Role Of Ethics

Ethics & It’s Role in Business

Presented By ♦ Mr. Sudhir Salaskar ♦ Mr. Bhavin Vakil ♦ Mr. Ashish Thakkar ♦ Mr. Robin Gupta 1

Golden Words by Abraham Lincoln ♦ “Stand with anybody who

stands right. Stand with him while he is right, and part with him when he goes wrong.” ♦ “Character is like a tree and reputation like its shadow. The shadow is what we think of it; the tree is the real thing.”

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Why Study Ethics? ♦ It lets you to run a business in an ethical

manner. ♦ Ignored when faced with possibility of earning large sum of money. ♦ Help in trying to do the right thing

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Ethics ♦ Ethics is a Greek word, it means Character or

manners. ♦ Ethics is subjective while morality is objective. ♦ Ethics is about sense of belongingness to society of business or organization. ♦ Character is invisible force behind expressions, deed that has tremendous influence in changing and transforming the habits pattern

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Ethics (Contd.) ♦ What is ethics to individual is known as

strategy for organization and therefore no organizational growth is possible with out strategy.

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Ethics (Contd.) ♦ Ethics and Religion ♦ Ethics and Social Responsibility Ethics - two levels of concern Individual -- Ethical Tests Organizational – Corporate Social Responsibility

♦ Soc. Responsibility - Win -Win

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Ethics & Corporate Social Responsibility "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large"

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TWO KEY ASPECTS OF ETHICS ♦ The first involves the ability to discern right

from wrong, good from evil, and propriety from impropriety. ♦ The second involves the commitment to do what is right, good and proper. Ethics entails action; it is not just a topic to mull or debate.”

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Moral/Values v/s. Ethics ♦ These terms are not

interchangeable. ♦ Ethics -actual behaviour. ♦ Morals / Values -should behave.

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Concepts of Ethics - Origin ♦ Developed by moral philosophers over

generations ♦ Used to distinguish ethical from unethical

behavior

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Relativism

Egoism

The 4 Concepts of Ethics Utilitarianism

Deontologism 11

Relativism ♦ There is no universal standard by which

morality can be judged. ♦ What is correct for one society may be

wrong for another.

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Relativism - Problems ♦ There are no absolutes - murder, slavery,

torture, rape. ♦ What is meant by a society & subsocieties? ♦ Leads to conclusion - each person’s opinion is correct. ♦ Nothing that anyone does is morally wrong.

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Egoism ♦ Ethical behavior is that which promotes

one’s own self interest. ♦ Does not mean should not obey laws - only do so if in self interest.

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Egoism - Problems ♦ An excessive or exaggerated sense of self-

importance. ♦ Externalities associated with private actions – E.g. to dump toxic wastes as long as don’t get caught.

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Utilitarianism ♦ Greatest Happiness Principle. ♦ The morality of an action can be determined

by its consequences. ♦ An action is ethical if it promotes the greatest good for the greatest number.

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Benefits and Costs of an Action to Whomsoever They Accrue B1 + B2 + B3 + . .+Bn> C1 + C2 + C3 + . . .+Cn Then the Action is Ethical

B1 + B2 + B3 + . .+Bn< C1 + C2 + C3 + . . .+Cn Then the Action is Unethical 17

Problems with Utilitarianism ♦ How do you quantify benefits and costs? ♦ How do you value benefits and costs? ♦ Can lead to unjust consequences.

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Deontologism ♦ Derived from the Greek word for Duty ♦ Actions

are not justified by their consequences. Factors other than good outcomes determine the rightness of actions ♦ E.g.- Starvation.

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Problems with Deontologism ♦ Conflicts between duties E.g. Govt officials

& Builders. ♦ Utilitarians argue that secretly appeal to consequences to demonstrate the rightness of actions.

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Utilitarianism Vs. Deontologism ♦ Utilitarianism - The ends justify the means ♦ Deontologism - It is the means which are

important

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THE CLASSIC TEST FOR ETHICS DECISIONS  Joseph Fletcher, in his book Moral Responsibility,

outlines the classic factors “to be weighed and ethically evaluated in every moral decision”: ♦ The END sought -- Utilitarianism ♦ The MEANS used -- Deontologism ♦ The MOTIVE involved -- Relativism ♦ The foreseeable CONSEQUENCES. ♦ The SELF INTEREST -- Egoism  Under this analysis, for the decision to be ethical,

ALL of the factors have to be “right.”

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What is Business Ethics?

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Business Ethics ♦ The application of general ethical concepts

to the unique situations confronted in business. It asks what is right or wrong behavior in business and what principles or rules can be used as guidance in business situations.

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10 Myths About Business Ethics 1. Business ethics is more a matter of 2. 3. 4. 5.

religion than management. Our employees are ethical so we don't need attention to business ethics. Business ethics is a discipline best led by philosophers, academics and theologians Business ethics is superfluous -- it only asserts the obvious: "do good!" Business ethics is a matter of the good guys preaching to the bad guys. 25

10 Myths About Business Ethics (Contd.) 6. Business ethics in the new policeperson on the block. 7. Ethics can't be managed. 8. Business ethics and social responsibility are the same

thing. 9. Our organization is not in trouble with the law, so we're ethical. 10. Managing ethics in the workplace has little practical relevance.

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Case Studies 1) Tainted Milk Scandal – China – – – – –

Introduction The Milk Scandal The Govt. Steps in The Impact on Chinese Dairy Industry The Aftermath

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Case Studies 2) TATA 1. JRD Tata paid salary by pledging his personal fortune of Rs. 1 cr. 2. On Business Dealing - JRD Tata had started the Tata Airlines with an English pilot, Neville Vincent.

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6 QUESTIONS TO ASK IN MAKING ETHICAL DECISIONS 1. Have you defined the problem accurately? 2. How would you define the problem, if you

were on the other side of the fence? 3. Are you confident that your decision will be as valid long-term as it appears to be short-term? 4. Whom could your decision injure?

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6 QUESTIONS TO ASK IN MAKING ETHICAL DECISIONS 5. What is your intention in making this

decision? 6. How does your intention compare with the likely result?

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Role of Ethics in business ♦ Checking Business Malpractices ♦ Improving customer confidence ♦ Cautious of social responsibility ♦ Safeguarding customers rights ♦ Protecting other social groups ♦ Cordial relationship between business &

society ♦ Good image.

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Whistleblowing ♦ Act of disclosing wrongdoing in an

organization ♦ Like blowing a whistle to call attention to a wrongdoing. ♦ Types Internal External

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Can Cause Bitterness in Organization ♦ Dissent - Must speak out against others in

organization. ♦ Breach of Loyalty - Perceived as one who violates confidentiality and loyalty. ♦ Accusation - Singles out specific individuals as threats to organization or the public.

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Possible Retaliation ♦ Fired. ♦ Blacklisted. ♦ Transferred to undesirable locations. ♦ Physical abuse.

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Failure to Reveal Wrongdoing ♦ Severe problems for society ♦ Negative image for organization ♦ Encouragement to wrong doers.

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Ethics of Whistleblowing ♦ When is it ethical to reveal wrongdoing ? ♦ When is it ethical to remain silent?

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Example ♦ In charge of Quality Control ♦ Company makes parts for automobile

brakes ♦ Find defect in brake part ♦ Could cause failure in brakes ♦ Failure not certain ♦ May take many years to develop

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Example (cont.) ♦ Go to VP of Production, your boss ♦ He tells you to overlook defect - company

may loose too much money ♦ What would you do?

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“What will it profit a man if he gain the whole world but lose his own soul?” Jesus Christ

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