Prepared by Jayesh Sir, Assistant Professor

Introduction and meaning

• Ethics is defined as “a systematic approach to analysing, and distinguishing
matters of right and wrong, good and bad, understanding them and admirable
as they relate to the well-being of the relationships”.
• Ethics decides one’s actions, without it everything a person does is random and
aimless. Only with a rational ethical standard, we will be able to correctly
organize our goals and actions to accomplish our most important values. Any
flaw in our ethics will reduce our ability to be successful.
• The study of ethics is a systematic science. Its scope encompasses all human
relationships in a society.
• Ethics also known as moral philosophy is a branch of philosophy that involves
systematizing, defending and recommending concepts of right and wrong conduct.
The study of ethics can be divided into four operational areas namely – meta ethics,
normative ethics, descriptive ethics and applied ethics.
• In this chapter, we will deal exclusively with the concept of ethics. A concept is a
mental model or a mental construct. With the mental model of ethics, we can
understand the various other concepts that go into its making. Once the complex
structure of this model is ready, we can execute it just the way architectural
engineers execute blueprints. The task of business ethics is to enable managers to
execute these mental models consistently, contingent on business management
situations. The consistency must be such that it becomes a universal principle or a
point of reference for right or wrong business actions.
• Ethics fundamentally comprises of two elements:
• Firstly, ethics refers to well founded standards of right and wrong that describe what
humans ought to do
• Secondly, ethics refers to the study and development of one’s ethical
standards.
• So, it is necessary to constantly examine one’s standards to ensure that
they are reasonable and well founded.
ETHICS AND MORALS
 the cause of unethical behaviour could be the
result of various factors
• Organisational culture - some would say unethical behaviour stems from unethical workplace cultures
that were enabled or not addressed by management earlier on.

• Individual differences - others would argue that it is more on individual differences and that people
have stronger or weaker ethical principles than others. So its believed to be either a case of bad apples
in good barrels or good apples in bad barrels.

• Contextual enablement - there are cases where employees may be given leeway to bend or act against
their organisational code of conduct for the benefit of the organisation.

• Situational responses - employees witnessing these unethical behaviours may turn a blind eye or stay
silent due to fear of voicing criticism towards their organisation.
 The consequences of unethical behaviour can
manifest through the following:
• 1. Damages reputation and credibility

• A lethal effect is the damage to your organisation’s reputation from both the consumer and employee point of view.

• A bad reputation may deter individuals from seeking to work for your company or may stop purchasing your
product/service due to lack of trust.

• From a B2B perspective, it may also discourage others from doing business with you resulting in social exclusion.

• 2. Low employee engagement

• Unethical behaviour can lower employee productivity by interfering with their morale.

• Employees who witness unethical behaviour lose motivation to work and can result in absenteeism or worse, they
may commit similar unethical behaviours perceiving this to be normal.
• 3. High employee turnover and loss of valuable talent

• Some companies wonder why they have so many employees leaving in a short amount of time.

• Unethical behaviour is a potential factor as exhibiting inappropriate behaviour creates a toxic

work environment and culture that demoralises talented employees.

• 4. Drain on resources

• Having unethical individuals at work is a drain on company resources and is damaging to the
company’s bottom line as they are getting paid for low quality and unproductive work.

• This also results in increased sick days and low creativity and innovation which is not only
financially costly to the company but may also lose competitive advantage.
• 5. Disrupt employee relations

• The display of unethical behaviour interferes with relationship building among the employees
and with their employer.

• When individuals witness a demonstration of unethical conduct it often creates disdain

towards that individual, preventing teams from having effective collaboration.

• In some cases, it triggers the occurrence of office politics where employees are perhaps
forced to choose a side.

• If unethical behaviour is being displayed by a manager or an employee with authority, the

outcome are two-fold it either starts a cascade of unethical behaviours exhibited by workers
due to the failure to lead by example, or they lose the respect of their staff.
CONFLICT INTEREST
 Conflict interest (Introduction):
• Conflict of interest is a common issue in the workplace. Most of us have heard someone
say, “It’s who you know, not what you know.” We have heard co-workers complain that
a manager’s relative always gets the biggest raise or the best assignment. We might have
seen colleagues accept gifts from potential vendors. Maybe a co-worker leaves work 20
minutes early every day so she can get to her second job.

• A supervisor may give a co-worker time off from work to do volunteer work or might
allow employees to solicit donations and funds in the workplace, whether for the Girl
Scouts or a local school function. Even though these situations are very different, they
all fall under the heading of “conflict of interest.”
 What is a Conflict of Interest?
• A conflict of interest occurs when an individual’s personal interests – family, friendships, financial, or
social factors – could compromise his or her judgment, decisions, or actions in the workplace.
Government agencies take conflicts of interest so seriously that they are regulated. Industry
organizations, corporations, and universities, including our university, follow that lead by including
conflicts of interest in our policies, regulations, and standards of operating procedures.

• Conflicts of interest are a clash that most often occurs between requirements and interests. Various
types of conflicts of interest can occur because of the nature of relationships versus rules of organizations
or federal and state laws. People can easily become biased (have an unfair preference) because of small
things like friendship, food, or flattery, or they may be influenced to make a decision because of the
potential to gain power, prestige, or money. Conflicts can occur when an individual makes or influences
a decision and does so for some personal gain that may be unfair, unethical, or even illegal.
• In our work lives, we also have interests that could influence the way we do our jobs and the decisions we make.
Even if we never act on them, there may be an appearance that a conflict of interest has influenced our decisions.

• Consider this example. Your supervisor is promoted to department director. His daughter-in-law is hired as a new
supervisor within the college but is not reporting to him. Maybe the new supervisor is the best candidate for that
position, and maybe the new department director had nothing to do with her hire. Even if this hire met all of the
requirements under our Employment of Relatives policy, the situation appears suspicious and employees may
think that something was unfair or unethical about her hire.

• Transparency (being completely open and frank) becomes important when dealing with both actual and
potentially perceived conflicts of interest. Perception happens when an individual observes something (behaviour
or activity) and comes to a conclusion. Perceiving a conflict of interest does not make it a conflict of interest. The
true test of verifying whether a matter is just a potentially perceived conflict of interest, or an actual conflict of
interest, is disclosure.
ALL THE BEST