U N I T

Ethics
An Introduction 1
Learning Objectives
This chapter will help the students to:
 define ethics
 know professional ethics
 differentiate between ethics and moral
values
 understand responsibility and accountability
of a professional
 learn concept of nucleation and fairness
 explain various theories of ethics and
moral development
 understand the concept of borderline

Key Terms
professional ethics, morale, accountability,
responsibility, nucleation, fairness, value system,
righteousnous, ethical code
Ethics and Corporate
Governance
ETHICS AND MORALE
The word ‘ethics’ stands for the discipline of the thought process of the human mind
NOTES that keeps continuously differentiating between right and wrong or between virtues and
vices and keeps guiding forever human actions and responses to circumstantial situations
around. The two words ‘ethics’ and ‘morale’ are used interchangeably and are generally
understood as conveying the same meaning though some philosophers tend to draw a
small hairline thick borderline between the two. According to these philosophers, the word
‘morale’ stands for the first seed discipline of the thought process of the inner mind that
has a tendency to align with the higher bandwidth, whereas the word ‘ethics’ stands for
a synthetic output of synergistic interaction between many such first seed thoughts and
governs the overall conscience of the mind. In this sense, morale could be visualised as
representing the inner strata of the human conscience (micro-conscience) and ethics as the
outer strata (macro-conscience).

ORIGIN OF THE CONCEPT

Though it is a universally well recognised fact that the traditional Indian scholars had laid
a good ethical foundation for the society and had valued ethics with highest esteem in all
walks of life, it is indeed very difficult to trace the origin of the concept of ethics in life.
Unethical practices had not even been heard of by people for a long time at the beginning
of the evolution of knowledge era. People’s thought processes used to be pure and simple.
People used to speak what they thought right and what they really meant and what would
they act, a rarity in today’s hi-tech knowledge society. Walk the Talk used to be the true
order of the day, both for personal lifestyle of people and for their social life.
The then knowledge society steadily learned to distinguish between rights and wrongs
over a period of time through their careful observations and their analytical approach to
acquire knowledge. Today’s glorified knowledge society is quite familiar with efforts where
people often try to project a selected few facets of otherwise multilayered and multifaceted
lifestyles of some public figures whose lifestyles are totally independent of each other and
do not carry much relevance to each other. Unlike in today’s knowledge society where
words and even assurances and promises do not carry any sanctity, people used to honour
their words to the core even at the cost of their personal needs and comforts. Similarly,
social culture did not have multiple layers to represent different facets of lifestyles of the
same individual in society.
The first reference to corrupt practice in our epical literature appears in the Ramayana,
Check Your Progress where a separate category of corrupt race has been depicted. Naturally, one would wonder
as to what were the pressing reasons that forced those scholars to ardently advocate ethical
How ethics is different
practices. The most likely reason for this could probably be that, these scholars had a
from morality?
premonition that corruption would gradually enter both personal and social life and would
gradually engulf the society as a whole. They were very seriously concerned about the same
and were very keen that they should protect the ensuing society and mankind as a whole
against entry of unethical practices. They ensured that education through highlighting how
unethical and corrupt practices gradually lead the society towards total anarchy and chaos
followed by destruction at the end, would bring better results.
These scholars ardently advocated, practised and lived to uphold certain ethical
or moral values in life. Other scholars and social philosophers across the world
describe ethics in six words, namely, wisdom, courage, humanity, justice, temperance, and
transcendence.

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2 Material
 Ethics—An Introduction
PROFESSIONAL ETHICS

The evolution of present-day knowledge society witnessed total collapse of traditional

family structures. And with this development, social ethics that used to rule society NOTES
and social life also collapsed. It is this situation that forced the intellectuals and social
philosophers to moot the concept of ethics for business establishments. It is generally
believed that each and every profession that one would come across in public life would
be governed by some professional ethics specifically designed for the purpose or profession
under consideration. The description professional code of conduct is also used occasionally in
place of the word ethics and the general public would ascribe similar meaning to both the
terms and descriptions. It is in this context that the general public would be familiar with
descriptions like code of conduct for doctors or medical practitioners (medical ethics), code
of conduct for engineers (engineering ethics), code of conduct for chartered accountants,
code of conduct for chartered engineers, code of conduct for legal practitioners, code of
conduct for safety engineers, code of conduct for structural designers and construction
engineers, code of conduct for teachers, code of conduct for examiners, code of conduct for
public servants, etc. When one explores the concept of applicability of ethics from broader
perspectives, one can hardly imagine a profession or activity that cannot be governed,
rather need not be governed, by any code of ethics.
It is a common knowledge that the concept of ethics or code of practice, also known
as the code of conduct, essentially stems from issues related with what others expect from
practicing professionals or from a group of practicing professionals and why do they expect so.
A profession is generally understood by people as any activity that keeps an individual
busy and profitably occupied more often in a specific activity area.
It is also a well-known fact and a common knowledge that a person keeps himself
occupied in a specific profession for one or more of the following reasons:
(i) He practices the said profession to leverage his professional knowledge and skills
for earning a competitively comfortable livelihood.
(ii) He practices the said profession exclusively for acquiring more and more of the Check Your Progress
involved and associated intricacies of the profession and to ensure that he is
Name the term
fully conversant with all the different facets of the said knowledge that governs
synonymously used for
the profession and to acquire mastery over the knowledge governing the said
ethics or professional
profession.
ethics.
(iii) He wants that the knowledge of the said profession should grow in leaps and
bounds and should multiply to widely spread its roots and wings across the entire
cross section of the society and to thereby ensure that the said knowledge keeps
radiating everywhere and keeps spreading its message to mankind as a whole.
(iv) He believes that he is practicing the said profession exclusively for the love of
the said profession essentially for ensuring that the society as a whole would be
greatly benefited by the same. He further believes that he has a great passion to
serve the society through the practice of the said profession and treats all monetary
and other forms of returns from the practice of the profession as just incidental to
the process (hypocrisy!).
The irony of the fact is that the entire society knows for certain that it is only the first
of the four reasons cited above that rules the entire professional scenario across the total
cross section of the society. The second and third reasons represent mere hypothetical or
imaginary situations hard to come across in the present-day society.
However, in reality, the society as a whole has always entertained a pre-conceived
notion about the scope and coverage of the word profession, though incorrect in the true
sense of the term, and always tries to identify a specific activity that it would like to
designate as professional activity. Over a period of time, and in tune with the steady
evolution of thought processes of intellectuals across the world, the society has learned to
add many more activities to its previously conceived list of professional activities. The list Self-Learning
Material 3
Ethics and Corporate of professional activities is steadily multiplying to grow by accommodating many other
Governance activities from different facets of life in the society.

NOTES EVOLUTION OF THE CONCEPT OF PROFESSIONAL ETHICS

The next question that why should there be any ethics for a profession? When we try to
understand the human psychology in the context of the understanding that ethics always
stands for what others, including the society as a whole, expect from a practicing professional
and try to explore people’s responses to the concept of personal or professional ethics, it
may not be a surprise that one would come across many people who wonder as to why
others should have any expectations from other professionals, particularly regarding their
professional practices and practice methodologies. Some people could even pose a counter
question as to what right others have in this regard. Some could also opine that practicing
a particular profession is an individual’s right and the individual’s choice. Then why not
he follows a practice methodology and norms that he feels good for him?
The answer to this question is very simple and easy to understand and could be readily
perceived and conceived by everybody though it appears to be a highly involved one.

Responsibility and Accountability

Man is a social being. He has a good stake in the society as he always lives in the society
and spends his entire life span in the society right from birth to death. Similarly, the society
also has an equally good stake in each and every individual living in the society as it is
made up of only those individuals. Nobody can live outside the society. As the knowledge
society evolved through the ages and through learning from the wisdom of scholars and
their practices and preaching, it has evolved certain discipline for people that can ensure
a comfortable living for everybody in the society when meticulously practiced in total
sincerity. Such a discipline is popularly known as “Disciplined way of Living” or as “discipline
for good living and social well-being with a full understanding and appreciation of the traditionally
guarded noble concept of universal brotherhood---vasudhaiva kutumbakam!” The discipline so
identified by the society generally has taken the form of “what to do” and “what not to do”.
Thus, depending on what an individual would keep himself/herself busy with in life, the
society prescribes certain norms, rather rules and regulations, to be adhered and practiced
Check Your Progress throughout. If the society does not follow those social norms, constraints and stipulations,
there would be only anarchy and chaos ruling the entire world and nobody can lead a
Prepare a ‘to do’ and
comfortable life on earth. It is for this reason that the society has laid down certain norms
‘not to do’ list for a
for everybody, whether a private individual, or a formally recognised professional or a
professional.
group of professionals and/or individuals. These norms do not recognise individual likes
and dislikes in this regard.
It is also a common knowledge that all individuals totally depend on the society
for their own welfare and for an overall secured development. In order to ensure that
all individuals evolve into productive and useful or responsible members of the society,
the society invests very heavily in developing and maintaining certain basic facilities,
amenities, utilities and infrastructure for the common benefit of everybody in the society.
The society also maintains many institutions or establishments that are totally dedicated
for developing skills of different professions in individuals. All development oriented
institutions established and maintained by the society aim at transforming the individuals
into highly responsible members and professionals in the society. Therefore, all individuals,
irrespective of the profession that they might be practicing or specialising in, have derived
their development/professional roots in the infrastructure and facilities provided by the
society. It is only the society that makes a professional of an individual. In the absence of
necessary social infrastructure and the support of the society, it is just not practical for any
individual to develop into a good professional entirely on his own (Figure 1.1).
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4 Material
 Ethics—An Introduction

NOTES

FIGURE 1.1  Total dependence of individuals on the society for a secured self development.

Conscious Concern

No individual can afford to create his own infrastructure for ensuring socio-economic,
cultural, intellectual and/or professional development of the self with a total sense of
socio-economic and cultural security throughout the evolutionary-development process.
Wherever such moves are attempted by people with a belief that they can afford and would
like to build their own development infrastructure for their children and kith and kin, the
net result would only be very partial and a highly biased development of the individual.
This is primarily because no development takes place in a totally isolated environment
away from practical realities of society and the public life. All the required resources could
be made available only by such collective group efforts. Therefore, it is only the society
around that invests and provides a suitable development infrastructure for the overall
development of all individual members of the society.
Any investment made by the society for the development and maintenance of all forms Check Your Progress
and kinds of infrastructure is nothing but society’s investment on people who are benefited
What is commonsense
by the same. This is a natural common sense law. This investment is, however, quite indirect
law?
and therefore cannot be directly calculated in terms of investment made on each separate
individual in the society and equated with the development status each individual has
acquired. The socio-economic and cultural development infrastructure of the society has
to be maintained on par with continuously growing development needs of the society and
has also to be maintained. Therefore, as a natural consequence of such heavy investments
made by the society on all individuals living in the society, it expects the beneficiaries
to plough back some contribution in terms of intellectual and other forms and kinds of
return (of gratitude for whatever they have received from the society) to ensure continuing
further smooth maintenance and steady advancement of such development infrastructures
in the society.
The society gradually started witnessing many of the non-desirable and unwelcome
aspects of practices by some professionals and groups of professionals. The evolving
knowledge society started analysing those non-desirable aspects and understood their
hazardous nature and tried to classify them into different groups based on their immediate Self-Learning
and/or long-term impacts and/or on their risk potential. Material 5
Ethics and Corporate In tune with the evolution of knowledge society and as a measure of collective,
Governance intellectual and sensible response to the welfare requirements of the general public including
their fast changing needs, the society steadily identified certain basic aspects associated
with practice of different professions and formulated a plough-back mechanism. Over a
NOTES period of time, this plough-back scheme underwent many modifications, additions and
refinements to acquire the form of some norms laid down for the purpose by the society.
Certain aspects of these norms are grouped together and described as professional ethics or
as professional code of conduct. The concept of evolution of professional ethics and its roots
are shown in Figure 1.2.

FIGURE 1.2  Evolution of the concept of professional ethics.

Check Your Progress
It is the norms, irrespective of whether mandatory category or optional category, that
Why should there be any would, when meticulously followed, ensure overall steady development of the society and
ethics for a profession? also ensure general well-being of the public that Ethics would focus on.
It is also clear that if appropriate measures are not introduced by the society to control
the nuisance or menace of those unwelcome aspects of some of those professional practices,
the public health and/or social well-being would always be jeopardised. The only other
question that remains to be answered is what others expect from practicing professionals or from
a group of practicing professionals and why do they expect so? Before attempting to answer this
question, let us first try to understand as to what triggers the thought of some expectation
from practicing professionals specifically with respect to their practice mechanism or
practice methodology.

Concept Nucleation

Let us start with understanding the phenomenon or the process that nucleates the concept
of the necessity of ethics for professionals and also the answer as to why should there be
such a nucleation process. All societies are made up of many individuals and groups of
individuals with innumerably different and widely varying requirements and aspirations.
Self-Learning
6 Material Requirements of people in a society also embrace a very wide spectrum. As the knowledge
society traversed through the knowledge driven evolutionary phases, it realised that with Ethics—An Introduction
a view to ensuring more satisfactory execution of certain activities, there was a need for
practice of certain degree of extra skills in those activity areas. This need gave birth to the
concept of specialisation. With this realisation, it did not take much time for the evolving
knowledge society to encourage people to take to acquiring special skills in those areas NOTES
of interest to wider sections of the society. Society also realised soon that in the interest
of the general well-being of the public, it is necessary to create the required additional
skill-development infrastructure and help/enable interested people in acquiring those
specialised skills. Acquiring of certain special skills to serve the society better gradually
became part of the knowledge society. Thus, the concept of specialisation in certain activity
areas took birth. It was also soon realised that those specialised activity areas do belong
to the category of dedicated professions and thus was born the concept of skilled people/
specialists or professionals.

Concept of Fairness

The seed thought of a need for a specialised service has its origin in the society and it is
only the society that provides necessary provision and scope for practice of specialised
professions and the so-called professionals have been trained to serve as a means of meeting
those identified requirements. The society, thus, provides both the source and the purpose
for all professions. Therefore, any expectation from a profession also stems from the same
all benevolent patron society (Figure 1.3). The all benevolent society expects a high degree,
rather totality, of performance fairness. This is primarily because the society has conceived
the necessity for a specialised skill to serve it better and it has only imparted the required
specialised skill in some people. Naturally, the society expects that it should be benefited
by those specialised skills it has imparted in people.

Check Your Progress

What do you mean by
nucleation and fairness?

FIGURE 1.3  Fairness in totality is all what is expected of a profession.

The stage is now set for identifying the various ingredient elements of fairness and
the meaning and scope of the description totality of activity fairness.
The concepts of evolution of professional ethics shown in Figures 1.2 and 1.3 together
refer to following four areas that one has to explore in this regard:
(i) Social responsibility as reflected in social accountability
(ii) Civic responsibility as reflected in civic accountability
(iii) Addressing fair purposes Self-Learning
Material 7
Ethics and Corporate (iv) Following fair practices (means and methodologies) as relevant to the profession
Governance under consideration.
(a) Prevailing socio-economic environment of the society would also have a say
in identifying the relevance of the profession.
NOTES If these four areas are addressed satisfactorily, then totality of activity fairness could be
achieved by all practicing professionals.
Let us next examine the following situations and check whether they address ethical
requirements.

CASE STUDY 1
RURAL FARM LAND DEVELOPMENT PROJECT
Once, a sponsored team of bright young horticultural research scientists (professionals) from
a well established research organisation decided to visit a remote village in the state to get a
first-hand knowledge of the various horticultural practices followed by farmers in the village
and to identify areas where they could help them in taking advantage of more productive
horticultural farming practices and help them in setting a role model for other farmers in the
region in implementing improved horticultural practices and techniques to supplement their
agricultural income. The team visited the village during different seasons of the year to observe
and study farmers’ current practices. The scientists formed different sub-groups of study within
their team in such a way that together they would be able to cover the activities of all farmers
in the village and the total farming land of the village for at least one complete yield cycle of
a selected few horticultural crops in the village. At the end of their study cycle, the scientists
exchanged their key observations. The team organised a study visit of farmers of the village to
a model horticultural farm situated in a distant town. The farm had many plants that carried
plenty of fruits and flowers and other horticultural products. They were explained how improved
technologies were working at that farm. The farmers’ queries were well answered and well
responded. They were very much impressed. They were impressed particularly with the visibly
extra high yield of fruits and flowers. Subsequent to the study visit, it did not take much time
for the scientists to convince the farmers about the merits of improved horticultural/agricultural
practices and to take to horticultural farming in small portions of their farm land. They next
identified a lead farmer who was willing to volunteer to give a try to those new concepts and
practices and was willing to convert a small portion of his land to develop a horticultural farm. All
these activities were part of their time-targeted sponsored development project. Another team
joined the scientists’ group at this stage and played an aggressive role further. In consultation
with the scientists’ and the farmer, the new team identified a small portion of his farm land and
decided to transform the same to a very fertile and productive horticultural farm. Soil samples
were collected from different parts of the land and were sent for analysis. One of the team
members personally took those samples to a soil testing laboratory and got them tested. In the
meantime, some new farming equipment had been procured and installation layout had been
prepared. Major pieces of equipment that had been procured were a couple of sprinklers, a few
fertigation equipment and micro-irrigation facilities. A few elevated water storage tanks had also
been fabricated and erected at different places in the farm. From then onwards, another team
took charge of the activities and kept visiting the village periodically. The new team ensured
that whatever activities needed to be carried out periodically in the farm with standing crops
were properly carried out as per the schedule they had identified earlier and had informed
the farmers in the village. At the end of the first cycle of some horticultural crops, the farmers
of the village virtually could not believe their own eyes and were extremely impressed with
the achievement which they had witnessed throughout from beginning to end of one farming
cycle. The new team started meeting other farmers in the village and could readily convince
Self-Learning them about the merits of the scheme. All farmers in the village decided to earmark a portion of
8 Material
their total farm land for the new project. Once development and investment decision was taken Ethics—An Introduction
by farmers, the team volunteered to help farmers by assuring them that they would support
them till the end. The team organised necessary documents and helped farmers in getting farm
loans from appropriate agencies. Loans were organised. Installations were completed. Required
seedlings and seeds were suitably organised. The whole project took off with a big bang. Farmers NOTES
in the village felt highly elevated and started planning further expansions with the returns they
would get from the first harvest. The members of the new team visited the village a couple of
times and subsequently asked the farmers to attend to the necessary periodical works on their
own based on the guidelines prepared for the purpose. Crop yield in some farms was good but
not so in many others. The farmers learnt that another team was working on a similar project
in another distant village in the region. They all visited that village and explained their problems.
The team informed the farmers that they would give the message to the team that had worked
in their village. Time passed. No one visited the village. A couple of reminders to the team
did not help the farmers. The farmers found it difficult to bear the burden of loans they had
raised for the new project. They continued to struggle for some time. In the meantime, they
learnt that another team of technical consultants are helping some farmers in another village.
When the farmers visited that village, they learnt that similar problems existed there also till
the new team of consultants started helping them and further that crop yields had improved
significantly. They requested those experts to help them also, which was readily agreed to. The
farmers of the village took a sigh of relief.
Let us analyse the above Case see Table 1.1.
TABLE 1.1  Rural Farm Development—Project Analysis

Sl. No. Analysis outcome

1. Project profile
(i) Identification of the village
(ii) Studying farmers’ current practices
(iii) Identification of more commonly grown horticultural crops
(iv) Identification of improvement potential
(v) Educating farmers on the merits of contemplated improvement programme
(vi) Organising study tour of farmers to a well performing horticultural farm
(vii) Answering all their queries to their complete satisfaction
(viii) Preparing a master improvement plan covering all farmers in the village
(ix) Proposing a suitable implementation scheme and discussing its details with farmers
(x) Identifying prospective suppliers of new farm equipment for the project and
explaining different features of financing schemes
(xi) Preparing an expenses budget for the project
(xii) Identifying prospective financiers
(xiii) Identifying a willing volunteer farmer for establishing a representative horticultural
farm
(xiv) Procuring all the needed farm equipment and installing the same as per layout
plan prepared for the purpose
(xv) Establishing a sample horticultural farm in the identified farm land
(xvi) Demonstrating the merits of the plan to all farmers of the village and re-educating
them with convincing evidence
(xvii) Preparing the final project report giving full details of studies, analysis, knowledge
sharing programmes, recommended horticultural crops for cultivation in the
village, etc. along with suitable recommendation for implementing the project and
submission of project report to sponsors
2. Methodology profile
(i) Identifying limitations of current horticultural farming practices and highlighting to
farmers
(ii) Educating farmers on how those limitations would lower their farm returns and
quantifying what farmers have lost
(iii) Preparing farmers of the village to accept the new concepts being propagated
(iv) Highlighting necessity to periodically check fertility levels of soil Self-Learning
(Contd.) Material 9
Ethics and Corporate TABLE 1.1  Rural Farm Development—Project Analysis (Contd.)
Governance
Sl. No. Analysis outcome
(v) Educating farmers on how those limitations would adversely affect crop growth
NOTES and yield
(vi) Highlighting the importance of regular fertigation coupled with explaining the
advantage of both sprinkler and micro-irrigation practices
(vii) Highlighting the significance of water conservation activities with specific reference
to use of sprinkler and micro-irrigation techniques
(viii) Convincing farmers on the merits of the proposed project through study visits
(ix) Explaining them how the improved technology helped plants to give high yields
from plants in the farm which they visited
(x) Clarifying all their doubts and satisfying them on all their queries, thereby further
ensuring that farmers do make up their mind to opt for improved technology in their
farms
(xi) Identifying a prospective farmer and enthusing and supporting him in setting up a
representative horticultural farm in the village
(xii) Establishing a typically prosperous horticultural farm in the village
(xiii) Preparing the necessary background in the village for all farmers to take to
horticultural farming through practice of improved technology
3. Recommendation
(i) Soil analysis should be periodically carried out to check soil conditions and nutrients
levels and to decide on fertigation composition, nutrient load, frequency and dosage
(ii) Preparing a list of identified horticultural crops for the village
(iii) Recommended mechanism to be followed for adoption for improving farm
productivity
(iv) Summarising highlights and merits of recommended technology

CASE STUDY 2
YOUNG PROFESSOR’S EPISODE
A bright young student hailing from a middle class family had a great flair for teaching. Even as
a student he used to coach his juniors and counsel his classmates. Whenever he used to get
some doubts in the subject, he would first rush to the books, read a couple of times all those
sections where he was not clear, note down his points and then meet his teachers to get his
doubts clarified. Such activities used to be his routine in his student days. As he moved up in
studies, he started visiting different libraries to refer to different authors on the same subject
so that he would come to know how a subject would be discussed by different authors. He
was very keen in referring to the exercise sections of books. He would pick up each and every
individual problem or exercise given at the end of each chapter in the book and would try
to workout solutions for the same. He would then cross check his answers with the answers
given in the book either at the end of the chapter or given separately at the end. Throughout,
he would exert great control on his curiosity to check the answer first and then prepare the
workout details. He would never do that. He would never be satisfied till he could workout
correct solutions to those problems. Wherever it used to be beyond his comprehension, he
would first go to his seniors for consultation. He would approach his professors only when his
seniors would not be able to help him. It never took much time for his classmates to recognise
him as an earnest student of the subject being taught. It had almost become a standard routine
for his classmates to consult him for their doubts. He had hardly failed to clear their doubts.
The young boy completed his postgraduate studies and decided to take to teaching profession.
As he used to top the rank list throughout his student days, all the colleges in the town were
eager to hire his services. The young gentleman joined one of the most popular colleges in the
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10 Material
town and started teaching some of his favourite subjects. As a student, he knew very well the
types of doubts students would get. He also knew why such doubts used to bother students. Ethics—An Introduction
It did not take much time for the young professor to build a good rapport with students. Soon,
he became a very popular teacher. Students always used to flock him to get their doubts clarified
as he never hesitated to explain them the subject as many times as needed and till the students
would get convinced. His popularity as an exceptionally good teacher grew throughout the town. NOTES
Gradually, students from other colleges also started visiting him to seek his help in clarifying their
doubts and to guide them in their preparations.
At this stage, some of the very popular private coaching colleges approached this young
professor and requested him to guide a larger cross section of students from different places
and to help them in preparing for competitive examinations for different professional courses.
The young professor yielded to their requests and started guiding aspiring students in their
preparation for contemplated examinations. His popularity knew no bounds. He started visiting
different private coaching colleges located in different parts of the town. The young professor
became extremely busy. His teaching schedules would start very early in the morning hours
and would continue till late hours in the evening. And, of course, with great difficulty he used
to attend to his regular college, in between. Beyond this stage, it is needless to say that it just
became not practical for any student to get to talk to this young professor for getting their
doubts clarified and in a short time the young professor became beyond the reach of normal
students. Students only from high end of the society could reach him. The only time and place
where students could talk to him was in those private coaching colleges and that too only during
his scheduled teaching hours.
Let us analyse this young professor’s professional career. See Table 1.2.
TABLE 1.2  Analysis of Young Professor’s Professional Career

Sl. No. Analysis outcome

1. Student career profile
(i) A very studious person
(ii) Never used to live with doubts on the subject being studied. He was very
particular that he should be very clear and thorough with the subject that
he would study
(iii) Would do everything that is required to get his doubts clarified
(iv) Would never jump to short solutions or quick solutions through direct
consultations
(v) He would first explore answers to his doubts only through books. If books
did not clarify his doubts, he would approach his seniors for clarification. At
last and only when neither the books nor his seniors could clarify his doubts,
he would approach his professors for clarification
(vi) He would read different authors on the same subject and find out different
ways in which a particular subject would be explained by them
2. Professional practice profile
(i) Started off in a very good way where he used to whole-heartedly help
students in understanding the subject he was teaching
(ii) Never used to distinguish between students
(iii) Used to clarify doubts of students without reference to the college where the
student studied
(iv) Did everything required to build a good rapport for himself in the society in
general and among students in particular
(v) Gradually started visiting private coaching colleges
(vi) Steadily expanded his territory and became very busy in teaching students
in private coaching colleges
(vii) Steadily made himself beyond the reach of common students from a wider
section of the society
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Material 11
Ethics and Corporate Let us next examine both these cases from professional ethical view points. For this purpose,
Governance let us explore the entire project from different perspectives (Tables 1.3 and 1.4).
Key issues to be examined are:
(i) Basic objective behind project conception
NOTES (ii) Methodology practiced during implementation of the project
(iii) Mechanism followed to ensure that the project did achieve its goal and expected results
were achieved.
TABLE 1.3  Ethical Analysis—Rural Farm Development Project

Sl. No. Ethical Actual practice

requirement
1. Nobility of the Visible objective
objective (sincerity (i) Appears indeed a very noble cause of rural economic uplift
to the purpose) Hidden objective
(ii) However, in reality, the team of development scientists and
technologists was working for the sponsoring company and
to indirectly promote their products and services
An ignoble cause!
2. Integrity of Implementation methodology
implementation (i) Development scientists selected the village that had been
and practices identified by the sponsoring agency.
(dedication to the (ii) Development scientists implicitly followed the details of
cause) preliminary studies designed by sponsoring agency group.
(iii) They conveyed the pre-designed message to farmers of the
village.
(iv) Farmers’ education cum training visit was organised to a
model horticultural farm established and maintained by
project development technologists of the sponsoring agency
group.
(v) Project implementation task was directly handled by project
implementation wing of the sponsoring agency.
(vi) Subsequent project maintenance consultancy was also
handled by a wing of the sponsoring agency group.
Dedicated only to commercial cause of the sponsoring
agency and not to the projected cause!

Note: Rural economic development project had the following hidden facts not disclosed to farmers
of the village:
(i) Rural development project was sponsored by a giant manufacturing company specialising in
manufacture of farm equipment and implements.
(ii) All the research scientists and technologists hired for rural development projects were
exclusively sponsored and supported by the project sponsoring agency.
(iii) The agency had built a good rapport with the officers of the rural development ministry of
the state government.
(iv) The agency also had a good rapport with executives of some finance agencies.
(v) Development scientists had been assigned specific pre-identified tasks and targets.
(vi) The company was operating in different names as its subsidiaries.
(vii) One such subsidiary company was a consultancy firm specialising in project survey, installation
and implementation.
(viii) This team had designed the format for preliminary studies and data generation. The team
had also designed education and training modules of farmers.
(ix) Another subsidiary company of the group was specialising in implementation consultancy.
(x) Yet another subsidiary company was specialising in horticultural seed and seedlings
development.
(xi) One more subsidiary company was specialising in manufacture, supply and installation of
Self-Learning fertigation equipment.
12 Material
 TABLE 1.4  Ethical Analysis—Young Professor’s Career Ethics—An Introduction

Sl. No. Ethical requirement Actual practice

1. Nobility of the objective (i) As a student he had a real, good objective of
(sincerity to the purpose) acquiring knowledge of different subjects he was
NOTES
exposed.
Integrity of implementation (ii) He puts in his earnest and honest efforts to acquire
and practices (dedication to the knowledge being pursued.
the cause) (iii) There was total dedication to the cause.
Truly a noble cause and novel means with total
dedication to the cause!
2. Nobility of the objective Professional practice
(sincerity to the purpose) (i) He started his profession as a sincere and earnest
teacher and taught students to their full satisfaction
and comfort.
(ii) Did not distinguish between students from his own
college and from other colleges.
(iii) Served the students to their full satisfaction and built
a good rapport in the town and also among the
student community across the town in particular.
ermination of corrupt thought
G
(iv) The professor started minimising the duration of his
stay in the regular college and started saving more
Integrity of implementation of his precious time for coaching other students.
and practices (dedication to (v) Thus, he gradually made himself less and less
the cause) available for discussions with the students of his
college.
(vi) His regular students started getting a feel of his non-
availability for clarifying their doubts.
(vii) The professor started visiting private coaching
colleges to coach students there.
Multiplication of corrupt thought
(viii) Expanded his service coverage to many more private
coaching colleges in the town.
Proliferation of corrupt practice
(ix) Accepted too many offers from private coaching
colleges so that he would keep himself very busy
from morning till evening.
(x) The net result was that no student could get the
professor free to clarify any of his doubts.
(xi) Students were forced to attend his private college
coaching classes if they had to get their doubts
clarified from him.
A novel way to steadily drift away from a noble
cause!

Is visiting private coaching colleges a sin?

(i) The question here is whether the professor was committing a sin by visiting private
coaching colleges.
(ii) There are both affirmative and negative views on this issue in the society.
(iii) As long as the professor was fully satisfying the needs of his regular college students
by way of making them fully understand the subject he was teaching and clarifying all
their genuine doubts on the subject, one school of thought firmly opines that there is
no sin in his visiting other private colleges for sharing his knowledge with other needy
students without reference to their affiliation.
(iv) This school also opines firmly that it is not a sin if the professor earns a little extra
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income through teaching and/or coaching other students in his spare time. Material 13
Ethics and Corporate (v) The only criterion this school prescribes for the professor is that he should first ensure
Governance that he does full and un-adulterated (non-corrupt) justice to his regular college students
and then could do anything in his spare time.
(vi) The other school of thought firmly believes that if the provision for earning extra money
NOTES is created, then the professor would most certainly not do full justice to his regular
students as he would always be hard-pressed for time and would always be in a hurry
to rush to his private coaching colleges.
(vii) While teaching his regular college students, he could, with or without intention and
knowledge, pose a very interesting question on the subject he is teaching or might
implant an intentional seed of mind provoking doubt in their minds to rouse their
curiosity and/or intellectual thirst with all good intentions. But, for want of time, he
may not be in a position to fully quench their intellectual thirst.
(viii) Alternatively, since he is always hard-pressed for time, he might not resort to such
innovative teaching methods but might follow a routine drudging way of teaching like
many others do.
Only the society should find an answer to this issue! understood as a commercial activity
carried out either individually and/or collectively by a group of individuals and/or professionals. It
is generally understood that the commercial aspect of a business activity refers exclusively to the
direct monetary return that gets generated and/or accrued at the end of the said activity cycle.
A return from a business activity could be either positive (desirable return—profit) or negative
(non-desirable return—loss). When a business activity is viewed from these perspectives,
one would realise that while either a profit or a loss could be incidental to the process, a
business activity is primarily the practice of certain pre-identified profession or professions
and combinations thereof with some pre-conceived objectives. This understanding brings total
clarity about the relationship between a professional activity and a business activity (Figure 1.4)
and tells us that the two are basically analogous to each other, if not identical in all situations,
though the general public has its own perception limitation. In certain situations, depending
on the magnitude and operation scales, some professional activities overlap with the concepts
of a business as is generally understood and it becomes difficult to describe the activity as not
belonging to the business category. Many times, it is only the magnitude of operations and
multiplicity of professions that could differentiate between a business and a profession.

FIGURE 1.4  Many professions make a business. (Many professional ethics add to business ethics.)

Such overlapping phenomenon could be readily seen in the following situations. Yet, many
people find it difficult to accept this activity as a standard business activity.
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14 Material
 Ethics—An Introduction
Activity Young Professor’s Profession
Let us get back to that situation of the young professor. At the start of his
professional career as a teacher, he just remained a professional because he
confined his activities exclusively to teach the subject in the college. He also NOTES
used to spend extra time to clarify all doubts that students might get during
the course of their understanding the subject. Thus, he was ensuring that he
would do full justice to his profession. In the next stage, when he expanded his
teaching activities and started coaching students from different colleges and from
different places for additional monetary gains, the element of business concept
started casting its shadow on his activities. All those coaching colleges had
actually hired the services of many professors to teach students, the way they
had hired this young professor. When one looks at all those private coaching
colleges, they are just carrying out a business activity. Each one of the students
enrolling in those private coaching colleges would be their customer. Similarly,
many professors like our young professor would be functioning as means of
carrying out the said business activity

Activity An Artisan’s Profession

Let us examine the professional situation of an artisan, say a jeweller. It is a fact
that a jeweller is a uniquely skilled professional like any other professional in the
society. Let us next imagine a situation where this particular artisan decides to
practice his profession with public knowledge and prepares ornaments (jewels)
for many interested customers. Further, in order to ensure that his customers
get a ready access to him for availing his skilled services, he starts working in a
confined and secured place. How would a common man describe this activity?
Without any hesitation, the common man would describe this artisan’s work
as a business activity and his secured working place for practicing his skills as
a jewellery shop directly meaning that it is a business centre or the business
premises.
Would there be any difference between a coaching class where many students
would be there to learn the skills of scoring high in examinations and this artisan’s
workplace? No. This sort of logic would apply to all professions especially because
all professions carry equal potential to be rightly described as a business activity.

Ethical Theories
TRADITIONAL KNOWLEDGE THEORY

It is a well-known fact that human thoughts have an intricately intertwined and an Check Your Progress
inseparable relationship with knowledge that people have acquired at any given point
Whether knowledge
of time and are exclusively derived only from the knowledge they carry with them.
is static or a transient
It is also an equally well-known fact that knowledge by itself is an ever transient
phenomenon.
phenomenon as it is an eternal and a perennial voyage to the boundaryless space
of eternal truth. Otherwise, there should be no reason for why a thought about a
particular thing should ever change. This intricately intertwined relationship of thought
with knowledge, leads us to identify three important evolutionary phases of ethical
thought development process analogous to knowledge evolution process as depicted in
Figure 1.5. Self-Learning
Material 15
Ethics and Corporate
Governance

NOTES

FIGURE 1.5  Integrated knowledge driven evolution of ethics.

The three phases, as shown in this diagram, stand for three distinctive stages of ethical
thought nucleation, formation and growth and the ultimate crystallisation. While views of
intellectuals across the world could differ, our traditional scholars had recognised these
three phases as basic to overall development of an individual and had also opined how
these phases should be harnessed and handled. These scholars had further grouped different
phases of intellectual development into three specific categories and had emphasised the
mechanism for ensuring good development. The traditional literature dwells elaborately
on the mechanism to be followed for satisfactorily nurturing and nourishing the process of
building a good knowledge structure during the second phase of knowledge development
to ensure that people automatically develop an inherent urge to take off on an eternal
voyage of continuing to acquire knowledge and truth governing all facets of life. It was also
a foregone conclusion of these scholars that development of moral ethos, which is nothing
but a firm conviction about knowledge-based absolute righteousness, would automatically
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16 Material
follow the same pattern and continue to get modulated as and when better knowledge Ethics—An Introduction
about facts emerges.
Thus, the traditional Knowledge Theory of Ethics propagates and upholds only one
concept: The absolute righteousness pursued through a perennial voyage to the space of
ultimate knowledge-based truth with a right attitude towards duty-bound work, free from NOTES
deviations from impacts from all sorts of inducements or allurements and attachments
camouflaged with a non-penetrably strong blanket of selflessness”.
In other words, the knowledge theory of ethics emphasises that “One should execute
one’s duty-bound responsibility with total dedication and sincerity to discharging
responsibility as demanded by the righteousness (truth) associated with the act of execution
without attachments to both pros and cons.” This is what the Bhagavad Gita also emphasizes
throughout. One should free one’s mind from concepts of good or bad of pros and cons
but diligently and sincerely discharge one’s duty-bound responsibility with skilful actions
(Buddhiyukto Jahatiha Ubhe Sokruta Dushkrute Tasmadyogaya Yujyasva Yogaha Karmasu
Koushalam!).
The knowledge theory recognises development of ethics in two clear phases. In the first
phase, it is only the knowledge based thought development that takes place and provides
the necessary base for development of the concept of ethical righteousness in multiple
stages during the second phase of development with some overlap between the two.

Development of Ethics—Phase One

Stage One: Thawing the Seed Thought

The inputs for thought nucleation processes are:
 As seen by kids.
 As told to them by elders and others in the family.
 As observed by kids in the surroundings and the society.
As a result of multiple inputs, through observations and hearings, the potential for
multiple seeding, multiple-germination and multiple-sprouting of thought-concepts grows.
Kids learn to absorb as many different thought nucleating concepts as possible. Kids
just continue to absorb without much of an intellectual response and/or interaction but
keep churning different concepts within themselves and allow them to steadily thaw to
germinate and sprout into healthy seedlings without recognising the significance, if any,
for those processes. The span of this stage is about five years. In this stage, children also
try to believe that what others are doing is the right thing to be followed and practiced.
This thought about right or wrong will not be based on the knowledge that kids would
have acquired.
Indian scholars characterised this stage as something that needs to be tendered and
cared for with the highest degree of diligence to ensure that only healthy seeds are sown
and to doubly ensure that no polluted thought seeds enter kids’ mind in this tender age
where the mind is totally open to absorb anything that is fed to it. This is one of the
fundamental parental responsibilities towards children.

Stage Two: Cultivation and Nourishment

This is the most critical stage in the development of the knowledge-oriented, thought-driven
ethical concepts. This stage is characterised by multiple intellectual input for exploration
of the truth or knowledge governing different processes and phenomena.
In this stage spanning about ten years, kids steadily sprout into their teens. From
intellectual evolution point of view, this stage is extremely critical because in this stage
they have unlimited access to all forms, kinds and varieties of knowledge and knowledge
driven thoughts which they themselves start nourishing and cultivating in response to what
they see and observe around. During this stage, children entertain almost an uncontrollable
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curiosity to know more about many things in life and around including occasional venturing 17
Material
Ethics and Corporate into some of those areas. They keenly explore each of those areas to which they are exposed
Governance and also wherever they have the right kind of mature knowledge input. They also seek
guidance from those who have passed through the various stages of knowledge driven
thought maturity process. A constant and good guidance is necessary during this stage.
NOTES Recognising the criticality of this stage of intellectual development, traditional scholars
have described this stage as the one that needs to be treated with firm approach and with
no soft corners (Dasavath–subordinates). The governing principle here is that, in this stage
children will have almost an unlimited potential for growth. They should be given suitable
opportunity for exploring their true strength potential yet retaining the need for certain
degree of overall knowledge driven thought development.
A deep sense of the clarity of knowledge-driven thoughts strongly grows in kids during
this stage and urges them to pursue the same.

Stage Three: Concept Modulation

This is the next critical stage of modulation, refinement and proper crystallisation of well
understood knowledge driven thought processes. By the time children have reached this
stage, they would have exposed themselves to different types and facets of knowledge
driven thoughts and would have acquired the skills necessary to discriminate between
right thoughts and wrong ones. They would also have acquired the necessary courage and
skill to suitably experiment with their knowledge driven thoughts to verify and confirm
and to frame a firm conviction based knowledge driven thoughts and actions. They are all
set and are ever ready for high levels of intricate intellectual interactions with intellectuals
from across the society. This stage actually spans the rest of the lifetime period of people.
Throughout this stage, new and innovative knowledge driven thoughts are received from
different corners from across the world and the mature mind keeps exploring all those
thoughts and retains after necessary screening and filtration only those thoughts and
intellectual inputs that truly appeal to their intellectual mind. This is the most realistic live
stage of ethical development because it is during this stage that people would be able to
confidently decide about right and wrong and their relative significance. They would also
be able to decide the transient and non-transient aspects of right and wrong.
This concept is exemplarily well emphasized in our sacred Vedic literature (Rig-Veda)
through a proclamation to ordain mankind that they should keep their intellectual doors
ever open to allow free flow of knowledge from all directions.

Development of Ethics—Phase Two

Stage One: Nucleation of the Concept of Righteousness
It is an undisputed fact that the basic concepts of ethics, whether personal ethics, social
ethics, professional ethics or business ethics are essentially originated from human thoughts.
The thoughts that are of concern for us here are some of the following and the like:
(i) What is right?
(ii) What makes a particular thing to become right?
(iii) Why a particular thing alone should be right?
(iv) Why not something else could also be right?
(v) Should there be any criteria for inferring that a particular thing is right or wrong?
(vi) If so, for whom all it is right?
(vii) And for whom all it is not right?
(viii) When all it can be right?
(ix) Is it an eternal right or a transient right?
(x) If it is an eternal right, where did it originate from?
(xi) If it is a transient right, for how long can a particular thing remain right?
(xii) And what makes a right to become transient?
(xiii) Why a particular thing is right for some or why it cannot be right for others?
Self-Learning (xiv) Can a right thing become a wrong thing under a different set of environmental
18 Material conditions?
 (xv) Can a ‘not right’ thing also become right any time? Ethics—An Introduction
(xvi) Who all can decide on this?
As soon as a clear answer emerges for each one of the above questions, one can
formulate a good ethical base. Can these questions be answered in simple words? No.
This is because the human thought itself is a transient phenomenon and keeps undergoing NOTES
steady but dynamic changes with time. And all along, the human mind keeps working to
arrive at dynamic balances though transient ones. This is the reason why the concepts of
ethics keep changing with time and from one region to another.

Stage Two: Identifying the Seed for Concept of Righteousness

(i) Generated data: Data on performance, collected from experiments, data on product
features, utility features service-life features, etc.
(ii) Observed data: Data from observations of incidences and phenomenon.
(iii) Compilation of data: Extracted data given in reference books, data from published
technical (documented data) literature.
(iv) Shared data: Checked from reliable sources, informed by authentic persons/experts.
(vi) Information/facts: Compiled from books and literature and collected from experts.

Stage Three: Sprouting of the Seed to Concept of Righteousness

The data so generated, compiled or gathered is carefully understood as to what it means
and what does it stand for and an understanding of why or how does such a data evolve
or emerge.
This is the first seed of understanding, rather the nucleation of an understanding.
This stage represents just a conceptualisation and is distinctly in tacit form as it cannot be
expressed in specific words free from ambiguity. It would generally be a hazy thought, a
stage somewhat similar to the stage in-between a seed and a sprout. The way a seed sowed
in a farm carries an element of uncertainty as to whether it would germinate and sprout or
may not germinate, the first conception of the hazy thought also need not always crystallise
to unambiguous explicit ethical thought.
This understanding should be supplemented by an understanding of circumstances
that gave rise to such a data and development of a correlation between data and the
environment.

Stage Four: Nurturing the Concept of Righteousness

The understanding reached, as stated under stage two, leads to an interpretation about
a process, a phenomenon or an observation when similar understandings emerge from
similar data. This stage represents a non-definable combination of both tacit and explicit
forms of ethical thoughts. The element of tacit form overweighs explicit form.

Stage Five: Development of the Concept of Righteousness

The above three stages are repeated a number of times by different means, by different
sources and under different circumstances and at different places, if need be by different
persons, to verify how the data keeps varying and to check the magnitude of such variations.
Wherever variations are noticed, attempts are made to re-arrange, re-organize or
re-design the circumstances to match with each other and to verify whether similar data
get generated.
This exercise needs to be repeated as many times as may become necessary to identify
correctly the circumstances that give rise to identical data without reference to person,
place or time for data generation.
(i) This stage needs to be again followed by a re-understanding of reasons for
variations, if any.
(ii) Such re-understanding leads one to get an insight as to how circumstances
lead to variation in the nature and magnitude of data from a similar process or
phenomenon.
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(iii) This is repetitive modulation. Material 19
Ethics and Corporate This stage also represents a combination of both tacit and explicit forms of ethical
Governance thoughts. However, in this stage, the element of explicit form overweighs tacit form.

Stage Six: Evolution of the Concept of Righteousness

NOTES The fourth stage when passes through necessary repetitive cycles to eliminate associated
ambiguities based on a clear understanding, associated tacit form of thought component
transforms itself to clear explicit form. This, in turn, leads to derivation of a mechanism
or a scheme or an insight into the driving force (intellectual component) behind a process
or a phenomenon.
(i) The explicit intellectual component so derived forms the basis for a firm or clear
thought (righteousness) about the process or phenomenon under consideration.
(ii) The concept of ethical righteousness evolves.

Stage Seven: Refinement and Strengthening of the Concept of Righteousness

When new or different acceptable and established interpretations emerge, clear thought,
the resultant intellectual outcome, also changes accordingly. This is thought refinement
and further strengthening.
The righteousness base is now ready for formulating ethics, personal, professional,
social and business. As we have seen above in the thought evolution mechanism, as the
thoughts keep changing, concepts of ethics also keep changing. Figure 1.6 depicts intricate
relationship between knowledge driven thought based ethics cycle.

Check Your Progress

List the phases and their
stages involved in the
development of ethics.

FIGURE 1.6  Knowledge based thought-driven ethics cycle.

MORAL DEVELOPMENT THEORIES

Morale, Ethics and Value Systems

The three descriptions morale, ethics and value systems are liberally used by people in
different contexts in our society. They are also used independently and in isolation of
each other as well as interchangeably with each other. As such, many times, it becomes
difficult to draw a demarcation border line between them. This is primarily because both
the description value systems and ethics are actually derivatives of the word morale. These
words can only be qualitatively described but cannot be unambiguously defined with
Self-Learning
certainty due to their overlapping nature and wide spectral coverage.
20 Material
 The entire intellectual world firmly opines that the concept of morality is centred Ethics—An Introduction
only on the righteousness of a thought and its apparent/visible response. As a converse
of this intellectual view, we can infer that all thoughts and responses of people need not
be right and therefore they need not be moralistic. The intricately intertwined relationship
of thought with knowledge, leads us to identify three important phases of transformative NOTES
evolution of the moralistic thought process, namely, the nucleation or seeding, formation,
development and growth and ultimately crystallisation.
Moralistic thought development stands for the following two specific aspects, namely:
 Attainment of the highest rational thinking or reasoning power of the human mind
that would mould and align the thought with higher end of the righteousness
spectrum.
 Development of globally holistic views about the concept of righteousness.
– Human thoughts distinguish between righteousness and wrongness.
– Concept of morale gets refined (Figure 1.7).
Such a concept of evolution of moral concepts developed by these scholars gives rise
to visualisation of two of the important facets of ethics, namely:
 Contemporary righteousness
 Contextual righteousness
Since ethics is related to moral oriented thoughts of the human mind, many moral
development theories have been developed. Notable among them are those of Lawrence
Kohlberg and Carol Gilligan.

Check Your Progress

According to moral
development theories,
morality is centred
around the righteousness
of a thought. How do
you interpret the word
righteousness?

FIGURE 1.7  Evolution of moral development theory.

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Material 21
Ethics and Corporate
Governance Lawrence Kohlberg’s Theory

According to Lawrence Kohlberg, development of human morale follows a six-stage

process, starting from childhood to adulthood. These six stages are usually grouped into
NOTES three levels similar to knowledge theory comprising two development stages each.

Level One: Preconventional Morality — Development of first concepts of right or

wrong (age group up to 9 years)
Stage 1. Obedience and Punishment Orientation
This stage is the actual starting point for development of morale around the concept of
“obedience and punishment”. These children develop a conviction that elders in society
who generally tell them what to do and what not to do and prescribe a set of fixed norms
and rules and/or discipline to be followed by them carry the necessary authority to enforce
those practices failing which they also carry the authority to punish. This conviction
implants in children a sort of a psycho-fear complex which in turn implants in them an
attitude of an unconditional obedience and avoiding being punished.
They also develop a conviction that whatever is prescribed for them should be ‘right’
and not obeying those orders amounts to committing ‘wrong’, which is punishable.
Stage 2. Individualism and Exchange
In this stage, children realise that different people have different views about what is right
and what is not. But still they like to be careful about being punished. Hence, they continue
to just obey the set of rules and norms handed over to them.

Level Two: Conventional Morality

This level focuses on development of conscious efforts to build an overall comfortable
acceptability of actions coupled with development of the sense of rightful duties and
responsibilities together with development of the sense of guilt for contradicting the above.
This level ensures that a good nourishment of attitudinal approach towards two key factors
that contribute to strengthening the sense of morale (age group between 9 and 20 years).
Stage 3. Good Interpersonal Relationships
In this stage, youngsters realise that morality, namely the aspect of being right or wrong
does not get just confined to mere obeying of orders laid down but extends beyond to the
sphere of learning to live up to the expectations of others in the family and in the society.
This is the origin of the development of the concept of ‘Interpersonal Relationship’ as an
element of morale. These youngsters also learn to think and practice that living to others’
expectations demands developing certain personal features generally known as ‘Good
Behaviour’.
Stage 4. Maintaining the Social Order
In this stage, the youngsters develop a good degree of reasoning power and learn to
develop necessary skills to practice good interpersonal relationship with family members
and close friends. They also try to know how others feel about things and develop an
attitude of helping people in need. In this stage, they also develop a conscious concern
for the society and social environment.
As a result, they start respecting social norms, rules and regulations and build a
concerned sense of discharging duties with a responsible approach.

Level Three: Postconventional Morality

This is the stage where people develop a high degree of sense and conscious involvement
in general well-being and welfare of the society through building clarity towards rights
and wrongs and moral standards for people (age group 20+ years),.
Stage 5. Social Contract and Individual Rights.
In this stage, people explore different areas to identify aspects like values and rights that
Self-Learning should be guarded by and for the society. They further identify and figure out the bad
22 Material things they see in the society and develop holistic views of what is good for the society.
 According to Kohlberg, people in this stage view the society as an entity with a good Ethics—An Introduction
social contract arrangement where people work with a high degree of sense of mutual
responsibility for the good of all and in return they expect the society to guard certain
basic values and rights of people.
Stage 6: Universal Principles NOTES
In this stage, people pursue further the sense of social consciousness they had built to
further the cause of ensuring better standards for the society. As a result, they try to
prescribe norms and/or measures for protecting the genuine rights of people without
conflicts and frictions by working towards achieving social justice for all through docile
means.

CAROL GILLIGAN’S THEORY

Carol Gilligan, a dedicated student and ardent admirer of Lawrence Kohlberg, recognised a
bias in the moral development mechanism proposed by her mentor. The bias she identified
was the fact that Kohlberg had developed his reasoning and inferences based only on
interactions with a good cross section of male members of the society. As such, she felt that
there could be some conceptual gender-biases in Kohlberg’s theory of moral development.
This thought pushed Carol Gilligan to reinvestigate the issue.
Gilligan identified that development of male psychology and moral thoughts would
generally be centred on rules, regulations and abstract principles and lacks the finer
elements of values of life that can make people happier. Gilligan identified that women
value interpersonal relationships in society from different perspectives and, naturally,
would view moral values for people differently.
Gilligan’s moral development theory emphasises the following:
(i) For women, moral concepts do not get confined to mere and/or blind abidance to
abstract rights and rules.
(ii) Moral thoughts should not be centred on impersonal justice but should be based
on a better affinity towards ways of living. Incidentally, in this sense, justice cannot
be blind or blind justice does not have a highly significant place in human life.
(iii) Moral thoughts should be more contextualised to the realities of life with due
emphasis on ongoing interpersonal relationships rather than on working towards
identifying abstract solutions to hypothetical situations even if they are dilemmatic
in nature. Thus, Carol Gilligan further supports and upholds the transient nature
of moral right and moral wrong as propounded in our traditional literature
and the traditional knowledge theory of ethics. Concepts like contextual and
contemporary rights of the knowledge theory stand fully justified and globally
well acknowledged.
(iv) Women care more for inherent concepts of ethics of care and responsibility.
(v) For women, there is a second dimension for development of morality concepts.
(vi) For women, morality concepts concurrently branches off to two independent areas,
one of them is logics, justice and social development and the other one is the
development of a healthy and congenial interpersonal relationship.
(vii) Characteristic features of moral development in women in Kohlberg’s
preconventional and postconventional stages are:
Preconventional: Survival of the individual.
Transition from a selfish attitude to a responsible behaviour
towards others.
Conventional: Self sacrifice to uphold virtues of human goodness.
Transition from goodness to truth.
Postconventional: The principle of non-violence.
Not hurting others.
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Not hurting self. Material 23
Ethics and Corporate
Governance CONTEMPORARY ETHICAL THEORIES
It is generally believed that all contemporary popular ethical theories have been derived or
have their origin, rather affiliation or alignment within one of the following basic concepts,
NOTES
namely,
(i) Consequence or impact of the output of an action.
(ii) Utility features of the output of an action.
(iii) Virtues of life.
(iv) Duties, rights and responsibilities of people.
A careful analysis of these concepts reveals that they embrace the outcome of a decision-
driven action. However, there is a significant difference in their emphasis.

Consequentialism Theory
The theory of consequentialism (this term was coined by G.E.M. Anscombe in 1958) embraces
all the aspects of consequences of an action to stress that an action path should be designed
in such a way that there would be no adverse consequence on anybody and should be free
from harming someone or causing problem to others. It then becomes an ethical product.
According to this theory, a decision and the consequent action could be described as ethical
only if the outcome remains totally good, in all respects. According to this theory, it is
only the ends that could justify the means to and qualify for being designated as ethical
means. An extension of this theory examines the same concept from a slightly different
view point. As per this modulated approach, one has to first decide on the ends before
working on means. If a specific good end-application is pre-specified and pre-defined and
if the same could be achieved by a means, then it could be described as fulfilling the
requirement for consequentialism provided the means by itself would not cause harm to
anybody in the process.
This theory, however, could not support many of the scientific and technological
product innovations. Intellectuals across the world got into an interest-conflict situation. As
such, it could not stay for long. This limitation gave rise to the onset of utilitarianism theory.

Utilitarianism Theory
The theory of utilitarianism does not outright rule out the likely possibility of some adverse
impacts of an action outcome. But it takes into consideration an average of both adverse
impacts of an action outcome and the beneficial impacts of the same action and tries to
weigh them together on the same evaluation scale. Whichever overweighs the other one,
either the good or the bad, would decide on the ethicality or morality or the righteousness
of the decision and the accompanying action. For example, if an action is designed to do
good for a bigger cross section of the society, then its adverse impacts on a smaller cross
section of the society cannot be taken seriously. Incidentally, this theory would not support
any activity that does not bring an apparently quantifiable benefit. Thus, as per this theory,
an activity that can bring only psychological comfort or mental feeling of happiness or
contentment, for example, watching an entertainment programme, becomes immoral.
This theory incorporates all the three forms of ethics, namely descriptive ethics (different
societies have different moral standards), normative ethics (an action which is considered
as a wrong in a particular society could be considered a right in another society) and
analytical ethics (morality is relative).
This utilitarianism theory of ethics is the origin for all innovative technological
developments aimed at enhancing material comforts of society as a whole. Thus, the
society learned to live with the phenomenon of smaller vices together with larger virtues.
The intellectual society steadily developed the view that even if some products can harm
some people, as long as the overall benefits or net benefits are considered more valuable
and more useful by a large section of the population, it should then be treated as an ethical
product and the means followed would automatically become ethical means. Creating
Self-Learning
greatest good for greatest number is the heart of this theory. The entire world knows that all
24 Material
innovatively developed technological products are definitely prone to some form or the Ethics—An Introduction
other of adverse impacts. For example, till a couple of years’ back when certain health forms
were specifically traced to use of mobiles, people did not even know about its adverse
side effects. What is the net result? Mobiles are not banned. But a mere advice to parents
to discourage their kids from liberally using hand-held mobiles emerged from this study. NOTES
This is where the consequentialism theory could not find a firm seat in the minds of
intellectuals for long and had to give way to the theory of Utilitarianism. One can site
innumerable numbers of examples from our day-to-day life in this context. Banning a useful
product is not the answer to unethical issues but following a well established noble path to achieve
good ends that one should be concerned about while discussing business ethics and ethical theories.
As such, it is only utility profile of a product or service that decides the ethicality of
a process or a product.

Virtue Theory
Historically, this theory is ascribed to have its roots in the Greek society and is based on
the principle that the actions of a person with good character and good habits are ethical and
the actions of a person with bad character and bad habits are immoral. This is again totally
descriptive and qualitative in nature and application. This theory demands that there
should be a constant dynamic and analytical driving force to induce and inculcate the
habits of good character in people and to ensure that they do not develop bad characters.
This theory also demands its counterpart, namely the society should also specifically
ensure that people do not inculcate bad habits in them. In this sense, this theory upholds
the foundation principle (the society should lay a strong foundation based on knowledge-
driven concept of righteousness in people right at their tender age) propagated by the
traditional Indian scholars. The Greek philosopher Plato had emphasised on a set of
cardinal virtues (mandatory suggestions), namely wisdom, courage, temperance and justice.
This was subsequently expanded to incorporate five other features of great utility to the
society, namely fortitude, generosity, self-respect, good temper, and sincerity. The Western
world added three more features of virtues to the list of virtues to be imbibed in men,
namely faith, hope and charity (known as ortheological virtues). Subsequently, another Greek
philosopher

DEONTOLOGY THEORY, DUTY THEORY, RIGHTS THEORY,

IMMANUEL KANT’S THEORY, NON-CONSEQUENTIALISM THEORY
These theories are based on the basic principle that as normal social beings, all men have
certain obligations to shoulder and diligently discharge them without specific reference to
the consequence of the outcome while discharging their obligatory responsibilities.
Published literatures refer to four distinct approaches under deontology theory.
The first of them appears to be German philosopher Samuel Pufendorf, who emphasised
that all men have to shoulder three basic duties. They are:
(i) One’s duty towards God.
(ii) One’s duty towards oneself.
(iii) One’s duty towards the rest in the society.
The next development in this direction appears to be the counterpart of the duty
theory, namely one’s right to demand from the rest in the society that they appropriately
discharge their duties towards others. The pioneer of this proposal appears to be the British
philosopher John Locke, who emphasised that God has bestowed on mankind certain
natural rights like personal safety, freedom to live comfortably, freedom to ensure one’s
health and belongings. Subsequently, this approach received a big boost through the United
States Declaration of Independence authored by Thomas Jefferson. This declaration upholds
three key aspects of one’s rights, namely right to live, right to liberty and the right to
pursue one’s comforts and happiness not jeopardising those of others.
The third prominent approach is ascribed to the German Philosopher Immanuel Kant. Self-Learning
The key aspect which Immanuel Kant emphasised was that in addition to discharging Material 25
Ethics and Corporate their basic duties and responsibilities, people carry equally major counter responsibilities
Governance particularly before staking any claim to their rights. This approach was developed primarily
to ensure that a good dynamic social balance is maintained, as otherwise it would only
result in everybody staking their claim to many things in society which the society cannot
NOTES afford to just keep distributing. He argued that each and every claim to a specific element
of right has to be preceded by certain pre-qualifying mandatory duties to be discharged
by the claimant. He described those pre-qualifying duties as categorical imperatives.
When the sense of duty alone becomes the prime driving force or the key criterion,
conflicting situations are bound to come up between sense of duty and human sentiments
and emotions. If the sense of duty overweighs, human sentiments and emotions get
suppressed. If sentiments overweigh, duty bound responsibility gets neglected. Many times,
intellectuals come across such conflicting situations. Let us consider a situation where a
technologist or a scientist is hired exclusively to carry out a specific development work
whose ultimate objective is to generate a product that is primarily designed and used only
for anti-humanitarian purpose or for anti-social purpose, for example developing a deadly
weapon having the potential to kill hundreds of people and used in warfare and/or by
terrorists or for developing the formulations and the associated technology for chemical
or biological genocide. What should the scientists and technologists hired for the purpose
do in such situations especially if their inner conscience does not permit them to become
instrumental in destructive actions? Where can such conflicts find a solution? Virtues theory
of ethics comes to rescue such situations since it derives its strength on the character of a
moral that drives the action. Hence, an adverse impact on someone could only be incidental
to the phenomenon but intentions should continue to remain genuinely good.

SOCIAL CONTRACT THEORY

This theory, proposed by the British philosopher Thomas Hobbes, is actually an extension
of the concepts highlighted under the theory of consequentialism though there could
be some difference of opinion among intellectuals in this interpretation. The element of
consequentialism stems from the concept that the impact and effect of the outcome of an
action should decide about the ethicality of the said action. Such a pre-qualifying description
could pose certain restrictions on particularly those actions that are not specifically pre-
contemplated and/or planned with pre-defined objectives but are spontaneously instinct
in nature, triggered by uncontrollable personal desire at its peak at the instinct moment.
Such acts are known as psychological hedonism where personal pleasure would be the only
criterion even if one of the involved parties does not derive any pleasure whatsoever and
may even suffer mental agony. A good number of them may remain forever outside the
purview of the general public or the society, for example, an action within the four walls of
a family about which many may not be concerned even within the family let alone outsiders
or interpersonal interactions or interpersonal relationship between two people in isolation
especially when such interactions do not cause any kind of physical harm or injury to the
other person even in the absence of willingness or concurrence of one of the persons in the
process and those actions that cannot leave any type of trail or track to evidence or prove the
incident from the perspectives of ascertaining mutual concurrence. Irrespective of whether
or not actions and their outcome or consequence come to public knowledge, the actions do
harm the other person’s interests. Where the consequence of an action becomes insignificant,
consequentialism theory would have constraints in deciding about the ethicality or morality
of those actions.
This is where Thomas Hobbes introduces the theory of social contract and proposes
that human nature and actions should be basically bound by certain personal and social
moral codes of discipline embracing dos and don’ts to ensure social harmony, congeniality
and comfort for all in a society. Such moral codes could be considered as a class of contract
of agreement and a contract of mutual commitment between people and the society and
Self-Learning between different people in a society. Practice and compliance to such moral codes of
26 Material personal, interpersonal and social conduct can only ensure a comfortable living in a society.
 Ethics—An Introduction
WHERE DOES ETHICAL CODE START?
Let us examine a few typical policy statements:
(i) To provide the best medical education at the most competitive costs for students NOTES
from middle class families of grade two cities and towns in the state.
(ii) To provide the best technical education at the most competitive costs to economically
weaker sections of the society.
(iii) To provide the best technical education to economically weaker sections of the
rural population at affordable costs.
(iv) To carry out the business of manufacturing and marketing of processed foods and
to establish global leadership in the field through best manufacturing practices and
fair business practices.
(v) To provide the best health care services at the most competitive and affordable
price to rural population.
What could happen if different entrepreneurs adopt the above as their policy statements?
How would they respond? In all probability, they would establish different infrastructure,
hire different numbers of executives at different levels. It is also likely that the educational
and experience background of those executives need not be similar. Physical location also
could be different. But if someone would carefully evaluate their infrastructure, they all
would equip their units with certain minimum but common facilities more frequently
used in the profession. And when they start functioning, they do serve their basic purpose
and could strive hard to uphold their policy objectives. More than two or three groups
of entrepreneurs could also adopt one common policy statement. None of the groups
would claim that they are not upholding their policy statements. Can such things happen
especially when different infrastructures exist? Yes, such things can happen particularly
because what matters to them is how sincerely they handle their activities and pursue their
objectives. The only variance could be in their definition, rather description, of what the
policy statement or commitment would mean to them.
Such variances could always come to existence because of differences in investment
components, approach concepts, etc. Variance is an order of nature. Therefore, variances
in modus operandi between different business establishments should not be a subject for
discussion of associated ethics. Check Your Progress
As a corollary, we can, therefore, say, that: How would you
Any business activity that follows a motivation induced path (action design, course and/or differentiate ethics from
sequence) deviated from pure knowledge-driven path to leverage a preconceived or a pre-designed unethical practices.
advantage of an individual or a group of individuals is unethical.
Similarly,
Any act or part of an act that would meet the description and/or definition of the word
corruption as discussed under corruption profile is an unethical act and a business that follows or
adopts such an unethical act qualifies to be described as engaged in unethical practices.
Therefore, from practical considerations, an ethical activity would meet all the three
features given below:
(i) Non-deviated practice of true requirements of knowledge that governs all activities
that constitute the business.
— Virginity of the knowledge is a key criterion.
(ii) Knowledge-driven, nobility-guided righteousness of all actions carried by the
business enterprise.
— Nobility of the action is a necessary criterion.
(iii) Carrying out all activities of the business with the highest degree of fairness to all
beneficiaries to the process.
— Totality of fairness of the activity is a basic criterion.

THE BORDERLINE
Self-Learning
We know that the two descriptions, namely nobility or nobility-guided righteousness and Material 27
Ethics and Corporate highest degree of fairness carry truly global scope and coverage and cannot be confined to
Governance restricted activities and operations. But, in real life, unless there is a clear definition of a
borderline, it would just not be practical to work on an abstract or a subjective mechanism.
What should be the borderline? As seen earlier, a business process embraces two
NOTES
spheres, namely the basic conception process and the execution process. Therefore, both
these spheres should have specific borderlines.
(i) The basic concept or the purpose of business:
(a) Should lead to designing an activity path or an execution mechanism that
should guard genuine interests and/or requirements of the society and
mankind.
(b) Wherever the basic concept is primarily to address the needs of a local society,
it should simultaneously uphold and guard the interests of the global society.
(c) Should not lead to designing an activity path that would jeopardise the general
belief of the bulk of the cross section of the society or moral ethos for the
society or for the individual.
(d) Should abide by norms and guidelines set by the government for the activity
purpose.
(ii) Execution methodology or execution (implementation) scheme:
(a) Should be in line with code of practice prescribed by the society.
 The law of the land.
 Guidelines set by the official administrative machinery or the government.
 Guidelines or norms set by any other administrative establishment or
wing formally constituted for the purpose and approved by the official
administrative machinery.
(iii) Fairness in Totality
(a) Fairness in totality: Fair purpose and fair practice and also fair end application.
(b) Output of execution.
 Could be an independent product or a component or a sub-component or
part of a component or an accessory thereof either direct or indirect.
 The output either directly or indirectly or in combination with other
products or components or accessories thereof along with associated service
components as may become applicable, should not go against:
— Any of the norms set by the government.
— Any of the norms set by other formally constituted administrative
bodies.
— The basic interests of the nation.
— The interests of the society—Local and Global.
Figure 1.8 give a schematic representation of the broad borderline for business ethics.

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28 Material
FIGURE 1.8  The Lakshmana rekha (borderline).
 Ethics—An Introduction
EXTENDED BORDER
All business activities are integral parts of a series of a supply chain mechanism. The chain
always terminates with an end-user. As such, a business activity is also bound by the
NOTES
commitments and/or addressing the requirements of the supplier as well as the customer
(Figure 1.9). This requirement generally takes the form of commitment.

FIGURE 1.9  Extended borderline.

Commitment has two components:

(i) Formal commitment.
(a) This comprises mutually agreed specifications, terms and conditions for
supply, transportation and delivery, transit insurance, installation where
applicable, performance assurances like guarantee or warrantee, servicing
and maintenance, knowledge transfer (training and educating) payment terms,
penalty clauses, etc.
(ii) Informal commitment.
(a) This embraces all applicable legal norms and statutory guidelines including
those specific norms as applicable to the product and as prevalent in the
country under consideration/reference.
(b) It is not necessary to enter into a formal commitment or agreement in this
regard.
 All legal norms of the country, both country of product generation and
the country of product destination and usage, as applicable automatically
become binding on the business enterprise.

CASE STUDY 3
XAVIER FINANCIAL CORPORATION LTD.
Xavier Financial Corporation Ltd. is an MNC with its headquarters in Kolkata and has its active
branches spread all over the country. Ms. Rupali joined the corporation as a product manager
immediately after her MBA from a premier management institute in the country. In a couple
of years, Ms. Rupali developed a few new products that became very popular among certain
cross sections of customers and many entrants to the corporation including some seniors started
envying her achievements. In the next couple of years, she married a business executive who
had taken up a job in another MNC near the national capital. Left with no alternative, Rupali
requested her boss to help her by giving a place for her in the national capital. The boss saw Self-Learning
the prospects of Ms. Rupali propagating her new products to corporate customers in and Material 29
Ethics and Corporate around New Delhi. Ms. Rupali was transferred to the main office at New Delhi where she was
Governance required to work in a product development group headed by one Mr. Rohan, who had joined
the organisation about two years back but had made a name for himself as an efficient business
executive. He had successfully handled many projects in the short time of his association with
NOTES the corporate. Mr. Rohan, a very ambitious executive, would always look for opportunities
including opportunities for claiming credit for good works done by other members in his team
and grab them. Mr. Rohan was quick to identify the talent in Ms. Rupali and started moving close
to her in all official matters so that he would gain her goodwill and support to his moves. The
latent objective was, of course, to leverage Rupali’s talents to his own growth prospects in the
Corporate. Whenever meetings and presentations were organised with prospective customers,
Rohan used to go with Rupali though the meetings used to be fixed and organised by Rupali.
Being her immediate supervisor, she could not ask him the reason for why he is also going
with her when presentations would be made only by her and she would only be explaining all
the technical features of the product being advocated. All along she was under the impression
that her supervisor was interested in knowing more about the new products which she had
developed. One day there was a closed envelope on Rupali’s table. It was a handwritten note
which read: Congrats! I had a call from M/s. Bandrekar. They appreciated your presentation.”
There was a similar note some other day. Rohan made it a point to impress on Rupali that
he keeps getting telephone calls from prospective customers expressing their appreciation
to Rupali’s product and her presentation. One day when he met her on the lunch table, he
informed her that he has spoken to product development and marketing chief that customers
are highly appreciative of Rupali’s products and presentations. Then, one day branch manager
told Rupali that Rohan has informed him that he gets many phone calls from prospective
customers expressing their appreciation for her presentation.
Meanwhile, Rupali developed two more new products. This development opened up one
more avenue for Rohan to move closer to Rupali. Rupali was trying her best to promote her
new products also along with her earlier ones. Once it so happened that a couple of her
prospective corporate customers could not give her time for presentation during the early hours
of the day. After a lot of persuasion, the customer agreed to give time for her presentation
after 6 p.m. Left with no alternative, Rupali decided to accept his time to make presentation at
customer’s convenience as he was otherwise expected to go out of town for over two weeks.
Rohan promptly accompanied Rupali. The presentation was followed with an elaborate meeting
with the customer and lasted nearly three hours. While the discussions with the customer
were going on, Rohan had managed to fix another meeting at 9 a.m. with the next level in the
same place. Getting back to their respective residences at that hour would easily take them
another two hours. Rohan forced Rupali to stay back and complete the presentation the next
morning. He also told her that he would arrange for a comfortable stay in the night. Rupali
and Rohan occupied their respective rooms in the hotel. As usual, Rupali had ensured that
she would first check emergency arrangements and the position of emergency call facilities
located in the room. When she was getting ready for retiring for the day, there was a knock at
the door. Very reluctantly, she opened the door. It was Rohan with some papers in his hands.
“Mr. Rohan, leave those papers with me. I am very much tired today. I will check them in the
morning before going for presentation.” “Rupali, I like to explain a couple of key issues to be
highlighted in tomorrow’s presentation.” Without waiting for Rupali’s response, he just walked in
and sat on a chair. Rupali’s sixth sense saw in his face something beyond mere discussion and
cautioned her to be extra careful. Naturally, Rupali got the first feel of some impending threat
and became extra alert. While pretending to lock the door, she ensured that she unlocked the
door-lock latch and ensured that she sat on the chair that was next to emergency call button.
Rohan started with appreciation for Rupali’s presentation. He said that the customer was
very much impressed and that was the reason why the customer wanted a second presentation
for the next level of executives. By this time he had physically moved himself next to Rupali.
Rupali’s sixth sense was all along very active. Sensing that Rohan was not in a mood to get out,
she repeated again, “Rohan, I am tired. Let us talk it over in the morning”. Rohan suddenly put
Self-Learning his hands around her trunk. She could read something more in Rohan’s eyes. Now Rupali was
30 Material sure of his next move. Before she could even respond, Rohan told in a feeble voice “Rupali,
You are very beautiful and charming. Come. Let’s have some fun... I want to have you now.” He Ethics—An Introduction
started firming up his grip around her trunk. Rupali leaned to the other side for a fraction of a
second and tried to coax Rohan to control himself and continued to push him away. The door
suddenly banged inside. Two hefty night service guards dashed in. In a fraction of a second, they
could realise why there was an emergency call. They rushed and grabbed Rohan and liberally NOTES
gave him blows. Next they physically dragged him to reception area and threw him on the floor
and kicked with their shoes. Furious Rupali also walked down to reception counter and asked
the receptionist in a loud voice to immediately call the police. In the meantime, some elderly
people sitting at the lounge walked close to Rupali and tried to console her and comforted
her with the words that fortunately nothing untoward had actually happened and the security
guards have taught that idiot a good lesson. Sensing their sentiments and sympathetic attitude,
Rohan immediately got up and fell at Rupali’s feet and requested her to excuse him. He pleaded
with the receptionist and requested him to let him go. He pulled out his wallet and cleared
hotel bill. The two elders advised Rupali to let Rohan get lost in the night. In the mean time,
the two guards brought Rohan’s baggage and threw it outside.
Next morning, Rupali called for one of her known cabs and straight reached home. No
presentation was made. Rupali packed up her belongings and took an evening flight to Kolkata.
It took her 3 to 4 days to come out of the shock. On the fifth day, she went to marketing chief’s
cabin and narrated the instance and also explained the way Rohan was trying to follow her
activities. She did not know that Rohan was much smarter. Marketing chief had already received
a very strongly worded complaint against Rupali alleging that she misbehaved at customers’
place and did not make the product presentation as promised to customers and the customers
were very unhappy and further that she has abstained from office without any intimation.
When the contents of Rohan’s letter were read and details were revealed, she concluded that
she has no place in the organisation. She got back home and sent her resignation letter. It was
accepted forthwith.
Questions for Discussion
1. Where do you classify Rohan’s behaviour as personal ethics, professional ethics, business
ethics or just an incidence of natural instinct of no serious concern?
(a) Does this act call for any punitive action—as an individual or as a business executive?
2. Was the marketing chief right in his actions?
(a) Why did he not believe Rupali when she narrated sexual harassment she suffered?
(b) What made him to go by Rohan’s report?
(c) Did he ignore the incidence as something that has not taken place either during the
office hours or within the office premises and he cannot initiate an inquiry into the
matter and take necessary action?
(d) Is it an ethical dilemma for the marketing chief—whether to go by Rohan’s reports
or to go by Rupali’s verbal statements?
(e) Did he conclude that the incidence, even if it had taken place, did not fall under
either business discipline or under business ethics and hence there was no need for
initiating an action?
3. Can you prepare a strategy usable by different corporates to identify crooks like Rohan?

SUMMARY
The concept of ethics is not new to the society. It is as old as the origin of traditional knowledge
society itself is. Our traditional scholars had long back visualised and projected the onset of
unethical practices in the society and had elaborately discussed the issue in the literature they
had created for the purpose. Bhagavad-Gita, the treasure house of knowledge, deciphers all the
elements of personal, professional and social ethics.
The two words ‘ethics’ and ‘moral’ are used interchangeably and are generally understood as
conveying the same meaning. Morale could be visualised as representing the inner strata of the
human conscience (micro-conscience) and ethics as the outer strata (macro-conscience). Self-Learning
Material 31
Ethics and Corporate
Governance Social accountability, civic responsibility and fair practices in all aspects of activity execution
and also the nobility of the very purpose of an activity are the key elements on which the code
of ethics for all professions and also for all business processes is developed.
Many intellectuals and social ethicists have developed different theories to explain the ethical
NOTES or unethical behaviour of mankind. One of the earliest such theories, though not formally
captioned and recognised as such, which is the knowledge theory, which is based on the concept
that the human mind develops a sense of fact based on knowledge-driven, thought-induced right
and wrong.
As the knowledge about observations and facts improves and/or undergoes modification, human
thoughts on the concept of righteousness also undergo a corresponding change, modification or
refinement. Other theories are moral development theories of Kohlberg and Gilligan. Some of the
contemporary ethical theories discussed are consequentialism, utilitarianism, virtue, deontology,
rights, duty, non-consequentialism, social contract theory, etc. The Unit concludes with a brief
discussion on ethical border lines.

MULTIPLE CHOICE QUESTIONS

1. What does the word Ethics stand for?
(a) Disciplined way of living. (b) Spectrum profile of thought processes.
(c) Conscience driven righteousness. (d) Social behaviour of individuals.
(e) Behaviour of individuals in isolation.
2. What is Professional Ethics?
(a) Ensuring customer happiness. (b) Code of conduct for practicing a profession.
(c) Fulfilment of contractual obligation. (d) Profitable practice of a profession.
(e) Enhancing customer happiness.
3. What is Knowledge Corruption?
(a) Knowledge of corruption
(b) Knowledge behind corrupt practices.
(c) Knowledge that induces corruption.
(d) Knowledge that originates during corruption.
(e) Misinterpretation or misrepresentation of knowledge.
4. Which of the following popular ancient Indian literature presents an excellent epitome of ethics
propagated by great traditional scholars namely Rishis?
(a) Mahabharata (b) Ramayana
(c) Bhagavad Gita (d) Bhagavatha
(e) Puranas
5. Which of the following bias is ascribed to Lawrence Kohlberg’s Theory?
(a) Moral bias (b) Gender bias
(c) Professional bias (d) Regional bias
(e) Personal bias

Answers to Multiple Choice Questions

1. (c), 2. (b), 3. (e), 4. (c), 5. (b)

ANALYTICAL QUESTIONS
1. “Ethics is an act of dynamic but justifiable balancing of conflicting interests.” Discuss your views
on this statement with a live example from your housing society.
2. Discuss the concept of contemporary ethics.
3. Discuss the concept of family structures and value systems.
4. Discuss the difference between moral development theories of Kohlberg and Carol Gilligan.
Self-Learning
32 Material 5. Take a live situation and discuss ethical border lines.