A PROJECT REPORT ON CHARACTER ETHICS IN CONTEXT OF HDFC BANK SUBMITTED BY: KAMAL KANT SAINI ENROLMENT NO : 04611301710 BBA

II YR (3rd SEMESTER) In partial fulfillment of the requirements For the reward of the degree OF BACHELOR OF BUSSINESS ADMINISTRATION Under the supervision of MISS AMANPREET KAUR

BERI INSTITUTE OF TECHNOLOGY, TRAINING AND RESEARCH TIKRI KALAN, DELHI

CERTIFICATE
Certificate that this project report titled character ethics and business values is the bonfide work of Mr. Kamal Kant Saini who carried out the research under my supervision. Certified further that to the best of my knowledge the work report here in does not form part of any other project report or dissertation on the basis of which degree or award was confirmed on an earlier occasion on this or any other candidate.

MISS AMANPREET KAUR

PREFACE
Initial in the one module of the project, which is allotted to me, CHARACTER ETHICS is covered in this project report. The report contains very nice and well arranged topics related to the subject CHARACTER ETHICS. The main contents of this project describes that That what are ethics, Code of Ethics, Business Ethics and many other topics which is countable in the CHARACTER ETHICS . The project report also contains a description of Business Ethics which is very important for an organization to work fairly in an environment. Overall this reports my work like a guide for the subject CHARACTER ETHICS.

ACKNOWLEDGEMENT
I would like to take this opportunity to sincerely thank MISS AMANPREET KAUR For her valuable support, guidance and suggestion. Under his able to accomplish my project with confidence. I would also like to thanks my friends and my siblings who directly or indirectly helped me in my project. I would also like to sincerely thank our Beri Institute of Technology Training And Research. Where, I spared my time to have access to wide information on internet.

DATE: PLACE:

OBJECTIVE OF STUDY
Even granting that business ethics is important, many seem to believe that there is no Point in studying the subject. Ethics is something you feel, not something you think. Finance, Marketing, operations, and even business law lend themselves to intellectual treatment, but ethics does not. The idea that ethics has no intellectual content is odd indeed, considering that some of the most famous intellectuals in world history have given it a central place in their thought (Confucius, Plato, Aristotle, Maimonides, Thomas Aquinas, etc.). Ethics is in fact a highly developed field that demands close reasoning. The Western tradition in particular has given rise to sophisticated deontological, teleological and consequentiality theories of right and wrong. No one theory explains everything satisfactorily, but the same is true, after all, in the natural sciences. Even when they grant that ethics has intellectual content, people often say that studying the field will not change behavior. Character is formed in early childhood, not during a professors lecture. If the suggestion here is that college-level study does not change behavior, we should shut down the entire business school, not only the ethics course. Presumably the claim, then, is that studying finance and marketing can influence ones conduct, but studying ethics cannot. This is again a curious view, since ethics is the one field that deals explicitly with conduct. Where is the evidence for this view? The early origins of character do not prevent finance and marketing courses from influencing behavior. Why cannot ethics courses also have an effect? Ethics courses have a number of features that seem likely to influence behavior. They provide a language and conceptual framework with which one can talk and think about ethical issues. Their emphasis on case studies helps to make one aware of the potential consequences of ones actions. They present ethical that theories help define what a valid ethical argument looks like. They teach one to make distinctions and avoid fallacies that are so common when people make decisions. They give one an opportunity to think through, at ones leisure, complex ethical issues that are likely to arise later, when there is no time to think. They introduce one to such specialized areas as product liability, employment, intellectual property, environmental protection, and cross-cultural management. They give one practice at articulating an ethical position, which can help resist pressure to compromise. None of this convinces one to be good, but it is useful to those who want to be good. It may also improve business conduct in general. How many of the recent business scandals would have occurred if subordinates had possessed the skills, vocabulary and conceptual equipment to raise an ethical issue with their coworkers?

Ethics not only should be studied alongside management, but the two fields are closely related. Business management is all about making the right decisions. Ethics is all about making the right decisions. So what is the difference between the two? Management is concerned with how decisions affect the company, while ethics is concerned about how decisions affect Everything. Management operates in the specialized context of the firm, while ethics operates in the general context of the world. Management is therefore part of ethics. A business manager cannot make the right decisions without understanding management in particular as well as ethics in general. Business ethics is management carried out in the real world. This is why business managers should study ethics.

CONTENTS
CERTIFICATE..(ii) PREFACE.....(iii) ANCKNOWLEDGEMENT....(iv) OBJECTIVE OF STUDY......(v)

CHAPTER -1 INTRODUCTION TO H.D.F.C.

Company Profile S.W.A.T. Analysis Competitor Analysis Code of Ethics (followed by H.D.F.C.)

CHAPTER - 2
Review of Literature
DEFINITONS ON ETHICS FEATURES OF ETHICS BUSINESS ETHICS AND ITS TYPES

CHAPTER -3
CONCEPTUAL MODEL OF BUSINESS ETHICS

CHAPTER 4
LEVELS OF ETHICAL DECISIONS IN BUSINESS

CHAPTER - 5
NEED AND IMPORTANCE OF BUSINESS ETHICS

CHAPTER 6
ELEMENTS OF BUSINESS ETHICS

CHAPTER -7
Research methodology

CONCLUSION

BIBLIOGRAPHY

CAMPANEY PROFILE

BACKGROUND
The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995.

PROMOTER
HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment.

BUSINESS FOCUS
HDFC Bank's mission is to be a World Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on four core values: Operational Excellence, Customer Focus, Product Leadership and People.

CAPITAL STRUCTURE
As on 31st December, 2009 the authorized share capital of the Bank is Rs. 550 crore. The paidup capital as on said date is Rs. 455,23,65,640/- (45,52,36,564 equity shares of Rs. 10/- each). The HDFC Group holds 23.87 % of the Bank's equity and about 16.94 % of the equity is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). 27.46 % of the equity is held by Foreign Institutional Investors (FIIs) and the Bank has about 4,58,683 shareholders.

The shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The Bank's American Depository Shares (ADS) are listed on the New York Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange under ISIN No US40415F2002.

AMALGAMATION OF TIMES BANK & CENTURION BANK OF PUNJAB WITH HDFC BANK
On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was formally approved by Reserve Bank of India to complete the statutory and regulatory approval process. As per the scheme of amalgamation, shareholders of CBOP received 1 share of HDFC Bank for every 29 shares of CBOP.

The merged entity will have a strong deposit base of around Rs1, 22,000 crore and net advances of around Rs89, 000 crore. The balance sheet size of the combined entity would be over Rs1, 63,000 crore. The amalgamation added significant value to HDFC Bank in terms of increased branch network, geographic reach, and customer base, and a bigger pool of skilled manpower.

In a milestone transaction in the Indian banking industry, Times Bank Limited (another new private sector bank promoted by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., effective February 26, 2000. This was the first merger of two private banks in the New Generation Private Sector Banks. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank.

DISTRIBUTION NETWORK
HDFC Bank is headquartered in Mumbai. As on December 31, 2009, the Bank has a network of 1725 branches in 771 cities across India. All branches are linked on an online real-time basis. Customers in over 500 locations are also serviced through Telephone Banking. The Bank's expansion plans take into account the need to have a presence in all major industrial and commercial centers, where its corporate customers are located, as well as the need to build a strong retail customer base for both deposits and loan products. Being a clearing / settlement bank to various leading stock exchanges, the Bank has branches in centers where the NSE / BSE have a strong and active member base.

The Bank also has a network of 3898 ATMs across India. HDFC Bank's ATM network can be accessed by all domestic and international Visa / MasterCard, Visa Electron / Maestro, Plus / Cirrus and American Express Credit / Charge cardholders.

MANAGEMENT
Mr. Jagdish Capoor took over as the Bank's Chairman (non-executive) in July 2001. Prior to this, Mr. Capoor was a Deputy Governor of the Reserve Bank of India.

The Bank's Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years. Before joining HDFC Bank in 1994, he was heading Citibank's operations in Malaysia.

The Bank's Board of Directors is composed of eminent individuals with a wealth of experience in public policy, administration, industry and commercial banking. Senior executives representing HDFC are also on the Board.

Senior banking professionals with substantial experience in India and abroad head various businesses and functions and report to the Managing Director. Given the professional expertise of the management team and the overall focus on recruiting and retaining the best talent in the industry, the bank believes that its people are a significant competitive strength.

TECHNOLOGY
HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. All the bank's branches have online connectivity, which enables the bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also provided to retail customers through the branch network and Automated Teller Machines (ATMs).

The Bank has made substantial efforts and investments in acquiring the best technology available internationally, to build the infrastructure for a world class bank. In terms of core banking software, the Corporate Banking business is supported by Flexcube, while the Retail Banking business by Finware, both from i-flex Solutions Ltd. The systems are open, scaleable and web-enabled.

The Bank has prioritised its engagement in technology and the internet as one of its key goals and has already made significant progress in web-enabling its core businesses. In each of its businesses, the Bank has succeeded in leveraging its market position, expertise and technology to create a competitive advantage and build market share.

BUSINESS PROFILE
HDFC Bank caters to a wide range of banking services covering commercial and investment banking on the wholesale side and transactional / branch banking on the retail side. The bank has three key business segments: a.)Wholesale Banking The Bank's target market is primarily large, blue-chip manufacturing companies in the Indian corporate sector and to a lesser extent, small & mid-sized corporate and agri-based businesses. For these customers, the Bank provides a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash management, etc. The bank is also a leading provider of structured solutions, which combine cash management services with vendor and distributor finance for facilitating superior supply chain management for its corporate customers. Based on its superior product delivery / service levels and strong customer orientation, the Bank has made significant inroads into the banking consortia of a number of leading Indian corporate including multinationals, companies from the domestic business houses and prime public sector companies. It is recognized as a leading provider of cash management and transactional banking solutions to corporate customers, mutual funds, stock exchange members and banks. b.)Treasury Within this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the liberalization of the financial markets in India, corporate need more sophisticated risk management information, advice and product structures. These and fine pricing on various treasury products are provided through the bank's Treasury team. To comply with statutory reserve requirements, the bank is required to hold 25% of its deposits in government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio.

c.)Retail Banking The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her banking requirements. The products are backed by world-class service and delivered to customers through the growing branch network, as well as through alternative delivery channels like ATMs, Phone Banking, Net Banking and Mobile Banking.

The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the Investment Advisory Services programs have been designed keeping in mind needs of customers who seek distinct financial solutions, information and advice on various investment avenues. The Bank also has a wide array of retail loan products including Auto Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading provider of Depository Participant (DP) services for retail customers, providing customers the facility to hold their investments in electronic form.

HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the Master card Maestro debit card as well. The Bank launched its credit card business in late 2001. By March 2009, the bank had a total card base (debit and credit cards) of over 13 million. The Bank is also one of the leading players in the "merchant acquiring" business with over 70,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank is well positioned as a leader in various net based B2C opportunities including a wide range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc.

RATINGS / AWARDS

Credit Rating The Bank has its deposit programs rated by two rating agencies - Credit Analysis & Research Limited (CARE) and Fitch Ratings India Private Limited. The Bank's Fixed Deposit programme has been rated 'CARE AAA (FD)' [Triple A] by CARE, which represents instruments considered to be "of the best quality, carrying negligible investment risk." CARE has also rated the bank's Certificate of Deposit (CD) programme "PR 1+" which represents "superior capacity for repayment of short term promissory obligations". Fitch Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned the "AAA (ind)" rating to the Bank's deposit programme, with the outlook on the rating as "stable". This rating indicates "highest credit quality" where "protection factors are very high".

The Bank also has its long term unsecured, subordinated (Tier II) Bonds rated by CARE and Fitch Ratings India Private Limited and its Tier I perpetual Bonds and Upper Tier II Bonds rated by CARE and CRISIL Ltd. CARE has assigned the rating of "CARE AAA" for the subordinated Tier II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating "AAA (ind)" with the outlook on the rating as "stable". CARE has also assigned "CARE AAA [Triple A]" for the Banks Perpetual bond and Upper Tier II bond issues. CRISIL has assigned the rating "AAA / Stable" for the Bank's Perpetual Debt programme and Upper Tier II Bond issue. In each of the cases referred to above, the ratings awarded were the highest assigned by the rating agency for those instruments.

Corporate Governance Rating: The bank was one of the first four companies, which subjected itself to a Corporate Governance and Value Creation (GVC) rating by the rating agency, The Credit Rating Information Services of India Limited (CRISIL). The rating provides an independent assessment of an entity's current performance and an expectation on its "balanced value creation and corporate governance practices" in future. The bank was assigned a 'CRISIL GVC Level 1' rating in January 2007 which indicates that the bank's capability with respect to wealth creation for all its stakeholders while adopting sound corporate governance practices is the highest.

 Awards and Accolades : HDFC Bank began operations in 1995 with a simple mission: to be a "World-class Indian Bank". We realized that only a single-minded focus on product quality and service excellence would help us get there. Today, we are proud to say that we are well on our way towards that goal.

SWOT ANALYSIS OF HDFC BANK

Strengths : Right strategy for the right products. Superior customer service vs. competitors. Great Brand Image. Products have required accreditation. High degree of customer satisfaction. Good place to work Lower response time with efficient and effective service. Dedicated workforce aiming at making a long-term career in the field.

Weakness :
Some gaps in range for certain sectors. Customer service staff need training. Processes and systems, etc Management cover insufficient. Sectoral growth is constrained by low unemployment levels and competition for staff

Opportunities :
Profit margins will be good. Could extend to overseas broadly. New specialist applications. Could seek better customer deals. Fast-track career development opportunities on an industry-wide basis. An applied research center to create opportunities for developing techniques to provide addedvalue services.

Threats : Legislation could impact. Great risk involved Very high competition prevailing in the industry. Vulnerable to reactive attack by major competitors. Lack of infrastructure in rural areas could constrain investment. High volume/low cost market is intensely competitive.

COMPETITOR ANALYSES
1.) ICICI Bank Limited

Company Description
ICICI Bank is India's #2 bank (after State Bank of India) and its largest private bank, with some 2,500 branches and 6,000 ATMs nationwide. It also has locations in about 20 other countries. ICICI's retail banking group offers lending and deposit services to small businesses and individuals; larger businesses are served by the corporate banking group, which offers finance services and treasury products. The rural and government banking unit offers micro-loans and agricultural banking. Foreign operations, as well as services related to international trade finance and expatriate Indians, fall under the international banking group. Other offerings include online banking, asset management, and insurance.

Financials
Company Type Fiscal Year-End 2010 Employees Public Headquarters March 74,056

Executives
32 executives listed for ICICI Bank Limited's Mumbai, India location. Chairman Managing Director and CEO Executive Director and CFO Kundapur Kamath Chanda Kochhar N. S. Kannan

Competitive Landscape
Demand is driven by consumer income and wealth and demographics. The profitability of individual firms depends largely on effective marketing. Large companies have some advantages in providing expertise in a wider range of investment options, and they may be able to charge lower fees. Small companies can compete successfully by providing better service and advice.

2.) Citigroup Inc. New York, NY United States

Company Description
This is the Citi. One of the largest financial services firms known to man, Citigroup (also known as Citi) has some 200 million customer accounts and does business in more than 150 countries. It offers deposits and loans (mainly through Citibank), investment banking, brokerage, wealth management, and other financial services. Few other banks can equal Citigroup's global reach: In addition to Citibank, it owns stakes in several international regional banks and has more than 50 million Citi-branded credit cards in circulation. However, Citi has been selling dozens of underperforming and noncore businesses in the aftermath of the financial crisis in order to refocus on its original mission -- traditional banking.

Financials
Company Type Fiscal Year-End 2010 Employees Public Headquarters December 260,000

Executives
386 executives listed for Citigroup Inc.'s New York, NY location.

Chairman Managing Partner Principle

Richard Parsons Alexander Coleman Barney Smith

Competitive Landscape
Demand is driven by consumer income and wealth and demographics. The profitability of individual firms depends largely on effective marketing. Large companies have some advantages in providing expertise in a wider range of investment options, and they may be able to charge lower fees. Small companies can compete successfully by providing better service and advice.

3.) Union Bank of India Mumbai India

Company Description
Union Bank of India has more than 600 branches and a network of more than 1,100 ATMs. In addition to serving consumers, small to medium-sized businesses, and government clients in India, the bank also caters to nonresident Indians living abroad. Its standard offerings include checking and savings accounts, credit and debit cards, and home, education, and business loans. Union Bank of India also provides cash management, life and health insurance, brokerage services, and mutual funds. The government of India owns approximately 55% of the institution.

Financials
Company Type Government-owned Single Location

Executives
14 executives listed for Union Bank of India's Mumbai, India location.

Chairman and Managing Director Director Director

Mavila Nair R. Nair Nandlal Sarda

4.)State Bank of India Mumbai India(Bombay: SBI)

Company Description
State Bank of India (SBI) is the nation's largest and oldest bank. Tracing its roots back some 200 years to the British East India Company (and initially established as the Bank of Calcutta in 1806), the bank operates more than 13,500 branches within India. It also owns majority stakes in five associate banks. SBI also has more than 155 branches in about 30 foreign countries, including multiple locations in the US, Canada, and Nigeria. The bank has other units devoted to capital markets, fund management, factoring and commercial services, credit cards, insurance, and brokerage services. The Reserve Bank of India owns about 60% of State Bank of India.

Financials
Company Type Fiscal Year-End Employees Public - Bombay: SBI Headquarters March 200,299

Executives
82 executives listed for State Bank of India's Mumbai, India location.

Chairman Managing Director and Group Executive (Corporate Banking) Deputy Managing Director and CFO

Om Prakash Bhatt Tara Shankar Bhattacharya Ashok Mukand

CODE OF ETHICS FOLLOWED BY HDFC BANK

INTRODUCTION This Code of Ethics / Conduct intends to ensure adherence to highest business and ethical standards while conducting the business of the Bank and compliance with the legal and regulatory requirements, including compliance of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and regulations framed there under by the Securities and Exchange Commission of USA and other statutory and regulatory authorities in India and USA. The Bank values the ethical business standards very highly and intends adherence thereto in every segment of its business.

Applicability This Code of Ethics/Conduct is applicable to the following persons. The Board Members Officials of the Bank one level below the Board

ETHICAL CONDUCT The Board members / Officials shall engage in and promote honest and ethical conduct of business, including the ethical handling of actual and / or apparent conflicts of interest between personal and professional relationships.

CONFLICT OF INTEREST The Board members / Officials shall avoid conflict of interest and disclose to the Board any material transaction or relationship that reasonably could be expected to give rise to such a conflict.

Confidentiality of Information The Board members / Officials shall ensure and take all reasonable measures to protect the confidentiality of non-public information about the Bank, its business, customers and other materially significant information obtained or created in connection with any activities with the Bank and to prevent the unauthorised disclosure of such information unless required by applicable laws or regulations or legal or regulatory process.

Disclosure of Information The Board members / Officials shall endeavor to produce full, fair, accurate, timely and understandable disclosures in reports and documents that the Bank files with or submits to the Securities and Exchange Commission and other regulators and in other public communications made by the Bank.

Compliance with Governmental Laws, Rules and Regulations The Board members / Officials shall comply with all the applicable governmental laws and the applicable rules and regulations.

Variation of the Code and Waivers The Code shall be reviewed from time to time for updation thereof. Any variation in the Code or any waivers from the provisions of the Code shall be approved by the Board and shall be disclosed on the Bank's website.

Contract or Term of Employment Nothing in this Code or other related communications by itself creates or implies an employment contract or terms of employment.

Violation of the Code The Board shall have the powers to take necessary action in case of any violation of the code.

REVIEW OF LITRATURE

The term ethics refers to value oriented decisions and behavior. It comes from the Greek word Ethos which means character, guiding beliefs, standards or ideals that pervade a group, community or people. Today, ethics is considered as the study of morals behavior. Terms such as business ethics, corporate ethics, medical ethics or legal ethics are used to indicate the particular area of application. Ethics involved in such area must still refer to value oriented decisions and behavior of individuals. A famous saying is there If a man violates some rules he is wrong according to law, but in ethics he is wrong only if he thinks of doing so.

Some Definitions of Ethics

1. Ethics are kind of like morals and common sense. it is what you think is right or wrong. Being "ethical" means trying to be reasonable and doing what you think is right.

2. Ethics can be considered as moral philosophy. It deals with critical analysis of morality. Ethics searches a reasonable ground to our moral standards. It deals with answering questions such as `what ought to be`, not `what is`.

3. The science of moral obligation; a system of moral principles, quality, or practice. The moral obligation to render to the patient the best possible quality of dental service and to maintain an honest relationship with other members of the profession and mankind in general.

4. Ethics is the science of morality or the systematic study of moral rules and principles. The term "morality" refers to rules which prescribe the way people ought to behave and principles which reflect what is ultimately good or desirable for human beings.

5. .The study and evaluation of human conduct in the light of moral principles. Moral principles may be viewed either as the standard of conduct that individuals have constructed for themselves or as the body of obligations and duties that a particular society requires of its members.

Features of Ethics
It contains principles of personnel and professional conduct. Existing norms and judgments may contain valuable insights but ethics sets out to

criticize and test them in terms of ultimate norms. It does not rest on feelings of approval or disapproval but in the careful examination of the reality around us. It is not a law. Even though law enshrines many ethical judgments. It criticizes law and customs to obtain more perfect rules for the conduct of life. Law may permit things which are unethical. What constitutes ethical behaviors in one society may be unethical in others. Ethics is involved in all human activities including business. There is need for a science of ethics in every human Endeavour.

Business Ethics
In business, ethics can be defined as the capacity to reflect on values in the corporate decision making process, to determine how these values and decision affect various stakeholders groups, and to establish how managers can use these observations in day to day company management. Ethical managers strive for success within the confines of sound management practices that are characterized by fairness and justice. Business Ethics refers to the moral principles which should govern business activities. It provides a code of conduct for the managers. The purpose of business ethics is to guide managers and employees in performing their jobs. Ethics are concerned with what is right and what is wrong in human behavior. They lay down norms of human behavior by the business. A few examples of ethics are: 1. 2. 3. 4. 5. To charge fair prices. To use fair weights for measurement of commodities. To pay taxes to government. To earn reasonable profits. To give fair treatment to workers.

The purpose of business ethics is to regulate both objectives of business and the means adopted to achieve these objectives. Ethics covers all possible areas of business ends and means must be justifiable as per norms of the society.

A business is an integral part of the society. It is in fact, a trustee of the resources of the society. So the business must observe the ethical standards of the society while using the resources. If a business fails to observe the social norms it will loose its public image.

Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia descriptive approaches are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values.

International business ethics

While business ethics emerged as a field in the 1970s, international business ethics did not emerge until the late 1990s, looking back on the international developments of that decade. Many new practical issues arose out of the international context of business. Theoretical issues such as cultural relativity of ethical values receive more emphasis in this field. Other, older issues can be grouped here as well. Issues and subfields include:

The search for universal values as a basis for international commercial behavior. Comparison of business ethical traditions in different countries. Comparison of business ethical traditions from various religious perspectives. Ethical issues arising out of international business transactions; e.g. bioprospecting and biopiracy in the pharmaceutical industry; the fair trade movement; transfer pricing.

Issues such as globalization and cultural imperialism. Varying global standards - e.g. the use of child labor.

CONCEPTUAL MODEL OF BUSINESS ETHICS

Business Ethics

Managerial Beliefs

Moral problems that manager face in decision making

Managerial beliefs concerning: 1. 2. Illegal acts Unethical or questionable practices

Examples: 1. 2. Fraud, Bribery Dumping of pesticides

Micro level problems: 1. 2. 3. 4. 5. Fairness in performance appraisal Accepting Gifts Confidentiality of company Treatment of problem employees Confronting expense account

LEVELS OF ETHICAL DECISIONS IN BUSINESS

Level 4 Individual

Level 3 Internal policy

Level 2 Stakeholders

Level 1 Society

1. 2. 3. 4.

Societal level Stakeholders level Internal policy Individual Le

1.

Societal Level: At this level, ethical questions about the basic institutions in society are asked. These represent an ongoing debate among major competing institutions including business.

2.

Stakeholders Level: In a business enterprise include employees, suppliers etc. Here they ask about how they deal with external groups. For example, should a company inform its customers about the potential dangers of its product?

3.

Internal Policy Level: At this level we ask questions about the nature of enterprise relations with employee both managers and workers. So also questions of motivation techniques, leadership roles, work rules etc. are involved at this level.

4.

Individual Level: At this level, we ask questions concerning how individual person should treat one another within the firm. These questions deal with day to day issues of life in any enterprise but in the ultimate analysis, they set the tone of ethical behavior of business at higher levels.

NEED AND IMPORTANCE OF BUSINESS ETHICS

More important is the fact that today a businessman is pressurized by various environmental factors to follow a business practice which is ethical from societys point of view irrespective of its impact on business profits. Such a significance of business ethics is attributable to following reasons:

1.

Environmental Pressures:

As apart of overall economic system, a business organization is pressurized by various environmental factors to act credibly and behave ethically. Thus a business enterprise may have no option but to desist from undesirable trade practices like hoarding and profiteering due to pressure from consumer forums.

2.

Enlightened self interest:

Todays businessman firmly believes that business ethics are in their own self interest. That is if business enterprise follows business practices, it will lead to higher profits and prosperity in the long run.

3. Moral consciousness:
It would not be an exaggeration to say that most business people behave ethically because of their moral consciousness. Like any other member of the society business people also believe that ethical business conduct is good business as well as good citizenship.

4. Legal Requirements:
In almost every sphere of business activity laws have been enacted which declare certain business practices. In short, obedience to such laws

ELEMENTS OF BUSINSS ETHICS

Business Managers must come to appreciate the key elements that comprise making ethical judgments. There are six major elements that are essential ethical judgments: 1. Ethical Imagination: Developing ethical imagination means being sensitive to ethical issues in business decision making and the ability to identify those situations where people are likely to be detrimentally effected by decision making. 2. Ethical Identification and Ordering: It refers to the ability to judge the relevance or non relevance of ethical factors in decision making situations. In addition to their identification, ethical issues must be ranked. 3. Ethical Evaluation: To evaluate ethical factors business persons have to develop clear principles, basis of weighing those factors and the ability to make out the likely ethical as well as economic outcomes of a decision. 4. Sense of Ethical Obligation: This refers to the intuitive or learned understanding that ethical fibers a concern for fairness, justice and due process to people, groups and communities should be woven into the fabric of managerial decision making.

RESEARCH METHODOLOGY
It refers to the method adopted to collect the relevant data and other information, which forms the basis of the thesis writing. So for the effective writing of the thesis report, the data must be quality oriented. My research is mainly based on the secondary data:

RESEARCH
Research is a studious inquiry or examination; especially : investigation or experimentation aimed at the discovery and interpretation of facts, revision of accepted theories or laws in the light of new facts, or practical application of such new or revised theories or laws".

METHODOLOGY
Methodology is a way of thinking about and studying social reality and is a way to systematically underneath the reasons behind the phenomenon. The methodology followed for conducting the study includes the specification of research design, sample design, questionnaire design, data collection and statistical tools used for analyzing the collected data.

DATA SOURCE
Secondary Data- Secondary data represents information that already exists somewhere, having been collected for another purpose. The secondary data that are available are relatively quick and inexpensive to obtain, especially now that computerized bibliographic search services and databases are available. The various sources of the secondary data and how they can be obtained and used are described ahead. Most secondary data are generated by specialized firms and are sold to marketers to help them deal with a category of problems. Nielsens television ratings, which marketers use in making advertising decisions, is the best-known example. Many of these services, broadly categorized as audits, commercial surveys, and panels, allow some degree of customization and thus fall between secondary and primary data. These sources are treated in detail ahead. The secondary data sources that came to be utilized by me in these were as follows-

Weve looked at three approaches to business ethics, and weve seen that all three have limitations. If we hope to find an approach to business ethics that is free from conceptual problems, we will not likely find any. Ethics is a complex subject and its history is filled with diverse theories that are systematically refuted by rival theories. So, we should expect to find controversies when applying ethics to the specific practices of business. However, following any of the above three approaches to business ethics will bring us closer to acceptable moral behavior than we might otherwise be. Close attention to ones profit motive and the moral interests of consumers might in fact generate some morally responsible business decisions. We can indeed find additional moral guidance by looking at the laws that apply specifically to businesses. In gray areas of moral controversy that are not adequately addressed profit motives and the law, we can turn for guidance to a variety of general and specific moral principles. In addition to the above three approaches to business ethics, it also helps to examine stories of businesses that have been morally irresponsible. By citing specific cases deceptive advertising, environmental irresponsibility, or unsafe products, we can learn by example what we should not do. Such cases often reveal blatantly crude, insensitive, or reckless attitudes of businesses, which we can view as warning signs of unethical conduct.

1. "Ethics the easy way". H.E.R.O... 2. "Miliband draws up green tax plan". BBC. 3. Friedman, Milton (1970-09-13). "The Social Responsibility of Business is to Increase Its Profits", The New York Times Magazine. 4. Hare, R. M. (1979). "What is wrong with slavery". Philosophy and Public Affairs 8: 103121. 5. Enderle, Georges (1999). International Business Ethics. University of Notre Dame Press, 1. ISBN 0-268-01214-8. 6. George, Richard de (1999). Business Ethics. 7. http://www.stthom.edu/academics/centers/cbes/jonachan.html

Further reading

Albertson, Todd. (2007). The Gods of Business: The Intersection of Faith and the Marketplace. Los Angeles, CA: Trinity Alumni Press.

Behrman, Jack N. (1988). Essays on Ethics in Business and the Professions. Englewood Cliffs, NJ: