Professional Documents
Culture Documents
INTRODUCTION:
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For example, most major corporations today promote their commitment
to non-economic values under headings such as ethics codes and social
responsibility charters.
Adam Smith said, "People of the same trade seldom meet together,
even for merriment and diversion, but the conversation ends in a
conspiracy against the public, or in some contrivance to raise prices."
Governments use laws and regulations to point business behavior in
what they perceive to be beneficial directions.
Ethics implicitly regulates areas and details of behavior that lie beyond
governmental control. The emergence of large corporations with limited
relationships and sensitivity to the communities in which they operate
accelerated the development of formal ethics regimes.
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DEFINITION:
History
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By the mid-1980s at least 500 courses in business ethics reached
40,000 students, using some twenty textbooks and at least ten
casebooks supported by professional societies, centers and journals of
business ethics.
Firms began highlighting their ethical stature in the late 1980s and early
1990s, possibly in an attempt to distance themselves from the business
scandals of the day, such as the savings and loan crisis. The concept of
business ethics caught the attention of academics, media and business
firms by the end of the Cold War. However, criticism of business
practices was attacked for infringing the freedom of entrepreneurs and
critics were accused of supporting communists.
ISSUES
From a 2009 National Business Ethics survey, it was found that types of
employee-observed ethical misconduct included abusive behavior (at a
rate of 22 percent), discrimination (at a rate of 14 percent), improper
hiring practices (at a rate of 10 percent), and company resource abuse
(at a rate of percent).
The ethical issues associated with honesty are widespread and vary
greatly in business, from the misuse of company time or resources to
lying with malicious intent, engaging in bribery, or creating conflicts of
interest within an organization.
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Many employees lie in order to reach goals, avoid assignments or
negative issues; however, sacrificing honesty in order to gain status or
reap rewards poses potential problems for the overall ethical culture
organization, and jeopardizes organizational goals in the long run.
International issues
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Many new practical issues arose out of the international context of
business. Theoretical issues such as cultural relativity of ethical values
receive more emphasis in this field. Other, older issues can be grouped
here as well. Issues and subfields include:
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Law and regulation
Sanctions for violating the law can include (a) civil penalties, such as
fines, pecuniary damages, and loss of licenses, property, rights, or
privileges; (b) criminal penalties, such as fines, probation, imprisonment,
or a combination thereof; or (c) both civil and criminal penalties.
Very often it is held that business is not bound by any ethics other than
abiding by the law. Milton Friedman is the pioneer of the view. He held
that corporations have the obligation to make a profit within the
framework of the legal system, nothing more.
Friedman made it explicit that the duty of the business leaders is, "to
make as much money as possible while conforming to the basic rules of
the society, both those embodied in the law and those embodied in
ethical custom". Ethics for Friedman is nothing more than abiding by
'customs' and 'laws'. The reduction of ethics to abidance to laws and
customs however have drawn serious criticisms.
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Further, as per law, "conduct is not criminal unless forbidden by law
which gives advance warning that such conduct is criminal".
Also, law presumes the accused is innocent until proven guilty and that
the state must establish the guilt of the accused beyond reasonable
doubt. As per liberal laws followed in most of the democracies, until the
government prosecutor proves the firm guilty with the limited resources
available to her, the accused is considered to be innocent. Though the
liberal premises of law is necessary to protect individuals from being
persecuted by Government, it is not a sufficient mechanism to make
firms morally accountable
Leadership
The culture of an ethical business is defined starting from the very top of
the organizational chart. For a business to be ethical, its leaders must
demonstrate ethical practices in any situation.
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The true test of this leadership is in the decision-making process when
there is a choice between what is ethically responsible and what will
result in profit or gain.
Leaders who can consciously choose the path that is ethically correct,
as opposed to one that is purely financially driven, have successfully
created an ethical culture in the business. When the culture is solid at
the top of the organization, it trickles down to all areas and employees.
Values
The ethical business will institute a code of conduct that supports its
mission. This code of conduct is the guideline for each employee to
follow as he carries out the company's mission.
Integrity
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Respect
Loyalty
Concern
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THE IMPORTANCE OF ETHICS
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Motivating and reinforcing positive behavior while creating an
environment that avoids unethical behavior is a critical responsibility of
both managers and employees.
RELIGIOUS VIEWS
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According to the article "Indian Philosophy and Business Ethics: A
Review", by Chandrani Chattopadyay, Hindus follow "Dharma" as
Business Ethics and unethical business practices are termed "Adharma".
Business men are supposed to maintain steady-mindedness, self-
purification, non-violence, concentration, charity and control over
senses. Books like Bhagavat Gita and Arthashastra contribute a lot
towards conduct of ethical business.
Managerial mischief.
There has been a great deal written about managerial mischief, leading
many to believe that business ethics is merely a matter of preaching the
basics of what is right and wrong. More often, though, business ethics is
a matter of dealing with dilemmas that have no clear indication of what is
right or wrong.
Moral Mazes
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BENEFITS OF MANAGING ETHICS IN THE WORKPLACE
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Government agencies were established. Unions were organized. Laws
and regulations were established.
Ethics programs align employee behaviors with those top priority ethical
values preferred by leaders of the organization. Usually, an organization
finds surprising disparity between its preferred values and the values
actually reflected by behaviors in the workplace.
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4. Ethics programs support employee growth and meaning.
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Drake and Drake (California Management Review, V16, pp. 107-123)
note that “an employer can be subject to suit for breach of contract for
failure to comply with any promise it made, so the gap between stated
corporate culture and actual practice has significant legal, as well as
ethical implications.”
6. Ethics programs help avoid criminal acts “of omission” and can
lower fines.
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This overall effort is very useful for several other programs in the
workplace that require behaviors to be aligned with values, including
quality management, strategic planning and diversity management.Total
Quality Management includes high priority on certain operating values,
e.g., trust among stakeholders, performance, reliability, measurement,
and feedback. Eastman and Polaroid use ethics tools in their quality
programs to ensure integrity in their relationships with stakeholders.
But, frankly, the fact that an organization regularly gives attention to its
ethics can portray a strong positive to the public. People see those
organizations as valuing people more than profit, as striving to operate
with the utmost of integrity and honor. Aligning behavior with values is
critical to effective marketing and public relations programs.
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Consider how Johnson and Johnson handled the Tylenol crisis versus
how Exxon handled the oil spill in Alaska. Bob Dunn, President and CEO
of San Franciscobased Business for Social Responsibility, puts it best:
“Ethical values, consistently applied, are the cornerstones in building a
commercially successful and socially responsible business.”
At personal level the policy should be set that not to misuse the
properties of the others or of the organisation keeping the promises and
extending the mutual help, not to seek quick gains and not to indulge in
politics to gain power.
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(ii) Internal policy level:
Let’s see how the environment and various stages of business affect the
application process of business ethics.
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Ethics, Economics, and Politics
Economic and political environment can both help and distract the
application process of ethics. Ethics that doesn’t have support of
economics and politics has no means to achieve the community ends.
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