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INDIAN ETHOS AND BUSINESS ETHICS

RIYAS.K MCom, Mphil, BEd, MBA
MODULE 1

ETHICS – INDIAN ETHOS IN MANAGEMENT
1.1 INTRODUCTION – MEANING AND DEFINITION
Ethics in Latin language is called ‘ethicus’ and Greek it is called ‘ethicos’

Intact, this word, has originated from ‘ethos’ meaning ‘character’ or ‘manner’ The word “conventional.” • “ethics” is derived from the Greek ethos, meaning “customary” or

Dictionary meaning “system of morals, rules and conduct” Ethics is defined as the ability to distinguish between right and wrong and act accordingly.

The study of standards of conduct and moral judgment, also, the standard of right conduct. • • • Ethics are the rule we play by. Ethics are the standard of behavior generally accepted by the society. Ethics are the standard of moral conduct.

Ethics is a body of philosophy or standard of human conduct that govern the behavior of individual in a group. • • • • • • • Ethics measure morality or the moral standard of society. It include morality, honestly, entricity responsibility Ethics attempts to distinguish between right from wrong, good from bad An overall study of human behavior Suggest moral behavior – prescribe Do’s and Don’ts Ethics is a discipline that examines one’s morality or the moral standard of the society. Ethics means excepted standard in terms of our personal and social welfare.

An ethic attempt to distinguish between rights from wrong, good from bad and decides a desirable conduct from a particular set of social circumstance. The study of standards of conduct and moral judgment; also, the standards of right conduct Ethics – The inner-guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the “right” or appropriate way to behave Ethics is an individual's personal beliefs about whether a decision, behavior, or action is right or wrong.

ETHICS – INDIAN ETHOS – RIYAS.K

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1.2 DETERMINANTS OF INDIVIDUAL ETHICS
Family influence Situational factor

Values and moral

Experienc e

Peer influence

Individual ethics

1.3 OBJECTIVE OF ETHICS
• • • • • • To define the greatest good of man and establish a standard for the same Set moral standards of behavior An overall study of human behavior Apply judgment upon human behavior Suggest moral behavior – Prescribe Do’s and Don'ts One’s opinion or attitude about human conduct

1.4 VIEW OF ETHICS
 Utilitarian – view of ethics  Right view on ethics  Theory of justice- via- ethics  Interrogative social contrast theory

1.4(1) UTILITIATARIAN
 Under this view ethical decision are made solely on the basis of outcomes or consciousness.  It considers how to provide greatest goods for the greatest no: of utilitarian.  It encourages efficiency and productivity and inconsistence with the goal of profit maximisations.

1.4(2) RIGHT VIEW ON ETHICS
Responsibility and protecting individual privileges such as:  Right to privacy ETHICS – INDIAN ETHOS – RIYAS.K Page 3

 Freedom of consciences  Free speech  Life and safety.

1.4(3) THEORY OF JUSTICE
Managers are impose and enforce rule fairly and impartially and do so by following all legal rules and regulation.

1.4(4) INTEROGATIVE SOCIAL CONTEST
Ethical decision should be based on empirical normative function . Manager need to look at existing ethical norms in industry and companies in order to determine what constitute right and wrong decision and action

1.5 VALUE
Value is derived from the French word ‘valoir’ which means worth, merit, usefulness or • • The value is a belief on which a man acts by preference. Belief about what is right and wrong and what is importance in life.

Values are the rules by which we make decision about right and wrong should and shouldn’t good and bad they also tell us which are more or less important, which is useful when we have to tradeoff meeting ones value over another

1.5(1) DEFINITION
According to the ancient India’s psycho philosophical wisdom literature “values are states of feelings or emotions that under pin the conduct of choice of decision and determined the manner of using the intellect or reason for justifying and implementing that choice or decisions” • • Values also termed as ‘GUNAS’ Character is the foundation of values Character – values – attitudes- behavior. Values can be defined as those things that are important to or valued by someone. That someone can be an individual or, collectively, an organization. One place where values are important is in relation to vision. One of the imperatives for organizational vision is that it must be based on and consistent with the organization's core values

1.5(2) HUMAN VALUE
• • • • • Truthfulness Integrity Gratitude Humbleness Forgiveness Page 4

ETHICS – INDIAN ETHOS – RIYAS.K

• • • •

Patients Transparence Charitableness Simplicity

1.5(3) TYPES OF VALUES
• • • • • • • • • • Aesthetic value Cultural value Economic value Ethical value Moral value Physical value Religious value Social value Spiritual value Scientific value

1.5(4) NEED OF VALUES
Right and wrong defined by different people may manifest diverse thinking, motivated by each individual’s personal values. Within a work environment, the cultural values that drive business decisions are critical to the organization’s credibility with its employees, customers, and shareholders. Today, in business, value is about prioritizing individual and operational values for the workplace and establishing codes of value and codes of conduct that ensures that employee behaviors and the internal systems are aligned with those values which in turn affects the performance of the organization

1.5(5) IMPORTANCE OF VALUES
Key leadership with appropriate values establishes the moral compass that guides the organization through the complexities of what is right and wrong and how management and staff are therefore expected to behave. Critical then, becomes the ability to manage for ethical outcomes—this is values-based management. Values provide the basis for judgment about what is important for the organization to succeed in its core business. Values are traits or qualities that are considered worthwhile; they represent an individual’s highest priorities and deeply held driving forces. Values - Describe what managers try to achieve through work and how they think they should behave ETHICS – INDIAN ETHOS – RIYAS.K Page 5

1. ETHICS – INDIAN ETHOS – RIYAS. and desirable. when taken together. norms behavior etc.• Values are: o o o The bedrocks of culture. constitute a design for living. values belief attitudes. and assumption norms etc. Have emotional significance to individuals and the society These are abstract ideas about what a group believes to be good.K Page 6 . right. which bind a group or community.6 NORMS Social rules and guidelines that prescribe appropriate behavior in particular situations. values. A system of norms and values shared among a group of people and. 1. His beliefs. They stem from Folkways: Routine conventions of everyday life.7 CULTURE Culture is the man made part of the environment which provides a comprehensive frame work for understanding the way of life of a persons. Culture comprises of shared philosophies ideologies. Mores (Essential accepted traditional customs that often become a part of the legal code): They are central to functioning of a society and its social life.

ETHICS – INDIAN ETHOS – RIYAS. Organizational culture has been described “as how people behave when no one is looking” The characteristics set of values and way of behaving that employee in an organisations share. • Pattern of behavior – ceremonial event written and spoken comments and actual behavior of an organisation members that create the organisational culture. and attitudes that characterize a community of people. beliefs. behaviors.7 (2) TYPES OF CULTURE • • • • Academy culture Base ball team culture Club culture Fortress culture 1.1. truths assumptions and values that operated in an organisation. customs.K Page 7 .7 (3) ORGANIZATION CULTURE The collection of values.7 (1) DETERMINANTS OF CULTURE Economic Philosoph y Political Education Culture: Norms and Value Systems Philosoph y Social Language Structure Religion 1.7 (3)(i) DEFINITION Organizational culture as the set of shared beliefs. 1.

stories. Stories o The repeated tales and anecdotes that contribute to a company’s culture by illustrating and reinforcing important company values. slogans. 1. ceremonies. Culture is a powerful force that can shape the firm’s overall effectiveness and long-term success.K Page 8 .7 (3)(vi)COMPONENTS OF ORGANIZATIONAL CULTURE • Signs and Symbols o • Practices and actions that create and sustain a company’s culture. heroes. and shared experiences.7 (3)(ii) THE IMPORTANCE OF ORGANIZATION CULTURE • • Culture determines the overall “feel” of the organization. 1. • Rites and Ceremonies o Traditional culture-building events or activities that symbolize the firm’s values and help convert employees to these values. 1. ETHICS – INDIAN ETHOS – RIYAS. and purposely break with tradition. Reward and promote people values. Shared experiences that bond organizational members together. ceremonies. stories.7 (3)(iv)MANAGING ORGANIZATION CULTURE • • • Understand the current culture to understand whether to maintain or change it. 1.• Values and beliefs – guiding standard of an organisation that a affirm what should be practiced as distinct from what is practices 1. Symbols. whose behaviors are consistent with desired cultural 1. Corporate success that strengthens the culture.7 (3)(v)CHANGING ORGANIZATION CULTURE • • • Develop a clear idea of what kind of culture you want to create. Articulate the culture through slogans. although it may vary across different segments of the organization. Ethics or behavior accepted with in a group is recorded as credos– espoused value of group/Organisation.8 ETHICS AND MORALITY Ethics is about field or domain of enquiry while morality is the object of enquiry. and ceremonies that embody and personify the spirit of the organization. Adopt new slogans. Bring in outsiders to important managerial positions.7 (3)(iii)DETERMINANTS OF ORGANIZATION CULTURE • • • • Organization’s founder (personal values and beliefs).

Law is the code of conduct which the authority in power prescribes for society.moral values exists independent of humans – psychological issues that deals with psychological basis of the moral actions and linguistic issues dealing with moral terms-reflect on reactions on photo at UK deities and others. So Government gives shapes to only those minimum social obligations.female feticide and infanticide. customs or traditions which are essential for peace and happiness.Kentucky launching chicken product at Bangalore.9 ETHICS AND LAW Respect for law is an ethical value. • • • • • • • Look after the elders Respect the elders Be considerable to your workers Be Punctual Teach well to students Students must focus on the subject taught in class Students should not talk while the teacher is teaching 1.When espoused values become practiced values. TERRI SCHIAVO FLORIDA women!!.10(1) META ETHICS Deals with entire gamut of ethical issues:. 1.g.K Page 9 . The most important divergence between ethics and law is that Ethics concentrate on Do’s and Law o the Don’ts. ETHICS – INDIAN ETHOS – RIYAS. 1. Belief system.10(3) NORMATIVE THEORIES-BUSINESS ETHICS.10 ETHICAL THEORIES Ethical theories can be classified into three subject areas such as♦ Meta ethics ♦ Normative ethics ♦ Applied ethics. displacement of tribal people due to hydel power projects. 1. It is considered with the minimum regulations necessary for public order.9(1) ETHICS IS MUCH WIDER THAN LAW Required Ethical Behavior may not be covered by Law e.10(2) APPLIED ETHICS Deals with ethics dealing with Euthanasia. then the group is said to be ethical Organisation. tradition. cloning. testing drugs on animals 1. 1.

customer satisfaction and quality ETHICS – INDIAN ETHOS – RIYAS.  Customer now days focus on the quality of the product even if they have to pay more.11(1) FOUR GUIDING PRINCIPLE INTO TQM • • • • Do it right the first time Be customer oriented Team empowerment Continuous improvement 1.  Thus goods and services rendered to them must meet their satisfactory and demanding levels. 1. FIRST TIME  This can be fulfill only when. for individual. 1. Social Contract Theory 1. when the right information is provided to the all levels of the organization.11(1)(ii) CUSTOMER ORIENTED  Business considered customer as their king. We can only improve that “which you can “measure “Buddha” has said “be become what we think” which implies what it is thought about a business and we can improve.10(3(i) GOLDEN PRINCIPLE BEHIND THIS “We should treat others the same way that we want others to treat us” There are three leading theories of Normative ethics1. its goodwill .K Page 10 .  So that decision can be TQM quality oriented 1.12(1)(iii) TEAM EMPOWERMENT  The more people feel involved themselves in group or in a team. TQM is a participative process because every employee in the organization is involved and expected to take responsibility for improving the quality every movement. the greater will be their commitment to the organization.11TOTAL QUALITY MANAGEMENT TQM is a continuous process of improvement. 1.11(1)(i) DO IT RIGHT.That which guides and controls human conduct. Sets out certain standards that determine what is right and what is wrong. group of workers and all the whole organization towards quality. Stock Holders Theory 2. Stake Holders Theory 3.

ideology.12(3) FACTORS OF QUALITY If we go into details of TQM we will find that it is not only a simple concept but there are six factors of quality in a person • • • • • • The person himself His peer (colleagues) His leader Top management His family Teacher.Reflect Knowledge. attitudes and action that control total quality of product and services provided by any organization.  Manpower governs the quality of collective minds. since there are no limitation in the expectation of customer of quality. 1.  Therefore continuous improvement must be establish with the ever-changing affairs in the business.1.K Page 11 .  The Indian insight into TQM indicates that “mind” is the master of total excellence of performance in any field of activity. guide 1.  Mind is a energy source of all the people in the organization to realize mission.  Hence TQM is ongoing process. Passion. perception.12(3) ACCORDING TO INDIAN INSIGHT A Human Have Certain Qualities • • • SATVA . Quest TAMSIC .Reflect Ignorance. 1. Wisdom And Intelligence RAJSIC .12(4) PRINCIPLES OF TQM IN INDIAN MANAGEMENT  TQM requires total quality mind of a quality person in core entire system ETHICS – INDIAN ETHOS – RIYAS. Willpower. Feeling.12(2) INDIAN INSIGHT INTO TQM  Nothing is perfect. Total quality of mind determines the quality of thought.12(1)(iv)CONTINIOUS IMPROVEMENT  It recognizes that how much may have improve. Laziness. Indescrimation. Poor.Whereas Dominance of RAJSIC and TAMSIC create negative skills 1.Reflect Activities. there is always a better way of doing things. Emotion. Fame. Illogical Dominance of SATVA and RAJSIC qualities gives rise to positive re-enforcement which leads to excellence and self improvement.

 The best art to do a work with perfection is to come first selflessly toward works. where success is assured. the glow of blissfulness will be provided by god 1. only then it turn to be worksheet. Indian life has four fundamental goal • • • Dharma Artha Kama Page 12 ETHICS – INDIAN ETHOS – RIYAS. he was opposing the Brahmanical dogmas in a sharp way Jain scriptures deal with “akriyavad” at length • • Jain philosophy was based on the quintessential principle of non-violence Buddha dwelt on compassion and brotherhood The Indian ethos is the out come of Hindu way of life.13 INDIAN ETHOS FOR MANAGEMENT • • Indian religion has always been associated with philosophy The Vedas (about 4000 years old) talked about 4 basic goals of existence: o o o o • • Prosperity Satisfaction of desires Moral duty Salvation Upanishads distinguished between law and ethics – ethics come from inner desire Charavac philosophy was basically materialistic and was a voice of dissent o o In a way.K .  Then the total quality of work will be in supreme position and in a winning situation. 1. Charvak was reactionary.  Knowledge rest is Divine power. product and services. person also  The employee will become self dependent and self manages  The employee as a person will become quality conscious  The employees will become self discipline Another hidden objective is that if we work with love and devotion.12(5) OBJECTIVE OF TQM  It will enrich the total quality of work. Divine principle of “work is work ship” least to perfection and completion.

He is Me He is Me. Indian ethos for management means application of principles of management revealed in our ancient wisdom described in the Upanishads and Begawad Gita. Respect for others. Integrity. Sacrifice and Selfless Service. Tolerance.• moksha To fulfill these goals human life is divided into four stages normally • • • • Brahmacharya Grasthasrama Vanaprastha Sanyasama Artha and kama are goal are predominated during Grahasthasrama. Team Work. Forbearance. These believe in UNITY IN DIVERSITY because of belief in “Vasudev Kutambak”. Honesty.  Believe in “Ayam Atma Brahma” – This Self is Brahma.K . because they deal with universal truths of Life. These believe in Patience. • • • • • These are based on Vedas. moksha dominates in sayasama. We are all part of SUPREME SOUL also:Hamsa Soham. 1. These do not depict any religion. I am He Therefore. Upanishads and the Bhagwad Gita.13(1) BASIC PRINCIPLES • Aham Brahmasmi o • “Ayam Atma Brahma” – This self is Brahma – “we are all part of supreme soul” Holistic approach in management o o Vyasthi (individual level) Smasthi ( part of universe level) • Use all resources o o Sthoola Sukshma Page 13 ETHICS – INDIAN ETHOS – RIYAS. each individual has Immense Potential. Soham Hamsa I am He . These have universal appeal.

Artha means attainment of riches and worldly prosperity advantages. power. It is the true north timeless principles and our actions are judged in the context of DHARMA. It is the basic value system which must be followed by each generation. there are four fold Purushartha or Missions of Life.13(2)(ii) ARTHA It is acquisition of wealth. 1.13(2)(iii) KAAM ETHICS – INDIAN ETHOS – RIYAS. It incorporates means to achieve wealth according to DHARMA.13(2) PURUSHARTHA The term purushartha literally signifies “what is sought by man” The word purushartha consists of two words viz ‘Purusha’ meaning person and ‘Artha’ meaning aim or end. Therefore purrushartha means aim or goal of human life.13(2)(i) DHARMA It is the righteous conduct which one should practice.• Work must be treated as worship o Karmayaga • Yoga Karmasu Koushalam o Excellence in work • Co –operation 1. profit and wealth. Artha or acquisition of material wealth. Ahimsa and Tapasya. • • • • DHARMA ARTHA KAAM MOKSHA 1. • • • Another Philosophy is Prarabdha – destiny – luck Through Purushartha – Prarabdha can be changed. It is the self-effort to modify the past and to create the future may be for better or for worst. 1. including Satya. money and knowledge are very important factors to motivate and to excel. It can also be called “Missions of Life” According to Indian Culture.K Page 14 .

13(2)(iv) MOKSHA It implies a complete freedom from all the limited and uncertain conditions that effect our bodies and minds. It includes enjoyment of sensual pleasure. It also implies zeal and passion in one’s activity. the fun and joy one finds in one’s work. 1.K Page 15 .  The trade union on their parts is always pressuring the employees for the benefits of their member. one need not leave the material world. 1. tasting and smelling assisted by the mind together with the soul” Desires and Expectations. It is a state of supreme bliss where the individual soul is free from all bondages caused by Maya. 1.14 (1)(ii) TRADE UNION  In Indian corporate sector trade union are always dealt as an enemy of employers. Subordinate are always or in most of the case unwilling to accept responsibility due to such conditions decision are always centralized. To attain Moksha.14 (1) PARAMETER OF MANAGEMENT ARE AS FOLLOWS  Delegation of authority  Trade union  Transfer policy  Performance appraisal  Customer’s grievances  Planning  Recruitment and selection  Human resources and development  Training and development  Employer’s employee relationship 1.  Excessive centralization is present in it. seeing. one is in touch with one’s True Self. This is ultimate stage of spiritual life.14 (1)(i) DELEGATION OF AUTHORITY  Although delegation of authority is a significance function of mgmt but it is nearly an informal activities. and the delight in any creative endeavors. In this state.14 MODEL OF MANAGEMENT IN SOCIO-POLITICAL ENVIRONMENT Indian model of management may be best defined on the basis of important parameter of management. ETHICS – INDIAN ETHOS – RIYAS. Trade unions are now just as formality and to enjoy political influences. feeling.“Kama is the enjoyment of the appropriate object by the five sense of hearing. 1.

1) (vii) RECRUITMENT AND SELECTION In public sector most of the recruitment and selection is done on the basis of recommendation reference of present employees are giving the priority providing less importance to the performance of the desired candidates.14 (1) (v) CUSTOMER GRIEVENCE  In practical situation such system seldom (rarely) used and grievance are dealt mostly on the basis of mutual settlement.  Profit maximization is the sole consideration of business organization neglecting other aspect of planning.14 (1) (vi) PLANNING  India has a well established planning commission under prime minister which formulate five year plan.  In private sector some transfer policy still exist but that’s to for top level employees. an especially a medium and small scale farms only short ranged planning is in existence. transfer are basically done on the basis of punishment.14 (1) (viii) HUMAN RESOURCES AND DEVELOPMENT  No proper policy of employees’ motivation and leadership exist in reality.  Appraisal is not done on the basis of actual performance. 1. 1.  Decision on promotion and tenure of service are based on recommendation and reference rather than performance  An ambiguous human resources policy is a main cause of employed dissatisfaction 1.  In private corporate sector.1.14 (1) (iv) PERFORMANCE APPRAISAL  It means evaluation of performance of an employee. favoritism and recommendation . 1. ETHICS – INDIAN ETHOS – RIYAS. there are rare transfer policies  Such policies exist only on papers. 1.  But now a day.14 (1) (ix) TRAINNING AND DEVELOPMENT  No proper policy to determine the need of training and development.14 (1) (iii) TRANSFER POLICY  In Indian public sector. India has hardly been able to achieve any five year plan objective in a successful manner due to lack of proper implementation of programs.K Page 16 . due to excessive competitive atmosphere companies have started giving first preference to customer grievance.  In Indian mgmt model there is no concrete appraisal system.  Expenses allocation for training is very less.

not wasting work time. required to be followed when an individual is at work 1. employees are treated just as commodity or cost centers. No proper atmosphere to learn and understood the importance of the concept of training on development.15(1)(iii) LOYALITY  Work ethics is also dealt with loyalty towards the organization. values. This can be notices through job description. formal training etc. norms.14 (1)(x) EMPLOYER EMPLOYEE RELATIONSHIP  Relation ship between employee and employer are not very cordial (understanding) and comfortable. 1.K Page 17 .  The one who make all possible efforts to accomplishment the work in the time and also in a satisfying manner. 1. 1. colleague and superiors. behaving with respect and dignity to subordinates.15(1)(ii) COMMITMENT AND ACCOUNTABLITY  Work ethics is also about the commitment and accountability. by not talking negatively about the organization.15 WORK ETHOS  work ethos can be defined as the principles.15(1) DIFFERENT LEVEL OF WORK ETHOS  Discipline  Commitment and accountability  Loyalty  Responsibility  Work culture 1. 1. ETHICS – INDIAN ETHOS – RIYAS.15(1)(iv) RESPONSILBLITY  People in the organization have different attitude toward at their work.  To know does the worker feel responsible for the tasks assigned to him. staffing properly at work during working hrs. 1.15(1)(i) DISCIPLINE  It is mainly confined to coming at work on time. performance. evaluation career development. by protecting the interest of the organization.  They hardly participate in any mgmt function.  Employer are at lower level are given very lower autonomy (power authority).

 Now days a bulk of non renewable resources like coal and oil are being wastefully used in production of good and services that are not really useful to man. Rather than producing arms.  In the Buddhist economic planning non renewable and scares resources would be conserved because the priorities in production would be determined according to the man basic need of food. clothing and housing. alcohol and harmful chemicals.”  Indian heritage emphasized that the assent of civilization lies not in multiplication of quant but in the purification of human character. proper dress code. 1.K Page 18 . strictly following the rules and regulation of the organization.16(2) INDIAN HERITAGES FOR CONSUMPTION  According to modern economies a major of standard of living is judged by the amount of annual consumption. 1.15(1) WHAT INFLUENCES ETHICAL BEHAVIOR AT WORK Ethical Work Behaviors Individual Factors Organizatio nal Factors Top Management Ethics Policies and Codes 1.  Production for basic requirement should be prime outlook 1. drugs. ETHICS – INDIAN ETHOS – RIYAS.  A good work culture can also be introduced through effective induction program.1.  Dependence of import and consequent needs to produce for export is highly uneconomic. proper behavior and respect towards your superior.16 INDIAN HERITAGE PRODUCTION AND CONSUMPTION  To Indian heritage to men’s attitude toward his social existence shifted toward duties obligation and sacrifice.15(1)(v) WORK CULTURE  India has considered has strong work culture which includes punctuality. economics production from local resources for local needs is the most rational ways of economic life. peers and subordinates.16(1) INDIAN HERITAGE FOR PRODUCTION  From the point of Buddhist.  He believed in “simple living and high thinking.

 This implies that at least one fourth of the total production of the community would be set aside for the future.17 NISHKAMA KARMA Only those prayers which have their origins in the spirit of Nishkama Karma. alcoholically liquors. 1. what nature has taken thousand of years to build. chemical that are dangerous to man and which would ultimately result in moral and material degradation. that is. 1. Buddhism advocates economic use of resources in the interest of man. by replicating forest resources man destroy at one stroke. Rather the aim should be to obtain the maximum well being with minimum of consumption. 1.K Page 19 . Therefore. An Indian would use resources rationally while promoting their conservation.  Buddha said poverty should be eliminated and a country should prosper by providing employment to every one since employment is the source of income for every individual for their survival Buddhist belief one way to providing more employment is to use more man then machines in production technology should not be allowed to dominate man.16(3) (iv) PUBLIC AND PRIVATE SAVING  Buddha has advised laymen to save one fourth of what they earn. 1.16(3) (i) INCREASE IN PER CAPITA INCOME AND HUMAN WELFARE  A performance of the plant is judged by the criteria how quickly a country is able to increase its per capita income. It is not possible for prayers of any other kind to reach Him directly.  If a nation could limit consumption to three fourth of the national product it would be saving one fourth which could be invested for developing the economy. weapons. It would exclude harmful drugs. it is only through these three media. infinite and pure love and an unsullied heart reach the Lord directly. Nishkama ETHICS – INDIAN ETHOS – RIYAS.  Whereas a Buddhist economist would consider this approach totally irrational. slaughter of animals. narcotics. 1.16(3) (ii) USE OF RESOURCES  Another of model development planning is to full use of the productive resources of a company. In Indian heritage only good value can increase mans material and spiritual well being.  Avoiding indiscriminate and irresponsible use of resources.16(3) (iii) EMPLOYMENT  The provision of full employment is an important objective in all development plants but Buddhist economist pays much greater attention to this because achievement of other objective depends upon it. since consumption is mainly the means to human well being.16(3) INDIAN HERITAGE FOR OTHER ECONOMIC ACTIVITIES 1.  The Buddhist economic system or Indian heritage system not pay much attention of per capita income because it’s only a statics figure.

but does not favor you with His benediction. He is only the dispenser of the results of the deeds done by humans.20(1) ETHICS IS MUCH WIDER THAN LAW Required Ethical Behavior may not be covered by Law e. customers. EQ and SQ culture. then the group is said to be ethical Organisation. It focuses on the business relationship with employees. creditors.g.19 ETHICS AND MORALITY Ethics is about field or domain of enquiry while morality is the object of enquiry. • • • • Look after the elders Respect the elders Be considerable to your workers Be Punctual Page 20 ETHICS – INDIAN ETHOS – RIYAS. leaving the results thereof to the Lord. When espoused value becomes practiced values. He gives the fruits of actions according to the kind of work performed by man. and an unsullied heart. boundless love. 1. The most important divergence between ethics and law is that Ethics concentrate on Do’s and Law o the Don’ts. stockholders. God does not enjoin man to do any work in particular. The Bhagavad-Gita has proclaimed the path of Nishkama Karma as the royal road to perfection. Ethics or behavior accepted with in a group is recorded as credos– espoused value of group/Organisation. prior and just" in decisions and actions made that affect stake holders. So Government gives shapes to only those minimum social obligations. 1. Law is the code of conduct which the authority in power prescribes for society. It exhorts man not to crave for the fruits of action and merely perform one’s duties in a detached manner. suppliers and member of the society in which it operates. ♦ Corporate ethics is a matter of leadership. 1. 1. God merely listens to your entreaties. that we can hope to secure direct contact with the Lord and obtain His Divine sanction to our request. customs or traditions which are essential for peace and happiness. It is considered with the minimum regulations necessary for public order." fair.K . you pray for personal gain. without performing good deeds.20 ETHICS AND LAW Respect for law is an ethical value. Important Points: – – Something may be legal but not right (ethical) Something may be right (ethical) but not legal. ♦ Adhere to corporate credos-code of conduct. If.18 ETHICS AND CORPORATE GOVERNANCE Deals with determination what is ‘right'. ♦ Development of IQ.Karma.

this does not stand to Logic. 2.• • • Teach well to students Students must focus on the subject taught in class Students should not talk while the teacher is teaching MODULE II BUSINESS ETHICS 2. Ethics is moral behavior of an individual and it determines what is right or wrong.2 CONCEPTUAL BACKGROUND • • • Many people think that Business and Ethics are two different concepts and are not interrelated. Business ethics is also an academic discipline that studies those standards. Therefore Business and Ethics have nothing to do with each other.K Page 21 . values and principles while seeking to articulate and defend the ones that ought or should operate in business. standards and principles that operate within business.1 BUSINESS ETHICS – MEANING Business ethics refers to those values. Business is an economic activity based on Input and Output relationship. ETHICS – INDIAN ETHOS – RIYAS. However.

The Rule of Conscience in Business:ETHICS – INDIAN ETHOS – RIYAS. To enable business to tackle social issues like ecology. 2. Norms of conduct which apply to common man has to be applied to the business.Business is a part and parcel of human life and. There should be an element of mutual benefit – Business gets the price of the Product and consumer get the satisfaction. employees. To protect the following rights of consumers:a) Right of information b) Right of Safety c) Right of Choice d) Right to be heard 3.People should be adequately informed about the nature. 3. financiers and other related agencies. people oriented management. suppliers. To safeguard the interest of all stakeholders against unfair. human dignity.K Page 22 .People receive the goods and services fully equivalent to the money paid. 2. People should get the best return of their spending. 4.3 NEED FOR BUSINESS ETHICS The need for business ethics Can be highlighted with the help of the following points:1. energy conservation. Rule of Publicity:. To enable business to prepare and publish a code of ethics. d) Ethical Climate of the Country 2. dealers. 2. The value of what should be done and what should not be done from the business point of view 2. 5. dealers and suppliers in the quality of functions and dealing of the organization. This will boost up the confidence of customers. Therefore business has to consider concepts and norms of good and bad developed by the society. Rule of Equivalent Price:. consumerism.5 PRINCIPLES OF BUSINESS ETHICS 1.4 FACTORS AFFECTING BUSINESS ETHICS a) Personal Code of Behavior of the individual b) Policies of the company c) Ethical Standards imposed on the managers by Superiors. etc. purpose and consequences of business dealings. environmental protection. unethical ways of dealing and exploitation. society and business exist together. To develop or prescribe business code which provides ethical standards of suppliers.

v.Establishment of Unions and other regulatory bodies has contributed to the development of the Society. iv. 6. It substantially improved society . iii. b) Decision of businessmen should be governed by the concern for the society. Business should be just and human as well as efficient and dynamic. Growth of the size of business must be accompanied by the growth of human values 7. ETHICS – INDIAN ETHOS – RIYAS.a) Rules of Business should be judged by the moral judgment. Business must make best and fullest use of its input. It creates Strong Public Image .Ethical training helps in such times. 2.7 ETHICAL ISSUES FOR BUSINESS ♦ Product safety standards ♦ Advertising contents ♦ Working environment ♦ Unauthorized payments ♦ Employee’s privacy ♦ Environmental issues 2. Discrimination and exploitation of employees have been reduced. 5.6 BENEFITS FROM BUSINESS ETHICS i. Helps in turbulent (violently disturbed) times . consumers and General Public.This leads to strong and continued loyalty of employees. it means Character or manners. 8. 4. rather than selfish motives.8 GENESIS OF ETHICS ♦ Ethics is a Greek word. ♦ Ethics is subjective while morality is objective. ♦ Ethics is about sense of belongingness to society of business. The Rule of Spirit of Service – Service FIRST and Profit NEXT. Formed with a limited vision for economic generation but should resolve conflict with society by servicing the community. 2. High Productivity and Strong Team Work.K Page 23 . Acts as an insurance   Future functions Competition ii. Business should promote and support open and healthy competition.

Improves faithfulness and engagement of its employees. It is also the part of us that thinks. 2. Develop and maintain strong employee relations . To increase the lifetime of an organization.Suffer less turnover • Enjoy better employee morale Suppliers and other business partners prefer companies that operate in a fair and ethical manner 2. Body .12 HOLISTIC APPROACH IN DECISION MAKING Meaning Holistic Therapies have been around for thousands of years and were commonly used in ancient Egypt.K Page 24 .Our mind is our brain. the part that works things out through thought. Holistic means Care for the whole person. Prevents business loss. mind. Mind .Our body is our physical shell.2. Produce safe and effective products. Decreases risk. China. and India for their therapeutic effects. ETHICS – INDIAN ETHOS – RIYAS. that is logical. Helps to retain license to operate. reputation and company image.10 IMPORTANT OF ETHICS IN BUSINESS • • • • • To gain the goodwill of the community. Provide excellent service & Maintain customers. Empowers communication channels for interest groups. body and spirit.9 INVENTORY OF ETHICAL ISSUES IN BUSINESS • • • • • Employee-Employer Relations Employer-Employee Relations Company-Customer Relations Company-Shareholder Relations Company-Community/Public Interest 2.11 BUSINESS ETHICS IMPORTANT FOR A COMPANY • • • • • • Protects and improves sales.

2.15 (2) INDIVIDUAL CHARACTERISTICS OF THE DECISION MAKER THAT INFLUENCE THE ETHICAL DECISION-MAKING PROCESS • • • Achievement motivation Knowledge Need for affiliation Page 25 ETHICS – INDIAN ETHOS – RIYAS. It is the part that makes us who we are. Holistic therapists believe that the body has a vital force or life energy. thus allowing the body to heal itself naturally.13 SIMPLE ETHICAL TEST FOR A BUSINESS DECISION • • • Transparency: Do I mind others knowing what I have decided? Effect: Who does my decision affect or hurt? Fairness: Would my decision be considered fair by those affected? 2. It is this force that protects the body from disease and allows it to heal. the part that expresses our uniqueness and the origination of our feelings. The holistic approach to health differs from the conventional medical approach in that it takes into account the whole patient rather than just focusing on the symptom or the part that has the problem. Holistic therapies aim to help the patient restore the balance.K . We often refer to it as the "immune system". When the balance of the immune system is disturbed we the see the various symptoms of Dis-ease.15 (1) ELEMENTS OF THE ETHICAL SITUATION • • • Opportunity Ethical decision history Moral intensity of the situation 2.Spirit is the hardest to define.14 A GENERAL FRAMEWORK OF THE ETHICAL DECISION-MAKING PROCESS CHARACTERISTICS OF THE DECISION MAKER ETHICAL SITUATION DECISION OUTCOMES SIGNIFICANT INFLUENCES 2.Spirit .

Page 26 ETHICS – INDIAN ETHOS – RIYAS. other “opinion leaders” 2. customers. top managers.16(2) AREAS OF SOCIAL RESPONSIBILITY – – – Stakeholders: customers. employees. friends. and support for social issues such as child labor and human rights. and public safety.16(1) SOCIAL RESPONSIBILITY The set of obligations (to behave responsibly) that an organization has to protect and enhance the social context in which it functions.15 (3) SIGNIFICANT INFLUENCES ON THE ETHICAL DECISION-MAKING PROCESS • • • • • • • The organization Technology The law Work Economics Professionalism *Significant others. family.• • • • Experience Ego strength Risk taking Locus of control 2. and investors. The natural environment: environmentally sensitive products. recycling. immediate supervisor.16 SOCIAL RESPONSIBILITY AND ORGANIZATIONS 2.K . The general social welfare: charitable contributions. peers.15 (3) OUTCOMES THAT RESULT FROM THE ETHICAL DECISION-MAKING PROCESS • • • • • • Performance Feedback Rewards Promotions Satisfaction Learning 2. 2.

that they have changed over time. no moral right and wrongs. Instead. If ethical relativism is correct. there can be no ETHICS – INDIAN ETHOS – RIYAS. 2. federal.standards that can be universally applied to all peoples at all times. there are no universal moral standards -.16(3) MANAGING SOCIAL RESPONSIBILITY 2. Ethical Compliance – Extent to which members of the organization follow basic ethical/legal standards of behavior.16(3)(ii) INFORMAL ORGANIZATIONAL DIMENSIONS • Organizational Leadership and Culture – Leadership practices and the culture of the organization can help define the social responsibility stance an organization and its members will adopt. 2. • Philanthropic Giving – Awarding of funds or gifts to charities or other social programs. state. ethical relativism would mean that our morals have evolved. For the ethical relativist. whether an action is right or wrong depends on the moral norms of the society in which it is practiced.16(3)(i)FORMAL ORGANIZATIONAL DIMENSIONS • Legal Compliance – • Extent to which the organization conforms to local.2.K Page 27 . At any rate. Some have heard of the term situational ethics which is a category of ethical relativism. That is. Ethical relativism is the theory that holds that morality is relative to the norms of one's culture. right and wrong are based on social norms. The same action may be morally right in one society but be morally wrong in another.17 ETHICAL RELATIVISM Ethical relativism is the position that there are no moral absolutes. The only moral standards against which a society's practices can be judged are its own. and that they are not absolute. and international laws.

and justice is all relative. and "rules" that seem to bring the most benefit. Ethical relativism undermines that glue. regulation and/or a direct threat to public interest. rule. 2. right and wrong. especially a business or government agency.K Page 28 . or member of an organization. It is when person takes a concern (such as suspected abuse or fraud) outside of the organization in which it is occurring   The person with the concern must be affiliated with the organization The misconduct is a violation of law. Now it is not. safety violations The organizational response to the disclosure by an employee of illegal or unethical conduct on the part of others within the organization is indicative of the organization’s stance on social responsibility. Slavery is a good example of this. Generally the misconduct is a violation of law. social preferences and patterns. Whistle blowing is a term used to describe the disclosure of information that one reasonably believes to be evidence of contravention of any laws or regulation or information that involves mismanagement. The disadvantage of ethical relativism is that truth. Morality is the glue that holds a society together. It also allows people to adapt ethically as the culture. Just because the group of people thinks that something is right does not make so. This is good and a valid form of relativism. regulation and/or a direct threat to public interest— fraud. logic. health. corruption or abuse of authority. slavery was the norm and morally acceptable. Whistle blowing is… 'raising concerns about misconduct within an organization or within an independent structure associated with it' (Nolan Committee on Standards in Public Life) 'bringing an activity to a sharp conclusion as if by the blast of a whistle' (Oxford English Dictionary) 'giving information (usually to the authorities) about illegal and underhand practices‘ ETHICS – INDIAN ETHOS – RIYAS. Within ethical relativism. who reports misconduct to people or entities that have the power and presumed willingness to take corrective action.common framework for resolving moral disputes or for reaching agreement on ethical matters among members of different societies. Of course.18 WHISTLE BLOWING A whistleblower is an employee. experience. right and wrong are not absolute and must be determined in society by a combination of observation. Two hundred years ago in America. There must be a consensus of right and wrong for a society to function well. it goes without saying that a society involved in constant moral conflict would not be able to survive for very long. rule. emotions. knowledge. Advantage of ethical relativism is that it allows for a wide variety of cultures and practices. and technology change in society. former employee.

(Chambers Dictionary) 2.18(2) TYPES OF WHISTLE BLOWERS • • Internal whistle -blowers report misconduct to another employee or a superior within their organization External whistle-blowers report misconduct to outside persons or entities 2.18(3) REASONS WHY SOMEONE WOULD BLOW THE WHISTLE ARE: • • • • • A violation of a law.18(1) CHARACTERISTICS OF A WHISTLEBLOWER • • • • • Altruistically Motivated Utilitarian Uninterested in Altering Their Behavior Allows Own Attitudes and Beliefs to Guide Them Often are Well Educated and Holds Professional Position 2.18(4) REACTIONS TO WHISTLE-BLOWERS: • • • They are ostracized by their co-workers Discriminated against by future potential employers Fired from their organizations 2.18(5) WHEN TO BLOW THE WHISTLE Knowledge of inappropriateness  Making proprietary software available to public  Back door/booby-trap in code  Embezzlement or redirection of funds Bad claims  Unrealistic date projection  Advertising hype Knowledge of impending doom ETHICS – INDIAN ETHOS – RIYAS.K Page 29 . rule or regulation Gross mismanagement A gross waste of funds An abuse of authority A substantial and specific danger to public health or safety 2.

6. A person. avoidable 2. An ethical organization has got values and hence it thrives for a longer period. 4.20 ETHICS AND VALUES Ethics are guided by certain moral principles. 8. Principle of `non-violence’ This principle protects an organization from strikes and lockouts and unnecessary conflicts. commands a superior place in the organization. Groups are encouraged to stay united in order to reap the benefits of division of labour.2. Principle of `Polygamy’ This is nothing but the wedding of two different cultures by absorption or takeover. Principle of `harmony’ An individual is trained in such a way that to avoid conflicts and friction one should be guided by certain set of moral conducts and principles. Some of the business ethos principles. 3. practiced by Indian companies are listed below: 1. 7.K Page 30 . Principle of `taxation’ The one who is taxed more is encouraged to stay fit for a longer period by proper appreciation and encouragement. Principle of `Integrity’ An integrated mind is more productive. 5 Principle of `justice’ The one who works hard is `rewarded’ and the one who fails to do so is `punished’. This principle applies to individuals who are hardworking and productive. Principle of `reward’ The one who performs well are encouraged to do so. Such organizations generally have an infinite existence. This is essence the principle of Justice. ETHICS – INDIAN ETHOS – RIYAS.19 BUSINESS ETHOS PRINCIPLES PRACTICED BY INDIAN COMPANIES Indian companies are guided by certain rules of conduct in the form of ethical and moral standards. Principle of `sacrifice’ An individual is trained by the principle of `sacrifice’ through the process of `give and take’ policy. This implies that the activities of individuals need to be monitored and encouragement in the form of `rewards’ may cultivate the spirit of higher productivity among groups. who is willing to sacrifice part of his bread or effort. 2.

2) Secularists thoughts and views on management finds its way from Maslows need hierarchy and culminate till the most modern thoughts on management. Efforts are milestones and the frequency with which one labours the more. Vision acts as a foundation stone and pillar for enriching values in each and every organization. Spiritualists find their reference one value based management as ethical or moral. The contribution of Indian thoughts towards spiritual values on management has magnificent theories. 3) Dedication and values A dedicated mind is God’s workshop.K Page 31 . 3) Secularists treat management values. The Indian spiritual values in management have divinity as the ideal to be portrayed. with reference to spiritual values on management. By spiritual values in management. in the same proportion. the more it brings fertility to the ‘tree’ called values. 7) The secular views on management as propounded by management experts lack any ideals. in its true sense. The following point throws valuable insights on formation of values. 5) Secularists views on values in management are not generally ethical by nature. 6) The contribution of Indian thoughts towards secular values on management as reproduced by management science is comparatively poor.20(1) SECULAR Vs SPIRITUAL VALUES IN MANGEMENT 1) By secular view on values in management. 2. Such efforts never go invain. Spiritualists believe sources like Bhagavat Gita. Efforts undertaken in order to enrich productivity among labourers by the process of experimentation. it refers to the insights thrown on management by Vedas and Upanishads (or) by spiritual Gurus. Values are formed through dedicated efforts. Spiritualists treat management values as a philosophy rather than by ordaining it as a science. 1) Efforts and values. from an organizational perspective. 4) Morality and values The more an organization concentrates on morality or ethics. as a science rather than ordaining it as a philosophy. ETHICS – INDIAN ETHOS – RIYAS. never go in vain. when compared to secular values on management. 5) Culture and values A well developed culture evolves positive values. 2) Vision and values The vision of the entrepreneur generally tallies with the organizational goals.2. the value in an organization grows.20(2) HOW ARE `VALUES’ FORMED? Values are formed through the process of efforts. 4) Secularists treat management values as an evolutionary concept. it refers to the worldly thoughts and philosophies as reproduced by management Gurus or experts. Spiritual values in management find its base from the age old Vedas and Upanishads with special reference to Bhagavat Gita. as a ready reckoner on value based management.

♦ They need to develop the following values ♦ Optimum utilization of resources ♦ Attitude towards work. 'integrity' and 'conduct' are often used interchangeably and uncertain language is one of the barriers to establishing a widely understood framework for ethics. Values serve as standards of conduct that guide our behavior Indian managers are moving away from the concept of values and ethics. The lure for maximizing profit is deviating them from the value based managerial behavior. where values are translated into conduct. They have to develop a sense of larger vision in their work for the common good.Managers have a long term vision. and from which ethical principles derive. ETHICS AND CONDUCT .the commonly held beliefs that guide judgment about what is good and proper. ♦ Codes of conduct . dynamic and capable of translating dreams into reality The managers of Indian companies should also develop the following values:♦ Move from the state of inertia to the state of righteous action. Normative ethics is largely about values and the accepted norms for 'right' conduct. ♦ Integrity . ETHICS – INDIAN ETHOS – RIYAS. ♦ Work commitment ♦ Vision. but also used in the current departmental Performance Assessment as synonymous with a departmental framework for ethics.THE DEFINITIONS The terms 'values'.what ought to be. 'ethics'. This paper is concerned with applied ethics.20(4) VALUES FOR INDIAN MANAGERS Values: these are beliefs that a given behavior or outcome is desirable or good. good and proper. For the purposes of this paper. The visionary managers must be practical. the ideals of what is just. the following definitions will apply: ♦ Ethics .K Page 32 . ♦ Move from the state of faithlessness to the state of faith and self-confidence.Managers have to ♦ Develop the visionary perspective in their work. There is a need for our managers today both in private and public sectors to develop a set of values and believes that will help them attain the ultimate goals of profits and survival and growth. Applied ethics is the practical application of values and standards. 2.2. and ♦ Conduct . which sometimes involves choosing between values in a particular context.20(3) VALUES. ♦ Values .normally one of the key ethical values.the rules that translate ideals and values into everyday practice.the actual behavior and actions of public servants.

21 THE ESSENCE OF ETHICS (Article by Williams) • • • • • Codes of ethics do not necessarily lead to ethical behavior.22 STRESS When a person is not able to cope with the environment and surrounding and cannot maintain proper balance. Build ethics into organization policies and practices. ♦ Professional efficiency and work disciplines are the managers perform.22(1) DEFINITION According To S. 2. Make sure quality and service and integrity permeate the entire organization. ♦ They consider rules as sacred in their value system. ♦ Western value system teaches contractual obligations. Managers honor their contracts. “Create an organizational culture that encourages.. 22 (2) EFFECT OF STRESS  Both positive and negative effect are found due to stress. Develop high expectations of all members of your organization.20(5) VALUE FOR WESTERN MANAGERS ♦ Western managers are highly professionals with professional education and specialization. high ♦ Western managers follows a proper code of conduct and work in the structured formal atmosphere with no place of modesty in their behavior.… open and honest communication continual learning personal development respect for people” 2.K Page 33 .P Robbins “stress is a dynamic condition in which an individual is confronted with an opportunity constraint or demands related to what he/she desires for which outcome is perceived to be both uncertain and important” In other words when demands on a person from the environment are more and his output is less because of his failure then person is under stress. ♦ Western managers value principles above its privilege and they consider this as the best strategy to win. The core values we profess are not necessarily those by which we live. 2. conditions under which western 2. excellent analysis power. 2. ♦ Move from untruth to truth.. ETHICS – INDIAN ETHOS – RIYAS.♦ Move from unethical actions to ethical actions.

Including Natural Calamities 2. 22 (5) EFFECT OF STRESS 2. There should be little stress in order to complete the work on time effectively and efficiently  Total absence of stress may lead to abnormality and loss. accident. competition or sudden impact ENVIRONMENTAL FACTOR . 2.Including conflict. 22 (4) CAUSES OF STRESS  High expectation  Excessive competition  Instability and insecurity  Over burden of work  Unhealthy personal relationship with co-worker or suppliers  Misbehavior from management or colleagues  Family problems  Conflict  Unhealthy working condition and unhealthy environment  Excessive working hours  Desire for status or self-esteem 2.Includes physical and psychological problems SITUATIONAL FACTOR . 22 (3) FACTOR CAUSING STRESS • • • PERSONAL FACTOR .K Page 34 . 22 (5) (I) PSYCHOLOGICAL REACTION  Anxiety  Depression  Decreasing in satisfaction  Frustration  Tension  Impatience  Unpleasant feeling and inability to relax etc ETHICS – INDIAN ETHOS – RIYAS. thus stress cannot be escaped but it should be managed.

22 (6) THE ANSWER TO STRESS CAN BE FOUND IN THE VERY LETTERS OF WORD “STRESS” S . ETHICS – INDIAN ETHOS – RIYAS.Surrender to Lord 2.  Love.Sharing S .22 (5)(II)PHYSICAL REACTION  Under fatigue  Headache  Uneasiness  Hypertension or high blood pressure  Heart problems  Asthma 2.2. intellectual and spiritual. emotional. in a poem.Re-Design E .STRENGTH  Physical. he ask for strength to bear them  “Before start of Mahabharata war Arjun was seized with emotional weakness and he refused to fight the war.Traffic Control R . compassion and friendship are valuable strength. but instead. prays to lord not to remove all obstacles.Erase S . exercise and pranayama techniques help to reduce stress at physically. lord Krishna gave him that emotional strength. the mind can be strengthened.K Page 35 .22 (5) (III)BEHAVIORAL REACTION  In cooperative  Quarrelsome  Aggressive  Inefficient  Low quality of performance  Lack of concentration and irregular etc 2.Strength T .22 (6) (I) S .  “Rabindranath Tagore .  Through satsang and appropriate learning gained therein .  Proper diet.

22 (6) (v) S – SHARING  Share your wealth  Knowledge  Workload  Anything else you have 2. 2. physical exercise etc  Involves one self in group activities  Meditation. spirituality or yoga ETHICS – INDIAN ETHOS – RIYAS.ERASE  Ego  Anger  Fear  Jealously  All these are negative emotions that reduce efficiency.RE-DESIGN  We tend to view life and ourselves through our own philosophy  A re-adjustment or reorientation in this philosophy increase our capacity to bear heavier loads 2.22 (ii) T .  Eat while eating  Work while working  Leave the home and office in the office  Worrying only reduce efficiency and then even simple tasks cannot be completed correctly and in time 2. success and freedom from stress. leading to mental weakness. causing stress. 2.22 (6) (iv) S .SURRENDER TO LORD  Free your mind from the weight of worries and become an instrument  Adopting an attitude of service  This attitude will ensure efficiency.2.22 (7) (iv) E . reading.TRAFFIC CONTROL  We need to regulate and control our thought . painting.22 (7) METHOD TO REDUCE STRESS  Developing hobbies like games.22 (6) (iii) R .K Page 36 .

Thomas Donaldson’s Three Principles: • • • Respect for core human values (human rights). by and large. which determine the absolute moral threshold for all business activities. MODULE 3 ETHICS MANAGEMENT 3. It is developed by individuals (managers) in an organization. Developing a code of ethics. Context matters when deciding what is right and what is wrong. • A written statement of firm’s actions. Respect for local tradition. By ethics. the role of ethics has been recognized. it refers to the principles of conduct governing an individual or group in a society is known as ethics management. the values and ethical standards that guide the 3. Hence. 3. gimmicks and uncertainty. ETHICS – INDIAN ETHOS – RIYAS. Includes training on how to handle different ethical dilemmas.2(2) CULTURE IN AN ORGANIZATION (a) Culture is `alive’ Culture is an evolutionary concept. Becoming good and patient listener than a big talk  Positive thinking/optimistic approach  By doing job of satisfaction  Choosing suitable company  Avoiding overburden of work and unfavorable conditions  Making cordial relation with surrounding people  Avoiding lies. A good organization is represented by its culture.2 ETHICS IN ORGANIZATIONS • Managing Ethical Behavior – – – Begins with top management which establishes the organization’s culture and defines what will and will not be acceptable behavior. With the rapid evolution in the field of management.2(1) CULTURE AND ETHICS o o Do the “right” thing. 3. culture is alive. by the management experts.1 ETHICS MANAGEMENT Ethics management is a new science in the field of management.K Page 37 .

ETHICS – INDIAN ETHOS – RIYAS. communicated or passed along. as in or to succeeding generations. of a particular people or group in a particular period evolves a distinct culture as drastically different from that of other similar organizations in the field. (g) Culture and `polygamy’ When an organization absorbs another organization then a `wedding’ of different culture takes place. customs etc. customs. (c) Culture has `image’ Since an organization is represented by its practiced culture.K Page 38 . With the involvement of management in ethical related issues in an undertaking.(b) Culture has `values’ Culture is certain set of `practices’ followed by individuals. arts etc. Two themes: (1) Public or corporate statements and actions about ethical behavior. It is built based on steady and steadfast efforts as nourished by the individuals through hard core labour. skills. 3. the roles of organizational culture in ethics need to be recognized. (2) The collection of ethical attitudes and values in the country. (e) Culture is `fundamental’ Culture is the backbone of each and every organization.2(3) ROLE OF ORGANIZATIONAL CULTURE IN ETHICS By culture. The rapid involvement of the organization towards upbringing an emerging culture or nourishing a new culture enforces rigid constraints on the working style on group or individuals by emphasising on a set of code of conduct. in terms of morality. It has a form and the same is imprinted in the minds and hearts of individuals. It is based on this image that an organization is built and hence culture acts as a foundation based on which it is formed. This is known as organizational culture. A live organization has got values. Such practices are evolved through proper experimentations.2(4) CULTURE AS THE BASIS OF BUSINESS ETHICS There is common agreement that a country’s culture is directly related to the ethical behavior of its managers. It is through steady efforts and practices that such a culture is represented to the outside world. The organization that manages such ideas. of a people or group. 3. (f) Culture is an `unique’ property The essential quality of culture is that it is unique for each and every organization. Such values are inseparable and are a product of labour. Image is nothing but an expression of `culture’ as is patronized by the `society’. This is the principle of polygamy. in the form of organizational culture. it is `alive’ and has `values’. (d) Culture is `representative’ Culture is represented by each and every organisation in one way or the other and such practices forms part of organizational culture. it refers to the ideas. which are transferred.

or human research ethics committee. the influence in helping to establish best practices has been far-reaching. They are particularly interested in uncovering or preventing unethical and illegal actions.3(1) MAIN FUNCTIONS OF THE COMMITTEE The Committee on Ethics was first constituted on March 4. and disseminating information to employees. This committee considers and decides if proposed clinical trials are ethical. one might expect the efficacy to be minimal. nurses. In respect of procedure and other matters. over the short term. This led to the creation of the Defense Industry Initiative (DII). In the wake of numerous corporate scandals between 2001-04 (affecting large corporations like Enron.3 ETHICS COMMITTEE Definition An independent group of medical and non-medical people who verify the integrity of a study and ensure the safety. WorldCom and Tyco). integrity. this is because ethical business practices result from a corporate culture that consistently places value on ethical behavior.K Page 39 . commercial and non-commercial) had to follow to obtain a reduction in sentence if they should be convicted of a federal offense. a culture and climate that ETHICS – INDIAN ETHOS – RIYAS. and families regarding difficult treatment decisions. corruption and abuse scandals that afflicted the U. 3. at least. They often report to the Chief Executive Officer and are responsible for assessing the ethical implications of the company's activities. Although intended to assist judges with sentencing. If the appointment is made primarily as a reaction to legislative requirements. This is an independent group of people that includes doctors. A consultative committee in a hospital or other institution whose role is to analyze ethical dilemmas and to advise and educate health care providers. In part. and human rights of the study participants.S. A mandated committee of an institution (hence institutional ethics committee.4 ETHICS OFFICERS Ethics officers (sometimes called "compliance" or "business conduct officers") have been appointed formally by organizations since the mid-1980s. Another critical factor in the decisions of companies to appoint ethics/compliance officers was the passing of the Federal Sentencing Guidelines for Organizations in 1991. which set standards that organizations (large or small. medical staff. making recommendations regarding the company's ethical policies. The effectiveness of ethics officers in the marketplace is not clear. even small and medium-sized companies have begun to appoint ethics officers.3. or IEC. The details of the proposed trial are considered and that it is looking at an important question that cannot be answered through existing information. members of the public and sometimes lawyers. One of the catalysts for the creation of this new role was a series of fraud. patients. defense industry at that time. A committee appointed to consider ethical issues 3. a panindustry initiative to promote and ensure ethical business practices. the rules applicable to Committee on Privileges were to apply to the Committee with such variations and modifications as the Chairman. 1997 to oversee the moral and ethical conduct of Members and to examine the cases referred to it with reference to ethical and other misconduct of Members. or HREC) that conducts medical research.

K . it can: Clarify the actual values to which the company operates Provide a baseline by which to measure future improvement Learn how to meet any societal expectations which are not currently being Give stakeholders the opportunity to clarify their expectations of the Identify specific problem areas within the company Learn about the issues which motivate employees Identify general areas of vulnerability. complete. by examining the way in which it does business. and documented measurements of compliance with policies and procedures Can be a precursor to establishing an ethics program Helps to identify the firm’s current ethical standards.usually emanates from the top of the organization. By taking a picture of the value system at a given point in time. Companies recognize the importance of their financial profile for their investors. and that it incorporates a stakeholder approach. and risk areas 3. In recent years many companies have appointed a senior manager with dedicated responsibility for promoting ethical behaviour throughout the company. Ethical auditing is a process which measures the internal and external consistency of an organization’s values base. There is nothing new about ethical behaviour in business. Its objectives are two-fold: It is intended for accountability and transparency towards stakeholders and it is intended for internal control. of their service profile for their customers. nor about programmes designed to improve and perhaps formalise an ethical approach to decision making within companies. policies. The key points are that it is value-linked. The mere establishment of a position to oversee ethics will most likely be insufficient to inculcate ethical behaviour: a more systemic programme with consistent support from general management will be necessary.5(2) BENEFITS OF AN ETHICS AUDIT • • Identify potential risks and liabilities and improve legal compliance Can be key in improving organizational performance Page 40 ETHICS – INDIAN ETHOS – RIYAS. to meet the ethical objectives of the organization.5(1)ETHICAL AUDIT Ethical audit is a new technology which is being developed at the European Institute for Business Ethics (EIBE).5 ETHICS AUDIT Systematic evaluation of an organization’s ethics program and performance to determine whether it is effective – – Regular. An ethical profile brings together all of the factors which affect a company's reputation. and of their profile as an employer for their current and potential employees. particularly related to lack of openness met company's behaviour 3. The value of the ethical audit is that it enables the company to see itself through a variety of lenses: it captures the company's ethical profile. 3.

legal. customer relationships. and community involvement 3. ethical.5(5)(i) SECURE COMMITMENT OF TOP MANAGEMENT AND THE BOARD • The first step in the auditing process – • Top management may want a way to benchmark their ethical performance The board may – Initiate audits based on stakeholder concerns or in response to corporate governance reform Have been held responsible for the ethical and legal compliance programs of the company’s they oversee ETHICS – INDIAN ETHOS – RIYAS. employee relations.5(3) THE SOCIAL AUDIT Process of accessing and reporting a business’s performance in fulfilling the economic. and values Collect and analyze relevant information Verify the results through an outside agent Report the findings to – Audit committee.5(4) RISKS IN ETHICS AUDITING • • • • Ethics audits may uncover ethical problems that a company cannot remedy Stakeholders may be dissatisfied with the information Conducting the audits is a financial and record keeping burden No guarantee that auditing is the solution to ethics concerns 3. ethics programs. environmental policies.K Page 41 . managers. goals.5(5) THE AUDITING PROCESS • • • • • • • Secure top management and board commitment Establish an ethics audit committee Define the scope of the audit Review the organizational mission. and philanthropic responsibilities expected by its stakeholders – – Broader in scope than an ethics audit An ethics audit might be a component of a social audit 3. and stakeholders 3.• Improved relationships with stakeholders – Pressure to account for actions in areas including corporate governance.

the board of directors’ financial audit committee would oversee the audit – • In most companies.5(5)(vi) VERIFY THE RESULTS • Have an independent party verify the results of the data analysis – Increasing numbers of companies having results independently audited Verification is an assessment of the quality. managers or ethics officers conduct it Individuals within the firm and external auditors should be involved – An external auditor should not have other consulting or conflict-of-interest relationships with top managers or board members 3.5(5)(ii) ESTABLISH AN ETHICS OVERSIGHT COMMITTEE • Ideally. and completeness of a company’s social report 3. and the opportunities to manage ethics – Includes defining the key subject matter or risk areas that are important to the ethics audit as well as the bases on which they should be assessed 3.K . accuracy.5(5)(v) COLLECT AND ANALYZE INFORMATION • • • • Identify tools for measuring progress in improving employee’s ethical decisions Collect internal and external documents Determine a baseline level of compliance Determine all commitments 3.5(5)(iv) REVIEW ORGANIZATIONAL MISSION AND GOALS • • • Should include a review of the current mission statement and strategic objectives Should examine all formal and informal documents that make commitments with regard to ethical. or social responsibility Define the firm’s ethical priorities 3.5(5)(vii) REPORT THE FINDINGS • The final step: Issue the ethics audit report – • Should spell out the purpose and scope of the audit.3. their different 3. risks faced. the methods used in the audit process forms are Although the ethics audit may be similar to a financial audit.5(5)(iii) DEFINE THE SCOPE OF THE AUDIT • Scope is determined by the type of business.5(6) STRATEGIC IMPORTANCE OF ETHICS AUDITING • Should be conducted regularly Page 42 ETHICS – INDIAN ETHOS – RIYAS. legal.

it also publishes an annual Global Corruption Report. The headquarters is located in Berlin. It brings people together in a powerful worldwide coalition to end the devastating impact of corruption on men. The CPI ranked nations on the prevalence of corruption within each country.  The goal of TI is to be non-partisan and to build coalitions against corruption. while also being praised for highlighting corruption and embarrassing governments`.7 TRANSPARENCY INTERANATIONAL Transparency International (TI) is a non-governmental organization that monitors and publicizes corporate and political corruption in international development. ETHICS – INDIAN ETHOS – RIYAS. TI developed the Corruption Perceptions Index (CPI). women and children around the world. a comparative listing of corruption worldwide. based upon surveys of business people. "Transparency International is the global civil society organisation leading the fight against corruption. TI has issued an annual Corruption Perceptions Index (CPI). and environmental concerns Ethical disasters follow recognizable phases of escalation – Anticipation of problems and intervention can stave off organizational disaster 3. The CPI was subsequently published annually." Since 1995. economic.K Page 43 .6 ETHICAL CRISIS MANAGEMENT Plans to respond to and recover from disasters that can disrupt operations.• Provide a benchmark of overall effectiveness of ethics initiatives – Can be important in asset allocation and program development Can demonstrate the positive impact of ethical conduct and social responsibility initiatives on the firm’s bottom line 3. companies and governments to implement them. destroy organizational reputation and erode shareholder confidence – Involves contingency planning. social. a Global Corruption Barometer and a Bribe Payers Index.6 (1) CRISIS MANAGEMENT AND RECOVERY • • U. a former regional director for the World Bank In 1995. companies are failing to identify and manage ethical. TI's mission is to create change towards a world free of corruption. It publishes an annual Corruption Perceptions Index.S. Germany but operates through more than 70 national chapters TI was founded in May 1993 through the initiative of Peter Eigen. planning for potential occurrences and providing tools to respond 3. It was criticized for poor methodology and unfair treatment of developing nations. assessing organizational risks.  TI does not undertake investigations on single cases of corruption or expose individual cases  It develops tools for fighting corruption and works with other civil society organisations.

Sri Lanka. 1976. on September 20. Participatory monitoring. Maldives and others. an international civil society organisation based at Berlin that has turned the fight against corruption into a worldwide movement. Private sector and NGOs 3. their perceptions of how corrupt a country is. TI's biggest success has been to put the topic of corruption on the world's agenda. TI compiles surveys that ask businessmen and analysts. Bangladesh. both in and outside the countries they are analyzing.K Page 44 .8(1) PRIORITY AREAS        Good governance.  The CPI—besides the World Bank corruption index is the most commonly used measure for corruption in countries worldwide. social. It was registered with the Registrar of Societies. Transparency International’s name and logo were also registered with the Trade Marks Registry vide Registration No. Capacity building.8(2) LEGAL STATUS TI India was launched in March 1997. vide registration number S-32570 of 1998 under the Societies Registration Act 1860. Research.1343408 Clause 42. International Institutions such as the World Bank and the International Monetary Fund now view corruption as one of the main obstacles for development.  Relying on the number of actual corruption cases would not work since laws and enforcement of laws differ significantly from country to country. non-party and not-for-profit organisation of Indian citizens with professional. Engaging with Government. TII is part of the Asia Pacific forum comprising 20 nations that include China. 3. 2007. TII is a non-government. Transparency International India was also registered with Income Tax u/s 12 A of the Income Tax Act.8 TRANSPARENCY INTERNATIONAL INDIA Transparency International India (TII) is the accredited India chapter of Transparency International. Pakistan. Delhi. 1961 and with Ministry of Home Affairs vide Foreign Currency Regulation Act. 3.  To form this index. whereas prior to the 1990s this topic was not broadly discussed  TI furthermore played a vital role in the introduction of the United Nations Convention against Corruption and the OECD countries’ Anti-Bribery Convention. industrial or academic experience seeking to promote transparent and ethical governance and to eradicate corruption. Communication and advocacy. ETHICS – INDIAN ETHOS – RIYAS.

Be Transparent Openly identify the nature. including clear and adequate disclosures of all material terms. location. and ownership of the business.9 (1) TRUTH IN ADVERTISING The National Advertising Division of the CBBB (NAD) reviews national advertising for truthfulness and accuracy.    Build Trust Establish and maintain a positive track record in the marketplace. This initiative is designed to shift the mix of advertising messaging to children to encourage healthier dietary choices and healthy lifestyles.  ETHICS – INDIAN ETHOS – RIYAS. founded in 1912.  Towards improving governance. Its policies and procedures are established by the National Advertising Review Council (NARC).Surveys and Studies Surveys   Youth corruption surveys. Citizen report card surveys.  Corruption in Trucking Operations in India  Other Ethical Bodies 3. so that buyers and sellers can trust each other ("Start With Trust") 3.9 BETTER BUSINESS BUREAU The Better Business Bureau (BBB). The BBB also administers the Children's Food and Beverage Advertising Initiative.3. guarantees and procedures that bear on a customer’s decision to buy. and fosters public confidence in advertising accuracy. The Children's Advertising Review Unit (CARU) of this BBB entity reviews advertising directed to children. Tells the Truth Honestly represent products and services. which work together through the Council of Better Business Bureaus (CBBB).8(3) ACTIVITIES OF TII . a voluntary self-regulation program undertaken in cooperation with major corporations.  India corruption studies 2008.K Page 45 . The BBB goal is to foster a fair and effective marketplace. Advertise Honestly Adhere to established standards of advertising and selling. and clearly disclose all policies. is a corporation consisting of several private business franchises of local BBB organizations based in the United States and Canada. Studies  India corruption studies 2005.

Founded in 1960. professionally. With over 220 member organisations in 115 countries. and where the strength of our collective power is used for the good of consumers throughout the world. Our vision is a world where everyone has access to safe and sustainable goods and services.10(1) VISION CI is working to put the rights of consumers at the heart of decision-making. 3. working together with its members. and in good faith.10(2) PRINCIPLES There are eight basic consumer rights which define and determine CI principles:  The right to satisfaction of basic needs  The right to safety  The right to be informed  The right to choose  The right to be heard  The right to redress  The right to consumer education ETHICS – INDIAN ETHOS – RIYAS.   Honor Promises Abide by all written agreements and verbal representations. and respect the preferences of consumers regarding the use of their information.K Page 46 . Safeguard Privacy Protect any data collected against mishandling and fraud. safe and sustainable future for all consumers in a global marketplace increasingly dominated by international corporations. we are fighting for a fair. CI is a not-for-profit company limited by guarantee and registered in the UK (company no. Be Responsive Address marketplace disputes quickly. 4337865). collect personal information only as needed. serves as the only independent and authoritative global voice for consumers. CI are building a powerful international movement to help protect and empower consumers everywhere. 3.  Embody Integrity Approach all business dealings.10 CONSUMERS INTERNATIONAL Consumers International (CI) is the world federation of consumer groups that. marketplace transactions and commitments with integrity. 3. 1122155). CI are also a registered UK charity (no.

3. engaging and accessible communication.10(4) CI DO THIS BY  Working with national member organisations to influence governments. This means achieving real changes in government policy and corporate behaviour while raising awareness of consumer rights and responsibilities. highlight marketplace abuses and raise grass roots support. CI are committed to acting as a global watchdog: campaigning against any behaviour that threatens. and the Food and Agriculture Organization (FAO). Our capacity building projects stretch the globe. 3.10(3) CI WORK CI campaigns on the international issues that matter to consumers everywhere.  Research and consultation  Transparent debate  Exposure for public comment  Consideration of comments received on exposure  Affirmative approval ETHICS – INDIAN ETHOS – RIYAS. whether in public practice. CI also committed to advancing consumer rights by building better consumer organisations around the world. helping organisations develop their own in house skills. 3. knowledge and expertise. and the public sector  International Ethics Standards Board for Accountants pronouncements.K Page 47 . World Health Organization (WHO).  Raising awareness about purchasing choices through clear.  Pressing consumer concerns through our official representation at global bodies such as the United Nations (UN). CI seek to hold corporations to account and demands government action to put consumer concerns first.11 INTERNATIONAL ETHICS STANDARDS BOARD FOR ACCOUNTANTS The International Ethics Standards Board for Accountants develops and issues in the public interest high-quality ethical standards and other pronouncements for professional accountants for use around the world  The IESBA Code of Ethics for Professional Accountants and Interpretations apply to all  professional accountants. ignores or abuses the principles of consumer protection. education. in business. The right to a healthy environment. International Organization of Standardization (ISO).

relationships.K . The elected Board of directors appoint and oversee management of the corporation.Ayodhya Kand 3.3.12 CORPORATE GOVERNANCE 3. A corporation is an organization created (incorporated) by a group of shareholders who have ownership of the corporation.12(2) “GOVERNANCE” Corporate is adjective meaning “of or relating to a corporation” derived from the noun corporation. A corporation is an organization created (incorporated) by a group of shareholders who have ownership of the corporation.12(4) GOVERNANCE CONCEPT IN ‘RAMAYANA’ To provide “the maximum happiness for the maximum number of people for the maximum period. The elected Board of directors appoint and oversee management of the corporation. Page 48 ETHICS – INDIAN ETHOS – RIYAS. based on the principles of Dharma – righteousness and moral values. vendors and the society-at-large.12(5) WHAT IS CORPORATE GOVERNANCE? • The Manner in which a Corporation is Run ▫ ▫ ▫ ▫ • • • Achieving its Objectives Transparency of its Operations Accountability & Reporting Good Corporate Citizenship The Processes & Operating Relationships that Best Achieve Organisational Goals The primary purpose of corporate leadership is to create wealth legally and ethically. systems and processes within and by which authority is exercised and controlled in corporations.” . 3. 3.” 3.12(3) “CORPORATE GOVERNANCE” • • • It is a broad concept and has been defined and understood differently by different groups and at different points of time.customers. employees. The Cadbury Committee report defines it as “the system by which companies are directed and controlled”.12(1) “ CORPORATE” Corporate is adjective meaning “of or relating to a corporation” derived from the noun corporation. It is generally understood as the framework of rules. This translates to bringing a high level of satisfaction to five constituencies -. investors.

. keeping in view the Interests of other Stakeholders CG a Way of Life rather than a Code 3. BPO etc. 3. 2) Impact of Globalization ▫ ▫ ▫ ▫ Integration with Foreign Market Foreign Investors expectations New Business Opportunities --.around 4.12(6) FUNDAMENTAL OBJECTIVE OF CORPORATE GOVERNANCE • • Enhancement of Shareholder Value. .IT & ITES.• The raison d'être of every corporate body is to ensure predictability.12(9) FRAMEWORK OF GOVERNANCE 1. Supervisory Board/ Committee/ Team 2. FDI 3) Impact of Privatisation ▫ ▫ New structure of ownership Multinational Companies 3.12(7) DRIVING FORCES OF CORPORATE GOVERNANCE IN INDIA 1) Unethical Business Practices ▫ Security Scams ---Harshad Mehtha Security Scam  Equity allotments at discount rates to the controlling groups  Disappearance of Companies (1993-94) . and Accountability To ensure that responsibility could be assigned easily for actions or inaction and also for the safeguarding the interests of the stakeholders and the investors in the organization.000  companies with 25.12(8) REQUIREMENT FOR CORPORATE GOVERNANCE Corporate governance in India calls for Two main requirements: • • Transparency in decision-making. Audit Committee Page 49 ETHICS – INDIAN ETHOS – RIYAS. sustainability and profitability of revenues year after year.000 crores without starting business ▫ Misdeed of Companies  Plantation. New Capital formation – FII.K . etc.N R Narayana Murthy 3. Sheep rearing.

Community (people affected by the actions of the organization) 3. Safeguard the integrity of company reporting 5. Suppliers 8. Regulators 6. Customers 7. Internal Audit Statutory Audit Disclosure of information Risk management framework 7. 5. Workers 4. Establish a code to ensure integrity 4. Internal Control framework 8. Whistle blower policy 3.3.12(11) PARTIES TO CORPORATE GOVERNANCE 1. 4.12(10) OBJECTIVES OF GOOD CORPORATE GOVERNANCE 1. Recognition and preservation of needs of shareholders 3. Shareholders or owners 5. experience and independence on the board appropriate to the nature and extent of company operations 3. Managers 3. Balance skills.12(13) CONSTITUENTS OF CORPORATE GOVERNANCE • The Board of Directors  Pivotal role ETHICS – INDIAN ETHOS – RIYAS. 6. Board of directors 2. Strengthen management oversight functions and accountability 2. Risk management and internal control 6.K Page 50 . Disclosure of all relevant and material matters 7.12(12) PRINCIPLES IN DEVELOPING CORPORATE GOVERNANCE FRAMEWORK  Openness  Integrity  Accountability 3.

The conduct of CEOs and the values and ethics they stand for will ensure the long-term success of a company. there is a tendency to compromise. Ethical behaviour should be part of corporate culture. While culture and values are the drivers for good governance. Corporate governance is not about numbers but about the quality of people ETHICS – INDIAN ETHOS – RIYAS. The successful are the ones who manage in this shelf life to adjust knowledge and skills to the market needs. Accountable to stakeholders  Directs management • The Shareholders & Stakeholders  To participate in appointment of directors  To hold the BoD accountable for governance through proper disclosures • The Management  To act on the direction of the BoD  To provide requisite information to the BoD for decision making  To implement and monitor control systems Good ethics and governance are not just `moral' or `compliance' issues In the highly competitive target-driven buyers' market. will ethics have some value.K Page 51 . `Volume creation' takes precedence over `value creation'. Success is a short term phenomenon and knowledge and skills have shelf life. and law coming in slightly afterwards. Only when we realise that the `means' is more important than the `end'. codes should be preferred coming in the forefront.

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