Lecture 1 Ethics Presentation

8/7/2019 Lecture 1 Ethics Presentation

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The Nature of Ethics

Ethics:- The inner guiding moral principle ,

values and beliefs that people use to analyze

or interpret a situation and then decide what

is the right or appropriate way to behave


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Ethical Performance

Ethical business performance means adhering

to society's basic rules that define right and

wrong behavior. Eg.

1) J&Jprotected the customers by recalling stocks of Tylenolcapsules twice within 5 years when poison was found in some

bottles

2)Parker brothers withdrew its all time best selling toys when 2kids swallowed the parts and died .

3) HMT Ltd withdrew all its milk separators supplied through its

dairy machinery unit at Aurangabad when at the customers

place the lid flew & hit the roof


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Importance of Business Ethics

Businesses that treat their employees with dignity & integrity

reap many awards in the form of high morale and improvedproductivity . People feel good about working in an ethical

company since they are protected along with the general

public.

In spite of the positive benefits of good ethical practices ,

ethical problems occur for the following reasons:

Failure of Ethics---WHY ?

1)Personal gain/ dubious character

2)Individual values widely differ with organizationalgoals

3)Managers values & attitudes

4)Competitive pressures

5)Cross-cultural contradictions


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Importance of Business Ethics (cont)

1) Personal gains : Greedy people put their own welfare ahead of others . Since

ethical qualities are difficult to anticipate & measure at the

time of recruitment many people creep in like the embezzler,

the expense account paddler, the chronic sick leaver andbribe taker .

Personal gains is not the most important reason why unethical

practices occur

Eg The marketing officer of a big company who makes a lot ofmoney apart from his high salary .The owner of the company

is aware of the same but ignores it because the officer is good

in his work and supports the owner on various critical issues .


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2)Individual values vis a vis organizational goals :

If a company pursues goals or uses methods not acceptable to

some of its employees it will create ethical conflicts in the

business

Whistle Blowing will be the outcome where the employee

who does not like the companys practices reveals thesituation to the general public

Eg In one of the machine tool manufacturing firm one of the

officers who was posted abroad was called back by the

director who was not as qualified as him . The methods

followed by the director was not accepted by the officer and

there used to be heated arguments between both .This officer

was not a trouble maker but genuinely interested in the

welfare of the company & employees .This was a ethical

dilemma


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3)Managers values & attitudesAs decision makers ,managers have more opportunities than

others to set an ethical tone for the company.

Factors which cause managers to make unethical decisions are

a) Behavior of the supervisor

b) Behavior of ones equals in company

c) Societys moral climate

d) Formal company policy

e) Personal financial need

Values & attitudes of managers are a critical element in a

companys ethical performance


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4)Competitive pressures: When companies compete for a similar product, they

sometimes engage in unethical activities in order to wipe out

competitor .

Rivalry between employees for advancement can motivatesome kind of unethical behavior.


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Factors Influencing Business Ethics

Nature of

Ethics

LeadershipIndividual

CharacteristicsCorporate

Culture

EnvironmentStrategy&

Performance


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Scope ofBusiness Ethics

At 4 levels

1)Stakeholders level

2) Personal policy level

3) Societal level

4) Internal Policy level


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Scope ofBusiness Ethics

1) Stake holders level

Employees

Security of Jobs

Better working conditions

Better recommendation

Participative management

Welfare facilities

Customers

Better quality of goods

Goods & services at reasonable prices Not to corner stocks & create securities

Not to practice discriminatory pricing

Not to make false claims about products in advertisements


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2)Personal Policy level

Not to use office car, stationery & other facilities for personal use

Not to fall prey to short ends

Not to indulge in politics to gain power

Not to spoil promotional chances to others

Promise keeping Mutual level

3)Societal Level

Concern for poor & downtrodden

No discrimination against any particular section or group

Concern for clean environment

Contributing to better quality of life


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4) Internal policy level

Fair practices relating to requirement , compensation, lay- offs, perks,

promotions etc.

Transformational leadership to motivate employees to aim at better &

higher things in life

Better communication at levels.

Documents

Lecture 1 Ethics Presentation