Ethics & Governance

Topic 1 - Values & Ethics

in Organizations
Prof. Sandeep Hegde
Ethics & Governance - Syllabus
Values and Ethics in Organizations
Values and Vision Statements (6 hours)
Stakeholders Model (4 hours)
Code of Ethics (4 hours)
Ethical Dilemmas (8 hours)
Ethical Decision Making (8 hours)
Corporate Governance & CSR (5 hours)
Environmental issues and Triple
Bottom Line Organizations (5 hours)
 Ethics & Governance
Pedagogy
Class discussions
Group discussions
News Paper Clips and articles
Video based discussions
Case Study (This would be our main focus
for this course)
Team Project Presentation
 Internal Evaluation Scheme
Internal Assessment 30 Marks
Marks for class participation 10 (for class
behavior, proactive participation and
knowledge sharing)
Mid Trimester test 10
Team Presentation 10
Trimester end examination 70 Marks
 Trimester end paper pattern
(70 Marks 2 hours duration)
One liners (10 X 1Mark) no options given
10 Marks
Expected to write simple one line definition or explain the term
given in your own words
Short Answer type questions (4 X 5 Marks) 4 out of 6 Questions
20 Marks
Expected to give argumentative discussion based on theory with
some industry examples to supplement your arguments
Case Study (2 3 pages in length) with 2 questions of 15 marks
each. 30 Marks
Expected to relate the case to theories covered in the entire
syllabus. Theoretical illustrations a must. Using the theoretical
illustration one must explain the case and bring out solutions or
recommendations. Citing industry examples to illustrate your
point would be highly appreciated.
Situational type of question or a news paper clip related to
theoretical concepts. 10 Marks
Discussion oriented answer with argumentative pros and cons.
Your personal viewpoints carry weight.
 Prescribed Text
Business Ethics: Concepts and Cases
by Manuel G. Velasquez (6th ed)
Essentials of Management by Harold
Koontz and Heinz Wiehrich (6th ed)
Environmental Management by Bala
Krishnamoorthy
www.greenpeace.org
www.cse.org
www.tata.com
 Ethics Vocabulary

Obligation
Professionalism
Responsibility Virtue
Morals
Character Courage
Integrity
Honesty Accountability
Ideals
Self-Respect
 What is meant by ethics?
Consists of moral principles governing the
right and wrongs of human conduct.
Is about the principles of right and wrong
accepted by individuals or social groups.
A code of behaviour considered morally
correct.
Code of moral principles that guide the
action of people and groups.
Ethical behaviour is doing what is morally
right
 Business ethics
Business ethics are the principles and standards
that:
- Define acceptable conduct in business
- Should underpin decision making
An alternative definition is: the moral values
which govern business behaviour and restrains
companies from pursuing the interest of the
shareholder at the expense of all other
considerations
Some activities might be profitable and legal but
nevertheless are considered to be unethical
An ethical decision is one that is both legal and
meets the shared ethical standards of the
community
Is ethics the same as the law?
- No - although the law should reflect the ethical views of
society there are certain activities permitted by law which
some individual or groups in society or individual might
regard as unethical.
- Ethical considerations are about what is right and what
is wrong
- The law is about what is lawful and what is unlawful
The following business activities are legal but might pose
ethical dilemmas for individuals:
Profiting from gambling
Selling goods manufactured by low wage in developing countries
Engaging in the fur trade
Experimenting on animals
 What is the starting point of
Business Ethics
Mission
A strategic plan starts with a clearly defined
business mission.
Mintzberg defines a mission as follows:
A mission describes the organisations
basic function in society, in terms of the
products and services it produces for its
customers.
 TATA Group and TBEM
Jamshedji Tata, said ...
Be sure to lay wide streets planted with shady
trees, every other one of a quick-growing variety.
Be sure that there is plenty of space for lawns
and gardens. Reserve large areas for football,
hockey and parks. Earmark areas for Hindu
temples, Mohammedan mosques and Christian
churches

.he created a VISION, a key element of TBEM

 TATA Group and TBEM
JRD Tata said
The wealth gathered by Jamshetji Tata and his
sons in half a century of industrial pioneering
formed but a minute fraction of the amount by
which they enriched the nation. The whole of
that wealth is held in trust for the people and
used exclusively for their benefit. The cycle is
thus complete, what came from the people has
gone back to the people many times over

.he articulated our MISSION again, a key

element of TBEM
A perfect value consists in doing without
witness all that we could have done in front of
the entire world

- Nobel Laureate Gabriela Mistral

 Values and Vision
Values form the foundation of a businesss
management style.
Values provide the justification of
behaviour and, therefore, exert significant
influence on all major business decisions.
NESTL CORPORATE BUSINESS PRINCIPLES
Nestl is committed to the following business principles in all countries taking into
account local legislation, culture and religious practice:
Nestl's business objective, and that of management and employees at all levels,
is to manufacture and market the company's products in such a way as to create
value that can be sustained over the long term for customers, shareholders,
employees, business partners and the large number of national economies in
which Nestl operates.
Nestl does not favour short-term profit at the expense of successful long-term
business development, but recognizes the need to generate profit each year in
order to maintain the support of the financial markets, and to finance
investments.
Nestl believes that, as a general rule, legislation is the most effective safeguard
of ethical conduct, although in certain areas, additional guidance to management
and employees, in the form of voluntary business principles, is beneficial in order
to ensure that the highest standards are met throughout the organization.
Nestl is conscious of the fact that the success of a corporation is a reflection of
the professionalism, conduct and ethical values of its management and
employees, therefore recruitment of the right people and ongoing training and
development are crucial.
Nestl recognizes that consumers have a legitimate interest in the company
behind the Nestl brands, and the way in which the Nestl company operates.
 Creating Shared Value
Creating Shared Value is a fundamental
part of Nestl's way of doing business that
focuses on specific areas of the
Company's core business activities
namely water, nutrition, and rural
development where value can best be
created both for society and
shareholders.
 Values
Terminal Values
A lifelong goal or objective that an individual seeks
to achieve (e.g., success or happiness)
Instrumental Values (virtues)
A mode of conduct that an individual seeks to
follow (e.g., honest or capable)
Value System
The terminal and instrumental values that are
guiding principles in an individuals life.
 Foundation of TBEM - Core
Values
Visionary Leadership
Organizational & Personal Learning
Agility
Valuing Employees & Partners
Managing for Innovation
Customer- Driven Excellence
Focus on the Future
Management By Fact
Focus on Results & Creating Value
Social Responsibility & Citizenship
Systems Perspective
 TATA - Values and purpose
The Tata Group is one of India's oldest, largest and most respected
business conglomerates. The Group's businesses are spread over
seven business sectors. It comprises 96 companies, operates on six
continents and employs 350,000 people.

Core values
The Tata group has always been a values-driven organisation. These
values continue to direct the group's growth and businesses. The five core
Tata values underpinning the way we do business are:
Integrity: We must conduct our business fairly, with honesty and transparency.
Everything we do must stand the test of public scrutiny.
Understanding: We must be caring, show respect, compassion and humanity
for our colleagues and customers around the world, and always work for the
benefit of the communities we serve.
Excellence: We must constantly strive to achieve the highest possible standards
in our day-to-day work and in the quality of the goods and services we provide.
Unity: We must work cohesively with our colleagues across the group and with
our customers and partners around the world, building strong relationships based
on tolerance, understanding and mutual cooperation.
Responsibility: We must continue to be responsible, sensitive to the countries,
communities and environments in which we work, always ensuring that what
comes from the people goes back to the people many times over.
 Growth of attention to Values & Ethics
Much
Amount of Attention

Little

1950 1960 1970 1980 1990

Phase I Phase II Phase III

Gestation and Innovation Development Maturity and

and Expansion Institutionalization
 Historical Phases of Social
Responsibility
Social Responsibility
1900s 1930s 1960s

Phase One: Phase Two: Phase Three:

Profit-Maximizing Trusteeship Quality-of-Life
Management Management Management
Businesss primary Corporate managers Managers have to do
responsibility to society need to maintain an more than achieve
is to underwrite the equitable balance economic goals, but
countrys economic among the competing they should manage the
growth and to oversee interests of all groups quality-of-life by helping
the accumulation of with a stake in the develop solutions for
wealth. organization. societys ills.
 100%
Phase Three: Quality of Life

75%

Proportion of Phase Two:

Trusteeship
Firms Adopting

Each Perspective 50%

Phase One:
Profit Maximization

25%

1800 1900 2000

 Corporate Values Statements
Describes the core values the company
wants its employees to exhibit including:
How employees are to treat one another
How employees are to treat customers and
stockholders
 How Are Tatas Showing
Commitment ?
The Tata Group Purpose statement

Our Purpose in Tata is to improve the Quality of Life in the

communities we serve. We do this through Leadership in
sectors of National Economic Significance to which we bring a
unique set of capabilities. This requires us to grow
aggressively in focused areas of business.

Our heritage of returning to society what we earn evokes Trust

among consumers, employees, shareholders and the
community. This heritage will be continuously enriched by
formalizing the high standards of behavior expected from
employees and companies.

The Tata name is a unique asset representing Leadership with

Trust. Leveraging this asset to enhance Group synergy and become
globally competitive is the route to sustained growth and long term
success.
 British Telecom Group
- defining its values:
BT's activities are underpinned by a set of values that all BT people
are asked to respect:
- We put customers first
- We are professional
- We respect each other
- We work as one team
- We are committed to continuous improvement.

These are supported by our vision of a communications-rich world -

a world in which everyone can benefit from the power of
communication skills and technology.

A society in which individuals, organisations and communities have

unlimited access to one another and to a world of knowledge, via a
multiplicity of communications technologies including voice, data,
mobile, internet - regardless of nationality, culture, class or
education.

Our job is to facilitate effective communication, irrespective of

geography, distance, time or complexity.
 References
Essentials of Management An
International Perspective by Harold Koontz
and Heinz Weihrich
Business Ethics: Concepts and Cases
Sixth Edition. By Manuel G. Velasquez.
www.tata.com