ETHICS & CSR

Reference books

Business Ethics: An Indian Perspective by Prof.

P.S. Bajaj / Dr. Raj Agrawal

Business Ethics: Text & cases by C.S.V. Murthy

A Study in Business Ethics by Rituparna Raj Business Ethics concepts and cases by Manuel
G. Velasquez

Ethics: What Does It Really Mean???

Derived from Greek word Ethicos meaning

Character or Manners

Science of character of a person expressed as

right or wrong conduct or action.

Set of moral principles prescribing code,

explains what is good and right, or bad and wrong.

Meaning of Ethics

Character of a man

Decided by

Conduct of a person

Leads to

Series of Actions

Taken together Considered As

Good or Bad, Right or wrong, Moral or Immoral

By which we can Judge again Moral Standards

Known as Moral Judgement

Requires

Ethics can be termed as the science of character of a person expressed as right or wrong conduct or action

Objective of Ethics
Studies
human behavior and makes assessment about them as moral or immoral evaluative

Establishes moral standards and norms of behavior Makes judgment upon human behavior based on these
standards and norms

Prescribes moral behavior and makes recommendations

about how to or how not to behave

Expresses an opinion or attitude about human conduct in

general

Business Ethics: What Does It Really Mean???

comprises principles and standards that guide

behavior in the world of business

According to John Donaldson Business Ethics

can be described as the systematic study of moral (ethical) matters pertaining to business, industry or related activities, institutions, or practices and beliefs. It is the systematic handling of values in business and industry.

Views on relationship between Business & Ethics

Unitarian View: Business & morality cannot be separated and it must play by the rules of ethics of the community.

Moral Structure

Business

Moral Ethics

Separatist view of Ethics

Proposed by Adam Smith and Milton Friedman:
Business is a distinct entity and does not include ethics and morality

Business

Ethics

Integration view of ethics

Proposed by Talcott Parsons
Government Law

Business

Morality & Ethics

Market Systems

Business Ethics

Society

Business Ethics
When business people speak about business ethics they usually mean one of three things: 1. 2. 3. Avoid breaking the criminal law in ones work related activity Avoid action that may result in civil law suits against the company Avoid actions that are bad for the company image

Businesses are especially concerned with these three things since they involve loss of money and company reputation.

Relationship between law and moral standards

Laws and moral standards overlap to a certain extent Law represents a minimum set of standards for producing a desired
human behaviour Ethics often represents a standard that exceeds the legal minimum
Frequent Overlap

Ethics

Law

Common Unethical Acts...

lying and withholding needed information abusive or intimidating behavior misreporting time worked

discrimination and sexual harassment

stealing breaking environmental and safety laws

falsifying records
drug or alcohol abuse giving or accepting bribes

Why Misconduct Is Not Reported...

belief that nothing will be done fear of retaliation

fear of being viewed as a troublemaker

Why ethical behavior is important???

Business is a subsystem of society

Empowers all stakeholders concerned Reduction in cost of friction with social
environment Important for organizations leaders because they influence the ethical climate for the rest.

Why Ethical problems occur?

Personal gain
Individual values widely differ with organizational goals

Managers values and attitudes

Competitive pressures Cross-Cultural contradictions

Sources of Ethical Norms

Regions of Country

Fellow Workers

Culture

Family

Profession

The Individual
Conscience Friends Employer

The Law

Religious Beliefs

Society at Large

Encouraging Ethical Conduct

Ethics Training
Key features of effective ethics training programs

Top management support. Open discussion. A clear focus on ethical issues. Integration of ethics into the organization. A mechanism for anonymously reporting ethical
violations. Reward ethical conduct.

Encouraging Ethical Conduct

(contd
Whistle-Blowing
The reporting of perceived unethical matters. Reducing the fear of retaliation against whistleblowers

Ethical Advocate

Anonymous hotlines and web sites Personal, confidential guidance

An ethics specialist who plays a role of critical questioner in top-managements decision-making. Serves as the Board of directors social conscience. Helps prevent groupthink and blind conformity

Encouraging Ethical Conduct

(contd)
Code of Ethics
Published statement of moral expectations for employee conduct Requirements for an effective ethics code

Must describe specific practices as unethical

(e.g., kickbacks, payoffs, gifts, falsification of records, and misleading product claims). Must be firmly supported and fairly enforced by top management.

THANK YOU !