MEANING OF ETHICS

Ethics is the most difficult concept to be defined. The term ethics refers to a code of conduct that guides an individual while dealing with others. Ethics means the rules or principles that define right and wrong conduct. According to Baumhart the following terms are more synonymous with ethics: moral, good, right, just honest, fair. It relates to the social rules and cardinal value that motivates people to be honest in dealing with others. In general ethics deals more with good thane with evil. Ethics is mostly considered relating to the value judgments, actions and conduct of the individuals in relationships with others. The term ethics is derived from the Greek word ethos which refers to character. Ethics can be defined as a system of moral values. The term ethics has wide scope and applications. It is applicable to our economic, social, political and religious activities. They are certainly applicable to all business activities and operations. It may have some facts that are universal in nature but much of it may be defined with reference to the values established by particular society eg; accepting bribes may be unethical in some societies and may be a way of life for others to get things done. This determination of ethical conduct is subjective and vague varying among different cultures and different environmental conditions. Ethics is the discipline that examines ones moral standards or the moral standards of a society. It asks how these standards apply to our lives and whether these standards are reasonable or unreasonable. When a person asks questions about his or her moral standards of his or her society, the persons has started to do ethics. Ethics is the study of moral standards - the process of examining the moral standards of his or her society to determine whether these standards are reasonable or unreasonable in order to apply them to concrete situations and issues.

NATURE OF BUSINESS ETHICS

In a now classic study of the ethics of business managers, Raymond Baumhart asked more than 100 businesspeople what does ethical mean to you? Of the business people Baumhart interviewed, 50 % defined ethical as what my feeling tell me is right, 25% defined it in religious terms as what is in accord with my religious beliefs, and 18% defined it as what conforms to the golden rule. Yet felling is a notoriously inadequate basis on which to make decisions of any sort, and religious authority and the golden rule have been rather devastatingly criticized as inadequate foundations for judging the ethics of business companies. What then do ethics and ethical mean? According to the dictionary the term ethics has a variety of different meanings. One of the meanings given to it is the principles of conduct governing and individual of a group. We sometimes use the term personal ethics, while referring to the rules by which an individual lives his or her personal life. We use the term accounting ethics when referring to the code that guides the professional conduct of accountants. Another important meaning of ethics according to the dictionary is the study of morality. Ethicists use the term ethics to refer primarily to the study of morality. Although ethics deals with morality it is not quite the same as morality. Ethics kind of investigation and includes both the activity of investigating as well as the results of that investigation. Whereas morality is the subject matter that ethics investigation. MORALITY Morality can be defined as the standards that an individual or a group has about what is right and what is wrong and good and evil. A person who is moral is supposed to abide by certain principles, which by implications, are deemed to be important.

BUSINESS ETHICS
According to Wheeler, Business ethics is an art or science of maintaining harmonious relationship with society, its various groups and institutions as well as reorganizing the moral responsibility for the rightness or wrongness of business conduct. Business ethics is a specialized study of moral right and wrong. It concentrates on moral standards as they apply to business policies, institutions, and behaviour. It is the application of our understanding of what is good and right. The coverage of the business ethics is very wide as it deals with norms relating to customers, shareholders, employees, dealers, government and competitors. Business ethics suggest that dealings with all social groups should be honest and fair. Business ethics is a study of moral standards and how these apply to the systems and organizations, through which modern societies produce and distribute goods and services, and the people who work within these organizations. Business ethics, in other word, is a form of applied ethics. It includes not only the analysis of moral norms and moral values, but also attempts to apply the conclusions of this analysis to that assortment of institutions, technologies, transactions, activities, and pursuits that we call business. Business ethics is a code of conduct which businessmen should follow while conducting their normal business activities. The businessmen should be given proper education, guidance and training in order to motivate them to follow ethical business practice. Business ethics cannot be enforced by law. So it must be accepted as self-discipline by businessmen.

PRINCIPLES OF BUSINESS ETHICS

Principles of business suggest the code of conduct for businessmen. They suggest how businessmen should conduct business activities for social good. Such principles are related to consume, employees, investors, local community and the society as a whole. Important principles of good business ethics (Code of business ethics) are as follows:1. Principle of sacredness of ends and means:This is the first and foremost principle of business ethics. It emphasizes that the means and techniques adopted to secure the business ends must be sacred and pure. 2. Principle of not to do evil:It is unethical to expect evil against oneself or against anybody else. 3. Avoid exploitation of consumers :One should not cheat/exploit consumers through business malpractices such as artificial price rise and adulteration. 4. Ensure accuracy :There should be accuracy in weighing, packaging and quality while supplying goods to consumers. 5. Avoid profiteering :There should be no black-marketing, profiteering and sale of harmful goods. 6. Regular tax-payments :-

There should be payment of taxes and other charges to concerned authorities honestly and regularly and should avoid bribing officials and lobbying for favours. 7. Proper accounts-keeping :There should be maintenance of accurate business records, accounts and make them available to all authorized persons and authorities. 8. Fair treatment to employees :There should be payment of fair wages, provision of facilities and incentives and giving of treatment to employees. 9. Keep shareholders informed :There should be supply of reliable information to shareholders regarding financial position and other policy decisions of the company. 10. No discrimination among employees:Businessmen avoid injustice and partiality to employees in regard to transfer and promotion and also on the basis of sex, religion and language. 11. Fulfill customer expectations:Businessmen should adjust his business activities as per the needs and expectations of consumers. 12. Respect consumers right :One should give respect and honour to the basic rights of consumer. 13. Principle of equivalent price :The people are entitled to get goods equivalent to the value of money they pay.

14. Principle of publicity :This principle suggests that anything that is being done or to de done, should be brought to the knowledge of everyone. When everything or any decision is in the knowledge of all concerned, none gets any opportunity to do unethical act. 15. Principle of consciousness on business :This principle states that a business should give importance to his inner voice coming out from his sub-conscious mind. He should not play the game of business like other games. He should have an interest above the level of winning or losing. 16. Principle of satisfaction :The conduct of business should be such that it must produce satisfaction. One should make efforts by his own actions to keep others more satisfied. 17. Principle of Non-violence :Where a businessman hurts the interest and rights of the society and exploits the consumers by over looking their interests for the satisfaction of his own interest, this is equivalent to violence and unethical act. The principle of non-violence gives more emphasis that a businessman should not hurt the property, body, emotions and interests of others.

GOOD ETHICS IS GOOD BUSINESS

Some research findings had made it clear that only those business can develop on a long term basis which conduct their activities on ethical grounds. Good ethics not only promotes professionalism in management, but if purify the inner mind of every businessman.

 Satisfaction of sub-conscious mind :- Certain people consider that only good ethics can promote good business as the ethical conducts give satisfaction to their sub conscious mind. Goodwill of business and businessman :- Ethical conduct of business increases the goodwill of business and the businessman both. It is known fact that nobody likes to deal with a mischievous or fraudulent businessman. At the same time, people do like to deal with a good businessman, but introduce him with others also, for regularity in dealings. This way a good ethical behaviour increases the goodwill of both, the business and the businessman. It increases mutual trust and confidence :- When ethical conduct is displayed, it puts some kind of trust and confidence in relationship. Because of this reason, people deal with a businessman. Protects each other :- It protects people in dealing with each other. Helps in professionalization of management :- Prof. Pay writes that management cannot become a profession so far as it does not follow good ethics. Initiative for others :- When certain number of businessman follows the ethical principles in the conduct of business, others may also follow the same principles gradually. The businessman who follows the ethical principles in the conduct of business, motivates others to follow the same principles. Releases from tension :- A businessman who follows the ethical principles in the conduct of business, releases himself from tension or worries. He

need not have the fear of legal action or social boycott. He need not worry about the security of his property as he gets legal protection. Greater zeal and productivity :- It increases the persons creative capability and be success in achieving his objects. Unethical person is of deceiving nature and never be able to face the creative enthusiasm of sincere person. Perpetual i.e. never ending succession :- Ethical conduct of business leads to development and perpetual succession of success. A sincere person who does who does hard work becomes ethical and always succeed in his efforts, but an unethical person cannot.

ETHICAL AND UNETHICAL BUSINESS PRACTICE

Ethical business is useful to businessman and also to the society. Lying, stealing, deceiving and harming others are generally accepted as immoral and unethical, while honesty, keeping ones promises, helping others and respecting basic human right are accepted as morally right and ethical. These ethical rules can be applied to business in order to decide which business practices are ethical or unethical. Business practices may be ethical or unethical. Both of these practices are different from each other. Ethical means as per certain well-recognized social rules and most important values. Business practices which are legally, morally and socially fair and consumer friendly are ethical practices.

Ethical practices are beneficial to all social groups. Such practices are not harmful to this group and as well as business. For example, to supply goods regularly, to charge fair prices, to pay fair wages to workers, to give them decent/good treatment and welfare facilities, to avoid pollution and ecological imbalance etc. This practices promote social welfare and create goodwill for the business. Consumers always support ethical business practices and they and their associations demand ethical practices from the businessmen. Only ethical conducts of business will provide a long term existence of business and the success or development of business depends on it. It may be possible that unethical conduct may sometimes give short term benefits, but for perpetual succession of business, ethical conducts in business are important. Therefore we may conclude that good ethics promotes good business. Walton writes that business ethics is related with truth and justice; and it has various components like expectations of society, healthy competition, advertising, public relation, social responsibility, consumer freedom and good behaviour. People expects that all the business activities and decisions must be aimed at ethical grounds. But, in practice, it finds that business is involved in unethical activites. Many of its activities are objectionable, exploitative and loss giving to the people. Many of its decisions are violation to principles of ethics. Business practices which are not fair (legally, socially and morally) are treated as unfair/unethical business practices. Unethical practices are used for exploiting, cheating consumer and other social groups. They are used for profit maximization at the cost of social good. Unethical practices bring bad name and public criticism top business. They are also harmful to the growth of business as well as consumers. Such practices lead to social control on business. Consumers oppose unethical business practices individually and collectively. Such practices affect not only business and consumers but also employees, shareholders, government and the society at

large in an adverse manner. The purpose of unethical trade practice is to exploit the specific social group for profiteering. For example artificial scarcity, price rise, adulteration and misleading advertising are unethical practices in the case of consumers while low wages, bad working conditions and absence of welfare facilities are unethical practice in regard to employees. Few of such unethical conduct of business are : Political donations and gift :- Gifts, donations or contribution to political leaders or parties to get any unconstitutional act done, namely sanctioning of any special contracts, issues of licenses, etc. Spreading of corruption :- Giving bribe to government officers and subordinates encourages for the practices of corruption in government offices. Neglect of social interest :- Social and consume interests are neglected by mis-utilising the national assets and using the government machinery for private gain. Presentation of false returns of income and statements :- False income returns and statements of accounts are presented before the various authorities for the purpose of evading taxes and to have the benefit of various incentives form the government. Creation of cut-throat competition with other business institutions :- In addition to the creation of acute competition, it solicits the consumers and leaks out the business secrets of other institutions.

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 Accumulation of profits by ill-legal means :- It undertakes various unconstitutional activities like hoarding of goods, black marketing , speculation etc to maximize profits. Exploitations of society :- For the purpose having monopoly profits it gives misleading advertisements and publicity, false labeling use of false trade mark, etc. Production and distribution of illegal items opposed to public policy :- It produces and distributes goods of harmful nature to health and security be conduct of unethical methods. Encourage smuggling activities :- It engages in smuggling activities and establishes relations with inter national gang of smugglers to enter int illegal trading between countries. Destroys the national beauty :- It depends upon the natural beauty of the country by irregular construction of building, destroying the forest/ animal wealth of the country as well as by creating imbalance in the ecology of the country. In conclusions, we may state that business ethics examine carefully the business activities and conducts in the context of moral responsibility and then postulates them in the sense of being proper or improper, right or wrong, fair or unfair. It expresses the moral responsibilities and duties of business and further emphasis the need for executing them.

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MEANING OF SOCIAL RESPONSIBILITY

Social Responsibility is a universally accepted aspect of business management. Business and society are interrelated and interdependent. The concept of social responsibility of business was mooted first by President Wilson in USA as early as 1913 as a measure of the New Democracy .He suggest the concept of sub-rules in industry which listed fair trade practices and enforced sub-discipline by the business community. Society is the home of business. Business depends on society for the needed inputs for production activities. Dependence of business on society is complete. Being so much dependent, business has definite responsibility towards society popularly called Social Responsibility of business. Businessman / business enterprises /corporate sector should not ignore the social realities and social dynamic. Business has to shoulder certain obligations to these social groups. This constitutes social responsibility of business. In brief social responsibility of business means duties and obligations of business towards different social groups i.e. shareholders, consumers, employee, local community and the society at large. Business enterprises have to honour such responsibilities honestly and also on their own. The concept of social responsibility to all business enterprises, irrespective of their nature, size, area of operation, profitability and so on. According to Steiner George Social responsibility is to understand public consensus, to recognize it, and co-operate in achieving this. Each business has responsibilities in some way commensurate with its power. According to the International seminar on social responsibility (held in 1956 at New Delhi) social responsibility means Responsibility to itself, to its investor, workers, shareholder and the community and it is the task of management to reconcile these separate and sometimes conflicting responsibilities.

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NEED FOR SOCIAL RESPONSIBILITY

1) To avoid excessive government interference / regulation (social control of private ownership) in the conduct of business activities. 2) To avoid misuse of natural resources and economic power available with businessmen / corporate sector. 3) To avoid class-conflicts by giving fair treatment to all social group. 4) To establish a better public image and to have co-operation from all (i.e. society) for the expansion of business activities. 5) To fulfill long term self-interest i.e. to create favourable environment for business expansion. Need for social responsibility in business is felt more in modern business. This statement is correct. In the olden days business was profit oriented and businessman was interested only in profit maximization. This situation changed gradually due to market competition, growing consumer awareness, growth of trade union movement, awareness among local community and the society as a whole. Gradually the scope of social responsibility was widened,. Now it is treated as inseparable part of the business management.

IMPORTANCE OF SOCIAL RESPONSIBILITY

The importance of social responsibility of business was universally accepted. It is important to business and to the society. Social responsibility indirectly facilitates business growth and provides market standing and goodwill. Business develops goodwill and reputation by discharging social responsibilities on voluntary basis. Reputation or corporate image building is necessity and not a luxury in the present business environment. In short a company can have market

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reputation/ good corporate image by discharging its social responsibilities honestly. Unfavourable factors will affect the stability progress and prosperity of business. The profitability in business will go down. Such situation will be harmful to businessmen and the society as a whole. The better alternative is to have support and co-operation from the government and other social group. In brief, discharging social responsibilities honestly is the best alternative available to businessmen. Business just cant afford to neglect it or oppose social responsibility. They have to find out ways and means for discharging social responsibilities in best manner. This is necessary for their survival and prosperity.

ARGUMENTS AGAINST SOCIAL RESPONSIBILITY OF BUSINESS

Main argument cited against the concept of social responsibilities of business may be summarized as under. 1. Violates the rule to profit maximization : Since business is purely an economics institution, profit maximization is the sole objective. According to Joel Dean, Maximization of profit is the chief social responsibility of management in competitive economy. 2. Cost Burden : Cost on social responsibility is considered to be a social cost which a business may not be prepared to pay. In case the cost burden is passed on the prices, which may not be in the interest of the consumer and the society at large. 3. Lack of accountability : Another argument against social responsibility of business is that the management of business enterprises is accountable to the owners but not to the pubic. Hence the business is asked to fulfill its social responsibilities.

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4. Lack of social skills : Since businessmen do not possess the requisite social skill required to solve varied and complex social problems, they should not be compelled to comply with social obligations. He devotes all his energies to running his business smoothly and efficiently. He may not be able to tackle social problems properly. 5. Influencing social setup : Modern business commands huge economic power. In case, it is asked to spend money in solving social problems it may try to influence society for its own good. For e.g. now a days a number of educational and other social institutions are being urn by big business enterprises. Instead of providing any assistance to the society, they have become the source of income to them. 6. Adverse impact on economic efficiency : It is feared that if business enterprises are engaged in fulfilling their obligations, it might adversely affect heir main business activities of producing quality goods and services at optimum cost and selling at competitive prices. From the above discussion it is evident that every decision to discharge social responsibility leads to both benefits and costs. However the obligations to discharge social responsibility is in the h=interest of business enterprise itself.

ARGUMENTS IN FAVOUR OF SOCIAL RESPONSIBILITY OF BUSINESS

No business enterprise can afford to work in isolation with society. The businessmen must be guided not by profit motive alone but also by the need of fulfilling it is social obligation. However, views differ widely whether the business should assume social responsibility. Some expert are the opinion that a business enterprise has no other responsibilities except efficient utilization of wealth producing resources.

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1. Moral justification : Since society is the home of business it is the moral responsibilities of the business to discharge its social responsibility towards society. A business depend entirely on the society for supplying necessary resources for the establishment and development of business. Hence it is expected to respond to the need and aspiration of the society. In case business fails to do this, the society will either force it do or compel it to close down its business. 2. Long term self interest of business : The performance of social obligation by a business enterprise will not only be in the interest of the society but in its own interest also. If the business section of the society such as consumer, government, suppliers, investors, community etc, it will be able to achieve its profit motive easily. 3. Create better environment for business : The concept of social responsibility system of business creates a better environment for the establishment development and success of business. 4. Changed public expectation : Another argument in favour of social responsibility of business is that public expectation from business have completely changed. If the business want to exist for long period, it must respond to the social needs, hopes and aspirations of the society. 5. For achieving government support : Business is an economic activity. No business activity can be conducted in a country without the support of government. Now the government support can be achieved only when the business enterprise is fulfilling social responsibilities both in theory and practice. The government may intervene and enact suitable legislation to force the businessmen to shoulder their social responsibilities.

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BIBLIOGRAPHY
1. BUSINESS ENVIRONMENT (SECOND SEMESTER) 2. INTERNET (www.google.com) 3. BUSINESS ENVIRONMENT MATHEW

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