ETHICS

Anthropologists have suggested that humanity developed ethics even before the advent of
agriculture. Humans could not have lived together without some system of safe interaction,
protection of the group and respect for individuals. According to Stanford University
biologist Paul R. Ehrlich, professor of population studies, empathy -- the ability of one
individual to imagine the feelings of another -- is the evolutionary development at the heart of
ethics.

Ethics is a branch of Philosophy and is considered as normative science. Ethics as a science,

involves systemizing, defending and recommending concepts of right and wrong behaviour.
Personal ethics refer to the set of moral values that form the character and conduct of a
person. Organisation ethics, on the other hand, refers to what constitutes right and wrong or
good and bad, in human conduct in the context of an organisation.

The study of ethics has become an important part of management studies. This is mainly due
to the various ethical issues that businesses have been plagued with, in recent times. The
fraudulent activities of these corporations have resulted in failure of corporations, defrauding
of shareholders, consumers, employees, creditors, government and the society to varying
degrees. It has therefore, become a necessity to imbibe ethical values in students of Business
Schools who would be taking up the role of future managers.

Ethics also involves evaluation and application of certain moral values accepted by a Society.
Ethics is generally described as a set of principles or moral conduct. Business Ethics
comprises of the principles and code of conduct businessmen are expected to follow in their
dealings with various stakeholders.

The word ‘ethics’ is derived from the Greek word ‘Ethikos’ meaning “character”. Business
Ethics covers diverse areas including labour practices, human cloning, environmental
concerns, free and fair trade, health concerns, etc. Chambers Dictionary defines Ethics as “a
code of behaviour considered correct’. What the society considers as correct may have been
derived by consumer pressures on corporations and government and regulatory forces.

Ethics is a system of moral principles and attitude that guides our actions to be morally
correct, fair and just. Ethics are not simply professing about virtue or good behaviour; ethics
are the expression and exhibition of standards of moral conducts governing the members of a
profession, business or society so that the interests of people involved in these organisations
or associations are protected. Ethics and ethical behaviour, reflecting moral principles and
values, not only apply to personal lives but are also applicable equally in society and
business.

Ethics in personal life refers to the standards of conduct and behaviour of an individual with
respect to his or her moral principles and values. The latter attributes guide us in choosing
what is morally right and wrong under given circumstances, and in taking appropriate
decision and action, based on our moral judgement, thereby making us feel satisfied or
dissatisfied with our decision, their actions and outcomes. We make this choice of decision
on the basis of our moral understanding and feelings. If the choice is just and fair, we feel
happy and satisfied or vice versa. In practice, as individual, we feel, reason out and
deliberate; and, based on these feelings and deliberations, we decide and act in given
situations. Thus our acts or responses to a situation practically reflect our feelings, thinking
and judgement based on our moral principles and values. This, therefore, brings out two
things: (i) our acts and behaviour are reflections of our ethics, and (ii) our feelings of
satisfaction and dissatisfaction or happiness and unhappiness are dependent on our moral
judgement, which in turn, is based on our moral principles and values.

Why do people who appear similar sometimes have completely different sets of individual
ethics? The origins of ethics and morality have been considered for many, many years. From
ancient Greek metaphysicians, to the great theologians of the Middle Ages, to modern
philosophers, different systematic frameworks have been developed to understand how and
why ethics are formed. These frameworks provide people and organizations with guidance
about how to act toward other humans and institutions in their environment.

FORMATION OF VALUES

Values are associated with thoughts, speech and actions of human beings. It is considered
that values are the basis of prolonged success of every human being, and actions, ideas and
behaviour are the reflection of our values. Values are associated with contents and intensity
of human beliefs and feelings. As a result, contents are related to mode of conduct of human
beings. Values are the basis for influencing choices available to human beings.

Personal values play a great role in organisation. These serve five roles in organisations:
a) Values serve as a tool of behaviour
b) Useful to decision making and conflict resolution
c) Values effect thoughts and actions
d) Values are used for motivation and influencing employees
e) Values are useful to change attitudes and behaviour

The early phase of values is formed by parents, teachers, friends and society. The early ideas
of right and wrong are formed by the parents. With the passage of time and experiences,
values change for a person.
Steiner and Steiner (1991) discuss six different primary sources for understanding the
development of values leading to ethical behaviour:
o family, cultural, religious, philosophical systems, legal, codes of conduct

Family’s role in formation of values in a human being is unquestioned. An infant is a piece

of blank paper when they are born. They will be learning and gaining experience and
information that is being sent to them. The first influence would be the parents.
Certainly, family influence is the strongest influence in the lives of human being when they
grew up. Parents characteristics, the behaviour of siblings, family’s socioeconomic status,
their education, the place they lived in will shape the children.

They teach a child character, by making them appreciate the reason for possessing certain
traits such as values, love, confidence, communication, culture, beliefs, and many other topics
that develop the self and how to behave towards society, understanding the value of culture,
tradition and religion. Caring for family members, respecting elders, renunciation, integrity,
responsibility, dedication, fairness, etc., are some of the values initially taught by parents.

Culture: Groups of people develop a culture that answers the needs of the society. Culture
includes language, gender roles, how to behave, religion, food preferences, customs and
ethical principles that guide the behaviour of the people in that society. Today humanity faces
many pressures from cultural differences in ethics.

When interacting with an unfamiliar culture, a person may encounter cultural behaviours and
customs that are ethically unacceptable or repugnant within his own cultural frame of
reference. The decision to reject or accept undesirable ethics when dealing with any society
can be difficult. The concept of ethical relativism allows a person to suspend judgment of the
other’s ethics because morality is relative to the standard of each person's own culture. This
difficulty has given rise to organizations that help professionals in health care and business
deal with ethics and their relationship to local cultures.

Today’s international business ethics deal with the problem of how to conduct business in
situations where ethical morals conflict with differing cultural practices. Should a company
operate on the principle of “When in Rome, do as the Romans do” or adhere to the ethics of
the company’s home country? Should the company bribe local officials, a practice that is
common in some Latin American and African countries? Business ethicists suggest a middle
ground that is in keeping with the United Nations Global Compact. The Compact encourages
businesses to honour human rights, to accept collective bargaining, to disallow slavery and
child labour, to care for the environment and to avoid corruption such as bribery and
extortion.

Religion is a belief that relates human to spirituality. Many believe that morality emanates
from religion, which provides its followers its own set of moral instructions, beliefs, values,
traditions and commitments. Most religions tend to derive morality, ethics, or preferred
lifestyle by their religious doctrines or laws. Some countries even adopt certain religious
teachings to apply in their laws, in order to socially construct the behaviour of the citizens.
The belief that religion and morality are inseparable and that religion forms the basis of
morality has long been held by many. However, it is also believed by some that moral
principles can easily be explained without assuming the existence of GOD. Religious leaders
have all along been in the forefront of man’s march toward higher and better standards of
morality.
Code of Conduct is another source of formation of ethical behaviour. Moral consciousness
in man has developed as a result of the growth of social consciousness. Men living in society
began to realise that immoral acts can jeopardise their social life and everyone would suffer.
For these reasons, some influential persons in society began to frame rules of conduct to
ensure relative peace and tranquillity. The rules began to be gradually accepted by the
members of society and to acquire the status of moral principles. These principles are the
social rules and norms.

Though the earliest principles of morality seem to have been formulated for social
convenience, the roots of morality lie deep within man’s spiritual nature. Since in the
primitive man, consciousness was rather limited in range, the moral principles were restricted
within tribes and races. There was no idea of universal moral principles. With the further
evolution of consciousness, man began to think of a higher principle, higher than his limited
social life. Gradually, he began to feel the unity of mankind and began to think of universal
moral principles applicable not just for one’s own group or society, but to all men.

Law plays a major role in creating values and ethics in the society. Law evolved from social
code of conduct, which gives guidance for human behaviour of a particular group. Laws, and
a person abiding by them, influence ethical behaviour. Fear of prosecution and punishment is
a great deterrent, and as such, many do not break the law.

It has to be remembered that

 an action can be illegal, but morally right (revolt against tyrannical rule)
 an action that is legal, might be morally wrong

However, it is understood that law has limitations as it cannot cover the wide variety of
possible individual and group behaviour and in many situations is an inadequate tool to
provide moral guidance.

Philosophical system of a person is believed to play a significant role in forming ethical

values in an individual. Philosophy is the study of general and fundamental problems, such
as those connected with reality, existence, knowledge, values, reason, mind, and language.
Philosophical system is a consistent set of values, criteria, and beliefs accepted as
authoritative by some group as applicable to a wide variety of issues. The basic philosophical
systems are:
 Idealism – Believes that reality is basically spirit or idea. Knowledge is gained
through the mind. Value is measured by conformity to ideals.
 Relativism - Reality is basically matter or the physical universe. Knowledge is gained
through the senses. Value is measured through conformity to nature
 Pragmatism - Reality is process or experience. Knowledge is gained through trial and
error. Value is measured by what is of practical benefit to society
 Existentialism - Reality is self-defined. Knowledge is gained through personal
decision making. Value is measured by responsible individual choice