m
 

 

   

 



 The word Business Ethics itself is a contradictory
one. In the era of global changes, sustainable
existence gets priority over short term gains. This
paper tries to highlight the pre-conditions of ethics
in a business unit and also the importance of
cultivating a culture of ethics in organization2
 The aim of the study is to understand Ethics & Its
Importance In Modern Business¶ specific aspects to
be studied were ;

 3actors Affecting Employee Ethics.

 Is Ethics A Management Discipline.

 Reasons 3or Not Being Ethical .

 Obstacles In Ethical Conduct.

 In the initial phrase the data's are from secondary
sources.

The major sources are ;

½ Research journals and surveys.

½ Business magazines,
½ Internet««
m


Basically ethics refer to the rules and principles that

define rights or wrong conduct. It also relate to the
social rules that influence people to be honest in
dealing with others.

  

Ethics is the study of moral obligations involving the

distinction between right and wrong.
R.M.Kidder
Business Ethics
³Business Ethics is generally coming to know, what is
right or wrong in the workplace and doing what is
right ± this regards to the effects of products or
services and in relationships with stake holders´
- CARTER MCNAMARA
 Business operations include variety of activities to be
carried out. These activities pertain to various issues in
the organization.
 The process of decision making involved in these
activities faces tremendous challenges in the form of
dilemma.
 The confusion of ³What is Acceptable & What should
be Acceptable´ leads to variety of dilemma in the mind
of persons connected with the business operations.
 Whether a person acts ethically or unethically when
faced with an ethical dilemma is the result of complex
interactions between:
1) Stage of moral development

2) Individual characteristics

3) Organizations structural design

4) Organizations culture

5) Intensity of ethical issue

 



  
  

    m   

  
  m
   



  
  

There are three levels of moral development.
a      ± At this level, persons choice
between right and wrong is based on personal
consequences involved such as physical punishment,
reward.

    
± Indicates that moral values reside in
maintaining expected standards and living up to the
expectations of others.

a  ± Individuals make a clear effort to define

moral principles apart from the authority of the
groups to which they belong or society in general.
Every person joins an organization with a relatively entre-
nched set of values. Our values developed at young age
fromparents,teachers,friends-represent basic conviction
about what is right or wrong.Two personality variables
found to influence an individu-als action are:

½ EGO STRENGTH

½ LOCUS O3 CONTROL
½ m
 
- is the personality measure of the strength of a
persons convictions. Individuals high in ego strengths are
more likely to do what they think is right. People with high
ego strengths are more consistent in their moral judgments
and moral actions.

½ r 

  
reflects the degree to which people believe
they control their own fate. People with internal LOC believe
that they control their own fate and people with external
LOC believe that what happens to them is due to luck or
chance.
An organizations structural design influences
whether employees behave ethically. Some structures
provide strong guidance, whereas others create
ambiguity and uncertainty.
Organizational mechanism that influence ethics
include performance appraisal systems and reward
allocations procedure.
When employees are evaluated only on outcome they
may be pressured to do" whatever is necessary´ to
look good on outcome variables and not be
concerned with how they got results. The danger is
that if managers toke a more lenient view of
unethical behaviors for successful employees. other
employees will model their behavior.
 A organizational culture most likely to encourage high
ethical standards is one that is high in risk tolerance,
control and conflict tolerance.
 Employees in such a culture are encouraged to be
aggressive and innovative, are aware that unethical
practices will be discovered and feel free to openly
challenge expectations they consider to be unrealistic or
personally undesirable.
Ethics acts as the character of any business house. It is
very much essential for a business organization to
follow business ethics as the firm has to survive
with in the society.
Values like honesty, integrity, truthfulness, sincerity,
fairness and many others are very much required for
a business house to progress.
The reason for this is that the only way a business
house can build goodwill is by following ethics.
In this scenario the entire world has turned into a Global
Market, it is important to every organization to follow
ethics.

If Profit is the Heart of a business house, Ethics are the

Veins keeping the heart going on.

Business houses, adopting such two faced principle seldom

succeed as they loose out on good ethics and principles,
thus resulting into a bad reputation.

A good well run business must have high and consistent

standards of ethics.
a  
 
 :
Even if a subordinate feels that the work assigned to
him is unethical, he is compelled to do the work due
to pressure.
 
   
There is absence of clear-cut ethical guidelines due
to which, at times, managers are faced with the
situations that are ethically ambiguous.
  
   
  

Managers argue that the relationship between them and

the top management is such that they cannot question
the instructions issued to them.

a   
 

If a person follows ethics, he faces monetary loss as

compared to not following ethics. This tempts the
person to adopt unethical means.
-  
a 

The complicated and ambiguous government policy is yet

another reason why people develop unethical means like tax
evasion and bribery.





Ethical way results to higher expenses thus reducing the

business profits. As the main aim of starting a business house
is to earn profits, the reduction in expenses tempts the
business house to adopt unethical means.
r 

  


Even though an employee wishes to be ethical, he may

not do that as the higher authorities do not permit him to

do so.

  
  

To survive the internal company politics, an employee

may adopt unethical means for better incentives or

higher post.
Ú
  

When a company is going through a crisis, it may

adopt unethical means to save resources.

a   
  
 

Sometimes, the salary given to employees may prove

less to meet the financial expenses. Due to this, they
adopt unethical means of earning money.
r 


   


 

When the employee is not being acknowledged for his

ethical behavior, he may resort to unethical means.




 


 
 

When any employee has a goal or a task to achieve, in

case of the task resulting into failure, he might adopt
unethical ways for job accomplishment.
 It guides to make right decisions that affect employees,
shareholders, investors and the organization.

 After the setting up of Consumer Courts, business ethics have

become a topic of concern because business has come to
realize that unethical activities by management can cost
business in many ways.

 The distinctly visible line between ethical and unethical

activities helps to decide what a firm should do.

 There are many laws and court decisions defining the right
and the wrong facilitating more for better ethical values.
½ Hire individual with high ethical standards

½ Establish codes of ethics and decision rules

½ Lead by example

½ Performance Appraisal Mechanism

½ Ethics Training

½ Support to individuals facing ethical dilemmas

 The question of relevance of ethics in a business
unit has been a matter of controversy for the very
nature of business activities so far.

 But in the competitive age of business units to

sustain, ethical issues to play a prominent role in the
world.

 In the Indian environment also this applies with

equal importance.
 Business ethics need to be converted, from a
contradictory task into a compatible task for business
operations. Its importance has got to be known to the
business houses.

 Indian business houses must be taken away from the

state of confusion to a state of clarity and be made
fully committed to the practice of ethics into their
business operations.
` 

1) Business Ethics And Corporate Governance.

-- Dr.Ahmad Abad

2) Ethical Issues In Management

-- Verma Ajay

3or Commonwealth Publishers

3) Mc Grawhill Educations Management

-- issued on 2008-2009
0 
1) www.indianmba.com
2) www.knowledge@wharton.com
3) www.sharetermpapers.com
4) www.yahoosearch.com
5) www.wikipedia.com