Contents

TASK 01 .......................................................................................................................................................................................................... 2 T 1.1 Explain the ethical perspectives of deontological ethical theory with illustrations. ....................................................................................2 T 1.2 Explain the teleological theories with reference to philosophical antecedents ..........................................................................................3 T 1.3 Apply teleological theories to the scenario in terms of providing employment opportunities for developing countries discussing the facts of the scenario .............................................................................................................................................................................................3 T 1.4 Demonstrate the views of Kant and Mill in terms of ethical means ............................................................................................................4 T 1.5 Compare and contrast absolute and relative ethics with illustrations .........................................................................................................5 TASK 02 .......................................................................................................................................................................................................... 7 T 2.1 Discuss the concept of profit maximization and business objectives with ethical perspectives..................................................................7 T 2.2 Examine the social responsibility in a business environment of private banking sectors. ...........................................................................8 T 2.3 Analyze the stakeholders of HSBC and their interest in the scenario and discuss the conflict of interests in ethical perspective applying virtue and stakeholder theory ..............................................................................................................................................................................9 T 2.4 Demonstrate the necessity to consider social responsibility and environmental considerations in order to achieve business objectives with illustrations. ................................................................................................................................................................................................10 TASK 03 .........................................................................................................................................................................................................13 T 3.1 Demonstrate nature of employment relationships in general and the necessity of achieving ethical business objectives discussing the facts in the scenario ............................................................................................................................................................................................13 T 3.2 Distinguish the legal relationship from an ethical perspective in an employment relationship. ...............................................................13 T 3.3 Discuss the role of the company as moral agent and suggest how to ensure an ethical organization analyzing possible conflicts. .........15 T 3.4 Discuss the development of mechanisms for achieving employee involvement and empowerment in order to ensure good practices in equal opportunities in employment. ..................................................................................................................................................................16 TASK 04 .........................................................................................................................................................................................................19 T 4.1 Demonstrate narrow business ethics and broad business ethics with illustrations ..................................................................................19 T 4.2 Explain the importance of ensuring broad business ethics in a business environment in terms of environmental protection with current issues of an organization or a sector you are familiar with ................................................................................................................................19 T 4.3 Discuss ethical values in terms of economic theory and examine how it assists to achieve economic objectives of a country. ..............21 T 4.4 Analyze the nature of multinational companies and recommends the strategies to safeguard local economy in terms of introducing ethical guidelines to multinationals ....................................................................................................................................................................22 T 4.5 Analyze the employment practices of HSBC in the scenario in terms of international business ethics .....................................................23

TASK 01
T 1.1 Explain the ethical perspectives of deontological ethical theory with illustrations.
What is Ethics? Ethics is the branch of study dealing with what is the proper course of action for man. It answers the question, "What do I do?" It is the study of right and wrong in human endeavors. At a more fundamental level, it is the method by which we categorize our values and pursue them. Ethics is two things. First, ethics refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues. Ethics, for example, refers to those standards that impose the reasonable obligations to refrain from rape, stealing, murder, assault, slander, and fraud. Ethical standards also include those that enjoin virtues of honesty, compassion, and loyalty. And, ethical standards include standards relating to rights, such as the right to life, the right to freedom from injury, and the right to privacy. Such standards are adequate standards of ethics because they are supported by consistent and wellfounded reasons. Secondly, ethics refers to the study and development of one's ethical standards. As mentioned above, feelings, laws, and social norms can deviate from what is ethical. So it is necessary to constantly examine one's standards to ensure that they are reasonable and well-founded. Ethics also means, then, the continuous effort of studying our own moral beliefs and our moral conduct, and striving to ensure that we, and the institutions we help to shape, live up to standards that are reasonable and solidly-based. Why is Ethics important? Ethics is a requirement for human life. It is our means of deciding a course of action. Without it, our actions would be random and aimless. There would be no way to work towards a goal because there would be no way to pick between a limitless number of goals. Even with an ethical standard, we may be unable to pursue our goals with the possibility of success. To the degree which a rational ethical standard is taken, we are able to correctly organize our goals and actions to accomplish our most important values. Any flaw in our ethics will reduce our ability to be successful in our endeavors. Deontological ethical theory This type of theory claims that there are features within the actions themselves which determine whether or not they are right. These features define the extent to which the actions conform to recognized moral duties. For example, driving while drunk violates the duty to above all do no harm. The duties derive from various sources, such as religion, biology, psychology, metaphysics, culture, language, etc. Depending on the deontological theory, these duties may be absolute (no exceptions), prima facie (can only be overridden by a more important duty), or conditional (only hold under specified circumstances). Deontological theories do not consider consequences to be important when determining whether or not an action is ethical. It doesnt matter if the drunk driver made it home safely. Driving drunk was still wrong because the intention to drive drunk was wrong (or to drink alcohol when one knows one needs to drive). Deontological moral systems typically stress the reasons why certain actions are performed. Simply following the correct moral rules is often not sufficient; instead, we have to have the correct motivations. This might allow a

person to not be considered immoral even though they have broken a moral rule, but only so long as they were motivated to adhere to some correct moral duty. Benefits: Right and wrong actions are easily determined by considering one's duties. In some cases, these are explicitly spelled out (i.e. religion). However, the use of judgment is usually necessary to determine which duties apply and how. Unlike utilitarianism, the end does not justify the means. Deontological theories provide a sound basis for inalienable rights and inherent value. Since duties do not change, there is a greater sense of security/predictability in the accepted behavior of others. Right and wrong dont vary with the consequences, although there may be various according to circumstances (i.e. in the case of conflicting duties). Good motives are valued, even if the outcome wasnt what you expected.

T 1.2 Explain the teleological theories with reference to philosophical antecedents

Teleological theory This describes an ethical theory which judges the rightness of an action in terms of an external goal or purpose. So, according to a teleological theory, consequences always play some part, be it small or large, in the determination of what one should or should not do. Not all teleological theories are consequentiality. Teleological moral systems are characterized primarily by a focus on the consequences which any action might have (for that reason, they are often referred to as consequent list moral systems, and both terms are used here). Thus, in order to make correct moral choices, we have to have some understanding of what will result from our choices. When we make choices which result in the correct consequences, then we are acting morally; when we make choices which result in the incorrect consequences, then we are acting immorally. Benefits: There is room in some theories for good intentions, even if the action didnt active the desired end. Active attempt to connect morality with the real world. By allowing for the consideration of consequences, teleological theories can adapt to different circumstances and situations.

Bentham, J. Introduction to the Principles of Morals and Legislation in Warnock, M ed. Utilitarianism, On Liberty, and Essay on Bentham: together with selected writings of Jeremy Bentham and John Austin, Meridian/New American Library (New York, NY: 1974).

T 1.3 Apply teleological theories to the scenario in terms of providing employment opportunities for developing countries discussing the facts of the scenario
What is teleological theory? Teleological moral systems are characterized primarily by a focus on the consequences which any action might have (for that reason, they are often referred to as consequent list moral systems, and both terms are used here). Thus, in order to make correct moral choices, we have to have some understanding of what will result from our choices. When we make choices which result in the correct consequences, then we are acting morally; when we make choices which result in the incorrect consequences, then we are acting immorally. As for the ethical and moral arguments regarding the movement of hundreds of thousands of jobs from developed countries to developing countries, the corporation and supporters of such decisions may claim that it is a teleological

ethical decision and motivated by the needs to help LDCs to provide for themselves instead of depending on handouts from developed countries. The real fact is that these multinational corporations do not care about the so call global-stakeholders just as they did not care about those stakeholders in developed countries who lost their jobs, and the communities suffer as a result. Moving call centers and service operations to developing countries have only one aim to cut cost and save their shareholders millions of pounds by paying workers in developing countries less than 2 per day even though most of them are graduates. The HSBC Bank is not alone in this argument other major high street Banks in the UK have all moved their call centers to India. Furthermore, most of the FTSE-100 companies in the UK have already moved their call centre operations to India, and other Asian countries.

T 1.4 Demonstrate the views of Kant and Mill in terms of ethical means
Kant and Mill on Morality What is right and what is wrong is a question that has sparked countless debates for philosophers and theologians alike. Should the morality of a civilization be based on what actions would be best for the greatest number of citizens, or should it be based on abstract principles either derived through logic or proposed by religion? Although both Kant and Mill have convincing answers to these questions, their ideas, due to lack of clarity and universality, can be easily misused to justify immoral actions. However, the holes in each philosophy are complemented by the strengths of the other, and thus a synthesis of the two ideas would provide a clearer, more complete method for determining morality. Immanuel Kant and John Stuart Mill are both clearly very smart people but there is one main difference between them; Kant focuses not on the outcome of the action, while Mill does. Kant believes that what matters in the action is the will that was involved, while Mill on the other hand believed that the reasoning behind an action does not matter because in the end the action is what has happened and why it happened is unimportant. While Kant has good intentions involved, it seems that in reality nowadays it doesnt matter why an action occurs; it is the outcome that matters. While Utilitarianism was certainly all over the map, Mills belief that the outcome of the action and the consequences of it is what matters, regardless of why the action was made. Kant uses his proof of the existence of metaphysics as a science in his proposed moral philosophy. If a law is to have moral force . . . it must carry with it absolute necessity (Kolak, 700). Because this maxim is the basis for Kants ethics, metaphysics as a science or a set of necessary truths is required for morality to exist. It is the fulfillment of ones duty to these necessary truths that makes an act has moral worth, regardless of its consequences. One may object to Kants moral philosophy on the grounds that it ignores human desire. Many philosophers, including Hume and Hobbes, stipulated that human actions are driven mainly, if not solely, by their desires. Kants morality, however, requires that humans be able to follow duty independent of desire, or else no one could be moral (164). Kant states that it is impossible to prove we are free, because freedom does not belong to the world of experience. Although we cannot prove that we are actually free, humans must believe that they are free in order for them to act at all. This belief in freedom and responsibility causes one to act according to duty, and not according to desires. Mills moral philosophy provides such a road map. With his general rule clearly defined to at least give an answer, if not necessarily the correct answer, for every situation, it is a more complete moral philosophy than Kants is. The basis of Mills ethics is the greatest happiness principle, which stipulates that the ultimate end of human action is the greatest amount of happiness for the greatest amount of people. Mill explains that the general happiness is desirable because each person, so far as he believes it to be attainable, desires his own happiness (Mill qtd. in McCloskey, 61).

In deciding the morality of specific cases, one can apply both rules and determine the best course of action. A set of laws could also be derived from these two maxims which could include both proscriptions and prescriptions. Not only is this system objective and based on the a priori truths of Kant, but it is also flexible and can adapt to changing truths and apply to every situation as a moral system should. Why do we need morality? If we lived in a world that contained no other people, would we need to be moral? If no other entity existed and we were totally alone would our day-to-day existence contain any need to modify our behavior in order to do what was morally right? How could we steal? There would be no one to murder or insult. The only person offended by our violence, bad language and behavior would be we. Those who believe in a deity would of course still say that morality was important, that God had laid down moral rules which must still be followed. But even those who do not believe in God would in it morally repugnant to do some things. Chopping down all the trees in the world, even if no one else was there, would be an act that many would consider to be immoral. Morality would still be an important consideration in your life in such circumstances; it would just have very different rules. Without anyone else, entirely marooned, there would be far fewer moral dilemmas to solve. Moral dilemmas are the penalty of our involvement with society, the price we pay for the benefits of living in close proximity with others. At one end of the spectrum this involves adhering to the law; at the other, being courteous and respectful to others. Laws normally apply to the whole of society but there are some actions that can only be perpetrated by certain people in certain positions. Some of these actions are so important to society that they require legislation. For instance, corruption of officials or politicians only involves a few people in powerful positions but the corruption may affect many other people. Consequently we enshrine such matters in our legal system. Other i ssues, a doctors impropriety with a patient, for instance, may affect individuals but do not directly damage society and consequently are not enshrined directly in law. This is where professional ethics become important. A doctor who has an affair with a patient may be deemed to have breached professional ethics; he or she has not broken the law. A journalist is in the same position. For example, if he or she takes advantage of a situation and does not deal fairly with those to whom he or she owes loyalty (e.g. revealing a source who wishes to remain anonymous), then it is unlikely that society will suffer directly but the individual might well suffer. There are a wide range of issues in which journalists are involved that are not subject to the law but must be considered from an ethical viewpoint.

T 1.5 Compare and contrast absolute and relative ethics with illustrations
Absolute and Relative Ethics As applied to ethics, the word absolute will by many be supposed to imply principles of right conduct that exist out of relation to life as conditioned on the earthout of relation to time and place, and independent of the universe as now visible to us"eternal principles, as they are called. If, for example, any one should assert that the Cause of things, conceived in respect of fundamental moral attributes as like ourselves, did right in producing a universe which, in the course of immeasurable time, has given origin to beings capable of pleasure, and would have done wrong in abstaining from the production of such a universe; then, the comment to be made is that, imposing the moral ideas generated in his finite consciousness, upon the Infinite Existence which transcends consciousness, he goes behind that Infinite Existence and prescribes for it principles of action.

There is a distinction between relative (or personal or cultural value) and absolute (or numeral) value (not to be confused with mathematical absolute value). Relative value is subjective, depending on individual and cultural views, and is therefore synonymous with personal and cultural value. Absolute value, on the other hand, is philosophically absolute and independent of individual and cultural views, as well as independent of whether it is apprehended or not. Relative value may be regarded as an 'experience' by subjects of the absolute value. Relative value thus varies with individual and cultural interpretation, while absolute value remains constant, regardless of individual or collective 'experience' of it. Relative value may be explained as an assumption from which implementation can be extrapolated. If it be known, absolute value may be able to be implemented, but as it exists, regardless of whether it be known, its implementation cannot be assumed. Ethical Absolutism The absolutist says there is a universal moral standard Ethical Relativism The relativism denies that there is a universal moral standard The absolutist says there are two senses to the word The relativist usually believes there is just the descriptive "standard": (a) what is done (the descriptive sense) and sense (a) of "standard," and this sense of the word (b) What ought to be done (the prescriptive sense). changes according to the place or time. If the relativist admits that there are two senses to the word, then the relativist believes there is no instance of the universal moral code about what ought to be done. ) The absolutist makes a distinction between what is The relativist believes there is no difference between thought right and what is actually right. what is thought right and what is actually right.

TASK 02
T 2.1 Discuss the concept of profit maximization and business objectives with ethical perspectives
Today, profit maximization cannot be achieved if ethics or morals applied in that business are compromised on. Importance of business ethics in the workplace and in society is a crucial study for everyone who owns a business, or believes in being a thoughtful and informed customer. In every business, there comes a time when profit maximization and social issues meet at a common junction. If at that time, the social issues are compromised on, there is a breaking of ethical code. To make this simpler, let us assume that organizations are people, which is the case in most countries including the United States where companies are legally considered as persons. If that person, for his personal benefit, decides not to abide by the norms of society or does not deliver as promised, he is guilty of his actions. This is where business ethics come in to the picture, to avoid a conflict between personal gain and social benefit. Business ethics are a term of today, having been formed somewhere around the 1970s. The history of business ethics and its co-relation with other economic and business terms is discussed below with some examples, which will help give you a clear understanding of the term. The importance of ethics in business can be understood by the fact that ethical businesses tend to make much more profits than the others. The reason for this is that customers of businesses which follow ethics are loyal and satisfied with the services and product offerings of such businesses. Let us take an example. Suppose, there is an organization named XYZ which manufactures cosmetics. XYZ greatly believes in the importance of ethics in business. When XYZ advertises its cosmetics in the market, being an ethical organization, it will be very truthful and honest in its communication with the probable customers. It will tell correctly about the kind of ingredients it has used while manufacturing the cosmetics. It will not lie or exaggerate about the benefits or uses of its products either. So the customers, who buy its cosmetics, know precisely what they are buying and how useful that product is going to be for them. This way, the product will meet their expectations and thus, satisfy the customers. When customers are satisfied, they will become loyal to the company and come back again for re-purchasing. This will surely increase the profits of the organization. Thus, the importance of business ethics is that it creates loyalty in customers and maximizes the profits. A business objective is essentially a consideration of what future course an organization intends to take; often it starts when writing a business plan. Strategic planning is instituted and applied to every aspect of the business in order for its objectives to be met. A company must determine what its organization does, who its clients are and how it intends to excel in its field. For most businesses this takes place during a strategic planning session. When creating a strategic plan the business also must analyze its competition and determine how it sets itself apart. A business objective is usually laid out in a vision plan for the next year of operation. Business objectives use strategies and tactics to implement the course and direction. It is a proactive measure rather than a reactive one. Again, this always requires first writing a business plan. Strategic planning sessions focus on laying out an internal plan that provides course of action and business benchmarks that ensure progress and reaching the desired outcome. A business objective is applied once and each subsequent event is geared to the directives it has established. The planned outcome is utilized to guide each function within the organization. Every division within the company is focused on this same outcome, establishing how each department functions and how it will work to attain the same goals.

T 2.2 Examine the social responsibility in a business environment of private banking sectors.
The social responsibility of banks can hardly be in doubt and is inherent in the services they provide as safe repositories of public deposits, suppliers of credit to individuals and institutions to support enterprise and fuel economic development, providers of payment and settlement systems and a variety of other related services. In India, social responsibility of the banking sector was the underlying philosophy for the nationalization of major banks. The private sector and financial institutions in particular, are increasingly expected to play an important role in helping to create a truly sustainable world. Conscious consumers, ethical investors, enlightened businesses, nongovernmental organizations (NGOs), cultural creatives, and leading international institutions are working to make the triple bottom line (People, Planet and Profit) a reality. These people and institutions want solutions for poverty, injustice, war, widespread diseases, educational inequalities, destruction of nature and the planet. In short, they want to improve quality of life for everyone on this planet, and they understand that we all are economically interdependent and thus co-responsible for taking care of current and future generations. They share a common set of values centered on the enhancement of human dignity. Some of these values are already universally accepted, other are nurtured at a personal level. These people and institutions know that knowledge, capital and energy are available to solve most of the problems, and they see themselves as part of the solution, ready to contribute. Banking and finance as a profession have an intrinsic value chain which is interwoven with the cycle of providing adequate financial products and services. As long as there are no bank guidelines or criteria on ethical, social and sustainability aspects, the individual co-worker or the lending committee are generally applying the neutrality rule, excluding ethical, social and environmental considerations from the bankers decision making. In reality however, money is not neutral and it involves responsibilities from its inception and along the distribution chain where it has to do with value creation, not only pure financial value but also human, social and environmental added values. Money, capital, intelligently and wisely invested as an instrument for improving quality of life, can have a major impact on human development. Because of this impact, a neutral attitude to investment and lending is irresponsible. In the financial markets, money and money systems become mechanical and develop uncontrollable dynamics. Financial regulators and authorities are only concerned with the mechanics of the system in order to prevent major breakdown. Example: Commercial Bank Their commitment towards Sri Lanka Banking is their business. Making it the most people oriented, technologically advanced Organization, providing upto-the-minute products and services, with superlative financial management have enabled Commercial Bank, to be Sri Lankas Leading Bank year after year. And beyond financial responsibilities, Commercial Bank has chartered new territories by identifying needs and providing just the right kind of service when required. The Commercial Bank Social Responsibility Trust, founded for this purpose, has reached out to the core to uplift creatively, socially, culturally and ethically in an outstanding manner. Their commitment for the planet Extending beyond the borders of its financial domain, Commercial Bank is involved as a Participating Financial Institution in the E-Friends loan scheme. Partnered with the Japan Bank for International Corporation who supplied the funds, loans were granted at concessionary rates to motivate companies to be more environment-conscious. Projects such as reducing emission, improving worker safety etc. were financially assisted with easy pay loan

schemes. The Technical Transfer Assistance Scheme also contributed in controlling emission in plants, water treatment, waste minimization etc.

T 2.3 Analyze the stakeholders of HSBC and their interest in the scenario and discuss the conflict of interests in ethical perspective applying virtue and stakeholder theory
"Stakeholder management is critical to the success of every project in every organization I have ever worked with. By engaging the right people in the right way in your project, you can make a big difference to its success... and to your career." As you become more successful in your career, the actions you take and the projects you run will affect more and more people. The more people you affect, the more likely it is that your actions will impact people who have power and influence over your projects. These people could be strong supporters of your work or they could block it. Stakeholder Management is an important discipline that successful people use to win support from others. It helps them ensure that their projects succeed where others fail. Stakeholder Analysis is the technique used to identify the key people who have to be won over. You then use Stakeholder Planning to build the support that helps you succeed. The benefits of using a stakeholder-based approach are that: You can use the opinions of the most powerful stakeholders to shape your projects at an early stage. Not only does this make it more likely that they will support you, their input can also improve the quality of your project Gaining support from powerful stakeholders can help you to win more resources this makes it more likely that your projects will be successful By communicating with stakeholders early and frequently, you can ensure that they fully understand what you are doing and understand the benefits of your project this means they can support you actively when necessary You can anticipate what people's reaction to your project may be, and build into your plan the actions that will win people's support.

HSBC Holdings plc (commonly known as HSBC) is a British multinational banking and financial services company headquartered in London, United Kingdom. As of 2011 it was the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine. HSBC is a universal bank and is organized within four business groups: Commercial Banking; Global Banking and Markets (investment banking); Retail Banking and Wealth Management (retail banking and consumer finance); and Global Private Banking. It has around 7,200 offices in 85 countries and territories across Africa, Asia, and Europe, North America and South America and around 89 million customers. As of 31 March 2012, it had total assets of $2.637 trillion, of which roughly half were in Europe, a quarter in the Americas and a quarter in Asia. HSBC Holdings plc was founded in London in 1991 by The Hongkong and Shanghai Banking Corporation to act as a new group holding company and to enable the acquisition of UK-based Midland Bank the origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865. Today, HSBC remains the largest bank in Hong Kong, and recent expansion in mainland China, where it is now the largest international bank, has returned it to that part of its roots. HSBC has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. As of 6 July 2012 it had a market capitalisation of 102.7 billion, the second-largest of any company listed on the London Stock Exchange. It has secondary listings on the Hong Kong Stock Exchange (where it is a constituent of the Hang Seng Index), the New York Stock Exchange, Euronext Paris and the Bermuda Stock Exchange.

T 2.4 Demonstrate the necessity to consider social responsibility and environmental considerations in order to achieve business objectives with illustrations.
Social responsibility is integral to long-term business success. Today's organizations must be increasingly mindful of the impact that their operations have on society at large, and this requires much more than isolated measures. In a climate of heightened social awareness and instant access to information, social responsibility must be a fundamental part of your company's targeted practices, broad objectives, and overall culture. You will enhance your ability to set priorities, measure results, and communicate the value of social responsibility efforts across your organization. Specifically, you will learn how to: Create competitive advantage through social responsibility Assess risks and opportunities before making capital investments or other business decisions Align social responsibilities strategies with organizational goals and capabilities Evaluate current initiatives and consolidate efforts around key objectives Present a business case for social responsibilities initiatives Understand how social responsibility directly affects current and future regulatory practices Foster successful interaction with key internal and external stakeholders as well as governments and nongovernmental organizations (NGOs)

Why is social responsibility and ethics important in business? Take the wholesaling industry for example. This is typically a cut-throat industry with razor-sharp profit margins, often under 10%. Yet still manufacturers of green and eco-friendly products are finding that more and more wholesalers are placing orders from them rather than their more established competitors. Why? Because more and more people are choosing to buy socially responsible products and not purchase from companies that damage the environment. Socially responsible and ethical products dont cost m uch more than their socially irresponsible counterparts. More and more smart consumers are switching to socially responsible products. Would you rather work for a company that stands for something benefiting humanity as a whole, or a company that just stands for its own profits? Employees in ethical businesses are often willing to work harder, with more passion for the same or even sometimes less pay than their more cut-throat counterparts. Not only will people give more to your business without you having to ask, but youll also enjoy working there more! When the people around you love their work, youll naturally enjoy your working environment more. Socially responsible and ethical businesses often find that other businesses come to partner with them before they look to partnering with other less socially responsible companies. Take Kiva for example, a non-profit micro-loan facilitation website. They get literally hundreds of thousands of dollars every year in free legal and organizational work that theyd never get if they were primarily motivated by money. You dont need to be a non-profit company to get the same treatment. If your company as a whole conducts business in a way that benefits the greater good, people will generally want to do business with you rather than the other guy, all else being equal. The bottom line is, people want to be associated with businesses that are moving towards being socially and ethically responsible. The days when businesses can walk all over their employees, trash the earth, destroy the long-term health of the economy and still prosper are over. Today consumers, employees and business owners alike are becoming very aware of the many social and ethical issues that abound in todays world. Building a business that caters to this awareness is not only the right thing to do its smart business!

Business ethics have never been more important than they are today from a social standpoint. Business decisions made each day have profound effects on the environment, the economy, on our health, on our safety, and on our future as a whole. What are your social responsibilities from a business and ethical point of view? First and foremost, you must consider your fellow humans. How do your business practices affect your customers, your employees, your community, your country, and the global community as a whole? If you fail to consider the human side of your business and the effects of your business, you are not only acting in a socially responsible way, you are also setting your business up for failure, because you will eventually do some harm that puts you out of business, and at the very least, you will not garner any public support, because of a poor public image, which does indeed have a profound effect on your bottom line. Some people do not distinguish between the effect of business decisions on human life and the effects on the environment. Activists believe that one is as important as the next, but others agree that human life is more important than the environment. Logic, of course, says that human life is more important, but if a business has a negative effect on the environment, at some point in time, that damage to the environment has an effect on human life. Do your business decisions negatively affect either? Do businesses have more of a responsibility than individuals have? Some believe that they do, while others do not think so. Others believe that individuals and businesses are equally responsible for society. This, however, is not your debate as a business owner, because everyone does indeed agree that businesses do have some level of social responsibility, and that this social responsibility is more important than the bottom line. Even the Government believes this. For example, recently there were congressional hearings with executives of the top five oil companies. Congress essentially wanted to know what these companies were doing to reduce fuel costs, and also wanted to know that with $40 billion dollar profits annually, why these companies were only investing about $100 million back into research for renewable energy resources. Those, of course, were tough questions for these executives who do not have trouble paying for their gasoline and of great interest to those of us who do, in fact, have to be very careful when driving our cars or heating our homes, because we cant afford todays fuel prices. These oil companies have a social responsibility that they have been essentially ignoring for years, and now want to open up drilling in areas where it was banned to preserve the environment or wildlife. Obviously, these are not ethical business decisions or practices, and they do indeed have a profound effect on the economy, the environment, and eventually on human life as a whole. So, when you make business decisions, remember that ethics must play a role in those decisions because whether you realize it or not, those decisions do have a social effect at some point in time, in some way great or small. Business activity is focused around the achievement of business aims and business objectives. A business aim is the goal a business wants to achieve. A primary aim for all business organizations is to add value and in the private sector this involves making a profit. More strategic aims include expansion, market leadership and brand building. A business objective is a detailed picture of a step you plan to take in order to achieve a stated aim. These need to be SMART in order for the business to know what progress it has made towards achieving the objective: Specific - clear and easy to understand. Measurable - i.e. able to be quantified. Achievable - possible to be attained. Realistic - not 'pie in the sky'.

Time bound - associated with a specific time period. Public sector organizations like the Inland Revenue set objectives for service, such as processing customers' tax returns within a given time period. Private sector organizations like Kelloggs might set objectives for customer satisfaction, and effectiveness in handling customer orders within a given time period. Objectives within an organization are established at a number of levels from top level corporate objectives, down to team objectives and individual objectives that create a framework for operational activities. These are often translated into targets which help to motivate staff in reaching short-term goals. Objectives therefore provide a clear structure for all of the various activities that an organization carries out. By measuring how well an objective has or has not been achieved, managers can make necessary changes to their activities to ensure progress and achievements of the stated objectives are made within the timescale allocated.

TASK 03
T 3.1 Demonstrate nature of employment relationships in general and the necessity of achieving ethical business objectives discussing the facts in the scenario
The employment relationship is a legal notion widely used in countries around the world to refer to the relationship between a person called an employee (frequently referred to as a worker) and an employer for whom the employee performs work under certain conditions in return for remuneration. It is through the employment relationship, however defined, that reciprocal rights and obligations are created between the employee and the employer. The employment relationship has been, and continues to be, the main vehicle through which workers gain access to the rights and benefits associated with employment in the areas of labor law and social security. It is the key point of reference for determining the nature and extent of employers rights and obligations towards their workers. What is Employee Relations? Employee Relations involves the body of work concerned with maintaining employer-employee relationships that contribute to satisfactory productivity, motivation, and morale. Essentially, Employee Relations is concerned with preventing and resolving problems involving individuals who arise out of or affect work situations. Advice is provided to supervisors on how to correct poor performance and employee misconduct. In such instances, progressive discipline and regulatory and other requirements must be considered in effecting disciplinary actions and in resolving employee grievances and appeals. Information is provided to employees to promote a better understanding of management's goals and policies. Information is also provided to employees to assist them in correcting poor performance, on or off duty misconduct, and/or to address personal issues that affect them in the workplace. Employees are advised about applicable regulations, legislation, and bargaining agreements. Employees are also advised about their grievance and appeal rights and discrimination and whistleblower protections.

T 3.2 Distinguish the legal relationship from an ethical perspective in an employment relationship.
The employment relationship can be complex, with no quick and easy formulae to use which will provide an instant solution. When gathering information from the parties in regards to their work relationship, the inspector/health and safety officer must keep in mind that the many "tests" are not tests in and of themselves, but rather conditions outlined in jurisprudence. They may be given more or less weight in a particular case to determine if a worker is simply part of the payer's business or in business on his or her own account. Employer-Employee relationship from an ethical perspective Work Performance Strong leadership from employers is a must when expecting employees to display working ethics. For example, a boss who expects employees to put in longer house should be willing to stay longer hours himself. Employers should credit those employees who show good work performance, punctuality and teamwork and put in a full day's work, and may even reward the employees by giving them an important project. It is an ethical responsibility of the employer to acknowledge an employee's job well done. Likewise, employers and employees both have a responsibility to adapt to changes in the work environment, such as a change in working schedules, as long as the changes are fair. Respect Business ethics involve showing respect for others, cooperation, communicating in a professional manner and adhering to dress codes and language codes. Both employees and employers should show tactfulness while on the

job and keep clear from engaging in harassment of any kind. Those disrespecting the rules and codes of conduct should be reprimanded with fair and standard punishments. Accountability It is the employer's responsibility to create clear-cut goals for each employee and make sure the employees know how to reach those goals. In order to reach goals efficiently and smoothly, employers have an ethical responsibility to keep track of employee progress and day-to-day activities, have regular meetings and keep communication open at all levels of business. Likewise, employees show responsibility by working to reach those short-term and long-term goals. Hiring and Wages An employer has the responsibility to hire the best candidate suited for the job without discrimination in regard to race, gender, sexual orientation and religion. The employer must be honest about working conditions, work expectations and wages. The wages must be fair for the entire employment population and reflect experience level and skills, education, job performance and length of employment. Employers must hire enough employees to meet business expectations and keep wages proportionate to the inflation of general living expenses. Employer-Employee ethical issues Exploitation Working conditions for employees are a major point of contention in many workplaces, and are usually a central factor in labor negotiations and strikes. Unethical employers fail to provide safe working conditions either through negligence or intentionally. This can lead to higher rates of illness and injury for workers. Rates of pay are also a frequent source of disagreement. While it is understandable that workers want higher pay and employers want to pay less, some employers exploit workers to the point that it becomes unethical. If rates of pay go below minimum wage laws, this practice becomes not only unethical but illegal. Theft Employee theft costs American companies over $40 billion a year, according to Thompson Security Systems. There are many reasons for employee theft, including the simple urge to get something without paying for it, bitterness at low pay, vengeance for mistreatment by a company, addictive behavior and stealing to resell for cash. Business responses to this behavior range from improving employee morale to termination to legal action. Stealing from an employer is both unethical and illegal, and in the eyes of the law is no different than shoplifting or stealing from a stranger. Misuse of Power Certain personalities succumb to the urge to abuse power when it is given to them. Abuses of power by managers, employers and business owners can involve minor annoyances such as working for an arrogant boss, or can be as serious as blackmail and sexual assault. The economic inequalities between employers and employees can lead to unhealthy relationships if those in power decide to abuse their privileged positions. When employers view themselves as providing a service to both clients and employees, relationships will remain healthier and more egalitarian. Revealing Company Secrets Companies that are involved in research and development and the release of new products have structures in place to prevent the acquisition of company secrets by competitors. Employees who have access to this privileged information may be tempted to reveal it to others, either for monetary reward or personal reasons. When employees are subject to confidentiality clauses as part of their employment, this activity is illegal and can lead to

criminal prosecution. Working against the interests of an employer can be seen as unethical even in the absence of legal restrictions.

T 3.3 Discuss the role of the company as moral agent and suggest how to ensure an ethical organization analyzing possible conflicts.
Obviously, moral and legal behavior is not identical. Indeed, some legal behavior may appear quite immoral to sensitive observers. For example, college students are morally outraged when they discover that their universities and colleges quite legally hold securities in companies that invest in South Africa or that make munitions. The assertion that values and morals are always cut on the bias is probably not far from correct. Faith is implicit in moral definition and injunction. An understanding of ethical precepts and the choice of such values ultimately rest on reason, experience and hunch. Hence, we need to examine the nature of our values before we legitimate them as prescriptions and injunctions. To accept secular normative behavior as a matter of faith is to confuse secular and religious values. We are mainly concerned with reasoned behavior in business affairs. It appears, therefore, that the secular ethical decisions facing business concerns are always matters of judgment. It then follows that ethical decisions are uniquely limited to people, and can never be the product of institutions. Hence, business as an institution is a moral and, like any other institution, is an artifact rather than a natural person. An organization's ethical analysis Business Organization's Ethical Analysis For a decision to be considered fair by a stakeholder in an organization, he expects a confident ethical analysis that is, that the organization has taken into account as much information as possible before arriving at a decision. He expects that: those who have a right to be heard are involved in the decision-making process; the organization is prepared for the consequences of its actions, and the decision upholds the organization's values. As the final part of the analysis, if the details of this decision were known, the organization would be at ease, with nothing to hide. Medical Research Ethics Analysis A satisfactory ethics analysis in research requires that a voluntary participant of research is informed of the purpose of the research, the procedure, benefits and risks, and alternatives to participating in the research. She is provided with a confidentiality statement and has the option of anonymity. She is informed of her compensation and medical treatments in case of a research-related injury. The participant has the opportunity to ask questions. Workplace Ethical Analysis An employee in the workplace may encounter a grey area when it comes to ethics. For example, an issue may be that an employee who works in quality control has been asked by her supervisor to deliver refurbished computers to a school as part of its annual goodwill. There are no specific records kept of the transaction and the employee needs a computer for her son and takes the computer. As another example, an employee uses the workplace photocopier for personal use. In an ethical analysis, the problem is identified; facts and effects on those that were affected by the decision are noted. Other options that the employee may have had are considered as well as resulting harm, values compromised or regulations violated. Confidentiality Ethical Analysis In a doctor-patient scenario, the patient's right to privacy develops a trusting relationship for a successful, healthy outcome. A doctor may be tempted to share with friends that a well-known celebrity is his patient or use the patient's name or title in his advertising such as "acupuncturist to the mayor." In an ethical analysis, it crosses the boundary of confidentiality.

Many philosophers, such as Kant, view morality as a transaction among rational parties, i.e., among moral agents. For this reason, they would exclude other animals from moral consideration. Others, such as Utilitarian philosophers like Jeremy Bentham and Peter Singer have argued the key to inclusion in the moral community is not rationality, for if it were, we might have to exclude some disabled people and infants, and might also have to distinguish between the degrees of rationality of healthy adults, but the real object of moral action is the avoidance of suffering.

T 3.4 Discuss the development of mechanisms for achieving employee involvement and empowerment in order to ensure good practices in equal opportunities in employment.
Employee Definition : A person who is hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as part of an independent business. An employee contributes labor and expertise to an endeavor of an employer and is usually hired to perform specific duties which are packaged into a job. In most modern economies, the term "employee" refers to a specific defined relationship between an individual and a corporation, which differs from those of customer or client. Duties of employees Employees have health and safety duties as well as employers. This reflects the fact that for good safety management it is essential for the employer and employees to work together. An employee's duties are to: Take reasonable care of the health and safety of themselves and of others who may be affected by what they do or do not do Cooperate with the employer on health and safety matters Not misuse any equipment that is provided for safety purposes (e.g. fire extinguishers or safety goggles) Follow instructions from the employer on health and safety matters and attend relevant health and safety training Report hazards and defects observed in the workplace.

Employee involvement Employee involvement is very important, as it is a system wherein employees are encouraged to use their expertise and knowledge to suggest methods for improvements in their work areas. These suggestions could relate to improvements in the job, the product, the work atmosphere or the company as a whole. Many companies have ventured into a participation-style of management by involving employees in the problem solving and decision making processes. Some of the most successful companies are those that have achieved a close relationship between workers and the managers. The policies in these companies fostered teamwork, participation, continuous learning and flexibility. Employee involvement takes many forms, such as participation in: union/management safety and health committees specific-function committees workplace safety committees site inspections safety observer roles routine hazard analysis assistance site safety requirements and standard operating procedures development or revisions

Training Qualified employees who are trainers or mentors are valuable resources.

Employee empowerment In addition to employee involvement, employee empowerment is another management concept the basic theme of which is to give employees the means for making important decisions, and making those decisions the "right" ones. When done right, the results are heightened productivity and a better quality of work life. While the actual practice of employee empowerment varies across organizations, empowerment is based on the fundamental concepts of job enlargement and job enrichment. Job enlargement involves changing the scope of the job to include a greater portion of the horizontal process. Job enrichment involves increasing the depth of the job to include responsibilities that have traditionally been carried out at higher levels of the organization. Benefits Employee Involvement & Empowerment While both employee involvement and employee empowerment are each distinct practice and are usually mutually exclusive to one another, the benefits of each can be similar. The main benefits of employee involvement and empowerment are enhanced morale, more productivity, healthier coworker relationships and creative thinking. 1) Improved Morale. Involving employees in decisions and policy changes that directly affect their jobs while also empowering employees to be more autonomous, greatly improves company morale at large. When employees are treated as an asset and their input is given consideration, confidence increases among every team member, and the organization sees significant gains in different facets such as productivity and loyalty. Improved morale can also increase employee longevity with the company, as the longer an employee is associated with the company, the more experienced they become. This makes them mentors to new employees and therefore indispensable to managerial staff. 2) Increased Productivity. Both quality management practices also translate into increased productivity. Employees with an investment in the best interest of the organization increase their role in the company, and foster a stronger work ethic. When employees are given independence and expected to be more self-sufficient, they eventually become more efficient as they learn to navigate their responsibilities with minimal interference and/or relying less on managerial staff for direction. This allows managerial staff more time to tend to their own responsibilities other than giving assignments to subordinates and decreases micromanagement, which minimizes productivity. 3) Team Cohesion. Employee empowerment fosters better relationships between employees and with their managers, as employees that are given more independence tend to form better working relationships. Each sees the other as mutually benefiting from their working relationship. In addition, more self-governance in the workplace lessens dependence on managers and supervisors and redirects that reliance laterally to coworkers. 4) Innovation. Employee empowerment cultivates innovation, as employees that have a stake in company growth and sustainability will offer more ideas and problem-solving solutions when obstacles arise. As the employee meets particular challenges or finds improvements in policies, procedures or products, it will foster growth and more critical and imaginative thinking. Employees can offer different perspectives than a manager, and be able to offer a creative solution not otherwise considered by staff. Organizational Hierarchy Top level managers Middle level manager Operational level managers

A hierarchical organization is an organizational structure where every entity in the organization, except one, is subordinates to a single other entity. This arrangement is a form of a hierarchy. In an organization, the hierarchy usually consists of a singular/group of power at the top with subsequent levels of power beneath them. Members of hierarchical organizational structures chiefly communicate with their immediate superior and with their immediate subordinates. Structuring organizations in this way is useful partly because it can reduce the communication overhead by limiting information flow; this is also its major limitation. Power of Hierarchy Hierarchy protects subordinates by clearly outlining chains of command. What a superior can and cannot do and where her authority has power is delineated in hierarchical structures. This allows the subordinate some level of power to stop interference by an unauthorized superior. An advantage for subordinates within the hierarchical structure knows clearly who their boss is. This relieves any conflict they may be faced with when another superior attempts to direct them without authority. Hierarchical Communication Daily communication typically occurs between an immediate superior and his subordinates. The immediate supervisor is directly responsible for the results delivered by her subordinates. Initiatives, or directives that involve the organization as a whole, are delivered from the top of the organization downward. The directives are sent specifically to the superior of each department listed in the organizational chart. This departmental superior delivers the initiative to his subordinates. Example A good example of a hierarchical organizational structure is the United States government. At the top of the pyramid is the Constitution; this is the governing concept (idea, goal) on which the government is based. Below it are the three branches of government: the executive branch, the judicial branch and the legislative branch. These three branches are equals and sit in a horizontal line below the Constitution. Directly below the three branches, the departments that answer to that branch (authority) are listed horizontally. Directly below those departments are the personnel, offices or organizations subordinate to those departments.

TASK 04
T 4.1 Demonstrate narrow business ethics and broad business ethics with illustrations
Narrow business, is a very important concept of organizing function of management. It refers to the number of subordinates that can be handled effectively by a superior in an organization. It signifies how the relations are planned between superior and subordinates in an organization. Narrow means a single manager or supervisor oversees few subordinates. This gives rise to a tall organizational structure. While, a broad management means a single manager or supervisor oversees a large number of subordinates. This gives rise to a flat organizational structure. There is an inverse relation between the management and the number of hierarchical levels in an organization, i.e., narrow management, greater the number of levels in an organization. Narrow management is more costly compared to broad management as there is larger number of superiors/ managers and thus there are greater communication issues too between various management levels. The less geographically scattered the subordinates are, the better it is to have a broad management as it would be feasible for managers to be in touch with the subordinates and to explain them how to efficiently perform the tasks. In case of narrow management, there are comparatively more growth opportunities for a subordinate as the number of levels are more.

T 4.2 Explain the importance of ensuring broad business ethics in a business environment in terms of environmental protection with current issues of an organization or a sector you are familiar with
We have seen successful businesses fail, we have witnessed profitably running businesses suffer from a downfall and some seemingly effective corporate receive a great fall in their profits and popularity. One of the main reasons behind these surprising failures was the lack of business ethics. A true understanding of the right and the wrong and the ability to distinguish between them is ethics. Ethics is an important part of life and running a successful business is no exception to this. To become successful, a business needs to be driven by strong ethical values. The mindset of a businessman creates a mindset for his/her company, which in turn sets the work culture of the business organization. For a business to prosper and maintain its wealth, it ought to be founded on certain ethical principles. A business that is based on ethics can run successfully for long years. Moneymakers who do not heed to ethical values can only earn a short-lived success. To last long in the market, business ethics is essential.

Here are some factors, importance of business ethics in a business environment 1. Improve customers' confidence: Business ethics are needed to improve the customers' confidence about the quality, quantity, price, etc. of the products. The customers have more trust and confidence in the businessmen who follow ethical rules. They feel that such businessmen will not cheat them. 2. Survival of business: Business ethics are mandatory for the survival of business. The businessmen 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. 3. Safeguarding consumers' rights: The consumer has many rights such as right to health and 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.

4. Protecting employees and shareholders: Business ethics are required to protect the interest of employees, shareholders, competitors, dealers, suppliers, etc. It protects them from exploitation through unfair trade practices. 5. Develops good relations: Business ethics are important to develop good and friendly relations 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. 6. Creates good image: Business ethics create a good image for the business and businessmen. 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. 7. 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. 8. Consumer movement: Business ethics are gaining importance because of the growth of the 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. 9. Consumer satisfaction: Today, the consumer is the king of the market. Any business simply 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. 10. Importance of labor: Labor, i.e. employees or workers play a very crucial role in the success 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. 11. Healthy competition: The business must use business ethics while dealing with the competitors. They must have healthy competition with the competitors. They must not do cut-throat competition. Similarly, they must give equal opportunities to small-scale business. They must avoid monopoly. This is because a monopoly is harmful to the consumers. For a business to achieve long-term profits, customer relationship is of utmost importance. To gain a long-term relationship with customers and achieve customer return for the business, the business needs to be based on ethics. The trustworthiness of a business, its customer service, its customer care, its way of dealing with customers and its urge to retain their old customers, is a part of ethics in business. Business ethics leave a long-lasting impression on the customers and the impression on their minds builds trust, fetching a business more customers while retaining the older ones. Most of us are concerned about making money for our business and we cater to the legalities in business. But we seldom bother to base our business on ethics. At times, ethical duties of businessmen and project managers could be more abiding than even the business laws. Ethics is a far-reaching concept and goes beyond the idea of making money legally. Ethical values are way ahead of earning money. Ethics is more about earning long-lasting relationships in business. People who seek motivation behind being ethical should understand that they are ethical by definition. Ethics is an integral part of running a business and hence ethical values accompany business by default. Without following certain ideals in business, one cannot become successful. Success that is attained without a foundation of strong

ethics is bound to be short-lived. A business cannot continue to prosper without an ethical base. A few successes can be coincidences or flukes but persistent success can only be a result of a strong foundation of ethics. The benefits given by the business organization should not be used in an unfair manner. The use of company resources for personal benefits and taking an undue advantage of business resources is completely unethical. Using the wealth of the business for personal reasons is not ethical. Using company funds for personal reasons is unethical. A thoughtful and a careful utilization of company resources is a part of business ethics. A vigilant and a prudent use of resources is an essential component of ethics in business. Accepting bribes, pleasing the so-called 'important' clients, favoring a part of the customers while being unfair towards the others is against ethics in business. The primary aim of business is not just to maximize profits. It is rather to cater to the needs of society and work towards benefiting the masses. Experts in business management and researchers have endorsed the need for businessmen and company professionals to study ethics. They have asserted the importance of founding business on ethical values and following them. They have urged management professionals to adhere to ethics and accept it as a part of business. Ethics remain being important in business and strong ethical values shall take the business a long way!

T 4.3 Discuss ethical values in terms of economic theory and examine how it assists to achieve economic objectives of a country.
Is capitalism good? Should we admire hard workers who are motivated to make large profits? Does competition bring out the best in people? These questions juxtapose practices and institutions that economists study (capitalism, profits, competition) with concepts that ethicists use (good, admirable, and best). Ethics studies values and virtues. A value is a good to be achieved or a standard of right to be followed, while a virtue is a character trait that enables one to achieve the good or act rightly. For example, a list of core goods might include wealth, love, and freedom. A corresponding list of virtuesor character traitsmight include the productiveness that enables one to achieve wealth, the honesty that enables one to enjoy loving relationships, and the selfresponsibility that enables one to live in freedom. Ethical issues connect intimately with economic issues. Take the economic practice of doing a cost-benefit analysis. You could spend one hundred dollars for a night on the town, or you could donate that one hundred dollars to the reelection campaign of your favorite politician. Which option is better? The night on the town increases pleasure. A politicians successful campaign may lead to more liberty in the long term. We regularly make decisions like this, weighing our options by measuring their likely costs and likely benefits against each other. Economists implicitly adopt a value framework when beginning a cost-benefit analysis. Different value commitments can lead to the same item being considered a cost from one perspective and a benefit from another. For example, those whose standard of value is increasing human happiness would count a new road to a scenic mountain vista as a benefit, while those whose standard is maintaining an unchanged natural environment would count it as a cost. The results of economic analysis also lead directly to ethical issues. For example, one result of the nineteenth- and twentieth-century debate over capitalism and socialism is a general consensus that capitalism is effective at producing wealth and socialism is effective at keeping people poor. Advocates of capitalism use these results to argue that capitalism is good; others might respond that socialism is good in theory, but unfortunately it is not practical. Implicit in the capitalist position is the view that practical consequences determine goodness. By contrast, implicit in the position of those who believe socialism to be an impractical moral ideal is the view that goodness is distinct from practical consequences. Strong forms of egoism hold that individuals should be self-responsible and ambitious in their pursuit of happiness, that they should treat other individuals as self-responsible trading partners, and that those who are unable to be self-responsible should be treated through voluntary CHARITY. Strong forms of altruism argue the opposite, holding

that morality is primarily a matter of helping those who are in need, that charity is more moral than trade, and that the most moral individuals will be motivated by a spirit of self-sacrifice. For example: Carly worked hard and earned $10 million by the time she was forty. She is now in semiretirement, enjoying the good life of travel, building her dream home, managing her investments, and spending time with her family and friends. Jane, by contrast, inherited $10 million at age forty, gave $9.9 million away to charity, and lives frugally on the remaining money. Which woman is more morally admirable? Setting business ethical standards Businesses make decisions that influence consumers, employees, and society in general. It is people who make up the businesses, and it is people who must set the standards for ethical conduct. The process for setting standards needs to be a top-down approach management must develop and support an ethical code. Employees must understand what is expected of them in order to follow the codes. Managers and employees must be trained to interpret and consider alternatives relative to established ethical codes. In larger businesses, compliance offices are often established to assure that ethical codes are followed. People outside the business must also know what ethical standards are being followed, and they must know that individuals within the company who do not follow the prescribed ethical codes will be dealt with in a manner appropriate to the violation. This illustrates the need to enforce the ethical codes. If a business establishes an ethical code but does not enforce it, the code will not be followed.

T 4.4 Analyze the nature of multinational companies and recommends the strategies to safeguard local economy in terms of introducing ethical guidelines to multinationals
Nature of multinational companies A multinational company has branches in many countries. Ford and Sony are examples. Multinational companies do bring some benefits to developing countries. They provide jobs and increase the wealth of the local people. The country gains some wealth by way of taxes. However, there are some problems as well. The jobs are often low-skilled and poorly paid. Much of the profit will go out of the country, and the company may pull out to relocate in a country where it can make a greater profit. Multinational companies are primarily interested in making profits for their shareholders. Paying wages is an expense that the company will try to reduce to as low a level as possible. A multinational company is one which has its home in one country but lives and operates under the law and customs of other country. The head office of multinational company is in one country and its branches are spread all over the world. Hindustan lever, Procter and gamble, Colgate Palmolive etc are examples of multinational companies Following are the features of multinational company 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Huge amount of capital Large sized plant and machinery Various activities Expansion on large scale Professional management Advance technology Market expansion Profit is the main objective Control of head office Creation of new project

Introducing ethical guidelines to multinationals 2011 Update of the OECD Guidelines for Multinational Enterprises Background to the update The update of the OECD Guidelines for Multinational Enterprises began early in May 2010. Governments adhering to the Guidelines engaged in an intensive consultation process with a wide range of stakeholders. The Guidelines are recommendations by governments covering all major areas of business ethics, including corporate steps to obey the law, observe internationally-recognized standards and respond to other societal expectations. Since the last review of the Guidelines in 2000, the landscape for international investment and multinational enterprises has continued to change rapidly. The world economy has witnessed new and more complex patterns of production and consumption. Non-OECD countries are attracting a larger share of world investment and multinational enterprises from non-adhering countries have grown in importance. At the same time, the financial and economic crisis and the loss in confidence in open markets, the need to address climate change, and reaffirmed international commitments to development goals have prompted renewed calls from governments, the private sector and social partners for high standards of responsible business conduct. At their 2009 Annual Meeting, NCPs responsible for the implementation of the Guidelines recommended that adhering countries review the experience gained with this instrument with a view to defining terms of reference for its possible update. At the June 2009 OECD Council Meeting at Ministerial level, ministers from OECD and nonmember countries welcomed further consultation on the updating of the OECD Guidelines to increase their relevance and clarify private sector responsibilities. The first step in this process took place on 8 December 2009 with a consultation which sought the views of business, labor, NGOs, non-adhering countries and international organizations on the priority areas for an update. Adhering governments decided on the terms of reference for an update in April 2010. Work on the update started in June 2010 and the updated Guidelines were formally adopted in May 2011.

T 4.5 Analyze the employment practices of HSBC in the scenario in terms of international business ethics
Human resource management, in the sense of getting things done through people. It's an essential part of every manager's responsibilities, but many organizations find it advantageous to establish a specialist division to provide an expert service dedicated to ensuring that the human resource function is performed efficiently. "People are our most valuable asset" is a clich which no member of any senior management team would disagree with. Yet, the reality for many organizations is that their people remain Under valued Under trained Under utilized Poorly motivated, and consequently perform well below their true capability

Under human resource management there are lots of activities done in an organization. The function was initially dominated by transactional work such as payroll and benefits administration, but due to globalization, company

consolidation, technological advancement, and further research, HR now focuses on strategic initiatives like mergers and acquisitions, talent management, succession planning, industrial and labor relations, and diversity and inclusion. In practice, HR is responsible for employee experience during the entire employment lifecycle. It is first charged with attracting the right employees through employer branding. It then must select the right employees through the recruitment process. HR then on boards new hires and oversees their training and development during their tenure with the organization. HR assesses talent through use of performance appraisals and then rewards them accordingly. In fulfillment of the latter, HR may sometimes administer payroll and employee benefits, although such activities are more and more being outsourced, with HR playing a more strategic role. HSBC may have decided to self-insure its risk of unpaid overtime class litigation. But if it has employment practices coverage excluding this kind of loss, it may want to pay close attention to not only the actual terms of the coverage, but also whether the class representatives belong to any protected class. If they do, the employment practices insurance company may have a duty to defend potentially giving the bank a way out of otherwise costly class litigation. References 1. http://www.scu.edu/ethics/practicing/decision/whatisethics.html 2. http://atheism.about.com/od/ethicalsystems/a/Deontological.htm 3. Kolak, Daniel. The Mayfield Anthology of Western Philosophy. Mountain View: Mayfield Publishing Company, 1998. 4. Kupperman, Joel J. The Foundations of Morality. London: George Allen & Unwin, 1983. 1. Received from: http://qirien.icecavern.net/punkus/school/kantmill.htm 5. http://www.rsrevision.com/Alevel/ethics/absoluterelativemorality/index.htm 6. http://businesscasestudies.co.uk/business-theory/strategy/aims-and-objectives.html 7. VSDas.pdf 8. http://www.isb.edu/bankingconference/File/VSDas.pdf 9. http://www.enotes.com/social-responsibility-organizational-ethics-reference/social-responsibility 10. http://employment.findlaw.com/employment-discrimination/employees-rights-101.html 11. http://www.hrsdc.gc.ca/eng/labour/ipg/069/page01.shtml 12. Josephson Institute; Responsibilities in the Employer-Employee Relationship, December 2010 13. Georgia: Career, Technical, & Agricultural Education: Workplace Ethics Activity 14. Employee Involvement in SMEs, International Journal of Human Resource Management 15. Wayne State: Impact of Hierarchical Structures on Decision-Making (PDF) 16. http://www.econlib.org/library/Enc/EthicsandEconomics.html 17. http://www.econlib.org/library/Mill/mlLbty.html 18. Boulding, Kenneth E. (1968). Beyond Economics: Essays on Society, Religion, and Ethics. Ann Arbor; MI: University of Michigan Press. 19. OECD Observer article: Multinational enterprises: Better guidelines for better lives 20. Comparative table of changes made in the 2011 update of the OECD Guidelines forMultinational Enterprises (pdf) 21. Consultation with stakeholders, 13 December 2010