The document discusses the importance of ethics, particularly in business, highlighting the need for clear moral standards to guide corporate actions. It defines business ethics as both a descriptive and prescriptive discipline that evaluates actions and practices at multiple levels, including individual, institutional, and societal. Furthermore, it emphasizes that ethical conduct contributes to social responsibility, sustainable practices, and the overall credibility of businesses.

1. ETHICS
• BE- 1/1:
• Modern world of rapid and complex changes.
• Business Corporations play vital role in shaping quality
of community life.
• In such a world, just as individuals should be concerned
with right or wrong, good or bad, Institutions also
should be similarly concerned.
• Clear concepts of good and bad, right and wrong are
important in guiding Corporation’s professional action.
• Hence the need for study of ethics in general, business
ethics in particular.

2. • BE- 1/2:
• Ethics is the discipline dealing with good and bad, right
and wrong.
• Ethics is from a Greek word “Ethos”. Ethosboth the
character of an individual or culture of a community.
• Business ethics is concerned with applying principles of
ethics in conducting business.
• Such ethics is both descriptive and prescriptive.
• It describes actions, processes as they exist.
• It also prescribes what is right or wrong, good or bad.

3. Some concepts- definitions:
• BE- 1/3:
• Ethics prescribes a theory and system of moral values.
• It prescribes a set of moral beliefs and moral standards for
evaluating actions, practices at individual, institutional
system and societal level.
• Ethics as a study of moral standards, conducts
examination/evaluation of individuals, institutions, systems
and societies.
• These moral standards are carefully thought through –
acceptable – applicable.
• These are then applied to decide choice options

4. • BE- 1/4:
• Moral belief- A judgment whether certain human
actions, practices, institutions or systems are
right or wrong.
• A belief is about something – this is called the
subject.
• The second part of any belief is the predicate –
what one thinks or says about the subject.
• Eg: Stealing is bad  Stealing- the Subject
 Bad- the Predicate

5. • BE- 1/5:
• Actions – Primary subject matter of moral belief
is actions. An action is an activity that is
deliberate – derived through careful
considerations and performed by choice.
• Actions having shared characteristics constitute
practices.
• Eg: Ram stole a watch- Stole – Actions.
Stealing is wrong (All stealing have some similar
characteristics giving rise to practice of stealing)

6. • BE- 1/6:
• Ethics evaluates actions, practices, institutions and
systems.
• Not all evaluations are ethical evaluations
• Eg: Profit at the end should be 100 crores.
• Evaluation may be confined to assess whether profit
has been achieved. This accounting evaluation is not
ethical evaluation.
• Ethical evaluation will be concerned with assessing
ways the profit has been achieved – whether they are
right or wrong.

7. BE-1/7:
• Moral norms arise out of moral values.
• Moral values – prescribe beneficial / positive worth.
Eg: Tolerance is good.
• Moral standards arise out of moral values.
• Characteristics of moral standards:
i. Deal with subjects having large beneficial or injurious effects.
Eg: Taking drugs – large injurious effects. Non violent behavior – having
large beneficial effects.
i. Moral standards not changed by legislation.
ii. Moral standards should have preference over other standards and values.
iii. Moral standards should be impartial and unbiased.
iv. Moral beliefs generate moral norms  moral norms generate moral
values.
v. Actions and practices are evaluated by moral beliefs.
vi. Only ethical evaluations are based on moral beliefs.

8. • BE-1/8:
• Business ethics is a sub part of ethics.
• Business facing serious credibility problem.
• Business ethics is an idea whose time has come.
• Business cannot be done devoid of scruples.
• More often than not, good ethics is good
business.
• Being ethical usually does have good
consequences.
• Primary purpose of business is to benefit society.

9. Scope of business ethics
• BE-1/9:
• Scope can be discussed at several levels.
• At societal level – based on principles of equity,
equality, justice, fairness and caring.
Equity concern for poor, downtrodden, deprived,
exploited.
Equality and fairness, justice
anti-discrimination, concern for clean environment
 Sectoral, inter temporal and inter generational
equities.
 Equitable - growth leading to sustainability.

10. Scope of business ethics (Contd)
• BE-1/10:
• At stake holder levels:
a) Customer: improved quality of goods/services at just prices- at right
time-No discriminatory pricing that is not equitable. No false claims-
Fair advertising.
b) Employees: Job security- conducive work environment- fair and just
performance evaluation – participation – empowerment –
democratic decisions.
c) Share holders: capital appreciation, steady and regular dividend
payment – No creative accounting or window dressing of balance
sheets, open disclosures.
d) Banks and Lending insitututions – Ensuring safety of borrowed funds
– prompt repayment – proper end use of funds.
e) Government / Regulators – Complying with rules and regulations –
Paying taxes and dues honestly.

11. Definitions of Ethics
• BE-2/1:
• Out of numerous definitions of ethics for our purpose
we shall deal with the following four:-
• (a) Ethics: A discipline dealing with good or bad – with
moral duty and moral obligation.
• (b) Ethics as a set of moral principles and values.
• (c) Ethics as principles of conduct governing an
individual or group or an institution.
• (d) Ethics is thus concerned with right or wrong
behavior of individual, group or institutional levels.

12. Ethical approaches
• BE-2/2:
• (1) Descriptive approach.
• (2) Analytical approach- analyze existing ethical principles-
assessing them in the light of ultimate value of human well
being.
• (3) Normative approach- Prescribing a particular set of
principles, codes and standards of behaviour.
Basically business ethics deals with normative issues. These
normative issues are linked with long term sustainability.

13. Importance of Business ethics
BE-2/3:
• Ethics help in determining right action in case of
complex issues.
• Ethical issues make managers more
knowledgeable and conscientious about moral
issues.
• Business ethics help Corporations to conduct
their business activities in a socially responsible
way.

14. Role of business ethics
BE-2/4:
At the level of individuals and Organisations:-
• Moral awareness
• Values adequately defined
• Ethical analysis of issues
• In case of conflict resolution of dilemmas

15. Core purpose of a business
BE-2/5:
Three core purposes of a business:
• To trade profitably.
• To reward enterprise.
• To reward effort.

16. Basic values followed in business
BE-2/6:
• Honesty
• Trust
• Respect
• Responsibility
• Fairness
• Creativity
• Innovation
• Justice
• Equity

17. • BE-2/7:
• Ethical issues arise when there is lack of
congruence between human behavior, ethical
code of conduct or shared values.
• Thus ethical issues arise for one or two
following reasons:
• Departure from core ethical values or
• Conflict between two core values.

18. • BE-2/8:
• At systems level in business ethics we sort out ethical
questions arising out of economic, political, legal and
other social systems within which the business
operates.
• At corporate level, business ethics is concerned with a
particular company, whether business practices and
systems followed by the company are ethical or not.
• At individual level, business ethics may be concerned
with ethical questions raised in relation to a particular
individual or particular action.

19. Evolution of ethical behaviour
BE-2/9:
Three stages in the evolution of maturity and moral development:
• Pre conventional stage
• Conventional stages
• Post conventional stages
• Pre Conventional Stage – Two parts:
• Part- 1: Child Age – Punishment and obedience orientation.
Physical consequences of an act, wholly determine goodness
or badness of an age.
• Part-2: Here we deal with instrument and relativity
orientation. Those actions are right which satisfy child’s needs or of
those whom the child cares.

20. • BE- 2/10:
• Conventional Stage:
• Here the person counts to measure upto
expectation of family, peer group community
or nation.
• Wrong and right by law and order orientation.
• Determined by loyalty and adherence to law
and order – fulfilling expectation of nation
community or society.

21. • BE-2/11:
• Post Conventional Stage:
• Autonomous individual.
• Independent value judgement of what is good or bad.
• Universal ethical principles for determining right or
wrong.
• Principles are accepted because of logical
comprehensiveness, universality and consistency.
• By and large most people progress through these
stages but it is not necessary that everyone must go
through these stages.

22. Ethical relativism
BE-2/12:
• Moral standards from society to society.
• No absolutely true ethical standards.
• Principles of ethical relativism suggest that
moral standards of a society are the only
criteria by which all actions are judged.

23. BE–3/1:
• Ethical Programmes in the an Organization can
be:
a) Compliance Based
b) Value based
• Compliance Based – Sense of imposition – apart
from self
• Compliance – sense of loss of autonomy
• Value based compliance desirable

24. BE–3/2:
Compliance Based Method
• Define rules and responsibilities for everyone
• Unify and prescribe the core organisational
values and
• Also provide framework for organisational
decision making

25. BE–3/3:
• Value based Method
• Employee given ethical autonomy
• Autonomy – Self Directing Freedom and independence for work
Shift from compliance based to value based system desirable because:
• IT encourages spontaneity of action and innovative spirit of the
employees
• IT provides scope for decentralized decision – making
• IT allows organizational policies to be adopted to people – centred
approach combing institutional authority and individual autonomy

26. Ethical Dilemmas
BE–3/4:
• Right Vs Right – Dilemma
• Four Types:
• 1) Justice Vs Mercy
• 2 )Truth Vs Loyalty
• 3) Short term Vs Long term
• 4) Individual Vs Community

27. Principles of Ethical decision making
BE–3/5:
• End based principle - also called utilitarian
principle
• Rule based principles - consequences are
unimportant but should be concerned with
rightness of rules and actions
• Care based principles - do to others only what
you would like them to do to you

28. Models of Ethics
BE-3/6:
• Utilitarian Model – An ethical decision produces
the greatest good to greatest number of people.
• Moral Rights Model- Ethical decisions protect
fundamental rights/privileges of people affected.
(Rights to freedom, privacy, security, freedom of
speech. etc)
• Justice Model- An ethical decision distributes
benefits and harms among stake holders in a fair
equitable or impartial way.

29. BE-3/7:
Sources of Organisational Code of Ethics
Societal ethics
Values embodies in a society’s
laws, customs, practices, norms
and values
Organisation’s code of ethics derived from
Professional Ethics: Values
and standards that groups
of managers and workers
used to decide how to
behave appropriately
Individual Ethics: Personal
values and standards that
result from the influence of
family , fears, upbringing
and involvement of
significant social institution.

30. Ethical Aspects as an Indian Culture
BE – 4/1:
Following are the Basic Cultural Imperatives:
• Tolerance
• Liberty & Equality
• Respect for Elders, Seniors and Leaders.
• Faith in Triumph & Truth

31. BE – 4/2:
Karma Yoga
• Everyone must perform Activity.
• Working is superior to Egoism.
• Right action ultimately desirable.
• Excellence can be achieved by right Karma.
• Niskam Karma Yoga is the best route for Self
development of all.
• A Person, Community or Society should be Sensitive to
its Obligation. Should be progressive and this will bring
prosperity in long run.

32. BE – 4/3:
• Doing Work is the Duty – Expecting Result Is Not –
Niskam Karma.
• When we do a Job with an expectation of worldly
achievement – It is Sakama Karma.
• Niskam Karma helps in spiritual growth and continual
bliss.
• Sakama Karma resulting in failure results in distress.
• Niskama Karma can be totally Ethical.
• Ultimately ethical business adopts ethical means
irrespective of consequences.

33. Some Ethical Standards
BE – 4/4:
Some Ethical Standards accepted in India through ages are:
• Treat all men with Fairness & Justice.
• Do to others as you would have them to do to you.
• Treat individuals with Respect & Dignity.
• Always ask Question – Will it Hurt anyone?
• Be honest with yourself
• Examine the Morality of an action by evaluating the
purpose behind it.
• Where all actions appear unethical take the alternate which
is lesser evil.

34. Codes of Ethics for Professional
groups
BE – 4/5:
• For Medical Professionals
• For Chartered Accountants
• For Engineers
• For Professional Managers.
• For Politicians and representatives of people.
• For Lawyers.

35. Ethics of Banking and Finance
BE – 4/6:
Basic Ethical Principles in Banking and Finance:
• Avoidance of Deception & Fraud
• Honoring Commitments.
• Treating all customers equitably.
• Being Inclusive.
• Being Transparent.

36. All banks should have Ethical Policy
BE-4/7:
• It has to be realized that bankers enjoy special rights and privileges.
• The above means special obligations and responsibilities.
• Banks should follow ethical banking practices – no inequitable contracts, no
concessional charges, no misleading publicity.
• Banks have ethical duties to cater to the banking needs of all.
• Key issues for a Bank for becoming ethical and socially responsible are:
• Process of Banking must be value based and such values must be ethically right.
• Must have total commitment to ethical at all levels specially at the top.
• Complete openness and transparency (beyond transparency of financial
statements).
• Conducting banking business with integrity (Integrity – truthfulness, honesty,
generating trust, being true to oneself – true to the needs of the clients and the
profession)
• Show objectivity in banking decisions: Objectivity- No bias, based on facts/data.