Ethics & Discipline

Ethics• Business ethics is the application of ethical values to

business behavior• Business Ethics is a code of moral principles that

management and employees follow with respect to what is right and what is wrong from the standpoint of the organization’s dealings and interactions with its stakeholders. Besides generally acceptable values and norms, the organizational culture and internal policies of individual organization play a very important role in determining the ethical policies that are followed in the company. The guidelines for proper ethical conduct are embodied in the company’s Code of Ethics.

Ethical Dilemmas:

• Child labor• Environment protection for law or future

generations• Bribes or official presents• Downsizing: maintaining ratios or competence• Testing medicine on less priveleged• Merck Vioxx• Apple shares issue

Reidenbach & Robin Model• Amoral: winning at any cost – no set of values other

than greed• Legalistic: obeying the law – if it is legal then it is OK• Responsive: what can be gained from ethical

behavior – pretending to be caring• Emerging ethical: take an active interest in ethical

issues – recognize social contract – want to do the right thing

• Ethical cos – have a ‘total ethical profile’ – balance profits/ethics throughout their culture

Code of Ethics

Code of Ethics provides a guideline to the moral principles or values by which an organization conducts its business with respect to what is right or wrong.The Code of Ethics applies both to the organization as well as its employees in all their business dealings.

Advantages of adopting a Code of Ethics:

• Provides guidance to employees so that they know what is expected from them in terms of ethical behavior.

• Enhances the organization’s reputation and inspires public confidence.

• Creates an awareness of the organization’s expectations of proper conduct among all the stakeholders.

• Promotes a culture of excellence by demonstrating the organization’s commitment to ethical behavior.

Measures to eliminate unethical practices

• Create a written Company Code of Ethics and circulate it to each member of the staff.

• Issue clear and specific instructions, requiring adherence to the norms of ethical behavior.

• The consequences of indulging in unethical behavior should be stated clearly in the code of ethics.

• Good and ethic behavior should be rewarded.• Sponsor and organize seminars and workshops on

Ethics to emphasize the importance of ethical behavior.

Steps involved in conducting a disciplinary enquiry

• Obtain complete written record (date, time, names of people involved in offensive conduct)

• Obtain specific information from complaints as well as other sources

• Investigate the personal record of the employees involved in misconduct

• Study E & D rules of the organization• Ask the employee involved to give a written statement to the

various allegations leveled against him.• Meet the employee to listen to his point of vie.• Examine similar cases and incidents reported in the past.• After listening to the employee in an objective, fair and

consistent manner draw conclusion.• Prepare a report.

Wilful Misconduct(a) Wilful Misconduct is a deliberate act of violation of rules of employment by an employee. Acts of Wilful Misconduct are considered to be serious offences as they can cause serious financial loss to the employers and their reputation or pose grave risks to the health and safety of other employees.

The situations in which an employee may be liable to be guilty of Wilful Misconduct are: (i) Theft.(ii) Fraud.(iii) Misuse of official properties/assets. (iv) Damage to employer’s property with malicious intent.(v) Harassment of other employees.(vi) Gross misbehaviour with supervisors, peers and junior staff.(vii) Conduct or actions which pose threat to the employee’s own life or the lives of others

(c) It may be necessary for an organisation to dismiss an employee in the following situations: (i) The abilities of the employee have been impaired and it is not possible for the individual to continue to perform the assigned duties satisfactorily.(ii) The employee has indulged in serious misbehaviour/indiscipline with the supervisor or peers and this conduct is not conducive to the good working environment of the organisation.(iii) The employee cannot continue to work as it would be in contravention of the legal requirements/ laws of the country.(iv) The employee is involved in corruption/misappropriation of the employer’s properties.(v) The employee has divulged company’s confidential/proprietary information to competitors.(vi) The employee has attempted or made unauthorized access in