CONCEPT OF ETHICS

• Ethics is the study of morals and moral choices.

• It focuses on standards, rules and codes of conduct that govern the

behaviour of individuals and groups.

• Ethics is the set of universally accepted moral principles and values

that govern the behaviour of a person or group in terms of what is
right and wrong.

• Ethics is concerned with how people think about and behave towards
each other; how the consequences of their decisions and behaviour
impact human life.

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 ETHICS AND MORALITY

Ethics also known as moral philosophy, is a branch of philosophy

that involves systematising, defending and recommending concepts
of right and wrong conduct.
Parameter Morality Ethics
Name Greek - “Mos” meaning ‘customs’ Greek - “Ethos” meaning ‘character’
Origin Spiritual principles Materialistic and social principles
Onus Generally on society, religion and One’s own self
culture and the leaders
Acceptance As designed by a group, no choice Individual is free to think and choose
of acceptance, ie.. Do or die
Dynamism Varies to people to people, society to Regardless of society or culture
society and culture to culture
Business Not applicable Applies in businesses
Basis Based on right and wrong actions Based on right or wrong choices
Format Expressed as general rules or Abstract as the close associates only
statements can understand

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 ETHICS Vs. ETHOS
Ethics means a set of moral standards, rules and codes one has to follow
in a social context,
whereas
ethos mean a set of qualities that defines one’s character and manners.

ETHICS ETHOS
1. Generally universally accepted 1. Generally individual specific
2. Helps in getting to know how to behave 2. Helps in creating impression on how we like to
behave
3. Violations are prescribed with consequences 3. Consequences depends the context in which / how the
individual acts
4. Change is possible only with the help of the 4. Change is in the hands of the individual
formulators

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4
 The Whistleblower Protection
Act
• Addresses the issue of retaliation against whistleblowers

• Imposes specific processing deadlines of complaints

• Guarantees anonymity of the whistle-blower

• Requires prompt payment of any portion of the settlement entitled to the

whistle-blower
 Sarbanes-Oxley Act
An integrated approach of whistle-blowing by:

– Prohibiting retaliation against whistle-blowers

– Encouraging the act of whistle-blowing itself

Dodd-Frank Wall Street Reform
and Protection Act
Introduced a new reward program for whistle-blowers
who report securities law violations to:

– The Securities and Exchange Commission (SEC)

– The Commodity Futures Trading Commission (CFTC)

 OBJECTIVES / BENEFITS OF ETHICS

• Making evaluative assessment about human behaviour as moral or immoral.

• Establishing moral standards/norms of behaviour.

• Making judgment upon human behaviour based on these standards and norms.

• Prescribing moral behaviour, makes recommendations about do’s and don’t’s of

human behavior.

• Expressing an opinion or attitude about human conduct in general.

• Defining the greatest good of man and establish a standard for the same.

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 CONCEPT OF BUSINESS ETHICS
Business Ethics means conducting all aspects of
business and dealing with all stakeholders in an
ethical manner.

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 ROLE OF ETHICS IN BUSINESS

• Builds trust

• Promotes confidence

• Validates relationships

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 FORMS OF UNETHICALITY IN BUSINESS

• Accounting fraud
• Deceptive advertising
• Unfair competitive /
labor practices
• Internet theft

Top 10 Crime Types as reported to the Internet Crime

Complaint Centre (IC3) by Victim Loss

• Trademark infringement 
• Unauthorized substitution of one brand of
goods for another
• Misappropriation of trade secrets
• False representation of products or
services
• Violating HR Policies and Labor Laws
• Harassment / Discrimination / Bias 11
 ETHICAL
THEORIES

Ethics of Conduct
Ethics of Character
What is the right choice of
action in an ethical dilemma What sort of person should we
be

Non-
Consequentialism Consequentialism
The right action is that which The right action is that which
achieves the best outcome is good-in itself, or follows a
rule

DEONTOLOGY TELEOLOGICAL /
ETHICAL EGOISM
Best of Oneself (Randism) UTILITARIANISM To perform one’s moral duty (Kantism) VIRTUE THEORY
* N o exemptions to the Categorical
* Reasoning Best for Everybody (Benthamism) We should be virtuous, i.e., act with virtue
Imperative
* Rational Self-interest (Aristotlism)
* Formula of Universality
* Laissez-faire Capitalism * Act Utilitarianism 4 Cardinal Virtues:
* Formula of Autonomy
* Rule Utilitarianism * Prudence
* Formula of Humanity
* Temperance
* Courage
* Justice
 CONCEPT OF VALUES

Values can be defined as broad preferences

concerning appropriate courses of actions or
outcomes.

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 VIEWS OF VALUES (Cont…)

THE TRADITIONAL VIEW OF VALUES (RELIGION):

• From the traditional viewpoint any group, i.e.

any social unit, is defined by its possession of
shared values.
• A group‘s values derive from the ancient
traditions of the group or are presented if they
did.
• By turning their gaze inwards and not outwards
to other groups and societies, they fail to
recognize the fragmentation and diversity of
values that surrounds them. 14
 VIEWS OF VALUES (Cont…)

THE MODERNIST VIEW OF VALUES (REASONING)

• Characterized by value fragmentation.

• However, this is seen as a transitory phase and it is
thought that, through the application of reason, the
pieces can be put back together and true values
defined.
• Those who take this position believe that values are
tangible, and can be unambiguously stated and defined
through formal and rational debate.
• The modernist believes that values can be
determined by ethical study.

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 VIEWS OF VALUES (Cont…)

THE NEO-TRADITIONAL VIEW OF VALUES (CULTURE)

• Neo-traditionalists see values in the context of organizational and social cultures.
• They argue that the fragmentation of values can be overcome and that organizations
and societies have unified values.
• But such an end cannot be achieved by rational analysis, which sees values as
objects for analysis and not as shared myths, which is how neo-traditionalists view
them.
• Myths can act as the glue that holds and organization or society in unity because of
their simplicity (which needs no sophisticated explanation) and because of their ability
to skilfully or effortlessly deal with dilemmas.

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 VIEWS OF VALUES (Cont…)

THE POSTMODERN VIEW OF VALUES (NO VALUES)

• The postmodern stance sees nothing in the social and intellectual world as
tangible or fixed.
• Large ideological schemes, such as capitalism and communism, that used to
dominate people´s thinking no longer have credibility.
• In the postmodern view there are no eternal truths of values.
• What we think of as objectively true emerges through discourses that are
embedded in power and knowledge relationships where some have more
influence on the outcomes of the discourse than others.
• But what emerges is in any case uncertain because the language we use is
opaque and carries no single, clear messages.
• The words we use to express our values have no fixed meaning. Statements
of values have to be treated as texts and deconstructed.

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 VIEWS OF VALUES (Cont…)

THE PRAGMATIC VIEW OF VALUES (PRACTICALITY):

• If a belief helps us to interpret our other beliefs and

vice versa then it is useful.
• The justification of belief is therefore conversational.
• The line taken by pragmatists is that the inability to
ground values in some overarching theory such as
Hinduism, Christianity, Marxism, Islam or
Capitalism does not prevent people making sensible
and practical arrangements for living in a civil and
well-mannered life.

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 BENEFITS OF VALUES IN
MANAGEMENT / BUSINESS
• Provide basis for business decisions
• Improve service quality
• Facilitate innovation to support competitiveness
• Provide good knowledge of business KPIs
• Enhance communication and teamwork
• Bring commitments among the stakeholders
 APPROACHES / PERSPECTIVES TO ETHICS

• Utilitarian Approach: Moral behavior produces the greatest good for the
greatest number

• Individualism Approach: Acts are moral if they promote the individual’s

long-term interest

• Moral-Rights Approach: Human have fundamental rights and liberties

that cannot be taken by an individual’s decision

• Justice Approach: Moral decision must be based on standards of equity,

fairness and impartiality
 CONCEPT OF ETHICAL
CORPORATE BEHAVIOUR (ECB)
Ethical Corporate Behavior (ECB) is how the corporates
behave with the stakeholders of the business.
STAKEHOLDER GROUPS

• Shareholders (BODs)

• Product Market Stakeholders (customers, supplier and host communities)

• Organizational Stakeholders (managerial and non-managerial employees)

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 STEPS TO DEVELOP CORPORATE ETHICAL
BEHAVIOUR (CEB)
(1) Ethical Training Programme: focus on official policy on ethical issues
(2) Code of Ethics: General, Stakeholders, Stockholders, Employees and
Community/Neighbourhood
(3) Organisation Ethics Development System (OEDS):
• Moral Leadership,
• Regular Assessments,
• Strategy and Structure &
• Ethics Steering Committee
(4) Ethics Committees:
• Working Group by the Companies Act,
• Confederation of Indian Industry (CII),
• Kumaramangalam Birla Committee / Audit Committee by SEBI,
• Naresh Chandra Committee,
• Narayana Murthy Committee
• DR J J Irani Committee
(5) Integration of Ethical Concepts
(6) Checklist Method
(7) Reward-Punishment System and
(8) Whistle Blowing
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QUALITIES OF AN ETHICAL LEADER

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Source - Harvard Business Review

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 WORK ETHICS
(Work Ethics Conference by Family, Career and Community Leaders
of America (FCCLA), 2017)

A set of moral principles or standards of behavior, or

set of values regarding proper conduct in the
workplace.
 WORK ETHICS
(Work Ethics Conference, FCCLA, 2017 Contd…)

FORMS OF WORK ETHICS

• Attending regularly

• Arriving on time and be ready to work

• Listening to and following instructions

• Willingness to learn (learning attitude)

• Performing quality work

• Displaying a positive “can do” attitude

• Completing work in time

 CONCEPT OF ETHICAL
ISSUE IN BUSINESS

Ethical Issue is an identifiable problem,

situation, or opportunity that requires a
person to choose from among several
actions that may be evaluated as right or
wrong, ethical or unethical.

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 UNETHICAL ISSUES IN BUSINESS

ETHICS AND COMPLIANCE INITIATIVE – GLOBAL BUSINESS ETHICS SURVEY (2016)

Bribery and corruption related misconduct by country

TRANSPERANCY INTERNATIONAL SURVEY (2011) – LOST BUSINESS DUE TO BRIBERY
Companies that decided not to conduct business in a particular country because
of the perceived / actual risk of corruption
The list of tax haven countries
includes…
• Andorra,
• the Bahamas,
• Belize,
• Bermuda,
• the British Virgin Islands,
• the Cayman Islands,
• the Channel Islands,
• the Cook Islands,
• Hong Kong,
• The Isle of Man,
• Mauritius,
• Lichtenstein,
• Monaco,
• Panama, and
• St. Kitts and Nevis 29
 ENVIRONMENTAL ETHICS
Environmental Ethics is a branch of ethics that studies
the relationship of human beings and the
environment and how ethics play a role in this.

Environmental ethics is a branch of applied philosophy

that studies the conceptual foundations of
environmental values as well as more concrete issues
surrounding societal attitudes, actions, and policies
to protect and sustain biodiversity and ecological
systems. 

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 GLOBAL ENVIRONMENTAL ISSUES - THREAT OF EXTINCTION

as per 2009 statistics

Source: International Union for Conservation of Nature (IUCN) as reported by BBC

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 Believes that Stresses
Nature is Advocates
To look after the animals Advocates upon the
important and holistic
the earth, its Advocates Rawl are essential importance rights of
humanbeings approach
human right and advocates for earthly of all living animals /
essentially to protect
responsibility wrong distributive life to beings for living-
are and
, i.e., actions justice continue, so human- beings preserve the
dependent on their protection other than
stewardship beings environment
the nature is important humans 32
 CONCEPT OF ETHICAL DILEMMA

Ethical Dilemma is a conflict between….

• one’s personal and professional values
• two values/ethical principles
• two possible actions each with reasons strongly
favorable and unfavorable
• two unsatisfactory alternatives
• one’s values/principles and one’s perceived role
• the need to act and the need to reflect
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 COMMON STRATEGIES TO SOLVE ETHICAL
DILEMMA
• Refute / Disprove the paradox (dilemma): The
situation must be carefully analysed. In some cases,
the existence of the dilemma can be logically
refuted / disproved.

• Value theory approach: Choose the alternative

that offers the greater good and the lesser evil.

• Find alternative solutions: In some cases, the

problem can be reconsidered, and the new
alternative solutions may arise.
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 STRATEGIES TO SOLVE ETHICAL DILEMMA IN
BUSINESS
• Own Code of Conduct – Eg. Ethics published as insider (communicative) tools
– Company Website
• Code of Conduct by Professional / Business Regulators – Eg. BIS, ISI, WTO,
IRDAI, TRAI, ASCI, NAAC, UGC, etc.
• Ethical Standard Program: Programs for making ethical awareness
• Ethics Training: Training on ethical issues, ethical dilemma and mechanisms to
handle
• Due Diligence - Reasonable steps taken by a person / a business to avoid
committing a tort or offence - Administrative DD, Financial DD, Asset DD,
HR DD, Environmental DD, Tax DD, IT DD, Legal DD, Customer DD,
Strategic DD, etc.

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 CONCEPT OF ETHICAL DISPLACEMENT
Ethical displacement means that if an ethical conflict cannot be
solved at a certain level of social aggregation (the individual, the
organization, the industry, or the national international political
level), then one should look for a solution at a level other than
that at which the dilemma occurs.

Eg. Many of the scams should have been eradicated /

trapped / curtailed by internal audit and such system within
the organizations, but they are not. So, they were whistle-blown
to the attention of justice system and public opinion.