Royal College of Art Science

And Commerce

Business Ethics
Project on-
Business Ethics in HRM

Professor in charge-
Prof.Arshi Siddiqui

Compiled by-
Shafqat Shaikh50
Saniya Tole32
Kinjal Kareliya11
Aafreen VIrani34
Neha Mhatre20
 ACKNOWLEDGEMENT
This project has been a result of the hard work of many people. We
would like to appreciate them for the valuable support they have
offered.

First, we would like to sincerely thank Principal Sir A.E. Lakdawala

for giving us this opportunity. We would also like to thank Vice-
Principal Kamala Ma’am.

And we would sincerely like to thank Prof. ARSHI, our project guide
for making this project a great learning experience and for her
continuous guidance, which has brought the best out of us and
enriched this project.

We are thankful to all the faculty members of our college for their
guidance and support.

Last but not the least we would like to thank our family and friends
for their patience, support and perseverance.

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 Index
Sr.no Topic Page
no
1 Introduction to ethics 4

2 Principles of business ethics 5

3 Key role of HR 6

4 Benefits of managing ethics in workplace 7

5 Guidelines for managing ethics 8

6 Ethical issues in HRM. 10

7 Importance of business ethics 12

8 Ethics code of conduct. 14

9 Various practices that an HR manager 16

should follow.
10 Functions of HRM 19

11 Responsibility of HR manager . 20

12 Responsibility of employees 22

13 Ethical dilemmas 25

14 Case study 28

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 15 Conclusion 31

16 Bibliography 32

Introduction to Ethics
"Ethics is simply to do what's right" or saying just “do good”. Ethics
involves learning what is right or wrong, and then doing the right thing -- but
"the right thing" is not nearly as straightforward as conveyed. Most ethical
dilemmas in the workplace are not simply a matter of yes or no. For example,
AZIM PREMJI tells all his employees whatever that is, “Grey is Black”. That
means even if there is some kind of doubt about a transaction, do not go for it.
We have to answer a question is there are always a right thing or ethics depend
on situation? Many ethicists consider emerging ethical beliefs to be legal
principles, i.e., what becomes an ethical guideline today is made into to a law,
regulation or rule. Therefore following law of the land is one of the basic
virtues of ethics. Values, which guide how we ought to behave, are moral
values, e.g. values such as respect, honesty, fairness, responsibility, etc. Ethics
is the set of moral principles and values that govern the behavior of a person in
terms of what is right and wrong. Ethics is concerned with how people think
about and behave towards each other, and how the consequences of their
decisions and behavior impact human life.

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 The major principles of business ethics
1. No discrimination should be done on the basis of caste ,color and religion,
2. The polices should be fair and transparent
3. Proper provision of safety should be provided by the company to the
employees.
4. There should be proper honesty, loyalty, and integrity in the employees.
5. The company’s resources should not be utilized by the employees for their
personal usage.
6. Company should provide better environment condition.
7. Information about employee’s personal lives, health, and work evaluations
should be kept confidential.
8. Regular measurement of employee satisfaction should by company.
9. To neither give nor take any illegal payment, remuneration, gift, donation, or
comparable, benefits to obtain business or favours.
10.Employee should report to management any actual or possible violation of
code or an event that could affect the business or reputation of the
employee’s company.

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 Introduction to ethics in HR

The Human Resources Management function includes a variety of

activities, which includes staffing, recruiting and training the best employees,
ensuring they are high performers, dealing with performance issues, and
ensuring your personnel and management practices conform to various
regulations. Activities also include managing your approach to employee
benefits and compensation, employee records and personnel policies. Usually
small businesses (for-profit or nonprofit) have to carry out these activities
themselves because they can't yet afford part- or full-time help. However, they
should always ensure that employees have -- and are aware of -- personnel
policies which conform to current regulations. These policies are often in the
form of employee manuals.
The ethics of human resource management covers those ethical issues
arising around the employer-employee relationship, such as the rights and
duties owed between employer and employee. As part of a company's attempt
to create an ethical work environment, it's important to offer an effective ethics
training program. And the training should include more than just a review of
your company's ethical rules. Perhaps some kinds of behavior that we find
acceptable in the U.S. are not acceptable in another culture, or vice versa. That
doesn't mean that some conduct should be tolerated in one place and not
another. Rather, company should set standards to which everyone can and
should adhere. There is no better way to attract and retain good employees than
to have the respect of those you interact with every day.

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 The Key Role of HR in Organizational
Ethics
Research suggests that successful ethics management depends less on
formal ethics programs and more on employees' fairness perceptions, ethical
leadership at all levels, and the alignment of multiple formal and informal
cultural systems to support ethical conduct. To the extent that HR systems
invoke fairness evaluations, HR managers design leadership training, and HR
systems help to create and maintain organizational culture, HR professionals
must play a key role in ethics management.
Research has found that employees' perceptions of fairness are equally or
more important than other factors in terms of their influence on ethics-related
outcomes. Fair treatment is so important because employees who perceive
unfair treatment will rebalance the scales of justice by harming the
organization. Employees who perceive fair treatment, on the other hand, will
reciprocate by going above and beyond the call of duty to help management (by
reporting ethical problems, for example). To ensure that employees feel they are
treated fairly, it is important to design HR systems and interventions with
perceived fairness as a key goal, with an emphasis on procedural (fair decision
making procedures) and interaction (fair interpersonal treatment) fairness. It is
also important for HR managers to work with the ethics/compliance office to
follow up on employees' ethics concerns because a large percentage of reported
concerns are fairness and therefore HR system-related. Most employees equate
ethics and fairness; for them, there is no bright line between the ethics and HR
offices. Ethical leadership is vital to creating an ethical workforce. It is
important that HR managers design performance management, career
development, and training systems that:
1. Hold leaders accountable for the ethical dimension of their leadership;
2. Identify ethical leaders and rely on them for role modeling and mentoring
others;
3. Incorporate the ethical dimension of leadership into all leadership training
and development programs.

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 Benefits of Managing Ethics in the
Workplace
1. Attention to business ethics has substantially improved society:
A matter of decades ago, children in our country worked 16-hour days.
Workers’ limbs were torn off and disable workers were condemned to
poverty and often to starvation. Trusts controlled some markets to the extent
that prices were fixed and small businesses choked out. Price fixing crippled
normal market forces. Employees were terminated based on personalities.
Influence was applied through intimidation and harassment. Then society
reacted and demanded that businesses place high value on fairness and equal
rights. Anti-trust laws were instituted. Government agencies were
established. Unions were organized. Laws and regulations were established.

2. Ethics program helps maintain a moral course in turbulent times:

Attention to business ethics is critical during times of fundamental change
times much like those faced now by businesses, either nonprofit or for-
profit. During times of change, there is often no clear moral compass to
guide leaders through complex conflicts about what is right or wrong.
Continuing attention to ethics in the workplace sensitizes leaders and staff to
how they want to act – consistently.

3. Ethics programs cultivate strong teamwork and productivity:

Ethics program align employee behaviors with those top priority ethical
values preferred by leaders of the organization. Usually, an organization
finds surprising disparity between its preferred values and the values
actually reflected by behaviors in the workplace. Ongoing attention and
dialogue regarding values in the workplace builds openness, integrity and
community critical ingredients of strong teams in the workplace. Employees
feel strong alignment between their values and those of the organization.
They react with strong motivation and performance.

4. Ethics programs support employee growth and meaning:

Attention to ethics in the workplace helps employees face reality, both good
and bad in the organization and themselves. Employees feel full confidence
they can admit and deal with whatever comes their way. Bennett, in his
article “Unethical Behavior, Stress Appear Linked”, explained that a
consulting company tested a range of executives and managers. Their most

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 striking finding: the more emotionally healthy executives, as measured on a
battery of tests, the more likely they were to score high on ethics tests.

5. Ethics program are an insurance policy – they help ensure that policies
are legal:
There is an increasing number of lawsuits in regard to personnel matters and
to effects of an organization’s services or products on stake holders.
Attention to ethics ensures highly ethical policies and procedures in the
workplace. It’s far better to incur the cost of mechanisms to ensure ethical
practices now than to incur costs of litigation later. A major intent of well-
designed personnel policies is to ensure ethical treatment of employees, e.g.
in matters of hiring, evaluating, disciplining, firing, etc. Drake and Drake
note that “an employer can be subject to suit for breach of contract for
failure to comply with any promise it made, so the gap between stated
corporate culture and actual practice has significant legal, as well as ethical
implications.”

6. Ethics programs help manage values associated with quality

management, strategic planning and diversity management – this
benefit needs far more attention:
Ethics program identify preferred values and ensuring organizational
behaviors are aligned with those values. This effort includes recording the
values, developing policies and procedures to align behaviors with preferred
values, and then training all personnel about the policies and procedures.
This overall effort is very useful for several other programs in the workplace
that require behaviors to be aligned with values, including quality
management, strategic planning and diversity management. Total quality
management includes high priority on certain operating values, e.g., trust
among stakeholders, performance, reliability, measurement, and feedback
Ethics management techniques are highly useful for managing strategic
values, e.g., expand market share, reduce costs, etc.

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 Guidelines for Managing Ethics in the
Workplace
1. Recognize that managing ethics is a process:
Ethics is a matter of values and associated behaviors. Values are discerned
through the process of ongoing reflection. Therefore, ethics programs may
seem more process-oriented than most management practices. Managers
tend to be skeptical of process-oriented activities, and instead prefer
processes focused on deliverables with measurements practices are only
tangible representations of very process-oriented practices. For example, the
process of strategic planning is much more important than the plan produced
by the process. The same is true for ethics management. Ethics programs do
produce deliverables, e.g., codes, policies and procedures, budget items,
meeting minutes, authorization forms, newsletters, etc.

2. The bottom line of an ethics program is accomplishing preferred

behaviors in the workplace:
As with any management practice, the most important outcome is behaviors
preferred by the organization. The best of ethical values and intentions are
relatively meaningless unless they generate fair and just behaviors in the
workplace. That’s why practices that generate lists of ethical values, or
codes of ethics, must also generate policies, procedures and training that
translate those values to appropriate behaviors.

3. The best way to handle ethical dilemmas is to avoid their occurrence in

the first place:
That’s why practices such as developing codes of ethics and codes of
conduct are so important. Their development sensitizes employees to ethical
considerations and minimizes the chances of unethical behavior occurring in
the first place.

4. Make ethics decisions in groups, and make decisions public, as

appropriate:
This usually produces better quality decisions by including diverse interests
and perspective, and increases the credibility of the decision process and
outcome by reducing suspicion of unfair bias.

5. Integrate ethics management with other management practices:

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 When developing the values statement during strategic planning, include
ethical values preferred in the workplace. When developing personnel
policies, reflect on what ethical values you’d like to be most prominent in
the organization’s culture and then design policies to produce these
behaviors.

6. Use cross-functional teams when developing and implementing the

ethics management program:
It’s vital that the organization’s employees feel a sense of participation and
ownership in the program if they are to adhere to its ethical values.
Therefore, include employees in developing and operating the program.

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 Ethical issues in HRM
Ethical issues abound in HR activities. Areas of ethical misconduct in the
personnel function include employment, remuneration and benefits, labour
relations, health and safety, training and development, and HRIS.

Cash and Performance Race and disability

incentives appraisal

Business
ethics

Employment Privacy Safety and Restructuring

issues issues health and layoffs

1. Cash and incentives plans

This includes base salaries, annual incentive plans, long term incentive
plans, executive perquisites, and separation agreements.

 Base salaries- The HR function is often presumed to justify a higher

level of base salaries, or a higher percentage increase than what
competitive practice calls for. In some cases, pressure is exerted to re-
evaluate the position to a higher grade for the purpose of justifying a larger
than normal increase.
 Annual incentive plan- The HR manager is often forced to design and
administer top-management incentive plans, at higher rater’s than what the
individuals deserve. A common rationale presented to the HR executive for
bending the rules is the fear of losing the outstanding executives, if higher
incentives are not paid.
 Long-term incentive plan: Just as with annual incentive plan, many HR
executives have the responsibility of designing and administering the
firm’s long term incentive plans, but in consultation with CEO and an
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 external consultant. Ethical issues arise when the HR executive is put to
pressure to favour top management interests over those of other employees
an investors.
 Executive perquisites: Executive perquisites make the ethical standard
of the HR executive difficult because their cost is often out of proportion to
the value added. For example a story relates to Bangalore based , losing
making public sector undertaking whose CEO spend 20lakhs to get
swimming pool built at his residence.

2. Performance Appraisal:
Performance appraisal lends itself to ethical issues. Assessment of an
individual’s performance is based on observation and judgment. HR manager
are expected to observe the performance in order to judge its effectiveness.
Ethics should be the cornerstone of performance evaluation, and the overall
objective of high ethical performance reviews should to provide an honest
assessment of the performance and mutually develops a plan to improve the
rate effectiveness.

3. Race, Gender, Age, and Disability:

The practice of treatment of employees according to their race, ethnic origin,
sex, or disability has largely been stopped. A framework of laws and
regulations has evolved that it should have significantly improved work place
behavior. No enterprise today dare to publicly state it denies minorities,
woman, and the disable opportunities for employment, remuneration, and
growth prospects different from those given to others.

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 Importance of Business Ethics
Ethics is important to business in general and HR in particular, for
several reasons as stated below:

1. Ethics corresponds to basic human needs:

It is men basic nature that he desires to be ethical, not only in his private life
but also in his business affairs where, being a manager he knows that his
decisions may affect the life of thousands of employees. Most HR manager
would like to respond to this need of their employees and, they (managers)
themselves feel an equal need to be genuinely proud of the company they
are directing. These bases ethical needs compel the organizations to be
ethical oriented.

2. Values create credibility with the public:

A company perceived by the public to be ethical and socially responsive will
be honored and respected even by those who have no intimate knowledge of
its actual working. There will be an instinctive prejudice in favour of its
products, since people believe that the company offers value for money. Its
public issues will attract an immediate response. Valued give the
management credibility with its employees. Values are supposed to be a
common language to bring the leadership and its people together.
Organizational ethics, when perceived by employee as genuine, create
common goals, values, and language. The HR management can have
credibility with its employees simply because it has credibility with the
people.

3. Ethics and profit go together:

A company which is inspired by ethical conduct is also profitable. Value-
driven companies are most likely to be successful in long run, though in the
short run, they may lose money.

4. Law can’t protect society, ethics can:

Ethics is important because, law and lawyer cannot do ever thing to protect
society. Technology develops faster than the government can regulate.
People in an industry know the dangers in the particular technology better
than the regulatory agencies. Further, the government cannot always
regulate all activities which are harmful to the society. Where law fails,

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ethics can succeed. An ethically-oriented management takes measures to
prevent pollution and protect workers health even before being mended by
law .An ethically sound HR manager, who can reach out to agitated
employees, will quell a double more effectively than the police.

Business ethics scenarios that happen in organizations

every day.

1. An employee surfs the Internet shopping for personal items on company

time.

2. A plant manager decides to ship product to a customer even though he

knows the parts have a quality problem because the problem doesn't
affect part function and the customer probably won't notice.

3. An employee spends several hours a week on her cell phone talking with
her children and their associated caregivers, schools, and friends.

4. A salesman marks parts as "sold" in the company data base, even though
his sale is uncertain.

5. A manager shares important company information with a competitor for

her potential gain.

6. A store misrepresents the quality or functionality of an advertised sale

item.

7. An employee takes office supplies home to stock his home office.

8. A finance officer accounts questionably for purchases and expenditures.

9. An accountant tells a supplier that their "check is in the mail" when he

knows he hasn't written the check.

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 Code of ethics in HR
Code of ethics has become popular .Nearly 95 percent of the Fortune 500
Companies have codes, and a trend is visible in the corporate sector in India
also. For example, the council of fair business practices (CFBP) established in
1916, by leading private sector industrialist in western India, and adopted a
code of fair business practices. The code constitutes a primary level, self
regulation character for enlighten citizenship among business entities. The
CFBP has initiated a set of prizes and awards called ‘Jamnalal Bajaj Uchit
Vyavahar Puraskar’ to promote exemplary application of the above norms .The
CFBP president claimed that sustained pressure from his council has resulted in
creation of Advertising standards Council of India (ASOI) and in promulgation
of the consumer protection act (CPA) ,1986.The Federation of Indian chambers
of commerce industry (FICCI, which includes the MNCs)has recently issued a
declaration on Norms of business consisting of ten points. The main purpose of
evaluating the code is to provide guidance to manager and employees when
they face ethical dilemma.
Code of ethics is guidelines to steer the conduct of both the organizations
and its employees in all business activities. These are intra and inter-
organizational in nature and relate to all activities of an organization and its
environment. They provide positive and productive orientation and direction to
the code of business, besides giving an individual identity to that organization.
Code of ethics provides general guidelines with respect to the values and ethical
standards of the company. Business ethics is concerned with truth and justice
and has a variety of aspects, such as expectation of society, fair completion,
advertising, public relations, social responsibilities, consumer autonomy, and
corporate behaviors within and without. A code is a statement of policies,
Principles, or rules that guide behaviors. Codes of ethics commonly address
issues such as conflict of interest, behavior toward competitors, and privacy of
information, gift giving, and making and receiving political contributions.
According to a recent survey, the development and distribution of a code of
ethics within an organization is perceived as an effective and efficient means of
encouraging ethical practices within organizations.

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 Objectives of code of ethics

 Guidance: It provides direction to the most important element of an

organization namely the “People”, so that they know how to conduct
themselves in terms of ethical behavior and give them a sense of common
identity.
 Confidence: It inspires public confidence besides enhancing the reputation
of the organization.
 Initiative: It provides initiative and stimulation to the suppliers and
Customers for proper conduct by creating a sense of moral obligation.
 Ethical culture: It promotes a culture of excellence by not just formally
teaching ethics, but by demonstrating through leaders the commitment of the
organization to ethical behavior.

Various practices that an hr manager should follow

The role of human resource is changing as fast as the technology and the
global market place. Before the hr department was viewed as a administrative
over head.hr processed payrolls, handled benefits administration, kept personal
files and other records, managed the hiring process and provided other
administrative support to the business. Those times have changed, HR
professionals have the opportunity to play more strategic roles in the business.
The challenge for hr manager is to keep up to date with the latest hr innovations
–technological legal or otherwise.

 The various practices are as follows:

 Exercise and fitness, Stress management, Nutrition etc.

 They should provide proper work place for the wellbeing of the workers
 They should help them in providing a healthy food.
 Make sure drinking water is available to employees
 Providing fire safety at workplace
 Implement a pre-shift stretching program
 Pay attention at the noise levels in the workplace
 They should come up with cost cutting programs.
 They should take into account the disease management which provides
employees with self and health care.

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 They should provide employees with internal email address, the hr
manager must see whether the administrator communicates with the
employees or no, in some cases there is no possibility so email becomes
one of the standards of communication.

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 Functions of Human Resource
Management
1. Promotion of organizational needs
This is a very crucial function of HRM. The organization needs people
human assets. People appreciate day by day with experience and are
extremely valuable assets in an organization. HRM functions in this
regard refer to planning of human resources, recruitment, placement,
motivation, training, assessments, appraisals etc., so that there is an
effective contribution from them to the organization.

2. Development of employees
It is very necessary to make development plans for employees because
here the employees do not bring their abilities, attitudes, personality, and
behavior with him. An individual aims for development and personal
growth in the work sphere.

3. Relationship maintenance function

HRM functions include maintenance of effective interpersonal relations.
In this context the functions of legal compliance, maintenance and
Industrial relations are done by HRM.

4. Empowerment
It is the provision of greater freedom and discretion to employees. When
employees are given freedom they work effectively as a team and strive
for the development and growth of the organization. The function of
empowerment leads to the prosperity of the organization.

5. Communication
HRMs crucial function also includes Good and effective communication
of policies. Communication when streamlined effectively leads to
excellent network building and growth.

6. Equality
Employees need to be treated with fairness and equality. HRM function
of equal policies and justice make sure that the employees are protected
fully. Equality leads to well trained and well-motivated employees.

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 Unethical practices followed by the hr
manager and responsibilities of hr
towards employees
1. Discrimination
Discrimination occurs when an employee suffers unfavorable or unfair
treatment due to their race, religion, national origin, disabled or veteran status,
or other legally protected characteristics. Federal law prohibits discrimination in
a number of work-related areas, including recruiting, hiring, job evaluations,
promotion policies, training, compensation and disciplinary action.
These discriminations are clearly exhibited by Indian corporations in matters of
recruitments and promotions. though the threat of litigation and attendant costs
have made firms deny publicly that they discriminate against minorities,
women and the disabled in matters of employment, remuneration, and growth
prospects, the poor representation of these categories of people in most of the
promoter family organizations is a clear evidence to the contrary.

2. Sexual and racial harassment

It is a violation of this Policy to engage in sexual (or gender-based) harassment
of any kind, including hostile work/educational environment harassment, quid
pro quo harassment, or same-sex harassment. They include
 Generalized gender-based remarks and comments,
 Unwanted physical contact such as intentional touching, grabbing,
pinching, brushing against another's body or impeding or blocking
movement;
 Verbal, written, or electronically sexually suggestive or obscene
comments, jokes or propositions including letters, notes, e-mail, text
messages, invitations, gestures or inappropriate comments about a
person’s clothing.

3. Unethical selection
Now-a-days selections are done on influences .And many unethical practices
are followed during recruiting a candidate. It is very important in hiring a right
person who will be able to contribute most to the organization. Ethical selection
is acting in a way that is honest, fair, and legal. An ethical personnel officer
must provide the employees about all the requirements and benefits of the job.
When the principle of ethical selection is not followed, a wrong candidate may

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 be hired for a job. This breeds dissatisfaction among the employees. Ethical
selection is possible if there is no discrimination done selection be based on the
functional qualities and abilities of the person that are required to do the job.

4. Remuneration
Remuneration is the act of rewarding the employees in proportion to their
contribution to maximize long term ownership values. This remuneration is
considered ethical when it is just and equitable. remuneration is not only
monitory rewards for work, but also includes fringe benefits, perks, recognition
and promotions. Equitable remuneration plays a crucial role in employee
motivation. Lack of equitable remuneration demotivates the employees and
adversely affects their contribution to business. An ethical business does not
reward anything other than contributions to organizations well being.

5. Working conditions
It is the responsibility of the hr manager to provide the employees with proper
working conditions. So as to carry on the work effectively and efficiently. It is
the responsibility to provide the employees with a safe and conducive
atmosphere at workplace. In actual practice it is hardly done. over past few
decades, several legislations have been enacted requiring managers and
government to compensate victims of accidents and occupational hazards.
effective working hours should also be provided to reduce mental and physical
health of the employees. Hence proper working conditions must be provided so
as to motivate the employees.

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 Responsibility of employees towards
the organization
Just as the business has certain responsibilities towards the employees in
the same way employees should have certain responsibilities towards the
business. They are expected to be loyal to the business this will help them in
giving job security and a sense of belonging.

 Do Early Homework
Every employee is responsible for understanding the work allotted and
determining if it is appropriate for him. He/she should make sure whether
he/she has mastered the skills required to perform the task completely. If
he/she is not sure about how to handle the work allotted to them they should
talk with their superiors and get suggestions and directions in fulfilling the
work allotted to him/her. This will help the employee in building good
relations with not only their superiors also with their colleagues.

 Plan with the Manager

Having a proper work schedule or time table for the work allotted to the
employee helps the employee in Time Management and reaching the
deadlines in time Also, when a new work is allotted.

 Use Available Resources and take responsibility

The employees should have sense of responsibility towards the resources of
the Organization. As a part of the Organization every employee is equally
responsible for the long life of the existing resources, for which smooth
usage and suggestions for usage is required, which in case is not provided
should be requested for.

 Participation
Active listening and participation in teams will ensure that all employees
become good team players and work with unity towards common goals of
the Organization. Whenever a new work is being allotted all the Employees
should be eager enough to take the initiative rather than trying to avoid
newer tasks. This will facilitate in employees learning new skills and
reaching the Organizational goals with much effectiveness.

 Be punctual and regular

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 The prime responsibility of every employee must be punctuality and
regularity. You can be better organized by being punctual and regular.
Unwanted and unexpected work delays can be dealt effectively.
 Creative Thinking and Suggestions
The employee should always think upon the improvement of work
efficiency and organizational development Please be organized and
contribute to the growth of the Organization. Everyone grows with the
Organization. So, Organizational Growth is the Growth of individual and
nation.

 Agent and principle relationship

All employees are the agents of the organization. As an agent the employees
are hired to perform certain tasks and have the duty to act on the behalf of
the principal. The primary responsibility of the employee is to be loyal
obedient and confidential towards his employer there should be good
relationship maintained.

 Honest whistle blowing

Beyond various responsibilities of employees towards the firm it also has
ethical responsibilities towards the third parties outside the workplace.
Employees have an ethical responsibility to be honest. In the organization
employees find some of the activities misdemeanors, will be exposed in the
form of rumors in the organization. A whistle blower is an employee who
informs the public or the government agency of an illegal harmful or
unethical activity being done by the business or institution here the
employee has the responsibility to blow the whistle whenever he wishes.

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 Employees’ rights and duties
 Right to work
 Right to just remuneration
 Right to free association and to strike
 Right to privacy and to normal family
life
 Freedom of conscience and freedom
of speech
 Right to healthy and safe working
condition
 Right to work quality (job
satisfaction)
 Duty to comply with labour contract
 Loyalty to the firm
 Respect for current legal and moral
norms
Employer’s rights and duties
 No discrimination rules for
recruitment conditions for firing
 Duty to fair compensation
 Respect for union presence and
activities
 Work oriented code of conduct
 Acceptance of criticism from workers
without repression
 Duty to guarantee same
 Duty to improve quality of work
 Demand of minimal productivity of
employees
 Right to loyal co-operation
 Recruitment of correct behavior at the
work place
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 Ethical dilemmas in business:
1. Human resource issues
Human is the most important resource to an organization. Issues associated
with human resources occur as a result of employees working together. These
issues are by far the largest category of ethical dilemmas in business.

The four main types of human resource issues are as follows

 Hiring and Termination Issues

Recruitment or hiring process is the first step in selecting human resource
into an organization; Ethics plays a very important role during the recruitment
of new employees. Law and regulations dictate that we have to be ethical in
hiring. It has been widely reported by many researchers that ethical hiring
practices actually result in better employees being recruited. It is therefore
important that sound ethical rules are followed when hiring a new employee. It
is of vital importance that candidates are to be selected based on merits. such as
knowledge, skills, and ability in accordance to the needs of the organization .In
any case, any preferential treatment should be one that is legally allowed. When
we recruit new employees, we should tell the applicants about the true state of
the organization.

 Discrimination
It is the unfair or preferential treatment of a person on the basis of one or
more uncontrollable characteristics, including race, gender, age, color, religion,
or national origin, as well as handicapped or pregnancy status.

 Performance Appraisals
Performance appraisals are conducted to evaluate an employee’s
performance over a set period of time. When evaluating subordinates, one has
to remain consistent and objective. For example, it would be wrong to punish
one employee's tardiness while leaving another employee's tardiness
unchecked. In order to maintain objectivity, the company’s standardized
evaluation forms should be used.  In this way, uniform criteria can be used for
the appraisal of all employees. Also, Constant feedback and communication
between you and your subordinates is necessary to facilitate a positive and
productive working relationship.

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2. Disciplinary issues
Disciplining employees is one of the most difficult parts of a manager’s job.
Nevertheless, it is vital to the growth and overall success of the organization.
Disciplining employees both ensures productivity and sets standards for the
future. Discipline should occur immediately after a problem has occurred. It is
imperative that the disciplinary actions remain consistent for all employees.
A serious disciplinary issue is sexual harassment where female employees (less
so for male employees) are subjected to an unwanted sexual behavior that
creates an intimidating or hostile work environment.

3. Employee Safety Issues

Every employee is entitled to a safe and healthy work environment. We shall
discuss in some details the works of The Occupational Safety and Health
Administration (OSHA). OSHA The Occupational Safety and Health
Administration (OSHA) was created to ensure the safety and health of
America's workers by setting and enforcing standards; providing training,
outreach, and education; establishing partnerships; and encouraging continual
improvement in workplace safety and health. To enforce staff protective
standards as well as to reach out to employers and employees through technical
assistance and consultation programs, OSHA and its state partners have
approximately 2100 inspectors, engineers, physicians, educators, and other
technical and support personnel spread over more than 200 offices throughout
the country.

 Conflicts of interest
Conflicts of interest arise when an employee’s judgment is compromised
due to external influences. These situations present a particular ethical dilemma
when the best interest of the employee and the best interest of the company are
at odds. Conflicts of interests often arise.  A company may specify that an
employee must not have any financial interests in a company that has dealings
with or competing with it.  A conflict of interest situation may not arise out of
financial interest.  We have to be careful that while we attempt to eliminate a
conflict of interests, we do not cause another conflict of interest issue.

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 Use of corporate resources
Ethical use of corporate resources requires that employees be fair and honest
to their employers. Here are three considerations that fall under this category:
 Using company letterhead: Employees should not use company
letterhead for personal reasons because such use can imply that the
information contained in the personal document is supported by the
organization.

 Using supplies: Unauthorized use of supplies is unethical because it

costs organization money, regardless of the quantity of supplies used.
Although taking a box of pens home from the office might not appear to
be an ethical issue, it is. Suppose that the box of pens costs the company
five dollars. Now consider that instead of taking the box of pens, you
took five dollars out of the petty cash box. Ethically, the two actions are
the same.

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 CASE STUDY ON BUSINESS ETHICS OF
J.R.D TATA
The life of JRD Tata defines ethics and values in their truest sense
showing us that it is possible to create a large, successful yet humane
organization. JRD Tata was the Chairman of Tata Sons, the holding Company
of the Tata Group of Companies which has major interests in Steel,
Engineering, Power, Chemicals and Hospitality. He was famous for succeeding
in business while maintaining high ethical standards. Under JRD’s
Chairmanship, the number of companies in the Tata Group grew from 15 to
over 100. Monetarily, the assets of Tata group grew from Rs 620 Million to
over Rs 100 Billion.
In the public mind, ethics in business is mainly identified with financial
integrity. J.R.D. Tata was meticulous when it came to financial ethics. in 1979
the Tata’s had not expanded as much in the 1960s and 1970s as some other
groups had, J.R.D Tata put up the statement that: “I have often thought about
that. If we had done some of the things that some other groups have done, we
would have been twice as big as we are today. But we didn't, and I would not
have it any other way.”
The well-known tax consultant, Dinesh Vyas, says that JRD never entered into
a debate over ‘tax avoidance’, which was permissible, and ‘tax evasion’, which
was illegal; his sole motto was ‘tax compliance’. On one occasion a senior
executive of a Tata company tried to save on taxes. Before putting up that case,
the Chairman of the company took him to JRD. Mr. Vyas explained to JRD:
“But sir, it is not illegal.” JRD asked, softly: “Not illegal, yes. But is it right?”
Mr. Vyas says that during his decades of professional work no one had ever
asked him that question. Mr. Vyas later wrote in an article: “JRD would have
been the most ardent supporter of the view expressed by Lord Denning: ‘The
avoidance of tax may be lawful, but it is not yet a virtue.’

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 JRD's strong point was his interest in
people and his desire to make them happy. He
was always polite. Towards the end of his life
he often said: “We don't smile enough.” With
each man he had his own way. He said that, I
am one who will make full allowance for a
man's character and idiosyncrasies. You have to
adapt yourself to their ways and deal
accordingly and draw out the best in each man.
At times it involves suppressing yourself. It is
painful but necessary to be a leader you have
got to lead human beings with affection.”
It is a measure of his affection that even after
some of them retired he would write to them. He was always grateful and loyal.
To him, ethics included gratitude, loyalty and affection. It came about because
he thought not only of business but also of people. In dealing with his workers
he was particularly influenced by Jamsetji Tata, who at the height of capitalist
exploitation in the 1880s and the1890s gave his workers accident insurance and
a pension fund, adequate ventilation at the workplace and other benefits. He
want ed workers to have a say in their own welfare and safety, and he wanted
their suggestions on the running of the company. A note that he wrote on
personnel policy resulted in the founding of a personnel department. As a
further consequence of that note came about two pioneering strokes by Tata
Steel: a profit-sharing bonus and a joint consultative council. Tata Steel has
enjoyed peace between management and labour for 70 years.

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Beyond Business
Decades later, Tata Steel workers had received several benefits. Then JRD
looked further. In a speech in Madras in1969 he called on the managements of
industries located in rural or semi-urban areas to think of their less fortunate
neighbors’ in the surrounding regions. “Let industry established in the
countryside ‘adopt’ the villages in its neighborhood; let some of the time of its
managers, its engineers, doctors and skilled specialists be spared to help and
advise the people of the villages and to supervise new developments undertaken
by cooperative effort between them and the company.”
To put JRD's ideas into action, the Articles of Association of leading Tata
companies were amended and social obligations beyond the welfare of
employees was accepted as part of the group's objectives. In the 19th century,
Baron Edward Thurlow, the poet, asked: “Did you ever expect a corporation to
have a conscience?” The answer from J.R.D. Tata was: “Yes”.
Whenever he could, he raised his voice against state capitalism. He never bent
the system for his benefit. L.K. Jha recalled in 1986 that whenever JRD came to
him when he was a Government Secretary, he came not on behalf of a company
but the whole industry. He wanted no favours, only fairness.
In his last years he was very conscious of the environment and industry’s part in
spoiling it. He wrote in his Foreword to The Creation of Wealth in 1992: “I
believe that the social responsibilities of our industrial enterprises should now
extend, even beyond serving people, to the environment.”
To him India was not a geographical expression; it was people. When he was
awarded the Bharat Ratna in 1992, Tata employees arranged a function on the
lawns of the National Centre for Performing Arts in Mumbai. When JRD rose
to speak, he said: “An American economist has predicted that in the next
century India will be an economic superpower. I don't want India to be an
economic superpower. I want India to be a happy country.”
This was not only his hope, it was also his life. He brought sunshine into the
lives of many of us who knew him.

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 Conclusion
So we come to a conclusion that, ethics plays a vital role in the business,
Ethics is good in itself, ethics and profit go together in the long run and ethics
alone can protect the society. Ethics is a set of moral principles and values, and
these principles must be followed in an ethical manner. An ethically responsible
organization is one, which has developed a culture for caring for the people and
for the betterment of society as a whole. Ethics has a considerable influence on
the economy for efficient and smooth functioning. The government, the laws
cannot always resolve certain key problems of the society and business. Ethical
behavior enhances the quality of life. An ethically based economy can do
wonders in the way of creating wealth or society. The world of business ethics
is quite broad and its tentacles spread into a number of areas in the larger sphere
of business society relationship. The social responsibilities of businessmen, for
instance, clearly involve ethics and morality. There is always a doubt in the
mind of the businessmen about what is and what is not ethical. So it is very
necessary to develop a proper code of ethics and follow proper standards which
will make it easy to understand what is right and wrong. It is the responsibility
of every hr manager to follow ethics in his day to day work from recruitment till
performance appraisal. Following standard ethics will help in proper decision
making and help the organization to earn huge profits and gain a competitive
advantage. It is difficult to understand business or business society
relationships, without knowledge of the ethics. Business ethics is what society
expects from business.
 Mark Twain once said: “ To be good is noble. To tell people

how to be good is even nobler”.

In short “Corporate Houses can earn Profit with

Morality”

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 Bibliography

www.wikipedia.com

www.economictimes.com

www.tata.com

Google search engine

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