Saurav Banerjee

Business Ethics

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 Notable quotes

Saurav Banerjee
“Sheelam pradhanam purushe taddasseh pranasyati,
Na tasya jeewito, nartho na dhanen na bandhuvi”
- Mahabharata
Ethical behavior is important for a man. When a man goes
down in ethical values, he would have no use of his money,
his relatives nor he has any reasons to live.

The reputation of a thousand years may be determined by the

conduct of one hour - Japanese proverb

“To educate a person in mind and not in morals is to educate a

menace to society” - Teddy Roosevelt

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 Notable quotes contd…

Saurav Banerjee
"We Will Not Lie, Steal Or Cheat, Nor Tolerate Among Us Anyone
Who Does"
U.S. Air Force Academy

“To see what is right and not to do it is want

of courage” - Confucius

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 Ethics & Business Ethics

Saurav Banerjee
Etymology - The Latin word Ethicus and Greek Ethicos are the roots of
the word Ethics. Both the words originate from ethos meaning character.
System of moral principles, rules and conduct is ethics. It deals with
morals.
Ethics involves a discipline that examines good or bad practices within the
context of a moral duty. Moral conduct is behavior that is right or wrong.

Plato’s Republic is the earliest work on ethics from western world, in orient
Vedas, Kautilya’s Arthashastra, Confucious’ work are the important works.

The age old Sarvjana Hitaya, Sarvjana Sukhay (Welfare to all, happiness
to all) evolved to Stakeholder Theory (Shareholder, stakeholder – customer,
Employee, community, activists, regulators, governments), Trusteeship
Theory of Mahatma Gandhi.

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Saurav Banerjee
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Theories of Ethics
Concept of Virtue

Saurav Banerjee
Plato (wrote Republic)
Aristotle (wrote Nicomachean Ethics)
Vedantic scholars and ancient Indian scriptures
Bible
Albert Carr, one of the most relevant to contemporary Business Ethics, strikes
a balance between pragmatic ambivalence, maneuvering (play to win) and
utopian idealism.
However, in play to win motto, bribing to get a contract, cash for votes to stay
in power (government), to fix a match, cooking books, fudging mark sheets,
lying in CV are neither ethical nor legal.
The virtue ethical theory judges a person by his/her character rather than by
an action that may deviate from his/her normal behavior. It takes the person’s
morals, reputation, and motivation into account when rating an unusual and
irregular behavior that is considered unethical
Teleological
The teleological theory of ethics is also known as the Utilitarian theory, tries
to measure the probable outcome of consequences of decisions taken.
Leading proponents - John Stuart Mill, Jeremy Bentham.
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Theories of Ethics

Saurav Banerjee
Utilitarian ethical theories are based on one’s ability to predict the
consequences of an action. To a utilitarian, the choice that yields the
greatest benefit to the most people is the one that is ethically correct.
There are two types of utilitarianism, act utilitarianism and rule
utilitarianism. Act utilitarianism subscribes precisely to the definition of
utilitarianism—a person performs the acts that benefit the most people,
regardless of personal feelings or the societal constraints such as laws.
Rule utilitarianism takes into account the law and is concerned with
fairness. A rule utilitarian seeks to benefit the most people but through
the fairest and most just means available.
Deontological
Immanuel Kant is the leading proponent.
Stresses on rightness of rules rather than the end results.
This means that a person will follow his or her obligations to another
individual or society because upholding one’s duty is what is considered
ethically correct.

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 Inventory of Ethical Issues in Business

Saurav Banerjee
Employee-Employer Relations
Employee-Employee Relations
Company-Customer Relations
Company-Shareholder Relations
Company-Community/Public Interest

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 Saurav Banerjee
Business Ethics:Today vs. Earlier Period

Society’s
Expectations
Expected and Actual Levels

of Business
of Business Ethics

Ethics

Ethical
Problem

Actual
Ethical Problem Business
Ethics

1950s Time Early 2000s

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 Two Key Branches of Ethics

Saurav Banerjee
Descriptive ethics involves describing, characterizing
and studying morality
“What is”
what people actually believe (or made to believe) to
be right or wrong, and accordingly holds up the
human actions acceptable or not acceptable or
punishable under a custom or law.
Normative ethics involves supplying and justifying
moral systems
“What should be”
The Golden rule of normative ethics is “doing to
other as we want them to do to us“. 
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Conventional Approach to
Business Ethics

Saurav Banerjee
Conventional approach to business ethics
involves a comparison of a decision or
practice to prevailing societal norms
Pitfall: ethical relativism

Decision or Practice Prevailing

Norms

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Sources of Ethical Norms

Saurav Banerjee
Regions of
Fellow Workers Fellow Workers
Country

Family Profession
The Individual
Conscience
Friends Employer

The Law Religious

Society at Large
Beliefs

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Ethics and the Law

Saurav Banerjee
Law often represents an ethical minimum
Ethics often represents a standard that
exceeds the legal minimum
Frequent Overlap

Ethics Law

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Making Ethical Judgments

Saurav Banerjee
Behavior or act compared with
Prevailing norms
that has been
of acceptability
committed

Value judgments
and perceptions of
the observer

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Ethics, Economics, and Law

Saurav Banerjee
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Four Important Ethical Questions

Saurav Banerjee
What is?
What ought to be?
How do we get from what is to what ought to be?
What is our motivation for acting ethically?

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3 Models of Management Ethics

Saurav Banerjee
1. Immoral Management—A style devoid of
ethical principles and active opposition to
what is ethical.
2. Moral Management—Conforms to high
standards of ethical behavior.
3. Amoral Management
Intentional - does not consider ethical factors
Unintentional - casual or careless about ethical
considerations in business

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3 Models of Management Ethics

Saurav Banerjee
Three Types Of Management Ethics

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Three Approaches to Management Ethics

Saurav Banerjee
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Three Models of Management
Morality and Emphasis on CSR

Saurav Banerjee
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Moral Management Models and
Acceptable Stakeholder Thinking

Saurav Banerjee
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Making Moral Management Actionable

Saurav Banerjee
Important Factors
Senior management
Ethics training
Self-analysis

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Developing Moral Judgment

Saurav Banerjee
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Developing Moral Judgment

Saurav Banerjee
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Developing Moral Judgment

Saurav Banerjee
External Sources of a Manager’s
Values
Religious values
Philosophical values
Cultural values
Legal values
Professional values
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Developing Moral Judgment

Saurav Banerjee
Internal Sources of a Manager’s
Values
Respect for the authority structure
Loyalty
Conformity
Performance
Results

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