BUSINESS ETHICS

Prof. P. K. BRAHMA IMT,CDL

How lonely are the Humans! . A bundle of contradictions, Ignorance and arrogance, Prejudice and superstitions, Bigotry and fanaticism, Illusions and hallucinations. Tamoso Maa Jyotirgamayo. µLet the Lights remove all Darkness¶, µLet Noble Thoughts come from all sides¶. .

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1.1 Definition of Ethics 1.2 History of Ethics and Business Ethics 1.3 Scope of Business Ethics 1.4 Applicability of Business Ethics

1. Introduction: Concepts of Market, Business and Ethics

2. Theoretical Issues of Business Ethics
2.1 Deontological Theory of Emanuel Kant 2.2 Utilitarianism 2.3 Cognitivism vs Non-Cognitivism Non2.4 Consequentialism vs non-Consequentialism non2.5 The Concept of Rights 2.6 Ethical Relativism 2/9/2012 2,7 Secular Morals vs Religious Morals

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3.Indian Ethos- Ethical Heritage of India Ethos3.1 Vedic and Vedantic Ethics 3.2 Ethics of the Gita 3.3 Buddhist Ethics 3.4 Ethics of Jainism 3.5 Philosophy and Ethics of Swami Vivekananda 3.6 Philosophy and Ethics of Mahatma Gandhi 3.7 Philosophy of Rishi Aurobindo 3.8 Philosophy of Rabindra Nath Tagore
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4 Economic Responsibilities 4.7 Corporate Social Reporting 4.5 Social Responsibilities 4.the Iron law of Responsibility Laws4.6 Total Social Responsibilities 4.1Ethics and Laws.3 Shareholders vs Stake-holders Stake4.2 Basic Responsibilities of Companies and Corporations 4. Ethics in Action: Corporate Governance and Corporate Social Responsibility 4.4.8 Social Audit 2/9/2012 5 .

4 Ethics of Lawyers 5.5 Ethics of Public Servants 5.6 Ethics of Teachers and Education Profession 2/9/2012 6 .1 Ethics of Chartered Accountants / Public Auditors 5. Ethics in Action: Ethics of Professions 5.5.3 Ethics of Engineers 5.2 Ethics of Doctors and Medical Profession 5.

1 Ethics of Accounting and Accounts Manager 6.6 Positive and Negative Areas of Investment 6.4 Ethics of the Stock Exchange 6.8 Ethics of Investment in Social Sectors-Educational SectorsInstitutions and Healthcare 2/9/2012 7 . Ethics of Finance 6.7 Government Control in Investment 6.3 Ethics of Investment Bankers and Lenders 6.5 Ethics of Investments 6.2 Ethics of Financial Advisor 6.6.

3 Quality.1 Safety and Security of Industrial Establishments and Equipment 7.7.Air.5 Transparency in Disclosure of Contents of Products 2/9/2012 8 . Quantity.4 Control of Pollution.2 Working Conditions and Environment in factories and Offices 7. Soil and PollutionEnvironment 7. Water. Price and Supply of Products 7. Ethics in Action: Ethics of Production 7.

6 Aggressive Marketing.5 Media Ethics. Ethics in Action: Ethics of Sales and Marketing 8.1 Ethics of Commercial Advertising 8.Paid News Ethics8. Hostile Takeovers.4 Customer Complaints Redressal Mechanism 8.8.2 Control of Advertising 8. Manipulations 8.7 Mergers and Aquisitions 2/9/2012 9 .3 Customer Service and After-sales service After8.

10 White collar Crime 9.11 Sexual harassment 9.4 The Executive as a Yogi.6 Unethical Behaviour of Employees 9.9. Organization culture 9.12Whistle Blowing 2/9/2012 10 .5 Ethical Behaviour of Employers 9.2 Role of HRD and Qualities of a Good Manager 9. Ethics in Action : Ethics at Work Place and .3 Age of Stress ±Manifestations of Stress at Work Place 9.1 Factors Contributing to Bad Work Culture and Factors Promoting good Work Culture 9.the Indian Solution Yogi9.

5 Ethics of the Judiciary 2/9/2012 11 .3 Business-Politician-Criminal-Police Nexus Business-Politician-Criminal12.4 Ethics of the Bureaucracy 12. Ethics in Governance-Ethics of the State Governance12.12.2 Ethics of Policing 12.1 Ethics of the Political System-the Politicians System12.

5 Discriminatory Treatment world Bodies like the IMF.4 Political Influence of Transnational Companies 12. in Trade 12.International Business Ethics and Ethics of Economic Systems 12.1 Economic Blocs and Cartels 12.3 Ethics of Intellectual Property Rights 12. Exploitation etc. WTO etc.2 Discriminatory Treatment of Nations on Issues like Child Labour. World Bank.. 12. Subsidy.6 Treatment of Democratic and non-Democratic nonRegimes 2/9/2012 12 .

the entire world is a stage not for acting but for business and marketing.you will always find yourself in some market place or other.´  Except perhaps for a few hours at home . an economic activity where there are buyers. 2/9/2012 13 .e.  You find business anytime. there will be a ³Market. And if there is ³Business´ (i.Chapter 1:Introduction Introduction Shakespeare said the world is a stage (he meant acting we are all actors) but today. anywhere and in anything. sellers and transactions for a consideration).

Sports.Export-Import etc. 2. . Hospitality. MarketsInsurance etc. International Markets. The Capital Goods Markets 6.water Communications. 9. groceries.Types of Markets The Retail Markets ± Food. 3. Marriage Beauty etc. Vegetables. The Raw Materials Markets ±Inputs for finished products. medicines etc. Banking. jute etc. The Financial Markets. Commodity Markets ± food grains.Export2/9/2012 14 10. Cotton.stock market. The Service Sector Markets ±Transportation-air Transportationroad. Markets. books. Entertainment . 8. Cyber Market 1. railways . 4.. The Finished Goods Markets 5. Health. fruits. The Labour Markets 7.

Applicability of Business Ethics The common concept is business ethics concerns the corporate sector.  Ethics of Doctors and Medical profession. retailers and vendors. 2/9/2012 15 . Teachers & Educational Institutions. Modern concept is it should cover:  Ethics of companies & corporations.  Ethics of traders.  Ethics of NGOs.  Ethics of Public Administrators. Trusts and Institutions.  Ethics of Public Accountants.  Ethics of Engineers  Ethics of Educators.  Ethics of Lawyers and Law Firms.

technical.Definition of Business and Ethics Business is an economic activity . It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole. Applied ethics is a field of ethics that deals with ethical questions in many fields 2/9/2012 16 such as medical. legal and business ethics.  .  Ethics comes from the Greek word Ethos which means character of the individual or the culture of the community. a transaction where an offer is made by a seller and the offer is accepted by a buyer for a consideration with the hidden agenda of a gain or profit .  Business ethics is a form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment.

were blind to ethics and morality which were obviously unethical to the succeeding epoch. is tainted by and through the history of slavery history of colonialism and later by the history of cold war. The postpostneed for business ethics in the current epoch had begun gaining attention since 1970s. especially the elites of the world. thus. as the world witnessed serious economic and natural disasters because of unethical business practices. and the fall of Enron are instances of the 2/9/2012 major disasters triggered by bad corporate ethics.Business ethics being part of the larger social ethics. The current discourse of business ethics is the ethical discourse of the post-colonialism and post-world wars. firms started highlighting their ethical stature since the late 1980s and early 1990s. History of business. At different epochs of the world.Historically. always been affected by the ethics of the epoch. disaster. The Bhopal disaster. History of Business Ethics 17 . people.

discourse of business ethics both at media and academics. seen . promotion of firms owned by American nationals were presented as if it were freedom and the local resistance against the excess of American firms were labeled as communist upraising sponsored by the Soviet Block. Ideologically. Overt violence by business firms have decreased to a great extent in the democratic and media affluent world of the day. even legitimate criticism against unethical practice of the firms were presented as if it were infringement into the 'freedom' of the entrepreneurs by activists backed by communist totalitarians. The war in Iraq is one of the recent 18 2/9/2012 example of overt violence by the liberal western . media and business firms by the end of the overt Cold War. This scuttled the totalitarians. War.It should be noted that the idea of business ethics caught the attention of academics. Further. through and through pages of history were fought fought for American business firms abroad. Cold Wars. though it has not ceased to exist.

etc. Rules and Regulations to govern Business           The Companies Act The Income Tax Act The SEBI Act The Factories Act The Environment Act The Minimum Wages Act The Provident Fund Act The Hazardous Substances Act The FEMA The Consumer Protection Act etc. 19 2/9/2012 .Plethora of Laws.

Two Questions which arise: 1. 2/9/2012 20 .Rules and Regulations to control business.When there is a plethora of Acts . where is the need to frame a separate Code of Business Ethics? 2.Why should the Corporate world be periodically rocked by scandals in spite of having the Code of Business Ethics? The answer is Ethics begins where the Law ends.

Yajur-veda.Panchatantra and a treasure of unparalled Sanskrit & Pali 2/9/2012 21 Literature.Rigveda. Treasure of Indian Philosophy and Ethical Values:  The Vedas (4).2 Indianness of Indian Business-Rediscovery of Indian Schools of thought and Philosophy. Logic etc.1. Chapter 2. Jataka Tales. Samaveda. Economics.Law. Indian Ethos: Ethical Heritage of India . 13 basic)  The Puranas (18)  The Greatest Epics -The Ramayana & The Mahabharata  The Greatest Book of Philosophy-The Gita  Indian Schools of Philisophy (6)  Buddhism. Atharvaveda (Nalayira Divya PrabhandhamTamil)  The Upanishads (123 books. Jainism. Ayurveda.

Purva Mimamsa (or simply Mimamsa). scholasticism into a standard list of six orthodox (astika) schools (darshanas).Nyaya.Vedanta (also called Uttara Mimamsa).Vaisheshika. with emphasis on Vedic ritual.Many Hindu intellectual traditions were classified during the medieval period of Brahmanic-Sanskritic Brahmanic. the enumeration school 4. the "Six Philosophies" ( ad-dar ana). 2/9/2012 22 . the atomist school 3. all of which cite Vedic authority as adtheir source: 1.Yoga. and 6. the tradition of Vedic exegesis. with emphasis on Vedic philosophy. the school of Patanjali (which provisionally asserts the metaphysics of Samkhya) 5. the school of logic 2.Samkhya. the Upanishadic tradition.

Attitude to the World: Shanti. Reverence for Elders: Matrideva bhaba. Style of Living: Spiritualistic against Materialistic: Simple Living and High Thinking 4. Atithideva bhava 5. Moksha. Banaprastha (Pilgrimage and Meditation). Kutumbakam---Universalism ---Universalism . 2/9/2012 23 Vasundhara Kutumbakam. peace of mind. Business and Governance 1. Detachment. 2. Duties of Life: Artha. Pitrideva bhava. Sukham. Moksha (Salvation).Brahmacharya(Duties as Student life). Chidanandam 6. Grihastha (Duties as a Householder). to the evrywhereuniverse. Kama. Dharma Every individual including businessman and ruler must conduct himself according to DHARMA i.e. honesty. acharyadeva bhaba . equity and with a sense of divine duty and Nishkam Karma.Ethical Principles of Indian Society ±Individuals. to vegetation.Aims of Life: Four Phases of Life. Yoga and Meditation. Anandam-let there World: Anandambe peace evrywhere-to humans.Attitude towards Self: Inner Happiness. 3. fairness.the whole world is your family.

Bhuta Rin: subspecies . fish.  2. for their incalculable gifts to us. insects etc.Pitri Rin :-Indebtedness to Parents and ancestors for their cumulative contributions to us.  3. air. realised the highest truths and gave the wisdoms.trees.Devarin :-Indebtedness to supra. water light etc. to countless people who have contributed to make existence a reality. . birds.human powers suprafor the gifts of Sun. animals.Bhuta Rin:-Indebtedness to all sub-human . 2/9/2012 24  Albert Einstein had the same concept.Nri Rin :-Indebtedness to humanity at large.Rishi Rin :-Indebtedness to sages who leading a life of utter self denial.  4.Indian Concept of Indebtedness Five Categories of Indebtedness (Rin) 1.  5.

so why worry? dies A person who can give up ego. pride. You can avoid this cycle and achieve Moksha (Salvation) through Nishkam Karma and Surrender to God. he only is qualified to think of 2/9/2012 25 achieving Brahma. Bhakti Yoga (the Beauty of Surrender)  Karma Yoga -Nisham Karma-Egoless work with Divine KarmaDuty. Karmanye aadhikaresthey maa phaleshu kadachana  Soul is indestructible.  .as you discard old clothes. power.Principles of the Gita Raj Yoga.  Don¶t fear death because death is certain when one is born and birth is certain when one dies.  The cycle of death and birth is painful. lust .anger and taking favours. the Soul indestructiblediscards the old body and enters into a new body. Gyan Yoga.  Be Fearless and do your duty with Dharma .

2/9/2012 26 .  Eight Schools of Thoughts or Philosophy.Vedic IndiaSystem and Buddhist System Essentials of Indian Philosophy:  The law of Karma.  Difference with Buddhist philosophy.System of Education in Ancient India.  Common principles²simple living high principles² thinkingthinking-nonattachment to material things. and Moksha. Rebirth and Salvation (idea of liberation)-Brahmacharya. liberation)Baanprastha. Grihastha.

don¶t steal.Sat Karma.Right Speech 2.Right Remembrance (Right Views) Smriti6.Smyag Samadhi.Sat Chinta. respect ladies and abjure violence.Right Thinking (Right Resolve) Chinta4.Sat Jeevan. peopledon¶t lie.Right Perception ( Mindfulness) Drisht8.Right Meditation .Sat Vakya . SamadhiShortShort-cut principles for ordinary people. Eightfold Noble Path or Madhyapantha 1.Sat Smriti.Samyag Drisht.Right Action (Right Conduct) Karma3.Ethics of Buddhism-the principle of SufferingBuddhismSufferingexistence.Sat Cheshta²Right Effort Cheshta² 5. 2/9/2012 27 .( Concentration).Right Livelihood Jeevan7. causes and cessation of sufferings.

Utilization of local resources Full employment µDana¶-giftsµDana¶-gifts-and charities to others-profit.sharing others-profit(ethics of the wealthy and the business class) Least expenditure on armies and promote development through non-violence (ethics of nongovernance) Following Dharma by the Rulers (ethics of rulers) 28 2/9/2012 .Ethics of Buddhist Economics       Sustainable Growth-Planting and nurturing of trees Growthand nature.

Asteyam (Abstinence from stealing) 4. 2/9/2012 29 .Satyam (Abstinence from falsehood) 3. infatuation and greed.Brahmacharyam (Abstinence from self-indulgence) self5. pride.Ethics of Jainism 1.  Liberation of the soul: dissociation of the soul from the matter.Aparigraha (Abstinence from all attachments)  Bondage of the soul: causes: anger.  Believes in the Theory of Karma and Rebirth but not in God.Ahimsa (Abstinence from all injury) 2.

You can not preach religion to people with empty stomachstomach-food and education come first before anything else.Those who are serving jiva i. enlightenment and freedom from superstition and blind faith. Building of a strong nation and character through education. Service to Humanity .e living beings are serving God. and downthe untouchables are your brothers & sisters. Education.Swami Vivekananda-Philosophy & Ethics Vivekananda     Don¶t forget that the poor. You will reach God by playing football rather than by reading the Gita. & education for allall. 30 2/9/2012 .women¶s freedom. economic and spiritual development. education. the down-trodden.

up-liftment of the downtrodden (Vivekananda) Khadi & Village development.dev.upHarijans.Moral Law (Gita) TruthTruth-Truth is God and God is Truth (Aristotle: know Thyself) Communal Harmony (Indian tradition of tolerance and harmony) Equality of all human beings and Women (Western thoughts) Harijans.Non-violence ( imbibed Buddhism & Jainism & Tolstoy) DharmaDharma.Philosophy of Mahatma Gandhi          Ahimsa. from grassroots development(innovation) Trustee for Industries & Industrial Houses (innovation) Sarvodaya & Community Development ( Marxism) 31 2/9/2012 .NonAhimsa.

.. it is to India that is reserved the highest and most splendid destiny.Philosophy of Rishi Aurobindo-the Divine Man AurobindoEvolution of Consciousness. the most essential to the future of human race. Divine Life on earth. It is she who must send forth from herself the future religion of the entire world.  ³ India cannot perish .  . Money not despised-it is an instrument of Life despisedDivineDivine.among all the divisions of mankind. the eternal religion which is to harmonize all religions.µI do not regard business as something evil or tainted.. It is for this Shi Ramkrishna 2/9/2012 32 came and Vivekananda preached´. science and philosophies and make mankind one soul.¶  Super-consciousness and mind-ascent of human Supermindsoul to Supreme Spirit.

´  Tagore epitomized the entire Indian Culture of five 2/9/2012 thousand years.  Truthfulness.  Humanism. Humanizing Education System in natural environment (Shantiniketan). ³those who do injustice and those who tolerate injustice are equally condemnable.  .  Freedom and Fearlessness. Agricultural development (Sriniketan). A unique example of Total Quality 33 Management.  The religion of Man.Philosophy of Rabindranath Tagore Universalism against Nationalism.  Peace and Non-violence. Non Unity of Mankind.´  ³Where the mind is without fear and the head is held high«.

attitudes of races. religion & societies RelativismSecular Ethics. Human Rights.Market Ethic (Adam EgoismSmith).    Chapter 3. Theoretical Aspects of Ethics Cognitivism and Non-cognitivism NonConsequentialism and Non-consequentialism NonDeontological Theory of Emanuel Kant -µgoodwill¶ UtilitarianismUtilitarianism. fairness Justiceand equality. Protestant Ethic (work ethic-Max Weber). Retributive Justice.truth. PrinciplesDemocratic Rights. Liberty ethicEthic (John Lock). Ethical Relativism. Rights Principles. Distributive Justice. Women Rights.Animal Rights. rationality and humanism. Children¶s Rights Theory of Justice-based on principles of rights. Ethics34       2/9/2012 .Enlightened Egoism. Compensatory Justice.maximum good for the maximum number -Jeremy Bentham EgoismEgoism.

Ethics is all about distinguishing between: *Good & bad or good and evil *Right & wrong *Morality & immorality *Rationality & irrationality *Justice & Injustice *Reason & unreason or prejudice *Fairness & unfairness *Truth and untruth 2/9/2012 35 .

situations and circumstances. cow slaughter or killing of animals for meat or hunting. female infanticide. abortion. What is moral today may be immoral tomorrow. (mainly religion based e. interest on deposits etc. sati.Cognitivism and Non-Cognitivism NonMoral principles which can be identified or recognized. drinking. There is nothing in the world which is unconditional except man¶s Free will and Good Will.g. place.)  The second view is Moral principles can never be known because there is nothing in the world which is absolute truth and which does not depend upon or vary with time. 2/9/2012 36  Ethical Relativism  . what immoral in one society may be moral in another society depending on the cultural differences.

Consequentialism & Non-Consequentialism NonConsequentialism: Consequentialism:  UtilitarianismUtilitarianism-Jeremy Bentham  EgoismEgoism- Enlightened Self Interest ±Adam Smith NonNon- Consequentialism:  Deontological Theory of Emmanuel Kant (Duty and Goodwill).  Justice Principles ±Distributive Justice, Retributive Justice, Compensatory Justice.  Rights Principles ± Human Rights, Women Rights, Animal Rights, Environmental Rights, Children Rights, Minority Rights, Education Rights,
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Human Values For Indian Managers In spite of the fact that ancient India set highest ethical, moral and spiritual standards, there is no evidence of those in Corporate governance. While Japan has largely retained their own cultural values in management Indian managers are governed by western values which are mainly materialistic. Need for moral regeneration and adopt an Indian Style of Management.
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Basic Questions in Economics²WHAT, Economics² . HOW and FOR WHOM²answers all WHOM² questions. When there are plethora of Acts, Rules, Guidelines and Regulatory Authorities to regulate Business ,the question arises why should there be a separate set of Business Ethics? The answer is Acts and Rules are not enoughenoughBusiness has to do much more than this and that brings us to the question of Morality and Moral Judgements.
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Nature of Business Ethics
Three Approaches to Study of Business Ethics:  Descriptive (describing practices, moral codes and beliefs)  Prescriptive (attempt to formulate and defend basic moral norms)  Conceptual study of ethics (analysing central ethical terms such as right, good, justice, virtue-an attempt virtueto distinguish what is moral and what is immoral). FourFour-part structure of Business Ethics: 1.Specification of Moral Judgement. 2.Moral Judgement and Moral Standards. 3.Logical Reasoning and Moral Standard. 5.Moral Judgement and Moral Responsibility.
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1. then it should be seen as unethical for a company to consider the interests and rights of anyone else. shareholder concept. stakeholder concept v.General Business Ethics . fundamental purposes of a company. one of the aims of which is to determine the business.  Issues regarding the moral rights and duties between a company and its shareholders: fiduciary responsibility. This part of business ethics overlaps with the philosophy of business. 2/9/2012 41 . If a company's main purpose is to maximize the returns to its shareholders.  Corporate social responsibility or CSR: an umbrella term under which the ethical rights and duties existing between companies and society is debated.Various Aspects of Business Ethics.

such as the ethical debate over manslaughter. industrial espionage. Corporate Social Entrepreneurship Political contributions made by corporations. introducing a crime of corporate manslaughter. Law reform. take-overs. 2/9/2012 42 .     Ethical issues concerning relations between different companies: e. governance. .g. espionage. hostile take-overs. The misuse of corporate ethics policies as marketing instruments. Leadership issues: corporate governance.

these practices may be anti-competitive or offend against the values of antisociety. facilitation payments: while Bribery. securities fraud. Enron. 2/9/2012 Satyam 43 . shops.  Executive compensation: concerns excessive compensation: payments made to corporate CEO's and top management. WorldCom. trading.  Cases: accounting scandals. . kickbacks. kickbacks. fraud. misleading financial analysis. Enron. Ethics of Accounting and Financial Information  Creative accounting.  Bribery. scandals. forex scams: concerns (criminal) manipulation of scams: the financial markets. WorldCom.  .2. bucket shops. accounting. earnings management. analysis. management. payments: these may be in the (short-term) interests of the (shortcompany and its shareholders.  Insider trading.

religion. race. such as the rights and duties owed between employer and employee.  Issues surrounding the representation of employees and the democratization of the 2/9/2012 workplace: union busting. also known as At-will employment.  44 . Atemployment. breaking. harassment. Issues arising from the traditional view of relationships between employers and employees. busting. strike breaking. covers those ethical issues arising around the employeremployer-employee relationship. sexual harassment. 3. Ethics of Human Resource Management The ethics of human resource management (HRM) . See also: affirmative action. disabilities. action.  Discrimination issues include discrimination on the bases of age (ageism). disabilities.. (ageism). weight and attractiveness. gender.

An employee or future employee can not be hired or fired based on race. servitude. health.  Occupational safety and health. See also: testing. privacy. law. age. indentured slavery.. religion.  Issues relating to the fairness of the employment contract and the balance of power between employer and employee: slavery. All of the above are also related to the hiring and firing of employees. privacy. or any other discriminatory 45 2/9/2012  .  Issues affecting the privacy of the employer: employer: whistle-blowing. employment law. Issues affecting the privacy of the employee: workplace surveillance. surveillance. whistle-blowing. gender. drug testing. servitude. .

but where is the ethical line to be drawn? Marketing ethics.  Pricing: price fixing. shill. (electronic). discrimination. . 2/9/2012 46 (electronic). may seek to manipulate our values and behavior. skimming. skimming. and switch. shill. marketing. See: antianti-competitive practices. ethics overlaps strongly with media ethics. price fixing. antitrust law. which goes beyond the mere provision of information about (and . practices. However. because marketing makes heavy use of media. price discrimination. media ethics is a much larger topic and extends outside business ethics. law. pyramid scheme. spam switch. planned scheme. bait wash. viral marketing. To some extent society regards this as acceptable.  Specific marketing strategies: green wash. access to) a product.4.  Anti-competitive practices: these include but go Antibeyond pricing tactics to cover issues such as manipulation of loyalty and supply chains. Ethics of Sales and Marketing Marketing.

 See also: .. markets. markets. advertising regulation advertising. messages. Content of advertisements: attack ads. sex in advertising. advertising techniques. schools. products regarded as advertising. immoral or harmful . 2/9/2012 47 . false advertising. subliminal ads. messages. disinformation.  Children and marketing: marketing in schools. grey markets. Benetton.  Black markets. disinformation.  Cases: Benetton.

g. jumping). Ethics of Production This area of business ethics usually deals with the .5. addictive and inherently dangerous products and services (e. tobacco. bungee jumping). alcohol. motor vehicles. weapons.  Defective. or the degree of permissibility may depend on the changing state of preventative technologies or changing social perceptions of acceptable risk. chemical manufacturing. Some of the more acute dilemmas in this area arise out of the fact that there is usually a degree of danger in any product or production process and it is difficult to define a degree of permissibility. duties of a company to ensure that products and production processes do not cause harm. 2/9/2012 48 .

mobile phone radiation food. Product testing ethics: animal rights and animal testing. carbon emissions trading Ethical problems arising out of new technologies: genetically modified food. testing. Bhopal disaster. use of economically disadvantaged groups (such as students) as test objects. environmental ethics. health. See also: product liability Cases: Ford Pinto scandal. and health. Peanut law. ethics. .     Ethical relations between the company and the pollution. disaster. Corporation of America 49 2/9/2012 . environment: pollution. asbestos / asbestos and the law.

trademark infringement.  Misuse of the intellectual property systems to stifle competition: patent misuse.  Even the notion of intellectual property itself has been criticized on ethical grounds: see intellectual property. . troll. or the company which discovered and developed the plant's medicinal potential? As a result. property. submarine patent. misuse. infringement. infringement. Ethics of Intellectual Property. or the employee themselves? The country in which the plant grew. patent troll. copyright misuse. Nor is it obvious who has the greater rights to an idea: the company who trained the employee. regardless of need. attempts to assert ownership and ethical disputes over ownership arise. in order to prevent any 50 competitors employing them. infringement. . copyright infringement.6. misuse. patent.  Employee raiding: the practice of attracting key employees raiding: away from a competitor to take unfair advantage of the knowledge or skills they may possess.  Patent infringement. Knowledge and Skills  Knowledge and skills are valuable but not easily "own able" as objects.  The practice of employing all the most talented people in a 2/9/2012 specific field.

. I International Business Ethics and Ethics of Economic Systems . 2/9/2012 51  Comparison of business ethical traditions from various religious perspectives. Also on the basis of their respective GDP and [Corruption rankings]. International business ethics  While business ethics emerged as a field in the 1970s. [Corruption rankings]. Many new practical issues arose out of the international context of business. older issues can be grouped here as well. Issues and subfields include:  The search for universal values as a basis for international commercial behaviour. looking back on the international developments of that decade. Theoretical issues such as cultural relativity of ethical values receive more emphasis in this field.  Comparison of business ethical traditions in different countries. Other.7. international business ethics did not emerge until the late 1990s.

It becomes difficult for these markets to compete with the pricing set by foreign markets. low The permissibility of international commerce with pariah states.  Issues such as globalization and cultural imperialism. call centres) to low-wage countries. In 2/9/2012 2009. the fair trade movement. transfer pricing.g. Dumping is often anti- . the International Trade Commission has been 52 researching anti-dumping laws. bioprospecting and biopiracy in the pharmaceutical industry. selling products at prices lower than their normal value.  Foreign countries often use dumping as a competitive threat. This can lead to problems in domestic markets.g. e. clothes) and services (e. Ethical issues arising out of international business transactions.  The way in which multinationals take advantage of international differences. labor.e..  Varying global standards .g. pricing. . the use of child labor.g. imperialism. such as outsourcing production (e.

a particular outcome might be 2/9/2012 good for the employee. society. Some ethicists .Theoretical Issues in Business Ethics . I. including the perspective of the employee. focusing on the rights and philosophy.ethics. perhaps not part of but only related to business. and society as a whole. For example. the commercial enterprise. such that serving the interest of one party is a detriment to the other(s). it would be bad for 53 the company. Very often.Ethics of Economic Systems  This vaguely defined area. whereas. or vice versa. John Rawls and Robert Nozick are both notable contributors. wrongs of various systems for the distribution of economic benefits. is where business ethicists venture into the fields of political economy and political philosophy.Conflicting interests  Business ethics can be examined from various new perspectives. situations arise in which there is conflict between one or more of the parties.

Motive or Intention-What is the Objective of Moral IntentionJudgment? The Scope of Ethics-Concerns all sciences and all Ethicsactions of individuals. politics and society. (b) Reason. Postulates of Ethics-(a) Free will.Unit 4 Features and Purpose of Ethics         Ethics ±a Normative Science. The Need for Ethics The Need to go beyond Ethics Spirituality is not Denial of the World Ethics and Religion 54 2/9/2012 . and (c) EthicsPersonality.

 An independent rational morality not based on religious faith or commandments.  Development of work culture  Factors responsible for poor work culture in an organization. 2/9/2012 55 .Features of Values-Types of valuesValuesvaluesFormulation of values The Relevance of Human Values in Management  Elements of Indian Ethos Secular Vs Spiritual Values in Management. Work Ethos.

Unethical behaviour will damage Public Image. Perspective. Unethical Behaviour from a Macro Perspective. .Unit 5. erode Goodwill( biggest Asset).  Bribery  Coercive Acts  Deceptive Information  Theft  Discrimination 2/9/2012 56 . Importance of Ethics and Moral standards Importance of Ethics in Business-essential for long-term Businesslongsuccess in business. Intervention. affect efficiency and will invite Govt.

Egoism Utilitarianism-utility to individual & community.The Macro Perspective-Ethics and Trust PerspectiveTrust in Supplier Relations  Trust in Customer Relations  Trust in Employee Relations Moral Standards Essential Elements of Social contract theory Consequentialist Principles-decision ethical or Principlesunethical will depend on consequences.  Egoism-individual¶s personal interest. Utilitarianism 2/9/2012 57 .

58 2/9/2012 . flattened hierarchy.Unit 6. customer satisfaction etc. quality Control-zeroconscious production. Prospective scenario of the Future Organization: Stress -second nature of Executives Total Quality Control-zero-defect product. reduced obesity. Model of Management in the Indian ± SocioSocio-political Environment      Role of Indian Ethos in Management : A TwentyTwentyFirst Century Perspective Fragmentation of human consciousness accelerated by science and technology is a prime cause of the widespread fall in the level of human values reflected in our lives. increased creativity.

Karma and Dharma YogiImaan and Izzat. The East and the West Plain Living and High Thinking : a Study in Contrast 2/9/2012 59 .‡Relevance of Indian Ethos to Future Organizations    The Executive as a Yogi.

Brain Selfstilling.causes and Solutions Environmental Factors & Life style Indian Perspectives :Meditation.‡Problems Relating to Stress in Corporate Management and Indian Perspective         Age of Discontinuity (Peter Drucker) Age of Uncertainty (J. Mindfulness. family values and bonding. 60 2/9/2012 . Music. Yoga. Self-introspection. Galbraith ) Age of Future Shock (Alvin Toffler ) Age of Anxiety ( Karl Albrecht ) STRESS : Symptoms .K.

Unit 7 Corporations and Social Responsibilities The concept of Social Responsibility  Plethora of Acts. 2/9/2012 61 . Rules and Regulations exist. R . then why other responsibilities?  Howard Bowen ( Social Responsibilities of Businessman )  K. Laws. Andrews (intelligent and objective concern )  Keith Davis ±´social responsibility begins where the law ends´.

Need for Social Responsibilities         The iron Law of Responsibility To fulfil long-run Self-interest To establish a better Public Image To avoid Government Regulation or Control To avoid misuse of National resources and economic power To avoid Class conflicts To convert resistance into Resources To minimize Environmental damage. 2/9/2012 62 .

Responsibility Towards the Consumers and the Government.Responsibility Towards the Society in General especially Environment.  Economic Objectives  Social Objectives ( profits can no longer be the 2/9/2012 63 Sole objective of Business²Urwick) Business² .Responsibilities Towards their own Employees. 2. 4.Resposibility Towards the Shareholders. 3.Responsibility of Business Towards Society Four Categories of Responsibilities: 1.

Be Law abiding Citizen. 6. Social Responsibility towards Government: 1. 2 .Not to resort to hoarding and unfair Trade practices. 4. honestly and promptly .Pay Taxes and dues to Govt.Not to corrupt Govt. Servants and the Democratic processes for selfish ends..Not purchase Political support by unfair means. 3. 2/9/2012 64 . 5 Not to produce and sell Sub-standard commodities Suband services .

2/9/2012 65 . *Milton Friedman¶s Thesis *Ethics in Management. To Whom Are Organizations Socially Responsible? Total Social Responsibilities  Economic Responsibilities  Legal Responsibilities  Ethical responsibilities  Discretionary Responsibilities *Social Responsibility and Economic Performance.‡Place of Ethics and Values.

Corporate and Socio-Economic Conflict SocioThe Social Audit *  The Sachar Committee Recommendations*  Corporate Social Reporting*  Corporate Social Objectives  Social Report in Practice : -Environmental controls. -Minority Employment -Responsibility to personnel -Community activities -Product Improvement (Fortune 500 companies )  2/9/2012 66 .

Ashoka¶s Edicts.Ethics and Environment Environmental Ethics-1 : Ethics Bhopal Gas Tragedy (Union Carbide)  Chernobyl Nuclear power plant Tragedy (USSR)  Ecological Sustainability  Indira Gandhi on Environment.  A Brief Historical Sketch of Environmental Ethics *  Rachel Carson-Silent Spring. Peter Singer-Animal CarsonSinger2/9/2012 67 Liberation.Unit 8 . (development without environmental destruction)  Environmental Ethics-II (John Locke) ±the Earth is Ethicsgiven to men to protect and comfort all beings. . Ancient Indian Values.

International Code Of Medical Ethics:  Duties of Doctors in General :THE HIPPOCRATIC OATH.Unit 9. Medical Profession. (Ancient Greece)  Duties of Doctors Towards the Sick:  Duties of Doctors Towards Each Other:  THE DECLARATION OF GENEVA (General Assembly of World Medical Association. Ethics in Action ± Ethics of Professions A.1948) 2/9/2012 68 .

1949.  The Council of the Institute has two bookletsbooklets2/9/2012 69 (i ) Code of Conduct and (ii) Professional  .1954 . 1997. C.B.  The Tenets of the Code Ethics: 11 Codes of Conduct and 10 Instructions as Guidelines. Professional Ethics for Chartered Accountants:( Chartered Accountants Act. Code Of Ethics For Engineers Code of Ethics for Corporate Members mandated by the Institution of Engineers(India).

(Professional Misconduct Defined by the CA Act) Four Basic Needs to be met:  Credibility  Professionalism  Quality of Service and 2/9/2012  Confidence 70 .g. Satyam Scandal-PWC ) Scandal Confidentiality  Professional Behaviour.Fundamental Principles for Chartered Accountants  Integrity  Objectivity  Professional Competence and Due Care (e.

.D.  The Universal Moral Codes are wantonly violated in this Profession  No Accountability( Ghaziabad Treasury Scandal)  Justice Delayed. Professional Ethics for Lawyers-Not LawyersCodifiedCodified-Fundamental Moral Values Only.  Strict Codes for both inside and outside courts 2/9/2012 71 needed for speedy justice. Justice Denied  Plight of Common Man²either you lose all Man² your money or lose your life before justice comes.

 2/9/2012 72 .Modern Concept of Professional Behaviour Responsibilities Towards Clients  Responsibilities Towards the Profession Itself  Responsibilities Towards Society * Professional Ethics in Public and Private Organizations.

commitment. sense of Culturebelonging. Ethics in Action-Ethics at Work ActionPlace What Are Work Ethos? Work Culture.discipline.Unit 10. sense of pride Unethical or Dysfunctional Behaviour in Organizations: Employees & Employers  Lying  Free-riding Free Employee Crime  White Collar Crime  Embezzlement and Fraud  Sexual Harassment  Bribery 2/9/2012  Whistle Blowing 73 .

Operational Systems for improvement of work culture        Job Enrichment.Herzberg¶s two-factor Enrichmenttwotheory² theory²Hygienes and Motivators Job Rotation Quality Circles* Workers¶ Participation Organizational Development ( OD ) Labour Welfare Human Engineering-to fit man into machine. Engineering74 2/9/2012 .

 2/9/2012 75 .Modern Concept of Professional Behaviour Responsibilities Towards Clients  Responsibilities Towards the Profession Itself  Responsibilities Towards Society * Professional Ethics in Public and Private Organizations.

Ethics and Employees        DecisionDecision-Making and Morality Moral Approbation Organizational Culture Organizational Climate Organizational Goals Decision Processes Total Benefit Test 76 2/9/2012 .Unit 11.

2.4. . Unfair labour practices.*Ethical Models  Developing Organizational Values :  Selection  Promotion  Transfer  Termination Prevent other unethical practices: 1.and 5. bad conditions and long working hours .Sexual harassment. Non -implementation of ILO 2/9/2012 77 conventions. 3Unsafe work places.Embedding Ethics in Organizational Culture *Decision Support Model .No redresal of ILO grievances .

Training and learning opportunities 2. Growth opportunities 3. Openness 5. Nurturing innovation and allowing paticipation 6 Employee welfare 2/9/2012 78 .Accountability along with power for decision making 4.Qualities of a Personnel Manager 1.

³You shall others as equals´ ³You should show the ability to forgive´ ³You shall love your fellowmen and women´ 79 2/9/2012 .one has to a good man-bigman-big-hearted.An Ethical HRD Manager      A Personnel Manager must be a good manager and to be a good manager.big-minded and respect. commands respect.bigdevelopment of people below manager. HR men should provide proper Leadership. genuine concern for others.

 It induces people to buy things they don¶t need or can¶t afford.  It creates undue pressure on the Consumers  Big firms can afford it but small producers can¶t  Huge money involved should be better spent on improving the quality of products 2/9/2012 *The critics blame the tool and not the user like 80 blaming weapons. Ethics of Advertising Critics of Advertising argue:  Ad is unethical.  Propagates and perpetuates Capitalistic value system.Unit 12. is inherently a social evil. Increases expectations. .

.Govt.Neutral and Aesthetic. (specially with children.Competitive and Comparative( cars) 5. dogs) 3. Advt.Informative-to create awareness of the presence of a company or a product.Dangerous Stunts 7.Message Bearing (Tata Tea) 4.Impact of Advertisement : To Influence Advertisements can be categorized into 7 groups: 1.Aggressive and Offensive 6. launching of productnew products. 2.Deceptive *Deception is the main problem ±it is immoral & 2/9/2012 81 unethical .Informative1.

Regulation of Advertising      LegislationLegislation-Govt. Control Voluntary-SelfVoluntary-Self-Regulatory Control-Ad ControlCouncil as Watchdog Media Control Consumer Fora Public Control 2/9/2012 82 .

UNIT 13 Ethics in Business and Investment Negative and Positive Forms of Ethical Investment.  Negative Criteria in Ethical Investment Decisions  Positive Criteria Influencing Ethical Investment Decisions  Animal Rights-A Moral Concept ?-The Big Rights?DebateDebate.International Movement for Prevention of Cruelty to Animals. 2/9/2012 83 .

Other Leading Ethical Investment µTarget¶ Industries Alcoholic Beverages Production and Distribution. Different Value Systems in Different Cultures Kant¶s Kingdom of Ends Other Possible Approaches  2/9/2012 84 .  International Narcotics Trade  International Arms Trade  Use of Additives in Food Production.

Medical Treatments (sex determination. fertility etc.) *Bio-Technology*Bio-Technology-Limits ? *Genetic Engineering ±Moral and Safety Issues *Human Genome Project *Stem Cell Research. 2/9/2012 85 .Unit 14 Ethics in SCI-TECH and SCILAW *Bio-Ethics*Bio-Ethics-Manufacture of Medicines.