ethics 10.12.11

8/3/2019 Ethics 10.12.11

1/6

Business Ethics & Corporate Governance 1

Contents

Values................................................................................................................................................ 2

Morals & values ................................................................................................................................. 2

Ethics ................................................................................................................................................. 3

Ethics and morals/morality (October 2006)........................................................................................ 4

Business Ethics .................................................................................................................................. 4

What are the advantages of studying business ethics? ....................................................................... 5

8/3/2019 Ethics 10.12.11

2/6


Values Values are the rules by which we make decisions about

i. right and wrongii. should & shouldnt

iii. good and bad Values are our fundamental beliefs or standards that incline us to act or to choose in one

way rather than another, they are our own standards. Values tell us

i. which values are more or less importantii. which is useful when we have to trade off meeting one value over another.

A companys core values are those beliefs and principles that provide the ultimate guide inthe companys decision-making.

Values are beliefs of a person or social group in which they have an emotional investment(either for OR against something) example : He has very conservative values

Examples of values.honesty, responsibility, patriotism, respect and fairness

Values are subjective, and vary as a result of our culture, beliefs, and experiences.

Morals & values Morals are system of belief that are taught for deciding good/badvalues are personal

beliefs or something that comes from within

Morals contribute to the system of beliefs/values which we get from the society. Morals are taught by the society to the individual whereas values come from within. Morals have more social value & acceptance than values, therefore a person is judged

more for his moral character than the values.

Moral is a key for leading a good life in right direction whereas value is imbibed within aperson, a value can be bad or good depending on the persons choice.

8/3/2019 Ethics 10.12.11

3/6


Morals are related to ones religion, business or politics whereas values are personalfundamental beliefs or principle.

Morals are deep seated whereas values keep changing with time & needs. To conclude, Morals are like commandments set by the elders and to be followed by the

descendants. They can be set by ones elders or religious teachers or leaders of society who

want to lead people away from immoral thoughts. One always treasures the moralsthroughout his life and they never change with time or conditions. While on the other hand

values are not set by the society or teachers, but are governed by an individual. Values do

not mean that it is always right to do so. Whatever is valuable for one person may not be

the same for the other. Hence it is personal aspect and changes according to different

situations with time and needs.

Ethics

Ethics is a formal system or set of rules which are explicitly adopted by a group of people.E.g. medical ethics, corporate ethics, legal ethics.

If you accuse someone of being unethical, its equivalent of calling them unprofessional andmay be taken as significant insult & perceived more personally than if you called them

immoral (which of course they may also not like) Ethics are defined as rules or standards governing the conduct of a person or the members

of a profession. Ethics & Ethos

i. The word ethics is derived from the Greek ethos, meaning customary orconventional.

ii. To be ethical in the sense of ethos is to conform to what is typically done, to obeythe conventions and rules of ones society and religion.

The inner-guiding moral principles, values & beliefs that we use toi. Analyse or interpret a situation andii. Decide what is the right or appropriate way to behave

Moral guidelines which govern good behaviouri. So behaving ethically is doing what is morally right

Ethics as a normative sciencei. It lays down norms or standards of what is good & what is bad. It specifies what we

ought to do & what we ought not to do, in a certain situation.

Ethical conduct aims at wellbeing of people- if our thoughts, deeds do not cause any harmor pain to other living creature and are in harmony with nature then our conduct is ethical.

Ethics gives us the vision to discriminate & decide on a course of action.

8/3/2019 Ethics 10.12.11

4/6


Ethics and morals/morality (October 2006) Morals define personal character while ethics stress a social system in which the morals are

applied. In other words ethics point to standards or codes of behaviours expected by the

group to which the individual belongs, e.g. company ethics, family ethics

For example, a criminal defence lawyers personal moral code likely finds immoral &reprehensible however, ethics demand the accused client be defended as rigorously aspossible. Even though the lawyer knows the party is guilty & that a freed defendant would

potentially would lead to more crime. The logic here is Legal ethics must override personal

morals for the greater good of a justice system in which the accused are given a fair trial.

Ethics are internally defined & adopted, whilst morals tend to be externally imposed onother people

Business Ethics Deciding what should be done and what not should be done from business point of view Is a behaviour that a business adheres to in its daily dealings with the world The ethics of a particular business can be diverse. They apply not only to how the business

interacts with the world at large, but also to their one-on-one dealings with a single

customer.

Business ethics prescribes standards of how the business is to be carried out. It lays downguidelines for the companys response & accountability to its various stakeholders.

An ethically responsible company is one which has developed a culture of caring for people& for the environment, a culture which flows downward from the top Managers & Leaders.

Many businesses have gained a bad reputation just by being in business. To some people,businesses are interested in making money. Making money is not wrong in itself. It is the

manner in which some businesses conduct themselves that brings up the question of

ethical behaviour.

Good business ethics should be a part of every business. Say Company A does businesswith company B which is considered to be unethical, does this make the first company

unethical by association? Some people would say yes, Company A has a responsibility and

it is now a link in the chain of unethical businesses.

Many global businesses, including major brands are seen not to think too highly of goodbusiness ethics. Many major brands have been fined millions for breaking ethical business

laws. Money is the major deciding factor. If a company does not adhere to business ethics and breaks the laws, they usually end up

being fined. Many companies have broken anti-trust, ethical and environmental laws and

received fines worth millions. The problem is that the amount of money these companies

are making outweighs the fines applied. Billion dollar profits blind the companies to their

lack of business ethics, and the dollar sign wins.

A business may be a multi-million seller, but does it use good business ethics and do peoplecare? Business ethics can be applied to everything from the trees cut down to make the

paper that a business sells for importing coffee from certain countries.

When a company starts making large amounts of money, it may not wish to pay closeattention to their ethical behaviour. There are many companies that pride themselves in

their correct business ethics, but in this competitive world, they are becoming very few and

far between.

An organisation has to maintain a fine balance & care of the interest of the shareholders onone hand & other stakeholders like employees, suppliers, customers & community on the

8/3/2019 Ethics 10.12.11

5/6


other hand. It should be noted that all the stakeholders have different objective of what

they expect from the company & at times these objectives can be conflicting in nature. For

example, maximisation of shareholders wealth is one of the important objective of any

company, however, while meeting this objective it shouldnt neglect other objectives of

other stakeholders like employees needs a fair remuneration, good working conditions,

quality products to the customers at a reasonable price. Offering good employmentopportunities to the society, fund development projects as a social responsibility & follow a

discipline & transparency in all its financial dealings.

In nutshell,1. Ethics is important for any business & the progress of a society2. Ethics makes for an efficient economy, not the govt laws.3. Ethics & profits go together in the long run.

Whatare the advantages of studying business ethics? Study of ethics & study of business ethics are closely related

i. Management is concerned with how decisions affect the company (growth of thecompany)

ii. Ethics is concerned with how decisions affect everything (general context of theworld)

A business Manager cannot make right decisions without understanding businessmanagement in particular as well as ethics in general.

By studying & practicing the ethics Managers are able to resolve the dilemmas moreeffectively. Such managers will not be the slaves of material possessions, accumulate

wealth by wrong means. Managers who practice business ethics would be led by divine

thoughts within & through their relentless ethical conduct.

Business executives can apply the ethical principles in their routines, & are in a position tojudge situations ethically.

Study of ethics leads students respect opposite views and reflecting upon them It helps build & groom a value based organisation. An ethical behaviour which is important

for business leaders as they influence the ethical climate for everyone else. A value based

organisation possess a high degree of trust & integrity & empowers all the stakeholders.

Creates an awareness about their social responsibility A business has to share part of itsprosperity with the community, by offering amenities & services not otherwise available to

the needy part of the community.

Study of ethics engages students in an active process of thinking and questioning Study of ethics provides

i. a language & a conceptual framework with which one can think & talk aboutethical issues

ii. Makes one aware of the potential consequences of ones actionsiii. Exposure to specialised areas such as product liability, employment, environmental

protection, customer focus etc

Knowledge & practicing of business ethics can improve overall business conducti. Business scandals can be reduced if the employees possess the skills, vocabulary to

raise an ethical issue in an organisation

8/3/2019 Ethics 10.12.11

6/6


Thus ethical conduct would be self-realised conduct which would give a new vision to the

Managers & people associated with him/her.

In nutshell, Business ethics is Management carried out in the real world, this is why business

managers should study ethics.

ethics 10.12.11

Documents