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AN INTRODUCTION TO BUSINESS ETHICS

Professor Jayashree Sadri and Dr Sorab Sadri


Sustainable Business Excellence thru' Ethics and Governance

What is Ethics?
Ethics is a set of rules that define right and

wrong conduct.These ethical rules tell us when our behavior is acceptable and when it is disapproved and considered wrong. Ethics deals with fundamental human relationships.

Ethical rules are guides to moral behavior.

Sustainable Business Excellence thru' Ethics and Governance

APPROACHES TO THE STUDY OF ETHICS


Spiritualism Political Science Sociology Philosophy Anthropology

Sustainable Business Excellence thru' Ethics and Governance

Sociological route takes you to the

following chain of causality


Values-Beliefs-Attitudes-Behavior-Outcomes

Sustainable Business Excellence thru' Ethics and Governance

What is Business Ethics?


Business Ethics is not a special set of rules

different from ethics in general and applicable only to business.


Business Ethics is the application of general

ethical rules to business behavior.

Sustainable Business Excellence thru' Ethics and Governance

Why is Business Ethics Important?


The general public expects business to exhibit high levels of ethical performance and social responsibility.
To Act Ethically is to prevent harm to society. To protect business firms from abuse by unethical

employees or unethical competitors

Sustainable Business Excellence thru' Ethics and Governance

Why Ethical Problems Occur in Business.


Personal Gain. Individual Values in Conflict with

Organizational Values. Managers Values and attitudes. Competitive Pressures. Cross-cultural contradictions.

Sustainable Business Excellence thru' Ethics and Governance

ETHICS MEANS :
A set of actions born out of our beliefs. These beliefs give rise to values. Values condition attitudes. Attitudes condition behavior . Behavior can be ethical or unethical. Ethics are an activity based concept.

Sustainable Business Excellence thru' Ethics and Governance

BELIEFS VALUES AND IDEOLOGY


Beliefs: Set of ideas about what is right or

wrong, good or bad in any context whatsoever and from the basis of behavior. These beliefs are often conditioned by upbringing and the general environment.

Sustainable Business Excellence thru' Ethics and Governance

BELIEFS VALUES AND IDEOLOGY


Essentially values are set of beliefs that form the basis of thinking and thence to action. Values are notions that are guided by our actions. It forms the bulwark of our attitudes which form our behavior. Values are a thought-based concept.

Sustainable Business Excellence thru' Ethics and Governance

Kinds of Values
When we speak of values having been based

on a set of beliefs that we hold sacrosanct we are in the subjective realm of values. When an organisation operates on the basis of such values it is called value based.

Sustainable Business Excellence thru' Ethics and Governance

Kinds of Values
When we speak of value addition by the

actions or thoughts of a person, the functioning of a process and the sale or use of a product we are in the objective realm of values. When an organisation operates such that value ought to be added at the level of the person, the process or the product it is called value driven.
Sustainable Business Excellence thru' Ethics and Governance

Kinds of Values
When we speak simultaneously of the

subjective and the objective notions of value then we are in the realm of rationality. When an organisation operates simultaneously in both realms (subjective and objective) it is called value centered

Sustainable Business Excellence thru' Ethics and Governance

BELIEFS VALUES AND IDEOLOGY


Ideology : Set of beliefs and values

held by a person, a group of persons or a nation about what is good or bad for it and this forms its basis of social, political and economic policies.

Sustainable Business Excellence thru' Ethics and Governance

ETYPOLOGICAL ROOTS
Ethics comes from the Greek word

ethos while Morality comes from the Latin word mores. Both root words imply from a culture

Sustainable Business Excellence thru' Ethics and Governance

DISCUSSION ON BUSINESS ETHICS


At a general level this can be reduced to:
1. Issues relating to what is right or wrong. 2. Issues relating to what is good or bad. 3. Issues relating to what is the desired

human conduct.

Sustainable Business Excellence thru' Ethics and Governance

SPECIFICITY OF ETHICS
Ethics is person specific Ethics is context specific Ethics is culture specific

Sustainable Business Excellence thru' Ethics and Governance

Where do ethical conducts originate?


Within the self? Within the norms of the larger civil society? Within the organization's work environment?

Sustainable Business Excellence thru' Ethics and Governance

Three important axioms:


ALL TRUTH IS RELATIVE [HEGEL] THE ONLY ABSOLUTE TRUTH IS THAT

GREAT IMMENSITY
THE ONLY ABSOLUTE CERTAINITY IS

DEATH [DURKHEIM]

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Ethical Problems in Decision Executing.


Can be manifested in a Covert Manner Can be manifested in an Overt manner

Sustainable Business Excellence thru' Ethics and Governance

Three rules in the sociology of ethics:


Always ask the question Why? Clarity of action follows clarity of thought. Ethical conduct must be seen always in the

light of the person, the culture and the context. It should never be seen in isolation as an act devoid of the surroundings.

Sustainable Business Excellence thru' Ethics and Governance

Noam Chomsky once said:

States are not moral agents; people are, and can impose moral standards on power institutions. Hence the ideology or religion or politics driven moral policing is unethical.
Sustainable Business Excellence thru' Ethics and Governance

Man and Civil Society


Man and organization are both a microcosm

of the larger civil society. No person works in isolation nor is an organization an island unto itself. We can see globalised relations of business in the form of concentric circles viz:

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Unity of Conduct At All Five Levels


Individual Team Organization National Economy Global Business

5 4 3 2 1

Values & Ethics

Sustainable Business Excellence thru' Ethics and Governance

Where does ethics become most relevant in business?


At the point of delivery: sale or

production. At the point of decision making. At the point of decision executing.

Sustainable Business Excellence thru' Ethics and Governance

Ethical Problems at the Point of Delivery


Is the product, service or process reliable? Does it meet the required quality standards? Does it actually possess ingredients that it

claims to possess? Does it pose a threat to the general humanity, the geo-physical environment or the innocent consumer?

Sustainable Business Excellence thru' Ethics and Governance

Ethical problems in Decision Making


However, as the market gets more

competitive and organizations get more complex, we are forced to make decisions under conditions of relative uncertainty. All facts relevant to the issue are never available.

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THE VALUE DECISION LINK


OK NOT OK OK

Individual values

CLEAR APPROVAL

HAZY

HAZY

CLEAR REJECTION

NOT OK

Sustainable Business Excellence thru' Ethics and Governance

Organizational values

Ethic is involved in three levels of interaction


PERSON GROUP
ORGANIZATION

PROCESS

PRODUCT

INDIVIDUAL

When we place one triangle over the other, we get a six pointed star that exemplifies the form and nature of business ethics.
Sustainable Business Excellence thru' Ethics and Governance

INTRODUCTION TO ETHICS

THANK YOU

Sustainable Business Excellence thru' Ethics and Governance

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