Be Sure you are right, then go ahead.

Davy Crockett1786-1836

Question Stem

• Do you think there is an importance of ethics in continuing to work ?

• Have you observed misconduct in the work place? Does it prevails?

Business Ethics: What Does It Really Mean?

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Ethical Problem

Ethical Problem

Society’s Expectations of Business Ethics

Actual Business Ethics

1950s Early 2000sTime

Business Ethics:Today vs. Earlier Period

Genesis of ETHICS

• Dictionary Meaning – “system of moral principles, rules and conduct.”

• The origin of this word is from ETHOS which mean character.

• Ethics is defined as the ability to distinguish between right and wrong and to act accordingly.

Sources of Ethical Norms

Fellow Workers

Family

Friends

The Law

Regions of Country

Profession

Employer

Society at Large

Fellow Workers

Religious Beliefs

The Individual

Conscience

Perception of countries as least / most corrupt

LEAST CORRUPT COUNTRIES CORRUPT COUNTRIES

Finland Bangladesh

New Zealand India

Iceland Nigeria

Singapore Kenya

Canada Indonesia

UK

Can ethics be taught?

Teddy Roosevelt said, “To

educate a person in mind

and not in morals is to educate a menace to society.”

Educational Institutions have established Ethics code for their students, e.g. the US Air Force

Academy “We Will not Lie, Steal or Cheat, Nor Tolerate Among us anyone who does”-which do you think is the harder part : part 1 or part 2? Why?

From Where the Ethics Comes

• Religious values• Philosophical values• Cultural values• Legal values• Professional Values• Environment• Parents & Teachers• Now-a-days Media

Ethics, Economics, and Law

3 Models of Management Ethics

1. Immoral Management—A style devoid of ethical principles and active opposition to what is ethical.

2. Moral Management—Conforms to high standards of ethical behavior.

3. Amoral Management• Intentional - does not consider ethical factors• Unintentional - casual or careless about ethical

considerations in business

Three Approaches to Management Ethics

Developing Moral Judgment

Real-to-Life Ethical Dilemmas

• "A customer (or client) asked for a product (or service) from us today. After telling him our price, he said he couldn't afford it. I know he could get it cheaper from a competitor. Should I tell him about the competitor -- or let him go without getting what he needs? What should I do?"

• "Our company prides itself on its merit-based pay system. One of my employees has done a tremendous job all year, so he deserves strong recognition. However, he's already paid at the top of the salary range for his job grade and our company has too many people in the grade above him, so we can't promote him. What should I do?"

• "Our company prides itself on hiring minorities. One Asian candidate fully fits the job requirements for our open position. However, we're concerned that our customers won't understand his limited command of the English language. What should I do?"

• "My boss told me that one of my employees is among several others to be laid off soon, and that I'm not to tell my employee yet or he might tell the whole organization which would soon be in an uproar. Meanwhile, I heard from my employee that he plans to take a home loan for a new house. What should I do?"

• "A fellow employee told me that he plans to quit the company in two months and start a new job which has been guaranteed to him. Meanwhile, my boss told me that he wasn't going to give me a new opportunity in our company because he was going to give it to my fellow employee now. What should I do?"

Business Ethics

• The study and examination of moral and social responsibility in relation to business practice and decision making in business is known as “Business Ethics”.

• The term “business” is commonly referred to the commercial activities achieved at making profit. But gradually there is a substantial change in the way in which people viewed the business.

ETHICS AND CORPORATE GOVERNANCE

• Deals with determination what is ‘right'," fair, prior and just" in decisions and actions made that affect stake holders. It focuses on the business relationship with employees, customers, stockholders, creditors, suppliers and member of the society in which it operates.

• Corporate ethics , is a matter of leadership.

• Adhere to corporate credos-code of conduct.

• Development of IQ andEQculture.

A business is regarded as social institution forming integral part of social systems .The business is viewed as subsystem to the social system.

Inventory of Ethical Issues in Business• Responsibility towards the

Employees• Responsibility towards the

Shareholders• Responsibility towards the

Shareholders• Responsibility towards the

Customers• Responsibility towards the Society• Responsibility towards the

Competitors• Responsibility towards the

Environment

Ethical issues for business

• Product safety standards• Advertising contents• Working environment• Unauthorized payments• Employee’s privacy• Environmental issues

Requirements for ethics in Organization• Clear Vision• Define the framework of the acceptable behavior. • Follow high standards of practice. • Create benchmarks for self evaluation. • Enhance sense of community. • Open Communication.• Create transparency in the business activities. • Foster higher standards of business ethics. • Comply with government laws and norms.

Who is responsible for Ethics in an Organization

“Everyone”

• The creation of an ethical organizational culture resides with leaders & followers; leadership by nature demands that leaders be the front runners in establishing an ethical organizational culture

Managing Ethics in Business

• Top Management• Code of Ethics• Ethics Committee• Ethics Training programs• Ethics and law

Ethical conflict arises When there is a presence of…

• Significant value conflicts among differing interests• Real alternatives that are equality justifiable• Significant consequences on "stakeholders" in the

situation

Importance of Ethics in Business

• Ethics corresponds to basic human needs• It creates credibility with the public• It gives management credibility with the

employees, shareholders, and stakeholders

• It helps in better decision making• It helps in building goodwill• It helps in efficient utilization of resources

Principals for ethically run Business

• Principle 1 – Productivity Is Much More Important Than Profitability

• Principle 2 – The Customer Is Not Sheep That Can Be Sheared

• Principle 3 – The Buyer's Domain Is More Important Than the Middlemen's Domain

• Principle 4 – Be Diplomatic With Your Competitors.

• Titan is India’s premier watch company. They have a well defined policy on social responsibility. Its Corporate Governance initiatives include

• Children’s education• Employing the disabled• Women’s empowerment• Environment management programme’s and other

community initiatives.

Appreciations for their initiatives..• Signatory to the Global Compact

• Awarded the Helen Keller award and Mother Teresa award

• Watch and Jewellery Divisions are certified under ISO 9001:2000 quality management system standards & the ISO 14001 environment system standard

• The President of India’s Award for employing the disabled.

• Friends of BIL Award for employing the handicapped.

• SAKTHI MASALA employs about 200 disabled persons to enable them to lead an honourable living. SAKTHI DEVI CHARITABLE TRUST, the social service arm of the SAKTHI MASALA, was founded in the year 1997 to promote the cause of community development services.

• Since then, the Trust has been carrying out projects with concern and compassion to uplift the underprivileged especially the disabled.

The Trust runs – • Rehabilitation Centre for

Physically challenged - training is offered free of cost to the physically & mentally challenged children.

• Sakthi Hospital offers quality medical treatment to the people of the society at highly subsidized rates.

• It is noteworthy that such CSR initiatives are not an obstacle to its success but have partnered in their success.

Awards won by Sakthi Masala Group: • Outstanding SSI Award 1987, 1988 & 1990 • Jamnalal Bajaj Award 1992 & 2001 • National Award for Quality Products 1994 • Best Employer of the State Award 1997, 2000,

2001 & 2004 • Samman Award for the years 1994-99 • National Award for Outstanding Employer 1998

& 2004 • State Safety Award 1999 & 2000 • Shell Helen Keller Award 2002 • IMM Award for Excellence SSI Unit 2003

NABARD, Bank of India, BPCL

• Nabard helps 101 million poor people through micro finance program, providing access to credit.

• Joint liability groups(JLG)- rythu mitra program- credit access to landless farmer's agri laborers, empowers women with micro credit, micro enterprise, created special funds for water shed development, Partnering with corporate like ITC, Tata’s, M and M, ambuja cements etc, many more.

• BPCL provides alternate source of energy, solar energy for street lights at villages, skill enhancement on modern farming practices, distributes smokeless Chulas, training for income generation projects.

• Bank of India, focuses on below poverty line, adopted 101 villages .makes use of four M (Meaningful projects, Managing the projects, Monitor projects, Measure projects) with NGO for various services.

Airtel India Ltd. Complaints - Unethical Business Practice

This has reference to my Airtel connection no. 9892578113. Rs. 30/- had been deducted from my account making balance in negative. When inquired with the customer care at 121 I had been told that same is deducted for the caller tune for which I have never made any request. After making continuous calls to customer care I had been told that the same service had been cancelled. Without my consent the caller tune facility was given at a charge of Rs. 30 and the same has been cancelled without making refund of Rs. 30 to my account. When I kept on calling the customer care for an explanation for this act of Airtel they regret their inability for the refund and instead asked me to mail my complain to you directly. Strangely this has became a common practice of the company to deduct amounts in the name of caller tunes or GPRS services for most of the new connections.

Hope this Unethical Business Practice will be stopped and a refund of Rs. 30/- will be made in my aforesaid Airtel account.

Rs 400 cr fraud at Citibank India;20 high net worth clients swindled

• A banking fraud which could run into a whopping Rs 400 crore has been unearthed at leading multinational lender Citibank''s Gurgaon (Haryana) branch.• The fraud is said to be a handiwork of Shivraj Puri who was working as a Relationship Manager for the past 7-8 years, the employee who is alleged to have sold investment products to high networth clients claiming that they would generate unusually high returns.•Puri has also been charged with producing forged circulars from the Securities and Exchange Board of India (Sebi) to con people into investing in a non-existent scheme and making people believe that the scheme was only available in that particular branch.

• He is also accused of claiming that these products were authorised by the bank's investment product committee.

• Sources said Puri allegedly sought deposits from high networth customers in lucrative schemes but transferred the funds to some fictitious accounts.

• Citibank has intimated the Reserve Bank of India and Sebi about the fraud. In a statement given out by the bank, "Identified suspicious transactions have been isolated and we are providing full assistance to the authorities in their investigations. This issue does not impact other accounts, transactions or customers of the bank. Subsequent to our complaint naming the involved employee and other external individuals who appear to be perpetrators in these suspicious transactions, Gurgaon police have registered an FIR."

Conclusion

• Business system as a subsystem to the social system should promote ethics for improving health and wealth of the society consistently.

• In order to win the game, you need to plan. To plan, information is imperative . Get it through legal & ethical means. It’s fact that to win consistently , you need to play by rules. In life play hard and play fair.

• In Life and Business,

Ethical Standards must be set,

Ethical Standards must be met.