Ethics Explained

ETHICS
What is Ethics?
So, we can define ethics as:
• “the study of what is right or good human conduct”
• “the science of ideal involved in Human life”
• “the science of moral judgment”
• “the science of morals in human conduct”
• “the study of the general nature of morals and of specific moral choices"
Descriptive ethics:
It is an empirical study of people’s moral belief, actions, and conduct. It aims to know the actual
choices that people in a particular society make in a particular situation. It is known as value free
approach. It gives us idea about way of life, behavior, choices of people in different communities.
Prescriptive/Normative Ethics
It involves moral standards that differentiates right and wrong conduct. It is study of ethical theories
which prescribes how people should act in certain situation. It is further divided into 3 major
domains.
A. Deontological approach (means are important):
This approach gives priority to actions and not results. It prescribes to take actions which are
inherently good. It evaluates the rightness or wrongness of the action based on characteristic of the
action.
B. Teleological Approach (Ends are important):
This approach evaluates morality (right/wrong) of action based on the goals/ends to be achieved.
This approach prescribes that an action is right if it leads to happiness, pleasure and an action is
wrong if it leads to unhappiness or pain not only for the performer but also for everyone else who is
involved in it.
C. Virtue Ethics:
This PDF Has Been Compiled By Tanay Sir – 8961556195 Under RBI Gr B Mentorship Program
Virtue is the moral behavior of the person/ individual. It is related with the inherent character of an
individual. An action would be right/wrong if it corresponds with the virtue of an individual.
Meta Ethics
It deals with the broader questions related with study of ethics. Rather than focusing on what is right
and wrong, meta ethics deals with why it is right/wrong. It goes into the origin, meaning and depth
of the concepts related to study of ethics.
Applied ethics
It deals with the study of controversial moral issues. IT helps to use knowledge of moral principles to
present dilemmas. It deals with the practical and live issues to apply ethical principle.
a. Bioethics: It is the study of ethics concerning issues related with biological issues and facts
concerning living beings. For Example: Abortions, Euthanasia, Aadhar data breach
b. Environmental ethics: It is the part of environmental philosophy which considers extending the
traditional boundaries of ethics from solely including humans to including non-human also. For
Example: Protecting tigers, forest conservation.
c. Social issue: Social aspects of human life which involves questions of right and wrong. For
Example: Inter-caste marriages, reservation issues, gender discrimination.
d. Administrative issues: Administrative officer come across many issues in day-to-day

administration. For Example: whether encroachments of poor should be removed to beautify city is
an ethical issue. Whether to do it or not is an ethical dilemma
Who Sets Ethical Standards?
The moral standard are set by the following agents and institutions:
➢ Tradition and convention, and inter-generational practices.
➢ Various type of institutions, such as, religion, social institutions and educational institutions.
➢ Nomological axioms.
➢ Knowledge, wisdom and experience.
➢ Family and Friends.
4.1 Ethical standards
Many philosophers and ethicist suggested different sources of ethical standards that we should use.
Fairness/Justice Approach:
This approach is propounded by Greek philosophers like Aristotle. Core idea of this philosophy is to
treat all equals equally.
For Example: Positive discrimination in India (reservation) is the intervention to do justice with
oppressed
Rights Approach:
Some philosophers suggest that ethical action is the one that protects and respects moral rights of
those affected. This approach considers that humans, living beings have certain rights and dignity
based on humanity. On the basis of this dignity, they have rights to be considered as ends and not as
means.
For Example: The Code of Medical Ethics of the American Medical Association is an example of
rights-based ethics. It defines patient rights and the duty of physicians to respect them.
Utilitarian Approach
Ethicist like Jeremy Bentham suggest that ethical action is the one that provides greatest balance of
good over harm. It teaches to ensure largest good for largest number of entities involved in the
action.
Common Good Approach
This approach considers the common good while taking actions. If an action is in common interest
will be termed as ethical. This also calls attention to the common conditions that are important to
the welfare of everyone in the society.
For Example: Imposition of lockdown to ensure safety of lives of citizens
Care Approach
The approach believes that context can sometimes overrule justice and our universal code of
conduct. This approach focuses more on the interconnectedness of humanity and places a moral
significance on our relationships as 'care-givers' and 'care-receivers.'
Discuss in more details in the later part of chapter
The virtue Approach:
Virtue ethics is a philosophy developed by Aristotle and other ancient Greeks. It is the quest to
understand and live a life of moral character.
This character-based approach to morality assumes that we acquire virtue through practice. By
practicing being honest, brave, just, generous, and so on, a person develops an honorable and moral
character.
Ethical Syllogism (Reasoning)
In ethical reasoning, the moral standard of any country or society can be judged with reference to
the set of universal moral standards. In ethical or moral reasoning, there are two interrelated ethical
propositions, and on the basis of this relationship, one can arrive at the third proposition. The third
proposition is called the inference or conclusion.
EXAMPLE:
A country is unjust if there is gender discrimination. Saudi Arabia is a country where there is gender
discrimination. Therefore, Saudi Arabia is an unjust country, In this example, the first proposition can
be regarded as ethically correct. Any form of discrimination is morally unjust in the sense that it
violates human rights and goes against the natural principle of equality. The second proposition is to
be based on strict empirical truth. If the second proposition is factually incorrect, we will not have
correct ethical reasoning.
What Are Moral Principles?
Moral principles are guidelines that people live by to make sure they are doing the right thing. These
include things like honesty, fairness, and equality. Moral principles can be different for everyone
because they depend on how a person was raised and what is important to them in life.
Types of Moral Principles
There are two types of moral principles: absolute and relative
Absolute Moral Principles
Absolute moral principles are based on universal truths about the nature of human beings. For
example, murder is wrong because it goes against the natural order of things. These are also
sometimes called normative moral principles, or those that are generally accepted by society.
Relative Moral Principles
Relative moral principles are based on opinions and circumstances that may change over time or
from person to person or for different situations.
Some concepts related to ethics
Cognitivism and Non-Cognitivism
One branch of ethical philosophy claims that it is possible to differentiate right from wrong or good
from bad in a noticeably clear and objective manner. This is called cognitivism. However, some
philosophers maintain that it is not objectively possible to know what is good and what is bad. This is
known as non-cognitivism.
Belief
Belief stem from knowledge or information. Beliefs are ideas or principles that are dear to people.
Ethical behavior of a person in many cases depends on belief and attitudes. Every type of belief
cannot be equated with knowledge because some of our beliefs may turn out to be false on
verification. The beliefs which are supported by evidence are called justified Beliefs. Only Justified
belief is knowledge.
Justified beliefs consist of two types of judgments:
➢ direct or intuitive judgment- based on our sense perceptions
➢ derived judgments - formed out of the existing body of knowledge.
Belief depends on the moral state of the believer.
There are basically two types of beliefs: core beliefs and dispositional belief. Core beliefs are more or
less permanent and difficult to change whereas dispositional beliefs are dependent and changeable.
Formation of Belief
There are the following six ways of belief formation:
• Beliefs come out of confidence in the spoken words of people we respect. This type of belief is
called commendatory belief.
• We may have a belief from childhood about the existence of ghosts or supernatural phenomenon
they may be real or not. This type of belief is called existential belief.
• Beliefs can be adopted from our role models.
• In our formative years, somebody else's belief may be internalized.
• Sudden changes in life may also result in new beliefs, or cancellation of old beliefs.
• Some beliefs are formed on the basis of knowledge, research or commercials.
Values
• Every person believes in certain critical values. Mahatma Gandhi valued truth, Plato valued
wisdom, and Moses valued justice.
• A value is a general belief which helps differentiate good from bad. Values guide actions in your
personal or social life. It is a particular standard that a community gives importance to. In most
communities, moral values are assigned to fairness, justice, honesty and integrity to name a few.
• When we can assign values to particular objects, it becomes easier to make a choice.
• The intensity attribute of value indicates the degree of its importance in a particular context.
Individual values are commitments to which a particular person subscribes, like social justice,
honesty, and so on.
Significance of Values:
• It gives a person direction and motivation to live in a desired way.
• The value system helps a person in making clear decisions.
• A clear value premise helps a person arrive at flawless logical deductions and moral reasoning.
Types of Values:
There are mainly Two types of values:

1. Terminal Values:
• Terminal values are those that a person wants to address at the end.
• These values are called instrumental values.
• An instrumental value is necessary to achieve the ultimate goal.
2. Personal Values:
• Egocentric value: The value is directed towards satisfying the ego.
• Socio-centric value: The value aims at socialization and adaptation to society.
• Conformist value: This is an orientation to achieve a materialistic goal by controlling the physical
resources
• Supernatural value: It is a type of a metaphysical value beyond norms of the physical world to
achieve the ultimate reality.
• Tribalistic value: It consists of submission of oneself to higher power and authority.
• Deontic value: It considers one's own duty as the supreme religion.
• Utilitarian value: In this type of the aim is to realize the net benefits over cost.
• Consequentiality value: In this case, an important value is assigned to those actions having good
consequences.
Characteristics of Values:
• A value or values are chosen freely without any coercion or compulsion.
• A value is chosen from a number of options.
• The choice of value is made after considering different consequences of this choice.
• The value that is chosen is practiced and then sustained
• Value becomes a part of yourself and being.
• Values are partly genetically determined, and partly acquired through experience and interactions.
Sources of Value
1. Parents and Family
2. Teachers and Classmates
3. Peer Groups and Friends
4. Reference Groups
5. Culture and Tradition
6.3.5 Values and Business:
A business organization depends on the following types of values:
• Excellence in all fields of business-like production, marketing and distribution.
• Innovation in production technique, cost reduction, etc.
• Establishing credibility can be ensured by trust, goodwill, rapport with customers.
• Providing consumers with best services, in particular after-sales services.
• Gathering market intelligence to know the status of the product
• Maintaining external and internal coordination of all product lines
• Creation and development of corporate values towards employees, customers and suppliers, and
social responsibility towards society.
Conflict of Values:
• Every professional has to live with two sets of values: personal and professional. These two values
could be conflicting at times.
• However, whenever a clash occurs between these two values, professional and morally
responsible people give preference to the professional value over the personal value or interest.
Thus, a judge may sentence his only son for murder, or a teacher may punish his daughter for not
learning the lesson.
Theories of Ethics The theories we look at here, however, are important to help us understand why
the decisions we make, or someone else makes, are ethical or unethical.
Virtue Ethics:
• Virtue ethics is a special branch of ethics founded by Plato and his disciple, Aristotle.
• Virtue ethics emphasizes the importance of right character among human beings.
What is Virtue:
• Virtue is the habit of deliberate choice of right activities and performance of duties in the correct
way. Virtue is excellence of character. According to Aristotle, virtue is a permanent state of mind to
perform the best things in life.
• There can be a long list of virtues. However, the major virtues are honesty, sincerity, truth,
courage, temperance, integrity, compassion, and kindness.
• Virtue is not a congenital (from birth) but an acquired disposition which is in harmony with moral
laws. Virtue constitutes only socially desirable human disposition and not all types of disposition.
Virtue is a Relative Concept:
• Virtue is a relative concept. Virtue is relative to society, the nature of the state and social position
and responsibility.
• Like in a communist state, religious activities are not looked upon as virtues. For a totalitarian
state, loyalty to ruler is a higher virtue than devotion to God.
• The nature of virtue differs from country to country and from time to time.
Classification of Virtue:
Plato’s Cardinal Virtue:
These are considered as Basis of all other Virtues. They are: Wisdom, Courage, Temperance &
Justice.
Aristotle’s Classification:
1. Intellectual Virtue (rationality and Knowledge).
2. Moral Virtue (temperance, courage, habits for realization of good).
Criticism OF virtues:
• Virtues are not enough for enhancing social welfare which depends on some right over action.
Virtues are covert qualities. Unless virtues are translated into action, there is no social welfare or
personal improvement or gratification.
• At times, it becomes very difficult to distinguish between virtues and values, and to that extent,
virtue ethics loses its importance as a separate branch of ethics.
• Virtues may be looked upon as vice. For instance, in Aristotle's Greece, humility was a vice but to
Christians, it was a virtue. There is no clear-cut classification of unique virtues.
• A man may possess some virtues, yet he may be a bad man. For instance, a man may possess
courage, prudence, justice and temperance (the four classic virtues) and yet he may be angry, cruel,
nasty and vengeful.
• Virtue ethics fails to address the dilemmas that arise in applied ethics. For instance, in the case of
abortion, virtue ethics does not give any direction.
Golden Mean Theory
The theory has been given by Aristotle. According to Aristotle virtue ethics is based on the idea of
golden mean. It is a virtue to follow the middle course between excess and deficiency, doing so
requires restraint and control of greed or instincts.
• The essence of Aristotle's theory of golden mean is the idea that moderation is a definite virtue to
enjoy life and is the secret of a good and happy life.
• The Greek philosophical idea on the golden mean is entertained by Buddhism.
• Buddhism advises its followers to adhere to the middle path by abandoning the sufferings of a very
strict ritualistic life on the one hand and the pleasure and easy-going life of a worldly man on the
other.
Teleological Theory
• Greek philosophers, in particular Aristotle, popularized the teleological theory.
• The word teleology is derived from telos which means the end or consequences.
• Thus, the theory of consequentialism is directly associated with the teleological theory. There are
indeed many variations of the theory of teleology.
Teleological theories do give a definite perspective to make moral choices by comparing competitive
alternatives, and the relative impact on people.
Criticism of Teleological Theory
• They rely too much on unknown and uncertain results, and neglect the rights and needs of
minorities. These right and needs may be in conflict with those of the majority
Utilitarianism
• Utilitarianism is a teleological theory. According to this theory, social welfare is the sum of the
well-being of all individuals. Utilitarianism states that man's worldly happiness is the only good. This
is a normative positive test of all policies, actions and institutions. The motto: "greatest good of the
greatest number", was first voiced by Francis Hutcheson.
• The main proponent of this philosophy is Jeremy Bentham who is revered as the father of
utilitarianism. In the Greek period, utilitarianism was regarded as a form of hedonism
(Epicureanism).
• The neoclassical economists used the concept of diminishing marginal utility and interpersonal
comparison utility to demonstrate that overall utility will increase if there is a transfer of income and
wealth from the affluent section of the people to the poor. The richer section will lose some utility in
this case, but the gain of utility received by the poor people will be more overwhelming.
• The theory of utilitarianism is sometimes interpreted in terms of cost and benefit analysis (net
benefit).
Summarising the Definition of Utilitarianism:
we can define utilitarianism in the following way:
• Greatest good of the greatest number.
• Maximization of Pleasure
• Minimization of Pains
• Maximization of happiness
• Satisfaction of desire
Two Variants of Utilitarianism:
• Act utilitarianism is concerned with those actions which will bring great benefits to great number
of people. However, in case of act utilitarianism, the problem arises because some acts are by
themselves not socially acceptable like stealing.
• Hence, act utilitarianism has to be supplemented with Rule utilitarianism which gives direction to
the former. However, the fact that "stealing is not acceptable" is not always correct to rule based
utilitarianism, because sometimes, stealing can save innocent lives too.
Limitations of Utilitarianism:
• The concept (happiness) means different things to different people.
• In the case of utilitarianism, the end justifies the means. This idea has been vehemently criticized
by many. It is said by critics that for a moral action, both the end and the means must be good.
• Utilitarianism does not consider individuals or minorities.
Ego Based Principle- Ethical Egoism:
• Human actions are essentially ego-centric and selfish. Even when a man is donating to an
organization, his intention is to gain popularity which will feed his ego.
• However, as Adam Smith observed, some consequences of human selfishness may bring social
welfare by satisfying human needs. However, there is a difference between selfishness and self-
centeredness.
• Self-centeredness is aimed at furthering personal ambition; it does not harm the interest of others.
Selfishness, on the other hand, is the achievement of gains the cost of others.
Consequentialism
• A consequentialist theory is end based. If the consequences and end are good, then it can be
recommended for implementation; otherwise not.
Consequentialism is different from utilitarianism. The former simply depends on good consequences
for a policy to be supported but the latter has nothing to do with any consequences other than
utility.
Theory of Deontology and Categorical Imperative
Deontologists are non-consequentialists which is governed by certain dos and do nots. The principle
of deontology is based on the idea of correctness or rightness of moral behavior. According to
deontologists, the nature of moral principles is permanent and stable.
• The philosophy of deonticism has found its best expression in the hands of Immanuel Kant (1724-
1804), a celebrated German philosopher. Kant advised us to do that act which can be universalized.
• Kant is the leading founder of the principle of universalism. Universal ethical principles are based
on justice, rights, fairness, honesty and respect. Kant makes it clear at the beginning that:
o Morality is impartial. It applies equally to everybody.
o Morality is concerned with our intentions and not necessarily with the consequences of our
actions.
There are 2 Types of Deontologists: Act Deontologist and Rule Deontologist:
• Act deontologists believe that the ethicalness of a person can be known by his overt actions which
should be based on justice, fairness, benevolence, equity and kindness. Deontologists observe that
deontological rules provide only guidelines.
• Rule deontologists believe that there are certain rules of morality that people should follow while
making decisions. These rules are framed on the basis of moral and logical principles to guide human
actions. Kant's categorical imperatives provide some of these rules. These rules guide ethical
behavior and actions which eventually override other contextual local practices.
• The theory of deonticism is silent in case of ethical dilemma.
• It is often difficult to follow your duties blindly when confronted by a situation that demands
immediate attention.
• It is not a good behavior to follow blindly one’s own duty as directed by your boss. The duties may
be wrong or immoral.
Rights and Duties:
Rights
• Right is the entitlement or empowerment to do certain things. Rights are moral claims of
individuals recognized by society.
• There are many types of rights, like, legal, constitutional, fundamental and moral.
• These rights are essential for the highest personal good and social benefits.
• Negative and Positive Rights
➢ Negative rights are rights to be free from interference by others.
➢ Positive rights are those that others have a duty to supply. If you have a right to education, others
must supply schools, teachers and books.
• Kant and Rawls argue that rights are based on your intrinsic value.
• To Kant, the intrinsic value lies in your ability to make rational decisions and duties to respect all
human beings and to do what is morally good.
• To Rawls, intrinsic value lies in the ability to do justice based on free and fair distribution.
• John Locke observes that human beings have - natural right to life, liberty and property, and by
virtue of a social contract, the state is assigned rights to protect them. The purpose of the state is to
ensure that people respect and do not violate each other's rights.
• Hohfeld (1923) considers all rights as relationships. There are four types of rights:
➢ Claims (A claim entitles a person to demand something from another person).
➢ Privilege (Liberty/No-claim. Therefore, one is free to do something).
➢ Power (A legal relationship or claims can be created by power to control others).
➢ Immunity (This enables a person to resist the powers of others over a person having immunity).
Duties:
• Duties are moral obligations. The main examples of duties are:
➢ Respect for truth, laws, society and the state etc
• There are generally three classes of duties:
➢ Duties to self
➢ Duties to others
➢ Duties to God
Kantian Theory of Duty
• Immanuel Kant distinguished between duties of perfect obligation and of imperfect obligation. The
former duties are generally duties which are precise and definite and can be exacted from
individuals. The latter duties are mostly positive and are indefinite, unlimited, and cannot be exacted
from individuals.
• There are four principles of Kantian theory of Duty:
➢ Morality of your action depends on what you intend to do and not on the consequences.
➢ Moral rules are impartial, and these apply equally to everyone.An action is moral only if you can
justify the rule that everyone can follow.
➢ People are not merely means to an end. They should be treated as human beings with infinite
value.
➢ Reversibility and universality are the 2 rules for determining a morally right duty in the Kantian
categorical imperatives.
Theory of Entitlement and Property Rights
• Robert Nozick is an American philosopher. His entitlement theory (ET) is a theory of distributive
justice: - a distribution of wealth obtaining in a society as a whole is a just distribution if everyone in
that society is entitled to what he has.
• Nozick is of the view that a voluntary transfer of a property is a just transfer. Transfer under
duress, temptation or false promise is unjust.
• The entitlement theory of Nozick goes against the two popular theories of distributive justice:
➢ Nozick does not agree with the Marxian theory of equality. According to Nozick inequality is
natural. Equality is a contrived notion that is unjust and unnatural.
➢ Nozick also does not believe in the difference principle of Rawls. He dislikes the idea that there
should be redistribution of income or goods from the rich to the poor.
W.D. Ross 7 Duties
W.D Ross was an American who has given seven absolute moral rules for human beings to live a
happy life. These 7 rules are:
1. Fidelity
This is essential to maintain a good relation in a society by keeping promises and being honest in all
situations and respecting the rule of mutual trust.
2. Justice
In dealing with people and in the distribution of basic goods, justice and fairness should be practiced
by people.
3. Gratitude
Gratitude is basically an individual virtue that makes life enjoyable and pleasant. It is necessary to
return a favour by words or deeds of gratitude.
4. Reparation
It is a kind of compensation for the injury and harm done to others. This is a form of justice.
5. Beneficence
You must be benevolent in nature and do good to others whenever necessary. Thus, kindness and
compassion are important.
6. non-malice
This means the prevention of injury or harm to others.
7. Self-improvement
Ross's rules do include provisions for constant self-improvement by practicing virtues and a value
system in accordance with the principles of morality.
Albert Carr’s Theory of Business Ethics
• According to Albert Carr the profit maximization principle should be followed by businesspeople
even if it involves lying.
• According to him, deception is a legitimate part of Business. He compares business with poker
game. Family ethics and values are not relevant in business.
Concept of Justice
• The term "justice" is derived from the word "just", which means "appropriate", "proper" and "fair".
When a treatment is accorded to a person in proportion to what he deserves, he can be said to be
treated in a just way.
• Justice is something which can be regarded as reasonable on both moral and empirical grounds.
Justice is a normative social order.
• Absolute justice is divine and is difficult to achieve in the real world. In the actual practice, we
come across what is known as relative justice.
Types of Justice
Procedural Justice
• There may be justice in an act. However, what is important is to see whether that action has been
performed complying to the law or through a correct procedure.
Commutative Justice
• Commutative justice is a form of justice where fairness or justice is ensured at the beginning and
all people are treated equally. In other words, people start on the level field. The background of the
people is totally irrelevant in the case of commutative justice.
Compensatory Justice:
• In the case of compensatory justice, some compensation is given to the person who has been
treated unequally in the past.
• Compensation for the injustice done in the past must be proportional or equivalent to the loss
sustained by an individual in question. But, in many cases, it is difficult to assess the appropriate
amount of financial compensation.
Retributive Justice
• This ensures some form of punishment to a defaulter. The imposition of fines or penalties,
however, may not be adequate or just in a particular situation.
• Sometimes, the punishment may be more than what is needed and sometimes, it may be less than
what is necessary. The basic purpose of retributive justice is to prevent the person from doing
similar type of unjust work in the future.
Communitarian Justice
• This refers to a system of justice shown to a particular community which has been suffering in the
past from injustice (say, the tribal people in Australia).
Distributive Justice
• Distributive justice is very critical for human society as a whole. The basic idea of distributive
justice is to treat equal people equally and unequal people unequally.
• The principle of distributive justice upholds the view that the benefits and burdens in a society
must be distributed equally among its members.Egalitarian Theory of Justice
• This theory is based on equality in the matter of distribution of burdens and benefits. This is an
important theory of distributive justice.
• The theory seems to give importance to absolute equality. It does not consider ability, efforts and
need. Thus, according to this theory, the rich and poor will get the same benefits and will make the
same sacrifices. This theory has been criticized on many grounds.
CRITICISM OF EGALITARIAN THEORY OF JUSTICE:
• Firstly, since human beings are not equal, it is said that the principle of equality is not a just
principle.
• Secondly, it does not consider the genuine need of people.
• Thirdly, if all people are treated equally, there would be no incentive for the hardworking and
intelligent people to produce or achieve more.
Capitalist Theory of Justice
• The basic principle of Capitalist Theory of Justice is that everybody should receive the benefits
according to his contribution. Capitalist justice favors inequality because inequality leads to
differential contribution.
• It assumes that human beings are essentially unequal. Therefore, justice wants inequality to be
accepted as the basis of just reward.
Marxian Theory
• Karl Marx (1867) was of the view that only the establishment of communism could guarantee the
need-based wage payments to workers. Thus, communism to Marx is a just economic system.
• Justice requires that the wage system should be need-based. The needs should include not only
the individual needs but also the social needs of human beings.
• Marx has given a number of instances where he has proved that a capitalist system is basically
unjust, particularly to the working class.
Surplus value:
• A capitalist does not pay a laborer according to the productivity of his labor. The wages under a
capitalist system are always less than the productivity of labor.
• This surplus is pocketed by the capitalists. The greater this surplus value, the greater is the degree
of exploitation.
Capital Accumulation:
• Capitalism survives on the basis of capital accumulation which leads to centralization of capital and
concentration of capital.
• As a result, workers under capitalism not only suffer from physical poverty including malnutrition,
under-nutrition, and poor living conditions but also from social poverty, implying discrepancy
between wages, inequality in consumption, inequality in opportunities and in resource endowments.
Capitalism leads of alienation of workers.
• According to Marx labor power is regarded as a commodity under capitalism.
• According to Marx the government or the state is also not neutral under capitalism;
CRITICISM OF MARXIAN THEORY:
• Firstly, Marx's prediction that economic conditions of workers under capitalism worsens, has not
been supported by historical evidence.
• Secondly, Marx's idea that workers should be given need-based wage, has not been accepted on
economic grounds.
• Thirdly, Marx's view that the free market is an unjust system because it generates inequalities has
been criticized by non-Marxists by saying that justice does not mean equality.
• Lastly, it is pointed out by critics that the demise of the Soviet Union is proof that the Marxian
theory is unworkable in actual practice.
Socialist Theory of Justice
• Socialism is based on the idea of equality of human rights, freedom and dignity. Socialism is the
first or the lower phase of communism. In this system, the ideal form of distribution will be: "from
each according to his ability and to each according to his needs".
• Socialism stands for the abolition of class conflicts, through the socialization of means of
production. Under socialism, the state does not represent the interest of any particular class, but it
stands for the interest of all people.
• The social properties are held by the state.
• All people work collectively, and labor is socialized.
• The surplus product is utilized for the purpose of socio-economic development.
Criticism of Socialist Theory
• The remuneration is not based on contribution but on the needs of the people.
• Secondly, the needs of people are very ambiguous. There may be physical, social, present and
future needs. What type of need is to be considered under socialism is the question?
• Thirdly, no incentive for the workers to increase his productivity.
• Lastly, under socialism, individual freedom may be restricted.
John Rawls Theory
• John Rawls' theory of justice (1971) has been regarded as a landmark that provides an alternative
to the theory of utilitarianism.
Rawls theory is based on the following three principles:
➢ There should be equal liberty for all citizens
➢ There should be equality of opportunities for everybody

➢ Some amount of inequality is permitted
• A morally warranted situation for justice will have to be based on some neutral position at the
beginning, which Rawls refers to as the original position. In this original position, the parties (the
rational people) will choose those principles which they will apply to themselves.
• According to Rawls, social welfare is the welfare of the worst-off members of a society. Rawls
rejects the importance of merit because merit comes from heritage, upbringing and natural
endowments that are irrelevant from the moral point of view.
• In Rawls' theory, no person deserves to benefit exclusively from his talent.
Libertarian Theory
• The most important proponent of libertarian thinking is Robert Nozick (1974).
• According to him, the transfer of income or wealth from the rich to the poor is unjust for many
reasons. Nozick is an anti-consequentialist.
• According to Nozick, only those processes are just where exchange is voluntary.
• The motto is from each according to his choice and to each according to what he has chosen.
• Nozick also does not support the idea of infringement of individual freedom by any authority.
CRITICISM:
• Most of the poor persons in a society will remain poor forever.
• The level of socio- economic inequality will go on increasing. The theory is anti-Progressive.Nozick
has given primary importance to freedom from coercion. He is not concerned with basic human
freedom like freedom from poverty and unemployment, ignorance and starvation.
Gandhian Concept of Justice
• In Gandhi's conceptualization, justice constitutes natural universal justice and is based on rights.
• Duties are preconditions of rights that are to be earned through proper performance of duties.
• Gandhi has talked about 6 different Types of Justice: Pure Justice, Social Justice, Satanic Justice,
Claim to natural rights, No harm to the opponent party & Absence of Duress
• According to Gandhi, an action is just when it does not harm either party to a dispute. This idea of
justice is the very heart of Gandhi’s satyagraha and conflict resolution.
• The satanic concept of Justice is wicked in nature and is motivated by revenge and selfish personal
gain. As against this auto-centric concept, there is the notion of pure Justice which is according to
Gandhi is motivated by compassion, kindness ad pity shown by employers towards the subordinate
or dependent employees.
Care Ethics
• Care-based ethics teach the golden rule: "Do unto others as you would have them do to you". The
ethics of care is based on the philosophical theory of reversibility.
• Care is primarily based on love and includes respecting the dignity of other individuals. Care for
somebody depends primarily on the nature of the relationship.
• Ethics of care is a study of all the factors concerning care, care-based relations, sources and
motivation for care, costs and conflicts of care, care and justice, and many other related issues.
Two Broad domains of Care:
1. Esoteric Care
2. Exoteric Care
Esoteric Care
• The conventional analysis that care is only related to one's near and dear ones, family and friends
is indeed a narrow view.
Exoteric Care:
• This type of care is shown to the people outside the domain of family and friends. It can also be
about a community (communitarian care).
• Over the course of time, the exoteric domain mingles into the esoteric domain if the relationship is
sustained and nurtured.
The Feminist Theory of Care Ethics
1. Mary Midgley’s View
2. Nel Nodding’s View
3. Marilyn Friedman’s View
Mary Midgley’s View
• Mary Midgley (1991) concludes that morality begins and grows with our natural affections for the
family and friends.
• Midgley assures us that the natural affection for family and friends plays a major role in the
development of care and compassion.
Nel Nodding’s View
• According to her giving care does not mean the negation of liberty or personal wishes of the
person being cared.
• One should not impose one’s own rules while taking are of others.
Marilyn Friedman’s View
• Marilyn Friedman (1987) is of the view that the ethical principles of care must be integrated with
those of justice. But that does not mean that care and justice are the same notions.
• Friedman makes it clear that men and women use care and rights more or less in the same way.
• It is the general belief that most men use justice-based reasoning, and most women use care-
based reasoning.
• We need care in many situations where justice is a major concern, and care can become an
important issue in a case involved with justice. Thus, Friedman advises us to integrate justice with
care for the best possible result.
• Friedman in this context speaks about the following three types of Justice:
➢ Distributive Justice
➢ Corrective Justice
➢ Institutional Justice
DISTRIBUTIVE JUSTICE
According to her, distributional equality in the matter of distribution of property, assets and wealth
among the members of a family is unjust, if one of the members is doing most of the work than
others to maintain the family relationship and contributing maximum to the growth of the family.
CORRECTIVE JUSTICE
Very often, a personal relationship stands in the way of corrective injustice in a family. A person in
the family may constantly impose harm to another or cause injury to others but he goes scot-free. In
an ideal situation, the wrong doer should regret and change his behavior so that this type of
transgression may not happen in future. However, this does not happen in most of the cases, and
women remain the most vulnerable.
INSTITUTIONAL JUSTICE
Institutional justice is based on an integration of care, corrective justice and distributive justice.
9.3 Conflict Between Care and Justice
• Justice focuses more on values, principles and abstract rules, but care specifically focuses on
persons and personal relations and does not depend on codified rules.
Why do We Care?
• It is a natural human instinct.
• Natural justice demands that one should take care of those who are dependent on you.
• Compassionate Behavior.
• Care is based on security (Child parent relationship).
• Care gives a rare sense of happiness, mental peace and satisfaction.
• Care gives us an opportunity to Pay off our debts.
• For many religious-minded people, care for others is a means to get the blessings of God.
Care, Cost and Conflict
• As a part of the programme for the social responsibility of business now becoming popular, many
organized and established companies have been undertaking activities for providing various types of
care to the sick, disabled, mentally retarded, orphans and helpless people.
Care is a function of mind, which does not depend so much on the level of profit or assets but on
values, attitude and the tradition of care culture.
• Some companies that are making huge amount of profit may not be motivated by the philosophy
of ethical care because they lack in the culture of care, sympathy and compassion.
Conflict and Trade-off
• There is often a conflict between the personal care (PC) and impersonal care (IC) expenditures.
• An increase in the personal care expenditure leads to a decrease in the impersonal care
expenditure.
• The situation becomes difficult to settle when personal care expenditure includes care for one's
own parents or dependent children. In such a case what is appropriate is to make a trade-off.
• There may be many points of trade-offs between PC and IC, and out of these, depending on the
urgency, need and circumstances, one can choose a particular point of trade-off.
Criticism of Care Ethics
• Too much care can make a person dependent creating a moral hazard problem.
• The needs of the caretaker are at times ignored and compromised.
• The application of care ethics is likely to give rise to discrimination, inequality and even injustice. In
the same family, some may receive more care and others less without any apparent cause.
• Care ethics has no legal standing in the same sense in which utilitarianism and deontology seems
to have. Care ethics cannot be made made operational through enactments, policy and legal codes.
It is entirely voluntary.
10 Some Additional Ethical Theories and Philosophies
Rule Based Ethics:
• This principle believes that ethical action should be based on certain given rules of ethics. In such a
case, the consequences are not important, but the open action is crucial.
Ethical Relativism
• It is an empirical fact that all ethical norms and practices are not equally valid and applicable to all
societies.
Thus, ethical standards differ from country to country or from place to place, and hence the birth of
ethical relativism. Ethical standards are relative to a situation, place, time and circumstances.
Criticism against Ethical Relativism
• It seems that to the proponents of ER, all local moral standards are equally acceptable without
exceptions. Morality in that case becomes a flexible concept without any rational basis.
• ER believes that the only criteria for judging right and wrong are the local standards and practices.
Such a standard of judgment is too constricted.
• ER tends to believe that the moral standards of a particular society are the fundamental basis of
judging it or for subsequent policy actions. This view is incorrect.
• ER does not lay emphasis on the universal moral standard. In fact, some moral standards are
unchanged, and live on.
Ethical Pluralism
Ethical pluralism tries to integrate all the ethical theories or principles while considering a particular
situation.
Ethical Objectivism
Moral Objectivism holds that there are objective, universal moral principles that are valid for all
people. Louis Pojman proposes one such moral principle that he believes is binding upon all human
beings: “It is morally wrong to torture people just for the fun of it.”
Ethical Absolutism
Moral absolutism is an ethical view that all actions are intrinsically right or wrong.
10.6 Ethical/ Moral Realism
‘Happiness is good.’ ‘We shouldn’t punish innocents.’ ‘Generosity is a good character-trait.’
Ethical realists say that ethical claims such as these are objectively true: their truth does not depend
on anyone’s particular opinions, beliefs, preferences, or characteristics. That is, realists believe that
there are right answers in ethics. Moral statements provide factual information about those truths
Ethical/ Moral Subjectivism
Subjectivism teaches that moral judgments are nothing more than statements of a person's feelings
or attitudes, and that ethical statements do not contain factual truths about goodness or badness.
Ethical/ Moral Emotivism
Emotivism is the view that moral claims are no more than expressions of approval or
disapproval.Hence, it is colloquially known as the hurrah/boo theory.
Ethical/ Moral Prescriptivism
Prescriptivists think that ethical statements are instructions or recommendations.
Ethical/ Moral Supernaturalism
Supernaturalism makes ethics inseparable from religion. It teaches that the only source of moral
rules is God. So, something is good because God says it is, and the way to lead a good life is to do
what God wants.
Ethical/ Moral Intuitionism
This refers to the philosophical belief that there are objective moral truths in life and that human
beings can understand these truths intuitively. Intuitionists think that goodness or badness can be
detected by adults- they say that human beings have an intuitive moral sense that enables them to
detect real moral truths. Something is good because it's good; its goodness doesn't need justifying or
proving.
Hedonism
Hedonism is a school of thought that argues that pleasure is the highest good, the supreme ideal of
life. In simple terms, a hedonist strives to maximize net pleasure [pleasure minus pain).
Hedonism evaluates human actions on the basis of the consequences of actions i.e., pleasure and
pain.
There are two forms of Hedonism viz. Psychological Hedonism and Ethical Hedonism
• Psychological hedonism is the view that humans are psychologically constructed in such a way that
we exclusively desire pleasure.
• Ethical hedonism is the view that our fundamental moral obligation is to maximize pleasure or
happiness.
Ethical Hedonism again has two varieties viz, gross, and refined.
• Gross Hedonism gives weightage to the sensuous pleasures. All pleasures are alike, and they differ
only in intensity. Present pleasures are to be preferred over future pleasures.
• Refined Hedonism gives weightage to mental and more subtle, fine pleasures. Refined Hedonism
accepts the role of reason in the attainment of pleasures.
What is Business Ethics?
Different writers define Business ethics differently. Some of the important definitions are:
1. Business ethics is the application of the principles of ethics in the realm of business, and
commerce.
2. Business ethics deals with certain moral principles that can tell us whether a particular business
concern is run in a morally right or wrong way.
3. Business ethics is the sum-total of rules and principles which can be regarded as the standard
norm to evaluate and guide business activities.
Relation between Ethics and Business Ethics
There are at least the following three inter-relations between Ethics and Business ethics:
• First, ethical theories offer various concepts and precepts which are relevant to business managers
in conceptualising certain ethical issues in relation to business.
• Second, ethical theories provide a set of analytical guidelines and moral standards, which can be
directly or indirectly applied to the solutions of business problems
• Third, one of the most important ways in which ethical theories can contribute to business
management is the building up of ethical models (framework) about ethical decision-making, ethical
audit, solving ethical dilemmas, and so on.
Classical View on Business Ethics
• The classical and neo-classical views considered business ethics as irrelevant and supported
unbridled expansion of capitalism and market forces.
• According to these views, business and ethics are two separate categories, and these cannot be
meaningfully mixed up.
Scope of Business Ethics
Business Ethics works at different planes and levels. It encompasses different level of activities:
o Individual level (personal Level)
o Organizational Level
o Association Level
o Societal Level
o Internal Policy making (making business strategies)
o Global Level (Business Interactions)
Importance of Business Ethics
• Following business ethics strictly leads to profits.
• Ethical policies leads to transparency in the business landscape.
• Business ethics help the company to get talented employees on board. • It also helps in setting a
safer and conducive environment in the company for employees to work in. • Business ethics will
create a positive image of the company. • If business ethics are strictly followed, it will safeguard
consumer rights as well. • It will ensure there are no unfair or malpractices taking place in the
company
Approach to Business Ethics
There are basically the following 3 approaches to Business Ethics:
1. Profit Based Morality Approach
2. Law Based Morality Approach
3. Natural Laws
Profit Based Morality Approach
• This approach recognizes the symbiotic relation between profits and moral activities.
• Thus, when the profit of a firm is high, its morality gets a better priority.
Law Based Morality Approach
• This approach believes that the laws of a country are mostly based on moral principles.
Natural Laws
This approach upholds the view that there the following five moral obligations for business ethics:
• Veracity principle: A business firm should follow the truth under all situations.
• Non-injury (no harm) principle: A business firm should not harm anybody.
• Fairness (Honesty) principle: A business firm must remain honest in its dealings.
• Human Rights principle: A business firm must respect and maintain human rights.
• Autonomy principle: A business firm must ensure that it does not make infringement of human
choice for goods and services.
Major Unethical Business Practices:
1. Sexual Harassment at Workplace
o It includes many types of offences including sexual advances, requests for sexual favours,
avoidable physical contacts, request for dates, and so on.
o Sexual harassment has been made punishable by laws.
2. Forced and Bonded Labour
o In India, bonded labour and forced labour in the rural and urban areas is around two per cent of
the total labour force in the country.
The incidence is higher in the rural than in the urban labour market. Bonded child labour is
widespread in many parts of the country.
o Children are also forced to serve as domestic servants, road-side beggars, prostitutes and shop
boys in many Third World countries. These children never get the opportunity to go to school.
3. Health and Safety in Workplace
o Health and safety concerns should not be limited to physical harm. Factors such as job insecurity,
high demands, effort-reward imbalance, and low autonomy, were all found to contribute to health-
related behavioural risks, including sedentary lifestyles, heavy alcohol consumption, increased
cigarette smoking, and eating disorders.
4. Discrimination
o Various types of discriminations including gender discrimination, age discrimination, and racial and
minorities discrimination are openly practiced by business houses.
5. Fraud
o A fraud is a type of theft by deception.
o Fraud may be a violation of civil law (Law of Tort) and/or a violation of criminal law. A fraud is a
deliberate misrepresentation of facts that causes the other party to suffer loss or damage.
6. Unethical accounting
o Publicly traded companies may engage in unethical accounting to appear more profitable than
they actually are. In other cases, an accountant or bookkeeper may change records to skim off the
top.
7. Corruption
o Corruption is the abuse of public offices and power for private gain. The gain may be financial or in
kind or any other temptation. There are many forms of corruption such as bribery, kickbacks,
extortion and the like. Absence of accountability and transparency and lack of proper control are the
basic causes of corruption.
Ethical Issues in Business
There are many other issues that fall under the ethical issues in business:
Compliance
In business ethics contexts, compliance generally refers to a company’s or a businessperson’s

conformity with relevant laws and regulations—that is, following the rules set out by government.
The use of ethical standards can both reduce the chances of a workplace lawsuit and help to create a
positive work environment.
Advantages of Ethical compliance:
1) Ethical compliance helps companies to develop a work culture that abides by the workplace laws
and reduces the costs associated with fines and lawsuits.
2) Better Workplace Culture
3) Improves operational efficiency and safety
4) Enhances Public Relations
Disadvantages of Ethical Compliance
1) One of the disadvantages of an ethical compliance program is that it requires the comprehensive
support of management to be effective. If members of the management team decide to apply their
own version of corporate ethics to the way they manage their departments, then this clash of
principles can cause confusion in the workplace.
2) Developing, implementing and maintaining an ethics compliance program within an organization

can be expensive and time-consuming.
Creating a Culture of Ethics and Compliance
1. A business need a detailed policy manual, and more specifically, a written code of conduct and/or
code of ethics policy.
2. A business need to have a person responsible for overseeing company’s ethics and compliance
initiatives.
3. Hold employees accountable
4. The next step involves communicating ethics and compliance efforts to employees.
5. Implement ethics training. It is vitally important to train employees according to policies.
Ethical Issues in Marketing and Advertisement
Paradigm shift in the sphere of Marketing Management over the time:
The emphasis has shifted from the philosophy of "let the buyer beware (caveat emptor)” to that of
"let the seller beware (caveat venditor)". The responsibility of sellers has enormously increased.
What is Marketing Ethics?
o Honesty in all marketing transactions
o Responsibility for the goods sold
o Openness in all dealing
o Fairness in all the deals (absence of cheating or deception at any stage)
Respect for human dignity
o Disclosure of information regarding the product
o Selling products that are not harmful or injurious
o Absence of unethical means to sell the product (no unethical advertisements OR surrogate
advertisement)
o Charging fair prices
o Truthfulness in disclosing the quality and effect of the product being sold (no hiding of
information)
ETHICS OF COMSUMER ISSUES:
Consumer ethics is based on the following theories:
Contractual Theory
It argues that while buying/selling a product, the seller and the consumer enter into an implicit
contract that protects the buyer from the risk of the product.
Social Cost Theory
The theory argues that the product sold should not create extra social cost by creating negative
utility, sickness, disease and environmental degradation, loss of life and any other type of social
danger.
Due Care Theory
This theory is based on the presumption that due care has been taken by the seller/manufacturer so
that it is safe and does not involve any risk at the time of use.
The major issues that ethical consumerism is presently trying to address are:
• Consumer protection and safety.
• Consumer organization is looking after the interest and welfare.
• Assurance about product life, product safety, reliability and maintenance.
• Disclosure of all necessary and relevant information about the product.
• There should be no information asymmetry about the product between the seller and the buyer.
• Proper marketing and advertisement.
• Proper product labeling with warnings and methods of use.
• Protection against unfair trade practices and unfair and false advertisement. ethics for selling
products.
• Consumers' grievance cells run by the state
• Strong consumer organizations and agencies.
• Consumer-seller relations agencies.
• Consumer’s law and policy.
Ethical Issues in Finance and Accounting
• Financial management is concerned with many related activities like investment, financial decision
making and also decisions on dividend payments.
• A proper financial management, however depends on the correctness of information and its flow.
If there is any uneven flow of information across the market, the financial market dynamics cannot
work in an optimum way.
UNETHICAL FINANCIAL PRACTICES:
• Company cooks the financial data and manipulates them to suit the requirements. The cooking of
data is also known as creative accounting.
• The share prices are artificially raised without any economic fundamentals justifying this action.
• Insider Trading is a very notorious form of financial practice.
• Merger of companies may be a financial stunt.
• Another unethical financial issue is creating unusual delay in making payments to suppliers, taxes,
excise duties and other legal payments.
• Tax evasion and avoidance.
• Financial irregularities also include cheating employees in the matter of payment of regular wages,
medical bills, bonus, LTC, children's tuition fees, and so on.
• Loans are often taken from those institutions which are ready to do some personal favour.
• Sometimes, excessive or inappropriate trading on behalf of a client is done by a broker. This is

called churning.
• Many a time a company does not share the correct information in the stock market.
• The banking sector is not free from fraud. These frauds are of three types: involving banking
officials, non-involvement of banking officials but there may be the element of dereliction of duties,
or frauds committed by outside elements. There may also be frauds through forgery of signature,
misuse of credit cards, and so on.
UNETHICAL PRACTICES IN ACCOUNTING:
• Misappropriation by not recording cash receipts and cash payments.
• Misappropriation of goods by wrong recording.
• Manipulation of accounts may be done by showing higher value of assets, lower liabilities, higher
sales and so on. This may be done to show the good financial position of the company. This is called
Window Dressing.
Ethical Issues in HRM
What is HRM?
Broadly defined, it includes recruitment, training, positioning, allocation, motivation, performance

appraisal, promotional policy, welfare consideration, workforce strategy and policy, forecasting of
workforce demand and supply, and developing a committed workforce through a healthy
relationship between the employer and the employees and also between the employees themselves
to work as an organized team.
UNETHICAL PRACTICES IN HRM:
• Many firms use discriminatory policies in recruitment, promotion, wages payment and even in
work allocation.
• Firms often do not care for safety, health, job satisfaction and comfortable working environment.
• Workers' rights and unionism are not looked upon favourable by employers.
• While practicing downsizing and lay-offs, sufficient prior notice is not given to employees.
• Many firms are engaged in exploiting workers by giving them unjustifiably lower wages.
• Sometimes privacy is not allowed, and this goes against the women workers.
• Forced labour and child labourers are used by many firms.
• Hiring and firing policy is extended too far to threaten the workers.
• Sexual harassment prevails in many firms in both overt and covert forms.
• Conflicts are not settled through negotiations and co-operations.
• For the exploited workers, compensatory justice policy is either delayed or completely denied.
Ethical Principles in Business
Now that we know what is meant by business ethics, we must identify and understand the 12 pillars
or principles of ethics for business executives:
1. Honest: Businesses must show honesty in all their communications and conducts.
2. Integrity: You demonstrate integrity when your thoughts, words and actions are in line with each
other. Ethical executives earn trust by having the integrity of character.
3. Keeping Promises: An executive who makes all efforts to fulfil the spirit of their commitments and
promises earns trust and respect.
4. Loyalty: Executives must be loyal with their organizations as well as people or other organizations
they work with.
5. Fairness: Fairness means not to exercise power arbitrarily to gain or maintain any advantage.
6. Caring: A genuine compassion should be shown towards other’s well being.
7. Respect For Others: Every person with whom a business executive interacts with must be treated
with respect, autonomy and dignity.
8. Law-abiding: All laws, rules and regulations related to one’s business activities must be followed.
9. Commitment to Excellence: Excellence in their job is key to an organization's success. Ethical

executives must be well-informed and constantly work towards improving their proficiency in
diverse areas.
10. Leadership: An ethical role model would strive to be a role model for his or her subordinates or
employees. They promote ethical decision-making principled reasoning.
11. Reputation and Morale: Reputation of a company and the pride and morale of their employees is
of the utmost importance to an ethical businessman.
12. Accountability: A business person must own the outcome of their decisions and accountability of
the ethical quality of decisions they make.
Organization structure and Ethics
An organizational structure is a system that outlines how certain activities are directed in order to
achieve the goals of an organization. These activities can include rules, roles, and responsibilities.
As Ferrell has said, “An organization’s structure is important to the study of business ethics because
the various roles and job descriptions that comprise that structure may create opportunities for
unethical behavior.”
Advantage and disadvantage of organizational structure
Though there are many kinds of organizational structures, broadly there are centralized and
decentralized organizational structures. Both these have their own advantages and disadvantages to
business ethics.
Centralized organizations are characterized by concentration of power at the top and there is little
scope for delegation of authority. Such structures are said to promote unethical behavior in the
organization because there is no interaction between the decision makers
at the top and the employees at the lowest level of organization. Also, there is hardly any upward
communication due to which the people at the top never come to know of unethical activities going
on at lower levels. Such a structure also promotes blame shifting as employees may try to transfer
the blame for their wrong actions on others.
Decentralized organization structure focuses on delegation of authority and individual responsibility.

Such structure also promotes unethical behavior among organizational members because there are
independent profit centers which make their own decisions and sometimes these units deviate from
organizational objectives and serve their individual interests. Decentralized structures run on
employee empowerment but if the employees misinterpret their power; this may lead to immoral
acts by employees. There are also chances that middle-level managers when get pressure from the
top may exert unnecessary pressure on lower-level employees and this may again lead to unethical
behavior in the organization.
Role of Board of Directors
A corporation’s culture starts at the top with the board of directors, CEO or executive director, and
other top managers.
5 ethical responsibilities of corporate boards:
1. Know the health of the company’s ethical culture.
2. Evaluating the ethics of the business strategy.
3. Monitoring the real ethics risks in the organization.
4. Monitoring the ethical behavior of the leadership team.
5. Verifying that the elements of the ethics and compliance system are strong.
Strengthening of Ethical and Moral Values
Following strategies can be adopted to ensure ethics & moral values in private and public spheres of
services.
1. Code of ethics: It is a written set of rules issued by an organization/government to its employees

to help them conduct their actions in accordance with the foundational values and ethical standards.
Second Administrative reform commission have identified certain values to be guiding principle in
civil services which are as follows:
I. Selflessness: Public interest should always be upheld and should not engage in any act which
deliberately prioritize personal gain.
II. Objectivity: Public officials should always act based on certain proof, data, merit. Public business-
like appointment, promotion, contract awarding should be on the basis of merit devoid of any bias.
III. Openness: Public official should be open about their actions and decisions.
IV. Integrity: Public officials should not come under any kind of liability from other (monetary or
materialistic gains) which may hamper his decisions in future.
V. Honesty: Public officials should disclose their private/personal property in order to avoid any
conflict of interest.
VI. Accountability: It refers to the answerability of the public figure..
VII. Leadership: Public officials should uphold all these principles through proactive action and
leadership skills.
2. Code of Conduct in Business
• The basic purpose of code of conduct in business is to ensure a proper ethical behaviour in the
conduct of the business.
• Code of conduct in business is important to organize certain business activities.
• All codes of conduct in business are based on the core values of the company, its mission and
vision.
• Different companies may have different code of conduct in business; however, the basic business
codes remain the same.
3. Citizen Charter
o A Citizens' Charter represents the commitment of the Organisation towards standard, quality and
time frame of service delivery, grievance redress mechanism, transparency and accountability. It
provides more responsive and citizen-friendly governance.
Origin and Principle of Citizen Charter
The concept of citizen charter enshrines the trust between the service provider and its users. The
concept was first articulated and implemented in United Kingdom by the conservative government
of John Major in 1991. It was aimed at improving the quality of public services for the people of the
country. It was relaunched in 1998 by Tony Blaire government.
6 principles of citizen charter movement as originally framed are:
▪ Quality, Choice, Standards, Value For Money, Accountability, & Transparency
Indian Scenario of Citizen Charter
o Department of Administrative Reforms and Public Grievances in Government of India (DARPG)

initiated the task of coordinating, formulating and operationalising Citizens' Charters.
4. Human Resource Management: Various strategies and mechanism in human resource

management will help to ensure appropriate balance of moral values in civil services.
5. Effective Laws: Legal binding to act in public interest guide the business action in public interest. It
also helps in preventing corrupt practices. Thus, laws ensure ethical values in public and private
organization.
6. Civil Society Engagements: The citizens' voice can be effectively used to expose, denounce and
restrain corruption. This introduces a new dimension to the concept of accountability of official to
the people.
7. Integrity Pacts: Integrity Pact is a mechanism that helps in promoting transparency and creating
confidence in public contracting/tendering.
8. Proactive vigilance: The main emphasis in proactive vigilance has been on identifying suspected
corrupt elements and then devising mechanisms to weed them out or to ensure that they do not
occupy sensitive positions.
Best Practices in Ethics Programme Ethics Management Programs are designed by an organisation or
an employer as an attempt to have formalised structures for ensuring the organisation is perceived
as fair, honest, responsible and just.
Benefits of Managing Ethics as a Program
There are numerous benefits in formally managing ethics as a program, rather than as a one-shot
effort when it appears to be needed. Ethics programs:
1. Establish organizational roles to manage ethics
2. Schedule ongoing assessment of ethics requirements
3. Establish required operating values and behaviors
4. Align organizational behaviors with operating values
5. Develop awareness and sensitivity to ethical issues
6. Integrate ethical guidelines to decision making
7. Structure mechanisms to resolving ethical dilemmas
8. Facilitate ongoing evaluation and updates to the program
9. Help convince employees that attention to ethics is not just a knee-jerk reaction done to get out of
trouble or improve public image
The 12 elements of a best-practices ethics program include the following. Each element is described
in reference to the pressure-to-perform scenario.
1) Vision statement. A vision statement defines the long-term, most desirable future state for the
organization. The vision gives employees and managers a first screening test for decisions.
2) Values statement. A values statement defines general principles of required behavior. It’s the
standard against which decisions and actions are evaluated to determine if they meet the company’s
and employees’ requirements.
3) Organizational code of ethics. Already discussed
4) Ethics officer. An ethics officer ensures that the ethics systems are in place and functioning.
5) Ethics committee. The ethics committee oversees the organization’s ethics initiative and
supervises the ethics officer.
6) Ethics communication strategy. If employees are to know what’s expected of them and what
resources are available to them, the ethics officer must create a cohesive ethics communication
strategy.
7) Ethics training. Ethics training teaches employees what the organization requires, gives them the
opportunity to practice applying the values to hypothetical situations and challenges, and prepares
them to apply those same standards in the real world.
8) Ethics help line. Help lines aren’t just for reporting unethical conduct. They also make it easier for
the organization to provide guidance and interpretation of its expectations when the intent of an
ethics policy is unclear.
9) Measurements and rewards. If ethical conduct is assessed and rewarded, and if unethical conduct
is identified and dissuaded, employees will believe that the organization’s principals mean it when
they say the values and code of ethics are important.
10) Monitoring and tracking systems. It’s also critical to assess the extent to which employees accept
and internalize the organization’s values and ethics code.
11) Periodic evaluation. It’s important to assess periodically the effectiveness of any initiative,
especially an ethics program.
12) Ethical leadership. The bottom line is that ethics is a leadership issue. Leaders set the tone, shape
the climate and define the standards.
Corporate Social Responsibility
Corporate social responsibility (CSR) applies to businesses that put policies and practices in place
that will have a positive impact on the environment and community. Common CSR objectives include
donating a portion of a company’s proceeds to charitable causes, supporting local vendors and
suppliers, using FSR recycled packaging, among other pro-social initiatives.
Difference between CSR and Business Ethics
Though business ethics and social responsibility seem to be overlapping, there has always been a
contradiction between the two.
1) There are good things for society that are not good for business and this is where social
responsibility comes in. There are also good things in business that are not good for society and this
is where business ethics comes in.
2) Social responsibility is more of a policy or an obligation to the community, while business ethics is
more of a conscience.
3) Business is focused on profits but with social responsibility. It is still obliged to perform beneficial
activities for society, while business ethics should make a positive move for society.
4) Without social responsibility, the community will not benefit, however, without business ethics,
business is capitalism at its worst.
Ethical Dilemma
• An ethical dilemma is a situation that involves at least an ethical issue where a clear decision or
choice becomes problematic because of competing claims or interests .
• There may be an ethical contradiction or conflict in the choice to be made.
20.1 Characteristic Features of Ethical Dilemmas
• Social cost and private gains are different.
• No linkage is established between the two alternative courses of actions (choices).
• Competitive behaviour gains predominance in many cases.
• There may be an inconsistency between goals (e.g. materialism vs altruism).
• Cross-cultural value differentials do exist.
• A problem of right choice is the main issue.
• Very often, the exact impact of the two alternatives may not be known or determined.
Types of Ethical Dilemma
• Ethical dilemma may be of different types:
o Ethical dilemma between one ethically right and one ethically wrong alternative.
o Ethical dilemma between two ethically wrong alternatives.
o Ethical dilemma between two ethically right alternatives.
o In the case of two morally wrong situations, the person may choose the one which brings least
harm or injury to the smallest number of people. This may be called the situation of reverse
utilitarianism.
The typology of dilemma may involve the following situations:
o Organization vs Persons (Employees)
o Persons vs Society
o Local culture vs Foreign culture
o Organization vs Law
o Organization vs Society
o Person vs Law
o Right vs Right
o Wrong vs Wrong
o Right vs Wrong
Resolution of Ethical Dilemma
There is no clear-cut method to resolve an ethical dilemma. But us let us try and discuss the general
resolution process:
1. Study the Nature of the Ethical Dilemmas:
2. Analyse the Consequences of Each Contemplated Solution. Very often, the following types of
ethical dilemmas need resolution:
I. Individual Gain vs Social Gain
II. Truth vs Loyalty
III. Justice vs Mercy
IV. Short-run vs Long-run Gains
In each one of these cases of ethical dilemmas, the solution can depend on any prejudiced
preconception. Each case of ethical dilemmas is a different world and the decision has to be based
on circumstances. However, some general naïve views may be useful.
DESCRIPTIVE ANSWERS
Q1.) Elaborate on some ethical Dilemmas arising out of conflicts of values by giving suitable
examples?
Value conflicts are caused by perceived or actual incompatible belief systems. Values are beliefs that
people use to give meaning to their lives. Values explain what is "good" or "bad," "right" or "wrong,"
"just" or "unjust."
Every professional has to live with two sets of values: personal and professional. These two values
could be conflicting at times. However, whenever a clash occurs between these two values,
professional and morally responsible people give preference to the professional value over the
personal value or interest. Thus, a judge may sentence his only son for murder, or a teacher may
punish his daughter for not learning the lesson-there are several such cases in society.
In many cases, barring penal code cases, a compromise, trade off or a balanced approach may be
possible. For instance, a forest officer and on his inspection, tour find a woodcutter cutting a tree
from the forest illegally. On enquiry, officer learns that woodcutter is poor, jobless and his family is
starving. Being compassionate, you may tell him not to indulge in this illegal act again and impose a
penalty on him. He pays him money which helps him pay his penalty and feed his family too.
In the case of media reporting too, there may be some potential conflict areas between the public's
right to know everything about the reported case and the individual's right to privacy and
confidentiality. For instance, it is not necessary to reveal the full name and address of a rape victim
while reporting such a case.
The above examples make it clear that a compromise is possible in many cases by following a
middle-path, thus it can also be concluded that the Golden mean theory of Aristotle can provide a
right direction in case of the ethical dilemmas caused due to the conflict of Values.
Q.2) Discuss, how the board of directors of a company can set the tone for an ethical culture in an
organization.
responsible for illegal behavior at their companies. For example: Oliver Schmidt, the highest-ranking
Volkswagen officer residing in the United States, was sentenced to seven years in prison and ordered
to pay $400,000 for his role in the VW diesel emissions scandal.
A corporation’s culture starts at the top with the board of directors, CEO or executive director, and
other top managers. Everyone else within the corporation gets a sense of the corporation’s values
through what they say and what the corporation has to say through its media, advertising, employee
communications and other messages.
The board of directors of a company can set the tone for an ethical culture in an organization in the
following way:
1. Know the health of the company’s ethical culture. Most boards or their audit committees hear pro
forma reports on ethics violations and lists of calls to their hotlines. Few know anything about the
culture in which these violations arise. Do these behaviors reflect widespread acceptance of
improper behavior — or a few bad apples?
2. Evaluating the ethics of the business strategy. Business models and strategies are being junked
and reformulated everywhere in our modern economy. New sources of revenue are being sought;
radical transformations of manufacturing and delivery systems are being implemented. Sadly, some
boards are swept along by management proposals to change the nature of the business without
asking critical ethics questions about the strategies.
3. Monitoring the real ethics risks in the organization. Every organization manages financial risks, and
boards pay close attention to the level of that risk. Few senior managements and even fewer boards
evaluate the ethical risk of entering new markets, extending the supply chain to new regions, or
putting extreme performance pressure on a sales force that is prone to shortcuts.
4. Monitoring the ethical behavior of the leadership team. No decisions are more complex than
hiring and firing top executives. It is tough enough to find a prospect who has the skills needed to
execute the company’s strategy for the next five years. It’s even more difficult to identify if the
leader has the required ethical behavior.
5. Verifying that the elements of the ethics and compliance system are strong. Every company has a
code of conduct, but is it viewed cynically by the staff? Do people really believe the company wants
more than minimal compliance? The board needs a way of evaluating the strength of these systems,
not just their existence.
By meeting each of these responsibilities, the board sets the tone for true ethical behavior in the
company — and does its best to prevent future wrongdoing. Today it is not enough to be
conscientious about cleaning up scandals after they occur.
Q3). What do you mean by ethics? Discuss, why ethical issues occur in Business?
According to Potter Stewart, “Ethics is knowing the difference between what you have a right to do
and and what is right to do.”
Ethics carries significant influence in the corporate world. Business ethics is the study of how a
business should act in the face of ethical dilemmas and controversial situations. This can include a
number of different situations, including how a business is governed, how stocks are traded, a
business' role in social issues, and more.
Obviously, ethics problems in business appear in many forms. Although not common or universal,
they occur frequently. Finding out what is responsible for causing them is one step that can be taken
toward minimizing their impact on business operations and on the people affected. Some main
reasons are as follows:
1) Personal Gain and Selfish Interest
Personal gain, or even greed, cause some ethics problems. Businesses sometimes employ people
whose personal values are less than desirable. They will put their own welfare ahead of all others,
regardless of the harm done to their employees, the company, or society.
2) Competitive Pressure on Profits
When companies are squeezed by tough competition, they sometimes engage in unethical activities
to protect their profits. This may be especially true in companies whose financial performance is
already substandard.
For example: An especially infamous example of unethical behavior comes from Enron. For years,
the energy company was submitting inaccurate financial statements. Collusion with the accounting
firm Arthur Andersen LLP meant that Enron’s auditor kept signing off on the falsified statements.
3) Business Goals versus Personal Values
Ethical conflicts in business sometimes occur when a company pursues goals or uses methods that
are unacceptable to some of its employees. Whistleblowing may be one outcome if the employee
goes to the public with a complaint after failing to convince the company or correct the alleged
abuse.
4) Top Management sets an Example
Company ethics begin at the highest manager level in a company. The top managers, including CEOs,
financial officers, vice-presidents and other officers, establish the vision, goals and tone of
operations for the company. Top managers who are unethical or who
promote activities and decisions that are unethical, project the image that ethics don’t matter.
For example: Rana Kapoor, former YES Bank managing director and chief executive officer, used the
lender as his “personal fiefdom” to carry out illegal activities and was the architect of a financial
fraud. Practices followed by the YES Bank under Kapoor’s regime promoted a poor credit and
compliance culture, centralization of power and lack of institutionalization, putting it in a situation
where its survival came into question.
5) Unclear Policies
In some cases, managers and employees exhibit poor ethical behavior because the company doesn’t
offer a clear model of ethics. A company policy manual and ethical code of conduct normally
establish ethical standards and consequences for poor decisions. Some businesses have no formal
ethical policy documents and offer no guidance at all. Others have policies that are unclear, vague,
inconsistent or not consistently enforced.
For example: Sexual harassment and abuse allegations against figures high up in Fox News started in
2016 — just over a year before the #MeToo movement took off. Multiple women at the television
network said that sexual harassment from superiors led to them being fired, demoted, or denied
jobs entirely. It was later revealed that Fox News had settled several lawsuits (some of them years
earlier), but the network was more concerned with covering up the allegations than resolving the
underlying issue with clear guidelines and policy to deal with sexual harassment at workplace.
Even after taking all necessary precautions, ethical problems can still arise, so it's crucial that you be
well-prepared to tackle them. First, be aware of all the ethical concerns your business is likely to
face, identify ways to detect them at the earliest, and most importantly, learn to manage such issues
fairly without ignoring or denying that the problem exists.
Q.4) What is an Ethics Programme? Discuss the best practices to develop an Ethical programme in
an organization.
An ethics program helps communicate your company’s business philosophy to employees, vendors,
investors and customers. A good ethics program can help strengthen your relationships with
employees and customers and improve your company’s reputation. Although your employees might
be familiar with your company’s informal stance on ethics, instituting a program eliminates any
confusion and provides everyone with the same information regarding ethical business behavior.
Best practices are the working standards or ethical guidelines that provide the best course(s) of
action in a given situation. In order to develop best ethical programme, an organization can follow
the following practices:
1. Vision statement. A vision statement defines the long-term, most desirable future state for the
organization. An ethical program needs to have a clear vision statement that gives employees and
managers a first screening test for decisions. Example: When setting performance goals HR should
question whether the goals further the vision.
2. Values statement. A values statement defines general principles of required behavior. It’s the
standard against which decisions and actions are evaluated to determine if they meet the company’s
and employees’ requirements. Example: An organization that adopts the simple values of fairness,
honesty and integrity would set only those goals that employees can achieve through honest means
and would require that employees refrain from “gaming the system” and that communication
among all parties be truthful.
3. Code of ethics: It is a written set of rules issued by an organization/government to its employees

to help them conduct their actions in accordance with the foundational values and ethical standards.
4. Ethics officer. An ethics officer ensures that the ethics systems are in place and functioning. This
person monitors the organization to determine if it’s making a good faith effort to abide by its stated
values, that the code of conduct supports those values and that violations of those values are
prevented or detected and addressed.
5. Ethics committee. The ethics committee oversees the organization’s ethics initiative and
supervises the ethics officer. It’s the final interpreter of the ethics code and the final authority on the
need for new or revised ethics policies
6. Ethics training. Ethics training teaches employees what the organization requires, gives them the
opportunity to practice applying the values to hypothetical situations and challenges, and prepares
them to apply those same standards in the real world.
7. Measurements and rewards. In most organizations, employees know what’s important by virtue
of what the organization measures and rewards. If ethical conduct is assessed and rewarded, and if
unethical conduct is identified and dissuaded, employees will believe that the organization’s
principals mean it when they say the values and code of ethics are important.
8. Ethical leadership. The bottom line is that ethics is a leadership issue. Leaders set the tone, shape
the climate and define the standards. If managers are trustworthy and trusted, if their motivations
are honorable and their expectations crystal clear, and if they’re paying attention to ethics as an
integral element of every business decision, then ethical problems will be rare.
Above discussed best practices can prevent the vast majority of ethics violations, large and small, if
they’re systematically and systemically applied. Nothing has proven effective in preventing the rogue
employee from perverting any system. But these practices can ensure that an organization is doing
nothing to encourage good people to do bad things.

Ethics Explained

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ethics Explained

Uploaded by

Copyright:

Available Formats

ETHICS

So, we can define ethics as:

• “the study of what is right or good human conduct”

• “the science of ideal involved in Human life”

• “the science of moral judgment”

• “the science of morals in human conduct”

A. Deontological approach (means are important):

B. Teleological Approach (Ends are important):

d. Administrative issues: Administrative officer come across many issues in day-to-day

Who Sets Ethical Standards?

➢ Tradition and convention, and inter-generational practices.

➢ Knowledge, wisdom and experience.

➢ Family and Friends.

4.1 Ethical standards

Common Good Approach

For Example: Imposition of lockdown to ensure safety of lives of citizens

Discuss in more details in the later part of chapter

The virtue Approach:

Ethical Syllogism (Reasoning)

What Are Moral Principles?

Types of Moral Principles

There are two types of moral principles: absolute and relative

Absolute Moral Principles

Relative Moral Principles

Some concepts related to ethics

Cognitivism and Non-Cognitivism

➢ direct or intuitive judgment- based on our sense perceptions

➢ derived judgments - formed out of the existing body of knowledge.

Belief depends on the moral state of the believer.

There are the following six ways of belief formation:

• Beliefs can be adopted from our role models.

• In our formative years, somebody else's belief may be internalized.

• Some beliefs are formed on the basis of knowledge, research or commercials.

• It gives a person direction and motivation to live in a desired way.

• The value system helps a person in making clear decisions.

There are mainly Two types of values:

• These values are called instrumental values.

• An instrumental value is necessary to achieve the ultimate goal.

• Egocentric value: The value is directed towards satisfying the ego.

• Socio-centric value: The value aims at socialization and adaptation to society.

• Tribalistic value: It consists of submission of oneself to higher power and authority.

• Deontic value: It considers one's own duty as the supreme religion.

• A value or values are chosen freely without any coercion or compulsion.

• A value is chosen from a number of options.

• The value that is chosen is practiced and then sustained

• Value becomes a part of yourself and being.

1. Parents and Family

2. Teachers and Classmates

3. Peer Groups and Friends

5. Culture and Tradition

6.3.5 Values and Business:

A business organization depends on the following types of values:

• Innovation in production technique, cost reduction, etc.

• Establishing credibility can be ensured by trust, goodwill, rapport with customers.

• Providing consumers with best services, in particular after-sales services.

• Gathering market intelligence to know the status of the product

• Maintaining external and internal coordination of all product lines

Virtue is a Relative Concept:

Plato’s Cardinal Virtue:

1. Intellectual Virtue (rationality and Knowledge).

2. Moral Virtue (temperance, courage, habits for realization of good).

Golden Mean Theory