Ethics in Busi

8/2/2019 Ethics in Busi

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Business Ethics


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Evolution of Thoughts

First Phase License Quota Permit Raj-(Independence- late 1960s)

Second Phase- Socialistic frenzy(1970- mid 1980s)

Third Phase- Economic Reforms, 1991


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Reasons for Evolution of BE

Globalization and Decentralization ofbusiness

Growth of Media- Co. are being heldincreasingly accountable for their ethicalconduct

International Agreements and Actions- to

fight against corruption and bribery around theworld


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Global Initiatives

Global Sullivan Principles- IncludesCorporations, Higher Education and CivicInvolvement

SA8000- created in 1997, by SAI and CEP is astandard based on commitment to establishinga cross country standard for workplace.Focuses on Labor Rights.

United Nations Global Compact- Kofi Annan (July31,1999) at Davos, CSR, 9 principles- HumanRights,Labour standards & Environment.


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Caux Principles

The Caux Round Table consisted ofgroup Of International Executives.

Shared a belief that businessorganizations can be powerful forcefor +ve change

Two basic ethical ideals: KYOSEI and

HUMAN DIGNITY


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Kyosie and Human Dignity

KYOSEI- means living and workingtogether for the human good

Human Dignity can be defined as valueof each person as an end

Shared values, including commitment to

shared prosperity are important toglobal as well as communities of smallerscale


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Foundation for actions by BusinessLeaders

Principle 1: The Responsibilities ofBusiness: beyond Shareholderstowards Stakeholders

Principle 2: The Economic and SocialImpact of Businesses: towards

innovation, justice and worldcommunity


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cont

Principle 3: Business Behavior:beyond the letter of the Law towardsa 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


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ETHICS AND DECISIONMAKING


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Ethical Dilemmas

Significant value conflicts among differinginterests

Real alternatives that are equally justifiable

Significant consequences on "stakeholdersin the situation


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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


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Resolving Ethical dilemma

Recognize that there is a moral issue and define theproblem accordingly

Determine the actor who will be affected by the decision.

Also determine your role.

Analyze the facts how events happened. This will reducedilemmas to common patterns which are ultimatelymanageable

Test for Right versus Right paradigms such as Truth versusLoyalty, self versus community, short term versus longterm, justice versus mercy.


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Resolving Ethical dilemma

Apply all three approaches to solving the dilemmas-(i)utilitarianism i.e. do whatever produces greatest goodfor the greatest number; (ii) rule based thinking i.e.follow rules only; (iii) care based i.e. do what youwould like to be done to you.

Investigate to find a third way out.

Make decisions and take action.

Revisit and reflect on the decision.


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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


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Guiding factors for managers in ethical decisionmaking

A persons personal code of ethics

The companys formal policies, values and culture

The ethical climate in the industry

Government regulations. Morality transcends conformity tolaw

Behaviour of management in the company

Deep belief to abide by the laws

Ethical conduct/Standards tend to rise due to greater publicexposure/image


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Ethical Dilemmas at Workplace(Donaldson)

Recognizing conflicts of interest and avoidingthem

Deciding if the business gift is just a gift or a

bribe

Attaining fairness in employee performanceappraisals

Initiating disciplinary action against anemployee

Executing an order to take action against staff


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Ethical Dilemmas at Workplace(Donaldson)

Managing a problem employee

Handling reports of wrong doing on the job

Safeguarding confidential information

Recognizing and balancing the legitimateinterest of customers, employees, suppliers,owners and the society in which they live


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Sources of Ethical Dilemmas

Face-to-Face Ethics

Corporate Policy Ethics

Functional Area Ethics


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Difficulties in Ethical decisionmaking

Face dilemmas in deciding a course of action

Confront a distinction between facts andvalues

Knowledge about the consequences of anaction is limited

Antagonist interests frequently useincompatible ethical arguments to justify theirintentions

Some ethical standards vary with the passage

of time


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Difficulties in Ethical decisionmaking

Competitive pressures

Individual values in conflict withorganizational goals

Cross cultural contradictions


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Suggestions for Ethical decisionmaking

Top management can improve behavior

Code of Ethics

Interaction with peers and othercolleagues

Control System


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Stakeholder Analysis for EthicalDecision Making

Identification

Facts

Alternatives

Stakeholders

Impact

Guidance

Constraints

Comfort

Assessment


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NASHS TWELVE POINT PRESCRIPTION Resolving Ethical Dilemma

Have you defined the problem accurately?

How would you define the problem if you stoodon 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 thecorporation?

What is your intention in making the decision?

How does this intention compare with theprobable results?


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NASHS 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 seemsnow?

Could you discuss without qualm your decisionor 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?


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FRAMEWORK FOR ETHICALTHINKING

Do what is best for the greatestnumber of people [consequence-based thinking]

Follow the applicable universalprinciple, e.g. do not lie [duty-basedthinking]

Do what a good [virtuous] personwould do [virtue based thinking].


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Four Factors : Ethical Decisions

The end- outcome sought

The means methods employed

The motive

Foreseeable consequences


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Kohlbergs 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


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Usefulness of Kohlbergs theory

Helps us understand how our moralcapabilities develop

Reveals how we can become increasinglysophisticated and critical in our understandingof moral standards we hold

People generally progress through the stagesin the same sequence and not everyoneprogresses through all the stages

Implies that moral reasoning of people at laterstages of moral development are better thantheir reasoning at earlier steps


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Carol Gilligan Moral DevelopmentTheory

Pre-conventional level: Right conduct isviewed in a selfish manner solely as what isgood for oneself

Conventional level: Importance is on nothurting others and willing to sacrifice onesown interest and help others. This is acharacteristic feature of women

Post-Conventional level: At this level, balancesis found between caring about others andpursuing owns interest


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Kohlberg vs. Gilligan

Kohlberg Gilligan

A. Basic Aspects

Based on study on men Based on study on men and women

Men give importance to moral rule Women always wants to keep up

personal relationships with all thepersons involved in the situation

Ethics of rules and rights Context oriented and ethics of care

B. Characteristic Features

Taking a commanding role Shying away from decision making

Rigid Human Oriented

Factual Emotional

Independence Dependence


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Code of ethics

Most common way of institutionalizingethics in the organization

Statements of the norms and beliefs whichform the ethical rules of the organization asdefined by the middle and top levelmanagement

Indicates This is what we expect you tobehave


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Thank You

Documents

Ethics in Busi