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VALUES & ETHICSOF
PROFESSION & BUSINESS
By
Prof. S.K. SarangiB. Tech. (Hons-IIT), PGDM, C. Engg., M. Phil. (Mgt.)
MACS (USA), MIMA, AMT (AIMA), FIE, FIV
Head of Management Sciences & Vice PrincipalB.P. Poddar Institute of Management and Technology,
Saltlake, Kolkata, India
2nd Edition
VALVALVALVALVALUES & ETHICSUES & ETHICSUES & ETHICSUES & ETHICSUES & ETHICSOFOFOFOFOF
PROFESSION & BUSINESSPROFESSION & BUSINESSPROFESSION & BUSINESSPROFESSION & BUSINESSPROFESSION & BUSINESS
Asian Books Private Limited7/28, Mahavir Lane, Vardan House, Ansari Road,
Daryaganj, New Delhi - 110 002.
Concepts & CasesA Textbook suitable for MBA, BCA, MCA, B.Tech.
PGDBM and MBBS courses of all Indian Universities includingWB Technical University and UP Technical University
Values and Ethics of Profession and BusinessProf. S. K. Sarangi
Asian Books Private LimitedRegistered and Editorial Office7/28, Mahavir Lane, Vardan House, Ansari Road, Daryaganj, New Delhi-110 002Ph.: 011-23282098, 23271887, Fax: 011-23262021E-mail: [email protected], [email protected]: http://www.asianbooksindia.com
© Author
First Edition 2008Second Edition 2013
ISBN 978-81-8412-191-9All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in anyform or by any means, electronic, mechanical, photocopying, recording and/or otherwise, without the prior writtenpermission of the publisher.Published by Kamal Jagasia for Asian Books Pvt. Ltd., 7/28, Mahavir Lane,
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Dedicated to the
DIVINE MOTHER
Preface to the 2nd Edition
1990s is called the “Three E decade” with the three Es standing for Economy, Environment and Ethics.Population explosion, fast pace of industrialisation and large disparity in the per capital income in India are
some of the causes for the degradation in value systems and ethical moral standards.The fast pace of economic development has also given rise to a dark phase consisting of environmental
pollution and erosion of values and ethics. Degradation in value and ethics has resulted in corruption in allwalks of life in India.
India has witnessed a number of scandals since the independence. Starting with the Jeep scandals in 1948and the HG Mudgal case in 1950, a series of scandals like The Mundhra deal, the Pratap Singh Kairon’s mis-adventure in 1964, imposition of Emergency in 1977, the money raising exercise for the party during IndiraGandhi’s period, the HDW deal with Germany for submarines in 1981, the Bofors sandal in 1987, the HarshadMehta’s scam of 1992, Jain Hawala case in 1995 and the Ketan Parekh’s stock market and the UTI scandal at theend of the last century. The Telgi Stamp Scandal, The Godhra train carnage and the subsequent worst commu-nal riot in Gujarat in the new millennium including Satyam Computer scandal in 2008 and Telecom 2G scandal in2010 are just some glaring examples of degeneration of values and unethical practices in society, public andhigh places in political field.
Dr. S. Radhakrishnan, the noted philosopher and the former President of India had said, “Unless we destroycorruption in high places, root out every trace of nepotism, greed for power, profiteering and black marketingwhich have spoiled the good name of the country in recent times, we will not be able to raise the standards ofefficiency in administration as well as production and distribution of goods of life.”
One of the unofficial estimates of IMF stated that the Indians have stashed away at least hundred billiondollars in foreign banks, who have supplied the name and such account holders to Government of Indiarecently.
It is indeed a matter of shame that the Transparency International has ranked India as one of the tenmost corrupt countries in the world.
In the above backdrop, the endevaours of the UGC and AICTE in introducing one full paper each on “Valueand Ethics of Profession” for BCA and MCA & Engineering Courses and “Values and Ethics in Business”for MBA curriculum are timely and praiseworthy. The book also contains the syllabus of “Value and Ethics” ofUP Technical University.
In fact, many universities abroad had made it mandatory the study of Values and Ethics in the Undergradu-ate and Postgraduate studies since 1970. This Second Edition of the book, has been improved in contents andis recommended for BCA, MCA and Engg. courses and that for MBA.
This book covers the entire syllabi for BCA, MCA and Engg. courses including that for MBA for all IndianUniversities including W.B. Technical University and U.P. Technical University.
The students in Management, Computer Application & Engg. courses will find the book very useful arefriendly since it is written in simple language and style and with large number of examples.
The book contains nineteen chapters. Most chapters deal with Values and Ethics for both profession andbusiness.
Some chapters specifically deal with important topics of current interest as on the following:• Features of Values and attitudes including social changes necessary for the effective national integra-
tion.• Ethical issues relating to Corporate and Political governance recommending measures for improving
interrelationship between the Governments at the centre and the state.• Ethical codes on social responsibilities of management and business.• The United Nation’s Global Compact including its salient principles.• Macro economic theories on Utilitarianism and principles of distributive justice.• Views of great personalities like Swami Viveknanda, Mahatma Gandhi, Sri Aurobindo and Rabindranath
Tagore on Values and Ethics.• Current state of environmental pollution and measure to minimise the same.• GHG Pollution & The Climate Refugees.• Profession and Business based on value systems and ethical codes.• Code of Medical Ethics.
A “Question Bank” provided at the end of the book would help students prepare for the examinations.My thanks are for the management and staff of Asian Books Pvt. Ltd. for bringing out the Second Edition of
the book.
Kolkata Prof. S.K. SarangiDated : 25.2.2013
(viii) PREFACE
CHAPTER–1: VALUES AND ETHICS .................................................................................... 1-161. Introduction ....................................................................................................................................... 12. Significance of the Study of Values and Ethics by Management Students ....................................... 13. Ethics ................................................................................................................................................. 24. Rules of Proper Conduct at Workplace Especially at Office ............................................................... 65. Ethical Foundations of Business ....................................................................................................... 76. Personal Values and Business Ethics ................................................................................................. 97. Values ................................................................................................................................................ 108. Value—Meaning and Concept .......................................................................................................... 129. Values and Organisations ................................................................................................................. 13
10. Companies as Social Entities ............................................................................................................. 1311. Ethical Foundation of Business ........................................................................................................ 1412. Moral Issues in Business .................................................................................................................. 1513. Justice and Economic Systems ......................................................................................................... 1514. Probable Questions ........................................................................................................................... 16
CHAPTER–2: SCIENCE, TECHNOLOGY AND ENGINEERING ............................................ 17-241. Science, Technology and Engineering .............................................................................................. 172. Management as Profession ............................................................................................................... 193. Scientific Management and Management Specialisation .................................................................. 194. Engineering Profession and Ethics ................................................................................................... 205. Professional Ethics and Codes of Professional Ethics ...................................................................... 206. Profession such as Design, Production, Information, Engineering and Marketing and related Ethical
Codes ................................................................................................................................................ 217. Marketing and Professional Ethics ................................................................................................... 228. Appropriate Technology Movement of Schumacher and Later Developments ................................ 239. Probable Questions ........................................................................................................................... 24
CHAPTER–3: ENVIRONMENT AND POLLUTION ............................................................... 25-331. Environment ...................................................................................................................................... 252. Industrial Establishments and Pollution ............................................................................................ 273. Basic indicators of Economic Development and Natural Resources. ................................................ 284. Natural Resources and their Depletion ............................................................................................. 295. Development of Resources for the Benefit of Society at large and Betterment of Quality of Life ..... 296. Reports of Club of Rome ................................................................................................................... 317. Ethics of Conserving Depletable Resources and Environmental Ethics ........................................... 32
Contents
(x) VALUES AND ETHICS OF PROFESSION AND BUSINESS
8. Social Ecology ................................................................................................................................... 329. Probable Questions ........................................................................................................................... 33
CHAPTER–4: ECONOMIC GROWTH AND DEVELOPMENT ............................................... 34-421. Limits of Growth ................................................................................................................................ 342. Economic Development .................................................................................................................... 353. Sustainable Development ................................................................................................................. 364. Environmental Regulations and Eco-friendly Technologies ............................................................. 375. Environmental Ethics ........................................................................................................................ 416. Probable Questions ........................................................................................................................... 42
CHAPTER–5: ENVIRONMENT AND STRATEGIC MANAGEMENT ...................................... 43-541. Introduction and Status of Environmental Quality ........................................................................... 432. Pollution–A Social Economic Problem. Optimum Pollution Level ..................................................... 433. Finite World Cannot Support Infinite Growth ................................................................................... 444. Strategic Decision For Utilisation of Industrial Wastes .................................................................... 445. Environmental Pollution Control - Air, Water, Noise Pollution .......................................................... 476. Economy and Environment ............................................................................................................... 477. Energy–Environment Nexus .............................................................................................................. 478. Recommendation for use of Coal Bed Methane (CBM) and Natural Gas as Energy Sources ........... 489. Non-Conventional Renewable Energy Sources ................................................................................ 49
10. Indian Culture and Preservation of Ecological Balance .................................................................... 5011. Environment, Society and the Nation ............................................................................................... 5012. GHG Pollution and The Climate Refugees ......................................................................................... 5113. Future Potential of Renewable Energy in India ................................................................................. 5214. Probable Questions ........................................................................................................................... 54
CHAPTER–6: TECHNOLOGY, DEVELOPMENT AND HUMAN CENTRED TECHNOLOGY .. 55-771. Technology and Economic Growth ................................................................................................... 552. Growth Accounting–Technology Vs Capital .................................................................................... 593. Economic Development .................................................................................................................... 604. Economic Growth for Developing Countries ..................................................................................... 615. Technology Life Cycle (TLC) ............................................................................................................ 646. Technology Life Cycle, Product Obsolescence and GE Matrix ......................................................... 657. Three Areas of Technology .............................................................................................................. 66
Part-II1. Technology and Developing Nations ............................................................................................... 682. Technology Assessment Impact Analysis ........................................................................................ 703. Defining Technology and Technology Transfer ............................................................................... 704. Technology policy statement of GOI ................................................................................................ 715. India and Technology Requirement .................................................................................................. 716. Mechanisms of Technology Transfer ............................................................................................... 727. Technology Transfer Process ........................................................................................................... 738. Problem of Technology Transfers ..................................................................................................... 73
CONTENTS (xi)
Part-III1. Human Operators in Engineering Projects and Industries ................................................................ 752. Problems of Man-Machine Interactions ............................................................................................ 753. Impact of Assembly Line and Automations ...................................................................................... 764. Human Centred Technology ............................................................................................................. 775. Probable Questions ........................................................................................................................... 77
CHAPTER–7: BUSINESS ETHICS ....................................................................................... 78-961. Business and Factors Influencing Business ..................................................................................... 782. Business Ethics ................................................................................................................................. 793. Approaches to Business Ethics ........................................................................................................ 804. Ethical Standards and Business Ethics ............................................................................................. 805. Ethics ................................................................................................................................................ 826. Conflicts Between Business demands and Professional ideals ........................................................ 857. Whistle Blowing and Beyond ........................................................................................................... 878. Recommendations—Ethics Hot Line ................................................................................................ 899. Moral Principles for Business ........................................................................................................... 89
10. Seven general Moral Principles for A Manager ................................................................................. 9011. How to Improve The Organisation’s Ethical Climate ......................................................................... 9112. Moral Duty, Rights and Justice ......................................................................................................... 9113. Building a Good Society .................................................................................................................... 9314. Conflicts and Management of Conflicts ............................................................................................ 9415. Indians as Successful Business Leaders .......................................................................................... 9616. Probable Questions ........................................................................................................................... 96
CHAPTER–8: PROFESSION AND HUMAN VALUE ............................................................97-1071. Value Crisis In Contemporary Society ............................................................................................... 972. Nature of Values ................................................................................................................................ 983. Value Spectrum of A Good Life .......................................................................................................... 994. Psychological Values, Integrated Personality, Mental Health ........................................................... 995. Social Values ................................................................................................................................... 1016. Indian Constitution and Societal Values ......................................................................................... 1017. The Modern Search for a Good Society .......................................................................................... 1038. Work Culture and the Viewpoints of Workers and Managers ......................................................... 1039. Corporate Culture: Both Adaptive and Unadaptive ........................................................................ 105
10. Types of Corporate Cultures ........................................................................................................... 10611. Culture Gap— Acquisition and Merger .......................................................................................... 10612. Socio-Cultural Environment ............................................................................................................ 10713. Probable Questions ......................................................................................................................... 107
CHAPTER–9: VALUES: PROFESSION AND HUMAN ...................................................... 108-1201. Introduction .................................................................................................................................... 1082. Religion, Morality and Moral Values ............................................................................................... 1093. Character and Moral Development ................................................................................................. 1094. Culture and Socialisation ................................................................................................................ 1105. Aesthetic Values, Perception and Enjoyment of Beauty, Simplicity, Clarity .................................... 111
(xii) VALUES AND ETHICS OF PROFESSION AND BUSINESS
6. Nature of Moral Judgements ........................................................................................................... 1127. Ethics of Responsibility .................................................................................................................. 1138. Moral and Ethical Values ................................................................................................................. 1149. Aesthetic Values – Case Study ....................................................................................................... 115
10. Competition and Fair Practices ........................................................................................................ 11511. Quality and Price Issues in the Context of Consumerism ................................................................ 11612. Legal Parameters Consumer Protection ACT .................................................................................. 11713. Law and Ethics ................................................................................................................................ 11814. Corporate Houses, Strategic Management ..................................................................................... 11815. Cultural Relativism .......................................................................................................................... 11916. Probable Questions ......................................................................................................................... 120
CHAPTER–10: GROWTH AND DEVELOPMENT .............................................................. 121-1271. Human Growth and Development ................................................................................................... 1212. Factors Affecting Physical Growth and Development .................................................................... 1223. Mental Development and Factors Affecting Mental Growth and Development ............................. 1234. Emotional Development and Emotional Maturity ........................................................................... 1235. Moral Development or Development of Character .......................................................................... 1246. Social Development and Factors Affecting Social Development .................................................... 1247. The Main Areas of Adjustment ....................................................................................................... 127
CHAPTER–11: SECULARISM, VALUES AND ATTITUDES .............................................. 128-1301. Secularism ....................................................................................................................................... 1282. Indian Society, Values and Attitudes .............................................................................................. 1283. Social Change and National Integration .......................................................................................... 1294. Probable questions ......................................................................................................................... 130
CHAPTER–12: MANAGEMENT OF PERSONAL LIFE–ETHICAL CODES ........................ 131-1391. Introduction .................................................................................................................................... 1312. Professional Life vs Family Life ...................................................................................................... 1313. Adjustment Process ........................................................................................................................ 1324. Ethics and Happy Home .................................................................................................................. 1335. Household Management ................................................................................................................. 1346. Strategy for Managing Stress ......................................................................................................... 1357. Managing Cross Cultures ............................................................................................................... 1378. Need for Value Education ................................................................................................................ 1389. Religious Morality ........................................................................................................................... 139
10. Probable Questions ......................................................................................................................... 139
CHAPTER–13: ETHICS AND VALUES OF CORPORATE GOVERNANCE ....................... 140-1511. Corporate Governance and Ethics ................................................................................................... 1402. Corporate Governance and Values .................................................................................................. 1423. Corporate Policy of Ethics ............................................................................................................... 1424. Functional Area of Ethics ................................................................................................................ 1435. Managing Ethics ............................................................................................................................. 1436. Ethics Committees ........................................................................................................................... 145
CONTENTS (xiii)
7. Ethics Hotlines ................................................................................................................................ 1458. Ethics and Law ................................................................................................................................ 1459. Corporate Culture and Ethical Issues .............................................................................................. 145
10. Improving Corporate Ethical Decision Making—Difficulties in Decision Making .......................... 14611. Recommendation for Making Corporate Ethical Decision ............................................................... 14612. Corporate Culture ............................................................................................................................ 14713. Corporate Politics and Use of Power ............................................................................................... 14714. Globalistion and Global Compact .................................................................................................... 14815. Ethics of corporate Governance, Examples Tata Finance and Britannia Industries Ltd. .................. 14816. Ethics of Political Governance, Examples: The Centeral and State Governments in India ............... 14917. The Cadbury Code of Best Practice in the Corporate Governance ................................................. 15018. Probable Questions ......................................................................................................................... 151
CHAPTER–14: VALUES, ETHICS AND HUMANISM ........................................................ 152-159Part—I: Values & Ethics
1. Values and Ethics According to Swami Vivekananda ...................................................................... 1522. Mahatma Gandhi ............................................................................................................................. 1533. Rabindranath Tagore ....................................................................................................................... 1534. Sri Aurobindo .................................................................................................................................. 154
Part—II1. Humanism ....................................................................................................................................... 1552. Practising Religion—The Various Advantages ............................................................................... 1563. Cultivation of Values ....................................................................................................................... 1564. Religions and Views about Business .............................................................................................. 1565. Science and Religion ....................................................................................................................... 1576. Culture ............................................................................................................................................. 1587. Probable Questions ......................................................................................................................... 159
CHAPTER–15: INDIAN CULTURE AND VALUES ............................................................. 160-170Part—I
1. Indian Culture and Values ............................................................................................................... 1602. Fundamental Vlues of Indian Culture .............................................................................................. 1603. The Ethical Values ........................................................................................................................... 1614. Virtues and Vice-Categories ............................................................................................................ 1615. Synthesis of Culture ........................................................................................................................ 1626. Cultural Relativism .......................................................................................................................... 1627. Business Organisation’s Culture and Characteristics ..................................................................... 163
Part—II8. Religions–Unity of All Religions ..................................................................................................... 1679. Religions of the Spirit ...................................................................................................................... 167
10. Business Ethics and Codes of Moral Conducts for Religions ........................................................ 16811. The Upanishads .............................................................................................................................. 17012. The Bhagvad Gita ........................................................................................................................... 17013. Probable Questions ......................................................................................................................... 170
(xiv) VALUES AND ETHICS OF PROFESSION AND BUSINESS
CHAPTER–16: SOCIAL RESPONSIBILITIES OF BUSINESS AND MANAGEMENT ........ 171-1831. Social Responsibilities of Business ................................................................................................ 1712. Management and Business ............................................................................................................. 1723. Examples of Social Responsibilities ................................................................................................ 1724. Social Audit ..................................................................................................................................... 1735. Social Responsibility of Management ............................................................................................. 1746. Social Aspects of Marketing ........................................................................................................... 1767. Principles of Welfare Economics and Social Control of Business in India ...................................... 1788. Social Control of Business in India and Nationalisation ................................................................. 1809. Examples of Corporate Ethics in Business Houses ......................................................................... 181
10. Examples of Social Responsibilities of Corporate Business Houses ............................................... 18211. Probable Questions ......................................................................................................................... 183
CHAPTER–17: THE ETHICAL ORGANISATION AND ISSUES ......................................... 184-1991. Introduction .................................................................................................................................... 1842. Organisation Codes and Ethics ....................................................................................................... 1853. Markets and Morality ..................................................................................................................... 1854. Strategic Management–Ethical Issues ............................................................................................ 1865. Marketing Function and Ethical Issues .......................................................................................... 1866. Operations Management and Ethical Issues ................................................................................... 1877. Human Resource Management and Ethical Issuess ....................................................................... 1878. Ethical Issuess in Acounting .......................................................................................................... 1889. Ethcial Dilemmas at Work ................................................................................................................ 188
10. Value based Ethical Organisation .................................................................................................... 18911. Industrial and Domestic Consumer Characteristics ........................................................................ 19112. Consumerism–Definition, Characteristics ....................................................................................... 19213. Consumerism for Industrial Consumers and Domestic Consumers ................................................ 19314. Producer and Consumer Behaviour ................................................................................................ 19315. Types and Values Used in Marketing ............................................................................................. 19516. Milton Rokeach ............................................................................................................................... 19517. Focus of Cultural and Terminal Value in Advertising — A Marketing Strategy .............................. 19718. Value Resistance and Consumer Behaviour .................................................................................... 19719. Risk Resistance and Consumer Behaviour ...................................................................................... 19820. Consumer’s Mind – A Blackbox ...................................................................................................... 19821. Probable Questions ......................................................................................................................... 199
CHAPTER–18: ETHICS AND BUSINESS.......................................................................... 200-2221. Ethics—Definition and Nature ........................................................................................................ 2002. Business–Definition, Characteristics and Objectives ..................................................................... 2013. Market and Business ...................................................................................................................... 2024. Ethics in Marketplace ...................................................................................................................... 2035. Ethics in Materials Management ..................................................................................................... 2126. Ethics in Production and Technology ............................................................................................. 2207. The Individual in the Organisation ................................................................................................. 2208. Business Duties to Consumers ....................................................................................................... 2219. Organisational Politics .................................................................................................................... 222
CONTENTS (xv)
10. The Caring Organization ................................................................................................................. 22211. Probable Questions ......................................................................................................................... 222
CHAPTER–19: VALUES AND ETHICS IN BUSINESS (TOPICS FOR MBA CURICULUM)225-2491. Indian Values and Ethics ................................................................................................................. 2252. The Ethical Value System ................................................................................................................ 2333. Culture and Ethics ........................................................................................................................... 2344. Social Responsibilities of Business ................................................................................................ 2375. Ethics and Corporate Social Responsibility .................................................................................... 2396. Ethics and Corporate Excellence ..................................................................................................... 2457. Probable Questions ......................................................................................................................... 249
CHAPTER–20: CODE OF MEDICAL ETHICS (TOPICS FOR MBBS COURSE) ................ 250-2541. Preamble .......................................................................................................................................... 2502. General Principles ............................................................................................................................ 2503. Maintenance of Medical Records ................................................................................................... 2514. Announcements .............................................................................................................................. 2515. Compensation of Professional Services .......................................................................................... 2516. Ethics of Profession ........................................................................................................................ 2517. Physicians Duties to Patients ......................................................................................................... 2528. Duties to the Profession .................................................................................................................. 2529. Physician Duties to Consultation ................................................................................................... 253
10. Medical Council’s Disciplinary Action Against Offences ............................................................... 25311. Professional Certificate, Reports and other Documents .................................................................. 25312. Declaration at the Time of Registration ........................................................................................... 254
QUESTION BANK ............................................................................................................. 255-259
Values & EthicsOf
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