BUSINESS ETHICS

FIVE BUSINESS ETHICS MYTHS

BUSINESS ETHICS LEVELS

STAKEHOLDERS MAP OF A LARGE ORGANIZATION

ENVIRONMENTAL DIMENSIONS AFFECTING INDUSTRIES,

ORGANIZATIONS AND JOBS

STAKEHOLDER ANALYSIS

AN ISSUE DEVELOPMENT LIFE CYCLE OF

MICROSOFT ANTITRUST CASE
High

Societal Awareness

2. Political
Awareness
Netscape
Navigator is
introduced;
1. Social
Microsoft
Control
retaliates. Clinton
Microsoft
administration
dominates
takes position
market for PC
against Microsoft.
operating
systems; OS/2
and Mac OS fail

Low

3. Legislative
Engagement
Judge Jackson
declares Microsoft
a monopoly.4. Litigation
Microsoft is
currently engaged
in settlement talks
with the U.S.
Department of
Justice and State
Attorneys General.

DIAGNOSTIC TYPOLOGY OF ORGANISATIONAL STAKEHOLDERS

Stockholder's Potential for Threat to Organisation

Stakeholders potential for Cooperation

with Organization

High

High

Low

Type 4
MIXED BLESSINGS

Type 1
SUPPORTIVE

Strategy:
COLLABORATE

Strategy:
INVOLVE

Type 3
NONSUPPORTIVE

Type 2
MARGINAL

Strategy:
DEFEND

Strategy:
MONITOR

Low

POTENTIAL FOR THREAT

Low

Potential for Cooperation

High

High

Low

Type 4

Type 1

Mixed Blessing Stakeholders

Strategy: Collaborate

Supportive Stakeholders
Strategy: Involve

Many Customers
Employees

Suppliers
Trade Associations
Shareholders
Many Customers

Type 3

Type 2

Nonsupportive Stakeholders
Strategy: Defend

Maginal Stakeholders
Strategy: Monitor

Federal Government
State Government
Browser Suppliers (Netscape and
Spyglass)
Sun Microsystems
AOL
Netscape
18 States

OEMs, ISPs, OLS, ICPs

Media
Apple (OS)
IBM (OS/2)

DEFINITION
Ethics : Ethos means character
It is science of morals
It is recognised rule of conduct
It is science pf character of a
person expressed as right or wrong
conduct or action.

Nature of Ethics

Ethics deals with human beings only

Ethics is a field of social science
It is a normative science :

Normative science judge the value of the

facts in terms of an ideal. What ought to
be?

It deals with human conduct which is

voluntary and not forced or coerced by
persons and circumstances

Stakeholders theory of the

firm

The corporation should be managed

for the benefits of its stakeholders
The rights of the group must be
ensured
The group should participate in
some sense in decision that
substantially affect their welfare.

Trusteeship

Capitalism
Socialism
Egalitarian

(The principle of equal rights for all persons)

Non-Violence,Ahimsa,Stealing,Non-possession

Gandhian Philosophy of
Wealth Management

It does not recognise right to individual property.

Ends and means cannot be separated and both
needs to be equally moral to achieve moral results
The enterprise of the entrepreneur, the worker and
the consumer, all being co-trustees of the
enterprise, responsible to the society at large

Enjoy your wealth by

renouncing it

Earn your crores by all means. But

understand that your wealth is not yours it
belongs to the people. Take what you
require for your legitimate needs, and use
the remainder for society
Trusteeship seeks to convert through a nonviolent process, private property into social
property.

Swaraj- self rule and self discipline

Ahimsa - Non violence, non exploitation,
equality and freedom
Economic Equality
Equal Distribution
Concept of theft

Trusteeship

Raw material should be purchased to ensure

a living wage to producers
Natural resources not digging cost,
replacement cost.
Reduce disparity the ratio between lowest
and highest 1:7 in the initial stages

Expansionism and centralization shall be

resisted , decentralization should be
encouraged
Enterprise is ultimately responsible to the
world at large
Consumer should be on the board
Capital for such enterprises should be
interest free

Gandhian Philosophy of
Wealth Management

Seven greatest sin :

Politics without principles

Education without character
Commerce without morality
Pleasure without conscience
Wealth without work
Science without humanity
Worship without sacrifice

Ethics in Marketing

Product
Pricing
Physical distribution
Product promotion

Intellectual Property Rights

Copyright
Trademarks
Patents
Industrial designs
Geographical indications

Product

No safety
Hazardous products
Duplication

Product Pricing

Dumping
Deceptive pricing
Predatory pricing
Price fixation
Insider trading

Product Promotion

Making false claims and misleading

advertisement
Ethics in advertisement
Lower the dignity of women
False promise

Physical distribution

Territorial restrictions
Full line forcing
Exclusive dealing arrangement
Artificial scarcity of the product

Corporate Social
Responsibility

Philip Kotler and Nancy Lee as CSR is a

commitment to improve community well
being through discretionary business
practices and contribution of corporate
resources.

Corporate Social
Responsibility

Corporate Citizenship
Corporate Philanthropy
Corporate Giving
Corporate Community involvement
Societal Marketing
Community Relations
Community Affairs
Community Development
Global Citizenship

DIFFERENCE
GOOD
COMPANY

GREAT
COMPANY

Excellent Products
&
Services

Excellent
Products/services
&
Makes the world a better
place

a)

50% of children under 4 malnourished

b)

33% of children below 14 out of school

c)

60% women anemic

d)

e)
f)

5 Mln.++ are HIV positive growing at a compounded rate of 10%

each year
500,000 child deaths/year due to respiratory disease
1 Mln. preventable infant deaths (63/1000 for India, 13/1000 in
Kerala)

g)

130 Mln. without basic health

h)

226 Mln. without safe drinking water

Can Government alone do?

NO

Corporate Social
Responsibility

Corporate Cause promotion

Persuasive Communication
Building awareness and concern
Persuading people to

to find out more about the cause

to donate their time
to donate their Money
To donate non monetary resources
To participate in the event

Corporate
Cause
promotion
Ben & Jerrys : Global warming

One Sweet Whirled

Body Shop : Animal Testing for Cosmetics
Tata : Jagore

Cause Related Marketing

as the process of formulating and

implementing marketing activities that
are characterized by an offer from the
firm to contribute a specified amount to
a designated cause when customers
engage in revenue providing exchanges
that satisfy original and individual
objectives.
American express Bank

ITC notebook contributes Re. 1 from the purchase of each

notebook for the education of the under privileged children
Indian Oil Corporation contributes a fixed percentage of its
profits for the development of SC and ST community
Lifebuoy contributes Re.1 from the purchase of each soap for
NGO
Motorola Mobile phone - Motoslvr and Motorazer V3i (every
purchase of the same contribute $8.50 to the global fund that fights
AIDS in Africa
Surf Excel saves two buckets of water on every wash and
preserves the water
Hall Mark cards - 8% of the net wholesale sales goes to the
global fund that fights AIDS in Africa

Corporate Social Marketing

Means whereby a corporate supports the

development and/or implementation of a
behavior change campaign intended to
improve public health, safety, the
environment , community well being.

Corporate Social Marketing

Health issues
Injury prevention
Community involvement
Corporate Philanthropy

Whistle blowing

The disclosure by organisation members

(former or current) of illegal, immoral or
illegitimate practices under the control of
their employers to persons that may be able
to effect action.

Whistle blowing

Cynthia Cooper of World com,

Sherron Watkins of Enron
Coleen Rowley of FBI

Whistle blowing

There is a misdeed or illegal activity in the organization

A perception that either the management can prevent it or
that it has been initiated by management or certain
employees.
Important factor is the presence of an individual or group
of people who view that some action should be taken
against the illegal activity.
There is a process by which the individuals or group try to
expose the problem to the authorities who can take action.

6 STEP ISSUE MANAGEMENT PROCESS

1.
Environmental
scanning and
issues
identification
6.
Issues evaluation
and monitoring

2.
Issues analysis

6 Step
Issue
Management
5.
Issues response and
implementation

3.
Issues ranking
and prioritizing
4.
Issues resolution
strategizing

FOUR SOCIAL RESPONSIBILITY MODES AND ROLES

MOTIVES

ORIENTATIONS
Stockholder

Stakeholder

Model

Model

Self-Interest

1
Productivism

2
Progressivism

Moral Duty

3
Philanthropy

4
Ethical Idealism

STATES WITH HIGHEST POLLUTANT EMISSIONS FROM

POWER PLANTS
Rank

State

Pollutant Emissions
(millions of pounds)

Ohio

95.2

West Virginia

62.3

Pennsylvania

58.9

Florida

58.0

North Carolina

48.4

Georgia

47.2

Kentucky

44.8

Indiana

44.3

Michigan

33.8

10

Illinois

32.1

11

Alabama

28.7

12

Tennessee

26.7

GREENHOUSE GAS EMISSIONS:

UNITED STATES, JAPAN, AND SELECTED EU COUNTRIES
Country

Reduction Target
Increases by 2008
2012*

Emission Change
1990 - 1999

Spain

15%

23.2%

Ireland

13.0

22.1

United States

- 7.0

16.0

Japan

- 6.0

7.8

Netherlands

- 6.0

6.1

Italy

- 6.5

4.4

Denmark

- 21.0

4.0

European Union

- 8.0

- 4.0

Britain

- 12.5

- 14.0

Germany

- 21.0

- 18.7

* Kyoto Protocol and E. U. burden

sharing

5 STAGES OF ENVIRONMENT CORPORATE COMMITMENT

Stage

Manager Mindset

Resource
Commitment

Top-Level Support
& Involvement

Environmental
management
unnecessary

Minimal resource
commitment

No Involvement

Environmental issues
addressed when
necessary

Budgets for problems

as they occur

Piecemeal
Involvement

3. Concerned citizen

Environmental
management is a
worthwhile function

Consistent yet minimal

budget

Commitment in theory

4. Pragmatist

Environmental
management is an
important business
function

Generally sufficient
funding

Aware and moderately

involved

5. Proactivist

Environmental
management is a
priority item

Open-ended funding

Actively involved

1. Beginner

2. Firefighter