MANAGERIAL ETHICS LEARNINGS

Submitted by:

Himanshu Pareek

B11021 XLRI JAMSHEDPUR

Course Facilitator: Prof. Paul Fernandes S.J.

INTRODUCTION The day Mr.Ramalingam Raju in a shocking revelation accepted that Satyams accounts were fudged in order to inflate its share prices in the stock market, corporate Indias ethical standards were put to question for the nth time. That organizations have been long involved in corrupt practices , starting from bribing government officials for undue benefits to violating labor and safety standards, from openly flouting laws to evading tax through various creative means, was well known even before the Satyam saga made headlines. Yet this one incident for the first time created a buzz of unprecedented level and prompted companies and academicians to incorporate ethics as an integral part of management. Following the Satyam scandal, the Neera Radia tapes exposing unethical corporate lobbying, the KG basin row, the illegal mining by Vedanta and the 2-G scandal involving telecom giants showed that lessons were not learnt and that Indian business managers and leaders pegged ethics at the bottom of their priority list when it came to doing business. But XLRI thought differently and hence introduced the course on ethics for the budding managers. Thanks to the course many like me, learnt what constitutes business ethics, what are the various theories in the field of ethics, what are the elements of ethics in the fields of accounting, economics etc. KEY LEARNINGS The key learnings for me from the course were: a) What is business ethics? b) Why ethics is relevant as a subject in current scenario? c) How people perceive ethics under various situations and circumstances? d) What should a manager do when confronted with a situation of ethical dilemma? e) What are the major theories in ethics? f) How the various ethics is applied to various fields of business like accounting, sales&marketing,HR and economics ? g) How can we apply ethics in our daily interactions as managers of organizations?

Detailed Explanation Of Learnings Ethics as per my learning is the critical, structured examination of how people and institutions should behave-in particular how we should behave particularly how to constrain the pursuit of self interest when it affects others in a negative way. Business ethics is the extension of this definition which teaches how we should behave in an organization or in the world of commerce. The interview of a person from a different world than me revealed the startling fact that people have different ideas of what constitutes ethical behavior in an organization. While most people agree on certain broader aspects of ethics, yet what is ethical for me may not be ethical for someone else and vice-versa. Hence there should be some guidelines especially in an organizational context to ethical behavior. So organizations should have a code of conduct for its employees and managers, a benchmark sort of. I learnt how closely related ethics and human resource management i.e. HR manager should not discriminate among employees, not flout labor laws, should be unbiased at every step and help build an ethical ambience in the organization.HR managers should build the first line of ethical system where employees can report ethical issues without any fair of being vindicated. The various methods to study ethical behavior is important, as I understood. As a part of descriptive ethics a manager should understand the morality as it is actually found in a culture, group, society or in an individual. We should have a birds eye view of the entire issue of ethics. We should keep explaining to ourselves and others Why be moral? The answers could be to avoid punishment, to gain praise, to attain happiness, to be dignified or to be fit in the society. The course helped me understand the issues which motivate human actions like egoism or altruism. The idea of normative ethics helps us to understand that ethics includes right of self rule,right of life and human dignity. As for example if as a manager I am trying to break a trade union of workers I am actually violating the right of employees desire of self rule

and hence it is an unethical thing to do.Similarly when Union Carbide violated safety norms at the Bhopal plant for monetory gains it actually denied the people of Bhopal the right of life or when a child labour is forced to work in a factory his/her right of human dignity is being taken away. The deontological view of ethics has been a great learning for me personally.It states that our duties as a human being is the foundation of ethics.As managers we have duties towards God,towards others and towards ourselves, we should treat people as an end and not as means to an end .If we are aware of this we can : a) avoid doing wrong to others b)treat people equally an promote their good c)meet our duty to GOD d) meet our duties to our soul and body When in business world, we should never forget the above set of rules and of we can do that we will be able to be ethically correct at every step. As managers we should have clear idea of what corporate social responsibility means and the commandments of CSR like: We need to take corrective actions before required,work with affected constituents to resolve mutual problems, establish industry wide standards, admit our mistakes, get involved in appropriate social programs,take needed public stands in social issues instead of being a mute spectator, monitor social change closely etc. As managers we need to scrutinize the principles most commonly appealed to in applied ethical discussions like personal benefit, social benefit, principle of benevolence, paternalism, harm, honesty, autonomy, lawfulness etc At the end of the course I will surely be able to examine the ethical issues of a business decision by asking a set of questions to myself:

a) Have I been able to define the problem accurately? b) Have I seen the others point of view clearly by stepping into his/her shoes? c) Whom should I show loyalty? d) How did this situation occur at the first place? e) Under what circumstances do I allow exceptions to my stand? f) What is the symbolic potential of my action if understood or misunderstood? g) Can the problem be discussed with affected parties before taking a decision? h) Whom could my actions injure? i) What is my intention to take the action?Is it my self interest r good for everyone? j) Am I confident that my position will be valid over a long period of time?

Answers to these questions if taken properly can help me in taking an ethically correct business decision and I feel this is valid in every decision I make in my life. Another significant learning for me has been the impact of ethics in every sphere of business like economics, accounting, sales&marketing and HR. The various examples given in the class discussions have opened my eyes to the various morally wrong steps managers take to maximize benefit at the cost of others sufferings and disgrunt. As for example the idea of selling products through wrong inflated information by advertisers is so dangerous for the society. A recent news regarding the arrest of few sales & marketing employees of a famous telecom company who were activating sim cards by faking documents just to fulfill their annual sales target made me realize the importance of an important subject like ethics all the more and the need of inculcating morality in every manager. Similarly accounting frauds can lead to death of large organizations like Arthur Anderson , rendering thousands jobless and huge loss for the shareholders. In the world of economics what is ethical helps us move from the traditional utility based approach where every one is trying to maximize his/her utility, to a more comprehensive explanation where freedom to make choices, freedom to lead a life of ones like and upholding individual rights take the centre stage.This idea of Amartya Sen is definitely the real measure of economic development for me.

CONCLUSION In the increasingly conscience focused market place of 21 st century the demand for more ethical business processes and actions is increasing.Simulatneously public initiatives and laws are increasing the pressure on managers to think and act ethically. Had organizations like Union carbide, Enron, Arther Anderson, Satyam, Reliance, Vedanta and Unitech being more socially responsible and ethically upright, publics image of the corporate world would not have been tarnished to the extent that in India, there would be an increasing demand from the Indian civil society to include Indian corporations in the Lok-Janpal bill. Yes the competition is high, the expectations of shareholders sky-high and stakes at astronomical levels, yet sacrificing all ethical aspects citing such excuses is unacceptable. Reliance should have realized that the gas in KG basin is a national property and when it has the privilege to earn revenues from such a crucial public property, then it should follow the deontological aspect of morality in order to do justice to the people of this country. The course has helped me to realize the importance of ethics in my future life and how to make the correct morally correct decisions. The course was an eye opener and in sync with the chords of many budding managers like me who want to be successful in the corporate world without sacrificing morality and ethics.