To start with

y After the classes you go to pick your vehicle If you don t

find a cloth in your vehicle you pick it up from neighbours vehicle after using it will you put it back?
y How many of you will believe in god?

Philosophical statements. GOD & YOU
y God wont ask about the colour of the skin,but will ask y y y y

about the content of the character God wont ask what you did to help yourself, but will ask what you did to help others. God wont ask in what neighbourhood you lived,but will ask how you treated your neighbours God wont ask how many times your deeds matched your words, but will ask how many times they didn t God wont ask what your highest income was, but will ask if you compromised your chartacter to obtain that income.

What do you mean by ethics?
y According to the dictionary ethics means

the principles of conduct governing an individual or a group y According to the dictionary second important meaning is ethics is the study of morality y Ethics is a kind of investigation & includes both the activity of investigating as well as the results of the investigation y Morality is the subject matter that ethics investigates

Ethics as police Morality How? Highest number of people should consider action What ethics Investig ate Right or Wrong/Good or evil .

. y Ethics can be defined as the science of character of a person or a society expressed as right or wrong conduct /action.y The word Ethics which in Latin is called ethicus & in greek is called ethikos has come from the word ethos meaning character or manners.

What do you mean by business ethics? y Business enterprises are the primary economic institutions which y y y y y y produces goods & services to the society. The most significant kinds of modern business enterprises are corporations or organisations that the law provide with special legal rights & powers. In order to link the activities of the individual members & to attain common objectives organization have formal systems . 2) Directors & officers who administer the corporations assests & who run the corporation through various levels of middle managers 3)Employess who do the basic work of production of goods & services. As an organization the modern corporation consist of :1) stock holders who contribute capital & who own the corporation but whose liabality for the acts of the corporation is limited to the money they contributed.

y Business ethics is a study of moral standards & how these apply to the systems & organisations through which modern societies produce & distribute goods & services & to the people who work within these organisations y For ex when acquisition takes place between companies where job positions are duplicated instead of employees loosing their jobs for no fault ethical solution lies in job reassignment or training for alternative job assignments. .

Classic example of a normative principle: Since I would want people to feed me if I was starving. For ex sach ka samana. Thirdly the science of ethics is a normative ethics . then it is wrong for me to steal his car.Nature of ethics y Firstly the concept of ethics deals with human beings y y y y y y y evil Only human beings know what they want to pursue & the means to gain the end. then I should help feed starving people. right & wrong. Good & . Secondly the study of business ethics has today become a set of organised facts about moral behavior & conduct. Since I do not want my neighbor to steal my car. Fourthly ethics deals with human conduct which is voluntary & not forced by persons or circumstance.Normative ethics involves arriving at moral standards that standardize right and wrong conduct.

y For ex building construction y Ethical decisions are not limited only to themselves. unethical decisions do not end in themselves. Similarly. And this frame of reference is the person s own unique value system. but have widespread ramifications. y For ex paying bribe in order to obtain job .Nature or characteristics of business ethics y Ethical decisions differ with individual perspective of different persons. Each person views the ethical question in terms of his or her own frame of reference. but affects a wide range of other situations as well.

y For ex even if you refused to pay the bribe & approached a higher offical yor work may be done on the other hand you may not get a job or yor money back . somehow. The only certainty is that somewhere. profits and social responsibilities are different ends of a single spectrum. something positive will result from an ethical decision and something negative from unethical one. All cannot be maximized simultaneously & the compromise results in a decission being ethical or unethical y The consequences of most ethical or unethical decisions are not clear.Nature or characteristics of business ethics y Most ethical decisions involve a tradeoff between cost incurred and benefits received. Cost and benefits. sometime.

y For ex ratnasur thief valmiki .ramayana y Ethical decisions are voluntary human actions.Nature or characteristics of business ethics y Every person is individually responsible for the ethical or unethical decision and action that he or she takes. y For ex taking a bribe . A person cannot escape his personal liability for his crimes citing force of circumstances or pressure. Taking an ethical decision cannot be an impersonal activity as it involves the person s individual unique value system along with his moral standards.

colleagues and subordinates and not wasting time during time during working hours..e. it is about commitment and Protecting the interests of the organization. To maintain punctuality. At the top level. behaving properly with superiors.Nature or characteristics of business ethics Ethics will be different at different levels At the basic level. it is about discipline. coming to work on time. i. .

Importance of ethics in business y Part of society y y y y Business is a part of society. .Evasion of tax Expectations of public all stake holders expects a high level of ethical behaviour from the business organization Ex reliance used to dominate stock browsers Trust of employees high level of morale & productivity can be easily obtained in the companies which follow ethics. What ever ethical principle apply in society apply to business For Ex .

indian well managed companies are published by business india based on profit sharing.Importance of ethics in business y Image commands trust & respect from stake holders. y Pride of best companies ethically managed companies command respect from public as well as government organisations. bonuses. .social responsibility are quoted y Overall benefit win win situation for both stake holders & organization.

Relationship between business & ethics
y We can study the relationship between business &

ethics in three different views y 1.The unitarian view consider business as part of the society y Hence business has to follow the moral of the society y In medieval period(1000 & 1450 century) the churches prescribes that business must do well to the society & business were run according to the laws framed by churches

The separatist view
y well known economist

Adam smith & friedman believed that business should concentrate in business activity & social issues should be left to government & socities. y If much importance is given to ethics in business then economy may go back to the olden days. y Business should only obey the laws of the land & achieve economic goals

The integrated view
y This view was proposed by parson. y He believed business & ethics should go hand by hand. y As business is a profitable thing it has to make profits

for its survival. y Business helps society by producing quality goods & services so it becomes ethics even when it makes profit.

told the industrialist JRD Tata. It is a dirty word. y Today profit is not un ethical. y A sick company is liabilty to the economy as it is not generating returns to its stake holders which is unethical y Only when companies make profit it can very well discharge its social responsibiliies. Never speak to me of profit. y The means & methods of making it is the ethical question. companies are judged depending on the profits what they generate. Jawaharlal Nehru. .Business ethics & profits y India's first prime minister.

y Because the society reacted and demanded that businesses place should be of high value on fairness and equal rights. Anti-trust laws were instituted.Benefits of managing ethics in an organisation y 1. . Government agencies were established. Attention to business ethics has substantially improved society. Unions were organized. Laws and regulations were established.

When an organization develops ethical value s employees react with strong motivation and performance.y 2. an organization finds surprising disparity between its preferred values and the values actually reflected by behaviors in the workplace. Ethics programs align employee behaviors with those top priority ethical values preferred by leaders of the organization. Ethics programs cultivate strong teamwork and productivity. Usually. .

in the organization and themselves. . Ethics programs support employee growth and meaning. Attention to ethics in the workplace helps employees face reality. Employees feel full confidence they can admit and deal with whatever comes their way. both good and bad -.y 3.

. There is an increasing number of lawsuits in regard to personnel matters and to effects of an organization s services or products on stakeholders. A major intent of welldesigned personnel policies is to ensure ethical treatment of employees.y 4. Ethics programs are an insurance policy -. etc. firing.. It s far better to incur the cost of mechanisms to ensure ethical practices now than to incur costs of litigation later. evaluating.they help ensure that policies are legal. e. disciplining. Attention to ethics ensures highly ethical policies and procedures in the workplace. in matters of hiring.g.

y 5. People see those organizations as valuing people more than profit . Ethics programs promote a strong public image. the fact that an organization regularly gives attention to its ethics can portray a strong positive to the public. managing ethics should not be done primarily for reasons of public relations. frankly. But.

y 6. supports greater consistency in standards and qualities of products . Overall benefits of ethics programs: managing ethical values in the workplace develops reasonable managerial actions. improves trust in relationships between individuals and groups.

and most -.formal attention to ethics in the workplace is the right thing to do. . Last .y 7.

so also their ability to deal with moral issues develops as they move through their lives. y The psychologist Lawrence kohlberg concluded on the basis over 20 years of research that there is a six identifiable stages in the development of persons ability to deal with moral issues y He grouped them into three level each containing two stages .Meaning of Moral development y We assumed that a persons values are formed during childhood & do not change. y Many researchers believed that just as their physical & emotional abilities develop as they age .

right or wrong If you can ask a 5 year old whether stealing is wrong then you get a reply it is wrong If you ask why it is wrong the answer you will get mother will punish The child can see situations only from his/her point of view STAGE ONE punishment & obedience orientation the child reason for doing right thing are to avoid punishment or suspend the superior physical power of authorities STAGE TWO This we can call the exchange stage. In this stage." children learn that it is in their interest to behave well. Those interests are still understood in a very concrete fashion. . bad.Level one pre conventional stage y At these first two stages the child is able to respond to rules & social y y y y y expectation & can label good. because rewards are in store if they do. and the child deals with others in terms of simple exchange or reciprocity: "I'll scratch your back if you scratch mine. there is increased recognition that others have their own interests and should be taken into account.

This is called the law-and-order stage. and gratitude are understood. Stage 4.or nation is now y y y y seen as valuable in its own rights regardless of the consequences If you ask an teenager why something is wrong or why it is right he may reply what my family has taught me or what our laws say The adolescent at this stage is now able to see situation from the point of view of others. Now they become interested motives or intentions. The rules of the society are the bases for right and wrong.conventional stages y Maintaining the expectations of ones own family. trust. although it is limited to the people they actually deal with on a day-to-day basis. Children in this stage often adhere to a concrete version of the Golden Rule. Children now take the point of view that includes the social system as a whole. peer group.Level Two. and to seek their approval. . and concepts such as loyalty. The child tries to live up to the expectations of others. and doing one's duty and showing respect for authority are important. Stage three This stage is often called the good boy/good girl stage.

. An individual who reaches this stage acts out of universal principles based upon the equality and worth of all human beings. This stage is referred to as the stage of universal principles.Level three: Post-conventional morality y Individual ability to think for themselves by logically deciding what is right & what is wrong y Stage 5. individuals judgments of good and bad become influenced by universal moral principles. The social contract stage recognises that rules are social agreements that can be changed when necessary y Stage 6.

Arguments for & against business ethics y Business ethics as the process of rationally evaluating our moral standards & applying them to business situations y Some part of the society have raised objections to the very idea of applying moral standards to to business activities y Three different kinds of arguments have been developed for bringing ethics into business y Firstly in perfectly competitive free markets the search of profit will by itself ensure that the members of society are served in the most socially beneficial ways y To be profitable each firm has to produce what the members of the society want & has to do this by the most efficient means available .

y An employer wants to be served in whatever ways will advance his/her self-interest. . as loyal agents of their employers (stockholders) managers have a duty to serve their employers in whatever ways advance their employers self-interest.y Second argument .Business managers should single mindedly practice the interest of their firms & should ignore ethical considerations y A loyal agent's duty is to serve his/her employer as the employer wants to be served. y Therefore.

y Third kind of objection is sometimes made against y y y y bringing ethics into business Business ethics is essentially obeying the law For ex when an accountant was asked to prepare a business ethics report his report excluded allegations that a store manager was trying to bribe officials but when the directors asked him he replied he did not feel the incident was unethical Some laws require behaviour that is the same as the behaviour required by our moral standards For ex laws that probhit murder.fraud so on . theft.

y Some laws have nothing to do with morality as they do not involve serious matters which includes parking law & dress code y Other laws may even go against our moral standards so that they are actually opposing to morality y For ex saudi arabia lingerie shop .

Business is a human activity. y There are many difficulties involved in trying to study whether ethical companies are more profitable than unethical ones. . y Studies have suggested that how socially responsible firms perform on the stock market & have concluded that ethical companies provide higher returns than other companies.Points for bringing ethics into business Firstly Ethics should govern all human activities. the search of business requires atleast a minimal adherence to ethics on the part of those involved in business. ethics should govern business too. no business can exist entirely without ethics. Therefore. y Secondly y Ethics should be part of business.

relativistic form where the anwser always seems to depend entirely on circumstance We can understand through stakeholder model . Moral reasoning considers two extreme form 1.Moral reasoning y Is a more intentional form of decision making where y y y y the decision maker considers evidence & reaches judgement about the right & wrong way to act.absolute form where one believes that the same rules applies no matter the circumstance 2.

Stake holder model y Stake holders include all the groups & individuals who are affected by a decision policy of a firm or individual y The central claim of the stakeholder approach is that corporations are operated for the benefit of all those who have a stake in the enterprise y Although the relation of each stake holder group to the corporation is different each of the constituencies is integral to the operation of a corporation & its role must be taken into account by managers .

Responsible leadership y In bhagavadgita krishna advises arjuna y Klaibyam ma sma gamah paartha y Naitatava yyupa padyate y Kshudram hridaya daurbalyam y Tyaktvottishta parantapa y Oh partha do not yield to weakness it is not fit to be feeble & weak in heart it is very unwise so arise a be terror for the enemies .

how war preparations to be made & other issues related to the rulers y He always thought not to include ethics in politics y In his book he discussed how some kings of his time got popularity by adopting strategies to gain popularity.Ethical Theories y Ends & Means of Machiavelli y Niccolo Machiavelli was born in florence in a family of political prominence. y He enjoyed big position in government of Florence y He wrote a book called Prince y It proposes how a ruler should behave. influence .

this leaves no time to people to think against him .y Wage a war on neighbouring kingdom in the name of religion by this he can fulfill ambitions of his senior ministers & thus get no threat at home y Acquire influence without anyone aware of it y In the name of religion practice pious cruelty y Keep subjects surprised by new announcements of mega projects.

y Some of the tips given to a ruler or a manager are y Reputation comes through on great undertakings & doing extraordinary things y Rulers should know how to be true allies & true enemies y Whenever any one happens to do anything extraordinary whether good or bad in life find ways which are unique to reward or punish them y Ruler should encourage his citizens to pursue their occupations peacefully y Meet public showing himself to be generous & understanding but always retaining his authority & dignity .

.Might Equals Right of marx y Karl Marx was born in Trier. hence eqality in distribution of benefits.Germany y Karl marx & frederick formed the communist party in 1948 y According to him society is an association of individuals who cooperate to advance the good of all y Joint actions generate much greater benefits than lonely efforts. y Individual exist for others but others also exist for them.

Sources of ethics y Genetic inheritence the quality of goodness is a product of hereditary behavior y Religion hinduism.christanity.islam y Legal system y Code of conduct .

teleological theory y The word telos means the end y The teleological theory of ethics is based on the end results of theconsequences .

Utilitarianism y It is the most well-known and prevalent forms of consequentialism. y Consequentialism is an umbrella term for a range of moral theories that state the rightness or wrongness of an action should be based solely on the results produced by that action. y An action is right if & only if it produces the greatest balance of pleasure over pain for everyone. .

y Central to this concept was his understanding of human behaviour as solely motivated by the pursuit of pleasure and the avoidance of pain.Psychological Hedonism and Psychological Egoism y Much of Bentham s moral theory of utility is based on his concept of human nature. y Psychological hedonism refers to the notion that human beings are naturally motivated by a desire for pleasure and an aversion to pain. . y Hedonism is a philosophical theory that views pleasure as the supreme good (or value) and pain as the ultimate evil.

Act Utilitariansim y Act utilitarianism states that the best act is whichever act would yield the most happiness. .

and two need kidneys. . one needs a gall bladder. violating his rights is exactly what we ought to do. The sixth just came in to have his appendix removed. one needs a pancreas.This would obviously violate the rights of the sixth man. given a purely binary choice between (1) killing the man and distributing his organs or (2) not doing so and the other five dying.Act Utilitariansim y To illustrate. Should the surgeon kill the sixth man and pass his organs around to the others. but act utilitarianism seems to imply that. consider the following scenario: A surgeon has six patients: one needs a liver.

y if everyone were to obey this rule.Rule Utilitariansim y Rule utilitarianism is not concerned with assessing individual acts but the utility of a rule for action. would the general happiness be maximised? .

we'd end up performing many risky transplant operations. if instituted in society. would obviously lead to bad consequences. rather than the act." This rule. he ought to do so. If the surgeon killed the sixth (seventh) man. . The rule in this case would be: "whenever a surgeon could kill one relatively healthy person in order to transplant his organs to more than one other person who needs them. would look at the rule. that would be instituted by cutting up the sixth man.. however. etc. etc. Relatively healthy people would stop going to the hospital.Rule Utilitariansim y A rule utilitarian. So a rule utilitarian would say we should implement the opposite rule: don't harvest healthy people's organs to give them to sick people. then he would be doing the wrong thing.

y For ex a bus driver .Negative Utilitarianism y Negative utilitarianism requires to prevent the greatest amount of harm for the greatest number.

y For ex saving ones own child . like any utilitarian theory. but they define the best consequences in terms of preference satisfaction. So.Preference Utilitarianism y Preference utilitarianism is a particular type of utilitarianism which defines utility in terms of preference satisfaction. preference utilitarians claim that the right thing to do is that which produces the best consequences.

Utilitarianism in the strictest form would allow slavery and torture of a few if it increased the happiness of the population as a whole. pleasure is neutral . . y In utilitarianism.the pleasure of a sadist is equal to the pleasure of the altruist. y The greatest happiness of the greatest number leaves minorities in any society at a distinct disadvantage.Criticisms of Utilitarianism There is a problem with distinguishing types and degrees of happiness/pleasure.

y Define moral development?explain the kohlbers theory .Assignment y Define value?discuss the key forces in individuals environment that influence in the formulation of value y What are the arguments for & against business ethics.

y A second problem is that some benefits & cost seem intractable to measuremet y For ex can one measure the value of health or life. y A third problem is that because many of the benefits & cost of an action cannot be reliably predicted they also cannot be adequately measured.Problems of measurement y One major set of problems with utilitarianism is centred on the difficulties encountered when trying to measure utility y For ex suppose two persons both enjoy getting a job. y For ex how much to invest in a research program that will probably uncover some highly theoretical but not immediately usable (Cloning) .

a bank must decide whether to extend loan to the manager of a local pornographic theatre .because different people view in different ways. y Fifth the utilatarian assumption that all goods are measurable implies that all goods can be traded for equivalents for each other.equality health beauty cannot be traded off. .freedom. y For ex if you are willing to trade the enjoyment of eating two slices of pizza for the enjoyment of a half hour of listening to your favourite CD y Some others believed that life .y Fourth problem is that it is unclear exactly what is to count as benefit & what is to count as cost y For ex .

.not installing safety device y For ex suppose that subsistence wages force a small group of migrant workers to continue doing the agricultural jobs in an economy but produce immense amounts of satisfaction for the vast majority of society members because they enjoy cheap vegetables.Problems with rights & justice y Certain actions are morally right when in fact they are unjust or violate peoples rights y For ex uncle chemical plant .

. Means adhering to society s basic rules that define right & wrong behaviour Parker brothers voluntarily with drew its all time best selling toy when it found that two children were choked to death by swallowing some of its parts which they never anticipated One recent example is Nokia batteries. Companies has to demonstrate ethics in their business in order to have build long relationship with society.Ethical business performance y Business frequently demonstrates a high level of y y y y ethical performance too.

temples.environment in which they live Corporations are greatly influenced by ethical values indiviuals bring to the business Often business managers are faced with a conflict between their individual ethical values & those of the corporation .teachers.peers.Individual code of coduct y It is important to understand that business is made up y y y y of indivivals These individuals obtain the etical values from Parents.

.it is commonly used to all things which people regard as good. desirable & just.Define Values y Value is quality of being useful or desirable.

respect for the high achievers. . y The companies having strong corporate cultures have y Shared idea.value the importance of the people. y Corporate culture is continually transmitted by the leaders in the corporations through communications between the employess & other stake holders.Corporate culture y Corporate culture is defined as the basic purpose which holds the organization together y It is the sahred values that each of the member of the organization holds in common.caring & sharing approach between members of management & other employees.

Sources of ethics y General inheritence y Religion y The legal system y Philosophical systems y Code of conduct y Cultural experience .

y Over centurie natural traits have influenced & ingrained in the minds of people y Many of the basic qualities like courage.y General inheritence all people inherit lot of traits from fore fathers.generosity comes to man from inheritence .sympathy.

y The religious books lay down the ethical standards. y The religious belief what is right & what is wrong are coming to us from generation to generation.y Religion provides ethical principles & standards to all humans. .

Legal system y Laws are based on society rules of what is acceptable & what is not. y These rules are made as laws by authority for the proper regulation of a community or society for correct conduct in life y Laws are vehicles for expressing ethical preference of socirty .

.Philosophical system y The philosophical base of the society we live in add to thinking & decision making process y Indain thinkers harm none y Modern business thinkers hard work & efficiency.

expressed broad expectations from employess that is accepted in the organization y Company operating policies serve as guide to conduct & as shield by which the employee can protect against the unethical advances. .highly generalised.Code of ethics y The codes of conduct that are detailed in the following sources are y Company codes generally brief. y Industry principles lobbying in excise industry.

.Cultural experience y Individuals values are shaped by the society where we grow & live in.

. The entitlement is then called a legal right.The concept of right y In general right is an individuals claim to something. y The entitlement may derive from a legal system that permits or empowers the person to act in a specified way or that requires others to act in a certain ways toward the person. y A person has a right when that person is entitled to act in a certain way or is entitled to have others act is a certain way toward him or her.

y Moral rights are not restricted to particular jurisdiction. y .y Entitlements can also derive from a system of moral standards independently. y Moral rights unlike legal rights are usually thought of being accepted universally. y For ex right to work. y Rights that all human being possess such rights are called human rights y Human rights are based on moral norms & principles that specify all human beings are permitted or empowered to do something or are entiltled to have something done for them.

. Secondly Moral rights provide individuals with independence & equality in the free pursuit of their interest. For ex my moral right to worship as I choose can be defined in terms of the moral duties other people have to not interfere in my chosen form of worship. For ex if I have a right to worship as I choose then this implies that I am free to worship & that I am not dependent on any ones permission to worship.y Moral Rights are powerful devices whose main purpose is to y y y y y enable the individuals to choose freely whether to pursue certain interest or activities Moral rights have three important features Firstly moral rights are tightly connected with duties.

y If I have a moral right to do something then I have a moral reason for doing it.y Third moral rights provide basis for justifying ones action. .

y Negative rights are distinguished by the fact that its members ca be defined wholly in terms of the duties others have to not interfere in certain activities of the person who holds a given right.Negative & positive rights. . y For ex if I have right to privacy this means that every other person including my employer has the duty not to intervene in my private affairs.

it also means that if I am unable to provide myself with an adequate income then I must be provided with such an income ( by government) .Positive rights y Positive rights do more than impose negative duties. y For ex if I have right to an adequate standard of living this does not mean that others must not interfere.

A basis for moral rights or kants theory y Leagal rights one can understand because person lives with legal system. y Kant suggested two ways of formulating this basic principle. y A more satisfactory foundation for moral rights is provided by the ethical theory developed by immanuel kant. y Kant theory is based on the principle that every one should be treated as free person and everyone everyone has the correlative duty to treat others in the same way. .

Formulation of kants categorical imperative y I ought never to act except in such way that I can also will that my maxim should become a universal law y For ex If don t like the race of employee so I would burn him to death y Before doing this act I should understand that even my employee will be considering in the same way then wheteher am I ready to get burnt from him y Moral right & wrong according to kantian theory are distinguished not by what person accomplishes but by the reason the person has for what he tries to do. .

.Second formulation of kants categorical imperative y The second formulation says never treat people only as means but always also as ends. y An action is morally right for a person if he does not use others only as means for advancing his interest but respects to choose freely for themselves.

y Ex suppose I am a murderer would I then be willing to have everyone follow the ploicy that all murderers should be punished.Problems with kant y One difficulty lies in trying to determine whether one would be wiling to have everyone follow. y Iwould be because I want to protect from other murders y & because I don t want to be punished myself. .

y Secondly An employer pays minium wages & refuses to install safety equipmet she is respecting their capacity freely choose for themselves to work elsewhere. .

y Aristotle defines virtue as a character trait that manifests itself in habitual action.Virtue ethics Aristotle Nicomachien ethics) y This theory originated in greek. y It considered moral character rather than right action . it is the trait of a person who tells the truth as a general practice. y For ex honesty cannot consist in telling the truth once. .

y An action is right if & only if it produces the greatest balance of pleasure over pain for everyone. y For ex if we think slavery is unjust then we condemn a society that uses slavery even if slavery makes that society more productive .Justice y The terms justice & fairness are used almost interchangeably we tend to reserve the word justice for matters that are especially serious y Standards of justice are generally taken to be more important than utilitarian considerations.

distributive justice y Retributive justice y Compensatory justice. .y Justice is divided into three categories y 1.

Distributive justice y The fundamental principle of distributive justice is that equals should be treated equally & unequals treated unequally. . y For ex if person x & Y are both doing the same work & there are no differences between them then in justice I should pay them equal wages. y If person x works more time than person y & if time duration is the considered for paying wages then person X has to get more wages.

y They feel that all human beings are equal in some fundamental respect & that in virtue of this equality each person has no claim to societys goods. .Justice as equality y Egalitarians believe that there are no relevant differences among people that can justify unequal treatment. y It is not onlyfor society but even for families in the society y For ex parental properities.

If everyone is given exactly the same things then the lazy person will get as much as the industrious one although the lazy one does not deserve as much. . if this is so then human beings are unequal in all respects. needs & desires. ability & effort. The sick person will get only as much as healthy ones although sick person needs more. Human beings differ in their abilities intelligence.Criticism y There is no quality that all human beings possess in precisely the y y y y same degree. Second criticism argues that the egalitarian ignores that some characteristic that should be taken into account in distributing goods both in society & smaller groups need.

One long lived tradition is that contributions should be measured in terms of work effort.god justly rewards hard worker with wealth & success & justly punishes laziness with poverty & failure. The main question raised by the contributive principle of distributive justice is how the value of the contribution of each individual is to be measured. . For ex sales people on the road.Justice based on contribution y Some writers have argued that a societys benefits should be y y y y y distributed in proportion to what each individual contributes to a society or to a group When we talk in terms of business the more a worker contributes to the project the more he or she should be paid. Puritan ethics considers harder one works. the more one deserves.

y Problem is hanidcapped. . untrained & immature people may be unable to produce anything worthwhile.y First to reward person efforts without any reference to whether the person produces anything worthwhile through these efforts is to reward incompetence & inefficiency. better the quality more he should receive. y Second if we reward people solely for their efforts & ignore their abilities & relative productivity then talented & highly productive people will be given little to invest their talent. ill. y Contributions should be measured in terms of productivity.

. (because remuneration would depend on need not on effort) Second objection is that opponents of the socialist principle have urged is that the occupation each person is entered would be determined by the persons ability & not by his or free choice. For ex ability to become teacher but prefer to be a cab driver then he has to become teacher not a cab driver.Justice based on needs & abilities. y The socialist principle is based on the idea that people realise y y y y y their human potential by exercising their abilities in productive work. Work should be distributed in such a way according to his ability. Criticism under socialist principle there would be no relation between the amount of effort a worker puts forth & the amount of remuneration one receives.

. if a person needs a loaf of bread but wants a bottle of beer he or she will have to take loaf of bread.y Similarly under the socialist principle the goods a person gets will be determined by the persons needs & not by his or free choice.

The only distribution that is just according to robert nozick is one that results from free individuals choices. If I choose . .I should be allowed to to give them away to some one else or exchange them for other objects with whomever I choose. For ex if I choose to write a novel or carve a statue out of a piece of wood then I should be allowed to keep the novel or statue if I choose to keep it.Justice as freedom libertarianism y Libertarian holds that no particular way of distributing goods y y y y can be said to be just or unjust apart from the free choices the individual make. Any distribution that results from an attempt to impose a certain pattern on society (imposing equality on everyone or taking from the haves & giving to have nots) will there fore be unjust.

y Criticism for libertarian position y For ex if a man is starving from hunger it is important than the right of a satisfied man to be free of the constraint of being forced to share is surplus food. y To secure these important rights society may impose a certain pattern of distribution even if this means that in some cases some people will have to be forced into conforming to the distribution y For ex Tax. .

.y Second criticism of libertarianism claims that certain resource may be unavilable to a person through no fault of the person. other people because of greed may refuse to provide that person with what he or she needs.then this is unjust.

principle of fair equality of opportunity .Justice as fairness y Rawls distribution of benefits & burdens in a society can be understood by y 1.principle of equal liberity y 2.difference principle y 3.

y Difference principle rawl claims that the more productive a society is the more benefits it will be able to provide for its least advantaged members. y .y Principle of equal liberity .Each citizens liberity must be protected from invasion by others & must be equal to those of others.pressure managers. y If the principle of equal liberity is correct then it implies that it is unjust for for business institutions to invade the privacy of employess .

y A person efforts. .abilities & contribution would then determine his or her remuneration.y Fair equality of opportunity it says that everyone should be given an equal opportunity to qualify for the more privileged positions in societys institutions y It dosent mean that job qualifications should be related to the requirements of the job but each person must have access to the training & education neede to qulaify for the desirable jobs.

Retributive justice y Concerns the justice of blaming or punishing persons for doing y y y y wrong. For ex if the cotton mill owners do not know the conditions in their mills would cause brown lung disease then it would be unjust to punish them. punishment is consistent only when everyone is given the same penalty for the mistake. A second kind of condition is punishing an employee on the basis of incomplete evidence is rightly considered as in justice Third kind of condition of just punishments is that they must be consistent & proportioned to the wrong. . If people do not know or freely choose what they are doing they cannot justly be punished or blamed for it.

For ex if I destroy somones property I will be held morally responsible for paying him damages. . For ex car damage If I destroy someones reputation how much compensation should be given. It is difficult to consider the compensation.Compensatory justice y Holds that when a person wrongfully harms the y y y y interset of another person the wrongdoer has the moral duty to provide some form of compensation to the concerned person .

The persons action was the real cause of the injury For ex banker loans a person money & the borrower uses the money to cheat others can we make responslible the banker to compensate those people who have been cheated. The person caused the injury voluntarily if I injure someones property accidentally & without negligence I am notmorally obligated to compensate the person.y Traditional moralist have argued that a person has moral y y y y y obligation to compensate an injured party only if three conditions are present 1.the action that cause the injury was wrong or negligent For ex if efficiently managing my firm I undersell than my competitor & run him out of market should I compensate him. .

.sell off the remaining assets & set up a new factory in other country y Instead aaron announced that he would build a new factory in lawrence & promised every emploee would get their full wages & receive mediacl benefits & assured of their positions oncethe factory is built.Ethics of care y Malden mills factory a family owned company in Lawrence(in New england) caught fire on dec 11 1995. y President & major owner Aaron feuerstein shared very good relationship with workers he used to tell its workers are the most valuable assets that malden mills has. y The next morning after the fire broke out news paper prdeicted that aaron would collect the the huge amount of insurance.

y According to utilitarian view once again rebuilding the

factory is not a right action because it gives utility to less number of people if he had moved his factory to a third country where more number of people would be benefited. y The key concept of ethic of care is that an individual have an obligation to exercise special care towards those particular persons with whom we have valuable close relationships particularly relations of dependency.

y We each exist in a web of relationships & should preserve & nurture those concrete & valuable relationships we have with specific persons. y We each should exercise special care for those with whom we are concretly related by attending to their particular needs, desires & concrete well being. y It is important to distinguish three different forms of caring y 1.caring about something y 2.caring after someone y 3.caring for someone.

y Caring for someone the kind of caring demanded by

ethic for care is caring for someone. y For ex caring for someone is the kind of caring that a mother extends toward her child. y Such caring is focused on persons & their well being .it does not seek to foster dependence but nurtures the development of the person so that one become capable of making ones own choice & living ones own life.

y For ex hospitals. y Caring after someone one can become busy by taking care of people in manner that looks after their needs but remains some purpose. .y Caring about something is the kind of concern & interest that one can have for things or ideas where there is no second person in whose individual reality one becomes occupied y Such caring for objects is not the kind of caring demanded by an ethics of care.

y The advantage of an ethic of care is that it forces us to focus on the moral value being partial towards those concrete persons with whom we have special & valuable relationships y In these aspects an ethic of care provides an important corrective to other approaches which emphaisze on impartiality & universality. .

rights. y We each should exercise special care for those with whom we are concretly related by attending to their particular needs. desires & concrete well being. y A person has a right when that person is entitled to act in a certain way or is entitled to have others act is a certain way toward him or her. justice & caring y An action is right if & only if it produces the greatest balance of pleasure over pain for everyone. .Integrating utility. y Justice how benefits & burdens should be distributed among the members of a group.

does the action exhibit appropriate care for the well being of those who are closely related.does the action as far as possible maxmise soial benefits & minimise social injuries 2.is the action consistent with the moral rights of those whom it will affect 3. .will the action lead to a just distribution of benefits & burdens 4.y In order to integrate all the four considerations one y y y y might ask a series of questions about an action 1.

The recovered drugs we assume will save more lives where as the invasion of privacy will affect only a dozen of people 3.When we consider Utilatarian approach saving human life is more important 2.black mail or restriction on their freedom as result of uncovering information aboyt their private lives 4. y For ex . 1. Then my invasion of the privacy of employees is justified.Suppose that I can ensure my employess suffer no shame.Whether the potential break down in trusting relationships that surveillance risk is more or less important than the theft of life saving resources.only by invading my employees right to privacy with hidden cameras will I be able to stop the continuing theft of several life savings drugs that some of them are clearly stealing.

its development requires effort. y A moral virtue is praiseworthy because it is an achievement. . y If a person tells the truth on occasion we would not say person is honest. y A person possesses the virtue of honesty when the person is disposed to habitually tell the truth.The nature of virtue y A moral virtue is an acquired disposition that is valued as part of the character of a morally good human being that is exhibited in the persons habitual behaviour.

desires & actions in a manner that seeks the reasonable middle ground & avoid unreasonable extremes. y Virtues then are the habits of dealing with ones emotions. y Cowardliness is the vice of not being daring enough in response to fear & recklessness is the vice of being too daring in response to fear. . y A moral virtue is a mean between two vices one of excess & other of deficiency.The moral virtue y The most significant & influential theory of virtue was proposed by aristotle who argued that a moral virtue is a habit.

.Virtues.in that situation it does not help to be told what kind of character one should have . y In such situations one needs advice about what kind of actions are appropriate in ones situations & virtue theory seems incapable of providing such advice. y For ex when a woman wants to take divorce from his husband & he ask her friend what he has to do. y Can ethic of virtue able to provide us with little guidance about how we should live our lives or how we should behave.& actions y The key aspect of virtue theory is it helps us decide what we are to do.

y For ex different parameters befor getting married. .y From this view then the wrongfulness of an action can be determined by examining the kind of character the action have a tendency to produce. y If the husband is not able to support & by taking divorce she can lead happy independent life then the action is considered as right y If the husband is able to support & the woman wants to marry another person then the action is wrong.

. social & economic resources available.Morality in international context y The government laws of different nations differ from different countries y Legal safety y Consumer product safety & labeling laws y Environment pollution laws y Multinational often operate in countries at very different levels of development y Some countries provide very high level of technological. y May be in underdeveloped countries resources may not be available.

y For ex nestle corporation has been accused of marketing powdered infant formula whose safe use requires literate consumers who has clean supply of water available in less developed nations where illiterate mothers have used unsanitary water to mix & dilute the formula which they have fed their babies resulted in complications y Most strikingly the cultural practices of nations may differ so radically that the same action may mean something very different in two different cultures. y For ex paying tax in america & italy .

& cultural understanding all must be taken into account when evaluating the ethics of business policies & actions in a forgien country. When a MNC is operating in less developed countries MNC from more developed home countries should always follow those practice prevalent in the more developed country which set higher or more stringent standards. Local laws.levels of development. For ex environment standrads of set up by indian companies.should the manager of MNC has to adopt the practices of its home country or those prevalent in host country.y When laws differ from country to country what the manager has y y y y to do. . Wages paid by american compniies in india can take local talents MNC should follow local practices.

.aristotle theory. y emphasies based on end results of the consequences. y Dentological theory example kants theory based on the measurement by the rightness of the rules rather than the end results.y Telelogical theory utlitarian theory by stuart mill & distributive theory john rawls theory. y Virtue theory .

y Modern view considers business as part of society & both are interdependent y Society provides various inputs to business which in turn provides goods & services to society. dividends etc. . y Society pays the price of goods & services to business in order to have them on the other hand business rewards inputs by paying wages. salaries.Business & society y Changing concept & objectives of business y What do you mean by business????? y Traditional view activities or organization aimed at making profit.

Business & culture y In a narrow sese culture is understood to refer to such activities as dance. .music & festivals.drama.beleifs & values the common view points which bind them together as a social entity. y According to steward & Glynn the idea & beahviour patterns that members of society learn through language & other forms of symbolic interactions their customs. habits.

organisations themselves tend to acquire distinct cultures. own & manage organisations. y When people with different cultural backgrounds promote. .Culture creates people y It is not that all people are alike in a particular culture y There are sub cultures within a culture. y Thus the culture of infosys is different from wipro.

the clothes they wear & the building materials they use to construct house vary from culture to culture & time to time within the same culture.Culture determines good & services y Culture broadly determines the type of goods & services a business should produce. y Business should realise these cultural differences & bring out products accordingly. . y Veg cakes from britannia specially for states in south india. y The type of food people eat.

Caste system y Our society was divided into four major caste y Brahmins. y Even we can find stratification in other religions also y But over the years society has taken a different shape. . kshatriyas.v aishyas & sudras.

Cultural adaptation y The term cultural adaptation refers to the manner in which a social system or an individual fits into the physical or social environment. y It is often necessary to know process & nature of the cultural environment for successful formulation of business strategies. y Adaptation is essential for survival for individual as well as organization y For ex a woman who lives with her husbands family would have to fit into that family culture y An indian who settles in the USA has to adjust to the social & physical environments there.(new ideas. segmenting the market) .

y Executives & other employees on forgien assignments may experiene cultural shock in alien environment.& anxiety caused by the strangeness of the new environment y For ex youngster born & brought up in large city when shifted to small remote village may experience the cultural shock. .Cultural shock y Environmental changes sometimes produce culture shock a feeling of confusion.insecurity. y This highlights the importance of the selection of people for forgien markets.

from one generation to the next. y Transmission also facilitates cultural diffusion the spread of cultural elements from one place to another. y The nature & process of cultural transmission & diffusion in a society is important to business decission making. y Many cultural behaviour are handed down by by elders to childrens or vice versa.Cultural transmission y The elements of the culture are transmitted among the members of the culture. .

Cultural conformity y Individuals in a culture tend either to conform to the cultural norms or to deviate from them. y If a society is by & large characterised by blind conformity it would be very difficult to market new revolutionary ideas in such a society. . y Special efforts may be required in such a society to change the attitude of the people in favour of unconvetional ideas. y For ex a s student who abides by the rules of his school discipline does his home work promptly & studies properly is conforming to his role obligations.

y Individuals from such culture look beyond the facts & figures & take into consideration such factors as personal relationships.religion & trust y A low context on the other hand assumes a high degree of shared knowledge in a transaction thus deals only in such tangible aspects. attitude towards respect.Low context & high context cultures y A high context culture is one that placesgreat value on the intangible aspects of a negotiation or business deal. . y In low context business can be conducted without meeting face to face.

y Feminine culture which appreciates interpersonal relationships put quality of life before material acquistion & shows concern for individuals y As mitchell observes business people from feminine culture are often more reserved y Where as in masculine culture success is the function of the individual & society.Masculine & feminine cultures y Socities with masculine values apperciate aggressiveness while respecting the goal of material acquistion. .

.Individualism VS communitarianism y In individualism people regard themselves as individuals while communitarianism they regrad themselves as part of group.

Religion may also influence the attitude towards work People of one religion may be very industrious when compared to others .beiefs.Religion y People have their own religious y y y y convictions.sentiments. When an american fast food chain was planning to enter india people opposed the marketing of beef product in the country by the multinational.& festivals. The cost of ignoring certain religious aspects could be very high sometimes even fatal in business.

Ethnodomination y In many countries one or the other industry or trade is y y y y dominated by certain groups For ex automobile spare parts business is dominated by sikhs Shettys from coastal areas in karnataka resturants. . Marwaris in whole sale trade in several products. Many ethnic business can go international.

Social responsibilty of business y According to the classical view business has only economic objectives. . y Main objective is to use its resources & engage in activities designed to increase its profits y According to contemporary view business is an integral part of the society to serve a social purpose.

A firm has the following four categories of obligations of corporate performance Economic Legal Ethical Discretionary . Carolls define CSR as the entire range of obligations business has to society.Social responsibility models y y y y y y y y y Carolls model Halals model Ackermans model.

. y discretionary responsibilities refer to the voluntary contribution of the business to the social cause like involvement in community development & other social programmes. y Legal responsibilties are also fundamental in nature as the business has to obey the law of the country.]\[ y The firm being an economic entity its primary responsibility is economic i. y Ethical responsibilties are certain norms which the society expects the business to observe though they are not mandated by law.e efficient operations to satisfy economic needs of the society & generation of profits for rewarding the investors & further development.

y According to William a large spending for social cause may affect the profitability of the firm which could have implications for the stake holders & the future of the firm. y Accorrding to ackerman model there are three phases y The first phase is one when the top management recognises the existence of a social problem which deserves the companys attention & acknowledges the company policy towards it. y Third phase involves the implementation of social responsibility programmes. . y Second phase is character ised by the company appointing staff specialist or external consultants to study the problem & suggest ways of dealing with it.

y These business may even contribute a part of their black money for social purpose . y They try find out the loop holes in the legal system.Extent of social orientation & involvement y Anti social not only these companies have no social orientation but also they are unfair in conducting the business. y Promoters & top managerial personnel of several organization have been found to engaged in malpractice. .

.y Indifferent . y Peripheral these companies are slightly a shade better than the indifferent category.these are the companies which have no social orientation beyond discharging the legal as well as the economic responsibilities. y Socially oriented companies in this category have a high level of social orientation but their real involvement is constrained by limitations of resource. they have little bit of social orientation. y Committed & very active these companies are characterised by high level of social orientation & real involvement in the societal welfare programme.

as business is part of society there are methods of government influence like incentives & others. Top management they form strategies in achieving the objectives the attitude of the top management is an important influencer of the social orientation. . Stake holders Societal factors for ex a resourceful firm located in a poor community may be expected to contribute to the development of education & health facilities of the locality where as such involvement may not be required of a firm in well developed community.Factors affecting social orientation y Promoters & board of directors y y y y the values & vision is one of the very important factors which influence the CSR. Government & laws laws are society s codification of right & wrong.

sometimes there may be competition between companies to outperform others. some times these groups will try to have a direct confrontation with business in many cases.o\[ y Political influence include pressure exerted by special interset groups in society & media to control business practices. y Competitors social orientation of a company is also influenced by competitive forces.these include a variety of NGO like consumer interest groups. .

Responsibility to different sections y There is no particular one opinion as to what constitute social responsibility.company has to provide a reasonable dividend by earning profits. y Along with their investement share holders look for good image of the company in business community y Share holders have to apperciate the responsibility of the business to other sections of society. y To protect the interest of the share holders . . y Generally accepted responsibilties of the business to different sections are y The responsibility of a company to its share holders who are the owners is indeed a primary one.

Responsibility to employees y The success of an organization depends to a very large extent on the morale of the employees & their whole hearted cooperation. . apperciation & encouragement of special skills & capabilities. y The provision of best possible working conditions y Arrangement of proper training & education of workers y Proper recognition. y The responsibility of the organization to the workers include y The payment of fair wages.

. To avoid misleading the customers by imporoper advertisements. improve quality & make the goods available. reduce prices. To improve productivity. To give imporatnce on R & D for quality goods.Responsibility to consumers y The customer is the foundation of a business & keeps y y y y it in existence. To provide after sales service.

Responsibility to the community y Taking appropriate steps to prevent environmental pollution. y Assisting in the overall development of the locality y con .

y Better environment for business better society produces environmental conditions more favourable for operations y The firm which is committed for improvement of community quality of life will as a result have a better community around it y For ex labour recruiting will be easier & labour will be a higher quality. .Arguments for social involvement business y Changed public expectations of business if business wishes to remain viable in the long run it must respond to society s needs & give society what it wants.

y Public image each individual firm firm seeks an enhanced public image so that it may gain more customers. more responsive money markets & other benefits. y Avoidance of government regulation y Balance of responsibility with power. better employees. . y Business has the resources.

.Arguments against social responsibility y Profit maximisation y Lack of social skills y Lack of broad support.

Social audit
y A social audit is a systematic study & evaluation of an

organisations social performance as distinguished from its economic performance. y Fenn define social audit as comitment to systematic assessment of & reporting of some meaningful

Features of social audit
y The areas of social audit include any activity which has significant social impact such as activity affecting environmental quality, consumerism,opportunities for women & other disadvantaged people in society & similar others. y Activities covered by social audit y A. ecology & environmental quality y Clear up of existing pollution y Noise control y Dispersion of industry y Control of land use. y Required of recycling

y Consumerisim truth in labelling,advertising & in all business activities y Product warranty & services y Control of harmful products y Community needs y aid with health care facilities y Aid with urban renewal y Minorities & disadvantaged person y Training & hard core employment y Operation of programmes for alcoholics & drug addicts

y Thirdly social performance is difficult to audit because most of the results of social activities occur beyond the company s gate. y Second feature about social audit is that it can determine only what an organization is doing in social areas not the amount of social good that results from these activities.r y Labour relations y Improvement of ocuupational health& safety y Provision of day care centres for children of working mothers. .

y Social audit enables the company to take close look at itself & understand how far the company has lived up to its social objectives y Social audit provides data for comparing effectiveness of the different types of programmes. y Social audit increase the public visibilty of the organization .Objectives & benefits of social audit y Objective is to evaluate the social dimensions of the performance of the company.

Macro micro social indicator audit the macro micro social indicator audit attempts to evaluate the micro indicators against a set of macro indicators such as national policies. . Corporate rating approach it is an external evaluation of the companys performance by public groups like consumer organisations. Constituency group audit under this audit the preference & attitude of various employess. Financial statement format audit under the financial statement format audit the social information is presented in the conventional financial statement format.creditors. Comprehensive audit attempts to evaluate the total performance of the organization including social performance.suppliers & customers are identified & measured.social welfare organization or media.Methods of social audit y Social process audit y y y y y the aim of social process audit also known as programme management audit is to develop an internal management information system that will allow management to create & administer the social programmes in a better way.

effort & difficulty involved in the task.Obstcales to social audit y No clear a well accepted methodology for conducting the social audits is not available. y There is no agreement as to the items to be concluded for social audit. . y There may be resistance within the company to social audit because of the time.

monitor & lead corporations & there by either create. destroy. or maintain social systems. . y Corporate governance is therefore the process where by people in power direct. structures & processes.modify or destroy the structures & systems under which they operate.Corporate governance y Governance is the process where by people in power make decision that create.

Reasons for growing demand of corporate governance
y Governance is not new it is old as human civilisation y Manu the son of prajapathi was the first king who brought out a y y y y y y

comprehensive code of conduct for men,society & the state as whole in his treaty called manu dharma shastra Kautilya in his treaty arthasastra has laid down the ideals at which the king was expected to look into. In U.K in 1980 the coporate world was facing many problems. The cadbury committee was set up by the london stock exchange to address the financial aspect of corporate governance. Directors pay become a political issue a committee under sir richard greenbury was set up to study directors remuneration. Liberralisation brought many scandals in india. SEBI in india has taken the initiative in framing new rules & laws to strengthen corporate governance.

Need for corporate governance.
y Recent corporate failures & scandals involving mis

governance & unethical behaviour shook the investors confidence in stock markets. y These incidence diminished reputation & goodwill of even those corporates who enjoy the trust & confidence at large. y Corporate governance is important because corporate decisions impacts on its share holders, customers,creditors & employees. y For sound corporate governance managers need to act as trustee of share holders.

Pre requisties for good corporate governance
y A proper system consisting of clearly defined &

adequate structure of roles, authority & responsibility. y Vision,principles & norms which indicate development path, & guidelines & norms for performance. y A proper system for guiding, monitoring,reporting & control.

Regulatory & voluntary actions y The organization for economic cooperation & development(OECD) formed the business sector advisory group in 1996 to set core principles of good corporate governance y The advisory group report emphasised that good corporate governance can best be achieved through a combination of regulatory & voluntary private actions .

r Internal environment company Corporate Governance .

Accountability clarifying governance roles & responsibilities . Fairness protecting share holders rights Transparency requiring timely disclosure of adequate information on corporate financial performance Responsibility ensuring corporate compliance with the laws & regulations that reflect societys values.y On the regulatory side it is noted that government y y y y interventions are most effective when consistently & efficiently enforced.

Recommendations of birla commitee y The birla committee report is the first formal & comprehensive y y y y y y attempt to evolve a code of corporate governance. Applicability the recommendations will apply to all the listed private & public sector companies. Board of directors should have an optimum combination of executive & non executive directors. Committee felt that recommendations should be divided into mandatory & non mandatory . The board should set up a qualified & independent audit committee . Board meetings should be held at least four times in a year with a max time gap of four months between any two meetings The board should set up a remuneration committee to determine the remuneration packages for executive director.

y A management discussion & analysis report should form part of the annual report to the share holders covering industry structure. opportunities & threats segment wise or product wise performance.y Companies should require to give consolidated accounts in respect of all their subsidaries.a company having multiple lines of business should be segmental reporting. . y Companies should arrange to obtain certificates form their auditors regarding compliance of corporate governance provision & the certificate should be sent to stock exchanges & all the share holders.

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