Paper Title:

Principles and Importance of Business Ethics in Modern Scenario

Ramapriya H.D
Lecturer in department of Commerce and Management
N.D.R.K First Grade College

Introduction:
Business operates within the society. It is an organ of the society and its
function must contribute to the society. It must earn social sanction for survival and maintain
a proper public image by following good ethical principles. Today, the ethical issues in
business have become more complicated and created its importance because of the global and
diversified nature of many large corporations. The word Ethics was once considered
irrelevant by corporate loyalists but now in the modern world discussions of, it is increasingly
seen as not only important but also as critical to a companys success. Business ethics is a
subject which has suddenly gained status. Today in the competitive world, more and more
importance is being given to the application of ethical practices in business dealings and the
ethical implications of business decisions.
What is Ethics?
Ethics is a set of standards or a code or value system, worked out from Human
reason and experience by which free human actions are determined as ultimately right or
wrong, good or evil.
Definition of Business ethics
Business ethics may be defined as those principles, practices and philosophies that
are concerned with moral judgment and good conduct as they are applicable to business
situations.
Robert Gurinner

Principles of Business Ethics

The various well known authorities on the subject have contributed much to
establish the principles of business ethics. They include the name of Cantt, J.S Mill, Thomas
Garrett etc... The principles of Business Ethics are: Principle of Sacredness of Ends and Means
This is the first and foremost principle of Business ethics. It emphasizes
that the means and techniques adopted to secure the business ends must be sacred and pure. A
good object should not be obtained by evil means. Therefore, both the end and the means
must be sacred. It means that a good end cannot be obtained by a wrong means even if it
gives benefit to the people.

 Principle of proportional judgment:In practice, there arise as situation (while achieving the ends through
means) where the business may give some losses to others. In order to avoid such situation,
the principal of proportional judgment must be observed. This principle suggests that one
should make proper judgment before doing anything. So that others do not suffer from any
losses or risk of evils by the conduct of business.
Principle of co-operation with others:This is another important principle of business ethics to co-operate with
others in doing good work. It should not co-operate with those who do not deserve it or to
those who do evils.
Principle of universal value:This principle suggests that the conduct of business men should be based
on universal values. He should act with sincerity, mutual good and confidence. All his acts
should be based on the accepted principles of ethics.
Principle of non violence:Where the business man hurts the interest and rights of the society, exploit
to the consumers, over look their interests and use the community interests for the satisfaction
of his own interests, this is equivalent to violence and unethical. This principle of non
violence gives more emphasizes that a business man should not hurt to the property, emotions
and interests of others.
Importance of business of ethics
Or
Good Ethics Promotes Good Business
Good business ethics promotes good business. Well known authorities like Raymond
Baumhari, brener and Molander, Strom and Ruch, in their research findings have made it
clear that only those businesses can develop on a long term basis which conducts their
activities on ethical grounds. Once Robert day has said that good ethics not only promotes
professionalism in management but it purifies the inner mind of every businessman.
Some of the important attributes of Business ethics are as follows:
Satisfaction of sub conscious mind
Really speaking a businessman is first an individual of the society, a
businessman later. Many businessmen first behave like individuals and then work for
satisfaction to their inner sub-conscious mind. A person may not take any decisions
which do not give him mental satisfaction.
Goodwill of business and Businessman

It is known fact that nobody likes to deal with a mischievous or

fraudulent businessman. At the same time, people do like to deal with a good
businessman. At the same time, people do like to deal with a good businessman, but
introduce him with others also, for regularity in dealings.
Mutual trust and confidence
Prof.Robert Day writes, When ethical conduct is displayed, it puts some
kind of trust and confidence in relationship. Because of this reason, people deal with
a businessman.
Protects each other
Prof.Robert Day further adds, Good ethics is sound business insurance. It
protects people in dealing with each other. In realty, businessmen act more sincerely
with each other.
Professionalization of management
Prof. Day writes that management cannot become a profession so far as it
does not follow good ethics. Really speaking, an important feature of a profession is
that it has a laid down code of conduct, which remains on the principles of Service of
Humanity. Therefore, it is the first condition for professionalization to develop and
follow ethics.
Perpetual succession
Ethical conduct of business leads to development and perpetual succession
of success. The business may prosper in the shadow of ethics. Learned writes a
sincere a person who does hard work becomes ethical and always succeed in his
efforts, but an unethical person cannot.
Essential to the modern Situation
It is the need of the hour for ethical conduct of business. The following
situations compel a business to follow the ethical principles:
Increased competition.
Enlarged and Stringent legislator provisions.
Birth of consumer movement.
Development of labor unions
Development of buyer-oriented marketing strategy.

Case Study Infosys Technologies

Starting in 1981 in Bangalore, India with seven colleagues who dared to dream and
who were lucky to be among the first in economic liberalization of India in 1990 S.The
Company has maintained a consistent growth and built a global company. There are many
businesses succeed the unique factor about Infosys is in just over two decades it has built a
brand known for ethical standards both inside and outside in the market place.
Infosys Technologies:
In many public addresses, the chief mentor of Infosys has tried to set
benchmarks in the Business Environment. In his address at the CII leadership summit in Sept
2003, he said CEO compensation is an issue that has to be decided be the board and

shareholders. Three factors to be considered for this Fairness, Transparency and

Accountability. Company established a philanthropies foundation in 1996, which is mostly
engaged in social, health and education programs in India.
Companys believes that sound corporate governance is critical to enhance and
retain investor trust. Accordingly, they attain the performance rules with integrity. They
disclosures always to attain the best practices in international corporate governance. The
Image of a non- compromising attitude on ethical issues builds up the confidence of the
stakeholders. Infosys has built a state of the art office complex in Bangalore with all modern
facilities which helps in giving its employees a sense of belonging. Action speaks louder than
words and leaders must speak in a way that inspires integrity and a vision for the company.

Infosys operations are driven by key values

Customer Delight A commitment to our customer expectations.

Integrity and Transparency A commitment to be ethical, sincere and open in our
dealings.
Fairness A commitment to be objective and transaction oriented, there by earning
trust and respect.
Pursuit of Excellence A commitment to strive relentlessly, to constantly improve
ourselves, our teams, our service and products, so as to become the best.

Infosys Ethical philosophy is based on the following principles:

Satisfy the spirit of the law and not just the letter of the law.
Be transparent and maintain a high degree of disclosure levels.
Communicate externally, in a truthful manner, about how the company is run
internally.
Comply with the laws in all the countries in which the company operates.

Have a simple and transparent corporate structure driven solely by business needs.

Infosys Technologies: - The Best among Indian Corporates

As per the credit Lyonalnais Securities Analysis (CLSA), the corporate governance

ratings of the software firms are higher than those of other Indian Firms.
ISO 9001 certified company offering information technology consulting and software

services.
Respected across the country, with very strong systems, high ethical values and a

nurturing working atmosphere.

Level 5 of CMM in 1999.
First Indian registered company to list in NASDAQ in 1999.

ICSI National Award for Excellence in Corporate Governance

Best Governed Companies

Conclusion:
While fashions and buzzwords may change, ultimately certain ethical principles
or values remain constant. In the global competition, importance for Business ethics has
gained status. Business ethics proves that business can be and have been ethical and still
make profits. Infosys Company by practicing high standard of ethics had created a global
image by complying with the laws in all the countries in which the company operates.
Therefore, Good Ethics Promotes Good Business. Non-co-operation with the evil is as
much a duty as is co operation with good. Mahatma Gandhi
[Satyam Vada Dharma Chara]
Forever speak the truth and follow the dharma
Bibliography:

Corporate Governance and Social Responsibility

V. Balachandran and V. Chandrasekaran
Corporate Governance A.C Fernando
www.ethicsworld.org
Business Ethics An Indian Perspective
Business ethics and Corporate Governance
Source - ICFAI Center for Management Research
www.infosys.com