Professional Documents
Culture Documents
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Ph.D.
climate in which business operates has become cold and unfriendly to day as a result
of revelations of unethical behavior that have rocked nations and the world. Ethics is
crucial for an efficient and smooth operating economy. An ethically based capitalism
can do wonders in the way of creating wealth for society. According to economic
philosopher, Adam Smith: that our system of capitalism does not work well unless it
has the moral co-operation of its participants. Jewish theologian wrote: Its what
people do when they all are alone, when one is looking that makes all the difference
between civilization and the jungle. Ethics is important because either government
or legislation cannot do everything to protect society. Technology races ahead much
faster than the government can regulate. People in an industry often know the
dangers in a particular technology better than government regulators who sit at a
distance. Ethics is good in itself. Ethics is important to create a smoothly and
efficiently running economy. The Bhagavad Gita asks us not consider only the fruits of
our actions. It invokes the notion of passionless action. The concept of Gita of doing
ones duty without seeking for the fruits, Manus concept of inheriting debts as well
as property, the Mauriyan idea of accountability provide a basis for Gandhijis belief
that politics and business must work hand in hand for the development.
FACTORS HAVING IMPACT ON ETHICS
Ethical considerations vary by class, structure, economic group, industry,
professional group and so on. Business ethics has to be on par with the ethical code
of the society in which it operates. It is essential that the business adheres to
the well-established ethics. The following are the factors that creates the basis to
ethical consideration (a) Value, (b) Culture,and (c) Transformation.
VALUE
Values are additions or accretions to the image. Values are not fixed. They
change. As they undergo change the society and its constituents also have to
undergo the process. When the values undergo a change it takes the culture along
with it. Values are crucially important factor in business relationships. Values create
credibility with the public. It will certainly add value to the concern and create more
credibility by being morally responsible and accountable. This creates a confidence in
those who are directly and indirectly involved. An organization perceived by the
public to be ethically, socially concerned will be honored and respected even those
who have no knowledge of its actual functioning. Not only this enhances the
credibility within itself but also with its employees. It creates a feeling of oneness
among employees having a common goal. For an individual business values derive
from multitude of sources, such as mission of business as a social institution, the
nation in which business is located, the type of industry in which it is active and the
nature. Over a period of time value become institutionalized with regard to business
and society. These values perform two important functions. First they form as a guide
to business environment. Second, they become strong motivators for people in
business. They become the key factor in the system relationship of business with
society. Business has certain rights but it also has certain responsibilities to society
and in turn society has certain rights and responsibilities in regard to business
activity. Value-ethical attitude helps management for better decision-making. The
decisions are in the interest of public, society and environment. Ethical decisions are
in the interest of public, society and environment. Value added rather based ethical
decision-making will make an organization and its decision-maker to look into all
aspects of economic, social, politico-legal aspects.
CULTURE
Culture is described as human environment of humans. The system aspect of
culture is the set of relationship that makes it possible for human beings to create a
Laws relating to ethics in business speaks about consumer protection, product safety,
shareholders and stakeholders rights and environmental protection. Having a code of
ethics with an implementation program is the minimum requirement for reputation of
the management. Ethics focus its attention on solving not only the internal problems
of the concern but also of the society at large. The economy as a whole has been
thro five revolutions in the twentieth century, which have transformed its basic
structure and method of functioning. First, the organizational revolution led to
increase in number, size and power of organizations of all types. Second, the
corporate revolution expanded the scale of business enterprise and led to dominate
of modern big business corporations. Third, the managerial revolution saw the
emergence of a class of professional mangers who took over the active control of
large corporation. Fourth, the property revolution separated ownership and
management and diffused property rights within the corporation. Finally, the
capitalist revolution brought about a change in the moral order of capitalism and
greatly enlarged the public role of business and the economic role of government. In
this changed socio-economic environment the focus of business ethics is on social
responsibility. Social responsibility is a reaction to the goals of the society and the
economic, technological, social and political forces that mould the society.
The ethics in the business community is not alienated or any different from the
ethics in the society at large. The codes of ethics, legislative changes and the
standards will not result in the desired holistic change. It is the mind set of the
concerned people which matter most and not the stick that forces compliance with
reluctance. Hence, there is an imperative need on the part of the corporate sector
and profession to create a higher standard of openness, truthfulness, honesty, clarity,
transparency and accuracy to ensure that all the stake holders have the best possible
timely information. The corporates in general and professionals in particular must
adhere to the highest ethical standards and assume a positive duty to unfold and
update equivocally material information.
Institutionalizing Ethics
A business that seriously desires to operate in an ethical environment has to
institutionalize ethics by drawing up a company policy and code of ethics,
familiarizing all concerned at all levels with the code of ethics and ensuring the
implementation. Code of ethics is nothing but a blue print of what is going to followed
and adopted by the company from then onwards. The companys ethical code should
be printed and circulated to all those who deal with the company, by clearly bringing
out what is unethical conduct. The company may appoint ethics committee which
offer training within and outside. The duty of the committee is to report periodically
to the Board and offer suggestion for the betterment. The committee must also
review the code of ethics from time to time keeping pace with the changing
environment. Business ethics has to be practiced and preached. Before setting
business standards, ethics and morality have to be internalized so that they
become a part of the blood stream. If the corporate becomes committed to selfimposed standards of business morality the whole countrys standards could be
influenced.
Development of Program of Ethics
Merely endorsing a standard code or copying that of another will not suffice. It is
important to find out on what topics and areas require guidance.
Select a prominent personality to endorse the business ethics policy.
Choose a framework, which addresses issues as they affect different constituents
or shareholders of the company. The usual ones are: shareholders, employees,
REFERENCES
1. Bowie, Norman E; Business Ethics; Prentice Hall Inc., New Jersy.
2. Davis Keith & Blomstrom.R.L.; Business & Society; McGraw Hill, New York.
3. Donaldson, John & Others; Business Ethics; Academic Press, London.
4. Dr. Robert F. Drainan; Globalizaion and Corporate
foundation for ethics in Business, XLRI Jamshedpur.
Ethics;
JRD TATA