Nature of business ethics:
Business ethics generally relates to the following aspects:
i) Moral judgment
ii) Moral standards
iii) Justification and logical reasoning
Elements of a moral judgment:
It should be logical.
It should be based on facts.
It should be based on acceptable moral principles.
Ethics as a normative science- Thinking
- Feeling and
- Willingness
Importance of ethics and moral standards in business
- It creates a long-term success for the business.
- The need to adapt to the market system which requires the following conditions:
ii) Freedom of choice in buying and selling of goods and services.
iii) The availability of information of goods and services based on the principle ‘let the buyer be aware’.
Carbon efficiency testing of DHL express in the year 2009 which provided the following results:
i) During the financial year 2009, DHL express improved
the overall carbon efficiency level by 19%, reduced the
carbon emission by 9% and saved 10 million euros in
the overall energy and fuel costs.
iii) Building of Trust in business which involves the following fundamental elements:
a) Predictability
b) Dependability and
c) Faith
1) Trust in supplier relations:
i) Existence of an exchange relationship
ii) Reducing risk in the buying process.
2) Trust in customer relations:
- The seller should be dependable.
- He should be honest.
- He should be competent and customer-oriented.
3) Trust in employee relation:
- Applies to both peers as well as to superiors and subordinates.
4) Willingness to listen and acceptance of criticism.
For example, companies having their own Corporate Scorecards where individuals are assessed by everybody in the organization.
1) Trust in supplier relations:
i) Existence of an exchange relationship
ii) Reducing risk in the buying process.
2) Trust in customer relations:
- The seller should be dependable.
- He should be honest.
- He should be competent and customer-oriented.
3) Trust in employee relation:
- Applies to both peers as well as to superiors and subordinates.
4) Willingness to listen and acceptance of criticism.
For example, companies having their own Corporate Scorecards where individuals are assessed by everybody in the organization.
The Hindu philosophy:
- i) Hindu philosophy talks about spirituality and ethics as the foundation for day-to-day business activities.
- ii) It also emphasizes on rituals being performed and scriptures as the sources of understanding Indian philosophy which involves the existence of the following elements:
- a) desham/desh(space or location)
- b) Kaalam/kaal(time of any activity)
- c) patram/patra(the person performing any activity)
Important aspects of the Jain philosophy:
- i) Right faith
- ii) Right knowledge and
- iii) Right conduct
Five ethical principles of Jainism:
- i) Non-violence(Ahimsa)
- ii) Truth(Satya)
- iii) Non-stealing(Asteya)
- iv) Celibacy(Brahmacharya)
- v) Non-possession(Aparigraha)
The Buddhist economics:
- a) Value based judgement and
- b) A well planned decision making process
- c) Ensuring of savings by the individuals in the form of both public as well as private savings.
Teaching of ethics:
1) Ethical reasoning process:
a) Example of the total assessment test conducted by Procter & Gamble for fair and well informed employment decisions and effective recruitment by testing candidates on logical and mathematical reasoning.
2) Rule based ethics and value based ethics:
a)Example of a value based system is that of HUL and ITC where effective marketing and selling of products is done through a ‘touch point system’ customers and business engage to exchange information, provide service, or handle transactions.
3) Role of mentors:
- Mentors like Indira Nooyi and the role played by women mentors, for example the percentage of women employed by women in India is 23% out of the total working people.
4) Role of Indian Philosophy:
- The major concept of Indian Philosophy advocates the thought of ‘Swarat Samrat Bhavati’ which means ‘One who conquers himself conquers the world’
5) Role of parents:
- Instilling values and nurturing their children.
- Convincing the children
6) Impact of the visual media:
- The impact of the visual media on consumers of the product or services offered by the company.
i) For example, Uninor’s strategy of reaching customers without the usage of a brand ambassador and
ii) Wal-Mart’s written communication to the Chief Editor of Hindu and the New York Times regarding the criticism made by these newspapers on Wal-Mart regarding quality compromise, foreign product outsourcing, etc.
7) Exercise of caution and discrimination:
- ‘The Corporate Citizenship Policy’ adopted by Oil and Natural Gas Corporation(ONGC) where it has a policy of retaining 0.75% of it’s annual net profits for socio-economic development activities.
Swami Vivekananda’s views on ethics:
- i) Social service and importance of ethics(from the perspective of the conditions of the poor and the needy).
- ii) Conflicting goals of Westerners and Indians
Gandhiji’s philosophy on ethics:
- i) Concept of ‘ahimsa or non-violence’.
- ii) Self sacrifice and spiritual strength
- iii) No desire for wealth, position, name or fame.
Philosophy of Aurobindo:
- Adherence to Vedanta and Yoga
- Realization of destiny
- Avoidance of crimes, corruption.
Tagore’s philosophy:
- Importance of Mahabharatha, Ramayana and Vedas.
- Enlightenment and intellectual abilities.
Philosophy of Socrates:
- Self awareness leading to realization of competencies
- Self awareness leading to self knowledge.
Philosophy of Aristotle:
- Ethics is not a functional knowledge but relates to practical aspects of life.
- Intermediate activity between surplus and deficiency.
Education in Teaching ethics
- i) Continuation of the initial value based education.
- ii) Changing trends in education
- iii) Influence of life style of people and explore different life styles
Nandan Nilekani’s views:
- Having a common set of values and implementing them.
- Important aspects of Nilekani’s book-”Imagining India: Ideas for the new century:
- i) Equal society- the need for economic growth of a country.
- ii) Equal access to resources by all and removal of conflicts arising because of difference in standards of education.
- For example, individuals studying in IIM Bangalore and schools in Bihar have different exposure to education.