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An introduction to business ethics

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An introduction to business ethics

  1. 1. AN INTRODUCTION TOBUSINESS ETHICSProfessor Jayashree SadriAndDr Sorab SadriDr. Sorab Sadri & Prof Jayashree Sadri 2011
  2. 2. What is Ethics? Ethics is a set of rules that defineright and wrong conduct .Theseethical rules tell us when ourbehavior is acceptable and when itis disapproved and consideredwrong. Ethics deals withfundamental human relationships. Ethical rules are guides to moralbehavior.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  3. 3. APPROACHES TO THESTUDY OF ETHICS Spiritualism Political Science Sociology Economics Philosophy AnthropologyDr. Sorab Sadri & Prof Jayashree Sadri 2011
  4. 4.  Sociological route takes you to thefollowing chain of causality Values-Beliefs-Attitudes-Behavior-Outcomes Economic route takes you to thefollowing chain of causality Ethics – Governance-Excellence-SustainabilityDr. Sorab Sadri & Prof Jayashree Sadri 2011
  5. 5. What is Business Ethics? Business Ethics is not a special set ofrules different from ethics in general andapplicable only to business. Business Ethics is the application ofgeneral ethical rules to business behavior.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  6. 6. Why is Business Ethics Important? The general public expects business toexhibit high levels of ethical performanceand social responsibility. To Act Ethically is to prevent harm tosociety. To protect business firms from abuse byunethical employees or unethicalcompetitors Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  7. 7. Why Ethical Problems Occur inBusiness. Personal Gain. Individual Values in Conflict withOrganizational Values. Managers’ Values and attitudes. Competitive Pressures. Cross-cultural contradictions.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  8. 8. A set of actions born out of ourbeliefs. These beliefs give rise tovalues. Values condition attitudes.Attitudes condition behavior .Behavior can be ethical or unethical.Ethics are an activity based concept.ETHICS MEANS :Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  9. 9. BELIEFS VALUES ANDIDEOLOGY Beliefs: Set of ideas about what is right orwrong, good or bad in any contextwhatsoever and from the basis ofbehavior. These beliefs are oftenconditioned by upbringing and the generalenvironment.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  10. 10. BELIEFS VALUES ANDIDEOLOGYEssentially values are set of beliefs thatform the basis of thinking and thence toaction. Values are notions that are guidedby our actions. It forms the bulwark of ourattitudes which form our behavior. Valuesare a thought-based concept.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  11. 11. Kinds of Values When we speak of values having been based on aset of beliefs that we hold sacrosanct we are in thesubjective realm of values. When an organization operates on the basis ofsuch values it is called “value based.”Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  12. 12. Kinds of Values When we speak of value addition by theactions or thoughts of a person, thefunctioning of a process and the sale or useof a product we are in the objective realm ofvalues. When an organization operates such thatvalue “ought to be” added at the level of theperson, the process or the product it is called“value driven”.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  13. 13. Kinds of Values When we speak simultaneously of thesubjective and the objective notions of valuethen we are in the realm of rationality. When an organization operates simultaneouslyin both realms (subjective and objective) it iscalled “value centered”Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  14. 14. BELIEFS VALUES ANDIDEOLOGY Ideology : Set of beliefs and values held by aperson, a group of persons or a nation aboutwhat is good or bad for it and this forms itsbasis of social, political and economicpolicies.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  15. 15. ETYPOLOGICAL ROOTS Ethics comes from the Greek word ethos whileMorality comes from the Latin word mores. Both root words imply “from a culture”Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  16. 16. DISCUSSION ON BUSINESSETHICSAt a general level this can be reduced to: 1. Issues relating to what is right or wrong. 2. Issues relating to what is good or bad. 3. Issues relating to what is the desiredhuman conduct.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  17. 17. SPECIFICITY OF ETHICS Ethics is person specific Ethics is context specific Ethics is culture specificDr. Sorab Sadri & Prof Jayashree Sadri 2011
  18. 18. Where do ethical conducts originate? Within the self? Within the norms of the larger civilsociety? Within the organizations workenvironment?Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  19. 19. Three important axioms: ALL TRUTH IS RELATIVE [HEGEL] THE ONLY ABSOLUTE TRUTH IS THATGREAT IMMENSITY THE ONLY ABSOLUTE CERTAINITY ISDEATH [DURKHEIM]Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  20. 20. Problems in Decision EthicalExecuting. Can be manifested in a Covert Manner Can be manifested in an Overt mannerDr. Sorab Sadri & Prof Jayashree Sadri 2011
  21. 21. Three rules in the sociology of ethics: Always ask the question Why? Clarity of action follows clarity of thought. Ethical conduct must be seen always in thelight of the person, the culture and thecontext. It should never be seen in isolationas an act devoid of the surroundings.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  22. 22. Noam Chomsky once said:States are not moral agents; people are, and canimpose moral standards on power institutions.Hence the ideology or religion or politics drivenmoral policing is unethical.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  23. 23. Man and Civil Society Man and organization are both a microcosmof the larger civil society. No person works in isolation nor is anorganization an island unto itself. We cansee globalised relations of business in theform of concentric circles viz:Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  24. 24. Unity of Conduct At All Five Levels Individual Team Organization NationalEconomy Global Business115432Values &EthicsDr. Sorab Sadri & Prof Jayashree Sadri 2011
  25. 25. Where does ethics become mostrelevant in business? At the point of delivery: sale orproduction. At the point of decision making. At the point of decision executing.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  26. 26. Ethical Problems at the Point ofDelivery Is the product, service or process reliable? Does it meet the required quality standards? Does it actually possess ingredients that it claimsto possess? Does it pose a threat to the general humanity, thegeo-physical environment or the innocentconsumer?Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  27. 27. Problems in Decision Making However, as the market gets morecompetitive and organizations get morecomplex, we are forced to make decisionsunder conditions of relative uncertainty. Allfacts relevant to the issue are neveravailable.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  28. 28. CLEARAPPROVALHAZYHAZYCLEARREJECTIONOKNOTOKIndividualvaluesTHE VALUE – DECISION LINKOrganizational valuesOK NOT OKDr. Sorab Sadri & Prof Jayashree Sadri 2011
  29. 29. PERSONPROCESS PRODUCTINDIVIDUALGROUPORGANIZATIONEthic is involved in three levels of interactionWhen we place one triangle over the other, we get a six pointed star thatexemplifies the form and nature of business ethics.Dr. Sorab Sadri & Prof Jayashree Sadri 2011
  30. 30. READINGS Jayashree S, Sadri S and Dastoor D S (2008): Theory and Practice ofManagerial Ethics, Jaico Pub. Co. Delhi Sadri S and Jayashree S (2011): Business Ethics and CorporateGovernance, Current Pub. Co. Agra. Sadri S (ed) (2011): Management in the New Millennium, HimalayaPub. Co. Mumbai. Sadri S, Jayashree S, Bendigiri S and Guha B S (2012):Manifestations of Excellence in Management (forthcoming)THANK YOUDr. Sorab Sadri & Prof Jayashree Sadri 2011

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