Ethics or ethical behavior is used commonly when

people talk of what is desirable behavior from society.

Ethics is a set of moral principles about what human
conduct ought to be. In other words what is good or bed
,fair or unfair ,right or wrong.

Business ethics : It refers to the moral principles which

should govern business activities. It provide a code of
conduct for the manager.

Business ethics are moral principles that guide the way a

business behaves. The same principles that determine an
individual's actions also apply to business.
Acting in an ethical way involves distinguishing between right
and wrong and then making the right choice. It is relatively
easy to identify unethical business practices.

Example: To Charge fair price from the customer

To
commodities.
To
To
To

use fair weights for measurement of

pay taxes to the Government honesty
earn reasonable profits
give fair treatment to the workers.

Garrat: Ethics is a science of judging specifically human ends

and the relationship of means of those ends.
Unethical Business Practices
A business practice which is against the moral principles laid
down by the society is termed as unethical .
Ex: Against the Employee

Paying salaries lower than those fixed by the government

Poor working condition

Lack of safety measures for workers and lack of provision

for welfare
facilities .

Against the Government

Evasion of excise duty ,Sale tax ,income tax.

Smuggling of goods
Offering bribes to government officials and politicians for
getting favors.

Against the Consumers and society

Adulteration of goods; Coloring of wood pieces and selling as

turmeric .
Sale of duplicate products under popular brands names

Deceptive advertisement and false claims in advertisement.

Pollution of environment

Obey
Rule
to
Avoid
e

Follow rules
only if it self
interest

Conform
to meet
the
expectati
on
of
others

Doing
right
is
one
s
duty.
obey the
law

Current
laws and
values
are
relative
laws and
duty

Follow
self
chosen
universal
ethical
principles

Ethics are concern with dealing with moral judgement

regarding voluntary human conduct.
Morals are duties or rules that govern behavior of person
Ethics is the theory of morality where morality is the quality of
being in accord with what is right and wrong. A moral person
knows why decisions have been taken and can explain his
actions.
There are four ethical categories:
- Descriptive ethics : How to describe ethical problems and
ethical standards
- Normative ethics : Theories about what is right and wrong
-Applied ethics : ethics that address practical questions and
helps in making
decisions
- Meta ethics : Reasoning about ethics

Dont kill
Dont cause pain
Dont deprive of freedom
Dont deceive
Keep your promise
Dont Cheat
Obey the Law
Do your duty with honesty

Ex. Bribery
Theft
Sabotage
Collusion

Ex. Marketing Policies

HRM Policies
Capital
Investment
Industrial
Espionage

Part of Society:
Expectation of Public - All stake holder have an eye on the
cultural and behavior of a business organization due to dominance
of economic in the society.
Trust of employees- High level of morale and productivity can
be easily obtained in companies that treat their all employee with
equality ,encourage
Good team and work culture.
Image- An ethical organization commands trust and respect of its
stakeholders.
Costs- Deterioration of relationship ,damage to reputation in
reduction of employee productivity.
Pride of best companies Over all benefit- Ethical behavior of an industry or business
gives a win win
situation to all the stakeholders and general
public.

 HONESTY. (Be honest in all communications and actions)

INTEGRITY
PROMISE-KEEPING (Keep promises and fulfill
commitments)
LOYALTY (Be loyal within the framework of other ethical
principles
FAIRNESS (Strive to be fair and just in all dealings
CARING.(Demonstrate compassion and a genuine concern
for
the well-being of others)
RESPECT FOR OTHERS.(Treat everyone with respect)
LAW ABIDING.(Obey the law)

COMMITMENT TO EXCELLENCE (Pursue

excellence all the time in
all things.)
REPUTATION AND MORALE
ACCOUNTABILITY (Responsible for action and
expected to explain
them)

The social responsibility of business means various

obligations or responsibilities or duties that a businessorganization has towards the society within which it exists
and operates.
Koontz: social responsibility is the personal obligation of
people as they act in their own interest to assure that right
and legimate interest of others.
William Fredrick : social responsibility implies that the
business
Community should oversee the operation of an economic
system that fulfil the expectation of the public.

Howard Bowen : social responsibility of business are

the obligation to pursue those policies and to make
decision or to follow those lines of action which are
desirable in terms of the objective and the value of
the society .

Owners or
Shareholders
Resources
Men
Men
Materials
Materials
Machines
Machines
Methods
Methods
Money
Money
Markets
Markets

Managemen
t Philosophy

Values
Values
Belief
Belief
Attitudes
Attitudes
Ethics
Ethics

Customer
and Suppliers

workers
Managemen
t
Process

Planning
Planning
Organizin
Organizin
g
g
Directing
Directing
Controllin
Controllin
g
g
Society and
Government

Result
Goods
Goods &
&
Services
Services
Desired
Desired
by
by the
the
Customers,
Customers,
Fulfillment
Fulfillment of
of
the
the
expectation
expectation
of
of workers
workers

Shareholders or investors who contribute funds for

business.
Employees and others that make up its personnel.
Consumers or customers who consumes and/or uses its
outputs (products and/or services).
Government and local administrative bodies that
regulate its commercial activities in their jurisdictions.
Members of a local community who are either directly or
indirectly influenced by its activities in their area.
Surrounding environment of a location from it operates.
The general public that makes up a big part of society.

Towards
Owners/Sharehol
ders

Towards
Government

Towards
Employees

Towards Society

Towards
customers

Towards InterBusiness

Fair Dividend
Stability and Growth
Effective Communication
Protection of assets
Trustee of shareholders.

Fair Salaries
Job Satisfaction
Good Working Condition
Succession Planning Development
Co-operation
Opportunity for growth

Fair Price
Superior Service
Superior Product Design
Quick and complete Information

Maintain Law
Observe the Policies
Adibe by the Laws
Payment of Taxes, Custom Duties etc.&
Security

Maintaining Pollution
Free Environment
Welfare Services
Employment
Business Morality

Cooperation for Sharing of Scarce

Resources
Fair Competition
Collaboration for Maximization of
Business Efficiency Facilities

Corporate governance refers to the formally established guidelines that

determine how a company is run. The companys board of directors approves
and periodically reviews the guidelines, which must align with the companys
direction, performance and regulatory practices.

Corporate Governance ensure how effectively the Board of Director and

Management are discharging their function in building and satisfying
stakeholders confidence.

Corporate Governance refers to the way a corporation is governed. It is the

technique by which companies are directed and managed. It means carrying the
business as per the stakeholders desires. It is actually conducted by the board
of Directors and the concerned committees for the companys stakeholders
benefit. It is all about balancing individual and societal goals, as well as,
economic and social goals.

Corporate Governance deals with the manner the providers of finance

guarantee themselves of getting a fair return on their investment.
Corporate Governance clearly distinguishes between the owners and
the managers
Corporate governance specifies the rights and responsibilities
of company stakeholders, with particular emphasis on three
groups:
Shareholders who own the company
The board of directors who oversee the managers
And management which runs the daily operations

Corporate governance is the way a corporation polices itself. In short, it is a

method of governing the company like a sovereign state, instating its own
customs, policies and laws to its employees from the highest to the lowest
levels.
Corporate governance is intended to increase the accountability of your
company and to avoid massive disasters before they occur. Failed energy giant
Enron, and its bankrupt employees and shareholders, is a prime argument for
the importance of solid corporate governance.

Good corporate governance ensures corporate success and

economic growth.
Strong corporate governance maintains investors
confidence, as a result of which, company can raise capital
efficiently and effectively.
It lowers the capital cost.
There is a positive impact on the share price.
It provides proper inducement to the owners as well as
managers to achieve objectives that are in interests of the
shareholders and the organization.

Good corporate governance also minimizes

wastages, corruption, risks and mismanagement.
It helps in brand formation and development.
It ensures organization in managed in a manner
that fits the best interests of all.

Accountability :This refers to your companys

ethical behavior. Set up ethical guidelines for your
management, employees, outsourced operations
and dealings with the government.
Fairness

Does your company treat shareholders,

debtholders and stakeholders fairly? Shareholders who are
alienated by an unfair voting structure such as executive
shares with 10 times voting power are unlikely to support
your company when it loses its growth momentum.

Transparency Your companys investor relations arm should

clearly announce and detail all its current operations to
investors and the media, and answer all questions regarding
controversial business segments