VALUES, NORMS AND MORALST AND ARDS

Introduction:
Values are expectations about human behaviour. Some values are good and positive and
some others are bad and negative. A good business should be driven by positive values.
Values can be created through goods, services, transactions and fair treatment.

There are many types of values:

Cultural values represent the expectations of customers and public.
Moral values based on good ideas and feelings.
For example not to cheat the customers is an excellent moral value.
Values are related to ethical considerations. Peter Prately says that "values can be defined
as abstract, collective representations of what people believe to be just, good and
worthwhile to pursue". Modern management is stressing on some managerial values like
productivity, profit maximization, customer care and organisational efficiency.

The values have the following features.

1) The values are pragmatic which can be experienced.
2) The values should have an ethical basis. Positive values are considered as real values.
For example, labour welfare is a positive value.
3) The values should be capable of bringing some changes in the feeling of individuals. A
satisfied consumer is happy with the price and quality of the product.
4) The values should be normative in nature. A good value should emphasize on 'what is
ought to be'.
5) A good value should passthe test of universability.
6) It should give greatest good to the greatest number of people.

The Sanskrit equivalent for the word 'value' is 'Ishta' which means 'the object of liking'.
Hence the word 'value' means that which is desired. Values can be objective and
subjective. Value can be obtained from a tangible object. Value can come from the
subjective or psychological satisfaction.
Value is always associated with a feeling of pleasure.
Certain things can be called instrumental value. For example, a TV is an instrument with
the help of which one gets some pleasure through entertainment.
Indian philosophy is essentially a philosophy of values. There are many types of values.
Of these values, ethical values are of utmost importance.
Ethical values deal with moral truth and practice of virtues. Concern to others is a virtue.
In a mutually interrelated society, ethical values are based on the concept of obligation.
Ethical behaviour is a function of context, content, culture and time. That is why even
learned people sometimes tend to act unethically. The modern world is facing the
problem of values and perspectives. Knowledge and skills are rewarded but human
values bring sufferings. In fact knowledge and skills should be accompanied by human
values.

The following is the list of ethical values to be optimized in any

society:
1) Purity of heart.
2) Efficiency and work ethics.
3) Truth.
4) Honesty.
5) Charity.
6) Harmony with self, society and nature.
7) Gentleness.
8) Sacrifice.
9) Tolerance and pluralism.
10) Even temper.

Reasons for the good people doing bad things:

(1) No one is perfect and everyone makes mistakes. Thousands of managers are bound to
make mistakes.
(2) Since people are primarily motivated by self-interest, due to greed many are bound to
make mistakes.
(3) Some people do not have regard to social and legal networks of relationships.
(4) In the complex network of professional, managerial and legal relationships, it is
difficult for an individual manager to make a right decision.
(5) Since media is relishing bad news, good companies are not able to escape from some
lapses published. Even some omissions and commissions are very much highlighted.
(6) Many companies and their managers are not aware of moral dimensions of their
activities. Many managers lack skills in moral reasoning.

Basic human nature is self-interest. All the business companies are made up of all and
hence moral mistakes are increasing. Arthur Anderson made the same mistakes at Waste
Management, Sunbeam, Baptist Foundation and finally at Enron. The audit partners of
Anderson manipulated the system in order to accumulate wealth for themselves. Acting
in self-interest is not bad. But it was done at the cost of other stakeholders.
People are involved in a collection of social, cultural and spiritual roles, each of which
makes moral demands. This overlap creates problems. Individuals should use the same
tools of common morality for judging institutions.

Norms:
Norms are the specific expectations about concrete behaviour. Norms are serving as a
criterion for judging the quality of human behaviour. The individuals are expected to
behave in a particular norm.
Norms differ from place to place and time to time.
Example: providing hospitality to your guests.

Beliefs:
The beliefs are standards of thought. These beliefs are gradually evolved over a period of
time by the senior executives.
Example: "our most important person in business is customer".
Indian students bow to foreign professors and it is the belief that elders have to be
respected. The American students on the other hand shake hands with professors, a belief
that students should be friendly with the faculty.

Moral standards:
Moral standards contain a normative appeal.
Example: I want to maintain good health.
All moral standards deal with matters of serious consequence for human well being.
These norms condemn certain activities like child labour, fraud and cheating.
Moral standards cannot be established by the decisions of certain authorities. People have
to give their co-operation and support for the moral standards.
All moral standards are prevailing over self-interest. The self-interest is relegated to the
background.
All moral standards are based on impartial norms and values. It believes that all human
beings have equal rights.
All moral standards are closely associated with special emotions. When the labourers are
given low wages, the labourers are bound to be agitated.

Special studies in business ethics:

1) Business and internal stakeholders:
A good business ethics should take care of the interests of internal stakeholders, such as
employees. The employees should have a good working conditions, fair treatment, and
decent wages. The stakeholders should be assured of a good return for their investment.

2) Business and customers:

Quality products, fair price, safety and advertising ethics are suitable to be applied to the
customers.

3) Business and social environment:

Protection of human rights, parity of men women wages, abolition of child labour and
protection of health of consumers are some ethical issues affecting the social
environment.
4) Business and the natural environment:
Business ethics is also concerned with pollution control, sustainability of resources and
green marketing. Any business should be able to tackle environmental issues. The
economic values and ecological values go together. Economic development is the bottom
line of any society and it should be achieved by positive and constructive means.
Economic values are dominant in the modern culture and form the basis for the abuse of
the environment. There is a lack of ecological perspective and we are slowly introducing
ecological perspectives along with economic perspectives.
A survey was made in 1993 by Ulrich and Thidemann on how business managers
consider the role of morality in business.
According to this study, "sound ethics is good business in the long run". Only a small
percentage of business people (15 percent) believed that 'whatever is good business is
good eth ics'.
The other findings of this survey are:
(a) Ethical orientation and market orientation are in conflict with each other.
(b) Strategic legalism is not a dominant attitude among the managers.

Business ethics is concerned with business policies, business norms and values. It
prescribes moral standards related to business.
Business is an autonomous part of modern society. Business has its own inner logic such
as 'maximize corporate profits, reduce corporate costs'. Private enterprise is integrated
into the sphere of moral society through market constraints, legislation and personal
commitment of managers.
Moral behaviour provides a free choice to people. A sane and sound person integrates
education and life experiences. Our life is not completely determined by external factors
and depends on personal initiatives also. These personal initiatives can be called internal
factors. Human beings are capable of conscious behaviour.
In 1972 there was an aeroplane crash in the Andes Mountains of Chile. Some passengers
survived but found themselves without food supplies. Cold snow slopes with no fear
except the dead bodies of other passengers was the environment available to them.
Some dead bodies were including their dead friends or relatives. These survived
passengers faced a terrible dilemma.
They had a clear choice, either starve to death or eat the dead bodies of relatives and
friends. They selected the latter option with remorse and utter hatred. People have to
choose when options are limited.

Six spheres of life

Huiberts has defined six spheres of life, represented as a hierarchy of concentric circles.
The smallest circles are directly related to the individual. On the other hand, the larger the
circles spread, the smaller is the capacity to influence. It should be noted that each circle
requires individual input in order to realize our survival.
The six circles are given below:
1) The individual person.
2) Primary group of family consisting of partner, children and parents.
3) The groups and organisations in which they participate.
4) Future mankind.
5) Life on earth consisting of plants, animals and humans.
6) The physical universe consisting of sun, heat, water and other resources.

It is wrong to think that business is consisting of fraud, cheating and bribing. A good
business system should promote trust, high quality of work, healthy competition and
impartial procedures.

Moral corporate excellence

Hoffman in his article on 'what is necessary for corporate moral excellence?" in Journal
of Business Ethics (1986) writes, "It must be made clear to all its individual members that
it values and will not tolerate any deviation from the moral point of view. But at the same
time, this moral culture, which gives meaning, identity and integrity to the whole
corporate collective, must also value and encourage the moral autonomy of its individual
members".
Hoffman is emphasising on the moral dimension of corporate excellence. For example,
Hewlett- Packard developed one of the best cultures called 'the HP - way'. Hewlett-
Packard has given the people the freedom to work towards the overall objectives of the
company. The individuals are made responsible for what they do.
A few failing entrepreneurs blame the circumstances and not themselves. It is not correct.
In fact the business managers can achieve a higher performance by integrating moral
demands with corporate policies.

The term 'higher performance' can be discussed with reference to three basic ethical
requirements.
(a) Meeting corporate goals.
(b) Ethically motivated job satisfaction for all the employees.
(c) The growth of durable partnership.
The safe and satisfactory functioning of a product is not the only objective. Reduction of
health risks is considered as one of the modern objectives. The quality commitments are
to be made in moral terms. Many consumers are also concerned with environmental
values. In fact, the modern requirements combine a mix of environmental and social
concern.

Three modern theories of business ethics:

1) Contract theorv:
According to contract theory responsibility is the result of the mutual obligations
acceptedby partners in a deal. Both the partners are fully responsible for their own
individual engagements. Both should take care of their interests. It can be used in buying
departments.
There should be fairness in all dealings. A contract should prevail between sellers and
buyers.
2) Due care theorv:
In terms of this theory, the manufacturers ought to exercise due care. All precautions are
to be under taken to produce a product free of defects.
The manufacturers are liable for the damages caused by a firm. Production below the
prescribed standards is also negligence.

The following are the areas of due care:

(a) Design should be in accordance with government and industry standards.
(b) Materials should be of specified standards.
(c) Production should be undertaken on specified lines.
(d) The prescribed standards of quality control have to be followed.
(e) Packaging, labeling and warnings have to be provided.
(f) Adequate safety messages should be provided.

3) Social costs theorv:

According to this theory, the manufacturers have to pay for the damages inflicted by the
products. This theory is concerned with the social concerns and moral standards. This
theory is a version of recognition ethics. The manufacturers of new products have a moral
obligation towards the society. Their goods should not harm the society.

Amoral business egoism:

Too much of self interest is opposed by morality and ethics. Amoral means non-moral.
Business amoralists believe that business has nothing to do with any moral consideration.
It believes that the pursuit of profit is the only goal. It also believes that conventional
moral judgements do not apply to business. 'Getting quick rich, no matter how' is the
strategy of amoralists.
Criticism:
(1) Amoral business egoism is a self-contradictory position in the world. Any good
business should follow the moral normative goals.
(2) Amoral business is inconsistent with the concept of self-interest. In business we are
concerned with not only our interests but also with the interests of other parties.
(3) Amoralism glorifies capitalist abuse. The encouragement of child labour, poor
working conditions and exploitation are examples of capitalist abuse.
(4) Amorality in business abuses the idea of profit maximization. Economic theories
suggest that profit maximization can be achieved through the development of free
markets.
Partial rules, abuse of power, lack of concern for weaker parties and creation of a
unhealthy competition are the features of unethical business practices.
According to the Dutch business ethicist, JAN DELEEUW, there are four requisites of
ethical communication, namely, openness, mutual respect, logical coherence and relating
the various points of view.
From self-centred interest (blatant egoism), business should go through enlightened
selfinterest of recognizing interest of others to the level of public utility (social welfare).

Summary
Values are expectations about human behaviour, values can be created through goods,
services,transactions and fair treatment.
There are many types of values. There are some reasons for the good people doing bad
things.
Norms are the specific expectations about concrete behaviour.
The beliefs are standards of thought.
A good business system should promote trust, high quality of work, healthy competition
and impartial procedures.
Contract theory, due care theory and social cost theory are the modern business ethics
theories.

Review Questions
1) What are values?
2) What are the types of values?
3) Define norms.
4) Define beliefs.
5) What are moral standards?
Section 'A'
Section 'B'
1) Discuss the importance of values in business.
2) Discuss the special areas of studies in business ethics.
3) Examine the six spheres of life as suggested by Huiberts.
4) What is moral corporate excellence?
5) What is contract theory?
6) Explain due care theory?
7) Outline social costs theory?
Section 'e'
1) Examine the importance of values in modern business.