Business ethics

Nature of ethical questions in business

The discipline
Dealing with the skepticism
Dealing with the unflattering self glorifying language

Recognition of commerce as a central structure of society

Adam Smith

Changing outlook of business responsibilities

Stakeholders

Honored (ethics) in breach than in the observance High cost of being unethical
Question on sustainability Heavy fine Low employee morale Increased turnover Loss of public confidence Ecological concerns Goodwill is a major asset

The discipline
Not separate set of ethical standards Adherence to general standards of ethics
Issues are specific
Waste disposal Dehumanization in work place Violation of rights and increasing rights movements Price fixing Product safety Insider trading Hostile takeover Fraudulent Accounting practices Social justice Global warming and ecology

Three levels of ethical issues

1. Individual 2. Organizational 3. Systemic

Individual level
Honesty Trustworthiness Promise keeping and other obligations Intentions Consequences and other implications of individual's action Grounds and nature of individual rights Respect the rights and liberty of others Respect human well being Fairness: fair treatment, fair wage, fair exchange Honor confidentiality

Organizational level
Context, situation and individuals capacity
The McCoy example (The Parable of the Sadhu)

Complexity of ethical issues are very high

Increased number of stakeholders More chances of conflict of interest Increased legal implications Leaders value Organizational culture and codes of ethics Risk of job and even life
Whistleblowers

Individual in the organization

Objectives of the institution and organization
As defined As projected As believed

Individuals perception of this objective Redefining the objective

Relook at the purpose of its existence How it relates to other institutions of society

Will institutionalizing help? What would institutionalization achieve?

Institutionalizing ethics in business/ introducing professional standards

How to define a profession? What do professionals do?/ Why do we take help of professionals?
Technologically complex modern society requires a greater application of specialized knowledge We depend on doctors, lawyers, engineers, financial service agents and investment consultants The expertise or proficiency of the field

What distinguishing feature they have?

Agreed upon general characteristic of professionals

Vast body of knowledge and extensive training Significant intellectual component Provides a vital service to organized society
Compliance with the code of conduct

Credentialing

 Professions stand to fulfill as completely as possible the primary service for which it stands specialized service to society They enjoy significant monopolistic control and significant autonomy in using their judgments Regulation (self or other)

Monopoly and self regulation if not exercised properly can be detrimental to society.

Professional Codes
Codes ensure Services to all who need them Services should be provided so as to best promote the public (society) interest

Why professionalism in necessary

Business persons? Business Mangers? Because of its own blasphemy of profit making and limited obligation i.e. only to shareholders Hence
not considered as vital to societal existence ?? not subject to the high ethical standards of professionals??

Professionalism
Recognition of the institution and its vital requirement in society
Interconnectedness to established professions Clarity of its objectives and all its inclusiveness Clear-cut professional responsibilities
Employee-employer relationship Manufacturer/ Marketer buyer/customer relationship