Post on 05-Apr-2018
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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