Introduction to Ethics
What is Ethics
- The study of values and customs of a person or group. It covers the analysis and employment of concepts such as right and wrong, good and evil, and responsibility
- The term comes from the Greek word ethikos, which means "character".
Principles of Personal Ethics
- Concern for the well being of others.
- Respect for the autonomy of others.
- Trustworthiness and honesty.
- Willing compliance with the law.
- Basic justice: being fair.
- Refusing to take unfair advantage
- Benevolence: doing good.
- Preventing harm to any creature.
What is Business Ethics?
- Business ethics is the application of general ethical ideas to business behavior.
- It is based on the principle of integrity and fairness and concentrates on the benefits to the stakeholders, both internal and external
What is not Business Ethics?
- Ethics is different from religion.
- Ethics is not synonymous with law.
- Ethical standards are different from cultural traits.
- Ethics is different from feelings.
- Ethics is not a science in the strictest sense of the term.
- Ethics is not just a collection of values.
Code of Conduct and Ethics for Managers
- Impartiality
- Responsiveness to public interest
- Accountability
- Honesty
- Transparency
- Integrity
Importance and Need for Business Ethics
- A business organization competes in the global market on its own internal strength, in particular, on the strength of its human resource and on the goodwill of its stakeholders.
- The value-based management and ethics that an organization uses in its governance enable it to establish a productive relationship with its internal customers, and lasting business relationship with its external customers.
Values and Ethics in Business
- A value is a view of life and judgment of what is desirable. It is very much part of a person’s personality and a group’s morale.
- Business ethics relates to issues of “what is right” and “what is wrong” while doing business. What values are to individuals, ethics are to business.
- Business ethics operates as a system of values, relating business goals and techniques to specific human ends.
Why should Businesses act Ethically?
- To protect its own interest,
- To protect the interests of the business community as a whole so that the public will have trust in it,
- To keep its commitment to society to act ethically, and
- To meet stakeholder expectations.
- To prevent harm to the general public,
- To build trust with key stakeholder groups,
- To protect themselves from abuse from unethical employees and competitors,
- To protect their own reputations,
- To protect their own employees, and
- To create an environment in which workers can act in ways consistent with their values.
Ethical Decision-making
- Is your decision fair?
- Is it a win-win situation for all?
- Is your decision legal? If it is not legal, it is not ethical.
How Corporations Observe Ethics in Their Organizations?
- Publish in-house codes of ethics to be strictly followed by all their associates.
- Employ people with a reputation for high standards of ethical behaviour at the top levels.
- Incorporate consideration of ethics into performance reviews.
- Give rewards for ethical behaviour.
- SEBI, CII and such other organizations representing corporations issue codes of best practices and enjoin their members to observe them.
- IIMs and highly rated B-schools give extensive and intensive instruction in business ethics, corporate social responsibility and corporate governance as part of their curriculum.
- Conduct an Ethics Audit.
Corporate Governance Ethics
- Corporate governance is a set of rules that govern the administration and management of companies.
- Its goalposts are transparency, integrity, the full disclosure of financial and non-financial information, and protection of stakeholders’ interests.
Benefits of Managing Ethics in Workplace
- Attention to business ethics improves society.
- Ethical practice contributes towards high productivity and strong teamwork.
- Changing situations require ethical education.
- Ethical practices create a strong public image.
- Strong ethical practices act as an insurance.