Notes of “Business Ethics and Corporate Social Responsibility (BEC)”

(From presentation)
For students of MBA (HRM) || AY 23-24

Compiled and prepared by

Prof. Satyendra Nath Mishra
School of Rural Management
XIM University

Session I

Act 1
• Focus on exploring meaning of professional and their role in society.

Act 2

• The link between economy, society and environment

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Session II
• Overview
• The Fable
• Business
– Purpose and objectives
– Development
– Modernization
– Urbanization
~ Economics Paramount ~
View: Narrow (human only?)
• The vision of Development
• Economic progress for ‘humane’ development
• ??
• The multiple meaning of economic development
• Political
• Economic
• Social
• Cultural
• ??
~ Physical need of life and other realities of social life ~
• Modern approach
– Modernization as urbanization / Westernization
• The precursor of present model of economic development
– WW II and afterward
– Seen as economic problem (value free?)
– As technical examination
• Tools?
• The call for critical inquiry on value assumption underlying economic development
Good Life → Good Society
(Any relation)
• how business development is pursues is no less important than what benefit are gained
~ the normative dimension of business development~
Defining what is our business?
• Business!
• Purpose and objective
– ‘an organization to make profit’
– ‘to maximize profit’
• Root of confusion
– Profit motive of executive
– ?
• When only profit is motive
– What is missed?
• What ‘E’ does?
• How ‘E’ preform?
• ‘…..the profit motive and its offspring maximization of profits are just as irrelevant to the function of a
business, the purpose of a business, and the job of managing a business….’
• ‘…focus only on profit…..it does harm…’
• The outcome
– Contradiction between profit and social contribution

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 – Outcome
• CSR??
• Purpose of business
– Customer
• Need …want
– Two basic function
• Marketing
• Innovation
• Marketing
– The aim of marketing is to know and understand the customer so well that the product or
service fits him and sells itself
• Customers
– Value
– Need
– Want (#what to sell?)
• Innovation
– Technological
– Social
– Economic
• Defining what is our business?
• Who is the customer?
– Where?
– What customer buy?
• What should out business be?
– Innovation
• Own and
• Others
• Objective of business [set in eight key areas]
– Marketing
– Innovation
– Human resources
– Financial resources
– Physical resources
– Productivity
– Social responsibility
– Profit requirements

Discussion note

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Session III
• Overview
• Babies means business!
• Why business ethics?
• The role of ethics in 21st century organisations
• Why business ethics?
• Is study of ethics necessary for managers?
• The rationale [no need for extra wing of ethics]
• Doing job as give by organization
• Within defined legal framework
• Ethical duty is legal profit for firm
• Ethical duty is beyond what is required in law
• But character can't be taught
• Why should be [manager] ethical?
• Being good
• Motivation?
• Does it always pay-off?
• Self interest of being good?
• Doing Well by doing good
• Ethics ~ self-interest
• Good behaviors # tangible reward
• Ethics
• How to reach the destination of being ‘good’
• Manager want inherently to do good
• What John Ruskin wanted manager to do
• Business forms and profit become means for it
• The Duty to make Money
• Business – to make world better place
• Make as much money as possible
• Subject to limit of law
• ‘The social responsibility of business is to increase its profit’ By Milton Friedman
• Executive not qualified to do anything other than maximize profit
• Executive have no right do anything other than maximise profit
• Business function
• Owner and agent relation
• The Rules of the Game
• Business ethics
• Duty of business-person - manager?
• ‘rules of game’
• Deception as part of business?
– Acceptable
• Negotiation in business
• Is it always
– Transparent?
– Done right way?
– Why?
• So why ethics?
• Rule of game?

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 • Game itself?
• Theories of ethics like
• Deontology
• Duty
• Teleology
• Purpose, process
• Consequentialist
• Outcome
• Utilitarianism
• Utility
• Other argument
• Not change behavior based on lecture
• Does not hold?
– Role of Ethics in 21st Century Organisation
• Failure of business function
• ?
• Ethics in leadership
• Bank lending
– Telephone lending in India bank
• Legislation to correct the course of action
• Can ethics be regulated?
• The case of subprime lending
• The case of Enron
“…leaders ‘‘created an organizational culture that put the bottom line ahead of ethical behavior and doing
what’s right’….”
“…The ethics of leadership affects the ethics of the workplace and helps to form the ethical choices and
decisions of the workers in the Workplace…”
• What are ethics?
– Simply
• Right and wrong
• What are ethics?
– Simply
• Right and wrong
– Application | interpretation | why | how?
• Ethics is
– Reflective process
– Work out
• Rights and
• Obligations
• Organisation
– Backbone of modern social function
• ‘…value are an intrinsic part of cultural behavior…’
• Example
– Use of CSR fund?
• Role of Ethics in 21 Century Organisation
st

– Role of ethics
• Reactive approach
• Active / Guiding / Inbuild approach

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 – The problem with management professionals
• “…Regarding a code of ethics, there is no code of ethics for management as such
as there is for the practice of law and medicine. What codes of ethics do exist are
related to a particular business organization, not to the practice of management
as a whole (Buchholz and Rosenthal (2008)…”
• Professional trap
– Organization interest as code of ethics
– Acceptable?
– What is the role of organization?
• The role of ethics
– “….Show what dangers the loss of traditional values may bring….”
– Values
• Ethics
– What kind of actions ought we to perform?
• As professional
• Action speaks louder than words
– Action as learning mechanism
• Ethics is not only about
– Behavior of individual and organization
– Is about thinking process to guide action
• Is the Nestle identified the problem well?

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Session IV
• Overview
• Story and Decision Making
• Ethics and Morality?
– Case and exercise
– Let's Enjoy a Small Story with Simple Exercise
• Enjoy a Small Story and a Simple Exercise
• Part of Kathāsaritsāgara
– 11th century By Somdev from Kashmir
– Collection of stories to learn various facet of life
– 18 books, with 124 chapter
– Book 12 as written in Hindi / English translation have 25 stories named as
Vetalapanchavimsati, or Baital Pachisi (Bikram and Betal)
• How to Move Ahead
• Assumed reality
• Based on assumption/s (or as one see the world)
Versus
Reality as it is?
• Moral / Ethics? What it does?
• ‘....moral life is fiction in contemporary moral theory….’
• What comes in mind?
• Ethics
• Moral principles that control or influence a person’s behavior
• The branch of philosophy that deals with moral principles
• Morality
• Principles concerning right and wrong or good and bad behavior
• A system of moral principles followed by a particular group of people
• The Divide: Moral vs Ethical
• Central contrast
– Moral theory (like Deontology, Utilitarian Liberalism etc) embrace that divide via
• Theory
• Problematic practicality of theory
– How to reconcile
• The ‘social role’
• Argument
• Moral attributes are related to ‘social role’
Role centered morality
Help to overcome problematic divide
(of self vs other)
• The divide
• Ethical Life
– (Made of)
– Feeling
– Inclinations
– Preferences
– Motives
– Virtues
• Moral Life
– (Made of)

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 – Action
– Principles
– Right
– Duty
– obligation

• Contracts
– Ethics
• Conviction
• Human Lives
• Scaler
• Self regarding
• Subjectivity
– Morality
• Principle/Rule
• Human actions
• Non-Scaler
• Other regarding
• Objectivity
• The Debate
• Organization of moral phenomenon as duel (assumes)
– Moral life lives in duality / bifurcated
• To address this divide
– Logical connection among norms
• Socially acceptable rules
• ‘Role’ as remedy
• Social Roles
• Exercise
• With reference to the case discuss the role of CEO against the conception of
– Duty
– Obligation
– Good
– Right
– Social role (as professional)

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Session V
• Overview
– “Us” “Them”
• Virtue, Knowledge and Wisdom
• Revisiting
– “Us” “Them”
• What is?
– Virtue
– Knowledge
– Wisdom
• What is?
– Virtue
– Behaviors or attitude that show high moral standards | attractive / useful quality
• Knowledge
– The information, understanding, and skills that you gain through education, or experience
• Wisdom
– The ability to make sensible decisions and give good advice because of the experience and
knowledge that you have
• Virtue
– ~Moral (West)
• Moral
– Interior good behavior
– Feel inwardly at peace
• Knowledge (~intelligence ~ Intellect [west])
– Function of
• Pondering
• Understanding
• Relating things
• ?
– Virtue ~ Morality
(2 Type)
• Private Virtue (I)
– Modesty
– Integrity
– Purity
– Fidelity
• Public Virtue (II)
– Shame
– Justice
– Courage
– Straightforwardness
• Intelligence
(2 Type)
– Private (lesser) knowledge
• ‘…..the capacity to fathom the principles of things and respond to them…’
– Public knowledge
• Evaluate person / events
• Give weight
• Priority
• Judge proper time / places
~Greater knowledge as ‘wisdom’~
• Wisdom (role?)
• Wisdom (function?)
– Also called as supreme virtue
– To regulate
• Knowledge

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 • Virtue (~Moral)
• Space – Time
(India/Japan – West)
– Morality (Individual private virtue)
• Gentle
• Modest
• No ambition
• Benevolent
~Seen as ‘Passive’ (in west)~
Why?
~Circularity vs Binary~
• Private Virtue
– As universal principle for all ages!
• Place to exercise
• Social change (context)
• Proper way to use
• Example
– ‘need to eat’ vs ‘how to eat’
• Author Approach
Wisdom ……(as)……Intelligence
Morality ..(as)….Passive Private Virtue (narrow)
• The Split
Intelligence and morality
Two split
Which is more important?
[West vs East]
Both needed to make complete human being
• 80/90 percent of theory give importance to
• Morality
• Over intelligence
• Implication
– Freedom trap
• Morality
• Activity of one person
• Sphere of influence is family
• Morality
• Can it be taught?
• Implication
• Intelligence
• Method of acquiring knowledge
• ?
• Present day approach
• Morality must be taught?
• Governing social organization
• Can we do it accidentally
• Like driving?
• Role of intelligence
Knowledge vs / and Virtue
Compete / Complement
~The role of wisdom~
• As detailed out in case what would be the direction of decision making by using the tool of
– Private Virtue
– Public Virtue
– Private Knowledge
– Wisdom ~ Public Knowledge

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Session VI
• Overview
• Ethics
– What is…
– What is not….
– Case of Tata Motors
• Philosophical Ethics (two claim by author)
– Ethics is new to you
– Current idea of right / wrong not clear / logical as you think you are?
– Why this claim?
• Approach to Ethics
– Practical reason (trouble that we face)
– Authority
– Please other people
– Approval / acceptance
• Ethics-What it is?
– Evaluate human action
– Making [+ / -] judgement
But
Philosophical inquiry is not only about evaluating behavior
• The Case of ‘Law’
– Legal
– Illegal
– Legitimacy
Ethical?
– Example
• Moonlighting in companies
– ?
• The BT cotton farming in India
– 2001
– Benefit to farmers? At what cost?
• The Jallikatu festival
– Community || State || Supreme court || Civil society
– Example
Player dies while playing in field
• Who is responsible?
• Ethics
– ;….most important thing is not life, but a good life….’ (Socrates)
– What people do and how they do
– Character
– Charity
• Generosity vs tax issues?
• Taking bath kit from hotel
– Right / wrong?
• P-4 (read)
– Three questions?
3Q
• What do we mean when we say that an action is positive or negative from an ethical viewpoint?
• What standard does an ethically acceptable action meet?
• What does it mean to say that an ethically unacceptable one falls short?
• Ethics (Philosophy)
– Uses
• Reason | logic | concepts | arguments
• To analyze problem and find answers
– Use the important tool available to human
• Own mind

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 – Reason
– A cause or an explanation for something that has happened or that
somebody has done
– Logic
– A way of thinking or explaining something
– Concept
– An idea or a principle that is connected with something
– Argument
– The act of disagreeing in a conversation or discussion using a reason / set
of reason
Oxford Dictionary (9th Edition)
• Facts
– ?
– Who’s?
– From where?
– Can we rely on?
– Tata Motors case
• ?
• Philosophical approach to ethics
– Analyze action
– Consequences
– Facts in case
– Conclusion
~use mind……craft argument~
~Explanation~
• What Ethics is Not
• Ethics and Emotions
– Think vs feel
– Thinking statement vs feeling statement
• Ethics and authority
– Grant power to us as rational individual
• Approach
– Discussion || Dialogue || Debate || Disagreement
• Ethical question settled through authority
– Say by State?
– Problem with authority
– Punishment / reward
– Disagreement with authority
• A tinderbox
– The whole debate of religion-state debate
• Ethics, authority and religion
– Religion
• How to live
– Provide sense of purpose, comfort, social stability
– Why it is not ethics
• Comes from authority
• Stand on certain unquestioned faith
• Not behavior but what person believe
• Ethics, authority and law
– Someone is wrong – right as per law
– Can law be standard then?
• Case of Tata Motors?
– Ethical?
• Ethical Relativism
• Can there be any objective foundation of ethics
– Ethics does not agree with law / religion

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 – Ethical judgement are limited by individual / societal norms
– What to conclude?
– Cultural relativism
– For group of people
– Adjunct to law
• Farmers in case of Tata Motors
– How this shape
• Fear of otherness
• practice for social / business organization
• Individual relativism
From where || own ultimate moral authority
Problem?
• Relativism- caveat
• Aim of PE
– Ethical argument to get someone else to freely agree with you for good reasons
• Logical and
• Persuasive arguments

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Session VII
• Overview
– Heinz Case
– Stages of Moral Development
– Revisiting Heinz case
• Stages of Moral Development
– Can moral be developed
• Potential (+)
• Challenge (-)
• Exercise
– Heinz Steals the Drug
Read, Deliberate and Share
• Exercise
(with explanation)

• Piaget study of moral judgement

• Two stages
• Kohlberg Six Stages
• Three Level and Six Stages
• Level I: Pre-conventional Moral Development
• Stage 1:
• Stage 2:
• Level II: Conventional Moral Development
• Stage 3:
• Stage 4:
• Level III: Post-Conventional Moral Development
• Stage 5:
• Stage 6:
• Stage 1: Obedience and Punishment orientation
• Powerful – authority – rule – obey
• Pre-conventional
• For child morality is external to themselves
• Do not speak as member of society
• Punishment: Disobedience is wrong
• Stage 2: Individualism and Exchange
• There is not one right
• As from authority
• Individual to individual
• Relative (self interest)
• Punishment-Simply a risk (one want to avoid)
• Pre-conventional
• Child speak as isolated individual
– Authority (obedience) || Self interest (risk)
• Level II: Conventional Morality
• Stage 3: Good interpersonal relationships
• Children enter teen age
• Morality more than simple deal
• Live up to expectation of
– Family || Community || Other group affiliation
• Good behavior
• Motive | love | empathy | trust | concern for other
• Shift from 1 ->2 -> 3
Obedience → Relative outlook + Good intent
• Stage 4: Maintaining the social order (16)
– Respondent concern for society
– Emphasis on obey law || respect authority || perform duty

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• To maintain social order
• Level III: Post-conventional Morality
– Stage 5: Social contract and Individual right (20)
• Smooth functioning of society
BUT
• Can that be always good
– Autocratic system?
– What make good society
• Rights
• Appreciation of different values
– People agree on two points
• Basic rights
• Democratic procedure for changing unfair law
– While judging
• Balance between
– Morality
– Law
• Example
– Life vs property
– Cont…
• Stage 6: Universal Principle
– Can democratic process always result in outcome that are just?
– Claim of all party
• ?
• Respect for Each other
– Process to follow
• See through others eye!
– Case
• Life vs property?
• Challenges to this model
• Moral thought vs moral behavior
• Moral thinking # Moral action
– Invariant sequence and hierarchy
– Only one after other
– Culturally biased
– West model imposed on all social system
• Respondent bias
– All were male
• Right / wrong vs interpersonal relation
• Impersonal justice vs affiliative way of living
• Hypothetical vs more contextualized
• Now explore what level and stage of moral development influenced your decision?
• Challenges to this model
• Moral thought vs moral behavior
• Moral thinking # Moral action
• Can good lawyer be a good human being?
• Can a good professional be a good employee?
• What to do?
– Other form of cognition
• Moral thinking as part of logical and social thought process
– Implication for education
• Passive vs active engagement
• Inducing cognitive conflict
• To explore observe change
• Invariant sequence and hierarchy
– Only one after other

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• Culturally biased
– West model imposed on all social system
– Like Panchkosha theory from Indian tradition
• One stage to other is not fixed.
• Respondent bias
– All were male
• Right / wrong vs interpersonal relation
• Impersonal justice vs affiliative way of living
• Hypothetical vs more contextualized

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Session VIII
• The word ‘Market’
– Origin of word
• Latin word mercatus
– Trading, buying and selling
– Old French marchiet, Modern French marché
• Trade / commerce
– To buy or sell
– Exchange of
• Good / services
• Class Exercise
• ~~~~~~

• Limits for market?

• What is market?
– Flow of goods / services without intervention of State?
– Transaction of goods / services
– Act of buying / selling
– Transaction of Money and goods / services
– Allocation of resources
– ?
• Are we missing something?
– ?
• Exchange
– The act of giving something to somebody
• What we give
– Only money?
• Assumption of free market
– Information?
– Buyer and seller?
– Free entry / exit
– ?
• What happen if the assumptions does not hold?
• We are talking of two person
– Buyer and seller
– What this conveys
• Exchange of
– Private good? Club Good? Commons? Public?
– How we deal with it?
• Market thinking
– ‘…..mechanism of organizing the production and distribution of goods/services has
proved as successful at generating affluence and prosperity…’
–
–
–
–
• Market thinking
– ‘…..mechanism of organizing the production and distribution of goods/services has
proved as successful at generating affluence and prosperity…’
• Question
– How to organize?
– How to produce?
– How to distribute?
– What goods / services?
– How we define effluence and prosperity?

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• Market
– Allocation of risk?
• Efficiently?
• Externality?
– What this means?
– Moral failing for Market
• The ‘Greed
– To rein it
• Integrity
• Responsibility
The right diagnostic
Expansion of market value?
Debate on place of market in society?
Moral limits of market
(Monetary transaction?)
• Market
– Arrangement for provider of goods and services
– Does that need any limitation / regulation?
– What money should not buy?
• The inroad of
– Market oriented thinking in
– Non-market norms
• ‘…..the reach market, and market-oriented thinking, into aspects of life
traditionally governed by nonmarket norms is one of the most significant
developments in our time…..’
• Issue like
– National security || Criminal justice || Environment protection || Recreation ||
Procreation || Family || Nature || Duty || ??
– The drift
~ having a market economy’ to ‘being a market economy’
~ market economy or market society ~
• Problem with ‘Everything for Sale’ – Market
– Why to worry
• Inequality
– Have / have not / modest means?
• Corruption
– Corrosive tendency of market
» Market crowd out non-market value worth caring for
• Example Kidney market
• What is wrong in valuing as per market value
– Commodification
• Slave
• Vote
• Relation
• ?
??is that ok?
– The basic question asked?
– Good society
Is there a definitive answer with market
– Good life
• Rethinking the role of market
– The power and prestige it carry
• Like privacy?
– Emptiness of public discourse
• Why?
?self correcting nature of market?

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 ?The Myth?
• Public discourse
– Who shapes it?
• Market
• State
• Community
• Moral vacancy
– What is good life in public debate?
• To avoid social fissure
– Citizen to leave their conviction when enter public life
• Is that good?
The stand and reasoning we take

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Session IX
• Overview
– Integrity and Justice
• Free market?
• Case of Gronomics
• Free market → Limits
• Can we check through
– Integrity
– Justice
– Defining justice as desert
– Give other what they are owed
• ??
– To avoid scaler / linear / imposed model of justice
– Increase transparency
• Integrity
– Teg
• Sanskrit root: Touch / handle
– Integ: Not touched
– Integritis (latin) Ethical Leadership
• Moral quality
• Integrity
– Trait that the society expects from leader and citizens
• What to expect of market leaders?
– Apple? Tim Cook?
• Moral integrity
– Identity conferring commitment to moral value
– Uncorrupted self-identity
• Intersect of moral integrity
• Individual integrity (commitment)
Link
• Social / Stakeholders / Community expectation
– Shared basic moral values
• Moral values
– Human community in general has a right to expect it members (market players) to
practice
• Reliable negative action (not to lie / hurt)
• Positive action = help in emergency
• Integrity at organizational level
– Responsibility for values
– Deliberating with others / shared narrative
– Integrity
– Deep commitment vs temporary objective
• Cases?
– As part of human community (to adhere to basic moral values)
• Individual || Corporation || Government || Others?
• Practicing Integrity in Business
‘…Practising integrity in business demands taking responsibility for critically relating to each of these
anchor points in developing: a narrative of values, purpose and worth; a public account of meaning and
practice; and creative responsive practice…” (Robinson, 2016)
• Free market
– Ideal market produce
• Values
• Social benefits
– Caution (By Smith)
• How wealthy and politician can manipulate to own gain
– Cases?

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 • Then how normal citizen will participate?
• How normal citizen participate?
– State
– Market
– Other options?
– In what way?
• In reality
– Wealth
– Inequality
• Negative and positive justice
– Smith, justice as negative concept
• Law of justice
– Life
– Property (possessions)
– Personal right (contracts)
• By not doing anything you can fulfill this
– Is that, ok?
• As society and market grows
– State pass law
• To reduce
– Inequality
– Protect worker
• How we do that
– Some action
• Positive justice (not ideal; challenging it)
• Positive justice
– You (Market) acquire wealth, I (state) will distribute
– Issues?
– State and citizen relation
• Can it work for Market / Business ?
• Justice as Desert
• Justice rely on community expectation
– Previous theory do not factor this in
• Moral community
– Good for community
– Good for individual
– Community based
• What this means?
– The case of CSR
» Good for community and individual
• How to implement?
– Respect the integrity of
• Property || freedom of exchange || promise || contract etc
– Monetary and non-monetary value
• Determine and give what is
– Owned
» Based on merit of situation
• [De]merit
• Justice as desert concept
– Require constant conversation
• Between market players and community
• How to implement?
– The case of Gronomics?

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