Value and

Ethics
Lesson 02
Lesson's Objectives
Define Value & familiar with types of value
Identify the formation of value
Define Ethics
Familiar with the formation of Ethics
Define Business Ethics
Identify the importance of Business Ethics
Identify relationships between ethics and
organization
Value
As we knew the firm is determined by its
values
Edwerd Spranger define the value as "the
constellation of standards, or qualities,
characteristics, or ideas that determine a
person's view of the world
Those standards/idea, qualities are likes,
dislikes, viewpoints, inner inclinational,
rational and irrational judgments,
prejudices, and association patterns
 Value
Then values provide the basic foundation
for understanding a persons personality
perception and attitudes.

Value Beliefs Perception Attitudes Behavior interest and

personality
Importance of Value
A powerful force affecting behavior
Values contain a judgmental element in that
they carry an individual's ideas as to what is
right or desirable
Provide a way to understand organization
Help to differentiation
Determine the retention
Personal Value
Personal values denote a sense of right or
wrong, good or bad, and other judgmental
criteria based on our strong sense of what
the ideal ought to be
Personal values serve five purposes in
organizations
Value serve as standards of behavior
Guidelines for decision making and conflict
resolution
Value effect our thought & action
Influence on employee motivation & perception
Influence on attitude and behavior
Formulation of Our Value
40% value is genetically determined
Balance is given by the environmental
factors
Culture
Parental dictates
Teachers
Friends and other situations
Workforce Value
At the workplace
Old value: Hard work, conservative-
traditional, loyalty to the employer
organization.
Today value: Job satisfaction, leisure time,
loyalty to relationship, flexibility to career
Negative value: Anger, ,meanness,
arrogance (overconfidence),crookedness-
wicked, greed/lust
Positive value: Integrity, honesty,
truthfulness, kind heartedness, humility
Business Value

Scholars identified ten fundamental shared

values for successful organization
Truth Openness
Mentoring Risk taking
Giving credit Social conscience
Honesty Responsibility &
Caring accountability
Trust
Firm can manage itself through values and core
values
Office Technology
Is it wrong to use company e-mail for personal reasons?
Is it wrong to use office equipment to help your children or
spouse do schoolwork?
Is it wrong to play computer games on office equipment
during the work day?
Is it wrong to use office equipment to do internet shopping?
Is it unethical to blame an error you made on a technological
glitch?
Is it unethical to visit pornographic web sites using office
equipment?
Gift and Environment
Whats the value at which a gift from a supplier or client
becomes troubling?
Is an Rs.10000 gift to boss unacceptable?
Is an Rs.10000 gift from the boss unacceptable?
Is it OK to take an Rs.5000 pair of cricket match tickets from
suppliers?
Is it OK to take an Rs.120 pair of theater tickets?
Is it OK to take an Rs.1000 holiday food basket?
Is it ok to take a Rs.2500 gift certificate?
Can you accept Rs750 prize won at a raffle at a supplier
conference?
Truth and Lies
Due to on the job pressure. Have you ever abused or lied about
sick day?
Due to on-the job pressure have you ever taken credit for
someone elses work or idea?
Ethics
There is no agreement to define ethics
means
E.g.:
Helpless Boy from everything asked Priest
I will give you an apple if you tell me where
god is?
Priest replied, I will give you two apples if
you tell me where he is not?
ValueEthics
Ethics
Ethics is derived from the Greek word
ethos which means customs, habitual
usage, conduct and character.
Ethics is an individuals personal beliefs
regarding what is right and wrong or good
or bad.
Ethics involves a discipline that examines
good or bad practices within the context of
a moral duty
Formation of Personal Ethics
Persons ethics are formulated through the
operation of five key forces in the
individuals environment.
Family influences
Peer influences
Experiences
Value and Morals
Situational factors
Ethics
Philosophers today usually divide ethical
theories into four general subject areas:
Descriptive ethics
Metaethics
Normative ethics
Applied ethics
Descriptive ethics
It is closely related to anthropology, sociology,
and psychology and leans heavily on them.
It consists of studying and describing the
morality of a people, culture, or society.
It compares and contrasts different moral
systems, codes, practices, beliefs, principles,
and values.
Metaethics
Metaethics investigates where our ethical
principled come from, and what they mean.
That attempts to discover the origin or cause of
right and wrong.
It discuss about the theoretical meaning and
reference of moral propositions and how their
truth values may be determined;
questions such as What is goodness?
Normative ethics
Normative ethics, about the practical
means of determining a moral course of
action.
This may involve articulating the good
habits that we should acquire, the duties
that we should follow.
Question as what should one do?
Applied ethics
Applied ethics ,consider about how moral
outcomes can be achieved in specific
situations;
And applied ethics involves examining
specific controversial issues, such as
abortion, infanticide, animal rights,
environmental concerns, homosexuality,
capital punishment, or nuclear war.
Ethics and Moral
Moral is similar to ethics and many
people use the two words
interchangeably and derived from the
Latin mores, means custom or habit.
And morals are based on religious beliefs
and social influence and group norms.
Ethics & Moral
Ethics and morals both relate to right
and wrong conduct. However, ethics
refer to the series of rules provided to an
individual by an external source. E.g. their
profession. On the other hand, morals
refer to an individuals own principles
regarding right and wrong.
 Ethics
What is it? The rules of conduct recognized
in respect to a particular class of
human actions or a particular
group, culture, etc. it defines
how thing are according to the
rules.
Source Social system/ external
Why we do it? Because society says it is the
right thing to do.
What if we dont do We will face peer/ societal
it? disapproval, or even be fired
from our job.
Flexibility Ethics are dependent on others
for definition. They tend to be
consistent within a certain
context, but can vary
Morals
Principles or habits with
respect to right or wrong
conduct. It defines how
things should work according
to an individual ideas and
principles.
Individual / internal
Because we believe in
something being right or
wrong.
Doing something against
ones morals and principles
can have different effects on
different people, they may
feel uncomfortable, remorse,
depressed etc.
Usually consistent, although
can change if an individuals
beliefs change.
Ethics, value, Moral
Ethics are rules that help us tell the difference
between right and wrong. They encourage us to
do the right thing.
Values tell us what is important. They help us
make decisions about right and wrong.
Morals are rules we use to decide what is good
or bad.
1960s 1970s 1980s 1990s 2000+
Environment Employee Bribery and Unsafe work Emerging
al issues militancy (us illegal practice in technology
vs. them) contracting third world issues cyber
practices countries crime privacy
Employer/em Human rights Deceptive Increased Intellectual

Business Ethics Time line

ployee issues (forced advertising corporate property
tensions labor, low Inability for theft
wages, work personal
environment) damage
Civil rights & Firms start Financial Financial International
race relation practice of fraud (savings mismanagem corruption
issues covering up & loan ent & fraud
not scandals)
confronting
issues
Changing Federal Transparency Federal Sarbannes
work ethics Corrupt issues arise sentencing oxley Act
Practices Act Guidelines (2002)
passes (1977) for Org
(1991)
Drug use Compliance Defense Global UN
escalated & legal to Industry Sullivan Convention
values Imitative Principles Against
orientation (1986) (1999) Corruption
(2003)
 Sources of Ethical Norms
Regions of
Fellow Workers Opposites
Country

Family Profession
The
Individual
Conscience
Friends Employer

The law Religious Beliefs Society at large

Ethics and Law
Law often represent an ethical minimum
Ethics often represents a standards that
exceeds the legal minimum
Frequent Overlap

Ethics Law
Concepts of Ethics
Developed by moral philosophers over
generations and used to distinguished ethical
from unethical behavior. But each ethical
concepts has problems
The 4 Concept of Ethics
Relativism
Egoism
Utilitarianism
Deontologism
Relativism
There is no universal standard by which
morality can be judged
At here what is correct for one society may be
wrong for another
And Ethics and morality are relative
Relativism
There are no absolutes/limits-murder, slavery,
torture, rape are also accepted
Always directed to meant by a society as a sub-
societies
Leads to conclusion each persons opinion is
correct
Nothing that anyone does is morally wrong
Egoism
It is one ought to act in his or her own self
interest and when it is ethical behavior is
that which promotes ones own self interest.
And it does not mean should not obey laws
only do so if in self interest
Ethical egoism is the view that what a
person ought to do is always what they
judge to be in their individual best interest
to do.
Psychological egoism is the view that
everyone, in fact, always does act from a
self-interested motive
Utilitarianism
The morality of an action can be determined by
its consequences.
And an action is ethical if it promotes the
greatest good for the greatest number
The benefits of the Action is higher than its cost
means the behavior is ethical otherwise it is
unethical
Restrictions against the majority to protect a
minority is not utilitarian
In the eyes of a utilitarian, any action is justified
if it works towards the greatest utility.
Deontologism
Derived from the Greek world for Duty
Actions are not justified by their
consequences.
Factors other than good outcomes
determine the rightness of actions
Macro & Micro Ethics
Micro-ethics Macro-ethics
(individual focus)

De George in Roddis Actions of individual The role of individual in

(1993) considered person. industry and other
organizations,
professional, societies,
and responsibilities of
the profession
Ladd (1991) Professional Problems confronting
relationships between members of a
individual professionals profession as a group
and other individuals in their relationship to
who are their clients, society
colleagues, employers

Vanderburg (1995) Microlevel analysis of Macrolevel analysis- of

individual technologies technology as a whole
or
 Business Ethics Typologies

Micro Macro
Normative Values/Norms & Norms & Principles and
Principles for a Fair economic System
Organizational i.e. Distributive
Decisions Justice

Descriptive Codes, Standards of Public Policy & the

Conduct, & Compliance Legalization of Business
Systems for Ethics
Organizations i.e.U.S.Sarbannes Oxley
Act, EU Privacy Laws
Development Of Ethics
Different cultures have different
standards of what is good and what is
bad, but humans tend to go through a
certain process in learning to apply their
ethics and cultural morels to their own
behavior.
Contributors
Piaget Cognitive development Theory
Kohlberg Conventional Approach
PREMORAL PERIOD (up to 4-5)
Preschool children show little awareness of
rules, purpose of the game is to take turns
and have fun and Parents and older children
are more tolerant of kids behavior.
At the end of this stage (~4 -5) children
become more aware of the rules by
watching older people and imitating their
behavior.
MORAL REALISM (6-10)
Children at this stage tend to think of
rules in terms of MORAL ABSOLUTES is
right always means following the rules
The child also believes in IMMANENT
JUSTICE is any violation of society rules
will be caught and punished
In SUM: rules exist outside of themselves.
Wrong is whatever adults forbid and
punish. Rules MUST NOT be questioned.
AUTONOMOUS MORALITY (11 on)
Older, more autonomous (independent)
children begin to understand that social
rules are arbitrary
They exist because agreements have been
made. And it is at this stage that rules
begin to be challenged
At this stage the INTENTION of the
individual begins to have an impact
(punish kid who was stealing jam)
Kohlberg Contribution
Kohlberg proposed 3 stages of moral
development, with each stages consisting
of 2 distinct sub stages.
Level 1: preconvention morality (1&2)
Level 2: conventional morality (3&4)
Level 3: post-conventional morality (5&6)
Level 01
Stage 01, - punishment & obedience
orientation
Goodness or badness of an act is based on its
consequences.
Stage 02, - instrumental orientation
Person conforms to rules in order to gain
rewards or to satisfy personal needs,
Level 02
Stage 03: Good-boy/good-girl orientation
Moral behavior is that which pleases, helps,
or is approved by others. And actions are
evaluated on the basis of intent with one
objective is to be thought of as a nice
person
Stage 04: Authority and social-order-
maintaining morality
Accept and conforms to social rules and
conventions because of a belief that rules
and laws maintain an order which is judged
good or moral
Law and order mentality
Level 03
Stage 05: Social contract morality.
Flexibility begins in moral reasoning with a
sense of having to live up to the law, but an
understanding that laws can be wrong
Stage 06; Universal ethical principles
Highest stage of moral reasoning right and
wrong defined on a personal belief or self-
chosen ethics
Belief in abstract principles which override all
others (life, liberty, equality)
Business ethics
Business Ethics means conducting all
aspects of business and dealing with all
stakeholders in ethical manner
A specialized study of right and wrong
applied to business policies, institutions
and behaviors; where moral standards
apply to social systems and organizations
that produce and distribute goods and
services.
 Business Ethics: Today vs. Earlier
Societys
Expectations
of Business
Ethics
Levels of Business Ethics
Expected and Actual

Ethical
Problem

Actual
Ethical Problem Business
Ethics

1950s Time Early 2000s

Business ethics
Three basic topics covered:
Systematic Issues Raised question about
economic, political, legal or other social
systems within which business operate
Corporate Issues raised question about a
particular company
Individual Issues Questions about a
particular individual within an organization,
their behavior & decisions
A model to Identify Business Ethics
Business Ethics
Managerial Mischief Moral Problems
Illegal act Micro level problems
(Individual
consideration)
Questionable Macro level problems
Practices (organizational
consideration)
Business ethics
At the Practices of Business Ethics have to
consider
Profits versus higher wages
Expansion versus development
Production versus pollution
Supplier benefits versus consumer
prices/lower costs
Survival of the business versus needs of
stakeholders
Business ethics
Solutions for Business immoral/amoral
Taxation
Self Regulation
Subsidies
Government/EU regulation
Legislation
Pressure Groups
Improve competition and contestability of
markets
Social Environmental Audits
Significance of Business ethics
Attract customers to the firms products,
thereby boosting sales and profits
Make employees want to stay with the
business, reduce labor turnover and
therefore increase productivity
Attract more employees wanting to work for
the business, reduce recruitment costs and
enable the company to get the most
talented employees
Attract investors and keep the companys
share price high, thereby protecting the
business from takeover.
Significance of Business ethics
The need for a company to behave
ethically is described in terms of a
companys need to interact productively
with its stakeholders.
Behavior that is trusting, trustworthy, and
cooperative, not opportunistic, will give the
firm a competitive advantage.
Sustainable global competitive advantage
occurs when a company implements a value-
creating strategy which other companies are
unable to imitate.
Significance of Business ethics
It facilitates the delivery of quality of
products in an honest, reliable way.
This approach can enhance work life by
making the workplace more fun and
challenging.
It can improve relationships with
stakeholders and can instill a more
positive mindset that fosters creativity
and innovations among the stakeholders.
 Thank you!