Ethics

Ethics may be defined as an individuals or societys beliefs regarding what is right and wrong, or good and bad. Ethics is about how our decisions affect other people. It is also about the rights and duties of people, the moral rules that people apply in decision making and the nature of relationships in a society.

Managerial Ethics

Personal Ethics refers to the rules by which an individual lives his or her personal life. Professional ethics refers to the rules that guide professional conduct for example accounting ethics Managerial Ethics refer to the standards of behavior of individual managers in their work.

Four Levels of Ethical Questions in Business

Societal At the societal level, we ask questions about basic institutions, practices and behaviors in a society. For example, is racial discrimination right? Is capitalism the just system to allocate resources in a society?

Four Levels of Ethical Questions in Business

Stakeholder At the level of the stakeholders of a business, such as customers, shareholders, suppliers, etc., the ethical issues concern, disclosing correct information to customers, insider trading, relationship and trust with suppliers, etc.

Four Levels of Ethical Questions in Business

Internal Policy Ethical issues relating to internal policy concern nature of employment policies, fairness of job contracts, work rules, motivation, layoffs, etc.

Four Levels of Ethical Questions in Business

Personal At the personal level ethics refers to individual behavior in an organization and covers issues of honesty, professional integrity, etc.

Tools of Ethics
Values are beliefs that are (a) Relatively few in numbers (b) Serve as a guide for culturally appropriate behavior (c) Enduring or difficult to change (d) Not tied to specific objects or situations (e) Widely accepted by members of a society Values are the answers to the why questions.

Tools of Ethics

Rights Claims that entitle a person to take a particular action Duties obligations to take specific steps or obey the law Moral rules Rules for behavior that often become internalized as moral values Relationships People are related directly or indirectly in a society, which makes ethical behavior necessary

Common Morality
Common morality refers to the body of moral rules governing ordinary ethical problems. Some basic principles of common morality Promise keeping Non-malevolence Mutual Aid Respect for Persons Respect for Property

Approaches to Ethics
In the international context, there are three approaches to Ethics Ethical Relativism The belief that there are no universal or international rights and wrongs. So, an MNC may adopt the practices that are accepted as right in each country, regardless of whether such practices are accepted as right in the home country

Approaches to Ethics

Ethical Absolutism The belief that an MNC should only follow what is accepted as ethical in its home country, regardless of which country it operates in.

Approaches to Ethics

Ethical Universalism The belief that there are certain fundamental principles of right and wrong that are universal in nature and accepted by every culture. MNCs while operating in different countries must adhere to these universally accepted principles of right and wrong.

Ethical Standards Through History

Some of the most popular ethical standards drawn from both philosophy and religions used by man through the ages are:

Treat all men with fairness and justice Do to others as you would have them do to you Love your neighbor as you love yourself Always ask : will my action hurt anyone? Know thyself be always honest with yourself and with others

Why Use Ethical Reasoning In Business?

1.

2.

We may cite three reasons: For many business situations laws are insufficient and do not cover all aspects or gray areas of a problem Free-market and regulated-market mechanisms do not effectively inform owners and managers about how to respond to complex issues and crises that have far-reaching ethical consequences

Why Use Ethical Reasoning In Business?

The third reason states that ethical reasoning is necessary because complex moral problems require an intuitive or learned understanding and concern for fairness, justice, due process to people, groups and communities that goes beyond procedures, rules and laws.

Can Business Ethics Be Taught?

There is no definite answer to this question. Since ethical reasoning is more intuitive than rule bound, ethics, as a subject, can offer guidelines for managers, but not any definite How to answers. We can look at what business ethics courses SHOULD NOT do, and what they CAN DO.

What Ethics Training Should Not Do

Should not advocate a set of rules from a single perspective nor offer only one best solution to specific ethical problems More-desirable and less-desirable courses of actions may exist, but decisions depend on facts, inferences and rigorous, logical, ethical reasoning. Ethical course should NOT promise absolute ways of thinking and behaving in situations.

What Ethics course can do

Provide people with rationales, ideas, and vocabulary to help them participate effectively in ethical decision-making processes Help people make sense of their environments by abstracting and selecting ethical priorities Provide intellectual weapons to do battle with advocates of economic fundamentalism and those who violate ethical standards

What Ethics course can do

Enable employees to act as alarm systems for company practices that will not meet societys ethical standards Enhance conscientiousness and sensitivity to moral issues and commitment to finding moral solutions. Enhance moral reflectiveness and strengthen moral courage

What Ethics course can do

Increase peoples ability to become morally autonomous ethical dissenters and conscience of a group Improve the moral climate of firms by providing ethical concepts and tools for creating ethical codes and social audits

STEP1: Determine the fact of the situation STEP2: Identify the ethical issues in the situation. STEP 3: Specify whose interests are involved and who will be most effected STEP4: Develop a list of available and realistic alternative situation. STEP5: Analyze the ethical impact and implications of each of the alternative solutions. STEP6: Select the solution that provides the optimal ethical resolution STEP7: Implement the decision, follow up and adjust if necessary.

A MODEL FOR ETHICAL DECISION MAKING -St.Louis Writers.

THE JOSEPHSON INSTITUTE 7-STEP PATH TO BETTER ETHICS DECISIONS

Stop and think. Clarify goals. Determine facts. Develop facts. Consider consequence. Choose. Monitor and modify.

Concern for poor and downturn. No discrimeination against any particular sector of group. Concern for clean environment. Preservation of scarce resources for prosperity. Contributiong to better quality of life.

Employees

Security of job. Better working conditions. Better recommendations. Participative management. Welfare facilities.

Customer

Better quality of goods. Goods and service at reasonable price. Not to corner stocks and create security. Not to practice discriminatory pricing. Not to make false claims about products in advertisements.

Share holders

Ensure capital appreciation. Ensure stead and regular dividends. Disclose all the information. Protect minority stakeholders interest. Not to window dress balance sheets. Protect interest in times of mergers, amalgamations and takeovers.

Banks and other legal institutions

Guarantee safety of borrowed funds. Prompt repayment of loans.

Government

Complying with rules and egulations. Honesty in paying taxes and other dues. Acting as the partner in the progress of the country.

Organization level -I

Fair practices relating to recruitment, compensation, layoff, strike, perks, etc.. Transformational leadership to motivate employees to aim at better and higher things in life. Better communication at all levels.

3Ps Approach

PROFIT
PEOPLE