Jaipreet Character-ethics (1) (1)

7/27/2019 Jaipreet Character-ethics (1) (1)

1/53

A PROJECT REPORT ON

BUSINESS VALUES AND CHARACTER ETHICS

Submitted in partial fulfillment of the requirements

GURU GOBIND SINGH INDRAPRASTHA

UNIVERSITY, DELHI

A TRAINING REPORT

SUBMITTED BY

JAIPREET SINGH

I n partial ful fi llment for the award of the degree

Of

BBA

IDEAL INSTITUTE OF MANAGEMENT AND

TECHNOLOGY

DEC-JAN 2O12-13

(2nd year)


2/53

BACHELOR IN BUSINESS ADMINISTRATION (GENERAL)

SUBMITTED BY: Jaipreet singh

ENROLLME -05021001711

UNDER THE GUIDANCE OF

MR. MAYANK SHARMA (ASSISTANT PROFESSOR)

(IDEAL INSTITUTE OF MANAGEMENT AND TECHNOLOGY

AND SCHOOL OF LAW)


3/53

Certificate

This is to certify that the project titled BUSINESS VALUES AND CHARACTER

ETHICS is a bonafide work carried out by Jaipreet Singh, a student of ideal Institute of

Management & Technology. It is submitted in partial fulfillment of the requirement for the

award of the Degree of BBA under our guidance and direction.

To the best of our Knowledge, it is an original piece of work.


4/53

ACKNOWLEDGEMENT

I consider it a great privilege to be under the guidance ofMr. Mayank Sharma, Assistant

Professor, Ideal Institute of Management and Technology and School of Law, Guru Gobind

Singh Indraprastha University. The contribution and significant role played by him helped me

in preparation and submission of project report in time. I gratefully acknowledge the team of

staff members in B.B.A department for helping me in all aspects and giving their valuable

ideas for making my project efficient and effective. Last but not the least I would like to

thank my parents and friends for their valuable support and encouragement throughout the

course of the project


5/53

CONTENTS

Introduction

Company profile

Product profile

Literature review

Objectives of the study

Limitations of the study

Research methodology

Data Analysis & Interpretation

Findings

Recommendation

Bibliography


6/53

PREFACE

Initial in the one module of the project, which is allotted to me, BUSINESS

VALUES AND CHARACTER ETHICS is covered in this project report.

The report contains very nice and well arranged topics related to the subject

BUSINESS VALUES AND CHARACTER ETHICS. The main contents of this project

describes that That what are ethics, Code of Ethics, Business Ethics and many other

topics which is countable in the BUSINESS VALUES AND CHARACTER ETHICS.

The project report also contains a description of Business Ethics which is very

important for an organization to work fairly in an environment.

Overall this reports my work like a guide for the subject BUSINESS VALUES AND

CHARACTER ETHICS.


7/53

OBJECTIVES

The main objectives of the project were:

To gain more information about values and character ethics

To know the importance of values in business.

To study and evaluate human conduct in the light of moral principles.

To collect information about the involvement of ethics in human activities

including business.


8/53

Contents

TOPICS PAGE NO.

ACKNOWLEDGEMENT,CERTIFICATE ,PREFACE & OBJECTIVES 2-4

CONTENTS 5

CHAPTER 1-VALUES

a)BUSINESS VALUES

b)CRITICISMS

6-13

CHAPTER 2-ETHICS,VALUES AND MORALS 14

CHAPTER 3-INTRODUCTION ON ETHICS

a)DEFINITONS ON ETHICS

b)FEATURES OF ETHICS

c)BUSINESS ETHICS AND ITS TYPES

15-26

CHAPTER 4- RELATIONSHIP B/W BUSINESS ETHICS AND

MANAGERIAL VALUES AND UNETHICAL BUSINESS ETHICS

27-28

CHAPTER 5- CONCEPTUAL MODEL OF BUSINESS ETHICS 29

CHAPTER 6- LEVELS OF ETHICAL DECISIONS IN

BUSINESS

30-31

CHAPTER 7- NEED AND IMPORTANCE OF BUSINESS

ETHICS

32-33

CHAPTER 8-ELEMENTS OF BUSINESS ETHICS 33-34

CHAPTER 9-APPROACHES TO BUSINESS ETHICS 34


9/53

STUDY QUESTIONS FOR APPROACHES TO BUSINESS

ETHICS

43

CASE STUDY ON HDFC BANK 45

CONCLUSION 53

REFERENCES 54

Values

Values are convictions and a framework of philosophy of an individual on the basis of which

he judges what is good or bad, desirable or undesirable, ethical or unethical.

Rokeach defines values as

Values represent basic convictions that a specific mode of conduct is personally or socially

preferable to an opposite mode of conduct

It has some characteristics like

Part of culture

Learned Responses

Inculcated

Social Phenomenon

Gratifying Responses

Adaptive Process


10/53

Values are even classified into various categories that are

Allports Values Classification

Graves Classification

Englands Classification

Rokechs Classification

Values System is even adopted by Indian Managers in their own way. Various researchers

have attempted to identify the value systems of Indian managers. These researchers have

used AllportVernomLindzey model, Gravess model and Englands model. The major

findings are given below

Managers tend to have value orientation towards economic, theoretic, political,

social, aesthetic and religious in that order.

Managerial Values tend to be existential, conformistic, manipulative, sociocentric,

tribalistic and egocentric.

Indian managers are more pragmatist than moralist. There are generally some

acceptable unethical practices in business.

In term of work values, Indian managers tend to money orientation during early

days of their career and later shifts to matters like job satisfaction.

Indian mangers give importance to various occupational values in the order to be

free from supervision.


11/53

Business values

Physical Values

Accuracy

The precision, exactness, and conforming to fact in details of work.

Cleanliness

of offices, production and warehouse facilities, equipment, customer service areas, raw

material and finished product inventory, closets, bathrooms, and so on

Maximum Utilization of Resources

The desire and ability of the company to improve its performance by full utilization of its

current resources (i.e. as time, money, equipment, materials, space, people, etc.).

Punctuality and Timeliness

in arriving on time to work, from breaks, from lunch, to meetings, in replying to letters and

phone calls, in paying bills on time, etc. Occurring at the most suitable or opportune time.


12/53

Quality of Products and Services

in terms of presentation, functionality, choice, value, speed, timeliness, suitability,

repeatability, reliability, life span, repeatability, courtesy, friendliness, etc.

Regularity

of meetings, reports, sales calls, performance reviews, and so forth

Reliability

The way system or persons consistently produce the same results, preferably meeting or

exceeding its specifications. Dependability.

Responsiveness

The way people, the organization, systems, etc. react to a need coming from within or

without.

Speed of Operations

The measurement of whether actions occur in the fastest time.

Organizational Values

Accountability

of individuals, departments and divisions for performance, results, problems, and so on

Communications

up, down, and sideways within the company, with customers and vendors, in terms of

openness, frankness, clarity, frequency, accuracy, timeliness, and brevity

Cooperation (Teamwork)

among individuals, departments, divisions, branches, and so on


13/53

Coordination

horizontally between departments in terms of plans, activities, and systems

Psychological Values

Continuous Improvement

The desire and ability of the company to develop and incorporate ways to improve itself.

Creativity

in terms of new products, new ideas, new systems, new production methods, new

applications of technology, new methods of financing, new marketing strategies

Customer Delight

The positive emotional response and joy that the customer feels from interaction with our

people and our products and services.

Decisiveness

in solving problems, planning, executing plans, in terms of speed and commitment to

decisions once made

Develop People

The desire and ability of the company to improve the lot of its employees, including,

ultimately, their personal growth.

Harmony

The overall atmosphere and interaction between people, departments, divisions, systems,

activities, rules, and policies within the company and between these elements and the external

environment, customers, vendors, community laws, and so on.


14/53

Innovation

The desire and ability of the company to venture into new, breakthrough areas of opportunity.

(e.g. in the industry, in emerging trends in society, etc.)

Integrity

Keeping to one's word, promises, agreements, being truthful, non-deceitful etc. with

employees, customers, vendors, government, etc.

Loyalty

to and from suppliers, customers, and employees

Resourcefulness

The ability to deal resourcefully, i.e. creatively, imaginatively, self-reliably with unusual

problems, difficult situations, or unanticipated opportunities.

Respect for the Individual

in establishing rules and policies, design of systems, making decisions, executing

instructions, and so on in terms of people's health, safety, self-esteem, feelings, and opinions

Service to Society

Community welfare, environmental protection, development of products and services that

meet real physical, social, or psychological needs.

(A Will to) Succeed

in any aspect of work.

Criticisms

Business value is an informal concept and there is no consensus, either in academic circles or

among management professionals, on its meaning or role in effective decision-making. The


15/53

term could even be described as a "buzz word" used by various consultants, analyst firms,

executives, authors, and academics.

Some critics believe that measuring economic value,economic profit, orshareholder valueis

sufficiently complete to guide decision-making. Their logic is that all other forms of value are

essentially intermediate to the ultimate goal of economic profit. Furthermore, if they do not

contribute to economic profit, they are actually a distraction for the firm.

Other critics believe that extensive efforts to measure business value will be more of a

distraction than a boon. For example, there is a fear that decision-makers will be confused if

there are too many goals and measures that need to be accommodated.

Ethics, Values and Morals

Values are our fundamental beliefs. They are the principles we use to define what is right,

good and just. Values provide guidance in determining the right versus the wrong, the good

versus bad. They are our standards. Another way to characterize values is that they are what

an individual believes to be having worth and importance to their life. Values do not

encompass all beliefs, but only those beliefs that define importance.

Morals are values that we attribute to a system of beliefs that help the individual define right

versus wrong, good versus bad. These values typically get their authority from something

outside the individuala higher authority.

In business world we often find ourselves avoiding framing our ethical choices in moral

terms for fear that doing so might prove offensive to someone whose moral frame of
http://en.wikipedia.org/wiki/Economic_profithttp://en.wikipedia.org/wiki/Economic_profithttp://en.wikipedia.org/wiki/Economic_profithttp://en.wikipedia.org/wiki/Shareholder_valuehttp://en.wikipedia.org/wiki/Shareholder_valuehttp://en.wikipedia.org/wiki/Shareholder_valuehttp://en.wikipedia.org/wiki/Shareholder_valuehttp://en.wikipedia.org/wiki/Economic_profit


16/53

reference might be different. The moral concept of justice has one meaning concerned with

developing rational normative claims and theories.

Ethics is the study of what we understand to be good and right behavior and how people

make those judgments. When ones action are not congruent with our moral values our

sense of right, good and just we will view that are acting unethically. Defining what is

ethical is not an individual exercise. However, if it were then one could have argued that what

Hitler did was ethical since his action conformed to his definition of right, wrong or just.

Ethics is the discipline that examines ones moral standards or the moral standards of the

society. It asks how these moral standards apply to our lives and whether these standards are

reasonable or unreasonable. Ethics is not the only way to study morality. The social sciences

such as anthropology, sociology and psychologyalso study morality, but do so in a quite

different way from the approach to morality that is characteristics of ethics. A descriptive

study is one that does try to attain any conclusions about what things are truly good or bad.

Introduction on Ethics

The term ethics refers to value oriented decisions and behavior. It comes from the Greek

word Ethos which means character, guiding beliefs, standards or ideals that pervade a

group, community or people. Today, ethics is considered as the study of morals behavior.

Terms such as business ethics, corporate ethics, medical ethics or legal ethics are used to

indicate the particular area of application. Ethics involved in such area must still refer to

valueoriented decisions and behavior of individuals. A famous saying is there

If a man violates some rules he is wrong according to law, but in ethics he is wrong only if

he thinks of doing so.


17/53

Some Definitions of Ethics

Ethics are kind of like morals and common sense. it is what you think is right or

wrong. Being "ethical" means trying to be reasonable and doing what you think is

right.

Ethics can be considered as moral philosophy. It deals with critical analysis of

morality. Ethics searches a reasonable ground to our moral standards. It deals with

answering questions such as `what ought to be`, not `what is`.

The science of moral obligation; a system of moral principles, quality, or practice.

The moral obligation to render to the patient the best possible quality of dental service

and to maintain an honest relationship with other members of the profession and

mankind in general.

Ethics is the science of morality or the systematic study of moral rules and principles.

The term "morality" refers to rules which prescribe the way people ought to behave

and principles which reflect what is ultimately good or desirable for human beings.

.The study and evaluation of human conduct in the light of moral principles. Moral

principles may be viewed either as the standard of conduct that individuals have


18/53

constructed for themselves or as the body of obligations and duties that a particular

society requires of its members.

Features of Ethics

It contains principles of personnel and professional conduct.

Existing norms and judgments may contain valuable insights but ethics sets out to

criticize and test them in terms of ultimate norms.

It does not rest on feelings of approval or disapproval but in the careful examination of

the reality around us.

It is not a law. Even though law enshrines many ethical judgments. It criticizes law and

customs to obtain more perfect rules for the conduct of life. Law may permit things which

are unethical.

What constitutes ethical behaviors in one society may be unethical in others.

Ethics is involved in all human activities including business. There is need for a science

of ethics in every human Endeavour.

Business Ethics

In business, ethics can be defined as the capacity to reflect on values in the corporate decision

making process, to determine how these values and decision affect various stakeholders

groups, and to establish how managers can use these observations in day to day company


19/53

management. Ethical managers strive for success within the confines of sound management

practices that are characterized by fairness and justice.

Business Ethics refers to the moral principles which should govern business activities. It

provides a code of conduct for the managers. The purpose of business ethics is to guide

managers and employees in performing their jobs. Ethics are concerned with what is right

and what is wrong in human behavior. They lay down norms of human behavior by the

business. A few examples of ethics are:

To charge fair prices.

To use fair weights for measurement of commodities.

To pay taxes to government.

To earn reasonable profits.

To give fair treatment to workers.

The purpose of business ethics is to regulate both objectives of business and the means

adopted to achieve these objectives. Ethics covers all possible areas of business ends and

means must be justifiable as per norms of the society.

A business is an integral part of the society. It is in fact, a trustee of the resources of the

society. So the business must observe the ethical standards of the society while using the

resources. If a business fails to observe the social norms it will loose its public image.

Business ethics can be both anormativeand adescriptivediscipline. As a corporate practice

and a career specialization, the field is primarily normative. In academia descriptive

approaches are also taken. The range and quantity of business ethical issues reflects the

degree to which business is perceived to be at odds with non-economic social values.

Types of Business Ethics
http://en.wikipedia.org/wiki/Norm_(philosophy)http://en.wikipedia.org/wiki/Norm_(philosophy)http://en.wikipedia.org/wiki/Norm_(philosophy)http://en.wikipedia.org/wiki/Descriptivehttp://en.wikipedia.org/wiki/Descriptivehttp://en.wikipedia.org/wiki/Descriptivehttp://en.wikipedia.org/wiki/Descriptivehttp://en.wikipedia.org/wiki/Norm_(philosophy)


20/53

General business ethics

This part of business ethics overlaps with thephilosophy of business, one of the aims

of which is to determine the fundamental purposes of a company. If a company's main

purpose is to maximize the returns to its shareholders, then it could be seen as

unethical for a company to consider the interests and rights of anyone else.

Corporate social responsibility or CSR: an umbrella term under which the ethical

rights and duties existing between companies and society is debated.

Issues regarding the moral rights and duties between a company and its shareholders:

fiduciaryresponsibility,stakeholder conceptv.shareholder concept.

Ethical issues concerning relations between different companies: e.g. hostile take-

overs,industrial espionage.

Leadership issues:corporate governance.

Political contributionsmade by corporations.

Law reform, such as the ethical debate over introducing a crime of corporate

manslaughter.

The misuse of corporate ethics policies as marketing instruments.
http://en.wikipedia.org/wiki/Philosophy_of_businesshttp://en.wikipedia.org/wiki/Philosophy_of_businesshttp://en.wikipedia.org/wiki/Philosophy_of_businesshttp://en.wikipedia.org/wiki/Corporate_social_responsibilityhttp://en.wikipedia.org/wiki/Corporate_social_responsibilityhttp://en.wikipedia.org/wiki/Fiduciaryhttp://en.wikipedia.org/wiki/Fiduciaryhttp://en.wikipedia.org/wiki/Stakeholder_concepthttp://en.wikipedia.org/wiki/Stakeholder_concepthttp://en.wikipedia.org/wiki/Stakeholder_concepthttp://en.wikipedia.org/wiki/Shareholder_concepthttp://en.wikipedia.org/wiki/Shareholder_concepthttp://en.wikipedia.org/wiki/Shareholder_concepthttp://en.wikipedia.org/wiki/Takeoverhttp://en.wikipedia.org/wiki/Takeoverhttp://en.wikipedia.org/wiki/Takeoverhttp://en.wikipedia.org/wiki/Industrial_espionagehttp://en.wikipedia.org/wiki/Industrial_espionagehttp://en.wikipedia.org/wiki/Industrial_espionagehttp://en.wikipedia.org/wiki/Corporate_governancehttp://en.wikipedia.org/wiki/Corporate_governancehttp://en.wikipedia.org/wiki/Corporate_governancehttp://en.wikipedia.org/wiki/Campaign_finance_reformhttp://en.wikipedia.org/wiki/Campaign_finance_reformhttp://en.wikipedia.org/wiki/Corporate_manslaughterhttp://en.wikipedia.org/wiki/Corporate_manslaughterhttp://en.wikipedia.org/wiki/Corporate_manslaughterhttp://en.wikipedia.org/wiki/Corporate_manslaughterhttp://en.wikipedia.org/wiki/Corporate_manslaughterhttp://en.wikipedia.org/wiki/Campaign_finance_reformhttp://en.wikipedia.org/wiki/Corporate_governancehttp://en.wikipedia.org/wiki/Industrial_espionagehttp://en.wikipedia.org/wiki/Takeoverhttp://en.wikipedia.org/wiki/Takeoverhttp://en.wikipedia.org/wiki/Shareholder_concepthttp://en.wikipedia.org/wiki/Stakeholder_concepthttp://en.wikipedia.org/wiki/Fiduciaryhttp://en.wikipedia.org/wiki/Corporate_social_responsibilityhttp://en.wikipedia.org/wiki/Philosophy_of_business


21/53

Professional ethics

Professional ethics covers the myriad practical ethical problems and phenomena which arise

out of specific functional areas of companies or in relation to recognized business

professions.

Ethics of accounting information

Creative accounting,earnings management,misleading financial analysis.

Insider trading, securities fraud,bucket shops, forex scams: concerns (criminal)

manipulation of the financial markets.

Executive compensation: concerns excessive payments made to corporate CEO's and

top management.

Bribery,kickbacks,and facilitation payments: while these may be in the (short-term)

interests of the company and its shareholders, these practices may be anti-competitive

or offend against the values of society.

Ethics of human resource management

The ethics ofhuman resource management(HRM) covers those ethical issues arising around

the employer-employee relationship, such as the rights and duties owed between employer

and employee.
http://en.wikipedia.org/wiki/Creative_accountinghttp://en.wikipedia.org/wiki/Creative_accountinghttp://en.wikipedia.org/wiki/Earnings_managementhttp://en.wikipedia.org/wiki/Earnings_managementhttp://en.wikipedia.org/wiki/Earnings_managementhttp://en.wikipedia.org/wiki/Misleading_financial_analysishttp://en.wikipedia.org/wiki/Misleading_financial_analysishttp://en.wikipedia.org/wiki/Misleading_financial_analysishttp://en.wikipedia.org/wiki/Insider_tradinghttp://en.wikipedia.org/wiki/Insider_tradinghttp://en.wikipedia.org/wiki/Securities_fraudhttp://en.wikipedia.org/wiki/Securities_fraudhttp://en.wikipedia.org/wiki/Bucket_shop_(stock_market)http://en.wikipedia.org/wiki/Bucket_shop_(stock_market)http://en.wikipedia.org/wiki/Forex_scamhttp://en.wikipedia.org/wiki/Forex_scamhttp://en.wikipedia.org/wiki/Executive_compensationhttp://en.wikipedia.org/wiki/Executive_compensationhttp://en.wikipedia.org/wiki/Bribehttp://en.wikipedia.org/wiki/Bribehttp://en.wikipedia.org/wiki/Kickbackhttp://en.wikipedia.org/wiki/Kickbackhttp://en.wikipedia.org/wiki/Kickbackhttp://en.wikipedia.org/wiki/Facilitation_paymenthttp://en.wikipedia.org/wiki/Facilitation_paymenthttp://en.wikipedia.org/wiki/Facilitation_paymenthttp://en.wikipedia.org/wiki/Human_resource_managementhttp://en.wikipedia.org/wiki/Human_resource_managementhttp://en.wikipedia.org/wiki/Human_resource_managementhttp://en.wikipedia.org/wiki/Human_resource_managementhttp://en.wikipedia.org/wiki/Facilitation_paymenthttp://en.wikipedia.org/wiki/Kickbackhttp://en.wikipedia.org/wiki/Bribehttp://en.wikipedia.org/wiki/Executive_compensationhttp://en.wikipedia.org/wiki/Forex_scamhttp://en.wikipedia.org/wiki/Bucket_shop_(stock_market)http://en.wikipedia.org/wiki/Securities_fraudhttp://en.wikipedia.org/wiki/Insider_tradinghttp://en.wikipedia.org/wiki/Misleading_financial_analysishttp://en.wikipedia.org/wiki/Earnings_managementhttp://en.wikipedia.org/wiki/Creative_accounting


22/53

Discrimination issues include discrimination on the bases of age (ageism), gender,

race, religion, disabilities, weight and attractiveness. See also: affirmative action,

sexual harassment.

Issues surrounding the representation of employees and the democratization of the

workplace:union busting,strike breaking.

Issues affecting the privacy of the employee: workplace surveillance, drug testing.

See also:privacy.

Issues affecting the privacy of the employer:whistle-blowing.

Issues relating to the fairness of the employment contract and the balance of power

between employer and employee:slavery,[4]indentured servitude,employment law.

Occupational safety and health.

Ethics of sales and marketing

Marketing which goes beyond the mere provision of information about (and access to) a

product may seek to manipulate our values and behavior. To some extent society regards this

as acceptable, but where is the ethical line to be drawn? Marketing ethics overlaps strongly

withmedia ethics, because marketing makes heavy use of media. However,media ethicsis a

much larger topic and extends outside business ethics.

Pricing:price fixing,price discrimination,price skimming.

Anti-competitive practices: these include but go beyond pricing tactics to cover issues

such as manipulation of loyalty and supply chains. See: anti-competitive practices,

antitrust law.

Specific marketing strategies: green wash,bait and switch, shill, viral marketing,

spam (electronic),pyramid scheme,planned obsolescence.
http://en.wikipedia.org/wiki/Discriminationhttp://en.wikipedia.org/wiki/Discriminationhttp://en.wikipedia.org/wiki/Ageismhttp://en.wikipedia.org/wiki/Ageismhttp://en.wikipedia.org/wiki/Ageismhttp://en.wikipedia.org/wiki/Disabilitieshttp://en.wikipedia.org/wiki/Disabilitieshttp://en.wikipedia.org/wiki/Affirmative_actionhttp://en.wikipedia.org/wiki/Affirmative_actionhttp://en.wikipedia.org/wiki/Sexual_harassmenthttp://en.wikipedia.org/wiki/Sexual_harassmenthttp://en.wikipedia.org/wiki/Union_bustinghttp://en.wikipedia.org/wiki/Union_bustinghttp://en.wikipedia.org/wiki/Union_bustinghttp://en.wikipedia.org/wiki/Strike_breakinghttp://en.wikipedia.org/wiki/Strike_breakinghttp://en.wikipedia.org/wiki/Strike_breakinghttp://en.wikipedia.org/wiki/Privacyhttp://en.wikipedia.org/wiki/Privacyhttp://en.wikipedia.org/wiki/Workplace_surveillancehttp://en.wikipedia.org/wiki/Workplace_surveillancehttp://en.wikipedia.org/wiki/Drug_testinghttp://en.wikipedia.org/wiki/Drug_testinghttp://en.wikipedia.org/wiki/Privacyhttp://en.wikipedia.org/wiki/Privacyhttp://en.wikipedia.org/wiki/Privacyhttp://en.wikipedia.org/wiki/Whistle-blowinghttp://en.wikipedia.org/wiki/Whistle-blowinghttp://en.wikipedia.org/wiki/Whistle-blowinghttp://en.wikipedia.org/wiki/Slaveryhttp://en.wikipedia.org/wiki/Slaveryhttp://en.wikipedia.org/wiki/Slaveryhttp://en.wikipedia.org/wiki/Indentured_servitudehttp://en.wikipedia.org/wiki/Indentured_servitudehttp://en.wikipedia.org/wiki/Indentured_servitudehttp://en.wikipedia.org/wiki/Employment_lawhttp://en.wikipedia.org/wiki/Employment_lawhttp://en.wikipedia.org/wiki/Employment_lawhttp://en.wikipedia.org/wiki/Occupational_safety_and_healthhttp://en.wikipedia.org/wiki/Occupational_safety_and_healthhttp://en.wikipedia.org/wiki/Media_ethicshttp://en.wikipedia.org/wiki/Media_ethicshttp://en.wikipedia.org/wiki/Media_ethicshttp://en.wikipedia.org/wiki/Media_ethicshttp://en.wikipedia.org/wiki/Media_ethicshttp://en.wikipedia.org/wiki/Media_ethicshttp://en.wikipedia.org/wiki/Price_fixinghttp://en.wikipedia.org/wiki/Price_fixinghttp://en.wikipedia.org/wiki/Price_fixinghttp://en.wikipedia.org/wiki/Price_discriminationhttp://en.wikipedia.org/wiki/Price_discriminationhttp://en.wikipedia.org/wiki/Price_discriminationhttp://en.wikipedia.org/wiki/Price_skimminghttp://en.wikipedia.org/wiki/Price_skimminghttp://en.wikipedia.org/wiki/Price_skimminghttp://en.wikipedia.org/wiki/Anti-competitive_practiceshttp://en.wikipedia.org/wiki/Anti-competitive_practiceshttp://en.wikipedia.org/wiki/Antitrust_lawhttp://en.wikipedia.org/wiki/Antitrust_lawhttp://en.wikipedia.org/wiki/Greenwashhttp://en.wikipedia.org/wiki/Greenwashhttp://en.wikipedia.org/wiki/Bait_and_switchhttp://en.wikipedia.org/wiki/Bait_and_switchhttp://en.wikipedia.org/wiki/Shillhttp://en.wikipedia.org/wiki/Shillhttp://en.wikipedia.org/wiki/Viral_marketinghttp://en.wikipedia.org/wiki/Viral_marketinghttp://en.wikipedia.org/wiki/Spam_(electronic)http://en.wikipedia.org/wiki/Spam_(electronic)http://en.wikipedia.org/wiki/Pyramid_schemehttp://en.wikipedia.org/wiki/Pyramid_schemehttp://en.wikipedia.org/wiki/Pyramid_schemehttp://en.wikipedia.org/wiki/Planned_obsolescence_(business)http://en.wikipedia.org/wiki/Planned_obsolescence_(business)http://en.wikipedia.org/wiki/Planned_obsolescence_(business)http://en.wikipedia.org/wiki/Planned_obsolescence_(business)http://en.wikipedia.org/wiki/Pyramid_schemehttp://en.wikipedia.org/wiki/Spam_(electronic)http://en.wikipedia.org/wiki/Viral_marketinghttp://en.wikipedia.org/wiki/Shillhttp://en.wikipedia.org/wiki/Bait_and_switchhttp://en.wikipedia.org/wiki/Greenwashhttp://en.wikipedia.org/wiki/Antitrust_lawhttp://en.wikipedia.org/wiki/Anti-competitive_practiceshttp://en.wikipedia.org/wiki/Price_skimminghttp://en.wikipedia.org/wiki/Price_discriminationhttp://en.wikipedia.org/wiki/Price_fixinghttp://en.wikipedia.org/wiki/Media_ethicshttp://en.wikipedia.org/wiki/Media_ethicshttp://en.wikipedia.org/wiki/Occupational_safety_and_healthhttp://en.wikipedia.org/wiki/Employment_lawhttp://en.wikipedia.org/wiki/Indentured_servitudehttp://en.wikipedia.org/wiki/Slaveryhttp://en.wikipedia.org/wiki/Whistle-blowinghttp://en.wikipedia.org/wiki/Privacyhttp://en.wikipedia.org/wiki/Drug_testinghttp://en.wikipedia.org/wiki/Workplace_surveillancehttp://en.wikipedia.org/wiki/Privacyhttp://en.wikipedia.org/wiki/Strike_breakinghttp://en.wikipedia.org/wiki/Union_bustinghttp://en.wikipedia.org/wiki/Sexual_harassmenthttp://en.wikipedia.org/wiki/Affirmative_actionhttp://en.wikipedia.org/wiki/Disabilitieshttp://en.wikipedia.org/wiki/Ageismhttp://en.wikipedia.org/wiki/Discrimination


23/53

Content of advertisements: attack ads, subliminal messages, sex in advertising,

products regarded as immoral or harmful

Children and marketing:marketing in schools.

Black markets,grey markets.

Ethics of production

This area of business ethics deals with the duties of a company to ensure that products and

production processes do not cause harm. 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, or the degree of permissibility may

depend on the changing state of preventative technologies or changing social perceptions of

acceptable risk.

Defective, addictive and inherently dangerous products and services (e.g. tobacco,

alcohol, weapons, motor vehicles, chemical manufacturing,bungee jumping).

Ethical relations between the company and the environment:pollution,environmental

ethics,carbon emissions trading

Ethical problems arising out of new technologies:genetically modified food,mobile

phone radiation and health.

Product testing ethics: animal rights and animal testing, use of economically

disadvantaged groups (such as students) as test objects.
http://en.wikipedia.org/wiki/Attack_adhttp://en.wikipedia.org/wiki/Attack_adhttp://en.wikipedia.org/wiki/Subliminal_messagehttp://en.wikipedia.org/wiki/Subliminal_messagehttp://en.wikipedia.org/wiki/Sex_in_advertisinghttp://en.wikipedia.org/wiki/Sex_in_advertisinghttp://en.wikipedia.org/wiki/Marketing_in_schoolshttp://en.wikipedia.org/wiki/Marketing_in_schoolshttp://en.wikipedia.org/wiki/Marketing_in_schoolshttp://en.wikipedia.org/wiki/Black_markethttp://en.wikipedia.org/wiki/Black_markethttp://en.wikipedia.org/wiki/Grey_markethttp://en.wikipedia.org/wiki/Grey_markethttp://en.wikipedia.org/wiki/Grey_markethttp://en.wikipedia.org/wiki/Bungee_jumpinghttp://en.wikipedia.org/wiki/Bungee_jumpinghttp://en.wikipedia.org/wiki/Bungee_jumpinghttp://en.wikipedia.org/wiki/Pollutionhttp://en.wikipedia.org/wiki/Pollutionhttp://en.wikipedia.org/wiki/Pollutionhttp://en.wikipedia.org/wiki/Environmental_ethicshttp://en.wikipedia.org/wiki/Environmental_ethicshttp://en.wikipedia.org/wiki/Environmental_ethicshttp://en.wikipedia.org/wiki/Environmental_ethicshttp://en.wikipedia.org/wiki/Carbon_emissions_tradinghttp://en.wikipedia.org/wiki/Carbon_emissions_tradinghttp://en.wikipedia.org/wiki/Carbon_emissions_tradinghttp://en.wikipedia.org/wiki/Genetically_modified_foodhttp://en.wikipedia.org/wiki/Genetically_modified_foodhttp://en.wikipedia.org/wiki/Genetically_modified_foodhttp://en.wikipedia.org/wiki/Mobile_phone_radiation_and_healthhttp://en.wikipedia.org/wiki/Mobile_phone_radiation_and_healthhttp://en.wikipedia.org/wiki/Mobile_phone_radiation_and_healthhttp://en.wikipedia.org/wiki/Mobile_phone_radiation_and_healthhttp://en.wikipedia.org/wiki/Animal_rightshttp://en.wikipedia.org/wiki/Animal_rightshttp://en.wikipedia.org/wiki/Animal_testinghttp://en.wikipedia.org/wiki/Animal_testinghttp://en.wikipedia.org/wiki/Animal_testinghttp://en.wikipedia.org/wiki/Animal_rightshttp://en.wikipedia.org/wiki/Mobile_phone_radiation_and_healthhttp://en.wikipedia.org/wiki/Mobile_phone_radiation_and_healthhttp://en.wikipedia.org/wiki/Genetically_modified_foodhttp://en.wikipedia.org/wiki/Carbon_emissions_tradinghttp://en.wikipedia.org/wiki/Environmental_ethicshttp://en.wikipedia.org/wiki/Environmental_ethicshttp://en.wikipedia.org/wiki/Pollutionhttp://en.wikipedia.org/wiki/Bungee_jumpinghttp://en.wikipedia.org/wiki/Grey_markethttp://en.wikipedia.org/wiki/Black_markethttp://en.wikipedia.org/wiki/Marketing_in_schoolshttp://en.wikipedia.org/wiki/Sex_in_advertisinghttp://en.wikipedia.org/wiki/Subliminal_messagehttp://en.wikipedia.org/wiki/Attack_ad


24/53

Ethics of intellectual property, knowledge and skills

Knowledge and skills are valuable but not easily "own able" as objects. Nor is it obvious that

has the greater rights to an idea: the company who trained the employee or the employee

themselves? The country in which the plant grew or the company which discovered and

developed the plant's medicinal potential? As a result, attempts to assert ownership and

ethical disputes over ownership arise.

Patent infringement,copyright infringement,trademark infringement.

Misuse of the intellectual property systems to stifle competition: patent misuse,

copyright misuse,patent troll,submarine patent.

Even the notion of intellectual property itself has been criticized on ethical grounds:

seeintellectual property.

International business ethics

While business ethics emerged as a field in the 1970s, international business ethics did not

emerge until the late 1990s, looking back on the international developments of that decade.

Many new practical issues arose out of the international context of business. Theoretical

issues such as cultural relativity of ethical values receive more emphasis in this field. Other,

older issues can be grouped here as well. Issues and subfields include:

The search for universal values as a basis for international commercial behavior.

Comparison of business ethical traditions in different countries.

Comparison of business ethical traditions from various religious perspectives.

Ethical issues arising out of international business transactions; e.g. bioprospecting

and biopiracy in the pharmaceutical industry; the fair trade movement; transfer

pricing.
http://en.wikipedia.org/wiki/Patent_infringementhttp://en.wikipedia.org/wiki/Patent_infringementhttp://en.wikipedia.org/wiki/Copyright_infringementhttp://en.wikipedia.org/wiki/Copyright_infringementhttp://en.wikipedia.org/wiki/Copyright_infringementhttp://en.wikipedia.org/wiki/Trademark_infringementhttp://en.wikipedia.org/wiki/Trademark_infringementhttp://en.wikipedia.org/wiki/Trademark_infringementhttp://en.wikipedia.org/wiki/Patent_misusehttp://en.wikipedia.org/wiki/Patent_misusehttp://en.wikipedia.org/wiki/Copyright_misusehttp://en.wikipedia.org/wiki/Copyright_misusehttp://en.wikipedia.org/wiki/Patent_trollhttp://en.wikipedia.org/wiki/Patent_trollhttp://en.wikipedia.org/wiki/Patent_trollhttp://en.wikipedia.org/wiki/Submarine_patenthttp://en.wikipedia.org/wiki/Submarine_patenthttp://en.wikipedia.org/wiki/Submarine_patenthttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Bioprospectinghttp://en.wikipedia.org/wiki/Bioprospectinghttp://en.wikipedia.org/wiki/Biopiracyhttp://en.wikipedia.org/wiki/Biopiracyhttp://en.wikipedia.org/wiki/Fair_tradehttp://en.wikipedia.org/wiki/Fair_tradehttp://en.wikipedia.org/wiki/Transfer_pricinghttp://en.wikipedia.org/wiki/Transfer_pricinghttp://en.wikipedia.org/wiki/Transfer_pricinghttp://en.wikipedia.org/wiki/Transfer_pricinghttp://en.wikipedia.org/wiki/Transfer_pricinghttp://en.wikipedia.org/wiki/Fair_tradehttp://en.wikipedia.org/wiki/Biopiracyhttp://en.wikipedia.org/wiki/Bioprospectinghttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Submarine_patenthttp://en.wikipedia.org/wiki/Patent_trollhttp://en.wikipedia.org/wiki/Copyright_misusehttp://en.wikipedia.org/wiki/Patent_misusehttp://en.wikipedia.org/wiki/Trademark_infringementhttp://en.wikipedia.org/wiki/Copyright_infringementhttp://en.wikipedia.org/wiki/Patent_infringement


25/53

Issues such asglobalizationandcultural imperialism.

Varying global standards - e.g. the use ofchild labor.

Ethics of economic systems

This vaguely defined area, perhaps not part of but only related to business ethics, is where

business ethicists venture into the fields ofpolitical economy and political philosophy,

focusing on the rights and wrongs of various systems for the distribution of economic

benefits. The work ofJohn RawlsandRobert Nozickare both notable contributors.

Conflicting interests

Business ethics can be examined from various perspectives, including the perspective of the

employee, the commercial enterprise, and society as a whole. Very often, situations arise in

which there is conflict between one and more of the parties, such that serving the interest of

one party is a detriment to the other(s). For example, a particular outcome might be good for

the employee, whereas, it would be bad for the company, society, or vice versa. Some

ethicists (e.g., Henry Sedgwick) see the principal role of ethics as the harmonization and

reconciliation of conflicting interests.

Corporate ethics policies
http://en.wikipedia.org/wiki/Globalisationhttp://en.wikipedia.org/wiki/Globalisationhttp://en.wikipedia.org/wiki/Globalisationhttp://en.wikipedia.org/wiki/Cultural_imperialismhttp://en.wikipedia.org/wiki/Cultural_imperialismhttp://en.wikipedia.org/wiki/Cultural_imperialismhttp://en.wikipedia.org/wiki/Child_labourhttp://en.wikipedia.org/wiki/Child_labourhttp://en.wikipedia.org/wiki/Child_labourhttp://en.wikipedia.org/wiki/Political_economyhttp://en.wikipedia.org/wiki/Political_economyhttp://en.wikipedia.org/wiki/Political_philosophyhttp://en.wikipedia.org/wiki/Political_philosophyhttp://en.wikipedia.org/wiki/John_Rawlshttp://en.wikipedia.org/wiki/John_Rawlshttp://en.wikipedia.org/wiki/John_Rawlshttp://en.wikipedia.org/wiki/Robert_Nozickhttp://en.wikipedia.org/wiki/Robert_Nozickhttp://en.wikipedia.org/wiki/Robert_Nozickhttp://en.wikipedia.org/wiki/Henry_Sidgwickhttp://en.wikipedia.org/wiki/Henry_Sidgwickhttp://en.wikipedia.org/wiki/Henry_Sidgwickhttp://en.wikipedia.org/wiki/Robert_Nozickhttp://en.wikipedia.org/wiki/John_Rawlshttp://en.wikipedia.org/wiki/Political_philosophyhttp://en.wikipedia.org/wiki/Political_economyhttp://en.wikipedia.org/wiki/Child_labourhttp://en.wikipedia.org/wiki/Cultural_imperialismhttp://en.wikipedia.org/wiki/Globalisation


26/53

As part of more comprehensive compliance and ethics programs, many companies have

formulated internal policies pertaining to the ethical conduct of employees. These policies

can be simple exhortations in broad, highly-generalized language (typically called a corporate

ethics statement), or they can be more detailed policies, containing specific behavioral

requirements (typically called corporate ethics codes). They are generally meant to identify

the company's expectations of workers and to offer guidance on handling some of the more

common ethical problems that might arise in the course of doing business. It is hoped that

having such a policy will lead to greater ethical awareness, consistency in application, and the

avoidance of ethical disasters.

An increasing number of companies also requires employees to attend seminars regarding

business conduct, which often include discussion of the company's policies, specific case

studies, and legal requirements. Some companies even require their employees to sign

agreements stating that they will abide by the company's rules of conduct.

Many companies are assessing the environmental factors that can lead employees to engage

in unethical conduct.

Not everyone supports corporate policies that govern ethical conduct. Some claim that ethical

problems are better dealt with by depending upon employees to use their own judgment.

To be successful, most ethicists would suggest that an ethics policy should be:

Given the unequivocal support of top management, by both word and example.

Explained in writing and orally, with periodic reinforcement.

Doable....something employees can both understand and perform.

Monitored by top management, with routine inspections for compliance and

improvement.
http://en.wikipedia.org/wiki/Compliance_and_ethics_programhttp://en.wikipedia.org/wiki/Compliance_and_ethics_programhttp://en.wikipedia.org/wiki/Compliance_and_ethics_program


27/53

Backed up by clearly stated consequences in the case of disobedience.

Remain neutral and nonsexist.

Religious views on business ethics

The historical and global importance of religious views on business ethics is sometimes

underestimated in standard introductions to business ethics. Particularly in Asia and the

Middle East, religious and cultural perspectives have a strong influence on the conduct of

business and the creation of business values.

Examples include:

Islamic banking, associated with the avoidance of charging interest on loans.

Traditional Confucian disapproval of the profit-seeking motive.

Quakertestimony onfair dealing

Relationship between business ethics and managerial values

Ethics refers to the entire body of moral values that society attaches to the actions of human

being. Ethics are interrelated with values. In fact values are considered the language of ethics.

Ethics in business emanate from the values of top management which are in turn shaped by

social, cultural and national values.

Values can be moral, immoral or amoral, depending upon whether they conform to, go

against or are different towards certain norms of morality. But ethics represent only moral

values. The value judgments do have ethical content when they are linked with the element of

morality. Values help to establish proper relationship between ends and means. If the

management of a business is pursuing sound values, and it will follow those business
http://en.wikipedia.org/wiki/Islamic_bankinghttp://en.wikipedia.org/wiki/Islamic_bankinghttp://en.wikipedia.org/wiki/Quakerhttp://en.wikipedia.org/wiki/Quakerhttp://en.wikipedia.org/wiki/Quakershttp://en.wikipedia.org/wiki/Quakershttp://en.wikipedia.org/wiki/Quakershttp://en.wikipedia.org/wiki/Quakershttp://en.wikipedia.org/wiki/Quakerhttp://en.wikipedia.org/wiki/Islamic_banking


28/53

practices that are ethical and socially justifiable. And in absence of sound value system, the

management of a business may be tempted to pursue unethical business practices.

Unethical behaviors constitutes of

Bribing public officials to obtain undue favors.

Using false claims in advertisements.

Keeping two sets of books to evade taxes.

Using co. property for personal use.

Overlooking safety violations to get the job done.

Revealing confidential information or trade secrets to competitors.

Artificially inflating profits to get re- elected as directors.

Unethical Business Practices

Against Employees

Paying salaries lower than those fixed by the government to the employees.

Poor working conditions like dirty water, poor lightning.

Lack of safety measures for workers.

Against Government

Evasion of excise duty, sales tax, income tax etc.

Smuggling of goods.

Offering bribes to government officials and politicians for getting favors.

Against consumers and society

Adulteration of goods like mixing of papaya seed with black pepper.

Sale of spurious goods


29/53

Sale of duplicate products under popular brand names.

Sale of products injurious to public health like charas, heroine.

Pollution of environment.

Deceptive advertisements and false claims in advertisements.

Conceptual model of Business ethics

Business Ethics

Managerial Moral problems that

Beliefs manager face in decision making

Managerial beliefs concerning:

Illegal acts

Unethical or questionable practices

Examples:

Fraud, Bribery


30/53

Dumping of pesticides

Micro level problems:

Fairness in performance appraisal

Accepting Gifts

Confidentiality of company

Treatment of problem employees

Confronting expense account

Levels of Ethical Decisions in business

Level 4

Individual

Level 3

Internal policy


31/53

Level 2

Stakeholders

Level 1

Society

Societal level

Stakeholders level

Internal policy

Individual Level

Societal Level:

At this level, ethical questions about the basic institutions in society are asked.

These represent an ongoing debate among major competing institutions including

business.

Stakeholders Level:


32/53

In a business enterprise include employees, suppliers etc. Here they ask about how

they deal with external groups. For example, should a company inform its

customers about the potential dangers of its product?

Internal Policy Level:

At this level we ask questions about the nature of enterprise relations with

employee both managers and workers. So also questions of motivation techniques,

leadership roles, work rules etc. are involved at this level.

Individual Level:

At this level, we ask questions concerning how individual person should treat one

another within the firm. These questions deal with day to day issues of life in any

enterprise but in the ultimate analysis, they set the tone of ethical behavior of

business at higher levels.

Need and Importance of Business Ethics

More important is the fact that today a businessman is pressurized by various environmental

factors to follow a business practice which is ethical from societys point of view irrespective

of its impact on business profits. Such a significance of business ethics is attributable to

following reasons:


33/53

Environmental Pressures:

As apart of overall economic system, a business organization is pressurized by

various environmental factors to act credibly and behave ethically. Thus a

business enterprise may have no option but to desist from undesirable trade

practices like hoarding and profiteering due to pressure from consumer forums.

2. Enlightened self interest:

Todays businessman firmly believes that business ethics are in their own self

interest. That is if business enterprise follows business practices, it will lead to

higher profits and prosperity in the long run.

Moral consciousness:

It would not be an exaggeration to say that most business people behave ethically

because of their moral consciousness. Like any other member of the society

business people also believe that ethical business conduct is good business as well

as good citizenship.

Legal Requirements:

In almost every sphere of business activity laws have been enacted which declare

certain business practices. In short, obedience to such laws is ethical.

Elements of business ethics


34/53

Business Managers must come to appreciate the key elements that comprise making ethical

judgments. There are six major elements that are essential ethical judgments:

1. Ethical Imagination:

Developing ethical imagination means being sensitive to ethical issues in business

decision making and the ability to identify those situations where people are likely to be

detrimentally effected by decision making.

2. Ethical Identification and Ordering:

It refers to the ability to judge the relevance or non relevance of ethical factors in

decision making situations. In addition to their identification, ethical issues must be

ranked.

3. Ethical Evaluation:

To evaluate ethical factors business persons have to develop clear principles, basis of

weighing those factors and the ability to make out the likely ethical as well as economic

outcomes of a decision.

4. Sense of Ethical Obligation:

This refers to the intuitive or learned understanding that ethical fibers a concern for

fairness, justice and due process to people, groups and communities should be woven

into the fabric of managerial decision making.

APPROACHES TO BUSINESS ETHICS


35/53

When business people speak about business ethics they usually mean one of three things:

(1) Avoid breaking the criminal law in ones work-related activity;

(2) Avoid action that may result in civil law suits against the company; and

(3) Avoid actions that are bad for the company image.

Businesses are especially concerned with these three things since they involve loss of

money and company reputation. In theory, a business could address these three concerns by

assigning corporate attorneys and public relations experts to escort employees on their daily

activities. Anytime an employee might stray from the straight and narrow path of acceptable

conduct, the experts would guide him back. Obviously this solution would be a financial

disaster if carried out in practice since it would cost a business more in attorney and public

relations fees than they would save from proper employee conduct. Perhaps reluctantly,

businesses turn to philosophers to instruct employees on becoming moral. For over 2,000

years philosophers have systematically addressed the issue of right and wrong conduct.

Presumably, then, philosophers can teach employees a basic understanding of morality will

keep them out of trouble.

Deriving Business Ethics from the Profit Motive

Some businesspeople argue that there is a symbiotic relation between ethics and business in

which ethics naturally emerges from a profit-oriented business. There are both weak and

strong versions of this approach. The weak version is often expressed in the dictum that good

ethics results in good business, which simply means that moral businesses practices are

profitable. For example, it is profitable to make safe products since this will reduce product

liability lawsuits. Similarly, it may be in the best financial interests of businesses to respect


36/53


37/53

since it assumes that consumers or workers will demand the morally proper thing. In fact,

consumers may opt for less safe products if they know they will be saving money. For

example, consumers might prefer a cheaper car without air bags, even though doing so places

their own lives and the lives of their passengers at greater risk, which is morally

irresponsible. Similarly, workers may forego demands of privacy at work if they are

compensated with high enough wages. In short, not every moral business practice will simply

emerge from the profit principle as suggested by either the weak or strong views.

Business Ethics Restricted to Following the Law

A second approach to business ethics is that moral obligations in business are

restricted to what the law requires. The most universal aspects of Western morality have

already been put into our legal system, such as with laws against killing, stealing, fraud,

harassment, or reckless endangerment. Moral principles beyond what the law requires or

supra-legal principles -- appear to be optional since philosophers dispute about their validity

and society wavers about its acceptance. For any specific issue under consideration, such as

determining what counts as responsible marketing or adequate privacy in the workplace, we

will find opposing positions on our supra-legal moral obligations. It is, therefore,

unreasonable to expect businesses to perform duties about which there is so much

disagreement and which appear to be optional.

The unreasonableness of such a moral requirement in our society becomes all the

more evident when we consider societies that do have a strong external source of morality.

Islam, for example, contains a broad range of moral requirements such as an alms mandate,

prohibitions against sleeping partners that collect unearned money, and restrictions on

charging interest for certain types of loans, particularly for relief aid. Thus, in Muslim


38/53

countries that are not necessarily ruled by Islamic law, there is a strong source of external

morality that would be binding on Muslim businesses apart from what their laws would

require. Similarly, Confucianism has a strong emphasis on filial piety; thus, in Chinese and

other Confucian societies, it is reasonable to expect their businesses to maintain a respect for

elders even if it is not part of the legal system. In Western culture, or at least in the United

States, we lack a counterpart to an external source of morality as is present in Muslim or

Confucian societies. One reason is because of our cultural pluralism and the presence of a

wide range of belief systems. Even within Christianity, the diversity of denominations and

beliefs prevents it from being a homogeneous source of Christian values. In short, without a

widely recognized system of ethics that is external to the law, supra-legal moral obligations

in our society appear to be optional; and, it is unreasonable to expect business people to be

obligated to principles which appear to be optional.

In our culturally pluralistic society, the only business-related moral obligations that

are majority-endorsed by our national social group are those obligations that are already

contained in the law. These include a range of guidelines for honesty in advertising, product

safety, safe working conditions, and fair hiring and firing practices. In fact, the unifying

moral force of businesses within our diverse society is the law itself. Beyond the law we find

that the moral obligations of businesses are contextually bound by subgroups, such as with a

business that is operated by traditional Muslims or environmental activists. In these cases, the

individual businesses may be bound by the obligations of their subgroups, but such

obligations are contingent upon one's association with these social subgroups. And, clearly,

the obligations within those subgroups are not binding on those outside the subgroups. If a

business does not belong to any subgroup, then its only moral obligations will be those within

the context of society at large, and these obligations are in the law.


39/53

Corporations that assume an obligation beyond the law, either in their corporate codes or in

practice, take on responsibilities that most outsiders would designate as optional. A good

example is found in the mission statement of Ben & Jerry's Ice Cream, which includes the

following:

Social Mission -- To operate the company in a way that actively recognizes the central

role that business plays in the structure of society by initiating innovative ways to

improve the quality of life of a broad community -- local, national, and international.

Consistent with this mission, the highest paid employees of Ben & Jerry's would not earn

more than seven times more than the lowest paid full-time employees. "We do this," they

explain, "because we believe that most American corporations overpay top management, and

underpay entry-level employees -- and because everyone who works at Ben & Jerry's is a

major contributor to our success." In spite of the merits of this pay scale policy, it clearly

lacks majority endorsement in our national social group, and would not be a binding

obligation. In fact, it is not even binding on Ben & Jerrys itself since, in recent years, Ben &

Jerrys had to abandon its own ideal pay scale in an effort to attract a CEO with the right

skills to expand their company.

Strictly following this legal approach to business ethics may indeed prompt businesses to do

the right thing, as prescribed by law. Nevertheless, there are two key problems with

restricting morality solely to what the law requires. First, even in the best legal context, the

law will lag behind our moral condemnation of certain unscrupulous, yet legal business

practices.

Deriving Business Ethics from General Moral Obligations


40/53

The third approach to business ethics is that morality must be introduced as a factor

that is external from both the profit motive and the law. This is the approach taken by most

philosophers who write on business ethics, and is expressed most clearly in the following

from a well known business ethics essay:

Proper ethical behavior exists on a plane above the law. The law merely specifies the

lowest common denominator of acceptable behavior. (Gene Laczniak, "Business Ethics: A

Manager's Primer," 1983)

The most convenient way to explore this approach is to consider the supra-legal moral

principles that philosophers commonly offer. Five fairly broad moral principles suggested by

philosophers are as follows:

Harm principle: businesses should avoid causing unwarranted harm.

Fairness principle: business should be fair in all of their practices.

Human rights principle: businesses should respect human rights.

Autonomy principle: businesses should not infringe on the rationally reflective

choices of people.

Veracity principle: businesses should not be deceptive in their practices.

The attraction of these principles is that they appeal to universal moral notions that no one

would reasonably reject. But, the problem with these principles is that they are too general.

These principles do not tell us specifically what counts as harm, unfairness, or a violation of

human rights. Does all damage to the environment constitute harm? Does it violate an

employee's right to privacy if an employer places hidden surveillance cameras in an


41/53

employee lounge area? Does child-oriented advertising mislead children and thus violate the

principle of veracity?

The above principles are abstract in nature. That is, they broadly mandate against harm,

and broadly endorse autonomy. Because they are abstract, they will be difficult to apply to

concrete situations and consequently not give clear guidance in complex situations. An

alternative approach is to forget the abstract, and focus instead on concrete situations that

affect the particular interests of consumers, workers, stockholders, or the community. The

recent stakeholder approach to business ethics attempts to do this systematically. It may be

expressed in the following:

Stakeholder principle: businesses should consider all stakeholders' interests that are

affected by a business practice.

A stakeholder is any party affected by a business practice, including employees,

suppliers, customers, creditors, competitors, governments, and communities. Accordingly,

the stakeholder approach to business ethics emphasizes that we should map out of the various

parties affected by a business practice. But this approach is limited since proponents of this

view give us no clear formula for how to prioritize the various interests once we map them

out. Should all stakeholders' interests be treated equally from the largest stockholder down

to the garbage man who empties the factory dumpster? Probably no defenders of the

stakeholder approach would advocate treating all interests equally. Alternatively, should the

stockholders' interests have special priority? If we take this route, then the stakeholder

principle is merely a revision of the profit principle.

Another way of looking at concrete moral obligations in business is to list them issue by

issue. This is the strategy behind corporate codes of ethics that address specific topics such as


42/53

confidentiality of corporate information, conflicts of interest, bribes, and political

contributions. Consider the following issues from Johnson and Johnson's Credo:

Code of Conduct

Characteristics

The codes of conduct or codes of practice adopted by a number of mainly multinational

enterprises include a variable number of principles which define the ethical standards of the

enterprise. These may be general principles such as, for example, the concept of non-

discrimination while, in a number of cases, there is a detailed description of the social

practices which the enterprise wishes to see respected in the production and sale of the goods

and services which it markets. Some enterprises make a distinction between the basic

principles which regulate its internal activity and those which it wants to apply in the

selection and monitoring of activities of its subcontractors. A number of codes make explicit

reference to ILO Conventions, in particular those concerning the respect of human rights at

work. In other cases, the reference is more indirect, even if the principles established are

often based on fundamental ILO Conventions.

The Agrofood, forestry, chemicals and consumer products sectors are amongst those which

have progressively introduced a number of codes of practice. However, while the concept of

ethical practice has made a remarkable comeback in recent years in the strategic policy of

industrial and commercial enterprises, it is above all in the textile sector, and in particular in

clothing and footwear, that the trend is the most evident. United States enterprises have

played a pioneering role in this respect. Since Levi Strauss adopted in 1992 a code entitled

"Business partner terms of engagement and guidelines for country selection", many other


43/53

enterprises producing apparel and footwear as well as major retail groups have followed suit.

In Europe, the trend has been longer in coming,

Study Questions for Approaches to Business Ethics

Introduction

(1) What three things do business people usually mean by business ethics?

(2) Why cant philosophers teach people to be ethical?

Deriving Business Ethics from the Profit Motive

(3) What is the weak version of theory that connects business ethics to the profit

motive?

(4) What are problems with the weak version?

(5) What is the strong version of theory that connects business ethics to the profit

motive?

(6) What are problems with this?

Business Ethics Restricted to Following the Law

(7) Define supra-legal principle.

(8) Why is it unreasonable to expect businesses to follow supra-legal moral

principles?

(9) What are some supra-legal moral principles that are binding in Muslim countries?

(10) What are the problems with restricting business ethics to what the law requires?

Deriving Business Ethics from General Moral Obligations

(11) Give an example of a broad moral principle suggested by philosophers.

(12) What is the problem with deriving business ethics from broad moral principles?

(13) What is a stakeholder?


44/53

(14) What is the problem with articulating good business behavior in corporate codes

of ethics?

Conclusion

(15) What are some benefits of all three approaches to business ethics?

(16) What can we learn by looking at case studies in business ethics?

CASE STUDY ON HDFC BANK

HDFC PROFILE

HDFC Bank was incorporated in August 1994, and, currently has an nationwide network of

1229 Branches and 2526 ATM's in 444 Indian towns and cities.

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to

receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the

private sector, as part of the RBI's liberalisation of the Indian Banking Industry in 1994. The

bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its


45/53

registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled

Commercial Bank in January 1995.

Business Focus

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound

customer franchises across distinct businesses so as to be the preferred provider of banking

services for target retail and wholesale customer segments, and to achieve healthy growth in

profitability, consistent with the bank's risk appetite. The bank is committed to maintain the

highest level of ethical standards, professional integrity, corporate governance and regulatory

compliance. HDFC Bank's business philosophy is based on four core values - Operational

Excellence, Customer Focus, Product Leadership and People.

Management

Mr. Jagdish Kapoor took over as the bank's Chairman in July 2001. Prior to this, Mr. Kapoor

was a Deputy Governor of the Reserve Bank of India.

The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years,

and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia.

The Bank's Board of Directors is composed of eminent individuals with a wealth of

experience in public policy, administration, industry and commercial banking. Senior

executives representing HDFC are also on the Board.


46/53

Senior banking professionals with substantial experience in India and abroad head

various businesses and functions and report to the Managing Director. Given the professional

expertise of the management team and the overall focus on recruiting and retaining the best

talent in the industry, the bank believes that its people are a significant competitive strength.

Business

HDFC Bank offers a wide range of commercial and transactional banking services and

treasury products to wholesale and retail customers. The bank has three key business

segments:

Fair Practices for lending

The bank would have loan application forms for retail advances and credit cards.

These would include information about the fees/charges, if any, payable for

processing, the amount of such fees refundable in the case of non acceptance of

application, pre-payment options and any other matter which affects the interest of

the borrower, so that a meaningful comparison with that of other banks can be made

and an informed decision can be taken by the borrower.

As part of the wholesale banking business, the bank has various segments to which

credit facilities are provided for their business requirements. These include a wide

range of customers and range from small & medium enterprises to large corporate

borrowers. The bank has a process for identification of target customers to whom

facilities can be provided based on customer selection and risk assessment for that

segment. Thus, the focus is on contacting prospective customers and encouraging


47/53

them to avail of banking services from HDFC Bank based on the incremental value

we can add to a customer's business, rather than customers making applications to

the Bank for facilities / services.

Thus, for the wholesale banking segment, we do not have any standardized

application forms to be submitted by prospective customers.

Code of Ethics

Be aware of frauds

Security tips

Security Meaasures of HDFC

Code of Corporate Governance

Code of corporate Rating

Composition of board

Committee of Directors

Profile of Directors

Ownership Right

Promoters Rights

Keyshareholders Right

Dividend Policy

Memorandum of Association

Articles of Association

Fair Practices

Code of Lending

Internet Browsing


48/53

Money mules

Introduction:

The Board members / Officials shall engage in and promote honest and ethical

conduct of business, including the ethical handling of actual and / or apparent conflicts of

interest between personal and professional relationships.

Applicability:

This Code of Ethics/Conduct is applicable to the following persons.

1. The Board Members

2. Officials of the Bank one level below the Board

Ethical Conduct:

The Board members / Officials shall engage in and promote honest and ethical

conduct of business, including the ethical handling of actual and / or apparent conflicts of

interest between personal and professional relationships.

Conflict of Interest:

The Board members / Officials shall avoid conflict of interest and disclose to the

Board any material transaction or relationship that reasonably could be expected to give rise

to such a conflict.

Confidentiality of Information:


49/53

The Board members / Officials shall ensure and take all reasonable measures to

protect the confidentiality of non-public information about the Bank, its business,

customers and other materially significant information obtained or created in connection

with any activities with the Bank and to prevent the unauthorized disclosure of such

information unless required by applicable laws or regulations or legal or regulatory process.

Disclosure of Information:

The Board members / Officials shall endeavor to produce full, fair, accurate, timely

and understandable disclosures in reports and documents that the Bank files with or submits to

the Securities and Exchange commission and other regulators and in other public

communications made by the Bank.Compliance with Governmental Laws, Rules and

Regulations:

The Board members / Officials shall comply with all the applicable governmental laws and

the applicable rules and regulations.

Variation of the Code and Waivers:

The Code shall be reviewed from time to time for updation thereof. Any variation in the Code

or any waivers from the provisions of the Code shall be approved by the Board and shall be

disclosed on the Bank's website.

Contract or Term of Employment:

Nothing in this Code or other related communications by itself creates or implies an

employment contract or terms of employment.

Violation of the Code:

The Board shall have the powers to take necessary action in case of any violation of the code.


50/53

Dividend Policy

Your Bank has had a track record of moderate but steady increases in dividend

declarations for the last 10 years and dividend payout ratio in the last few years has been in

the range of 20-25 %. Your Bank's dividend policy is based on the need to balance the twin

objectives of appropriately rewarding shareholders with cash dividends and of retaining

capital to maintain a healthy capital adequacy ratio to support future growth. In line with this

policy and recognisation of healthy performance during 2007-08, your directors pleased to

recommend a dividend of 85% for the year ended on March 31,2008 as against 70% for the

year ended March 31, 2007. This dividend shall be subject to distribution tax to be paid by

the Bank but will be tax-free in the hands of the members.


51/53

Conclusion

Weve looked at three approaches to business ethics, and weve seen that all three

have limitations. If we hope to find an approach to business ethics that is free from

conceptual problems, we will not likely find any. Ethics is a complex subject and its history is

filled with diverse theories that are systematically refuted by rival theories. So, we should

expect to find controversies when applying ethics to the specific practices of business.

However, following any of the above three approaches to business ethics will bring us closer

to acceptable moral behavior than we might otherwise be. Close attention to ones profit

motive and the moral interests of consumers might in fact generate some morally responsible

business decisions. We can indeed find additional moral guidance by looking at the laws that

apply specifically to businesses. In gray areas of moral controversy that are not adequately

addressed profit motives and the law, we can turn for guidance to a variety of general and

specific moral principles.

In addition to the above three approaches to business ethics, it also helps to examine

stories of businesses that have been morally irresponsible. By citing specific cases deceptive

advertising, environmental irresponsibility, or unsafe products, we can learn by example what

we should not do. Such cases often reveal blatantly crude, insensitive, or reckless attitudes of

businesses, which we can view as warning signs of unethical conduct.


52/53

References

"Ethics the easy way".H.E.R.O...

"Miliband draws up green tax plan".BBC.

Friedman, Milton (1970-09-13). "The Social Responsibility of Business is to Increase

Its Profits",The New York Times Magazine.

Hare, R. M. (1979). "What is wrong with slavery". Philosophy and Public Affairs 8:

103121.

Enderle, Georges (1999). International Business Ethics. University of Notre Dame

Press, 1.ISBN 0-268-01214-8.

George, Richard de (1999). Business Ethics.

http://www.stthom.edu/academics/centers/cbes/jonachan.html

Further reading

Albertson, Todd. (2007). The Gods of Business: The Intersection of Faith and the

Marketplace.Los Angeles, CA: Trinity Alumni Press.

Behrman, Jack N. (1988). Essays on Ethics in Business and the Professions.

Englewood Cliffs, NJ:
http://www.hero.ac.uk/uk/business/archives/2003/ethics_the_easy_way5043.cfmhttp://www.hero.ac.uk/uk/business/archives/2003/ethics_the_easy_way5043.cfmhttp://www.hero.ac.uk/uk/business/archives/2003/ethics_the_easy_way5043.cfmhttp://en.wikipedia.org/wiki/H.E.R.O._(Higher_Education_and_Research_Opportunities_in_the_UK)http://en.wikipedia.org/wiki/H.E.R.O._(Higher_Education_and_Research_Opportunities_in_the_UK)http://en.wikipedia.org/wiki/H.E.R.O._(Higher_Education_and_Research_Opportunities_in_the_UK)http://news.bbc.co.uk/1/hi/uk/6095680.stmhttp://news.bbc.co.uk/1/hi/uk/6095680.stmhttp://en.wikipedia.org/wiki/BBChttp://en.wikipedia.org/wiki/BBChttp://en.wikipedia.org/wiki/BBChttp://en.wikipedia.org/wiki/1970http://en.wikipedia.org/wiki/1970http://en.wikipedia.org/wiki/September_13http://en.wikipedia.org/wiki/September_13http://en.wikipedia.org/wiki/September_13http://www-rohan.sdsu.edu/faculty/dunnweb/rprnts.friedman.htmlhttp://www-rohan.sdsu.edu/faculty/dunnweb/rprnts.friedman.htmlhttp://www-rohan.sdsu.edu/faculty/dunnweb/rprnts.friedman.htmlhttp://www-rohan.sdsu.edu/faculty/dunnweb/rprnts.friedman.htmlhttp://en.wikipedia.org/wiki/The_New_York_Times_Magazinehttp://en.wikipedia.org/wiki/The_New_York_Times_Magazinehttp://en.wikipedia.org/wiki/The_New_York_Times_Magazinehttp://en.wikipedia.org/wiki/University_of_Notre_Dame_Presshttp://en.wikipedia.org/wiki/University_of_Notre_Dame_Presshttp://en.wikipedia.org/wiki/University_of_Notre_Dame_Presshttp://en.wikipedia.org/wiki/Special:BookSources/0268012148http://en.wikipedia.org/wiki/Special:BookSources/0268012148http://en.wikipedia.org/wiki/Special:BookSources/0268012148http://www.stthom.edu/academics/centers/cbes/jonachan.htmlhttp://www.stthom.edu/academics/centers/cbes/jonachan.htmlhttp://en.wikipedia.org/wiki/Los_Angeles,_CAhttp://en.wikipedia.org/wiki/Los_Angeles,_CAhttp://en.wikipedia.org/wiki/Los_Angeles,_CAhttp://en.wikipedia.org/wiki/Englewood_Cliffs,_New_Jerseyhttp://en.wikipedia.org/wiki/Englewood_Cliffs,_New_Jerseyhttp://en.wikipedia.org/wiki/Englewood_Cliffs,_New_Jerseyhttp://en.wikipedia.org/wiki/Los_Angeles,_CAhttp://www.stthom.edu/academics/centers/cbes/jonachan.htmlhttp://en.wikipedia.org/wiki/Special:BookSources/0268012148http://en.wikipedia.org/wiki/University_of_Notre_Dame_Presshttp://en.wikipedia.org/wiki/University_of_Notre_Dame_Presshttp://en.wikipedia.org/wiki/The_New_York_Times_Magazinehttp://www-rohan.sdsu.edu/faculty/dunnweb/rprnts.friedman.htmlhttp://www-rohan.sdsu.edu/faculty/dunnweb/rprnts.friedman.htmlhttp://en.wikipedia.org/wiki/September_13http://en.wikipedia.org/wiki/1970http://en.wikipedia.org/wiki/BBChttp://news.bbc.co.uk/1/hi/uk/6095680.stmhttp://en.wikipedia.org/wiki/H.E.R.O._(Higher_Education_and_Research_Opportunities_in_the_UK)http://www.hero.ac.uk/uk/business/archives/2003/ethics_the_easy_way5043.cfm


53/53

Jaipreet Character-ethics (1) (1)

Documents

Transcript of Jaipreet Character-ethics (1) (1)