SRI VENKATESWARA COLLEGE OF ENGINEERING AND TECHNOLOGY

AUTONOMOUS
MASTER OF BUSINESS ADMINISTRATION

BUSINESS ETHICS UNIT I

S.No

Contents

Meaning and Definitions of Ethics

Origin of ethics and Development of business ethics

Concept of Ethics

Importance of Ethics

Theories of Ethics

Need and Values

Morals

Management and Ethics

Meaning and Definitions of Ethics

The branch of philosophy that deals with morality. Ethics is concerned

with distinguishing between good and evil in the world, between right
and wrong human actions, and between virtuous and nonvirtuous
characteristics of people.
Ethics or moral philosophy is the branch of philosophy that involves
systematizing, defending, and recommending concepts of right and
wrong conduct. The term ethics derives from the Ancient Greek word
ethikos, which is derived from the word ethos (habit, "custom").
An area of study that deals with ideas about what is good and bad
behavior : a branch of philosophy dealing with what is morally right or
wrong.
Business ethics is the study of proper business policies and practices
regarding potentially controversial issues, such as corporate governance,
insider trading, bribery, discrimination, corporate social responsibility
and fiduciary responsibilities.

Ethics reflect beliefs about what is right, what is wrong, what is just,
what is unjust, what is good, and what is bad in terms of human
behavior.
Ethical principles and values serve as a guide to behavior on a personal
level, within professions, and at the organizational level.
Ethics is a branch of social science. It deals with moral principles and
social values. It helps us to classify, what is good and what is bad? It
tells us to do good things and avoid doing bad things.
According to Andrew Crane, "Business ethics is the study of business
situations, activities, and decisions where issues of right and wrong are
addressed."
According to Raymond C. Baumhart, "The ethics of business is the ethics
of responsibility. The business man must promise that he will not harm
knowingly."

Origin of ethics and Development of business ethics

The known history of pure ethics or ethics (moral) theories begin with ancient
Greek philosophers (Sophists, Socrates, Socratic schools, Plato, Aristotle,
Epicurus, Stoics) and after recovered by early English positivists has been the
main topic of discussions in the Medieval times in Europe. As the scholastic
doctrines are by-passed (therefore Christian Ethics is not a scientific term
anymore), we come to the illuminated times after the Medieval, and continue
with Hobbes, the Father of Modern Ethics. This type of ethics is known by two
logical methods; criticism and comparison. After Hobbes, English and German
schools of ethics have been differentiated. These led to English Intuitionists
(naturalists) followed by Utilitarians against Kantian ethics. Throughout 19th
Century these ideas have been discussed very fiercely throughout Europe.
Then Comte, Darwin, and finally Spencer followed by Green came in, who set
the evolution concept into physical sciences as well as the development of
ethics. So at the beginning of 20th century Ethics was more with evolutionary
concepts but still divided between Utilitarians and Kantians (Kants Categorical
Imperative).
Antiquieties or the Ancient Greek Era
Started by the SOPHISTS who studied the human conduct for the first time:

Positive side: PROTOGORAS (of Abdera, 480 B.C.): Good is subjective;

MAN IS THE MEASURE OF ALL THINGS (therefore all practical
philosophy is personal in a positive way that the idea of good in
individuals mind create moral codes for the social group)

Negative side: GORGIAS (of Leontini, 483 B.C.): (as the good and truth
are subjective in the mans mind there are only particular feelings of

limited subjective nature, THE GOOD OF ANOTHER CANNOT BE AN

END OF ACTION TO ME (Sceptisism-Egoism)
Then came the philosophers who took the individual as the main subject
of ethical conduct:

SOCRATES
(Athens, 469-399 B.C.): he was against SOPHISTS LIKE Gorgias and their
egoism, SOCRATES IS the founder of Science of Ethics:
Virtue is knowledge (it may be thought and learned)
He who knows must act accordingly
No one voluntarily follows evil
Vice can only be because of ignorance
Only by self-knowledge can freedom be acquired
Learn your passions within your own soul and control them to Reach
wisdom
PLATO (427-347 B.C.)
Students of Socrates, Socratic schools of thought Defined the social good and
individual good and their relationships (Famous book of Republic)

The four cardinal virtues belonging to the state; wisdom, fortitude or

courage, temperance, justice
Justice is the highest virtue and it includes all others. It requires
individuality, too. Every member of the state should be just.
Social and individual goods are defined.
Ideal rulers are described for an ideal state; he should be a philosopher,
a lover of wisdom, combining intellectual insight with practical
intelligence. They should be educated for literature, art, gymnastic,
mathematics (so that he will know how to generalize and find the
accuracy in details), and tested for fortitude. Chief rulers must be chosen
from those who are best qualified in dialectics (wisdom).
Highest good: absolute good in the form of ideas, ideals and reason in the
universe.
He defined mortal body and immortal soul
He defines the good man in whom knowledge, emotion and desire work
in perfect harmony, no part of the soul tyrannising over the rest, each
part exercising its due activity.

ARISTOTLE
(384-322, Stagira, Thrace) (the separation of the sciences)

He defines political science as the highest of all sciences, as everything

else aims at the good of the state.

Social good is above the individual good, only in so far as individuals

make up a society and their actions attain the good of the society, it is
the subject of political sciences (science of ethics).
Defines well being as the activity of the soul in accordance with virtue
during the period of a complete life.
The definition of the truth
Doctrine of mean: every kind of excellence (=virtue) is a mean between
two extreme, one an excess and the other a defect.
Epicurus (hedonism arose first by cyrenaics and sympathized by romans,
psychological hedonism)
Pleasure is the primary and natural end at which every sensible being
aims, there is no other good. We use only our senses to decide what is
good for a lifetime.
The stoics (mainly a latin school following the epicurian teachings, with
the main difference of having reason instead of feelings, divine spirit;
some theists and materialists) (founded by zeno, and followed by seneca,
340-265 b.c., epictetus, a.d. First century)
1. Well-being is acting rationally, or in accordance with the nature of the
man; a nature partly self-determined, partly determined by the eternal
laws of the universe, and those laws are the expressions of reason, are
thus in conformity with mans self-determining nature.
2. Rational action and morally virtuous action are the same.
3. From social point of view there results an extension of the areas of
duties to all beings possessing reason, that is, to the whole of
humanity.

HOBBES
(The founder of modern Ethics, an Egoistic Naturalist) (1588-1679)

Hobbes defines Philosophy as the knowledge of effects by means of the

concepts of their causes. By this he identifies it with Deductive Science
based on observation and reason. For reason, Logic is important to seek
the cause-to-effect pathways.
Hobbes doctrine is Exclusive Egoism (Ego being the soul). All men, he
says, are equal by nature; they possess equal powers of self-defense and
similar tastes. Except for specially surprised condition, men are in war
with men (MAN IS THE WOLF OF MAN). In this state of mind nothing is
right or wrong. Force and fraud are in war with the two cardinal virtues.
But when they become rational, then peace comes. Without social
harmony happiness is impossible.
Therefore seek the peace and follow it, for if we cannot get it we are to
defend ourselves at all costs. To attain peace men will use that much
liberty to allow a similar liberty for other men.

Immanuel Kant (1724-1804)

Immanuel Kant (1724-1804) is the most important name in modern

ethics. He is a follower of both the Intuitionists and Naturalists. He
underlines the importance of duty and self-love as two district
motives.
He says that the only absolutely good thing is the good will. It is the
principle of action that ought to be obeyed by all rational beings, under
all circumstances and for its own sake. This principle of action is
adopted by the person, and not the laws which are independent of the
person. Kantian Categorical Imperative suggests that A person should
act on that principles, and when everybody act like that principles
become a universal law.
Kants definition of Free-will is based on the consciousness of moral
obligations: we ought, therefore we can
Kant based his theory on three postulates of morality.
The Existence of God The freedom of will The Immortality of the Soul.
The particular duties as well as the general principles of morality can never
be doubtful as they are known by rational intuition: he ascertains that, We
can do what we ought to do, but unless we know what we ought to do we
cannot do it. A conflict of duties is impossible. Motive determines the
morality of the actions; not the effects. Kants most important teaching is
morality of an action depends only on the motive, and is independent of the
effects on the person doing it or on the others.
UTILITARIANISM
Utilitarianism is the doctrine that the ethical standard should be
great happiness of the greatest number (of people). Its founder is
Bentham (1748-1832) who was followed with Stuart Mill and Sidgwick.
Bentham says that Nature has placed man under the governance of
two masters, pain and pleasure. It is for them to tell us what we ought
to do, therefore, we shall do.
Then the principle of utility comes into picture; to approve or
disapprove every action with a value in itself to increase or decrease
the happiness of the party (community) whose interest (sum of
interests of members of the community) is in question.
What is the measure of pleasure and pain? For the personal pleasure;
(1) intensity, (2) duration, (3) certainty, (4) propinquity, (5) tendency to
be followed by other pleasures, (6) purity (freedom from pain) are the
criteria for the measure. For the community it follows; (7) the extent
(the number of persons to share the pleasure). The seventh measure
was brought to define the equity by Bentham. In his words every
one is to count for one, and no more for more than one.

Development of Business Ethics

Business ethics has evolved through time and across disciplines into a discipline that is one of
the most important topics in the field of business. For the historical development of business
ethics, it is important to start with a definition of business ethics in a global context. We define
business ethics from a managerial perspective as decisions about what is right or wrong
(acceptable or unacceptable) in the organizational context of planning and implementing
business activities in a global business environment to benefit: organizational performance,
individual achievement in the workplace, social acceptance and approval of peers and coworkers
in the organization as well as responding to the needs and concerns of relevant internal and
external stakeholders. The goal of proactive ethical organizations is to develop an ethical
organizational culture. This requires strategies, systems, and procedures to ensure that the firms
ethics and compliance program is in place and operating effectively with continuous assessment
and improvement. It is important to provide an initial overview of our managerial approach to
understand the diverse and broad span of influences on the discipline. To engage in a historical
overview of ethics would require the description of thousands of years of philosophy, social,
cultural influences as well as the religious writings on this topic. We narrow the scope to
describe the development of business ethics.
Framework for Understanding the Development of Business Ethics
Business ethics can be approached from many different perspectives. Business ethics can be
approached from a normative (what should occur) or a descriptive perspective (what does occur).
Business ethics has macro or societal dimensions as well as micro or firm level considerations
and managerial dimensions. The context of the matrix in Figure 1 is similar to a
conceptualization of the field of marketing by Hunt (1991).
Figure 1

The scope of ethics is so broad that it affects almost every decision made in social interaction.
Figure 1 is an attempt to narrow and focus our observations to typologies from an organizational
perspective. Some definitions and discussion of this framework are necessary to properly
interpret and provide a foundation for the understanding of the historical advancements of
business ethics.
Normative decisions in an organizational culture relate to what can be, that is, what a business
organization ought to consider in evaluating and improving their ethical conduct (Laczniak and
Murphy, 2006). Normative decisions are based on deontological and teleological norms.
Deontological norms involve hypernorms and local norms described by Donaldson and Dunfee

(1994) as integrative social contracts. In deontological evaluation, the decision maker evaluates
the inherent rightness or wrongness of the behavior implied by each alternative (Hunt and Vitell,
2006). Deontology assumes there is an absolute fixed norm, or expected behavior, to resolve an
ethical issue. The decision is compared to predetermined norms that could relate to honesty,
fairness, and trust or other norms of behavior.
Teleological decisions are based on four elements: 1.) perceived consequences at each decision
for stakeholder groups, 2.) probability that the consequence will occur to each stakeholder group,
3.) desirability of each consequence, and 4.) importance of each stakeholder group (Hunt and
Vitell, 2006). Teleology is often called consequentialism because individuals using teleology are
basing decisions on philosophies, such as egoism and utilitarianism. Utilitarians believe that they
are achieving the greatest benefit for all those affected by a decision. Therefore, teleological
decisions are based on flexible decisions based on the consequences or the benefit to history.
Descriptive or positive perspectives attempt to describe, explain, predict, and understand
business ethics activities and phenomena that actually exist (Hunt, 1991). In other words, a
descriptive approach to business ethics examines what actually exists, not what organizations
ought to do. In an organization, a descriptive perspective would examine policies on conflicts of
Interest, strategies, compliance systems, and various artifacts of ethical standards in the
organization.
In Figure 1, micro is referred to as the business ethics conduct of individual units (organizations,
business persons, or individuals, such as an entrepreneur). Macro refers to the impact of business
decisions on the various stakeholders in society. For example, decisions made by an organization
about the nutrition of food advertised and sold to children could affect the obesity rates the
therefore the health and wellbeing of this important vulnerable group of consumers. The impact
of the aggregation of organizations or the complete system of micro decisions on stakeholders
creates macro business ethics issues that are often addressed in public policy and the formal
institutionalization of business ethics through government (macro/descriptive).
Business Ethics Before the 1960s
The history of business ethics before 1960 depends on ones perspective and objectives in tracing
the concept. In this chapter, we are tracing the history of business ethics from the viewpoint of
the development of business organizations, as referred to in Figure 1. Ethics as a field of thought
has existed in religion and philosophy for thousands of years and has been applied to business
activities in the same way ethical values and norms have been applied to everyday life.
Aristotle discussed economic activities, commerce, and trade. He makes normative judgments
about greed, or the unnatural use of ones capabilities, in the pursuit of wealth for its own sake.
Aristotle provides the first recorded definition of justice and fair treatment of all parties in a
transaction (Aristotle, 2000; DeGeorge, 2007). Fair treatment and justice have been a part of our
social existence since the beginning of civilization.
Key philosophies that built a foundation for business ethics include John Lockes classic defense
of property as a natural right (Locke, Property). Adam Smith, often identified as the founder of
capitalism created the concept of the invisible hand and wrote about self-interest, however, he
went on to explain that The common good is associated with six psychological motives and that

each individual has to produce for the common good with values such as prosperity, prudence,
reason, sentiment, and promoting the happiness of mankind (Smith,2000). These values should
be applied to the needs and concerns of stakeholders from a macro/normative perspective. Other
contributors to the foundation of business ethics include John Stuart Mill (1863), Immanual Kant
(1899), and G.W.F. Hegel (1820). These philosophers wrote on economic fairness, especially
distributive justice (DeGeorge, 2007). Karl Marx deserves mention because he took an anticapitalism position and claimed capitalism could be morally condemned because of exploitation.
Possibly the philosophy that had the most impact on understanding the macro/normative area of
business ethics in the last fifty years is the contribution of John Rawls (1971). One perspective is
the Rawls (1971) Difference Principle to maximize the minimum which holds that the worst off
position should be made as well off as possible. It is discussed in this time period since the work
of Rawls is linked to earlier philosophical discussions of distributive justice.
The Difference Principle
Although the Difference Principle is based on equalitarianism, this alternative principle permits
inequalities in the distribution of goods and services only if those inequalities benefit the worstoff members of society. This principle falls under Rawls (1971) proposed principles of justice:
1. Each person has an opportunity to a fully adequate set of equal basic rights, open to all
participants; and in this scheme with equal opportunity guaranteed to bring fair value to all
participants.
2. Social and economic inequalities are to satisfy two conditions: (a) They are to be attached to
positions and offices open to all under conditions of fair equality of opportunity; and (b) they
have to be to the greatest benefit of the least advantaged members of society (Rawls 1993, 5-6).
The difference principle is unique because Rawls links the justice of outcomes to specific ethical
principles. The difference principle could be used as a defense for public policy to prevent unfair
competition. For example, a health care program to cover all of the children in a society would
assist in overcoming inequalities associated with class and income. The difference principle is
connected to our discussion of stakeholder orientation in that it provides an ethical rationale for
the problem of why organizations are obligated to consider claims of secondary stakeholders
such as competitors, special interest groups, and vulnerable consumers such as children and the
elderly.
Most of the contributors to business ethics before 1960 were philosophers that were concerned
about the macro/normative relationships of business and society. Only in the next fifty years
have we seen an emerging interest in the micro/normative and micro/descriptive components of
business ethics.
Early Twentieth Century Interest in Business Ethics
Most contemporary timelines, such as the Ethics Resource Center Timeline (Figure 2) trace the
history of business ethics issues since 1960. Although we will attempt to trace the history since
1960, it is appropriate to start by tracing the origins of business ethics thought over the past 100
years. The first managerial textbook on business ethics was Business Ethics by Frank Chapman
Sharp and Phillip D. Fox (1937). The preface starts off with the statement this book deals with
the right and wrong of the transactions that take place in the competitive business world. Based

on our research, this was the first textbook based on organizational ethical decision making from
a micro and macro descriptive perspective, in the world not just in the United States. The
chapters in this book provide evidence that many of the topics of concern today were also of
interest nearly 70 years ago. Frank Chapman Sharp and his associate Philip G. Fox were the first
true business ethics scholars to develop a textbook with the main focus on micro/descriptive
concerns of business.
Figure 2

Frank Chapman Sharp was a philosophy professor at the University of Wisconsin from 1893
until his retirement in 1936. He taught what is believed to be the first business ethics course in
the world at the University of Wisconsin in 1913-14. Many of the first business courses on other
topics, such as marketing originated at the University of Wisconsin during this time period. In
his preface, Sharp makes it clear that his book does not deal with social and economic reform,
the focus, instead, is on a small group of intimately related problems with the ultimate goal of
the discovery of what modes of positive action the spirit of fairness requires in its application to
business life (Sharp and Fox, 1937). The book focuses on issues as they relate to court decisions
and points out that the law and ethics are not identical. There are twenty chapters in the 1937 text
on topics such as intentional misrepresentation, the limits of persuasion, loyalty to contracts,
ethics of bargaining, property of ideas and social control through government agencies. This
book captures most of the micro discipline of business ethics issues in the first half of the
twentieth century. These issues include: fair trade, breach of contract, intangible property,
deceptive selling and advertising, and truthful information about products. Methods to improve
business ethics, such as the Better Business Bureaus and government agencies were discussed as
ways to make ethical progress in the business world from a macro/descriptive perspective.
Business Ethics: 1960-2008
The time frame or 1960-2008 is selected to reflect almost fifty years of increasing interest and
rapid change in business ethics. Also, this time period shaped the current managerial view of

business ethics that is seen in global ethics programs in corporations. We will focus especially on
the discussion of developments since the 1990 because this has been a critical period of time
with respect to global ethics crises and public policy developments designed to institutionalize
business ethics around the world.
Academic Contributions to Business Ethics
In the 1960s, the global interest in business ethics turned to causes. Most of these issues related
to macro or societal issues. Therefore, this period of time focused on macro/normative issues and
even a much larger emphasis on macro/descriptive issues (Ferrell, Fraedrich, and Ferrell, 2008, p.
12). Business ethics as an academic field emerged in the 1970s, with a few business ethics
courses being taught (DeGeorge, 2007). A number of philosophers entered the business field and
the textbook contributions of Norman Bowie, Ethical Theory and Business, Thomas Donaldson
and Patricia Werhane, Ethical Issues in Business: A Philosophical Perspective, and other early
textbooks by philosophers emerged, including Richard DeGeorge (1982) and Manual Vasquez
(2002). Most of these books focused on business ethics from a moral philosophy and
macro/normative perspective but micro issues were also examined. Most of these books focus on
helping the individual with their ethical reasoning. As philosophers developed macro/normative
foundations for business ethics, a number of business professors were developing
micro/descriptive research to understand organizational ethics (Ferrell and Weaver, 1978; Ferrell
and Gresham, 1985). Ethical decision making models evolved that linked normative and
descriptive models. The Hunt and Vitell (1986) normative/descriptive model provides the first
comprehensive inter-relationship between deontological and teleological ethical traditions linked
to decision making in an organizational context (Hunt and Vitell, 2006). The Hunt and Vitell
model starts when an individual encounters a situation and recognizes ethical content. The
individual will have some idea of a limited number of potential solutions or alternatives,
however, this subset of alternatives is not comprehensive. The individual then filters these
alternative courses of action through two filters:
1.) Is this course of action right or wrong? 2.) A series of questions are relevant here: a.)
What will the impact be on stakeholders? b.) What is the probability these outcomes will occur
for each stakeholder group? c.) How good or bad would each consequence be? d.) How
important are each of the stakeholder groups that could be impacted? An individuals ethical
judgments are a function of applying norms to each of the possible behaviors in light of the
potential impact on and importance of each stakeholder. There are several personal
characteristics which will influence decision making. Religion, personal value systems, strength
of moral character, level of cognitive moral development, and ethical sensitivity will impact the
decision making process. In addition, the organizational culture and social networks will
influence the decision (Hunt and Vitell, 2005).
Additional ethical decision making models include Ferrell and Gresham (1985), Trevino (1986),
and Jones (1991). While all of these models contributed new insights their major contribution
was to provide a more concrete foundation for micro/descriptive research in business ethics. All
of these models position co-workers and peers as influencing the ethical decision making process
in an organizational context. As courses and textbooks were published in business ethics, the first
managerial or micro/descriptive book since Sharp and Fox (1937) was Ferrell and Fraedrich in
1990 (2008). This book defined business ethics as principles and standards that define business
ethics in the world of business practice. Topics covered included ethical issues, ethical decision

making, organizational culture and relationships, and ethics programs. There was a major shift
from the individual to the organization.
The next major micro/descriptive book on business ethics was Linda K. Trevino and Katherine
Nelson (1995), Managing Business Ethics: Straight Talk About How to Do it Right. This book
addressed ethical decision making ethical problems of managers, organizational culture, as well
as ethical and legal compliance from a managerial perspective. Both of these books continue to
be among the most managerial focused books used in teaching business ethics. During the 1980s,
there were many centers of business ethics established in educational institutions The leader and
role model in center activities and leadership in bridging business and academic interests was the
Bentley College, Center for Business Ethics in Boston, MA. This Center became a leader in
assisting practitioners with business ethics programs and helped establish the Ethics and
Compliance Officers Association which today is the largest ethics organization for managers of
ethics programs in the U.S. There are many other organizations working globally to promote
ethical conduct including the European Business Ethics Group, European Business Ethics
Network, Ethical Corporation Europe, Australia Business Ethics Network, Business Ethics
Institute of Malaysia, Business Ethics Network of Africa, Business Ethics Research Center,
Business Roundtable Institure of Corporate Ethics, Canadian Centre for Ethics Corporate Policy,
The Caux Round Table, The Coalition for Environmentally Responsible Economies, The
Copenhagen Centre, Corporate Social Responsibility Europe, The European Business Campaign
on Consumer Social Responsibility, Global Sullivan Principles, Hong Kong Ethics Development
Centre, Institute of Global Ethics, and International Business Ethics Network. Academic journals
were established to publish both normative and descriptive research in business ethics. The
Journal of Business Ethics was established in 1982, the Business Ethics Quarterly was
established in 1991 and Business Ethics: A European Review was established in 1992. Other
journals have evolved since then with many articles on business ethics also published in leading
academic journals including functional areas such as marketing, management, accounting, and
finance. In addition, trade books and trade publications on business ethics are widely available.
Defense Industry Initiatives
Perhaps the biggest impact on the practice of business ethics in the 1980s was the Defense
Industry Initiatives. The Defense Industry Initiative on Business Ethics and Conduct (DII) was
developed to guide corporate support for ethical conduct. In 1986 eighteen defense contractors
drafted principles for guiding business ethics and conduct (Yuspeh, 1995). The organization has
since grown to nearly fifty members. This effort established a method for discussing best
practices and working tactics to link organizational practice and policy to successful ethical
compliance. The DII includes six principles. First, DII supports codes of conduct and their
widespread distribution. These codes of conduct must be understandable and provide details on
more substantive areas. Second, member companies are expected to provide ethics training for
their employees as well as continuous support between training periods. Third, defense
contractors must create an open atmosphere in which employees feel comfortable reporting
violations without fear of retribution. Fourth, companies need to perform extensive internal
audits and develop effective internal reporting and voluntary disclosure plans. Fifth, DII insists
that member companies preserve the integrity of the defense industry. Finally, member
companies must adopt a philosophy of public accountability (Hill, 1995). Most of the
recommendations fall into the micro/descriptive area for organizational compliance standards.

The Institutionalization of Business Ethics

By 1990, business ethics was well established as an academic discipline. On the other hand, this
was the beginning of the rapid acceptance of business ethics in organizations. The first
developments occurred in the 1980s, but the institutionalization of business ethics through public
policy moved rapidly through the 1990s and 2000s. Wide spread and highly visible
organizational misconduct and scandals such as Enron, WorldCom in the United States and in
Europe, Parmalat (Italy), and Royal Ahold (Netherlands) have plagued global businesses. All
four of these companies have engaged in massive accounting frauds to overstate their earnings
and had operated unethical organizational cultures. Managers involved in channel stuffing,
inventory shifting strategies, deceptive sales techniques, financial fraud, and other schemes to
inflate earnings. Misconduct related to employees, suppliers, and consumers created discussions
about right and wrong, as well as the appropriate legal consequences. Organizational ethics
programs in the U.S. were developed in public corporations as ethics became more
institutionalized by the Federal Sentencing Guidelines for Organization , especially the 2004
amendment and the Sarbanes-Oxley Act (2002). These public policy approaches to
institutionalization represent a macro/descriptive approach to business ethics. In Europe, the
European Union has a strong Directive on Data Protection (1995) and anticompetitive legislation
that is being strictly enforced to prevent price fixing. For example, British consumer affairs
watchdog groups have triggered a government investigation of price fixing at food & package goods
firms including Procter & Gamble, Reckitt Benckiser, Mars, Unilever, & Tesco PLC (Wall Street Journal,
April 29, 2008). The Federal Sentencing Guidelines for Organizations (FSGO), approved by

Congress in November 1991, set the tone for organizational ethical compliance programs in the
1990s. The guidelines, which were based on the six principles of the DII, broke new ground by
codifying into law incentives to reward organizations for taking action to prevent misconduct
such as developing effective internal legal and ethical compliance programs (Conaboy, 1995)
Provisions in the guidelines mitigate penalties for businesses that strive to root out misconduct
and establish high ethical and legal standards (United States Code Service, 1995). On the other
hand, under FSGO, if a company lacks an effective ethical compliance program and its
employees violate the law, it can incur severe penalties. The guidelines focus on firms taking
action to prevent and detect business misconduct in cooperation with government regulation. At
the heart of the FSGO is the carrot-and-stick approach: By taking preventive action against
misconduct, a company may avoid onerous penalties should a violation occur. A mechanical
approach using legalistic logic will not suffice to avert serious penalties. The company must
develop corporate values, enforce its own code of ethics, and strive to prevent misconduct. In the
1990s, ethical and legal misconduct became more widespread on a global basis. Issues such as
financial mismanagement contributed to the Asian financial crisis. Reports of fraud in financial
reporting and issues related to sexual harassment and discrimination were wide spread. This
period was also known as a time of excessive executive greed with exorbitant pay packages
associated with mergers and acquisitions. Pay was not effectively tied to performance and many
non-performing CEOs found themselves ousted and financially comfortable as a result of their
lavish severance packages. In the 2000s, the interest in business ethics has accelerated rapidly.
Such abuses increased public and political demands to improve ethical standards in business. In a
survey of twenty thousand people across twenty countries, trust in global companies has declined
significantly (Ferrell, Fraedrich, Ferrell, 2008). To address the loss of confidence in financial
reporting and corporate ethics, the U.S.

Congress in 2002 passed the SarbanesOxley Act, the most far-reaching change in
organizational control and accounting regulations since the U.S. Securities and Exchange Act of
1934. The new law made securities fraud a criminal offense and stiffened penalties for corporate
fraud. It also created an accounting oversight board that requires corporations to establish codes
of ethics for financial reporting and to develop greater transparency in financial reports to
investors and other interested parties. Additionally, the law requires top executives to sign off on
their firms financial reports, and they risk fines and long prison sentences if they misrepresent
their companies financial position. The legislation further requires company executives to
disclose stock sales immediately and prohibits companies from giving loans to top managers
(CNN, 2002)
The 2004 amendment to the FSGO requires that a businesss governing authority be well
informed about its ethics program with respect to content, implementation, and effectiveness.
This places the responsibility squarely on the shoulders of the firms leadership, usually the
board of directors. The board is required to oversee the discovery of risks and to design,
implement, and modify approaches to deal with those risks. The SarbanesOxley Act and the
FSGO have institutionalized the need to discover and address ethical and legal risk. Top
management and the board of directors of a corporation are accountable for discovering risk
associated with ethical conduct. Such specific industries as the public sector, energy and
chemicals, health care, insurance, and retail have to discover the unique risk associated with their
operations and develop an ethics program to prevent ethical misconduct before it creates a crisis.
Most firms are developing formal and informal mechanisms to have interactive communication
and transparency about issues associated with the risk of misconduct. Business leaders should
view that their greatest danger is not discovering serious misconduct or illegal activities
somewhere in the organization (Ferrell, Fraedrich and Ferrell, 2008). It is important that the shift
has been away from trust in individuals to do the right thing based on moral judgment to formal
ethics programs based on values and culture. ts to improving business ethics in the future.
Concept of Ethics
"Ethics" is a set of principles used to determine what is "right" when it comes to
the conduct or behavior of an individual. This includes individuals who are
acting on behalf of a business entity.
Business ethics involves the application of moral standards to the systems and
organizations through which we produce and distribute goods and services and
to the people who work within these systems and organizations.
Business ethics concepts are concerned with three different kinds of
ethical/moral issues. Some concepts are related to issues involving the conduct
of business within the systems where business operates, including economic,
political, legal and other social systems. Other concepts are concerned with
corporate issues those involving questions related to the conduct of a
particular company. And, still other concepts are concerned with examination

of individual issues those where questions are related to the behavior/conduct

of one or more individuals within a company.
Businesses as "Corporate" Citizens
"Good" Business Ethics
Immoral" Business Practices
What Constitutes a Moral Right?
Ideas about Justice
The Concept of Businesses as "Corporate" Citizens
Corporations, in the United States and most other nations, are legally
considered as persons. That means they are legally entitled to the same rights
and liabilities as persons who are citizens.
What is the foundation of an individual's moral standards? Where do they
come from? The job of teaching morality or moral standards, many believe, has
to begin in the home with parents as part of early childhood development.
Those who study human moral development believe that by the time a child
reaches adulthood, their basic moral predispositions are already in place. A
person starts to practice ethics when he or she, after taking into consideration
the moral values and standards absorbed from family, church, friends,
institutions, or social organizations, begins to ask such questions as:
What are my moral values and standards? What do they actually mean, to me?
How are my moral standards important to me when it comes to making life
choices, daily decisions, and how I conduct myself in situations as I live my life?
How should I use my moral standards in the conduct of activities in which I
engage--at home, at work, and during leisure-time activities?
The ultimate goal of ethics, for the individual, is development of a set of moral
standards that, after careful consideration, are believed to be reasonable to
hold. The standards an individual holds are usually viewed by the individual as
justified and logical, able to be accepted and applied to the many types of
choices and decisions an individual must make in different circumstances on a
daily basis--in business, personal, and social settings.
As consumers, most people believe that business should be held to standards
of morality that apply to how they interact in their dealings with one customer,
as well as with customers in general, within local, national, and world
communities.
The Concept of "Good Business Ethics"
"Good" business ethics involves having and adhering to a code of moral
conduct that places the rights and expectations of people over and above the
"profit motive" of business. Even though it is the goal of business to make

money, the manner in which profit is sought can come under intense scrutiny
if it is believed that the rights of human beings are being compromised in the
process of making money. For this reason, it can result in good business for
companies to practice good business ethics, because moral business practices,
in the final analysis, can be seen as "profitable." Ethical conduct helps
business in three primary ways by:
(1) Discouraging the breaking of laws in work-related activity. Since it is wrong
or "criminal" to break the laws of society, then it is morally "right" to uphold (or
not to break) them.
(2) Helping business entities avoid actions that may result in costly civil law
suits against the company. Since individuals have rights, business has
obligations to observe those rights.
(3) Motivating companies to avoid engaging in actions that can harm the
company's image. Having a "moral code of conduct," or ethics, can help
businesses improve their profitability, because adhering to moral standards
can help to prevent loss of revenue and loss of company reputation.
Some of the moral obligations of business are determined by what the law
requires. Moral standards are part of our legal system. There are laws, for
example, against killing, stealing, engaging in fraudulent activities, sexual
harassment, and public nudity, among other things. But moral standards go
beyond what the law requires. For example, in the U. S. and most Western
nations, adopting positions with regard to "social responsibility" are optional for
companies. No company is required by law to help improve the quality of life on
a local, national, or international level, yet that is exactly what the company
called Ben & Jerry's has vowed to do.
The Concept of "Immoral" Business Practices
Many major companies have become embroiled in trouble, and have been fined
millions of dollars for violating laws that were set up based on ethical
considerations. But unethical business practices extend well beyond activities
that break the law. Hundreds of companies participate in "questionable" and
clearly "unethical" practices--without breaking any established laws. They
engage in practices developed only to improve their bottom-line profits, with no
regard for anything or anyone else.
A good example of such practices is dead peasant insurance policies. These
policies were widely exposed in the 2010 Michael Moore documentary movie,
"Capitalism, a Love Story." "Dead peasant" policies are those companies take
out on their employees, without the employee's consent, which not only give
the companies tax breaks, the policies allow them to make money off of an
employee's death. Some of the policies are worth millions of dollars, and the

companies collect on them, not the deceased employees' families or loved ones.
(You can learn more about "dead peasants" insurance policies and see a list of
companies
that
have
taken
them
out
on
employees
at
http://deadpeasantinsurance.com/which-employers-bought-policies-on-thelives-of-employees/). (Please note: the term "dead peasants," which speaks
volumes about the attitude of many top executives and business owners,
toward rank and file employees, was coined by one of the companies that
engaged in this deplorable practice.)
It is not wrong to make money, but it is important for businesses owners and
executives to conduct themselves in ways that are moral and ethical, as they
make money. Hundreds of examples of businesses engaging in bad, unethical,
and immoral behavior in order to make money only serve to convince people
that major companies are immoral, and that they don't think highly of ethical
business practices. When companies engage in practices such as "dead
peasants" insurance policies, consumers become convinced that business will
stop at nothing to keep the rich getting richer and the poor poorer.
Organizations are morally responsible for their actions, and their
actions/conduct are judged to be either moral or immoral in the same sense
as those of individuals.
The Concept of "Rights"
What Is a Moral Right?
In general, a moral "right" is an individuals entitlement to something. It is a
gift from God that extends from being a human being. When someone has a
"right," it means he or she is able to choose freely whether or not to pursue
certain interests or activities, without need of the permission of others. Rights
impose prohibitions and requirements on others not to interfere, and it is these
prohibitions and requirements then enable people, as individuals, to choose
freely which interests and activities they will pursue.
The possession of moral rights necessarily implies that others have certain
duties toward the bearer of that right. For example, the moral right to worship
as one chooses comes the moral duty of other people not to interfere in one's
chosen form of worship.
What Are "Negative" Rights and "Positive" Rights?
Negative rights are sometimes called the right to non-interference. Negative
rights impose duties on other people to leave you alone; to not stop or block
you from doing things that you feel are right for you, and that are important to
you. For example, you have a right to make your own decisions and choices for
your life, as well as a right to voice your opinion on a topic (freedom of speech).

American society places a great deal of importance on the rights of individuals,

and most of us understand the importance of not violating the negative or
"non-interference" rights of others. We understand that it is our duty not to
interfere in certain activities of other human beings who are holders of a given
right.
Positive rights do more than impose negative duties. They create duties on
others to provide something for the holder of the right. They say that others
must provide the holder of the right with benefits; whatever he or she needs to
freely pursue his or her interests.
Let's use, for example, the notion of health care. If we look at health care as
being a negative right, then, you and I possess the right of non-interference
when it comes to getting health care. Even though we must pay for health care
services, we have a right to obtain health care. The right we have to pursue
health care, and the right to non-interference with this right, has to be
protected by the state in order to ensure that no one interferes with or
discriminates against us as we pursue our right to obtain health care.
But, if health care is a positive right, that means the state has an obligation to
provide health care for us.
Concepts of Justice
Before looking at concepts of justice, here is a scenario for you to consider.
Let's say that you are the owner of a corporation that has a manufacturing
plant employing hundreds, yet the plant pollutes an environment that affects
thousands.
You and your employees get to leave your company every day, and you drive
home to communities that you have not polluted, where the air is fresh and
safe to breathe. But, those people who live near the plant and the pollution you
created are suffering serious adverse health effects caused by the pollution,
and they are having to pay the health and medical costs of their illnesses.
As the business owner, are you sharing equally in societys benefits and
burdens? Or are you getting more than your share of benefits, as you're
creating more, and shouldering less, than your share of the burdens?
Judgments about justice are based on moral principles that identify fair ways
of distributing benefits and burdens to members of a society. Questions
concerning how justice is "distributed" can arise when different people put
forth conflicting claims on societys benefits and burdens and all the claims
cannot be satisfied.

Egalitarianism is the belief in the equality of all people. Believers in human

equality say that there are no relevant differences among people that can
justify unequal treatment. According to them, all the benefits and burdens of
society should be distributed according to this formula: Every person should
be given exactly equal shares of a societys or a groups benefits and burdens.
The egalitarian view of how justice should be distributed is based on a
seemingly simplistic view that all human beings are equal in some fundamental
respect and that, in view of this equality, each person has an equal claim to
societys goods, and that goods, and burdens, should be allocated in equal
portions.
Utilitarianism is the belief that a society is just to the extent that its laws and
institutions exist to promote the greatest overall or average happiness of its
members. Utilitarians believe in the best consequences for all, and that it is
right to organize society in a way that distributes or redistributes wealth so
that everyone's basic needs are met. Since "happiness" cannot be quantified or
averaged, many Utilitarians consider a "basic-needs" minimum, to which they
believe every person is entitled. Basic needs are viewed as being universal. All
people have a basic need for things such as food, shelter, clothing, medical care,
protection, companionship, and self-development. The basic-needs minimum,
says Utilitarianism, is a prerequisite to any desirable kind of life, and is
something every human being is entitled to just because they are human
beings.
Socialist justice, on the other hand, says work burdens should be distributed
according to peoples abilities, and benefits should be distributed according to
peoples needs. It is concerned with equal justice for all, in every aspect of
society, arguing that there should be an "even" chance for everyone, and
opportunities for all--from the poorest, to the middle class, to the rich.
Capitalist justice says that the benefits a person receives should be equal or
proportional to the value of his or her contribution to society. It says, benefits
should be distributed according to the value of the contribution the individual
makes to a society, a task, or an exchange. If this is true, we have to ask, Do
manufacturers contribute more value to society? If so, does that mean their
larger portion of benefits and lesser portion of burdens is legitimate?
Libertarian justice says the free market is inherently just, and that
redistributive taxation violates peoples property rights. Libertarian distributive
justice is based on two principles defining how individuals are responsible for
their own future no matter what happens. Principle 1 (Principle of equal liberty)
of distributive justice says that each persons liberties must be protected from
invasion by others and must be equal to those of others. Principle 2 (Difference
principle) assumes that a productive society will incorporate inequalities, but it

then asserts that steps must be taken to improve the position of the most
needy members of society, such as the sick and the disabled--unless such
improvements would so burden society that they make everyone, including the
needy, worse off than before.
The Ongoing Challenge of Business Ethics
Many different problems, concerns, and issues surround the idea of business
ethics. There is little room for doubt that corporate wrongdoing, and wrong
thinking, will continue to create a seemingly unending supply of case studies
for society to examine. While it would be great to live in a world where business
was always conducted "on the up and up," we all know from the examples we
hear or read about every day, that it is not likely any such world of business
will ever exist.
Ethical challenges and dilemmas, and how to solve or deal with them, will
continue to be topics of study in business schools around the nation, and the
world. Figuring out legal, moral, ethical, and socially responsible ways to keep
profits rolling in, while delivering value to shareholders, will continue to be
challenges for business.
The best businesses, however, will be those that recognize these challenges,
and that seek to address them in ways that serve the interests of business--by
creating sound and sustainable profit, and the interests of society--by engaging
in ethical business practices that minimize harm to everyone, not just to a
select few.
Importance of Business Ethics

Stop business malpractices : Some unscrupulous businessmen do business

malpractices by indulging in unfair trade practices like black-marketing,
artificial high pricing, adulteration, cheating in weights and measures, selling
of duplicate and harmful products, hoarding, etc. These business malpractices
are harmful to the consumers. Business ethics help to stop these business
malpractices.
Improve customers' confidence : Business ethics are needed to improve the
customers' confidence about the quality, quantity, price, etc. of the products.
The customers have more trust and confidence in the businessmen who follow
ethical rules. They feel that such businessmen will not cheat them.
Survival of business : Business ethics are mandatory for the survival of
business. The businessmen who do not follow it will have short-term success,
but they will fail in the long run. This is because they can cheat a consumer
only once. After that, the consumer will not buy goods from that businessman.
He will also tell others not to buy from that businessman. So this will defame
his image and provoke a negative publicity. This will result in failure of the
business. Therefore, if the businessmen do not follow ethical rules, he will fail
in the market. So, it is always better to follow appropriate code of conduct to
survive in the market.
Safeguarding consumers' rights : The consumer has many rights such as
right to health and safety, right to be informed, right to choose, right to be
heard, right to redress, etc. But many businessmen do not respect and protect
these rights. Business ethics are must to safeguard these rights of the
consumers.
Protecting employees and shareholders : Business ethics are required to
protect the interest of employees, shareholders, competitors, dealers, suppliers,
etc. It protects them from exploitation through unfair trade practices.
Develops good relations : Business ethics are important to develop good and
friendly relations between business and society. This will result in a regular
supply of good quality goods and services at low prices to the society. It will
also result in profits for the businesses thereby resulting in growth of economy.
Creates good image : Business ethics create a good image for the business
and businessmen. If the businessmen follow all ethical rules, then they will be
fully accepted and not criticised by the society. The society will always support
those businessmen who follow this necessary code of conduct.

Smooth functioning : If the business follows all the business ethics, then the
employees, shareholders, consumers, dealers and suppliers will all be happy.
So they will give full cooperation to the business. This will result in smooth
functioning of the business. So, the business will grow, expand and diversify
easily and quickly. It will have more sales and more profits.
Consumer movement : Business ethics are gaining importance because of the
growth of the consumer movement. Today, the consumers are aware of their
rights. Now they are more organised and hence cannot be cheated easily. They
take actions against those businessmen who indulge in bad business practices.
They boycott poor quality, harmful, high-priced and counterfeit (duplicate)
goods. Therefore, the only way to survive in business is to be honest and fair.
Consumer satisfaction : Today, the consumer is the king of the market. Any
business simply cannot survive without the consumers. Therefore, the main
aim or objective of business is consumer satisfaction. If the consumer is not
satisfied, then there will be no sales and thus no profits too. Consumer will be
satisfied only if the business follows all the business ethics, and hence are
highly needed.
Importance of labour : Labour, i.e. employees or workers play a very crucial
role in the success of a business. Therefore, business must use business ethics
while dealing with the employees. The business must give them proper wages
and salaries and provide them with better working conditions. There must be
good relations between employer and employees. The employees must also be
given proper welfare facilities.
Healthy competition : The business must use business ethics while dealing
with the competitors. They must have healthy competition with the competitors.
They must not do cut-throat competition. Similarly, they must give equal
opportunities to small-scale business. They must avoid monopoly. This is
because a monopoly is harmful to the consumers.
Theories of Ethics

Utilitarianism
Utilitarianism is a normative ethical theory that places the locus of right and
wrong solely on the outcomes (consequences) of choosing one action/policy
over other actions/policies. As such, it moves beyond the scope of one's own
interests and takes into account the interests of others.

Bentham's Principle of Utility: (1) Recognizes the fundamental role of pain and
pleasure in human life, (2) approves or disapproves of an action on the basis of
the amount of pain or pleasure brought about i.e, consequences, (3) equates
good with pleasure and evil with pain, and (4) asserts that pleasure and pain
are capable of quantification (and hence 'measure').
In measuring pleasure and pain, Bentham introduces the following criteria:
intensity, duration, certainty (or uncertainty), and its nearness (or farness). he
also includes its "fecundity" (will more of the same follow?) and its "purity" (its
pleasure won't be followed by pain & vice versa). in considering actions that
affect numbers of people, we must also account for its extent.
John Stuart Mill adjusted the more hedonistic tendencies in Bentham's
philosophy by emphasizing (1) It is not the quantity of pleasure, but the quality
of happiness that is central to utilitarianism, (2) the calculus is unreasonable -qualities cannot be quantified (there is a distinction between 'higher' and 'lower'
pleasures), and (3) utilitarianism refers to "the Greatest Happiness Principle" -it seeks to promote the capability of achieving happiness (higher pleasures) for
the most amount of people (this is its "extent").
Act and Rule Utilitarianism
We can apply the principle of utility to either particular actions or general rules.
The former is called "act-utilitarianism" and the latter is called "ruleutilitarianism."
Act-utilitarianism -- The principle of utility is applied directly to each alternative
act in a situation of choice. The right act is then defined as the one which
brings about the best results (or the least amount of bad results).

Criticisms of this view point to the difficulty of attaining a full knowledge

and certainly of the consequences of our actions.
It is possible to justify immoral acts using AU: Suppose you could end a
regional war by torturing children whose fathers are enemy soliders, thus
revealing the hide outs of the fathers.

Rule-utilitarianism -- The principle of utility is used to determine the validity of

rules of conduct (moral principles). A rule like promise-keeping is established
by looking at the consequences of a world in which people broke promises at
will and a world in which promises were binding. Right and wrong are then
defined as following or breaking those rules.

Some criticisms of this position point out that if the Rules take into
account more and more exceptions, RU collapses into AU.
More genearl criticisms of this view argue that it is possible to generate
"unjust rules" according to the principle of utility. For example, slavery in

Greece might be right if it led to an overall achievement of cultivated

happiness at the expense of some mistreated individuals.
Rights
In ethical theories based on rights, the rights established by a society are
protected and given the highest priority. Rights are considered to be ethically
correct and valid since a large population endorses them. Individuals may also
bestow rights upon others if they have the ability and resources to do so. For
example, a person may say that her friend may borrow her laptop for the
afternoon. The friend who was given the ability to borrow the laptop now has a
right to the laptop in the afternoon. A major complication of this theory on a
larger scale is that one must decipher what the characteristics of a right are in
a society. The society has to determine what rights it wants to uphold and give
to its citizens. In order for a society to determine what rights it wants to enact,
it must decide what the societys goals and ethical priorities are. Therefore, in
order for the rights theory to be useful, it must be used in conjunction with
another ethical theory that will consistently explain the goals of the society. For
example in America people have the right to choose their religion because this
right is upheld in the Constitution. One of the goals of the Founding Fathers of
America was to uphold this right to freedom of religion.
Virtue
The virtue ethical theory judges a person by his/her character rather than by
an action that may deviate from his/her normal behavior. It takes the persons
morals, reputation, and motivation into account when rating an unusual and
irregular behavior that is considered unethical. For instance, if a person
plagiarized a passage that was later detected by a peer, the peer who knows the
person well will understand the persons character and will judge the friend
accordingly. If the plagiarizer normally follows the rules and has good standing
amongst his colleagues, the peer who encounters the plagiarized passage may
be able to judge his friend more leniently. Perhaps the researcher had a late
night and simply forgot to credit his or her source appropriately. Conversely, a
person who has a reputation for academic misconduct is more likely to be
judged harshly for plagiarizing because of his/her consistent past of unethical
behavior. One weakness of virtue ethical theory is that it does not take into
consideration a persons change in moral character. For example, a scientist
who may have made mistakes in the past may honestly have the same late
night story as the scientist in good standing. Neither of these scientists
intentionally plagiarized, but the act was still committed. On the other hand, a
researcher may have a sudden change from moral to immoral character may go
unnoticed until a significant amount of evidence mounts up against him/her.
Justice
The justice ethical principle states that decision makers should focus on
actions that are fair to those involved. This means that ethical decisions should

be consistent with the ethical theory unless extenuating circumstances that

can be justified exist in the case. This also means that cases with extenuating
circumstances must contain a significant and vital difference from similar
cases that justify the inconsistent decision. Ask students if they describe what
extenuating circumstances might be.
For individuals, the ethical theory they employ for decision making guidance
emphasizes aspects of an ethical dilemma important to them and leads them to
the most ethically correct resolution according to the guidelines within the
ethical theory itself. Four broad categories of ethical theory include deontology,
utilitarianism, rights, and virtues.
Deontology
The deontological class of ethical theories states that people should adhere to
their obligations and duties when engaged in decision making when ethics are
in play. This means that a person will follow his or her obligations to another
individual or society because upholding ones duty is what is considered
ethically correct. For instance, a deontologist will always keep his promises to a
friend and will follow the law. A person who adheres to deontological theory will
produce very consistent decisions since they will be based on the individuals
set duties. Deontology contains many positive attributes, but it also contains
flaws. One flaw is that there is no rationale or logical basis for deciding an
individuals duties. For instance, a businessperson may decide that it is
his/her duty to always be on time to meetings. Although this appears to be
something good, we do not know why the person chose to make this his duty.
Ask students what reasons they might provide for this behavior. Sometimes, a
persons duties are in conflict. For instance, if the business person who must
be on time to meetings is running late, how is he/she supposed to drive? Is
speeding breaking his/her duty to society to uphold the law, or is the
businessperson supposed to arrive at the meeting late, not fulfilling the duty to
be on time? Ask students how they would rectify the conflicting obligations to
arrive at an a clear ethically-correct resolution. Also ask students to bring into
play the consideration of the welfare of others as a result of the business
persons decision.
Need of Business Ethics
Avoid exploitation of consumers : Don't cheat and exploit consumers
by using bad business practices such as artificial price rise and
adulteration.
Avoid profiteering : Don't indulge in unscrupulous activities like
hoarding, black-marketing, sale and use of banned or harmful goods,
etc., for the sake of greed to earn exorbitant profits.
Encourage healthy competition : Don't destroy a healthy competitive
atmosphere in the market which offers certain benefits to the consumers.

Do not engage in a cut-throat competition. Avoid making attempts to

malign and spoil the image of competitors by unfair means.
Ensure accuracy : Always check and verify the accuracy in weighing,
packaging and quality while supplying goods to the consumers.
Pay taxes regularly : Pay taxes and other charges or duties to the
government honestly and regularly. Avoid bribing government officials
and lobbying for special favours.
Get accounts audited : Maintain accurate business records, accounts
and make them available to all authorised persons and authorities.
Fair treatment to employees : Pay fair wages or salaries, provide
facilities and incentives and give humane treatment to employees.
Keep investors informed : Supply reliable information to shareholders
and investors about the financial position and important decisions of the
company.
Avoid injustice and discrimination : Avoid injustice and partiality to
employees in transfers and promotions. Avoid discrimination among
them based on gender, race, religion, language, nationality, etc.
No bribe and corruption : Don't give expensive gifts, secret commissions,
kickbacks, payoffs to politicians, bureaucrats, government officials and
suppliers. Say no to bribe and avoid corruption.
Discourage secret agreement : Do not make a secret agreement with
other businessmen for controlling production, distribution, pricing or for
any other activity, which is harmful to the consumers.
Keep service before profit : Accept the principle of "service first and
profit next." The customer or consumer is the most important part of any
business. All business activities are done for meeting his needs and for
increasing his satisfaction and welfare.
Practice fair business : Make your business fair, humane, efficient and
dynamic. Give the benefits of these qualities to the consumers.
Avoid monopoly : Avoid forming private monopolies and concentration
of economic power. Monopolies are bad for consumers.
Fulfil customers expectations : Adjust your business activities as per
the demands, needs and expectations of the customers.
Respect consumers rights : Give full respect and honour to the basic
rights of the consumers.
Accept social responsibilities : Honour responsibilities towards
different social groups.
Satisfy consumers wants : Find out and satisfy the wants of the
consumers. Use the available resources to produce good quality goods

and services. Supply these goods and services regularly to the consumers.
Charge reasonable prices for the goods and services. Give proper aftersales services. Do not produce goods and services, which are harmful to
the health and life of the consumers. Remember, the main objective of
the business is to satisfy the consumers wants.
Service motive : Give more importance to service and consumer's
satisfaction and less importance to profit-maximization. Make profits by
providing services to the consumers. Do not make profits by exploiting
the consumers.
Protect group interests : Protect the interest of the group i.e give
employees better wages and good working conditions, give shareholders
better rate of dividend, give consumers good quality goods and services
at low prices, etc.
Optimum utilisation of resources : Ensure better and optimum
utilisation of natural and human resources and minimise wastage of
these resources. Use the resources to remove poverty and to increase the
standard of living of people.
Intentions of business : Use pure, legal and sacred means to do
business. Do not use illegal, unscrupulous and evil means to do
business.
Follow Woodrow Wilson's rules : According to the late American
President Sir Thomas Woodrow Wilson, there are four important
principles of business ethics. These four rules are as follows:Rule of publicity : According to this principle, the business must tell the
people what it is going to do. It must not create doubts,
misunderstanding, suspicion, secrets, etc.
Rule of equivalent price : According to this principle, the customer
must be given proper value for their money. So the business must not
sell below standard, outdated and inferior (poor) goods for high prices.
Rule of conscience in business : If the business is conducted properly,
then it is beneficial to the society. Otherwise, it is harmful to the society.
Therefore, the businessman must have a conscience, i.e. a morale sense
of judging what is right and what is wrong. He must be very careful while
taking business decisions because these decisions affect the entire
society.
Rule of spirit of service : The business must give importance to the
service motive. That is, priority must be given to render service to human
beings over profit.

Values in Ethics

Values and ethics are central to any organization; those operating in the
national security arena are no exception. What exactly do we mean by values
and ethics? Both are extremely broad terms, and we need to focus in on the
aspects most relevant for strategic leaders and decision makers. What we will
first discuss is the distinctive nature of ethics for public officials; second, the
forces which influence the ethical behavior of individuals in organizations; and
third, explore the actions strategic leaders can take to build ethical climates in
their organizations.
Values can be defined as those things that are important to or valued by
someone. That someone can be an individual or, collectively, an organization.
One place where values are important is in relation to vision. One of the
imperatives for organizational vision is that it must be based on and consistent
with the organization's core values. In one example of a vision statement we'll
look at later, the organization's core values - in this case, integrity,
professionalism, caring, teamwork, and stewardship- were deemed important
enough to be included with the statement of the organization's vision. Dr. John
Johns, in an article entitled "The Ethical Dimensions of National Security,"
mentions honesty and loyalty as values that are the ingredients of integrity.
When values are shared by all members of an organization, they are
extraordinarily important tools for making judgments, assessing probable
outcomes of contemplated actions, and choosing among alternatives. Perhaps
more important, they put all members "on the same sheet of music" with
regard to what all members as a body consider important.

The Army, in 1986, had as the theme for the year "values," and listed four
organizational values-loyalty, duty, selfless service, and integrity-and four
individual values- commitment, competence, candor, and courage. A
Department of the Army pamphlet entitled Values: The Bedrock of Our
Profession spent some time talking about the importance of values, and
included this definition:
Values are what we, as a profession, judge to be right. They are more than
words-they are the moral, ethical, and professional attributes of character . . .
there are certain core values that must be instilled in members of the U.S.
Army-civilian and uniformed soldier alike. These are not the only values that
should determine our character, but they are ones that are central to our
profession and should guide our lives as we serve our Nation.

Values are the embodiment of what an organization stands for, and should be
the basis for the behavior of its members. However, what if members of the
organization do not share and have not internalized the organization's values?
Obviously, a disconnect between individual and organizational values will be
dysfunctional. Additionally, an organization may publish one set of values,
perhaps in an effort to push forward a positive image, while the values that
really guide organizational behavior are very different. When there is a
disconnect between stated and operating values, it may be difficult to
determine what is "acceptable." For example, two of the Army's organizational
values include candor and courage. One might infer that officers are
encouraged to "have the courage of their convictions" and speak their
disagreements openly. In some cases, this does work; in others it does not.
The importance of values
For humans, some things have always been more important than others. That
is why we value people, ideas, activities and objects according to their
significance in our life. However, the criteria used to give value to those
elements have varied throughout history, and depend on the values each
person assumes.

Values allow the members of an organization to interact harmoniously. Values

affect their formation and development as individuals, and make it easier to
reach goals that would be impossible to achieve individually.
For the well-being of a community, it is necessary to have shared rules that
guide the behavior of its members, otherwise the community will not function
satisfactorily for the majority.
When families, schools, companies, and society in general function poorly,
many times it is due to a lack of shared values, which is reflected in a lack of
consistency between what is said and what is done.
For example, it is difficult to teach our children tolerance if our leaders and
rulers constantly insult those with whom they disagree.
By the same token, its difficult to promote respect if teachers, professors,
bosses, or parents, when faced with complex situations, defend their decisions
by saying, Here you do what I say or, Things are like that because I say so.

In practical terms, a community is unlikely to function well, much less

perfectly, if its members dont share certain principles that permanently guide
the way they relate to each other, in good times and in bad times.
The word community means couples, families, the workplace, the classroom,
the neighborhood, the city, the country, and any other place where people
interact. If we dont share their values, we will neither feel at ease nor function
properly in that community, and well feel little satisfaction in being a part of it.
In a companys organizational culture values are the foundation of employee
attitudes, motivations and expectations. Values define their behavior.
If values dont have the same meaning for all employees, their daily work will
be more difficult and cumbersome. The work environment becomes tense,
people feel that they are not all moving in the same direction, and clients pay
the consequences.
Being a pillar of a company, values not only need to be defined, they must also
be maintained, promoted and disseminated. Only then will workers have a
better chance of understanding and using them in their daily activities.
Types of values:
We can speak of universal values, because ever since human beings have lived
in community, they have had to establish principles to guide their behavior
towards others.
In this sense, honesty, responsibility, truth, solidarity, cooperation, tolerance,
respect and peace, among others, are considered universal values.
However, in order to understand them better, it is useful to classify values
according to the following criteria:
Personal values:
These are considered essential principles on which we build our life and guide
us to relate with other people. They are usually a blend of family values and
social-cultural values, together with our own individual ones, according to our
experiences.
Family values:
These are valued in a family and iare considered either good or bad. These
derive from the fundamental beliefs of the parents, who use them to educate

their children. They are the basic principles and guidelines of our initial
behavior in society, and are conveyed through our behaviors in the family, from
the simplest to the most complex.
Social-cultural values:
These are the prevailing values of our society, which change with time, and
either coincide or not with our family or personal values. They constitute a
complex mix of different values, and at times they contradict one another, or
pose a dilemma.
For example, if work isnt valued socially as a means of personal fulfillment,
then the society is indirectly fostering anti-values like dishonesty,
irresponsibility, or crime.
Another example of the dilemmas that social-cultural values may pose is when
they promote the idea that the end justifies the means. With this as a pretext,
terrorists and arbitrary rulers justify violence, intolerance, and lies while
claiming that their true goal is peace.
Material values:
These values allow us to survive, and are related to our basic needs as human
beings, such as food and clothing and protection from the environment. They
are fundamental needs, part of the complex web that is created between
personal, family and social-cultural values. If exaggerated, material values can
be in contradiction with spiritual values.
Spiritual values:
They refer to the importance we give to non-material aspects in our lives. They
are part of our human needs and allow us to feel fulfilled. They add meaning
and foundation to our life, as do religious beliefs.
Moral values:
The attitudes and behaviors that a society considers essential for coexistence,
order, and general well being.
Organizational values
Work has been a key element in the development of human beings, because it
requires organization, planning, and effort.
Today, working and producing in coordination with others is an essential need,

hence the emergence of organization in the work place.

Just as social life is framed within cultural values that allow for individual
development, organizations also have their own culture. This culture must
facilitate the integration and growth of its members, and its soundness is also
proof of the soundness of the organization.
Organizational culture is the foundation of the identity and understanding of
its members. It allows us to appreciate and organize the different situations
that arise to respond to them in an appropriate and coherent manner. It
provides the capacity to act in a strategic and efficient manner.
When we talk about culture in an organization, we refer to specific behavior
patterns that can be recognized, conveyed and appropriated. It is the set of
values
used
to
organize
the
relations
between
its
members.
The culture of an organization isnt present from the beginning; it is formed
gradually, and is consolidated by the coherence and consistency between what
its members say and do. This is an essential condition for the culture, to be
conveyed to new members and to preserve its principles. But to convey a value,
one must possess it and implement it; its credibility depends on it.
How an organization functions, well or poorly, is determined by the strength of
its values. These function as an operating system which shows us how to meet
our needs, and allows us to assign them a priority. They provide a common
direction for all members, and establish guidelines for their daily commitments.
Values also inspire the purpose of each organization. The founders must be
explicit about them from the beginning. In this way the value system of the
company is best communicated, which in turn allows the existence of unified
criteria that strengthen the interests of all.
The compatibility of personal values with organizational values leads to a high
level of personal satisfaction with our work. The objectives of the organization
and those of its members acquire greater meaning and importance.
If both of these values stray from each other, the culture of the organization
weakens and its members begin to scatter.

The formation of values

We start forming values in our childhood. First we learn to appreciate things
that fulfill our basic needs, but we value especially those people that provide
them to us. Their behavior towards us becomes the main reference of what is
valuable.
Thus, our character and personality are molded through the attitudes and
behavior of the people who raise us, whether theyre our parents or other
relatives. Their behaviors determine in large part what will subsequently
become our most important beliefs and principles.
We learn to value the substance and the form of everything they say and do,
and what they dont say and dont do. Each gesture or comment affects how we
learn to make choices We also learn to differentiate between the theory and
practice of values. The latter is what marks us the most.
So the consistency and coherence of our parents behavior is what strengthens
our formation. If they practice what they preach, our personality will be
stronger than if they dont.
Later, when we are students, we start feeling social pressures and the pressure
of values that are different from ours, as we relate to other people. The strength
of the values formed through our parents is put to the test.
Values are often confused with habits, and many parents hope that school will
form the values that were not instilled at home. This is not possible, because
school does not fulfill the basic needs of life that is the responsibility of those
who raise us.
Teachers, leaders, and value models at school can reinforce what was formed
at home, but they cannot replace them. If the convictions formed at home are
not solid, they will soon be exposed to an intense social competition against
other beliefs.
Why is it so difficult to form values? Because, unlike norms, values are
convictions; they are behaviors we gladly decide to follow and produce
satisfaction. We can follow norms against our will, but values have the support
of our will. We have learned their importance due to the benefits they produce,
individually and collectively.

Those who play a leadership role in our lives are most powerful at conveying to
us their values. They are our parents, elder siblings, grandparents, some
relatives, teachers, peers we admire, professors, and bosses.
However, to convey something, we must first possess it. Values are only
conveyed through the example of our daily attitudes and behaviors. They can
seldom be formed by explaining them or through a list of what is considered
correct or incorrect. Memorizing their theoretical meaning does not guarantee
their implementation.
Ten commandments of organizational values
The following are ten principles which, when followed, allow some organizations
to perform at a higher level than others, and provide their members with
greater
personal
satisfaction
by
belonging
to
them.
You can add, delete, or modify this list. It is just an exercise to show a way of
presenting values more as behaviors than as theoretical concepts. In this way,
they have greater practical meaning for the members of your team.
These came to me as I began thinking about organizations in general.
Organizations subscribe to any number of values, and the particular behaviors
related to these values can be described with more specificity. Think of it as a
starting point to develop your own list.
Honesty:
We offer what we can deliver, and work hard to achieve it.
We act in an accurate and timely manner. We dont leave things to chance.
We honor and defend what belongs to others. We behave with integrity,
consistently.
We are genuine in what we do. We have only one face.
We always act with justice in mind. We respect the truth.
We dont take advantage of the innocence or ignorance of others.
Responsibility:
We accept responsibility for what we do or fail to do.
We make decisions with special care and attention.

We assume responsibility for our actions and their consequences.

Responsibility is an essential commitment towards others and ourselves.
We honor our debts.
We are well-prepared. We plan and make an effort to work in an orderly fashion.
We recognize our mistakes and strive to correct them.
Communication:
We make an effort to listen to what others are trying to tell us. If we dont
understand, we ask.
We try to make sure that we are explaining things correctly.
We dont take anything for granted. We dont make assumptions.
We avoid labeling our interlocutors or their messages.
We avoid prejudice.
We dont listen to gossip or rumors.
If we dont receive the information we need, we look it up.
We dont remain quiet when we have something to say.
We dont miss any opportunity for self-improvement.
Sincerity:
We express ourselves freely, without dissembling.
We believe in truthfulness as the foundation for trust.
We say what we think, without harming others.
We act consistently with all people, and at all times.
We treat others with openness.
We believe in loyalty and transparency when we communicate.
Sincerity reflects appreciation for our teammates.
Respect:
We dont look down on others or their opinions.
We act with consideration and respect towards other peoples feelings.
We appreciate those around us.
We make an effort to understand with empathy their points of view and the
specific situations they are in.
We dont look down on people when we interact with them.
We dont insult or mistreat others.
We dont assault others either physically or verbally.
We treat people with dignity.
Comradeship:
We create the success of our organization together.
Teamwork requires individual courage.
People who value this principle dont avoid being in a team with members with

whom they have less in common.

The best result is achieved when everybody in the team does the best they can
for themselves and for the group.
We dont achieve harmony by chance; its the result of the effort of the people in
an organization. Its based on knowing and appreciating all team members.
Solidarity:
We dont just help; we also commit to and share the situations of others.
We give support to another human being in need.
We understand that for solidarity to exist, two people or communities are
required.
It means helping without receiving anything in exchange, even if no one finds
out about it, without expecting reciprocity.
It means abiding by common principles and implies sharing benefits and risks.
Tolerance:
We respectfully accept opinions that are different from ours.
We dont discredit people who have points of view we dont share. We accept
them with genuine respect for the individual, even though we dont see eye to
eye.
Tolerance doesnt mean making concessions. It isnt indifference either.
It assumes that we know and accept the other person.
We choose to be tolerant because of our convictions.
It means understanding.
Tolerance implies willpower and maturity.
Learning:
We believe in constant improvement, learning from our everyday experiences.
We believe in the authority that knowledge, study and experience provide.
We therefore look for opportunities to update our knowledge, permanently and
systematically.
We consider learning as a practical process of implementing behavioral change
and adjustments, not just a way of expressing theoretical knowledge.
We say we learn after we have changed what was necessary to change.
Self improvement:
We are committed to improving what we do, every day, even if its just a small
part of the whole.
Its our ability and desire to overcome obstacles or difficulties. Were motivated
by it.
Challenges inspire us.
We feel fulfilled as individuals when we make a conscious effort, because thats
where we see our potential.

We dont do things half-way or because its my duty.

We believe in the power of discipline and perseverance.
Fostering values in organizations
In order for an organization to internalize a set of values its members must first
identify with them. Management must assume the responsibility of defining,
informing and cultivating them, according to the mission.
This is a two-way commitment. Leaders have the responsibility of promoting
organizational values, and the rest of the members have the responsibility of
getting to know them and implementing them.
The greatest challenge is not in the theory but in the practice.
Organizations foster values all the time, through the attitudes and behaviors of
their leaders, at all levels. Every action conveys a value.
For example, if a company must give a course during a non-working day, it
must properly communicate the reason for doing so. Otherwise, the
organization ends up conveying the idea that continuing education is not work,
and isnt very important.
Another example of a situation that conveys values contrary to those we wish
to convey is when supervisors dont attend training sessions but rather send
their subordinates, or when they do the opposite of what was taught in the
course, or when they try to encourage effort or creativity with the argument
that it this is easy.
Promoting values like work, constant improvement, personal excellence,
learning or proactive behaviors in organizations, requires courage and a special
effort from leaders. What we do or dont do has a greater effect than words
alone.
Those at the same level within an organization also communicate what their
personal values are. For example, those who dont collaborate on a task end up
losing the appreciation and respect of their peers.
In addition to defining them in terms of specific behaviors, organizations must
show the practical benefits of implementing values. This is far from obvious to
many. Its always best to make the outcomes explicit.
The most efficient way to foster values is to reinforce good practices and
behaviors that better reflect the desired organizational culture. This is a proven

and effective way to stimulate others to assume principles with conviction.

Threats and punishment in the best of cases produce only fear, not conviction.
The principle of positive reinforcement is simple: One cannot force people to do
well what they dont want to do. This does not imply that mistakes must be
overlooked or that we must be lenient. But positive reinforcement is much
more than a pat in the back. For this method to work, people must receive
praise immediately for a specific behavior, and we must express the positive
feeling that implementing the value entails.
If this method is practiced systematically, the organizational environment
works as a virtuous cycle of value reproduction.
Morals
Ethics and morals relate to right and wrong conduct. While they are
sometimes used interchangeably, they are different: ethics refer to rules
provided by an external source, e.g., codes of conduct in workplaces or
principles in religions. Morals refer to an individuals own principles
regarding right and wrong.

Comparison chart
Ethics versus Morals comparison chart
Ethics

Morals

The rules of conduct recognized in respect

to a particular class of human actions or a
particular group or culture.

Principles or habits with respect

to right or wrong conduct. While
morals also prescribe dos and
don'ts, morality is ultimately a
personal compass of right and
wrong.

Where do they
come from?

Social system External

Individual - Internal

Why we do it?

Because society says it is the right thing to

do.

Because we believe in something

being right or wrong.

Ethics are dependent on others for

definition. They tend to be consistent within
a certain context, but can vary between
contexts.

Usually consistent, although can

change if an individuals beliefs
change.

What are
they?

Flexibility

Ethics versus Morals comparison chart

The "Gray"

Origin

Acceptability

Ethics

Morals

A person strictly following Ethical Principles

may not have any Morals at all. Likewise,
one could violate Ethical Principles within a
given system of rules in order to maintain
Moral integrity.

A Moral Person although perhaps

bound by a higher covenant, may
choose to follow a code of ethics
as it would apply to a system.
"Make it fit"

Greek word "ethos" meaning"character"

Latin word "mos" meaning

"custom"

Ethics are governed by professional and

legal guidelines within a particular time and
place

Morality transcends cultural

norms

Morality (from the Latin moralitas "manner, character, proper behavior") is the
differentiation of intentions, decisions, and actions between those that are
distinguished as proper and those that are improper. Morality can be a body of
standards or principles derived from a code of conduct from a particular
philosophy, religion, or culture, or it can derive from a standard that a person
believes should be universal. Morality may also be specifically synonymous
with "goodness" or "rightness."
Moral philosophy includes moral ontology, or the origin of morals, as well as
moral epistemology, or knowledge about morals. Different systems of
expressing morality have been proposed, including deontological ethical
systems which adhere to a set of established rules, and normative ethical
systems which consider the merits of actions themselves. An example of
normative ethical philosophy is the Golden Rule, which states that: "One
should treat others as one would like others to treat oneself."
Immorality is the active opposition to morality (i.e. opposition to that which is
good or right), while amorality is variously defined as an unawareness of,
indifference toward, or disbelief in any set of moral standards or principles.
Management and Ethics
The modern concept of ethical organisations encompasses many related issues
including:

Corporate social responsibility (CSR) - or simply social responsibility

Ethical management and leadership
'Fair-trade'

Globalization (addressing its negative effects)

Sustainability
Corporate governance
Social enterprise
Mutuals, cooperatives, employee ownership
Micro-finance, and
Well-being at work and life balance, including the Psychological Contract.

Guidelines for Managing Ethics in the Workplace

The following guidelines ensure the ethics management program is operated in
a meaningful fashion:
1.Recognize that managing ethics is a process.
2. The bottom line of an ethics program is accomplishing preferred behaviors in
the workplace.
3. The best way to handle ethical dilemmas is to avoid their occurrence in the
first place.
4. Make ethics decisions in groups, and make decisions public, as appropriate.
5. Integrate ethics management with other management practices.
6. Use cross-functional teams when developing and implementing the ethics
management program.
7. Value forgiveness.
8. Note that trying to operate ethically and making a few mistakes is better
than not trying at all.
Key Roles and Responsibilities in Ethics Management
1. The organization's chief executive must fully support the program.
2. Consider establishing an ethics committee at the board level.
3. Consider
establishing
an
ethics
management
committee.
4. Consider assigning/developing an ethics officer.
5. Consider establishing an ombudsperson.
6. Note that one person must ultimately be responsible for managing the ethics
management program.
Developing Codes of Ethics
Consider the following guidelines when developing codes of ethics:
1. Review any values need to adhere to relevant laws and regulations;
2. Review which values produce the top three or four traits of a highly ethical
and successful product or service in your area,
3. Identify values needed to address current issues in your workplace.

4. Identify any values needed, based on findings during strategic planning.

5. Consider any top ethical values that might be prized by stakeholders.
6. Collect from the above steps, the top five to ten ethical values which are high
priorities in your organization (see item #7 below for examples).
7. Examples of ethical values might include
(the following list is the "Six Pillars of Character" developed by The Josephson
Institute of Ethics, 310-306-1868):
a)
Trustworthiness:
honesty,
integrity,
promise-keeping,
loyalty
b) Respect: autonomy, privacy, dignity, courtesy, tolerance, acceptance
c)
Responsibility:
accountability,
pursuit
of
excellence
d) Caring: compassion, consideration, giving, sharing, kindness, loving
e) Justice and fairness: procedural fairness, impartiality, consistency, equity,
equality, due process
f) Civic virtue and citizenship: law abiding, community service, protection of
environment
8. Compose your code of ethics; attempt to associate with each value, two
example
behaviors
which
reflect
each
value.
Critics of codes of ethics assert that they seem vacuous because many only list
ethical values and don't clarify these values by associating examples of
behaviors.
9. Include wording that indicates all employees are expected to conform to the
values stated in the code of ethics.
Add wording that indicates where employees can go if they have any
questions.
10. Obtain
review
from
key
members
of
the
organization.
Get
input
from
as
many
members
as
possible.
11. Announce and distribute the new code of ethics (unless you are waiting to
announce it along with any new codes of conduct and associated policies and
procedures).
Ensure each employee has a copy and post codes throughout the facility.
12. Update the code at least once a year.
As stated several times in this document, the most important aspect of codes is
developing them, not the code itself. Continued dialogue and reflection around
ethical values produces ethical sensitivity and consensus. Therefore, revisit
your codes at least once a year -- preferably two or three times a year.
13. (Note that you cannot include values and preferred behaviors for every
possible ethical dilemma that might arise.
Your goal is to focus on the top ethical values needed in your organization and
to avoid potential ethical dilemmas that seem mostly likely to occur.)
Benefits of Managing Ethics as a Program
There are numerous benefits in formally managing ethics as a program, rather
than as a one-shot effort when it appears to be needed. Ethics programs:
Establish organizational roles to manage ethics
Schedule ongoing assessment of ethics requirements

 Establish required operating values and behaviors

Align organizational behaviors with operating values
Develop awareness and sensitivity to ethical issues
Integrate ethical guidelines to decision making
Structure mechanisms to resolving ethical dilemmas
Facilitate ongoing evaluation and updates to the program
Help convince employees that attention to ethics is not just a knee-jerk
reaction done to get out of trouble or improve public image

GOOD LUCK
Prepared By
Dr.C.Rajanikanth
MBA,MHRM,Ph.D,(MAPC)

Associate Professor
MBA Department
SVCET,Chittoor
[email protected]