Business Ethics and Corporate

Governance
1. What is Ethics?
2. Nature and Scope of Ethics
3. Purpose of Ethics
4. Relevance of values
5. Imp of Ethics
6. Ethics and moral decision making
7. Corporate Social Responsibilities
8. Corporate Governance
9. Ethical Values related to Advertisement
10.Ethical Values related to Finance
11.Ethical Values related to Investment
12.Ethical Values related to Technology
13.Secular versus Spiritual Values
14.Work Ethics : Concept of Swadhrama on our own Conduct
15.Mr Gandhis Doctrine of Truth and Non Violence
16.Relevance of Trusteeship, Relevance in Modern Business
17.Need, Purpose and Relevance of Indian Ethics
18.Brain Stilling
19.Total Quality Mind
20.Intuition
21.Intellectual Rational Brain versus Holistic Spiritual Brain
22.Bhagvad Gita and Self Management
23.Doctrine of Karma and Nishkarma Karmayoga
or
Doctrine of Action and Action without Pursuance of Fruits
24.Theory of Gunas [SRT Model]
25.Theory of Sanskaras

What is Business Ethics?

1. The word ethics is derived from the Greek word Ethikos which
means character.
2. Ethics is a set of principles.

3.
4.
5.
6.

It deals with morality.

Ethics is a code of conduct considered correct.
Ethics deal with right and wrong behaviour.
Ethics involves listening to ones inner voice in solving issues related
to ethical dilemmas.
7. What is Business Ethics? Ethics as applied to business is Business
Ethics.
8. Business ethics deals withi. Fair labour practices like remuneration
ii. Environmental concerns
iii. Animal welfare
iv. Health concerns
v. Individual productivity
vi. Reduction of criminal penalties
vii. Protection of stakeholder interests both external
stakeholders as well as internal stakeholders
viii. No discrimination in individual recruitment against
vacancies
ix. Prevention of cyber crimes
9. Business ethics proves that business can be ethical and still earn
economic value.
10.
Business ethics deals withi. Integrity
ii. Impartiality
iii. Accountability
iv. Honesty
v. Transparency
vi. Upholding of Stakeholders Interest
vii. Commitment to justice
viii. Efficiency
ix. Prevention of Corporate politics
x. Taking decisions lawfully
xi. Innovation
xii. Full disclosure of financial information
xiii. Clear Communication
xiv. Equal pay for equal work
11.A business that lacks ethical values is bound to disaster and failure soon.
12.The best way to evolve ethical behaviour is by setting a personal example
for the same.
13.Excellent organisations are driven by values not greed.
14.Within an organisation normally values are impacted by the chairperson
and managing director of the company and the same trickles down.
15. What are some of the unethical practices prevalent in business dealings?
They arei. Discrimination in recruitment of individuals
ii. Lack of transparency in financial operations
iii. Window dressing of balance sheets
iv. Manipulation of profit and loss accounts

v. Continuous upward revaluation of assets to conceal poor

performance. E.g. Satyam Corporation.
vi. Insider-trading-Revealing confidential information of your
corporation house to outside parties
vii. Tax Violations
16.How can corporations ensure ethical conduct in business practices?
i. Publishing of in-house code of ethics.
ii. Set a personal example.
iii. Recruit individuals who have a strong value system.
iv. Reward ethical behaviour.
v. Provide protective mechanism for ethical people.
vi. Incorporate ethical values in performance appraisals.
vii. Zero tolerance for corrupt practices in personal or business
dealings.
viii. Provide training on ethical behaviour.
ix. Openly discuss ethical issues and resolve doubts.
x. Provide solution easily in cases of ethical misconduct.

Nature and Scope of Business Ethics

Nature
Ethics covers all areas of-Politics

-Diversity

-Sociology

-Psychology

-History

-Tourism

-Organisational
Behaviour

Communicatio
n

-Administration

-Law

-Finance

-Personality
-Change

-IT

-Marketing

-Human
Resource
-Purchase
-Geography
-Science
-Religion

1. Maintain Personal Relations- It is a part of our personal life and how to give
our best to our personal relations.
2. Ethics nurtures our faith in goodness of heart, purity of soul and originality
of our mind.
3. Carry out Professional Duties- Business ethics coaches us on how to carry
out our professional duties with verge and vigour and how not to succumb
to corrupt practices in our dealings with our fellow-mates in the corporate
sector.
4. Ethics is not just theory but it is a very vital tool in the hands of every
person and one should use it for safeguarding ones own interests as well
as those of others.
5. Ethical behaviour makes one more trustworthy in the eyes of our
customers and colleagues.
6. When ethics is pursued it gives you the security that under adverse
circumstances you will be able to come out clean and nobody can raise
her/his finger at you.
7. Ethical constraints make us more legally wise and inculcate in us lawful
character.
8. When we think and perform ethically we get an example for others to do
the same.
Scope
The scope of ethics covers all parameters of our personal bearing, attitude and
behaviour.
1. Can perform well as an executive- Due to ethical training one can do
justice to ones role as an Executive.
2. Maintain good relationship with customers- If we are completely honest
and truthful to our customers we can win their regard and can generate
their loyalty for our company.
3. Ethics makes one detailed, methodical and meritorious and we can then
deserve our pay-check.
4. Financial transparency with the shareholders- In the financial bracket
ethics is useful for us to be completely transparent with our all
stakeholders. [External stakeholders as well as Internal Stakeholders]
5. Makes us more sincere, genuine and natural- It makes us more sincere,
genuine and natural in our interaction with our associates and
administrators.
6. Always follow the law- We must never think of bypassing laws as that can
land us in deep trouble.
7. Whatever wrong and right we do comes back to us- The mills of God
grind slowly yet they grind exceedingly small. This means that whatever
right we do comes back to us and whatever wrong we do also comes back
to us.
8. Show love for fellow beings and colleagues- Ethics also covers love for our
fellow-beings and to do for them even it is in small measures.
9. Following Ethical path our dreams can be fulfilled in reality- Ethical
pointers give us proper focus to go achieve our dreams in the real manner
and not to harm our near and dear ones in the process.

10.Ethics tells us how to earn profit by following ethics and how to be ethical
for employees, workers and clients- Ethics involves how business can earn
profits for its efforts and how it can stay ethical towards its employees,
workers, management, customers and clients at the same time.
What does ethics covers and how?
1. Politics (Honest, positive, transparent personality)We can be more honest transparent and positive to stay away from
following corrupt practices.
2. Psychology (Understanding nature of others)We can understand the nature of other person and can act and talk
accordingly and consider the other persons opinions and advices
accordingly. We can come to know if the other person is manipulating us
or giving us right counsel.
3. Organisation Behaviour (Conflict resolution, management of stress, self
motivation)We can be motivated to behave with proprietary with our organisational
associates and follow conflict resolution strategies and stress-coping
mechanisms when in trouble we can work with intrinsic motivation and not
with extrinsic motivation towards our corporation.
4. Personality (Politeness, positive, perfectionist, respecting person)Ethics shapes our personality by making us more polite, positive and
perfectionist. It gives us an idea on how to behave with etiquettes
especially with the opposite gender.
5. Change (Helps in adopting changes)Ethics helps us to adopt change with one step at a time and without fear.
It gives us wings to fly in our own small yet meaningful measure.
6. Diversity (Enjoying diverse peoples habits)Ethics helps us to enjoy diverse people and their lifestyle, good habits,
culture, religions, thinking processes, etc. It makes us to appreciate and
respect differences not just to accept the contrasts but also to thrive in
them.
7. History (World war teaches us to love and tolerance for our neighbouring
mates)World wars teach us the importance of tolerance and love for our
neighbouring mates like Pakistan. It helps us to extend our love and
support to Pakistan and other countries in being time of need irrespective
of their attitude towards the country people.
8. Communication (Helps in effective communication, good listening,
speaking, writing habits)Ethics is a guide to clear transparent and educated communication in

terms of reading, writing, speaking and listening. It makes us more

humane in our forgiveness of other persons mistakes.
9. Law (Do everything following the rules and under law)Ethics makes us do our duties with rules and regulations and under the
book of law. It is a safety from getting into legal tangle. If we pursue law
and order faithfully.
10.Sociology (Work for the society, respect and deal with others and fight for
others)Ethics is a code of conduct for respectful and authentic communication
with our loved ones.
Ethics tells us how to fight for a good and worthy cause and sustain it to
reform the society and take it to greater heights.
11.Tourism (Befriend tourists of other countries due to which our culture is
promoted)Ethics gives us a clue as to how we can befriend foreigners visiting India
and how we can help them in finding their way.
It tells us how to advertise about Indian Dressing, Indian Cuisine, Indian
Festivals, Indian Lifestyle, Indian Historical Vedas and Epics, Indian
Monuments, Indian Values and Indian Psychology- to advertise them in a
truthful way and in a global way.
12.Administration (Helps in monitoring staff and encouraging everyone in the
organisation)Ethics helps administrators monitor their staff in an alert manner and train
them personally in a detailed manner. Ethics is a morale booster which
encourages that all organisational activities are being done punctually and
in the proper sequence.
13.IT (Dont commit crime, hacking, frauds, and carry other corrupt activities
online)Not to sabotage others computers. Not to commit crime of hacking. To
reveal your identity correctly in a correct format when chatting with
friends- these are some pointers in which ethics contributes in IT
specialisation.
14.FinanceNot to manipulate profit and loss accounts. To be completely honest and
forth right with our stakeholders.
15.Marketing (Do not show misleading ads, provide goods at cheaper rate
with quality)Be conscious of the needs of the customers. Produce brands with good
quality.

16.HR (Provide freedom, training, equal treatment and remuneration to

employees)To give workers freedom to perform in their own way. To train labours in
handling updated tasks and updated technology.
17.PurchaseEthics is a good step to attaining highest quality products which can
benefit the consumer adequately. Ethics shows us the record keeping
methods for future performance.
18.GeographyTo create world without boundaries and to live and let live.
19.ScienceEthics forbids dissection of animals. Killing of animals to fulfil ones
appetite as food is not good.
20.ReligionEthics prohibits sacrifice of animals made to please the deities- a common
practice in some temples and mosques. It helps develop secular feelings
towards all the religions of the world be it Christianity, Hinduism, Islam,
Buddhism, Jainism etc.
Daily Purpose of Ethics1.
2.
3.
4.

Perform job with honesty and sincerity.

Do not cheat other people in words or actions.
To live up to our souls command.
Learn from past mistakes and become the best- To enrich our own lives in
a renewed fashion everyday by becoming a better and better person with
every passing minute.
5. Learn to love others- To learn to love our colleagues unconditionally and
continuously.
6. Enjoy everything in life- To better enjoy our work as well as home life.
7. Learn to give credits-To give credit to the higher authorities for their
regular encouragement and loving guidelines.
8. Behave well with others- To behave with our friends and folks with due
etiquettes and courtesy.
9. Time Management- To manage our time efficiently.
10.No discrimination in religions and respect all religions- To adopt all
religions as our own and create no distinction between Hindus, Muslims,
Sikhs, Christians, Jews among others.
11.Become hard working- To become more and more hard-working.
12.To give rise to new ideas to our organisational fellow-mates.
13.Effective Decision Making- To take decisions in our technical as well as
conceptual areas with more precision and moral virtues.
14.To think intuitively which means not just mentally not just emotionally and
not just spiritually in all three positions holistically. (as a whole)

15.Befriend our enemies- To make friends of our enemies by our conscious

endeavours in their direction.
16.Use Technology wisely- To use technological features like online shopping,
E-reservation System, ATM machines operation, Data Card Internet
Services, E-Bills. Online payments with necessary care and evaluation.
17.Analyse Problems- To analyse a problem from all angles before reaching to
the main cause and its solution.
18.To speak lovingly to our younger generation. i.e., Gen next.
19.To contribute to our workplace.
20.Stay inspired- To stay inspired to achieve our goals.

Relevance of Values1. Service Mindedness

2. No discrimination in recruitment
3. Philanthropy (the desire to promote the welfare of others, expressed
especially by the generous donation of money to good causes.)
4. Values related to corporate governance
a. Transparency
b. Integrity
c. Disclosure of Financial & Non-Financial Information
d. Protection of Stakeholders Interest
e. Act with honesty
f. Provide with information that is accurate, complete, objective,
relevant, timely understandable
g. Comply with the laws of the land
h. Act in a good faith without misrepresenting material facts
i. Protect the confidentiality of information provided at the workplace and
not use it to promote personal benefit
j. Achieve responsible use of all assets and resources employed.
k. Shoulder responsibility individually rather than collectively.
l. Communicate clearly, frankly and directly without pretensions
m. Minimize bureaucracy and control in business dealings
n. Learning new ways of contributing to your workplace
o. Working with dignity and a high regard for self
p. Being absolutely sincere to your work and life
Kinds of Values1. Courage in speaking your mind
2. Empathy (Empathy is the experience of understanding another person's
condition from their perspective. You place yourself in their shoes and feel
what they are feeling. Empathy is known to increase pro-social (helping)
behaviours.)
3. Cherishing ones own freedom of thought, speech and action
4. Self respect
5. Valuing ones health
6. Eudemonia- A doctrine that states that happiness is the highest good
7. Adopting an inside-out approach- making & keeping promises to ourselves
precede making and keeping promises to others, putting character ahead

of personality, first improving ourselves and then improving our relations

with others.
8. Altruism
9. Conscientiousness (Conscientiousness is the personality trait of being
thorough, careful, or vigilant. Conscientiousness implies a desire to do a
task well. Conscientious people are efficient and organized as opposed to
easy-going and disorderly.)
10.Building truth of character in oneself

Classification of Values
1. Terminal ValuesDesirable end states of existence or goals which an individual would like to
achieve during his lifetime.
2. Instrumental ValuesPreferable mode of behaviour or means of achieving ones terminal value

1.
2.
3.
4.
5.

Terminal Values
Sense of achievement
Sense of High Regard for self
Sense of Justice
Fulfilling ones potential
Assuming responsibility

Instrumental Values
Ambition
Truth
Courage
Making efforts
Trying against all odds

How corporations & organisations observe ethics1.

2.
3.
4.
5.

They publish in house code of ethics.

Employ people with a reputation for high standards of ethical behaviour.
Incorporate ethics into performance reviews.
Reward Ethical behaviour.
Appoint ombudsmen (An ombudsman or public advocate is usually
appointed by the government or by parliament, but with a significant
degree of independence, who is charged with representing the interests of
the public by investigating and addressing complaints of
maladministration or a violation of rights) in their organisations.
6. Develop protective mechanism for people who are ethical and who blow
the whistle on wrong doing.
7. Provide training on Ethical Conduct frequently.
How is the value system developed?
1.
2.
3.
4.
5.

Genetic or hereditary factors

Cultural impact (Society)
Guidance from parents (Family)
Mentoring from teachers & educational institutions
Influence of friends & peer groups (clubs, colleges, conferences)

Types of Values

1.
2.
3.
4.
5.
6.
7.

Theoretical Values
Economic Values
Aesthetic Values
Social Values
Political Values
Religious Values
Psychological Values

Definition of a value1. A value is a sustained ethical and assimilated mode of acting, thinking or
merely being.
2. A value is a moral code of conduct.
3. A value stands for listening to ones inner voice no matter how hard the
decision is.
4. A value makes one wiser in the deliverance of duty.
5. A value is a perpetual guideline that imparts one character, courage and
consciousness towards work and people.
6. With a value one cannot go wrong.
7. If a value is pursued determinedly, a person will become strong
conscientious and uncompromising.
Importance of Ethics to Corporate house as well as to the Executive1. Ethics is necessary to gain trust-trust in customer relations, employee
relations as well as supplier relations. E.g., Notice, Torrent
Pharmaceuticals, Cotton County & HUL (Lakme)
2. It is necessary for the welfare of the society as it motivates proactive
action on the part of the individual. E.g., The Hindu (Newspaper)
3. For building regard in the eyes of the customer for the organisation. E.g.,
Nestle India Ltd. (Maggie, Nescafe, Kitkat)
4. Ethics helps to improve efficiency in the input-output process thus leading
to increased productivity. E.g., Parle Agra (Biscuits), Gujarat Cooperative
and Milk Marketing federation (Amul icecream, milk, cheese etc.)
5. Ethics helps to attain competitive advantage in the industry. E.g., Revlon
Cosmetics and Hair Colour (Ammonia free hair colour)
6. For continued success of the business enterprise. E.g., Microsoft (Windows
XP), HUL (Surf Excel).
7. To build corporate reputation. E.g., Loreal (Hair Care Products)
8. To take care of the interest of all stakeholders. E.g., Unichem Laboratories
Ltd. (Pharmaceuticals Group)
9. To face global challenges. E.g., LG (Refrigerators, Washing Machines,
Phones, Microwaves), Nivea (Talcum Powder, Cream, Deodorant)
10.To build an ethically sound corporate culture which others look upto. E.g.,
SBI (Indias largest Nationalised bank)
11.Leads to employee retention and customer regard. E.g.,