1. How do you differentiate between ethics and morality? How do Indian value systems promote ethics in business?

Answer: Ethics: Ethics relates to the philosophy behind a moral outcome. In order to spotlight acceptable and unacceptable behavior within a specific situation, ethical behavior is defined. The term 'ethics' also refers to understanding and adopting moral values within the home or workplace that should be defined. It relates to values commonly adhered to and fundamentals or meta-ethics in the immediate surroundings. There are different types of ethics and the application of each differs from one situation to another. In the case of normative ethics, the notion behind what declares an action as 'right' or 'wrong' is derived and defined. In meta-ethics, judgmental properties within a situation are investigated. Issues relating to the sensitivity of ontology, semantics and epistemology are explored in this stream of ethics. Descriptive ethics examines a situation as a choice made in the presence of the moral agents relevant. Here issues like preferred concepts of etiquette and aesthetics are considered. Relational ethics relate to personal interactions and responsibilities. Applied ethics on the other hand, investigates the success or failure of the application of ethical theory to every day situations. Ethics are an integral part of social laws and politics. In any dichotomy situation, one where two choices are available, ethics steps in to identify the best action-choice. Ethical action is defined and questioned within our interactions with the terminally sick, animals aged citizens and in issues such as abortion. Morality: Morality refers to an adopted code of conduct within an environment and a set of agreed upon rules for what is 'right' and 'wrong'. Morals have formed the spine of modern society, religion and every individual's conscience. The conceptions changed in time and take on a new meaning. For example, 'murder is immoral', but 'on the battlefield murder is permissible'. In a way, morality is in sync with ethics. While one is abstract in understanding, the other is defined and in the form of written code. Morality addresses the ethical queries on the moral outcome of a specific situation. The code of conduct formulated probes prohibitions, controversial behavior, standards of belief systems and social conformity of morally 'right' behavior. Moral codes define 'appropriate' and 'expected' activity. Community morality is usually defined via commentaries and codes of authority. Morality is better understood as an assimilation of beliefs about the essentials to lead a 'good' life. It is not to be confused with religious or fanatic or political perception. Moral codes are based on value systems that have been tried and tested. The best examples of moral codes include the Eightfold Path of Buddhism and the Ten commandments. It is believed that all of us, throughout our lives, act from a developing moral core.

Difference between Ethics and Morality: While morals define our character, ethics dictate the working of a social system. Ethics point towards the application of morality. In the wake of this understanding, national, social and workplace ethics are based on the abstract moral codes adopted and adhered to by each member of the group. It is part of individual morality to respond to the needs of the elderly citizens within the community. Social ethics require you to sign up for a community outreach program. The difference between morality and ethics is a fine line that differs between communities and environment. 2.What are six stages of moral development of an Individual as explained by Lawrence Kohlberg? Answer: Moral development is a major topic of interest in both psychology and education. One of the best known theories was developed by psychologist Lawrence Kohlberg who modified and expanded upon Jean Piaget's work to form a theory that explained the development of moral reasoning. Piaget described a two-stage process of moral development, while Kohlberg's theory of moral development outlined six stages within three different levels. Kohlberg extended Piaget's theory, proposing that moral development is a continual process that occurs throughout the lifespan.

Explain Trusteeship Management- Gandhian philosophy of wealth management. Answer: Mahatma Gandhi in 1939 said to questioner: Just imagine that I have a crore of rupees in my possession. I can either squander the amount in dissipation; or take up the attitude that the money does not belong to me, that I do not own it, that it is a bequest, that it has been put in my possession by God and that only so much of it is mine as is enough for my requirements. ..My requirements cannot be greater because I happen to be son a rich man The man who takes for himself only enough to satisfy the needs customary in his society and spends the rest for social service becomes a trustee This theory of trusteeship had evolved as a response from Gandhi to the issue of usurpation (seize and hold) of the property of princes and zamindars. Continuing his reply, he also said: We also wish that the Princes and the millionaires too should do manual work and maintain themselves on eight annas a day, considering the rest of their property as national trust The notion of trusteeship espoused by Gandhi centered on denying material pursuits and coveting of wealth, with practitioners acting as trustees of other individuals and the community in their management of economic resources and property. The rich should serve the society after satisfying his needs and not merely enjoy his life. Throughout his life, Gandhi sought to develop ways to fight India's extreme poverty, backwardness and socioeconomic challenges as a part of his wider involvement in the Indian independence movement. Gandhi's championing of Swadeshi and non-cooperation were centred on the principles of economic self-sufficiency.

Gandhi was averse to all notions of class warfare and concepts of class-based revolution, which he saw as causes of social violence and disharmony. Gandhi's concept of egalitarianism (a belief in human equality esp. with respect to social, political, and economic rights and privileges) was centred on the preservation of human dignity rather than material development. Some of Gandhi's closest supporters and admirers included industrialists such as Ghanshyamdas Birla, Ambalal Sarabhai, Jamnalal Bajaj and J. R. D. Tata, who adopted several of Gandhi's progressive ideas in managing labour relations while also personally participating in Gandhi's ashrams and socio-political work.

Gandhian economics do not draw a distinction between economics and ethics. Economics that hurts the moral well-being of an individual or a nation is immoral, and therefore sinful. The value of an industry should be gauged less by the dividends it pays to shareholders than by its effect on the bodies, soul and spirits of the people employed in it. In essence, supreme consideration is to be given to man than to money. In fact, the first basic principle of Gandhis economic thought is a special emphasis on plain living which helps in cutting

down your wants and being self-reliant. Accordingly, increasing consumer appetite is likened to animal appetite which goes to the end of earth in search of their satisfaction. Thus a distinction is to be made between ' Standard of Living and Standard of Life, where the former merely states the material and physical standard of food, cloth and housing. A higher standard of life, on the other hand could be attained only if, along with material advancement, there was a serious attempt to imbibe cultural and spiritual values and qualities.

Under the Gandhian economic order, the character of production will be determined by social necessity and not by personal greed. Gandhi has often quoted that if mankind was to progress and to realize the ideals of equality and brotherhood, it must act on the principle of paying the highest attention to the prime needs of the weakest sections of the population. Therefore any exercise on economic planning on a national scale would be futile without uplifting these most vulnerable sections of the society in a direct manner. In the ultimate analysis, it is the quality of the human being that has to be raised, refined and consolidated. In other words, economic planning is for the citizen, and not the citizen for national planning. Everybody should be given the right to earn according to his capacity using just means. The rich should serve the society after satisfying his needs and not merely enjoy his life. Gandhian economics places importance to means of achieving the aim of development and this means must be non-violent, ethical and truthful in all economic spheres. In order to achieve this means he advocated trusteeship, decentralization of economic activities, labour intensive technology and priority to weaker sections. Gandhi claims that to be non-violent an Individual needs to have a rural mindedness. It also helps in thinking of our necessities of our household in terms of rural mindedness. The revival of the economy is made possible only when it is free from exploitation, so according to Gandhi industrialization on a mass-scale will lead to passive or active exploitation of the people as the problem of competition and marketing comes in. Gandhi believes that for an economy to be self-contained, it should manufacture mainly for its use even if that necessitates the use of modern machines and tools, provided it is not used as a means of exploitation of others. The path of socialism should only be through non-violence and democratic method and any recourse to class-war and mutual hatred would prove to be suicidal.

Gandhian economics is a school of economic thought based on the socioeconomic principles expounded by Indian leader Mohandas Gandhi. It is largely characterised by its affinity to the principles and objectives of nonviolent humanistic socialism, but with a rejection of violent class war and promotion of socioeconomic harmony. The path of socialism should only be through non-violence and democratic method and any recourse to class-war and mutual hatred would prove to be suicidal.Gandhi's economic ideas also aim to promote spiritual development and harmony with a rejection of materialism. The term "Gandhian economics" was coined by J. C. Kumarappa, a close supporter of Gandhi.

Gandhian economics brings a socialist perspective of overall development and tries to redefine the outlook of socialism. Gandhi espoused the notion of trusteeship which In the ultimate analysis, it is the quality of the human being that has to be raised, refined and consolidated. In other words, economic planning is for the citizen, and not the citizen for national planning. Everybody should be given the right to earn according to his capacity using just means.

General Issues concerning Trusteeship Theory

Trusteeship, as applicable to the corporate world, refers to the act of holding and managing resources on behalf of the stakeholders of the firm. Whats new about that, one may query. Given that the traditional take on wealth has almost always been tilted towards owners of corporations, this concept brings in an element of equity, by placing other stakeholders such as employees, customers and society on the same rung as large and small shareholders.

The idea is that all wealth, including human, financial and technological resources, belongs to society and the rewards accruing from their use must revert to society at large. The principles of trusteeship can be traced to the concept of collective endeavour and community living. Briefly, these are: Resources must be held and utilised for the benefit of society. Managers are the trustees of the stakeholders and must work towards optimizing stakeholder value, not merely maximising shareholder value. The small investor has as much a say in decisions as the large investor. Overall approach is towards the macro and the long-term perspective, rather than the shortterm perspective which is often geared exclusively to suit the shareholder and top management.

At first sight, this seemingly idealistic concept invariably raises a few protests. The owner/s must be rewarded for bearing risks and supplying expertise: Definitely. But the reward must be in proportion to the skills and expertise supplied. The increasing instances of ethical transgressions on the part of leaders and CEOs indicate the need for better balance in the risk-

reward relationship. The Enron fiasco and the sale of shares worth over $70m by erstwhile chief Rebecca Mark, a few months before its bankruptcy, is a case in point.

Corporations exist for profits: No, they exist to fulfill the needs of society and in the process, generate profits. Even if profits were to be the only determinant of policies, trusteeship would still score over inequitable sharing of wealth, since better wealth management automatically leads to more lasting and stable equations with stakeholders. This, in turn, leads to higher profits, goodwill and trust. Trusteeship might lead to a disincentive for efficiency and efforts: When individual and group efforts are correctly aligned with social needs, the possibility of de-motivation or deliberate inefficiency does not arise. Conviction in the utility of the concept, coupled with the commitment of top leadership, would ensure efficiency as well as. 4.Explain basics of normative ethics : there are five major systems that do have a direct relevance to managerial decisions. Answer: The ethical dilemma in management centers on the contentious conflict or potential conflict that exists between economic and social performance on an organization. Business firms have to operate on profit otherwise it will not survive long. This is their economic performance. Business firms also have to recognize social performance for their survival, i.e., they have to pay well their employees, suppliers, distributors, and satisfy their customers, stock holders and the society at large. The problem- and the essence of the ethical dilemma in management is that sometimes improvement in economic performance - increase in sales or decrease in costs can be made only at the expense of one or more of the groups to whom the organization has some form of obligation. The economies of scale that follow a merger can be achieved only if the surplus employees are discharged or demoted. The benefits of direct factory to store distribution can be realized only if the existing wholesales are displaced. The advantages of hydro electric power can be achieved only if a river valley is flooded and locals are forced to move. Five major systems:1.Ethical relativism Are there objective universal principles upon which one can construct an ethical system of belief that is applicable to all groups in all cultures at all times? Moral standards of behavior differ between groups within a single culture, between cultures, and between times. The question in ethical relativism is not whether different moral standards and ethical beliefs exist; they obviously do, and we all have experiences to confirm the same. The question is whether there is any commonality that overrides differences. Fortunately, there is one principle that exists across all groups, cultures, and times which form part of every ethical system; that is the belief that members of a group bear some form of responsibility for the well-being of other members of that group.

People in all culture, even the most primitive, do not act solely, for their own interest. They also understand that standards of behavior are required to promote cooperation and ensure survival. If you and I belong to different social group your behavior at a certain situation may be quite different from that of mine. For example, A, an American from US and B, a Brazilian, work for one company. B believes that it is morally acceptable to pay small bribes to expedite import clearance and shipment. A believes that it is morally un-acceptable. They differ. A and B go to Brazil and together get an important shipment cleared through customs. A returns to US and tells his friends that he had to pay a bribe to clear the shipment. As friends are shocked. B talks to his friends in Brazil about A and says he didnt want to pay. They are shocked! Both are right as long as we base our standards on what we believe to best for society. B thinks Customs agents need money. The Government sets their salary assuming that they get a small percentage. The system would work better if everyone were much more honest. 2.Utilitarianism (Teleology): The word Teleology is derived from Greek meaning outcome or result. Influential philosophers like Jeremy Bentham (1748-1832) and J S Mills propagated this idea of moral worth. They held that moral worth of personal conduct can be determined solely by the consequence of that behavior. This theory says that an actor decision is right if I results in benefits to people, and it is wrong if it leads to damages or harm. The objective of this theory is to create the greatest degree of benefits to largest number of people while incurring the least amount of damages or harm. If the cumulative benefits outweigh harms such as actions are said to be right. This philosophy could be extended to economic or managerial decisions. Teleology is a moral philosophy in which an act is considered morally right or acceptable if it produces some desired results such as pleasure, knowledge, career growth, realisation of self interest, utility, wealth or even fame. It assesses the moral worth of a behavior by looking at its consequences. Two important philosophies under teleology that often guide decision making in individual business decisions are egoism and utilitarianism. Egoism defines right or acceptable behavior in terms of its consequences for the individual. Egoists believe that they should make decisions that maximize their own self interest. Utilitarianism on the other hand is concerned with consequences (utilities) that make greatest good for the greatest no. of people. Utilitarians believe that they should make decisions that results in the greatest total utility, that achieve the greatest benefit for all those affected by a decision. It relies on cost benefit analysis(net) of all concerned for all possible actions and selects the one action that results in the best net benefit as the correct action under the circumstances. 3.Universalism- Deontological Theory: Deontology is derived from another Greek term referring to the duties or obligations of an individual. This theory states that moral worth of action cannot be dependent upon the outcome. Instead it has to depend upon the intention of the person making the decision of performing the act. Personal intentions can be translated into personal duties or obligations because, if we truly wish the best for others, then we always act in certain ways to ensure beneficial results and those ways become duties that are incumbent upon us rather than our choices that are open to us. It is our duty to tell the truth; it is our duty not to take property that belongs to others; it is our duty to adhere to contacts etc.

Other people should be seen as worthy of dignity and respect and not as impersonal means to achieve our ends. Our personal duties are universal, applicable to everyone. 4.Distributive Justice: This is one of the two modern theories proposed by John Rawls, a Professor at Harvard. He proposes that Justice is to be felt as the first virtue of social institutions, as truth is the first virtue of system of thought. A theory, however useful and complete, has to be rejected or revised if it is found to be untrue. In the same manner our laws and institutions, no matter how efficient or accepted, must be reformed or abolished if they are unjust. Prof. Rawls proposes that society is an association of individuals who cooperate to advance the good of all. The society or the institutions within the society are marked by conflict and collaboration. The collaboration comes about since individuals recognize that joint actions generate much greater benefits than solitary efforts; the conflict is inherent because people are concerned by the just distribution of these benefits. The distribution can have different bases, to each person equally, or to each according to his or her need, to his or her effort, to his or her contribution, to his or her competence (five principles). 5.Personal Liberty: The existing pattern of holding of each person, in income, wealth and other bases of self respect are derived other people in exchange of some good or service, or received from other people in the form of a gift. The distribution of these wealth might have taken place according to the above five principles. But the pattern will be changed by transfers. Those transfers by exchange or gift may be considered just as long as they are voluntary. Non-voluntary exchanges, based on the use of social force or other coercive means, are unjust. This the principle of personal liberty propagated by Professor Robert Nozick, also a Harvard faculty.