BUSINESS

ETHICS
PRESENTATION
TOPICS COVERED:

Meaning
Guidelines for ethical behavior.
Importance of ethics for managers.
Roles and functions of ethical
managers
Guidelines for ethical
behaviour.
1. Obey the law:
Obeying legal practices of the country is conforming to ethical values.
2.Tell the truth:
Disclosing fair accounting results to concerned parties and telling the
truth is ethical behaviour of managers.
3.Respectfor people:
Ethics requires managers to respect people who contact them.
4.The golden rule:
The golden business principle is Treat others as you would want to be
treated. This will always result in ethical behaviour.
5.Above all, do no harm:
Even if law does not prohibit use of chemicals in producing certain
products, managers should avoid them if they are environment pollutants.
6.Practice participation not paternalism:
Managers should not decide on their own what is good or bad for the
stakeholders. They should assess their needs, analyse them in the light of
business needs and integrate the two by allowing the stakeholders to
participate in the decision -making processes.
7.Act when you have responsibility:
Actions which cannot be delegated and have to be taken by managers
only (given their competence and skill) must be responsibly taken by them
for the benefit of the organisation and the stakeholders.
IMPORTANCE OF ETHICS

Creating credibility.
Long term survival of the firms.
Satisfying basic human needs.
Uniting people and leadership.
Improving decision making
Securing the society.
Creating Credibility:

An organization that is believed to be driven by moral values

is respected in the society even by those who may have no
information about the working and the businesses or an
organization. Infosys, for example is perceived as an
organization for good corporate governance and social
responsibility initiatives. This perception is held far and wide
even by those who do not even know what business the
organization is into.
Long Term Gains:

Organizations guided by ethics and values are profitable in

the long run, though in the short run they may seem to lose
money. Tata group, one of the largest business
conglomerates in India was seen on the verge of decline at
the beginning of 1990s, which soon turned out to be
otherwise. The same companys Tata NANO car was
predicted as a failure, and failed to do well but the same is
picking up fast now.
Satisfying Basic Human
Needs:
Being fair, honest and ethical is one the basic human needs. Every
employee desires to be such himself and to work for an
organization that is fair and ethical in its practices.
Uniting People and
Leadership:
An organization driven by values is revered by its employees also.
They are the common thread that brings the employees and the
decision makers on a common platform. This goes a long way in
aligning behaviors within the organization towards achievement of
one common goal or mission.
Improving Decision
Making:
A mans destiny is the sum total of all the decisions that he/she
takes in course of his life. The same holds true for organizations.
Decisions are driven by values. For example an organization that
does not value competition will be fierce in its operations aiming to
wipe out its competitors and establish a monopoly in the market.
Securing the Society:
Often ethics succeeds law in safeguarding the society. The
law machinery is often found acting as a mute spectator,
unable to save the society and the environment. Technology,
for example is growing at such a fast pace that the by the
time law comes up with a regulation we have a newer
technology with new threats replacing the older one. Lawyers
and public interest litigations may not help a great deal but
ethics can.
Roles and Functions of
ethical managers.
Managers makes sure that employees are aware of the organization's
ethical code and have the opportunity to ask questions to clarify their
understanding.

They also monitor the behavior of employees in accordance with the

organization's expectations of appropriate behavior.

They have a duty to respond quickly and appropriately to minimize the

impact of suspected ethical violations.

Moreover, managers make themselves available as a resource to counsel

and assist employees who face ethical dilemmas or who suspect an ethical
breach.
Continued
In addition, managers are responsible for upholding ethical standards in
their own actions and decisions.

They are obligated to follow a separate professional code of ethics,

depending on their role, responsibilities, and training. Fiduciary duty is an
example that applies to some managerial roles.

Many managers have responsibility for interacting with external

stakeholders such as customers, suppliers, government officials, or
community representatives. In those encounters, managers may be called
on to explain a decision or a planned action in terms of ethical
considerations.
Continued.
Managers are responsible for creating and/or implementing
changes to an organization's ethical codes or guidelines. These
changes may be in response to an internal determination based on
the experience of employees; for instance, additional clarification
may be needed about what constitutes nepotism or unfair bias in
hiring
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