ETHICS & CSR

Reference books

Business Ethics: An Indian Perspective by Prof.
P.S. Bajaj / Dr. Raj Agrawal

Business Ethics: Text & cases by C.S.V. Murthy

A Study in Business Ethics by Rituparna Raj

Business Ethics concepts and cases by Manuel
G. Velasquez
Ethics: What Does It Really Mean???

Derived from Greek word Ethicos meaning
Character or Manners

Science of character of a person expressed as
right or wrong conduct or action.

Set of moral principles prescribing code,
explains what is good and right, or bad and
wrong.

Meaning of Ethics
Character
of a man
Conduct
of a person
Series of
Actions
Good or
Bad,
Right or
wrong,
Moral or
Immoral
Moral
Standards
Decided by
Leads to
Taken
together
Considered As
Known as
Moral
Judgement
Requires
By which
we can
Judge
again
Ethics can be termed as the
science of character of a
person expressed as right or
wrong conduct or action
Objective of Ethics

Studies human behavior and makes evaluative
assessment about them as moral or immoral

Establishes moral standards and norms of behavior

Makes judgment upon human behavior based on these
standards and norms

Prescribes moral behavior and makes recommendations
about how to or how not to behave

Expresses an opinion or attitude about human conduct in
general

Business Ethics: What Does It Really
Mean???
comprises principles and standards that guide
behavior in the world of business
According to John Donaldson Business Ethics
can be described as the systematic study of
moral (ethical) matters pertaining to business,
industry or related activities, institutions, or
practices and beliefs. It is the systematic
handling of values in business and industry.

Unitarian View: Business & morality cannot be separated and it
must play by the rules of ethics of the community.

Views on relationship between Business
& Ethics
Moral Structure
Business
Moral Ethics
Separatist view of Ethics
Proposed by Adam Smith and Milton Friedman:
Business is a distinct entity and does not include
ethics and morality
Business
Ethics
Integration view of ethics
Proposed by Talcott Parsons
Law
Society
Government
Market Systems
Business
Morality
&
Ethics
Business
Ethics
Business Ethics

When business people speak about business ethics they
usually mean one of three things:

1. Avoid breaking the criminal law in ones work related
activity

2. Avoid action that may result in civil law suits against
the company

3. Avoid actions that are bad for the company image

Businesses are especially concerned with these three
things since they involve loss of money and company
reputation.



Laws and moral standards overlap to a certain extent

Law represents a minimum set of standards for producing a desired
human behaviour
Ethics often represents a standard that exceeds the legal minimum

Ethics Law
Frequent Overlap

Relationship between law and moral
standards

Common Unethical Acts...

lying and withholding needed information

abusive or intimidating behavior

misreporting time worked

discrimination and sexual harassment

stealing

breaking environmental and safety laws

falsifying records

drug or alcohol abuse

giving or accepting bribes
Why Misconduct Is Not Reported...

belief that nothing will be done

fear of retaliation

fear of being viewed as a troublemaker


Why ethical behavior is important???
Business is a subsystem of society

Empowers all stakeholders concerned

Reduction in cost of friction with social
environment
Important for organizations leaders because
they influence the ethical climate for the rest.

Why Ethical problems occur?


Personal gain

Individual values widely differ with organizational goals

Managers values and attitudes

Competitive pressures

Cross-Cultural contradictions

Sources of Ethical Norms

Fellow Workers
Family
Friends
The Law
Regions of
Country
Profession
Employer
Society at Large
Religious
Beliefs
The Individual
Conscience
Culture
Encouraging Ethical Conduct
Ethics Training

Key features of effective ethics training programs
Top management support.
Open discussion.
A clear focus on ethical issues.
Integration of ethics into the organization.
A mechanism for anonymously reporting ethical
violations.
Reward ethical conduct.

Encouraging Ethical Conduct
(contd
Whistle-Blowing
The reporting of perceived unethical matters.
Reducing the fear of retaliation against whistleblowers
Anonymous hotlines and web sites
Personal, confidential guidance
Ethical Advocate
An ethics specialist who plays a role of critical
questioner in top-managements decision-making.
Serves as the Board of directors social conscience.
Helps prevent groupthink and blind conformity

Encouraging Ethical Conduct
(contd)
Code of Ethics
Published statement of moral expectations for
employee conduct
Requirements for an effective ethics code
Must describe specific practices as unethical
(e.g., kickbacks, payoffs, gifts, falsification of records,
and misleading product claims).
Must be firmly supported and fairly enforced by
top management.

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