UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS

Introduction Ethics

• Term Ethics is derived from the
Greek word – ETHOS
• Ethos means custom or character,
convention, customary
fundamental values peculiar to a
specific person, people, culture or
movement.
• From a conceptual viewpoint, ethics
are norms, codes, conventions and
other value-based principles of a
person, group or society.
• Conceptually they are the norms,
codes, conventions and other value-
based principles of a person, group
or society.
or
• Ethics is a theory or system or
science of moral values.
• Operationally ethics is the way we
deliberate, judge, chose, act or
behave that reveal our underlying
values, norms, principles and
standards.

• Ethics is a theory or system or • Further it is that branch of

science of moral values. philosophy that theoretically,
logically and rationally
• Term ethics is also used to denote
distinguishes between and
the field of moral philosophy
determines right from wrong, good
• It is also defined as “the study of from bad, moral from immoral, fair
morality” from unfair and just from unjust

• Operationally, ethics is the way we actions.

deliberate, judge, chose, act, or • Ethics establishes rules and

behave that reveal our underlying standards that govern moral
values, norms, principles and behaviour of individual and groups,
standards. organisations and institutions.

• Being ethical is what my feelings

tell me is right. But this is not a fixed
standard and that makes problems.

• Ethical means accepted standards

in terms of your personal and social
welfare what you believe is right.

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Morality and Ethics • The term ethics is also used to

denote the field of moral
• Lot of attempts are made to
philosophy.
distinguish between morality and
ethics. • Finally, ethics is considered as the
branch of philosophy that
• Historically morality has preceded
theoretically, logically and
ethics by centuries and has helped to
rationally distinguishes between
guide and formulate ethics.
and determines right from wrong,
• Morality is as old as humanity. good from bad, moral from

• Conceptually, morality is the moral immoral, fair from unfair and just

quality or character of a person, from unjust actions.

family, group or society. Implications

• Although ethics deals with • Ethics bears two significant

morality, it is not quite the same as implications such as
morality.
• As culture change over time,
• It is rightness or wrongness in ethics change. Hence ethics
action of a person, group or society. is a dynamic and not a static

• Morality constitutes principles of concept.

right or wrong in human conduct. • As values changes over

• This term is generally used to time, ethics change across

describe a sociological cultures, values define what

phenomenon, namely the existence we consider acceptable

of a society with rules and standards ways of working.

of social behavior. Business Ethics

• These refers to the rules and norms • Is a subset of ethics.

of specific kinds of conduct or the
• Business Ethics is the study of
code of conduct for specialized
business situations, activities and
groups.
decisions where issues of right and
• Thus we have ethics of doctors, wrong are addressed.
ethics of lawyers, ethics of
• When we say right – morally right
engineers etc.
or wrong.

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• Is it possible to distinguish from the of ethics into specific social rules,

law? regulations and proscriptions.

Business or Corporate Ethics Relationship between law and ethics

• Business ethics is a specialised

study of moral right and wrong in
the business arena.

• Business Ethics is the science of

values and principles in business
exchanges, and corporate ethics is
• Nevertheless, the two are not
the science of exchange values and
equivalent.
principles in corporate
deliberations, decisions, choices • The best way to think of the law and
and strategies that impact the whole ethics is in terms of two intersecting
corporation and its stakeholders. domains.

• So, business ethics is a science of • Law might be said to be a definition

moral values and principles in of the minimum acceptable
business exchanges. standards of behaviour.

• Corporate ethics is a science of • However, many morally contestable

executive moral values and issues in the context of business or
principles relative to strategic elsewhere is not explicitly covered
corporate decisions, choices and by the law.
their consequences.
• The domain of ethical behaviour
Business Ethics and the Law extends beyond what is legal.

• Surely the law is also about the

issues of right and wrong.

• This is true and indeed there is

considerable overlap between ethics
and the law.

• In fact, law is essentially an

institutionalisation or codification

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Why is business ethics important?
• Power and influence of business in
society is greater than ever before.
• Business has the potential to
provide a major contribution to our
societies – producing the products
we want, providing employment,
paying taxes etc.
• Business malpractices have the
potential to inflict enormous harm
on individuals.
• Demands placed by its
stakeholders enforcing business to
be ethical.
• Improve ethical decision making
• Provides avenue to assess the
benefit and problems associated
with the ways of managing business
or organisation.
Business Ethics
• Is a study of moral standards and
how these apply to the social
systems and organisations through
which modern societies produce
and distribute goods and services
and to the behaviour of the people
who work within
organisations.
• Business ethics is a form of applied
ethics. It not only includes the
analysis of moral norms and moral
UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS | Prepared by Aruna Menezes
values but also attempts to apply the
conclusion of this analysis to the
assortment of institutions,
organisations, activities and
pursuits which is business.
• The first common element between
ethics, business ethics and corporate
ethics is - values, actually human
principled values.
• Moral values are our fundamental
meaning, beliefs and principles by
which we define and distinguish
wide what is right and wrong, good and
evil, just and unjust and true and
false.
• These values provide guidance and
standards by which we discern right
from wrong and good from evil,
truth from false and so on.
Benefits of Business Ethics
• When we have ethical culture, we
visualise
• Employee commitment and
Trust
• Investor loyalty and Trust
• Customer Satisfaction and
these Trust
• Existence of these positivity
leads to profits.
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Ethics contributes to employee Ethics contributes to Investor Loyalty

commitment
• Ethical conduct of an organisation
• More the business is dedicated to or business results in shareholder
taking care of its employees, the loyalty.
more likely it is that the employee
• Investors today are increasingly
will take care of the organisation.
concerned about the culture of
• How can you foster the ethics, social responsibility as well
development of an ethical culture as the reputation of the company in
which they desire to invest.
• Absence of abusive
behaviour Ethics contributes to Customer
Satisfaction
• Safe work environment
• Customer satisfaction is an
• Competitive salaries
inevitable factor in a successful
• Fulfilment of contractual business strategy.
obligations toward
• Along with developing and
employees
adapting new products in tune with
• Employee perception that their firm changing desires and preferences, it
has an ethical culture leads to must also seek to develop long term
performance enhancing outcomes relationship with its customers and
within the organisation. stakeholders.

• A strong organisation culture that • For most businesses repeat

integrates strong ethical values and purchases and an enduring
positive business practices has been relationship of mutual respect and
found to increase group creativity cooperation with customer are
and job satisfaction and decrease essential for success.
turnover.
Ethics contribute to Profits
• The ethical culture of a company
• A business house cannot nurture
seems to matter to employees. The
and develop an ethical culture
companies that viewed as highly
unless it has achieved adequate
ethical by their employees were six
financial performance in terms of
times more likely to keep their
profits.
workers.

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• Ethical conduct toward customers • On the other hand, large companies

builds a strong competitive position tend to have much more formalised
that has been shown to positively approach with considerable
affect business performance and resources to evolve and develop
product innovation. sophisticated ethics management
programmes.
Business Ethics in different
organisational context Business Ethics in PPC

• Business ethics matter not just for • In public sector, more attention is
huge multinational corporations but paid to higher level Government
also for a range of other types of and general public.
organisations.
• Typically, ethical issues prioritised
• Some of the issues will be by Government agencies will be
inevitably be rather similar across those of rule of law, corruption,
the organisational types. conflicts of interest, public
accountability and various
procedural issues involved in
ensuring that resources are
deployed fairly and impartially.

• Usually reflected in a formalised

and bureaucratic approach to ethics
management.
Business ethics in Large / Small
companies

• Small business typically differs in

their attention and approach to
business ethics.

• These differences include the lack

of time, resources that the managers
are exposed to, their autonomy and
independence with respect to
responsibilities to other
stakeholders etc.

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 UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS
The Ethics and Fraud
• Fraud has existed since the dawn of
humanity and will continue until the
end of times.
• Given human nature and
weaknesses, one’s avarice and
greed for money, power
popularity has been the major
stimulus for fraudulent crime.
• Fraud exists even today and can
occur anytime in organisation.
• There is no special recipe or
checklist for detecting
preventing corporate or personal
fraud at all times.
• Managers should be aware of fraud,
deal with the human factors that
generate fraud by hiring honest
people and keep them honest by
instituting strong deterrents
fraud, and deal with
environment factors that cause
crime by enforcing adequate
monitoring, controls policies and
procedures.
• The corporate world is terribly
failing with its fiduciary duty and
loyalty to its stakeholders.
• During the last decade the media
has been reporting various cases on
the corporate frauds either in the
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form of accounting misdeeds or
insider trading security scandals.
• In the very wake of extraordinary
scandals, discussions on the values
and virtues of honesty are no longer
its
academic and challenging.
and • As representatives of the
corporation, they must be the
frontline public relations and
goodwill ambassadors for their
firms, products and services.
Corporate Fraud
and • The giant brands such as Enron,
WorldCom, Tyco, and others have
been known for the events of
corporate fraud.
• In the past the crimes were of low
profile which included theft of
physical goods and even small
of amount of money, owing to fear of
the being caught.
• Whereas at present, the crimes are
way too sophisticated and are
electronic in nature.
• A fraud in general means –
Deliberate misrepresentation.
• It implies a deliberate or willed and
planned misrepresentation of
subjects, objects, properties, in a
deviant behaviour situation.
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• Occupational fraud – The use of
one’s occupation for
enrichment through the deliberate
misuse or misapplication of the
employing organisation’s resources
or assets.
Corporate Frauds
• They are purely deceptive trade
practices.
• Includes transactions that have a
tendency or capacity to mislead
consumers.
• When we classify occupational
fraud on the grounds of type,
perpetrators, methods, victims and
costs of deception.
• The most common occupational
frauds on behalf of
organisation are those of the top
management that result in false
financial reporting.
• Financial statement frauds occur in
companies that are experiencing net
losses or have profits much less than
forecasts or expectations.
Occupational Abuse
• This is a form of fraud presumably
of smaller proportions.
• Abuses imply on some form of
cheating and cost to the employers.
• Use sick leave when not sick
personal
• Come to work late or leave
work early
• Take a long lunch break
without approval
• Indulge in slow and sloppy
work
• Declare more hours of work
than in reality
Can ethics combat corruption?
• Much of corruption thrives on
uncertainty or ambiguity of the law,
licenses and other excessive
regulation and its enforcement
mechanisms.
• In order to do this, there is a need to
one’s breakdown the phenomenon of
corruption into inputs, process and
outputs and distinguish the supply
side and demand side under each.
• There are three dimensions to any
corporate fraud
• The human
• The technology
• Legal dimension
• There are several issues that make it
difficult to predict, uncover or
control corporate corruption and
fraud.
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• When top level executives are

corrupt it is hard for mid level
managers to detect the deceptive
acts and problems.

• Mid level worried about whistle

blowing

Corporate Ethics
Language of Executive Ethics
• If ethics is the science of values and
• It is generally assumed that business
principles in business exchanges
executive ethics can be predicted
then corporate ethics is the science
about two components of executive
of exchange values and principles in
conduct.
corporation deliberations,
decisions, choices and strategies • Firstly, the decisions, choices,
that impact the whole corporation actions or even strategies
and its stakeholders. incorporated by executives.

• At corporate level, higher profile • Secondly, the intent, statements,

executives and many others declaration or even reports of the
decisions impact the entire executives.
corporation.
Is it possible to define business executive
• The major area of concern is such morality?
deliberations, choices, decisions
• Veracity
and strategies that have impact
corporation wide and on the • Legality
industry as a whole. • Integrity
• As is apparent from the definitions • Social equality
and the conceptual clarity that the
• Equality of human dignity
very common aspect between
Ethics, business ethics and • Impartiality
corporate ethics is values, human
principled moral values and reality.

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Major Ethical Systems Rules • Personal ethical inputs each

corporate executive brings
• Ethical theories are the rules and
principles that determine right and to the decision action situation and
wrong for a given situation. corporate ethical inputs

• In understanding the place for that comes from the corporation.

ethical theory, Richard De George
• Personal ethical inputs are again
(1999) suggests that we can imagine
classified as
two positions.
• Cognitive or intellectual
• Ethical Absolutism
development
• Ethical Relativism
• Moral development
• Executive behaviour or corporate
• Personality or volitional
conduct in general and business
development
executive decisions, actions and
strategies in particular may be Corporate ethical inputs

characterised as involving a system • These are the norms and values that
of ethical inputs, outputs and define the corporation in its
process. everyday turnaround operations.

• Thus if the outputs are good and • These are grouped under three
beneficial to society, then the heads
business executive must be praised
• Corporate cognitive
and rewarded appropriately.
development
• If the outputs bring about harmful
• Corporate moral
effects of cost to society then the
Development
executive or the corporation is and
must accept responsibility for these • Corporate personality
cost burdens. development

Personal ethical inputs

• Basic ethical inputs to business

conduct are twofold – Personal
ethical inputs and corporate ethical
inputs.

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Corporate ethical process Moral absolutism

• The corporate ethical process that • Some people think there are such
converts – personal and corporate universal rules that apply to
ethical inputs into ethical outputs everyone. This sort of thinking is
may involve three components. called moral absolutism.

• Corporate planning • Moral absolutism argues that there

are some moral rules that are always
• Corporate strategy
true, that these rules can be
• Corporate ethical moral discovered and that these rules
dilemma apply to everyone.

Corporate ethical outputs • Absolutism takes a universal view

• Basic corporate ethical outputs are of humanity - there is one set of

realised values in terms of satisfied rules for everyone - which enables

or dissatisfied stakeholders who the drafting of universal rules - such

include stockholders, suppliers, as the Declaration of Human Rights.

creditors, employees, unions, • Immoral acts - acts that break these

customers, Government etc. moral rules - are wrong in

Ethical Absolutism and Relativism themselves, regardless of the

circumstances or the consequences
• This claims that there are eternal,
of those acts.
universally applicable moral
principles. As per this view, right Moral relativism

and wrong are objective qualities • Moral relativists say that if you look
that can be rationally determined. at different cultures or different

• This claims that morality is context periods in history you'll find that

dependent and subjective. they have different moral rules.

• Relativists tend to believe that there • Therefore it makes sense to say that

are no universal right and wrongs "good" refers to the things that a

that can be rationally determined – particular group of people approve

depends on the person making the of.

decision and the culture in which • Moral relativists think that that's
they are located. just fine, and dispute the idea that

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there are some objective and Legally Ethical Rules

discoverable 'super-rules' that all
• A business executives decision,
cultures ought to obey. They believe
choice of action that conforms to
that relativism respects the diversity
and fulfils duly promulgated laws,
of human societies and responds to
ordinances and standards.
the different circumstances
surrounding human acts. • One that does not conform with
legal laws or rules are unethical or
Major Ethical Systems Rules
illicit action.
• Factually Ethical Rules
• Business executive reports or
• Legally Ethical Rules statements that do verify or support
legal specifications, accounting
• Teleological Ethical Rules
regulations are legally truthful or
• Parenetic Ethical Rules valid statement.

• Deontological Ethical and Moral • These rules are subjective in nature

rules and less objective.

• Distributive Justice based Ethical Teleological Ethical Rules

and Moral rules
• Under these, the business executive
• Corrective Justice based Ethical and decisions, actions or strategies
Moral rules conform with utilitarian rules of

Factual Ethical Rules common good ie benefit of any

action should always exceed its
• Over here the executive decision,
cost, should maximum utility or
choice of action or strategy
happiness of the most, or minimise
responds to the real facts or actual
disutility or unhappiness of the
data.
greatest number are teleological
• Eg. Truthful ads ethical actions.

• One that does not conform is a

formally factually unethical or
wrong action. Such as untruthful
ads, firing without due notice or
compensation.

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Parenetic Ethical Rules Corrective Justice based Ethical and

Moral Rules
• Business ethical rules that conforms
to industry codes of business • Business executive decisions,
conduct and agreements, norms of especially those that deal with the
trade association is a parenetical corrective distribution of burdens of
ethical rules. burdens and social externalities.

• The measure of these acts may be • In summary, one may combine

less objective as the codes of several perspectives to arrive at
conduct, business covenants are not more informed and more objective
universal across industries or business executive ethical and
corporation nor are they uniformly moral decisions.
interpreted .
• For instance – One may ethically
Deontological Ethical Rules believe that unplanned, unnecessary
plant closing are morally wrong
• Actions that conform to or respect
because teleologically viewed they
personal or social rights of
incur more costs than benefit to
employees, customers and other
great numbers, Deontologically
stakeholders.
considered they violate more rights
• Business executive statements that of stakeholders and from a
do verify or support personal or distributive justice viewpoint they
social rights – employee are inequitably distribute the cost
performance appraisal, product and benefits etc.
labels.
The Human Person
Distributive Justice based Ethical Moral
• Recent advancements in all the
Rules
areas of sciences have not only
• Business Executive decisions, initiated technological and market
actions or strategies especially those breakthroughs but more importantly
that deal with the distribution of have unearthed human potentiality
costs and benefits and thus conform for design, creativity and
to the principles of distributive innovation.
justice.
• This growing consciousness of
increased power that human beings

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have over nature and over the future kind of executive person do I want
development have become a to become?
blessing and a curse too.
• The basic remarks of personhood is
• We can make or mark our destiny. inevitable.

• In this regard, the concept of human • We are human persons every

personhood cum human moment if our being – fixed nature
responsibility is a fundamental part of human personhood.
of this new self understanding and
Human Personhood
undertaking.
• Ethically personhood has been
• Ethics and morality are a critical
defined as a stage where a
component of this very creating and
developing human is either
unusual journey to destiny.
endowed with moral or social
• Corporate ethics in particular characteristics defining an adult
requires the development of a clear with full moral status, or
understanding of the relationship importantly has the potential to
between executive autonomy and develop those characteristics.
freedom, human creativity and
• Theologically it can imply when an
market innovations, culture and
entity becomes fully recognized by
social responsibility.
God or as a new creation or a new
Human Personhood ‘soul’, hence the term ensoulment.

• Regardless of our religion, beliefs, • Biologically, it can relate to a

nationality etc our common grounds particular stage in embryo
our recognition of the value of development when a new individual
human person and personhood is is created or when an entity has
given prominence. gained recognizable characteristics
of a human being or a particular
• Corporate ethics and morals deal
capacity for independent existence.
not only with executive decisions
and actions, but even raise the more
fundamental question – What ought
I to do?, What ought I to be? What

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What is human? • Our knowledge is very reflective

and our choices are informed and
• Aristotle’s balanced formula for
reflective.
man was: Man is a rational animal.
• Our skills and potential for
• Greek Philosophy and
knowledge and choice empower us
categorisation of this definition
to be – causes or authors of our own
meant that human being is endowed
action and hence accountable and
with the highest of three types of
responsible for the effects of our
souls
actions
• Vegetative soul
• Our surface of human behaviour is
• Animal soul basically a set of actions that are

• Rational soul governed by our feelings, emotions,

attitudes and beliefs regarding
Vegetative soul
proposed ends, ideals, goals and
• In the thought of Aristotle, the type objectives.
of soul possessed by plants. The
• In general, most actions stem from
vegetative soul has the capacity for
and are affected by one’s
growth and reproduction but does
personality or character.
not have the capacity to receive and
react to sense impressions or the • To an extent, these actions are

capacity for rational thought. human, they are usually assessed by

several dyadic qualifications – right
• Human is capable of nutrition,
or wrong, good or bad, ethical or
growth and reproduction.
unethical, moral or immoral, just or
Animal Soul unjust and fair or unfair.

• The human is capable of knowledge

and choice.

• That is this rational soul expresses

itself in the two fold activity of
thinking and willing.

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Ethics and Corporate Ethics • Affective – We are affective, also

fed by our five sense, empowered
• Ethics is concerned with
and reinforced by our attitudes,
responsible human behaviour.
beliefs, instincts and drives, needs
• Corporate ethics is concerned with and wants, desires and aspiration,
responsible human behaviour in ambitions and dreams
relation to executive decision,
• Cognitive – Humans have a unique
actions, and also the outcomes.
capacities for thinking, reasoning
• Good business executives execute explanations, experimentation,
good decisions and actions that creativity and innovation,
generate good outcomes, and avoid imagination and intuition,
bad decisions and actions that result judgement and decisions.
in bad consequences.
Volitive – We are voluntary and
Value and Function of Executive intentional.
Personhood
• The unity of these activities –
• Human behaviour, however cannot Sensitive, Cognitive, Affective and
be reduced to a set of decisions and Volitive has been identified by
actions. There is a profound unity many as the nexus of human
and interrelatedness that affects four personhood.
basic characteristics of what it
• Our thinking is an activity that is
means to be human:
highly dependent upon choice and
• Sensitive intimately affected by our

• Affective emotional state of mind.

• Cognitive • In the scholastic tradition, this

human personhood is represented
• Volitive
by the “soul” that unifies the body
• Sensitive – We are uniquely and spirit, the physical and the
sensitive fed by our five senses that mental, the understanding and the
are nuanced or differed by will, the voluntary and the
observation, perception, involuntary and human instincts and
internationalisation and pleasures. human drives.

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• The unifying power and principle is • For sure, the human person is not a
the human person. simple or random by product of the
internal and external stimuli.

• Our human personhood is a unique

• On one hand our human personhood
combination of four internal and
is fed and moulded by the internal
external forces that unify, interpret,
stimuli of our sensitive, cognitive,
internalise and respond to the
affective and volitive lives whereas
various stimuli.
on the contrary it is also influenced
by external stimuli – family, • They are – Our immanence, our
ergonomic stimuli, market stimuli individuality, our sociality and
and ideological stimuli. our transcendence

• Family and School – childhood Our Unique Immanence

experiences, adolescent experiences
• Means to remain in, or to be
and experience of peers.
operating and living within
• Ergonomic Stimuli – Experiences something.
of the workplace in relation to
• We are basically immanent in the
gainful work, meaningful work,
world and in the universe.
unions, new source of income,
rewards merited etc. • The human person dwells in
immanence.
• Market Stimuli – Factors from in
and around, supply and demand, • Our immanence has two aspects –

magazines, newspapers, Facebook, We are corporeal material in nature,

etc. we are living physical organisms

made up of flesh and blood.
• Ideological Stimuli – Our unique
value experiences derived from our • Because of our immanence we have

society, art, poetry, language and needs, wants and desires, capacities

literature, fictions, movies etc. and limitations.

What constitutes our human • We tend to have interaction – our

personhood? needs and limitations are sourced in

the interactions and unity that exists
between human and its
environment.

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Our Unique Individuality • Our very existence is dependent

upon this social quality of human
• We are unique combination of body
personhood.
and soul, mind and matter,
conscious and unconscious, • As human beings we have two
physical and emotional etc. major sources of information –
Genetic and cultural.
• This unique combination makes
knowledge, thought, talent, skills • We are individuals precisely
choice etc. because we are social beings.

• So do you think that this • By nature we are gregarious beings.

combination has just happened We need contact with other beings
randomly? like ourselves in order to understand
that we are human and what this
• Difficult to answer.
means.
• Our unique, irreplaceable
• Without sociality there is no
individuality cannot be fully
individuality. We cannot be
understood and explained unless we
personalised human persons in
accept that it comes from being
isolation. It is through our social
uniquely shaped and moulded in the
contacts that we activate and
image of God.
develop the ability to be individual
Our unique sociality and social, to be ethical and moral.

• We do not live, move and have our • Human personhood is more than our
being in isolation. personality.

• Because of our unique immanence • Our fundamental nature of human

and individuality we are social personhood as expressed –
beings. sensitive, affective, cognitive and

• We sense, feel and to an extent volitive becomes alive through our

manipulate the world around as sociality.

animals. • Social contact is necessary for our

• But we are far more than animals, as very survival as a species.

we are knowledgeable. • Without this social interactions and

contacts it is highly difficult to

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develop our personality, further our • My choices are limited, but I can
individuality, community, society still be free in the autonomy of
and our culture and civilisation. personhood that makes the choices.

Corporate executives

• Responsible for unique immanence

Our unique Transcendence • Responsible for unique

individuality
Transcendence implies to going beyond
one’s sense and experience, emotions and • Responsible for unique sociality
feelings, knowledge and skills, capacities
• Responsible for unique
and limitations in order to achieve
transcendence
excellence, moral integrity, and
extraordinary heights of self-actualisation. Ethics of Corporate Human Act

Executive Freedom and Human Acts • From the unique composition and
engineering of the human
• A vital aspect of our transcendence
personhood arise certain properties
and our nature as executive human
such as human acts, actions which
persons is our free will or the realm
further define the human behaviour
of our freedom.
and personality, self-identity and
• Our executive freedom is two fold – self-transcendence and a strong and
We are free to make choices and we persistent need for self-
are free to determine the direction actualisation.
and meaning of our existence.
What is an executive human act?
• Freedom of choice is largely
• Human Acts – Those that stem from
dependent upon the domain and
human actors / human beings.
situation of choices.
• As human personhood is basically
• Our transcendental freedom
constituted of body and soul, mind
whereby we determine the meaning
and matter, emotion and spirit,
and direction of our existence is the
intellect and will and as this unique
autonomy of character which
composition has immanence,
expresses the person behind the
individuality, sociality and
character.
transcendence, it reasonably

UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS | Prepared by Aruna Menezes

 UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS

follows that human acts are those • An act or action is specified

that define the human person as in terms of its purpose.
person, acts that are characterised
• Every human act or action has
by knowledge.
typical human inputs, human
• They are freely willed acts. processes and human outputs in
relation to the internal and external
• Executive human acts are those
environment the action is situated.
corporate acts that are deliberate
and voluntary. • Our human motivated behaviour is
differentiated from that of the
• They are those acts where executive
animal world by the level of
is the direct casual agent of an
hierarchical sophistication and
activity.
specially by our capacity to
• In an executive human act, the represent.
executive is some way chooses to
• There are certain assumptions made
perform that act
on the grounds of theory of human
representation and following
definitions are made.

The phenomenology of the executive • Intentional acts

human act • Intentional motivated actions

• How does the corporate executive • Automatic motivated behaviour

execute a human act?
• Intentionality
• What happens when an executive
• Volitional power
acts and how does it happen?
• Valences
• How do you judge the
ethicality or morality of the • Motivated behaviour action theory
executive act we must
Theory of Action: The volitionalist
understand the structural
tradition
existential process in which
the act originates, • In the volitionalist paradigm, acts

progresses and is finally and actions primarily consist in

posited. willing events caused by volitions

UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS | Prepared by Aruna Menezes

 UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS
based in desire, and the volitions are
themselves uncaused.
• Volition or intellection or bodily
motion or whatever combination
thereof, there must be
fundamental motivational energy or
power that is rationally released into
action when triggered by certain
internal and external factors.
• Human beings generate varied
responses some which we term as
acts, some as reflexes some as
operations and some as actions.
The ethics of Corporate Judgement
• There are several task that we
accomplish by – formulating
appropriate principles, precepts,
rules and regulations in a way we
can easily understand ourselves and
instruct people to remember them,
apply them to concrete situation,
• The concept of good and evil, truth
and falsehood and so on are
primarily employed in relation to
task.
Deliberation, Explanation and
Justification
• Moral value judgement enable us to
ask and answer normative question
such as :
• What should I do?
UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS | Prepared by Aruna Menezes
• What I ought not to do ?
• Why should I do it?
• What is my compelling
moral reason for not doing
a
it?
Deliberation
• Deliberate means – done
consciously and intentionally
• Deliberation means – long and
careful consideration or discussion.
• In deliberation we try before acting
to determine which course of action
is open and is best under the
circumstances.
• Deliberation is a form of reasoning
that responds to two question –why
I should do a particular thing and
what is causal efficiency of that
reason in moving or obliging me to
do such a thing?
Explanation
• Here we try to reason why I do or
did this particular fact or a moral
principle and that was the sole
factor that motivate me do this.
• In explanation, we are primarily
interested in what moved the agent
to act.
 UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS

• Here we are not interested to know conventions or from our moral

right or wrong but actually what did training.
make me do it?

Justification

• In justification we try, after acting to

argue that this was the best course
of action open to me at the time and
under the circumstances and I did it
but cannot be condemned for it nor
held accountable for it.

• In justification you may either

justify the inputs, the process and
the outputs of your reasoning,
evidence and action.

• In justification we are primarily

interested in the rights and wrongs
of a given outcome or case.

The nature of moral deliberation

• Moral deliberation involves moral

reasons or consideration.

• Moral deliberation looks for the best

course of action that is supported by
the best moral reasons.

• Moral reasons are moral rules of

action.

• Some moral rules of action are our

moral conviction that can be true or
false.

• Our moral convictions derive from

some law, common good,

UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS | Prepared by Aruna Menezes

 UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS

The social factor of Moral reasoning

• Moral development is a study of

psychology that overlaps moral
philosophy.

• Moral reasoning can be defined as

being the process in which
individual try to determine the
difference between what is wrong
and right using logic.

• For instance the dilemma to lie.

People make this decision by
reasoning the morality of their
potential action through weighing
their action against potential
consequences.

UNIT – 1 THE FOUNDATION OF CORPORATE ETHICS | Prepared by Aruna Menezes