An employee named Balasubramanayam (Bala) suffered a severe heart attack and needed expensive bypass surgery that his family could not afford. When Bala's wife and children came begging to the company for help, the Head of HR and CEO faced an ethical dilemma. They discussed that while company funds for individual medical help were limited, Bala was a long-term employee who could not be left without support in this critical situation. The CEO and HR head resolved to provide the funds needed from the company to save Bala's life, despite risks of creating a precedent, due to their duty to support loyal employees and prevent demoralizing other workers.

1. Business Ethics
Individual Assignment
EPGP 2009-10 - Term II- Individual Submission
20-Nov-2009
Instructor: Prof. Lalitha Sreenath
Prof. M.R. Sreenath
Submitted by:
Rajendra Inani
Roll #27

2. Table of Contents
1 What is your understanding of ethics? ..............................................................................................3
2 Was any person known to you personally at any time involved in an ethical dilemma? How did
he/she resolve it? What lessons did you learn from it? ........................................................................5
3 Write about a person who, in your opinion, is the most ethical. Give reasons why you consider
him/her as the most ethical. .................................................................................................................7
4 In business, profit-making and ethics do not go hand-in-hand. Discuss.............................................9
5 Bibliography......................................................................................................................................12
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3. 1 What is your understanding of ethics?
Ethics is a philosophical term derived from the Greek word “ethos”, meaning character or
custom. In a business environment, this definition drives towards an organizational code of
conduct consisting of moral integrity and values in service to the public to be practiced by
organizational leaders.
Ethics is a branch of philosophy, which seeks to address questions about morality, such as
following.
1. What moral values people actually abide by?
2. How moral values should be determined?
3. How a moral outcome can be achieved in specific situations?
4. How moral capacity or moral agency develops and what its nature is?
Commonly, we come across the words values, morals and ethics and try to use them
interchangeably. These all provide behavioral rules, but the differences can be important
when persuading others. These words can be defined as following.
Values - These are the rules by which we make decisions about right and wrong, should and
shouldn't, good and bad. They also tell us which are more or less important, which is useful
when we have to trade off meeting one value over another.
Morals - These have a greater social element to values and tend to have a very broad
acceptance. Morals are far more about good and bad than other values. We thus judge
others more strongly on morals than values. A person can be described as immoral, yet
there is no word for them not following values.
Ethics - One can have professional ethics, but we seldom hear about professional morals.
Ethics tend to be codified into a formal system or set of rules which are explicitly adopted by
a group of people. Thus, one can have medical ethics. Ethics are thus internally defined and
adopted, whilst morals tend to be externally imposed on other people.
Difference between Ethics and Morals – Some Examples
Ethics and morals are not the same thing. Though, it may look arbitrary to many, but
there is a basic difference between ethics and morals. Morals define personal character,
while ethics stress a social system in which those morals are applied. One can say,
ethics point to standards or codes of behavior expected by the group to which the individual
belongs. This could be national ethics, social ethics, company ethics, professional ethics, or
even family ethics. Thus, while a person’s moral code is usually unchanging, the ethics he or
she practices can be other-dependent.
In a certain period of time, Morals form a tradition in a certain society and define how one
should behave, giving the concepts of what is “good” and what is “bad”. These Morals rules
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4. would vary differently in different countries or within the same country in different regions.
These are a subjective phenomenon as its rules do not follow from any objective necessity
and advisability. For example, a moral rule about how to dress, where and how much one
can cover the body, what is “appropriate” to do and what is not, what one should be
ashamed of, what turns of speech are decent and what are not, etc.
Based on the real necessity and advisability, Ethical principles are formed in objectivity.
They are based on the understanding of the Path to the Perfection, to God. It believes that it
is what God tries to explain people. It is the science about the correct attitude of man toward
God in all of his aspects and manifestations, towards other people and to all incarnate and
non-incarnate beings and towards one’s own life path.
Let’s take a case of Criminal defense Lawyer to better understand difference between ethics
and morals. The Lawyer’s ethics demands that the accused client must be defended as
vigorously as possible, despite the fact that the lawyer knows him to be a guilty and if let
free, it would potentially lead to more crime. Though, his personal moral code finds murder
immoral and reprehensible. Finally, the Legal ethics must override personal morals for the
greater good of upholding a justice system ensuring that the accused is given a fair trial and
guilt must be proved beyond a reasonable doubt.
Similarly, the prosecution and court deal with the difference between ethics and morals. The
prosecutor never reveals the prejudicial evidence, in case he is aware of past actions of the
accused which might resonate with the current charges, thus the prosecutor ensures
avoiding prejudicing the jury. But, if the prosecutor finds that her friend have a date with a
potentially dangerous or suspect history, he would go ahead and reveal to her on moral
grounds.
We are all faced with the butting heads of ethics and morals in Society. Abortion is found to
be personally immoral by many people but considered legal and therefore medically ethical.
Extremists, fundamentalists and even mainstream theists all have different ideas about
moralities which impact our everyday’s life, even if though indirectly through social pressures
or legal discrimination.
Morals and ethics also clash at the workplace where company ethics play against personal
morality. One has to choose demanding, stressing and consuming work ethics over family
obligations, since later is viewed as moral obligations towards spouse and children. This is
despite the facts that corporate greed itself blurs its own ethical lines. On the other hand a
common reason for dismissal like employee theft is due to poor personal morals.
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5. 2 Was any person known to you personally at any time involved in an
ethical dilemma? How did he/she resolve it? What lessons did you
learn from it?
In my last job with L&T McNeil, a subsidiary of Larsen & Toubro Limited (L&T) during the
year 1992, an employee Mr. Balasubramanayam (Bala) had severe heart attack and
admitted to hospital. He was diagnosed with blocks in his heart arteries and advised to
undergo Bypass surgery. His condition was very serious and doctors advised him to undergo
this surgery at the earliest.
During that period, personal health insurance was not very common and this person was not
having any personal health insurance. He was belonging to Supervisor cadre of organization
and was entitled only up to Rs 10000 per annum of medical reimbursement.
This employee had responsibility of a homemaker wife, 2 school going little kids and his old
mother. He had been with organization with more than 20 years and his humble earnings
were not enough to bear load of expensive surgery and post operative care costing more
than Rs. 2 Lakhs. It was not possible for his wife to arrange this huge sum at such short
notice. Also, even after undergoing such surgery, there was no means with the family to
repay the money, if a loan is taken.
This employee’s wife (Mrs. Bala) along with her two kids landed in the company’s office for
help with tears in her eye. She was begging for life of her husband and father of her kids.
She was arranged to meet Head of HR Mr. Srinivasan.
Mr. Srinivasan was aware about the health of Mr. Bala, who was away from office for a week
and was also aware of the financial condition of his family. The company was having more
than 3000 employees and it was not within the powers of Head of HR to arrange any
immediate help either from company’s fund or immediately arranging any employee
contribution. Not seeing any feasible solution within his reach, Mr. Srinivasan approached
Mr. K V Mathew, the CEO of L&T McNeil, whose office was located within the same factory
campus.
Mr. Srinivasan informed the emergency need of Mrs. Bala to Mr. Mathew. The two, the CEO
and Head of HR, discussed and evaluated this employees employment record and come to
conclusion that he has been a diligent long time employee of organization and should be
helped by any suitable means. They come to agreement that
• There was a limitation on the funds to be released on any compassionate ground
given the large number of employees in the organization, and such move could
create a precedence which may be difficult to comply at later date.
• An employee, who has spent a major part of his career for the company, cannot be
left alone in such bad situation, and his family would be orphaned in case he is not
helped in time.
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6. • Any untoward outcome of this situation with Mr. Bala, would demoralize employees
of the company, who have seen Mrs. Bala in company campus with her kids in
helpless situation.
• Many of the employees of company could imagine such situation with their families in
case they undergo any emergency in future and hardship to be faced by them, this
has put a big responsibility before the CEO before taking any decision on Mrs. Bala’s
request.
Mr. Mathew quickly reviewed the HR policies of organization with Mr. Srinivasan and
available options for Mr. Bala’s treatment. In the rules book of company there was very little
could be done given the employee cadre of Mr. Bala. Seeing the cost of treatment, it was
difficult to arrange fund in personal capacity with other employees’ contribution. They also
noticed that while an employee is in Supervisory cadre, his medical treatment is his own risk,
if not covered under medical insurance by employee himself, where as employees in
Executive and upper cadres are covered for medical treatment on company’s cost. Thus, to
handle this situation there idea came to promote Mr. Bala to Executive cadre with immediate
effect, so that his cost of medical treatment can be billed to company and his family can be
helped. This solution raised a number of ethical questions.
1. Could Mr. Bala be given out of turn promotion, whereas as per his seniority and other
merits, it may take two more years for him to get this promotion?
2. Impact on employee morale, in case Mr. Bala is given this promotion.
3. Would this be a fair practice to pass an employee’s expenses to company by this
means?
After a quick thought, Mr. Mathew decided to go ahead and promoted Mr. Bala to Executive
cadre.
Mr. Mathew met Mrs. Bala and his family and assured them that company would be taking
care of full medical expenses of Mr. Bala’s treatment and whole company is with them in this
hour of crises. He instructed Mr. Srinivasan to depute one employee from HR department to
attend Mr. Bala in hospital and ensure that all necessary support for his best treatment is
arranged immediately.
This situation’s handling of the CEO had created a lot of positivity among employees and
assured them that in hours of any genuine need, the company would be taking care of them.
It gave them belief that company would not be constrained by rules book, but it would extend
support using any alternative path. Even the employees, who were affected with out of turn
promotion of Mr. Bala never complaint about it, instead they appreciated the CEO’s effort in
handling the situation in unique way. Mr. Bala was back to work after 3 months with
renewed commitment to the company and he became an ambassador of company’s
employee friendliness behaviour.
Business Ethics – Individual Assignment Page |6

7. 3 Write about a person who, in your opinion, is the most ethical. Give
reasons why you consider him/her as the most ethical.
I consider my mother to be most ethical person whom I met in my life. This is due to values
she enforced on me since my childhood despite her undergoing a lot of hardship in her life.
My mother lost her own mother at age of five. She had a hard upbringing in a lower middle
class conservative family with her brothers with no other female in her house. She had to
take care of all homely work at very tender age due to being only female in home. She got
married at age of seventeen due to customs of the society at her time with a small school
teacher. She was unfortunate to lose her husband at age of 36. She was left with four small
kids and a meager sum of pension provided by government due to my father’s untimely
death. My father was a simple person, did not leave any bank balance or any big property.
My mother was educated only a matriculate level and was not in a position to take up a job
to support her family. Living in a small town further limited her option for livelihood and kids
education. Some of her options to survive were
• Discontinue studies of at least two elder kids and put them on any meager jobs to
survive the family, though they were minor. This posed a big question front of her, if
she should ruin kids’ childhood for family survival.
• Sale the ancestral house in village to get some funds to survive, which would bring in
lot of social wrath and extinction. This created a big dilemma between social prestige
vis-à-vis justices with childhood of kids, especially she herself had a tough childhood.
• Get her daughter, who was only fifteen to get married to someone less suitable
person from any rich family, who can support her family in return. This was well
supported by local village customs, but in her own wisdom it was most unethical with
her personal life experiences.
My mother decided to sale off the ancestral house and left the village and moved to a nearby
city. She ensured that all four of her kids going to school and there is no discontinuity in their
studies. While, there was scarcity of resource to fund study and expenses, she motivated
elder kids to take up part-time jobs and tuitions to fund the study. She taught us lesions of
hard work with dignity. She never accepted any donation from any relatives in cash or kind.
She also ensured that we do not get lured by taking up any unlawful jobs or short cuts in
study. She motivated all kids to maintain high values in life and achieve success by sheer
hard work. She used to be very strict mother and used to punish us children badly for any
misdeed, which was unethical or unlawful. She ensured that her love and care do not
develop any bad habits in the kids and if needed she suppressed its display itself.
Today, when all four kids are well settled their career and family, my mother still remains a
source of strength and inspiration to all kids and grand kids. She still maintains very high
ethical values and her principles of self dependence. Even, she does not take any money
from kids, but maintains her simple life with meager pension received from government.
Business Ethics – Individual Assignment Page |7

8. She used to tell me a story in childhood about a small boy, who used to steal toys from his
friends and neighborhood. As the boy grew up, he started stealing and robbing other people
and his mother never corrected him, instead encouraged him to bring more valuable things
back home. One day, this boy turned out to be a big thief and ultimately caught by police
and put into jail. This boy requested police to arrange a meeting with his mother. When he
met his mother in the jail, he told her that he wants to tell her some secret by whispering in
her ear. On the pretext of telling her something in her ear, he bites off her mother’s ear with
anger. He told her that in his childhood, she did not correct him when he used to steal small
toys of his friends in school. If she would have corrected him at that step, today he would
have not landed in jail.
She continues to tell this story to her grandchildren with the same enthusiasm.
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9. 4 In business, profit-making and ethics do not go hand-in-hand.
Discuss.
In summary, this is totally a misconception that profit-making and ethics do not go
hand-in-hand. In fact, they are complimentary instead of being adversaries.
One may show high profit with short term vision using unethical means, this may turn up with
an immediate gain, but the losses are passed to the society or environment. Since, the
social cost is not accounted in the books of the profit maker; it gives an illusion of profit. On
the other hand, business did with ethical means shows a slow but study profit, which on long
run results in overall more profit then the previous case. In the later case, the ethical practice
reaps more benefit and trust of stake holders, which would not be the earlier case. Also,
legal liabilities arising out due to unethical practice can wipe off earlier profits at any time
during the life of business.
Ethical behavior involves a Golden Rule, a Guiding Philosophy. It's doing things the Right
Way, when no one else is watching. The thing is, people are always watching the decision
makers, particularly when they make bad decisions. In the real world of business, companies
are faced with issues not only of profit maximization, but also of ethical responsibilities
towards social and environmental causes. While making business decisions a firm needs to
take into account the moral and ethical repercussions of the firms’ activities. The tradeoff
between profit and social responsibility and ethical principles is inevitable.
In the recent years, social and environmental responsibilities have emerged as a great
sense of corporate wisdom. While making business decisions, in early days managers used
to usually look at maximization of profit, but now forced to look into its social and
environmental implications as well. Particularly, an unpopular opinion with regards to sex,
creed, race, religion, politics, sexual preference, job discrimination, difference in sporting
team favorites, abortion, gay marriage, military support, etc. may cost terribly to a manager,
if he gives priority to profit over these issues.
The recent corporate scandals have fostered in many people’s minds the notion that the
pursuit of profit by its very nature leads to poor behaviour. In a system of free exchange,
profit is an indication that someone has created value for others. At the root of many of
these scandals is a business model that isn't working and they have failed to discover how to
create real value, where companies fall into ethical lapses. It's an inability to legitimately turn
a profit that leads some corporate actors to behave poorly. Once companies have
discovered how to deliver sustainably superior value to customers, they don't need to
engage in creative accounting, or political efforts to restrict competition. Their successful
pursuit of profit is one of the key things that distinguish them from unethical companies.
Business Ethics – Individual Assignment Page |9

10. Principled Entrepreneurship - Effective entrepreneurial action produces profit, making
unethical behavior a waste of time. A culture infused with strong principles, meanwhile,
makes unethical behavior a non-starter. One of the advantages of building a company based
on principled entrepreneurship, then, is that it will be filled with people who, most importantly,
will not tolerate any violation of law or integrity, but also who would never need to do such a
thing, because they are focused on creating genuine value for customers.
Book : Profit with Honor - Daniel Yankelovich one of the world's most respected social
science survey researchers and as a member of numerous corporate boards - to bear on the
issue of values and ethics, published his views in the book titled “Profit with Honor”. This
book talks about the New Stage of Market Capitalism, as its subtitle suggests. This book
answers questions like "Is Corporate Ethics an Oxymoron, and If Not, What the Heck Can
We Do About It? ". It suggests that even if you're not in business, this question matters. It
finds us today facing a "third wave of mistrust of business and other institutions," following
two earlier waves around the time of the Great Depression and again in the late 1960s.
This book argues that the current mistrust, while fed by scandals at Enron, Tyco, WorldCom,
and elsewhere, springs from a convergence of three deeper trends:
• The deregulation of the 1980s and 1990s that "transformed the gatekeepers - the
accounting firms, the investment bankers, the business law firms, the regulatory
agencies - into enablers."
• The excesses of CEO pay, which tied it to "the vagaries of the stock market" and
"sorely tempted" CEOs to "take questionable shortcuts, or even cheat."
• The importing into business of bad cultural norms that include winning at all costs
and gaming the system.
This book suggests that "one need to give people a positive basis for trust and respect and
an ethical vision to live by, not merely severe punishment for misdeeds." It concludes that
fighting such trends with laws and compliance structures isn't enough. "If one wants positive
results."
Stewardship Ethics - Unlike many laments about corporate malfeasance that are awash
with diagnoses but scant on prescriptions, this book steers directly toward a concept of
“stewardship ethics”. It advocates it as "a new stage of enlightened self-interest" that brings
social norms together with business imperatives, focuses on community, and "emphasizes
the conscious effort required to reconcile profitability with social good."
This book locates its concept between two popular business ethics.
• A laissez-faire approach that assumes "all reasonably honest ways of making profit
somehow serve the public good" with no additional ethical imperatives required.
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11. • A corporate social responsibility approach. Arising from the nonprofit sector, this
theory finds profit making suspect, and seeks to burden business with the correction
of social ills unrelated to its core objectives.
Will it matter? Will hard- driving executives buy into stewardship ethics? Here the
book draws few strong arguments.
• Executive pay – The book divides compensation into two pieces: "the wealth needed
to provide a CEO with financial security and a high-status lifestyle, and the wealth
desired mainly for scorekeeping purposes ('my bonus is bigger than yours')." The
author suggests that baby boomers - who make up the bulk of today's CEOs - desire
more than money. He finds them "hungry for recognition and for the conviction that
they are leaving a valued legacy for the future." If that hunger can replace the
"scorekeeping" part of executive compensation - and author thinks it can - then
stewardship ethics may well be attractive to the CEO.
• Culture's broad social norms - "The good news is that the larger culture is ready for
less self-centered, more-communal-minded values," as suggested by the book.
What's most needed today is a new vision for corporate ethics, this book makes perfect
sense.
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12. 5 Bibliography
1. http://en.wikipedia.org/wiki/Ethics
2. http://changingminds.org/explanations/values/values_morals_ethics.htm
3. http://www.allabouttruth.org/Moral-Ethics.htm
4. http://www.wisegeek.com/what-is-the-difference-between-ethics-and-morals.htm
5. http://www.religiousbook.net/Books/Online_books/Jt/Jesus_Teaching_20.html
6. http://www.academon.com/Essay-The-Ethics-of-Profit-Maximization/45819
7. PROFIT WITH HONOR: The New Stage of Market Capitalism By Daniel Yankelovich
8. Moral Courage By Rushworth M. Kidder
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