BUSINESS ETHICS UNIT II.pptx

ETHICS OF
ENVIRONMENT,
EMPLOYEES
RIGHTS AND
DUTIES &
CORPORATE
SOCIAL
RESPONSIBILITY
Module 2
Unit 2
1
DR VIJAY VISHWAKARMA

Unit 2 Ethics of Environment, Employees Rights and Duties & Corporate
Social Responsibility:
a) Environment Issues – Global Warming, Climate Change, Ethics in Human
Resource Management , Employees Rights- Right to work, Equality of
Opportunity, Concept of fair wages, Duties of employees, Human Rights ,
Sexual Harrassment
b) Corporate social responsibility and Corporate governance – Concept and
Importance, Corporate philanthropy, Drivers of CSR, Indian Corporates and
CSR Case Studies, Role of NGOs in CSR, CSR and Sustainable Development
2

ETHICS IN HUMAN
RESOURCE
MANAGEMENT
Ethics in HRM is whereby human resource professionals
or business managers help an organization embed and
uphold its set values regardless of levels.
This is so that they can be able to build, sustain, and
improve employee trust and relations.
For instance, encouraging accountability is one of the
elements that will prevent arising of workplace issues in
the first place.
3

PROFESSIONAL RESPONSIBILITY
Core Principle
As HR professionals, we are responsible for adding value to the
organizations we serve and contributing to the ethical success of those
organizations. We accept professional responsibility for our individual
decisions and actions. We are also advocates for the profession by
engaging in activities that enhance its credibility and value.
Intent
•To build respect, credibility and strategic importance for the HR profession
within our organizations, the business community, and the communities in
which we work.
•To assist the organizations we serve in achieving their objectives and goals.
•To inform and educate current and future practitioners, the organizations we
serve, and the general public about principles and practices that help the
profession.
•To positively influence workplace and recruitment practices.
•To encourage professional decision-making and responsibility.
•To encourage social responsibility.
4

Guidelines
Adhere to the highest standards of ethical and professional behavior.
Measure the effectiveness of HR in contributing to or achieving organizational goals.
Comply with the law.
Work consistent with the values of the profession.
Strive to achieve the highest levels of service, performance and social responsibility.
Advocate for the appropriate use and appreciation of human beings as employees.
Advocate openly and within the established forums for debate in order to influence decision-making and results.
5

PROFESSIONAL DEVELOPMENT
Core Principle
As professionals we must strive to meet the highest standards of competence and
commit to strengthen our competencies on a continuous basis.
Intent
• To expand our knowledge of human resource management to further our
understanding of how our organizations function.
• To advance our understanding of how organizations work ("the business of the
business").
Guidelines
1.Pursue formal academic opportunities.
2.Commit to continuous learning, skills development and application of new
knowledge related to both human resource management and the organizations we
serve.
3.Contribute to the body of knowledge, the evolution of the profession and the growth
of individuals through teaching, research and dissemination of knowledge.
4.Pursue certification where available, or comparable measures of competencies and
knowledge.
6

ETHICAL LEADERSHIP
Core Principle
HR professionals are expected to exhibit individual leadership as a role model for
maintaining the highest standards of ethical conduct.
Intent
•To set the standard and be an example for others.
•To earn individual respect and increase our credibility with those we serve.
Guidelines
1.Be ethical; act ethically in every professional interaction.
2.Question pending individual and group actions when necessary to ensure that
decisions are ethical and are implemented in an ethical manner.
3.Seek expert guidance if ever in doubt about the ethical propriety of a situation.
4.Through teaching and mentoring, champion the development of others as ethical
leaders in the profession and in organizations.
7

FAIRNESS AND JUSTICE
Core Principle
As human resource professionals, we are ethically responsible for promoting and fostering fairness and
justice for all employees and their organizations.
Intent
To create and sustain an environment that encourages all individuals and the organization to reach their
fullest potential in a positive and productive manner.
Guidelines
1.Respect the uniqueness and intrinsic worth of every individual.
2.Treat people with dignity, respect and compassion to foster a trusting work environment free of
harassment, intimidation, and unlawful discrimination.
3.Ensure that everyone has the opportunity to develop their skills and new competencies.
4.Assure an environment of inclusiveness and a commitment to diversity in the organizations we serve.
5.Develop, administer and advocate policies and procedures that foster fair, consistent and equitable
treatment for all.
6.Regardless of personal interests, support decisions made by our organizations that are both ethical and
legal.
7.Act in a responsible manner and practice sound management in the country(ies) in which the organizations
we serve operate.
8

CONFLICTS OF INTEREST
Core Principle
As HR professionals, we must maintain a high level of trust with our stakeholders. We must
protect the interests of our stakeholders as well as our professional integrity and should not
engage in activities that create actual, apparent, or potential conflicts of interest.
Intent
To avoid activities that are in conflict or may appear to be in conflict with any of the provisions of
this Code of Ethical and Professional Standards in Human Resource Management or with one's
responsibilities and duties as a member of the human resource profession and/or as an
employee of any organization.
Guidelines
1.Adhere to and advocate the use of published policies on conflicts of interest within your
organization.
2.Refrain from using your position for personal, material or financial gain or the appearance of
such.
3.Refrain from giving or seeking preferential treatment in the human resources processes.
4.Prioritize your obligations to identify conflicts of interest or the appearance thereof; when
conflicts arise, disclose them to relevant stakeholders.
9

USE OF INFORMATION
Core Principle
HR professionals consider and protect the rights of individuals, especially in the
acquisition and dissemination of information while ensuring truthful communications
and facilitating informed decision-making.
Intent
To build trust among all organization constituents by maximizing the open
exchange of information, while eliminating anxieties about inappropriate and/or
inaccurate acquisition and sharing of information
10

Guidelines
1.Acquire and disseminate information through ethical and responsible means.
2.Ensure only appropriate information is used in decisions affecting the employment
relationship.
3.Investigate the accuracy and source of information before allowing it to be used in
employment related decisions.
4.Maintain current and accurate HR information.
5.Safeguard restricted or confidential information.
6.Take appropriate steps to ensure the accuracy and completeness of all
communicated information about HR policies and practices.
7.Take appropriate steps to ensure the accuracy and completeness of all
communicated information used in HR-related training.
https://www.shrm.org/about-shrm/pages/code-of-ethics.aspx
11

EMPLOYEES RIGHTS-
RIGHT TO WORK
EQUALITY OF OPPORTUNITY
12

CONCEPT OF FAIR WAGES
The concept of fair wage is linked with the capacity of the industry to pay.
The Committee has defined fair wage as follows:
Fair wage is the wage which is above the minimum wage but below the living
wage. The lower limit of the fair wage is obviously the minimum wage: the
upper limit is to be set by the capacity of the industry to pay.
Thus, fair wage depends on different variables affecting wage determination.
Such factors are labour productivity prevailing wage rates, the level of
national income and its distribution and the capacity of industry to pay. At
present, the concept of fair wages is followed by the most business
organisations.
13

A tripartite Committee Viz., "The Committee on Fair Wage" was set up in 1948 to provide guidelines
for wage structures in the country.
The report of this Committee was a major landmark in the history of formulation of wage policy in
India. Its recommendations set out the key concepts of the 'living wage', "minimum wages" and "fair
wage" besides setting out guidelines for wage fixation.
Article 39 states that the State shall, in particular, direct its policy towards securing
(a) that the citizen, men and women equally shall have the right to an adequate livelihood and
(b) that there is equal pay for equal work for both men and women.
Article 43 states that the State shall endeavour, by suitable legislation or economic organization or in
any other way, to give all workers, agricultural, industrial or otherwise, work, a living wage, conditions
of work ensuring a decent standard of life and full enjoyment of leisure, and social and cultural
opportunities.
14

DUTIES OF EMPLOYEES
15

HUMAN RIGHTS
Human rights are rights inherent to all human beings, regardless of race, sex, nationality,
ethnicity, language, religion, or any other status.
Human rights include the right to life and liberty, freedom from slavery and torture, freedom of
opinion and expression, the right to work and education, and many more.
Everyone is entitled to these rights, without discrimination.
https://www.un.org/en/global-issues/human-
rights#:~:text=Human%20rights%20are%20rights%20inherent,and%20education%2C%20and%2
0many%20more.
16

SEXUAL HARRASSMENT
https://www.thehindu.com/news/national/explained-the-indian-law-on-sexual-
harassment-in-the-workplace/article66854968.ece
17

CORPORATE SOCIAL
RESPONSIBILITY– CONCEPT AND
IMPORTANCE
Corporate social responsibility is the idea that businesses have a
responsibility to create a positive impact on society and the environment.
It goes beyond just making a profit and includes ethical practices,
sustainability, philanthropy, community outreach, and stakeholder
engagement.
CSR has become an essential aspect of business operations, as consumers,
investors, and other stakeholders demand that businesses operate in an
ethical and responsible manner.
18

IMPORTANCE OF CORPORATE SOCIAL
RESPONSIBILITY:
https://www.linkedin.com/pulse/importance-corporate-social-responsibility-creating-
impact-magazine
Sustainability: CSR helps businesses to adopt sustainable practices that have a positive impact on the
environment. This includes reducing carbon emissions, promoting energy efficiency, sustainable sourcing, and
responsible supply chain management.
Social Impact: CSR allows businesses to create a positive impact on society by engaging in philanthropic
activities, supporting social causes, and giving back to the community. This includes community outreach
programs, employee volunteerism, and charitable donations.
Ethical Practices: CSR promotes ethical practices in business operations. It includes adhering to ethical
standards, fair labor practices, responsible marketing, and avoiding unethical practices such as bribery and
corruption.
Stakeholder Engagement: CSR helps businesses to engage with their stakeholders, including customers,
employees, suppliers, and communities. This creates a sense of trust and loyalty, which is beneficial for the
business in the long run.
Brand Reputation: CSR helps to enhance the brand reputation of the business. By being socially responsible,
businesses can differentiate themselves from their competitors and build a positive brand image. This can
result in increased customer loyalty and improved financial performance.
19

•Patagonia – Patagonia is a clothing company that is committed to environmental sustainability.
The company uses organic cotton, recycled materials, and sustainable production methods to
reduce its environmental impact. It also donates 1% of its sales to environmental causes.
•Coca-Cola – Coca-Cola has a number of CSR initiatives, including its 5by20 program, which aims
to empower 5 million women entrepreneurs by 2020. The company also supports sustainable
agriculture and water stewardship initiatives in the communities where it operates.
•Microsoft – Microsoft has a range of CSR initiatives, including its YouthSpark program, which
aims to provide education and job training opportunities for young people around the world. The
company also supports environmental sustainability initiatives, including the use of renewable
energy.
•Unilever – Unilever has a commitment to sustainable sourcing and production, with a goal of
sourcing 100% of its agricultural raw materials sustainably by 2020. The company also has a
range of CSR initiatives focused on health and hygiene, including its Lifebuoy handwashing
campaign.
https://www.linkedin.com/pulse/importance-corporate-social-responsibility-creating-
impact-magazine
20

CORPORATE GOVERNANCE –
CONCEPT AND
IMPORTANCE
Corporate governance is a combination of rules, processes, and practices by
which an organization is controlled and maintained.
Corporate governance is a crucial component of an organization. It maintains
the balance between the stakeholders.
It also helps the organization attain its goals. It also helps organizations to
make better decisions for the betterment of the organization as well as its
stakeholders.
Overall, we can say that corporate governance is very important from the
point of view of the organization as well as its customers.
21

Why should we have corporate governance or why
should it exist.
We can divide this into different factors:
1.Better access to external finance- It would be easy to
get external finance since you have established
corporate governance. Since you have proved the
transparency and genuineness of your business.
2.Lower cost of capital interest rate on loans.
3.Improved company performance.
4.Higher firm valuation and share performance.
5.Reduced risk of corporate crisis.
22

IMPORTANCE OF
CORPORATE GOVERNANCE
The widespread of shareholders- Shareholders is
widespread throughout the nation or even outside the
nation. Strong corporate governance is required for that
and in return, it would result in the satisfaction.
Resistance against corporate scams – There have been
many scams in the corporate world that shook the public
and as the result, it affected their confidence in the
corporate world. So strong corporate governance is
required to prove the firm’s transparency as well as its
genuineness. It would reduce corruption and would
create a strong sense of satisfaction among the
stakeholders.
Changing the ownership structure- Corporate
governance helps in changing the ownership structure
of the company and it would not affect the goodwill of
the company.
23

Globalization- For a company to get listed on an
international stock exchange it is important for them to have
good corporate governance as it will boost its credibility and
transparency. It would result in a good reputation in and
outside their country.
Customer and shareholder satisfaction- When there is
good corporate governance is introduced within an
organization. It would result in credibility and accountability.
Everything would go in a disciplined manner. As discussed
earlier there would be transparency in the organization’s
work. This is required for the satisfaction of shareholders
and customers. Bad corporate governance would create a
bad image for the organization and it would result in a bad
reputation among the customers and shareholders.
It creates a secure and prosperous operational
environment and it would improve the operations of the
firms in India.
24

Satyam scam- In 1987 Ramalinga Raju established a company
in Hyderabad named Satyam computers. It was an IT company.
It was listed on the Bombay stock exchange during the year
1990-91.
It was a booming company in the IT sector at that time but its
scams lead to its demise. this was an important cause of
corporate governance.
It was much highlighted in this case. corporate governance
shapes many important roles in a firm like the creation and
working of auditing committees, and duties of board members.
Now let us talk about the scam. Ramalinga Raju was interested
in real estate dealing. That too was a booming sector at that
time. To purchase more real estate property he needed more
money for that he manipulated the financial statements of
Satyam computers. He misleads his stakeholders by showing
inflated reports of his companies.
25

This created a notion among his stakeholders that his
company was growing at an excellent rate. This resulted in
an increase in the share prices of the company.
After this Raju and his brother started selling some of their
shares and pledged some other shares to take loans from
banks and bought many properties across India.
He started buying properties by hook or crook. He even got
to know many internal details of Hyderabad metro rails so
he started purchasing land near the planned metro route so
that he could sell that at a higher price.
He even started creating fake sales invoices for Satyam
computers to manipulate the data. He even started creating
fake bank statements to show his funds in the bank as
bank reserves. By doing this he started attracting even
more investors and hence the price of the stocks further
increased.
26

Raju’s planning was shattered during the 2008 recessions due to the decrease in
the rate of return of the real estate. He couldn’t fill the gap between the fake figures
and the original figures of Satyam computers.
In 2009 he confessed that Satyam computers have manipulated data to increase the
stock price. The special court of CBI convicted Raju, his brother, and 7 other people
and imposed fines on them.
This scam made a huge tension among other companies. The government of India
and SEBI decided to do something about this. Companies decided to change their
panel of auditors every 10 years then
https://ondemandint.com/resources/corporate-
governance/
27

CORPORATE
PHILANTHROPY
Corporate philanthropy refers to the activities that
companies voluntarily initiate to manage their impact on
society.
Typically, corporate philanthropic activities include
monetary investments, donations of products or
services, in-kind donations, employee volunteer
programs and other business arrangements which aim
to support a social cause.
While some companies spearhead and operate
corporate philanthropy programs themselves, others
may focus on advancing the work of local community
organizations, nonprofit organizations or other social
initiatives geared toward improving society.
28

Corporate philanthropy has become increasingly popular in
recent years, as consumers now expect a certain level of
accountability and transparency from corporate entities.
With higher levels of open dialogue between consumers and
businesses via social media, companies have taken on more
responsibility for their particular social effects, wielding their
financial and societal influence to empower communities.
It's important to note that corporate philanthropy differs from
corporate social responsibility (CSR) in that CSR is typically
incorporated into a company's actual practices and functions
as a business.
Here are a few types of corporate philanthropy programs that
companies undertake:
29

Gift matching
Matching gifts are a popular type of corporate philanthropy effort. In matching gift programs,
companies donate the same amount of money to a nonprofit or community organization that
other stakeholders do. These stakeholders could be employees, consumers or the general
public. Typically, these programs increase the amount of philanthropic benefit to other
organizations by a certain match ratio.
https://www.indeed.com/career-advice/career-development/guide-to-activism
Volunteer grants
In volunteer grant programs, companies usually donate money to nonprofits and community
organizations matching stakeholders' volunteer hour contributions. These programs typically use
a particular hour-to-donation formula to calculate contributions after stakeholders complete their
volunteer hours. These projects not only allow companies to donate but can also encourage
donations from other parties.
https://www.indeed.com/career-advice/career-development/types-of-social-responsibility
30

Employee grants
Companies may allow their employees to designate which nonprofit
or community organizations to receive philanthropic donations. In
employee grant programs, companies usually award monetary grants
to organizations selected by employees. Though these programs may
contribute less than match programs, they rarely rely on any
monetary investment from employees or external stakeholders.
https://www.indeed.com/career-advice/finding-a-
job/philanthropic-careers
Community grants
Community grant programs typically allow nonprofit or community
organizations to apply for funding from a company. Companies
choose to fund particular organizations depending on their goals for
social impact. This allows businesses to support organizations that
match their values and passions.
31

Corporate sponsorship
Corporate sponsorship is a standard type of philanthropic initiative in which
companies provide financial support to nonprofit or community organizations
which help further their particular mission. Typically, these programs also
entail such organizations publicly acknowledging the support they've
received from the company. This allows companies to support causes they're
passionate about while gaining publicity.
Volunteer support initiatives
Volunteer support initiatives typically entail companies donating employee
time to support nonprofit or community organizations. Sometimes,
companies partner with organizations to provide specialized support aligned
with their unique abilities. For example, a technology company may host a
program in which employees volunteer to teach older community members
computer literacy skills.
32

DRIVERS OF CSR
Stakeholder Expectations:
Reputation and Brand Enhancement:
Risk Management and Long-Term Sustainability:
Reporting and Compliance:
Recruiting and Retaining Talent:
Access to Capital and Investment:
Innovation and Competitive Advantage:
Positive Community Relations:
https://www.managementnote.com/drivers-of-csr/
33

INDIAN
CORPORATES AND
CSR CASE
STUDIES
ROLE OF NGOS IN
CSR
34

CSR AND SUSTAINABLE
DEVELOPMENT
https://csrgeorgia.com/en/overview/csr-and-Sustainable-
development
https://www.legalservicesindia.com/article/1766/Corporate-
Social-Responsibility-And-Sustainable-Development.html
DR VIJAY VISHWAKARMA 35

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