Tasaduk Aziz Salman H.

Malik Sumaiya Siddiqui Taruna Bhasin Toktam Razai

CONCEPT OF ETHICS
y The word

ethics is derived from the Latin word ethicus and the Greek word ethikos, meaning characters and manners. y Ethics can be interpreted as the method of systemizing, defending & recommending concepts of right & wrong behaviour.

MODEL OF BUSI ESS ET I S

Model consists six stagesy Law of jungle y Anything for profit y Short Term Profit Maximization y Long Term Profit Maximization y Stakeholder Concept y Corporate Citizenship

MODEL OF BUSI ESS ET I S

y The first three stages are coming under Aggressive

Capitalism. Profit maximization is the main objective of the organization and the objective has to be achieved at any cost. y The last three stages are coming under concious capitalism. Here organizations are aiming for long term profit .They believe on the value premise that ethics can not be diluted if they have to survive in the long run.
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MODEL OF BUSI ESS ET I S

y Law of jungle : This implies corporate are ready to

earn the profit by applying money, mussel, mafia, media as well as political power. For example: Removal of tribal people in the name of industrialization without offering any kind of compensation or rehabilitation package.

MODEL OF BUSI ESS ET I S

y Anything for profit : According to this, Earning profit is only ethics for business. Organization can do anything such as bribing the Government, misrepresentation of statement, window dressing etc. For example- Telecom Companies like Unitech & Swan purchased Unified Access Service (UAS)licenses from Telecom Ministry of Government of India after paying Rs 1658 crore. It has created a confusion about the mind of all rational individuals how the rate of Rs 1600 crore determined as far back as in 2001 has been applied for a license given in 2007 without any indexation. The possibility can not be ignored that companies might bribe the Telecom Minister to get the license at dam cheep rate.
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MODEL OF

SINESS ETHICS

y Short Term Profit Maximization : The focus is on short term gain

rather than long term viability of business. Often black marketers do hoarding of essential commodities to create an artificial demand for the product so that they will be able to offload their stock at a higher price. For example- After the general election of 1998, Mr. Atal Behari Bajpayee led National Democratic Alliance came into power. In the same year ,the assembly elections were going to happen in Delhi, Madhya Pradesh and Rajasthan .Just couple of months before election, onion price went up like anything. As a consequence incumbent BJP lost the assembly poll to each state as they were unable to control the price hike of necessity commodity like onion. After the assembly election, when Government raided different go downs , it was found that huge amount of onion was hoarded by blackmarketers.

MODEL OF

SINESS ETHICS

y Long Term Profit Maximization : Here goal of the company is

achieving long term sustainability and creating a sound brand equity. Therefore in the short run they are ready to incur some cost. For example: Mahindra & Mahindra, a major player in Indian Auto Ancillary market, is also selling tractor side by side. The auto major is transferring these tractor selling outlets by adding a repertory of agricultural operation & advice. The new move is known as Samriddhi. Independent of the fact that whether the farmer has the tractor of M& M or not, they can come their to solve their agricultural problems. Each Samriddhi center has an agricultural expert and a lab technician. When farmer walks into Samriddhi center, expert asks about their problem and farming practices. The nature of assistance is lab tests on farmers land , advice on the crops nature, schedule, utilization of fertilizer, demonstration of farming technique on different seeds. Advises are available at free of cost.
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MODEL OF

SINESS ETHICS

y Stakeholder Concept : Here the objective of the organization is not limited to

the maximization of wealth of the shareholders but the emphasis is given to maximize the satisfaction of all the stakeholders such as creditors, suppliers, employee, customer & society as a whole. For example Marico is in business of cooking oil but FMCG player Marico spends time and money telling people how to go easy on it. Marico launched the Saffola Healthy oil . Saffola is made in such a way that consumer will be able to use less of it than other oils. Company has 9 to 6 phone line where anyone can talk with nutrition expert for diet related queries. The expert does not promote saffola. It facilitates the common people to know their state of health. In the year 2009-10, with every pack of saffola, company gave away two coupon of free lipid profile test. The Saffola health Heart foundation set up in 1991 holds free heart and cholesterol check up .For heart patient, it involved cardiac rehabilitation workshop which included session by cardiologist, physiotherapist etc.

MODEL Citizenship:SINESS ETHICSis OF y Corporate The company s focus

on societal marketing concept. Apart from earning profit, they always prefer to maintain a human face . For Example : Tata Steel , mentioned in one of its Article of Association (AOA) that company shall be mindful of social and moral responsibility to consumers, employees, shareholders as well as local community. All civic amenities in 103 year old city Jamshedpur is managed by the subsidiary of Tata Steel by Jusco. Tata Steel had done this just to ensure that their employees could reside nearby the factory . As a result productivity of the workers would not be reduced due to wastage of time , labour and energy for reaching to their workplace.
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MORAL STANDARDS
y Moral standards focuses on the norms about the kinds of actions believed to be morally right and wrong as well as the values placed on the kind of objects believed to be morally good and morally bad. y Characteristics of Moral Standard a) Involved with serious injuries or benefits b) Not established by law or legislature c) Should not be preferred to other values including self interest d) Based on impartial considerations e) Associated with special emotions & vocabulary

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Ethics & law

y The law can be explained as a consistent set of

universal rules that are widely published , generally accepted and usually enforced. y The character of the law is a) Consistent b) Universal c) Published d) Accepted e) Enforced

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Relationship between the Law and Moral Standards

y Clearly when a person violates the law eg bank robbery

also violates the moral standard against theft. y It is easy to show that the laws governing sexual conduct, narcotics usage, product liability and contract adherence are similar to the moral beliefs that probably held by a majority of people in society.

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Relationship between the Law and Moral Standards

y But the area off overlap is not complete. There are

some laws with no ethical content whatever. The requirement individual should drive on the right hand side of the road is neither inherently right nor inherently wrong. But it is the law of traffic and if one is found violating the traffic law, he may be charged certain amount of fine.

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Some concept of Ethics

y Ethical Subjectivism: According to this, there is no basic thumb rule by which one can conclude whether a particular action is ethical or not. It completely depends on the circumstances under which the action takes place. Same action which is ethical in one circumstances can be termed as unethical in different circumstances. y Ethical Relativism : There is no universal ethical an unethical action. It varies from community to community, religion to religion, caste to caste, race to race, culture to culture. y Consequensialism : This concept takes into account two factors one is value and another is which maximizes the value. If happiness is the value, then any action is ethical if it maximizes the happiness.
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Environmental Ethics
y Pollution refers to the undesirable & unintended contamination of the

environment by the manufacture or use of commodities. y Air Pollutants affect vegetarian, decreasing agricultural yields and inflicting losses on the timber industry. y Global warming has become an issue of concern. It increases in temperatures around the globe due to rising levels of greenhouse gases. Greenhouse gases are carbon dioxide, nitrous oxide, methane and chlorofluorocarbons gases that absorb and hold heat from the sun preventing it from escaping back into space much like a greenhouse absorbs and holds the sun s heat.

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Environmental Ethics
y Ozone depletion is another threat to

environment. The gradual break down of ozone gas in the stratosphere above us caused by the release of chlorofluorocarbons into the air. y Acid Rain occurs when sulfur oxides and nitrogen oxides are combined with water vapor in clouds to form nitric acid and sulfuric acid. These acid are then carried down in rainfall.
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Environmental Ethics
y Water pollution : The contamination of water resources is an

old problem. y Organic wastes are largely untreated human wastes, sewage and industrial wastes from processing various food products, from the pulp and paper industry & from animal feedlots. y Oil spills are also a form of water pollution whose occurrence becomes more frequent as our dependence on oil increased. Oil spills results from offshore drilling, discharges of sludge from oil tankers and oil tanker accident.

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Environmental Ethics
y Land Pollution : Hazardous or toxic substances are

those that can cause an increase in mortality rates or irreversible or incapacitating illness or those that have include acidic chemicals, inorganic metals such as mercury or arsenic , flammable, solvents ,pesticides, phenols ,explosives and so on. Solid wastes and nuclear wastes are various other sources of land pollution.
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Ecological Ethics
y Ecological

system is an interrelated and interdependent set of organisms and environment. y Ecological ethics implies the view that non human parts of the environment deserved to be preserved for their own sake regardless of whether this benefits human beings. y The well being and flourishing of human and non human life on earth have value in themselves. These value are independent of the usefulness of the non human world for human purposes.
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Ecological Ethics & Externality

y Individual consumption and production functions are

interdependent to each other. This creates the concept of externality or spill over effect. y Positive externality takes place when social benefit exceeds from private benefit derived from an action or social cost incurred is less than private cost . y Externality are of three types-consumption, pecuniary and technological externality.

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