OPERATIONAL MANAGEMENT

CONTINUOUS ASSESSMENT – 1

Name VEDAANT S. AGARWAL

Roll No. 1645 (one thousand six hundred and forty
five)
Semester 6th (Sixth)

ANSWER 2

Introduction
 The concept of business ethics is the specialization of such study where the business
establishment determines what the moral right for the organization is and also assesses
the wrong in conduct of the business and set standards in-order to ensure that people in
the organization follow.
 This concept of business ethics is decided by the business institution itself. There is no
regulatory body to determine the right or wrong. This implies that the institution culls out
the ethical standards i.e. right or wrong on the basis of best interest of the business.

Business ethics as an unquestionable value

 Moreover, having ethics in business is an unquestionable value. It stems for the basic
ideology of the organization and goes all the way down to the lowest levels of
management. The reasons why, business ethics is an unquestionable value is as follows:

1. Principle over profit

 Generally the ethical standard of the business is designed in a manner that it must lead to
profit maximization. However, if the ethics hinders the business itself, then the question
that would arise is – ‘should the business abandon the principle or hold on to them
because the principle is important than the profit’.
 The answer is that profit maximization is incidental because the principle is more
important. The ideal situation is where the business gives more importance to ethics,
treating ethics as primary goal with profit maximization being secondary or incidental.
 Henry Ford said, “Business that makes nothing but money is a poor kind of business”.
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 2. Eventual institutionalization of ethics
 Business ethics is a dynamic study. There is no straight jacket formula. Every business
tries to have a discussion of what is considered as an ethical conduct of business. Then, it
tries to implement it as far as possible.
 This implementation of ethics can be done at any stage. The business can do it in arbitrary
manner or in a planned manner. Supposing, when the organization attains a market
foothold with wide customer recognition then it might decide to implement ethics. Thus,
as and when the organization grows, they start creating a perception that organization is
creating a puristic form of business practice. Thereby creating a better image in the
market and makes the stakeholders believe in the business practice of the organization.
This, every business eventually recognizes and implements ethics.

3. Morality and ethics – a recognized value by the society

 Morality cannot be enforced through the backing of law in the society. It is always
inherent in the society. A society’s interpretation of morality will vary and cannot be
uniformly enforced through the means of law.
 However, even in the absence of legislation the society or people are able to enforce the
moral assessment of the action on the basis of the social conditioning. Because ethics and
morality are result of indoctrination and social condition. Thus, even in absence of any
law, every business will have ethics in their conduct eventually.

4. Business cannot neglect ethics for long

 Even if a business denies the existence or practices of ethics in their conduct. They can’t
continue to be in the denial mode for long because society will eventually hold them
accountable for their practice.
 Example – HUL changed the name of ‘Fair and Lovely’ to ‘Glow and Lovely’ after the
huge public outcry.
o The company did so to calm the negative public opinion and imbibe the ethical
practice.
o However, making assertion that ‘Fair and Lovely’ would make the user fair is a
question of ethics. If a consumer after using the product is not satisfied then will it be
a question of ethics. The answer must be affirmative because the practice of the

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 business in not ethical. The brand makes unsubstantiated claims and assures people of
fair skin.
o Since the organization has only changed the nomenclature without making any
substantial change, then again the society will make them accountable for ethical
practice.

5. Ethical practices is the core reason that helps the organization to foster an
environment of productivity and belongingness
 Managers have to remember that leading by example is the first step in fostering a culture
of ethical behavior in the companies. “If ethics are poor at the top, that behavior is copied
down through the organization”.
 “Price is what you pay. Value is what you get” – Warren Buffet. Thus, a manager should
treat his employees, customers, shareholders, government, media and society in an honest
and fair way by knowing the difference between right or wrong and choosing what is
right, this is the foundation of ethical decision making. REMEMBER: GOOD ETHICS IS
GOOD BUSINESS.
 Such an practice would help the organization create an culture where every employee is
committed to the organization and works for the benefit of the organization and towards
providing better products and services to the society.

6. Without ethics the organization lacks credibility

 An organization that is believed to be driven by moral values is respected in the society
even by those who may have no information about the working and the businesses or an
organization. Infosys, for example is perceived as an organization for good corporate
governance and social responsibility initiatives.
 This perception is held far and wide even by those who do not even know what business
the organization is into.

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