Business and Ethics

8/8/2019 Business and Ethics

1/27

The Polluters Dilemma

Janice Gunson is the environmental compliance manager for a small

plastics manufacturing company. She is currently faced with the

decision whether or not to spend money on new technology that will

reduce the level of a particular toxin in the wastewater that flows out

the back of the factory and into a lake.

The factorys emission levels are already within legal limits. However,

Janice knows that environmental regulations for this particular toxin

are lagging behind scientific evidence. In fact, a scientist from the

university had been quoted in the newspaper recently, saying that ifemission levels stayed at this level, the fish in the lakes and rivers in

the area might soon have to be declared unsafe for human

consumption.


2/27

ContinueContinue

Further, if companies in the region dont engage in someself- regulation on this issue, there is reason to fear thatthe government backed by public opinion mayforce companies to begin using the new technology, and

may also begin requiring monthly emission level reports(which would be both expensive and time consuming).

But the companys environmental compliance budget istight. Asking for this new technology to be installedwould put Janices department over-budget, and couldjeopardize the companys ability to show a profit thisyear.


3/27

Questions for Discussion

What motives would the company have to install the

new technology?

What motives would the company have to delay

installing the new technology?

Why might the companies in this region prefer forthe government to impose new regulations?


4/27

BUSINESS &

BUSINESS ETHICS

By:

Dalbir Arora - 303Murtuza Azhar - 305

Suman Bhattacharya - 306Mohit Kumar - 325Arun Rustagi - 342Ajay Surana - 347


5/27

Is Business Ethics anIs Business Ethics an

Oxymoron???Oxymoron??? Is it impossible to be an effective managerIs it impossible to be an effective manager

and an ethical individual at the sameand an ethical individual at the sametime?time?

Are managerial effectiveness and ethicalAre managerial effectiveness and ethicalbehavior mutually exclusive?behavior mutually exclusive?

Are all the people who are or want to beAre all the people who are or want to bemanager ready to sell their soul?manager ready to sell their soul?


6/27

The Answer is NOThe Answer is NO

Good ethics is synonymous with goodGood ethics is synonymous with goodmanagementmanagement


7/27

Business Ethics: What DoesBusiness Ethics: What Does

It Really Mean?It Really Mean?

DefinitionsDefinitions

EthicsEthics involves a discipline thatinvolves a discipline thatexamines good or bad practicesexamines good or bad practiceswithin the context of a moral dutywithin the context of a moral duty

Moral conductMoral conduct is behavior that isis behavior that isright or wrongright or wrong

Business ethicsBusiness ethics include practicesinclude practicesand behaviors that are good or badand behaviors that are good or bad


8/27

EthicsEthics Why now???Why now???

Spurred by media publics interest in businessSpurred by media publics interest in businessethics increased during the last four decadesethics increased during the last four decades

A rise in the civic society and the increase inA rise in the civic society and the increase inpeople making value driven decisionspeople making value driven decisions

Changing Business EnvironmentChanging Business Environment peoplepeoplebecoming intolerant about organizations drivenbecoming intolerant about organizations drivenby sayby say--do gapdo gap


9/27

Ethical Problem

Ethical

Problem

Societys

Expectations

of Business

Ethics

Actual

Business

Ethics

1950s Early 2000sTime

Business Ethics:Today vs. Earlier Period


10/27

Peoples opinion of business ethicsPeoples opinion of business ethics

Gallup Poll finds that only 17 percent to 20 percentGallup Poll finds that only 17 percent to 20 percentof the public thought the business ethics ofof the public thought the business ethics ofexecutives to beexecutives to be very highvery high oror highhigh

To understand public sentiment towards businessTo understand public sentiment towards businessethics, ask three questionsethics, ask three questions

Has business ethics really deteriorated?Has business ethics really deteriorated?

Are the media reporting ethical problems moreAre the media reporting ethical problems morefrequently and vigorously?frequently and vigorously?

Are practices that once were socially acceptable noAre practices that once were socially acceptable nolonger socially acceptable?longer socially acceptable?


11/27

Sources of Ethical NormsSources of Ethical Norms

Fellow Workers

Family

Friends

The Law

Regions of

Country

Profession

Employer

Society at Large

Boss

Religious

Beliefs

The Individual

Conscience


12/27

10 Phases in Ethics


13/27

3 Models of Management Ethics3 Models of Management Ethics

1.1. Immoral ManagementImmoral ManagementA style devoid ofA style devoid ofethical principles and active opposition to whatethical principles and active opposition to whatis ethical.is ethical.

2.2. Moral ManagementMoral ManagementConforms to highConforms to highstandards of ethical behavior.standards of ethical behavior.

3.3. Amoral ManagementAmoral Management

IntentionalIntentional -- does not consider ethical factorsdoes not consider ethical factors

UnintentionalUnintentional -- casual or careless about ethicalcasual or careless about ethicalconsiderations in businessconsiderations in business


14/27

Ethics and the LawEthics and the Law

Law often represents an ethicalLaw often represents an ethicalminimumminimum

Ethics often represents a standardEthics often represents a standardthat exceeds the legal minimumthat exceeds the legal minimum

Ethics Law

Frequent Overlap


15/27

Ethics, Economics and lawEthics, Economics and law


16/27

Lawful, ButUnethicalLawful, ButUnethical

JRD Tata started Tata Airlines with friend NevilleJRD Tata started Tata Airlines with friend NevilleVincent.Vincent.

Profit rose to Rs 60000 initially.Profit rose to Rs 60000 initially.

At the expiry of the contract profit rose to 10At the expiry of the contract profit rose to 10times.times.

JRDLegal Adviser asked him not to renew theJRDLegal Adviser asked him not to renew thecontract on the same terms as the profits werecontract on the same terms as the profits were

higher.higher. JRD replied that it may be Lawful but it is notJRD replied that it may be Lawful but it is not

ethical.ethical.


17/27

Approach to Business EthicsApproach to Business Ethics

Teleological Ethical SystemTeleological Ethical System-- Utilitarianism approachUtilitarianism approach

-- Distributive JusticeDistributive Justice

Deontological Ethical SystemDeontological Ethical System-- Categorical ImperativeCategorical Imperative

Hybrid Approach to ethical systemHybrid Approach to ethical system


18/27

Developing moral judgmentDeveloping moral judgment


19/27

Business Ethics and CSR

Manought to regard himself, not assomething separated and detached, but as a

citizen of the world, in member of the vastcommonwealth of natureto the interestthis great community, he ought at all timesto be willing that his own little interest

should be sacrificed.

-- Adam Smith


20/27

Ethics and CSREthics and CSR--Benefits societyBenefits society

attract customers to the firm's products, therebyattract customers to the firm's products, therebyboosting sales and profitsboosting sales and profits

make employees want to stay with the business, reducemake employees want to stay with the business, reducelabor turnover and therefore increase productivitylabor turnover and therefore increase productivity

attract more employees wanting to work for theattract more employees wanting to work for thebusiness, reduce recruitment costs and enable thebusiness, reduce recruitment costs and enable the

company to get the most talented employeescompany to get the most talented employees

attract investors and keep the company's share priceattract investors and keep the company's share pricehigh, thereby protecting the business from takeover.high, thereby protecting the business from takeover.


21/27

Company levelCompany level

GLAXO SMITHKLINES CODE OF CONDUCT

GlaxoSmithKline is committed to sales and marketing activities that are ethical,responsible, principled and patient focused.

GlaxoSmithKline aims to produce safe and effective medicines and vaccines thatbenefit patients by addressing their unmet medical needs.

GSK believes that it is important to work with governments to contribute toconstructive debate on issues surrounding pharmaceuticals and healthcare.

GSK have company wide auditing in place to fully investigate suspected breachesof company standards and take appropriate disciplinary action, including dismissalwhere appropriate.


22/27

ContinueContinue

MOTOROLAS CODE OF CONDUCT.

Times will change. Our products will change. Our people will change. Ourcustomers will change. What will not change is our commitment to our key beliefs.

Abusive, harassing or offensive conduct is unacceptable, whether verbal, physicalor visual.

Motorolas who deal with government officials and contracts are responsible for

knowing and complying with applicable laws and regulations.

Require honest and accurate recording and reporting of information. This includessuch data as quality, safety and personnel records, as well as all financial records.


23/27

Ethics is PricelessEthics is Priceless

WiproWipro The Ethical way ..The Ethical way ..

Received PHDCCIs award for Business Ethics.Received PHDCCIs award for Business Ethics.

Turned out an employee for inflating the travelTurned out an employee for inflating the travelbill.bill.

Refused to bribe the custom officials and paidRefused to bribe the custom officials and paidthe higher custom dutythe higher custom duty


24/27

Reliable but UnethicalReliable but Unethical

Reliance evaded Tax in Year 2003Reliance evaded Tax in Year 2003--0404

Bogus purchases of steel.Bogus purchases of steel.

Imported steel from entities only on paperImported steel from entities only on paper Escaped due to political linksEscaped due to political links

ProfitProfit At what cost??At what cost??


25/27

Maximizing Ethics and ProfitsMaximizing Ethics and Profits

As per Milton Friedman(1970), the social responsibilityAs per Milton Friedman(1970), the social responsibilityof business is to maximize profitof business is to maximize profit

However, the values he wanted to encourage areHowever, the values he wanted to encourage are

focused exclusively on utility, on usefulness tofocused exclusively on utility, on usefulness toproduction.production.

The need is to develop a value system which appreciatesThe need is to develop a value system which appreciatespeople and things for their own positive existence, theirpeople and things for their own positive existence, their

own presence in the world, rather than how they can beown presence in the world, rather than how they can beuseful to us.useful to us.


26/27

The ConclusionThe Conclusion

ETHICSAND BUSINESSCANCO EXIST

ETHICSAND BUSINESSARECOMPLIMENTARY,NOTSUPPLEMENTARY


27/27

THANK YOUTHANK YOU

Business and Ethics

Documents

Transcript of Business and Ethics