Business EthicsBusiness Ethics

Ethics refers to code of conduct that guides an individual in dealing with others Ie. Personal conduct with moral duty and concern human relation with respect to

Right & wrong.Ethics rule – not enforced by public authority

ETHICS

INTERNAL EXTERNAL

INTERNAL ETHICS

Be honest with oneself

Be straightforward

Treat other as one wants treatment with oneself

Fairness in competing with competitors

Right of privacy

( corruption index +time taken to complete the business proceeding)

Level of purposeful political interference

A Management discipline, which has gained much awareness and important in recent Years, is Business Ethic. Manager across the globe, now realize that the reputation and success of organizations are linked to their compliance with ethical standards. Organisation that are trusted and respected by their stake holders including Employees Customer at large are likely to be more successful in long term

It involves complying with company, legal, professional, and regulatory standards and abiding by principles like fairness, honesty, respect and truth. It implies right or wrong in the work place.

Sources of ethics

( idea of reciprocity or mutual help ,runs through all value system )

1.Religion

1.Cultural Experience ie. Hunting & gathering Stage/Agriculture stage/Industrial Stage

3. Legal System

Managing Ethics

Today companies are using managerial techniques that are designed to encourage ethical behavior.

1.Top Management : JRD Tata “Sacrificed 100% growth”

2.Code of Ethics: CFBP Council of fair business practice,Jamunalal Bajaj Uchit Vayapar puruskar , ASOI, Promoted consumer protection Act.

3. Ethic committee4. Ethical Hotline5 Ethical Training program

Fraud in banks / Telecom.

LG bribes for export sale

France demands for 20% of telecommunication market in exchange of aid

European aerospace company threatens to block EU membership for Turkey and Malta unless their national airlines purchase their aircrafts

US used $ 75 billion for bribes

$28 billion spent during cold war

Indian skirt _ contain phosphorus

France has legalized foreign payment as middle man payment.

Ancient time interest rate were different (24/36/48/60)

Why ethic is important?

1.Ethics corresponds to basic needs2.Value create creditability with public3.Value give management creditability with employees4.Value helps in better decision making5.Ethics and profit6.Laws cannot protect society ethic can

Making Business Ethical

1.Drawing up the code of conduct2. Familiarizing the employees3. Implementation of code

Ethical dilemmas

Business ethic code plays important role in building corporate reputation. According to Wallace “ An ethic code or credo generally describe the highest value to which the company aspire to operate. A code of ethic specifies the ethical rule of operation “ An ethic code has several tangible and practicalbenefit for a business, an individual as well as the society.

Written ethic code can serve following purpose:

Develop trust and confidence among public for businessmen

Build an environment that ensure that employees and their Companies will behave ethically during the time of crises.

Define clear boundaries and standards that can be measured by individuals, other businessmen and society.

A rich rubric of ethics

Defined by a deeply rooted set of values and beliefs, corporate governance in the Tata Group rests on the twin pillars of trust and integrity

Group chairman Ratan Tata's views on the issue are illuminating. Speaking in an interview in 2002, he said: "Business, as I have seen it, places one great demand on you: it needs you to self-impose a framework of ethics, values, fairness and objectivity on yourself at all times. It is easy not to do this; you cannot impose it on yourself forcibly because it has to become an integral part of you. What has to go through your mind at the time of every decision, or most decisions, is: does this stand the test of public scrutiny…? As you think the decision through, you have to automatically feel that this is wrong, incorrect, or unfair…"

#####

Five core values of Tata group

1.Integrity

2. Understanding

3. Excellence

4. Unity

5. Responsibility #####