BUSINESS ETHICS AND SOCIAL VALUES

Ethics concern an individual's moral judgements about right and wrong. Decisions taken within an organisation may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. The decision to behave ethically is a moral one; employees must decide what they think is the right course of action. This may involve rejecting the route that would lead to the biggest short-term profit. Ethical behaviour and corporate social responsibility can bring significant benefits to a business. For example, they may: -attract customers to the firm's products, thereby boosting sales and profits -make employees want to stay with the business, reduce labour turnover and therefore increase productivity -attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees -attract investors and keep the company's share price high, thereby protecting the business from takeover. Unethical behaviour or a lack of corporate social responsibility, by comparison, may damage a firm's reputation and make it less appealing to stakeholders. Profits could fall as a result. Eg. CADBURY SCHWEPPES Along with good corporate governance, ethical behaviour is an integral part of everything that Cadbury Schweppes does. Treating stakeholders fairly is seen as an essential part of the company's success, as described here: 'A creative and well managed corporate and social responsibility programme is in the best interests of all our stakeholders - not just our consumers - but also our shareowners, employees, customers, suppliers and other business partners who work together with us. *' Ensuring that employees understand the company's corporate values is achieved by the statement of 'Our Business Principles' which makes clear the behaviour it seeks from employees.

Ethical Values for Business Success (By Mark S. Putnam)

Ethics is based on a set of moral and ethical values. These values must be absolute that is, you must take them seriously enough to override any human rationalization, weakness, ego, or personal faults. When all else fails, you will always look back to these core values to guide you. Unfortunately, life is not that easy and there's always disagreement about what values should reign supreme.

Luckily, in the world of business ethics, your employer helps you. In a nutshell, their values are your values (in the context of work). Your freedom to choose your own ethical values is somewhat limited. Considering the rash of corporate scandals these days, the thought of following the corporation's values might not be too comforting. Problem: Whose or what values can you trust?

Look behind successful, honest businesses and you will see a set of values that have stood the test of time. Think about how these values are communicated in your organization and what you can do to support them.

Honesty. The old adage, "honesty is the best policy" is true today more than ever. It's not just lip service. Employee manuals from most scandalized corporations are likely to contain slogans touting its commitment to honesty. Claiming to be honest in an employee manual is pass. You're either honest or not. Even if you haven't got caught yet, most people know who is and who isn't.

Integrity. Integrity connotes strength and stability. It means taking the high road by practicing the highest ethical standards. Demonstrating integrity shows completeness and soundness in your character and in your organization.

Responsibility. Blaming others, claiming victimhood, or passing the buck may solve short-term crises, but refusal to take responsibility erodes respect and cohesion in an organization. Ethical people take responsibility for their actions. Likewise, actions show the ability to be responsible both in the little and big things.

Quality. Quality should be more than making the best product, but should extend to every aspect of your work. A person who recognizes quality and strives for it daily has a

profound sense of self-respect, pride in accomplishment, and attentiveness that affects everything. From your memos to your presentations, everything you touch should communicate professionalism and quality.

Trust. There's no free ride. Trust is hard to earn and even harder to get back after you've lost it. Everyone who comes in contact with you or your company must have trust and confidence in how you do business.

Respect. Respect is more than a feeling, but a demonstration of honor, value, and reverence for something or someone. We respect the laws, the people we work with, the company and its assets, and ourselves.

Teamwork. Two or more employees together make a team. It is a business necessity to work openly and supportively in teams whether formal or informal.

Leadership. How many hardworking, honest employees have been tainted and led astray by corporate leadership failings? Managers and executives should uphold the ethical standards for the entire organization. A leader is out front providing an example that others will follow.

Corporate Citizenship. A foundational principle for every company should be to provide a safe workplace, to protect the environment, and to become good citizens in the community.

Shareholder Value. Without profitability, there is no company. Every employee should understand how he or she fits into the profitability picture. Everyone's common goal should be to build a strong, profitable company that will last.

The real test of these values comes from the resulting action. It takes a concerted, company-wide effort, beyond inserting these words in an employee manual, to make it happen.

-First, management must lead by example. Good ethics should be most noticeable at the top. Every employee must be accountable to the same rules.

-Second, a corporate values or ethics initiative must be "sold" and "marketed" aggressively throughout a company. Every forum and medium should be used to spread the good message. Of course, it will only be credible if the company is practicing what it preaches.

-Third, training must be provided to get everyone on the same page. It's easy to ignore a motivational speech or pass by a poster, but spending time learning about the issues will have a lasting impact.

-Fourth, both you and the company must be in it for the long haul. The ethics fervor should extend to the next generation of employees. The longer it lasts, the more ingrained the principles will become.

Despite failings of some, there is plenty of room at the table for good ethics and profitable business to reside. Together they can lay the cornerstone for a secure and prosperous society. These ten values you can put in the employee manual and mean it.

Importance of business ethics

Ethics in business are not only common sense, but business sense as well, no matter if you run a huge corporation or a little home business from your garage. Some people raise hell when they get bad service or are overcharged for a product. But the vast majority of people are too busy or too tired to make a scene or write letters of complaint. This majority of customers just make a quiet mental note of what a useless business you have, and vow to never go back there, and they usua lly dont. These days of online shopping and delivery to your doorstep services, its really easy to find an alternative supplier. So honesty and respect really do pay in the business world, especially in the long term. Many hot shot whizz kids have made their fortune by partially ignoring business ethics and honesty, and this was one of the main contributing factors to the latest recession we are presently enduring. Bad ethics and dishonesty, greed and rudeness do not help a business at all, and the business will collapse when the customers all go elsewhere, or when the whizz kid crookedness is found out and punished. It doesnt take a rocket scientist to work these simple principles out. So why do highly educated professionals and seasoned businessmen and entrepreneurs make the

mistake of forgetting business ethics? It requires the courage of your convictions and a good moral base in the individuals. Dishonesty does give you cash in the short term, much like sawing off the branch that you are sitting on gives you timber for a short time. So it will always be a temptation to those with weak morals coupled with financial pressure. In many cases it takes raw courage to be honest, but out of the troubles that businesses go through, its reputation grows, and businesses with good reputations are successful businesses. Naturally, you still need a good business plan and a hungry market, as well as ethics, to be successful. But good ethics are vital to keeping you successful. Business ethics that are important are: 1. Charge the customer a fair price. Dont be greedy. 2. Treat the customer with respect, as though he is better than you. 3. Do not purposely sell the customer defective items or advice, or anything that is harmful or unsafe. 4. Always tell the customer the truth. 5. Treat your staffs like you treat yourself, or better. Be kind and generous to your staff. 6. Pay your suppliers promptly. Ethics do take courage, and hard work. But they are worth it. And they are good business sense too. Commercial aspirations have never accepted any constraints and so are about the corporate. Money spinning is something that is more about the reward than the ethics. Yet somewhere there has to be a balance between the two. It is this very juncture where the critical negative of capitalism lies. The challenge can be how to incorporate social responsibility with lucrative demeanor. Though a company is committed to the highest standards of social and business practices, it takes an effort to establish and to maintain them. The delivery of success to the clientele results from the efforts of an organizations people it is their resourcefulness, professionalism and dedication that give the company its leading edge as one of the forerunners in the respective industry. Just to ensure all this, the directors and employees are expected to observe the highest standards of integrity in the conduct of business. Ethics is not the same as self-interest however entrepreneurs often want to ensure that it is the same. They want to ascertain that one can do well by doing well, meaning that one can succeed in business by being ethical. There is no denying that one can often do well by doing good. A company with a code of business ethics is more likely to build

a good reputation, which is more likely to bring financial rewards over a period but good behavior cannot be grounded in tangible reward alone. People who are interested only in reward will conduct business ethically when it suits their purpose but they will go astray whenever the incentives diminish. There is a profound confusion here too. To look to ethics for motivation is to misunderstand what ethics is all about. It is like studying finance to find a reason to make money. Finance does not teach one to want to be rich. It teaches one how to be rich, assuming one wants to be rich. So it is with ethics. Ethics teaches one how to be good, assuming one wants to be good. It is important to know that one can normally do well by doing well. Otherwise ethical people could go into business only with a high risk of failure. Business ethics, however, addresses the opposite question: how can one do well by doing well? It begins with the premise that enterprises want to do something good with their lives and investigates how to accomplish this through business. In other words, it treats profit and business success as means to a greater end, while in the hind side making the world a little better. Ethics are a set of moral principles which are recognized in respect to a particular class of human actions or a particular group, for instance the medical ethics, legal ethics, teaching ethics that brings together people of the same profession. These principles deal with values relating to human conduct with respect to concepts such as being good or bad, noble or ignoble, right or wrong etc. These values guide members of a group to act in a manner that is consistent with the values and standards as established. Business ethics are those virtues that business people apply when making business decisions. They are the standards expected within the business world, even if they are not written down and which business people ought to adopt. For instance business people are expected to afflict least suffering to their customers, being fair in their dealings and nurturing an enduring virtuous corporate character in totality. Business ethics are important because they keep business people to operate within a moral and legal pedestal which not only leaves them satisfied internally but also increases sales because most people like dealing or doing business with honest businessmen. Also if the public or your potential customers perceive you to be engaging in improper business deals, they will shun you. Good business ethics should be embraced by all businessmen because engaging in unethical practices, which may include breaking the law, may lead to heavy fines or lack of trust by members of the public.

Some of the business ethics include the following: 1. being trustful by recognizing that customer is the king. Customers want to do business with companies they trust and which they perceive to be showing them respect. When a business entity is trusted, it creates a loyal clientele. 2. Business people should be ready to meet the obligations of their customers and business partners regardless of anything else. Business people should offer their end of the bargain at all cost because this is the only way to cement customer and business partners loyalty. 3. Engaging in fair trading practices like guaranteeing a safe workplace for your employees, fair pricing for your products, that will at least cover the cost of production and treating you customers well among others will guarantee a high business turnover. 4. Every businessman wakes up every day with the intent to make profit. When a business operates within ethical realms, there will always be clear indications for growth. Equally, a business needs to make profit so as to meet its ethical obligations to the company, its employees, the authorities and customers. 5. In essence, being ethical as a business person builds the image of reliability and establishes reputation with your customers, the two things that are very important to a business. Most business people do not take a keen interest in implementing business ethics. Most of them think that making profit is the most important thing but as they realize later, no matter how hard they try, they do not achieve their objectives.

I want to share a presentation that was shown in NITIE Mumbai According to a special report in Times of India It is disgraceful that the poverty ratio is 28% (according to a recent government estimate) after half a century of Independence. Why so? Because, despite spending enormous sums, the government has failed dismally to provide every village with the basics of growth

Wealth Crreattiion or Value Erosion? In the present system, top of our value hierarchy is money and all of its constituents like power, status and accumulation of wealth According to Kasser (2002) materialistic values are associated with lower personal wellbeing, poorer interpersonal relationship and diminished value to the community

Shifting Paradigm:: Economic Centric to Social Centric According to Nobel Peace Prize winner,Mohammed Yunus, Bangladeshi founder of Grameen Bank, social investment can helps in converting the poor into entrepreneurs. Yunus himself has innovated a great idea micro finance to get loans to poor people with no collateral. According to C.K.Prahlad (2004), poor people should not be considered as burden on society rather they are an opportunity, which may create a difference for corporations. Corporations should not ignore the poor, who represent the BOP (bottom of the pyramid) markets. He supports inclusive capitalism and indicated how profitability can be generated by tapping this bottom of pyramid. According to Amarrtya Sen, though it is the time of globalization but it is equally important to pay attention towards the social side of economic operations. Any democracy can work better if it consider and focus on the deprived sections of the society.

What business students need to know? Two broad categories: 1. Decorative knowledge: models and ideas that lend themselves to conceptual Representations and abstractions 2. Tacit knowledge : mastered largely through experience Twofold approach. 2. Educators need to emphasize without any reference to financial performance that ethical and social responsible behavior by firms is an aspirational standard for business practitioners (Aspirational Approach) 3. Emphasize the relationship between the investments made by firms in the arena that is commonly referred to as values and the benefits that they earn over the short and long term, thereby convincing future managers of the advantages of being responsive to broader

The Role of Ethics in 21st Century Organizations

Ethics have become an organizational priority. In the 21st century, ethics is neither a luxury nor an option. There is a growing impatience within society with selfish and irresponsible actions that impoverish some, while enriching the crafty. Hewlett Packard demonstrated its commitment to ethical integrity under the leadership of Carly Fiorina. The former CEO of Hewlett-Packard said of her six-year tenure, Some of the most important choices I ever made were firing people who weren't conducting themselves with integrity (Weil, 2007). In contrast, R. J. Reynolds Tobacco Company was caught covering up knowledge about the addictiveness of nicotine. Tolerating bad behavior to improve the bottom line and justifying it as not really illegal creates a climate that ultimately becomes corrosive. In addition to social responsibility, there are other compelling motivations for 21st century organizations to make ethical values a priority. Its About Responsibility, Stupid! Political strategist James Carville coined the phrase, Its the economy, stupid, which became widely used in Bill Clintons 1992 successful presidential campaign against George H. W. Bush (Its the economy, stupid, 2007). With the nation in a recession at the time, the catchy slogan helped Clinton connect with Americans on a critical issue. In todays crisis of ethics, a similar message might well be sent to organizational leaders, Its about responsibility, stupid! The issue of responsibility is foundational to understanding organizational ethics. It seems almost too basic to merit mention, but irresponsible behavior is so common that the obvious must be stated. Fueled by selfish ambition, greed can cause leaders to lose perspective and rationalize unethical behaviors. The bad news for offenders is that society is more alert than ever before to ethical recklessness that benefits some, while injuring others. Kilcullen and Kooistra (1999) exposed the sins of the R.J. Reynolds Tobacco Company in their article titled, At Least Do No Harm: Sources on the changing role of business ethics and corporate social responsibility. An internal memo distributed throughout the R.J. Reynolds Tobacco Company read, Happily for the tobacco industry, nicotine is both habituating and unique in its variety of physiological actions. As if this was not bad enough, at the time that this memo was circulating, the CEO of R.J. Reynolds publicly declared that, Cigarette smoking is no more addictive than coffee, tea, or Twinkies. Apparently, Americans believe more corporate executives should be fired. According to the Business Ethics Index (BEI) there was a nearly 6% drop in the BEI rating from 2004 to 2006. This was attributed to a fall in consumer expectations of the future ethical behavior of businesses (Tsalikis & Seaton, 2007).

One definition of business ethics is a set of principles that guides business practices to reflect a concern for society as a whole while pursuing profits (Kilcullen & Kooistra, 1999). The phrase concern for society as a whole indicates a growing impatience with the selfish and irresponsible actions of so many organizations today. Ethics as a Priority More than simply a legal or moral responsibility, ethics need to become an organizational priority. Organizational leaders have a lot on their minds in todays highly competitive world. They must keep abreast of rapid technological advancements, competitors products and services, the effects of globalization, and opportunities and threats within their own industry, to name the most obvious. Leaders must also keep a constant eye on the mission, vision, values, culture, strategy and goals of their own organizations. In the midst of all of this complexity, its not easy to find room on the organizational plate for another major priority. However, to succeed in the 21st century, organizations will have to figure out how to make ethics a priority. Priorities are those few things that are deemed most important. Many things are important, some more and some less important, but only a few things are most important. Ethical values need to achieve recognition as among the elite, most important success factors in modern organizations. As an organizational priority, ethics will not only affect decision-making but also, and ultimately, institutional culture. To achieve this ideal, there must be an alignment process that integrates business ethics with mission, vision, values, strategies and goals. Ethical values are essentially social in nature, therefore, this alignment process will be concerned with relationships and defining relational expectations. The goal of an ethical organizational culture is the greater good of all. Internal relationships between leaders and followers, as well as external relationships with clients, customers, vendors and the community are all prized. As a result, people are treated well consistently and an ethical culture emerges. Beyond Responsibility and Priority to Opportunity Todays organizations need to advance beyond a view of ethics as necessary for safeguarding their reputation and thereby avoiding bad media coverage; or as mere compliance with forced regulations. A great opportunity awaits organizations alert to the potential of ethical values in shaping the future. One illustration of this kind of possibility thinking is found in a challenge put to the International Olympic Committee. The challenge originates from a growing disillusionment with the Olympic Games, which has become characterized by the worst features of the competitive culture: winning at any cost, corruption and the unfair advantage of advanced nations (Milton-Smith, 2002). Almost simultaneously on another front, disenchantment with the social and ethical consequences of globalization is occurring. Milton-Smith identifies the Olympic Games as being in a unique position to

influence society, It is difficult to conceive of another institution with the same capacity as the Olympic Games to positively shape popular culture on a global scale (MiltonSmith, 2002, p. 131). Societys desperate need for an ethical culture is every organizations opportunity to influence social culture, through the institutionalization of ethical values. When this occurs, communities benefit from the positive influences employees take from their workplace back to families, friends and associates. Values-Based Culture In the 21st century, ethics is neither a luxury nor an option. More than competence, experience, intelligence and drive, people at all levels of an organization need ethical values. According to Kidder (2001), The principle task of this decade is the creation and nurturing of a values-based culture. Due to the extensive amount of time people spend at work, much of that nurturing must take place in the business environment. Rushworth M. Kidder is the founder and president of the Institute for Global Ethics, an organization whose research has identified four key factors in creating a values-based culture. These factors include:

Shared core values According to Kidder (2001), there are five core values found in some form in every culture worldwide. They are honesty, respect, responsibility, fairness and compassion. A values-based culture will make these core values the driving force in decision-making. Common language Employees need a language of ethics that allows them to communicate readily and comfortably about issues that are typically sensitive and difficult to discuss. Effective ethics training programs provide the common language needed. Commitment at the top Ethics training is meaningless without top-level executives who walk the talk. When leaders consistently reward those who choose to do what is right, it helps to create an ethical culture more than anything else could. Moral courage Kidder (2001) describes moral courage as the quality of mind and spirit that enables one to face up to ethical dilemmas and moral wrongdoings firmly and confidently, without flinching or retreating.

Ethics, lifestyle and culture must become so interwoven that they cannot be separated. Together, they constitute how people relate to one another in the home, the workplace and every part of society.

Conclusion Many organizations are aware of the critical need for ethics in their cultural fabric. However, there is still a great deal of room for improvement. First, organizations must see ethics as a social responsibility to which they are obligated. No matter how cleverly done, hurting others for personal gain is unacceptable. Next, ethics will only find its proper place in organizations that make it a priority by creating relational expectations that work for the good of everyone. Finally, the best organizations will seize the opportunity to shape the future by influencing culture through the institutionalization of ethical values. By creating a values-based culture within the organization, society can be improved by positive influences that perpetuate outside the organization. Quotations: Business ethics, management Management is doing things right; leadership is doing the right things. Peter Drucker, economist, management guru, author (1909-2005) Dont tell people how to do things; tell them what to do and let them surprise you with the results. George S. Patton, Army general (1885-1945) Inventories can be managed, but people must be led. H. Ross Perot, businessman What you cannot enforce, do not command. Sophocles, Greek playwright (c. 496 BC-406 BC) A good leader inspires others with confidence; a great leader inspires them with confidence in themselves. Unknown A good leader cant get too far ahead of his followers. Franklin D. Roosevelt, 32nd president (1882-1945) Leadership is getting someone to do what they dont want to do but to achieve what they want to achieve. Tom Landry, pro football coach (1924-2000) I am more afraid of an army of 100 sheep led by a lion than an army of 100 lions led by a sheep. Talleyrand, French diplomat (1754-1838) Great necessities call forth great leaders. Abigail Adams, First Lady (1744-1818) The function of leadership is to produce more leaders, not more followers. Ralph Nader, activist lawyer, consumer advocate

Leadership has a harder job to do than just choose sides. It must bring sides together. Jesse Jackson, civil-rights activist, minister Its hard to lead a cavalry charge if you think you look funny on a horse. Adlai Stevenson, politician, statesman (1900-1965) The only safe ship in a storm is leadership. Faye Wattleton, nurse, administrator, author If I have seen farther than others, it is because I was standing on the shoulders of giants. Isaac Newton, physicist, mathematician, astronomer, inventor (1643-1727) If your actions inspire others to dream more, learn more, do more and become more, you are a leader. John Quincy Adams, 6th president (1767-1848) The price of greatness is responsibility. Winston Churchill, British prime minister (1874-1965) A competent leader can get efficient service from poor troops; an incapable leader can demoralize the best of troops. John J. Pershing, Army general (1860-1948) In matters of style, swim with the current. In matters of principle, stand like a rock. Thomas Jefferson, 3rd president (1743-1826) To lead people, walk beside them. Lao-tsu, Chinese philosopher (c. 4th-6th century BC) The task of leadership is not to put greatness into people but to elicit it, for the greatness is there already. John Buchan, Scottish politician, author (1875-1940)