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The synonyms of ethics as per Collins Thesaurus are - conscience, moral code, morality,
moral philosophy, moral values, principles, rules of conduct, standards.
Ethics refers to well- founded standards of right and wrong that prescribe what humans
ought to do, usually in terms of rights, obligations, benefits to society, fairness, or
specific virtues.
Ethics is a set of principles or standards of human conduct that govern the behavior of
individuals or organizations. Using these ethical standards, a person or a group of
persons or an organization regulate their behavior to distinguish between what is right
and what is wrong as perceived by others. It is not a natural science but a creation of
the human mind. For this reason, it is not absolute and is open to the influence of time,
place and situation.
In bygone times, kings used to keep food testers who ate the food prepared for the king
before it was offered to him. This was royal clinical research to find out if the food was
poisoned. The practice did not raise eyebrows because the king was regarded as the
most important person in the kingdom, and his life was more precious than that of
anyone else. It was the ethics of the time.
1. Features of Ethics
• Ethics can be defined as the discipline dealing with moral duties and obligation, and
explaining what is good or not good for others and for us.
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• Ethics is the study of moral decisions that are made by us in the course of performance
of our duties.
• Ethics is the study of characteristics of morals and it also deals with the moral choices
that are made in relationship with others.
• Ethics is concerned with truth and justice, concerning a variety of aspects like the
expectations of society, fair competition, public relations, social responsibilities and
corporate behavior.
• Ethics mainly stems from culture, religion and law. (source of ethics)
2. Categories of Ethics
Ethics can be distinguished in three categories: normative ethics, descriptive ethics and
metaethics.
a) Metaethics:
It focuses on the issues of universal truths, ethical judgements and the meaning of
ethical terms.
b) Normative ethics:
It can be used to regulate the right and wrong behaviour of individuals.
c) Descriptive ethics:
It also called applied ethics, is used to consider controversial issues, such as abortion,
animal rights, capital punishment and nuclear war.
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4. Integrity
A person of integrity will consistently demonstrate good character by being free of
corruption and hypocrisy. Integrity is revealed when people act virtuously regardless of
circumstance or consequences. This often requires moral courage.
5. Accountability
It means obligation or willingness to accept responsibility or to account for one’s action.
In simple words it is answerability of one’s actions. It implies liability to give satisfactory
account of exercise of the power of discretion vested in some authority to which it is
due, failing which, some kind of punishment may follow.
6. Principles
A fundamental truth or proposition that serves as the foundation for a system of belief
or behaviour or for a chain of reasoning. It is highly subjective and based on one’s
perception and values.
7. Values
According to T. W. Hippie, “Values are conscious or unconscious motivators and
justifiers of the actions and judgment”
A value is a shared idea about how something is ranked in terms of desirability, worth
or goodness. Sometimes, it has been interpreted to mean “such standards by means of
which the ends of action are selected”.
This standard help in deciding what is good and bad for individual (moral values) and
society (ethics)
8. Ethical subjectivism:
This concept emphasizes that the ethical choice of the individual decides the rightness
or wrongness of his behaviour.
9. Ethical relativism:
According to this concept, no principle is universally applicable and so it would be
inaccurate to measure the behaviour of one society with another’s principles or
standards. Relativism overlooks the fact that there may be enough evidence to believe
that an ethical practice is based on false belief, illogical reasoning, and so on.
10. Consequentialism:
Consequentialism is based on two ideas: the concept of value and the maximization of
value. If, for example, honesty is considered a value, an act is considered ethical only if
it maximizes this value. An act, which does not maximize the said value, is not ethically
permissible.
11. Deontological ethics:
This concept stresses that ethical values can be developed from the concepts of reason
as all rational individuals possess the ability to reason. We may, for example, end up
causing pain unknowingly while trying to create happiness. Therefore, the ethical value
of an action cannot be determined by its consequences. Instead, it is in the motive that
lies behind the particular action.
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12. Ethics of virtue:
This concept emphasizes those traits that give the individual a sense of satisfaction from
ethical point of view. Virtuous acts like courage, honesty, tolerance and generosity are
done as a way of living and not by chance.
13. Whistle blowing:
Whistle blowing refers to the attempt of an employee to disclose what he or she
believes to be UNETHICAL/ illegal behaviour in or by the organization.
14. Absolute Ethics:
The belief that there is only one truth and code of conduct which people generally belief
in, which everyone obey and is the truth and everyone must obey it and people must
be aware of it.
15. Relative Ethics:
The belief of relative ethics is base on the fact that there is only single moral standard
which applies to all human being. The moral ideas and belief of human being differ from
one another and also people belief in different part of the world is also different from
one another which show that there is no stable moral standard in the world.
16. Ethical Dilemmas
C. Business Values and Ethics
a) Business Definitions
According to Peterson and Ploughman, ‘Business may be defined as an activity in which
different persons exchange something of value, whether goods or services for mutual
gain or profit.’
According to James Stephenson, ‘Business is the sum total of those processes which are
engaged in the removal of hindrances of persons (trade), places (transport and
insurance) and time (warehousing) in the exchange (banking) of commodities.’
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b) Values
According to T. W. Hippie, “Values are conscious or unconscious motivators and
justifiers of the actions and judgment” Values has been interpreted to mean “such
standards by means of which the ends of action are selected”.
Business values can be defined as conscious or unconscious motivators and justifiers of
the actions and judgment of the business activities. These motivators or justifiers are
often translated in form of objectives of the business. Following are the business values
or objectives.
• Incentive: Profit is the biggest incentive for work. It is the driving force behind the
business enterprise. It encourages a man to work to the best of his ability and capacity.
• Survival: Profit is essential for the survival of a business. In the absence of profits, an
organization will not be able to survive. It also helps in replacing obsolete machinery
and equipment and, thus, ensures the continuity of a business.
• Growth: Stagnation is the biggest setback for any industry. The prosperity and
continuity of an industry largely depends upon its growth and expansion.
• Measurement of efficiency: Profits measure the performance of the business. It is the
accepted yardstick for the evaluation of the efficiency of the business.
• Prestige: An unsuccessful business concern carries no good will. Higher profits not
only provide economic power and status to the businessman but also improve the
creditworthiness and bargaining strength of the business.
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b) Customer satisfaction:
It refers to making the customers feel important and responding to their needs,
interests and, if need be, providing solutions to their problems in case of any
documentation processes regarding the purchase of the organization’s product.
Also Customer satisfaction is the backbone of a business. Therefore, a business must
ensure a supply of better quality of goods and services to its customers.
c) Personnel development:
When it comes to development, organizations can benefit more by developing the skills
of their employees. Besides considering the satisfaction of its customers and
management, it should take into account the satisfaction of its employees, which in turn
can yield sincere work performance from the employees. It may further classified as:
• Fair wages: Social justice requires that employees get fair remuneration for their
work. Apart from the wages, if their employers acknowledge their contribution,
the employees would be satisfied and would work more sincerely.
• Growth and promotion: The work of the employees must be acknowledged and
they should be given adequate training to improve themselves so that they will
be ready to accept better positions in an organization, if offered.
• Partnership in the prosperity of business: Employees should not be considered
servants in an organization. Their contribution must be given due recognition.
They must be allowed to share in the prosperity of the business either by sharing
of profits or capital.
d) Innovation:
It refers to the enthusiasm to take on new challenges and responsibilities on the part
of the employees and a desire to diversify and try out new ventures on the part of the
organization.
e) Optimal use of resources:
It refers to making sincere efforts to enhance overall business performance by
maximum utilization of the organization’s current resources as well as responsible use
of environmental resources.
POINT BV BE
MEANING What organisation values. Guiding principle for
I.e what organisation aim action
to achieve.
function It acts as motivator and It acts prescription of what
justifier is right and wrong.
source Founding member leaders Religion, culture and Law
Effect of time More Stable Less stable
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D. Concept of Business Ethics
1. Meaning and definition
Business is described as an activity done by humans to produce or acquire wealth where
he buys and sells goods. Business ethics is a form of applied ethics. In broad sense ethics
in business is simply the application moral or ethical norms to business. Business ethics
refers to a 'code of conduct' which businessmen are expected to follow while dealing
with others.
'Code of conduct' is a set of principles and expectations that are considered binding on
any person who is member of a particular group. The alternative names for code of
conduct are 'code of ethics' or 'code of practice'.
Business ethics stands for the saneness or purity of purpose that is upheld through
carefully designed actual practices of business enterprises. It is an embodiment of
conscience concern towards execution of business processes in tune with the nobility
of the purpose.
Business ethics comprises the principles and standards that guide behaviour in the
conduct of business. Fairness, integrity, commitment to agreements, broadmindedness,
considerateness, importance given to human esteem and self-respect and many such
principles determine business ethics.
Businesses must balance their desire to maximize profits against the needs of the
stakeholders. Maintaining this balance often requires tradeoffs. To address these
unique aspects of businesses, rules - articulated and implicit, are developed to guide
the businesses to earn profits without harming individuals or society as a whole.
The coverage of business ethics is very wide as it deals with norms relating to a company
and its employees, suppliers, customers and neighbors, its fiduciary responsibility to its
shareholders. It reflects the philosophy of business, one of whose aims is to determine
the fundamental purposes of a company.
Thus, Ethics in business refer to a code of standard by which one can determine what is
wrong and what is right for the business enterprise.
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c) Personal Dignity:
The principles of ethics develop the personal dignity. Many of the problems of ethics
arise due to not giving dignity to individual. All the business decisions should be aimed
by giving dignity to the customers, employees, distributors, shareholders and creditors,
etc. otherwise they develop in immorality in the business conducts.
d) Related to Human Aspect:
Business ethics studies those activities, decisions and behaviors which are concerned
with human aspect. Also, ethics is basic need of human being. Whether business is
ethical or unethical it will make difference to human being and no other thing.
e) Study of Goals and Means:
Business ethics is the study of goals and means for the rational selection of sacred
objects and their fulfillment. It accepts the principles of ―Pure goals inspire for pure
mean and ―Means justifies the end. It is essential that goals and means should be
based on morals.
f) Different from Social Responsibility:
Social responsibility mainly relates to the policies and functions of an enterprise,
whereas business ethics to the conduct and behaviour of businessmen. But it is a fact
that social responsibility of business and its policies is influenced by the business ethics.
g) Greater than Law:
Ethics can always save society but law cannot. There are many instances where
extensive laws are made but seldom are followed. If ethics are developed among
children, they will become such citizen who will always be ethical and society can
experience less crimes.
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An act would be considered moral if it produced more satisfaction than dissatisfaction
for society.
It must be understood that this satisfaction or happiness should be for the society in
general and not to the people committing the act or the people who are directly
involved in the act.
For example, not paying the money to someone whom you owe may make you happy
but it disrupts the social system of fairness and equity thus making the society as a
whole unhappy. Hence, it would not be an ethical act.
2. Deontological approach:
While a “teleologist” focuses on doing what will maximize societal welfare, a
“deontologist” focuses on doing what is “right” based on his moral principles.
Accordingly, some actions would be considered wrong even if the consequences of
these actions were good. According to DeGeorge:
“The deontological approach is built upon the premise that “duty” is the basic moral
category and that the duty is independent of the consequences. An action is right if it
has certain characteristics or is of a certain kind and wrong if it has other characteristics
or is of another kind”.
This approach has more of a religious undertone. The ethical code of conduct has been
dictated by the Holy Scriptures. The wrongs and rights have been defined by the word
of God. This gives the concept of ethics a fixed perception. Since the word of God is
considered as permanent and unchangeable, so then is the concept of ethics.
Holy Scriptures like those of Bhagwad Gita, Guru Granth Sahib, the Bible and the Quran,
are considered to be the words of God and hence must be accepted in their entirety
and without question. In similar thinking, though based upon rationality, rather than
religious command, Emmanuel Kant, an eighteenth-century German philosopher
suggested morality as universally binding on all rational minds.
3. Emotive approach:
This approach is proposed by A.J. Ayer. He suggests that morals and ethics are just the
personal viewpoints and “moral judgements are meaningless expressions of emotions.”
The concept of morality is personal in nature and only reflects a person’s emotions.
This means that if a person feels good about an act, then in his view, it is a moral act.
For example, using loopholes to cheat on income tax may be immoral from societal
point of view, but the person filing the income tax returns sees nothing wrong with it.
Similarly, not joining the army in time of war may be unethical and unpatriotic from the
point of view of the society and the country, but the person concerned may consider
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war as immoral in itself. According to this approach, the whole idea about morality
hinges on the personal view point.
4. Moral-rights approach:
This approach views behaviour as respecting and protecting fundamental human rights,
equal treatment under law and so on. Some of these rights are set forth in documents
such as Bill of Rights in America and U.N. Declaration of Human Rights. From ethical
point of view, people expect that their health and safety is not endangered by unsafe
products.
They have a right not to be intentionally deceived on matters which should be truthfully
disclosed to them. Citizens have a fundamental right to privacy and violation of such
privacy would not be morally justifiable.
Individuals have the right to object and reject directives that violate their moral or
religious beliefs. For example, Sikhs are allowed to wear turbans instead of putting on
a hat as required by Royal Canadian Police, because of their religious beliefs.
5. Justice approach:
The justice view of moral behaviour is based on the belief that ethical decisions do not
discriminate people on the basis of any types of preferences, but treat all people fairly,
equitably and impartially, according to established guiding rules and standards. All
mankind is created equal and discriminating against any one on the basis of race,
gender, religion, nationality or any such criteria would be considered unethical.
From organizational point of view, all policies and rules should be fairly administered.
For example, a senior executive and an assembly worker should get the same treatment
for the same issue, such as a charge of sexual harassment.
6. Absolutist approach:
According to this approach there exist one set of moral rules. That do not change with
situation. The rules are common to everyone. What is ethical for one person is ethical
for all and vice versa. These rules are unlikely to change over time. This approach is
often tagged as dogmatic (believe that there are absolute truths exist)
7. Relativist approach:
According to this view there are many acceptable sets of rules within society. The one
that is ethical in one situation or for one person might not be otherwise. Also, rules can
change over time. This approach is often tagged as pragmatic (believe that there are no
absolute truths)
F. Ethical Theories
1. Deontological
• The person should uphold his/ her duty and obligation in order to be ethical. In
other words, the person who is fulfilling his/her duty is considered ethical
otherwise not.
• Whenever there is ethical dilemma (cannot decided what is ethical) one has to
take decision on the criteria of duty.
• According to this theory there will be consistency in behaviour. i.e. the
behaviour or choice of person will not change according to situation. Eg. Telling
lie is unethical in all context.
• There are special duties that comes with status and power. For example, an
older brother may have an obligation to protect his little sister when they cross
a busy road together. “with great power comes great responsibility”
• There is scope of supererogation. The one who exceed their duties and
obligations, are called “heroes” For example, if a person hijacked a train full of
students and stated that one person would have to die in order for the rest to
live, the person who volunteers to die is exceeding his or her duty to the other
students and performs an act of supererogation.
• There are certain limitations
o No logic behind deciding individual’s duty. It is individual who is deciding
and not the society.
o There is no provision for welfare of others in this theory. Eg. If reaching
at meeting in time is my duty and I am running late then should I drive
fast and risk other’s lives.
o The theory does not talk what to do in case of conflicting duties.
• Limitation of theory
o It is based on prediction of consequences. That may be right or wrong.
Eg. mother is feeding his child a product it is good for child’s growth.
However, the product contains high level of chemicals that mother is
unaware. The act becomes unethical.
o “those who have power to give orders cannot have luxury to be
ignorant.”
o There is no scope of supererogation. There will be no “Hero”. Whatever
one will do for better benefit for other is basically ethical.
o Individual benefit will be sacrificed for benefit of greater others. Eg. Mass
promotion due to pandemic.
3. Kohlberg Theory
These theories are based on the sorts of reasoning and motivation adopted by
individuals with regard to moral questions. According to Lawrence Kohlberg’s Theory,
the people progressed in their moral reasoning through a series of stages. His theory is
based on the foundation that morality is a form of reasoning that develops in structural
stages. The three levels of moral development, suggested by Kohlberg, are:
1. Pre-conventional level; 2. Conventional level; and 3. Post –conventional level.
5. Rights
Kant has advocated this rights theory of ethics. In the rights ethical theory the rights set
forth by a society are protected and given the highest priority. Rights are considered to
be ethically correct and valid since a large or ruling population endorses them.
Individuals may also bestow rights upon others if they have the ability and resources to
do so. For example, a person may say that her friend may borrow the car for the
afternoon. The friend who was given the ability to borrow the car now has a right to the
car in the afternoon. A major complication of this theory on a larger scale, however, is
that one must decipher what the characteristics of a right are in a society. The society
has to determine what rights it wants to uphold and give to its citizens. In order for a
society to determine what rights it wants to enact, it must decide what the society's
goals and ethical priorities are. Therefore, in order for the rights theory to be useful, it
must be used in conjunction with another ethical theory that will consistently explain
the goals of the society (1). For example in America people have the right to choose
their religion because this right is upheld in the Constitution. One of the goals of the
founding fathers' of America was to uphold this right to freedom of religion. However,
under Hitler's reign in Germany, the Jews were persecuted for their religion because
Hitler decided that Jews were detrimental to Germany's future success. The American
government upholds freedom of religion while the Nazi government did not uphold it
and, instead, chose to eradicate the Jewish religion and those who practiced it.
Kant also introduced maxims, which are subjective rules that guide actions and
help an individual to act according to the relevant description. There is sufficient
generality in description. All actions have maxims like:
6. Casuist
The casuist ethical theory is one that compares a current ethical dilemma with examples
of similar ethical dilemmas and their outcomes. This allows one to determine the
severity of the situation and to create the best possible solution according to others'
experiences.
One drawback to this ethical theory is that there may not be a set of similar examples
for a given ethical dilemma. Perhaps that which is controversial and ethically
questionable is new and unexpected. Along the same line of thinking, a casuistical
theory also assumes that the results of the current ethical dilemma will be similar to
results in the examples. This may not be necessarily true and would greatly hinder the
effectiveness of applying this ethical theory.
7. Virtue
The virtue ethical theory judges a person by his character rather than by an action that
may deviate from his normal behavior. It takes the person's morals, reputation and
motivation into account when rating an unusual and irregular behavior that is
considered unethical. For instance, if a person plagiarized a passage that was later
detected by a peer, the peer who knows the person well will understand the person's
character and will be able to judge the friend. If the plagiarizer normally follows the
rules and has good standing amongst his colleagues, the peer who encounters the
plagiarized passage may be able to judge his friend more leniently. Perhaps the
researcher had a late night and simply forgot to credit his or her source appropriately.
Conversely, a person who has a reputation for scientific misconduct is more likely to be
judged harshly for plagiarizing because of his consistent past of unethical behaviour One
weakness of this ethical theory is that it does not take into consideration a person's
change in moral character. For example, a scientist who may have made mistakes in the
past may honestly have the same late-night story as the scientist in good standing.
Neither of these scientists intentionally plagiarized, but the act was still committed.
• Corporate ethics is concerned with the ethical quality of organisation and its
activity as a whole.
• Corporate ethics evaluates an organisation on the basis of morality and
rationality.
• There are four types of organisation based on morality and rationality.
• Here organisation is treated as single entity.
• The locus of control of corporate ethics is BOD, Corporate Team, Founding
Members and CEO.
Levels of Corporate Ethics
Organizational ethical issues can be handled at three levels. These levels are:
1. Corporate mission:
• It is a statement that shows the objective (long term -5 to 10 years) of the firm
and strategy of achieving the objective.
• Corporate ethics studies the mission statement and evaluate how mission
statement is contributing to morality and rationality.
Eg.
Company Mission M R
Tata Steel …. Tata Steel recognizes that while honesty and yes yes
integrity are essential ingredients of a strong and
stable enterprise, profitability provides the main
spark for economic activity……
Future Group We share the vision that our customers and yes yes
stakeholders are best served by creating and executing
future scenarios in the consumption space leading to
economic development…….
We shall ensure that our positive attitude, sincerity,
humility and united determination shall be the driving
force to make us successful.
TCS Our Mission is to glorify God as we provide exceptional yes no
IT services focused on building relationships with our
clients and employees.
Mconals McDonald's brand mission is to be our customers' No yes
favorite place and way to eat and drink,…..
2. Manipulative:
Organizations with high economic performance concerns and low ethical concerns
are called manipulative organizations. These organizations use tax laws, labour laws
and union leaders to maximize profit. This type of organisation finds loopholes in
legal system to operate there business.
3. Holistic:
Organizations with high ethical concerns and low economic concerns are called
holistic organizations. These organizations spend their money in social and
environmental purposes. NGOs, Religious and community institutions are holistic in
nature.
4. Balanced:
Balanced organizations have high ethical and economic concerns. These types of
organizations gain profit as well as work for social and environmental purposes.
H. Code of Ethics
A Code of Ethics, also called a Code of Conduct, is a document created to
establish the culture, feeling, and expectations for each member of the
company. This document sets requirements and benefits that offer a standard
that all team members can be held accountable to live by. This is the document
that tells the expected behaviour from the member of the organisation.
In other words, Corporate ethical codes can be defined as the standards and
beliefs of an organization. These standards and beliefs are made by the
managers of the organization and can be used to adjust the thinking and
attitude of the individuals in the organization.
In companies with no Code of Ethics, these principles are only implied and
assumed. Unfortunately, in these circumstances, what is expected of
employees often depends on the immediate mood of the boss, or the
circumstances you’re wading through at the moment. The result is a constantly
changing set of pseudo rules and an unclear picture of what actions are right
and which are wrong. A well-written code provides clear guidance as to what
is expected of everyone.
Thus, Organizations can handle the issue of ethics by incorporating the code of
ethics in the corporate structure. These codes of ethics can be used to advise,
guide and regulate the behaviour of the individuals in organizations.
Guide lines for drafting Code of Ethics
Organizations can translate the human core values into business codes by using
some specific guidelines.
• Written for the reader. It is easy to understand and doesn’t include any
technical or legal jargon.
• Comprehensive. It covers all important details that may impact the daily
lives of employees and answers common questions that arise.
• Supported by leadership. It has been acknowledged and approved by the
company’s senior management team. This is often demonstrated in the
form of a foreword written by the CEO or President.
• Accessible. It is available to all employees, current investors and potential
investors.
• Visually appealing. It follows a style that is clean and reflective of the
organization.
Many organizations have formulated codes of ethics for their employees. Most
of these codes are very different and some are similar. These formulated codes
of ethics can be used as a tool for developing ethical conduct. Some of the ethical
codes formulated by organizations are:
• Ethical codes for discipline
• Proper code of dressing
• Avoiding abusive language or actions
• Punctuality
• Legalistic ethical codes
• Always following instructions from superiors
• Performance of fair performance appraisals
• Personal and cultural ethical codes
• Not using official property for personal use
• Performance of good quality of work
• Having initiative
• Conservation of resources and protection of quality of environment
Advantages of a Code of Ethics
Some of the advantages of a code of ethics are: