Values Definition – What is Values?

Values defined in Organizational Behavior as the collective conceptions of what is considered good, desirable, and proper or bad, undesirable, and improper in a culture.

Some common business values are fairness, innovations and community involvement.

According to M. Haralambos, “A value is a belief that something is good and desirable”.

According to R.K. Mukherjee, “Values are socially approved desires and goals that are internalized through the process of conditioning, learning or socialization and that become subjective preferences, standards, and aspirations”.

According to Zaleznik and David, “Values are the ideas in the mind of men compared to norms in that they specify how people should behave. Values also attach degrees of goodness to activities and relationships”

According to I. J. Lehner and N.J. Kube, “Values are an integral part of the personal philosophy of life by which we generally mean the system of values by which we live. The philosophy of life includes our aims, ideals, and manner of thinking and the principles by which we guide our behavior”

According to T. W. Hippie, “Values are conscious or unconscious motivators and justifiers of the actions and judgment”

A value is a shared idea about how something is ranked in terms of desirability, worth or goodness. Sometimes, it has been interpreted to mean “such standards by means of which the ends of action are selected”.

Sometimes, it has been interpreted to mean “such standards by means of which the ends of action are selected”.

Thus, values are collective conceptions of what is considered good, desirable, and proper or bad, undesirable, and improper in a culture.

Familiar examples of values are wealth, loyalty, independence, equality, justice, fraternity and friendliness.

Familiar examples of values are wealth, loyalty, independence, equality, justice, fraternity and friendliness. These are generalized ends consciously pursued by or held up to individuals as being worthwhile in them.

It is not easy to clarify the fundamental values of a given society because of their sheer breadth.

Characteristics of Value

Values are different for each person.

These can be defined as ideas or beliefs that a person holds desirable or undesirable.

The variability in that statement is, first, what a person could value, and second, the degree to which they value it.

Values may be specific, such as honoring one’s parents or owning a home or they may be more general, such as health, love, and democracy. ‘Truth prevails”, “love thy neighbor as yourself, “learning is good as ends itself are a few examples of general values.

Individual achievement, personal happiness, and materialism are major values of modem industrial society.

It is defined as a concept of the desirable, an internalized creation or standard of evaluation a person possesses.

Such concepts and standards are relatively few and determine or guide an individual’s evaluations of the many objects encountered in everyday life.

The characteristics of values are:

These are extremely practical, and valuation requires not just techniques but also an understanding of the strategic context.

These can provide standards of competence and morality.

These can go beyond specific situations or persons.

Personal values can be influenced by culture, tradition, and a combination of internal and external factors.

These are relatively permanent.

These are more central to the core of a person.

Most of our core values are learned early in life from family, friends, neighborhood school, the mass print, visual media and other sources within the society.

Values are loaded with effective thoughts about ideas, objects, behavior, etc.

They contain a judgmental element in that they carry an individual’s ideas as to what is right, good, or desirable.

Values can differ from culture to culture and even person to person.

Values play a significant role in the integration and fulfillment of man’s basic impulses and desire stably and consistently appropriate for his living.

They are generic experiences in social action made up of both individual and social responses and attitudes.

They build up societies, integrate social relations.

They mold the ideal dimensions of personality and depth of culture.

They influence people’s behavior and serve as criteria for evaluating the actions of others.

They have a great role to play in the conduct of social life. They help in creating norms to guide day-to-day behavior.

The values of a culture may change, but most remain stable during one person’s lifetime.

Socially shared, intensely felt values are a fundamental part of our lives. These values become part of our personalities. They are shared and reinforced by those with whom we interact.

Since values often strongly influence both attitude and behavior, they serve as a kind of personal compass for employee conduct in the workplace.

These help to determine whether an employee is passionate about work and the workplace, which in turn can lead to above-average returns, high employee satisfaction, strong team dynamics, and synergy.

Types of Values

The values that are important to people tend to affect the types of decisions they make, how they perceive their environment, and their actual behaviors.

There are two types of values;

1. Terminal Values.

2. Instrumental Values.

Learn more about types of values.

Importance of Values

Values are the enduring beliefs that a specific mode of conduct or end-state of existence is personally or socially preferable.

These are more difficult to change or alter.

As ethical conduct receives more visibility in the workplace, the importance of values is increased as a topic of discussion in management.

Values are general principles to regulate our day-to-day behavior. They not only give direction to our behavior but are also ideals and objectives in themselves.

They are the expression of the ultimate ends, goals or purposes of social action.

Our values are the basis of our judgments about what is desirable, beautiful, proper, correct, important, worthwhile and good as well as what is undesirable, ugly, incorrect, improper and bad.

Pioneer sociologist Durkheim emphasized the importance of values (though he used the term ‘morals’) in controlling disruptive individual passions.

He also stressed that values enable individuals to feel that they are part of something bigger than themselves.

E. Shils also makes the same point and calls ‘the central value system,’ (the main values of society) are seen as essential in creating conformity and order.

Indian sociologist R.K. Mukherjee writes: “By their nature, all human relations and behavior are embedded in values.

Value is the foundation for understanding the level of motivation.

It influences our perception.

Value helps to understand what ought to be or what ought not to be.

It contains interpretations of right or wrong.

These influence attitudes and behavior.

It implies that certain behaviors on outcomes are preferred over others.

These allow the members of an organization to interact harmoniously. These make it easier to reach goals that would be impossible to achieve individually.

These are goals set for achievements, and they motivate, define and color all our activities cognitive, affective add connective.

They are the guideposts of our lives, and they direct us to who we want to be.

Values and morals can not only guide but inspire and motivate a person, give energy and a zest for living and for doing something meaningful.

Actually, values are important to the study of organizational behavior because they lay the foundation for the understanding of attitudes and motivation.

Individuals enter an organization with preconceived notions of what “ought” or what “ought not” to be. Of course, these notions are not value free.

These are part of the makeup of a person. They remind us as to what is important in our lives, such as success or family, but also, by virtue of their presence, they provide contrast to what is not important.

That is not to say that, over time, values cannot change.

As we grow and change as individuals, we will begin to value different aspects of life.

If we value- family when we are younger, as our children get older, we might start to value success in business more than the family.

Sources of Values

Sources of value are a comprehensive guide to financial decision-making suitable for beginners as well as experienced practitioners.

It treats financial decision-making as both an art and a science and proposes a comprehensive approach through which companies can maximize their value.

Generally, no values tend to be relatively stable and enduring.

A significant portion of the values we hold is established in our early years from parents, teachers, friends, and others. There are so many sources from which we can acquire different values.

Sources of values are;

Family: Family is a great source of values. A child leams his first value from his family.

Friends & peers: Friends and peers play a vital role in achieving values.

Community or society: As a part of society, a person leams values from society or different groups of society.

School: As a learner, school and teachers also play a very important role in introducing values.

Media: Media such as – Print media, Electronic media also play the role of increasing values in the mind of people.

Relatives: Relative also helps to create values in the minds of people.

Organization: Different organizations and institutions also play a vital role in creating value.

Religion.

History.

Books.

Others.

Values and Beliefs

Values are socially approved desires and goals that are internalized through the process of conditioning, learning or socialization and that become subjective preferences, standards, and aspirations.

They focus on the judgment of what ought to be. This judgment can represent the specific expression of the behavior.

They are touched with moral flavor, involving an individual’s judgment of what is right, good, or desirable.

Thus-

Values provide standards of competence and morality.

These are ideas that we hold to be important.

They govern the way we behave, communicate and interact with others.

They transcend specific objects, Situations or persons.

These are relatively permanent and there is resistant to change them.

Beliefs are the convictions that we generally hold to be true, usually without actual proof or evidence.

They are often, but not always connected to religion. Religious beliefs could include a belief that Allah is alone and created the earth.

Religions other than Islam also have their own set of beliefs.

Nonreligious beliefs could include: that all people are created equal, which would guide us to treat everyone regardless of sex, race, religion, age, education, status, etc with equal respect.

Conversely, someone might believe that all people are not created equal. These are basic assumptions that we make about the world and our values stem from those beliefs.

Our values are things that we deem important and can include concepts like equality, honesty, education, effort, perseverance, loyalty, faithfulness, conservation of the environment and many, many other concepts.

Our beliefs grow from what we see, hear, experience, read and think about.

From these things, we develop an opinion that we hold to be true and unmovable at that time.

From our beliefs, We derive our values, which can either be correct or incorrect when compared with evidence, but nonetheless hold true for us! Everyone has an internalized system of beliefs that they have developed throughout their lives.

These may stem from religion or may develop separately to religion.

Beliefs are concepts that we hold to be true.

These may come from religion, but not always.

Beliefs determine our attitudes and opinions.

Values in Workplace

Values can strongly influence employee conduct in the workplace. If an employee values honesty, hard work, and discipline, for example, he will likely make an effort to exhibit those traits in the workplace.

This person may, therefore, be a more efficient employee and a more positive role model to others than an employee with opposite values.

Conflict may arise, however, if an employee realizes that his co-workers do not share his values.

For example, an employee who values hard work may dislike co-workers who are lazy or unproductive without being reprimanded.

Even so, additional conflicts can result if the employee attempts to force his own values on his co-workers.

Types of Values:

Milton Rokeach Classification:

An extensive research conducted by the noted psychologist Milton Rokeach, identifies two basic types of values.

1. Terminal Values:

A terminal value is an ultimate goal in a desired status or outcome. These lead to the ends to be achieved.

The examples of terminal values are:

Instrumental values relate to means for achieving desired ends. It is a tool for acquiring a terminal value.

The instrumental values given in this study are:

The combination of terminal and instrumental values an individual has, create an enduring cluster of values which is his value system. Thus, according to this survey, our values and value system are primarily the determinants of who and what we are as individuals.

Allport, Vernon and Lindzey Classification:

G.W. Allport, P.E. Vernon and G. Lindzey have categorized values into six major types as follows:

1. Theoretical:

Interest in the discovery of truth through reasoning and systematic thinking. The ideal theoretical man values the discovery of truth.

2. Economic:

Interest in usefulness and practicality, including the accumulation of wealth. The ideal economic man values what is useful and concerned with practical affairs.

3. Aesthetic:

Interest in beauty, form and artistic harmony. The ideal aesthetic man values artistic and aesthetic experiences in life, though he himself may not be creative.

4. Social:

Interest in people and human relationships. The ideal social man places great values on affiliation and love. He tends to be kind and sympathetic to other individuals.

5. Political:

Interest in gaining power and influencing other people. The ideal political man places great value on power.

6. Religious:

Interest in unity and understanding the cosmos as a whole. The highest value for the ideal religious man may be called unit. Different people give different importance to the above mentioned six values. Every individuals gives ranking to the values from one to six. This is very important for understanding the behaviour of the people.

Sources of Values:

1. Family Factor:

The most important factor which influences the value system of an individual is his immediate family. Some values are inculcated in A person learn and develops values from the following sources the individuals from the childhood and remain in his mind throughout his life. The child rearing practices the parents adopt shape the personality of the human being. Family is the most influential factor in the individual’s learning of social behaviour, values and norms.

2. Social Factors:

Out of all the social factors school plays the most important role in developing the value system of an individual. The child learns the basic discipline from the school. Moreover, the interactions with the teachers, classmates and other staff members in the schools and colleges make the child inculcate values important to the teaching-learning process. Other social factors which may affect values are religious economic and political institutional in the society.

3. Personal Factors:

Personal traits such as intelligence, ability, appearance and educational level of the person determine his development of values. For example, if a person is highly intelligent, he will understand the values faster. If he is highly educated, high values will be inculcated in him by his school and college.

4. Cultural Factors:

Cultural factors include everything that is learned and passed on from generation to generation. Culture includes certain beliefs and other patterns of behaviour. An individual is a participant in social culture, group culture and organisational culture. Thus, he is known as a composite of many cultural elements. Culture is based on certain implicit and explicit values. For example, whether a person is co-operative, friendly or hostile depends upon to which culture he belongs to Individual relationships are different in different cultures and within certain groups of society also. Whether, the individual values money making or doing service to the mankind again depends upon his cultural background.

5. Religious Factors:

Individuals, generally, receive strength and comfort from their religion. Religion comprises of a formal set of values which are passed on from generation to generation. Advancement in technology has under viewed faith in traditional religious beliefs and values.

6. Life Experiences:

A man learns the most from his own personal life experience. Sometimes man can learn from the experience of others also. In the long run, most of the values which influence our behaviour are validated by the satisfaction we have experienced in pursuing them. Individuals work out their values on the basis of what seems most logical to them.

Values carry importance in direct proportion to how much faith the individual has in them. He should have those values which can stand the test of reality. He should not have rigid values but flexible system which can change with the changes in the individual himself, his life situation and the socio-economic environment.

7. Role Demands:

The role demand refers to the behaviour associated with a particular position in the organisation. All organisations have some formal and some informal code of behaviour. Role demand can create problems when there is a role conflict. Thus, the managers will have to quickly learn the value system prevalent in the organisation.

If they want to move up the ladder of success. For example, if the informal code of behaviour says that the manager must mix up socially with the subordinates, he should learn to do so even though, his personal value system conflicts with his role as a manager.

8. Halo Effect:

The halo effect refers to the tendency of judging people on the’ basis of a single trait, which may be good or bad, favourable or un-favourable. Sometimes, we judge a person by one first impression about him or her. For example, if a person is kind, he will also be perceived as good, able, helpful, cheerful, nice, and intelligent and so on.

On the other hand, if a person is abrasive, he shall also be perceived as bad, awful, unkind, aggressive, harmful and wicked. Thus, what one sees in the universe depends partly on one’s inner needs. Thus, with the help of halo effect, we see certain values in others which are actually not there, but we perceive them to be there

Values and Behaviour:

Values remain embedded in our minds since childhood. As children, we are taught what is good, bad, right or wrong by parents, educational institutions and social groups. These values become part of our behaviour and personality when we grow up and are transmitted to future generations, thus, creating a healthy society.

In the business world, every person, whether manager or non-manager, whose behaviour is value-based shapes the culture of the organisation. Organisation is a group of people responsible for its formation, survival and growth. How good an organisation is depends upon how good are the people managing it.

Good people are those whose actions and behaviour are based on a sound value system and ethical principles. Value system is a combination of all values that an individual should have. Values lay foundation for organisational success.

They develop the attitudes, perceptions and motives that shape the behaviour of people working in the organisation. This develops a sound organisation culture that promotes image of the organisation in the society. Values in individuals develop a value-based organisation, society, nation and the world as a whole.

Values in Business Management:

There are many ways in which the basic human values – truth, righteousness, peace, love and non-violence can be practiced in the day-to-day conduct of business. There are different aspects of management such as marketing, finance, industrial relations, etc., but the most important aspect is “man-management.” Each country has its own historical and cultural background and Indian managers should not mechanically copy practices from abroad but should keep in mind the Indian milieu and our national ethos.

Values of Managers:

Management is a systematic way of doing work in any field. Its task is to make people capable of joint performance, to make their weaknesses irrelevant and convert them into strengths. It strikes harmony in working equilibrium, in thoughts and actions, goals and achievements, plans and performance, products and markets.

Lack of management will cause disorder, confusion, wastage, delay, destruction and even depression. Successful management means managing men, money and material in the best possible way according to circumstances and environment.

Most of the Indian enterprises today face conflicts, tensions, low efficiency and productivity, absence of motivation, lack of work culture, etc. This is perhaps due to the reason that managers are moving away from the concept of values and ethics.

The lure for maximizing profits is deviating them from the value-based managerial behaviour. There is need for managers to develop a set of values and beliefs that will help them attain the ultimate goals of profits, survival and growth.

They need to develop the following values:

1. Optimum utilization of resources:

The first lesson in the management science is to choose wisely and utilize optimally the scarce resources to succeed in business venture.

2. Attitude towards work:

Managers have to develop visionary perspective in their work. They have to develop a sense of larger vision in their work for the common good.

3. Work commitment:

Managers have to work with dedication. Dedicated work means ‘work for the sake of work’. Though results are important, performance should not always be based on expected benefits. They should focus on the quality of performance. The best means for effective work performance is to become the work itself. Attaining the state of nishkama karma is the right attitude to work because it prevents ego and the mind from thinking about future gains or losses.

Managers should renounce egoism and promote team work, dignity, sharing, cooperation, harmony, trust, sacrificing lower needs for higher goals, seeing others in you and yourself in others etc. The work must be done with detachment. De-personified intelligence is best suited for those who sincerely believe in the supremacy of organisational goals as compared to narrow personal success and achievement.

Value based managers do the following to discharge their duties well:

a. Cultivate sound philosophy of life.

b. Identify with inner core of self-sufficiency.

c. Strive for excellence through ‘Work is Worship’.

d. Build internal integrated force to face contrary impulses and emotions.

e. Pursue ethico-moral righteousness.

4. Vision:

Managers must have a long-term vision. The visionary manager must be practical, dynamic and capable of translating dreams into reality. This dynamism and strength of a true leader flows from an inspired and spontaneous motivation to help others.

Vision includes the following:

(a) Forming a vision and planning the strategy to realize such vision.

(b) Cultivating the art of leadership.

(c) Establishing institutional excellence and building an innovative organization.

(d) Developing human resources.

(e) Team building and teamwork.

(f) Delegation, motivation and communication.

(g) Reviewing performance and taking corrective steps whenever called for.

The management gurus like Lord Krishna, Swami Vivekananda and Peter F. Drucker assert that managers should develop the following values:

1. Move from the state of inertia to the state of righteous action.

2. Move from the state of faithlessness to the state of faith and self-confidence.

3. Their actions should benefit not only them but the society at large.

4. Move from unethical actions to ethical actions.

5. Move from untruth to truth.

6. ‘No doer of good ever ends in misery’. Good actions always produce good results and evil actions produce evil results.

7. Take the best from the western models of efficiency, dynamism and excellence and tune them to Indian conditions.

Business Ethics

MEANING AND DEFINITION OF BUSINESS ETHICS

In the foregoing discussion, we have seen that ethics is concerned,with moral values or acts which a man is bound to do. Business ethics, therefore, refer to the acts, which a businessman ought to do. But such a simple definition is not sufficient to satisfy intellectuals. Hence, we shall reproduce some of the definitions developed by learned scholars.

Definition of T.M. Garrett:

Business ethics is a study of the moral rightness or wrongness of the acts involved in the production, distribution and exchange of economic goods and services.

Definition of Thomas J. Adams:

Business ethics deals with the values of what is right and wrong, good and bad and moral and immoral in business relationship.

The term business relationship is used here in a broader sense. It includes relationship with its employees, consumers, competitors, Governments, and finally the society at large.

WHAT IS ETHICAL FOR A BUSINESSMAN?

It is simply stated that a businessman should strictly adhere to the code of business ethics. But there is no comprehensive list to specify those which are ethical and which are unethical? This question poses a serious problem to the businessman acting in a particular business situation. When there are specific legal principles, no complication will arise. He should strictly follow the laws though it is unethical in his opinion.

A businessman should not try to violate the legal provisions. If he feels that the law is unfair or unjust, he should seek to change them by employing democratic devices. He should gather public opinion against such unfair legislation and persuade the Government to change or amend it.

But in the absence of well-defined law, the businessman should face a problem in deciding what is ethical or unethical because of contradictory moral values. His act may be ethical and

justifiable in a given situation. But it may do harm to a few. Those affected by his acts will consider them as unethical. Thus, drawing a line between right and wrong, black and white i.e. ethical and unethical practices is not an easy matter.

Due to this ambiguity, decisions with ethical overturns have become more complex. Arriving at a compromising solution suitable to conflicting interests is not so easy to a practical manager. Hence, there is a tendency to over simplify the matters of ethical problems in business organizations.

WHY BUSINESS ETHICS?

Though it cannot be clearly decided as to what is ethical and unethical for all, we cannot presume that businessman need not follow the ethical standards. Ethical considerations in business are highly important to the managers as individuals. The need for ethics in business had been a matter of great concern even in the ancient times.

The businessmen must render justice to various parties – the suppliers and the customers. They should be just and honest. Truthfulness should be the basic theme of their life. They maintain a long chain of honest tradition. This being the case the relevance of ethical code and its importance in business world is all the greater today in the context of growing industrialization and influence of the business on the society.

Today business has come to stay as dominant socioeconomic political institution next only to Government. Hence, ethical questions have become a primary concern of business managers. Besides, there are also a large number of factors, which necessitate the strict adherence of ethical behavior by the business community.

FACTORS WHICH NECESSITATE ETHICAL BEHAVIOR IN BUSINESS

1. Ours is an industrial society and its values tend to become those of the entire culture.

2. There is a growing awareness among the public. The society insists the business leaders to shoulder the responsibility for maintaining their welfare.

3. If an organization fails to live upon the expectations of the society, it will lose its market share, its prestige and reputation.

4. Unethical practices shall lead to Government control ultimately through legislation. Hence, prevention is better than cure.

Thus, not even for the society’s sake, but at least for his sake, the businessman, should adhere strictly to the ethical norms and the code of conduct.

NEED FOR BUSINESS ETHICS

It is necessary to observe business ethics for the following reasons:

usiness ethics

1. Survival of the Business Unit

Unethical practices of businessmen will lead to the closure of business unit. The closure of a business unit does not only create problems to business but also to employees and the society in general. Businessmen do not maximize the profit at the cost of existence of a business unit.

The behavior of a businessman is affected by some of the factors such as leadership qualities, integrity, knowledge, skills, influence and exercising power. Businessmen should protect their units in all respects.

2. Growth of Business Unit

Business ethics ensure the growth of a business. Whenever a businessman observes ethics strictly, definitely the particular business unit will get developed. A business could not be run in such a manner, which is detrimental to the interest of society or business itself. So there should be some business ethics for the growth of a business.

3. Earning Goodwill

If business ethics are properly followed by a business, automatically that particular business unit earns a good name among the public.

4. Improving the Confidence

Business ethics are necessary to improve the confidence of the customers, employees and the like. If confidence is infused, customers and employees will popularize the name of the particular business unit.

5. Maintaining Inter-relationship

No business functions independently. Each business has close relationship with another business even though the nature and size of the other business differs. It is expected that each business unit should have a smooth relationship with others. The inter-relationship of business is maintained by adopting business ethics.

6. Solving Social Problems

If a businessman observes ethics in his business, the public will not have any difficulty in getting their wants fulfilled. There is no bargaining between the businessman and public. There is a fair treatment of an employee by him. This will avoid social problems like strike, lockout etc.

30 Important principles of Business Ethics

30 IMPORTANT PRINCIPLES OF BUSINESS ETHICS

Some of the basic and important principles of business ethics are as follows:

1. Service motive should be preferred rather than profit motive.

2. There should not be any discrimination as to the rich, the poor, the high, the low, the caste, the religion etc. against any particular group of people.

3. Maximum satisfaction should be available to consumers.

4. Enough consideration should be given for clean environment.

5. Human feelings should be given importance.

6. Scarce resources should not be wasted.

7. Business must be a dynamic one.

8. It should provide quality products at reasonable price.

9. It must assist in raising the standard of living.

10. Competition should be healthy.

11. There should be job security to employees.

12. Businessman must pay fair wages.

13. Better working conditions should be provided.

14. Efficient employees should be properly motivated and recognized.

15. Employees should be allowed to participate in management.

16. Monetary and non-monetary incentives must be given to employees.

17. Businessman must pay taxes and fulfill other obligations promptly.

18. It must avoid unfair trade practices such as hoarding, black-marketing etc.

19. Businessman should not form cartel agreements to control production, price etc.

20. He must disclose all relevant information to those persons who require the same.

21. He must prepare genuine books of accounts and present before all authorized persons as and when required by them.

22. He should protect the interests of its members at the time of amalgamation, absorption etc.

23. He should be ready to extend mutual co-operation and mutual help.

24. It should work for the development of the nation.

25. He should follow proper communication system at all levels.

26. He should not make promises that could not be fulfilled.

27. Its assets should not be utilized for personal use.

28. Employees should be allowed to share their opinion in the work place.

29. It should follow proper personnel policy as to promotion, transfer etc.

30. He should not involve in politics

Nature or Features of Business Ethics-

The features of business ethics include various points like ethical values, relative terms, the interest of society, etc.

The nature of business ethics is also known as features of business ethics. It includes various points related to their ethics of business which is related to the corporate sector…

So, the nature of business ethics arises two types of questions but the answer to both questions are the same and the questions are:

1. Discuss the nature of business ethics.2. Explain the nature of business ethics.

1. Ethical Values:

Business ethics is totally focused on their morality factor because, in today’s world, community firms play a vital role in society and its actions are directly affected by the welfare and well-being of the society. Business affects society in terms of which type of products it supplies and produces.

So, that is the reason, it is mandatory that the business community conduct its activities with self-check, self-inspection, self-control,  self-sacrifices and also keeping always in mind the ethical values of community and their society.

2. Relative Term:

Ethics is a term of relation with the concept of morality and immorality. It differs from an individual to an individual, society to society, culture to culture, country to country. It helps to define the moral and immoral term of business ethics.

3. The interest of Society:

In this features of business ethics, Business ethics said that business should first do excellent to society and community and then to itself because social welfare is also the objective of a business.

Business is an important institution and they have various social responsibilities to protect the category of all formal or informal groups which are directly or indirectly related to the organization like employees, shareholders, consumers, and their stakeholders also to contribute to the growth of the business.

4. Business Social Relationship:

Business ethics helps to set or formulate the terms and standards to understand social affection or relationship of business. It describes what community or society expects from business and what it presumes about the business.

5. Provides the framework:

Business is an institution which includes various social and economic rules and regulations. Business is always trying to restrict its activities (formal or informal) within the limits of the social, cultural, regional, religion, and economic environment.

6. Facilitates the protection of social groups:

Business ethics is a type of code of conduct which includes the guidance of norms and behavior of an individual i.e., how to behave yourself, how to follow the norms, how to improve yourself, and so on. It gives protection to consumers and other social members such as shareholders, society, and employees.

7. Not against profit-making:

Business ethics is not in against real or fair profit making. However, it is totally against those profits which are earned by cheating and exploiting their customers, employees, and investors. It helps to support business activities but by accurate or fair means and not through illegal activities.

8. Needs willing acceptance:

Business ethics cannot be forced by law and other aspects. It must be accepted as self-indulgence by any businessman. It should come from the inner part of the soul. Businessman follows the guidelines of ethical trade activities by own and not by force of any law.

Characteristics of Business Ethics-

The characteristics of business ethics explain the various points like stakeholder balance, mission, and vision driven, process integrity, and so on.

The characteristics of ethics in business include various points such as:-

1.   Stakeholder Balance:

This is the first characteristics of business ethics and it means that the business policies follow the two basic points like protect the interest of shareholder values or balancing the needs of multiple stakeholders.

Stakeholders include inner and outer business peoples such as employees, the local community, and the customers.

2. Mission and Vision Driven:

In this characteritics of business ethics, ethical business is commonly focused on something more than profit, and those things are values and beliefs. When these values are supported by management and valued by individuals, the workforce becomes more effective and united by common goals rather than simply co-existing to pursue profits.

These type of values and beliefs are performed better for their employees and their relationship with the public and its market.

3. Process Integrity:

This is the third characteritics of business ethics and it means that the organizational culture is the product of hundreds of various processes that take place on a regular basis. These processes can be healthy or unhealthy, depending upon various factors effective to the process.

For Example, ‘healthy’ competition is a formulation of success, equal treatment by management and distribution of foils. Unhealthy competition is totally different, they have misaligned goals and unequal treatment of the better performers.

So, that is the reason, human resource managers help to review the integral processes and protect them with transparency.

4. Long-term Perspective:

In this characteristics of business ethics, companies follow the long term process with their ethical values and beliefs. This long term view should not only relate to wealth or profits but it also relates to the community and their standards. It helps to reflect the self-reflection policy so that the employees of an organization can freely take decisions and improve themselves also.

Thinking in the long term perspective also allow businesses to make the plan effective for their future growth and developments.

Amongst a host of ethical activities that managers can perform, a study conducted by Barry Posner and Warren Schmidt highlights the following ethical activities observed by managers:

1. The foremost goal of managers is to make their organizations effective.

2. Profit maximisation and stakeholders’ interests were not the central goals of the managers studied.

3. Attending to customers was seen as important.

4. Integrity was the characteristic most highly rated by managers at all levels.

5. Pressure to conform to organisational standards was seen as high.

6. Spouses are important in helping their mates grapple with ethical dilemmas.

7. Most managers seek the advice of others in handling ethical dilemmas.

Types of Management Ethics:

Three types of management ethics or standards of conduct are identified by Archie B. Carroll:

1. Immoral management:

It implies lack of ethical practices followed by managers. Managers want to maximise profits even if it is at the cost of legal standards or concern for employees.

2. Moral management:

According to moral management ethics, managers aim to maximise profits within the confines of ethical values and principles. They conform to professional and legal standards of conduct. The guiding principle in moral management ethics is “Is this action, decision, or behaviour fair to us and all parties involved?”

3. Amoral management:

This type of management ethics lies between moral and immoral management ethics. Managers respond to personal and legal ethics only if they are required to do so; otherwise there is lack of ethical perception and awareness.

There are two types of amoral management:

(a) Intentional:

Managers deliberately avoid ethical practices in business decisions because they think ethics should be followed in non-business activities.

(b) Unintentional:

Managers do not deliberately avoid ethical practices but unintentionally they make decisions whose moral implications are not taken into consideration.

Guidelines for Ethical Behaviour:

Though every individual and group has a set of ethical values, the following guidelines are prescribed by James O’Toole in this regard:

1. Obey the law:

Obeying legal practices of the country is conforming to ethical values.

2. Tell the truth:

Disclosing fair accounting results to concerned parties and telling the truth is ethical behaviour of managers.

3. Respect for people:

Ethics requires managers to respect people who contact them.

4. The golden rule:

The golden business principle is ‘Treat others as you would want to be treated’. This will always result in ethical behaviour.

5. Above all, do no harm:

Even if law does not prohibit use of chemicals in producing certain products, managers should avoid them if they are environment pollutants.

6. Practice participation – not paternalism:

Managers should not decide on their own what is good or bad for the stakeholders. They should assess their needs, analyse them in the light of business needs and integrate the two by allowing the stakeholders to participate in the decision-making processes.

7. Act when you have responsibility:

Actions which cannot be delegated and have to be taken by managers only (given their competence and skill) must be responsibly taken by them for the benefit of the organisation and the stakeholders.

Approaches to Management Ethics:

There are three approaches to management ethics:

1. Utilitarian approach:

In this approach, managers analyse the effects of decisions on people affected by these decisions. The action rather than the motive behind the action is the focus of this approach. Positive and negative results are weighed and managerial actions are justified if positive effects outweigh the negative effects. Pollution standards and analysing the impact of pollution on society is management ethics code under utilitarian approach.

2. Moral rights approach:

In this approach, managers follow ethical code which takes care of fundamental and moral rights of human beings; the right to speech, right to life and safety, right to express feelings etc. In the context of business organisations, managers disclose information in the annual reports necessary for welfare of the people concerned. The nature, timing and validity of information is taken into account while reporting information in the annual reports.

3. Social justice approach:

According to this approach, managers’ actions are fair, impartial and equitable to all individuals and groups. Employees are not distinguished on the basis of caste, religion, race or gender though distinction on the basis of abilities or production is justified. For example, all employees, males or females with same skills should be treated at par but it is justified to treat employees who produce more differently from those who produce less.

Need for Business Ethics:

Business ethics is important for the following reasons:

1. Business organisations are economic and social institutions that serve customers’ needs by supplying them right goods at the right place, time and price. This is possible if the institutions engage in ethical practices.

2. Business ethics help in long-run survival of the firms. Unethical practices like paying low wages to workers, providing poor working conditions, lack of health and safety measures for employees, selling smuggled or adulterated goods, tax evasion etc. can increase short-run profits but endanger their long-run survival. It is important, therefore, for firms to suffer short-term losses but fulfill ethical social obligations to secure their long-term future.

3. Business houses operate in the social environment and use resources provided by the society. They are, therefore, morally and socially committed to look after the interests of society by adopting ethical business practices.

4. Ethical business activities improve company’s image and give it edge over competitors to promote sales and profits.

5. Legal framework of a country also enforces ethical practices. Under Consumer Protection Act, for example, consumers can complain against unethical business practices. Labour laws protect the interests of workers against unethical practices. Legal framework of the country, therefore, promotes ethical business behaviour. Business houses want to avoid Government intervention and, therefore, follow ethical practices.

Barriers to Management Ethics:

James A. Waters describe three “organisational blocks” of management ethics:

1. Chain of command:

If employees know that superiors are not following ethical behaviour, they hesitate in reporting the matter up the hierarchy for the fear of being misunderstood and penalized. The chain of command is, thus, a barrier to reporting unethical activities of superiors.

2. Group membership:

Informal groups lead to group code of ethics. Group members are strongly bonded by their loyalty and respect for each other and unethical behaviour of any member of the group is generally ignored by the rest.

3. Ambiguous priorities:

When policies are unclear and ambiguous, employees’ behaviour cannot be guided in a unified direction. It is difficult to understand what is ethical and what is unethical.

Solutions to Barriers:

The following measures can improve the climate for ethical behaviour:

1. Organisational objectives and policies should be clear so that every member works towards these goals ethically.

2. The behaviour of top managers is followed by others in the organisation. Ethical actions of top managers promote ethical behaviour throughout the organisation.

3. Imposing penalties and threats for not conforming to ethical behaviour can reduce unethical activities in the organisation. Formal procedures of lodging complaints help subordinates report unethical behaviour of superiors to the concerned committees.

4. Educational institutions also offer courses and training in business ethics to develop conscientious managers who observe ethical behaviour.