Corpotate Ethics (Gourav)

8/3/2019 Corpotate Ethics (Gourav)

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Defining Ethics :

The word ethics is derived from the Greekword ethos (character), and from the Latin

word mores (customs). Together they combine to define

how individuals choose to interact with one another. In

philosophy, ethics defines what is good for the individualand for society and establishes the nature of duties that

people owe themselves and one another .

In simple words

Understanding of right and wrong /Ability to distinguish

between the right and the wrong.


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Two Key Branches of Ethics Descriptive ethics involves describing,

characterizing and studying morality

What is

Normative ethics involves supplying andjustifying moral systems

What should be


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Fellow Workers

Family

Friends

The Law

Regions of Country

Profession

Employer

Society at Large

Culture

Religious Beliefs

The Individual

Conscience


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Corporate Ethics

Corporate Ethics is a specialized study of moralright and wrong. It concentrates on moralstandards as they apply particularly to businesspolicies, institutions, and behavior.


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Ethical issues in Accounting and

Finance

Accounting and finance provides fair and accuratereporting of the financial position of a business. The

major ethical issues occur in accounting and financeare:

reporting false income,

falsifying documents, allowing or taking questionable

deductions, illegally evading income taxes,

engaging in frauds etc.


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management ethics:leadership and management model

Below is a modern model for management andleadership in the 21st century. It's an interpretation ofthe 'personality' of good ethical modern managementand leadership. As such it's not a process or technique- it's an attempt to characterise good modern ethicalmanagement and leadership.


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Ethics in Marketing

In a market economy, a business may be expected to act inwhat it believes to be its own best interest. The purpose ofmarketing is to create a competitive advantage. Anorganization achieves an advantage when it does a better

job than its competitors at satisfying the product and

service requirements of its target markets. Several areas of concern in marketing ethics

are :1. UNFAIR OR DECEPTIVE MARKETING PRACTICES

2. OFFENSIVE MATERIALS AND OBJECTIONABLE MARKETINGPRACTICES

3. ETHICAL PRODUCT AND DISTRIBUTION PRACTICES

4. DOES MARKETING OVERFOCUS ON MATERIALISM?

5. SPECIAL ETHICAL ISSUES IN MARKETING TO CHILDREN


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Corporate Ethics

Corporate Ethics Based on principles of integrity and

fairness .Focuses on

Stakeholders, and employees

Quality of product and services,

Customer satisfaction,

Community and environment.


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Inventory of Ethical Issues inBusiness

Employee-Employer Relations

Company-Government Relations

Company-Customer Relations

Company-Shareholder Relations

Company-Community/PublicInterest


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Lets take one of the above suppliers.

A business cannot claim to be ethical firm ifit ignores unethical practices by its suppliers e.g.

1.Use of child labour and forced labour2.Production in sweatshops3.Violation of the basic rights of workers4.Ignoring health, safety and environmental

standards


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Corporate Ethics are implemented to- :

1.Define the framework of the acceptable

behavior.

2.Follow high standards of practice.

3.Create benchmarks for self evaluation.

4.Enhance sense of community.

5.Create transparency in the business activities.6.Foster higher standards of business ethics.

7.Comply with government laws and norms.


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Direct consumer action is another way in whichbusiness ethics can be challenged. Consumers maytake action against:

Businesses they consider to be unethical in some ways(e.g. animal furs)

Business acting irresponsibly Businesses that use business practices they find

unacceptable

Consumer action can also be positive supporting

businesses with a strong ethical stance & record. Agood example ofthis is Fairtrade.
http://www.fairtrade.org.uk/http://www.fairtrade.org.uk/http://www.fairtrade.org.uk/http://www.fairtrade.org.uk/


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Principles for ethically run Business :

Principle 1 Productivity Is Much MoreImportant Than Profitability

Principle 2 The Customer Is Not Sheep That Can

Be ShearedPrinciple 3 The Buyer's Domain Is More

Important Than the Middlemen's

Domain

Principle 4 Be Diplomatic With Your

Competitors


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Situation in which a business

decision may be influenced

for personal gain.

Telling the truth and

adhering to deeply felt

ethical principles in

business decisions.

Businesspeople expectemployees to be loyal

and truthful, but ethical

conflicts may arise.Employees disclosure

of illegal, immoral, or

unethical practices in

the organization.

Solving ethical decisions are not easy


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Ethical Problem

Ethical

Problem

Societys

Expectations

of Business

Ethics

Actual

Business

Ethics

1950s Early 2000sTime

Business Ethics:Today vs. Earlier Period


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Difference between csr and corporate ethics:

CSR

Companies have a policy of social responsibility known as

corporate social responsibility whereby they commit to

follow their businesses in such a way so as to benefit the

community at large.ETHICS

But ethics is a loose term that is dependent upon a

persons conscience.


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Who is responsible for ethics in the

company?

Answer:

Everyone.


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An ethical problem cant be resolved

unless its first recognized as a dilemma

it is difficult to judge what is right and what is wrongbecause what is right in one situation can be wrong and

improper in another situation.

but Ethics involves learning what is right and wrong,and then doing the right thing.


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The Relation Between Law and Ethics

Ethical values and legal principles are usually closely related. Insome cases, the law mandates ethical conduct.

Though law often embodies ethical principles, law and ethics are

far from co-extensive. The law does not prohibit many acts that

would be widely condemned as unethical. And the contrary is true

as well. The law also prohibits acts that some groups would

perceive as ethical. For example lying or betraying the confidence

of a friend is not illegal, but most people would consider it

unethical. Yet, speeding is illegal, but many people do not have an

ethical conflict with exceeding the speed limit.

h f ll i di h h


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The following diagram shows the

relationship between law and

ethics.

Ethical values and legal principles areusually closely related, but. In some cases,the law mandates ethical conduct.


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Ethics, Economics, and Law


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How do we describe an ethical organization?1. They are at ease interacting with diverse internal and

external stakeholder groups. The basic guidelines of these

firms make the good of these stakeholder groups parts ofthe organizations' own good.

2. They are obsessed with fairness. Their guidelinesemphasize that the other persons' interests count as muchas their own.

3. Responsibility is individual rather than collective, withindividuals assuming personal responsibility for actions ofthe organization. These organization guidelines mandatethat individuals are responsible to themselves.

4. They see their activities in terms of purpose. This purposeis a way of operating that members of the organizationhighly value. Moreover, purpose ties the organization to itsstakeholders.


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The following characteristics are commonthe companies that are mentioned:1. There exists a clear vision and picture of integrity

throughout the organization.2. The vision is owned and practiced at every level ofmanagement.3. The reward system is aligned with the vision ofintegrity.4. Policies and practices of the organization arealigned with the vision and no mixed messages arebeing sent.5. It is understood that every significant management

decision has ethical value dimensions.

We see that organizations such as Tata Motors,Wipro, and Infosys have specific ethical policiesand they are immensely benefited by these policies


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Is ethical behaviour good or bad for business?

ou might think the above question is an easy one for businessesto answer? Surely acting ethically makes good business sense? As

with all issues in business studies, there are two sides to everyargument:The advantages of ethical behavior include:Higher revenues demand from positive consumer support

Improved brand and business awareness and recognitionBetter employee motivation and recruitmentNew sources of finance e.g. from ethical investorsThe disadvantages claimed for ethical business include:Higher costs e.g. sourcing from Fairtrade suppliers rather than

lowest priceHigher overheads e.g. training & communication of ethical policyA danger of building up false expectations


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Examples of Corporate Ethics

Chicago Tylenol Scare The Johnson & Johnson company, manufacturers of the

Tylenol product, has always been strict in having all of itsemployees adhere to a code of ethics. There are surveysgiven periodically to all of their employees to ensure thatethics are kept up. In the 1980s, there was an incident in

which seven Chicago residents died from ingestingcyanide-laced capsules of Tylenol. The CEO at the time,

James Burke, was on a plane when the news came out and

by the time he had landed, the managers had already madethe call to pull their products off the shelves. Money wasnot the first priority for these mangers, but the first priority

was the social responsibility of the company for theircustomers' safety.

Thank you for listening Patiently


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Thank you for listening Patiently


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Corpotate Ethics (Gourav)

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