing guidelines passed in 1991 permitjudges to reduce fines and jail time for executives proportionate to the ethical measures acompany has taken.ROLE OF GOVERNMENT OF INDIA IN ENFORCING ETHICALBEHAVIOUR:In India the central or state government has a great impact on how business conducts theiraffairs. In any country there is government interference in one or the other way.The government determines the conditions under which persons or associations may entercertain lines of business as in granting charter, licence or franchise.
  27. 27. The government may regulate or assist the conduct of economic ventures of many kinds,once they are under way. This includes control that merely lays down general standards andprohibitions and those that interfere with matters that may be considered managerial.Public control ma extend to the results of business operation as in the limitation of public-utility profits, ceiling on dividend and imposition of excess profit taxes on business generally.The government also controls the relationships between the various segments of theeconomy, the purpose being to settle conflicts of interests of legal rights and to prevent asundue concentration of economic power in one place. The government may sometimes takeupon itself to initiate actions for public good. e.g. when private enterprises fail. thegovernment takes over such enterprises so that their services continue to reach people andthat their employees do not become unemployed. The government also takes over privateenterprises when it wastes natural resources and when they fail to consider themselves astrustees of public good and abuses its power.The Indian Constitution-The preamble of the constitution states that attainment of social,economic and political justice and equality of status and of opportunity should be among themost important basic guiding principles of the functioning of the state. The constitutionassures citizens as their fundamental right, the freedom to practice any profession, carry onany occupation, trade or business. Some of the directive principles which promote ethicalbehaviour are cited below-1. The state shall strive to promote the welfare of people by securing and protecting aseffectively as it may, a social order in which justice, social, economic or political shall formall the institutions of national life.2. The state shall strive to minimise the inequalities in income and endeavour to eliminateinequalities in status, facilities and opportunities, not only among the individuals but alsoamongst groups of people residing in different.3. The state shall-in particular direct its policy towards securing- That is citizen, men and women equally, has the right to adequate means of livelihood. That the ownership and control of the material resources of the community are so distributed as best for common good That the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment (loss) That is equal pay for equal work for both men and women. That the health and strength of workers, men and women and the tender age of children are not abused and that citizens are not forced by economic necessity to enter a vocation unsuited to their age and strength.6. That children are given opportunities to develop in a healthy manner and in conditions offreedom and dignity and that the children and youth are protected against exploitation andagainst moral and material abandonment.
  28. 28. 7. The state shall with the limits of its economic capacity and development make effectiveprovision for securing the right work, to education and to public assistance in cases ofunemployment, old age, sickness and disablement (article 41).8. The state shall make provisions for securing just and humane conditions of work and formaternity relief (article 42)9. The state shall endeavour to protect and improve the environment and to safe guard theforests and wild life of the country (Article 48)10. The state shall take steps to secure participation of workers in management ofundertakings, establishments of other organisations engaged in any industry (article 43-A)The above mentioned directive principles clearly shows that the government has considerableinfluence upon business behaviour if it has to attain the goals established by the constitution.INDIAN BUSINESS LAWS AND THEIR IMPACT ON ETHICALBEHAVIOUR:The government has armed itself with numerous laws relating to business. The directiveprinciples of state policy of the Indian constitution also provide enormous scope forgovernment intervention in the functioning of businesses. All laws relating to business inIndia, can be broadly classified into 2 categories-1. Business laws2. Labour lawsBUSINESS LAWS.Some of the important business laws which aims to regulate business behaviour are 1. The Industries development and regulation act-This Act enacted in 1951 with the main objective of giving practical effect to the industrialpolicy, gave the government sweeping powers to control industries.It empowers the central government to develop and regulate the industrial sector in India,through suitable and appropriate means. However this has benefited the richer section thanthe poorer section of the society. A report on the operations of licensing under this Act by theplanning commission in 1966 stated that-1. The working of the planned economy had contributed to the growth of big companies2. The working of the industrial licensing system enabled the large industrial houses to obtaina disproportionate large shares of the license issued.3. The operation of the industrial licensing system was not successful in achieving theobjective of regional dispersal of industries.4. The large industrial houses were the major beneficiaries of public financial institutions.Thus this Act has not only failed to compel business to behave ethically, it has on the otherhand encouraged unethical behaviour of big business house.
  29. 29. Thus many controls of the government which were sought to be enforced through legislationwere no doubt introduced with good intentions, but they not only failed to achieve theobjectives but resulted in much unethical behaviour particularly big business houses.Foreign Exchange Regulation Act, 1973:This Act applies to all citizens of India, outside India and to branches of companies registeredin India. The main objective of FERA is the conservation of the foreign exchange resourcesof the country and the proper utilisation thereof in the interests of the economic developmentsof the country. Though FERA was started with a noble objective and patriotic feeling, itsimplementation has not resulted in the desired effects.Foreign investments and collaborations have been sanctioned in many cases which have hadno relevance to national priorities and development needs. This Act has severe criticisms. Ithas also been said to have a potent source of corruption, black money, scams and havewidened the trade gap. Instead of encouraging ethical behaviour, its imposition has resultedin unethical behaviour not only in the case of companies but also in the case of individuals.The Companies Act, 1956:This Act provides for a greater government control over the formation and management ofcompanies. Some of its significant objectives which is considered ethical are1. Minimum standard of good behaviour and business honesty in company promotion andmanagement.2. Recognition of the interest of shareholders and creditors3. Fair and true disclosure of the affairs of the company.4. Higher standard of accounting and auditing.5. A provision for investigation into the affairs of any company managed in an oppressivemanner to a minority of the shareholders.6. Enforcement of the performance of duties by the management of the company.However there exist many provisions in the companies Act which are subject tomanipulations. Companies resort to unfair trade practices while disclosing their affairs andthis Act has been helpless to detect and punish such offences.The Monopolies and restrictive Trade Practices Act, 1969:The main objective of this Act is to control the concentration of economic power andmonopolies and to prohibit monopolistic restrictive and unfair trade practices. The act hasrestricted and stopped many misleading advertisements, adulteration and all sorts of falsetrade practices. But some of the problems were that there was a considerable delay in disposalof cases under MRTP ACT. It has been ineffective in preventing economic concentration.The Essential Commodities Act, 1955:It was set to provide in the interest of the general public, control of production, supply anddistribution of trade and commerce in certain commodities. The government had listed
  30. 30. specific commodities as “essential commodities”. The effect of this Act is that it had led towide spread unethical behaviour in the society.Shortage of essential commodities has led to black marketing and the generation ofconsiderable sums of black money had led to the creation of a parallel economy. It also led tocorruption in bureaucracy which was invested with discretionary powers. This act also led tounethical behaviour and hardly proved effective in controlling essential commodities.Some of the other laws which provide the government with sweeping powers to controlbusiness behaviour are1. The capital issues control act 19562. The securities contracts act 19563. The imports and exports act 19474. The Indian Patents Act.19705. The partnership Act.19326. The sale of goods act 19307. The consumer Protection act 1986 and others.LABOUR LAWS:Labour laws represent a communitys attitude to the labour class. The basic philosophy oflabour legislation is to ensure regulation of employee-employer relationship to preventexploitation of employees and, more positively to ensure social justice, labour welfare, needsof national economy and international uniformity as far as possible without compromisingnational interest and ignoring social problems.The legislation is fundamentally based on the principle of social justice where the workmen isnot exploited labour legislation can be classified under the following categories-1. Laws relating to weaker Section (ie, children and women)a. The Factories Act, 1948b. The Mines Act, 1952c. The Plantation Labour Act, 1951d. The employment of children Act, 1938e. Maternity Benefit Act, 19612. Laws relating to specific Industries3. Laws relating to Specific Matters-3. 1.Wages.
  31. 31. a. The payment of wages Act, 1963b. The minimum Wages Act, 1948c. The Equal Remuneration Act, 19763.2Social Security-a. Workmen Compensation Act, 1923b. Retrenchment Benefit Actc. The payment of Bonus Act, 1965d. Employee State Insurance Act, 1948e. Fatal Accident Act, 19553.3 .Bonded laboura. Bonded Labour system(Abolition)Act, 19764. Laws relating toTrade union Act, 1926Industrial dispute Act, 1947The workmen compensation Act, 1923
  32. 32. CHAPTER 5RELATIONSHIP BETWEEN ETHICS AND CORPORATEEXCELLENCE:Organisations operate not just to survive but to excel(centres of excellence, market leaders,zero-defect products etc). They strive to achieve perfection and excellence in any field andcan be termed as the basis of ethics.Dr.M.B Atherya(management guru) Values like “atithi devo bhava(the customer is god)guna(quality) atmanirbharta(self-reliance) helps in survivng competition caused byglobalisation and liberalisation leading to corporate excellence.Also values mof kanashah artham saadhayet” says that one should earn wealth by savingevery bit possible and this is vital to increase organisational productivity.This is true for an organisation regarding the scarce natural resources as it is forindividuals.Comapnies can achieve excellence through ethical means through shloka:udyogam purusha lakshanam”(industiousness is the hallmark of a person).Companies canachieve excellence through the attitude of “seva” or service to the community and to thecustomer.The companies can achieve corporate excellence by following bhagavad gita value ofparasparam bhavayantah which means mutual concern.Mr.Anil Sachdeva,M.D Eicher consulatny services- It is possible to become a leadingcompany if we excel in quality in all respect and do more with less.He also remarked“knowing our unlimited potential is the essence of indian ethos”.Since the flow of products in the market is more, a shift from customer-creation to customerretention is given importance.Business ethics is the source behind quality products,smoothproduction processes,fair employment practices,operational transparency,concern forcustomers as well as shareholders and for social welfare.All these factors leads to corporateexcellence.Making mistakes or being less than excellent is certainly not unethical but individuals in theseat of authority and responsibility do have a moral obligation to perform to the best of theircapacity and capability and avoid making costsly mistakes.CORPORATE MISSION STATEMENT:An organisation mission consists of its long term vision of what it seal to achieve and thereason for its existence. This mission is denoted through its mission statement audit containsan account of how it wishes to serve the society and contributes to social welfare. Itincorporates the ethical values that the organisation strives to use in order to achievecorporate excellence.
  33. 33. This mission statement acts like the constitution of the company, the solid expression of thecompany’s vision and values. The process of writing out the mission statement is asimportant as having the mission statement because it forces the company to think about itspriorities deeply, carefully and to integrate its activities with the beliefs. It reflects the deepestvalues, unique talents and potential for achieving corporate excellence.A clear corporate mission statement makes the employees committed and creates unityamong them, it also forms a guideline for governing themselves and there will be no need todirect and control for they work for corporate excellence.An effective goal focuses on results rather than activity. It identifies where the organisationwants to be and determines where it is now.It depicts the organisations business character and the kind of organisation i strives to be. Forthe mission statement to become more meaningful, everyone should participate in itsformulation and not just its strategy planners or the top management. Only then it can beeffective. If an organisation only focuses on commercial performance, it may run the risk ofbecoming inhuman and socially irresponsible when it has to face an ethical dilemma.CODES OF ETHICS:Private Companies, organizations, and associations frequently establish their own Codes ofEthics. These may be formally written or understood. Although the government does notenforce these Codes, they are enforced internally. Violation of the Codes alone can, in someinstances, be grounds for termination. The following tables show examples of such Codes. I will conduct all business dealings with fairness, honesty and integrity. I will protect all information and resources available to me from loss, theft, and misuse. I will avoid even the appearance of conflict of interest or any other impropriety. I will treat my fellow employees fairly and with dignity and respect. I will help create and sustain an atmosphere conducive to the spirit of this code.Clearly, there is a relationship between law and ethics, and this relationship is important inmanagement. Managers must evaluate not only what is legal, but what they, their employees,and society consider ethical as well. Important here is that companies must also considerwhat behaviors their customers will and will not accept. The news is full of stories regardingthe ethical issues with which companies are being confronted, such as the practices of Nike,as outlined above. No company wants to be forced to defend itself over ethical issuesinvolving wages, the environment, working issues, or human relations.Managers play a vital role in a companys legal and ethical performance. It is in part theirresponsibility to ensure that their employees are abiding by Federal, State, and Local laws, aswell as any ethical codes established at the company. But most importantly, the managersmust provide a positive example to their employees of proper behavior in light of laws andethical codes.Certainly, policies and procedures will never be developed to satisfy everyone, but theestablishment of Codes of Ethics will at least provide a framework for ethical behavior, andallow customers to evaluate the type of company with whom they are doing business. With
  34. 34. this knowledge, employees and customers must decide whether or not they are willing andable to conform to these Codes, as well as to the laws that have been enacted. Managerscannot simply limit their decisions to following the law. They must also consider the ethics oftheir employees and customers. • A code of ethics is a statement of the norms and beliefs of an organisation. Norms are the standard of behaviour, expected from everyone in the organisation when confronted with a particular situation consisting of ethical dilemmas. It encourages people to think in a particular way which leads to positive attitude and consequently to the wanted behaviour. The code of ethics generally make an employee of the organisation aware of his or her obligation and the moral duties towards the organisation, but these codes cannot help to solve managerial; dilemmas between economic and social performance. • The organisation culture governs peoples behaviour in the direction where they strive to achieve and create excellence in corporate life. An organisation where its culture consists of top management’s commitment to good business practices, open communication, shared values, beliefs and norms for everyone within the organisation stands to benefit from corporate excellence. The corporate culture consciously created, must be value-based • Top management must continuously communicate these values to the lower levels in the organisation. Values produce a sense of direction for the employees and help to guide their day to day behaviour.ORGANISATION CULTURE: Culture refers to the set of values, dominant beliefs and guiding norms of behaviourfor its employees. It denotes the climate, the atmosphere, the mental attitude shared by themembers of the organisation. A strong culture provides a basis for productive ethos andethical behaviour of an organisation. such a culture spearheads the company’s commitment tocreating excellence-through zero defect products, excellent customer support service,quality, reliability, employee welfare commitment etc. The organisation culture plays adominant role in influencing employee’s ethical behaviour.TOTAL QUALITY MANAGEMENT (TQM): It is a systematic approach to guide an organisation towards excellence throughsuperior quality products, services and processes. It is a corporate strategy. Quality is nolonger limited only to products and services but also measured in terms of value forcustomers.