BUSINESS

ETHICS

Business Ethics
Vocational Course

Price- `699/-

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ISBN: 978-93-5470-740-7

9 789354 707407
Business Ethics

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Business Ethics

Swaranjali Publication
Address: No -1-B, Sector 10B, Vasundhara Sector 10,
Delhi - 201012, Behind Vanasthali Public School
E-mail: [email protected]
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 All rights are reserved. No part of this publication may be
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Book : Business Ethics
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CONTENT

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 Chapter- 1
Role of Indian Ethos for Management
Work Ethos or Work Culture refers to certain norms of behaviorgoverning the conduct
of workers involved in work situations to achieve certain desired objectives. The Indian
Ethos emphasizes on the concept like sacrificing individual desires in favour of social
benefits, preferring long term benefits over short term gains. According to Indian
Heritage man’s attitude towards his social existence shifted towards duties, obligations
and sacrifice. He believed in ‘Simple living and high thinking’. Indian ethos basically is
based on our social structure, culture and religions. Moreover, our Vedas, Upanishads,
Shrutis, Purans, Bhagvat Geeta and Ramayan were also contributed to create and
develop the holistic and value added aspects in ethos. It is the high time to locate and
evaluate the amicable role and contribution of our ethos for the goodness of society. We
need Indian ethos in our management for the following reasons. One who works with
calm and even mend achieves most. As we think, so we succeed, so we become.
Strength and cooperation for excelling in work comes from divine. All will enjoy the
highest good by mutual cooperation and respect. Indians are the products of Indian
Ethos. Indian management methods are bound to work in India. Indian Ethos is better
than other ethos present in other countries.

Indians believe:

1) Ego sublimation rather than ego assertion.

2) Sacrificing spirit rather than fighting spirit.

3) Team achievement rather than individual achievement.

4) Spiritual attainment rather than material prosperity.

5) Self-control rather than outside control.

6) Concept of duties rather than concept of rights.

7) Yielding rather than dominating.

8) Concern for this age world and improvement.

9) Respect for and search for all truth whatever be its source.

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To develop proper management system in the organization. Management systems based
on principles as per ancient wisdom are of immense help for the smooth conduct of
business. Value- oriented management system can be established with the help of Indian
ethos. To ensure all round development, growth and prosperity i.e., productivity,
marketing and profitability. Indian ethos teaches us that if you work sincerely for the
society, for your organization and for the Nature, you will really enjoy your life through
money harmony, peace and bliss.

Work culture is also concerned with a workers loyalty and sense of belongingness to the
organization. One should protect the interest of the organization. No employee should
make any adverse comments about the organizations in the public. Every man should
work like a master, not like a slave. The workers should take full responsibility for the
task assigned to them and furthest efforts to achieve what is expected from that. The
worker should exhibit by his behaviora sense of belongingness to the organization. A
feeling of respect should be there for the organization. One should maintain good
relationship with peers, sub ordinates and superiors and treat them well. Protecting the
interest of organization No adverse comment about the organization in public. The
following factors are responsible for poor work culture in an business organization:–
Lack of commitment refers to the disinterest shown by worker to the work. This creates
poor work culture in the organization and results in poor quality of product and lower
productivity. Dedication towards work should be visible by his behaviour. Discipline
includes regularity, punctuality such as to come in time to work place, to complete the
task in given time, to follow rules and regulations if any, do not waste time during
working hours etc. Hence, lack of discipline will create poor work culture which may
cause delay in operations A shared organizational culture helps to unite employees of
different demographics. Many employees within an organization come from different
backgrounds, families and traditions and have their own cultures. Having a shared
culture at the work place gives them a sense of unity and understanding towards one
another, promoting better communication and less conflict. In addition, a shared
organizational culture promotes equality by ensuring no employee is neglected at the
workplace and that each is treated equally.

Basic Principles of Indian Ethos for Management (iem):

1. Immense potential, energy and talents for perfection as human being has the spirit
within his heart.
2. Holistic approach indicating unity between the Divine (the Divine means
perfection in knowledge, wisdom and power), individual self and the universe.

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 3. Subtle, intangible subject and gross tangible objects are equally important. One
must develop one’s Third Eye, Janna Chaksu, the Eye of Wisdom, Vision, Insight
and Foresight. Inner resources are much more powerful than outer resources.
Divine virtues are inner resources. Capital, materials and plant & machinery are
outer resources.
4. Karma Yoga (selfless work) offers double benefits, private benefit in the form of
self Purification and public benefit.
5. Yogah Karmasu Kaushalam - Excellence at work through self-motivation and
Self development with devotion and without attachment.

Co-operation is a powerful instrument for team work and success in any enterprise
involving collective work. Principles of IEM are universally applicable. IEM can help
develop an effective and holistic management pattern which will assure all round growth
in productivity, marketing and profitability. This will help in synchronizing private and
public benefits and encourage individuals to lead an enriched quality of life together
with worldly achievements. The best form of management has to be holistic and value
driven which is the objective of IEM.

Table-1: Following Table Shows The Difference Between Management Oriented

By Science And Technology And Management Oriented By Values.

Items Management (Oriented by Management (Oriented by

Science and Technology, Values and adopting holistic
Western Approach) approach, Indian and
Eastern)
Belief Production, Productivity, Material gain with belief in
Profit at any cost achieving human and social
welfare in unison
Guidance Management guided by mind Management by consciousnes
only, led away by ego and s, power beyond mind i.e.,
desire. Soulless management soul. Interiorized management
Emphasis Worker development, Development of man,
management of others, profit integrated growth harmony,
maximization, human being happiness and health,
only given lip sympathy management of self
Tools Ms as Resources – Men, machines, materials and
men, money, materials, methods as conscious partners
machines and markets. –all having consciousness
Science & Technology, whether manifested or
information for decision dormant .Information and
making intuition for decisions. Ethics
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 and values combined with
skills
Problem Conflict resolution by Conflicts resolution through
solving negotiation, compromise, integration and synthesis on
arbitration. Liquidation of stressing super ordinate
common goals so that
differences only for a
enduring harmony and unity
temporary period. No is assured. Self-introspection,
reference to higher stepping back aids for
consciousness solution
Decision Brain storming Brain stilling
making
Develop Physical, Vital and Mental Integrated development.
ment only. Soul or spirit ignored. Whole man approach, breath -
process Material development only control and meditation
even at the cost of man and emphasized. Human
nature enrichment and total quality
Approach External behaviour. Mental, Noble attitudes, inner
material, selfish only. Soulless guidance, team spirit, total
harmony, global good.
Table 2. Following Table Shows Concept of General Management and
Management by Indian Ethos.

Term General Definition IEM Definition

Management Getting things done Helping other people to produce
extraordinary results
Productivity Output centric People centric
Effective Concern for task and Produce performers. Help the
supervision not for people Subordinates to develop leadership
quality
Motivation of Maslow’s Theory of Emphasis on self-motivation,
people Needs with some subordinates encouraged to be creative
modifications and given autonomy
Resources Reliance almost on Reliance almost on internal resources
external resources
Health of the Balance Sheet and People oriented performance,
company P/L a/c; money Environment friendly. Private –
oriented public benefit
Hygiene Attention only on Primary emphasis on mind Enrichment.
factor job enrichment
Rights and Emphasis on taking Emphasis on giving not on taking.
duties not on giving. Rights Duties given great importance

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 become primary. and Rights assume secondary value
Duties become
subsidiary
Structure Hierarchical Organic evolution, autonomous
Job Hygiene factor. Through innovation, uniqueness,
satisfaction Creativity ignored extraordinary result, trouble shooting

Indian Ethos Demands A Subjective Management System Which Leads To An

Understanding Of The Following:

(a) Management Attitude – Top management having firm belief in value-oriented

holistic management. Profit is earned through service and satisfaction of all
stakeholders – employees, customers, shareholders and citizens. Fulfilment of
social responsibility must be ensured.
(b) Humanising the Organisation – Looking at the three aspects of humane
organisations, i.e., inter-personal relations, man-machine equation where man is
the prime concern and inner management through mental and spiritual growth of
individuals.
(c) Interiorising Management – Self management or management by consciousness.
When the soul manages the other four members of the human being, namely, the
body, mind, intellect and the heart, the conflict these four have amongst
themselves can be resolved. This is management by consciousness. The objective
of self-management is to first know and manage oneself and then manage others.
(d) Self-introspection – Embark upon self-study, self-analysis and self-criticism to
locate areas of friction and disharmony, a self-examination of one’s own thoughts,
feelings, emotions, sensations and passions and a desire to reduce and subdue the
ego.
(e) Brain-stilling – For rational and enduring decisions, silent mind is a necessity. A
perfect Magnum (calm mind enjoying tranquillity) is necessary. Brain-stilling or
meditative silence is the most reliable method to discover solutions to problems
and difficulties which seem to be difficult to be tackled by reason and intellect
because through this one can come into contact with the inner mind or higher
consciousness called Chetana.
(f) Stepping Back (for a while) – Never decide anything, never speak a word, never
throw yourself into action without stepping-back. The stepping back from a
situation for a while enables one to control and master a situation.
(g) Self-dynamising Meditation – A dynamic meditation is meditation of
transformation of lower consciousness into higher consciousness and hence is
called transforming meditation. Through meditation, in a silent and calm mind,
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 one reaches a higher level of consciousness which offers guidance in the form of
intuitions to tackle a multitude of problems. This is called consciousness approach
to management.
(h) Role of Intuition – Intuition is the act of coming to direct knowledge or certainty
without reasoning or inferring. It is immediate cognition by the inner mind and
when fully developed, is efficient and effective for taking prompt and sound
decisions. Intuition skills enable one to cope with confidence the fluctuating
environment and rapid changes. Faith is a prerequisite to develop and realize the
power of intuition.

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 Chapter- 2
Management Skill from Indian Mythology and Vedas
In this modern world the art of Management has become a part and parcel of everyday
life, be it at home, in the office or factory and in Government. In all organizations,
where a group of human beings assemble for a common purpose irrespective of caste,
creed, and religion, management principles come into play through the management of
resources, finance and planning, priorities, policies and practice. Management is a
systematic way of carrying out activities in any field of human effort.

Its task is to make people capable of joint performance, to make their weaknesses
irrelevant, says the Management Guru Peter Drucker. It creates harmony in working
together equilibrium in thoughts and actions, goals and achievements, plans and
performance, products and markets. It resolves situations of scarcity, be they in the
physical, technical or human fields, through maximum utilization with the minimum
available processes to achieve the goal. Lack of management causes disorder, confusion,
wastage, delay, destruction and even depression. Managing men, money and materials in
the best possible way, according to circumstances and environment, is the most
important and essential factor for a successful management. It should literally transform
how people think and help them finally realize the potential of a truly universal
knowledge that is wisdom.

Management Guidelines from the Bhagavad Gita

• There is an important distinction between effectiveness and efficiency in

managing.
• Effectiveness is doing the right things.
• Efficiency is doing things right.

The general principles of effective management can be applied in every field, the
differences being more in application than in principle. The Manager's functions can be
summed up as:

• Forming a vision
• Planning the strategy to realize the vision.
• Cultivating the art of leadership.
• Establishing institutional excellence.
• Building an innovative organization.
• Developing human resources.
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 • Building teams and teamwork.
• Delegation, motivation, and communication.
• Reviewing performance and taking corrective steps when called for.

Thus, management is a process of aligning people and getting them committed to work
for a common goal to the maximum social benefit ‐ in search of excellence. The critical
question in all managers' minds is how to be effective in their job. The answer to this
fundamental question is found in the Bhagavad Gita, which repeatedly proclaims that
"you must try to manage yourself." The reason is that unless a manager reaches a level
of excellence and effectiveness, he or she will be merely a face in the crowd.

Old Truths in a New Context

The Bhagavad Gita, written thousands of years ago, enlightens us on all managerial
techniques leading us towards a harmonious and blissful state of affairs in place of the
conflict, tensions, poor productivity, absence of motivation and so on, common in most
of Indian enterprises today – and probably in enterprises in many other countries.

The modern (Western) management concepts of vision, leadership, motivation,

excellence in work, achieving goals, giving work meaning, decision making and
planning, are all discussed in the Bhagavad Gita. There is one major difference. While
Western management thought too often deals with problems at material, external and
peripheral levels, the Bhagavad Gita tackles the issues from the grass roots level of
human thinking. Once the basic thinking of man is improved, it will automatically
enhance the quality of his actions and their results.

The management philosophy emanating from the West is based on the lure of
materialism and on a perennial thirst for profit, irrespective of the quality of the means
adopted to achieve that goal. This phenomenon has its source in the abundant wealth of
the West and so 'management by materialism' has caught the fancy of all the countries
the world over, India being no exception to this trend. My country, India, has been in the
forefront in importing these ideas mainly because of its centuries old indoctrination by
colonial rulers, which has inculcated in us a feeling that anything Western is good and
anything Indian, is inferior.

The result is that, while huge funds have been invested in building temples of modem
management education, no perceptible changes are visible in the improvement of the
general quality of life ‐ although the standards of living of a few has gone up. The same

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old struggles in almost all sectors of the economy, criminalization of institutions, social
violence, exploitation and other vices are seen deep in the body politic.

The Source of the Problem

The reasons for this sorry state of affairs are not far to seek. The Western idea of
management centers on making the worker (and the manager) more efficient and more
productive. Companies offer workers more to work more, produce more, sell more and
to stick to the organization without looking for alternatives. The sole aim of extracting
better and more work from the worker is to improve the bottomline of the enterprise.
The worker has become a hirable commodity, which can be used, replaced and
discarded at will.

Thus, workers have been reduced to the state of a mercantile product. In such a state, it
should come as no surprise to us that workers start using strikes (gheraos) sit ins,
(dharnas) go slows, work to rule etc. to get maximum benefit for themselves from the
organizations. Society at large is damaged. Thus we reach a situation in which
management and workers become separate and contradictory entities with conflicting
interests. There is no common goal or understanding. This, predictably, leads to
suspicion, friction, disillusion and mistrust, with managers and workers at cross
purposes. The absence of human values and erosion of human touch in the
organizational structure has resulted in a crisis of confidence.

Western management philosophy may have created prosperity – for some people some
of the time at least but it has failed in the aim of ensuring betterment of individual life
and social welfare. It has remained by and large a soulless edifice and an oasis of plenty
for a few in the midst of poor quality of life for many.

Hence, there is an urgent need to re-examine prevailing management disciplines their

objectives, scope and content. Management should be redefined to underline the
development of the worker as a person, as a human being, and not as a mere wage
earner. With this changed perspective, management can become an instrument in the
process of social, and indeed national, development.

Now let us re-examine some of the modern management concepts in the light of the
Bhagavad Gita which is a primer of management by values.

Utilization of Available Resources

The first lesson of management science is to choose wisely and utilize scarce resources
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optimally. During the curtain raiser before the Mahabharata War, Duryodhana chose Sri
Krishna's large army for his help while Arjuna selected Sri Krishna's wisdom for his
support. This episode gives us a clue as to the nature of the effective manager ‐ the
former chose numbers, the latter, wisdom.

Work Commitment

A popular verse of the Gita advises "detachment" from the fruits or results of actions
performed in the course of one's duty. Being dedicated work has to mean "working for
the sake of work, generating excellence for its own sake." If we are always calculating
the date of promotion or the rate of commission before putting in our efforts, then such
work is not detached. It is not "generating excellence for its own sake" but working only
for the extrinsic reward that may (or may not) result. Working only with an eye to the
anticipated benefits, means that the quality of performance of the current job or duty
suffers through mental agitation of anxiety for the future. In fact, the way the world
works means that events do not always respond positively to our calculations and hence
expected fruits may not always be forthcoming. So, the Gita tells us not to mortgage
present commitment to an uncertain future.

Some people might argue that not seeking the business result of work and actions makes
one unaccountable. In fact, the Bhagavad Gita is full of advice on the theory of cause
and effect, making the doer responsible for the consequences of his deeds. While
advising detachment from the avarice of selfish gains in discharging one's accepted
duty, the Gita does not absolve anybody of the consequences arising from discharge of
his or her responsibilities.

Thus the best means of effective performance management is the work itself. Attaining
this state of mind (called "nishkama karma") is the right attitude to work because it
prevents the ego, the mind, from dissipation of attention through speculation on future
gains or losses.

Motivation – Self and Self Transcendence

It has been presumed for many years that satisfying lower order needs of workers
adequate food, clothing and shelter, etc. are key factors in motivation. However, it is a
common experience that the dissatisfaction of the clerk and of the Director is identical
only their scales and composition vary. It should be true that once the lower order needs
are more than satisfied, the Director should have little problem in optimizing his
contribution to the organization and society. But more often than not, it does not happen

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like that. ("The eagle soars high but keeps its eyes firmly fixed on the dead animal
below.") On the contrary, a lowly paid schoolteacher, or a self-employed artisan, may
well demonstrate higher levels of self-actualization despite poorer satisfaction of their
lower order needs.

This situation is explained by the theory of self-transcendence propounded in the Gita.

Self-transcendence involves renouncing egoism, putting others before oneself,
emphasizing team work, dignity, co-operation, harmony and trust – and, indeed
potentially sacrificing lower needs for higher goals, the opposite of Maslow.

"Work must be done with detachment." It is the ego that spoils work and the ego is the
centrepiece of most theories of motivation. We need not merely a theory of motivation
but a theory of inspiration.

The Great Indian poet, Rabindranath Tagore (1861‐1941, known as "Gurudev") says
working for love is freedom in action. A concept which is described as "disinterested
work" in the Gita where Sri Krishna says, "He who shares the wealth generated only
after serving the people, through work done as a sacrifice for them, is freed from all sins.
On the contrary those who earn wealth only for themselves, eat sins that lead to
frustration and failure." Disinterested work finds expression in devotion, surrender and
equipoise. The former two are psychological while the third is determination to keep the
mind free of the dualistic (usually taken to mean "materialistic") pulls of daily
experiences. Detached involvement in work is the key to mental equanimity or the state
of "nirdwanda." This attitude leads to a stage where the worker begins to feel the
presence of the Supreme Intelligence guiding the embodied individual intelligence. Such
depersonified intelligence is best suited for those who sincerely believe in the
supremacy of organizational goals as compared to narrow personal success and
achievement.

Work Culture

An effective work culture is about vigorous and arduous efforts in pursuit of given or
chosen tasks. Sri Krishna elaborates on two types of work culture – "daivi sampat" or
divine work culture and "asuri sampat" or demonic work culture.

Daivi work culture involves fearlessness, purity, self‐control, sacrifice,

straightforwardness, selfdenial, calmness, absence of fault‐finding, absence of greed,
gentleness, modesty, absence of envy and pride.

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Asuri work culture involves egoism, delusion, personal desires, improper performance,
work not oriented towards service. Mere work ethic is not enough. The hardened
criminal exhibits an excellent work ethic. What is needed is a work ethic conditioned by
ethics in work.

It is in this light that the counsel, "yogah karmasu kausalam" should be understood.
"Kausalam" means skill or technique of work which is an indispensable component of a
work ethic. “Yogah" is defined in the Gita itself as "samatvam yogah uchyate" meaning
an unchanging equipoise of mind (detachment.) Tilak tells us that acting with an equable
mind is Yoga.

By making the equable mind the bed rock of all actions, the Gita evolved the goal of
unification of work ethic with ethics in work, for without ethical process no mind can
attain equipoise. The guru, Adi Sankara (born circa 800 AD), says that the skill
necessary in the performance of one's duty is that of maintaining an evenness of mind in
face of success and failure. The calm mind in the face of failure will lead to deeper
introspection and see clearly where the process went wrong so that corrective steps
could be taken to avoid shortcomings in future.

The principle of reducing our attachment to personal gains from the work done is the
Gita's prescription for attaining equanimity. It has been held that this principle leads to
lack of incentive for effort, striking at the very root of work ethic. To the contrary,
concentration on the task for its own sake leads to the achievement of excellence – and
indeed to the true mental happiness of the worker. Thus, while commonplace theories of
motivation may be said to lead us to the bondage or extrinsic rewards, the Gita's
principle leads us to the intrinsic rewards of mental, and indeed moral, satisfaction.

Work Results

The Gita further explains the theory of "detachment" from the extrinsic rewards of work
in saying: If the result of sincere effort is a success, the entire credit should not be
appropriated by the doer alone. If the result of sincere effort is a failure, then to the
entire blame does not accrue to the doer.

The former attitude mollifies arrogance and conceit while the latter prevents excessive
despondency, de motivation and self pity. Thus both these dispositions safeguard the
doer against psychological vulnerability, the cause of the modem managers' companions
of diabetes, high blood pressure and ulcers.

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Assimilation of the ideas of the Gita leads us to the wider spectrum of "lokasamgraha"
(general welfare) but there is also another dimension to the work ethic if the
"karmayoga" (service) is blended with "bhaktiyoga" (devotion), then the work itself
becomes worship, a "sevayoga" (service for its own sake.)

Along with bhakti yoga as a means of liberation, the Gita espouses the doctrine of
nishkamya karma or pure action untainted by hankering after the fruits resulting from
that action. Modern scientists have now understood the intuitive wisdom of that action
in a new light.

Scientists at the US National Institute of Mental Health in Bethesda found that

laboratory monkeys that started out as procrastinators became efficient workers after
they received brain injections that suppressed a gene linked to their ability to anticipate a
reward. The scientists reported that the work ethic of rhesus macaques wasn't all that
different from that of many people: "If the reward is not immediate, you procrastinate",
Dr Richmond told LA Times.

Manager's Mental Health

Sound mental health is the very goal of any human activity more so management.
Sound mental health is that state of mind which can maintain a calm, positive poise, or
regain it when unsettled, in the midst of all the external vagaries of work life and social
existence. Internal constancy and peace are the pre requisites for a healthy stress free
mind.

Some of the Impediments to Sound Mental Health are:

• Greed for power, position, prestige and money.

• Envy regarding others' achievements, success, rewards.
• Egotism about one's own accomplishments.
• Suspicion, anger and frustration.
• Anguish through comparisons.

The driving forces in today's businesses are speed and competition. There is a distinct
danger that these forces cause erosion of the moral fiber, that in seeking the end, one
permits oneself immoral means tax evasion, illegitimate financial holdings, being
"economical with the truth", deliberate oversight in the audit, too clever financial
reporting and so on. This phenomenon may be called as "yayati syndrome".

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In the book, the Mahabharata, we come across a king by the name of Yayati who, in
order to revel in the endless enjoyment of flesh exchanged his old age with the youth of
his obliging youngest son for a thousand years. However, he found the pursuit of sensual
enjoyments ultimately unsatisfying and came back to his son pleading him to take back
his youth. This "yayati syndrome" shows the conflict between externally directed
acquisitions (extrinsic motivation) and inner value and conscience (intrinsic motivation.)

Management Needs Those Who Practice What They Preach

"Whatever the excellent and best ones do, the commoners follow," says Sri Krishna in
the Gita. The visionary leader must be a missionary, extremely practical, intensively
dynamic and capable of translating dreams into reality. This dynamism and strength of a
true leader flows from an inspired and spontaneous motivation to help others. "I am the
strength of those who are devoid of personal desire and attachment. O Arjuna, I am the
legitimate desire in those, who are not opposed to righteousness," says Sri Krishna in the
10th Chapter of the Gita.

Management Skill from Ramayana

One of the most obvious incidences, in which use management principles is very clearly
visible is that of Hanuman going to Lanka. His mission was to locate Sita there and give
her Lord Ram’s message. When it became clear that Sita was in Lanka, Jamvant asked
Hanuman to go there. He helped him in realising his true potential and motivated him to
go in the enemy’s camp. Once mentally prepared for the job and reached there, first
thing which Hanuman did was to completely analyse the situation in Lanka. He did a
complete study about the Lankans, assessing their strengths and weaknesses, the various
threats and opportunities which he had in the enemy’s camp.

This Is What Management Is All About

• Ascertaining the goals, or job to be done.

• Getting mentally prepared for it.
• Having a right plan.

Analyzing the Strengths and Weaknesses of the Competitor and What Threats and
Opportunities are there in the Business.

This swot [strength, weakness, opportunities and threats] analysis is one of the most
important aspects of modern day management. Moreover Jamvant motivating Hanuman

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is a classic example of a good Manager helping his personnel to realise their potential
and acting accordingly.

The other example which I would like to talk about here is that of good and bad
managers. A good manager is the one, who can get his work done even from the rivals.
In Ramayana Sughriv has shown some of the best managerial characteristics. As a
successful manager he had Ram to work accordingly and got his kingdom back from a
brother who was far mightier than him.

A Good Example of Getting Into Strategic Alliance with Others to Achieve Your
Desired Goal.

Using his managerial skills he even had Angad to work for him. Angad was the son of
his brother whom he got killed by Ram. Had Sughriv been a bad manager then the same
Angad would have proved to be his arch nemesis.

In the same Ramayana, again and again Ravana has shown the signs of a bad manager,
and hence led to the demise of his kingdom. From the starting itself he ignored the
suggestions of his managers and got his kingdom in the state of war with Ram.
Moreover during a crisis, a company needs its best of the managers to bail it out of the
same. A good manager listens to what his subordinates has to say and tries to keep them
together especially when the organization needs them the most. But Ravana’s
mismanagement was responsible for Vibhishan [one of the wisest manager he should
have listened to] leaving him amidst a crisis.

It is said that businesses are run on relations. A manager who can nurture good relations
with the employees, clients and anyone in whose contact the organization and the
manager comes in, can do wonders for his company. Lord Ram was very good at it. He
was the master of nurturing relations. His prowess at it was so great that while Ravana
was lying wounded in the battle field and was about to die, he shared some important
lessons which he had learnt in his life. The same Ravana, who at the same time had not
responded to Lakshman, when he was sent to seek Ravana’s wisdom by Ram, was more
than happy in sharing his knowledge with Ram.

All these examples and many more like this, tells us a great deal about management. For
a manager there is lot to learn from our epics. Not just Ramayana, but Gita, Mahabharat
and others as well have a lot to offer as management lessons.

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Building Leadership Skills - Lessons from the Ramayana

 Provide a concrete vision to followers: Rama held forth a concrete vision of the
future. The mission of the army led by him was to defeat the rakshasas and rescue
Sita. To this end, a number of actions were taken such as sending out search parties,
building an overseas bridge and issuing a direct challenge to Ravana. These actions
flowed naturally as a result of the vision held by Rama. This clarity about the goals
as well as the process enabled the army to put its heart and soul in the campaign to
rescue Sita.
 Provide a compelling dream along with a clear scenario of how it will be
accomplished : Believe in the ability of subordinates to achieve an aim and
inspire them to do so : Rama led what was essentially a rag-tag army against the
sophisticated army of Ravana. The Rakshasa army was a powerful one, which had
defeated the formidable, devas and vanquished powerful kings. In contrast, the
army of Rama comprised of soldiers who were perhaps aboriginal tribes who had
never encountered a sophisticated army before. Not surprisingly, Ravana and his
courtiers jeered at the army and laughed scornfully at Angad, Ram's messenger who
had come with an offer of peace. Yet Rama maintained confidence in the ability of
his army to surmount this seemingly impossible odd and enthused by his confidence
his army fought to achieve victory.
 Set ambitious goals and motivate troops to meet them: Treat all people
equally: Rama was a prince who interacted freely with the people. Unlike many
princes of his day who disdained the common folk, Rama did not have any biases
regarding developing relationships with people of a lower social status. Thus he
accepted the hospitality of the chief of the fisher folk and allied with the forest
tribes who were out of the pale of mainstream society. In fact, Rama gave them
positions of equality. This was not only due to the war conditions since he
maintained the same relationship when he won the war. Not surprisingly, he
commanded great loyalty from all.
 Develop relationships with people regardless of social status and treat
everybody with courtesy and respect: Stand courageously in the face of great
adversity: Following Sita's abduction, Rama wandered destitute and penniless in
the forests searching for Sita. The Ramayana is full of poignant details of Rama's
sadness and his memory of Sita. Yet this grief did not prevent him from searching
for allies even when the enemy was unknown. Sugriva, a chameleon like character,
would not have agreed to help them, had he not sensed that despite their misfortune,
the fugitive prince was indeed a power to reckon with. And throughout the battle

16
 with Ravana, Rama maintained his courage even at the darkest hours and in doing
so inspired his army to not only continue the unequal fight, but also win it.
 Maintain resolve during crisis and take proactive steps to meet challenges:
Stand for morality but do not engage in judgmental posturing: Rama was well
known for his moral conduct and his effort to stand forth as an example of his
values. But nowhere does the Ramayana depict him as a blind puritan who
demanded that all practices that did not conform to his code of conduct be seen as
sinful and be banned. A person with a resolve of having only one wife when other
kings including his own father had several, Rama did not raise any objection when
Sugriva married Bali's widow even though he had a wife already.
 Lead by example not coercion: Consult subordinates on important matters and
allow them to give their opinions freely: When Vibhishan defected; Rama took
him under his protection. He then had a talk with the various army chiefs some of
whom disagreed with Rama. Instead of punishing them, Rama assuaged their
suspicions and got them to accept his decision. Everybody felt that their opinions
had been heard and that their objections had been clarified. Empowerment of
subordinates to question his decisions was a key and unique quality of Rama which
one cannot but help comparing with Ravana who never allowed anybody to
contradict him.
 Empower subordinates: Follow a code of ethics and be ready to sacrifice to
follow it: Rama brought ethical decision making in all areas of his life. There are
many leaders who make a sacrifice once in order to build credibility and then use it
to make unethical decisions later relying on the knowledge that their initial sacrifice
would make them immune to attacks. The generation that fought for India's
independence degenerated into wheelers and dealers after assuming power. Yet the
same leaders would refer to their past sacrifices while seeking votes intending that
their current unethical conduct be tolerated. Rama did not do so. Thus, when
Ravana swaggered to battle on the first day without adequate preparations and was
rendered weaponless by Rama, he was allowed to return to his citadel because the
code of chivalry followed by Rama stipulated that an unarmed enemy not be
attacked. Build credibility by living according to cherished values.

Peace of Mind: Ramayana's Tips for Good Governance

The Ramayana, the saga of Rama's life written by Valmiki, is widely acclaimed as
among the greatest of all Indian epics. The narrative is regarded as a veritable treatise on
social sciences, offering lessons that transcend both time and space. In fact, this famous

17
Grantha carries useful tips on ethics and values, statecraft and politics, and even general
and human resources management.

The Ramayana can serve as a useful reference book for those willing to learn. With
Rama Rajya as a model for good governance, the Ramayana is a must read for
practitioners of statecraft. More so, because much fuss is being made today over
Ayodhya being the birthplace of Rama and the controversy over the building of a Ram
temple at the Ram janma bhoomi.

The Ayodhya Kanda, the second chapter, contains comprehensive lessons on good
governance. When Bharata, the younger brother of Rama, goes to meet the latter in the
forest to request him to return to Ayodhya and rule, the two brothers enter into a long
and instructive dialogue.

Rama counsels Bharata on governance. From quality of ministers and the importance of
strategy sessions, to temperance in administration to justice, Rama expounds on all the
subtleties of statecraft in a lucid manner. Apparently, Rama seems to be inquiring of
Bharata his well-being, whether all is well at Ayodhya - in fact, however, in the process,
the lessons on effective governance are offered in a powerful manner. Though the
dialogue between the two brothers runs into several pages and a thorough reading is
required to understand the intricacies, some important lessons are obvious, particularly
the ones given on pages 441-449 of the Valmiki Ramayana.

A critical factor in good governance is the quality of ministers. Rama asks Bharata
whether he has appointed courageous, knowledgeable, strong-willed men with a high
emotional quotient as his ministers, because quality advice is the key to effective
governance. The emphasis is on competence and confidentiality. Rama's advice to
Bharata is to take a decision on a complex issue neither unilaterally nor in consultation
with too many people. There should be an efficient core group.

A good administrator can ensure high returns from minimum investments. Lord Ram
had asked Bharat nearly 400 questions on governance when the younger brother
requested him not to go into exile Rama tells Bharata to prefer one wise man to a
thousand fools as it is the wise who can ensure prosperity during an economic crisis.
Even if there is one minister who is really effective, the king will gain immensely.
Appointing tested men of noble lineage and integrity for strategic positions is the key to
successful government. Moderate taxes should be levied on the people, lest they revolt.
Rama wants Bharata to treat his soldiers well and pay their legitimate wages on time.
Delays in payment of wages and other allowances can lead to dangerous consequences.

18
Trade and agriculture are important and Rama wants Bharata to ensure good irrigation
facilities rather than being overly dependent on rains. Traders need to be ensured of a
fear-free environment and their grievances should be redressed promptly.

Protecting the forests and maintaining livestock have also been dealt with as important
aspects of effective governance. In fact, the vision of the Ramayana has eternal
relevance. Law and justice, finance and business, corruption framing of innocents for
monetary gains, injustice to the poor are all mentioned.

Rama's words of advice to Bharata are as relevant today as they were in the Treta
period, the time when Rama is believed to have lived. It is worthwhile to ponder over
the thoughts and deeds of Rama rather than expend valuable time and energy fighting
over his birthplace and whether a temple should be constructed there. For the benefit of
present and future generations, Rama gave valuable tips to Bharata on good governance.
We should focus on this aspect rather than on outward worship.

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 Chapter- 3
Management Skill from Mahabharata

Mahabharata is one of the oldest and greatest epics of Hindu mythology that the world
has ever witnessed. It revolves around the varied emotions and family relation that
resulted in the battle among the Kauravas and Pandavas for conquering the throne of
Hastinapura. With 100,000 verses, it is the longest epic poem ever written and had been
composed in the 4th century BCE or earlier, which is astonishing and speaks volume of
this epic.

The epic also holds great moral and ethical value that can inspire and teaches the youth
of our generation to move in the righteous direction to achieve their goals. The epic is
filled with numerous incidents that can enrich and improvise the way in which people
and organization function. Through this article, we aim to share with you those strategic
incidents and tales that you can be implemented in your life and you could climb the
ladder of success and prosperity.

Lesson 1: Strategy and Leadership

What is popularly seen as per the Mahabharata is Krishna emerging as a renowned

strategist. In the battle Krishna ensues that he virtually leads the 7 divisions of
Pandavas’ army to a decisive win against the 11 divisions of Kauravs’ army. It was
Krishna who taught the skills of preparing the right strategy before venturing in the
battlefield. He with his discourses kept on motivating Arjuna that he has to take on the
role of the ‘Leader’ and fight against Kauravas.

In modern era, Stephen Covey also mentions in his book that “as a professional, you
must pay heed to your ‘inner voice’”. While proposing the whole person paradigm, he
focuses on the four dimensions of a person – spirit, body, heart and mind. The one who
listens to the voice of his/her conscience often excels in strategizing and pioneering
leadership skills.

Lesson 2: Team Spirit

This aspect is the pillar of the Mahabharata. Kauravas could not muster up the complete
support that was necessary for winning the battle. All the great generals of Kauravas,
including Bheesma, Drona, Karna crusaded individual fights on the battlefield.

20
However, Pandavas weaved one team that was directed by a single goal. All participated
in decision making process and contributed their skills leading to a synergic effect.

In contemporary era, MBA aspirants are taught management lessons on ‘Synergy’ and
‘Esprit de corps’. This principle is one of Henri Fayol's 14 administrative principles that
emphasizes on maintaining the group cohesion in the organization.

Lesson 3: Use the Right Model at the Right Time

In the days of the Kurukshetra war Krishna let Ghatotkach die so that Karna would not
be able to use his Shakti astra to kill Arjuna. Krishna let Abhimanyu die in violation of
all laws decided for the war so that even the Pandavas could break the laws to kill
Duryodhana, Karna and Drona. Ethically these moves were wrong, but they were
necessary to win the terminal goal of the battle.

In the strategic management also organizations are aware about various models, but
depending upon the nature of the economic downturn and boom, the model is chosen
and implemented to churn out the market share.

Lesson 4: Passion is the Best Teacher

Another prominent story about the devotion of 'Eklavya' the royal guru 'Dronacharya' is
a milestone to achieve for MBA aspirants. Eklavya was passionate about learning the art
of archery, but his potential guru 'Dronacharya' refused to teach him the skills.
Therefore, he hid behind trees and watched him teach the art of archery to Pandavas and
Kauravas. It is his passion that he learnt all the techniques of archery just by observing
from far away without a teacher actually teaching him. Not just that, he becomes so
good at it that Drona feels, he is actually better than (or at par with) Arjuna.

Hence, if you want to excel in a career of your choice then ignore the impediments and
work industriously to achieve your goals. In the field of management, your Passion to
succeed counts both academically and practically as well. Your commitment to fulfil the
deadlines, your agility to learn new skills and flexibility in adjusting to the ever
changing dynamic conditions of the business are required to sail through the waves of
challenges. Therefore, remain passion-driven to succeed or else you will perish.

Lesson 5: Excellence in Governance

When Indrapastha (City of Indra) was built, Pandavas ruled in a fair and just manner.
They did not drift from the path of righteousness. There administration and management

21
won the love and affection of their subjects. They ruled for thirty-six years on this path
before falling prey to an unfair game of dice. It was this excellence in governance that
eventually got lost and led to a heinous battle in Kurukshetra.

At present, Excellence in governance is a vital condition for a business leader to

command respect in the marketplace and among their employees. It is vital for
maintaining a healthy culture in the organizations and vent off the malice of office
politics and other emanating aspects that breeds negativity. The HR department can
ensure that certain initiatives taken by organization to ensure a culture of excellence in
governance. The Tata group, Google India, Intel, Wipro are some organizations that
offer best environment and place to work for their employees.

The above mentioned 5 management lessons from the Mahabharata have summed up
that in order to attain success in your goals and aspirations, you need to plan a direction
and not deviate from it. Another crucial factor that can be understood from the holy epic
is that if you chose management as a career, then it is not just your academic knowledge
that will be responsible for your growth but also your people and time management
skills that will play a significant role.

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 Chapter- 4
Managementl Skill from Kautilya Arthashashtra
Acharya Chanakya or Kautilya was the minister in the Kingdom of Chandragupta
Maurya during 317 – 293 B.C. He has been considered as one of the shrewdest ministers
of the times who has explained his views on State, War, Social Structures, Diplomacy,
Ethics, Politics and Statecraft very clearly in his book called Arthashastra that he wrote
in around 4th century before Christ. It consists of 15 chapters, 380 Shlokas and 4968
Sutras. In all probability, this treatise is the first ever book written on ethics of
Statecraft. It is essentially on the art of governance and has an instructional tone (Kohli,
1995). The Mauryan Empire was larger than the later British India which expanded from
the Indian Ocean to Himalayas and up to Iran in the West. After Alexander left India,
this was the most powerful kingdom in India and Acharya Chanakya or Kautilya
(hereafter Kautilya) was minister who advised the King. He thus wrote this treatise for
his Swamy (the king) Chandragupta Maurya and stated in its preface that it has been
written as a guide for "those who govern". Kautilya was interested in establishment and
operation of the machinery through which the king preserves the integrity and solidarity
of the State and generates power.

Organisational Skills:

Kautilya is aware that for efficient running of an organisation or the State, elaborate
machinery has to be established. He is equally clear on the organizational aspects,
human dimensions of an organization as well as the leadership requirement of an
organization. On the organizational aspects, Kautilya evolves an elaborate hierarchy
under the king. The king appoints Amatya, the Prime Minister. Amatya operates the
day-to-day machinery of the State through a council of officials consisting of Mantris,
the Ministers, Senapati, the warlord or the Defence Minister, Purohit, the Chief Justice
and Yuvaraj, the Heir Apparent or identified successor to the throne. Kautilya weaves a
design of a tall hierarchy for governance going down to the level of village through his
concept of Mandalas (Kohli, 1995). Gram Panchayats and Panchayati Raj set up that
was adopted by the Government of India can be considered as a logical derivative of
Kautilya's attempt to bring administration to the lowest appropriate level in the
machinery of State. His Arthashashtra has detailed policies for the society, individual
industries, labour and employment, calamities and control of vices (Boesche, 2003). At
this stage, he shows the depth of his knowledge of the major element of effective and
efficient implementation of business processes, namely, the human aspect of

23
management. He observes that the State, as an organization, is a social organization with
economic aim.

The Arthashashtra has a good deal of thoughts on the qualitative candidature for the
government machinery. Kautilya is specific about the qualities Mantris must possess. He
writes about these qualities as qualifying standards for appointment as a Mantri. These
qualities are: Drudhachitta (power of concentration), Shilavan (character), Pragna
(thinking capability), Vangmi (communication skills) and Daksha (observation/
vigilance). In addition, he highlights the competencies that a Mantri must possess. These
competencies are the same as the competencies advocated by the management gurus of
the present times, namely, Knowledge, Skills and Attitude. A candidate possessing these
qualities must get the keys to assist the leader in running statecraft (Gupta, 1987).
According to Kautilya, the essentials of the State should be taken care of through
'constituents of the State' identified by him. These constituents are: Swamy (King),
Amatya (Prime Minister), Janapada (populated territory), Durga (fort), Ksha (treasury),
Bala (force / army) and Mitra (ally). His choice of Mitra as a constituent of the State is
interesting. He thinks of a network of allies to fortify a kingdom. Mitra is a king who
would come to the support of Swamy, if Swamy's kingdom is attacked by another king.
It will also be the duty of the Swamy to extend all help if the Mitra is attacked by
another king (Mukherjee, 1976). In today's world of globalization, the same concept is
applied when corporate form alliances to fortify their territories from external dangers
such as cheap imports and the entry of strong competitors.

Managerial Skills:

As Arthashastra itself means ‘the science of Economics’, thus one can easily observe
that several concepts of present day economics management theories have been
explicitly explained by Kautilya in his work. As in the present day management, the
importance of vision, mission and motivation was captured in Arthashastra (Zysk,
1987). Kautilya advise his Swamy to rule through Prabhu Shakti (vision), Mantra Shakti
(mission) and Utsah Sahkti (motivation). Kautilya reminds his Swamy that his
objectives for his rule are:

 Acquire power;

 Consolidate what has been acquired;

 Expand what has been acquired; and

24
  Enjoy what has been acquired.

Finally, from the point of view of management of the kingdom, Kautilya's advice to his
Swamy is indeed introspective and valid to the corporate world of the 21st century. His
advice is as under:

 Swamy should run a diversified economy actively, efficiently, profitably and

prudently.

 Diversified economy should consist of productive forests, water reservoirs, mines,

productive activities, trade, markets, roads, ports, and storages.

 Efficient management means setting up of realistic targets and meeting targets

without using overzealous methods.

 Wealth lies in economic activities. Proper direction and guidance from Swamy
will ensure current prosperity and future gains. Inactivity of Swamy in economic
sphere will bring the kingdom close to destruction.

 Swamy must bear in his mind that a king with depleted treasury is a weak king
and the easiest target for a takeover.

 Swamy should ensure enactment of prudent policies. Prudence should be based

on Dharma and Nyay that will ensure equal opportunity for all to earn a decent
living.

 Profitability should not only mean surplus over costs. It should also mean
provision of investment for future growth.

 Availability of water is important. It is practical to acquire a small tract of land

with flowing water than a large tract that is dry and would need substantial
investment to generate water.

 An ideal Swamy is the one who has the highest qualities of leadership, intellect,
energy and personal attributes.

 Swamy can reign only with the help of others. He should appoint not more than
four advisors and sufficient number of Mantris to look after the governance of the
State machinery. While limiting the span of control for the Swamy, Kautilya
warns against centralization of power in the hands of the Swamy by stating "one

25
 wheel alone does not move a chariot".

 Swamy should take proper care in appointing advisors. He should have clarity in
terms of qualities an advisor should possess. Most important being practical
experience, thinking prowess, sound judgement and ability to differ while keeping
total devotion to the Swamy. (Kautilyam Arthaśāstram, ed.1909)

Knowledge:

Upon this issue, throughout Arthashstra, Kautilya makes some really thought-provoking
observations that seem to be a must to the leaders. Kautilya reminds his Swamy that
sound knowledge of complex human nature is essential in effective, efficient and honest
running of the State machinery. He warns of two undesirable attitudes of human nature,
Pramada, meaning excess and Alasya, meaning inactivity, to be watched for and
avoided. This is where, according to Kautilya, the leadership counts. Below are some of
his pearls of wisdom on knowledge:

 Small difference in ability can lead to enormous differences in results.

 Main aim throughout one's career is to identify, acquire and develop these
differences, which yield superior results.

 Knowledge is important. Knowledge is cumulative. Once it exists, it grows.

Every new piece of knowledge reveals connections with other areas of
knowledge. Each breakthrough in knowledge creates new opportunities that
expand and multiply.

 Thinking is creative. You can create your world by the way you think. Situation
and people have the meaning you give them. When you change your thinking,
you change your life. To take control of your life, you must take control of your
mind. (Kautilyam Arthaśāstram, ed.1909)

Justice:

Kautilya believed that for the prosperity of a state, the state must be devoid of internal
conflict and the King should be in control of the state. To maintain this internal peace,
he believed in a just and realistic rule of law. His definition of a state was one which had
power and wealth and hence he put property rights and protection of wealth as one of
the important themes in his jurisprudence. In fact he advocated that one could get rid of
corporeal punishment by paying off fines.
26
Kautilya also attaches great importance to human rights on how the invaded ruler and
his ministers should be treated. He shows a deep understanding of criminal justice and
war justice. Surprisingly, for a harsh and realist man like Kautilya he shows mercy
towards the people defeated in a war and recommends humanity and justice towards
them. He advocates that defeated king shall be treated with respect and he should be
made an ally and advices that the key people advising the defeated king should be
eliminated through a silent war.

Kautilya believes that law should be in the hands of the King and punishments need to
be awarded to those who are guilty so that King can protect himself from the social
unrest and unhappiness. He believes that punishment is a means to an end and it needs to
prevent the commission of the crime. Kautilya also was a reformer where he though
punishments could reform a person and hence a society. His devotion to social structure
was so strong that he thinks that Brahmins (Brekke, 2004) need to be punished less by
only exiling him and not to torture him. This unequal social justice was in itself injustice
but so was his belief.

He attaches great importance to dandaniti (Boesche, 2002) which includes protecting

property, acquiring property, augmenting them and distributing them. He thinks that
justice is an important constituent of sovereignty and it needs to be preserved by the
State and the ultimate responsibility lies with the King.

Diplomacy:

Kautilya believed that nations acted in their political, economic and military self-
interest. He thought that foreign policy or diplomacy will be practiced as long as the
sell-interest of the state is served because every state acts in a way to maximize the
power and self interest. He thought that the world was in such a state that a kingdom
was either at war or was preparing for a war and diplomacy was yet another weapon
used in this constant warfare. He believed that diplomacy is a series of actions taken by
a kingdom such that it gains strength and eventually conquers the nation with which
diplomatic ties were created.

He also believed that treaties should be made in such a way that King benefits and
serves the self-interest of the Kingdom. He did talk about violating treaties and creating
dissension between states so that his kingdom might benefit which directly is similar to
Bismarck’s strategies of treaties. In fact Kautilya can be compared to Bismarck that both
of them though of extremely complex network of treaties and relationships without any
successor in either case.

27
Kautilya described three types of political system namely rule making, rule application
and rule adjudication and has been recognized for his contributions to bringing
diplomacy at the helm of state’s affairs. In his words he defines diplomacy as, “A King
who understands the true implication of diplomacy conquers the whole world” (Spegele,
1987). To understand his concept of diplomacy it is important to understand his idea of
six types of diplomacy:

28
 Chapter- 5
Six Forms of Diplomacy
Kautilya elaborates on strategies for not only the strong king and the aggressor but also
explains the strategies a weak king should follow to defend himself and protect the state.

His forms of diplomacy also depends on the type of the king whether the policy is
directed toward the superior, inferior or equal (Spegele, 1987). The six types of foreign
policy that he advocates are:

1. Sandhi: This means accommodation, which means that kings seek to accommodate
the each other and does not resolve to hostile means. These Sandhis could be temporary
or permanent and it depends on the environment and relative powers of the kings. The
various sub-forms in this sandhi have been practiced by statesmen later. Bismarck had
used Karmasandhi with Austria and now Britain’s foreign policy has been to maintain
Anavasitasandhi with the United States.

2. Vigraha: This means hostility shown to neighbor or a state. Kautilya strongly

believed that the states are always at war and seek power hence it is necessary to have
hostile foreign policy towards few states which are either equal in power or subordinate
in power.

3. Asana: This means indifference and he chooses this policy for states which are
neutral in his mandala concept of nations. He also believes that an indifferent foreign
policy works well in the case of equal power. This idea seems obsolete as we have seen
in case of equal powers in history, there has been always tension which either led to a
war or an alliance. Germany viewed Britain as an equal power and could not be
indifferent neither could US be indifferent to Russia during the cold war.

4. Dvaidhibhava: This means double policy which was very well practiced by
Bismarck. Kautilya advocates this foreign policy for states which are superior militarily.
Kissinger followed this strategy where he made alliance with China such that at no time
Russia and China could become closer in ties than US and China. Kautilya advocated
the same concept within his Mandala framework.

5. Samsarya: This policy of protection is followed where a stronger state intervenes and
shelters a weak state. Kautilya advocates this policy when a stronger state needs a shield
to protect itself from an equal power it is good to use this policy of protection for a third
state and use this alliance to defend against the potential enemy. In one sense the

29
colonization was followed where European powers started controlling weak nations in
Africa and Asia and thus strengthening their position against one another.

6. Yana: This policy is to attack. Kautilya does mention that peace and stability in a
state makes the state even powerful but never shies away from attacking the weak and
unjust king. He thinks that an unjust king keeps the society unhappy which makes that
state a potential target as it is weak due to social unrest. Who knows may George W.
Bush read Kautilya before pursuing the Yana policy on Iraq! (Kautilyam Arthaśāstram,
ed.1909)

Thus Kautilya’s external policy was formed by his strong belief in the able leadership
and the state’s continuous thirst for power and wealth.

Essence of Leadership:

The essence of leadership, he stresses, lies in its acceptance by the subjects. He

therefore, advises the Swamy never to forget the two pillars of the art of governance:
Nyay, the justice and Dharma, the ethics. He also decries autocratic behavioras a leader
is visible and people follow the leader. Hence he advises the Swamy to introspect and to
identify his atma doshas, i.e. deficiencies to improve or develop himself. He further
advises his Swamy to study deficiencies of his cabinet members and take steps to
improve upon them. He states that Mantris could be incompetent, Senapati could be over
ambitious, Purohit may not consider the present day practices or traditions while
enacting laws or justice, which might lead to injustice (Gupta, 1987). As regards
Yuvaraj, he advises specific training to prepare him for the eventual succession. He
states that the Yuvaraj should be trained in three specific areas: Arthashastra (economic
administration), Nitishastra (foreign affairs) and Dandaniti (political science). The
Arthashastra holds some pearls for leadership which are presented below:

 A great leader shows ability to make decision and act boldly in the face of
setbacks and adversity.
 Power goes to the person who uses it most effectively.
 Leaders are sensitive to and are aware of the needs, feelings and motivation of
those they lead.
 Foundation of leadership consists of honesty, truthfulness and straight dealing.
 Leaders develop ability to predict and anticipate the future.
 Self-discipline is the most important personal quality of a leader.
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 Chapter- 6
Ethics vs. Ethos
Ethics and Values together lay the foundation for sustainability. While they are
sometimes used synonymously, they are different, wherein ethics are the set of rules that
govern the behaviorof a person, established by a group or culture. Values refer to the
beliefs for which a person has an enduring preference. Ethics and values are important in
every aspect of life, when we have to make a choice between two things, wherein ethics
determine what is right, values determine what is important.

In the world of intense competition, every business entity work on certain principles and
beliefs which are nothing but the values. Likewise, ethics is implemented in the
organisation to ensure the protection of the interest of stakeholders like customers,
suppliers, employees, society and government. Read the following article to know the
important differences between ethics and values.

Basis For
Ethics Values
Comparison

Meaning Ethics refers to the guidelines Value is defined as the principles

for conduct, that address and ideals, that helps them in
question about morality. making judgement of what is more
important.

What are they? System of moral principles. Stimuli for thinking.

Consistency Uniform Differs from person to person

Tells What is morally correct or What we want to do or achieve.

incorrect, in the given
situation.

Determines Extent of rightness or Level of importance.

wrongness of our options.

What it does? Constrains Motivates

Definition of Ethics

By the term ‘ethics’ we mean a branch of moral philosophy – a sense of rightness or

31
wrongness of actions, motives and the results of these actions. In short, it is a discipline
that identifies good or evil, just or unjust, fair or unfair practices, about moral duty. It is
well-based standards that a person should do, concerning rights, obligations, fairness,
and benefits to society and so on. The standard puts a reasonable obligation to stop
crime like stealing, assault, rape, murder, fraud and so on.

The system addresses the questions of the human morality, such as What should be a
standard way for people to live? Or What are the appropriate actions in the given
situations? What should be an ideal human conduct? etc. Under Ethics there are four
important subject areas of study:

 Meta-ethics: Ethical philosophy that analyses the meaning and scope of moral
values.
 Descriptive ethics: The branch of ethics that deals with psychology, sociology,
anthropology, etc.
 Normative Ethics: The study of the moral course of action through practical
means.
 Applied ethics: This branch tells us how we can achieve moral outcomes, in a
particular circumstance.

Definition of Values

Values refer to the important and enduring beliefs or principles, based on which an
individual makes judgements in life. It is at the centre of our lives which act as a
standard of behaviour. They severely affect the emotional state of mind of an individual.
They can be personal values, cultural values or corporate values.

Values are forces that cause an individual to behave in a particular manner. It sets our
priorities in life, i.e. what we consider in the first place. It is a reason behind the choices
we make. It reflects what is more important for us. So, if we are true to our values and
make our choices accordingly, then the way we live to express our core values.
Moreover, if you understand an individual’s values, you can easily identify what is
important for them.

Key Differences between Ethics and Values

The fundamental differences between ethics and value are described in the given below
points:

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  Ethics refers to the guidelines for conduct, that address question about morality.
Value is defined as the principles and ideals, which helps them in making the
judgement of what is more important.
 Ethics is a system of moral principles. In contrast to values, which is the stimuli
of our thinking.
 Values strongly influence the emotional state of mind. Therefore it acts as a
motivator. On the other hand, ethics compels to follow a particular course of
action.
 Ethics are consistent, whereas values are different for different persons, i.e. what
is important for one person, may not be important for another person.
 Values tell us what we want to do or achieve in our life, whereas ethics helps us
in deciding what is morally correct or incorrect, in the given situation.
 Ethics determines, to what extent our options are right or wrong. As opposed to
values, which defines our priorities for life.

While ethics are consistently applied over the period, and remains same for all the
human beings. Values have an individualistic approach, i.e. it varies from person to
person but remains stable, relatively unchanging, but they can be changed over time due
to a significant emotional event.

Western Managers vs. Eastern Managers: Difference in Management Style

There are some fundamental differences in the styles of management adapted

by Western and Eastern managers as illustrated below.

Western Managers Eastern Managers

Is more open, direct and confrontational Puts greater value on seniority,

relationships and family ties

Is more flexible and creative Is likely to be paternalistic

Encourages empowerment of line Supports lifetime employment and

workers opposes hire-and-fire

Favors databases and statistics and Places more emphasis on corporate

resists intuition loyalty

Is more productivity-oriented than Is more resistant to women

people-oriented assuming positions of management

33
 Is characterized more by individual Is more likely to stress quantity
initiative than by group consensus, Puts than quality
greater importance on short-term profits

There are also some similarities in the way that managers perceived the importance of
connections, like in business relationships and personal friendships but also some
marked differences, with local Asian managers and expatriate Western
managers regarding government connections, family connections, gifts and fevers, and
bribes as much more important that Western managers did. Against the background of
differences in management style, the achievement of a consistent corporate culture
throughout the MNE is considered in general. It must reflect the differences in the local
country and business culture but also maintain the firm’s standards and values.

A number of writers have considered the differences between the International and
domestic planning and explained that the very nature of international markets, which are
geographically dispersed and culturally difference means that whilst there may be
greater opportunities for the company there are also greater risks and uncertainties.

It is worth emphasizing at this point, however, that because domestic markets are
becoming more segmented and more culturally fragmented the differences between
International marketers and domestic marketers are becoming less clear especially as
few domestic markets are not unaffected by international competition. The definition of
what constitutes the home market is also changing as more countries become part of a
trading bloc.

Most companies, as they grow, move gradually into international markets and the major
evolutionary stages of planning; the unplanned stage, the budgeting stage, the
annual business planning and the strategic planning stage, which equate closely to the
evolution of the business.

Individual managers adopt different attitudes to International business planning, ranging

from enthusiasm to reluctance. The three most common reasons for resistance to the
planning process are,

1. Planning is time consuming when the time could be better spent on managing the
business,

2. Setting goals and objectives in a volatile environment remote from the HQ is

irrelevant, divisive and applies unnecessary constraints and Planning is purely a

34
 process by which senior managers at the domestic HQ can inform themselves and
control the international business and is of no benefit for other managers.

The three most common reasons for supporting the International business
planning process given by managers are that it

1. Encourages everyone wherever they might be in the organization to pull in the

same direction,

2. Avoids waste of time and resources through duplication of work and

3. Ensures that the company is better prepared for coping with unexpected events
and international competition.

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 Chapter- 7
Ethics and Marketing
Task of marketers is to influence the behaviorof customer. Ethics are standards of moral
conduct. Virtually all people prefer to act ethically.

Marketing executive face the challenge of balancing their own best interests in the form
of recognition, pay, and promotion, with the best interest of customers, their
organizations, and society into a workable guide for their daily activities. In any
situation they must be able to distinguish what is ethical from what is unethical and act
accordingly, regardless of the possible consequences.

Behaving Ethically in Marketing

1. To reserve declining public confidence in marketing.

2. To avoid increases in government regulation

3. To regain the power granted by society

4. To protect the image of the organization

Competition – Challenges and changes

Globalization and progressive liberalization of trade during the last decade opened a
widening atmosphere giving rise to certain inevitable tasks and challenges for every
country around the globe. The World Trade Organization’s (WTO) treaties and
agreements, their implications on trade and commerce have already compelled many
countries to review their competitiveness of trade and economic policies not only within
their economy but across the frontiers of other countries also. In India, in the recent
years, the corporate and economic reforms and policies had pervasive effects on the
structure of domestic trade and competition. The law which was originally enacted to
deal with market and competition (i.e., the Monopolies and Restrictive Trade Practices
Act, 1969) addresses the problem concerning Monopolistic, Restrictive and Unfair
Trade Practices only.

Completion and Consumer Welfare

It is sometimes believed that competition policy and law are tools for the rich, the urban
and industries alone. However, at the macro level, the design and implementation of a

36
competition policy promotes the advancement and increased welfare of the poor. At the
micro level, an effective competition regime or consumer law (covering competition
distortions) can prevent consumer abuses, both at industry level as well as village or
locality where one shopkeeper can cheat the whole community. An appropriate and
dynamic competition policy and law are imperative to buttress economic development,
curb corruption reduce wastage and arbitrariness, improve competitiveness and provide
succor to the poor.

The UN Guidelines call upon governments to develop, strengthen and maintain a strong
consumer policy, and provide for enhanced protection of consumers by enunciating
various steps and measures around eight themes (UNCTAD, 2001).

These Eight Themes Are –

1. Physical safety

2. Economic interest,

3. Standards

4. Essential; Goods and services

5. Redress

6. Education and information

7. Specific areas concerning health

8. Sustainable consumption

The Guidelines have implicitly recognized with consumer rights, which were made
explicit in the Charter of Consumer International as follows –

 Right to basic needs

 Right to safety

 Right to choice

 Right to redress

37
  Right to information

 Right to information

Consumer Protection Councils in India

• Right to consumer education

• Right to representation

• Right to healthy

• Environment

The central Consumer Protection Council–The objects of the Central Council shall be to
promote and protect the rights of the consumers such as –

a. The right to be protect against the marketing of goods and services which are
hazardous to life and property;

b. The right to be informed about the quality, quantity, potency, purity, standards
and price of goods (or services, as the case may be) so as to protect the consumer
against unfair trade practices;

c. The right to be assured, wherever possible, access to variety of goods, and

services at competitive prices;

d. The right to be heard and to be assured that consumer’s interest will receive due
consideration at appropriate terms.

e. The right to seek redressed against unfair trade practices (or restrictive trade
practices) unscrupulous explanation of consumers; and

f. The right to consumer education

• The State Consumer Protection Council – The objects of every State shall be
promoted within the State the right of the consumers laid down in point (a) to (f)
mentioned above.

38
 • The State Consumer Protection Council – The objects of every District Council
shall be promoted within the State the rights of the consumers laid down in point
(a) to (f) mentioned above.

Ethics in Advertising

Commercial advertising is sometimes defined as a form of ‘information’ and an

advertiser as “one who gives information”. This definition fails to explain
advertisements from the advertisement, which ‘compare, test and objectively evaluate
the durability, safety, defects and usefulness of various products. Advertisements often
do not include much objective information for the simple reason that their primary
function is not that of providing unbiased information. The primary function of
commercial advertisements rather, is to sell a product to prospective buyer.

Social effects of Advertising

It has adverse effects on society in following ways –

1. Psychological effects of advertisement

2. Advertising as a waste

3. Advertising as market power.

Some ads improperly claim about the benefits of using the products or mislead/
misrepresented the facts, and thud, go against scientific evidence. The other important
ethical issue is projecting women as sex control symbol. For example, showing in men
shaving products is quite unwarranted. In the VIP men’s undergarments as, a man is
shown with lipsticks marks all over the body. Here, the advertisement indirectly/
directly and unfairly shows women as stereo type sex symbol. Various other ads also
involve the women as sex symbol. The issue under discussion here it that how far it is
ethical can proper to show women in irrelevant products. The advertising agencies
should come to a common platform to debate and address these problems in a matter
manner.

Advertising economics says that it provides information, maintains brand equity,

supports the media, provides employment, reduces distribution costs, provides product
utility and stimulates introduction of new products. Ethical issues include undue claims,
wrong information and misrepresentation of facts. The basic questions, which can be
raised across all countries, are such as the following –

39
 1. Does advertising manipulate? (Motivation research and subliminal advertising of
coke can be an example of that)

2. Degree of emotional appeals (Complete man-Raymond’s fairness cream products

and beauty claims of Godrej fair-ever etc.)

3. Too much over exposure of advertising-privacy intrusion-SMS-TV-

Telemarketing).

4. Creative teams of ad-agencies sometimes miss utilized in creative efforts.

5. Advertising to children- (Too much exaggeration of fantasy in products use like

energy drink of glucose etc.)

6. Effects on values and life style such as materialism etc., (quality of life,
Raymond’s complete man advertisement).

In the backdrop of the above six issues in the modern society regarding the advertising,
the United Nations’ UNESCO organization for example, put together a 16 member
commission to study “the totality of communication problems in modern society”. The
commission’s report which became known as Mac bridge report (named after the Irish
diplomat Sean MacBride who headed the Commission) produced 82 recommendations
directed largely at eh potential danger of advertising and the needs for controls on
advertising practices. The issues have been in three areas –

1. The relationship of advertising to materialism (is defined as too much tendency to

give undue importance to material interests which may raise consumption of
FMCGs and consumer durable goods more).

2. The role advertising has played in creating harmful stereotypes of women and
ethnic minority (Keeping pace with joins type of personality).

3. The possible contribution of advertising in promoting harmful products (hype in

creating macho figure, by using alcohol, and cigarettes products).

Secular versus Spiritual Management

Spirituality involves a belief in a relationship with some higher power, divine being or
infinite source of energy. Derived from Latin word SPIRITUS which refers to “breath”
or “wind”.

40
Spiritual Needs

• Love

• Hope

• Trust

• Fullness Of Life

• Values

• Creativity

Role Of Management In Spirituality

• Forgiveness

• Being Respected &Valued

• Dignity

• Connecting With Higher Power

• Belonging To Acommunity

having an organizational vision/mission that helps individuals make a difference in

the world they could not otherwise make;

• leading and managing by using values that drive fear and abuse out of the
workplace and engage the hearts and minds of people;

• allowing for decision making responsibility through self-managed, empowered

teams;

• trusting people and letting them be who they are to use and develop their gifts and
skills;

• offering collective forms of reward and recognition; and providing a way for
employees to fulfill their family and other social obligations.

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Secularism

The fundamental principle of Secularism is that in his whole conduct, man should be
guided exclusively by considerations derived from the present life itself. Anything that
is above or beyond the present life should be entirely over looked. Whether God exists
or not, whether the soul is immortal or not, is questions which at best cannot be
answered, so they should be ignored.

Effects of Secular Management

• Management acted as a handmaid of profit, and the motto was more and more
money at any cost.

• Under such management we got ‘external growth at the cost of internal growth.

• Man as a human being stands nowhere.

• There is no human approach. We have erosion of ethical, spiritual, moral and

human values.

• In an organizational structure. We have erosion of human touch between top

management and operatives.

Work Ethics

Ensuring the presence of sound values and ethics is a vital and ongoing part of good
governance in organizations and an integral part of good management practices. “Work
place ethics” is how one applies values to work in actual decision making – a set of right
and wrong actions that directly impact the workplace.

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 Chapter- 8
Factors Influencing Ethical behaviour
Ethical decision in an organization is influenced by three key factors: individual moral
standards, the influence of managers and co-workers, and the opportunity to engage in
misconduct. If the company fails to provide good examples and direction for appropriate
conduct, confusion and conflict will develop and result in the opportunity for unethical
behaviour. For example if your boss or co-workers leave work early, you may be
tempted to do so as well. If you see co-workers making personal long-distance phone
calls at work and charging them to the company, then you may be more likely to do so
also. In addition, having sound personal values contributes to an ethical workplace.

The Individual

An ethical issue is an identifiable problem, situation or opportunity that requires a

person to choose from several actions which could be evaluated as right or wrong. For
example, should a salesperson omit the fact of frequent of the filter while selling a
kitchen chimney to as prospective customer? When does offering a gift to a customer
become a bribe rather than a sales promotion? There are no easy answers. An
individual’s ethical behavioraffects not only his or her reputation within the company,
but may also contribute to the way in which the company is perceives by others. Values
reflect enduring beliefs that one holds that influences attitudes, actions and the choices
one makes. As individuals, our values are shaped by our personal beliefs. Values
developed in childhood and youth are constantly tested and on-the-job decisions reflect
the employee understands of ethical responsibility. Various socio-psychological factors
could be responsible why individuals could develop negative attitudes or lose personal
motivation.

• Negative work or life experience.

• Employees failing to respect each other’s unique personalities.

• Overly aggressive financial or business targets.

• Pressures to perform and take quick decisions.

Some examples of ethical issues faced by an individual in the workplace are –

1. Relationships with suppliers and business partners –

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 a. Bribery and immoral entertainment

b. Discrimination between suppliers

c. Dishonesty in making and keeping contracts

2. Relationship with customers –

a. Unfair pricing

b. Cheating customers

c. Dishonest advertising

d. Research confidentially

3. Relationship with employees –

a. Discrimination in hiring and treatment of employees

4. Management of resources –

a. Misuse of organizational funds

b. Tax evasion

Stress

Stress is the “wear and tear” our bodies experience as we adjust to our environment; it
has physical and emotional effects on us and can create positive feelings. As a positive
influence, stress can help compel us to action; it can result in awareness and an exciting
new perspective. As a negative influence, it can result in distrust rejection, anger, and
depression, which in turn, can lead to health problems like headaches, upset stomach,
rashes, insomnia, ulcers, high blood pressure, heart attack and stroke.

Major Causes of Stress

Different situations an circumstances in our personal loves and in jobs reduce stress.
Conditions that tend to cause stress are called stressors. The sources of stress or factors
related to stress can be broadly divided into four parts –

• Organizational Causes

44
 • Individual causes

• Group causes

• Extra organizational causes

Organizational Causes

1. Rethinking Companies

2. Changing operations

3. Encountering New Work Cultures

4. Reaching the Limits

5. Occupational Demand

6. Role Conflict

7. Role Ambiguity

8. Work Overload and Work Under load

9. Responsibility for Other

10. Changes in Working Conditions

11. Lack of Involvement in Excisions

Group causes

1. Lack if Group Cohesiveness

2. Lack of social Support

3. Conflict

Personal Factors

1. Life and career Changes

2. Personality Type

45
 3. Career Development

4. Cultural Differences

5. Coping with Daily life

Extra organizational causes

1. Increasing Urbanization

2. Ageing Population

3. Changing Gender Role

Managing Stress – Useful Tactics

1. Individual Level – Some individual strategies, such as physical exercises,

relaxation, and meditation can shield the person for the negative impact of stress.
A person can use relaxation technique which is more powerful and was used by
ancient Indian Yogies. It is also known as ‘Shivasan’.

2. Organizational Coping Strategies – The most famous organizing coping

techniques are change in organizational structure and function, decentralization,
job enrichment, role clarity career planning and counseling.

3. Learning to Relax

4. Developing Interest

5. Improving Diet

6. Other Techniques

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 Chapter- 9
Professional Ethics
Ethics in Work Place:

Workplace ethics are codes of conduct that influence the development of an ethical
culture within the workplace. Going beyond what is considered legal in the area where
the business operates, workplace ethics inspire communication between employees,
allow for respect to be extended to each person within the organization, and promote
customer relationships that are based on honesty and integrity. While there are core
elements that tend to define a work-based code of ethics, the specific expressions of
these central values vary from one corporate setting to the next.

It is important to remember that workplace ethics are shaped by two important factors.
First, workplace policy must be in harmony with all laws and regulations that are
currently in force in the jurisdiction where the business operates. This helps to ensure
that basic workplace ethics preclude any pressure or coercion to engage in actions that
are considered to be illegal, promote discrimination in the workplace, support unfair
hiring and firing practices, or allow wages to be set that are below the minimum legal
standards for the area.

Along with being shaped by laws and regulations, workplace ethics are also influenced
by business ethics For example, ethical business practices would include actions such as
not using marketing materials or campaigns that mislead consumers. Workplace ethics
would also involve establishing and operating support networks such as wellness
programs that help employees be healthy and happy. Ethics of this type would also
involve the conscious effort to cultivate a working environment where people want to
come to work and be productive because of pride in what they do for a living.

While businesses tend to comply with laws and regulations set by local jurisdictions, not
every company sees the need to develop workplace ethics that affirm the worth of
employees and motivate them to be productive on the job. When a company chooses to
do no more than what is required by local law, the chances of heavy employee turnover
are much higher. In addition, it is easier for cliques to develop among certain groups of
employees, a state that can often undermine productivity and cost the company a great
deal in terms of time and revenue generation.

47
Formulation of Ethics:

Family Ethics are formulated through the operation of five forces in the individual’s
environment:

1. Influences: the formulation of ethics begins when the individual is a small child
parents demonstrate high ethical standards.

2. Peer Influence: As the child develops contacts outside the home through school,
play and work, peer exert considerable influence on the individuals ethical beliefs

3. Experience: As a person matures and develops as a human being, he or she will

be exposed to many critical experiences that will affect his or her ethical
standards.

4. Values and Morals: People who have high value on money and material
possessions may have strong ethical standards. People who value the quality of
life enjoyed by all living creatures will have strong ethics.

5. Situational Fact us: People often change their ethics in response to unforeseen
situational fact us.

Managerial Ethics:

Managerial ethics illustrate a rather sensitive issue. The recent business history has
proven ethics as a rather challenging objective of larger organizations. The following
topics / views may illustrate fundamental issues in the current debate. The current
competing views include "Maximize Profit" and "society's welfare".

Maximizing profits illustrate the greatest commitment to shareholder and stakeholders.

In this particular theory, the managerial staff is only committed to maximize the bottom-
line in terms of profit: a mean to an end in order to achieve the highest possible profits.
Society's welfare illustrates a common goods approach.

In this particular approach managerial staff attempts to achieve a balance between the
bottom-line and social welfare of the society and employees. It is of great interest to
explore the theoretical aspects of managerial issues and compare them to real practices.

The two above name theories assume that managerial issues are constrained and
objective; stakeholders vs. society. On the other hand, the reality proves a rather multi-
dimensional reality; stakeholders vs. society vs. culture vs. religion vs. politics vs.
48
diversity vs. personality vs. globalization vs. many other unpredictable factors. Further,
both of theories appear to be better suited for larger organizations: small businesses
encounter more immediate issues such as revenue and cash flow rather than managerial
ethics.

Most small businesses ran by savvy business people are less concerned about ethics. Out
of extensive experience in consulting small businesses, I can confidentially stat that I
have never met a small business owner that was not willing to take unethical actions in
order to maximize profits. Given the fact that this is not a scientific statement, it is
important to view this statement in terms of personal experiences, which conflicts with
the academic management practices.

Moreover, there is more to the issue of ethics. Given the fact that both competing
theories consider some sort of managerial responsibility to someone or some group,
illustrates a major weakness of both theories. Both theories fail to point to the necessity
of "perception". It is hypocritical to expect only one segment of a society i.e. businesses
to create value or consider societal consequences.

Thus, most business simply attempt to create a perception of societal responsibilities

rather than genuine concerns In terms of creating profits, it is important to understand
that in practical terms, it is difficult to create social awareness or consider social issues
without being able to prove their value to the business shareholder or stakeholder. Thus,
any managers' first priority should be profits, once the objective of achieving the highest
possible profits have been achieved, an organization can effort to pursue alternate goals
of societal concerns and improvement. Some people may argue that societal benefits /
concerns may have a direct influence on the bottom line of any given business.

However, it is important to point to the fact that it is extremely difficult to quantify the
direct impact of societal charity work on corporate profits. It is merely possible to use
anecdotal and qualitative data in order to assign arbitrary real value to such social
actions. Ultimately, it is important to consider the main goal of any given company i.e.
profits. It is further important to allow for businesses to pursue and achieve their goals
before they can be expected to become beneficial corporate citizens.

Managing Ethical Behaviour:

Managing ethical behavioris a one of the most pervasive and complex problems facing
business organizations today. Employees' decisions to behave ethically or unethically
are influenced by a myriad of individual and situational factors. Background,

49
personality, decision history, managerial philosophy, and reinforcement are but a few of
the factors which have been identified by researchers as determinants of employees'
behaviour when faced with ethical dilemmas. The literature related to ethical behaviour
is reviewed in this article, and a model for understanding ethical behaviour in business
organizations is proposed. It is concluded that managing ethics in business organizations
requires that managers engage in a concentrated effort which involves espousing ethics,
behaving ethically, developing screening mechanisms, providing ethical training,
creating ethics units and reinforcing ethical behaviour.

Codes of Ethics:

Definition: Written guidelines issued by an organization to its workers and

management, to help them conduct their actions in accordance with its primary values
and ethical standards.

A code of ethics is a set of guidelines which are designed to set out acceptable
behaviours for members of a particular group, association, or profession. Many
organizations govern themselves with a code of ethics, especially when they handle
sensitive issues like investments, health care, or interactions with other cultures. In
addition to setting a professional standard, a code of ethics can also increase confidence
in an organization by showing outsiders that members of the organization are committed
to following basic ethical guidelines in the course of doing their work.

The format of a code of ethics can vary widely. Unlike more straightforward employee
guidelines and codes, a code of ethics usually starts with a section that sets out the
purpose, aspirations, and goals of the parent organization. For example, the 2002 code of
ethics for the American Psychological Association (APA) begins: “Psychologists are
committed to increasing scientific and professional knowledge of behaviour and people's
understanding of themselves and others and to the use of such knowledge to improve the
condition of individuals, organizations, and society.”

Following a general introduction to the function and goals of an organization is a section

dedicated to setting out specific behaviour standards for members. This section usually
covers potential ethical issues such as confidentiality, partisanship, or misuse of
information. In addition to addressing theoretical ethical minefields, a code of ethics
often contains a section which outlines the procedures for handling grievances, both
outside and inside the organization.

50
A well written code of ethics will be easy to follow and very clear, with sections that
people can point to in order to illustrate specific issues. In the sense of organizations like
the APA, members agree to support the code of ethics both because it is good practice
and because it promotes their organization. A code of ethics also stands behind most
scientific experimentation, ensuring that the results are valid and that the testing was
carried out in an ethical way.

A code of ethics: A code of ethics often focuses on social issues. It may set out general
principles about an organization's beliefs on matters such as mission, quality, privacy or
the environment. It may delineate proper procedures to determine whether a violation of
the code of ethics has occurred and, if so, what remedies should be imposed. The
effectiveness of such codes of ethics depends on the extent to which management
supports them with sanctions and rewards. Violations of a private organization's code of
ethics usually can subject the violator to the organization's remedies (such as restraint of
trade based on moral principles). The code of ethics links to and gives rise to a code of
conduct for employees.

Encouraging Ethical Behaviour:

Most authorities agree that there is room for improvement in business ethics. One of the
most problematic questions raised in relation to business ethics is whether or not
businesses can become more ethical in the real world. The majority opinion on this issue
suggests that government, trade associations, and individual firms can indeed establish
acceptable levels of ethical behaviour.

The government can do so by legislating more stringent regulations. But, rules require
enforcement and when in many cases there is evidence of lack of enforcement even the
ethical businessperson will tend to "slip something by" without getting caught. Increased
regulation may help, but it surely cannot solve the entire business ethics problems.

Trade associations can and often do provide ethical guidelines for their members. These
organizations within particular industries are in an excellent position to exert pressures
on members that stoop to questionable business practices. However, enforcement and
authority vary from association to association. Moreover, exactly because trade
associations exist for the benefit of their members, harsh measures may be self-
defeating. Employees can more easily determine and adopt acceptable behaviour when
companies provide them with a "code of ethics." Such codes are perhaps the most
effective way to encourage ethical behaviour. A code of ethics is a written guide to
acceptable and ethical behaviour that outlines uniform policies, standards and

51
punishments for violations. Because employees know what is expected of them and
what will happen if they violate the rules, a code of ethics goes a long way towards
encouraging ethical behaviour. However, codes cannot possibly cover every situation.
Companies must also create an environment in which employees recognize the
importance of complying with the written code. Managers must provide direction by
fostering communication, actively modelling and encouraging ethical decision making,
apart from investing in training employees to make ethical decisions.

Sometimes, even employees who want to act ethically may find it difficult to do so.
Unethical practices can become ingrained in an organization. Employees with high
personal ethics may then take a controversial step called "whistle blowing." Whistle
blowing is informing the press or government officials about unethical practices in an
organization. Whistle blowing could have averted disaster and prevented needless deaths
in the Challenger space shuttle disaster, for example. How could employees have known
about life-threatening problems and let them pass? Whistle blowing on the other hand,
can have serious repercussions for employees; those who make waves sometimes lose
their jobs.

Recent literature has suggested several strategies for promoting ethical behaviour in
organizations (Adler and Bird, 1988; Burns, 1987; Harrington, 1991; Raelin, 1987;
Stead et.al., 1990). First, chief executives should encourage ethical consciousness in
their organizations from the top down showing the support and care about ethical
practices. Second, formal processes should be used to support and reinforce ethical
behaviour. For example, internal regulation may involve the use of codes of corporate
ethics, and the availability of appeals processes. Finally, it is recommended that the
philosophies of top managers as well as immediate supervisors focus on the
institutionalization of ethical norms and practices that are incorporated into all
organizational levels.

Organizations and their managers must understand that the above recommendations are
key components in the development and maintenance of an ethically-oriented
organizational culture. Organizations can also enhance an ethically-oriented culture by
paying particular attention to principled organizational dissent. Principled organizational
dissent is an important concept linking organizational culture to ethical behavior.
Principled organizational dissent is the effort by individuals in the organization to
protest the status quo because of their objection on ethical grounds, to some practice or
policy (Graham, 1986). Organizations committed to promoting an ethical climate should
encourage principled organizational dissent instead of punishing such behavior.

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Organizations should also provide more ethics training to strengthen their employees'
personal ethical framework. That is, organizations must devote more resources to ethics
training programs to help its members clarify their ethical frameworks and practice self-
discipline when making ethical decisions in difficult circumstances.

An effective organizational culture should encourage ethical behavior and discourage

unethical behavior. Although much remains to be learned about why ethical behavior
occurs in organizations and creating and maintaining organizational cultures that
encourage ethical behavior, organizations can benefit from the following suggestions:

 Be realistic in setting values and goals regarding employment relationships. Do

not promise what the organization cannot deliver.
 Encourage input throughout the organization regarding appropriate values and
practices for implementing the cultures. Choose values that represent the views of
employees at all levels of the organization.
 Do not automatically opt for a "strong" culture. Explore methods to provide for
diversity and dissent, such as grievance or complaint mechanisms or other
internal review procedures.
 Insure that a whistle-blowing and/or ethical concerns procedure is established for
internal problem-solving (Harrington, 1991).
 Provide ethics training programs for all employees. These programs should
explain the underlying ethical and legal (Drake and Drake, 1988) principles and
present practical aspects of carrying our procedural guidelines. Understand that
not all ethical situations are clear-cut. Like many basic business situations, the
organization should recognize that there are ambiguous, grey areas where ethical
tradeoffs may be necessary. More importantly, some situations have no simple
solution (Cooke, 1991).
 Integrate ethical decision-making into the performance appraisal process.

Social Responsibility:

Definitions of Social responsibility:

• Social responsibility is an ethical or ideological theory that an entity whether it is

a government, corporation, organization or individual has a responsibility to
society at large. ...

• A voluntarily assumed obligation toward the good of a larger social unit as

opposed to the self alone

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 • Occurs when a retailer acts in the best interests of society -- as well as itself. The
challenge is to balance corporate citizenship with a fair level of profits.

• It is about improving the quality of relations with key stakeholders. Novo Nordisk
defines it as putting values into action in the perspective of human resources,
human rights, health and safety, and our relations with society at large.

• Responsibilities citizens have to their society and nation.

• Involves considering the impact and being accountable for the effects that actions
might have on society.

• It can be defined as accepting responsibility for others and taking action against
social injustice. it includes meeting the needs of others through charitable giving.

• Koontz and O’Donnell have given the definition of social responsibility thus:
“The personal obligation of the people as they act in their own interests to assure
that the rights and legitimate interests of others are not infringed.”

Social Responsibilities of Business

A firm expresses its responsibility to the society by reacting in either or both of the
following two ways.

1. The manner in which it carries out its own business activities

2. The welfare activities it takes upon itself as an additional function

Responsibility to Share Holders

1. To make the shareholders feel secured by protecting their investments

2. To be transparent

3. To allow them to participate in decision making

4. To ensure them good dividends

Responsibility to Employees

1. To offer employees fair wages

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2. To establish better working conditions

3. To provide them fair work standards and norms.

4. To provide labor welfare activities

5. To educate the employees by adopting proper training methods.

6. To recognize and appreciate the work of the employees and reward them or to
promote them.

7. To install grievance handling cell.

8. To enable them to involve in decision making.

Responsibility to Consumers

1. To improve the efficiency of the business by

a) Increasing productivity.

b) Improving quality.

c) Suroothening distribution system.

2. To offer the products at reasonable prices.

3. To provide pre-purchase and post purchase service to the consumers.

4. To facilitate research and development to meet the customer requirements.

5. To maximize imperfections in distribution systems

6. To provide sufficient and unnecessary information about the product.

Responsibility to Community

1. To be pollution free and maintain ecological balance.

2. To invest more in research and development so as to improve the standard of

living of the society.

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 3. To develop alternative recourses thereby preventing current resources being used
from exhaustion.

4. To improve the efficiency of business operations.

5. To include in social welfare activities

6. To contribute to national effort to build up a better society

If a firm fulfils all the above mentioned responsibilities then it is said to be following the
business ethics. But in practice such an ideal business doesn’t exist.

Few Environmental Concerns

One important factor a business man must not neglect is his responsibility to
environment. The abundant natural resources are getting exhausted after 19th
century due to rapid industrialization.

Land:

The worst affected are as their cattle starve and they travel even increasing distance for
grazing due to industrialization and urbanization.

Water:

Through people are keen in this issue by constructing dams and reservoirs the bi
products and industry waste couldn’t find a better discharge channel than this. Hence
sure measure must be take in this context to keep the water free from pollution.

Deforestation:

The results of deforestation for industrialization and urbanization are vulnerable. It is

resulting in destruction of wild life, increase in price of wood, air production etc.

Habitat:

The people who are living in forests and remote areas love their shelter and livelihood in
the vent of industrialization.

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Health:

The business users must be conscious about the health of the society and behave
responsibility for their health.

Spirituality (Spirituality & Ethics)

Today people are finding that there’s more to life—and business—than profits alone.
Money as the single bottom line is increasingly a thing of the past. In a post-Enron
world, values and ethics are an urgent concern. The hottest buzz today is about a “triple
bottom line,” a commitment to “people, planet, profit.” Employees and the environment
are seen as important as economics. Some people would say it’s all about bringing your
spiritual values into your workplace. A recent poll by KRC Research for Spirituality
published November 17, 2003 in USA Today found that 6 out of 10 people say
workplaces would benefit from having a great sense of spirit in their work environment.

What is spirituality in business? There’s a wide range of important perspectives. Some

would say that it’s simply embodying their personal values of honesty, integrity, and
good quality work. Others would say it’s treating their co-workers and employees in a
responsible, caring way. For others, it’s participating in spiritual study groups or using
prayer, meditation, or intuitive guidance at work. And for some, it’s making their
business socially responsible in how it impacts the environment, serves the community
or helps create a better world.

Some business people are comfortable using the word “spirituality” in the work
environment, as it’s more generic and inclusive than “religion.” Instead of emphasizing
belief as religion does, the word spirituality emphasizes how values are applied and
embodied. Other people aren’t comfortable with the word spiritual and prefer to talk
more about values and ethics when describing the same things that others would call
spiritual. However, there are some people who will talk about God as their business
partner or their CEO.

There’s some fear about spiritual beliefs or practices being imposed by employers, but
to date this has been extremely rare. On the other hand, some observers warn about the
potential for superficiality and the distortion of spiritual practices to serve greed.

Key spiritual values embraced in a business context include integrity, honesty,

accountability, quality, cooperation, service, intuition, trustworthiness, respect, justice,
and service. The Container Store chain nationwide tells workers they are “morally
obligated to help customers solve problems” – they’re not just to sell people products.
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The CEO of Vermont Country Store, a popular national catalogue company, honoured
(instead of fired) an employee who told the truth in a widely circulated memo, and so
increased morale and built a sense of trust in his company.

Spirituality plays a key role in the development of ethical leaders. Moreover, spirituality
demands that leaders cultivate and nourish a sense of self that recognizes the
interrelatedness of life or a sense of community. A sense of community refers to the
larger extended ecological sphere made tangible by nature, defined as the universe and
the cosmos, but in its final essence, it is spirit.

Spirituality is the core of the inner and social lives of ethical leaders. It informs the
relationship between the private and public spheres of leadership at the intersections
where worlds collide. How then do leaders utilize spirituality as a resource in making
fitting ethical decisions in the various contexts and situations that lead to transformation
of powerful, intransigent systems?

The relationship among spirituality, ethics, and leadership is important because leaders
in many public venues are increasingly turning to approaches that emphasize some form
of spirituality as an authoritative source in making decisions that impact the lifestyles,
attitudes, and behaviors of many people, especially in the areas of education,
government, health, science, and business. Often these appeals to spirituality fail to
address the larger ethical questions of justice, equity and truth-telling that are raised in
public life.

Kumar Mangalam Birla Committee

In early 1999, Securities and Exchange Board of India (SEBI) had set up a committee
under Shri Kumar Mangalam Birla, member SEBI Board, to promote and raise the
standards of good corporate governance. The report submitted by the committee is the
first formal and comprehensive attempt to evolve a ‘Code of Corporate Governance', in
the context of prevailing conditions of governance in Indian companies, as well as the
state of capital markets.

The Committee's Terms Of The Reference Were To:

 suggest suitable amendments to the listing agreement executed by the stock

exchanges with the companies and any other measures to improve the standards
of corporate governance in the listed companies, in areas such as continuous
disclosure of material information, both financial and non- financial, manner and

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 frequency of such disclosures, responsibilities of independent and outside
directors;
 draft a code of corporate best practices; and
 Suggest safeguards to be instituted within the companies to deal with insider
information and insider trading.

The primary objective of the committee was to view corporate governance from the
perspective of the investors and shareholders and to prepare a ‘Code' to suit the Indian
corporate environment.

The committee had identified the Shareholders, the Board of Directors and the
Management as the three key constituents of corporate governance and attempted to
identify in respect of each of these constituents, their roles and responsibilities as also
their rights in the context of good corporate governance.

Corporate governance has several claimants –shareholders and other stakeholders -

which include suppliers, customers, creditors, and the bankers, the employees of the
company, the government and the society at large. The Report had been prepared by the
committee, keeping in view primarily the interests of a particular class of stakeholders,
namely, the shareholders, who together with the investors form the principal
constituency of SEBI while not ignoring the needs of other stakeholders.

Mandatory and Non-Mandatory Recommendations

The committee divided the recommendations into two categories, namely, mandatory
and non- mandatory. The recommendations which are absolutely essential for corporate
governance can be defined with precision and which can be enforced through the
amendment of the listing agreement could be classified as mandatory. Others, which are
either desirable or which may require change of laws, may, for the time being, be
classified as non-mandatory.

Mandatory Recommendations:

 Applies To Listed Companies With Paid Up Capital Of Rs. 3 Crore And Above
 Composition Of Board Of Directors – Optimum Combination Of Executive &
Non-Executive Directors
 Audit Committee – With 3 Independent Directors With One Having Financial
And Accounting Knowledge.
 Remuneration Committee

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  Board Procedures – Atleast 4 Meetings Of The Board In A Year With Maximum
Gap Of 4 Months Between 2 Meetings. To Review Operational Plans, Capital
Budgets, Quarterly Results, Minutes Of Committee's Meeting. Director Shall Not
Be A Member Of More Than 10 Committee And Shall Not Act As Chairman Of
More Than 5 Committees Across All Companies
 Management Discussion And Analysis Report Covering Industry Structure,
Opportunities, Threats, Risks, Outlook, Internal Control System
 Information Sharing With Shareholders

Non-Mandatory Recommendations:

 Role Of Chairman
 Remuneration Committee Of Board
 Shareholders' Right For Receiving Half Yearly Financial Performance Postal
Ballot Covering Critical Matters Like Alteration In Memorandum Etc
 Sale Of Whole Or Substantial Part Of The Undertaking
 Corporate Restructuring
 Further Issue Of Capital
 Venturing Into New Businesses

As per the committee, the recommendations should be made applicable to the listed
companies, their directors, management, employees and professionals associated with
such companies, in accordance with the time table proposed in the schedule given later
in this section. Compliance with the code should be both in letter and spirit and should
always be in a manner that gives precedence to substance over form. The ultimate
responsibility for putting the recommendations into practice lies directly with the board
of directors and the management of the company.

The recommendations will apply to all the listed private and public sector companies, in
accordance with the schedule of implementation. As for listed entities, which are not
companies, but body corporate (e.g. private and public sector banks, financial
institutions, insurance companies etc.) incorporated under other statutes, the
recommendations will apply to the extent that they do not violate their respective
statutes, and guidelines or directives issued by the relevant regulatory authorities.

The Committee recognizes that compliance with the recommendations would involve
restructuring the existing boards of companies. It also recognizes that some companies,
especially the smaller ones, may have difficulty in immediately complying with these
conditions.
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The recommendations were implemented through Clause 49 of the Listing Agreements,
in a phased manner by SEBI.

Role of Media in Ensuring Corporate Governance

Media role can be seen as key to creating awareness of Corporate Governance in

business houses. Communication between Media and Corporate bodies directly and
through efficient public relations or mass communications can be vital to ensure good
governance and human rights. Media must be on the front line in disseminating
impartial news for ensuring transparency in the corporate sector. Media have a watchdog
role to ensure accountability and transparency of corporate sector. Media also need to
improve their capacity to play the watchdog role.

Role of Media in pressuring corporate managers and directors to behave in ways those
are socially acceptable. Sometimes this coincides with Shareholder’s value
maximization. Media affects company’s policy toward the environment and the amount
of corporate resources that are diverted to the sole advantage of controlling shareholders.

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 Chapter- 10
A Holistic Management System
Nudging one’s self towards ones’ Higher Self can be accomplished if a person realizes
the need for holistic and ethical approach to management by a paradigm shift from
western principles to an enlightened philosophy of life based on Yoga, Siddha and
Samadhi. Yoga is the way to lead oneself to Higher Self, Siddha is the appropriate
knowledge which has been proved or accomplished and Samadhi means a state of
equanimity of the mind or intellect.

Management is not merely the art of directing the activities of men so as to make the
best use of money and materials, but it is the skill of enterprise based on experience,
intuition and wisdom. While the task of managing material and financial resources may
not be difficult for an experienced manager, it is an entirely matter when it comes to
directing human resources. The difficulty arises simply because animate is quite
different from inanimate.

For example, one can polish a rough diamond and cut to make it sparkle so as to
enhance its beauty and hence its monetary value. The same does not apply in precisely
the same manner when it comes to training, whereby he can have the opportunity to
acquire skills. When finally placed in a business or industrial organization, such a person
may initially show great promise. However, his efficiency, morale, commitment and
loyalty may not necessarily be non-variable phenomena. The modern world of business
and industry abounds with examples that show that mere salary, training and handsome
perks do not necessarily guarantee wisdom or loyalty of the same degree from all such
employees.

Therefore, the need of the day is to provide the right kind of environment for all the
levels of employees to think for themselves in regard to the values and principles of
proper and efficient work. ‘Qualitative sincerity’ and not ‘quantitative variety’ should be
the guiding motto not only for an organization, but for each and every employees,
whether he is a laborer, a supervisor, a middle level manager or a personality belonging
to the top management. Development of the individual not merely for promoting the
productivity of the organization but essentially for the ‘good of the individual self’ is to
be emphasized as the most relevant work-philosophy for any organization.

The requisite holism of an employee as an individual existing and conscious of self as:

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 • Physical person respectively, implementing active techniques to gain physical
balance,

• Mental entity, enriching sentiment, perception, mind and will power by life
balancing techniques,

• Social entity, building quality communication with others by the techniques of

professional and working development and social integrity,

• Spiritual entity, longing after self-actualization and the sense of life, carrying it
into effect by the techniques of spiritual development,

• Economic entity, striving to satisfy her material needs as a person, family

member, co-worker, and as a member of a wider society.

In this way the behaviour of individuals, who are willing to practice interdisciplinary
cooperation, becomes socially responsible. It offers a possible answer to crisis; hence
the individuals evolve from being merely owners to requisitely holistic creators, who
enjoy subjective and objective welfare more than the others.

For the enterprises to solve their possible socio-economic problems the neo-liberal
economic measures can hardly work, because the problems have been caused by such
measures, unless the given enterprise is very exceptional.

Relevance of Values in Management and Social Values

The business generally interacts with owners, investors, employees. Supplier’s

customers, computers, competitors, government and society. These are called interest
groups because by each and every activity of business, the interest of these groups is
affected directly or indirectly.

Internal Interest Group

• Owners

• Employees

External Interest Group

• Competitor

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 • Investor

• Government

• Supplier

• Customer

• Society

Responsibility towards Owners

• To run the business efficiently

• Proper utilization of capital and other resources

• Growth and appreciation of capital

• Regular and fair return on capital invested.

Responsibility towards Employees

• Timely and regular payment of wages and salaries

• Proper working conditions and welfare amenities

• Opportunity for better career prospects.

• Better living conditions like housing, transport, canteen etc.

• Timely training and development

• Job Security as well as social security like facilities of provident fund, pension etc.

Responsibility towards investors

• Ensuring safety of their investment

• Regular payment of interest

• Timely Repayment of principal amount

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Responsibility towards suppliers

• Giving regular orders for purchase of goods.

• Dealing on fair terms and conditions

• Availing reasonable credit period.

• Timely payment of dues.

Responsibility towards customers

• Product and service must be able to take care of the needs of customers.

• Products and services must be qualitative

• There must be regularity in supply of goods and services.

• Price of goods and services should be reasonable and affordable.

• There must be proper after sale services

• Unfair means like under-weighing, adulteration etc. must be avoided.

• Grievance of the customers, if any must be settles quickly.

Responsibility towards Competitors

• Not to offer exceptionally high sales commission to distributors, agents etc.

• Not to offer to customers heavy discounts/or free products in every sales.

• Not to defame competitors through false advertisements.

Responsibility towards government

• Setting up units as per guidelines of government.

• Payment of fees, duties and taxes regularly as well as honestly.

• Not to indulge in monopolistic and restrictive trade practices.

• Not to indulge in corruption

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Responsibility towards Society

• To help the weaker and backward sections of the society

• To preserve and promote social and cultural values.

• To generate employment

• To protect the environment

• To conserve natural resources

• To provide assistance in the field of development research on education, medical,

science, technology etc.

Gandhian Approach in Management and Trusteeship

“Carefully watch your thoughts, for they become your words. Manage and watch your
words, for they will become your actions. Consider and judge your actions, for they
have become your habits. Acknowledge and watch your habits, for they shall become
your values. Understand and embrace your values, for they become your destiny.”

-Mahatma Gandhi

What is Trusteeship?

Trust is a fund or asset created to specific purpose. A wealthy person may set aside some
funds for specific purpose and appoint a trustee to manage it and make sure that the
benefits are made available to the specific beneficiaries. The beneficiaries are
mentioned.

The trustee is entitled to take a fee for his services. He is expected to take care of the
fund on his own but he must not take advantage of the fund for his personal benefit.

Trusteeship of Gandhiji

• In the first instance, everything must be surrendered to God and then out of it one
may use only that which is necessary for the service of God's creation, according
to one's strict needs.

• When an individual had more than his respective portion, he became a trustee
of that portion for God's people.

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 • Gandhi suggested this doctrine as an answer to the economic inequalities a kind
of nonviolent way of resolving all social and economic conflicts.

• Therefore man's dignity and not his material prosperity.

• Aims at a distribution of material prosperity keeping only human dignity in view

• Besides, trusteeship aims at the rising of the morale of the people by giving them a
sense of security in the hands of the trustees.

According to Gandhi, trusteeship is the only ground on which he can work out an ideal
combination of economics and morals. It is as follows:

(i) Trusteeship provides a means of transforming the present capitalist order of

society into an egalitarian one. It gives no quarter to capitalism, but gives the
present owning class a chance to reform itself. It is based on the faith that human
nature is never beyond redemption.

(ii) It does not recognize any right of private ownership of property except so far as
it may be permitted by society for its own welfare.

(iii) It does not exclude legislation of the ownership and use of wealth.

(iv) Thus under state regulated trusteeship, an individual will not be free to hold or
use his wealth for selfish satisfaction in disregard to the interests of society.

(v) Just as it is proposed to give a decent minimum living wage, a limit should be
fixed for the maximum income that would be allowed to any person in society.
The difference between such minimum and maximum incomes should be
reasonable and equitable and variable from time to time, so much so that the
tenancy would be towards the obliteration of the difference.

(vi) Under the Gandhian economic order, the character of production will be
determined by social necessity and not by personal greed.

"Always aim at complete harmony of thought and word and deed. Always aim at
purifying your thoughts and everything will be well.”

-Mahatma Gandhi

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Political Environment

Politics as a term is generally applied to the art or science of running governmental or

state affairs, including behavior within civil governments. It deals extensively with the
theory and practice of politics and the analysis of political systems and political
behavior. It consists of "social relations involving authority or power" and to the
methods and tactics used to formulate and apply policy.

In a democracy, there is always a conflict between the slow rates of social pay off. True
leadership is the ability to reconcile the two and promote long-term public good. A far
more dangerous threat is the loss of purpose for leadership.

A Code of Ethics for Politicians

• Tell the truth

• Take Responsibility

• Rise above the Fray

• Listen

• Criticize the argument, not the person.

• Don’t make promises you can’t keep

• Spend fairly

• Remember what it’s all about

• Take a break

• Lose well

Managing Ethics in Public Service

• Clear Ethical Standards

• Reflected in legal framework

• Ethical Guidance

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 • Information

• Reinforce Ethical conduct

• Transparent decision- making

• Public and private sector interaction

• Promote Ethical conduct

• Dealing with misconduct

Politics and Ethics of the Indian Constitution

• Rescue political theory in India

• The volume provides discussions on equality, the idea of citizenship and property.

Political Ethics

• Political ethics are a set of codes

• Political ethics balance the needs of situations with ethical questions

• Politics can involve a wide variety of ethical issues

• Politicians struggle with ethical dilemmas every day.

• Certain political activities are regulated to prevent ethical dilemmas

• Politicians have unspoken rules they follow when interacting with each other and
members of the public.

The Importance of Ethics

• Ethics should be an integral part of politics

• Citizens began to demand ethical behavior their business and political leaders

• Ethics is important, from a moral viewpoint.

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 Chapter- 11
Management in Indian Perspective
Management in Indian Perspective Indian Ethos & Values in Modern Management

“Certainly we should take care not to make intellect our God. Intellect has, of course,
powerful muscles but no personality. It cannot lead. It can only serve. It is not fastidious
about its choice of leaders (Mind) or Soul). The intellect has a sharp eye for tools and
methods but is blind to Ethos Ends and Values”.

-Albert Einstine

“It is already becoming clear that a chapter which has a western beginning in business
management will have to have an Indian ending, when the world adopts rich thought of
Indian ethos and wisdom, if it is not end in the self-destruction of the human race”.

-Arnold Toynbee, Nobel Laureate

What constitutes Indian Ethos?

Cambridge Advanced Learner’s dictionary defines Ethos as “the set of beliefs, ideas,
etc. about advances Learner’s Dictionary defines it as “the moral ideas and attitudes that
belong to a particular group or society”. Indian ethos is all about what can be termed as
“national ethos”.

Formally, the body of knowledge which derives its solution from the rich and huge
Indian system of ethics (moral philosophy) is known as Indian Ethos in Management
(IEM).

Management is behavioural science and it has to be culture specific. IEM has as its
basis, the culture base of India and as a country whose culture has its roots in religion- it
does draw its lessons from the religions of the land – be it Hinduism, Buddhism, or any
other. The salient ideas and thought scriptures are:

1. Atmano Mokshartham, Jagat hitaya cha: All work is an opportunity for doing
well to the world and thus gaining materially and spiritually in our lives.

2. Archet dana manbhyam – Worship people not only with materials things but
also by showing respect to their enterprising divinity within.

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 3. Atmana Vindyate Viryam – Strength and inspiration for excelling in work comes
from the Divine, God within, through prayer, spiritual readings and unselfish
work.

4. Yogah Karmashy Kaushalam, Samatvam Yoga uchyate – He who works with

calm and even mind achieves the most.

5. Yadishi Bhavana Yasya Siddhi Bhavati tadrish – As we think, so we succeed,

so we become. Attention to means ensures the end.

6. Parasparam bhavayantah shreyah param bhavasyathah – By mutual

cooperation, respect and fellow feeling, all of us enjoy the highest good both
material and spiritual.

7. Tesham sukham tesham shanty shaswati – Infinite happiness and infinite peace
come to them who see the Divine in all beings.

8. Paraspar Devo Bhav – Regard the other person as a divine being. All of us have
the same consciousness though our packages and containers are different.

Basic Principles of Indian Ethos for Management

1. Immense potential, energy and talents for perfection as human being has the spirit
within his heart.

2. Holistic approach indicating unity between the Divine (The Divine means
perfection in knowledge, wisdom and power), individual self and the universe.

3. Subtle, intangible subject and gross tangible objects are equally important. One
must develop one’s third eye, Jnana Chaksu, the eye of Wisdom, Vision, Insight
and Foresight. Inner resources are much more powerful than outer resources.
Divine virtues are inner resources. Capital, materials and plant & machinery are
outer resources.

4. Karma Yoga (Selfless work) offers double benefits, private benefit in the form of
self-purification and public benefit.

5. Yogah Karmasu Kaushalam – Excellence at work through self-motivation and

self-development with devotion and without attachment.

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6. Co-operation is a powerful instrument for team work and success in any enterprise
involving collective work. Indian ethos demands a subjective management system
which leads to an understanding of the following –

a. Management Attitude

b. Humanizing the Organization

c. Interiorizing Management

d. Self-introspection

e. Brain-stilling

f. Stepping Back (for a while)

g. Self- dynamising Meditation

h. Role of Intuition

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 Chapter- 12
Workplace Ethics
Today’s consumers are increasingly savvy about companies they support, and a growing
segment do so based on their ethical beliefs and world view. The way companies operate
and are perceived by the public often comes down to the ethics at work in their firm. An
ethical workplace should model behaviour from the top down and from the inside out,
from ownership all the way down to front-desk reception staff. Ethics are reflected in
how they treat suppliers and consumers, how they interact with others, how they do their
tasks and how they communicate internally and externally.

What Are Ethics?

Ethics come down to the subject of moral philosophy. It’s all about how a person or
company’s morality influences the decisions made and the behaviours exhibited. There
is the law, and then there’s ethics; it’s possible for a behaviour to be legal while still
considered unethical.

Today’s consumers are increasingly savvy about companies they support, and a growing
segment do so based on their ethical beliefs and world view. The way companies operate
and are perceived by the public often comes down to the ethics at work in their firm.

An ethical workplace should model behaviour from the top down and from the inside
out, from ownership all the way down to front-desk reception staff. Ethics are reflected
in how they treat suppliers and consumers, how they interact with others, how they do
their tasks and how they communicate internally and externally.

Ethics at work can refer to the way employees govern themselves and their work
attitude, but it can also refer to the morality or lack thereof surrounding a workplace.

What Are Ethics?

Ethics come down to the subject of moral philosophy. It’s all about how a person or
company’s morality influences the decisions made and the behaviours exhibited. There
is the law, and then there’s ethics; it’s possible for behaviour to be legal while still
considered unethical.

For instance, a man walking down the street sees a homeless person huddled against a
building, seeming to be in bad shape. Legally, he’s not obligated to check in with the
homeless person and see if he's OK, but it is unethical to just walk on by. It may be legal
73
for corporations to have environmentally destructive practices in foreign countries, but
it's unethical for them to destroy the environment for the sake of money and then walk
away.

On the flipside, it's sometimes illegal for cafes to donate leftover pastries to the poor, but
it’s the ethical thing to do because someone who is hungry gets to eat. So, the law and
ethics don’t always work in tandem. Ethics can be influenced by upbringing, social
norms, education, history, religion and so on, but every culture has some precepts on
what is deemed the ethical way to behave. Still, nearly every society and faith on the
planet has a variation of the golden rule — do unto others as you would have them do to
you — which is tantamount to an ethical precept.

Ethics in general refers to a system of good and bad, moral and immoral, fair and unfair.
It is a code of conduct that is supposed to align behaviors within an organization and the
social framework. But the question that remains is, where and when did business ethics
come into being?

Primarily ethics in business is affected by three sources - culture, religion and laws of
the state. It is for this reason we do not have uniform or completely similar standards
across the globe. These three factors exert influences to varying degrees on humans
which ultimately get reflected in the ethics of the organization. For example, ethics
followed by Infosys are different than those followed by Reliance Industries or by Tata
group for that matter. Again ethical procedures vary across geographic boundaries.

Religion

It is one of the oldest foundations of ethical standards. Religion wields varying

influences across various sects of people. It is believed that ethics is a manifestation of
the divine and so it draws a line between the good and the bad in the society. Depending
upon the degree of religious influence we have different sects of people; we have sects,
those who are referred to as orthodox or fundamentalists and those who are called as
moderates. Needless to mention, religion exerts itself to a greater degree among the
orthodox and to lesser extent in case of moderates. Fundamentally however all the
religions operate on the principle of reciprocity towards ones fellow beings!

Culture

Culture is a pattern of behaviors and values that are transferred from one generation to
another, those that are considered as ideal or within the acceptable limits. No wonder
therefore that it is the culture that predominantly determines what is wrong and what is
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right. It is the culture that defines certain behavior as acceptable and others as
unacceptable.

Human civilization in fact has passed through various cultures, wherein the moral code
was redrafted depending upon the epoch that was. What was immoral or unacceptable in
certain culture became acceptable later on and vice versa.

During the early years of human development where ones who were the strongest were
the ones who survived! Violence, hostility and ferocity were thus the acceptable.
Approximately 10,000 year ago when human civilization entered the settlement phase,
hard work, patience and peace were seen as virtues and the earlier ones were considered
otherwise. These values are still pt in practice by the managers of today!

Still further, when human civilization witnessed the industrial revolution, the ethics of
agrarian economy was replaced by the law pertaining to technology, property rights etc.
Ever since a tussle has ensued between the values of the agrarian and the industrial
economy!

Law

Laws are procedures and code of conduct that are laid down by the legal system of the
state. They are meant to guide human behavior within the social fabric. The major
problem with the law is that all the ethical expectations cannot be covered by the law
and specially with ever changing outer environment the law keeps on changing but often
fails to keep pace. In business, complying with the rule of law is taken as ethical
behavior, but organizations often break laws by evading taxes, compromising on quality,
service norms etc.

Semantics of Ethics in Work

Workplace ethics are not the same as work ethic. The work ethic you have is your
personal standard for how you do your job. It’s about how detail-oriented you are, what
sort of quality you’re intent on delivering for every project you do, whether you’re
punctual, how you treat your colleagues, if you take accountability for what you do and
so much more. These are all things that can be taught, but they also come down to an
employee’s internal moral code.

Workplace ethics can go two ways. One is how the employee governs herself within the
workplace, but the other is the ethics at play in the corporate culture and how the

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company conducts itself both inside the firm and also in the larger world. Each of these
can affect morale, performance, loyalty, job turnover and even employee work ethic.

The good news is that managerial styles can greatly improve employee work ethic
simply by creating systems and habits for getting work done and interacting in the
workplace.

Work Ethic: 8 Characteristics

1. Punctuality: The old “time is money” mantra matters when it comes to work.
Whether it’s getting projects completed when due, showing up on time, following
break-time protocols or informing your supervisors of hiccups or challenges with as
much lead time as you can, it’s all about respecting that time is valuable – not just
for you but for the company, for colleagues and even for clients.

2. Accountability: Being accountable means shouldering the responsibility for projects

happening or even taking the blame when things go poorly.

3. Focus: Seeing a task through requires paying attention to it, and that’s hard to do if
you let yourself get distracted by chatter, social media and the like.

4. Initiative: Doing something without being asked is initiative. Great employees care
about doing what needs to be done whether it’s on their task list or not. Showing
initiative is the way to indicate that you value results and are willing to do what it
takes to ensure the company's success.

5. Productivity: If you’re productive, it means you’re skilled at overcoming

distractions, ignoring your mood and conquering technology and other issues all to
deliver solid results. Getting work done is what it’s all about, day in and day out.

6. Professionalism: Showing up and taking work seriously, treating others with respect
and dressing appropriately for the job are all aspects of being professional.

7. Dedication: Dedication means consistency and showing up ready to get the job done
daily while having a great level of focus and productivity every day. When
management knows what they can expect from you because you’ve demonstrated it
week after week, it makes a big difference in their ability to manage projects and
meet deadlines.

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8. Desire to improve: Employees who embrace feedback and teaching moments show
that they’re willing to work to grow in their jobs. This helps management know
which employees have the most potential.

How to Inspire Work Ethic

Those work ethic characteristics are moot if employees are working for a company that
doesn’t use its talent as best as it can. A scant 33 percent of employees reported feeling
somewhat engaged by their workplace in Gallup’s 2017 State of the American
Workplace poll. That means 67 percent of workers were actively or somewhat
disengaged while at work. The blame for that lies entirely on workplace culture and poor
management, but there are some steps managers can take to change that.

• Set achievable goals: Be clear about the goals for projects and the company and set
achievable benchmarks along the way. By knowing toward what they’re working,
employees can be more productive, show initiative and stay focused.

• Lead by example: Employees can’t or won’t be professional and respectful if

management fails to behave that way. Punctuality, accountability, discipline and
dedication are all characteristics that must be modeled from the top down. Display
behaviors and employees will mirror them, good or bad. As business leader Jim
Rohn once said, “Discipline is the bridge between goals and accomplishment.”

• Create a great environment: The more accommodating and welcoming a

workplace, the more employees will feel comfortable working in it. If the place is
messy, chaotic, cramped, cold, poorly lit or has other uncomfortable attributes, they
will be looking for the exit sign from the moment they get to work. More
importantly, a clean and clutter-free workplace improves productivity.

• Provide feedback and mentorship: Employees can’t become better if they’re never
told where they’re not making the grade — or where they are. It’s important to let
employees know when work is not up to standards, but it’s also critical to let them
know when they’re doing great so they can repeat their behavior. For employees
who consistently do great work and aspire to accomplish more in the company,
mentorship should be provided so they can learn and grow.

• Remove hurdles: Whether it’s a team member failing to contribute or a manager

failing to lead well, it’s important to remove burdens from the workplace so
employees can excel. This also means quashing negative gossip, keeping a lid on

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 office politics, paying people what they’re worth and giving opportunities for people
to gain advancement and promotion no matter their gender or race.

• Inspire people to work: In the end, all the motivational quotes in the world won’t
do a thing if people don’t feel valued or appreciated. The quickest way to achieve
that is to pay them what they’re worth and give them benefits.

• Listen: The only ones surprised by toxic workplaces are managers that either cause
it or fail to listen to employees reporting it. Give employees easier access to speak
up when they're having issues with people or projects.

Ethics in the Workplace: Examples

Beyond work ethic and instilling work ethic is that dubious line between workplace laws
and ethics. Companies should always have an employee handbook or code of conduct
available so employees understand where the company stands on everything from
social-media use to dating co-workers. Just remember that some unethical behavior
seems harmless, but it’s a big indicator of your character and who you are, and folks will
notice.

Preferential treatment: Some people get special treatment at work — it can be

patronage, friendship, a sexual relationship or more. Whatever the case, it’s unfair and
unethical to show favoritism.

Gossiping: Spreading rumors about others, projects, the company’s plans or anything
else is unethical, and worse, it shows that you’re not to be trusted when discretion
counts. It’s a mistake to think that others aren’t taking note of your loose tongue.

Dishonesty: Taking credit for other people’s work or lying about your progress on a
project are presumably obvious examples of lies, but dishonesty comes in so many
forms. It’s another trait that can derail your career no matter how small the lie.

Selfishness: Hoarding office supplies so you don’t run out isn’t team behavior. Leaving
dishes unwashed in the kitchen is selfish and immature if it’s not an accepted practice.
So is not remaking coffee and not refilling the printer paper — it’s a simple matter of
doing unto others what you’d like them to do for you.

Corporate Ethics: Ethical dilemmas are constantly on the radar for companies,
including their environmental practices, payroll choices, political wrangling, hiring
policies, revenue reporting and so much more. Companies have an ethical stance in both

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how they project themselves to the wider world and how they operate internally, from
hiring practices to carbon footprints. When it comes to ethics in the workplace, diversity
is a big topic today because it’s not just about hiring diverse workers but also elevating
them to managerial and c-suite roles.

The diversity issue also applies to equality between male and female co-workers, where
equal work should mean equal pay, but the gender pay gap still persists, with the U.S.
Census reporting that women earn 80.7 cents on the dollar compared to men, who take
in an average of $9,909 annually versus female counterparts. Changing this status quo is
seen as an ethical imperative for many people today.

Corporate Ethics Abroad

Multinationals with offices in different countries and on different continents face on

going ethical challenges because accepted norms vary quite drastically by region.
Google is a great example, considering its presence in China, because it is the ultimate
champion of the free internet and information exchange, so much so that "just Google it"
has joined the modern lexicon. However, to provide any of that to the Chinese public,
they kowtow to a communist government known for suppressing free speech — but is
that unethical of them?

Ultimately, the definition of "ethical" varies tremendously. There is no shortage of

companies that take advantage of this gray area. Some people’s moral code has much
more flex than that of others, and that’s why laws get made — because eventually, an
incident reveals how important it is for the black-and-white moral clarity that laws
provide.

Basic Workplace Ethics for an Organization

Rules and regulations ought to be same for everyone. Everyone needs to attend office
on time irrespective of their designation, distance of their home from the workplace,
salary or status. An individual cannot come to office late just because he is the team
leader and his team is already present and working on his behalf. If a day’s salary of a
clerk is deducted for coming late to work, it should be the same for the marketing
manager as well.

Company’s policies need to be communicated clearly to each and every one. There
should be transparency at all levels of hierarchy. Employees are the backbone of any
organization and thus they must have a say in company’s goals and objectives.

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An organization ought to respect its employees to expect the same in return. Rules
and regulations should not be too rigid. Don’t expect an employee to attend office two
days before his marriage date. If an employee is not keeping well, please do not ask
him/her to attend office unless and until there is an emergency.

Management must not forget that money is a strong motivator for employees.
Everything is important, be it career, growth, job satisfaction but what is most important
is employee’s salaries. Do not unnecessary hold their salaries for a long time unless and
until there is really shortage of funds. In case of marketing and sales employees,
conveyance and mobile bills must be cleared at the earliest. Do not ask for unnecessary
bills and documents.

Organization should not expect employees to attend office 365 days a year. It is the
responsibility of human resource professionals to prepare the holiday calendar at the
beginning of the year and circulate the same among all employees. Let employees enjoy
their respective festivals and come back to work with positive energy and smile. In fact
allow them to go in the festive mood two days prior to the D day. Ask them to organize
pre festival bashes at the workplace. Let them dress in colourful attires and have fun.
Trust me, work never suffers this way. Rather, employees feel attached to the
organization and strive hard to deliver their level best every time.

Give employees the space they require. Key responsibility areas need to be
communicated to the employees on the very first day of their joining. Roles and
responsibilities need to be assigned as per an individual’s expertise and experience. Do
not expect an employee with one year experience to head the marketing team.
Employees need to be trained well. Organizations need to give at least six months time
to the new employees to adjust in the new environment.

It has been observed that most of the times employees crib when they are underpaid.
Make sure employees get what they deserve.

Salaries should be decided in the presence of the employee and also keeping in
mind an individual’s role in the organization, his/her gross salary in the previous
organization, responsibilities within the current system and of course his/her years
of experience. One of the major reasons as to why employees quit their jobs after a year
or so is poor appraisal system. Increments ought to be directly proportional to the
amount of hard work an employee puts in throughout the year and also his/her
performance. Unnecessary favours are against the workplace ethics.

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Do not be too strict with your employees. Do not block all social networking sites.
Blocking face book and Orkut is not the ideal way to ensure employees are working and
not wasting their time. Even a 24 * 7 check would not prevent employees from wasting
their time unless and until they realize it themselves. The moment, you are strict with
something, people would tend to do the same more.

Importance of Workplace Ethics

Workplace ethics ensures positive ambience at the workplace: Workplace ethics

leads to happy and satisfied employees who enjoy coming to work rather than treating it
as a mere source of burden. Employees also develop a feeling of loyalty and attachment
towards the organization.

Organizations need to have fool-proof systems to measure the performances of

individuals. Appraisal system needs to be designed keeping in mind employee’s
performance throughout the year and his/her career growth. Periodic reviews are
essential. It is mandatory for superiors to know what their subordinates are up to. You
need to know who all are going on the right track and who all need that extra push.
Workplace ethics ensures management guides and mentors their employees well.
Appraisal and salary hikes should not happen just for the name sake. Workplace ethics is
important as it enables management to treat all employees as equal and think from their
perspective as well. Employees must have a say in their appraisal system. Transparency
is essential.

An employee is bound to move on after a year or so if he/she is not appreciated and

rewarded suitably. It is indeed the organization’s loss when employees after being
trained quit and move on. Do you think it is entirely the employee’s fault? Why would
an employee move on if he/she is fully satisfied with his /her current assignment?
Employees change primarily because of two reasons - Career growth and monetary
benefits. Management needs to make employees feel secure about their job and career.
Unnecessary favouritism is against workplace ethics. If you favour anyone just because
he is your relative, the other team members are bound to feel demotivated and thus start
looking for new opportunities. An individual’s output throughout the year should decide
his/her increment.

Organizations need to stand by their employees even at the times of crisis. You cannot
ask your employees to go just because you don’t need them anymore or your work is
over. Such a practice is unethical. How can you play with someone’s career? If an
individual has performed well all through but fails to deliver once or twice, you just

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can’t kick him out of the system. Workplace ethics says that organizations need to retain
and nurture talents. If you have hired someone, it becomes your responsibility to train
the individual, make him/her aware of the key responsibility areas, policies, rules and
regulations and code of conduct of the organization. Employees need to be inducted well
into the system. They must be aware of the organization’s policies from the very first
day itself.

Workplace ethics also go a long way in strengthening the bond among employees
and most importantly their superiors: Employees tend to lie if you do not allow them
to take leaves. If you do not allow an employee to take leave on an important festival,
what do you expect the employee to do? What is the alternative left with him? He would
definitely lie. Do not exploit your employees and don’t treat them as machines. No
employee can work at a stretch without taking a break. It is okay if they talk to their
fellow workers once in a while or go out for a smoke break. Understand their problems
as well. If you feel the problem is genuine, do not create an issue. It is but natural that
once or twice they would definitely call their family members and enquire about their
well-being. Superiors should not have a problem with that It has been observed that
organizations which are impartial to employees, lend a sympathetic ear to their
grievances and are employee friendly seldom face the problems of unsatisfied
employees and high attrition rate.

Role of Management in Inculcating Workplace Ethics: Management plays an

essential role in inculcating workplace ethics in employees. Bosses need to set an
example for their subordinates. You need to come on time if you expect your team
members to reach office on time.

Management needs to act as a source of inspiration for the employees: It is

generally observed that team managers, leaders influence their team members to a large
extent. Superiors strictly need to adhere to the rules and regulations of the organization
for their employees to follow the same. Remember, you have no rights to scold your
subordinates if you yourself are at fault. Moreover no one would bother to listen to you
as well. Don’t expect your team members to sit till late if you yourself leave early.

It is the role of the management to motivate the employees and guide them as to what is
right and wrong. Remember a boss is like the captain of the ship. It is your responsibility
to take your team members along and provide constant mentoring. Rebuking is not the
only solution. If you know one of your team members is meeting his girlfriend during
office hours, do you feel insulting or criticizing in front of others would help? NO. Call
him to your cabin or speak to him in private and make him realize that it is not morally
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correct to bunk office. You need to counsel him and make him understand his mistake
politely. Trust me, being rude would make the situation more badly. Do not discuss the
matter in front of others. The other person might not like it. Your job is to make the
other person feel guilty and realize that indeed he has done something wrong. Believe
me; he would never repeat his mistake.

Constant communication between the management and employees is of utmost

importance in inculcating workplace ethics: Management ought to be transparent with
its employees. Let them have a say in company’s decisions. Let them decide what is
right and what is wrong for them. Sit with them, discuss, brainstorm ideas and listen to
what they have to say. Never ignore their opinions. Let them come out with their
grievances.

Lend a sympathetic ear to their problems as well. Try to provide them a solution. If you
feel most of your employees have a problem coming to office early as they in any case
have to stay back till late in the evening as per the client’s availability, please adjust the
office timings accordingly. How can you expect your employees to reach office sharp at
8 AM when they are leaving for the day at 10 PM. Remember, rules and regulations
should not act as a hindrance in their performance? Be realistic and logical. If the
problem is genuine and faced by a major chunk of employees, there is no harm in
changing the policies. Think from the employee’s perspective as well. Policies should
not be too rigid.

Don’t be too strict with the employees. If someone is not present in the office, please do
not call his family members to enquire about him. No one would like it. We all are
mature professionals to understand that if there is work, we need to finish it first rather
than waste our time in gossiping and surfing social networking sites. Management can’t
force employees to respect the organization. Respect must be commanded and not
demanded. Respect your employees if you expect the same in return.

Some organizations do not easily release their employees. Remember, you cannot
stop an individual from changing his job if he/she has already decided to move on:
Try to convince him once and if he/she is still not willing to continue, let him go.
Employees depend on fake relieving letters, experience certificates when they do not get
it from their previous organization on time.

Promote Workplace Ethics: Workplace ethics ensures employees are treated with
utmost respect. It also leads to a sense of satisfaction among employees and they
develop a feeling of attachment towards their respective organizations. The feeling of

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loyalty is a feeling which is seen in very few individuals. For them, going to work is the
best source of earning money and also keeping one-selves occupied. Organizations often
complain of employees moving on when they are fully trained. An organization invests
its time, money and energy in training a new employee and thus it is a big blow when
he/she quits all of a sudden.

The best way to promote workplace ethics is to be very specific and careful while
recruiting potential employees who would be representing the top levels especially
the human resource department: It is rightly said that human resource professionals
are the face of an organization. They need to understand the psychology of individuals
well as they are the ones who have the responsibility of formulating policies, rules and
regulations of the organization. Remember, policies should neither be too flexible nor
too rigid. If policies are too flexible, no one actually follows them and if policies are too
rigid, again employees would depend on excuses and lies to escape them. You must
understand your nature of business. An organization which works primarily for US
Clients can’t ask employees to report early in the morning as I am sure employees must
be working till late or probably the whole night.

Human resource professionals ought to communicate the organization policies and

code of conduct clearly to the employees the very first day: Also send them a mail
for their ready reference. Tell them very clearly the office timings, hierarchy, dress code,
salary structure, leave procedure, reporting structure and so on. In this case, they would
never have an excuse later. Tell them from the very beginning that there are certain
things which are expected out of them and organization is very strict on certain policies
like coming to office on time, informed leaves etc. Make them clear that if they are
caught bunking office or participating in unfair practices like stealing, passing on
confidential information, they would be shown the exit door the very next day. Trust me,
no one would even think of doing the same. Problems arise when employees are not
aware of rules and regulations. Transparency between management and employees is of
utmost importance and the best way to promote workplace ethics.

Listen to what your employees have to say. Let them come out with their problems:
Superiors need to interact with employees on a regular basis and address their
grievances. Management needs to make employees feel comfortable. They might come
up with lots of issues and as a boss it is your responsibility to guide them and help them
with a solution. Even if the problem is illogical, do not be harsh to them. Make them
realize as to where they are wrong. Open communication is the best way to promote
workplace ethics. Constant mentoring plays an important role in motivating the
employees to adhere to the organization policies.
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No employee should be given special treatments. Bonuses and hikes must be
proportional to the employee’s performance over a period of time. Appreciating the
employee who really deserves is essential. Do not favour anyone just because you like
him/her. Fair judgement is of utmost importance. You have nothing to do with his/her
personal life. There should be absolutely no problem if an employee goes out to meet his
girlfriend after office hours.

Organization needs to support its employees always, even at the hours of crisis.

Job security and constant career growth are two most important factors which
ensure employees stick around for a long time and also are satisfied with their
current assignment: If employees are happy and contended and feel respected, they
would also strive hard to deliver their level best every time.

Importance of Employee Code of Conduct

Employee code of conduct guides individuals as to how they should behave at the
workplace: Employees need to be aware as to what is expected out of them in the
office. You just can’t behave the same way at office as you behave at home. Your Boss
can be your best friend outside office but at work you have to respect him and also treat
him like your superior. Employee ethics is essential for maintaining discipline at the
workplace. Management needs to be liberal with the employees but there has to be some
element of fear also in the minds of employees. If the superiors are too friendly with
their subordinates, there are chances they might start taking undue advantage of the
friendship. There has to be a balance always. Yes, organization’s policies ought to be
employee friendly but that does not mean employees come to office at 11 AM just
because they cannot get up early in the morning. There has to be a genuine reason for
everything.

There has to be a proper dress code for employees: Individuals just can’t enter into
the office wearing anything. Employee code of conduct decides what individuals ought
to wear to office. Some organizations are very particular of what their employees wear
to work. Let us go through an example:

Organization A did not instruct employees about their dress code. There was really no
strictness as far as dress code was concerned. One fine day; Paul came to office wearing
T shirt and Capri. The same day, one of Organization A’s esteemed clients came for site
visit. Trust me, the moment the client met Paul, he was rather surprised. Understand,
coming in jeans and T shirt to work does not stop us from working but it just reflects the

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non-serious and casual attitude of employees. It is always better if employees come to
work in formals. Casual dressing is okay on Saturdays but that does not mean you can
come to work wearing shorts. Dress sensibly even if it is a weekend and you have
already gone in the holiday mood. Employee dress code also ensures uniformity among
employees.

Employee code of conduct ensures career growth and also benefits the organization
in the long run: If employees understand the difference between what to do and what
not to do at the workplace, problems would never arise. We bunk offices because we do
not realize that such a practice is wrong and unethical. Employee ethics ensures
employees adhere to the rules and regulations and also work for the organization.
Employee ethics motivates employees not to indulge in gossiping, nasty politics,
criticizing fellow workers, bunking office and so on. They seldom think of sharing
confidential information or data with competitors and all their energies are utilized in
productive activities which would benefit the organization.

Employee ethics ensures employees attend office on time and genuinely respect
their superiors: Most of the times it has been observed that employees have a hate
relationship with their Bosses. Are bosses wrong always? Ask yourself. How would you
feel if someone reporting to you is absconding from the office and you have a deadline
to follow? Yes, sometimes it does become essential to show your powers and be a little
authoritative. Understand that employee ethics is not meant to downgrade employees but
make them aware of their duties and responsibilities in the organization.

Most essentially, employee ethics is important as it goes a long way in making the
value system of employees strong: This way, employees on their own develop a
feeling of attachment and loyalty towards the organization. Remember, employee ethics
is not meant to bind you but make you an indispensable employee.

Ethics in Various Corporate Sectors

Most of us would agree that it is ethics in practice that makes sense; just having it
carefully drafted and redrafted in books may not serve the purpose. Of course all of us
want businesses to be fair, clean and beneficial to the society. For that to happen,
organizations need to abide by ethics or rule of law, engage themselves in fair practices
and competition; all of which will benefit the consumer, the society and organization.

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Primarily it is the individual, the consumer, the employee or the human social unit of the
society who benefits from ethics. In addition ethics is important because of the
following:

1. Satisfying Basic Human Needs: Being fair, honest and ethical is one the basic
human needs. Every employee desires to be such himself and to work for an
organization that is fair and ethical in its practices.

2. Creating Credibility: An organization that is believed to be driven by moral

values is respected in the society even by those who may have no information about
the working and the businesses or an organization. Infosys, for example is
perceived as an organization for good corporate governance and social
responsibility initiatives. This perception is held far and wide even by those who do
not even know what business the organization is into.

3. Uniting People and Leadership: An organization driven by values is revered by

its employees also. They are the common thread that brings the employees and the
decision makers on a common platform. This goes a long way in aligning behaviors
within the organization towards achievement of one common goal or mission.

4. Improving Decision Making: A man’s destiny is the sum total of all the decisions
that he/she takes in course of his life. The same holds true for organizations.
Decisions are driven by values. For example an organization that does not value
competition will be fierce in its operations aiming to wipe out its competitors and
establish a monopoly in the market.

5. Long Term Gains: Organizations guided by ethics and values are profitable in the
long run, though in the short run they may seem to lose money. Tata group, one of
the largest business conglomerates in India was seen on the verge of decline at the
beginning of 1990’s, which soon turned out to be otherwise. The same company’s
Tata NANO car was predicted as a failure, and failed to do well but the same is
picking up fast now.

6. Securing the Society: Often ethics succeeds law in safeguarding the society. The
law machinery is often found acting as a mute spectator, unable to save the society
and the environment. Technology, for example is growing at such a fast pace that
the by the time law comes up with a regulation we have a newer technology with
new threats replacing the older one. Lawyers and public interest litigations may not
help a great deal but ethics can.

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Ethics tries to create a sense of right and wrong in the organizations and often when the
law fails, it is the ethics that may stop organizations from harming the society or
environment.

Ethics in Human Resource Management

Human resource management deals with manpower planning and development related
activities in an organization. Arguably it is that branch of management where ethics
really matter, since it concerns human issues specially those of compensation,
development, industrial relations and health and safety issues. There is however
sufficient disagreement from various quarters.

There are different schools of thought that differ in their viewpoint on role of ethics or
ethics in human resource development. One group of thought leaders believes that since
in business, markets govern the organizational interests and these interests are met
through people, the latter are therefore at the highest risk. They believe that markets
claim profits in the name of stakeholders and unless we have protocols, standards and
procedures the same will develop into a demon monopolizing markets and crushing
human capital; HR ethics are become mandatory.

There is another group of ethicists inspired by neo-liberalism who believe that there are
no business ethics apart from realization of higher profits through utilization of human
resources. They argue that by utilizing human resources optimally, there is more value
creation for the shareholders, organization and the society and since employees are part
of the society or organization, they are indirectly benefited. Nevertheless ethics in
human resource management has become a perennial debate of late!

Discussions in ethics in HRD stem from employee relationships and whether or not
there can be a standard for the same. Employee rights and duties and freedom and
discrimination at the workplace are issues discussed and covered by most texts on the
topic. Some argue that there are certain things in employment relationship that are
constant others disagree with the same. For example, right to privacy, right to be paid in
accordance with the work (fair compensation) and right to privacy are some areas that
cannot be compromised upon.

Ethics and Market System

The kind of market system affects business and HR ethics; the latter thus becomes
negotiable. In occupations where the market conditions do not favour the employees it is
necessary to have government and labour union interventions in order to control the
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possible exploitation. In free market system, employees and the employer are almost
equally empowered, negotiation create win situations for both the parties. Government
or labour union interventions become harmful.

Globalization has brought about the concept of globalizing labour, trade unions have
started to decline and the role of HR as such in issues like employee policies and
practices has become a debatable topic. In fact many people are of the opinion that HR
is nothing but an arm of the stakeholders through which major strategic and policy
decisions are divulged geared towards profit making!

Though there can be no single opinion on ethics in HR that is convincing. Market in

itself is neither an ethical institution nor unethical and no policies and procedures alone
cannot govern and align markets to human well-being. However the requirement of such
policies and procedures can also not be denied. In lieu of this HR ethics should take care
of things like discrimination (sexual, religion, age etc), compensation, union and labour
laws, whistle blowing, health and safety of the employees etc.

Ethical Issues in HR

Of all the organisational issues or problems, ethical issues are the most difficult ones to
handle or deal with. Issues arise in employment, remuneration and benefits, industrial
relations and health and safety.

Diagrammatic representation of HR Ethical Issues

 Cash and Compensation Plans: There are ethical issues pertaining to the salaries,
executive perquisites and the annual incentive plans etc. The HR manager is often
under pressure to raise the band of base salaries. There is increased pressure upon
the HR function to pay out more incentives to the top management and the
justification for the same is put as the need to retain the latter. Further ethical issues
crop in HR when long term compensation and incentive plans are designed in
consultation with the CEO or an external consultant. While deciding upon the pay-

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 out there is pressure on favouring the interests of the top management in comparison
to that of other employees and stakeholders.
 Race, gender and Disability: In many organisations till recently the employees
were differentiated on the basis of their race, gender, origin and their disability. Not
anymore ever since the evolution of laws and a regulatory framework that has
standardised employee behaviours towards each other. In good organisations the
only differentiating factor is performance! In addition the power of filing litigation
has made put organisations on the back foot. Managers are trained for aligning
behaviour and avoiding discriminatory practices.
 Employment Issues: Human resource practitioners face bigger dilemmas in
employee hiring. One dilemma stems from the pressure of hiring someone who has
been recommended by a friend, someone from your family or a top executive. Yet
another dilemma arises when you have already hired someone and he/she is later
found to have presented fake documents. Two cases may arise and both are critical.
In the first case the person has been trained and the position is critical. In the second
case the person has been highly appreciated for his work during his short stint or
he/she has a unique blend of skills with the right kind of attitude. Both the situations
are sufficiently dilemmatic to leave even a seasoned HR campaigner in a fix.
 Privacy Issues: Any person working with any organisation is an individual and has
a personal side to his existence which he demands should be respected and not
intruded. The employee wants the organisation to protect his/her personal life. This
personal life may encompass things like his religious, political and social beliefs etc.
However certain situations may arise that mandate snooping behaviours on the part
of the employer. For example, mail scanning is one of the activities used to track the
activities of an employee who is believed to be engaged in activities that are not in
the larger benefit of the organisation.

Similarly there are ethical issues in HR that pertain to health and safety, restructuring
and layoffs and employee responsibilities. There is still a debate going on whether such
activities are ethically permitted or not. Layoffs, for example, are no more considered as
unethical as they were thought of in the past.

Ethics in Sales and Marketing

Markets present a clash of interest between various players. There is competition for
resources, customers and price etc, which breeds ground for activities that may not get
ethical sanctions. A certain code of conduct, policies and practices called ethics are
required to manage markets and marketing.

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Marketing is the heart of all businesses and all other functions depend upon the same for
keeping the business moving. It is one business function that interacts the most with
markets, in fact markets are meant to sell and they exist only when they sell! In such a
scenario there are bound to be multiple players and a clash is inevitable. Such clash
leads to malpractices like hoarding, price competitions, brand wars and use of unfair
tactics, which is precisely where marketing ethics come into play.

Simply put, ethics means principle or values by which marketing ought to be conducted
in the market place. Logically also when there are huge number of transactions involved,
a certain code or guiding principles are required to ensure that operations and industry
competitiveness is fair and beneficial to the end user. There are different philosophies or
schools of thought for ethics in marketing, one is the political philosophy and the other
is the transaction focused.

Whereas one school of thought says that all marketing efforts should be focused on
maximizing the shareholder value and that this is the only marketing ethics; the other
believes that that marketing and market is equally responsible to consumers, other stake
holders and the shareholders. The tactic of targeting targeted segments, creating needs
that were inexistent till now, transparency about the source of labour and environmental
risks, transparency about the use of source and the ingredients, appropriate labelling,
mentioning associated health risks, advertising jurisprudence and not making false
promises fall within the ambit of marketing ethics.

Lots of marketing and promotion was carried out for goods and services that were not a
need till yesterday and only a luxury. Today cell phones have become a need and a
status symbol! These are issues that are being discussed in marketing ethics nowadays.
Marketing ethics is in its budding stage only considering that it came into being only in
late 1990s.

Like other ethical disciplines, marketing ethics is also looked up from various
perspectives. There is the perspective of virtue, expediency and other perspectives. But
like other ethics there is also the difficulty of deciding the agency responsible for ethical
practice. Since there is not one single agency responsible for ethics this gives the
independence to an individual or to any marketing agency to act on its own and be
ethical!

Marketing ethics unlike other business ethics is not only restricted to the field of
marketing alone. It influences many aspects of our life and especially in developing
perceptions in the minds of people and creating identities, classes and sections in the

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society. The visual channels of communication used for marketing sometimes lead to
closure of knowledge, opinions, ideas and beliefs. It creates prejudices in the mind of
people.

Ethics and Production

Ethics in production is a subset of business ethic that is meant to ensure that the
production function or activities are not damaging to the consumer or the society. Like
other ethics there is a certain code of conduct or standards to be followed, however
ensuring that the ethics are complied with is often difficult.

One of the most important characteristic of the business today is that there is a great
degree of interdependence between various business functions. Production cannot
happen without marketing and sales and vice versa. In order to survive in the
competitive sphere organizations try to reduce the costs involved in production
processes. This cost efficiency is sometimes achieved at the cost of quality. Poor
processes and technology is used to keep the cost down, this is especially true for small
players who cannot afford economies of scale. Having said this there are also examples
of industry giants that compromised on certain production processes, cola companies
make up for a good example.

All the production functions are governed by production ethics but there are certain that
are severely harmful or deleterious which need to be monitored continuously. The
following are worth mentioning:

1. There are ethical problems arising out of use of new technologies that are
deleterious to health, safety and environment. Technological advancements like
genetically modified food, radiations from mobile phones, medical equipment
etc are less problems are more of dilemmas.

2. Defective services and products or products those are innately deleterious like
alcohol, tobacco, fast motor vehicles, warfare, chemical manufacturing etc.

3. Animal testing and their rights or use of economically or socially deprived

people for testing or experimentation is another area of production ethics.

4. Ethics of transactions between the organization and the environment that lead to
pollution, global warming, increase in water toxicity and diminishing natural
resources.

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Dilemma of Ethics in Production

There are certain processes involved in the production of goods and a slight error in the
same can degrade the quality severely. In certain products the danger is greater i.e. a
slight error can reduce the quality and increase the danger associated with consumption
or usage of the same exponentially. The dilemma therefore lies in defining the degree of
permissibility, which in turn depends on a number of factors. Bhopal gas tragedy is one
example where the poisonous gas got leaked out due to negligence on the part of the
management.

Usually many manufactures are involved in the production of same good. They may use
similar or dissimilar technologies for the same. Setting a standard in case of dissimilar
technologies is often very difficult. There are many other factors that contribute to the
dilemma, for example, the involvement of the manpower, the working conditions, the
raw material used etc.

Social perceptions also create an impasse sometimes. For example the use of some
fertilizer by cola companies in India recently created a national debate. The same cold
drinks which were consumed till yesterday became noxious today because of a change
in the social perception that the drinks are not fit for consumption.

Ethics and Technology

Businesses today are technology and innovation driven. There is huge competition in the
sphere and therefore like other industry or business function ethics is essential here also.
Specially because ethics by itself is only a tool to create and doesn’t know ethics or
morals!

Every day we have innovative products and services that announce their arrival in the
market place and others that go obsolete. It is this technology and innovation that leads
to ethical issues, considering the competition to stay ahead by innovating is immense.
Issues like data mining, invasion to privacy, data theft and workplace monitoring are
common and critical.

In technology we speak of ethics in two contexts; one is whether the pace of

technological innovation is benefiting the humankind or not, the other is either severely
empowering people while choking others for the same. Technology, for example, has
drastically replaced people at work.

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In the first case we are compelled to think about the pace at which technology is
progressing. There are manifold implications here, be it things like computer security or
viruses, Trojans, spam’s that invade the privacy of people or the fact the technology is
promoting consumerism.

Nowadays data storage is primarily on computer systems. With the advent of internet
technology the world has got interconnected and data can be accessed remotely by those
who are otherwise unauthorized to do the same. This is one of the pitfalls of innovation.
The other one i.e. the pace of technological change also raises the question of ethics.

New products make their way and leave the existing ones obsolete. In fact technological
change and innovation is at the heart of consumerism, which is bad for economy and
environment in general. The recent economic downturn makes up for a very good
example.

Increasingly technological products are adding up to environmental degradation.

Computer screens, keyboards, the ink used in the printers are some of the ways in which
technology is polluting the environment. All these produce toxins that cannot be
decomposed easily.

The other major issue in technology that brings in ethics is interface between technology
and the computers. Many scientists are of the opinion that the world will come to an end
with a war between the humankind and the technology. Technology they say will
advance to an extent beyond the control of those who have made it!

No doubt technology has replaced people at work and made certain others redundant.
On the flip side many people have been raised to power while others have been severely
handicapped. The latter is especially true for third world countries. New manufacturing
processes that are outsourced either replace manpower there or either exploits the latter
in the name of employment by engaging them cheaper prices.

Technology has also made inroads into the field of medicine and life care. New cloning
techniques, genetic modifications or other lifesaving drugs need continuous monitoring
and surveillance. Bioethics has thus emerged as ethics in the field of medical
technology.

Whereas we cannot talk of controlling technology and innovation, the better way is to
adapt and change. The role of ethics in technology is of managing rather controlling the
same. Continuous monitoring is required to keep track of latest innovations and
technological changes and for ensuring fair practices.
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 Chapter-13
Business Ethics: A Decision Between Right or Wrong
The moral and the subsequent strategy of a company decide it’s very far in future. Most
of the well trusted and well-earned companies in our country and also worldwide are
ashamed of what is called the wrong decision either by their stakeholders; or a very low
importance employee but one single mistake should become the nail in their coffin, the
stories are too much of interest but what is actually happened is called the ethics.

This is not only about ethics in general or the morals precisely, but if it is concerned
with a specific field of ethics related to corporate sector: business ethics.

Business ethics is a study of what is morally right and wrong. It spotlights on the
standards of morality which apply to the business strategies, human behavior and
various other institutions. As a part of the society every person has ends to accomplish
and the society categorize a method of establishments to comprehend the ends.

The establishments help a person to achieve the ends by following a fixed set of
activities which are political, social, economic and educational. Business is one of the
most important enterprises which help the people in the modern societies to carry on the
work of producing and distributing products and amenities. At different periods in the
world, the people in advanced countries turned a blind eye to morals and ethics which
proved to be disastrous for the coming generations[4].

As business world progresses it got tarnished by the evil practices of slavery,

industrialization and the cruel past of expansionism; and subsequently by the cold war.
In the modern times with the technology being highly advanced the focus of ethics is
mainly on a principled dialogue of the post-colonial and post-world war periods .

The need to incorporate ethics into business was felt in the late 90’s. It was during this
period when the world came from corner to corner natural calamities and financial
disruptions, that organizations started giving importance to ethical business practices.
The Gas Tragedy at Bhopal and the fall of Enron were indicative of a large scale
degradation that was characterized by highest standards of corrupt corporate ethics.
Business ethics is not alienated from the individual’s practice of ethics because in
business all choices and actions of human beings impact the activities of a business and
hence it is the responsibility of the people to bear the onus of the fallout.

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Problem on Hand

Lack of morals is equal to lack of expertise. Ethics augment the moral obligation of the
employees. What subjects a lot is punctuality, and attachment to rules and regulations in
ethical organizations. The businessmen who attempt to cut edges of law and club of the
land get into big difficulty and this problem of avoiding ethical practices has been
studied and analyzed by the investigator through a form of case studies.

1. Enron India Disaster

2. Mars Chocolate Recall
3. Money Laundering Scams- Ex Goldman Sach’s Director - Rajat Gupta & The
Liquor Barron - Vijay Mallya
4. The Union Carbide India Ltd
5. Siemens Limited
6. Parliaments & the Behavior of the parliamentarians
7. Sexual Harassment against Women
8. Glass Ceiling against Women
9. Nestle Maggi Noodles
10. The Sahara Group
11. Coca Cola
12. Johnson & Johnson Tylenol Crisis Management
13. Water Depletion Crisis – Dahanu Thermal Power Station

Majority of the multinational corporations maintain procedures and accomplish business

in more than one country. The biggest 300 of the United States business houses assert
their commercial activity in more than one country. Due to such large scale operations
there are various ethical issues which arise from time to time. The General Electric
Corporation has functioning’s in more than 100 nations all over the globe. They mostly
carryon operations done the use of the internet, their raw-materials and productions are
manufactured all over the world, are then gathered and distributed in 100 nations of the
world .

Under such circumstances many a times the directors are faced by the ethical
quandaries. The manager may be confronted by a dilemma to choose between the
benefit making endeavour and the economic demands on one side and the inevitably of
the host country on with their interests on the early. Since the multinationals function in
different countries they face different national and environmental criteria.

As time advanced business ethics came to be noticed as one of the requirements by

academicians, reporters and the business people more severely. And all this happened
after the cold war’s in America. This scampered the discussion of business concern
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ethics some in the print media as well as the educational institutions. In the democratic
and countries where practice of free press is recommended there is a sharp fall in the
barracking of averages by the business corporations. The unethical practices have not
concern an end completely but are on a sharp decline. The long becoming conflict in
Iraq is one of the newly and recent examples of unconcealed fierceness of the copious
developed countries in order to take charge of the oil fields to gain their home Countries.

Meaning of Business Ethics

Business Ethics is related to ethical philosophical system that describes correct and
incorrect conduct. It associates to the principles and behavior complied by a business
corporation. It includes in its horizon what is ethically viable along with being
trustworthy about a business exercise. The conception of ethics in management is
closely adjusted to the obligation that any business organization owes towards the
society. It is an obligation for a business to adopt a set of principles, rules and
regulations which gain the larger society. A well-defined ethical pattern in business goes
a guideline and a road map for the people adding an organization.

Definitions of Business Ethics

There is no single, consented definition of ‘Business Ethics’. Different persons below

different considerations and situations have defined business ethics in their have way. In
simple discussions Business Ethics is the learning about different sorts of business
conditions, happenings, and results and choices where all consequences of correct and
incorrect are taken note of. It is a set of philosophies or explanations which should
govern the manner in which the business whether at person or collective level brings.

An industry or a firmly is considered to be ethical only if tries to accomplish a trade-off

amongst its monetary objectives and its social responsibilities, for example
responsibilities to the humanity where it exists and functions; to its people for whom it
follows economic destinations: to the environment, from where it gets its resources. This
concept of business ethics is closely linked to the principles of honesty and equality and
centers on the welfare of its stakeholders some within and outside the organization.
Shareholders comprise persons and groups in the absence of which the business goes
wrong to exist. It comprises stockholders, individuals, personnel, clients, traders,
merchants, government and the public.

Ethics in Business Management

Ethics in professional life has been a hot field and a developing field in India. In today’s
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collective world, ethics in Business Management has developed heavily. Ethics is a
merger of decent and moral philosophies, which assures the code of conduct and
behaviour of the specific as well as the clusters in personal and qualified life and in the
social order. Business organization Ethics is fundamentally concerned with the fashion
in which the business operates. The guidelines of business behaviour and ethics have
proved to be a checking measure for the systematic behaviour of an enterprise. When we
talk of systematic conduct of an enterprise, ethical motive comes into picture.

Morality

Precisely there is a variation concerning ethics and conscience or morality. Ethics is

considered to be a field that scrutinizes the political orientation of what is correct and
incorrect or good and badness, while moralities concern to the beliefs that a society has
about what is correct and incorrect or good and bad. The morals can be dissimilar from
one person to the other from, one culture to the other and many are almost widespread as
they are a result of basic human emotions. One may think of exhorting as a scholarly
exercise, but more commonly it’s an endeavour to make sense of our intuitive
predispositions. The person often uses these terms inter changeably.

Each group in the company prescribes for its members certain rules of behaviour which
need to be adjusted. For ex, every state prescribes that the organizations treat their
positions as a public trust. A corporation prescribes that all people work in corporation.
Thus there are certain norms of social conduct which ought to be observed by all people.
These are the rules and the principles which are concerned with the moral conscience of
a person and this constitutes morality. Moral principles, morality are the basis of ethics.
The moral aspects of ethics completely depend on the business practices. It is the body
of moral rules which govern ordinary ethical problems. All decisions which are taken in
a business are based on the moral guidelines or principles.

The very basic principles of morality which speak the language of ethics are as follows:

• Respect for humans

• Helping others

• Promise keeping

• Non malevolence and respect for property.

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These principles can be applied as the basic tools of business ethics. The moral
principles help to strengthen the business norms which in return help to create an ethical
environment.

Values

While we talk about ethics the importance of values cannot be neglected in an

organization. Values and ethics are fundamental to any business. Values play a pivotal
role in relative to the organization’s vision. There has to be consistency between the
establishment’s vision and its core values. Values are a personification of what a
business stands for. The major values of a business concern are as follows– Faithfulness,
Responsibility, Altruistic Service and Truthfulness and four personal assesses can be
promise, potentiality, frankness and flexibility. These standards provide the basic
foundation for verdicts and decisions which are important for the organization to grow
in its core business and to conduct itself ethically is to adhere to a manner that is steady
to what is obviously regarded as right or morally ethical behaviour which is the
foundation of any business firm.

The ethical code of conduct needs to be applied to all business practices for a regular
period of time or also for a perpetual period and by doing so the long term goodwill for
the organizations culture and also for the society and the nation can be generated. The
values created by ethical principles have a long term effect, from the Viewpoint of
society and becomes a basis for ethical decision making. Whenever there is a struggle
amongst the business interest and the individual’s interest, the person should try to
resolve the same.

The ethics helps to create values for the entire system as a whole. This can be assured in
the points mentioned below:

• Ethics have a far-seeing term cultural impact on the firm.

• Unethical persons mechanically get weeded out.

• With the long term impact of ethics, the strategic gains can be incorporated into
the system.

• An ethical atmosphere is ideal and satisfactory to all.

• Ethic plays a vital role by incorporating internal and external factors.

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Therefore the ethics in any business or at a workplace is tied to practicing intrinsic
human values. We all know that it is values which enable a firm to grow and create its
credibleness, goodwill and net worth in the society. Thus the business ethics gets firmed
in an organization only when various values are exercised by the employees. The top
leadership should call for and approve the expression of the core values to guide all
major decisions, functioning and behaviour in the company. The values may be
conflated of the values that are in general exercised in the society, that particular
industry and the aspirations of the organizational members. Some basic values are as
good corporate citizenship, through legal compliance, social responsibility, following
fair dealings with all stakeholders, business partners and all other entities ad contribution
through the creation of wealth, jobs, innovation etc.

Integrity

Integrity is viewed by many societies and people as scrupulousness and faithfulness or

exactitude of one’s activities. The success of the organization depends on its employees.
In the personal or professional area if employees act without integrity the repercussions
may be far too many. So the values which are personal as well as professional are at the
core of integrity. There is a dynamic relationship between integrity and ethics, where
each strengthens and reinforces the other and is the foundation to business ethics.

The ethical behaviours of businesses confirm to the norms of a grouping, culture or

company as a whole which reflect upon as correct behaviour. The ethics in Business is
functional ethics. It has demonstration of our thoughtfulness and consideration of what
is good and veracious to that collection of bases, know-how’s, relations, doings and
quest of what we call professional person. It is basically pertained with moral issues of
business and in engaging ethical standards; the business concern can still make benefits.
Today businesses everywhere are thinking about the grandness of business ethics and
more importance is tending to behaving and clinging to principles in the place of bring
by prioritizing moral values for the work place and to make a point that the employee
behaviour in the workplace is aligned to the ethical values. A business house has its own
values, which are pondered, in the form of collective values of individuals who join it.
Employees demand to perform their duties correctly, impartially and without any bias or
discrimination. The senior managers in an organization should not misinform or favour
any person by going out of the way.

They should also not blow out their qualifications, experience and differentiation
beyond the limit. The example of Bagdad Gita needs to be quoted in this context. The
Bagdad Gita makes use of the practices which are being used in modern times like the
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vision, accomplishment of goals, convinced approach towards work, and excellence in
work etc. If a someone has integrity he or she should to be very conscious of the major
responsibility to use his or her soundness, knowledge and skills.

Ethics Is Highly Valued In Business World

Business ethics or corporate ethics is a professional ethics that examines ethical

principles, moral and ethical problems that arise in a business environment. It 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. It applies to all aspects of business conduct
and is relevant to the conduct of individuals and entire organizations.

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. Baum hart,

"The ethics of business is the ethics of responsibility. The business man must promise
that he will not harm knowingly."

Ethics Is the Main Root of Business

A flourish business is like a fully grown tree which has a lot of branches and each and
every branch is fruitful but the whole tree is dependent on the root and rootlets which
bounds the soil and support the tree, just like the business which is dependent on the
employee who are bound with some basic fundamentals of the firm or company which is
called the ethics. And some of them are:

1. Code of conduct: Business ethics is a code of conduct. It tells what to do and

what not to do for the welfare of the society. All businessmen must follow this
code of conduct.

2. Based on moral and social values: Business ethics is based on moral and social
values. It contains moral and social principles (rules) for doing business. This
includes self-control, consumer protection and welfare, service to society, fair
treatment to social groups, not to exploit others, etc.

3. Gives protection to social groups: Business ethics give protection to different

social groups such as consumers, employees, small businessmen, government,
shareholders, creditors, etc.

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 4. Provides basic framework: Business ethics provide a basic framework for doing
business. It gives the social cultural, economic, legal and other limits of business.
Business must be conducted within these limits.

5. Voluntary: Business ethics must be voluntary. The businessmen must accept

business ethics on their own. Business ethics must be like self-discipline. It must
not be enforced by law.

6. Requires education and guidance: Businessmen must be given proper education

and guidance before introducing business ethics. The businessmen must be
motivated to use business ethics. They must be informed about the advantages of
using business ethics. Trade Associations and Chambers of Commerce must also
play an active role in this matter.

7. Relative Term: Business ethics is a relative term. That is, it changes from one
business to another. It also changes from one country to another. What is
considered as good in one country may be taboo in another country.

Off late there has been a lot of discussion of integrating ethics in the business processes.
This has happened because in many of the businesses there is complete absence of
business ethics. One may of shrink at the very thought of a quick fix solution for an
organization’s unethical behaviour. As discussed earlier, ethics is the foundation of a
good organization, it is possible to secure it therefore the best companies in the world
have a firm ethical foundation. Many entrepreneurs try to overlook the importance of
ethical practices in a business as everyday confusion. But it is very easy for an
organization to establish itself in the market if it has a strong ethical basis. Market
specialists and experts treat ethics as a religious sermon that is to be followed. At times,
it is difficult for organizations to think of and strictly adhere to the ethics and morale,
but, the organizations that have an established code of ethical conduct do not face such
difficulties. And the good ethical behavior of such organizations can be seen in their
business practices. This is the reason why the best companies of the world are regarded
as most ethical. There are eight different aspects that form the foundation of an ethical
organization.

Respect

To build up a strong ethical foundation, one needs to not only respect oneself but be
surrounded with the people who can give as well as take respect. However, it also does
not mean that with respect, everything runs automatically. No doubt the employees in

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the organization will work and perform duties well, but they will definitely need
guidance and training. Where there is respect, trust and faith, things can move faster and
there may be no need for micromanagement. Business people generally do not wish to
do business with people with a low self-respect. So people with low respect do not show
respect towards colleagues, customers, suppliers, etc. If at any point in time the trust is
shaken, a person can try to rebuild the same but if things become difficult, let the person
go.

Honor

A good ethical organization essentially has employees who are morally upright. These
are the people who are the role models for others to do things in an ethical manner. It is
important for the leader of the business to give importance to the star performers in the
organization. People who go all out to meet the targets need to be honored and
appreciated. Only if the organization appreciates their sacrifices made from time to time,
the organizations will definitely grow. Because these are the people because of whom
the organization has progressed.

Integrity

It is important to note that integrity is one of the most significant virtues of a business. A
person with integrity is not essentially a preacher. Integrity means to display highest
degree of self-esteem and to stand by one’s word. If one’s actions are incorrect or
unacceptable one needs to take responsibility of the same. An important principle of
integrity is that we should do as we want others to do for us. People with low self-
esteem are a barrier for the growth of a business. Such people do not only influence the
other employees negatively but might also mislead the suppliers and the consumers. The
mistrust will spread and ultimately the people will stop having faith in the person who is
heading the organization. It is worth such people do not only influence the other
employees negatively but might also mislead the suppliers and the consumers. The
mistrust will spread and ultimately the people will stop having faith in the person who is
heading the organization. It is worth mentioning a person with low self-esteem can sell
the company values to make money. Through such deeds a person may succeed but in
the long run the unethical behaviour will make one person suffer.

Customer focus

Any business exists only because of its customers. A business will take no time to
become non-existent if it lacks customer focus. A business should focus on the products

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that they buy. It is the duty of the business to follow this practice because the business
decisions not only affect the stakeholders, partners but also the society at large. It is the
business’s ethical duty to focus on customer requirements. To sell sub-standard material
poses a risk not only for ethics but damages the reputation of the company in the times
to come.

Results-Oriented

Any organization ultimately aims at being successful. It is oriented towards the result
which also has ethics woven into it. One should aim at adhering to the organization
values and one ethical framework while aiming at the best results. Leaders in an
organization help to support their teams in achieving the results that they have
unmistakably identified. It is with the contribution of each and every employee in an
organization that successful results can be achieved. It is a well-established fact that in
ethical companies’ achievement of the results is not merely numbers and statistics.
These results are the road map for the future, with ethics imbibed in it.

Risk-Taking

Risk is a part of a business. Ethical organizations are not afraid of taking risks but with
ethics in place they succeed and grow by taking risks. In a business one may not succeed
always by sticking to a safe road. When organization thinks big and innovates out of
the box there is some hazard involved. It is important that the organizations
acknowledge the contribution of risk takers. Taking risk does not pose a threat to the
organization’s values and principles. It is a well-known fact that the organizations
reward employees who take risks. Apart from the business houses this practice is
prevalent in the Army where the officers and the soldiers get rewarded for displaying
exceptional courage by taking life threatening risks.

Passion

Organizations value people who have a real craving and passion for work. People who
are passionate about the work do the same out of happiness and not just for getting
salary. These are the people who are self-motivated, the ones who put in a lot of hard
work and believe strongly that their effort can bring about a change. In contrast to this
are the employees who show no interest towards the organization they are just making
time and add no value to the work or the grown of the organization.

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Persistence

People with perseverance are an asset to the organization. Such people are self-driven
and they keep working even when the desired outcome is not achieved. Employees who
persevere will continue to work hard with honor and integrity. For such employees the
customer is the utmost importance. It is very important for a leader in an organization to
acknowledge the time and effort of such employees. The leader needs to emphasize the
importance of these values which ultimately build a rock solid foundation for an
organization. If employees in an organization try to overstep or overrule they need to be
given one more chance to improve their approach. The organization needs to take action
and not let go such deviations.

Performance

The task of the firm is to examine its costs and performance in each value creating
activity and to look for ways to improve it. The firm should estimate the cost incurred by
its competitors and the performances as benchmarks against which to compare its own
costs and performances. The organizations should further go on to study “best of class”
practices of the world’s best companies.

Successful Organization

The organization success depends on not only how well each department performs its
work, but also on how well different departmental activities do is coordinated. Very
often, the company departments perform to maximize their interests. A credit
department can take a long duration to check a prospective customer’s credit so as to
incur bad debts. In the time being, the customer waits and the salesperson is frustrated.
A traffic department decides to ship the goods by railways to save the money and again
the customer waits. If every department becomes water tight it slows down the delivery
of quality customer service. This becomes problematic at times therefore to place more
emphasis on the smooth management of an ethical business process the following
should be included.

• The market sensing process: All the activities involved in gathering market
intelligence, disseminating the information within the organization and acting on
the same.

• The new offering realization process: This involves researching, developing

and launching new high quality offerings quickly and within the budget.

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• The customer acquisition process: All the activities involve in defining target
markets and prospecting for new customers.

• The customer relationship management process: This involves building a

deeper and intense understanding and relationship and offerings to each of the
customers.

• The fulfilment management process: The activities involved in receiving and

approving orders, transporting the goods on time and gathering payment. The
ethical behaviour of an organization helps in following ways

• Highlights Desired behaviours: Behavioural standards communicate that ethical

behaviour is considered a main concern and that the firm’s adopted righteous
values will be operationalized. Such standards take into account the greatest
significance. Of ethical circumstances and index expected behavioural outcomes
associated with these circumstances. Behavioural standards increase the people’s
awareness of ethical encounters in the office and highlight desired response
behaviours.

• Promotes Trust: Organizational trust is heightened when managerial leaders

emphasize and put attention on what is good and right and cultivate behavioural
standards in cooperation with employees. Senior management promotes and
enhances trust when they implement reward structures that are associated with the
organization’s advocated behavioural standards. Leadership actions must also
emphasize the well-known behavioural standards to promote trust and reliability
among the workforce.

• Maintains Accountability: Behavioural standards nurture a sense of answerability

when the standards are buttressed by management. They are also reinforced when
appropriate acknowledgment for following behavioural standards, as well as
consequences for not following them, is provided. Clear ideals and ethics linked
to virtuous values convert into clear behavioural expectations.

• Links Theory to Practice: Behavioural standards attach theory to real world

practice by specifying how virtuous values can be operationalized through
rousing key ethical behaviour patterns. Ethical action is more likely to surface as
behavioural standards become widely known, established, and acted upon.

• Reduces Legal Threats: Proactively creating behavioural standards can reduce

the occurrence of ethical and legal transgressions within the firm. Such standards
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 can in some cases also provide legal proof of good faith efforts to prevent legal
transgressions and may thus reduce the risk of financial and other types of
penalties in the event of such transgressions. Legislation such as the Sarbanes-
Oxley Act of 2002 requires public companies to implement codes of ethical
conduct. Legal counsel can advise managers regarding when a good faith effort to
avoid illegal behaviour is necessary or otherwise might be used to reduce
potential penalties.

• Enhances Ethical Decision Making: Behavioural standards offer criteria on

which to base ethical decisions. They provide a rational context within which to
effectively review questions concerning ethical conduct.

The whole business is mainly depend not only upon the what is right to do more money
but also what is right in favour of company and their employees to make more money.
An ethically right decision may not be in line to earn more money but an unethical
practice may decline a company’s trust in their cline which may leads to the way to
penetrate the other company in your business.

How Ethics Influences Organizational Culture

The culture of an Establishment is defined by the manner in which employees fulfil

obligations and execute jointly ease in a group. The social standard embraces frequent
principles, creed, services and symbols that administrate the functioning style of
someone’s within a corporation. Business ethos brings the workforce together and
proposes a direction for the company. In times of variation, the major trial for any group
may be to translate its culture, as the force is by now is habituated to a definite way of
doing things. The high culture in administrations depends on the situation in which the
corporation functions and achieves the organization’s aims, the credibleness of the
employees and the company’s administration style are an important ingredient of
organizational culture. Live business ethos points that personnel are like-minded and
hold akin impressions and virtuous ideals. When these philosophies and virtuous
standards support the business objectives, they can prove to be active in building teams
because understanding and faith quickly follows. Employees also know and understand
what is required of them, how administration evaluates their performance and what
forms of compensations still exist.

Culture can be described as an amalgamation of moral principles, beliefs, individual

communications and description of conduct that offers a path to individuals. The key
consciousness of cultural ethos comes from communion in wisdom the processes that

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have been based on orderly distribution of possessions. The rational looking upon
humans helps in teaching; thinking and pronouncements that assistance defines
organizational culture.

The dual vital factors that are central to literal culture management comprise
organizational stability and incorporation of higher and establishment of firm
organizational culture.

There are dissimilar degree of organization culture with different grounds, ethics and
cultural differences which affect upon functioning. The comparable organization
cultures with diverse backgrounds have shared set of values and beliefs to be realized by
organizational systems.

Different Types Of Culture Have Been Discussed As Follows:

Counter Culture

The ethical motive and principles of organizational culture which were common among
diverse administrative departments and executives who were drove to gain advantage
fall under countercultures. The organizational performance is based upon involvement
of durable culture to a strong association amongst performance and management of a
business concern.

Sub Culture

These are group sections with diverse sets of standards, ideals and principles on basis of
ecological and geographic region, business requirements and business destinations. The
commitment of workers for business concern is established upon workers understanding
that impresses upon culture. The social interface of place of bring outside organization
ruminates considerably for some clusters.

Strong Culture

The type of morals and dogmas which a worker holds in culture must be reflected upon.
The dogmas and morals of organizations are well-thought-out to be strong when
employee holds bigger part of culture. The decrease in breaches on worker connections
has been approved with managers till date. The guidelines in organization must be
considered significant for personnel. The strategies, processes and aims intended by top
managers must encourage the positive behavior of employees so that viable advantage
can be taken.

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Weak Culture

The roughly interweave organization cultures that helps in repelling insistent thought,
tactics and principles of someone to be more advance are a valuable asset and add to the
swelling needs and requirements of acculturation management. The slackly aggregated
culture based upon morals and principles have affiliation with flawless sets. The variety
between personal objectives and administrative goals has imaginative and creative
management of rules and processes so that flawless affiliation can be fashioned between
them.

The 4 Dimensions of Organizational Culture

Granting to the business expert the components which really govern the organizational
culture is primarily four and these factors are observed below:

• Authority detachment: It is delimitated as the degree of workers and direction

conduct that have been based upon flawless association amid schematic and
informal set of improved action.

• Individualism: This dimension is the difference amongst organizational concern

and self-interest has flawlessly been accorded.

• Uncertainty avoidance: The blurriness and indistinctness grounded upon open-

mindedness aids in alleviating readiness of people.

• Masculinity: It enters evasion of gentle and elevation fairly than level of triumph
based on trials, disrespect and need.

Practice of Ethics Improves Organizational Performance Positively

Carrying out is the point of an attainment to which a worker’s fulfil the organizational
appointments at workplace. Performance has been celebrated in varied ways by several
scholars, but most of the students distinguish that execution is the measurement of
transactional efficacy and success towards organizational goals.

The work of a worker is to shape up by virtue of achievement of a detail target or

mission that defines fixes of enactment. There are investigators who have recognized
dissimilar thought, attacks and principles of carrying into action as it helps in
understanding the dimension of input and output efficaciousness measures that conduct
to transactional suggestions. The manner in which has the employee does, and then the

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performance measurement organization helps in refining business associations to
accomplish aims and goals in an efficient manner. The tactical arrangement based upon
development of goals and aims help organization to focus nonfinancial or unperceivable
resources.

Organizational Culture and Performance

The corporation’s cultures can have different impacts on employee performance and
inspirational levels. Frequently, employees work more and more to accomplish
organizational aims if they consider themselves to be part of the industry civilization.
Dissimilar cultures functioning in one corporation backside also influence employee
carrying into action. For instance, if the organization asserts a culture to “talk when
necessity” culture, force may work in the same fashion however, if the organization
appropriates one area, say the selling team, to be candid and informally active, the
organization might experience contentions between other areas. Possibility of an area to
apparatus it’s have culture can disturb the carrying into action of the employees
positioned elsewhere in the company.

Integration of Ethics, Organizational Culture and Performance

Administrations in any sector must organize their employment processes and try to
appeal and involve inhabitants with the same principles and standards that demonstrate
the organization’s culture. This guarantees the new member’s adjusting to the company
and further reinforces company culture. Corporations should also make sure that they
attitude in a line corporate culture with carrying into action management systems. When
culture and direction systems are not associated, management must readdress them so
that worker behaviour effects in the accomplishment of organizational aims and
objectives.

1. Ethics in Compliance

To follow is to bind to plus obey the rules, regulations and the authority. The motivation
for an organization or an employee is to cleave to the right things minus any fear of the
effectual hassles or pursuance. A practice of a maiden and a decent environment in the
corporation guarantees that complying with ordinance or rules is powered by a yearning
to stick to the law. It is significant to note that organizations that respect high ethical
complaisance by following the law agree to abide by it not only in missive but also in
spirit.

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2. Ethics in Human Resources

Human Resource Management acts an extremely pivotal part in familiarizing and

applying ethical exercises in the organization. For all HR specialists / HR Capita moral
philosophy should be a field of concern. The moral philosophy of HR Management
highlights that the consequences arising out of the management – staff relationship such
as the exclusive right and responsibilities owed concerning the two.

The HR Management ethical issues comprise the subsequent:

• Sexual Harassment

• Affirmative action

• Discrimination based on age, gender, race, disabilities, religion, weight, etc.

• Concerns related to the employee personal space: workplace observation, medicine

testing

• Issues of trade unions

• Professional safety and health

3. Ethics in Finance

People in general say that there is amount lack of ethics in finance and the skeptical
school altogether accepts the view. This view is espoused in a volume, The Complete
Book of Wall Street Ethics which arrogates to powerfully advocate the demand for
ethical practices in the area of finance. A minute’s circumstance discloses that funding
would be awful without principles. The precise action of assigning our monomaniac to
other people demands enormous faith. An untruth stock broker or insurance agent, like
an untrustworthy physician or attorney, finds few takers for his or her serves. Financial
scandals shock us precisely since they involve people and institutions that we should be
able to trust.

Observed below are the ethical consequences in finance that the companies confront.

• Accounting – equivocal monetary scrutiny, window dressing

• Linked party dealings

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 • Insider trading, projectile’s fraud which leads to determining and manipulation of
the financial markets

• Executive compensation

• Inducements, over encouraging of expenses, enablement of payments, bribery.

• Bogus compensations

4. Ethics in Marketing

Marketing, allowing to one often-cited definition, “involves the demonstration of

commercial activities that uninterruptedly deal with the flow of subjects and facilities
from producer to customer or operator.” Within this broad characterization, there are
amount of different functions that admit product development, distribution, pricing,
advancement and sales. Although many of the activities of marketers are relatively free
from ethical problems, others have drawn broad criticism and given rise to a demand for
expanded list of consumer rights and the obligation of the manufacturers that entail
product safety processes and also the need to compensate to the victims of defective
productions.

Ethics in marketing is based on functional beliefs which deals with just principles and
norms linked to the operations and regulations of marketing. The ethical issues in
marketing include the following:

• Misleading advertising

• Advertising content

• Anti-compliance practices as the handling of supply exclusive dealing

arrangements, time arrangements, etc.

• Children and marketing

• Black markets, grey markets

• Price fixing, discrimination and perusing

5. Ethics in the Area of Production

Every business firm in its policies on business ethics demands to guarantee that its
goods and manufacturing procedures do not become conclude for any detrimental

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consequence within or outside the organization. There is invariably a point of hazard
and jeopardy intricately embedded in any develop or manufacturing procedure but
simultaneously it is hard to describe the point of acceptableness and this point of
acceptability may be decided by the changing state of precautionary knowledge or
altering societal observances of the tolerable perils. There could be faulty, addictive or
dangerous products, environmental standards may not adhere to which admit
environmental ethics and carbon emissions dealing. Ethics demands to be used in
production testing and the companies need to see of the right bugs rising by the use of
newly skills for example GM food, etc.

6. Ethics in displaying Investor Loyalty

The capitalists both as buyers and as sellers are dangerous to fraud because the value of
economic instruments depends almost completely on information that is hard to assert.
Much of the relevant information is in the hands of the emerging firms, so anti-fraud
commissariat in securities law place an obligation not only on the purchasers and sellers
of a firmly stock, for example, but also on the emerging firm. Therefore the company or
an organization that stammers in reporting bad news may be not adhering to the ethical
norms and hence devoting fraud, even though the purchaser of that company’s stock
buys from a previous owner who may or may not be cognizant of the news. Insider
training is engaged as a fraud under the securities exchange act on the bases that any
material non-public selective information ought to be revealed earlier trading .

The stockholders are anxious about the social obligation, morals and bearing of the
corporation in which one capitalizes. These shareholders are aptly being increasingly
mindful that an organization with an ethical environment bears a base for efficacy,
output and continues. The connection with any capitalist, as well as the shareowners is
based on reliability, trust and promise consequences in a long lasting faithfulness.

7. Customer Satisfaction

For an everlasting obedience the companies need to ensure a sound human relationship
with the customers. The title or the sword of the company should remind a lot of faith
and deference amongst the customers. This is achieved by a corporation that recourses
to virtuous deeds. Small aberrancies can be tolerated by consumers but larger crisis
management needs to be planned before hand to avoid major losses. Parties have pre-
defined ethical values and norms that help to ensure that the organizational behaviors are
adjusted to those values.

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 Chapter-14
Assessment of Business Ethics in Entrepreneurship
Along With Religion
Financial scandals have severely damaged the company's reputation in recent years. We
have seen false statements, manipulation of information, suspicious IPOs, corruption of
public officials and senior managers of the private sector. Many of them have resulted in
bankruptcy, layoffs and financial losses of individual investors. The common
characteristics are the unethical behaviour that results from conflicts of interest, such as
managers, businessmen, accountants, lawyers, bankers, etc.

One day, the ethical content of business behaviour became a public problem. As interest
in entrepreneurship grows, business ethics goes through the same type of research.
Religious devotion is traditionally considered to be related to the moral level of personal
and public life. This article examines the ethical attitudes of a business group and
examines the important differences between an entrepreneur who thinks he is more
religious and an entrepreneur who thinks religion is less religious in his personal life.
We also consider the impact that religious orthodoxy can have on the ethical attitude of
entrepreneurs.(2)

During the last decades, the attention and importance of the new entrepreneurship of
entrepreneurs and academics, including a number of journals, including the magazine in
the magazine, the change of business schools and the curricular reform of the business
school, curriculum has been expanded to a strict discipline. Ethical business areas
including ethical behaviour and social impact study of the profitable company during the
past 20 years in a manner similar to the creation of the relevant study group has a strict
and ensure recognition and legitimacy as relevant studies. But the intersection of
entrepreneurship and ethics has received recent attention from research, but remains
relatively early.

Entrepreneurial Spirit

Business concerns depend on economic growth, productivity, job creation, innovation,

deregulation and privatization, restructuring or reorganization, and entrepreneurs
recognize their contribution to the goals of public policy. However, a common opinion
in the field of entrepreneurship, which has little controversy about the outcome of
entrepreneurship, is that research has not reached consensus. Bull and Willard
commented: "This term has been used for more than two centuries, but we are

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reinterpreting and revising its meaning." The conceptual heritage of entrepreneurship is
valued as a topic to explore to determine the purpose of the study and provides a
perspective on contemporary understanding and the possibilities of future expansion.(4)

The attempt to define and explain entrepreneurship as a phenomenon for 250 years is
largely based on functional argumentation. Other interpretations of entrepreneurship can
be subdivided into:

(1) What the entrepreneur does in the economy

(2) Answering two related questions based on the unique characteristics that can
perform this function.

Originally simple terms of the so-called "end of the day" refers to the medieval term
"entrepreneur" French has evolved in the early 18th century, the contractor. Richard
Cantillon, a businessman with an uncomfortable resource, has a new and more important
meaning by promoting half of the economic documentation. Cantillon used this term in
1755 to identify people in the economic system who enjoy the economic benefits instead
of relying on regular income payments. This "entrepreneur" was later distinguished from
the public and was seen as the driving force of the permanent movement of the
economic cycle. Then, the first official concept of "entrepreneurs who take risks"
appeared as a catalyst for economic production.

From Cantillon, entrepreneurial attractiveness has been a constant theme among

entrepreneurs because entrepreneurs are willing to take risks. The concept of risk taking
was discussed and refined by a number of scientists, so there was a disagreement over
time. At the beginning of the 20th century, Knight distinguished between the
uncertainties of measurable uncertainty, the uncertainty of "risk" and the uncertainty of
"uncertainty". The risks he claims are simply insured. That is why entrepreneurs face
uncertainty about the space created by the economic system. In the case of gentlemen,
entrepreneurs are experts in uncertainty: those who are willing to take responsibility for
controlling the means of production in an uncertain environment.

An additional interpretation of the concept can be found by referring to the general

equilibrium model of the economy. On the other hand exists in the idea of Schumpeter
(Schumpeter) considered the grandfather of the modern theory of entrepreneurship,
entrepreneurship established as the staff responsible for economic imbalances.

Schumpeter fiercely opposed the idea of entrepreneurs taking risks. Instead, he

considered entrepreneurship as an act of carrying out a new combination of resource
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production. Schumpeter argued that "everyone is really an entrepreneur when in fact he
is making a new combination". So he tried to make it clear that the entrepreneur does is
exactly the same technology that the inventor was an act of innovation is considered as a
property of the entrepreneur. Schumpeter saw his definition as a change consistent with
the classical definition of Jean-Baptiste Say. "The function of an entrepreneur is to
integrate the elements of production." The idea of Schumpeter created one of the most
influential and on-going concepts in business research in "Innovative entrepreneurs".

Kirzner has established himself directly with entrepreneurs as a causal partner to restore
the economy to a balance. He argued that justice is an act of "probabilistic discovery"
and that the unique characteristics of an entrepreneur are prudent attention to
opportunities. In this way, valuable opportunities for economic imbalances are
recognized and economic balances are gradually restored by taking advantage of these
opportunities. Based on Kirzner's ideas, the concept of entrepreneurship is essentially
one of the most accepted definitions of risk and innovation: the "process of discovery,
evaluation and development of opportunities".

Entrepreneurship and Ethics

Protestant ethics and the spirit of the work of capitalism Max Weber was part of the
sociological literature for more than 100 years influence is powerful and controversial
remains a number of papers. Weber considered the most sociologists, however, relies on
the emergence and evolution of religious values and a small economics merger point of
the sociology of economics, in particular dealing with the problems associated with the
influence of culture on the economic system. Weber is a field that is described as "socio-
economics" Entrepreneurs are some of their attitudes and motives for a long time
considered to be different from the attitude and motivation of the population is
recognized as "breeding". Successful entrepreneurs are usually self-determined, action-
oriented, take risks and remain in the light of uncertainty and adversity. In short, they
tend to exhibit a high degree of individualism.

In a previous study, the authors found that entrepreneurs and non-entrepreneurs from
different parts of the attitude to ethical issues. In the case of problems that require
specific problems, in particular individual containers, entrepreneurs have set stricter
standards for ethical validity. In the case of personal gain at the expense of other issues,
particularly other issues, entrepreneurs have taken a less ethical position than non-
entrepreneurs. Moreover, entrepreneurs were more likely to feel moderate or extreme
pressure to intervene in unethical behaviour.

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Although the rise of scientific research that linked entrepreneurship and ethics was
recent, when interest in this topic grew, many early scholarships were created. There is
also a certain basic task in management that is directly related to the link between ethics
and entrepreneurship. Normative, descriptive, normative studies are all included in this
study. A better understanding of the different areas of theoretical and empirical studies
provide a fascinating insight into the questions of thinking about the road and this
interconnectedness that is related to ethics and entrepreneurship. Previous studies that
examine the ethical and entrepreneurial spirit in literature tend to fall into one of the
three major areas of business ethics and social adventure, entrepreneurship and society.
Much of the existing literature on ethics and entrepreneurship focuses on business ethics
micro level. Some companies also focus on the organizational dynamics of new
companies and their impact on ethical behaviorat company level, but they are aimed at
entrepreneurs who are interested in a new business environment and an ethical dilemma
that can be particularly relevant. This research stream raises at least six important
questions.

What is the difference between an entrepreneur and a non-entrepreneur in relation to

ethics? One question is whether the systematic differences between entrepreneurs and
non-entrepreneurs continue to make systematic differences in ethical perceptions and
behaviour. while raising questions about whether there are reliable and systematic
differences between entrepreneurs and non-entrepreneurs in the same dimension as
successful entrepreneurship - imagination, creativity, novelty, emotion is systematically
and theoretically important for ethical decision making and suggests that ethics and
entrepreneurship are closely linked. Also other companies is a successful entrepreneur in
addition to effectively dealing with the new strategic enterprise set up that requires
moral imagination. Some research shows that entrepreneurs are actually generally of
ethical behaviour to be stressed and raising the level of moral reasoning. According to
another study, an important factor for fairness or procedural justice is that the
relationship between entrepreneurs and investors can be managed becomes the key that
is derived from the desired results to entrepreneurs. But the attention of entrepreneurs to
ethics and honesty can entail their own risks makes it vulnerable for the opportunistic
person to discuss whether there is a tendency towards over-confident entrepreneurs.

On the other hand, another study discovered that entrepreneurs had a strong 'behavioural
bias' that prevented them from considering ethical issues; even though entrepreneurs pay
or violate the standards of fairness the costs of companies other than large companies
offered as an intensive management for personal financial resources. These effects have
been changes over time for "penetrating the nature of entrepreneurial skills and specific

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negative factors that could dominate their behaviour,". Entrepreneurship this' dark side '-
particularly entrepreneurs and institutional limits to discard disclaimers' tendency to act
explore empirical deficiencies as the subject of adult and entrepreneurship of young
people. The relationship between rule violations and entrepreneurship is normatively
examines the ethical tension created by entrepreneurship.

This tension was emphasized in the context of entrepreneurship in large companies; it

can be difficult to discover the differences between entrepreneurs and 'bad' middle
managers companies. Ethics and entrepreneurship at the level of analysis of the
organization itself has been explored by describing, Institutional entrepreneurship, the
pursuit of social causes. How stakeholders influence entrepreneurship? Organizational
misleading behaviour or "positive ethical prejudices" ?

Owners of small businesses tend to put customer interests above employees or

shareholders. They also have a differentiated approach to social involvement, and these
other initiatives have a heterogeneous impact on the performance of the organization. In
addition to "shareholders to maximize profits," which is generally attributed to a large
target market is seen as "unsuitable for SMEs"; small-scale firms tend to be supported
on competitors. Future research into the sector can therefore focus on the development
of the "entrepreneurial spirit of stakeholder theory" to deal with the theoretical and
practical challenges for entrepreneurs in order to balance the specific requirements of
certain stakeholders in the new enterprise. Are their dynamic interactions with business
actors qualitatively different from traditionally regarded as major stakeholders? How
does the entrepreneurship theory of entrepreneurship explain a wide range of scenarios
for entrepreneurial stakeholders, from venture IPO companies to small family
businesses?

We also discovered that companies feel too greedy and also focused on creating a short-
term sacrifice for the long-term interests of shareholders of companies and shareholders.
“Greed is a kind of higher calling. Companies are urged to ignore broader social
responsibilities and reduce shareholder value. Chief Executive Officer, they were
considered to create an economic performance ... Syndrome of selfishness captured our
businesses and communities, and in our hearts.

Greed, unsatisfactory consumption and self-service behaviour can be regarded as

desirable qualities in some parts of our society, as well as acceptable in society.
Unrestricted greed is not what we claim. It clearly states that "greed", or the search for
good results, motivates the public to participate in innovative and risky business
initiatives. Public companies have a prudent obligation to act on their behalf. Otherwise
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it is not a moral. In the analysis of gender social irresponsibility & Quality Approach in
life when companies are adopting QOL orientation of business customers a higher price,
the incomes of employees, Risk of adjustment of the risk of investors is low, jobs are
reduced and social welfare is often deteriorated. In general, listed companies should not
invest in if there is no chance to earn money-risk-adjusted returns based on the market
(even if the investment has large social benefits) in accordance with the principles. You
also have to be very careful when you start a social "good" by giving up the original
purpose of creating a company like Morgan P. Miles. Freedman gives the following
example. Select a business leader who said "I am more responsible than making a
profit." If he feels responsible, he will spend money in a way that is not in the interest of
the shareholders. Where does he get the money? What is suitable for management to
spend money on shareholders? How do I spend the money of my employees Or the
money from the customer. Have you given the right to decide who pays him? When a
'socially responsive' manager pauses and thinks, they will admit that they are really
irresponsible. I will give you an example that impressed me. In the 1930s, German
businessmen used a number of company funds to support Hitler and the Nazis. Was this
an appropriate event of social responsibility? If Friedman proposed that all stakeholders
disagree that it is socially "good" to use the company the Nazi movement funded. This
poses a major challenge when advocating business initiatives as socially responsible.
The 'virtue' of every business initiative, but also of beauty, is in the eyes of the viewer
and is based on social and cultural values. Not a private company that supports the
support they think supports their return on investment and social initiatives do not agree.

The Rise of Unethical Practices in Business

We have found that unethical behaviour occurs at every stage of the company.
Fortunately, the scale of the scandal is not seen in the press in most cases, but it exists in
many forms, somewhat unfair. The attitudes increase especially during difficult times,
especially in the business sector. Managers do not realize that their actions are
inappropriate. The disappearance of the standard results in an accident. Some managers
think that certain 'dirty tricks' are good management practices. Delaying payments to
suppliers to improve cash flow is considered efficient, even if other contracts are closed.
Just-in-time management is an excuse or hope that you know in advance that a supplier
cannot provide a contract to fulfil and that your actions justify the delay. Honest
businessmen who admit that they do not meet extreme requirements have no contractual
opportunities and are excluded from competition. Another danger is snowball effect. If
the supplier does not receive the money on time, he, in turn, cannot pay his supplier. In
some extreme cases, the only defence is to refuse to deliver. Again, it is unethical

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practice, and in some cases it is intimidating. Unethical behaviour promotes and
propagates other unethical practices in the company.

This can lead to a simple conclusion that the company is bad. Matters cannot be ethical.
Such a judgment is too easy. Especially if it comes from the protected position of
scholars or ethicists. Doing business is not bad and difficult. The first goal of the
company in a difficult time is to survive. This also applies to companies and individuals,
ie individuals (managers or entrepreneurs) within the company. It is therefore
worthwhile to analyze the reasons for unethical behaviour in companies.

There are many reasons for the occurrence of unethical behaviour in business. Some are
the result of the general evolution of society; others are mainly due to the evolution of
the business environment and the internal organization. The evolution of society in
recent decades has been marked by an increase in the individualism of the people. The
dominant business model of Anglo-Saxon has increased the importance of money in
society and the glory of material consumption. In the modern world the media has
become out of balance.

The example of a television model is not always a good example. Media reality shows
and political talk shows are not thorough and fair, and they like superficiality and show.
Globalization of the economy has caused harmful side effects. The result is a larger
structure with more centralization and greater power concentration.

Competition to increase productivity leads to non-personalization, as the distance

between the head office and anonymous employees increases. The CEO of a
multinational company closes the factory and rejects thousands of employees away from
Paris or Detroit headquarters is easier than firing those who know that the president of a
small family business has personally worked. Another evolution in business and society.
The system now focuses on the short-term attention of the stock market. This is
preferable to direct results.

Financial communication is becoming increasingly important. Business leaders have

learned to use this system and in the financial medium we see the trend of show about
content. Shareholder value is the ultimate value of the company. Hard decisions are
made with the excuse of shareholder value hidden in the anonymity of individual
investors. Another consequence of the dominance of the Anglo-American business
model is the 'lawsuit' of the business community. All important transactions are signed
and arranged in a contract. Again, the fact that many business people use letters of
agreement rather than the spirit of contract is a terrible side effect. Moreover, contracts

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are often required for things that are not explicitly mentioned in the contract, instead of
solving the problem. In order to prevent disputes, managers are very careful when taking
unethical behaviour. The administrator ensures that nothing is registered and cannot
account. Paradoxically, the inefficiency of the law, the slow pace of justice, is another
reason for the recent increase in unethical practices. Some claims are legally defensible
and others are not because they are based on goodwill in promises that are not in
writing. Despite your law, however, obtaining a court decision is very difficult, costly
and time-consuming. Nevertheless, it cannot repair the damage to the company, in
particular the alternative costs of the contract that was lost at a certain moment.
Continued damage to people who have lost their jobs due to missing orders cannot be
recovered.

Some entrepreneurs abuse the incompleteness of the business system to deliberately

commit unethical behaviour. They know that the costs of lawsuits, especially in
international transactions, are disproportionate to trade losses. They will sometimes use
it to negotiate discounts with pressure. In this situation, lawsuits are lengthy, expensive
and time-consuming to absorb the energy of many executives who have to be placed in
business development.

On the other hand, many examples of unethical behaviour are not illegal. Ethics
transcends the law. Other examples are difficult to prove and imperfections in the legal
system are a real obstacle to encouraging business ethics. Some of the reasons for
unethical behaviour are characteristic of the internal organization. Compensation and
evaluation systems for companies and managers do not always correspond with a long-
term vision. In addition, there are significant problems in converting the most bottom-up
strategy to a real-world implementation at low level. The contradiction cannot easily be
addressed by more junior managers. Entrepreneurs operate in a dynamic environment
with many uncertainties, such as changes in competitive changes, technological changes,
fluctuations in supply and demand, labour problems and legal and public environmental
regulations. Modern business is suffering under time pressure, scarce resources, social
and financial pressure, intense competition and pressure from all stakeholders.
Shareholders want better value and better share prices. Managers look for bonuses and
strive for higher wages and better working conditions. Customers expect higher quality
at lower prices. Suppliers try to increase their prices; The bank looks for interest and
guarantees. The government anticipates tax collection and restricts business. All these
stakeholders must put the entrepreneur under pressure and juggle with all sorts of
limitations and anticipatory expectations. "Entrepreneurs are too strong in competitive
market pressure and these forces can change their view on ethics".

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Entrepreneurship and Society

The third area of academic research, including ethics and entrepreneurship, takes a much
more macroscopic view of entrepreneurship and investigates the role of new enterprises
in the relationship between business and society. There is a thorough study of the
questions that mainly concern the relationship between entrepreneurship, economic
development and social well-being in economic literature. We will not try to assess all
the work here in a comprehensive way. Instead, we try to give an overview of some
current questions. This document, which uses both philosophical and empirical
approaches, explores at least six questions.

What does entrepreneurship play in social well-being in terms of economic theory?

There is a huge conflict in the economic theory of the social and moral role and impact
of entrepreneurship. It will be called, mainstream neoclassical theoretical insights or
entrepreneurship allocation mechanisms aberration scholars Smith cautiously capitalism,
but argued convincingly that a strong entrepreneurial spirit and an ethical focus.
Schumpeter as an alternative is the driving force of entrepreneurship, the "creative
destruction", he suggested that the existing balance to be destroyed and the creation of
new economic structure through innovation a revolution in the existing economic
structure cause. Focus on "imbalance, decision-making and uncertainty" and thus "how
the economy and its variables change endogenously in the historical and political
context" with regard to this entrepreneurial creative destruction, entrepreneurs have a
dramatic effect on the evolution of the ethical and social factors and moral needs of
society placed in a central location.

A clear focus on ethical perspectives and ethical approaches can enrich the current
economic theory of entrepreneurship. For example, it should be discarded in favor of
new, many economies imagination to better integrate the ethical requirements of
traditional, because the economic system is limited in terms of society availability in
entrepreneurship Employment to discuss the entrepreneurial spirit that I suggest
provocative for. What does this new paradigm look like? How can the existing
economic theory of entrepreneurship be informed or changed in a more explicit
treatment of ethical issues?

What is the role of entrepreneurship in macroeconomic development? Empirically,

entrepreneurship is considered an important form of economic development; most new
jobs do indeed take place in small, enterprising companies it might be suggested that
entrepreneurship can be the source of most economic growth. Researchers disagree
about the specific relationship between research done on the role of entrepreneurship in
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the growth and development of the economy and the general consensus is that corporate
activity is very important, but ventures and economic development. Most of these
studies assume that economic growth is driven by business innovation. others argue the
importance of process innovation has an abundance of knowledge entrepreneurial spirit
as a result of the integration, which suggests that leads to economic growth produced.

Some researchers are avoiding the link between innovation and economic growth,
imitative entrepreneurship, innovation is less common, it was proposed is much more
powerful than economic drivers. The particularly serious in the emerging economies, the
need for imitation entrepreneurship is mainly the biggest impact on economic growth.
Entrepreneurs seeking ways to conduct entrepreneurship largely depends on the quality
and supply of support from social institutions already taking place in the theory
confirmed by other scientists. Nevertheless, the differentiated institutional environment
has a completely different impact on business activities.

In this scientific debate on economic effects, there is particular interest in the social
impact of entrepreneurial activities on emerging economies and societies in developing
countries or third world countries and entrepreneurs in developing countries. However,
this environment can be particularly difficult for entrepreneurs due to corruption, which
represents the collapse of institutional ethics. Therefore, it was empirically examine the
relationship between business innovation and corruption, which influences the
relationship between entrepreneurship and economic development. All these studies
highlight many relevant questions for future research: in terms of macroeconomic
development, which mode of operation is most desirable and under which
circumstances? How do entrepreneurs in a corrupt environment deal with the risk of
acceptance? How does the relationship between corruption and entrepreneurship
influence macroeconomic growth? What does the policy mean?

What other social roles does entrepreneurship play? In the context of discussions on
entrepreneurship and economic development, some scientists argue that the link between
venture business and macroeconomic growth is extremely weak and that the real benefit
of entrepreneurship is the diversification of socio-economic portfolios. The real benefit
for the quality of life in society is due to the diversification of economic agents in
response to the environment in different ways.

At least other social units of measurement can be correlated with macroeconomic

development, but they can be specifically considered regardless of their impact on the
economic impact. For example, it suggests that entrepreneurs can play the most
important role in building a 'good society'. The dominance of entrepreneurship within a
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social framework is indeed a crucial indicator of socio-economic perspectives on self-
determination, freedom, inequality in prosperity and distributive justice. SMEs, often
entrepreneurs, have a ubiquitous social impact on the standards for citizen participation
and social capital building. Business activity is related to political policies that promote
socio-economic freedom. As a direct link between individual citizens and economic
entities, entrepreneurs and their new companies have an immediate and special impact
on stakeholder assessments and corporate citizenship judgments.

As discussed earlier, institutions play an important role in stimulating or discouraging

entrepreneurship. But what happens when there is a 'space' instead of a functioning
authority? This number show that a new company plays a key role in institution-building
in such a situation and provides economic benefits for entrepreneurs. Entrepreneurs can
create new networks of stakeholders and ultimately create markets that have not been
before. On the other hand, existing business networks without robust institutions and
markets can actually impede access to new businesses, further restrict their business
activities and create significant transaction costs for setting up new companies. More
research is needed to better understand how entrepreneurs deal with institutional gaps.
Under what circumstances does entrepreneurship in developing countries create a
virtuous cycle without resorting to public offers and corruption? Like other lines of
research that connect entrepreneurship and society, what is the meaning of the policy?

How do entrepreneurs use social change? Many studies that connect entrepreneurship
with society suggest that entrepreneurs can promote positive political changes by
removing outdated or anachronistic social patterns and creating new patterns, but what
do you know about this process? Entrepreneurs recognize their role in improving social
benefits. In fact, they claim that the description of entrepreneurs as self-interest and solid
individualists is "incomplete". That is why statements of business conduct argue that
when they are simultaneously dealing with both their own and collective interests, they
are theoretically perfect and empirically correct. "As discussed earlier, how
entrepreneurs are limited by sources and institutional constraints and ultimately
influence the environment - ultimately, the formation of an initial institution."
(8)Progressive entrepreneurs are often part of a larger social movement, which appeal to
various stakeholders and participate in certain activities, such as determining their own
goals with the help of non-market-oriented and political means. To achieve this goal,
Peter Drucker eventually suggested that social entrepreneurs "can change the
performance of society", but still have a compelling question: which strategic techniques
are most effective in linking business activities to social change? Research also suggests

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that institutions can be created, which can be used to company to further reduce
spreading processes.

In what ways can entrepreneurship be socially unproductive? Although entrepreneurship

is defined as a fundamental moral imperative and as an adaptation to ethical behaviour
for example, points out that opportunistic rental income for entrepreneurs can promote
corruption and its consequences. Such a result would be a timing problem because it is
better characterized as an evolutionary process indicative of the existence of an optimal
mechanism of Pareto. Nevertheless, entrepreneurship remains "awkward" since
entrepreneurial innovation can "bring loss and difficulties for members of society"
because it destroys the happiness of some stakeholders, as it creates new well-being
among other stakeholders. There is Certain new companies may also benefit from the
social or general interest. Business firms were able to make private gains appropriate
while imposing social costs. These companies are what call 'robberies'. Do you
recommend from a policy point of view that entrepreneurship must be governed by
certain social restrictions? How do you ethically respond to stakeholders who are
disadvantaged by entrepreneurship? Under what circumstances is such a consequence a
moral problem? How would other moral frameworks tackle this problem?

What is the ethics of using opportunities? The Austrian school economy emphasizes
entrepreneurs, but unlike the Schumpeterian view, traditional scientists suggest that
opportunities for business customers are created by existing inequalities in the market.
Therefore, the role of an entrepreneur in this respect is to discover and exploit such
opportunities. This raises a number of interesting questions about the ethics of
opportunity exploitation. Exploitation is often seen as a desirable and morally neutral
explanation for entrepreneurial initiatives or organizational learning, but areas that have
not yet been explored is ethical considerations of exploitation of business opportunities.
Future research can investigate the following questions: What is the moral implication
of creative destruction of entrepreneurs? Under what circumstances is exploitation of
opportunities impossible? How can an entrepreneur distinguish between ethically
responsible value creation and opportunistic exploitation? Which patterns emerge in
cultural or institutional factors that influence entrepreneurial exploitation? What are the
specific social obligations of an entrepreneur other than the manager of a mature
company? Additional research is needed in this sense to gain more insight into the
exploitation of business opportunities.

Religion and Economic Behaviour

Religion has long been recognized as an important determining factor for economic
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behaviour. At the beginning of the twentieth century Max Weber's Protestant ethics and
the spirit of capitalism and the religion and the rise of capitalism were somewhat
elaborated in this relationship. The two scholars thought that Protestantism provided a
favourable environment for business activities that are essential for economic progress.
Exploring the relationship between religion and economic activity in the context of an
overdeveloped country can be found in the spirit of biblical Christianity and economic
change in this book Sherman describes positive attitudes towards economic progress and
positive effects of religious orthodoxy on behaviour.

The specific relationship between religion and ethical attitude is not the subject of much
empirical research, and the research carried out has not produced any clear results. A
recent article by Barnett, Bass and Brown found that strongly religious people expressed
a strong belief in universal morality.

In this discovery, we concluded that religious beliefs would have a positive influence on
ethical attitudes, consistently found a positive effect in the lives of the respondents by
the importance of religion, participation in religious communities and ethical attitudes.
But the effect was always positive, but with now found it relatively modest. In contrast
to the studies mentioned above, showed a more generous attitude than the more
religiously religious, less suspicious situations.

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 Chapter-15
Business Ethics Branding Reputation
Brands have existed for more than 1000 years. As we see today, we have never had a
society that has never seen the power of branding. Brands are widespread in every
aspect of human life: production and consumption, food and clothing, personality and
lifestyle; from popular culture to politics. Branding no longer adds value to the product.
Branding represents and promotes lifestyle and the brand itself becomes a kind of
culture. Brands are focused on the internal life, values, beliefs and politics of the
consumer. Yes, their soul. The impact of branding and branding goes far beyond just
marketing and advertising. Branding is both social and economic. As an economic
structure, brands have been studied in the field of marketing and finance. As a social
structure, brands are not fully understood due to the lack of academic research in this
area. Advertising is the most prominent element in marketing, but branding is the core
of marketing communication. Most advertising problems are rooted in brand strategy. A
well-known example is Benetton's astounding tactical advertising in the 1990s.
However, little is known about the impact of branding (no advertising) on brand owners
and other stakeholders than users, and the link between branding and company
reputation. This report is intended to make people aware of ethical issues in corporate
branding.

What is Ethical Branding?

A brand is a simple but very confusing word with many meanings. The American
Marketing Association defines a brand as a name, a term, a symbol, a symbol or a
design, or a combination thereof, to identify and distinguish a product or service from a
single vendor or a group of vendors. A brand can have many different meanings,
depending on the role it plays, the more important it is and the person with whom it is
connected. For brand owners, brands are often a distinctive factor. For brand users,
brands can create an emotional bond that makes an icon an icon. In the most advanced
role, a brand is not only the product or service that the company offers, but the company
itself is a brand and the brand of the company is synonymous with company policy. The
brand is no longer the interface between the company and the customer. For whom and
for the general public it is the face of the company. Branding is an important feature of
marketing, which means more than just naming a product. Corporate branding is
essentially about developing and managing relationships between organizations and the
various stakeholders and the public. Should branding be ethical? The answer seems
obvious. Most companies will say yes. But it will be more difficult to reach universal

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consensus on what ethical branding is. Ethics is the moral rule or the principle of action
to determine what is good and bad. It is not always easy to define these principles,
because it is difficult to distinguish between ethics and legitimacy. Ethical values are
individual, organizational and other cultural differences. It changes over time. Ethics is a
very complex subject. Marketing ethics is part of business ethics, but is part of ethics
itself. Research on marketing ethics was limited to general marketing issues such as
product safety, pricing, advertising and marketing research. There is little interest in
branding. The book on business ethics mentions branding, but the branding text does not
mention ethics. Brands can be immoral, but branding has ethical issues. Ethical brand
marketing is related to certain moral principles that define right and wrong behavior
when making brand decisions as part of ethical marketing. Brands must be assessed not
only on the basis of economic or financial criteria, but also on the basis of moral
standards.

Ethical Branding

Ethical brands must not harm public interests. Instead, we must contribute to the
promotion of the public interest or the promotion of the public interest. These brand
goals can be ethically questionable through research. If a brand could dominate the
market, there would be no problem, but if the brand is monopolized by an aggressive
attempt to get out of the competition, as in the case of Microsoft, then it is a different
matter. The marking of human activities must be judged from a moral point of view. In
merciless competition for market share, the moral issue is probably the last concern of
the company. Paradoxically, the more successful a brand is in a market, the more likely
it is that the brand strategy is ethically skeptical. Consider the following cases:

Weak Assets

Brand images can also be affected by non-brand decisions taken at marketing or

business level, such as exploitation, animal testing and labor disputes. Ultimately, most
business decisions that could affect the image of an organization made it a financial
criterion that people other than the brand manager rarely considered ethical issues.
When something goes wrong, it can be a minor incident or a major crisis. It is a debt
brand. Brand image and company reputation are always victims. Because the trademark
is not a trademark or logo, it was a misplaced identity in the controversy between the
logo and The prologo camera, but it was a bad business policy that committed all the
mistakes. "The brand has not suffered social or environmental damage.

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It is not even a symbol of unethical business practices, companies are guilty and laws
that allow unethical practices are guilty. was that the collapse of Enron by corrupt
managers, rather than by brand branding is just an easy target or a scapegoat for the bad
behaviour of companies. Most valuable asset in your organization too often overlooked
is that it is also the most vulnerable assets. The reputation of the brand was established
with an investment of millions of pounds for many years or easily damaged and can
even be at night destroyed.

Multiple Images of Your Brand

Brand owners can create a positive and consistent image for their brand. In fact, brands
can store external images versus internal images, intended images versus positive
images, and neutral and negative images, depending on who interprets these images.
Consider the case of Coca-Cola. Officially the world's $ 689,000,000,000 brand that has
the most value (Coca-Cola .com). However, according to the former vice president of
the noble name Coca-Cola (Coca Cola) after drinking a lot of people as much as
possible the amount of Coca-Cola may be available to the company more money Horse
and actions form a great contrasts Nike and found it a big discrepancy in the well-known
brands such as McDonalds is not unusual. Another example is a retailer French
Connection fashion company property is a coalition of the FU word It is a smart or
irresponsible branding, because many people in marketing still think that "ethics is not
sold" and that such problems are beyond the responsibility, Will the dilemma of Enron's
former CEO Jeffrey Skilling (According to Jeffery Skilling's statement: "It My job as a
businessman is to maximize returns for shareholders, and if the product is dangerous, it
must be left to the government., which is consistent with influential and outdated view
that corporate social responsibility increases profits. There may also be differences in
the brand image as expected by product and company advertising. Brand
communication aimed at a group of target groups cannot be assessed or misunderstood
by others. There is a unique problem here. A brand with one image cannot appeal to
everyone. If a brand appeals to a group of target groups, it can distract or offend other
groups. Is that so important?

Lack of Brand Model

In the past 20 years, the focus of brand management has been limited to product
branding and corporate branding has been overlooked. This is reflected in brand models
and research, especially in the fast-moving consumer goods sector. Brand models from
the existing brand are associated with two types of public (brand owners and the brand
users). The value of brand value is defined and measured from an economic point of
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view. This model is useful to explain the so-called brand power, but there are many
shortcomings. Firstly, there are two fundamental elements of legitimacy and ethics that
form the basis for brand value. A good brand must be a legitimate and ethical brand.
That is why the brand value must be assessed on the basis of financial and ethical
measures. Second, existing brand models focus primarily on product branding rather
than on corporate branding. Branding and branding have a profound impact on society
and on people who attract people. In addition to shareholders and consumers who may
be influenced by brand decisions, employees, suppliers and the broader community are
distributed on a larger scale. Brands that meet one group can have a negative impact on
other groups. The impact of brands on these stakeholders should also be considered. A
good brand is said to create the financial value of the owner and the emotional value of
the user. What does the brand mean for the general public? Is it true that the interests of
some stakeholders (brand owners and buyers) are always more important than the
interests of other stakeholders? If a brand is studied in a broad social context, should it
also bring public goods to society by symbolizing symbolic human (moral) values? Or
does it need too much?

Company Brands

The main goal of corporate branding is to implement the company's value system and to
improve and improve the company's reputation. Corporate brand equity is related to the
attitudes and associations of a wide range of stakeholders vis-à-vis companies in
individual products. Brands cannot be separated in the organizational context in which
they are invented or developed and managed. You can therefore state that it relates to
brand value and the corporate culture and / or mission of the organization. The brand's
recent fashion is an internal brand and we believe that employees can offer consumers a
good brand experience when they fully understand and recognize their brand. A brand
cannot be an original sales offer. It must be an 'organizational principle' that integrates
and directs the entire organization. Employees can no longer do a good day. They have
to "live according to the brand". "Does the brand have the same meaning for managers
and employees as buyers?" The brand has two important relationships: the relationship
between the organization and its customers, and the organization and other stakeholders
and the general public. The economic basis of a brand is to keep its promise to offer
buyers physical and emotional benefits. Likewise, the social basis of a brand must be
dedicated to core values such as trust, honesty and integrity. Like other long-term
relationships, brands must be developed and maintained on the basis of trust. Once the
trust has been lost or destroyed by corrupt practices of companies, the biggest corporate
scandals in the United States and Europe are doomed to fail. Like some researchers,

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marketing should share some criticism when marketing is most vulnerable to unethical
behaviour due to intrinsic characteristics.

Branding and Corporate Social Responsibility

Corporate social responsibility (CSR) and business ethics are two frequently used
concepts that can be exchanged. This area is further complicated by the use of other
terms, such as company reputation, corporate image and business citizenship for a
comprehensive overview of CSR). CSR is related to social contracts between companies
and society, and business ethics requires companies to act according to rules or moral
philosophies that they carefully consider. Socially responsible behaviour may not be
morally neutral or even ethically justified, but behaviour that is driven by moral
philosophy is not socially acceptable. Critics CSR is all about hiding. Many companies
have used it as a form of business promotion rather than a genuine attempt to change the
way CSR interacts with society. When CSR is guided exclusively by risk management,
it is both fake and untenable and destined to fail itself. Instead of tackling real problems,
CSR performs a sophisticated pantomime to hide public attention or distract from
occupational diseases. CSR never tells the audience what happened behind the scenes -
what happens within the company. Enron has started in the last few years with Enron's
largest CSR show. Enron is listed on the list of 100 best companies to work for in the
United States and received six environmental awards in 2000. We have a good policy on
climate change, human rights and the fight against corruption. The CEO addressed the
ethical conference and synthesized a value declaration that emphasized 'communication,
respect and integrity'. The company's shares declined when it fell from many mutual
funds for investment funds. Cause-related marketing (CRM) or so-called third wave
branding is another trend. The background of CRM is that there is a strong connection
between consumer and company, creating a social capital by connecting the company
with the cause that the consumer feels strongly. CRM is at best opportunistic and
superficial, because most marketing managers do not have the right training or capacity
to support what causes and what to ignore. In the worst case this can cause more
problems for your organization than benefits. A good example of Benetton is given by
supporting a number of potential consumers who are controversial or have little to do
with the core activities. A company's reputation can be defined in terms of many
attributes that determine the buyer's perception of whether a company is known, good
and bad, reliable, reliable, reliable and reliable. A company's reputation is related to how
people think about a company based on information about company information,
business activities, and work, past performance and future prospects (or incorrect
information). Socially responsible image consultations with companies imply that the

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consumer is made aware of the company as an attempt to contribute to community
programs, to support artistic and social activities and, in general, to improve general
well-being. Company brands are an important part of company reputation. Because it is
the face of an organization that owns an enterprise brand, it has to communicate with a
wider audience than consumers and investors. There is an interesting relationship
between company reputation and company performance. The reputation of the company
has a positive influence on the market share of the company and ultimately on the
market value. A survey of long-term equity movements and changes in corporate
reputation can explain the company's stock price as 8-15% by corporate reputation. In
contrast, corporate reputation is influenced by past performance: financial performance
and social performance. Obviously there is a close relationship between ethical branding
and company reputation. These characteristics can consist of honesty, integrity,
diversity, quality, respect, responsibility and responsibility (cocacola.com) and define
what an ethical brand means. Ethical brands strengthen the reputation of the company.
This reputation strengthens the brand. Ethical branding can be studied at both company
and product level. At corporate level, corporate branding is an important part of
corporate reputation management. As demonstrated by recent high-profile scandals such
as Enron and Anderson Consulting, all unethical behaviours damage or destroy the
entire intangible asset. At product level, branding includes labels, packaging and
communication. Although they have no direct influence on the corporate brand, they can
still influence the reputation of the organization. Some of the company's public relations
activities, such as sponsorship and donations, do not generally change public opinion
unless the business is unethical and recognized as genuine. Corporate donations and
CSR should not be used as varnish to cover business misuse. Organizations must make a
systematic effort to create and maintain an ethical business image for the brand that not
only enhances a company's reputation, but also provides a competitive advantage for the
company.

Are Consumers Really Interested In Branding Ethics?

A popular or successful brand may not be ethical (it can be a controversial brand for
chainsaws). However, ethical branding cannot guarantee the success of the company.
Consumers generally have ethical concerns, but such concerns do not necessarily occur
in actual buying behaviour. Is moral branding so important? The literature seems
divided according to the consumer's reaction. An American survey showed that ethical
behaviour is an important consideration in purchasing decisions and those consumers are
prepared to pay higher prices for their products. According to a study in the UK, today's
consumers are not interpreted as more sophisticated but ethical companies that prefer

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unethical companies. Another American study shows that today's consumers, who have
more choices and changes in lifestyle on the market, are in decline earlier than they are
becoming more sophisticated. The outcome of this decline is purely people who tend to
compensate consumers for unethical business practices and punish ethical business
practices. As far as ethical branding is concerned, you must ask two questions: "Are you
interested in your brand?" And "Do you highlight the attention of the general public?"
Despite conflicting results in the literature, current society seems to be more concerned
about ethical issues. As more and more consumers become ethically aware, they
seriously consider the ethical aspects of branding. This makes branding more ethically
responsible.

Business is a human activity, and as with most human activities, it is and was evaluated
from a moral point of view. Branding is no exception as part of the company. Whether
the brand itself is unethical or unethical for the brand is still a lot of confusion. The
brand itself is neither good nor bad. However, brand value and brand decision and
marketing can be ethical or unethical as part of marketing. The differentiation of
products or services has disappeared because there is little difference from the
competition. Consumers are aware of this. According to a recent research by Forum
Marketing / Consumers Association (Marketing Forum / Consumer bond) research,
scepticism and cynicism about branding for the consumer showed a high level. 78% of
consumers, while I agree that while "companies are the most brands and want to
practice, but the difference is very little," he answers, 76%, many companies are looking
for the brand as a way to raise prices. Today's business organizations are getting more
and more pressure from shareholders for the two have a broad knowledge of social
responsibility to act in ways that improve official financial performance. If a company's
reputation is valuable intangible asset that must be actively managed in the meeting
room is not defensive or passive structures in a crisis of ethics and corporate social
responsibility is an important element of corporate communication. Ethical corporate
branding plays a greater role in corporate reputation management. Corporate branding is
to create a brand company in the world a better place; it needs a clear vision on how you
can have provided a legitimate number of core values (the Chernatony and McDonald,
2003). This ethical brand positioning can benefit from a competitive advantage. At the
same time it can help to overcome consumer scepticism and cynicism about brand
communication. Ethical branding is a new area with many complex problems that
require research. These problems can be divided into two broad categories. First ethical
issues with branding: naming, renaming, positioning and targeting. The brand is well
documented because of the benefits it brings to consumers and their owners. More
research should ask new questions: what is ethical branding? What criteria can you use

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to differentiate between ethical branding and unethical branding? How do companies
create and deliver ethical brands? Does ethical branding influence the purchasing
decisions of consumers? Secondly, on the philosophical level: the relationship between
brand / brand and society must be investigated. Is the purpose of branding primary
property to enrich shareholders? What is the social purpose of branding? What are the
effects and consequences? Should brands represent human core values? How does this
fit in with the social role of companies or CSR?

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(In consortium with Profoundly Educated And Highly Experts Team)

Services provided
CONFERENCE RELATED CONSULTANCY
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· Visit www.webinar.nrjp.co.in
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· Conference Edited Book Published online with Conference Series Association of NRJP
Journals
· Visit www.conference.nrjp.co.in

NAAC ACCREDITATION RELATED CONSULTANCY

· Document preparation assistance for Accreditation for all cycle1, Cycle 2, Cycle 3.
· IIQA, AQAC, AQAR, SSR document preparation
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BOOK CONSULTANCY
· Preparation of book With a profound and professional team
· Publish with ISBN No. Within 10 days
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· Hindi to English transliteration

JOURNAL PUBLICATION (REFERED BY CSJM UNIVERSITY)

· FREE OF COST PAPER PUBLICATION
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THESIS CONSULTANCY
· Thesis /Dissertation Writing related consultancy
· High profound experts of STATISTICAL ANALYSIS
· Tabulation and graphical representation of the Research Data with OROGIN and other graphical
software.
· ANOVA, Post ANOVA, Post HOC, Correlation and regression analysis by SPSS and other
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· Compilation of thesis with profound and professional team
· Hindi to English transliteration
· Thesis published with ISBN No in book format
· Online circulation free of cost.
· Highly advance MONOGRAPH PRESS ONLINE PORTAL.
· Visit www.monograph.nrjp.co.in

ACADEMIC PERFORMANCE INDICATOR (API) CONSULTANCY

· How to increase you API worried? Contact us
· Paper publication Portal free of cost with NRJP Journals
· Visit www.nrjp.co.in
· How to write papers (research and Review papers)
· Compilation of Books And Book Chapters

CONTENT WRITING CONSULTANCY

· Highly skilled and proficient CONTENT WRITING team
· Compilation of Books And Book Chapters
· High profound experts of STATISTICAL ANALYSIS
· Tabulation and graphical representation of the Research Data with OROGIN and other graphical
software.
· ANOVA, Post ANOVA, Post HOC, Correlation and regression analysis by SPSS and other
Statistical Software with full description analysis
· Assistance providence for text / reference book writing
· Graphic designing
· Hindi to English transliteration

LIBRARY RELATED CONSULTANCY

· Purchase books at highest discount rate ever for your college library
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· Purchase Computer Accessories and Peripherals

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FOR VARIOUS JOB ORIENTED EDUCATIONS

For more information visit swaranjalipublication.co.in

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Contact us 8700124880, 9810749840