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Business Ethics - Introduction

 According to the dictionary, the term ethics has a variety of different meanings. One of its meanings is: "the principles of conduct governing an individual or a group”. We sometimes use the term personal ethics, for example, when

referring to the rules by which an individual lives his or her personal life. We use the term accounting ethics when referring to the code that guides the professional conduct of accountants.  A second—and more important—meaning of ethics, according to the dictionary, is:  Ethics is "the study of morality." Ethicists use the term ethics to refer primarily to the study of morality, just as chemists use the term chemistry to refer to a study of the properties of chemical substances. Although ethics deals with morality, it is not quite the same as morality. Ethics is a kind of investigation— and includes both the activity of investigating as well as the results of that investigation —whereas morality is the subject matter that ethics investigates.  Business ethics is a form of Applied Ethics hat examines ethical principles and moral or ethical problems that arise in a business environment.

Business Ethics – Ethical concepts
 Ethical subjectivism – what is right or wrong depends on the individual. Ethics is entirely a personal matter.  Ethical relativism – Set of principles depends on each society and the values of      

society – no universal rules. Consequentialism – act is ethical if it maximizes happiness Ethics of virtue – Emphasis on the role of individual traits Ethical dilemmas in business – conflict between organization’s economic performance and its social performance. NATURE of ETHICS – Ethics deals with human behavoiour. Ethics is more of a normative science – it guides us. Ethics deals with human conduct and is voluntary.
Morals Rules or duties that govern our behavior – eg. Do not tell lies Ends or goals sought by us – e.g health, happiness Study of morality and its application to decisions

Values Business Ethics

Business Ethics - Introduction
 Business ethics can be both a normative ie. Prescriptive. As a corporate practice and a career specialization, the field is primarily normative.  A normative study is an investigation that attempts to reach normative conclusions—that is, conclusions about what things are good or bad or about what actions are right or wrong. In short, a normative study aims to discover what should be.  A descriptive discipline. In academia descriptive approaches are also taken.  A descriptive study is one that does not try to reach any conclusions about what things are truly good or bad or right or wrong. Instead, a descriptive study attempts to describe or explain the world without reaching any conclusions about whether the world is as it should be.  Ethics deals with Human conduct in various situations – Overt problems which are clear and reprehensible (corruption , theft) and Covert problems which are complex ( hostile acquisitions, lay-offs)

Business Ethics - Morality
 Moral standards can be distinguished from non-moral standards using five

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characteristics: 1. Moral standards deal with matters that can seriously injure or benefit humans. For example, most people in American society hold moral standards against theft, rape, enslavement, murder, child abuse, assault, slander, fraud, lawbreaking, and so on. 2. Moral standards are not established or changed by authoritative bodies. The validity of moral standards rests on the adequacy of the reasons that are taken to support and justify them; so long as these reasons are adequate, the standards remain valid. 3. Moral standards, we feel, should be preferred to other values, including selfinterest. This does not mean, of course, that it is always wrong to act on self-interest; it only means that it is wrong to choose self-interest over morality 4. Moral standards are based on impartial considerations. The fact that you will benefit from a lie and that I will be harmed is irrelevant to whether lying is morally wrong. 5. Moral standards are associated with special emotions and a special vocabulary (guilt, shame, remorse, etc.).

 Profit in business is OK – but ‘only profit’ is not O. Just.Business Ethics+Morality  Ethics is the discipline that examines one's moral standards or the moral standards of a society. a person starts to do ethics when he or she takes the moral standards absorbed from family.  Ethical decisions normally have a multitude of solutions.K  An IDEAL ETHICAL DECISION – Right morally. Therefore. . Proper and acceptable. Good for all concerned.  It asks how these standards apply to our lives and whether these standards are reasonable or unreasonable—that is. and friends and asks: What do these standards imply for the situations in which I find myself? Do these standards really make sense? What are the reasons for or against these standards? Why should I continue to believe in them? What can be said in their favor and what can be said against them? Are they really reasonable for me to hold? Are their implications in this or that particular situation reasonable?  Ethical decisions differ according to individual’s perspective. Equitable and just. church. whether they are supported by good reasons or poor ones. Fair.

This is an important study since businesses are some of the most influential institutions within modern society. the modern corporation consists of (a) stockholders who contribute capital and who own the corporation but whose liability for the acts of the corporation is limited to the money they contributed.  As an organization. and behaviors. all in their own name. (b) directors and officers who administer the corporation's assets and who run the corporation through various levels of "middle managers.  MNC -Operating in more than one country at once produces a new set of ethical dilemmas.  Modern corporations are organizations that the law treats as immortal fictitious "persons" who have the right to sue and be sued. and enter into contracts.Business vs. institutions." and (c) employees who provide labor and who do the basic work related directly to the production of goods and services. . own and sell property. Ethics  Business ethics is a specialized study of right and wrong applied to business policies.

its shareholders.  Social problems should be tackled by government and not business  UNITARIAN VIEW – business has a major role in serving society and ushering social welfare. under this view.Relationship between Business & Ethics  Philosophers and others disagree about the purpose of a business ethics in society. only those activities that increase profitability and shareholder value should be encouraged. suggest that the principal purpose of a business is to maximize returns to its owners. Business is a part of moral structure and moral ethics  INTEGRATION VIEW – Talcott Parsons – combine business with ethical behaviour as both are inter-related .  Milton Freidman .. or in the case of a publicly-traded concern.self-interest would still require a business to obey the law and adhere to basic moral rules. or company reputation. loss of licensure. Thus.  SEPARATIST VIEW :-Adam Smith views for example.Profit without deception / fraud. because the consequences of failing to do so could be very costly in fines. Only companies that are likely to survive in a competitive marketplace are those that place profit maximization above everything else.

Even self-interested organizations have a good reason to be ethical in their business dealings: it is in their own long-term best interests. The prisoner's dilemma demonstrates that cooperation is more advantageous than continuously trying to take advantage of others at least when we will meet these others again. if retaliation is a real threat then such behavior will impose costs that are greater than ethical behavior would have been in the first place.Arguments For Business Ethics  One argument points out that since ethics should govern all human activity. could be carried out in an ethical vacuum.  Perhaps the most fascinating argument for bringing ethics into business is the prisoner's dilemma. there is no reason to exempt business activity from ethical scrutiny.  Another more developed argument points out that no activity. it does clearly show that it is not a drag on profits. The data is mixed on this question.  One interesting argument actually claims that ethical considerations are consistent with business activities such as the pursuit of profit.  Though a business might get away with unethical behavior much of the time. A good example is the current GLOBAL MELTDOWN where all of us suffer due to non ethical behavoiur . Indeed. but even though it cannot demonstrate that ethical behavior is always more profitable. the argument claims that ethical companies are more profitable than other companies. business included. Business is a cooperative activity whose very existence requires ethical behavior.

They make three general objections. ensure that the members of a society are served in the most socially beneficial ways.  Third.  First. by itself. essentially." are obligated to serve their employers single-mindedly.  Second. nothing more than obeying the law. as "loyal agents. they claim that employees. . they argue that the pursuit of profit in perfectly competitive free markets will. in whatever ways will advance the employer's self-interest.Arguments Against Business Ethics  Some people object to the entire notion that ethical standards should be brought into business organizations. they say that obeying the law is sufficient for businesses and that business ethics is.

 Ignorance and inability to do otherwise are two conditions. Ignorance and inability do not always excuse a person. .Moral Responsibility and Blame  Moral responsibility is directed not only at judgments concerning right or wrong. called excusing condition. that ignorance does not excuse the wrongful injury. When one deliberately keeps oneself ignorant to escape responsibility. Sometimes. they are directed at determining whether a person or organization is morally responsible for having done something wrong. however. that completely eliminate a person's moral responsibility for causing wrongful injury. People are not always responsible for their wrongful or injurious acts: moral responsibility is incurred only when a person knowingly and freely acts in an immoral way or fails to act in a moral way.

Circumstances that minimize (but do not remove) a person's involvement in an act. or failed to prevent it when he could and should have. Circumstances that make it difficult (but not impossible) for the person to avoid doing it. The person did so of his own free will. the less the mitigating circumstances will diminish responsibility. Generally. The person caused or helped cause it. .  In addition to the excusing conditions. They are: 1. 3. 2.Moral Responsibility and Blame  A person is morally responsible for an injury or a wrong if: 1. Circumstances that leave a person uncertain (but not unsure) about what he or she is doing. the more serious the injury. there are also three mitigating factors that diminish moral responsibility. 3.  The extents to which these mitigating circumstances can diminish an agent's responsibility depend on the seriousness of the injury. The person did so knowing what he or she was doing. 2.

by companies to criminals (without verification) who use it for murders . or are the individuals who make up the company the ones we must hold accountable?  National Seminductors case – selling critical computer parts to U.S Defense department for deployment in missiles / nuclear bombs without adequate testing  Gun sales in U.S.Moral Responsibility and Blame  How do moral obligations apply to business organizations? Can companies be held accountable for what they do.

6. 5. Long term profit maximization – sound ethics is good business. Law of the jungle – might is right. Corporate citizenship – business can be healthy only if the society around it is healthy . Short term profit maximization within legal constraints. Anything for profit.profit is the only goal.Stages of Ethical consciousness  Ethical standards vary from country to country  Sequence of growth of ethical consciousness 1. 3. 2. 4. Stakeholder concept.

insider trading. The Golden rule Moral principles should be prescriptive. universal. Deontological theory and Virtue ethics .  2. cloning. Normative Ethics – a ‘ORIGIN’ and ‘MEANING” of ethical concepts -deals with the philosophical. Three theories guide us on how to act in a situation:Teleological theory. Applied ethics – deals with specific and controversial issues like abortion. tribal people displacement etc.Ethical Theories – 3 subject areas Ethical theories help us to explore our dilemmas and give us some norms for decision making  1. practical and public.     branch of ethics that guides your conduct Eg. overriding. psychological and linguistic issues. Metaethics – Study of the  3.

Another way of looking at consequentialism is referred to as "the ends justify the means". “end”. First list the good and bad consequences and if good > bad then OK. “science”) is      a theory of morality that derives duty or moral obligation from what is good or desirable as an end to be achieved. logos. TELOS = chief aim or end of life Also called Consequentialist or Utilitarianism theories – action is morally correct if the consequences are more favourable than unfavourable. Good and bad – for whom? .Teleological / Utilitarianism ethical theory – Focus on consequences (Ends)  Teleological ethics (Greek telos.

You must determine what alternative actions are available.Teleological ethical theory  “An action is right from an ethical point of view if and only if the sum total of utilities produced by that act is greater than the sum total of utilities produced by any other act the agent could have performed in its place. there are three considerations to follow: 1. . 3. 2.”  To determine what the moral thing to do on any particular occasion might be. You must choose the alternative that produces the greatest sum total of utility. You must estimate the direct and indirect costs and benefits the action would produce for all involved in the foreseeable future.

that when the government is trying to determine on which public projects it should spend tax monies.  Utilitarianism can explain why we hold certain types of activities. for example.Teleological ethical theory  Utilitarianism is attractive to many because it matches the views we tend to hold when discussing governmental policies and public goods. the proper course of action would be for it to adopt those projects that objective studies show will provide the greatest benefits for the members of society at the least cost. such as lying. It also fits in with the intuitive criteria that many employ when discussing moral conduct. . to be immoral: it is so because of the costly effects it has in the long run.  Most people agree.

we can note that utilitarianism fits nicely with a value that many people prize: efficiency. .  To calculate these costs and benefits. This type of analysis is used to determine the desirability of investing in a project (such as a dam. Finally. discounted monetary prices are estimated for all the effects the project will have on the present and future environment and on present and future populations.  Efficiency can mean different things to different people. factory.Teleological ethical theory  Utilitarianism is also the basis of the techniques of economic cost–benefit analysis. but for many it means operating in such a way that one produces the most one can with the resources at hand. or public park) by figuring whether its present and future economic benefits outweigh its present and future economic costs.

 Some benefits and costs are impossible to measure. so they are also not adequately measurable. it relies upon accurate measurement. when measurements are difficult or impossible to obtain.Teleological ethical theory  Though utilitarianism offers a superficially clear-cut method of calculating the morality of actions. for example?  The potential benefits and costs of an action cannot always be reliably predicted. shared or common-sense judgments of comparative value are sufficient. . However. There are five major problems with the utilitarian reliance on measurement:  Comparative measures of the values things have for different people cannot be made-we cannot get into each others' skins to measure the pleasure or pain caused. How much is a human life worth. and this can be problematic.  Utilitarian measurement implies that all goods can be traded for equivalents of each other. they know that this is largely impossible.  It is unclear exactly what counts as a benefit or a cost. People see these things in different ways. not everything has a monetary equivalent.  Utilitarians defend their approach against the objections raised by these problems by saying that though ideally they would like accurate measurements of everything. demonstrates just how closely the weighing of costs and benefits can be done.  Ford and its infamous Pinto. Therefore.

who coined the term "altruism. Cost – benefit analysis Altruism . the happiness of everyone and not the happiness of any particular person.Compare the actions of a driver of a car who sees an accident victim but does not attend him because of the consequent harassment he might have to face from police ." and whose ethics can be summed up in the phrase: Live for others Eg.Ethical altruism can be seen as a consequentialist ethic which prescribes that an individual take actions that have the best consequences for everyone except for himself. but it is generally seen as detrimental to general welfare. Using the theories .This form of utilitarianism holds that what matters is the aggregate happiness.Teleological ethical theory – consequences for whom?  Egoism – Agent focused . Thus.consequences for the individual agent are     taken to matter more than any other result. Utilitarianism . This was advocated by Auguste Comte. ethical egoism may license actions which are good for the agent.

 Theories of distributive justice need to answer three questions: 1. some combination of these things? 2. meritocratic.  Distributive justice concerns what is just or right with respect to the allocation of goods in a society. according to social status.Distributive justice – John Rawls views  Another Teleological approach to ethical decision making based on concept of fairness. nations? 3. What is the proper distribution? Equal. sentient beings. power. What goods are to be distributed? Is it to be wealth. future). according to need? . respect. the members of a single society. living. Between what entities are they to be distributed? Humans (dead.

Social and economic inequalities are to be arranged so that they are both  Difference principle . and  Principle of fair equality of opportunity – everyone should be given equal opportunity to qualify for the more privileged positions in society. . protected from invasion by others and must be equal to those of others. freedom of speech.Rawls views – Justice as fairness  Rawls’s two principles of justice: 1.to the greatest benefit of the least advantaged. freedom from arbitrary arrest etc. Basic liberties – right to vote. right to hold property. Principle of equal liberty – Citizens liberties must be 1.

Rawls views – Veil of Ignorance  In his A Theory of Justice. wealth. is a form of fairness: an impartial distribution of goods. John Rawls used a social contract argument to show that justice.  Rawls asks us to imagine ourselves behind a veil of ignorance which denies us all knowledge of our personalities. social statuses.You do not know whether you are going to be affected or benefited – now decide in this situation .  Decision without knowledge of the implications . moral characters. talents and life plans. and then asks what theory of justice we would choose to govern our society when the veil is lifted – this will force us to be impartial and look after the good of all. and especially distributive justice.

1. 2. Compensatory justice is concerned with compensating people for what they lose when harmed by others. . Retributive justice refers to the just imposition of penalties and punishments 3.Justice and Fairness  There are three categories of issues involving justice: Distributive justice is concerned with the fair distribution of society's benefits and burdens.

According to this method. Compassion. and kindness are all sentiments or virtues that normally manifest this dimension of morality.The Ethics of Care  This is central to the point of view known as the ethics of care. friendship. close relationships. an approach to ethics that many feminist ethicists have recently advanced. we have an obligation to exercise special care toward the people with whom we have valuable. love. . concern.

g Ten Commandments . do not do to others. Duty to self and Duty to others What you do not wish done to yourself. even to a murderer who asks where the would-be victim is. Let justice be done though the heavens fall! is one of its slogans Duty to God. a deontologist might argue that we should stick to our duty regardless of the consequences.Deontology – Deno = Duty  Deontological theories hold that we have a duty to perform or refrain        from certain types of actions and that this duty derives from the nature of the act itself. Immanuel Kant famously argued that we had a moral duty to always tell the truth. For example. freedom of consent and right to privacy. Religion as a basis for deontology– e. rather than from the consequences produced by the action. Golden Rule – act upon others as you would like others to act upon you Prescription of Universal laws – Kant recognized universal rights such as freedom of speech. Consequently.

Virtue ethics  Virtue theory is a branch of moral philosophy that emphasizes character. Truthful.  The virtue of a knife. Self control. is sharpness. or its purpose. Aristotle identified nine intellectual virtues. an outcome which can be reached by practicing the virtues. one must have an account of what the human purpose is. the most important of which were sophia (theoretical wisdom) and phronesis (practical wisdom). Aristotle . for example. and always has been. A virtue is a habit or quality that allows the bearer to succeed at his. There is. Thus to identify the virtues for human beings.describes that state achieved by the person who lives the proper human life. Gentle.  Character development . The moral virtues included prudence. fortitude. In the West virtue ethics was the prevailing approach to ethical thinking in the ancient and medieval periods. justice. Generosity. her. Modest.Courage. as the key element of ethical thinking. and temperance. among the virtues of a racehorse is speed. Friendly. rather than rules or consequences. sharp disagreement on this question!!  Aristotle categorized the virtues as moral and intellectual. Wittiness .

AN EXAMPLE COMPARING THE THREE THEORIES – ‘LYING’ For example. would focus less on lying in any particular instance and instead consider what a decision to tell a lie or not tell a lie said about one's character and moral behavior. A deontologist might argue that lying is always wrong. and from virtue ethics. a consequentialist may argue that lying is wrong because of the negative consequences produced by lying — though a consequentialist may allow that certain foreseeable consequences might make lying acceptable. regardless of any potential "good" that might come from lying. A virtue ethicist. in      that deontology derives the rightness or wrongness of an act from the character of the act itself rather than the outcomes of the action. . which focuses on the character of the agent rather than on the nature or consequences of the action itself. however.The three theories compared  Consequentialism is usually understood as distinct from deontology.

Moves the consideration of business ethics from the morality of the economic system in general to the morality of specific practices within our system Bioethics. Business ethics concerns questions such as the limits on managers in the pursuit of profit. or the allocation of scarce health resources. [1] . Environmental ethics is concerned with questions such as the duties of humans towards landscapes or species. for example. or the use of human embryos in research. As such. is concerned with identifying the correct approach to matters such as euthanasia.Applied ethics  It is a term used to describe attempts to use philosophical methods to     identify the morally correct course of action in various fields of human life. or the duty of 'whistleblowers' to the general public as opposed to their employers. it is a study which is supposed to involve practitioners as much as professional philosophers.

were not convinced by Caltex's arguments. Rather than focusing on the financial assistance they were giving the South African government. He supported the shareholder resolutions. 2. and introduced a series of shareholder resolutions requiring Caltex to leave South Africa. South African leaders. such as Archbishop Desmond Tutu. Caltex' s management did not agree. .Apartheid-era South Africa and Caltex 1. even at the cost of economic hardship. which they saw as racist and immoral. they pointed to the positive effects their operations had on black workers. saying that comfort under an immoral regime was not preferable to freedom. American oil company operating in South Africa during that time. 3. A large number of Caltex stockholders opposed the company's operations in South Africa.

6. . and caring. justice. 5. rights. On the other side. The arguments on both sides appealed to moral considerations and four basic types of moral standards: utilitarianism. Caltex's management made utilitarian arguments and arguments about caring: it was in blacks' best interests to have Caltex jobs. and Caltex had a duty to take care of these workers as best it could.Apartheid-era South Africa and Caltex 4. The point of this example is to show how a real moral debate in business works. The shareholders' argument referred to the unjust policies of the apartheid government and the fact that these policies violated the civil rights of black citizens.

best value for money – best at lowest cost Follow the rules established by society Follow business ethics principles LEGAL ANALYSIS ETHICAL ANALYSIS .  Multiple analysis framework:ECONOMIC ANALYSIS Limited resources.Applied ethics  Ethical theories lay down moral standards that provide a reference point and help managers to take acceptable decisions. efficient and effective use of resources.  Ethical decisions are complex and should strike a balance between multiple factors.

2. Dynamics of market system is needed to allocate goods/services. wholesalers etc.Ethics and the Market system Right to own private property Right to own a car and sell it to another for money. Unethical behaviors like coercion. retailers. deceptive information. to enable making the right choice Freedom of choice Product Information 1. theft and bribery lead to misallocation of resources LACK OF TRUST and hamper the functioning of the market system . If private property is not protected then ‘theft’ takes place and there will be no suppliers of goods and services Buy what I want provided I can pay for it. Access to information is required to make choice Provided by manufactures.

Applied ethics – Ethical decision making  Is the decision legal ? Yes then go ahead.  Is it fair ? To the various stakeholders?  Thou shall not be ashamed when found  The Golden Rule or ethic of reciprocity is a maxim. or morality that essentially states either of the following:  One should treat others as one would like others to treat oneself (positive form)  One should not treat others in ways that one would not like to be treated (negative/prohibitive form. also called the Silver Rule)  ‘Do not do to others that which we do not want them to do to us’ . ethical code.

Dependability – assurance that a person will perform as expected.Trust  Three elements of Trust:1. 3. 2. . Examine the Impact of unethical behavior on trust in business relations with – Suppliers. Faith – belief that one will continue to be dependable and predictable. Business should build up trusted relationships with all its stakeholders to survive and succeed. Employees. When Trust is built through experience it is a good risk reducing mechanism. Integrative Social Contract theory – Thomas Donaldson and Thomas Dunfee developed it based on principles of hyper norms (universal norms). Predictability – eliminates unforeseen actions or risks. It is an informal agreement concerning behavior . Customers.An organization that fulfills the social contract has performed well. Macro (global) norms and Micro (Community) norms.

must be used when we do not have the resources to attain everyone's objectives. These sorts of standards must be employed when evaluating actions whose distributive effects differ in important ways. Rights.Integrating Utility.  Standards of justice . so we are forced to consider the net social benefits and social costs consequent on the actions (or policies or institutions) by which we can attain these objectives. and Caring  Four main kinds of basic moral considerations:  Utilitarian standards .indicate how benefits and burdens should be distributed among the members of a group.  Standards that specify how individuals must be treated . Moral reasoning of this type forces consideration of whether the behavior respects the basic rights of the individuals involved and whether the behavior is consistent with one's agreements and special duties. Justice.must be employed when our actions and policies will substantially affect the welfare and freedom of specifiable individuals. .

 One simple strategy for ensuring that all four kinds of considerations are incorporated into one's moral reasoning is to inquire systematically into the utility. justice.Integrating Utility. Justice. particularly persons with whom one has close relationships. and Caring  Standards of caring . Standards of caring are essential when moral questions arise that involve persons embedded in a web of relationships. especially those of dependency. rights. Rights. there is not yet any comprehensive moral theory to show when one of these considerations should take precedence.indicate the kind of care that is owed to those with whom we have special concrete relationships. . and caring involved in a given moral judgment.  Unfortunately.

The second theory states that the behavior of the management towards its stakeholders plays a pivotal role in building an ethical organization. the culture and values of an organization play an important role in developing an ethical organization. 3. And according to third theory. According to the first theory.Ethical Organization and Corporate Code  Ethical organizations are ones that follow ethical behavior. Theory of corporate moral excellence – Corporate culture. Ethics and corporate governance. 2. corporate values and Ethical behavior (espoused vs values in practice) Ethics and stakeholders theory.  Nature of ethical organization is judged based on 3 theories:1. good governance is necessary for building an ethical organization .

goals around these values and org. responsibility. STAKEHOLDER THEORY – pay attention to needs and rights of all stakeholders. Are similar to large states – the system by which corporations are directed and controlled should be similar to how a State is managed – accountability. code of      ethics (refer Johnson & Johnson Credo) Align espoused values to values in practice. org. Michael Hoffman – basic values. power. credo. authority. procedures and processes. CORPORATE GOVERNANCE – large cos. The need to constantly monitor ethical behavior and align reward systems to ethical behavior.Ethical organization – how to build?  CORPORATE MORAL EXCELLENCE  Espoused values expressed in company statements. FOCUS on policy and decision making which is ethical and value driven .

Johnson & Johnson .

Should she do it?  These cases have two things in common: how they're handled can dramatically help or hurt your organization. But how would you want the people in your company to handle these situations? What have you done to let them know what they should do? What have you done to help them?  major corporations. Are you going to use it in developing your bid?  Or what if someone in sales is up against some very tough quarterly objectives. it's still proprietary information. and they're ethical issues. but she can make them by concealing from a customer that the product he's interested in will be made obsolete by a new line in six months. you have a code of conduct that might give your employees help with some of these situations. but you aren't sure. .Code of Conduct – why needed?  Imagine that one day someone in your organization walks in with a copy of your chief competitor's bid on a big contract. And whether he did or didn't. He swears he got it legally.

Ethics committee . Development involves identifying key behaviors. compliance certificates etc. management statements. Motivation and Communication.Corporate Code  Policy statements that lay down a company’s ethical      standards. Compliance codes. Implementation. Individual dimension. strategies for ethical leadership etc. structure. review by top management.Org. Group /peer influence and org. communication and periodic updating. corporate credos. Coordination.

Transparency 4.Corporate Code  What issues are covered by general governance codes? 1. Responsibility . Disclosure. Fairness 2. Accountability 3. Relations with stakeholders  What values do codes communicate? 1. reporting. The role of the board of directors and board members 3. verification 4. Fair treatment of shareholders 2.

How can one enforce a governance code?  Law  Regulation  Listing rules  Comply or explain  Ratings and rankings  Recognition/reward systems .