Business Ethics – Concept, Characteristics, Importance and Need for business ethics. Indian Ethos, Ethics and Values, Work Ethos

1. UNIT 1
INTRODUCTIONTO BUSINESS ETHICS
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2. The history of Ethics goes back to 1970’s when the term Business Ethics was
commonly used. Increasingly unethical conduct was found by corporations
during the 1960s.
To counter this, corporations developed social responsibility programmes
which included charitable donations and funding local community projects.
Business schools began to incorporate ‘social responsibility’ courses into their
syllabi but it was mostly focused on law and management strategy.
Eventually philosophers became involved and brought ethical theory to bear
on the relevant ethical issues and hence business ethics became a more
institutionalized part of business.
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3. • The word ethics is derived from the Greek word ‘ethos’, which means
character. Ethics is a branch of philosophy concerned with human character
and conduct. It is the discipline dealing with ‘what is good and bad’ and with
moral duty and obligation. Ethics is the embodiment of moral values, which
describes what, is ‘right’ and what is ‘wrong’ in human behaviour and what
‘ought to be’.
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4. Ethics refers to standards of conduct that guide people’s
decisions and behaviour (e.g., not stealing from others). Most
organizational scientists acknowledge that it is not a
company’s place to teach employees moral values.
After all, these come with people as they enter the workplace.
However, it is a company’s responsibility to set clear standards
of behaviour and to train employees in recognizing and
following them.
Just as organizations prescribe other kinds of behaviour that
are expected in the workplace (e.g., when to arrive and leave),
so too should they prescribe appropriate ethical behaviour
(e.g., how to complete expense reports and what precisely is
considered a bribe).
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5. BUSINESS
ETHICS
Ethics is a subject of social science that is
related with moral principles and social
values.
'Business Ethics' can be termed as a study of
proper business policies and practices regarding
potentially controversial issues, such as
corporate governance, insider trading, bribery,
discrimination, corporate social responsibility,
and fiduciary responsibilities.
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6. • “Business Ethics is an art and science for
maintaining harmonious relationship with society,
its various groups and institutions as well as
recognizing the moral responsibility for the
tightness and wrongness of business conduct” -
Wheeler.
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7. There are several characteristics or features of
business ethics.
1. Business ethics are based on
social values, as the generally
accepted norms of good or bad
and ‘right’ and ‘wrong’
practices.
2. It is based on the social
customs, traditions, standards,
and attributes.
3. Business ethics may
determine the ways and means
for better and optimum
business performance.
4. Business ethics provide basic
guidelines and parameters
towards most appropriate
perfections in business
scenario.
5. Business ethics is concerned
basically the study of human
behaviour and conducts.
6. Business ethics is a
philosophy to determine the
standards and norms to make
mutual interactions and
behaviour between individual
and group in organisation.
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8. 7. Business ethics offers to establish the norms and directional approaches for making an appropriate code of
conducts in business.
8. Business ethics are based on the concepts, thoughts and standards as contributed as well as generated by
Indian ethos.
9. Business ethics may be an ‘Art’ as well as ‘Science’ also.
10. Business ethics basically inspire the values, standards and norms of professionalism in business for the
well-being of customers.
11. Business ethics is to motivate and is consistently related with the concept of service motives for the
customers’ view point.
12. Business ethics shows the better and perspective ways and means for most excellences in customisation.
13. Business ethics aims to emphasise more on social responsibility of business towards society.
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9. RECENT
NEWS
https://economictimes.indiatimes.com/topic/unethical-practices
https://www.thehindu.com/business/Industry/infosys-ceo-accused-
of-unethical-practices/article29760483.ece
https://economictimes.indiatimes.com/news/company/corporate-
trends/covid-19-crisis-increases-risk-of-unethical-conduct-in-
corporate-india-ey-survey/articleshow/76623451.cms?from=mdr
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10. Nature of Ethics in Business
• In business activities, most ethical
questions could be of two types –
Overt and Covert.
• Overt ethical problems like bribery,
theft, sabotage, collusion, etc. are
clear for everyone to see and are
generally considered
reprehensible.
• Most people deplore it and most
businesses take care not to be so
openly unethical.
• For a decision to be ethical, it should
possess the following characteristics. It
should be –
• a. Right – that which is morally correct and
due;
• b. Equitable – that which is just and equal;
• c. Good – that which brings in the highest
good for all concerned;
• d. Proper – that which is appropriate and
acceptable;
• e. Fair – that which is honest and due;
• f. Just – that justice is not only done, but is
also seen to have been done.
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11. Ethical decisions should
express some obligations
to others. If a decision
merely results in benefits
only to oneself, then that
is not an ethical decision.
The very concept of
being ethical means
that it results in some
good for the larger
society and not just for
oneself.
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12. Ethics is unstructured, i.e., it does not have a structured format or
framework. It is abstract in concept. Hence, it does not have universal
acceptance, mainly because-
a. Ethics depend upon our moral standards;
b. Moral standards depend upon our value system;
c.The value system of people depend upon their background and
childhood experience; and
d.The background and experience of people are vastly different.
Hence the ethical practices of people are also different.
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13. Business Ethics – Importance of Ethics
Ethics in Finance: Ethics in Human
Resource Management:
Ethics in Marketing:
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14. Principles
of Business
Ethics
Avoid Exploitation of Consumers − Do not cheat and exploit consumer with measures
such as artificial price rise and adulteration.
Avoid
Avoid Profiteering − Unscrupulous business activities such as hoarding, black-
marketing, selling banned or harmful goods to earn exorbitant profits must be
avoided.
Avoid
Encourage Healthy Competition − A healthy competitive atmosphere that offers
certain benefits to the consumers must be encouraged.
Encourage
Ensure Accuracy − Accuracy in weighing, packaging and quality of supplying goods to
the consumers has to be followed.
Ensure
Pay Taxes Regularly − Taxes and other duties to the government must be honestly and
regularly paid.
Pay
Get the Accounts Audited − Proper business records, accounts must be managed. All
authorized persons and authorities should have access to these details.
Get
Fair Treatment to Employees − Fair wages or salaries, facilities and incentives must be
provided to the employees.
Fair
Keep the Investors Informed − The shareholders and investors must know about the
financial and other important decisions of the company.
Keep
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15. Principles of
Business
Ethics
Avoid Injustice and
Discrimination − Avoid all types
of injustice and partiality to
employees. Discrimination
based on gender, race, religion,
language, nationality, etc.
should be avoided.
No Bribe and Corruption − Do
not give expensive gifts,
commissions and payoffs to
people having influence.
Discourage Secret
Agreement − Making secret
agreements with other business
people to influence production,
distribution, pricing etc. are
unethical.
Service before Profit − Accept
the principle of "service first and
profit next."
Practice Fair Business −
Businesses should be fair,
humane, efficient and dynamic
to offer certain benefits to
consumers.
Avoid Monopoly − No private
monopolies and concentration
of economic power should be
practiced.
Fulfil Customers’
Expectations − Adjust your
business activities as per the
demands, needs and
expectations of the customers.
Respect Consumers Rights −
Honor the basic rights of the
consumers.
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16. Accept Social Responsibilities − Honor responsibilities towards the society.
Satisfy Consumers’Wants − Satisfy the wants of the consumers as the main
objective of the business is to satisfy the consumer’s wants. All business
operations must have this aim.
Service Motive − Service and consumer's satisfaction should get more
attention than profit-maximization.
Optimum Utilization of Resources − Ensure optimum utilization of
resources to remove poverty and to increase the standard of living of people.
Intentions of Business − Use permitted legal and sacred means to do
business.Avoid Illegal, unscrupulous and evil means.
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17. INDIAN
ETHOS
• The appeal of management concepts as
revealed in our past wisdom originates
from our holy writings such as the ‘Gita,’
‘Upanishads,’ ‘Bible,’ and ‘Quran,’ among
others.
• Indian Ethos for Management is the corpus
of knowledge that defines its responses
from the rich and large Indian system of
ethics.
• Management is a behavioural science that
must be determined culturally.
• The Indian Ethos for Management is
founded on India’s cultural foundations, and
as a country whose culture is rooted in
religion, it draws its chapters from the
religions of the nation, whether Hinduism,
Buddhism, or any other religion.
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18. There are six key concepts revealed in the
Divine scriptures that can be applied to
any management situation.They are as
follows:
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19. • As a person with the spirit within his soul, he has enormous potential,
power, and aptitude for perfection.
• A human being possesses a soul, which is divine light. A person’s heart is
where the Divine resides.
• The Divine resides in a person’s heart.
• The term “divine” refers to the highest level of knowledge, insight, and
energy.
• Even though a human being possesses enormous potential strength or
energy for self-development.
Every soul has the capacity to
become a God:
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20. A multifaceted approach:
• It represents the union of the Divine, the individual self, and the cosmos
(Divine signifies perfection in knowledge, wisdom, and strength).
• The holistic management strategy is based on the spiritual principles of
union, self-awareness, and the non-dual idea.
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21. Subjectivity and objectivity are equally vital:
• Subtle, intangible subjects and gross, concrete objects are both important.
Inside resources are divine attributes.
• External resources include capital, supplies, and equipment and machinery.
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22. “KarmaYoga” (selfless work):
• “KarmaYoga” (selfless work) has two benefits: individual self-purification
and public benefit.
• “KarmaYoga” is an excellent method for self-purification and self-
development, individual and group progress and welfare, a minimum of
passion, envy, hatred, greed, wrath, and arrogance, team spirit, teamwork,
autonomous management, and so on.
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23. “YogahKarmasuKaushalam”
• : It denotes superior performance in an activity through self-motivation and
self-development with devotion and without attachments.
• The concept of “KarmaYoga” is at the heart of this approach.
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24. Collaboration:
• Collaboration is a great tool for teamwork, and success in any business
demands group effort.
• The royal pathway for human beings, according to Indian ethos, is co-
operation, which is a potent motivator for teamwork.
• We are sentient beings with a mind and the ability to discriminate.
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25. REFERENCES
• https://www.economicsdiscussion.net/business/business-ethics/31798
• https://www.tutorialspoint.com/business_ethics/business_ethics_introducti
on.htm
• https://timesofindia.indiatimes.com/readersblog/legal-knowledge-and-
issues/indian-ethos-on-management-33865/
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