How to create an ethical working
environment?
• Make the decision to commit to ethics
•
Recognise that you are a role model by definition, by
your action, and by your values.
• Assume the responsibility for instilling ethical
behaviour.
• Articulate your values.
• Train your staff
• Encourage open communication
• Be consistent
• Abide by the laws of the land
Walton’s six models of
business conduct
• THE AUSTERE MODEL
It gives almost exclusive emphasis on
ownership interest and profit objects
Walton’s six models of
business conduct
• THE HOUSEHOLD MODEL
Following the concept of an extended
family, the model emphasizes employee
job, benefits and paternalism.
• THE VENDOR MODEL
In this model, consumer interests, tastes
and rights dominate the organization.
Walton’s six models of
business conduct
• THE INVESTMENT MODEL
This model focuses on the organization
as an entity and thus on long-term profits
and survival.
• THE CIVIC MODEL
Its slogan is ‘corporate citizenship’.
It goes beyond imposed obligations,
accepts social responsibility and makes a
positive commitment to social needs.
• THE CREATIVE MODEL
This model encourages the organization
to become a creative instrument, serving
the cause of an advanced civilization with
a better quality of life.
The employees perform as artists,
building their own creative ideas into
actions, resulting in new contributions not
originally contemplated.
Ethics will be different at
different levels
• At the basic level, it is about discipline, i.e..
to maintain punctuality, coming to work on
time, behaving properly with superiors,
colleagues and subordinates and not
wasting time during working hours.
• At the top level, it is about commitment
and Protecting the interests of the
organization.
Levels of business ethics
1. The society level, which defines ethical behavior and assesses
the effect of business on society.
2. The industry level, which suggests that different industries
have their own set of ethical standards
3. The company level, under which different companies have
their own set of ethical standards
4. The individual manager level, at which each manager and
other corporate participants are responsible for their own
ethical behavior
Six principles of business ethics
and conduct
➢ Comply with a written code of business conduct.
➢ Provide sufficient training to all personnel within their
organization regarding personal responsibility under the code.
➢ Encourage internal reporting of violations of the code with the
promise of no retaliation for such reporting.
➢ Self-govern their activities by implementing controls to monitor
compliance with all applicable laws and regulations.
➢ Share their best practices in implementing the principles
through participation in an annual Best Practices Forum.
➢ Be accountable to the public.
STRUCTURE OF ETHICS
MANAGEMENT
• Formal code of conduct
• Ethics committee
• Ethical communication
• An Ethic office with Ethical officers
• Ethics Training Programme
• A disciplinary system
• Establishing an ombudsman.
• Monitoring
Functions of the ethics officers
• Ethics officers are responsible for assessing the needs
and risks that an organization-wide ethics programme
must address.
• To develop and distribute a code of conduct or ethics
• To conduct ethical training programme for employees
• To establish and maintain a confidential service
• To answer employees questions about ethical issues.
• To ensure that the organization is in compliance with
governmental regulations
• To monitor and audit ethical conduct
• To take action on possible violations of the company‘s
code
• To review and update code in time
Code of Ethics in Business
• Codes of conduct specify actions in the
workplace
• Codes of ethics are general guides to
decisions about those actions
CODES OF ETHICS
• It will conduct all business dealings with
fairness, honesty and integrity
• It will protect all information and resources
available to the organization from loss, theft,
and misuse.
• It will avoid even the appearance of conflict of
interest or any other impropriety.
• It will treat all employees fairly and with dignity
and respect.
• It will help create and sustain an atmosphere
conducive to the spirit of this code.
Responsibilities of Business
• not to do harm knowingly, to adhere all applicable laws and
regulations, the accurate representation of their
education, training and experience,
• active support, practice and promotion of
this code of ethics.
Honesty and Fairness
• Being honest in serving consumers,
clients, employees, suppliers, distributors
and the public.
Rights and Duties of parties
• products and service offered are safe and
fit for their intended use,
• communications about offered product and
services are not deceptive,
• all parties intend to discharge their
obligations, financial and otherwise, in
good faith,
Ethics @ Workplace
• Body Language
• Avoid Creating Disturbance
• Trust & Respect for Others Work
• Don’t Interfere In Others Work
• Respect the Privacy of your Co-workers
• Avoid Ethnic & Gender Biasness
• Improve Your Self Presentation
• Avoid Lobbying
• No/Least Personal Work During Work Hours
•Maintain the balance between transparency/ openness
and confidentiality
Benefits of Ethics
• Fostering a more satisfying and productive working environment
• Building and sustaining Organization reputation
• Maintaining the trust of staff to ensure continued self-regulation
• Providing ethical guidance for employees prior to making difficult
decisions
• Aligning the work efforts of employees with the Organization's
broader mission and vision
• Increased employee loyalty, higher commitment and morale as well
as lower staff turnover
• Attraction of ‘high-quality’ staff
• Reputation benefits (customers and suppliers)
• More open and innovative culture
• Decreased cost of borrowing and insurance
• Generation of good-will in the communities in which the business
operates
INDIAN BUSINESS LAWS
AND THEIR IMPACT ON
ETHICAL
BEHAVIOUR:
• All laws relating to business in India, can
be broadly classified into 2 categories-
– Business laws
– Labour laws
The Industries development and
regulation act
– This Act enacted in 1951 with the main
objective of giving practical effect to the
industrial policy, gave the government
sweeping powers to control industries.
– It empowers the central government to
develop and regulate the industrial sector in
India, through suitable and appropriate
means.
Foreign Exchange Regulation
Act, 1973:
• This Act applies to all citizens of India,
outside India and to branches of
companies registered in India.
• The main objective of FERA is the
conservation of the foreign exchange
resources of the country and the proper
utilization thereof in the interests of the
economic developments of the country.
The Companies Act, 1956
• This Act provides for a greater government
control over the formation and
management of companies.
The Monopolies and restrictive Trade
Practices Act, 1969
• The main objective of this Act is to control
the concentration of economic power and
monopolies and to prohibit monopolistic
restrictive and unfair trade practices. The
act has restricted and stopped many
misleading advertisements, adulteration
and all sorts of false trade practices.
The Essential Commodities
Act, 1955
• It was set to provide in the interest of the
general public, control of production,
supply and distribution of trade and
commerce in certain commodities.
Some of the other laws to control
business behaviour are
• The capital issues control act 1956
• The securities contracts act 1956
• The imports and exports act 1947
• The Indian Patents Act.1970
• The partnership Act.1932
• The sale of goods act 1930
• The consumer Protection act 1986
Laws relating to weaker Section
(ie, children and women)
• The Factories Act, 1948
• The Mines Act, 1952
• The Plantation Labour Act, 1951
• The employment of children Act, 1938
• Maternity Benefit Act, 1961
Laws relating to Specific
Matters-
• Wages
– The payment of wages Act, 1963
– The minimum Wages Act, 1948
– The Equal Remuneration Act, 1976
Laws relating to Specific
Matters-
• Social Security
– Workmen Compensation Act, 1923
– Retrenchment Benefit Act
– The payment of Bonus Act, 1965
– Employee State Insurance Act, 1948
– Fatal Accident Act, 1955
• Trade union Act, 1926
• Industrial dispute Act, 1947
• The workmen compensation Act, 1923
• Bonded Labour system(Abolition)Act,
1976