Value and ethics in

business
Unit-I
Introduction: Values-Concept, types and formation
of values, ethics, values and behaviour, Values of
Indian Managers, Ethics, development of ethics,
ethical decision making and decision making process,
relevance of ethics and values in business.
Management of Ethics: Management process and
ethics, managerial performance, ethical issues, ethos
of Vedanta in management, Hierarchism as an
organizational value
Value
Values are beliefs that guide actions and judgements across a
variety of situation
In other words values determine what people consider to be
good or bad for a civilized society. For example an important
value of our society is honest dealing that means the society
does not approve sale of adulterated goods, use of false weight
or black marketing of product
Values have two attribute .first content attribute which states
that the conduct is important
Second is intensity attribute which specifies how important it
is.
Value concept :
Values are called GUNAS
Value represent the standard or ideals about
what a person, object, event or activity ,ought
to be
Values are means of perfection.
Value are concerned with internal development
of the person, purifying mind and heart.

Features of value:
Values are manifested in thoughts, speech and action
of people.
Values are inherent in all cultures and societies.
Values are comprehensive standards that direct
conduct in variety of ways.
Values guide people to take specific position on
societal issues
Values provide standards of morality
Values are relatively stable
CHARACTERISTICS OF VALUES:
It represent synthesis of social progress, justice and
spiritual growth.
It is a powerful source affecting behaviuor
These are dynamic and change with changing
behaviour.
Values are the means of perfection
These are concerned with the internal development
of person, purifying mind and heart.
The provide the standards of morality.
Values and attitudes
A value system is viewed as a relatively permanent perpetual
framework which influences the pattern of an individual
behaviour
An attitude is a predisposition to respond in a positive or
negative way to someone in ones environment.
Similarities
Both influence behaviour
Both are learned and acquired
Both are relatively permanent and resistant to change
Both have reciprocal influence i.e. attitude influence behaviour
and vise versa

Types of value
Terminal value: refers
to desirable end states
existence. These are the
goals that a person
would like to achieve
during his or her
lifetime.
Instrumental values:
refers to preferable
modes of behaviour, or
means of achieving
ones terminal goals.

Terminal values are:
Happiness, satisfaction in
life
Knowledge and wisdom
Peace and harmony in the
world
Pride of accomplishment
Prosperity, wealth
Lasting friendship
Recognition from peer
Salvation, finding eternal
life
Security,fredom from
threat.
Instrumental values are:
Assertiveness, standing up
for yourself.
Being helpful
Dependability being
counted upon by others
Education and intellectual
pursuits
Hard work and
achievement
Obedience, following the
wishes of others.
Open mindedness for new
ideas
Self-sufficient,
independence
Formation of value
Culture is the principal source of values. People incorporate
value from their parents,teachers,friends,media and all those
whom they admire.
Following are the factors influencing value formation:
Family
Social
Cultural
Personal
Organizational
Value forming institution 4 family, school, state and religion.

Role of value in understanding human behaviour
It lays the foundation of understanding the attitude, perception
and motive of which shapes the individual behaviour
Helps in developing organizational culture through shared
value
Organizational value which are ethical help to enhance the
image of organization
Choice of organizational goals

Value systems of Indian managers
Researchers have attempted to identify the value systems of Indian
managers. Their major findings are presented below.
Managers tend to have value orientation towards economic, theoretic,
political, social, and religious.
Managerial values tend to be manipulative, sociocentric, tribalistic, and
egocentric.
Indian managers are more pragmatist than moralist. There are generally
some acceptable unethical practices in business like bribes, gifts, personal
favours, unfair competitive practices, dishonesty in customer relations, and
personal benefits.
In terms of work values, Indian managers tend to: (i) be money oriented
during early days of their career and later shift to matters like job
satisfaction, and finally at the end of the career, to intangible values like
status; (ii) attach high importance to values like loyalty and obedience; and
(iii) be ambitious, and believe to a large extent in the fate, without allowing
this belief to directly interfere in doing day-to-day working.

The Indian managers need to
develop some values and beliefs
Utilization of available resources The first lesson in the management
science is to choose wisely and utilize optimally the scarce resources if
one wants to succeed in his venture. For example, Before the
Mahabharata war, Duryodhana chose Sri Krishnas large army for his
help while Arjuna selected Sri Krishnas wisdom for his support.
Attitude towards work Managers have to develop the visionary
perspective in their work. They have to develop a sense of larger vision
in their work for a common good.
Work commitment Managers have to work with dedication. Managers
performance should not only be based upon the benefits reaped, but also
the quality of performance
Vision Managers need to have a long term vision, should be practical,
dynamic and capable of translating dreams into reality. They should
have a spontaneous zeal to help others.
managers should possess the
following values
Forming a vision and planning the strategy to realize such a
vision
Cultivating the art of leadership
Striving for institutional excellence and building an innovative
organization
Developing human resources
Service to customers
Team building and team work
Delegation, motivation and communication
Reviewing performance and taking corrective steps whenever
required.
Loyalty to company
Values of western managers
Western managers follow a proper code of conduct .
Western managers are very professional with excellent analysis power,
education and specialization.
A belief in superior quality and service
Western managers value principles as they consider it as the best strategy to
win.
A belief in the importance of people as individuals and dignity of labour.
Western mangers are accountable and are held responsible for what they
do of their position.
Belief in and recognition of the importance of economic growth and
profits.
Western managers have respect for the public good like parks free of litter,
clean roads etc. They are better socially responsible people.
Western managers have a perfect combination of two important values
loyalty to family and loyalty to community.
ETHICS
The word Ethics has originated from Greek word
ethos which means character, norms and ideas
prevailing in a group / society. Ethics is study of
moral behavior.
Ethics is a mass of moral principles or set of values
about, what conduct ought to be. They give an idea
what is right or wrong, true or false, fair or unfair,
just or unjust, proper or improper, e.g. honesty,
obedience, equality, fairness etc.

Development of Ethics
Greek Period 500 BC AD 500
Medieval Period AD 500 AD 1500
Modern Period AD 1500 onwards
Greek Ethics - In this period the man who
performed his duties as citizen was regarded
as a good man. Socrates, Plato and Aristotle
are the founders of this period. Cyrenaics and
Epicureans were two groups which were not
in favour of Plato and Aristotle. Cyrenaics
believed that good life was not a part of
human nature and Epicureans believed that
good things are those which satisfy the
human desires. There was no link between
pleasure and goodness which satisfy the
human desires.
Medieval Ethics - Medieval period
emphasized on the inner aspect of morality
because of the spread of Christianity in
Europe. It helped to increase inner aspect of
morality.
Modern Ethics - Modern ethics believes that
right and wrong depends on the result of our
actions and particularly on their power of
satisfying our desires and causing pleasure to
ourselves and others.
MANAGEMENT PROCESS AND ETHICS
Management is a multipurpose organ that manages a
business ,manages manager and manage worker and
work.
Functions of management
1. PLANNING (what is to be done)
2. ORGANISING (who is to do)
3. LEADING (direction and supervision)
4. MOTIVATION (participation in management)
5. CONTROLLING (corrective action)
MANAGEMENT PROCESS AND ETHICS
contd
Business ethics has come to be considered a
management discipline since the birth of the social
responsibility movement in 1960s
An increasing number of people asserted that because
businesses are making profits from using the countrys
resources, these businesses owed it to the country to
work to improve society.
Many business schools and managers have recognized
this fact and have replaced the word stockholder with
stakeholders meaning to include employees,
customers, suppliers and the wider community.
MANAGEMENT PROCESS AND ETHICS
contd
The emergence of business ethics is similar to
other management disciplines
As commerce became more complicated and
dynamic, organizations realized that their
dealing supported the common good did not
harm others and so business ethics was born.
MANAGERIAL PERFORMANCE
Managerial performance relates to efficiency of
managerial action.
Following constitute the element of managerial performance:
Goal :define the conditions that managers want to control.
Perception: all that a manager knows of the controlled
condition is known by way of his perception.
Action: getting the job done through others is the essence of
managerial work.
Disturbances: budgets, new regulations, key employee
leaves, system crash etc..

Benefits of Managing Ethics in the Workplace
Attention to business ethics has substantially
improved society
Ethics programmes help maintain a moral course in
turbulent times (during change)
Ethics Programmes cultivate strong teamwork and
productivity .
Ethics programmes help avoid criminal acts of
omission
Ethics programmes help manage values associated
with quality management, strategic planning and
diversity management
Ethics programmes promote a strong public image
Relevance of ethics in business
Ethics are important in business because of the
following reasons
Business practices affect our lives, so businesses
should perform such actions which are morally right
and those that do not affect the lives of people at
large. Disasters like Bhopal Gas Tragedy can be
disastrous for people within and outside the business
organizations.
Business houses operating in global markets must
have common standards of employment, which is
possible only if they have a uniform code of ethics.
There is an increasing awareness in society that business houses
must work for the benefit of society. Along with the
governments responsibility, it is equally the responsibility of
the business houses to look after the social programmes
pertaining to education, hospitals, employment, old age homes
etc.
A business organization is pressured by various environmental
factors as well to behave ethically. Pressure from consumer
forums keeps the business firms to stay away from undesirable
trade practices like hoarding . Similarly, trade unions may also
put pressure on business firms to pay fair wages, provide for
labour welfare, encourage participation etc.
Firms themselves prefer to regulate their activities and address
issues that are morally justified, else it will have to face
government interference and regulations. That is why firms
avoid unethical practices like adulteration, black marketing,
producing inferior quality goods etc.
In almost every sphere of business activity,
laws have been enacted which declare certain
business practices as illegal and prohibited.
Obedience to such laws is ethical.
Business firms believe that if they follow
ethical business practices, it will lead to higher
profits and prosperity in the long run. For
example, if a firm maintains quality, pays
taxes honestly, cares for the welfare of
employees, its profits are bound to grow in the
long run.
Barriers to Business ethics
Chain of command If employees know that their
managers are not following ethical behavior, they will
hesitate to report the matter to managers for fear of
being misunderstood and penalized.
Group membership Emergence of informal groups
in the formal organization structure leads to the
development of a group code of ethics. An unethical
behavior by a particular group member is often
ignored by others due to a strong bonding and sense
of loyalty towards one another.
Ambiguous priorities If companys policies are
unclear, it becomes difficult to understand what is
ethical and unethical and employees behavior cannot
be rightfully directed in such a case
ETHICAL ISSUES
MARKETING
HUMAN RESOURCE
PRODUCTION
FINANCIAL

BBA 301-V&E IN BUSINESS 29
ETHICAL DECISION MAKING
The ethical component of the decision
making process takes the form of a set of
filters
These filters are PLUS ie
P= POLICIES
L= LEGAL
U= UNIVERSAL
S=SELF.
BBA 301-V&E IN BUSINESS 30
DEFINE THE PROBLEM
IDENTIFY AVAILABLE
ALTERNATIVE SOLUTIONS
EVALUATE THE IDENTIFIED
ALTERNATIVES
MAKE THE DECISION
IMPLEMENT THE DECISION
EVALUATE DECISION
PLUS surface the ethical issues
PLUS asses their ethical impact
PLUS sort out new ethical issues.
Ethos of Vedanta in management
Ethos is defined as the beliefs of community,
people and the way they react to various
problems and situation in life.
It refers to habitual character of a group or
community.

Features of Indian ethos
Indian ethos are deep and unseen foundation
supporting the structure of India. Indian
culture has a holistic approach that is there is a
close relationship between spiritual and
worldly life of human being.vedantic ethos is
capable of enriching the economic and
managerial processes in organization.
1.Individual is the focal, nucleus point in Indian
ethos and is called the foundation of Indian
ethos.if he is good the world is good.
2. It emphasizes on duties and responsibility .
3. Balance is the keynote of Indian thought. There has
to be synthesis and harmony between the dual
concept of desire and desirelessness and between
materialism and spiritualism.
4. Divine values are based on wisdom and character is
based on divine values
5. Main emphasis is on wisdom which comes from
experiences.
6. Materialism without spiritualism is not acceptable to
Indian ethos. Such state is termed as anartha (devoid
of goal).
Contd..
7. Dharma should be upheld at all times while
the goals of life PURUSHARTHA should be
achieved through means which are consistent
with dharma.

Basic principles of Indian Ethos in Management
High end management institutions in India
have to rewrite their curriculum to include the
teaching of vedas,purans and upnishads.
1. Each soul is potentially divine
a. AHAM BRAHMASMI (I have immense
potential and I can make the impossible
possible)
b. TAT VAM ASI (you are that (supreme)-
every body can make himself a genious)
b. Holistic management: ethics looks at things in
totality.it aims at development of the self and the
humanity.Atmano Mokshaya Jagat Hittaya ce (for
ones own development and for the good the
humanity).In Indian ethos the word OM is the
sound symbol of wholeness completeness.
The world is made from three symbol
A-It means form or shape like tree or earth
U-It means formless or shapeless like air or water.
M-It means neither shape nor shapeless like the energy
content of the universe.
AUM represent the divine energy united in its 3 element
aspect Brahma,Vishnu and Shiva

c) Principle of Cooperation vs Competition :The two
concepts of ego-less cooperation are Lok
Sanghraha and Nishkam Karma. There should be
a balance between cooperation and competition. Lok
Sanghraha means working for the welfare of the
world.
d) Combining Subjective and Objective :Subjective
is intangible (sukshma) and is more important than
Objective which is tangible and concrete (sthula).
Creator is subjective, Creation is objective. In
Hinduism, Lord Shiva has three eyes. The third eye
is the eye of wisdom and intuition. A manager must
develop his third eye of vision, foresight and
intuition (Gyana Chakshu).


e) Karma Yoga : The word Karma is derived from
Sanskrit word Kri which means to do, and
Yoga translates to Union. Hence, Karma Yoga
translates to the path of union through action.
Hence, we should work with the spirit of Nishkam
Karma (detached involvement) rather than Sakam
Karma (attached involvement). Nishkam karma is
inspiration and Sakam Karma is motivation.

The Indian Ethos in Management can be summarized as
All work is an opportunity for doing good to the world.
Worship people not only with material things but also by
showing respect to their ever present divinity within.
He who works with a calm and even mind achieves the most.
Strength and Inspiration for excelling in work comes from the
Divine, God within, through prayer, holy readings and
unselfish work.
By mutual cooperation, respect and fellow feeling, we all can
enjoy the highest good of material and spiritual.
As we think, so we become, and so we succeed.
Regard the other person as a divine being.
Infinite happiness and infinite peace comes to them who see
the Divine in everyone.