Business Ethics

Shivaji Gupta Roy

What is Ethics
 Treating of moral questions (The Concise Oxford English Dictionary)
 Code of behaviour considered correct (Chamber’s)
 a system of moral principles:
 the rules of conduct recognized in respect to
a particular class of human actions or
a particular group, culture, etc.:
 moral principles, as of an individual:
 That branch of philosophy dealing with values relating
to human conduct, with respect to the rightness and
wrongness of certain actions and to the goodness and
badness of the motives and ends of such actions.
What is Ethics?
Simply stated, ethics refers to standards of behaviour that
tell us how human beings ought to act in situations in
which they find themselves-as
 friends,
 parents,
 children,
 citizens,
 business and businesspeople,
 teachers,
 professionals, and so on.

Working for the “common good” or in a way working or

changing the world to make it a better place ……..
ultimate outcome of being and acting ethically.
Ethics
Five Sources of Ethical standards
 The Utilitarian Approach
 The Rights Approach
 The Fairness or Justice Approach
 The Common Good Approach
 The Virtue Approach
Each of the approaches helps us determine what standards of
behaviour can be considered ethical. But there is no
agreement on what is understood as utility, or what constitutes
rights or what is fair or what is the common good or even what is
the correct virtue. Each approach helps however to hone our
understanding and in more ways than one helps us to come to
a acceptable conclusion ….. To be and act ethically.
Overview of The Business
Ethics Course
 20 sessions of 90 mins each or 30 Contact Hours
 Each session will be interactive and call for students to
pre-view videos or pre-read materials.
 Evaluation will be based on
 Class Participation 30%
 Presentations and other Activities 30%
 Term Paper or Examination 40%
 Suggested Readings
 Justice by Michael Sandel – available on Amazon.
 Giving Voice to Values by Mary Gentile – available on
Amazon.
 Business Ethics: An Indian perspective, by A C Fernando, 2009,
Pearson.
 Additional Readings ( to be provided from time to time)
Objectives of the Course

 To recognize and appreciate the role of ethical issues

in business.
 To apply important concepts and frameworks of moral
reasoning to complex business issues to understand
and create the common good.
 To develop a perspective that includes an ability to
formulate, analyse, and create decisions in ethical
term that enhance the entity’s brand value
 To critically examine one’s personal ethics/values,
create an internal mechanism to voice these values
as well as endure.
The Changing World
 Organ Transplantation : The Story of Dilchand Singh
 Fortis Hospital ….green channel….brain dead person’s
heart from Bengaluru….who paid….is it ethical to use a
poor person as a “Guinea pig” …
 The closure of the Sterlite Tuticorin Plant
 Who lost…..was it a triumph of the power of NGOs /
protestors over the organised sector ….. What are the
after effects of the closure.
 Sacking of 300 employees: The Story of a French
Telecom company
 New MD……first task was to sack 300 employees within 30
days…..is it ethically wrong to sack employees….HR later
recruited the same numbers over a period of two years.
 Traffic Accidents Deaths vs Military Conflict Deaths
 Over 1,37,000 people were killed in road accidents in
2013 alone, that is more than the number of people killed
in all our wars put together……
Making an Ethical Decision

 Address and understand the ethical concern/issue

 Determine the effect and identify the affected parties
 List down the facts that affect the parties and the values
compromised
 Determine the best and worst case scenario
 Understand what others think
 Having more than one opinion helps in arriving at a well
rounded solution to deal with the situation
Ethical Expectations from
Business
 Purity of mind
 Call of the “inner voice”
 Driven by values rather than avarice
 Making profits but not profiteering
 Moral Myopia
 Self serving to serving
 Behaving responsibly or with virtue
 Avoidance of Ethical Fading

Absence of which can cause conflict between

Employees/ Stake3holders and Businesses during
strategy formulation and implementation
Characteristics of Ethical
Organisations
 They are at ease interacting with diverse internal or external
stakeholders groups. The ground rules of these firms make the
good of these stakeholder groups part of the organisations
own good
 They are obsessed with fairness. Their ground rules emphasize
that the other person’s interest count as much as their own
 Responsibility is individual rather than collective, with
individuals assuming personal responsibility for actions of the
organisation. These organisations’ ground rules mandate that
individuals are responsible to themselves.
 They see their activities in terms of purpose. This purpose is a
way of operating that members of the organisation highly
value. And purpose ties the organisation to its environment
There will be clear communication in ethical organisations.
Minimized bureaucracy and control paves the way for sound
ethical practices.
Mark Pastin: The Hard Problems of Management: Gaining the
Ethical Edge
Expected Ethical Standards
of Managers
 Integrity
 Impartiality
 Responsive to Public Interest
 Accountability
 Transparency
 Honesty
 Understanding and avoiding Ethical Blind Spots

Absence of which can create major and unwarranted

conflicts in the conduct of business
Values

 Self-chosen beliefs and ideals

 Internal, subjective, based on how we see the
world
 Influenced by upbringing, society, and personal
reflection
 May change over time

The worth or priority we place on people,

things, ideas, or principles
Defining your Values

 Step 1: Identify the times when you were happiest

 Step 2: Identify the times when you were most proud
 Step 3: Identify the times when you were most fulfilled
and satisfied
 Step 4: Determine your top values, based on your
experiences of happiness, pride, and fulfillment
 Step 5: Prioritize your top values
Principles
 Universal, timeless
 Produce predictable outcomes
 External to ourselves
 Operate with or without our understanding or
acceptance
 Self-evident and enabling when understood

Natural laws or fundamental truths

Character Ethic

PERSONALITY
50 years

CHARACTER
150 years
 Video

Character Ethic
Vs
Personality Ethic
An Introduction

 We all have an image of our better selves -- of how we

are when we act ethically or are "at our best." We
probably also have an image of what an ethical
community, an ethical business, an ethical
government, or an ethical society should be.
 Ethics really has to do with all these levels -- acting
ethically as individuals, creating ethical organizations
and governments, and making our society as a whole
ethical in the way it treats everyone.
Paradigms and Mind Sets
Foundation for Ethical Action
 Definition of a Paradigm

The way we see,

understand, and interpret the
world; our mental map.

Foundation 7
 See-Do-Get

Paradigm

Result Behavior

Foundation 7
 See-Do-Get Model

Paradigm

Result Behavior

Foundation 7
 Understanding Ethical Behavior
using the Proactive Model
Stimulus Response
FREEDOM TO
CHOOSE
ACCORDING
TO VALUES
Understanding Ethical Behavior
using the Proactive Model
Stimulus Response
Freedom
to
Choose

Self Awareness
Independent Will

Imagination Conscience
 USING THE FOUR HUMAN
ENDOWMENTS TO BECOME ETHICAL

Self-Awareness: Our ability to examine our own

thoughts, moods, and behaviors
Imagination: Our ability to visualize beyond our
current experience and circumstances
Conscience: Our understanding of right and wrong
Independent Will: Our ability to act independent of
external influences

Abilities that will create “ pre – scripting “ or muscle

memory to create and sustain ethical outcomes
 Video

Creating Ethical
Cultures in Business
A Thought to Ponder

Scepticism is a resting place for human reason where it

can reflect upon its dogmatic wandering but it is no
dwelling place for permanent settlement. Simply to
acquiescence cannot suffice to overcome the restfulness
of reason.
Immanuel Kant
References

Today’s References
 A C Fernando: Business Ethics An Indian Perspective.
Chapter 1
 Steven Covey : 7 Habits of Highly Effective People