Managerial Values and

Business Ethics
Basic Concepts
What is Ethics?
Related Terms:
Morality: The standards that an individual or a
group has about what is right and wrong or good
and evil.

Moral Standards: The norms about the kinds of
actions believed to be morally right and wrong
as well as the values placed on the kinds of
objects believed to be morally good and morally
bad.


What is Ethics?

The discipline that examines ones
moral standards or the moral
standards of a society.
What does it mean?

What is right and what is wrong?

Do we have right solutions?

Do we have the right solution?

How to choose one right alternative?


The Process
Awareness

Understanding

Sensitization

Sustenance

Why Ethics?
Accelerated rate of change

Uncertainty

Here and Now approach

Questionable business practices

Environmental Forces
Economic

Technological

Political

Governmental/Regulatory/Legal

Demographic/Social

Why does it matter?
To save billions of dollars each year

To build relationships:
Customers
Business Associates
Employees

To raise capital


Myths About BE
Ethics is a personal affair; not a public or
debatable matter.

Business and Ethics do not mix.

It is relative.

Good business means good ethics.

Can BE be taught?
Teaching
Provides rationale, logic and ideas;

Helps people make sense;

Provides intellectual support;

Enables people to act as alarm systems;

Enhances conscientiousness and sensitivity;

Enhances moral reflection;

Strengthens moral courage;

Provides moral autonomy;

Improves the moral/ethical climate of organization.
Types of Issues
BE cover 3 basic types of issues:

1. Systemic Issues

2. Corporate Issues

3. Individual Issues
Kohlbergs Stages of Moral Development
Level 1: Pre-conventional Level
Stage 1: Punishment and Obedience Orientation
Stage 2: Instrumental and Relative Orientation

Level 2: Conventional Level
Stage 3: Interpersonal Concordance Orientation
Stage 4: Law and Order Orientation

Level 3: Post Conventional Level
Stage 5: Social Contract Orientation
Stage 6: Universal Ethical Principles Orientation


Ethics in Business
Is Ethics or Ethical Behaviour a
Cause or an Effect/a
Derivative?

What is the relationship between
Values and Ethics?


Ethics in Business

Values and Ethics in
Business/Management
For
Holistic Competence
Dimensions of Holistic Competence
HC = Values + Skills

Values Becoming part (relating to
Doing right things)

Skills Doing part (relating to Doing
things right)
Holistic Competence
The Bottomline

Skills are to be necessarily applied and filtered
through the medium of values. If values are
contaminated, perverted then skills in application
will emerge as manipulative and corruptive.
Values
Contentment
Gratitude
Humility
Forgiveness
Honesty
Transparence etc.
Greed
Jealousy
Anger
Suspiciousness
Vindictiveness
Vanity etc.
Workplace Unethicality

Monetary Unethicality

Behavioural Unethicality
Behavioural Unethicality
Actions and decisions springing
from envy, egotism,
suspiciousness, competitive
one-upmanship, deception and
the like comprise Behavioural
Unethicality.
Other Dimensions of Workplace
Unethicality
Direct unethicality covers those acts and
decisions that are unambiguously wrong
and are known by the doers to be so.

Dilemma unethicality on the other hand,
is involved in situations with at least two
optional choices, both of which imply
adverse consequences.

Perpetrator-victim Dyad.
Ethical Principles/Approaches
The Disclosure Rule

In the full glare of examination by
associates, friends, family, newspaper,
television, etc. were to focus on your
decision, would you remain comfortable
with it?

If you think you would, it probably is the right
decision.
The Golden Rule

Do unto others as you would have them do
unto you

It includes not knowingly doing harm to
others.
The Intuition Ethic
People are endowed with a kind of moral
sense with which they can apprehend right
or wrong.

The solution to moral problem lies simply in
what you feel or understand to be right in a
given situation.

It is relating to what we call the gut feeling.
The Market Ethic
Selfish actions in the marketplace are
virtuous because they contribute to
efficient operation of the economy.

People should only ask whether their actions
in the market further their financial self-
interest.

If so, the actions are ethical.
The Means-Ends Ethic

Worthwhile ends justify efficient means;

That means, when ends are of overriding
importance or virtue, unscrupulous means
may be employed to reach them.
The Organization Ethic
The will and needs of individuals should be
subordinated to the greater good of the
organization.

An individual should ask whether actions are
consistent with organizational goals and
what is good for the organization.
The Revelation Ethic
Through prayer or other appeal to transcendent
beings and forces, answers are given to
individual minds.

The decision maker prays, meditates or otherwise
communes with a superior force or being.

They are then appraised of which actions are just
and which are not.
The Utilitarian Ethic
The greatest good for the greatest number.

Determine whether the harm in an action is
outweighed by the good.

If the action maximizes benefit, then it is the
optimum course to take among
alternatives that provide less benefit.
The Categorical Imperative

Act only according to that maxim by which you can
at the same time will that it should become a
universal law.

In other words, one should not adopt principles of
action unless they can, without inconsistency, be
adopted by everyone else.

(Source: Steiner, G. A. and J. F. Steiner, Business, Government, and Society:
A Managerial Perspective, 5
th
Edition, New York: Random House, 1988.)
Categorical Imperative
An action is morally right for a person in a
certain situation if, and only if, the persons
reason for carrying out the action is a reason
that he or she would be willing to have every
person act on, in any similar situation.

Eg.: Firing an employee because I do not like his
race.
(Manuel G Velasquez, p. 79)

Categorical Imperative
Two Criteria

Universalizability: The persons reasons for acting must be
reasons that everyone could act on at least in principle.

Reversibility: The persons reasons for acting must be
reasons that he or she would be willing to have all others
use, even as a basis of how they treat him or her.
(p. 79)

Consciousness Ethics

`It is an inside-out approach that
engages in the task of fostering a
spontaneously felt inspiration for
ethical behaviour.

Purusharthas
Eternal Objectives of Life

Dharma
Artha
Kama
Moksha
Law of Cause and Effect
(Karma Vada)

A cause at present produces an effect in
future
An effect at present must have had a
cause in the past
Like cause, like effect
Each cause produces its own effect, there
is no mutual cancellation
The Art and Science of Work
(Karma Yoga)
What is work?
It is a sacrifice!

Why work?
Lokasamgraha welfare of the world
Chittashuddi

How to work?
Nishkama karma - Desireless action

I lift my hands and I shout,
But no one listens.
From dharma comes wealth and pleasure
Why is dharma not practised?
-Vyasa.

To conclude

What is right is right even if no one is
doing it. What is wrong is wrong
even if everyone is doing it.
(Unknown Source)