UNIT I

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Unit I
Moral Values and Ethics: Values Concepts, Types and Formation of Values, Ethics and Behaviour.
Values of Indian Managers; Managerial Excellence through Human Values; Development of Ethics,
Ethical Decision Making,
Business Ethics- The Changing Environment and Stakeholder Management, Relevance of Ethics and
Values in Business, Spiritual Values. Modern Business Ethics and Dilemmas, Overview of Corporate
Social Responsibilities (CSR) and Sustainability. (12 Hours)
Unit II
Managing Ethical Dilemmas at Work: The Corporation and External Stakeholders, Corporate
Governance: From the Boardroom to the Marketplace, Corporate Responsibilities towards Consumer
Stakeholders and the Environment; The Corporation and Internal Stakeholders; Values-Based Moral
Leadership, Culture, Strategy and Self-Regulation; Spiritual Leadership for Business Transformation.
Organizational Excellence and Employee Wellbeing through Human Values. (10 Hours)
Unit III
Corporate Social Responsibility: A Historical Perspective from Industrial Revolution to Social
Activism; Moral Arguments for Corporate Social Responsibility, Development of Corporate
Conscience as the Moral Principle of Corporate Social Responsibility, Corporate Social Responsibility
of Business, Employees, Consumers and Community. Corporate Governance and Code of Corporate
Governance, Consumerism, Current CSR Practices of the Firms in India and Abroad. Challenges of
Environment: Principles of Environmental Ethics, Environmental Challenges as Business
Opportunity, Affirmative Action as a form of Social Justice. (10 Hours)
Unit IV
Issues in Moral conduct of Business and CSR: Failure of Corporate Governance, Social Audit,
Unethical Issues in Sales, Marketing, Advertising and Technology: Internet Crime and Punishment,
Intellectual Property Rights, Corruption in Business and Administration. BS / ISO Guideline on CSR
Management (ISO-26000). (10 Hours) 2
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 In ethics, value denotes something's degree of importance,
with the aim of determining what action of life is best to do
or live or to describe the significance of different actions.
It may be described as treating actions themselves as abstract
objects, putting value to them. It deals with right conduct and
good life, in the sense that a highly, or at least relatively
highly, valuable action may be regarded as ethically
"good" and an action of low, or at least relatively low, value
may be regarded as "bad".
Values can be defined as those things that are important to or
valued by someone. That someone can be an individual or,
collectively, an organization.
One of the imperatives for organizational vision is that it must
be based on and consistent with the organization's core
values.
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 Values are the embodiment of what an organization stands for, and
should be the basis for the behaviour of its members.
Values are the rules by which we make decisions about right and
wrong, should and shouldn't, good and bad. They also tell us which
are more or less important, which is useful when we have to trade
off meeting one value over another.
Values are principles that allow us to guide our behaviour to fulfil
ourselves as individuals. They are fundamental beliefs that help us
prefer, accept and choose one thing over another or a behaviour over
another.
Values translate into thoughts, concepts or ideas, but what we
appreciate most is behaviour, what people do. Valuable persons live
according to their values. Their worth is reflected in their values and
how they express these values in their daily life.
Values also constitute the foundations for co-existence n a
community and relations with others. They regulate our behavior to
the benefit of collective wellbeing.
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 We can speak of universal values, because ever since human
beings have lived in community, they have had to establish
principles to guide their behaviour towards others.
In this sense, honesty, responsibility, truth, solidarity,
cooperation, tolerance, respect and peace, among others, are
considered universal values.
However, in order to understand them better, it is useful to
classify values according to the following criteria:
Personal values:
These are considered essential principles on which we build
our life and guide us to relate with other people. They are
usually a blend of family values and social-cultural values,
together with our own individual ones, according to our
experiences.

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 Family values:
These are valued in a family and iare considered either good
or bad. These derive from the fundamental beliefs of the
parents, who use them to educate their children. They are
the basic principles and guidelines of our initial behavior in
society, and are conveyed through our behaviors in the family,
from the simplest to the most complex.
Social-cultural values:
These are the prevailing values of our society, which change
with time, and either coincide or not with our family or
personal values. They constitute a complex mix of different
values, and at times they contradict one another, or pose a
dilemma.
For example, if work isnt valued socially as a means of
personal fulfilment, then the society is indirectly fostering
anti-values like dishonesty, irresponsibility, or crime.
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 Material values:
These values allow us to survive, and are related to our basic
needs as human beings, such as food and clothing and
protection from the environment. They are fundamental
needs, part of the complex web that is created between
personal, family and social-cultural values. If exaggerated,
material values can be in contradiction with spiritual values.
Spiritual values:
They refer to the importance we give to non-material aspects
in our lives. They are part of our human needs and allow us to
feel fulfilled. They add meaning and foundation to our life, as
do religious beliefs.
Moral values:
The attitudes and behaviours that a society considers
essential for coexistence, order, and general well being.

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 We start forming values in our childhood. First we learn to
appreciate things that fulfill our basic needs, but we value
especially those people that provide them to us. Their
behavior towards us becomes the main reference of what is
valuable.
Thus, our character and personality are molded through the
attitudes and behavior of the people who raise us, whether
theyre our parents or other relatives. Their behaviors
determine in large part what will subsequently become our
most important beliefs and principles.
We learn to value the substance and the form of everything
they say and do, and what they dont say and dont do. Each
gesture or comment affects how we learn to make choices.

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 So the consistency and coherence of our parents behaviour is
what strengthens our formation. If they practice what they
preach, our personality will be stronger than if they dont.
Later, when we are students, we start feeling social pressures
and the pressure of values that are different from ours, as we
relate to other people. The strength of the values formed
through our parents is put to the test.
Values are often confused with habits, and many parents hope
that school will form the values that were not instilled at
home. This is not possible, because school does not fulfill the
basic needs of life that is the responsibility of those who
raise us.
Teachers, leaders, and value models at school can reinforce
what was formed at home, but they cannot replace them. If
the convictions formed at home are not solid, they will soon
be exposed to an intense social competition against other
beliefs. 10
 Ethics, sometimes known as moral philosophy', is a branch
of philosophy that involves systematizing, defending and
recommending concepts of right and wrong conduct, often
addressing disputes of moral diversity.
Ethics may be divided into three major areas of study:[1]
Meta-ethics, about the theoretical meaning and reference of
moral propositions and how their truth values (if any) may be
determined
Normative ethics, about the practical means of determining a
moral course of action
Applied ethics draws upon ethical theory in order to ask what
a person is obligated to do in some very specific situation, or
within some particular domain of action (such as business)

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 Behaviour is the range of actions and mannerisms made by
individuals, organisms, systems, or artificial entities in
conjunction with themselves or their environment, which
includes the other systems or organisms around as well as the
(inanimate) physical environment.
It is the response of the system or organism to various stimuli
or inputs,
whether internal or external, conscious or subconscious, overt
or covert, and voluntary or involuntary.

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 Accountability Describes what we do
Integrity Describes how we do it
Reliability Describes how we want it to be received
A manager :
Leads by example models the standards set and has respect for the
team.
Is accessible and visible to team members. Walks around the
department/section. Takes time for personal contact. Takes an
interest in staff as individuals and listens to their concerns.
Takes the flak when mistakes are made. Is fully accountable for the
actions of people who report directly to them.
Is prepared to admit when wrong and change own behavior. Is not
afraid to say sorry. Actively seeks out development opportunities for
people who report directly to them and seeks their input.

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 A manager :
Understands different needs and motivations of individuals and
adapts own style to suit person and situation.
Coaches and trains individuals to do their jobs better.
Makes each individual feel they are equally valued and that their
work is important.
Encourages staff to take their own decisions, to learn from their
mistakes and to take credit for their successes.
Carries out formal performance reviews to the standards required by
the Charity.

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 Effective managers operate on the basis of values. They are enabled
by their emotional competence, their conceptual competence and
their technical competence.
Effective managers have a clear sense of their personal values. Their
values serve as an internal compass for them, ensuring that their
actions are consistently aligned with their values.
Emotional competence may account for as much as 75% of a
managers effectiveness. It implies managing oneself and ones
relationships with others.
Emotionally competent managers are self-aware, managing their
own emotions and the impact they have on others. They create a
positive, energetic work environment, in which they and the people
they work with are inspired to contribute their best efforts.

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 Conceptual competence is essential for managers to develop
perspective on what is happening around them and on where they
want to go. It allows them to discern patterns of action, emerging
trends and how to respond to them.
Conceptual competence is a fundamental requirement for creating a
context for change.
Technical competence ensures that managers apply their
substantive/technical knowledge in ways which benefit their work
group and the organization as a whole.
It implies sharing their knowledge and building knowledge networks,
as well as developing themselves and others.
A consistent and intentional demonstration of values is the driver of
managerial effectiveness. Effective managers are aware of their
values, and act in accordance with them, creating a climate of
openness and trust.
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 Ethical decision-making refers to the process of evaluating and choosing
among alternatives in a manner consistent with ethical principles. In
making ethical decisions, it is necessary to perceive and eliminate
unethical options and select the best ethical alternative.
The process of making ethical decisions requires:
Commitment: The desire to do the right thing regardless of the cost
Consciousness: The awareness to act consistently and apply moral
convictions to daily behavior
Competency: The ability to collect and evaluate information, develop
alternatives, and forsee potential consequences and risks
Good decisions are both ethical and effective:
Ethical decisions generate and sustain trust; demonstrate respect,
responsibility, fairness and caring; and are consistent with good
citizenship. These behaviors provide a foundation for making better
decisions by setting the ground rules for our behavior.

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 Good decisions are both ethical and effective:
Effective decisions are effective if they accomplish what we want
accomplished and if they advance our purposes. A choice that produces
unintended and undesirable results is ineffective. The key to making
effective decisions is to think about choices in terms of their ability to
accomplish our most important goals. This means we have to understand
the difference between immediate and short-term goals and longer-range
goals.
Making ethical choices requires the ability to make distinctions
between competing options. Here are seven steps to help you
make better decisions:
Stop and think: This provides several benefits. It prevents rash
decisions, prepares us for more thoughtful discernment, and can
allow us to mobilize our discipline.
Clarify goals: Before you choose, clarify your short-term and
long-term aims. Determine which of your many wants and "don't
wants" affected by the decision are the most important. The big
danger is that decisions that fullfill immediate wants and needs
can prevent the achievement of our more important life goals.
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 Making ethical choices requires the ability to make distinctions
between competing options. Here are seven steps to help you
make better decisions:
Determine facts: Be sure you have adequate information to
support an intelligent choice. To determine the facts, first
resolve what you know, then what you need to know. Be prepared
for additional information and to verify assumptions and other
uncertain information. In addition:
Consider the reliability and credibility of the people providing the
facts.
Consider the basis of the supposed facts. If the person giving you the
information says he or she personally heard or saw something,
evaluate that person in terms of honesty, accuracy, and memory.

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 Making ethical choices requires the ability to make distinctions
between competing options. Here are seven steps to help you
make better decisions:
Develop options: Once you know what you want to achieve and
have made your best judgment as to the relevant facts, make a
list of actions you can take to accomplish your goals. If it's an
especially important decision, talk to someone you trust so you
can broaden your perspective and think of new choices. If you
can think of only one or two choices, you're probably not thinking
hard enough.
Consider consequences: Filter your choices to determine if any
of your options will violate any core ethical values, and then
eliminate any unethical options. Identify who will be affected by
the decision and how the decision is likely to affect them.

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 Making ethical choices requires the ability to make distinctions
between competing options. Here are seven steps to help you
make better decisions:
Choose: Make a decision. If the choice is not immediately clear,
try:
Talking to people whose judgment you respect.
Think of a person of strong character that you know or know of, and
ask your self what they would do in your situation.
If everyone found out about your decision, would you be proud and
comfortable?
Follow the Golden Rule: treat others the way you want to be treated,
and keep your promises.
Monitor and modify: Ethical decision-makers monitor the effects
of their choices. If they are not producing the intended results,
or are causing additional unintended and undesirable results,
they re-assess the situation and make new decisions.

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 Business ethics (also corporate ethics) is a form of applied
ethics or professional ethics that examines ethical principles and
moral or ethical problems that arise in a business environment. It
applies to all aspects of business conduct and is relevant to the
conduct of individuals and entire organizations.
The study of proper business policies and practices regarding
potentially controversial issues, such as corporate governance,
insider trading, bribery, discrimination, corporate social
responsibility and fiduciary responsibilities. Business ethics are
often guided by law, while other times provide a basic framework
that businesses may choose to follow in order to gain public
acceptance.

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 Effective Stakeholder Management
Careful assessment of the five core questions:
Who are our stakeholders?
What are our stakeholders stakes?
What opportunities and challenges do stakeholders present?
What economic, legal, ethical, and philanthropic responsibilities does
our firm have?
What strategies or actions should our firm take to best manage
stakeholder challenges and opportunities?
Organizations are embedded in and interact with multiple
changing local, national, and international environments. These
environments are increasingly merging into a global system of
dynamically interrelated interactions among businesses and
economies.
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 A first step toward understanding stakeholder issues is to gain an
understanding of environmental forces that influence stakes.
The stakeholder management approach is a way of understanding
the ethical effects of environmental forces and groups on specific
issues that affect real time stakeholders and their welfare.
Various business stakeholders:

Government Employees

Business

Community Owners

Consumers 24
 Primary and Secondary Stakeholders
Primary stakeholders are those stakeholders that have a
direct stake in the organization and its success
Secondary stakeholders are those that have a public or
special interest stake in the organization
Core, Strategic, and Environmental Stakeholders
Core stakeholders are essential to the survival of the
firm
Strategic stakeholders are vital to the organization
and the threats and opportunities the organization faces
Environmental stakeholders are all others in the
organization's environment
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 A Typology of Stakeholder Attributes
Legitimacy refers to the perceived validity of the stakeholders
claim to a stake
Power refers to the ability or capacity of a stakeholder to
produce an effect
Urgency refers to the degree to which the stakeholders claim
demands immediate attention
Strategic, Multi fiduciary, and Synthesis Views of Stakeholders:
Strategic approach considers stakeholders primarily as factors
managers should manage in pursuit of shareholder profits
Multi fiduciary approach considers stakeholders as a group to
which management has a fiduciary responsibility
Synthesis approach considers stakeholders as a group to whom
management owes an ethical, but not a fiduciary responsibility

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 Ethics are the principles and values an individual uses to govern his
activities and decisions. In an organization, a code of ethics is a set of
principles that guide the organization in its programs, policies and
decisions for the business. The ethical philosophy an organization uses to
conduct business can affect the reputation, productivity and bottom line
of the business.
Ethics concern an individual's moral judgements about right and wrong.
Decisions taken within an organisation may be made by individuals or
groups, but whoever makes them will be influenced by the culture of the
company. The decision to behave ethically is a moral one; employees
must decide what they think is the right course of action. This may
involve rejecting the route that would lead to the biggest short-term
profit.
Ethics and Values in Business is focused on ethics and accountability in
organisations as the foundation for sustainable business success. A shared
commitment to ethical behaviour builds trust. When there is trust,
people can give more, venture more and think more freely. Creativity is
possible, and groups begin to aspire to adventurous goals and work
collaboratively.

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 Leadership Ethics
The ethics that leaders in an organization use to manage employees may
have an effect on the morale and loyalty of workers. The code of ethics
leaders use determines discipline procedures and the acceptable
behaviour for all workers in an organization.
When leaders have high ethical standards, it encourages workers in the
organization to meet that same level. Ethical leadership also enhances
the companys reputation in the financial market and community. A solid
reputation for ethics and integrity in the community may improve the
companys business.
Employee Ethics
Ethical behaviour among workers in an organization ensures that
employees complete work with honesty and integrity. Employees who use
ethics to guide their behaviour adhere to employee policies and rules
while striving to meet the goals of the organization. Ethical employees
also meet standards for quality in their work, which can enhance the
companys reputation for quality products and service.

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 Ethical Organizational Culture
Leaders and employees adhering to a code of ethics create an ethical
organizational culture. The leaders of a business may create an ethical
culture by exhibiting the type of behaviour they'd like to see in
employees. The organization can reinforce ethical behaviour by
rewarding employees who exhibit the values and integrity that coincides
with the company code of ethics and disciplining those who make the
wrong choices.
Benefits to the Organization
A positive and healthy corporate culture improves the morale among
workers in the organization, which may increase productivity and
employee retention; this, in turn, has financial benefits for the
organization. Higher levels of productivity improve the efficiency in the
company, while increasing employee retention reduces the cost of
replacing employees.

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 Spiritual values are that which benefits our souls, motivates us toward
worship, and connects us consciously (or perhaps even unconsciously)
with the supernatural.
Values give us the knowledge for growth, development, accomplishment
and never ending progress. Values are spiritual skills that direct our
energies to every higher levels of accomplishment.
Some values which are direct reflections of pure spiritual powers are:
Harmony: Life is filled with competition, conflict and contradictions. The
spirit is a unified oneness based on harmony. Expressing and maintaining
harmony in our life and work is a powerful way to call down the higher
spiritual consciousness into our lives. When that is done it always brings
an opening up of unexpected opportunities, a sudden expansion, a burst
of joy or discovery of higher knowledge.
Truthfulness: Truth is the ultimate expression of divinity. Truth is Reality.
To be true in thoughts, words and acts is to align our outer lives with the
highest truth of which we are conscious. To be uncompromisingly true in
all circumstances elevates us above the normal plane of human
consciousness to spiritual heights.

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 Some values which are direct reflections of pure spiritual powers are:
Self-giving: Spiritual progress means outgrowing the ego. The ego is
concerned with its own welfare and enjoyment. To genuinely shift the
focus from ourselves to others is to move from ego to spirit. However, in
practice often when we help another it is with the expectation that they
will return the favor or love us in return. That is not true self-giving. It is
bargaining.
Faith: Many people regard faith as a faculty rather than a value, but the
mind can embrace the idea of faith and make it a dynamic principle for
living. Sri Aurobindo describes faith as the knowledge of the soul which
the mind does not yet possess. Everything we do in life requires faith in
something -- in our capacities, technology, law, the honesty of other
people, etc. Often it is severely limited by our past experience or our
willingness to trust others. To make faith a living value is to shift that
faith from ourselves, other people, money or any other thing to the Spirit
and to rely always on that highest spiritual reality as the basis for our
actions.

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Dilemma is a situation where there is no clear easy choice or answer.
Types of Dilemmas
Double bind dilemmas
In it victim placed in No win situation forced by another.
Fairness dilemmas
Arise when groups are faced with making decisions about how to share
their resources and rewards.
HOW TO OVERCOME ETHICAL DILEMMAS AT WORKPLACE?
Step1
Developing a workplace policy depends on companys philosophy, mission
statement and their code of conducts.
Step 2
Give training to employees about workplace ethics. Give instruction methods to
engage employees in learning how to manage and resolve ethical dilemmas or how
to face with ethical issues.

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 HOW TO OVERCOME ETHICAL DILEMMAS AT WORKPLACE?
Step3
Consider whether the organization needs an ethics hotline, which is confidential
service for every employee where employees may contact whenever they
encounter workplace dilemmas that put them into uncomfortable or threatening
positions.
Step4
Refrain from making employment decisions, such as terminations, in connection
with whistle blowing or an employees right to protected activity under whistle
blowing laws.
Step5
Design the same policies for every employee at workplace. And use the same
business principles in every circumstance.

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 Ethics at workplace is very important for Business.
It grows and runs its operations effectively.
If any kind of ethical dilemmas occur at the workplace, than It can be
resolved by the effective role of business communication.
Avoid disobeying the rules and regulations of the organization.
Favoritism should be avoided in at workplace.
Unethical HR decisions for hiring and firing should be avoided.

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 Corporate social responsibility is a form of corporate self-
regulation integrated into a business model. CSR policy functions
as a self-regulatory mechanism whereby a business monitors and
ensures its active compliance with the spirit of the law, ethical
standards and international norms.
The term "corporate social responsibility" became popular in the
1960s and has remained a term used indiscriminately by many to
cover legal and moral responsibility more narrowly construed.
Corporate social responsibility (CSR) can be described as
embracing responsibility and encouraging a positive
impact through the company's activities related to
the environment, consumers, employees, communities, and
other stakeholders.
Corporate social responsibility may include philanthropic efforts,
employee volunteering, and core strategies. Companies
may benchmark their CSR performance relative to peers and may
also report on CSR policies or undergo social audits.
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 Common CSR actions include:
Environmental sustainability: recycling, waste management,
water management, renewable energy, reusable materials,
'greener' supply chains, reducing paper use and
adopting Leadership in Energy and Environmental Design (LEED)
building standards.
Community involvement: This can include raising money for local
charities, providing volunteers, sponsoring local events,
employing local workers, supporting local economic growth,
engaging in fair trade practices, etc.
Ethical marketing: Companies that ethically market to consumers
are placing a higher value on their customers and respecting
them as people who are ends in themselves. They do not try to
manipulate or falsely advertise to potential consumers. This is
important for companies that want to be viewed as ethical.

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 Sustainability refers to an organizations activities, typically
considered voluntary, that demonstrate the inclusion of social
and environmental concerns in business operations and in
interactions with stakeholders.
What kind of leader is needed for building a sustainable global
society? How do we develop individuals with these capabilities?
Self-knowledge and mindfulness, consciousness, awareness, and
presence. The new model leaders can think holistically about
themselves, and not only exist as business executives but identify
themselves with other roles too: parent, citizen, and neighbour.
While making decisions, leaders consider if the action will leave a
positive footprint on communities and the physical environment.
Communication skills. Leaders are capable of active listening,
knowing when to speak and when to listen.

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 Leaders are ready to use values-based decision making, since values are
lived through routine decisions of employees at every level. Leaders
develop a decision-making process in the context of choices and
consequences, considering known and unknown costs and benefits.
Leaders understand the reality of the choice. They think in decades, not
in quarters, and realize that further options for action offer long term
benefits.

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