1.

Explain the concept of business ethics with context of an organization of your

choice.
 What is Ethics ?

The theory of Business Ethics can be extremely Complex and in order to be of use in our day to day
work situations. It must be made in practice.

“Ethics is about the theory of right of song not about the practice application of these principles. This is
the area of moral.”

“Ethics involves the values that a person seeks to express in a certain situation, moral the way he or she
said sets out to achieve this.”

Elements of Ethics :

 Fairness

 Deciding what is right and wrong

 The practices and rules which underpin responsible conduct between individual and
Groups.

Business Ethics

The term Business Ethics refers to the system of moral principles and rules of conduct applied to the
business. Because being a social organisation not be conducted in a way detrimental to the interests of
society and the business sector itself.

The ethics implies that professional should carefully e-value at his decisions and ensure that his action
will not proceed negative effects.

Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics that
examines ethical principles and moral or ethical problems that arise in a business environment. It
applies to all aspects of business conduct and is relevant to the conduct of individuals and entire
organizations.[1]These ethics originate from individuals, organizational statements or from the legal
system.

Business ethics refers to contemporary organizational standards, principles, sets of values and norms
that govern the actions and behavior of an individual in the business organization. Business ethics
has normative and descriptive dimensions. As a corporate practice and a career specialization, the field
is primarily normative. Academics attempting to understand business behavior employ descriptive

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 methods. The range and quantity of business ethical issues reflects the interaction of profit-maximizing
behavior with non-economic concerns.

WAYS TO PROMOTE ETHICAL BUSINESS

It is important for staffers to focus on accomplishing key company goals and developing good working
relationships in the office, but it is equally important to ensure ethical conduct among employees.
Ethical conduct ensures that your business maintains a reputation for sound professional principles and
values that are directly in line with the company mission. There are a few different ways that you can
promote ethical conduct among your staff.

I. Train Employees
You can't expect your staff to act ethically in accordance with your company's code of ethics if they
don't know what that code is or why it's important. Hold regular sessions on ethics and how to
approach ethical dilemmas among staff. The more training and resources you provide, and the greater
emphasis you place on being ethical and acting accordingly, the more your staff understands exactly
what you expect in the office.

II. Reward Ethical Behavior

Far too often, companies simply expect ethical behavior; however, if you want to promote this as a
prominent behavior among staff, then you need to show and prove, so to speak. Provide rewards for
solid ethical behavior; for example, if you have an employee that goes above and beyond to put her
personal interests aside to always do what is best for her clients, that is considered ethical behavior and
she should be rewarded and held up as an example for others to strive to do the same. The more you
reward employees for sound ethical decisions, the more likely the masses will follow suit.

III. Lead by Example

Expect more of your management team; employees generally follow company examples set forth for
them by management employees. Hold your managers to a higher ethical standard so that they are
credible when they communicate expectations to their staffers to do the same. Challenge management
staff to hold regular discussions with employees to work through potential ethical issues that may come
up and find ways to brainstorm through them as a team. If everyone is on the same page, it is more
likely that the team as a whole will adopt the same types of ethical behaviors.

IV. Consider Work-Life Balance

According to the Accounting Web website, a 2007 Ethics and Workplace survey by Deloitte & Touche
states that 91 percent of employees surveyed said they are most likely to make good ethical decisions at
work when they have a better sense of work-life balance. Pay attention to signs of burnout or
discontent among staff, and take steps to address these types of issues when they present themselves.

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 V. Educational persuasion

The trade Association can educate and persuade the members in the importance of and the
need for having Business Ethics.

VI. Code of ethics

Trade Association should formulate a code of conduct, which also contains a code of ethics for
their members.

VII. Moral sanctions

Sanctions refers to the ways in which moral conduct is rewarded or misconduct is punished.

NATURE OF BUSINESS ETHICS

The characteristics or features of business ethics are:-

 Code of conduct : Business ethics is a code of conduct. It tells what to do and what not to do for the
welfare of the society. All businessmen must follow this code of conduct.
 Based on moral and social values : Business ethics is based on moral and social values. It contains
moral and social principles (rules) for doing business. This includes self-control, consumer protection
and welfare, service to society, fair treatment to social groups, not to exploit others, etc.
 Gives protection to social groups : Business ethics give protection to different social groups such as
consumers, employees, small businessmen, government, shareholders, creditors, etc.
 Provides basic framework : Business ethics provide a basic framework for doing business. It gives
the social cultural, economic, legal and other limits of business. Business must be conducted within
these limits.
 Voluntary : Business ethics must be voluntary. The businessmen must accept business ethics on their
own. Business ethics must be like self-discipline. It must not be enforced by law.
 Requires education and guidance : Businessmen must be given proper education and guidance before
introducing business ethics. The businessmen must be motivated to use business ethics. They must be
informed about the advantages of using business ethics. Trade Associations and Chambers of
Commerce must also play an active role in this matter.
 Relative Term : Business ethics is a relative term. That is, it changes from one business to another. It
also changes from one country to another. What is considered as good in one country may be taboo in
another country.
 New concept : Business ethics is a newer concept. It is strictly followed only in developed countries. It
is not followed properly in poor and developing countries.

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 IMPORTANCE OF BUSINESS ETHICS

 Long-term growth: sustainability comes from an ethical long-term vision which takes into account all

stakeholders. Smaller but sustainable profits long-term must be better than higher but riskier short-

lived profits.

 Cost and risk reduction: companies which recognise the importance of business ethics will need to
spend less protecting themselves from internal and external behavioural risks, especially when
supported by sound governance systems and independent research
 Anti-capitalist sentiment: the financial crisis marked another blow for the credibility of capitalism,
with resentment towards bank bailouts at the cost of fundamental rights such as education and
healthcare.
 Limited resources: the planet has finite resources but a growing population; without ethics, those
resources are repleted for purely individual gain at huge cost both to current and future generations.

SCOPE OF BUSINESS ETHICS

Ethical problems and phenomena arise across all the functional areas of companies and at all levels
within the company.

1. Ethics in Compliance

Compliance is about obeying and adhering to rules and authority. The motivation for being compliant
could be to do the right thing out of the fear of being caught rather than a desire to be abiding by the
law. An ethical climate in an organization ensures that compliance with law is fuelled by a desire to
abide by the laws. Organizations that value high ethics comply with the laws not only in letter but go
beyond what is stipulated or expected of them.

2.Ethics in Finance

The ethical issues in finance that companies and employees are confronted with include:

 In accounting – window dressing, misleading financial analysis.

 Related party transactions not at arm’s length
 Insider trading, securities fraud leading to manipulation of the financial markets.
 Executive compensation.

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 Bribery, kickbacks, over billing of expenses, facilitation payments.
 Fake reimbursements

3.Ethics in Human Resources

Human resource management (HRM) plays a decisive role in introducing and implementing ethics.
Ethics should be a pivotal issue for HR specialists. The ethics of human resource management (HRM)
covers those ethical issues arising around the employer-employee relationship, such as the rights and
duties owed between employer and employee.

The issues of ethics faced by HRM include:

 Discrimination issues i.e. discrimination on the bases of age, gender, race, religion, disabilities, weight
etc.
 Sexual harassment.
 Affirmative Action.
 Issues surrounding the representation of employees and the democratization of the workplace, trade
ization.
 Issues affecting the privacy of the employee: workplace surveillance, drug testing.
 Issues affecting the privacy of the employer: whistle-blowing.
 Issues relating to the fairness of the employment contract and the balance of power between employer
and employee.
 Occupational safety and health.
Companies tend to shift economic risks onto the shoulders of their employees. The boom of
performance-related pay systems and flexible employment contracts are indicators of these newly
established forms of shifting risk.

4.Ethics in Marketing

Marketing ethics is the area of applied ethics which deals with the moral principles behind the
operation and regulation of marketing. The ethical issues confronted in this area include:

 Pricing: price fixing, price discrimination, price skimming.

 Anti-competitive practices like manipulation of supply, exclusive dealing arrangements, tying
arrangements etc.
 Misleading advertisements

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 Content of advertisements.
 Children and marketing.
 Black markets, grey markets.

5.Ethics of Production
This area of business ethics deals with the duties of a company to ensure that products and production
processes do not cause harm. Some of the more acute dilemmas in this area arise out of the fact that
there is usually a degree of danger in any product or production process and it is difficult to define a
degree of permissibility, or the degree of permissibility may depend on the changing state of
preventative technologies or changing social perceptions of acceptable risk.

 Defective, addictive and inherently dangerous products and

 Ethical relations between the company and the environment include pollution, environmental ethics,
and carbon emissions trading.
 Ethical problems arising out of new technologies for eg. Genetically modified food
 Product testing ethics.
The most systematic approach to fostering ethical behaviour is to build corporate cultures that link
ethical standards and business practices.

ADVANTAGES OF BUSINESS ETHICS

More and more companies recognize the link between business ethics and financial performance.
Companies displaying a “clear commitment to ethical conduct” consistently outperform companies that
do not display ethical conduct.

1. Attracting and retaining talent

People aspire to join organizations that have high ethical values. Companies are able to attract the best
talent and an ethical company that is dedicated to taking care of its employees will be rewarded with
employees being equally dedicated in taking care of the organization. The ethical climate matter to the
employees. Ethical

Organizations create an environment that is trustworthy, making employees willing to rely, take
decisions and act on the decisions and actions of the co-employees. In such a work environment,
employees can expect to be treated with respect and consideration for their colleagues and superiors. It
cultivates strong teamwork and Productivity and support employee growth.

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2. Investor Loyalty
Investors are concerned about ethics, social responsibility and reputation of the company in which they
invest. Investors are becoming more and more aware that an ethical climate provides a foundation for
efficiency, productivity and profits. Relationship with any stakeholder, including investors, based on
dependability, trust and commitment results in sustained loyalty.

3. Customer satisfaction
Customer satisfaction is a vital factor in successful business strategy. Repeat purchases/orders and
enduring relationship of mutual respect is essential for the success of the company. The name of a
company should evoke trust and respect among customers for enduring success. This is achieved by a
company that adopts ethical practices. When a company because of its belief in high ethics is perceived
as such, any crisis or mishaps along the way is tolerated by the customers as a minor aberration. Such
companies are also guided by their ethics to survive a critical situation. Preferred values are identified
ensuring that organizational behaviours are aligned with those values. An organization with a strong
ethical environment places its customers’ interests as foremost. Ethical conduct towards customers
builds a strong competitive position. It promotes a strong public image.

4. Regulators
Regulators eye companies functioning ethically as responsible citizens. The regulator need not always
monitor the functioning of the ethically sound company. The company earns profits and reputational
gains if it acts within the confines of business ethics. To summaries, companies that are responsive to
employees’ needs have lower turnover in staff.

 Shareholders invest their money into a company and expect a certain level of return from that money in
the form of dividends and/or capital growth.
 Customers pay for goods, give their loyalty and enhance a company’s reputation in return for goods or
services that meet their needs.
 Employees provide their time, skills and energy in return for salary, bonus, career progression, and
learning.
COMPANY WITH ONE OF THE BEST ETHICAL CORPORATE POLICIES
WORLDWIDE

It’s not often that companies are celebrated for good behavior. Here are corporations with policies we
can support:

Microsoft
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Given the fact that it was started by Bill Gates, one of America’s most generous philanthropists, it
follows that Microsoft(NASDAQ:MSFT) would do well in following his example. The tech company
and its employees donate over $1 billion yearlyto charities and non-profit organizations. If that wasn’t
enough, Microsoft’s management and employee’s have also decided to tackle America’s IT
professionals shortage through its TEALS program. Through the TEALS program, Microsoft
employees are encouraged to volunteer at local schools to instruct students in computer science, in the
hopes that it will inspire them to enter the technology industry. It’s only natural that Microsoft
employees would be generous people; in addition to being among the highest paid employees in
America, they also enjoy a plethora of perks, including 100% coverage on their health care premiums.

ETHICS AND COMPLIANCE AT MICROSOFT

Microsoft’s commitment to corporate responsibility and integrity defines the work of our compliance
program. CELA’s Office of Legal Compliance (OLC) is responsible for Microsoft’s overall
compliance with corporate policies, guidelines, as well as the laws around the world. The Office issues
the company’s code of conduct (Standards of Business Conduct), corporate compliance policies and
develops annual online training that reaches every Microsoft employee. It also supervises the
company’s non-EEO compliance internal investigations. More broadly, CELA’s leaders reinforce our
commitment to integrity as a fundamental part of every job within the Department - a commitment that
goes well beyond compliance with legal obligations.
Our Standards of Business Conduct help us live our values, which include fulfilling our commitment to
the highest ethical and legal behavior as we evolve in a mobile-first, cloud-first world.
The Standards are an extension of Microsoft’s values and reflect our continued commitment to ethical
business practices and legal compliance.
The Standards are designed to help you make the right decisions for yourself and Microsoft. They are
neither intended to cover every issue or situation you may face as a Microsoft employee, nor do they
replace other more detailed policies. You should use the Standards as a reference guide in addition to
Microsoft’s policies. These are as follows:

CORE VALUES

What are values? In simplest terms, they are a set of beliefs that govern behavior.
Like people, companies have values.
Our Standards of Business Conduct help us live our values, which include fulfilling our commitment to
the highest ethical and legal behavior as we evolve in a mobile-first, cloud-first world.
Our values must shine through in all our interactions.
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INTEGRITY & HONESTY

Integrity and honesty can be demonstrated in many ways. Honesty and integrity are demonstrated not
just in the extraordinary but in the everyday decisions we make. As employees, we strive for
excellence even when no one else is looking.

OPEN & RESPECTFUL

People who are open and respectful of others understand that how work is accomplished is as
important as the work itself. We never act in a manner that could be perceived as threatening,
intolerant, or discriminatory.
PASSION

Passion is everywhere you look at Microsoft. We have a zeal for technology and what it enables
customers to do. We strive to meet customer and partner expectations of quality, security, privacy,
reliability, and business integrity.
ACCOUNTABLE

Accountability is about keeping your word and taking responsibility for the commitments you make.
When you say you'll do something, you do it. Trust is built over time in just this way. Be honest and
accountable.
BIG CHALLENGES

From the very beginning, Microsoft has tackled big challenges. Big challenges have little to do with a
specific job and everything to do with the vision, courage, and fortitude of our people. People just like
Bill Gates. People just like you.
SELF CRITICAL

Our dedication to quality is not exclusive to our products. Each of us should improve over time. We
must consistently ask ourselves and co-workers, "What could I have done better? How can I improve
for next time?"
OUR RESPONSIBILITIES

The Standards are an extension of Microsoft’s values and reflect our continued commitment to ethical
business practices and legal compliance.
The Standards apply to Microsoft, and all employees, directors, and executive officers of Microsoft and
its subsidiaries and Controlled Affiliates.
The Standards are designed to help you make the right decisions for yourself and Microsoft. They are
not intended to cover every issue or situation you may face as a Microsoft employee. Nor do they

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 replace other more detailed policies. You should use the Standards as a reference guide in addition to
Microsoft’s policies.
You are expected to maintain high ethical standards, conduct Microsoft business with integrity, and
work in compliance with Microsoft policies and the law.
 Read, understand, and comply with the Standards and the Microsoft policies, laws, and regulations
applicable to your job.

 Obtain guidance for resolving a business practice or compliance concern or if you are uncertain about
how to proceed in a situation.

 Report possible violations of the Standards, policies, and legal and regulatory requirements.

 Be truthful and cooperate fully in any investigations.

 Complete annual training on the Standards and when completed, attest to your understanding of and
commitment to the Standards.
Failure to read or attest to the Standards does not excuse you from responsibility to comply with the
Standards, policies, and regulations applicable to your job.
REPORTING AND GUIDANCE

We want to hear your concerns and questions. Microsoft has zero tolerance for retaliation.
It is your right and responsibility to report compliance concerns and obtain guidance when you are
uncertain about what action you should take.
You are responsible and accountable for preventing, detecting, and reporting instances of non-
compliance to a member of Microsoft management, Human Resources, Finance, Corporate, External,
and Legal Affairs, the Director of Compliance, or the Business Conduct Hotline.
Any concerns or issues you report will be treated seriously, fairly, and promptly. Microsoft will handle
inquiries discreetly and make every effort to maintain, within the limits allowed by the law, the
confidentiality of anyone requesting guidance or reporting a possible violation.
Microsoft does not tolerate retaliation against any employee who makes a good faith report, cooperates
with an investigation or audit, or refuses to participate in activities that violate applicable laws,
regulations, company policies, or standards of ethical conduct. Any employee who engages in
retaliation will be subject to disciplinary action.

MAKING ETHICAL DECISIONS

We expect you to be well informed and exercise good judgment when making business decisions for
Microsoft. Before making a business decision, ask yourself the following questions:

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1. Is it consistent with our core values and the Standards? (We expect you to think through the issues and
to use available resources to help including our core values and the Standards.)

2. Is it Legal? (We are not expecting you to be a lawyer or legal expert. We do expect you to ask
questions and seek guidance if you are not sure.)

3. Am I comfortable with others finding out about my decision? (If you would not be comfortable with
friends, family, and co-workers, it probably is not the right thing to do.)

COMPLYING WITH LAWS, REGULATIONS & MICROSOFT POLICIES

International Business Activities

Microsoft acknowledges and respects the diverse cultures, customs, and business practices it encounters in
the international marketplace. Microsoft will comply with both the applicable U.S. laws and regulations
that govern its operations and local laws wherever it does business.

Intellectual Property

We comply with the laws and regulations that govern the rights to and protection of our own and others’
intellectual property including copy-rights, trademarks, patents, and trade secrets.
Fair Competition and Antitrust

We comply with the laws and regulations designed to promote healthy competition. Antitrust laws and fair
competition laws generally prohibit activities that restrain trade and restrict competition. We conduct our
business in compliance with these laws.
Investigations, Inspections, and Inquiries

We are direct, honest, and truthful in our discussions with agency representatives and government officials.
During investigations, inspections, and inquiries we work with Corporate, External, and Legal Affairs and
cooperate by responding promptly to appropriate requests for information.
Anti-Corruption

Microsoft prohibits corruption of government officials and the payments of bribes or kickbacks of any
kind, whether in dealings with public officials or individuals in the private sector.
Microsoft is committed to observing the standards of conduct set forth in the United States Foreign
Corrupt Practices Act and the applicable anti-corruption and anti-money laundering laws of all of the
countries in which we operate.
No Microsoft employee or Microsoft representative will suffer adverse consequences for refusing to pay or
take a bribe or kickback, even if this results in the loss of business to Microsoft

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Trade Controls

Microsoft complies with the laws and regulations related to the export, re-export, import, and use of our
software, products, devices, components, services, and technical data. These trade controls place
compliance obligations on Microsoft and on our suppliers or partners related to international distribution of
Microsoft products, services, or assets.
Gifts and Hospitality

Microsoft requires the use of good judgment, discretion, and moderation when giving or accepting gifts or
hospitality in business settings. Gift giving and hospitality practices may vary in different cultures;
however, any gifts and hospitality given or received must be in compliance with the law, not violate the
policies of the giver or recipient, and be consistent with local custom and practice. We do not solicit gifts,
hospitality, or favors of any value from persons or firms with which Microsoft does business currently or
prospectively . Nor do we act in a manner that would place any supplier, partner, or customer in a position
where he/she may feel obligated to make a gift, provide hospitality, or provide personal favors in order to
do business or continue to do business with Microsoft. More Info (PDF, Download Microsoft Reader)
Lobbying

We recognize our right and responsibility to lobby on behalf of issues that affect our company and
business operations. We comply with applicable political lobbying regulations.

Purchasing Decisions and Practices

In our purchasing decisions, negotiations, contract development, and contract administration, we comply
with the applicable laws and regulations that govern those relationships and expect the same from our
suppliers.

Suppliers

Microsoft suppliers must adhere to the highest standards of ethical behavior and regulatory compliance and
operate in the best interest of Microsoft. Suppliers are expected to provide high-quality services and
products while maintaining flexibility and cost-effectiveness. All suppliers are required to read and comply
with the Microsoft Supplier Code of Conduct and train their personnel on the requirements of the Supplier
Code.
All suppliers are required to read and comply with the Anti-Corruption Policy for Microsoft
Representatives and train their employees and personnel on compliance with anti-corruption laws.

Representatives

Channel partners, Microsoft Partner Network members, and other Microsoft representatives must adhere to
the highest standards of ethical behavior and regulatory compliance when they sell, distribute, or market

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Microsoft products and services. All representatives are required to read and comply with the Anti-
Corruption Policy for Microsoft Representatives and train their employees and personnel on compliance
with anti-corruption laws.
No Microsoft representative shall pay or offer to pay a bribe, or provide another thing of value for the
purpose of obtaining an improper benefit to any third party, public or private, with whom Microsoft is
doing business or is aiming to do business with in the future.

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 CONCLUSION
Ethics are the building block of our society and thus should be the building block of our corporations.
Henry Kravis states, “If you build that foundation, both the moral and the ethical foundation , as well as the
business…then the building won’t crumble.” It is not essential to let greed cloud judgement.

It can be concluded that it is the high time business ethics should be practiced all over the globe in the
benefit of the common society as described in the paper. It is not only in the favour of the mass but also
has advantages for the corporate.

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