ethics project report3
TRANSCRIPT
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CHAPTER 1:
INTRODUCTION
In today¶s era people are becoming materialistic, considering their own self and trying to get
successes through any mean, the ethics that has to be followed by one is no where in the current
scenario. Ethics have last place whether it is related to ones life or business. People are losing
confidence day by day towards business the current business the current scam which is occurring
demoralized people from ethical point.
So business should be one by taking in consideration all the aspects of ethics Business ethics
should be given more importance.
Basically ethics are more related to truth, reality and morality in the business organization which
shows that what should be done and what should not be done by any form to conduct its
activities on the principle of morality the code of ethics should be effective and mention the
values that important to top management and the conduct of business such integrity,
responsibility and reputation. Thus, the code should be such that is being properly developed and
implemented.
Business always tries to get success at any at any cost whether ethical or unethical and does give
rise to crime. Mostly it occurs due to unreflective approach to life. So to avoid this ethic should
be properly implemented.
For gaining confidence of people, to get good image in front of society, to run the business
successfully. Business ethics should be followed always. Though critical situation might
occur but after a span it will disappear and a success will be in your hand definitely.
The credibility of the term 'Business Ethics' has come into question, in recent times as
'business ethics' is increasingly being considered an oxymoron. It is generally believed that
business and ethics cannot coexist and organizations are said to thrive on unethical practices.
Business ethics, as far from being a contradiction in terms, has become one of the most
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important areas of managerial competence and responsibility. The ethics question warrants
exploration on several levels: -
1. At the macro- level: focusing on the ethical rightness of the system.
2. At the corporate-level: focusing the decisions that impact others.
3. At the individual-level: within an entity.
1.1 Meaning and definition of Ethics and Values
Business Ethics is a specialized study of moral rights and wrong. It concentrates on how moral
standards apply to particularly business policies, institutions and behavior.
³Business Ethics is an art or science of maintaining harmonious relationship with society, its
various groups and institutions as well as reorganizing the moral responsibility for the rightness
or the wrongness of business conduct´ ± Wheeler
³Businessman¶s integrity so far his conduct or behavior is concerned in all fields of business as
well as towards the society and other business´ ± Dr. Satish Mamoria & Dr. CB Mamoria
The most important professional ethics is expressed by the Hippocratic Oath of the Greek
physician: premium non nocere (³Not knowingly do harm´). This dictum suggests that a
professional should evaluate his decisions /actions will not produce harmful effects on others.
The simplest definition of ethics and moral values would be to not distinguish between the two
and say that they describe what is right and what is wrong in human behavior and what ought to
be. Business ethics are the desired norms of behavior exclusively dealing with commercial
transactions. Moral values are deep seated ideas and feelings that manifest themselves as
behavior or conduct. If we know the consequences of our actions we can convert values into
rules of behavior that can then be described as ethics, i.e, Values + Knowledge = Ethics
In the business world, ethics often are displaced by greed when there is a periodic frenzy of
rising stock market prices. Inevitably, a steep downturn then inflicts losses on investors and on
businesses with a concomitant reduction in the work force. An excessive competitive spirit tends
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to induce unethical business practices so the business world becomes a battlefield where the
normal rules are flouted, skirted or simply disregarded. The ensuing instability is bad for the
economy and for the government.
Values are those things/ideas/people that are important to us, central concepts that give meaningto our lives, a set of guiding principles that help us make decisions and chose a path.
Values are the things in our lives that shape our behavior and define who we are. The stronger they are, the less willing we are to change or compromise them.
Values are things (tangible or intangible) that we find of great significance.
A value is a principle, standard or quality considered worthwhile or desirable. Values are beliefsthat people have which serve as the basis for their decision-making. Value commits a person toaction.
Values are a cohesive system of beliefs, which are freely chosen by the individual, prized, publicly affirmed, and acted upon.
A principle, standard, or quality considered worthwhile or desirable(www.dictionary.reference.com)
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1.2 NATIONAL FERTILIZERS LIMITED ±A PROFILE
Incorporation
NFL, schedule¶A¶and a Mini Ratna Category 1 Company was incorporated on 23rd AUG 1974 for
implementation of two Fertilizer Plants, based on gasification technology. Of feed stock/LSHSat
Bathinda in Punjab and Panipat in Haryana having an installed capacity of 5.11 lakh tones of Urea
.In April 1978, the Nangal group of Plants of Fertilizer Corporation of India (FCI) were transferred
to NFL consequent upon reorganization of FCI .The govt of India, in 1984, entrusted the Company
to execute the country¶s first inland gas based Fertilizer project of 7.26 lakh tonnes Urea capacity in
district Guna of Madhya Pradesh, This project on completion, received the first prize for
³excellence in project management ³ from the Ministry of Program Implementation, Govt of
India. Expansion of Vijaipur plant was initiated in 1993 for doubling its annual production capacity.
The deppt. Of Fertilizers has received the annual installed capacity of Vijaipur Plant from 7.26 lakh
tonnes of Urea to 8.26 lakh tonnes with effect from 1st April 2000.
In order to sustain and enhance the Company¶s growth, NFL successfully completed the
revamping of Urea Plant at Nangal.with the re-rating of installed capacities of Vijaipur Plant and
revamping of Urea Plant at Nangal, the total installed capacity of Urea of NFL has increased to
32.20 lakh tonnes.
NFL is the second largest producer of nitrogenous fertilizers in India. The company µs
contribution towards Urea production in the country during 2002-03 is estimated at 17.1%
against 16.6% last year.NFL has been making profit consistently. The Company during 2002-03,
recorded pre-tax profit of Rs.48.33 crores during
2001-02
. However, the increase in profit duringthe year is on account of past periods arrears of subsidy pertaining to 7th & 8th pricing period
The Company during 2002-03, produced 32.12 lakh tonnes of Urea, thereby achieving a capacity
utilization of 99.4% based on the re-assessed capacity.
PRODUCTS
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NFL produces two popular brands of chemical fertilizers: KISAN KHAD (Calcium
Ammonium Nitrate), KISAN UREA. Beside this it manufactures and markets the products i.e.
Liquid oxygen, Liquid nitrogen. It¶s by products are Sulphur, Nitric Acid, Methanol, Argon.
PANIPAT UNIT
The Panipat Unit of NFL.is situated on National Highway No. 1 and Delhi-Amritsar railway
trunk route. Panipat city is about 90 km from Delhi and is covered in National
Capital Region. Panipat is a historical city, which was the scene of three historical battles.
Panipat is also famous for its handloom industry.
The Govt. of India approved the Panipat project on 10th
February 1975 for implementation.Prime consultants for design, engineering, erection and commissioning of the plant were M/s
Toyo engineering corporation of Japan and M/s engineers India Ltd. Starting from the zero-date
30.4.75, the feed in was achieved on 1.9.78 ie.within 40 months of the zero ±date. The Unit went
in commercial production from 1.9.79. The total cost of the project was rs.221.33 crores.
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Performance of the Unit in all areas of its performance has also been acknowledged. It has won
number of awards and recognitions in the field of production, productivity, safety, welfare,
innovation, environment protection, skills etc. The Unit is well known for its commitment
towards environment protection and social welfare in the region.
Panipat Unit is considered the show window of the company. The Unit being near to national
capital, it hosts a number of distinguished guests and visitors from with and outside the country.
The visitors show keen interest in the functioning of the plant and appreciate the progress made
by the fertilizers industry in the country.
SALIENT FEATURES OF THE PLANT
1) Annual Capacity : 5,11,500 MT
In terms of Urea 2,35,290 MT in terms of Nit.
2) Annual Requirement of Raw Materials:
I. Fuel-oil/LSHS : 3,00,000 M.T.
II. Coal : 5,45,000 M.T.
III. Power : 2,18,000 M.W.H
IV. Water : 5,630 Million Gallon
3) Estimated Cost : Rs. 182.88 crores
4) Foreign Exchange : Rs. 56.45 crores
5) Capacities of the Plant :
I. Ammonia : 900 M.T. per day
II. Urea : 1,550 M.T.per day
III. Steam Generation : 3 boilers each of 150 MT/hr.
IV. Captive Power Plant : 1 boiler of 210 MT/hr
2 Turbo generation of 15 *2 =30
MWH
6) Land : 442Acres- Plant
131 acres- Township
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NFL produces two popular brands of chemical Fertilizers, ie Kisan Urea. &Kisan Khad.NFL has
signed a memorandum of understanding with the govt. of India in 1991-92. All the years, after
signing the MOU, Govt.has rated the performance of the company as µexcellent¶. Company has
been performing at high level of capacity utilization.
PLANTS UNDER PANIPAT UNIT
AMMONIA UREA OFFSITES SMC
PLANT PLANT &
UTILITIES
1.3 GENERAL BUSINESS ETHICS OF NATIONAL FERTILIZER LIMITED
This part of business ethics overlaps with the philosophy of business, one of the aims of
which is to determine the fundamental purposes of N.F.L. 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.
No issues regarding the moral rights and duties between a company and its shareholders:
fiduciary responsibility, stakeholder concept v. shareholder concept.
Select capable people and improve their knowledge and skills on organized basis.
Motivate and enthuse the employees to achieve higher productivity with team spirit.
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Every professional has its own ethical standards i.e, rules of conduct and individuals conducting
that activity are expected to follow such ethical standards honestly. In this sense, medical
practitioners, lawyers, engineers, teachers, chartered accountants, etc, have ethical standards and
concerned professionals are expected to follow them unscrupulously. The same is the case with
businessmen and business enterprises. In fact, everyone needs some framework of values to
guide personal behaviour. The dual source of ethical, social and political standards is both
natural and necessary.
The most important professional ethics is expressed by the Hippocratic Oath of the Greek
physician: primum non nocere (³Not knowingly do harm´). These dictums suggest that a
professional should evaluate his decisions and ensure that his decisions/actions will not produce
harmful effects on others. A businessman, for example, should not use unfair trade practices as
they are always harmful to customers.
Business ethics suggests certain golden rules which are fair to all and should be followed by
businessmen. Business ethics is a part of social responsibility which the businessmen have to
honour in practice. It is the application of ethical values to business. Business ethics from the
Legal point of view ³If it is legal, it is ethical too´ is their approach. This is inadequate and even
dangerous over-simplification of the concept of business ethics. Sometimes line of demarcation
between ethical and unethical is very thin.
There are two theories when we talk about nature of ethics:
The theory of moral unity essentially advocates the principles that business actions
should be judged by the general ethical standards of society. There exists only one ethical
standard which applies to business and to non-business situations.
Second theory is the theory of amorality, which argues that business can be amoral, and
the actions of businessmen need not be guided by general ethical standards. Managers
may act selfishly because the market mechanism distills their actions into benefits to
shareholders and society at large. Adam Smith argued that the µinvisible hand¶ of the
market assures that by ³pursuing his own interest frequently promotes that of the society
more effectively than when he really intends to promote it.´ In this way, capitalism
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provides moral justification for the pursuit of profit through behavior which is not
purposefully ethical.
1.6 VALUES IN BUSINESS
To ensure that employees can and will act with integrity. Organizations need a strong and
consistent set of values that dictate appropriate individual actions. Navigating the complexities of
a situation requires a reliable compass. We can plot that "north" by determining clearly our own
core values. We have to identify - and articulate - what we believe is important to us and to our
companies. Our core values drive our behaviors, and our behaviors tell the world who we are and
what we stand for.Identifying and adhering to core-values compass point provides a standard that
will make decisions easier, consistent and justified.´ - Parkinson, J. Robert, Thinking clearly,
remembering values key to making the call, Milwaukee Journal Sentinel, March 22, 2004.
What are the core values that are fundamental to the success of any individual or
organization?
� Honesty: Being straightforward, sincere, truthful, free of fraud, deception or
misrepresentation.
± Builds/Maintains Trust
± Fosters Community
± Makes Communication more Efficient & Effective
± Demonstrates Respect for the Dignity of Others
� Respect:To give particular attention to, show consideration for, or hold in high or special
regard . Every man is to be respected as an absolute end in himself; and it is a crime
against the dignity that belongs to him as a human being, to use him as a mere
means for some external purpose.
� Responsibility : Moral Leaders take responsibility for their own actions/failures and
those of their companies and they demand accountability from their subordinates
Involves a commitment to competent quality performance. Implies fidelity to promises
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and other commitments and not making promises that cannot be kept, such as committing
to unrealistic delivery dates. Also calls for acknowledgment of implicit commitments,
such as the protection of confidences.
� Fairness : just, equitable, impartial, unbiased, objective. Involves a elimination (or at
least a minimalization) of one's own feelings, prejudices and desires, so as to achieve a
proper balance of conflicting interests. Implies an equitable distribution of burdens and
benefits. John Rawls argues in A Theory of Justice that rules are fair if they are rules that
the people operating under them would have agreed to, had they been given an
opportunity to accept or reject them beforehand.
� Compassion : sympathetic consciousness of another's distress together with a desire to
alleviate it; fellow feeling, the emotion of caring concern; the opposite of cruelty, based
on the idea of sibling love.
� Perseverance : steadfast determination to continue on despite adversity usually over a
long period of time. Nothing in the world can take the place of perseverance. Talent will
not; nothing is more common than unsuccessful men with talent. Education will not; the
world is full of educated derelicts. Genius will not; unrewarded genius is almost a
proverb. Persistence and determination alone are omnipotent
� Courage : The first place to start is for every individual to become aware of their core
values and to have the courage and discipline to live out of them in all aspects of their
lives. : the ability to disregard fear; bravery. The Latin root of this word is cur, which
means heart. Courage literally means to ³take heart´. Fear exists along a continuum.
Courage involves recognizing a reasonable amount of fear or nervousness, facing it and
then taking an intelligent risk.
Moral courage involves standing up for one¶s principles, in spite of possible adverseconsequences to such things as reputation or emotional well-being.
Many organizations have statement stating there mission. All mission statements incorporate
value relating to the conduct of its affairs. This may be express in terms similar to the
following.Honesty and Trust in all relations with customers, shareholders, business partners.
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Recognizing and respecting the needs of individuals.
Becoming the showcase for the productive.
The customer matters most.
Behold safety and health as our highest values.
Never to take or bribes.
No false billing, invoicing or documentation.
All rejects on quality to be followed carefully.
100% testing of finished products.
1.7 HOW VALUES EVOLVE?
Values are stated in formal statements. The real values are those that are practiced. Senior
personnel sitting together prepare the formal statements. They embody perhaps the ideals. The
real ones evolve during the pressure of operations, through processes of decision making. The
decision makers therefore create the real values.
The one mechanism to generate the uniform value system within an organization would be to
discuss decisions, not merely in terms of economic consequences, but also in terms of value that
they represent. There are some companies that have shown strong value system, fairly uniformly
held and operated by all decision makers in this cases, it is notice that the values had been led
down by the founders, usually one. The values pervade not merely the business activities, all
processes within.
Value at individual level includes:
Faith Self respect
Competitiveness Creativity
Devotion towards work Tolerance
Sacrifice Courtesy
Honesty Civil sense
Humility Absence of egoism
Poise Simplicity
Reason Truth
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Social conscience
Co-operation
Live and let live
Concern
Care
Mutual trust
Love
Team-spiritedness
Effectiveness
Productivity
Forgiveness Cleanliness
Values that can be imparted to members of organization collectively include:
Harmony
Resourcefulness
Discipline
Dharma
Equity
Brotherhood
Unity
Peace
Efficiency
Excellence
Morale
Risk bearing
Sharing
Every human being, at every moment, both in personal life is faced with a dilemma of selecting or
choosing this path or that one. In individual life one face several dilemmas. For example, taking a
chilled to hospital, attending on the guests, attending party, going to movie with a friend, preparing
material for the next days job and host of other dilemmas. In organizational life, one face several
dilemmas for instance attending to his job, attending the work he likes, attending the work that
satisfies boss, appeasing colleagues, doing something for the sake of subordinates, helping out of
way due to several reason like corruption, favoritism, and nepotism, etc. in all such situation, if the
man is clear with his values there will be less predicament, confusion, filing of loosing something
to the other and frustration. It is because the values created convictions even in critical situations.
A value to an individual is what a compass to a navigator both in personal and organizational life.
1.8 FEATURES OF BUSINESS ETHICS:
1. Refers to code of conduct.
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Business ethics is the code of conduct which businessmen should follow while
conducting their normal business activities.
2. Based on moral and social values.
Business ethics is based on well accepted moral and social values. It suggests moral
principles/rules of conduct for businessmen. They include self-control, service to society, fair
treatment to social groups and not to harm/exploit others.
3. Facilitates protection of social groups.
Business ethics gives protection to consumers and other social groups such as
shareholders, employees and the society at large. Business should give priority to social interest
or social good. Such ethical approach creates good name and status to business and facilitates its
expansion.
4. Provides basic framework.
Business ethics provides the framework within which business is to be conducted. It
suggests a legal, social, moral, economic and cultural limit within business is to operate. It
suggests what is good and what is bad in business.
5. Needs willing acceptance for enforcement.
Business ethics cannot be enforced by law or by force. It must be accepted as self-
discipline by businessmen. It should come from within. Businessmen should go for ethical trade
practices on their own and not by force of law.
6. Education and guidance required for introduction.
Businessmen should be given proper education, guidance and training in order to
motivate to follow ethical business practices. Trade associations and chambers of commerce
have to play a positive role in this regard.
7. Not against profit making.
Business ethics is not against fair profit making. However, it is against profiteering by
cheating and exploiting consumers, employees or investors. It supports expansion of
business activities but by fair means and not through illegal activities activities or corrupt
practices.
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8. Acts as µsummum bonum¶ of human life.
Ethics, as a science seeks to determine the µsummum bonum¶ of human life. It passes
judgments of value upon human actions with references to the moral values. Judgments of value
are judgments of what ought to be. Such judgments may be different from the judgments of facts
as they are judgements of what is.
1.9 IMPORTANCE OF BUSINESS ETHICS:
Business ethics is important as it has wider social significance. Society will get true benefits of
business activities only when business is conducted by respecting ethical values. In addition, it is
important as it offers the following advantage to the businessmen, consumers, and employees.
Advantages to businessmen/ managements/ business:
1) Orderly functioning:
Business ethics ensures orderly functioning of a business enterprise due to less
public criticism.
2) Favorable social image:
It creates good social image for business through alertness as regards social
responsibilities.
3) Guidance to businessmen:
Business ethics offers guidance to businessmen in decision making for social good
and not simply for profit maximization.
4) Support from employees:
Management gets support and cooperation from employees as regards future plans
and programmes of the company.
5) Creates social consciousness:
Due to business ethics, businessmen are made conscious as regards honesty and
social obligations ion business. It will lead to high level of corporate governance.
Respect to ethical values will create socially responsible business obligations.
6) Facilitates business expansion:
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Business ethics facilitates the expansion and growth of business activities due to the
support and cooperation from different social groups.
7) Encourages fair business:
Business ethics encourages businessmen to use fair business practices for the
protection of consumers and the society. It is concerned with morality in business.
Ethics is a system of moral values and ethics suggests the extent to which moral
values are respected in the conduct of business activities. Businessmen should
conduct business activities with self-control. This is necessary for the protection of
consumers and the society at large.
Advantages to consumers and the society at large:
1) Consumer protection:
Business ethics offers protection to consumers through the use of fair business
practices by businessmen.
2) Protection of consumer rights:
Due to business ethics, the rights of consumers are honored and protected. This
avoids their exploitation and ensures their safety and welfare.
3) Pro-consumer business:
Due to business ethics, business activities become pro-consumer friendly and this
gives satisfaction and pleasure to consumers.
4) Control of business malpractices:
Due to business ethics, consumers do not suffer as a result of business
malpractices, which are dangerous and troublesome to consumers.
5) Protection to environment:
Due to business ethics, pollution will be avoided or at least minimized.
Businessmen can make positive contribution in maintaining ecological balance by
respecting laws made for pollution control and ecological balance.
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Advantages to employees/workers:
1) Fair deals:
Employees get justice and fair deal when ethical rules and standards are followed
while dealing with them.
2) Fair wages:
Employees get fair wages and other monetary and non-monetary benefits, their
exploitation is also avoided.
3) Fair treatment:
Employees are treated with dignity and this raises their moral and mental
satisfaction.
4) Benefit of profit sharing:
Employees get a share of profits of the company in the form of bonus/ profit sharing or
other special monetary benefit. Business ethics involves protection of consumers and other social
groups, honor and respect to social responsibilities and conduct social relations for the growth of
business. This will lead to more expansion and diversification of business activities. Reasonable
profit is possible even when ethical practices are respected/honored by businessmen.
It is rather unfortunate that in the present world, in the pursuit of economic objectives, moral
and ethical scruples fall prey to neglect and finally decay. Moreover concern for such scruples is
considered as pursuit of outdated values. Businessmen should decide what is good and what I
bad and act accordingly. By following this rule, they can make their business ethical and also
beneficial to them and also to the society at large.
Business ethics is important as it offers long-term benefits. It is rightly said, ³Truth and
Ethics are more important to build, business and development, than just profits and
growth´. Business ethics may not give quick profit or quick expansion of business. However, itcreates good image of the business and facilitates its development over a long period. Ethical
business creates favorable atmosphere for public confidence and government support.
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Ethics is a leadership issue. Poor ethics can sap business production and long-term results. Here
is a concise list of ethical behavior.Ten Commandments of Ethical Business Behavior have their
roots in "Ethics: Easier Said than done," by Michael Josephson.
1 Be honest: To be honest means to be truthful, sincere, forthright, straightforward, frank and
candid. You should have zero personal tolerance for lying, stealing, cheating, deceiving or acting
deviously.
2. Have integrity: Always be principled, honorable, upright and courageous, acting upon your
convictions. Strive not to be unscrupulous or two-faced with a philosophy that the-end-justifies-
the-means.
3. Keep your word: Be worthy of others' trust by keeping promises, fulfilling commitments and
abiding by the spirit as well as by the letter of an agreement. Shy away from the temptation to
rationalize non-compliance or create an excuse to break a commitment on the basis of technical
or legalistic interpretations of agreements.
4. Maintain fidelity: Be faithful to your employees, family, friends and country, and never
disclose information earned in confidence. Scrupulously avoid undue influences and conflicts of
interest lest they cloud your ability to make independent and impartial decisions.
5. Always be fair: Be open-minded, willing to admit errors and change positions. Demonstrate a
commitment to justice, with equal treatment of all, and a tolerance for diversity. Never take
undue advantage of another's mistakes or adversities.
6. Care for others: Be kind, sharing and compassionate; share, give of yourself and serve others.
Help those in need and avoid actions that will bring harm to others.
7. Respect others: Demonstrate respect for human dignity, privacy and the right of self-
determination of all people. Be courteous, prompt and decent. Provide others with information
they need to make informed decisions and do not patronize, embarrass or demean.
8. Be a responsible citizen: Obey just laws (and protest unjust ones). Exercise democratic rights
and privileges responsibly by participation, social consciousness and public service. When in a
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position of leadership, openly respect the democratic decision-making process, avoid
unnecessary secrecy or concealment of information and ensure others have the information they
need to make intelligent decisions and exercise their rights.
9. Rigorously pursue excellence: Pursue excellence in all you do. Be diligent, reliable,
industrious and committed in meeting personal and professional responsibilities. Perform all
tasks to the best of your ability while developing and maintaining a high degree of competence.
Be well informed and well prepared. Never be content with mediocrity, and never strive to win
"at any cost."
10. Always be accountable: Being accountable means accepting responsibility for decisions and
the foreseeable consequences of actions and inactions, and for setting an example for others.
Employers, along with parents, teachers, professionals and public officials have a special
obligation to lead by example and to safeguard and advance the integrity and reputation of their
companies, families, professions and the government. Avoid even the appearance of impropriety
and take whatever actions are necessary to correct or prevent inappropriate conduct by others.
The consequences of lost ethics are summed up well in an ancient Chinese proverb, "He who
sacrifices his conscience to ambition burns a picture to obtain the ashes."
Ethics and Business:
Business and ethics are generally opposing in nature. A Businessman¶s main motive is to earn
profits and ethics emphasizes on the rightness or the wrongness of business conduct and tries to
maintain a harmonious relationship with society and environment. Generally emphasis on one
aspect leads to compromise in the other. If we were to consider the two as sets then they will
meet in a very small area to form a intersection. This is the area where business should ideally
function.
Can Ethics be applied to Corporations/Companies?
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Modern corp. are organizations that the law treats as immortal fictitious µpersons¶ who have the
right to sue and be sued, own and sell property, enter into contracts, all in their name.
Organizations neither feel pain nor pleasure nor cannot except act through human beings. The
above facts have become the basis of contradicting opinions regarding the applicability of ethics
to business.
However it is almost unanimously accepted that ethics can be and should be applied to business.
Since the actions and the inactions of an organization have serious repercussions on the society
and environment, therefore they are morally responsible for it.
1.10 UNETHICAL BUSINESS PRACTICES:
Business practices, which are legally, socially and morally not fair, are termed as unethical
business practices. They are basically used for profit maximization at the cost of exploitation of
poor consumers who feel that they are treated to ethical business practices. However, the
consumer protection act, 1986 puts control on such practices. Businessmen should be aware of
these unethical business practices as they can bring in bad name of the firm as well the
entrepreneur. Consumers can oppose these practices individually and collectively.
These unfair practices affect the consumers but also the employees, shareholders,
government and the society at large. Their main purpose is to exploit the specific social group for
profiteering. For example, artificial scarcity, price rise, adulteration and misleading advertising
are unethical practices in the case of consumers while low wages, bad working conditions and
absence of welfare facilities are unethical pratices in regard to employees. The usual unethical
practices in India noted are as follows:
1) Giving false, confusing and misleading advertisements of the products and
services.
2
)
Supplying inferior quality goods to consumers.3) Disregard to labour laws and other rights of the employee¶s including the right to from
trade union and right to make strike.
4) Exploitation of child labour and women workers.
5) Charging high prices by creating artificial scarcity for profit maximization.
6) Supplying inadequate information on the packages.
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7) Lack of safety measure to workers and not give them the benefits of permanent
services.
8) Over invoicing.
9) Inadequate measures in regard to pollution control and violation of legal provisions
relating to pollution control.
10) Paying low rate of dividend.
11) Formation of business combinations for avoiding competition and creating
monopolies.
12) Creating inconveniences to local people due to growing industrial activities without due
care to local community.
13) Avoiding payment of taxes as per existing laws.
14) Using unfair sales promotion techniques.
15) Giving bribes, gifts, donations, and payment of kickback money to politicians and
government officers for certain benefits.
16) Misbranding, hoarding and black-marketing.
17) Disregard to business laws, government policies and misuse of facilities and incentives
offered by the government.
18) Providing inefficient services to bank depositors/customers.
19) Misuse of funds and mismanagement of the company with which the shareholders are
closely linked.
20) Paying low wages, providing inferior quality welfare facilities and indecent treatment
to employees.
21) Adulteration and short weights and measures.
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1.11 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 shop, forex scams: concerns (criminal)
manipulation of the financial markets.
Executive compensation: concerns excessive payments made to corporate CEO's.
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 of human resource management (HRM) covers those ethical issues arising around the
employer-employee relationship, such as the rights and duties owed between employer and
employee.
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.
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Issues affecting the privacy of the employee: workplace surveillance, drug testing.
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, 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 with
media ethics, because marketing makes heavy use of media. However, media ethics is 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: greenwash, bait and switch, shill, viral marketing, spam
(electronic), pyramid scheme, planned obsolescence.
Content of advertisements: attack ads, subliminal messages, sex in advertising, products
regarded as immoral or harmful
Children and marketing: marketing in schools.
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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.
ETHICS OF INTELLECTUAL PROPERTY, KNOWLEDGE AND SKILLS
Knowledge and skills are valuable but not easily "ownable" objects. Nor is it obvious who 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
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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 criticised on ethical grounds: see
intellectual property.
Employee raiding: the practice of attracting key employees away from a competitor totake unfair advantage of the knowledge or skills they may possess.
The practice of employing all the most talented people in a specific field, regardless of
need, in order to prevent any competitors employing them.
Bioprospecting (ethical) and biopiracy (unethical).
Business intelligence and industrial espionage.
It must be understood that ethics and ultimate aim of business are in most cases contradictory.
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TWO BROAD AREAS OF BUSINESS ETHICS
1. Managerial mischief . Madsen and Shafritz, in their book "Essentials of Business Ethics"
explain that "managerial mischief" includes "illegal, unethical, or questionable practices
of individual managers or organizations, as well as the causes of such behaviours and
remedies to eradicate them." There has been a great deal written about managerial
mischief, leading many to believe that business ethics is merely a matter of preaching the
basics of what is right and wrong. More often, though, business ethics is a matter of
dealing with dilemmas that have no clear indication of what is right or wrong.
2. Moral mazes. The other broad area of business ethics is "moral mazes of management"
and includes the numerous ethical problems that managers must deal with on a daily basis,
such as potential conflicts of interest, wrongful use of resources, mismanagement of
contracts and agreements, etc.
1.12 FOUR VIEWS OF ETHICS
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1.13 ENHANCED PERFORMANCE, PRODUCTIVITY, AND COMPETITIVE
POSITION:
It increases effectiveness and efficiency by enabling all stakeholders to work together
closely on the basis of respect, shared values, and mutual trust. Such efforts lead to what
one author calls ³invisible savings´ by reducing employee conduct that is harmful to the
enterprise but difficult to detect. If ethics and values are there then many of the costs of
monitoring and supervision can be reduced. Product quality may improve and transaction
costs, such as contracting, may decline. For example, many large, complex enterprises
(LCEs), most of which have business ethics, are developing preferred supplier lists to
reduce the number of suppliers that they deal with. To ensure that there is no interruption
in supplies and services, these LCEs require that their supply chains adopt the same good
management practices that they follow, including a business ethics program.
Since, in the minds of most employees, ethics are essentially a matter of fairness; a
business ethics often increases employee morale. Better the essential elements of a
business ethics and values may help members of often distinct organizational cultures
manage their differences until they find common ground. These elements include core
beliefs, standards, and procedures; high-level personnel responsible for the program; and
dedicated resources to help employees seek advice. Enterprises undergoing privatization
should also consider the advantages of a business ethics program as a means to reduce the
risks associated with this transition process.
Profitability & Morality
Frequently the impression of most people is that ethics and profits are mutual, opposed to
one another and that if a company is ethical, it may forget about making profits. People
also frequently seem to believe that a profitable company must necessarily be unethical.
This is like saying that a company can make profits only through unethical means.
Nothing can be more have ethical companies made profits, but more importantly it is,
only ethical companies which discharged its social responsibilities, that have survived
competition and turbulent changes through the years and have contributed to social
welfare and have contributed to flourished undiminished.
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In fact, considered from all angles, it is unethical, NOT to make profit. It is unethical, for
a company, to make losses. Because, a company which can not make profits and makes
losses, misutilises scarce national resources can not pay back creditors, does not make
wealth for its shareholders, make huge liabilities, upsets the economy, promotes
inefficiency and most importantly, can not, at any cost discharge its social responsibility,
meet its welfare commitments and jeopardises the future of its employees. Such a loss-
making company becomes a nuisance and a burden to the economy and has not right to
exist in the market place. Moreover, it has no business to force its employees into
economic insecurity, which is highly unethical.
Thus instead of profits being contradictory to ethics, business ethics dictates that the first
responsibility of business is to remain profitable and generate revenue from the
shareholders and the society. Rather, it is unethical, not to make profits. Hence, the first
and foremost ethical obligation of every business is to make profits for its shareholders,
for its employees, for its creditors and most importantly, for itself, so that it can discharge
its social responsibilities and welfare commitments. But how much profits to make, the
means and methods of making it, and at what cost- that is the ethical question.
No business, however great or strong or wealthy it may be at present, can exist on
unethical means, or in total disregards to its social concern, for very long. Resorting to
unethical behaviour or disregarding social welfare is like calling for its own doom. Thus
business needs, in its own interest, to remain ethical and socially responsible. As V.B.
Dys in "The Social Relevance of Business " had stated-
"As a Statement of purpose, maximising of profit is not only unsatisfying, it is not even
accurate. A more realistic statement has to be more complicated. The corporation is a
creation of society whose purpose is the production and distribution of needed if the
whole is to be accurate: you cannot drop one element without doing violence to facts."
Business needs to remain ethical for its own good. Unethical actions and decisions may
yield results only in the very short run. For the long existence and sustained profitability
of the firm, business is required to conduct itself ethically and to run activities on ethical
lines. Doing so would lay a strong foundation for the business for continued and
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sustained existence. All over the world, again and again, it has been demonstrated that it
is only ethical organisations that have continued to survive and grow, whereas unethical
ones have shown results only as flash in the pan, quickly growing and even more quickly
dying and forgotten.
Business needs to function as responsible corporate citizens of the country. It is that
organ of the society that creates wealth for the country. Hence, business can play a very
significant role in the modernisation and development of the country, if it chooses to do
so. But this will first require it to come out from its narrow mentality and even narrower
goals and motives.
Business
Ethics
Shared
Values
TrustSocial
Capital
Economic
Growth
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1.14 RATIONALE OF THE STUDY
From the 16
th
century, trading is existing in India. So everyday a new company is arising. Somecompanies are opting ethical ways and some are opting unethical ways to make high profits.The
examples of the companies who believe in their values and adopted ethical ways to do business
are: NTPC¶s core values are Business ethics, Customer focus Organizational & professional pride,
Mutual respect and trust, Innovation and speed Total quality for excellence.
They have their business ethics that they never negotiate on their quality, never gives bribe at any cost.
Employees have pride being associated with NTPC & keep on innovating the technologies. This is why
they are progressing rapidly.
Tata has always been values-driven. These values continue to direct the growth and business of
Tata companies. The five core Tata values underpinning the way they do business are: Integrity,
Understanding, Excellence, Unity, responsibility. That¶s why they are able to stand out in the
market and making huge profits.
On the other hand the companies who have adopted unethical ways to do business are :KPMG
Xerox fraud case revealed in 2002,it had improperly classified over $6 billion in revenue, leading
to an over statement of earnings by nearly $2 billion. It implies that they had lost their ethics and
values. Not only KPMG Xerox fraud case, there are several other companies like Satyam, Tenet
Healthcare, Bank America etc. who were indulged in fraud cases, which inspired the researcher
to identify the impact of ethics and values on organization¶s performance.
The reason behind choosing N.F.L. is that there is lot of private sector companies but very few
public sector companies. N.F.L is one of those few public sector companies. Mostly Private
companies have professional managers. They keep their ethics and values up to the mark. But the
Public Sector Companies feels neglected, may be because bureaucratic functioning lacks
commitments to ethics and values. So the researcher has chosen National Fertilizer Limited.
Being the resident of Panipat the researcher is fascinated to identify the impact of ethics and
values on the performance of National Fertilizer Limited, Panipat.
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1.15 REFRENCES OF CHAPTER 1:
1. en.wikipedia.org/wiki/Ethics
2. www.ethics.org/resource/definitions-values
3. www.professionalethics.ca/
4. www.nationalfertilizers.com/
5. www.websukat.com/POM-managerial-ethics.htm
6. trade.gov/goodgovernance/adobe/bem_section_1/chapter 2.pdf
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CHAPTER 2:
REVIEW OF EXISTING LITERATURE
Source: Dr. M.Thenmozhi(Indian Institute of Technology Madras)¶´Ethics´
Ethics in business are nothing but the do¶s and don¶ts by the business users in the business. In
other words it could be referred as set of principles a business man ought to follow.´There
should be business ethics´ means that the business should be conducted according to certain self
recognized moral standards. Few unethical elements in the present day business are cheating,
stealing, lying, bribing, corrupting etc. Business user must realize is the management and
ownership must be separated because the owners always tend for profit maximization where as
the managers case for ethics as they work for fixed salaries.
The study and examination of moral and social responsibility in relation to business
practice and decision making in business is known as ³Business Ethics´
In the past primary objective of the business was profit maximization but the present
perspectives on business objectives is not maximization.
It is profit maximization in long run besides fulfilling the ethics in the business.The business is
regarded as social institution formal integral part of social systems.The business is viewed as
subsystem to the social system.This is because any type of social system is influenced by:
The way the business functions
The organization of business
Innovations
Transmission and diffusion of information
New ideas etc.
They have either direct or indirect effect on society.
Source:Journal of business ethics
Work place spirituality has been defined as ´a framework of organizational values evidenced in
the culture that promote employees experience of transcendence through the work
process,facilitating their sense of being connected to others in a way that provides feeling of
completeness and joy´ (Giacalone and jurkiewicz,2003).Individuals are seeking to merge their
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personal and professional values,desiring to achieve personal fulfillment through their
labor (Block,1993)
Peters and Waterman (1982) identified several values which were related to performance and
excellence in the marketplace. Their findings, though questioned by some authors, have received
widespread acclaim in the business community
(Carroll, 1983, and Hitt and Ireland, 1987). They studied a group of American firms which
were widely recognized as being superior performers in their industries for many years. Their
findings indicated that excellent firms possess a distinct and identifiable set of organizational
values which included beliefs about superior quality and service, being the best, innovation, the
importance of people as individuals, the importance of the details of execution, the importance of
informality to enhance communication, and the importance of a profit orientation and goal
accomplishment.
Values: Commitment, Satisfaction, and Cohesion
Many authors have investigated a variety of issues relating to commitment, satisfaction, and
cohesion. Most managers would probably agree that the presence of these individual behaviors
and attitudes has a direct impact on organizational performance. Hence, it would be desirable for
an individual or work force to possess these traits.
P rof. K.V. Bhanu Murthy, University of Delhi (April 2007),´ Business Ethics and Corporate
Responsibility ± A New P erspective´
Business Philosophy is a driving force of a particular business. For instance, the ³Business
Philosophy´ of Tata¶s might be to develop a business that is quality conscious and produces
products that are within the reach of the common man. On the other hand, Philosophy of
Business explains the moral principles that underlie business as a domain. It goes into the
purpose of business and the ethical basis and consequences of business. Therefore, ³Business
Philosophy´ relates to the vision of a company whereas ³philosophy of business´ is an area of
study. It is a sub-discipline of philosophy. There has a controversy over the need for business
ethics. The controversy had a misplaced emphasis. Today it is most urgently felt that different
dimensions, namely, social responsibility, environmental accountability and governance must be
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brought under one umbrella of business ethics. The top management must bring about
organizational transformation so as to make such a trifocal approach sustainable. However, the
major challenge is of evolving a strategy for laying down standards that take care of major issues
and provide standards that are measurable, objective and universal.
Rania Ahmed Azmi (2006),´ Business Ethics as Competitive Advantage for Companies
In the Globalization Era´
Companies that adhere to a strong ethics policy are likely to enjoy a long-term competitive
advantage. the importance of building a strong ethical culture is integral to the reputation, growth
and finances of any organization. It builds a brand that attracts the best talent and creates trust
among the stakeholders. Although companies are primarily business organizations run for the
benefit of shareholders, they have a wide-ranging set of responsibilities to their own suppliers,
customers and employees, to the communities in which they are located, and to society at large.
Most corporations recognize these responsibilities and make a serious effort to fulfil them while
trying to utilize their business ethics as a source of competitive advantage. This has been defined
as the ³hidden logic of business ethics.´ The research has explored the growing issue of business
ethics particularly as a competitive advantage. They have analyzed that business ethics as a
threat to business competitiveness, when ethical failure diminishes the reputation of a company
and its products, locally and globally. In certain markets companies¶ records of positive or
negative ethical conduct determine their ³licence to operate´ in some market.
An integrity approach to business can yield strengthened competitiveness: it facilitates the
delivery of quality products in an honest, reliable way. This approach can enhance work life by
making the workplace more fun and challenging. It can improve relationships with stakeholders
and can instill a more positive mindset that fosters creativity and innovations. The purpose of
ethics is to enhance our lives and our relationships both inside and outside of the organization.
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László Zsolnai, Corvinus, University of Budapest - Business Ethics Center, ³GENUINE
BUSINESS ETHICS´
Business ethics and corporate social responsibility are often seen as instruments for improving
the functioning of a corporation, to add value to business like other tools. Ethics is fundamental
to and relevant at all levels of economic activity, from the individual and the organizational to
the societal and the global. Yet there is a paradox in the proposition that higher standards of
behavior in today¶s world will automatically lead to higher profits and better performance. If the
aim of top executives is merely to use ethics to achieve greater efficiency their efforts will
ultimately fail. Superficially motivated business ethics initiatives rightly called, window
dressing. Often prove counter-productive. They are perceived as cheating by the stakeholders
who will react accordingly. Sometimes no ethics at all is better than opportunistic actions.
Business ethics can provide strategies to counteract organizational use of moral disengagement
strategies. One approach is to monitor and publicize corporate practices that produce detrimental
effect on humans. Another approach is to increase the transparency of the discourse through
which corporate policies and practices are born. Instituting clear lines of accountability inhibits
moral disengagement. Exposing sanitized language that masks reprehensible practices is another
corrective. The affected parties need to be confronted and their concerns publicized and
addressed.
David Burress 1979
Business ethics, especially among top managers, has become a topic of concern to the public and
business community. As a result, much attention has focused on the development of moral
reasoning in corporate individuals. Past research examining individual and business decision
behavior, indicates that several variables such the level of moral reasoning, perceived ethical
climate, education, age, management level, work tenure, industry types and gender have a
significant impact on individual decisions.
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Mary W. Vilcox and Thomas O. Mohan
Business ethics is a form of the art of applied ethics that examines ethical rules and principles
within a commercial context, the various moral or ethical problems that can arise in a business
setting, and any special duties or obligations that apply to persons who are engaged in
commerce. Business ethics can be both a normative and a descriptive discipline. 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. Historically, interest
in business ethics accelerated dramatically during the 1980s and 1990s, both within major
corporations and within academia. For example, today most major corporate websites lay
emphasis on commitment to promoting non-economic social values under a variety of headings
(e.g. ethics codes, social responsibility charters). In some cases, corporations have redefined their
core values in the light of business ethical considerations. Catching business ethics in action,
however, remains a seldom-spotted nugget for in reality it depends on the characters of the
characters.
Nikolay A. Dentchev1 and Derrick P . Gosselin1,2
1Ghent University, Ghent, Belgium
2University of Oxford (James Martin Institute), United Kingdom
Contemporary theorizing on business ethics is been predominantly approached through a
normative approach. Business ethics focuses on the moral adequacy of corporate activities
(Goodpaster, 1997). In this context, it is often argued that managers are obliged to pay more
attention to the moral implications of their actions. Business ethics has not only moral, but also
strategic implications for business organizations. According to them, more attention should be
devoted to addressing the managerial risks of business ethics.
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James A. Brickley, Clifford W. Smith, Jr. and Jerold L . Zimmerman (2000),´ Business Ethics
and Organizational Architecture´, FR 00-14
A company¶s reputation for ethical behavior, including its perceived integrity in dealing with
customers, suppliers, and other parties, is part of its brand name capital; as such, it is reflected in
the value of its securities (just as individuals¶ human capital is based in part on their reputations
for ethical behavior. Although they have not argued that these market incentives alone are
sufficient to ensure ethical behavior, their analysis of these costs helps explain why ethical
behavior is so widely observed in markets: ethical behavior frequently is profitable By credibly
promising to act ethically, a firm can differentiate their product and increase their demand²
potentially by a substantial amount. Their analysis suggests that a board of directors concerned
with the ethical conduct of the firm¶s employees should spend less time exhorting the human
resource manager to search for honest employees (like Diogenes search for an honest man). They
should identify potential incentive problems between the firm and its customers, creditors, or
employees. Once identified, attention can be focused on the constructive resolution of the
incentive problems.
Susan M. Anstead(1999),´ Law Versus Ethics in Management´
A relationship exists between law and ethics. In some instances, law and ethics overlap and what
is perceived as unethical is also illegal. In other situations, they do not overlap. In some cases,
what is perceived as unethical is still legal, and in others, what is illegal is perceived as ethical.
Managers must evaluate not only what is legal, but what they, their employees, and society
consider ethical as well. Important here is that companies must also consider what behaviors
their customers will and will not accept. No company wants to be forced to defend itself over
ethical issues involving wages, the environment, working issues, or human relations. Managers
play a vital role in a company's legal and ethical performance. It is in part their responsibility to
ensure that their employees are abiding by Federal, State, and Local laws, as well as any ethical
codes established at the company. But most importantly, the managers must provide a positive
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example to their employees of proper behavior in light of laws and ethical codes. They must also
consider the ethics of their employees and customers.
The word ethics is derived from the Greek word ethos (character), and from the Latin word
mores (customs). Together they combine to define how individuals choose to interact with one
another. In philosophy, ethics defines what is good for the individual and for society and
establishes the nature of duties that people owe themselves and
one another. The following items are characteristics of ethics:
y Ethics involves learning what is right and wrong, and then doing the right thing.
y Most ethical decisions have extended consequences.
y Most ethical decisions have multiple alternatives
y Most ethical decisions have mixed outcomes.
y Most ethical decisions have uncertain consequences.
y Most ethical decisions have personal implications.
It is important to note that there is also a difference between ethics and morality. Morality refers
both to the standards of behavior by which individuals are judged, and to the standards of
behavior by which people in general are judged in their relationships with others. Ethics, on the
other hand, encompasses the system of beliefs that supports a particular view of morality.
Dolan S. L , Garcia S, Diegoli S, Auerbach A´ Organizational Values as "Attractors of
Chaos´: An Emerging Cultural Change to Manage Organizational Complexity´, ³Journal of
Economics literature classification: D23, M14, and O33´.
Basic beliefs and values that form its organizational culture are the parameters that will lead the
company to its success (or not) in long term. Values will guide people¶s behaviour and work
conduct into achieving the desired results, just as do the attractors. Honesty, loyalty, sympathy,
and money are all values that people use to conduct their lives. Values are always a consequence
of human internal beliefs, and that's why, to produce changes in a company, one must start re-
evaluating people¶s beliefs to incorporate new values into their working lives. Values can also be
categorized into two main groups: finals and instrumentals. Final values can be explained as
existential objectives, or, the answer to the question, ³What do you/your company intends to
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be/achieve in the future?´ The answer, often embodied in the corporate mission statement, can be
economic benefits, excellence in products and services, customer or employee satisfaction,
personal fulfillment, happiness, and so on. To achieve these final values, one must define the
instrumental ones. Actually, it's necessary to clarify the set of the instrumental values that will be
used to reach the future. Instrumental values can be organized in two groups: ethical and
competence values (Rockeach, 1973). The ethical values refer to the conduct, the means that are
justified to achieve the final values). Usually, these are associated with social values such as
honesty, integrity, sincerity, and loyalty. Competence values are more individualistic and have to
do with the personal impression of what is necessary to achieve final values, or to be
competitive. Examples include creativity, patience, flexibility, order, intelligence, and health.
The all above studies describe simply business ethics and values and impact of ethics and values
on different aspects of organization. But there are little references explaining the impact of ethics
and values on organizational performance, particularly on any public sector unit as N.F.L. It
stimulates the researcher to go for such a study.
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CHAPTER 3:
OBJECTIVES OF STUDY
The main objective of the study to know the meaning of business ethics, its importance and tofind out the impact of ethics on the performance of National Fertilizer Limited, Panipat. But the
more specific objectives are as follows:
To study:
Why business should adopt ethics in their practices?
The impact of ethics on performance of N.F.L.
The impact of ethics on employee¶s satisfaction of N.F.L.
The extent to which ethics are prevailing in N.F.L.
To find out:
Ethical and non-ethical issues in N.F.L.
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CHAPTER 4 :
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It may beunderstood as a science of studying how research is done. We study the various steps that are
generally taken by a researcher in studying the research problem. Research is a human activity,
based on intellectual investigation and aimed at discovering, interpreting and revising human
knowledge on different aspects of world.
4.1 RESEARCH APPROACH ± Qualitative approach used for this research.
4.2 RESEARCH DESIGN-The researcher has adopted Descriptive Research Design, as it
involves observing and describing the behavior of a subject without influencing it in any way. 4.3 PERIOD OF STUDY-10 years
4.4 SAMPLING UNIVERSE-From a statistical point of view, the term µuniverse¶ refers to the
total of the terms or units in any field of inquiry &the attributes that are the objects of study.
Here sampling universe is National Fertilizer Limited.
4.5 SAMPLE UNIT- National Fertilizer Limited, Panipat
4.6 SAMPLING TECHNIQUE-The researcher has adopted Non-probability sampling
technique because the sample is taken deliberately by researcher, by using his own judgement
and as per convenience.
4.7 SAMPLING TOOL ± Percentage Method and pie charts.
4.8 SAMPLE SIZE 50
4.9 Sample Composition:
Managers: 19
Personnel Officer: 5
Accounts Officer: 9
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Personal Assistant: 8
Senior Assistant: 9
4.10 SOURCES OF DATA
Primary Data
For obtaining the primary data for the project, the researcher propose to use one
research instrument i.e. Questionnaire.
Secondary Data
The researcher propose to get the secondary data from
(a) Various journals and reports published in National Fertilizer
Limited.
(b) Newspapers, Books, Magazines, Research papers, Internet.
The primary and secondary data were comprehensive enough to supply information to
make logical and balanced assessments and conclusions on study.
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CHAPTER 5 :
DATA ANALYSIS AND INTERPRETATION:
Q1. Does the organization recruits staff on the basis of family ties and friendship?
Q2. Is there any discrimination in the organization on the basis of:
Age,Colour,Gender,Religion.
14%
80%
6%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
RATING SCALE NO. OF RESPONDENTS
Agree 7(14%)
Disagree 40(80%)
Neither agree Nor disagree 3(6%)
RATING SCALE NO. OF RESPONDENTS
Agree 10(20%)
Disagree 40(80%)
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Q3. Do you manipulate performance indicators to reach targets?
20%
80%
Percentage of respondents
Agree
Disagree
16%
74%
10%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
RATING SCALE NO. OF RESPONDENTS
Agree 8(16%)
Disagree 37(74%)
Neither agree Nor disagree 5(10%)
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Q4. Do you give out personal or organizational information to others?
Q5. Do you criticize your organization to others?
RATING SCALE NO. OF RESPONDENTS
Agree 3(6%)
Disagree 44(88%)
Neither agree Nor disagree 3(6%)
RATING SCALE NO. OF RESPONDENTS
Agree 0
Disagree 46(92%)
Neither agree Nor disagree 4(8%)
6%
88%
6%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
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Q6. Does the organization condone false or misleading advertisement to increase sales?
0%
92%
8%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
RATING SCALE NO. OF RESPONDENTS
Agree 0(0%)
Disagree 46(92%)
Neither agree Nor disagree 4(8%)
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Q7. Do the senior executives blame sub-ordinates for their own mistakes?
0%
92%
8%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
2%
84%
14%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
RATING SCALE NO. OF RESPONDENTS
Agree 1(2%)
Disagree 42(84%)
Neither agree Nor disagree 7(14%)
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Q8. Does the top management rewards employees differently?
Q9. Are there any conflicts in the interest of organization and employees?
10%
82%
8%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
RATING SCALE NO. OF RESPONDENTS
Agree 5(10%)
Disagree 41(82%)
Neither agree Nor disagree 4(8%)
RATING SCALE NO. OF RESPONDENTS
Agree 3(2%)
Disagree 42(84%)
Neither agree Nor disagree 7(14%)
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Q10. Do the senior executives ask the staff to carry out tasks which they are disagreedwith?
2%
84%
14%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
14%
72%
14%
Percentage of respondents
Agree
Disagree
Neither agree Nor
disagree
RATING SCALE NO. OF RESPONDENTS
Agree 7(14%)
Disagree 36(72%)
Neither agree Nor disagree 7(14%)
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Q11. Do you treat equal clients unequally?
Q12. Do you meet the targets at all costs?
8%
84%
8%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
RATING SCALE NO. OF RESPONDENTS
Agree 4(8%)
Disagree 42(84%)
Neither agree Nor disagree 4(8%)
RATING SCALE NO. OF RESPONDENTS
Agree 29(58%)
Disagree 16(32%)
Neither agree Nor disagree 5(10%)
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Q13. Is there proper transparency in policies and action?
58%
32%
10%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
80%
14%
6%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
RATING SCALE NO. OF RESPONDENTS
Agree 40(80%)
Disagree 7(14%)
Neither agree Nor disagree 3(6%)
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Q14. Do you utilize your potential to the best you can?
Q15. Is the organization committed to the quality standards?
96%
2%2%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
RATING SCALE NO. OF RESPONDENTS
Agree 48(96%)
Disagree 1(2%)
Neither agree Nor disagree 1(2%)
RATING SCALE NO. OF RESPONDENTS
Agree 43(86%)
Disagree 4(8%)
Neither agree Nor disagree 3(6%)
86%
8%6%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
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Q16. Is the organization having comfortable work environment?
Q17. Do you think ethical goals and objectives are as important as production, quality and
financial goals and objectives?
80%
6%14%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
RATING SCALE NO. OF RESPONDENTS
Agree 40(80%)
Disagree 3(6%)
Neither agree Nor disagree 7(14%)
RATING SCALE NO. OF RESPONDENTS
Agree 43(86%)
Disagree 3(6%)
Neither agree Nor disagree 4(8%)
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Q18. Do you know your roles and responsibilities properly?
86%
6%
8%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
98%
2% 0%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
RATING SCALE NO. OF RESPONDENTS
Agree 49(98%)
Disagree 1(2%)
Neither agree Nor disagree 0(0%)
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Q19. Is there team based culture in the organization?
Q20. Do you think there is a relationship between ethics, values and economic
performance?
86%
6%8%
Percentage of respondents
Agree
Disagree
Neither agree Nor disagree
RATING SCALE NO. OF RESPONDENTS
Agree 43(86%)
Disagree 3(6%)
Neither agree Nor disagree 4(8%)
RATING SCALE NO. OF RESPONDENTS
Yes 46(92%)
No 1(2%)
Don¶t Know 3(6%)
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Q21. Are you satisfied with the operational safety provided by the organization?
92%
2% 6%
Percentage of respondents
Yes
No
Don¶t know
86%
0% 14%
Percentage of respondents
Yes
No
Up to some extent
RATING SCALE NO. OF RESPONDENTS
Yes 43(86%)
No 0(0%)
Up to some extent 7(14%)
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Q22. Are you proud of being the part of NFL?
Q23. Please rate the ethics and values in the organization using the keys provided.
92%
0%8%
Percentage of respondents
Yes
No
Up to some extent
RATING SCALE NO. OF RESPONDENTS
Yes 46(92%)
No 0(0%)
Up to some extent 4(8%)
RATING SCALE NO. OF RESPONDENTS
Excellent 29(58%)
Good 20(40%)
Average 1(2%)
Poor 0(0%)
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8%
40%
2% 0%
Percentage of respondents
Excellent
Good
Average
Poor
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CHAPTER 6:
FINDINGS AND CONCUSION
The researcher has found that:
Ethics and values are prevailing in N.F.L at very high extent (around 80%).
There are more or less 90% ethical practices and 10% unethical practices prevailing in
N.F.L.
There is fair recruitment in the organization.
There is least discrimination on the basis of age, colour, gender, religion.
Employees are fully satisfied with their jobs.
Organization never compromise with the quality standards. Employees utilize their potential to the best they can.
Employees are loyal and honest to the organization.
Employees are fully satisfied with the operational safety provided by the organization.
Employees are proud of being part of N.F.L.
As a result the performance of National Fertilizer Limited is consistently high till now.
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Second Best National Productivity Award by National Productivity
Council (NPC) in 1993-94, Panipat.
Golden Peacock Innovation Award from IOD, N. Delhi. 2005,Panipat.
Best Energy Conservation Implementation Gold Award by Institutional
Green Land Society, Hyderabad. 1999-00, Panipat
Haryana State Safety & Welfare Award 1999-00, Panipat
Prime Minister¶s Shramvir Award to four employees for Unconventional repairs of Air
Compressor Blades, panipat
CONCLUSION:
From the analysis and findings, it is being concluded that ethics and values are prevailing in the
organization at a very high extent. Employees are fully satisfied with their jobs. Ethics makes for
an efficient economy. Ethics is good in itself, ethics and profit go together in the long run and
ethics alone can protect the society. National Fertilizer Limited, Panipat is an ethically
responsible organization which has developed a culture for caring for the people and for the
betterment of society as a whole. Ethics has a considerable influence on the economy for
efficient and smooth functioning.
It is being concluded that
³ Organizations can earn Profit with Morality´
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CHAPTER 7 :
SUGGESTIONS AND RECCOMENDATIONS:
There should be proper transparency in policies and action.
There should not be any conflicts in the interest of organization and employees.
There should be healthy work environment.
Senior executives should not ask the staff to carry out tasks which they are disagreed
with.
Organization should take care that the equal clients should not be treated unequally.
A bit more efforts should be done to provide best operational safety.
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CHAPTER 8:
LIMITATIONS OF THE STUDY:
The study is affected by non availability of proper information.
Biasness of the respondent creates problem in the study.
Time frame for the study is limited.
Finance problem is also a buzz in the study.
Sample size is not too large.
The study is limited to panipat plant only but unable to analyze the whole National
Fertilizer Limited.
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BIBLIOGRAPHY:
Text:
Anubhavananda, Swami,´Ethics in Management´Ed.2007,Ane Books India,
New Delhi.
Kothari, C.R., Research M ethodology, 2nd ed., New Delhi: New Age
International (P) Limited, 1985
E-Books:
Berry, J. (1989). Imposed ethics--emics--derived ethics: The operationalisation of a compelling idea. International Journal of Psychology, 24, 721-735.
Christina Soh:how IT creates business values:A process theory synthesis.
Hosmer, Larue Tone; T he E thics of M anagement ; Richard D. Irwin, Inc.; 1997.
McNamara, Carter; C omplete Guide to E thicsM anagement .
Hoffman, W. M. and J.M. Moore (1982) ³What is Business Ethics? A Reply toPeter.
Drucker,´ Journal of Business Ethics 1: 293±300.
Cazalot, Clarence (2005). ³Creating Competitive Advantage through BusinessEthics´, Executive Speeches Journal, April/May issue.
Donaldson, T. (1994). When integration fails: The logic of prescription anddescription in business ethics. Business Ethics Quarterly, 4(2), 157-170.
James A. Brickley, Clifford W. Smith, Jr. and Jerold L. Zimmerman (2000),´Business Ethics and Organizational Architecture´, FR 00-14
László Zsolnai, Corvinus, University of Budapest - Business Ethics Center,
³GENUINE BUSINESS ETHICS´.
Prof. K.V. Bhanu Murthy, University of Delhi (April 2007),´ Business Ethics and
Corporate Responsibility ± A New Perspective´
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ANNEXURE
QUESTIONNAIRE
This questionnaire is designed to encourage discussion of ethical issues and to definitions of ethical and unethical practices and to find out the impact of ethics and values on performance of National Fertilizer Limited, Panipat.
All of your responses are confidential. This survey will take just few minutes of yours.So please
answer them honestly:
Employment Details:
Name: Date of Birth:
Designation: Department:
Date of joining: Experience:
Q1. Does the organization recruits staff on the basis of family ties and friendship?
Agree Disagree Neither agree Nor disagree
Q2. Is there any discrimination in the organization on the basis of:
Agree DisagreeAge
Colour
Gender
Religion
Q3. Do you manipulate performance indicators to reach targets?
Agree Disagree Neither agree Nor disagree
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Q4. Do you give out personal or organizational information to others?
Agree Disagree Neither agree Nor disagree
Q5. Do you criticize your organization to others?
Yes No Sometimes
Q6. Does the organization condone false or misleading advertisement to increase sales?
Agree Disagree Neither agree Nor disagree
Q7. Do the senior executives blame sub-ordinates for their own mistakes?
Agree Disagree Neither agree Nor disagree
Q8. Does the top management rewards employees differently?
Agree Disagree Neither agree Nor disagree
Q9. Are there any conflicts in the interest of organization and employees?
Agree Disagree Neither agree Nor disagree
Q10. Do the senior executives ask the staff to carry out tasks which they are disagreed with?
Agree Disagree Neither agree Nor disagree
Q11. Do you treat equal clients unequally?
Agree Disagree Neither agree Nor disagree
Q12. Do you meet the targets at all costs?
Agree Disagree Neither agree Nor disagree
Q13. Is there p roper transparency in policies and action?
Agree Disagree Neither agree Nor disagree
Q14. Do you utilize your potential to the best you can?Agree Disagree Neither agree Nor disagree
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Q15. Is the organization committed to the quality standards?
Agree Disagree Neither agree Nor disagree
Q16. Is the organization having comfortable work environment?
Agree Disagree Neither agree Nor disagree
Q17. Do you think ethical goals and objectives are as important as production, quality andfinancial goals and objectives?
Agree Disagree Neither agree Nor disagree
Q18. Do you know your roles and responsibilities properly?
Agree Disagree Neither agree Nor disagree
Q19. Is there team based culture in the organization?
Agree Disagree Neither agree Nor disagree
Q20. Do you think there is a relationship between ethics, values and economic performance?
Yes No Don¶t know
Q21. Are you satisfied with the operational safety provided by the organization?
Yes No Up to some extent
Q22. Are you proud of being the part of NFL?
Yes No Up to some extent
Q23. Please rate the ethics and values in the organization using the keys provided.Excellent
Good