Corporate Ethics


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Corporate Ethics

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