Defining Ethics :

The word ethics is derived from the Greek word ethos (character), and from the Latin word mores (customs). Together they combine to define how individuals choose to interact with one another. In philosophy, ethics defines what is good for the individual and for society and establishes the nature of duties that people owe themselves and one another .

In simple words

Understanding of right and wrong /Ability to distinguish between the right and the wrong.

Two Key Branches of Ethics

Descriptive ethics involves describing, characterizing and studying morality
What is

Normative ethics involves supplying and justifying moral systems

What should be

Fellow Workers

Culture

Regions of Country

Family The Individual Conscience Friends

Profession

Employer

The Law

Religious Beliefs

Society at Large

Corporate Ethics
Corporate Ethics is a specialized study of moral right and wrong. It concentrates on moral standards as they apply particularly to business policies, institutions, and behavior.

Ethical issues in Accounting and Finance

Accounting and finance provides fair and accurate reporting of the financial position of a business. The major ethical issues occur in accounting and finance are: reporting false income, falsifying documents, allowing or taking questionable deductions, illegally evading income taxes, engaging in frauds etc.

management ethics:
leadership and management model
Below is a modern model for management and

leadership in the 21st century. It's an interpretation of the 'personality' of good ethical modern management and leadership. As such it's not a process or technique - it's an attempt to characterise good modern ethical management and leadership.

Ethics in Marketing
In a market economy, a business may be expected to act in

what it believes to be its own best interest. The purpose of marketing is to create a competitive advantage. An organization achieves an advantage when it does a better job than its competitors at satisfying the product and service requirements of its target markets.

Several areas of concern in marketing ethics are :

1. UNFAIR OR DECEPTIVE MARKETING PRACTICES 2. OFFENSIVE MATERIALS AND OBJECTIONABLE MARKETING PRACTICES 3. ETHICAL PRODUCT AND DISTRIBUTION PRACTICES 4. DOES MARKETING OVERFOCUS ON MATERIALISM? 5. SPECIAL ETHICAL ISSUES IN MARKETING TO CHILDREN

Corporate Ethics Corporate Ethics Based on principles of integrity and fairness . Focuses on Stakeholders, and employees Quality of product and services, Customer satisfaction, Community and environment.

Inventory of Ethical Issues in Business Employee-Employer Relations Company-Government Relations Company-Customer Relations Company-Shareholder Relations Company-Community/Public Interest

Lets take one of the above suppliers. A business cannot claim to be ethical firm if it ignores unethical practices by its suppliers e.g. 1.Use of child labour and forced labour 2.Production in sweatshops 3.Violation of the basic rights of workers 4.Ignoring health, safety and environmental standards

Corporate Ethics are implemented to- :

1.Define the framework of the acceptable behavior. 2.Follow high standards of practice. 3.Create benchmarks for self evaluation. 4.Enhance sense of community. 5.Create transparency in the business activities. 6.Foster higher standards of business ethics. 7.Comply with government laws and norms.

 Direct consumer action is another way in which

business ethics can be challenged. Consumers may take action against: Businesses they consider to be unethical in some ways (e.g. animal furs) Business acting irresponsibly Businesses that use business practices they find unacceptable Consumer action can also be positive supporting businesses with a strong ethical stance & record. A good example of this is Fairtrade.

Principles for ethically run Business :

Principle 1 Productivity Is Much More Important Than Profitability Principle 2 The Customer Is Not Sheep That Can Be Sheared Principle 3 The Buyer's Domain Is More Important Than the Middlemen's Domain Principle 4 Be Diplomatic With Your Competitors

Solving ethical decisions are not easy

Situation in which a business decision may be influenced for personal gain. Telling the truth and adhering to deeply felt ethical principles in business decisions.

Employees disclosure of illegal, immoral, or unethical practices in the organization.

Businesspeople expect employees to be loyal and truthful, but ethical conflicts may arise.

Business Ethics:Today vs. Earlier Period

Societys Expectations of Business Ethics

Ethical Problem Actual Business Ethics

Ethical Problem

1950s

Time

Early 2000s

18

Difference between csr and corporate ethics: CSR Companies have a policy of social responsibility known as corporate social responsibility whereby they commit to follow their businesses in such a way so as to benefit the community at large. ETHICS But ethics is a loose term that is dependent upon a persons conscience.

Who is responsible for ethics in the company? Answer:

Everyone.

An ethical problem cant be resolved unless its first recognized as a dilemma

it is difficult to judge what is right and what is wrong because what is right in one situation can be wrong and improper in another situation

but Ethics involves learning what is right and wrong,

and then doing the right thing.

The Relation Between Law and Ethics

Ethical values and legal principles are usually closely related. In some cases, the law mandates ethical conduct. Though law often embodies ethical principles, law and ethics are far from co-extensive. The law does not prohibit many acts that would be widely condemned as unethical. And the contrary is true as well. The law also prohibits acts that some groups would perceive as ethical. For example lying or betraying the confidence of a friend is not illegal, but most people would consider it unethical. Yet, speeding is illegal, but many people do not have an ethical conflict with exceeding the speed limit.

The following diagram shows the relationship between law and ethics.

Ethical values and legal principles are usually closely related, but. In some cases, the law mandates ethical conduct.

Ethics, Economics, and Law

How do we describe an ethical organization?

1. They are at ease interacting with diverse internal and external stakeholder groups. The basic guidelines of these firms make the good of these stakeholder groups parts of the organizations' own good. 2. They are obsessed with fairness. Their guidelines emphasize that the other persons' interests count as much as their own. 3. Responsibility is individual rather than collective, with individuals assuming personal responsibility for actions of the organization. These organization guidelines mandate that individuals are responsible to themselves. 4. They see their activities in terms of purpose. This purpose is a way of operating that members of the organization highly value. Moreover, purpose ties the organization to its stakeholders.

We see that organizations such as Tata Motors, Wipro, and Infosys have specific ethical policies and they are immensely benefited by these policies

The following characteristics are common the companies that are mentioned:
1. There exists a clear vision and picture of integrity throughout the organization. 2. The vision is owned and practiced at every level of management. 3. The reward system is aligned with the vision of integrity. 4. Policies and practices of the organization are aligned with the vision and no mixed messages are being sent. 5. It is understood that every significant management decision has ethical value dimensions.

Is ethical behaviour good or bad for business? ou might think the question is an easy one for businesses to answer? Surely acting ethically makes good business sense? As with all issues in business studies, there are two sides to every argument: The advantages of ethical behavior include: Higher revenues demand from positive consumer support Improved brand and business awareness and recognition Better employee motivation and recruitment New sources of finance e.g. from ethical investors The disadvantages claimed for ethical business include: Higher costs e.g. sourcing from Fairtrade suppliers rather than lowest price Higher overheads e.g. training & communication of ethical policy A danger of building up false expectations

above

Examples of Corporate Ethics

Chicago Tylenol Scare The Johnson & Johnson company, manufacturers of the Tylenol product, has always been strict in having all of its employees adhere to a code of ethics. There are surveys given periodically to all of their employees to ensure that ethics are kept up. In the 1980s, there was an incident in which seven Chicago residents died from ingesting cyanide-laced capsules of Tylenol. The CEO at the time, James Burke, was on a plane when the news came out and by the time he had landed, the managers had already made the call to pull their products off the shelves. Money was not the first priority for these mangers, but the first priority was the social responsibility of the company for their customers' safety.

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