Business Ethics

Response paper 1
Acceptance of gifts in organisational structure
Anand Pandit
AU1914025

When we were children one of the main reason about the

excitement of celebrating our own birthday was the gifts that we
received from our friends and relatives. As we grew up the exchange
of gift becomes an important component of our Social and Corporate
life. From an institutional and business perspective this practice is
now used to improve the prospects of business or to influence
decision making of the relevant authorities which would help us in
fulfilling our goals. Contrary to that gift giving is also considered as a
gesture of expressing gratitude.
There are two broad perspectives
1)Acceptance of Gifts should be allowed in an organisation as it is
way of appreciating good service
2)Acceptance of Gifts should be completely prohibited in an
organisation as it is always involves expectation to receive
illegimitate or additional favours in return which violates ethical and
moral principles
Before we take a stand it is very necessary to understand the
different important components of the practice of offering/accepting
gift, the parties involved in it as well as the resulting consequences
which many time have effect on society as well as the culture of the
organisation
In the business world especially while dealing with the government
bodies or financial bodies there is an unwritten rule of giving gifts in
other words favours which would help in getting things done.
E.g. In order to get loan easily for the business purpose Businessman
offers gifts to bank managers on various occasions and many times
regularly.
On the other hand, Many times a gift is offered to appreciate the
quality of service or as a gesture of gratitude E.g. A patient after
getting recovered from ill ness gifts a box of chocolates to his doctor
and hospital staff to appreciate their service.
It is clear that acceptance of gifts involves two kind of situation
1)A gift is given just to appreciate and without any expectation in
return
2)A gift is given with an intention to get some benefits
It is also perceived from an ethical point of view that there must be
cultural and professional boundaries between worker and customers
which is violated by the practice of Accepting/Offering Gifts.
But on the other hand, if the gift is an expression of customer’s
gratitude then it reflects a very positive intention and from point of
view of customer service worker should accept it.
Not accepting a gift can have a negative impact on the customer and
from viewpoint of customer service it is not good and can be harmful
to the business.
During the process of gift exchange it is necessary to analyse the
impact of the response of the worker on the customer.
Contrary to that when the intention of presenting a gift is not
positive or a gesture of gratitude but some expectation in return
which violates ethical and moral principles of Customer/Worker
relationship then it is always advisable
Thus It is v ery difficult to take a stand weather a gift should be
accepted or not.
There are many factors which are needed to be taken into account
before coming to a final decision
1)Culture
2)Motivations of customers
3)Motivations of workers
3)Effect on organisation
4)Effect on society
5)Monetary value of gift
6)Legitimacy of gift
7)Financial condition of Customer
8)Effect on worker
9)Effect on customer
10)Gift Policy of organisation
11)Relationship between customer and worker

1)Culture
Culture is something which plays a very important role. If exchange
of gifts is the part of culture then it can have greater impact on the
mind of both worker and costumer.
In a Country like India Offering and Acceptance of Gifts is considered
as a necessary part of Social life It automatically becomes the part
appreciate the people for their contribution or service.
E.g. When some industry expert is invited for a lecture in universities
they are also given a gift as a token of thanks giving for devoting
their time and imparting their knowledge at the end by the
University.
2)Motivations of customers
Motivations behind presenting a gift is also very important. Same
kind of response may have different impact on the customer’s
mindset as his motivations always differ.
Customer can present a gift in order to appreciate the worker’s
service
Customer may want some additional favour from the worker
By the theory of Egoism the customer is right as he is trying to fulfil
his own goals
By Kanthian theory he is wrong as some how he is violating the
universal ethical principles of professionalism.

3)Motivations of workers
If a person holds he may force the other party to do him favour if
they want to save themselves from the dire consequences that he
can create for them using his position.
E.g. A government official can ask for a free flat to a real estate
developer in his scheme and can threaten him to cancel the
permission that he gave to him for the construction.
Thus a worker can be motivated by greed to demand a gift from
other party
By the theory of Egoism Worker is right
By Kanthian theory the worker is absolutely wrong
With the Utilitarian perspective the situation in which the worker is
demanding the gift must be analysed and then conclusion must be
derived
E.g In return of a gift or bribe he is willing to let the project run
smooth which would be beneficial for the employees of the real
estate company, the labourers working on the project and the
people who have booked the flats in the same scheme.
On the other hand he clearly violating the three components of
virtue of ethics which are Indiavidual Character, Professional
Character and Work Character.
Also Repeated offering of gift may cause him to practice partiality
towards the customers
4)Nature
Nature as well as boundaries between customer and worker is also
an important factor which needs to be taken into account.
Nature of the gift is also an important factor which gives us idea
about the motivations as well as intentions of the customer.
E. g.
Gifts like a thank you card represents the feeling of gratitude
Gifts like a bottle of alcohol represents some vested interests

5)Effect on organisation
Exchange of gifts also has a strong effect on the organizational
culture
E.g.
In certain government organisations accepting gifts is considered as
necessary practice and when gifts are not offered the authorities
force the customers using their position. On the other hand it also
has a strong impact on the mind of all people working at the
organisation as they tend to justify or adopt an ethically wrong
practice just because it is done by most of the people there.
Accepting gift can create a conflict between worker and his team as
well as between worker and his supervisor.
Issues like informing higher management or organisation about the
gift offered which is not the part of the professional interaction
between worker and customer or Share of gift which is deserved by
the other team members as well as people belonging to higher
management can be some conflicts which can become serious.
Thus, Overall there are also some indirect consequences that an
organisation may have to suffer.

6)Effect on society
Consequences of the exchange of gift on the society or the
stakeholders other than worker and customer is one of the most
important factor which needs to be considered.
E.g. There are certain rules and regulations that every real estate
developer need to comply with For example. The building must be
earthquake proof. Now a real estate developer in order to increase
his profit does not comply with the rules and regulation while
constructing his project. At the time of government audit he offers
gifts to the authorities in return of covering his wrong action of not
complying with the rules.
Now if at any point of time after the project is completed and
possession of flats are given if Earth quake comes and the building
fails to withstand it and collapses then it can cause a lot of casualities
for the residential people who were living in flats.
In legal and compliance matters exchange of the gift which is
motivated by ill intentions have higher probability of having a
negative impact on the society.

7)Monetary value of gift

Monetary value of the gifts is also one of the important factor which
is gives idea about the intentions of customer. Gifts of low monetary
value are mostly always considered as token of gratitude. On the
other hand expensive gifts are always given with expectation of
some additional favour which a worker would provide by violating
ethical principles.

8)Legitimacy of gift
Legitimacy of the gift also helps us in differentiating between the two
contrary situations as illegitimate gifts always have ill intentions and
expectation of an undue favour which would violate ethical and
moral principles would be higher as the act itself violates it.

9)Financial condition of Customer

A gift which resonates with the financial condition of the customer is
the only one which should be accepted.
Kanthian Theory and virtue of Ethics theory absolutely resonates
with this.
10)Effect on worker
Accepting can create a bias in a worker’s way of providing services
and he may indulge in providing better services to the customers
whom he need to provide services equally without any bias. Culture
of offering/accepting gifts may motivate a worker to exercise
partiality which violates the ethical principles of working for every
customer equally and unbiased way.
It may also motivate a worker to persuade the customers to provide
him favours in exchange of better service or maintaining the good
quality of service.
Contrary to that it may also motivate a worker to work more
effectively as he got appreciation for the work he has done.

11)Effect on customer
Positive motivations like gratitude have a positive effect when gifts
are accepted.
On the other hand when gifts are presented out of any kind of
pressure or only for some other favour in return there is always a
negative impact on the mindset which can also result in long term
consequences which can be harmful to both as well as society in long
run.
Theory of Utilitarian completely prohibits any practice which harms
majority of stakeholders in the long run.
Theory of Egoism does allow any activity which helps in achieving the
desired goals

12)Gift Policy of organisation

Gift Policy of the organisation is not only a very important
component but also a necessary policy which must be defined and
which helps both workers and costumers to make decision in case of
exchange of gifts.
Gift policy is something which helps in reducing the negative impact
that accepting or rejecting gift can have on an organisation as well as
on the mindset of both customer and worker.
Accepting gift can create a conflict between worker and his team as
well as between worker and his supervisor.
Issues like informing higher management or organisation about the
gift offered which is not the part of the professional interaction
between worker and customer or Share of gift which is deserved by
the other team members as well as people belonging to higher
management can be some conflicts which can become serious.
A gift policy desgined in a way that it resonates with the ethical
values of the organisation and which takes in account the will of all
the relevant stakeholders gives suitable direction to both customers
and workers in dealing with the exchange of gifts.

13)Relationship between customer and worker

Relationship between worker and customer is also a very important
component.
E.g. Acceptance of a gift from a regular customer by a worker who
regulary provides him service can be justified as their relationship is
matured
On the other hand probability of negative consequences increases
when the relationship of the worker and customer is relatively new.
By Kanthian and Virtue of Ethics theory acceptance of gift is
completely wrong no matter what relation a worker and a customer
have as it violates the ethical principles of professionalism.
Some organisation completely prohibits this practice
Some organisations accepts gifts as a gift to the entire organisation
Some organisations makes expensive monetary gifts to be
mandatorily be divided among all the members of the entire team
Some organisations makes it mandatory for workers to report any
kind of gift that they have received from customer
Experts also suggests that instead of offering/accepting gift during
the middle phase of the services customer/worker should
offer/accept gifts during the termination phase as it reduces the
possibility of ill effects.
In addition of all this it is recommended that workers are trained to
respond the offering of gifts by customers in a way that it resonates
with the company gift policy as well as does not give any kind of
negative impression to the customers.
Workers before giving response must make customer aware about
the gift policy of the company.
In the case where a gift is accepted worker should report the
acceptance of gift to his subordinates as well as higher management.
Conclusion
Acceptance of gifts should definitely not be prohibited completely
but of course it should be regulated with a proper Gift policy and an
extra care must be taken in government institutions to make sure
that authorities there do not use their position in a wrong way and
exploit other stake holders.