Corporate Ethics: The Moral element of business

Defining Ethics
Understanding of right and wrong Ability to distinguish between the right and the wrong. Integral part of life Running a business is a part of life

Corporate Ethics
Based on principles of integrity and fairness Focuses on Stakeholders, and employees. Quality of product and services Customer satisfaction. Community and environment

Corporate Ethics are implemented toDefine the framework of the acceptable behavior. Follow high standards of practice. Create benchmarks for self evaluation. Enhance sense of community. Create transparency in the business activities. Foster higher standards of business ethics. Comply with government laws and norms.

Everyone

Reward or punishment to ethical integrity and moral courage decide the act of an individual

Corporate ethics: The global perspective

Study by Columbia University 1990 Half of 1,000 business executives admitted being rewarded for taking action on the job that they considered unethical. One in three reported that refusing to take unethical action resulted in penalties.

The inferences
Overemphasis on immediate gains can cascade down the organization. Sending message to staff to generate cash flow, supersedes all other objectives, including personal integrity. This message carries more weight than official proclamations of values, and codes of ethics Corporate directors need to minimize a company s ethical liabilities and maximize its ethical assets

How to maximize the ethical assets?

Recognizing the company s need to manage corporate ethics The dangers of taking it for granted. Supporting management to prevent or protect against unethical activities Developing strategies to raise the ethical standard in the organization. Build trust as a competitive lead.

Approaches to Bring a Code of Corporate Ethics to Life

Emphasize values, in creating the code of corporate ethics supported by rules. Employees should be Educated about the corporate ethics code to make it relevant and real. Reinforce the code within and beyond the organization. Encourage employees to become active participants in upholding the corporate. ethics code and its values. Gather feedback, measure effectiveness and continually improve the code of conduct.

Corporate ethics: the Indian Perspective

Indian business culture puts a premium on favors, friendship and clanship. Friendship is highly valued, whether based on multigenerational family friendships, school friendships or personal friendships. The Western concept of conflict of interest does not always mesh well with the Indian value of loyalty.

Case: Infosys Technologies

Have a distinctive work culture and value system. Great importance on customer delight, leadership, integrity, transparency, fairness and pursuit of excellence. Open door policy. Value employees and encourage them to make decisions about their own work. Treated as a flat organization when it comes to communication and information sharing

Does Satyam s story tell the myth and reality of Indian corporate ethics?

Corporate Ethics: Individual s Perspective

Signs of ethical deterioration. In business, people have made immoral millions In government, public officials are involved in bribery. In education, cheating scandals among students are common. under-the-table payments for admission People believe that they have to cheat to win. They believe that nice guys finish last.

Ethics in Curriculum

Ethics or business ethics should be made compulsory for all students.

Corporate ethics: Management perspective

What is included in corporate ethics? Purpose of the Business People Society Government Environment Factors to be kept in mind Involvement of The Senior Management Involvement of The Employee Picking The Well Tested Model

Management of ethics; an important function of the board

Accountable for corruption or impropriety in a company. Board s decisions on resource allocation, performance targets or promotions always trump official statements of ethical values. Whistleblowers are to be given protection Influence the pressures which the CEOs handle in managing ethics

Principals for ethically run Business

Principle 1 Productivity Is Much More Important Than Profitability Principle 2 The Customer Is Not Sheep That Can Be Sheared Principle 3 The Buyer's Domain Is More Important Than the Middlemen's Domain Principle 4 Be Diplomatic With Your Competitors

Thank you for listening Patiently