Business, Government & Society

Module 3 & 4
Business Ethics- Meaning of ethics, business ethics, relation between ethics and business ethics,
evolution of business ethics, nature of business ethics, scope, need and purpose, importance,
approaches to business ethics, sources of ethical knowledge for business roots of unethical
behavior, ethical decision making, some unethical issues, benefits from managing ethics at
workplace, ethical organizations
Management of Ethics - Ethics analysis [ Hosmer model ]; Steps/ considerations in resolving
ethical dilemma; Ethics in practice - professional ethics for functional managers; Comparative
ethical behaviour of managers; Code of ethics; Competitiveness, organizational size,
profitability and ethics; Cost of ethics in Corporate ethics evaluation
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Meaning Of Ethics
The basic concepts and fundamental principles of right human conduct.It includes study of
universal values such as the essential equality of all men and women, human or natural rights,
obedience to the law of land, concern for health and safety and, increasingly, also for the
naturalenvironment. See also morality.
Ethics, also known as moral philosophy, is a branch of philosophy that involves systematizing,
defending, and recommending concepts of right and wrong conduct. The term comes from the
Greek word ethos, which means "character". Ethics is a complement to Aesthetics in the
philosophy field of Axiology. In philosophy, ethics studies the moral behavior in humans, and
how one should act. Ethics may be divided into four major areas of study:
Meta-ethics, aboutthe theoretical meaning and reference of moral propositions and
howtheir truth values (if any) may be determined;
Normative ethics, about the practical means of determining a moral course of action;
Applied ethics, about how moral outcomes can be achieved in specific situations;
Descriptive ethics, also known as comparative ethics, is the study of people's
beliefsabout morality;
Business Ethics
Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that
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examines ethical principles and moral or ethical problems that arise in a business environment.
It applies to all aspects of business conduct and is relevant to the conduct of individuals and
entire organizations.
Business ethics has both normative and descriptive dimensions. As a corporate practice and a
career specialization, the field is primarily normative. Academics attempting to understand
business behavior employ descriptive methods. The range and quantity of business ethical issues
reflects the interaction of profit-maximizing behavior with non-economic concerns. Interest in
business ethics accelerated dramatically during the 1980s and 1990s, both within major
corporations and within academia. For example, today most major corporations promote their
commitment to non-economic values under headings such as ethics codes and social
responsibility charters. Adam Smith said, "People of the same trade seldom meet together, even
for merriment and diversion, but the conversation ends in a conspiracy against the public, or in
some contrivance to raise prices." Governments use laws and regulations to point business
behavior in what they perceive to be beneficial directions. Ethics implicitly regulates areas and
details of behavior that lie beyond governmental control. The emergence of large corporations
with limited relationships and sensitivity to the communities in which they operate accelerated
the development of formal ethics regimes.
Business ethics reflects the philosophy of business, one of whose aims is to determine the
fundamental purposes of a company. If a company's purpose is to maximize shareholder returns,
then sacrificing profits to other concerns is a violation of its fiduciary responsibility. Corporate
entities are legally considered as persons in USA and in most nations. The 'corporate persons'
are legally entitled to the rights and liabilities due to citizens as persons.
Ethical issues include the rights and duties between a company and its employees,
suppliers,customers and neighbors, its fiduciary responsibility to its shareholders. Issues
concerning relations between different companies include hostile take-overs and industrial
espionage. Related issues include corporate governance;corporate social entrepreneurship;
politicalcontributions; legal issues such as the ethical debate over introducing a crime of
corporatemanslaughter; and the marketing of corporations' ethics policies.

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Relation Between Ethics And Business Ethics
Ethics asks the question, How should I live my life?, and it uses moral philosophy and moral
reasoning to explore and answer that question. Business ethics asks, How should a business
live its life?or more appropriately, How should a business behave?, and it uses moral
philosophy and moral reasoning to explore and answer that question. The key word in all the
above questions is should.
The relationship between business and ethics is intrinsically entwined. A successful company is
one which can effectively recognize and cultivate the relationship which exists between the two.
Businesses that exhibit and promote strong corporate codes of ethics are more prosperous in the
long run because they show a commitment to an expectation of sound moral behavior. This
demonstrates a dedication to society, customers, employees and the business itself. It also
enhances a company's reputation if they become commonly known as an ethical company, and
this brings more value to the organization.
The relationship between business and ethics is intrinsically entwined. A successful company is
one which can effectively recognize and cultivate the relationship which exists between the two.
Businesses that exhibit and promote strong corporate codes of ethics are more prosperous in the
long run because they show a commitment to an expectation of sound moral behavior. This
demonstrates a dedication to society, customers, employees and the business itself. It also
enhances a company's reputation if they become commonly known as an ethical company, and
this brings more value to the organization.
Evolution Of Business Ethics
The term 'business ethics' came into common use in the United States in the early 1970s. By the
mid-1980s at least 500 courses in business ethics reached 40,000 students, using some twenty
textbooks and at least ten casebooks along supported by professional societies, centers and
journals of business ethics. The Society for Business Ethics was started in 1980. European
business schools adopted business ethics after 1987 commencing with the European Business
Ethics Network (EBEN). In 1982 the first single-authored books in the field appeared.
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Firms started highlighting their ethical stature in the late 1980s and early 1990s, possibly trying
to distance themselves from the business scandals of the day, such as the savings and loan crisis.
The idea of business ethics caught the attention of academics, media and business firms by the
end of the Cold War. However, legitimate criticism of business practices was attacked for
infringing the "freedom" of entrepreneurs and critics were accused of supporting communists.
This scuttled the discourse of business ethics both in media and academia.
Characteristics/Nature Of Business Ethics
The following are the important features of business ethics:1. Business ethics are the principles, which govern and guide business people to
perform business functions and in that sense business ethics is a discipline
2. It is considered both as a science and an art.
3. It continuously test the rules and moral standards and is dynamic in nature .
4. It is based on theological principles such as sincerity, human welfare, service, good
behavior etc.
5. It is based on reality and social customs prevailing in business environment.
6. It studies the activities , decisions and behavior which are related to human beings
7. It has universal application because business exists all over the world
8. Many of the ethical principles develop the personal dignity
9. Business ethics keeps harmony between different roles of businessman, with every
citizen, customer, owner and investors.
Need of Business Ethics
1. Stop

business

malpractices

Some

unscrupulous

businessmen

dobusinessmalpracticesby indulging in unfair trade practices like black-marketing,

artificial high pricing, adulteration, cheating in weights and measures, selling of
duplicate and harmful products, hoarding, etc. These business malpractices are harmful
to the consumers. Business ethics help to stop these business malpractices.
2. Improve customers' confidence: Business ethics are needed to improve the
customers'confidence about the quality, quantity, price, etc. of the products. The

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customers have more trust and confidence in the businessmen who follow ethical rules.
They feel that such businessmen will not cheat them.
3. Survival of business: Business ethics are mandatory for the survival of business.
Thebusinessmen who do not follow it will have short-term success, but they will fail in
the long run. This is because they can cheat a consumer only once. After that, the
consumer will not buy goods from that businessman. He will also tell others not to buy
from that businessman. So this will defame his image and provoke a negative publicity.
This will result in failure of the business. Therefore, if the businessmen do not follow
ethical rules, he will fail in the market. So, it is always better to follow appropriate code
of conduct to survive in the market.
4. Safeguarding consumers' rights: The consumer has many rights such as right to
healthand safety, right to be informed, right to choose, right to be heard, right to redress,
etc. But many businessmen do not respect and protect these rights. Business ethics are
must to safeguard these rights of the consumers.
5. Protecting employees and shareholders: Business ethics are required to protect
theinterest of employees, shareholders, competitors, dealers, suppliers, etc. It protects
them from exploitation through unfair trade practices.
Develops good relations: Business ethics are important to develop good and
friendlyrelations between business and society. This will result in a regular supply of
good quality goods and services at low prices to the society. It will also result in profits
for the
businesses thereby resulting in growth of economy.
7. Creates good image: Business ethics create a good image for the business
andbusinessmen. If the businessmen follow all ethical rules, then they will be fully
accepted and not criticized by the society. The society will always support those
businessmen who follow this necessary code of conduct.
8. Smooth functioning: If the business follows all the business ethics, then the
employees,shareholders, consumers, dealers and suppliers will all be happy. So they will
give full cooperation to the business. This will result in smooth functioning of the
business. So, the business will grow, expand and diversify easily and quickly. It will
have more sales and more profits.
9. Consumer movement: Business ethics are gaining importance because of the growth
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ofthe consumer movement. Today, the consumers are aware of their rights. Now they are
more organized and hence cannot be cheated easily. They take actions against those
businessmen who indulge in bad business practices. They boycott poor quality, harmful,
high-priced and counterfeit (duplicate) goods. Therefore, the only way to survive in
business is to be honest and fair.
10. Consumer satisfaction: Today, the consumer is the king of the market. Any
businesssimply cannot survive without the consumers. Therefore, the main aim or
objective of business is consumer satisfaction. If the consumer is not satisfied, then there
will be no sales and thus no profits too. Consumer will be satisfied only if the business
follows all the business ethics, and hence are highly needed.
11. Importance of labor:Labor, i.e. employees or workers play a very crucial role in
thesuccess of a business. Therefore, business must use business ethics while dealing with
the employees. The business must give them proper wages and salaries and provide them
with better working conditions. There must be good relations between employer and
employees. The employees must also be given proper welfare facilities.
12. Healthy competition: The business must use business ethics while dealing with
thecompetitors. They must have healthy competition with the competitors. They must
not do cut-throat competition. Similarly, they must give equal opportunities to smallscale

Importance of Business Ethics

There may be many reasons why business ethics might be regarded as an increasingly important
area of study, whether as students interested in evaluating business activities, or as managers
seeking to improve their decision-making skills.
It is generally viewed that good business ethics promote good business.
1 The power and influence of business in society is greater than ever before. Business ethics
helps us to understand why this is happening, what its implications might be, and how we might
address this situation.
2 Business has the potential to provide a major contribution to our societies, in terms of
producing the products and services that we want, providing employment, paying taxes, and
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acting as an engine for economic development and thereby increases the goodwill.
3 Business malpractices have the potential to inflict enormous harm on individuals, on
communities and on the environment. Through helping us to understand more about the causes
and consequences of these malpractices, business ethics helps to create mutual trust and
confidence in relationship.
4 The demands being placed on business to be ethical by its various stakeholders are constantly
becoming more complex and more challenging. Business ethics provides the means to
appreciate and understand these challenges more clearly, in order that firms can meet these
ethical expectations more effectively.
Business ethics can help to improve ethical decision making by providing managers with the
appropriate knowledge and tools that allow them to correctly identify, diagnose, analyse, and
provide solutions to the ethical problems and dilemmas they are confronted with.
6 A business can prosper on the basis of good ethical standards and it helps to retain the
business for long years.
7 Business ethics can provide us with the ability to assess the benefits and problems associated
with different ways of managing ethics in organizations.
8 In the age of complexity in business fields , competition is increasing day by day Good ethical
standard helps the business to face the challenges
Sources of Ethical Knowledge for Business Roots of Unethical Behavior

RELIGION: Principles of Business Ethics

The Principles of business ethics developed by well known authorities like Cantt, J. S.Mill,
Herbert Spencer, Plato, Thomas Garret, Woodrad, Wilson etc are as follows
1. Sacredness of means and ends : The first and most important principles of business
ethicsemphasize that the means and techniques adopted to serve the business ends must be
sacred and pure.It means that a good end cannot be attained with wrong means, even if it is
beneficial to the society.
2. Not to do any evil: It is unethical to do a major evil to another or to oneself , whether this
evilis a means or an end.
3. Principle of proportionality: This principle suggests that one should make proper
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judgmentbefore doing anything so that others do not suffer from any loss or risk of evils by the
conducts of business.
4. Non co-operation in evils: It clearly points out that a business should with any one for
doingany evil acts . that
5. Co-operation with others This principles states that business should help others only in
thatcondition when other deserves for help
6. Publicity: According to W. Wilson, anything that is being done or to be done, should
bebrought to the knowledge of everyone. If everyone knows, none gets opportunity to do an
unethical act.
7. Equivalent price: According to W. Wilson , the people are entitled to get goods equivalent
tothe value of money that he will pay.
8. Universal value: According to this principle the conduct of business should be done on
thebasis of universal values.
9. Human dignity: As per this principle , man should not be treated as a factor of production
andhuman dignity should be maintained.
10. Non violence: If businessman hurts the interests and rights of the society and exploits
theconsumer by overlooking their interests this is equivalent to violence and unethical act.

Cultural experience: It refers to the set of values, rules &beliefs among generations to be
followed.

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Ethical Decision-Making Process

1.

State problem.

For example, "there's something about this decision that makes me

uncomfortable" or "do I have a conflict of interest?".

2.

Check facts.
Many problems disappear upon closer examination of situation, while others
change radically.

3.

Identify relevant factors.

For example, persons involved, laws, professional code, other practical

constraints ( e.g. under $200).

4.

Develop list of options.

Be imaginative, try to avoid "dilemma"; not "yes" or" no" but whom to go to,
what to say.

5.

Test options. Use such tests as the following:

harm test: Does this option do less harm than alternatives?

publicity test: Would I want my choice of this option published in the newspaper?

defensibility test: Could I defend choice of option before congressional committee

or committee of peers?

reversibility test: Would I still think choice of this option good if I were adversely
affected by it?

colleague test: What do my colleagues say when I describe my problem and

suggest this option is my solution?

professional test: What might my profession's governing body for ethics

committee say about this option?

organization test: What does the company's ethics officer or legal counsel say
about this?
6.
Make a choice based on steps 1-5.
7.
Review steps 1-6. What could you do to make it less likely that you would have to make
such a decision again?

Are there any cautions you can take as an individual ( and announce your policy
on question, job change, etc.)?

Is there any way to have more support next time?

Is there any way to change the organization ( for example, suggest policy change
at next departmental meeting)?

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Hosmer Model of Ethical Analysis/ & 7 Principle of Ethical Analysis

1. Principle of Long-term self-interest
Never take any action not in your organization's long-term self-interest
2. Principle of Personal Virtue
Never do anything that is not honest, open, and truthful and that you would never be glad to see
reported in the newspapers or on TV
3. Principle of Religious injunction
Never take any action that is not kind and that does not build a sense of community.
4. Principle of Government Requirements
Never take any action that violates the law, for the law represents the minimal moral standard
5. Principle of Utilitarian benefit
Never take any action that does not result in greater good for society
6. Principle of Individual rights
Never take any actions that infringes on others' agreed-upon rights
7. Principle of Distributive Justice
Never take any action that harms the least among us: the poor, the uneducated, and the
unemployed

Unethical Issue at Work Place

Ethics is based on the recognition of certain human rights. An individual has the right not to be
deliberately deceived. He has the right not to be forced to go against his conscience. He has the
right to expect other parties to live up to their commitments and to behave according to the law.
In the workplace, the employer has the right to expect employees to behave according to
company policy.
Employer Intimidation
The 2005 National Business Ethics Study listed employer intimidation as the most common form
of ethical violation in the workplace. According to the Canadian Centre for Occupational Health
and Safety, intimidation, also known as bullying, typically involves a pattern of verbal abuse
directed at any employee by an employer. The employers attempts to assert his power by
humiliating the employee.
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Taking Credit for Others' Work
Employees often work in teams to create marketing campaigns, develop new products or finetune services, yet rarely does everyone in a group contribute equally to the final product. If three
members of a five-person team did all the work, do those three members demand to receive
proper credit while pointing out that two members of the team did not pull their weight?
This is a thorny question. If employees single out their co-workers in a negative light, it could
foment resentment. The same thing could happen, however, if all employees accept equal praise
even though only a select few did the real work. The best way to resolve this ethical dilemma is
to not let it happen. Team members should insist that all employees perform specific tasks to
help complete a project.
Safety Violations
Ethical violations may occur regarding workplace safety. The 2005 National Business Ethics
Study indicated that 16 percent of the surveyed employees observed violations of workplace
safety regulations. Not following established safety procedures can jeopardize the health, or even
the lives of other employees. Even something as simple as not wearing a hard hat or other safety
gear can result in worker injury, which impacts the employer as far as lost productivity and
possible payment of a workers compensation claim.
Time Theft
Time theft can be a more subtle form of unethical behavior. According to the International
Foundation for Protection Officers, common forms of time theft involve altering time cards or
time sheets to cover up late arrivals or early departures, or even standing around the water cooler
instead of working. Time theft also includes viewing non-work-related websites, or spending
time sending emails to friends.
Violation of Conscience
Your sales manager calls you into his office and threatens to fire you unless you sell 50 large
toasters. You know the large toasters are inferior products and have been selling the small
toasters to your customers, instead. To keep your job, you must violate your conscience and
recommend that your customers buy the large toasters. Your boss is engaging in unethical
behavior by forcing you to do something you know is wrong, and also risking the ire and
potential loss of valuable customers to meet a product sales goal. He may be engaging in
unethical conduct because top management has forced him by threatening his job, too. Coercion
is also the basis for workplace sexual harassment and results in lawsuits. Unethical behavior
often causes more unethical behavior.
Failure to Honor Commitments
Your boss promises you an extra day off if you rush out an important project by a certain date.
You work late hours and finish the project before the deadline. Ready for your day off, you
mention it to your boss who responds "No, we have too much work to do." Your boss engaged in
unethical behavior that has virtually guaranteed your future distrust and unwillingness to extend
yourself to assist in department emergencies. In addition, you are likely to complain to your coworkers, causing them to distrust the promises of the boss and be unwilling to cooperate with his
requests.
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Unlawful Conduct
Padding an expense account with non-business expenses, raiding the supply cabinet to take home
pens and notebooks and passing around unregistered or counterfeit software are examples of
unlawful conduct in the workplace. The person who steals from the company by padding her
expense account or taking supplies for personal use risks losing her job. If a company decides to
overlook such theft on the basis of maintaining employee morale by not firing a popular
employee, other employees will also steal so they can feel they are getting the same deal as their
co-worker. Passing around counterfeit software, if discovered by the manufacturer, can cost the
company through lawsuits and fines.
Disregard of Company Policy
An employer is understandably concerned about avoiding lawsuits and angry customers because
those things negatively affect profitability. Most employers clearly state company policies
against deception, coercion and illegal activities. They also strive to convey an image of
trustworthiness to their customers and employees. Corporate trustworthiness helps retain
customers and valued employees, and the loss of either also negatively affects company
profitability. To disregard company policy is unethical because it has the potential to harm the
company and other employees.
Stealing
Ethics violations can also involve stealing items, including office supplies and computer
equipment. Employees who have access to company finances can steal cash, or use "creative
accounting" as a means to embezzle money. Workers may also steal merchandise from a
business. The International Foundation for Protection Officers points out that product displays
are a frequent target of employee theft.
Misconduct
Misconduct in the workplace can take on many forms. Common varieties include sexual
harassment, or discriminatory practices, such as age, race or gender bias. The 2005 National
Business Ethics Study indicated that 12 percent of employees reported occurrences of
discrimination in the workplace, while 9 percent reported occurrences of sexual harassment.
Advantages of Managing Ethics in Workplace
1. Significant improvement to society
Application of business ethics helps to avoid many evils from the society. It includes child
labour, unscrupulous price fixing, harassment of employees, poverty and starvation of
employees etc.
2. Cultivate strong team work and productivity
Ethical programme helps to tune employee behavior in accordance with the values preferred by
leaders of the organization. It helps to build openness, integrity and a sense of oneness among
all. Employees feel strong alignment between their values and those of the organization and they
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react with strong motivation and performance.
3. Support Employee Growth
Ethics programme help employees to face reality, both good and bad in the organization and
themselves. They feel full confidence to admit and deal with whatever comes their way.
4. Insurance policy
Ethical programs help to ensure that policies are legal. Ethical principles are often applied to
current, major ethical issues and become legislation. A major intent of well designed personnel
policies is to ensure ethical treatment of employees.
5. Avoid Penal action
Ethical programs help to detect issues and violations early so that they can be reported or
addressed which helps to avoid subsequent penal actions and lower fines.
6. Helps in Quality Management, Strategic planning and diversity management
Ethical programme identify favorite values and ensure organizational behaviors which are
associated with those values. This complex effort can be aligned with values, including quality
management, strategic planning and diversity management.

Ethical Organizations:
Are business entities that have incorporated ethics & values in the bloodstream of
the organization. Management embodies the vision.
Characteristics:
Leadership
Integrity
Values
Respect
Loyalty
Concern

Theories of Business Ethics

a) Consequentialism is the class of normative ethical theories holding that the consequences of
one's conduct are the ultimate basis for any judgment about the rightness or wrongness of that
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conduct. Thus, from a consequentialist standpoint, a morally right act (or omission from acting)
is one that will produce a good outcome, or consequence. In an extreme form, the idea of
consequentialism is commonly encapsulated in the English saying, "the ends justify
the means",meaning that if a goal is morally important enough, any method of achieving it is
acceptable.
Consequentialism is usually contrasted with deontological ethics (or deontology), in that
deontology, in which rules and moral duty are central, derives the rightness or wrongness of
one's conduct from the character of the behavior itself rather than the outcomes of the conduct. It
is also contrasted with virtue ethics, which focuses on the character of the agent rather than on
the nature or consequences of the act (or omission) itself, and pragmatic ethics which treats
morality like science: advancing socially over the course of many lifetimes, such that any moral
criterion is subject to revision. Consequentialist theories differ in how they define moral goods.
Some argue that consequentialist and deontological theories are not necessarily mutually
exclusive. For example, T. M. Scanlon advances the idea that human rights, which are
commonly considered a "deontological" concept, can only be justified with reference to the
consequences of having those rights. Similarly, Robert Nozick argues for a theory that is mostly
consequentialist, but incorporates inviolable "side-constraints" which restrict the sort of actions
agents are permitted to do.
There are two theories under this category

Egoism
Utilitarian

i)Egoism
Ethical egoism: whatever action serves my self-interest is also the morally right action. Whats
good for me in the sense that it gives me pleasure and happiness is also good in the sense that its
the morally right thing to do.
Ethical egoism mirrors altruism: If Im an altruist, I believe that actions ought to heighten the
happiness of others in the world, and what happens to me is irrelevant. If Im an egoist, I believe
that actions ought to heighten my happiness, and what happens to others is irrelevant.
When we hear the word egoist, an ugly profile typically comes to mind: self-centered,
untrustworthy, pitiless, and callous with respect to others. Some egoists really are like that, but
they dont have to be that way. If youre out to maximize your own happiness in the world, you
might find that helping others is the shortest and fastest path to what you want. This is a very
important point. Egoists arent against other people, theyre for themselves, and if helping others
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works for them, thats what theyll do
ii)Utilitarian
The requirement to vaccinate children against diseases such as polio, measles, and whooping
cough is an example of utilitarianism, or serving the public good, as opposed to allowing parents
to opt out of vaccination based upon religious grounds.
Utilitarianism offers a relatively straightforward method for deciding the morally right course of
action for any particular situation we may find ourselves in. To discover what we ought to do in
any situation, we first identify the various courses of action that we could perform. Second, we
determine all of the foreseeable benefits and harms that would result from each course of action
for everyone affected by the action. And third, we choose the course of action that provides the
greatest benefits after the costs have been taken into account.
The principle of utilitarianism can be traced to the writings of Jeremy Bentham, who lived in
England during the eighteenth and nineteenth centuries. Bentham, a legal reformer, sought an
objective basis that would provide a publicly acceptable norm for determining what kinds of
laws England should enact. He believed that the most promising way of reaching such an
agreement was to choose that policy that would bring about the greatest net benefits to society
once the harms had been taken into account. His motto, a familiar one now, was "the greatest
good for the greatest number."
Over the years, the principle of utilitarianism has been expanded and refined so that today there
are many variations of the principle. For example, Bentham defined benefits and harms in terms
of pleasure and pain. John Stuart Mill, a great 19th century utilitarian figure, spoke of benefits
and harms not in terms of pleasure and pain alone but in terms of the quality or intensity of such
pleasure and pain. Today utilitarians often describe benefits and harms in terms of the
satisfaction of personal preferences or in purely economic terms of monetary benefits over
monetary costs.
Utilitarians also differ in their views about the kind of question we ought to ask ourselves when
making an ethical decision. Some utilitarians maintain that in making an ethical decision, we
must ask ourselves: "What effects will my doing this act in this situation have on the general
balance of good over evil?" If lying would produce the best consequences in a particular
situation, we ought to lie. Others, known as rule utilitarians, claim that we must choose that act
that conforms to the general rule that would have the best consequences. In other words, we must
ask ourselves: "What effect would everyone's doing this kind of action have on the general
balance of good over evil?" So, for example, the rule "to always tell the truth" in general
promotes the good of everyone and therefore should always be followed, even if in a certain
situation lying would produce the best consequences. Despite such differences among
utilitarians, however, most hold to the general principle that morality must depend on balancing
the beneficial and harmful consequences of our conduct.
Problems With Utilitarianism
While utilitarianism is currently a very popular ethical theory, there are some difficulties in
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relying on it as a sole method for moral decision-making. First, the utilitarian calculation requires
that we assign values to the benefits and harms resulting from our actions and compare them
with the benefits and harms that might result from other actions. But it's often difficult, if not
impossible, to measure and compare the values of certain benefits and costs. How do we go
about assigning a value to life or to art? And how do we go about comparing the value of money
with, for example, the value of life, the value of time, or the value of human dignity? Moreover,
can we ever be really certain about all of the consequences of our actions? Our ability to measure
and to predict the benefits and harms resulting from a course of action or a moral rule is dubious,
to say the least.
Perhaps the greatest difficulty with utilitarianism is that it fails to take into account
considerations of justice. We can imagine instances where a certain course of action would
produce great benefits for society, but they would be clearly unjust. During the apartheid regime
in South Africa in the last century, South African whites, for example, sometimes claimed that
all South Africansincluding blackswere better off under white rule. These whites claimed
that in those African nations that have traded a whites-only government for a black or mixed one,
social conditions have rapidly deteriorated. Civil wars, economic decline, famine, and unrest,
they predicted, will be the result of allowing the black majority of South Africa to run the
government. If such a prediction were trueand the end of apartheid has shown that the
prediction was falsethen the white government of South Africa would have been morally
justified by utilitarianism, in spite of its injustice.
If our moral decisions are to take into account considerations of justice, then apparently
utilitarianism cannot be the sole principle guiding our decisions. It can, however, play a role in
these decisions. The principle of utilitarianism invites us to consider the immediate and the less
immediate consequences of our actions. Given its insistence on summing the benefits and harms
of all people, utilitarianism asks us to look beyond self-interest to consider impartially the
interests of all persons affected by our actions. As John Stuart Mill once wrote:
The happiness which forms the utilitarian standard of what is right in conduct, is not...(one's)
own happiness, but that of all concerned. As between his own happiness and that of others,
utilitarianism requires him to be as strictly impartial as a disinterested and benevolent spectator.
In an era today that some have characterized as "the age of self-interest," utilitarianism is
a powerful reminder that morality calls us to look beyond the self to the good of all.

b)Non-Consequentialist Theory
Normative Ethical Theories are general approaches or strategies to moral deliberation and
decision-making. They are future oriented as well as past oriented. As future-oriented, they
provide us with guidelines for decision-making; as past-oriented, they provide criteria for
evaluation of choices or decisions already made. Each normative ethical theory typically
includes its own philosophical justification, worked out by its advocates, together with criticisms
of alternate approaches for being in some way inadequate.
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Normative Ethical Theories are generally divided into two groups: Consequentialist Theories and
Non-Consequentialist Theories.
Non-Consequentialist Theories always reach decisions or evaluations on the basis of something
other than, or in addition to, the sum total or net aggregate of the consequences of choices.
Non-Consequentialist Theories do not always ignore consequences. For example, some of Ross's
prima facie duties (non-injury and beneficence, for instance) are directly related to promoting
good consequences or minimizing bad ones, but others (fidelity, gratitude, justice) are not.
Virtue Ethics is included under Non-Consequentialism simply because the focus of virtue ethics
is on the creation or expression of character traits and not on production of the greatest net
aggregate of consequences.
The other types of Non-Consequentialist theories share the feature of being clearly rule oriented.
Duties can obviously be stated in terms of rules. Rights can be stated in terms of duties, which
can in turn be stated in terms of rules. And theories of justice endorse principles of justice, which
logically imply duties or rights that can be stated in terms of rules.

Ethical Dilemma
Managers are responsible for upholding the ethical code and helping others to do so as well.
Outline the role managers must play in implementing internal ethical standards and aligning the
organization with external standards
Managers hold positions of authority that make them accountable for the ethical conduct of
those who report to them.
Managers monitor the behavior of employees in accordance with the organization's
expectations of appropriate behavior, and they have a duty to respond quickly and appropriately
to minimize the impact ofsuspected ethical violations.
Managers may be responsible for creating and/or implementing changes to the ethical codes or
guidelines of an organization.
Managers may also be subject to a particular code of professional ethics, depending on their
position and training. Fiduciary duty is an example that applies to some managerial roles

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Essential Steps for Ethical Problem-Solving
1. Determinewhether there is an ethical issue or/and dilemma. Is there a conflict of values, or
rights, or professional responsibilities? (For example, there may be an issue of self-determination
of an adolescent versus the well-being of the family.)
2. Identifythe key values and principles involved. What meanings and limitations are typically
attached to these competing values? (For example, rarely is confidential information held in
absolute secrecy; however, typically decisions about access by third parties to sensitive content
should be contracted with clients.)
3. Rankthe values or ethical principles which - in your professional judgement - are most
relevant to the issue or dilemma. What reasons can you provide for prioritizing one competing
value/principle over another? (For example, your client's right to choose a beneficial course of
action could bring hardship or harm to others who would be affected.)
4. Develop an action plan that is consistent with the ethical priorities that have been determined
as central to the dilemma. Have you conferred with clients and colleagues, as appropriate, about
the potential risks and consequences of alternative courses of action? Can you support or justify
your action plan with the values/principles on which the plan is based? (For example, have you
conferred with all the necessary persons regarding the ethical dimensions of planning for a
battered wife's quest to secure secret shelter and the implications for her teen-aged children?)
5. Implement your plan, utilizing the most appropriate practice skills and competencies. How
will you make use of core social work skills such as sensitive communication, skillful
negotiation, and cultural competence? (For example, skillful colleague or supervisory
communication and negotiation may enable an impaired colleague to see her/his impact on
clients and to take appropriate action.)
6. Reflecton the outcome of this ethical decision making process. How would you evaluate the
consequences of this process for those involved: Client(s), professional(s), and agency (ies)?
(Increasingly, professionals have begun to seek support, further professional training, and
consultation through the development of Ethics review Committees or Ethics Consultation
processes.)
Professional Ethics of Functional Managers

Professional body must prescribe a period of theoretical and practical training.

Should possess strong sense of social responsibility. Should be committed to safe-guard

and protect the interest of his clients in all ways should have certain moral principles.

Should provide high standard of service.

Should maintain total confidentiality of work interested to him.

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Involves taking moral decisions.

It is based code of conduct self- regulation and self-discipline.

Business Ethics

Ethics, also known as moral philosophy, is a branch of philosophy that involves systematizing,
defending, and recommending concepts of right and wrong behavior .

Professional Ethics
Professional Ethics concerns ones conduct of behavior and practice when carrying out
professional work. Such work may include consulting, researching, teaching andwriting.The
institutionalization of codes of conduct and codes of practice is common with many professional
bodies for their members to observe.

Professional Ethics For Functional Manages

Functional Managers are those who are responsible for carrying at a particular function in an
organization like functional manager can be Marketing Manager, HR Manager, Financial
Manager, Public relation officer etc.

Marketing Manager:
Marketing manager Marketing Managers has to follow certain Marketing Ethics.

Marketing Ethics means a standard by which a marketing action may be judged as

Right or wrong.

A right marketing action is expected to contribute to the overall societal gain both in the
short and the long rule.

One ethical practice would be that which in a marketing exchange alters the entitlements
of either the buyers of the seller in such a way that it is at the expenses of others.

For instance, raising the price by a percent and offering that as a discount to attract.

Therefore Marketing ethics should guide a marketers action in such a way that a
marketing action.

Shall not do any harm knowingly.

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Shall not knowingly promote conflict of interest.

He should be honest and fair.

Adheres to all applicable laws and regulations.

Does not deceive.

Therefore a code of ethic for marketing managers is used by the American Marketing
Association.

Human Resource Manager

HR Manager is engaged in the process of identification and development of suitable manpower
resources within the parameter of the socio-legal framework of the org. Broadly, HRM functions
include recruitment, selection, training & development, performance etc. The ethics of HRM
revolve around those ethical issues arising of the employer-employee relationship, such as the
rights and duties between them.
The unethical behavior of HR manager may also be seen in the case recruitment and
promotion and also in the case of performance appraisal.
HR professionals confront several ethics dilemmas in their day to day work.
For this the org.
Should evolve code of ethics for managers, executives and employees and enforce them.
Financial Manager
Financial Manager Code Principles and Responsibilities Financial Managers shall adhere to and
advocate to the best of their knowledge and ability the following principles and responsibilities
governing their professional and ethical conduct. Act with honesty and integrity, including the
ethical handling of actual or apparent conflicts of interest between personal and professional
relationships.

When disclosing information to constituents, provide them with information that is

accurate, complete, objective, relevant, timely and understandable.

Reports and documents shall contain full, fair, accurate, timely and understandable
information.

Comply with rules and regulations of federal, state, provincial and local governments,
and other appropriate private and public regulatory agencies.

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Comparative Ethical Behavior of Managers

Managers, according to Gerald Cavanagh, can use a combination of ways of moral reasoning
based on rights, justice, utility, and care when they face a moral conflict and when these different
ways of reasoning conflict, as they often do. To decide effectively, managers need to take several
factors into consideration as they weigh decisions based on the principles of rights, justice,
utility, or care. For example, they can consider whether there are overriding factors in the
decision. If a decision might result in the death of a person made one way and the unemployment
of a group of persons made another way, then the overriding factor might be the life-death
decision. There are, however, no clear rules for making such decisions, and the judgment of the
decision maker is needed to determine which of the relevant factors should carry the most
weight. Another consideration is whether one criterion is more important in a particular situation
than others. For example, if the rights of a whole group of people are to be overrun by a decision,
that factor might override the fact that one or two individuals would not be treated fairly when
the decision is made. Similarly, a consideration might be whether there are incapacitating factors
(such as force or violence) that would come into play in making the decisionfor instance, to
stop a strike, which might violate a person's right to strike but forestall the destruction and injury
if the strike turned violent.
The decision can be considered ethical when there is no intent to make an unethical decision,
when a bad effect is simply a by-product, and when the good outcome is sufficiently good that it
outweighs the bad. Other decision-making aids for managers include thinking about whether
they would want their decision made publicfor example, to appear on the front page of a
newspaper or on television. If they are uncomfortable with such transparency, it would be well to
apply an ethical analysis to the decision. For managers operating in different countries around
the world, it is useful to remember that virtually every nation of the world has at its core some
version of the Golden Rule: Do unto others as you would have others do unto you. By keeping
some of these principles in mind, managers can avoid the problem of relativism in their decision
making. Relativism suggests that a decision is all right if it is apparently culturally acceptable,
irrespective of the consequences or harms.
Moral Development The ethical decision making framework for managers relies on reasoning
using the principles of rights, justice, utility, and care. It presupposes that managerial decision
makers have the capacity to reason from principles in making an ethical decision. Unfortunately,
not everyone reasons from moral principles in making ethical decisions. At the preconvention
stage of development, the rationale for ethical decision making is rewards and punishments or
self-interest. Most managers have passed beyond the preconvention stage to the conventional
stage of development.

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Codes of Ethics
Most large corporations today have developed codes of conduct internally, which are intended to
provide guidance for managers confronting ethical situations and moral conflicts. Such codes of
conduct need to be supplemented by internal systems, such as reward and information systems,
promotion and hiring practices, recognition systems, and organizational culture and
communication systems, that support their implementation. Strong top management commitment
to and communication about values and ethical conduct is a core element of ethical leadership
from the top of the organization. Ethical leadership is essential to managers and employees at all
levels of the enterprise when they are faced with difficult ethical decisions and moral conflicts.
Codes of conduct alone can seldom be sufficient for managers to come to good decisions unless
they are supported by these other aspects of the organization. In addition to company or
organizational codes of conduct, many of which have been developed internally by companies to
articulate their own value systems, a number of codes and principles have emerged globally to
help managers think about their ethical responsibilities. Some of these are quite spare and lay out
fundamental principles, based on globally agreed on documents signed by many nations, such as
the United Nations Global Compact with its 10 core principles or the OECD Guidelines for
Multinational Enterprises. Again, as with internal codes of conduct, these principles are helpful
guides but cannot address every unique situation. As a result, codes need to be supported by the
organization's managerial decision making, its culture, its reward systems, and the
communication that exists about ethical practices within the firm.

Competitiveness &Ethics
Any organization, public or private, large or small, faces internal and external uncertainties that
affect its ability to achieve its objectives. The effect of uncertainty on an organization's
objectives is "risk." Risk management, commonly known in the business community as
enterprise risk management (ERM), can provide for the structured and explicit consideration of
all forms of uncertainty in making any decision.
The overarching principle of ERM is that it must produce value for the organization. It is the
culture, processes and structures that is directed towards taking advantage of potential
opportunities while managing potential adverse effects. Corporations face the task of managing
their risk exposures while remaining profitable and competitive at the same time. Managing risks
is not a new challenge, yet it may get overlooked due to several reasons. The challenges and
demands of contemporary markets, customer expectations, regulatory authorities, employees and
shareholders present organizations with an interesting array of contradictions. Risk management
can enhance the environment for identifying and capitalizing on opportunities to create value and
protect established value.

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Efficient managers who undertake risk, use a variety of risk management solutions that trannds
through traditional insurance risk transfer products. The rapidly changing global economy has
created an expanding array of risks to be managed to ensure the viability and success of an
enterprise. Historically, the practice of risk management has been confined to the traditionally
insurable risks such as loss from fire, earthquakes, wind, flood, legal liability and other relatively
straightforward potential causes of loss. Solutions involving the purchase of insurance were
emphasized, with focus on type of coverage, adequacy of limits and cost of risk transfer.
Over the last thirty years, most major corporations have evolved a much more sophisticated view
of risk management, encompassing traditional risk management concerns and adding new issues
arising from the changing internal and external environments within which they work. Now, it is
understood that every aspect of a company's operational and financial activity contains the
potential for risk that can negatively and meaningfully affect the success and viability of the
organization.
Profitability & Ethics
In the fallout from Enron and others, many investors are paying closer attention to a company's
ethics, as well as their profits. These investors realize that a corporate focus on profits alone with
little regard to ethical standards, conduct and enforcementmay result in short-term revenue
gain, but long-term profitability may be limited. In cases like Enron, long-term viability is
limited too. Consider this balance between profits and ethics to be "ethical profitability." Wellbalanced companies not only consistently reward owners, investors and employees with
profitable performance, they also genuinely focus on these five key areas:

Leadership

Company-wide ethical awareness

Strong management of revenue generation and reporting

High level of internal trust

Formal and active compliance program

Cost of Ethics in Corporate Ethics Evaluation

Operating in an ethical way may incur additional costs to a business when compared with other
retailers and companies who may not do business in the same way. For example, Primark bears
the cost of carrying out all audits. Then there are its costs associated with working with ethical
partners. An example of this is Primark s partnership with NariUddug Kendra (NUK). This is
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an organisation supporting women's rights and health in Bangladesh. See more information and
read an interview with NUK on the Primark website.
NUK has more than 20 years experience in addressing women's rights and labour issues in the
ready-made garment sector in Bangladesh. Through this partnership, Primark seeks to identify
and address key issues around equal rights, opportunities for growth and career enhancement, as
well as training needs within some of its key suppliers in Bangladesh. NUK's expertise in this
area helps Primark provide employees and middle management at factories with more intensive
support and training on ethical issues.
Costs to Primark of working in an ethical way include:
The employment of the global Ethical Trade team
Training its buyers on all ethical trade issues
Managing and paying for external audits
Helping suppliers put right issues raised by audits, through training and support from the
Primark Ethical Trade team.

However, rather than seeing these activities as costs, Primark believes that they enable the
business to operate in a sustainable and well-managed way. Through its remediation programme,
Primark's team of ethical managers work with factories to help them find ways of putting issues
right and developing sustainable practices. This provides a benefit to the supplier but also in the
long term to Primark, who gains from having suppliers all working to its standards.

Eti Khatri, Asst. Professor