A PROJECT REPORT ON “Environment of Corporate Ethics”

A REPORT SUBMITTED IN PARTIAL FULFILEMENT OF THE REQUIRMENT OF (MMS) DEGREE

SUBMITTED BY: Group No. -3 Sumit Bhatia B-03 Nitin Gupta B-13 Akshay Kharde B-23 Suren Paradkar B-33 Supriya Salgaonkar B-43 Mohit Singh B-53

SUBMITTED TO: Prof. Preeti Duggal Y.M.T COLLEGE OF MANAGEMENT KHARGHAR, SECTOR -4, NAVI MUMBAI UNIVERSITY OF MUMBAI 2009-2011

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GROUP NO: B-3

Roll. No 03 - B

NAME Sumit Bhatia

TOPIC Relationship between Ethics & Business

13- B

Nitin Gupta

Morality in Ethics in Corporate World & Corporate Excellence

23 - B

Akshay Kharde

Moral Responsibility of Corporate in Business

33 - B

Suren Paradkar

Recognition of Corporate in areas of Rights & Duties

43 - B

Supriya Salgaonkar

Maintenance of balance between Ethics Value & Corporate Profit

53 - B

Mohit Singh

Case Study

ACKNOWLEDGEMENT

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As students of “YMT College of Management” Mumbai we would like to express our sincere thanks too all those who helped us during our project. However. I accept the sole responsibility for any possible error of omission and would be extremely grateful to the readers of this project report if they bring such mistakes to my notice.With immense pleasure. Our sincere and deepest thanks to Prof Preeti Duggal. Visiting Faculty Member of YMT COLLEGE OF MANAGEMENT. We would like to express my gratitude to all those who gave us the encouragement to complete this project. Mumbai for having spared valuable time with us and for all the guidance given in executing the project as per requirements. TABLE OF CONTENTS 3 . We would like to present this project report on “Environment of Corporate Ethics” It has been an enriching experience for us to undergo work on this project which would not have possible without the goodwill and support of the people in our team.

Sr.No Topic Page.No 1 Executive Summary 5 2 3 Introduction Relationship between Ethics & Business 6-7 7-10 4 Morality in Ethics in Corporate World & Corporate Excellence Moral Responsibility of Corporate in Business Recognition of Corporate in areas of Rights & Duties 11-15 5 15-18 18-19 6 Maintenance of balance between Ethics Value & Corporate Profit 20-24 7 Case Study 25-26 8 Bibliography 27 EXECUTIVE SUMMARY 4 .

The secondary objective was to analyze the cases which related to Environment of Corporate Ethics. Furthermore. Corporate Ethics teaches every modern organization to recon Corporate E If you can adhere to the ethics. Moral responsibility of Corporate in Business. will be discarded as well. As my Father always say. cheating. 5 . Corporate Ethics teaches every modern organization t Corporate Ethics is the backbone of any corporate organization. and if you can change then the corporate world can change too. leave the rest to God. All change begins with you. maintenance of balance between ethic value & corporate profit between. without ever being greedy for success and power. manipulating. Title: “Environment of Corporate Ethics”. In the study our intention was to go through the relationship between ethics & Busines.Corporate Ethics is the backbone of any corporate organization. hiding. Recognition of Corporate in areas of Rights & Duties. complaining. many other corporate evils such as gossiping. Objective: The Primary objective of our project was to study the Environment of Corporate Ethics. the golden rule in life is simply Do Good and Be Good. you may be pleasantly surprised by how successful you actually end up being.

but law enforcement can not with 6 . good morale and client satisfaction. Of course there is a "whistle blowers" law for protection. Corporate ethics has come to the surface over the past several years with many fraudulent transactions. Have you ever heard of the old saying "with friends like that. If the employees of a business are not ethical and loyal the results can be devastating. who needs enemies"? That is just the case where employees. In the past it has been so bad that those practicing the criminal or unethical behavior have threatened to hurt the employee if they speak up. Others such as employees may keep quite about what they know for fear of losing their job or worse. Many corporations entrust great confidential. important issues and financial responsibilities to employees that could destroy not only their business. corporate ethics must be a guiding policy for all involved. customers or other employees it is sometimes difficult to detect. managers or others working in a business are jeopardizing corporate ethics. but also their customers. When managers are skimming off the top or conducting unethical actions with shareholders.INTRODUCTION Corporate For businesses to reach financial stability.

This can be handled by requiring all employees to undergo ethics training and having a reporting system for them all. Many of these people have families and fear not only for themselves. not only lower level employees. report violations and not fear in doing so. customers. This demonstrates a dedication to society. Corporation's should make sure that they have a clear cut policy about reporting illegal or unethical activity. This person that they are "telling" on may be a family member. It is important that employees understand that by doing the right thing that they will not be sold out or punished for protecting the business. but they are often not that easy.them 24/7. their personal information and business dealings can also cause detriment to the business. financial issues and risk having to shut down operations when employees lack corporate ethics. That is the exact reason that many corporations have been implementing ethics training for all employees. A successful company is one which can effectively recognize and cultivate the relationship which exists between the two. That way there is less of a chance of an employee remaining quite. Theft is not the only problem or behavior that can risk the businesses stability either. These topics may seem black or white. There are several different issues that are commonly feared by those blowing the whistle. There should always be a second in command that employees can bypass their immediate supervisor to ensure they always have someone to report to. Low level employees are not the only ones that jeopardize corporate ethics. There are many companies and individuals that will work on sight to teach employees and managers how to remain ethical. and the corporation should keep that in mind. employees and the business itself. The business itself can suffer from the loss of clients/customers. but also their families. friend or boss and that can make the decision that much harder. 7 . and this brings more value to the organization. The treatment of clients/customers. Businesses that exhibit and promote strong corporate codes of ethics are more prosperous in the long run because they show a commitment to an expectation of sound moral behavior. RELATIONSHIP BETWEEN ETHICS & BUSINESS The relationship between business and ethics is intrinsically entwined. It also enhances a company's reputation if they become commonly known as an ethical company.

While the immediate bottom lines show a healthy profit through immoral acts. but there are some who fail to make this connection. As leaders show unethical behavior and perhaps even justify it even though they know to be wrong. this eventually becomes a part of organizational culture. In the long run. To determine "business is business" is not accurate as responsible (ethical) decision making is an important component of doing good business. these factors will all cut costs and give the appearance of profit. Often this pressure can result in unethical decisions being made in order to deliver positive results. People follow by example. yet many fail to realize the "system" is comprised of decision making individuals. It's easy to blame "the system". but it's inevitable that poor choices will negatively impact the business and be more costly in the long run. the immoral acts will decline. it will impact the potential to increase revenues to the fullest potential. This is perhaps part of the reason why some companies exhibit bad business practices. When this occurs it usually results in a pattern that gets passed down through the organization. 8 . Not the only reason. but at what cost? When companies make unethical decisions it can result in defective or rushed products. unsubstantiated firing of employees. While it may not necessarily shut the business down. The relationship between business and ethics is inherently linked. managers and leaders who promote an atmosphere with low ethical standards bring harm the business. Granted the unethical companies may initially make significant gains financially and deliver the profits. the reputations of these companies ultimately suffer which over the course of time and this can really hurt a business and its' profits. Yes. and false presentations of products to consumers.The highly competitive environment in today's global economy puts pressures on company leaders to remain profitable and to show a good return to stakeholders. but perhaps a common one. All too often we hear about CEO's who have either stolen funds or ruined a company's reputation due to corrupt practices. Is this good for the company? The fact is it's an illusion. and the lack of moral judgment will spread. Today's society is an instant gratification one and people expect immediate results. Obviously one's individual moral compass impacts choices made in a business. and when the cultural environment nurtures sound moral philosophies and does not tolerate bad business practices.

it would be in a company's best interest to promote universal ethically good behavior in the workplace. and it also affects employee morale. and by promoting a morally sound environment for both employees and customers. If customers can accurately rely on the fair treatment. earning decent money by unquestionable means for running the family. Commitment to Loyalty 9 . business and ethics have their connection. and their network will grow. Ultimately implementing a strong ethical policy is a win-win situation for all. This ultimately economically benefits the company as well. Ethics and business go hand in hand and cannot effectively be separated. none of the spouse ever having any extra marital affairs. A positive reputation leads to higher profits and provides better service for the public. Any family running within the framework of above moral guidelines gets respect from the society. this will further expand their reputation as honest and as a result attract more customers. a business run within ethical framework gets respect amidst its stakeholders. It displays strong values have been set for a commitment to company philosophy and mission. In today's competitive environment why wouldn't a company want to do all they can do to promote success on all levels? The relationship between business and ethics can be compared to marriage and morality. A good marital relationship has several essential moral ingredients: commitment of loyalty to each other by the partners. this can only enhance those assets. and they should lead by example. commitment to healthy upbringing of the children. Consumer trust and confidence in a business can only serve to benefit the company. Employees and reputation are two very valuable assets. Economic rules dictate that the larger a network. maintaining a responsible relationship with the society and contributing albeit in a small way for its welfare. This being the case. Almost in similar lines. Likewise. Let us analyze the equivalents of some of the moral aspects of a marital bond that we listed above as applicable to business ethics and grasp their purport more. The establishment of higher levels of ethical behavior within a business benefits the company in many ways. expertise and knowledge of a company. the more value is added to that network. Cheating and/or lying do not bring value to a business.Good business practices starts with management setting standards of what's expected. taking care of parents and elders in the family. There is no good reason why a company cannot make ethically sound decisions and still turn a profit.

In a public corporation. Social Responsibility 10 . or the commitment of the business promoters to the rest of the share holders is very important. It covers mutual trust and respect too. Ethics behind Profits Any organization that tends to bulldoze the business scenario by corrupt practices may make huge profits and even become adorable to the stakeholders. the commitment of the management to the shareholders.Particularly if a business is run or partnership. compromising on product quality and safety for the sake of maximizing the profits and so on. stifling competition by means of unfair business practices. Within the organization. Other than corruption. creating artificial scarcity to manipulate the prices. Absence of Unethical Extraneous Relationships If top level executives at the helm of affairs in a business organization have underhand dealings and indulge in corrupt practices to siphon off the company's money and resources to fulfill their selfish needs. Such practices can greatly mar the image and trustworthiness of the organization in the eyes of its stakeholders. the very ethical framework of the organization will get a jolt. Healthy Concern for Employee Welfare Does the organization consider and treat its employees as human assets and not like commodities? Do the employees at different levels in the organization feel that they are treated like respectable individuals and not as herds of slaves? Just in case the business faces some acute hardship (like a recession) and employees are to be retrenched in large numbers. other channels of unethical profit making will cover large scale exploitation of scarcity. or to unduly favor their near and dear ones. but such practices will definitely mar the image of the organization in the long run. how decently and courteously is the unpleasant task carried out? The answers to such questions will reveal the level of ethical business standards existing in the organization. the loyalty of business partners to each other is extremely important. the commitment and trust of higher management towards the employees and the employee's loyalty and sincerity towards the management are to be well established through good communication and well articulated and understood codes of ethics.

The corporate world is beginning to understand that ethics are important.Engaging in the business to make profits by producing products that have harmful effects on consumers. An organization paying taxes and duties promptly and justly as per laws is in fact contributing revenue to the Government and this revenue ultimately comes to the society by means of welfare measures and infrastructural development. WorldCom. Martha Stewart Omnicom and Barron’s Bank. It considers that the moral quality of the action or behavior lies on the quality of the act itself (which means that something which is right is always right and something which is wrong is always wrong) irrespective of the circumstances that cause the act or the consequences that result from the act. It is quite likely that profits may appear to have an inverse relationship with business ethics. Corporate corruption. With companies like Enron. Scandalous and unethical behavior has become so prevalent in the media that executives have realized the impact of ethical behavior on both themselves and their corporations. MORALITY IN ETHICS OF CORPORATE WORLD The moral absolutism approach presumes the existence of eternal moral values and principles that are applicable at all times and at all places and circumstances. But ethically sound business can run smoothly like well oiled machinery and is most likely to run longer and stronger when compared to immensely profitable competitors who lack ethical standards. Any organization making huge profits by cheating the exchequer by circumventing the tax laws will also be against ethics of social responsibility of the business. by creating pollution and consequently causing potential health hazards to the society etc will be considered as poor business ethics from the point of view of accountability to the society. government investigations and excessive pay 11 . executives are becoming increasingly worried whether their corporations are ethical. An ethically sound organization may also contribute a portion of its profits by engaging in philanthropic activities for the welfare of the society.

” Ethics is responsible of creating a corporate culture. “Ethical companies are more efficient. CORPORATE EXCELLENCE ACHIEVED THROUGH MORAL ETHICS: In the new millennium.In the process of this transformation. every element of business environment in India has been changing. managers should also maintain the ethical quality. The world has become too complex and interconnected to tolerate unethical behavior. As a result. Clarifying expectations is an important component of management and ethics is no exception.packages etc are some examples were corporate have to keep an eye on. privatization & globalization that has been introduced in 1991. In this context. it is up to the corporate community itself to implement adequate standards. in addition to confronting any wrongdoers. In addition to creating an ethical forum. every organization started searching for new ways and means of achieving excellence. It is clear that mere Financial performance can't be a basis for measuring company's excellence. Spending time with their subordinates to verbalize what the company’s ethical expectations are. A Good Ethical Approach Can Lead to Profitability A good ethical approach creates a positive corporate culture that makes customers happy and ultimately makes the company more profitable. managers can instill ethical behavior from with the culture itself. This transformation may be the result of economic liberalization. Many of the existing regulations and laws concerning environmental and social issues in our country are lacking. Corporate Excellence is defined as the ability of the company to outsmart Competitors consistently over a long period of time. successful organizations are 12 . so as not to later be accused by indigenous communities of immoral and unethical policies and procedures.

reasoning in prices. Success may be of one dimensions but excellence is of multiple dimensional in the company. Ethics deals with what is wrong and what is right in various disciplines of the organization. a new concept called – World Class Manufacturing ( WCM ) has emerged recently. is the fields that a firm seeking excellence should concentrate on. wide spread & easy reaches in placing. Young entrepreneurs and business mangers must pay attention to all these areas in order to see their organization excel (a) EXCELLENCE THROUGH MANUFACTURING :In the manufacturing area. (b) EXCELLENCE THROUGH MARKETING MIX:All organizations. and objective in promotion. Unethical practices may yield short term gains but organization can't be successful in the long run.) Products with enhanced features III. Besides the above said elements. Innovation in product attributes. irrespective of the product they offer and the service they provide are always in search of achieving excellence. there are certain areas by which corporate excellence is facilitated in the modern business world. Products of high quality II. The organization should develop and formulate the right approaches and strategies to excel. The companies adopting WCM are able to introduce the products and services very much closer to the needs and wants of the costumer.) Products at the right price. Because it is to be noted that being right in ethical behavior always pays off. the right distribution networks. 13 . the companies should have basics positive values and attitudes.different from excellent organizations. This helps the company to be successful because WCM has the following characteristics I). The basic area of concern to accomplish corporate excellence is effective management of Marketing Mix of the company. BUSINESS ETHICS AND CORPORATE EXCELLENCE In order to achieve excellence.

with a view to accord accreditation and promote policy research and studies. 14 . interpersonal communication. financial. Organizational objectives and strategies must match with HR strategies. Computer based information systems help the organization to convert raw data in to meaningful information. which in term improve business performance and ultimately lead to corporate excellence. Proper management of information is the best way to get competitive advantage. the human resources are the most vital and require constant refinement. (d) EXCELLENCE THROUGH INFORMATION:In this present networking era. MIS (Management Information Systems). initiation.Team work.Training. Since the change is the fundamental element in achieving corporate excellence. DSS (Decision Support Systems). Following are some suggestions for an ideal corporate to get Excellence in its field: (a) Setting up of an independent. (d) Clear distinction between direction and management that would ensure that the executive directors are held responsible for legal and other compliance with nonexecutive directors being charged with strategic and overall responsibilities. which helps the manger in taking effective decisions. or meeting through electronic media etc. training and education and awards etc. Hence the training programmes in the new age business organizations should focus on . human resources of the organization.(c) EXCELLENCE THROUGH HRM:Among all the organizational resources. through multiple location meetings. (c) Introducing formal recognition of corporate social responsibility with Triple bottom Line Accounting and Reporting. change management is to be backed by human resources of the firm. autonomous centre for corporate excellence. Information systems like TPS (Transaction Processing System). ESS (Executive Support Systems) if used intelligently helps the organization to reach the pinnacle in the competition. The change can be facilitated by means of HR activity. information has become a major resource after physical. (b) Introducing measures for greater shareholders participation. leadership. in the field of corporate excellence through improved corporate governance.

2) they knew what they were doing. Katie Tillman Buck. and 3) they could have prevented it. tighter delineation of independence criteria and minimization of interest –conflict potential." Velasquez said. The Charles Dirksen Professor in Ethics provided a theoretical look at the topic in a presentation for the June 13. Over the last couple of years. even when the company could not have prevented it. in terms of their board with independent directors. or in terms of culpability." This interpretation expanded even further with the idea of strict liability. followed Velasquez with a description of how her company. Moral responsibility can be interpreted two ways." he said. a company's scope of moral responsibility has even extended upstream (to suppliers) as well as downstream (to end-users). a company was held responsible for injuries users of its products inflicted on themselves. the idea of moral responsibility has been expanding over the years. However. approaches corporate moral responsibility. associate director of corporate affairs and ethics at Affymetrix. "The notion of moral responsibility that we have." Velasquez explained. Traditionally. MORAL RESPONSIBILITY OF CORPORATE IN BUSINESS The notion of corporate moral responsibility has expanded significantly in the past few decades. "A company is now held responsible also for injuries users inflicted on themselves. 2006. "A person or an agent or a party is morally responsible for an injury if 1) they caused it. meeting of the Business and Organizational Ethics Partnership. and it could have prevented it. "During the second half of the 20th century." Expanding interpretation This concept applies to corporations as well. "The company is held morally responsible provided they knew about it in some way. a company was morally responsible for injuries it inflicted provided the same three factors held. both in the law and in our everyday lives. Velasquez said: in terms of obligation or duty. is fairly straight forward. a leading supplier of genetic diagnostic research equipment. (f) Suggesting application of corporate governance principles to public sector undertakings. according to Manuel Velasquez.(e) Highlighting directional commitment and accountability through fewer and more focused board and committee membership. chair of the Santa Clara University Management Department. or should have known about it. "During the last 15 . certainly in the case of listed companies and preferably even in the case unlisted companies.

This is a very stretched notion of moral responsibility that's being used today. for example." Buck acknowledged. even if they have not been directly involved." he noted. "Our interests looking into these issues of moral responsibility. really melds very well with what our business goals are. looking at these ethical issues. many companies do not want to answer the first question because they are afraid of the answer. electronics assembly. Gun manufacturers and bar owners are two notable examples. where a party is morally responsible for an injury they inflict on another person knowingly and being able to prevent it. can put 6. Calif. company Affymetrix. there are a number of companies that have been held morally responsible-not legally-but in the eyes of the public have been held morally responsible for injuries that their suppliers have inflicted on some third party. but injuries in which one of their customers used one of their products to inflict an injury on a third party. By asking the question.." According to Buck.5 million discrete pieces of genetic information on a single chip. injuries in which their product was not defective. Corporate moral responsibility and Product Use or Misuse Such reluctance has not been the case with the Santa Clara. checking the background of potential gun buyers) or after the fact by using publicists and lawyers. and it can probably be used for a few bad things. Affimetrix understands that exploring the ethics of how its chips are used is ultimately in the company's best interests. "It's odd when you think about it. and others have been perceived as accessories to the mistreatment of workers by their suppliers. But as one attendee of the BOEP meeting noted. "There's this awareness in the general community as well as the genetics community that genetic information is powerful. Many now try to prevent that by doing onsite inspections.20 years or so. This brings up two theoretical questions: 1) To what extent is a company morally responsible for the way in which its customers use its products? 2) How can a company minimize its exposure to this kind of moral responsibility? The second question is commonly dealt with before the fact by monitoring who buys the products (for example. Companies in the apparel industry. "It can be used for a lot of great things. they become responsible for monitoring their product's use. Downstream responsibility has also expanded in the last two decades or so." he said. "We're at the stage where not being 16 ." Buck explained. toy manufacturing. because this differs pretty substantially from that first notion of moral responsibility with which we began." he said. The Affymetrix technology. "Companies have been held morally responsible for injuries which they did not inflict on somebody else.

and sociology. anthropology. "A lot of what we talk about at the Ethics Advisory Committee is completely hypothetical. We actually picked them not with the idea that they wouldn't get along. Our goal at these meetings is to really get everything out on the table. etc. Discussions vary at the meetings. would be bad for us and would be bad for the technology's ability to address all those markets we want to be in. "That wasn't really the first thing we wanted to do coming out of the gate. so we passed on that. Additionally. both treatable and untreatable. "They're very different. bioethics. It included several other disorders. the need for federal regulations. Her goal over the past five years has been to embed the idea in the corporate culture that ethics are important and that this committee is available to people throughout the organization." she said. getting embroiled in something that just feels bad to people." Buck said. in addition to late-onset diseases. the company received a proposal from an Israeli company that intended to use an Affymetrix chip to test for disorders common to that population.thorough. among others) concerned Affymetrix. The committee meets four times a year. The committee consists of seven external participants who have varied backgrounds. "But we're really trying to get ahead of the ball. Even though Affymetrix products are not currently used in newborn screening." One issue the committee has looked at has been newborn screening-the practice of automatically testing newborns for existing diseases and conditions before they leave the hospital. non-corporate views on the issues. Putting ethics into practice The committee has discussed less hypothetical situations as well. with no indication of when the testing would be done. as well as a selection of people from throughout the organization. and even a Swedish chip. they could be. Affymetrix determined that the company was more of a marketing firm than a genetic testing company. storage of samples. The company has taken a proactive approach to these concerns. The proposal also indicated that the company intended to market a Palestinian chip. setting up an Ethics Advisory Committee to address moral and ethical issues." she said. For example. 17 . genetic privacy. genetics. as well. It's becoming less hypothetical over time. It's becoming more and more realistic now." Buck said. The red flags this project raised (possible geopolitical implications and questionable genetics. but with the idea that they wouldn't agree. "We always have two or three executives in the room. including Tay-Sachs disease. They offer independent. including law. so they declined to be involved with the project. so the committee has addressed issues such as informed consent.

Moral rights are the rights that human being of every nationality possess to an equal extent simply by virtue of being human beings. "This is a new industry. Moral rights. are usually not limited to a particular jurisdiction. but national discussions as well. the entitlement is then called a legal right. unlike legal rights." Buck noted. The rights which are called moral rights or human rights are based on moral norms and principles that specify that all human beings are permitted or empowered to do something or are entitled to have something done for them. Taking part not only in internal discussions about moral responsibility. Moral rights are tightly correlated with duties. "being informed on what's going on and weighing in on the things that are particular to the kinds of data that we're generating" is a way of helping shape the moral climate of the industry as well. Characteristics of Rights: . Moral or human rights are based on moral norms and are not limited by jurisdiction Features of Moral rights 1.The constant emergence of new markets for genetic technology means new questions every day. A person has a right when that person is entitled to act in certain way or is entitled to have others act in certain way towards him or her. Rights derived from legal systems are limited by jurisdiction . RECOGNITION OF CORPORATE IN AREAS OF RIGHTS & DUTIES The Concept of a Right In general. This is because one person’s moral right generally can be defined – at least partially – in terms of moral duties other people have towards that person. A right is an individual’s entitlement to something . The entitlement may be drive from legal system that permits or empowers the person to act in specified way or that requires others to act in certain ways towards that person. a right is an individual’s entitlement to something. 18 . This is new research people are doing.

if I have right to privacy. For example. first. Third. a right identifies activities or interest that people must be left free to pursue or not pursue. has the duty not to intervene in my private affairs. Moral rights provide individuals with autonomy and equality in the free pursuit of their interests. Second. Contractual rights and duties are distinguished. Contractual Right and Duties Contractual rights and duties (sometime called special rights and duties or special obligations) are the limited rights and correlative duties that arise when one person enters an agreement with another person. Negative and Positive rights A large group of rights called Negative rights is distinguished by the fact that its member can be defined wholly in terms of duties other have not interfere in certain activities of the person who holds a given right. Unless I actually make a promise or enter some other. 4. if I contract to do something for you. That is. this means that every other person. In contrast Positive rights do more than impose negative duties. They also imply that some other agents (it is not always clear who) have positive duty of providing the holders of the right with whatever they need to freely pursue their interest. by the fact that they attach to specific individuals and the correlative duties are imposed only on other specific individuals. you do not acquire any contractual rights over me. contractual rights and duties depend on publicly accepted system of rules that defines the transaction that gives rise to those rights and duties. For example. Moral rights provide the basis for justifying one’s actions and for invoking the protection or aid for others. contractual rights arise out of specific transactions between particular individuals. and I have a contractual duty to perform as I have a promised. then you are entitled to my performance: You acquire a contractual right to whatever I imposed. 19 .2. similar arrangements with you. including my employer. 3. If I have moral rights to do something then I have moral justification for doing it.

20 .MAINTENANCE OF BALANCE BETWEEN ETHICS VALUE & CORPORATE PROFIT Every time in newspaper we find reports about controversies on business ethics of large corporate houses and even government organizations. effort and tremendous perseverance (2) Go the easy way . consolidate. Corporate houses feel that their stakeholders would appreciate the fact that they generate wealth for them . But you would be amazed at how many would still go the other way. In this scenario a question raises its head with timidity: 'is it not possible to make profit ethically?' A question we all need to answer for ourselves. the 'by whichever means' acceptability is debatable. 'the ethical way'. If you go down to the grassroots. build brand and image in the national and international market segment you prefer. ethics is still an important threshold in the values of the common human being. ethics seems less important than making profit.advertise. Ethics to most is synonymous with trust and truth without which no real value addition can be expected or enjoyed. in your opinion? You would say. of course. Creating a base for such activities can be done in two ways: (1) Go the hard way .bribe your way through government and other corridors which would help you create a niche market almost overnight.by whichever means. which is the ultimate goal all over the world. Today. The general public still values basic business ethics more than profit. the keyword today is "results" and here "results" means profit. coverage and products to capture large chunks of the market. While it is true that the public does like a hike in the profits. though globally the consumerism movement makes it seem otherwise. Why? Because. For this purpose the business houses need to expand their territory. In certain countries ethics comes on a poor second when it comes to doing business successfully. "Successfully" here means generating large amounts of surplus. This involves money. Often the amount of money and efforts spent on bribes is less than Which would be the best way.

and probably for no overtime pay or other compensation (I say that because I have come to learn that overtime pay is not mandatory to a salaried employee). and in worst cases. with less steam because fewer employees are left to do the work of more than one employee. this creates stress. diet is jeopardized because this person either has to grab fast food on the way 21 . sometimes working through lunch periods in order to complete tasks creates what I like to call "internal combustion. the inevitable happens. even drawing up those flow charts. This starts a snowball effect. to keep longer hours by coming in earlier or staying later. but production is still threatened. perhaps missing time with children who have already gone to bed. the message is the same. and bonuses are diminished. As a company attempts to move forward. they aren't there for their health! The heads of big corporations and for that matter. in most recent years. that they think are going to inspire the employees. mental anguish. From my varied experiences of working in both large corporations and small companies. the employees are the ones who feel the pinch when those little extras are taken away." When employees are working harder. However. An employee is not only put in a bad situation at work. have strong business ethics or should their primary consideration be profit? Can ethics and profits co-exist in a business environment? You can't deny that making a profit is the motivation behind any business! After all. and some spend endless hours writing reports. fatigue. A hard working employee now has new pressures to face. but his home life is affected as well. trying to pick up the slack of those that were let go. Employees work twice as hard. leaders of any size company.CORPORATE PROFIT Should an enterprise set-up for the purpose of rendering a service or making available a product with the intent of making profit. without sounding curt. Leaders preach the same story to their employees to work harder and keep production rolling. big business has felt the economic pinch and in an effort to keep profits rolling. have had to cut corners to keep the numbers out of the red! This has been defined as "down sizing". the staff must be cut. as they say. In some cases. low energy and even conflicts among the staff. are all watching their numbers. When more is expected of existing employees. or a return on investment for the shareholders.

a business can always hire a new employee. But if their aim is to enhance their profits by dispensing with prudence . or eat a less nutritionally balanced concoction at late hours. but for those employees that got let go during a financial crunch period." Ethics are the moral fiber of business. 22 .for example. less experienced candidate who will suffice to get the job done. will be defined by the behavior of top management. But it isn't a question of a leader wanting to cause all these conflicts. a younger. Here. He goes to sleep and repeats it all again the next day. It may seem callous to say. But I believe business ethics differ from the moral aspect of a business. Needless to say. having their managers decree operational shortcuts that ignore standard procedures and do not take safety into consideration .home. are really worth it. One can only tempt fate for so long. From this we can observed that how profit making can create desperate measures for the leaders and also for the employees. and the accompanying dire environmental consequences for the Gulf of Mexico as support for this assertion. the recent explosion involving the Deepwater Horizon rig. setting an example for employee behavior When corporations act unethically. to save his own neck. but with economics taking precedence. the profits. which in turn influences production and ultimately. As far as moral ethics are concerned. the tensions and negativities lead to "low morale" at home and at work. Hard to know if the profits made. ETHICS VALUE ETHICs are defined as "the principles of conduct governing an individual or a group. which unless clearly laid down in a program. it is often true that a company must make a profit in order to exist. Simple home chores are neglected because this person is just too tired to do anything else around the house. as a result of causing so much conflict that trickles down. most employees do try to make the most of their time at the office and do try to keep their associations with co-workers congenial. they may improve their bottom line over the shortterm. and have an impact on the status of the employees. it just happens because the leader is under his own competitive pressures to keep the numbers soaring. There may have been more concern about the ethical demeanor inside the halls of a company. at a lower rate of pay.then over a longer period of time such reckless behavior raises the odds of negative consequences. and often times.

A dishonest. on the other hand. honest. corrupt corporation. millions of gallons of oil to stream into the Gulf of Mexico. basic questions pertaining to how they do business. shortcut taking philosophy is the aforementioned explosion and subsequent oil spillage into the Gulf waters. unexpected fashion. Kind of like a boomerang does. This event raises a very troubling question. etc.sooner or later . And the event that is without question the worst consequence to date of BP’s habitual cost-cutting. will . There have been accidents that resulted in employee deaths. Such trustworthy behavior is critical to our future as a nation. This open-ended spill is nothing short of catastrophic. It is time for profit concerns to be put aside and for the public good to take precedence. and Transocean all owe the public and our government full cooperation and full disclosure. For years now. as should have been the case all along. All corporations that were involved in the Deepwater Horizon oil drilling need to ask themselves some serious. and in general be less than forthcoming about their culpability in the affair. In other words. will immediately set about to influence public opinion by denying blame. there have been accusations of cost-cutting at the expense of worker safety. this corporation’s track record in the area of public safety has been called into question. BP. the corporation has a choice. The explosion that occurred five thousand feet below the surface of the ocean has so far caused-by even the most conservative estimate. This is not a time for business as usual. how is it that a company with such a dicey track record for public and employee safety gets issued a permit to drill a hole at such a depth? How did our government and the public become so blind to the potential consequences of such drilling? And how could the corporations involved in this operation have such little foresight for the contingencies involved? When corporate negligence is suspected as playing a role in a disaster such as the Gulf oil spill. Such a corporation.It’s like a Karmic Boomerang. property damage. diverting blame.receive a wakeup call that cannot be ignored. 23 . A good.one that is arguably preoccupied with profit and not acting with the public welfare in mind. bad behavior brings with it bad consequences-said consequences arriving in a rather sudden. Haliburton. In the wake of these accidents. healthy corporate entity will acknowledge their failure and attempt a good faith effort to deal with and to minimize whatever damage they inadvertently caused. Our legal system needs to take a very close look at these companies and in particular at British Petroleum.

and deteriorating relations. all stakeholders will perceive increased value in a business built on strong ethical standards as well as business standards. but not the least. As economic upswings and downswings happen. In short.the employers. the employees . not built on ethics and strong values. equally important is ‘how' the enterprise does what it does. maybe.Sustainable business can only be built and nourished on the basis of a strong atmosphere of trust between all team members and with all the involved stakeholders i. but survive profitably with a strong network of relationships with all stakeholders and will serve as a role model for all businesses who have long-term vision of successful survival. Especially as the economy moves away from the recent turbulence. as a sudden downslide of public relations etc. investigation. that all these stakeholders will show increased involvement and commitment towards the shared vision of the business enterprise. the trust of its stakeholders will be eroded slowly and. the vendors. It is only when trust has been gained and merited through the experience of past behavior and interaction. business and profits. 24 . the customers. the shareholders. is always subject to questioning. Since any business. not only is what an enterprise does or deals in important. the regulators and last. doubt. This enhanced involvement will see improved investment. a business built on strong ethics and fundamentals will not just survive. suspicion.e.

but the rate and exact location of development will be subject to additional factors not considered such as market demand.g. and federal air and water quality laws (e. the agency that oversees ESA listing. and for biodiversity offsets . Forecasted impacts to sage-grouse populations could be revised lower if directional drilling to reduce well pad density at the surface became more commonplace. The analysis presented here can be used to inform planners and decision-makers about where oil and gas development is anticipated and potential impacts to sage-grouse.1 million ha) ecosystems and the species that inhabit them. The economic ramifications of listing species are substantial with estimated costs of recovery plans and their implementation reaching into the multi-millions. the capacity to transport oil or gas to consumers. 14–19 percent of the study area has high oil and gas development potential but the development rights have not been sold. with the previously noted exceptions. public or private. These results are based on the use of statistical models to forecast future change and the many assumptions inherent to this process. Our estimates provide insights into the trajectory and eventual endpoint of oil and gas development. Prevention of listing through thoughtful consideration of threats and possible avoidance or mitigation strategies is likely to be less costly and more effective. BLM estimates are frequently revised from new field discoveries and as technological advances influence resource extraction methods. development in these areas could be avoided by removing these leases for sale or mandating other special protections by government management agencies. climate change legislation). In the case of sage-grouse. Areas 25 .The US Fish and Wildlife Service. Our build-out scenarios are applicable across whole landscapes regardless of land tenure because we assumed that development could occur on any parcel of land. It provides a general framework for analyses using predictive models and build-out scenarios to anticipate impacts to species and the type of information needed for those making decisions about special protections for species.7 million ha) and grassland (1. faces difficult and complex decisions in determining if current or future risk of species population declines warrants ESA protection. We based our build-out scenarios on projections from the most recent BLM planning documents available at the time and on the oil and gas potential model.Case Study Our analysis shows that we can expect a 7–19 percent population decline in sagegrouse from future oil and gas development and that the impacts within our study area will be greatest to sagebrush (3. such as ESA listing in the US. if not billions of dollars for wide-ranging species such as sage-grouse. Clean Air Act.

already leased and important for sage-grouse could be considered a priority for lease swaps or buy-backs. non-governmental organizations and other private entities swap land or buy the lease back from the company that bought the development rights. Done in the right places. customers. companies could also be encouraged to forfeit their development rights with a perpetual NSO agreement. multiple stressors are affecting their populations. this is likely to be the more ecologically sound. Corporate Ethics teaches every modern organization to reconcile the organizational profit motive purpose with the needs and feelings of people—employees. and more efficient—the more sustainable—course of action. 26 . the world we live in—sustainability. our heritage. The framework we present could be modified to consider not just one type of energy development. environment. other culture Corporate Ethics is the backbone of any corporate organization. as part of the negotiation for enhanced access to exploration and development in other areas. Models and maps of multiple future threats are needed to fully quantify the future risk to biodiversity. Quantifying anticipated future impacts can help to justify proactive protection of places important to biodiversity and to underscore the ecological consequences of failing to do so. The case of sage-grouse and oil and gas development in the Intermountain West is a preview of confrontations likely to occur across the globe with profound implications to biodiversity. Incorporating the likelihood of future change into land-use planning can alleviate uncertainty and ultimately make societal adaptation to change more efficient and less costly. coal. Because many of these stressors do not correlate spatially. Corporate Ethics is the backbone of any corporate organization. We hope to inspire regulatory agencies and land mangers to use technologies available in mapping and modeling to forecast new impacts and for policymakers to use this information to avoid business-as-usual development . invasive species. suppliers and every individual. in favor of proactive efforts to predict and avoid impacts in places crucial for species conservation. where government. Alternatively. and pathogens. along with other stressors such as residential development. Corporate Ethics teaches every modern organization to reconcile the organizational profit motive purpose with the needs and feelings of people—employees. in this case oil and gas. solar. customers. For many species experiencing population declines. Keeping in mind. but also wind. this approach would account for cumulative impacts. oil shale and uranium. less costly. In the long run. a creative combination of approaches could yield maximum benefit to species.

compassion.suppliers and every individual. the world we live in—sustainability.Manuel G. environment. other cultures and societies and at all times acting with probity—encompassing love. Keeping in mind. our heritage. Seglin Perspectives in Business Ethics . integrity. honesty. s and societies and at all times acting with probity—encompassing love. Velasquez The Good. honesty. and truth. integrity. the Bad. and BIBILIOGRAPHY: Concepts and Cases. compassion.Laura Pincus Hartman Business Ethics Books – Raj Agrawal 27 .Jeffrey L. and Your Business: Choosing Right When Ethical Dilemmas Pull You Apart .

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