BUSINESS ETHICS

&
CORPORATE GOVERNANCE
VALUES
Value is anything which has utility or worth

general belief which help us to differentiate between good and bad

Guide actions

A value is a view of life and judgement of what is desirable and is

very much part of a persons personality and a groups morale

Values are related to culture, society or a system

Values reflects ones personal attitudes and behaviour

Service mindedness is a value which when cherished in an organisation

would enhance customer satisfaction
 Personal values

Within an organisation, values are imparted by

the founder-entrepreneur or a dominant chief
executive and they remain in same form, even
long after that person exists

Sources of value Family, Peer Groups, Role

Models, Institutions
 SIGNIFICANCE AND
CHARACTERISTICS
Gives a person direction and motivation to live in a desired way
Make clear decisions
Help to build perception of an individual
Flawless logical deductions and moral reasoning

Hardwork, Honesty, Sacrifice, Respect others

Chosen freely without any coercion or compulsion

Chosen from a number of options
Choice of value is made after considering consequences
Value becomes a part of yourself and being
Values are partly genetically determined
 VALUES AND ITS RELEVANCE IN MANAGEMENT

Ethics of an organisation is based on its values relating

business goals and techniques to meet specific human
needs.

Leadership helps to inculcate values and business ethics

to organisational members

Values determine organisations culture, politics, power,

social responsibility

When value system of org contaminated conflict with

personal values

Bribery, evasion of taxes, use of substandard inputs,

corruption are some of the unethical practices
 Excellent organisations are driven by values

Managers have to provide the right values and ethical sense

to the organisations they manage

Generally a business organisation depends on following types

of values

Excellence, Innovation, Establishing credibility, Providing

consumers with best services, Gathering market intelligence,
Maintaining external and internal coordination, Creation and
development of corporate values
 VALUES FOR MANAGERS
Business managers are custodians of immense economic
power vested in business organisations by society

Managers should be able to prevent their personal

values from affecting business strategy formulation
and implementation

Business managers should be guided as much by ethics

and values as by economic reasons

Business decisions not only on the basis of purely

economic reasons but on ethical and moral values as
well.
 Managers with values shape work environment

Align the beliefs and perceptions of employees

Build right attitude for work meeting organisational objectives

Establish trust, honesty, fairness and commitment

Resolve ethical issues & dilemmas as they arise

Helps in setting high standards

Helps in practicing Managerial conduct & Decision making

Effectiveness at work depends on Ethical and moral values

 BUSINESS ETHICS &
INDIAN VALUE SYSTEM
Ethical Indian firms have the following managerial
styles

Decisions are taken on the basis of the merit of the case and
these are not unreasonable or unethical
At the working place, respect is shown to elderly people and
senior officials
Work is regarded as worship and official duty is performed
without much considerations for its material reward as the
Bhagvad Gita teaches.
Human rights are respected and allowed and disputes are
amicably settled on the basis of cooperation and negotiation.
 Women employees are allowed privacy and respect

Working place discrimination is avoided as far as possible

Firms are engaged in performing social and ethical

responsibilities
Employee are treated well and often empathy plays an
important role

Management is value based and embezzlement, bribery and

corruption are mostly absent

Accountability and transparency are widely accepted

 Reliable price and product qualities. Promises are kept with
regard to after-sales services. Customer satisfaction is
the motto of many firms. Customers are regarded as
Lakshmi (the Goddess of wealth)

The margin of profit is reasonable and there is no attempt

to cheat the customers.

Firms are guided by the idea of creation and reputation

Unethical firms are characterized by many overwhelmingly
unethical practices.

Discrimination
Adulteration
Imitation of foreign brands to hoodwink customers
Political pressure
Child labour
Delay in wage payments and promotion
Window dressing of balance sheets
 Indian values emanating from our epics provide strength to
our value system.

The values rooted in the structure of Indian culture are

respect for the individual, cooperation and trust, top
quality product/service, work is worship, contentment,
ethical soundness, self-discipline and self-restraint,
customer satisfaction, creativity of human values anchored
in the transcendent aspect of human existence which
Indian management should immediately begin to
understand, explore and implement.
 A company operates throughout the year with a negative balance in its
general ledgerCash account. (Its balance at the bank is positive due to
the time it takes for its checks to clear its bank account.) Since the
financial statements report the Cash amount appearing in its general
ledger account, the financial statements would report a negative amount
of Cash. However,the company does not want its December31balance
sheet to report a negative cash balance, sinceit will be reviewed by
manyoutsiders.To avoid reporting a negative cash balance the company
does not make thepayments for amounts that should be paidbetween
December26 and December31. This postponement of payments allows
its book amount of Cash to temporarily be a positive amount. Then on
January2, the company issues checks for allofthe amounts that
normally would have been paid at the end of December
 India has rich ethical traditions which envisioned in the
scriptures of the land like the Gita, Upanishads, etc.

Hindu scriptures speak of the performance of right duty, at

the right time in the right manner

5,000 years ago, on the battlefield at Kurukshetra just before

the start of Mahabharata war, Krishna outlined to Arjuna a
system of ethics that has withstood the test of time In the
Bhagavad Gita. Krishna tells Arjuna not only how to build
character but also the root cause of ethical failure and how to
avoid it.
Gandhian Principles
APPROACHES TO ETHICS
Profit based morality approach
Law based morality approach

Natural laws and spiritual practices and advices-

- Veracity , Non-injury , Fairness, Human

rights, Autonomy.