Ethical Issues By Amit.docx.ca11229dc32a077d0ccccca89f8d4e0d.bak.docx

NAME- Amit Pal

CLASS- BBA(III)

ROLL NO.- 2506

SUBJECT- SOCIAL AND ETHICAL ISSUES IN INDIA TOPIC- ETHICAL ISSUES IN INDIAN BUSINESS INTRODUCTION Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. These ethics originate from individuals, organizational statements or from the legal system. These norms, values, ethical, and unethical practices are the principles that guide a business. They help those businesses maintain a better connection with their stakeholders. In this era of globalization and multinational competition, the most fundamental or essential ethical issues that businesses must face are integrity and trust. When customers perceive that a company is exhibiting an unwavering commitment to ethical business practices, a high level of trust can develop between the business and the people it seeks to serve. A relationship of trust between you and your customers may be a key factor in your company's success. For Example- selling tobacco and alcohol to an underage minor over the internet, which is impossible to regulate easily and affectively.

‘Definition’ of Ethical issues in business“A problem or situation that requires a person or organization to chose between alternatives that must be evaluated as right ethical or wrong(unethical)”.

ETHICAL ISSUES IN INDIA With the growing economy and evolving global demand from India, the proactive transformation into an ethical organization has become desirable. The various ethical issues in India are:

1. BriberyBribery is being accepted and practiced in Indian business. In the business world, stories of bribery are all too common. The term bribery means to give money, of gifts, in cash or kind to someone in order to persuade them to make favorable and biased decisions for business gains. However, in many countries, bribery may not be considered corrupt and is viewed as the normal way business is conducted. Bribery involves an attempt to influence the decision of someone in a position of authority by offering them money or some other benefit (gifts, sex, whatever). It is illegal everywhere on earth, though unfortunately common in some places.

It is unethical because it amounts to an inducement to disloyalty. Decision-makers (e.g., government officials) are obligated to make the decision that is best for the people they serve, and a bribe is typically aimed at getting them to make the decision that is best for you instead. Some people (and some legal frameworks) differentiate between bribery and “facilitation payments,” which are small payments aimed at getting someone to do what they are already obligated to do (e.g., install a phone for you). 2. Gifts and HospitalityFrom time to time employees may be presented with gifts from other business organizations or they may present gifts to others including to the public officials. Any such gifts that is offered, or is possibly offered, in the expectation of, or to solicit, favourable consideration of any nature must be refused and the fact of its having been offered, reported immediately to the relevant authority concerned. Employees must not accept money, loans, services, goods, entertainment or favours from any supplier, contractor, sub-contractor, customer or competitor for having given company business to an outside agency and they should also not give money, hospitality or gifts in order to obtain business for the company. 3. Conflicts of InterestConflicts of interest can occur in teaching, research, and clinical practice, and they may be obvious or subtle. No Principle or Rule of either the Code or the Issues in Ethics statement can address all of the forms that such conflicts can take. This Issues in Ethics statement gives guidance in identifying conflicts of interest and suggests what should be done when a conflict is identified.

Many conflicts of interest involve commercial interests or financial arrangements. Policies and procedures in workplace settings should be evaluated to safeguard against biases or preferences being introduced into professional judgments. If a professional is offered, or receives, gifts or incentives—even something as minor as a free lunch—conflict of interest may be suspected.

Personal and family relationships complicate the ability to recognize potential conflicts of interest. Preferential treatment in referrals, in the evaluation of employees, or in the assessments of students and fellow faculty members should be avoided. 4. Confidentiality and Insider TradingInsider Trading and Business Ethics. Many people are complaining insider trading since it is unfair for some people who do not have confidential information about a certain company. ... Insider trading is a huge issue among people. Insider trading can be an unethical; yet sometimes it can be ethical. Information which employees gain during the course of their employment should not be disclosed to anyone not employed by the company. It is the criminal offence to disclose insider information which results in dealing as well as a breach of the contract of employment. 5. Anti-Trust Compliance All employees have a duty to ensure that company’s business is conducted in a fair and competitive manner. In carrying out its business, the company shall ensure compliance of the Competition Act 2002, as amended from time to time and other applicable provisions, which has been enacted to eliminate practices that may have an adverse effect on competition and thereby promoting competition, protecting consumer interest and ensuring freedom of trade. 6. Tax EvasionTax takes many forms: income tax, corporate tax, land tax, capital gains tax, death tax, inheritance tax, sales tax, customs and excise tax, and value-added tax are all available to governments. Plus many more. Paying our taxes to fund public policy

initiatives and investments is a central necessity of most societies – and most of us do meet these expectations. But while there are those who seek to criminally evade their tax liabilities, or fraudulently deceive the government, we also see varying levels of non-compliance by others in society, raising questions about the ethics of minimising how much tax you pay. This is loss to the nation arising from tax evasion. 7. CorruptionCorruption is the single greatest challenge that erodes and defeats efforts made by many nations, especially in the developing world, towards sustainable development and towards the promotion and strengthening of democratic institutions and values. Corruption is an obstruction to development; it undermines stability and security and it erodes public trust and confidence. Some pernicious effects of corruption are the lack of quality essential services, the lack of public infrastructures and, above all, poor management of resources, or, more generally, bad governance. The consequences of corruption are borne by the poor. The most corrupt areas according to sources are the police and the legal system. 8. Employee Behaviour-

Ethical issues for dealing with individual employees is difficult because managers on the front line are responsible for various accounts such as hiring and firing disciplining and performance evaluation also during all these procedures managers are responsible for employee supervision because managers are role models for their employees in their department it is critical the managers are able to ethically resolve problems within the organization but unfortunately it is not always the case. Employee behavioral problems that occur in the workplace can have a dramatic effect on the overall atmosphere. It is the manager’s responsibility to correct these problems in a morally right way. 9. FraudFraud means and includes any of the acts committed by a party to a contract or with his connivance, or by his agents, with an intention to deceive another party thereto his agent, or to induce him to enter into a contract. Corporate fraud defined

by CIMA is a type of fraud that essentially involves using deception to make personal gain for oneself dishonestly or create a loss for others. The scale and size of corporate frauds in India have increased in the last 15 years with over half the cases of fraud dealing with transfer of funds by promoters/top management and defrauding the lenders. 10. Small Business EthicsAlthough there are ethical issues like discrimination that apply to all business, each business area has its own ethical concerns. Many other ethical issues are 11. Supply Chain Issues 12. Employee contributions to outside organisations 13. Fair employment practice 14. Employee working conditions 15. Political support

REASONS FOR UNETHICAL PRACTICES IN INDIAN COMPANIES/ INDIA In today’s time, people have to fac lot of problems. Some of the reasons which are responsible for degradation of ethical and moral values among Indian people are mentioned below: 1. Reducing spiritual valuesWhile western countries are adopting more of family values from east and practices like yoga, meditation, spirituality, the Indians are adopting more and more of incorrect things in their culture. India has been faced a tough past with instances of violence throughout its history. 2. Lack of Government RegulationGovernment is also to be blamed for not banning serious semi porn and porn content in some general magazines, TV channels etc. Tightening the laws and providing for class action suits will help to fight against fraudulent business practices. 3. Influence of western cultureToday, westernization has penetrated so much into Indian minds that people have rendered their culture. Now there were drastic changes in the lifestyle of the people

which led to conflicts and competition. Today, traditional lifestyle mean the average, middle-class, urban or semi urban mode of living. 4. IlliteracyThough India has been growing at a healthy rate of around 9% per annum, around 50% of the population is still illiterate. Illiteracy results in degradation of value system. India with its strong religious background has had a good value system but the presence of few traditions like sati, child marriage etc. has led to the degradation of the value system of India. 5. Defective Education SystemFormal education as is being imparted today, does not give proper importance to the building of moral and ethical aspects of human personality. The major stress is to create job-worthy individuals. Students who come out of the system are trained to work but are not trained to think. 6. Social IssuesMost of the violent/ criminal/ anti-social incidences that have happened in our system could have been prevented if the people had a good value system, a thinking mind and thought about their actions and their implications. Also, most of the continuing social issues like poverty, hunger, unemployment can be tackled if more thinking individuals enter into the system to fight against these issues. 7. Value placed on the sex of the childIt is very unfortunate that in India, parents differentiate between their son and daughter. Sons are preferred to daughters in our society. Going to market alone, laughing in public places, wearing western clothes are considered disgraceful for girls but these are not equally applied for boys. This unnecessary freedom to boys make them think that they are superior and can do whatever they want. 8. Conflicting Cultural InfluencesThe Indian society today is being exposed to conflicting cultural influences. On one hand, there is traditional Indian culture, whereas on the other hand, the industrialized western culture of individualism. This fragmentation of cultural identity is responsible for the dilution of Indian’s traditional moral and ethical values. 9. The Role of MediaAs the electronic media, serials, western programmes are unrestrictedly free on the television, they have created a great intolerable desire to live and adopt a lifestyle

as is shown there. For example, the rich and exotic dresses worn by celebrities on television are not those which they would wear in ordinary day to day life. TV has thus created a false glamour in the minds of the general public and people try to emulate this in their day to day lives. 10. Cultural and Social reasons for unethical behaviourIt includes economic and cultural factors, cultural logic, corruption, capitalism etc.

HOW TO PROMOTE ETHICAL CULTURE IN INDIAN COMPANIES There are different ways of promoting an ethical climate in the workplace:

1. Create a Code of ConductA code of ethics reflects an organization’s principles and values and provide guidelines for employees to follow. A few things that needs to be considered while developing a code of ethics include support and assistance from the management and ensuring that all employees are aware of and understand the code of ethics. A work ethics assessment will help you in identifying those individuals whose principles and values are aligned with those of your organization. 2. Continuous review of the codeKeeping the code updated is an important step in keeping a company’s ethics alive in the minds of the employees. The company must share and communicate share copies of the code of ethics or lectures every year. In doing so, the company will be able to set up an atmosphere that promotes values and ethics in the organization. 3. Lead by ExampleEmployees follow the business owners and managers for direction on how they should conduct their behaviour and activities in the organisations. Leaders should talk about the importance of policies and processes, incentives, communications and openness which helps in promoting the staff to behave ethically who have behaved unethically otherwise.

4. Appreciation to the employeesHuman Resources professionals play an important role in building an organizational ethos, designing and implementing best practice policy, fostering trust, and advocating and guarding ethics. Human Resources have to ensure a transparent and fair recruitment process, prompt selection and promotion processes, and performance appraisal processes with compliance and honesty. So, the business owners and managers must show appreciation to the employees for their hard work and fruitful results on a regular basis to encourage loyalty. 5. Reward systemIt is necessary for the organisations to incorporate reward systems which promote ethical means of achieving the specified objectives. The system should ensure rewards for the employees who show good judgmental capabilities or take proactive and ethical decisions that benefit the organization. 6. Ethics trainingOrganisations can give ethics training, which can include group discussions, case studies, and one-to-one meetings with senior managers, to emphasis the importance of ethics. A work ethics assessment is also an effective tool as it helps you understand a candidate’s likelihood of engaging in counterproductive work behaviour. Ethics assessments provide the necessary framework for conducting training and mentoring session that can help the attitude of employees to improve. 7. Communication and MeetingsCommunications plays a role in influencing ethics as well, although it generally must be supported by actions. Managers also communicate ethical standards and expectations from the employees though company or staff meetings. 8. Immediate correction and coachingWhen an employee makes a poor ethical decision, it is the duty of the manager to quickly address and correct the incident or decision. Coaching the employee on a more ethical approach is a key follow-up. 9. WhistleblowingIt is an act whereby an employee of an organization informs the higher authorities or public about unethical practices taking place in his/her organisations. Whistleblowers help organisations in tracking and curbing unethical practices, which would otherwise change the reputation of the organisations and can also cause harm to the well-being of the employees.

10. Human Resources RoleHuman Resources professionals play an important role in building an organisational ethos, designing and implementing best practice policy, fostering trust, and advocating and guarding ethics. Human Resources have to ensure a transparent and fair recruitment process, prompt selection and promotion processes, and performance appraisal processes with compliance and honesty. Other ethical culture to promote Indian companies are: 11. Reinforce consequences 12. Hire for values 13. Build a culture of transparency, openness and communication 14. Empower employees 15. Implement work ethics assessments

CONCLUSIONTherefore, Ethics are important not only in business but in all aspects of life because it is an essential part of the foundation on which of a civilized society is build. A business or society that lacks ethical principles is bound to fail sooner or later. A business is a collection of different proprietorships. Ethics is issues of right, wrong, fairness, and justice. Therefore, business ethics places it focus on ethical issues that arise in the commercial world.