Business Ethics

THE PRESENTATION IS BASED ON
1MADE BY : SAHIL JAIN

The word ethics is derived from the Greek word “ethos”
which refers to character, guiding beliefs, standards or ideals
that pervades a group, a community or people. The
community can exists in forms of neighborhood, profession,
city, state etc.
OR
Ethics is a study which deals with the law of morality and
rules of conduct. It determines the rightness and wrongness of
actions. Its determines the ultimate ends that man should
admire and ideals that he wishes to seek in life.
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Author’s Views
Ethics is a branch of
philosophy which is the
systematic study of
selective choice of the
standards of right and
wrong and by which it
may be ultimately
directed .
PHILIP WHEEL WRIGHT
4
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 Ethics contains a set of principles of personal and professional conduct
 Ethics is not legal, though it does not permit violation of laws, it is guided to law in so
far as it highlights its shortcomings.
 Ethics does not rest on feelings of approval or disapproval but in the careful
examination of the reality around us.
 Existing norms and judgments may contain valuable insights but ethics tests them in
terms of ultimate norms.
 Ethics is involved in all human activities including business. There is a need for science
of ethics in every human endeavor. 5

Importance Of Ethics
 REGULATING HUMAN BEHAVIOR: Ethics serves as the regulating force for the
conduct of mankind. These stop people from taking hasty and irrational decisions. Ethics
also help to observe moral standards in business dealing.
 BENEFIT IN LONG TERM: Decision based on ethics are balanced and well considered.
These ultimately benefit the business in the long run.
 CORRESPONDS TO BASIC HUMAN NEEDS: Ethics corresponds to basic human
needs. Most people want to be ethical not only in their private lives but also in their
business affairs.
 PROMOTES MORAL AND SOCIAL VALUES: Ethics are considered to be of utmost
importance simply because they assist in promoting other significant moral and social
values.
 BETTER DECISION MAKING: Ethical decisions made by the company will always be
in the interest of the shareholders, others stakeholders, public, and their employees.6

BUSINESS ETHICS

BUSINESS ETHICS refers to the application of ethics to
business. To be more specific, Business Ethics is the
study of good and evil, right and wrong and just and
unjust actions of businessmen. It may be defined as a
set of moral standards which people owing and
managing business is expected to follow.
OR
“Business Ethics is the study of what is ethically permissible
and what is positively virtuous, in regard to business
activities…” 8

 Business Ethics is concerned with Ethical values.
 Business Ethics is a relative term.
 It involves Interest of society.
 Business – S0ciety Relationship.
 Business Ethics provides Framework.
9

 Role of Business Ethics in the field of Finance.
 Role of Business Ethics in Sales and Marketing.
 Role of Business Ethics in Human Resource Management.
 Role of Business Ethics in Production.
 Role of Business Ethics in Technology. 10

 Business Ethics improves Society.
 Cultivate Strong Teamwork and Productivity.
 Help to Ensure that Policies are Legal.
 Help to Manage Values.
 Support Employee Growth and Meaning.
 Help to avoid Criminal Acts “Of Omission”.
 Formal Attention of Ethics.
 Law Cannot Protect Society, Ethics Can. 11

 No place for business ethics in perfectly
competitive market.
 Business manager should single minded
pursue interest of their firms.
 Obeying law is ethical.
 Gut feeling argument. 12

Value may be defined as a concept of a desirable, an internalized
criterion or standard of evaluation a person possesses. Such concepts
and standards are relatively few and determine or guide an
individual’s evaluation of the many objects encountered in every day
life.
OR
“ Values are specific mode of conduct or end state of existence is personally or
socially preferable to an opposite or converse mode of conduct or end state of
existence… ”
___Stephen P. Robbins.

 HUMAN VALUES: Human values consist of all that are
universally applicable to all people. These values relate to truth,
righteousness, peace, love, compassion, harmony, non violence
and appropriate ethical, human behavior.
 SOCIAL VALUES: Social Values are certain qualities and beliefs
that are shared within a specific culture or group of people. Inn
other words, social values comprise all those values which
people living in society and having common needs and
requirements, should practice and strictly adhere to, in the
 PROFESSIONAL VALUES: Professional Values include the rules of
conduct, ethical behavior, pattern and norms for various
professions. 14sahiljain0016@gmail.com

 BUSINESS VALUES: Business Values comprise all those ethical
behavioral aspects I all business dealings and transactions.
Harmonious and holistic business practices will ensure greater
customer satisfaction.
 COMMUNITY VALUES: Community values consist of the rules framed for
the welfare and development of the concerned communities. These
norms are prescribed by clubs, associations, and public organizations
or by the committees of panchayats in villages and rural areas.
 NATIONAL VALUES: National values comprises the rights and
responsibilities of citizens. They also include the entire gamut of civic
duties. National integration can be promoted if citizens promote
activities for the promotion of communal harmony, national
integration and understanding.
 FAMILY VALUES: It involves the bonds of affection between different
members within joint families, and respect towards elders. Ethical
behavior of youngsters towards their parents and teachers and also
the responsibilities of parents towards their children. 15

 Ethical values facilitate Image Building.
 Creates Trust and Support of whole organization.
 Successfulness in long-Run.
 Improves Economy Efficiency.
 Business values Attracts Investor .

Q & A

Work-life ethos or work ethos refers to certain norms of
behavior governing the conduct of workers involved in work
situations to achieve certain desired objectives. In other
words, work culture is the involvement of a workman with
work. The degree of one’s involvement impacts his
performance to give high or low productivity, high or low
quality, i.e., higher the degree of involvement, higher will be
the productivity and quality…
Sometimes, work culture is also concernedwith a worker’s loyalty andsense of
belonging, by his behavior, to the organization… 19

Reasons For Poor Work-Life Ethos
 Lack Of Commitment
 Lack Of Discipline
 Poor Working Conditions
 Political Interference
 Decline In Moral Standard

Guidelines For Improving Work-Life Ethos
 Thank You
 Public acknowledgement
 Give bonuses
 Special events
 Reviews
 Equal time
 Sense of ownership
 Participative management 21

Indian Values For The Workplace
 Strong Work Ethic
 Dependability And Responsibility
 Possessing A Positive Attitude
 Adaptability
 Honesty And Integrity
 Self-motivated
 Motivated To Grow And Learn
 Strong Self-confidence
 Professionalism
 Loyalty

WORK-LIFE BALANCE
“ Work-life balance is about individuals
having A measure of control over when,
where and how they work, leading them to
be able to enjoy an optimal quality of life. ”
___Work education

Guidelines For Improving Work-Life Balance
 Identify Employee’s Needs…
 Focus On Organizational Culture…
 Improve Personal And Organizational Efficiency…
 Set Up Work-life Policies…
 Inform And Train Managers…
 Communicate The Policies And Benefits…
 Evaluate Work-life Balance Success…

Q & A

Relationship between Ethics and Corporate
Excellence
 Increases Brand Image and Reputation.
 Increase Sales and customer loyality.
 Reduced government Regulation and
control.
 Attract and retain customers.
 Improvement in Productivity and Quality.
 Maintains Shareholder’s Trust.
 Achieves Employee Satisfaction. 27

CORPORATE MISSION
STATEMENT

Code of Ethics
 Maintain Confidentiality .
 Make Decisions Objectively.
 Acceptance of any form of bribes is prohibited.
 Do not use company property or resource for personal benefit.
 Convey true claim for products.
 Protect quality of environment.
 Do not provide any false or misleading information to corporation
or government agency and customers as well.
 Racial, religious or sexual harassment is prohibited.
 Strive to provide products and services of highest quality. 29

What is Organisational
Culture ?
“ Organisation culture is the common set of
assumption , beliefs , and values that has
developed within the organisation to cope
with the external and internal environment
and which is passed on to new members to
guide their actions within these
environments. ” 30

Strategies for Organisation
Culture Building
 Setting the right tone from the top.
 Managing the business using more than just financial
measures.
 Making ethics as a part of business decision making.
 Trusting and empowering people.
 Enabling personal development.
 Rewarding the right behaviours.
 Supporting people through difficult situations.
 Taking a through approach to regulatory compliance.31

QUALITY WORK-LIFE
32

What is Total Quality Management ?
“ Total Quality Management (TQM) is
an integrative philosophy of
management for continuously
improving the quality of products and
processes. ”

Key Elements Of TQM
TRAINING
TEAM WORK
LEADERSHIP
INTEGRITY & ETHICS
RECOGNITION
COMMUNICATION
C
O
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M
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N
I
C
A
T
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O
N
C
O
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Q & A

LOOK ATTENTIVE AT THE WORK PLACE

NO INTERFERENCE

MAXIMUM AVOIDANCE OF INFORMAL
COMMUNICATION

MAXIMUM FOCUS SHOULD BE ON WORK

CONFLICTS MUST BE AVOIDED

RESPECT THE WORKPLACE

BE POLITE
47

TEAM WORK
48

BE FORMAL

PROPER BALANCE B/W REST AND WORK
50

GANDHIAN PHILOSOPHY
MAHATMA GANDHI, the
FATHER OF THE NATION is now being
held up as the master strategist, an
exemplary leader, and someone whose
ideas and tactics corporate INDIA can
emulate… 51sahiljain0016@gmail.com

GANDHIAN PHILOSOPHY OF WEALTH
MANAGEMENT
“ The Gandhian Philosophy of Wealth
Management is based on the principle that
a wealthy man does not truly have the
right to hoard wealth solely for the self ;
the only right he has is that an honorable
livelihood… ”

TRUSTEESHIP means personal gain together with
social gain…
According to the concept of Trusteeship the rich man will be left in
possession of his wealth, which he will use reasonably for his personal needs and
will act as a trustee for the remainder to be used for the good of society…
Thus, the rich can become real servants of society by earning for the
sake society and spending for its benefit. “If men’s mind turns towards
this way of life” he wrote, "there will come about a peaceful revolution
in society and that without bitterness.”
Thus, Gandhi to bring about a non-violent transformation of society through his
doctrine of “ TRUSTEESHIP ” … 53

Elements Of Trusteeship
 REDUCE INEQUALITIES.
 CHANGE OF ATTITUDE OF BUSINESSMAN.
 SOCIAL PRESSURE.
 LEGAL PRESSURE.
 SOCIALISM.
 CONSIDER SOCIAL NEEDS.
 GOVERNMENT REGULATION.

 Rejection of excess wealth.
 Wealth should be utilized for the benefit of
society.
 Harmful activities should be avoided.
 No discrimination.
 Generation of opportunities.
 Violence should be avoided. 55sahiljain0016@gmail.com

 No relevance in today’s contest.
 Demotivation.
 Outdated socialism.
 Ignorance of responsibility.
 Unacceptable.
 Against capitalism.

GANDHIJI’S SEVEN GREATEST SOCIAL SINS…
 POLITICS WITHOUT PRINCIPLES…
 PLEASURE WITHOUT CONSCIENCE…
 EDUCATION WITHOUT CHARACTER…
 WEALTH WITHOUT WORK…
 COMMERCE WITH MORALITY…
 SCIENCE WITH HUMANITY…
 WORSHIP WITHOUT SACRIFICE…

POLITICS WITHOUT PRINCIPLE

EDUCATION WITHOUT CHARACTER

COMMERCE WITHOUT MARALITY

SCIENCE WITHOUT HUMANITY

WORSHIP WITHOUT SACRIFICE

Q & A

Social Responsibility
According to h.r. brown, “social
responsibility is to pursue those
policies and decisions or to follow
those lines of actions which are
desirable in terms of its objectives and
values of our societies”.
It is also known as corporate social
responsibility (CSR ), corporate
citizenship or corporate social
performance.

Social Responsibility
According to h.r. brown, “social responsibility is to pursue
those policies and decisions or to follow those lines of
actions which are desirable in terms of its objectives and
values of our societies”.
It is also known as corporate social responsibility (CSR ),
corporate citizenship or corporate social performance.

Features of social responsibility of
business
 Being a good citizen in the community.
 Willingness to pay heed to regulations.
 Responding positively to emerging priorities and expectation.
 Conducting business in an ethical way and in the interests of the
wider section of community.
 Balancing shareholder interests against the interests of the wider
section of community.

Arguments for social responsibility
 Public image
 To recognise socio-cultural norms
 Business has the resources
 Public expectation
 Social environment
 Survival and growth

Arguments against social responsibility
 Maximum profit
 Lack of accountability
 Society has to pay the cost
 Loss of incentive
 Non-availability of social skills
 Loss of productivity and efficiency.

Importance of social responsibility
 Increased productivity and quality
 Reduction in corruption
 Reducing operating costs
 Increased sales and customer loyalty
 Improved financial performance
 Improved , transparency and reporting

Social responsibility of business with
respect to different stakeholders

Shareholders
Reasonable
dividend
soundness
information
Protection of
assets

EMPLOYEES
Fair
remuneration
Good
working
condition
Opportunity
for growth
Adequate
service
benefits

Customers
Need satisfaction
Regular flow of goods
Courteous service
Right information
Fair trade practice

Suppliers
Giving regular orders from purchase
of goods
Dealing on fair term and conditions
Availing reasonable credit period
Timely payment of dues
Informing about the taste of the
consumer
Informing them for future
development plans 79sahiljain0016@gmail.com

Society
Socio-
economic
objectives
Improvement
of local
environment
Employment
opportunities
Efficient use
of resources
Welfare
activities
Business
ethics

Government
To abide by
the law of
the nation
To
encourage
fair trade
practices
To pay
government
taxes
honestly
To avoid
corrupting
government
employees

SOCIAL AUDIT
According to Blake, Fredrick and Myers,
“social audit is a systematic attempt to
identify, analyse, measure, evaluate and
monitor the effect of an organisation’s
operation society.”

Features of social audit
Getting the evidence
Community participation
Impartiality
Stakeholder buy in
No finger pointing
Repeat audits
Dissemination of results

Advantages
Enhances
benefits
Alters policy-
markers to
stakeholder
trend
Affects positive
organizational
change
Increases
accountability
Assists in Re-
Orienting and
Re-focusing
Priorities
Provides
increased
confidence in
Social Areas

Disadvantages
Difficult to
measure
Differ from
person to person
or country to
country
Difficult in
securing data

Q & A

Business Ethics

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