Ethical Issues at work

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 Ethics is derived from the Greek word ethikos meaning custom or character It is a science of morals, describing a set of rules of behaviour Its a branch of philosophy which defines the norms of human conduct.

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Examples
In the early years days of independence, companies had to grease the palm of bureaucrats to make them do things they were not supposed to do, but now corruption has graduated to such an extent that companies bribe bureaucrats to make them do things they are supposed to do. Examples include gifts to the factory inspector, Boiler Inspector, Pollution Control Board, Inspector and assessor for Customs, Excise, Income tax, Sales Tax and Octroi

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The Wall Street Journal Workplace-Ethics Quiz

Source: Wall Street Journal, 21 October 1999, pp. 8184. Ethics Officer Association, Belmont, Mass.; Ethics Leadership Group, Wilmette, Ill.; surveys sampled a cross-section of workers at large companies and nationwide.

FIGURE 21
G.Dessler, 2003

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What is Business Ethics

Application of general ethical ideas to business Behaviour. Ethical business behaviour is expected by public, prevents harm to society, improves, profitability, fosters business relations and employee productivity, reduces criminal penalty, protects business against unscrupulous employees and competitors, protects employees from harmful action by the employer

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Ethics is more than just a collection of values

Values are over simplified Rarely be applied uniformly Values tend o be under-defined Situational by nature subject to flawed human reasoning such that by themselves they cannot assure true ethical conduct.For e.g. employee loyalty Should employees be loyal to co-workers, supervisors, customers or investors? Since it is impossible to loyal to all the four simultaneously in what order these loyalties occur. Employers that demand employee loyalty rarely can answer this question completely
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Importance and Need for Business Ethics

Ethics is closely related to trust Trust will be used as an indicator variable of ethics Trust is Three dimensional Trust in supplier relationships Trust in employee relationships Trust in customer relationships Trust leads to predictability and efficiency of business so that the firm produces fruitfully and earns good reputation
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Ethics and the Law

Important Points:
Something may be legal but not right (ethical) Something may be right (ethical) but not legal.

G.Dessler, 2003

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The Indian context

Globalisation and huge foreign institution investment Clean up your acts or perish for want of investment Examples
Johnson and Johnson. The way it conducted itself in the Tynelol drug controversy was remarkable It had to withdraw massive stocks of drug from various pharmacies and druggists and suffered huge losses running into 100 million dollars. The effort that went into recalling all the stocks from the retail outlets was mind boggling Ultimately Johnson and Johnson came out triumphantly wit h its image enhanced even further when the public realized that it was nit was not its fault. The company regained its standing and covered up its losses also in a short time.

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JRD Tata A man who inspires

JRD believed in the company growth based on ethics, equity, and socially responsible behaviour. His inspiration was Jamsetji Tata, who was a man of vision.jansetji had a sense of values, sterling values which he imparted to the group. If someone asked me what holds the Tata Companies 9TISCO , Tatapower, Hoteliering)

shared values and values as corporate citizen.

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Another Dimension - Indian companies cannot be ethical

Indian companies face two types of corrupt practices Political corruption in which money is paid for favours done Administrative corruption .

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A Study
Ethical attitudes of Indian managers conducted by Arun Monappa reported that business executives listed three major obstacles for ethical Behaviour namely Company policies

Unethical industry climate Corruption in Govt

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What Influences Ethical Behavior At Work?

Individual Factors Organizational Factors Top Management

Ethical Work Behaviors

Ethics Policies and Codes

G.Dessler, 2003

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Other reasons for unethical behaviour of Indian companies

Globalisation and opening up of the Indian economydog eats dog kind of a syndrome Aspiration to builds a strong and economically powerful nation in a short time Socio-cultural factors such as sense of hospitality(not inviting business associate can be construed as being impolite and once invited you have to shower him with gifts is an accepted custom) Reciprocity(You gave me a license with which I can make money and there is nothing wrong in sharing a part with you.)
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Other reasons for unethical behaviour of Indian companies

Lax govt. structure and regulations Uncertainties and fear about the future Overall scarcity of resources and difficulty in amassing wealth through normal and legitimate means And inequitable and scorching tax system A belief that business and ethics is irreconcilable
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Roots of unethical behaviour

Ethical Officers Association 1997 (Statistical data)

Balancing work and family Poor Leadership Poor Internal communication Lack of Management support Need to meet goals

52% 51% 51% 48% 46%

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Why does business have such a negative image Competitive pressure Individual greed Differing cultural context In every organization there will always be some people who have the inclination to behave unethically(the ethical egoist) necessitating systems to ensure that such behaviour is stopped or detected and remedied. Ethics involves systematizing , defending and recommending concepts of right and wrong behaviour.
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Why should business act ethically

Protect its own interest Protect the interest of the community Keep its commitment to society to act ethically Meet stakeholder expectations Prevent harm to the general public Build trust wit key stakeholder groups Protect themselves from abuse from unethical employees and competitors Protect their own reputation Protest their own employees Create an environment in which workers can act in ways consistent with their values
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Some unethical issues

Bribery Coercion Insider Trading Tax evasion Conflicts of interest Pollution

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Ethics a must
Ethical behaviour starts at the top Ethical behaviour with its own employees is a must before you start it outside

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How organisations observe ethics

Publishing in-house code of ethics Employ people with high levels of reputation at top levels Ethics consideration in performance review Reward ethical behaviour. Some MNCs like NIKE, GM, IBM, and Indian companies like Infosys, ICICI,TISCO,ONGC, Indian Oil and several others want to be seen as socially responsible and have issued codes of best practices Teaching in academic curriculum
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Thank You

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