MODULE 1: INDIAN ETHOS AND VALUES

• Wisdom
• Sensibility towards vales and ethics and the rights and wrongs facing in the life

Values

Moral Ethics

• Logic: methods using to evaluate with evidence

• Aesthetics: beauty of our decisions, sentimental emotion
• Politics: power involved especially individual involvement
• Reality: eventual consequences of particular action
Ethics
It is the systematic reflection on what is moral. It is a Greek word ‘ethikos’ means morality
showing moral character
Types of Ethics
1. Normative Ethics: rules and regulations, norms which is to be followed
2. Applied Ethics: followed in business
3. Meta Ethics: moral philosophy is followed
Morality
• It is the whole of opinions, decisions and actions with which people express what
they think is good or right
• Derived from Latin word ‘mos’ meaning ‘custom’
• Values serve as the base for moral codes and reflections
Moral and Ethics
Discipline Difference Relation
Derived from Latin word Both are interest wind
‘mos’ means custom
Moral Axiology-description of Ethics is a reflection of
values conforming to a morality
standard of right behaviour Individual ethics is a relation
societal of moral values
Derived from Greek
Ethos/Ethikos means Ethics derives its theories
Ethics character normative science from moral values
tests or evaluated
Choosing principles of
guiding behaviour
Definition
• “Ethics is the philosophical study of morality” – John Deigh
• “The sense of satisfaction derived from knowing that or may judge his own life as he
would fridge another’s and find it good” - Mahatma Gandhi
• “Ethics is a conception of right and wrong behaviour defining for when our actions
are moral and when they are in moral” – A C Fernado
• “Ethics deals with things to be sought and things to be avoided with ways of life and
with telos” – Epicurus

Law Ethics
A systematic body of rules that governs the Branch of moral philosophy that guides
whole society and the actions of its people about the basic human conduct
individual members
Set of rules and regulations Set of guidelines
Expressed and published in writing Abstract
Punishment on violation No punishment on violation
To maintain social order To help to decide which is right or wrong
and how to act
Relationship between Law and Ethics
Law
• Focuses on rights and wrongs
• Ethics provides basic reasons for law
• Law mandates ethical conduct
Ethics
• Focuses on rights and wrongs
• Law is a public expression of social ethics
• Compliance to law reflects ethics
Origin of Ethics
Theory of forms:-
• The zenith of all forms is the form of goodness because it is the form of highest value
• Human well-being is the highest aim of moral thought and conduct plato
Natural Law Theory
• What is god and evil, is derived from the rational nature of human beings and natural
justices
• Emphasize virtue of mind, character and sense of honesty-virtue ethics
• Aristotle, Acquinos
Religion and Ethics
• Most religions have an ethical component often derived from purported
supernatural revelation or guidance
• Every religion prescribes high ethical standards
• Religion is based on the idea that God records insights about life and its true
meaning
 • Reasoning of these revelations leads to ethics
• Ethical principles derive their authority from religious doctrines meant to promote
and develop individuals
Work Ethics/Ethos
• Systematic reflection of what is moral at work
• A group of moral principles, standards of behaviour or act of values regarding proper
conduct in the work place
• Integrity, efficiency, responsibility, respecting law, technical competence, prudence
• Leads to employee engagement and better work culture
Dimension of Work Ethics
• Protecting the organization’s interest
Best efforts for higher productivity and quality
• Appropriate system
Unambiguous policies, rules and regulations, reward system etc
• Proper communication
Transparent communication channel
Work Ethics at Various Levels
• Basic Level: discipline, punctuality, cordial work relations, respect for hierarchy,
commitment to work, ethically sound activities
• Senior Level: work culture, loyalty and sense of belongingness, commitment to
organization’s reputation
Indian Values
• Human values
• Social and political values
• Spiritual values
Indian Culture
• Religiosity
• Diversity
• Inclusiveness
• Regionalism
• Harmony with nature
• Rich artistic heritage
Indian Heritage in Production and Consumption
• Agro based(self-consumption)
• Barter system(exchange)
• Industry, trade and commerce(foreign trade, shipbuilding, metallurgy, fabrics)
• Guild system(associations, code and guild courts)
Features
• Impact of spiritual consideration
• The role of grate economists
• Increase in spiritual growth vs per capita income
• Use of resources
Indian vs Western
Factors Indian Culture Western Culture
Origin Millennia old practices Ancient Greece & Roman
Feature Traditional Modern
Religion Diverse – Hindu Christianity and Judaism
Cuisine Spicy/Lunch Meat/Dinner
Family More weightage/Joint Nuclear
Festivals Religious harmony Event based
Society Active Passive
Equality Caste/gender/income Caste/gender/income
Hierarchy Important Less important
Clothing Societal Individual
Indian Value Driven Management

Indian Mythology
• Body of stories, symbols and rituals that communicates subjective truth of a
particular nature
• Itihasa and Puranas
• Story based management learning through Panchatantra, Vetal stories etc.
Organization
• Brahma(creation) and Saraswat(knowledge)
• Vishnu(preservation) and Lakshmi(wealth)
• Maheswara(destructions) and Durga(Power)
▪ Groups working together to achieve common objective
Feature of Indian Ethos
• Focus on the existence of human being as a truth: soul is supreme
• Principle: “if you are good, the whole world is good”
 • One must successfully strike a balance between spiritual values and secular
values
• Greater emphasis is one one’s duty that results
• Inner resources,i.e, self is more important than material possessions
• Indian ethos is explicit in itihas and puranas, Vedas, Upanishads etc.
• Indian socio-political environment is managed by human values(moral, ethical,
spiritual) and Holism(oneness)

MODULE 2: INTRODUCTION TO BUSINESS ETHICS

Business Ethics
• Principles and philosophies concerned with moral judgement and good conduct
applicable to business solution
• Application of normative ethics to business behaviour
• Set of principles or reasons which should govern the conduct of business whether at
the individual or collective level
• Based on the principle of integrity and fairness focussing on the benefits to the
stakeholders, internal and external.
Why Corporate Ethics??
i) To protect its own interest
ii) To protect the interest of business community
iii) To keep commitment to society
iv) To meet stakeholders’ expectations
v) To prevent harm to general public
vi) To build trust
vii) To protect their own reputation
viii) To protect their own employees
ix) To create a conducive work environment
Stakeholder Theory
• Stakeholder theory looks at the relationships between an organization and others in
its internal and external environment.
• It also looks at how these connections influence how the business conducts its
activities.
• Modified to Social Contract theory
• Gandhian Principle of Trusteeship
▪ Abhyudaya (worldly prospect)
▪ Paramartha (societal good)
• Internal stakeholders :- Employees, Managers and Owners
• External stakeholders :- Suppliers, Society, Shareholders, Government, Customers
and Creditors
Ethical Principles in Business
▪ THE PRINCIPLE OF FIDELITY (TRUSTWORTHINESS)
Honesty and reliability in conduct - with the company and co-workers
▪ THE PRINCIPLE OF AUTONOMY(RESPONSIBILITY)
Taking responsibility and pride in your work and strive for excellence.-
▪ THE PRINCIPLE OF PATERNALISM-FAIRNESS
▪ Do your share of work and guide others to best interest
▪ THE PRINCIPLE OF BENEFICENCE
Selflessness. Show kindness to others-CARING
▪ THE PRINCIPLE OF JUSTICE
Courtesy, tolerance and acceptance of the differences, adhere to corporate policies and
procedures -RESPECT, CITIZENSHIP
The Josephson Institute of Ethics has compiled the Six Pillars of Character, which explain
the way a company should embrace and display values in its everyday actions.
Approaches to Ethics/Ethical Theories
1. Teleological
▪ Greek ‘telos’ which means end or purpose
▪ Actions are judged based upon their consequences
▪ Also known as consequentialist ethics
EGOISM
▪ consequences to one’s self define actions as ethical or unethical
UTILITARIANISM
▪ the greatest good for the greatest number
▪ Proponent-Jeremy Bentham
Pros
Stresses happiness and utility
Cons
Ignores concerns of justice for minorities
2. Deontological
▪ Greek ’deon’, duty
▪ Actions are judged based on duty or the intentions of an actor
▪ MAXIMS-Consistency, Human dignity, Universality
▪ Proponent-Immanual Kant
Pros
Stresses role of duty and respect for people
Cons
Underestimate the importance of happiness
Virtue Theory
Act is right, if it’s virtuous
MODULE III: ETHICAL DECISION-MAKING IN BUSINESS
Corporate Governance
A formal system to facilitate ethical decision making in business
Accountability:
Strategic decision Legal and ethical

Oversight:
Checks to reduce deviations from policies and strategies
Control:
Process of auditing and improving organisational decisions and actions
Corporate Governance -Definition
▪ Corporate Governance is defined as holding the balance between economic and
social goals and between individual and communal goals.
-Adrian Cadbury

▪ Procedures and processes according to which an organisation is directed and controlled.

CG structure specifies the distribution of rights and responsibilities among the
different participants in the organisations and lays down the rules and
procedures for decision making
▪ -Organisation of Economic Co-operation and Development (OECD)
Ethical Dilemma
• A complex situation where ethical principles or values are in conflict.
• decision maker faces a choice between equally undesirable options
• Can affect organisation, employees and society at large
Sources of Ethical Dilemma in Business
• Failure of personal character
• Conflict of personal values and organisational goals
• Organisational goals vs Social values
• Hazardous but popular products
• Other ethical challenges-exploitation, discrimination, price fixing
- (Keith Davis and William Fredrick)
Considerations for Managers
RELATIVISM
• Theory that each society’s view of ethics must be considered legitimate and
ethical.
• This implies that when doing business in a country managers need only follow
local ethical conventions.
UNIVERSALISM
• Theory that basic moral principles transcends cultural and national boundaries.
• May be difficult in MNCs as it may lead to ethnocentrism
Ethical Decision-Making Framework in Business
1. Ethical Issue Intensity
▪ Relevance or importance of an ethical issue in the eyes of the individual, work group
or organisation.
▪ Reflects the ethical sensitivity of the individual or work group
▪ Spheres of influence-workplace, family, religion, legal system, community and
profession
▪ Organisations must identify areas of ethical issues, train employees, and sensitize
employees
2. Individual factors
▪ Age, Gender, educational qualification and nationality are the major influencers
▪ Decided by moral philosophies and cognitive moral development
▪ These individual differences affect the ethical judgment of managers to a great
extent
▪ Personal ethical issues involve honesty, conflicts of interest, discrimination,
nepotism, theft of organizational resource.
▪ Kohlberg’s Model of Cognitive Moral Development
STAGE FEATURES
1. Punishment avoidance Being ethical to avoid punishment
2. Instrumental purpose and Following norms for immediate reward
exchange
3. Interpersonal expectation and Doing good for sake of relationship
conformity
4. Social system and conscience Duty and respect for authority is focal
maintenance point
5. Social contract orientation Sense of social obligation and
commitment
6. Universal ethical principles Self-chosen ethical principles backed by
reason

3. Organisational Factors
▪ Corporate culture - a set of values, beliefs, goals, norms and ways of problem solving
shared among organisational members.
▪ Ethical climate- character or decision processes employees use to evaluate their
responses to ethical issues.
▪ Significant others -obedience to authority and those who have influence over
workgroup.
4. Ethical Opportunity
▪ The conditions in an organization that limit or permit ethical or unethical behaviour.
▪ Individual job context is the main aspect
▪ Ethical Decision Making Process
▪ Heinz Dilemma-Worked out
Ethical Decision Making Process
1. Identify the ethical problem
▪ Possible violations, potential consequences
2. Collect relevant information
▪ Type and degree of rights forsaken or harm inflicted
3. Evaluate the information
▪ Based on standard assessment criteria, ethical theories
4. Consider alternatives
▪ Confront/escalate/intervene and change
5. Make a decision
▪ Implement and review
Whistle Blowing
▪ Making a disclosure, by a member or former member of organization, in the public
interest regarding unethical practice in workplace
▪ The act of releasing information (as a form of moral protest) about the illegal and/or
unethical conduct of a business or organization that you are (or were) a member of.
▪ Whistle blowers are protected by well-laid systems - Whistle Blowers Protection
Act, 2011 and Sarbanes-Oxley Act,2002
Is it fair to Blow the Whistle? / Conditions
▪ Loyalty to people at large and not to an individual or institution is the guiding
principle.
1. A legitimate claim
2. The right motive
3. Exhausted alternatives
4. Done in good faith

MODULE IV: ETHICS IN FUNCTIONAL AREAS

1. Marketing Ethics
Defined as how moral standards are applied to marketing decisions, behaviours and
institutions.
▪ Fairness in transactions
▪ Freedom of stakeholders
▪ Wellbeing with regard to social impact
• Consumer rights
• The right to safety • The right to be informed
• The right to choose • The right to be heard
Ethical Areas in Marketing
1. Marketing Research
• Privacy protection
• Conclusions must not be generalised based on smaller numbers.
• Confidentiality of data
• Avoid using data for unintended purposes.
• Maintain Integrity
• No sales, stress for research
 Marketing Mix
• Products ensuring quality, utility and safety
• Fair Price avoiding price fixing, predation etc.
• Distribution without reciprocal dealing
• Promotion without false claims, surrogate ads, stereotyping etc.
• Process audits
• People with good moral background
• Physical evidence for positive influence.
Competition
• Fair practices
• No exploitation of stakeholders
• Compliance with laws and regulations.
2. Ethical Issues in HR
▪ Discrimination issues
▪ Suppression of democratic rights in workplace
▪ Privacy issues-personal and performance
▪ Safety and health
▪ Performance Appraisal
HR Role
▪ Top management should serve as role model
▪ Evolve code of ethics
▪ Ethics committee to advice on ethical issues
▪ Company journals with articles on ethics
▪ Ethics training
▪ Disciplinary system
3. Ethics in Financial Management
Financial statements
▪ Fraud reporting of revenues, asset valuation, liabilities and expenses etc
▪ Misleading disclosures or omittance of needed information
Financial markets
▪ Deception and churning, Insider trading, hostile takeovers etc.
▪ Information security
→ Compliance to code
→ Avoid conflict of interest
→ Legal compliance and Corporate Governance
→ Reputation
4. Ethics in IT
Information handling
▪ Password security, data confidentiality, hacking
Intellectual Property Rights
▪ Software piracy, illegal use of algorithm, source code, trade secret..
Fraud communication
▪ Spoofing, phishing
Cyber crimes
▪ Cyber terrorism, internet extortion, stalking etc.
5. Ethics in Production Management
▪ Ethically produced goods are, those produced under conditions of
▪ Progressive stakeholder relations,
▪ Advanced environmental practices
▪ Respect for human right
▪ Organisation practices
▪ Environmental policies in CSR
▪ Rain water harvesting
▪ Organizing camps to aware farmers
▪ Water treatment plant
▪ Industries should follow the rules/laws of govt. to preserve environment
▪ Free pollution check by govt
▪ Govt interventions
▪ Regarding NOC’s
▪ Regarding land allocation
▪ Regarding plant layout
▪ Proper periodic inspection
▪ Regarding implementation of rules
Environmental Ethics
▪ The discipline that studies about human relationship with natural environment and
its contents.
▪ Examines the ethical decisions regarding management, protection or endangerment
of natural environment.
▪ Leads to sustainability ethics

Principles of Environmental Ethics

▪ Extending human moral standards to non-humans
▪ Animal rights
▪ Land ethics
▪ Radical ecology of changing human centred ethics to ecological system centred
▪ Deep ecology - high interest in environment
▪ Social ecology - no dominance of any species
▪ Ecofeminism-connects women with nature
Gender Ethics
▪ Equality irrespective of gender differences
▪ Diversity training
▪ Effective gender reporting
▪ Outlining gender policies, programmes
▪ Monitoring for continuous improvement
▪ Transparency
Ethics in International Business
▪ Unique ethical climate of each market must be considered while framing code of
ethics include international employees in the process of creating ethics program.
▪ Decide on a case-by-case basis which local customs to follow and which to avoid
following home country's ethical standards around the world, turn down
opportunities in markets with unfavorable ethical climates

MODULE 5: ETHICS MANAGEMENT

Ethics Based Organisational Culture

Courtesy: Sauser and Sims (2007)

Reasons for Unethical Behaviour
1. Work-Family balance
2. Poor leadership
3. Poor internal communication
4. Lack of management support
5. Need to meet goals
▪ Ethics Officers ssociation,1997 Survey
Ethical Leadership by CEO
• Believe in the ethical principles in core
• Represents the highest moral authority
• Lead by example
• Respect self and others
• Intervene in ethical problems, when needed
• Should have mentors to confer with
▪ The paramount responsibility of leaders is to create a work atmosphere to
help followers to change and grow when faced with difficult situations
(Heifetz 2004)
Ethics Management
Managerial tool to enforce integrity of employees
▪ through a set of codified rules and regulations
▪ On reasonable ethical standards
▪ Considered as a distinct managerial function which embraces all other functions
Structure of Ethics Management
1. Ethics programme
▪ Formal codes of conduct
▪ Committees for developing and maintaining ethical policies
▪ Ethics communication system
▪ Ethics office
▪ Training
▪ Disciplinary system
2. Code of Conduct
Statements of organisational values
▪ Code of ethics-entire scheme of organisational ethics
▪ Code of conduct-written document on what is acceptable and not
▪ Statement of values-conceived by management to serve the general public
3. Ethics Committees
Appointed committee of chosen members exclusively for workplace ethics
▪ Formulate ethical policies, Raise concerns of ethical nature,
▪ prepare or update codes of conduct
▪ resolve ethical dilemma
4. Ethics communication systems (Ethics office/officers)
▪ Maintaining Principle of Veracity
▪ Communicate the company’s values and standards of ethical conduct to employees
▪ Provide information to employees on ethics policies and procedures
▪ Put in place processes to help employees obtain guidance on ethical conduct
▪ Establish means of enquiry like hotlines, suggestion box etc.
Guidelines of Ethical Communication
▪ Convey the desired message in a significant manner
▪ Maintain a relationship with the audience
▪ Avoid withholding crucial information
▪ Well organized value system
▪ Accuracy of information is necessary
5. Ethics office/officers
Responsible for
▪ Assessing the needs and risks that an organisation wide ethics programme must
address
▪ Developing and distributing a code of conduct
▪ Conducting ethics training for employees
▪ Establishing confidential service on employees’ ethical issues
▪ Making sure the company is in compliance with
Govt.’s regulation
▪ Taking action on possible violation ▪ Reviewing and updating code
Ethical Leadership by CEO
▪ Believe in the ethical principles in core represent the highest moral authority lead by
example respect self and others
▪ Intervene in ethical problems, when needed should have mentors to confer with
▪ the paramount responsibility of leaders is to create a work atmosphere to help
followers to change and grow when faced with difficult situations (Heifetz (1994)
Corporate Social Responsibility
Definition: Integrating the responsibility of corporate actions and its impact on ecological
and social aspects of environment in the business model of organisations.
Concept: Reflected as company’s sense of responsibility towards community and
environment.
Purpose: CSR serves as a self-controlling process which enables a business to ensure its
▪ Compliance with the legal system, the ethical standards and the international
prevailing norms.
▪ Encouraging a positive engagement towards the stakeholders.
Theory: Based on stakeholder theory, environmental ethics and Supported by Kantian ethics
theory or deontological approach.
Common CSR
Reduction in pollution, community improvement programmes, environmental
sustainability activities, social-business projects, contribution to national relief funds,
employment enhancing.
CG and CSR
CSR improved by way of social accounting and incorporating ethics management in CG
Contemporary
More recent approaches are corporate philanthropy and strategic philanthropy.
Strategic Philanthropy
▪ Linking core business competencies to societal and community needs
▪ Companies use philanthropy as a means to benefit their business interests and
those of a beneficiary organization
▪ Affiliated with corporation, not individuals and usually involves participation from
the board of directors and multiple departments
▪ Has an expectation of increased company profit, recognition or other direct/indirect
benefits
▪ The act of giving in any form is based on research, planning, careful execution,
analysis of the results and strategy revisions if company is not seeing their desired
results.
Standards
Recognized international standards for CSR is ISO 26000.
Regulation
Clause 135 of Companies Act, 2012 is CSR clause requires targeted companies to spend a
specified formula based amount to CSR in that year.
Merits
Facilitates the long term profitability for companies, supporting sustainability
Demerits
Distracts from the economic role of businesses.
Positive Impacts
Societal upliftment, ethical consumerism, socially responsible investing, strategic
philanthropy
Negative impacts
Green washing, window dressing or covering up unethical practices
Ethics Training
▪ The main purpose of ethics training is awareness raising around the code, in all
levels.
▪ Ethics training aim to raise the ethical sensitivity of staff so that they know what is
acceptable business practice
▪ It might provide them with the skills for working through a situation for which the
right thing to do is unclear.
▪ Some companies provide training on specific ethics challenges viewed as a risk to
the business such as Human Rights, Bribery and Corruption.
Guidelines for Successful Ethics Training (Walter W. Manley)
1. Help employees identify the ethical dimensions of business decision.
2. Give employees a means to address ethical issues
3. Help employees understand the ambiguity inherent in ethical situations.
4. Make employees aware that their actions define the company’s ethical posture both
internally and externally.
5. Provide direction for employees to find managers or others who can help them
resolve ethical conflicts.
6. Eliminate the belief that ethical behaviour is ever justifiable
Ethics Audit
▪ A systematic evaluation of an organisation’s ethics programme to determine its
effectiveness.
▪ Provides an opportunity to measure conformity to the firm’s desired ethical
standards.
▪ A tool to identify and measure the ethical commitment to stakeholders.
▪ Objective method for demonstrating the company’s commitment to improve
strategic planning, compliance with legal and ethical standards, social responsibility.
▪ Improves relationship with stakeholders who desire greater transparency.
Framework for Ethics Audit
Ethics Management & Corporate Governance
Ethics Management Bodies
1. Transparency International(TI)
▪ only international non-governmental organization devoted to combating
corruption
▪ Founded by Jeremy Pope
2. Organization of Economic Cooperation and Development(OECD)
▪ Established in 1948
▪ Ethics training for Govt.
3. Institutional Ethics Committee India(IEC)
▪ Bioethics
Ethics in International Business
▪ Unique ethical climate of each market must be considered while framing code of
ethics
▪ Include international employees in the process of creating ethics program.
▪ Decide on a case-by-case basis which local customs to follow and which to avoid
▪ Following home country's ethical standards around the world, turn down
opportunities in markets with unfavorable ethical climates
Right Theories
▪ The Universal Declaration of Human Rights specifies the basic principles that should
always be adhered to irrespective of the culture in which one is doing business
▪ some fundamental rights transcend national borders and cultures
Recent Trends in Ethics
▪ Stricter enforcement on transparency
▪ Stakeholder demands
▪ Cross pollination of best practices among companies
▪ High visibility through media
▪ Stronger emphasis on sustainability ethics
▪ Strategic Philanthropy gaining popularity
▪ Ethics training for Public servants
▪ Greater importance for ethics bodies