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Transcript of Business Ethics. Evolution of Thoughts First Phase License Quota Permit Raj- (Independence- late...
Business Ethics
Evolution of Thoughts First Phase License Quota Permit Raj-
(Independence- late 1960’s)
Second Phase- Socialistic frenzy (1970- mid 1980’s)
Third Phase- Economic Reforms, 1991
Reasons for Evolution of BE Globalization and Decentralization of
business Growth of Media- Co. are being held
increasingly accountable for their ethical conduct
International Agreements and Actions- to fight against corruption and bribery around the world
Global Initiatives Global Sullivan Principles- Includes
Corporations, Higher Education and Civic Involvement
SA8000- created in 1997, by SAI and CEP is a standard based on commitment to establishing a cross country standard for workplace. Focuses on Labor Rights.
United Nations Global Compact- Kofi Annan (July 31,1999) at Davos, CSR, 9 principles- Human Rights,Labour standards & Environment.
Caux Principles The Caux Round Table consisted of
group Of International Executives. Shared a belief that business
organizations can be powerful force for +ve change
Two basic ethical ideals: KYOSEI and HUMAN DIGNITY
Kyosie and Human DignityKYOSEI- means “ living and working
together for the human good”
Human Dignity can be defined as “value of each person as an end”
Shared values, including commitment to shared prosperity are important to global as well as communities of smaller scale
Foundation for actions by Business Leaders Principle 1: The Responsibilities of
Business: beyond Shareholders towards Stakeholders
Principle 2: The Economic and Social Impact of Businesses: towards innovation, justice and world community
…cont Principle 3: Business Behavior:
beyond the letter of the Law towards a spirit of Trust
Principle 4: Respect for Rules Principle 5: Support for Multilateral
Trade Principle 6: Respect for Environment Principle 7: Avoidance of Illicit
Operations
ETHICS AND DECISION MAKING
Ethical Dilemmas
Significant value conflicts among differing interests
Real alternatives that are equally justifiable
Significant consequences on "stakeholders” in the situation
Approaches to Ethical Decision Making
Utilitarian Criteria- Jeremy Benthham,1800. preaches maximum good for maximum no. of people as a result of an action.
Rights Criteria- ‘Right to speech’ ‘Whistle Blowers’
Justice Criteria – in decisions for wages, retrenchments
Ethics of Care- should exercise care
Resolving Ethical dilemma Recognize that there is a moral issue and define the
problem accordingly
Determine the actor who will be affected by the decision. Also determine your role.
Analyze the facts how events happened. This will reduce dilemmas to common patterns which are ultimately manageable
Test for ‘Right versus Right’ paradigms such as Truth versus Loyalty, self versus community, short term versus long term, justice versus mercy.
Resolving Ethical dilemma Apply all three approaches to solving the dilemmas-(i)
utilitarianism i.e. do whatever produces greatest good for the greatest number; (ii) rule based thinking i.e. follow rules only; (iii) care based i.e. do what you would like to be done to you.
Investigate to find a third way out.
Make decisions and take action.
Revisit and reflect on the decision.
Characteristics of an ethical decision
Right – morally correct
Equitable - Just and equal
Good – Highest good for all concerned
Proper – Appropriate and acceptable
Fair – Honesty
Just - Action
Guiding factors for managers in ethical decision making A person’s personal code of ethics
The company’s formal policies, values and culture
The ethical climate in the industry
Government regulations. Morality transcends conformity to law
Behaviour of management in the company
Deep belief to abide by the laws
Ethical conduct/Standards tend to rise due to greater public exposure/image
Ethical Dilemmas at Workplace (Donaldson) Recognizing conflicts of interest and avoiding
them
Deciding if the business gift is just a gift or a bribe
Attaining fairness in employee performance appraisals
Initiating disciplinary action against an employee
Executing an order to take action against staff
Ethical Dilemmas at Workplace (Donaldson) Managing a problem employee
Handling reports of wrong doing on the job
Safeguarding confidential information
Recognizing and balancing the legitimate interest of customers, employees, suppliers, owners and the society in which they live
Sources of Ethical Dilemmas
Face-to-Face Ethics
Corporate Policy Ethics
Functional Area Ethics
Difficulties in Ethical decision making Face dilemmas in deciding a course of action
Confront a distinction between facts and values
Knowledge about the consequences of an action is limited
Antagonist interests frequently use incompatible ethical arguments to justify their intentions
Some ethical standards vary with the passage of time
Difficulties in Ethical decision making Competitive pressures
Individual values in conflict with organizational goals
Cross cultural contradictions
Suggestions for Ethical decision making
Top management can improve behavior
Code of Ethics Interaction with peers and other colleagues
Control System
Stakeholder Analysis for Ethical Decision Making Identification Facts Alternatives Stakeholders Impact Guidance Constraints Comfort Assessment
NASH’S TWELVE POINT PRESCRIPTION – Resolving Ethical Dilemma Have you defined the problem accurately? How would you define the problem if you stood
on the other side of the fence? How did this situation occur in the first place? To whom and to what do you give your loyalty
as a person and as a member of the corporation?
What is your intention in making the decision? How does this intention compare with the
probable results?
NASH’S TWELVE POINT PRESCRIPTION – Resolving Ethical Dilemma Whom could your decision or action injure? Can you discuss the problem with the affected
parties before you make your decision? Are you confident that your problem will be
valid over a long period of time, as it seems now?
Could you discuss without qualm your decision or action with other?
What is the symbolic potential of your action, if understood? If misunderstood?
Under what conditions would you allow exceptions to your stand?
FRAMEWORK FOR ETHICAL THINKING Do what is best for the greatest
number of people [consequence-based thinking]
Follow the applicable universal principle, e.g. do not lie [duty-based thinking]
Do what a good [virtuous] person would do [virtue based thinking].
Four Factors : Ethical Decisions
The end- outcome sought
The means –methods employed
The motive
Foreseeable consequences
Kohlberg’s Moral Development Theory
Level 1Pre-conventional
Stages
Level 2Conventional
Stages
Level 3Post
ConventionalStages
Punishment and Obedience orientation
Instrument and Relativity Orientation
Interpersonal Concordance Orientation
Law and Order Orientation
Social Contract Orientation
Universal Ethical Principles Orientation
Usefulness of Kohlberg’s theory Helps us understand how our moral
capabilities develop Reveals how we can become increasingly
sophisticated and critical in our understanding of moral standards we hold
People generally progress through the stages in the same sequence and not everyone progresses through all the stages
Implies that moral reasoning of people at later stages of moral development are better than their reasoning at earlier steps
Carol Gilligan Moral Development Theory Pre-conventional level: Right conduct is viewed
in a selfish manner solely as what is good for oneself
Conventional level: Importance is on not hurting others and willing to sacrifice one’s own interest and help others. This is a characteristic feature of women
Post-Conventional level: At this level, balances is found between caring about others and pursuing own’s interest
Kohlberg vs. GilliganKohlberg Gilligan
A. Basic AspectsBased on study on men Based on study on men and womenMen give importance to moral rule Women always wants to keep up
personal relationships with all the persons involved in the situation
Ethics of rules and rights Context oriented and ethics of careB. Characteristic Features
Taking a commanding role Shying away from decision makingRigid Human OrientedFactual Emotional Independence Dependence
Code of ethics
Most common way of institutionalizing ethics in the organization
Statements of the norms and beliefs which form the ethical rules of the organization as defined by the middle and top level management
Indicates “This is what we expect you to behave”
Thank You