Ethics and Social

Responsibility
CONTENTS
Introduction
Approaches to ethics
Meaning of ethics
Major attributes of ethics
Business ethics
Factors that influence ethics
Importance of ethics
Ethics in management
Organisational ethics
Ethical aspects in marketing
Mass communication and ethics-television
Whistleblowing
Business education-ethics and new professionals
Intellectual property and ethics
Ethical investing
Ethicsin financial services
Review questions
2.1 INTRODUCTION
Ethics, sometimes known as moral philosophy, is not easily defined and
philosophers provide different explanations of it. It is certainly a subject that
is used in discussions about how we should live, what constitute right and
wrong, and what we mean when we use the words right and wrong, and
37
 Responsibility
Social
Elhics
and
Governance,

Comporate
get a n idea
aho.
Ethics and Social Responsibility 39
38
lollowing
questions
to
what -
Look at the
good
and bad.
of ethics: O 2.2 APPROACHES TO ETHICS
i n v o l v e d in
the study
If so, what
are they? Or does it
is wrong?
things always situation? There are three main approaches to ethics: (i) normative ethics,
A r e some of view
or
how?
depend
on the point
and
b a d n e s s ? If so, (i) descriplive ethics, and (ii) metaethics. These are now briefly described.
measure
goodness
Can we
kind?
selfish or
than others, or is
is everyone Normative Ethics
Are humans
people
"better" at morality

Are some of being good? Normative ethics was the prevalent form of ethics in philosophy till the end
equally capable how to be good?others wwhat is goodness of the 19th century. To decide what things are good on bad and what kind
teach people
Can we to tell or
anyone
have the right of actions/behaviour are right or wrong involves how people ought to act
Does to
wickedness?
on the principles, how they make moral choices, and how rules apply
individual lives. It includes a consideration of the importance of human
should you be good? what sort of knowl
Why kind of knowledge?
ll so,
edge freedom, and a discussion of the limits of a human's responsibility tor moral
I s ethics a special of it?
do get hold
we decisions and for the consequences of his actions. The role of conscience in
is it and how a set of rules or about thinking carefull..
arefu moral decision making is also a part of normative ethics. This may come
Is morality about obeying from an established group of culture, such as the Christian tradition, or it
about consequences? is wrong", do thev
murder someone
"I know of may be based on some other of way This is the traditional way of
thinking.
When people say,
or believe it very strongly? viewing ethics.
know it is wrong laws or are they different and
Are moral laws the same as society's
Descriptive Ethics
why? debated for thousands
to these questions have been hotly Descriptive ethics is the study of ways in which different people and
The answers
can see, ethics covers a
debated even today. As you societies have answered moral questions. Can it be described as moral
of years and are still of our lives. It n companies issues
wide range of topics and every aspect taxes or how we lreat our pets.
sociology or moral anthropology, a description of the moral code prevailing
as diverse as
whether we should pay our in different societies? It involves different approaches inside one society for
broad distinction between two different kinds of ethics:
We can make a the resolution of ethical problems.
ethics. Ethical theory examines
Ethical theory and applied or practical
different philosophies, systems,
ideas principles
or used to make judgments
Metaethics
or what we mean by those words,
about the right/wrong/good/bad things
is focused on subjects that invite ethical Metaethics is, sometimes called moral philosophy or philosophical ethics. This
Praclical or Applied Ethics more
abortion (e.g. in USA there understand the
questioning such as whether it is right to have an group attracts considerable interest today. It seeks to
and anti abortion or pro-life lobbies), and whether to meaning and function of moral language, and of ethical terms such as good
are strong pro-obortion

help someone who is terminally ill to die. Of course,

these two things are and bad. It looks at the logic used in arriving at
the conclusion of an
related. The theory we use alfects the decision about a particular moral issue.
argument that justifies a moral choice. ethical question illustrates
Posing an
For example, I may believe in a set of principles which include one that states the different ways the two positions respond to it. If you ask the question,
that life is sacred and no one can ever take it. This principle may lead me to "Is premarital sex right?", a normative ethical answer would be more
think that capital punishment is wrong (many countries in the west have concerned with the reasons why it might be right or wrong, and how they
abolished capital punishment). So, the ethical theory (the principle about life) relate to certain teachings, or with religious traditions of, say, Christianity,
leads me to a view about the moral issue (the death penalty). other group. A metaethical response would be more interested in
or some
right sexual action as
Before going any further, some definitions would not go amiss.
The word 'elhics' is derived from the Greek word ethikos (root form
what you mean by right, and what it means by a
number of different
opposed to a wrong one. Metaethics has produced
a
ethos)
which means "character" or "custom." For the
Greeks, it referred to the schools of thought.
appropriale customary way to behave in sociely.
or
A man's actions the result of a combination of voluntary and
are
The word circumscribed by many factors that
morality, has its rool in the Latin word moralis and is involuntary responses. His freedom is
concerned with which actions are The idiosyncrasies of individuals are
than the character of the
right and which are wrong, rather are beyond his conscious control.
person. Today, the two terms are often used for the sake of social
interchangeably. required to be regulated through social disciplinebeen marked the world
last 150 have
harmony and social good. The years
 Responsibility
Soc ial
Ethics and
Govrrnance,

Corporate oftechnoloo Ethics and Social Responsibilityy 41

40 advent
a n d tha
ushered in by the marked for its
of change has also
been
to The
over for rapidity
This period intellect. The
last"Pt The historical idea of the divine right of capital no longer applies.
of the society. entury
revolution. and
in turn,
changes in the values, cultures, and customs lead to change which,
reason
industrial human
faith in nes of
generale
unquestioning
intellectuals
becoming
the corner
slones

also ning lot

establishine
Rapid
a
leads to re-engineering of ethics.
witnessed the slandard of living; of The world of business ethics is quite broad and its tentacles are being
the
improved around the society. spread into a number of areas in the larger sphere of business-society
changes have in and
relationships in the 21st century In an relationship. The social responsibilities of businessmen, for instance, clearly
sensible of new challenges
has to face decisions will affect the
Our world business
all involve ethics and morality. There is always a doubt in the mind ot
increasingly
interdependent
economy,
sound ethical judgment
will have the businessmen about what is ethical and what is not. It is diflicult
to
on insernOSt
that are based are understand business or business-society relationships without
the
Those decisions
and beneficial
results. Ethical
considerations
parable knowledge of ethics.
favourable
connected with business decision-ma
from and systematically societies can and do have the rio
Donaldson (1992),
to
According to because sociely engages in a 2.3 MEANING OF ETHICS
function ethically
business to out the necessary world studies
expect with business to carry Ethics is the study of standards of conduct and moral judgment. It
contractual agreement
that sociely. Society may
also expect at what ought to be, what is the ultimate good, and how to achieve it. People
and services to
provide goods and limit their activities to accord ith have always thought that the primary purpose of business
is to serve
rights
corporations honour existing foundation of all economic activitia Business must have a social commitment; otherwise it cannot enjoy
Ethics form the society.
the bounds of justice. Busino and
essential in making business decisions. social sanction. Ethics studies human action in respect of being right
Ethical guidelines are of both
to make decisions based on ethical wrong, and attempts to discover what ought to be. It forms critique
professionals have responsibilities of elhics in business transactions ultimate values and goals and the means used in trying to achieve them.
The
the role and
principles. In this century, historyof busines ethics displays a growing recognition of the need
interactions is receiving more attention. to examine the transformations that have impacted the organisation
the world that elhics is important
growing realisation all
over
There is a management and society.
and for the progress of any society. Ethics makes for an
for any business A research paper submitted in California Management Review states that
efficient economy. It good
is in itselt. In the long run, ethics and profit go
the sociely. An ethically responsible most corporations which showed the highest concern for ethics also tended
together and ethics alone can protect to show the highest growth. Ethical behaviour was the basis of the
success.
a cullure for caring for the people and for
organisation is one has developed Ethics involves moral principles which, in turn, involve the way
the betterment of the society as a whole. Ethics has a considerable influence
individuals, groups or organisations conduct themselves which of the time
on the economy for its efficient and smooth functioning. The government
or bad conduct. It has to do with fulfilling the relationship between
and the laws cannot always resolve certain key problems of the society and asgood
business. Ethical behaviour enhances the quality of lives and work alike. An
people and society at large. When applied in a business context, it becomes
ethically based economy can do wonders in the way of creating wealth or business etlhics. Ethics in business has become one of the most challenging8
society.
issues confronting the whole business community. Establishing ethical
climate is like starting an endless marathon. The first step should be to
The task of business is to the outcome of economic activity. The
optimise
economic environment of business is the primary consideration in change unethical behaviour. It is an "on-going process" and never stops. An
effective programme of ethics requires involvement and commitment from
evaluating the business tactics. The present day economic environment of
business is a complex phenomenon. The trend and structure of all. The stakeholder, the management, the staff and everyone associated
economy are should ensure commitment towards ethical behaviour at all levels.
influenced by the economic relations with the
and the community.
government, public, society,
People and society are part and parcel of an 2.4 MAJOR ATTRIBUTES OF ETHIcS
organisation. People want and need to be ethical not only in their
private
life but also in
public. They are the ultimate sufferers if the affairs of the Concept: The field of ethics may be conceived as a discipline, science,
organisation are conducted unethically. Therefore, they have a concern over study or evaluation.
this. Over the last two
decades, there has been a shift in the attitudes of
corporates and their executives Content: The subject matter of ethics is concerned with what is good or

A silent revolution is
towards ethics.
bad, and right or wrong
beliefs and attitudes underway in business ethics today. The ideas,
associated with the profit ethic are Judgment: Judgment is required to determine whether human action is
being challenged. ethical or not. It is concerned with the overt act, not the motivations
behind
John Donaldson et al. (1992), Business Ethics, Academic Press,
London. it. Behaviour and its cause are judged.
 stbrlity
Reyyom
\ x 1al
bas.
and
urn, sel 43
n a n r
1
thur

whir h
are,
n Fthies and Sorial Pespmoibility
(orperatu m

1Profit
Marudards

mollve approsch:
ne
relstion between ethies and hrsinesspegje
42 baed
on

arge that there B3

is
the
set of value

avmbiotir rusiness fn a profit-oriented utr

Judgmert
is
S t a n d a r d s

rths,
t h e r e f r

o
e ,

m d u t
feels adopting lood ethical podicies will
neturally lead f
fos busines.in
valus
e l e m e n t
od human
oher wrds, m enies results in pd business. Moral busines
The
faral
for
jpudging
are profitable. This has also disadvantayes. pract
Values s t a r u i a r d s

first, mary maral busines

usnd
as
ofactices will have an eccmonic advaritage (mly in the
c r i t e r i s

onz
words, this may naot $uit the shertterm businesses and naY
run.
n rer
society
and
forms
incentive lor busieves that are designed enclusively to sweprwvoe
25 B U S I N E S S ETHICSS the
ol
an
organ wellare
oftthe
orofits. When conpetition ous, survival woruld be a serinsshort-eTm
If is to tlhe
sciety comfribste

thr a
within must
and
maintain

prope probien.
B u s i n s s
operates
Its
f u n c t i c m

fo
s u r v i t a l

the value
adtur
Second, sorne
moral busines practices may not be ecomonically viable even
system
of its sish
s a n c t i o n

higlier
is
wel in the long run.
For exanple, this might be the case with retaining De
part
mcial the for social elfare who are
workers
eam

soiety
I
nuust

hetter
the
image,
withoul
a
c o n c e r m

function
on a
inelficient, as opposed to replacing thern with younzPtana
more efficient wor kers, Third, moral business practices that are god
should
The
tor
b e h a v i o u r
u s i n e s s

imagr
pubik and
practices for
its exil. business depend upon what produces profit. In different segnents, the
way
Unethical
the soei

definitely
pase social
movements,
same practices might not be econonically viable. Thus, any overlap triat
w
r eo
nupl
o d
nsible corporate cilizen
by with
much
i n f l u e n c e d

s u r v i v e
or grow exists between morality and profit is both limited and incidenta.
ethica is very business
can

may he, ar not The other version of this profit approach takes a reverse
Business
prelerences.
No
hawever
best they
In the
strategy. In
system
and
social
I n d i v i d u a l ' s
values,
of
ethical
perlormance.

groul competilive and free market, the profit motive will, in fact, bring about
morally proper environment. That is, if customers demand safe products, or
a

MC1al
harmony. m a x i m u m
level
for
survival and h.
sufficent
to
attain
the
climate,
ethics is necessary

become
cold and unfriendi.
ily workers demand privacy, they will buy from or work for only those
prevailing
competitive
business
operates
has
behaviour
that have rocked the businesses that meet their demands. This view maintains that since the drive
The
climate in
which

of
revelations
of
unethicaB
efficient
and smooth operati.
ating for profit w creale morality, good business results
Proponents of this view, such as Milton Friedman, argue that this would
in good ethics.
result
crucial for
an
in thecreati
today as a
Ethics is wonders
ating if would allow a truly competitive and free market.
nations
arnd the
world.
capitalism
can
do
opines that ou
happen the government
has
An
ethically-based
Adam smith But this view also problems since it assumes that consumers or workers
philosopher m o r a l cooperation
the
economy.

wealth for society.

The
economic

work well
unless it has the
what people do
whonen
will demand morallyproper thing. In fact, consumers may opt
products whose price is less than the safe products. In short, not every moral
for
does not "Ir's
system
of capitalism theologian
wrote,
difference", Ethics iis business practice will simply emerge from the profit principle as suggested.
A Jewish makes all the
participants.
of its one is looking cannot do everythine to
when
they all are alone,
and legislation ofOu 2. Legal approach: This approach of assumes that moral obligations in
consider the fruits
because
government
asks us not to business are restricted to what the law requires. Moral principles are beyond
inheritine
concept of
important
The Bhagavadgeeta Manu's the requirement of law. The unreasonableness of such a moral requirement
protect society. selfless action. provide
notion of is all the more evident in societies that do have a strong external source of
It invokes the idea of accountability
actions.
and the Mayurian b u s i n e s s must work hand-in- morality. Islam, for example, contains a broad range of moral requirements
property,
well as and
debts as
belief that politics
a basis for Gandhiji's
of society.
such as alms giving, prohibitions
compulsory against
sleeping partners
collect unearned money, and restrictions on charging interest on certain
that
hand for the
development
types of loans, particularly on relief aid. Thus, in Muslim countries that are
Approaches mean one
not necessarily ruled by Islamic law, there is a strong source of external
morality that would be binding on Muslim businesses apart from what their
ethics" they usually
about "business
When business people speak law, (ii) avoid action,
and (iii) avoid laws would require. Similarly, Confucianism has a strong emphasis on filial
breaking the
of three things: (i)
avoid
Businesses are especially
concerned piety; thus, in Chinese and other Confucian societies, it is reasonable to
for one's image.
actions that are bad
since they
involve loss of money
and reputation. expect their businesses to maintain a respect for elders even if it is not part
with these three factors to be ethical. It is not easy
of the legal system.
to teach anyone The western culture lacks a counterpart to the external source of
However, it is not possible interests of the
between the ethical
to resolve the difference
in thought morality as is presentin Muslim or Confucian societies. One reason isEven
our
ideal-minded one. In most issues of the
and cultural pluralism and the presence of a wide range of belief systems.
money-minded businessperson economic viability.
business ethics, ideal moral principles
will be checked by within Christianity, the diversity of denominations and In
beliefs prevents it
standards of business ethics. of Christian values. without
short, a
There are three different ways of deriving from being a homogeneous source
 Saaa
nsiblity
md
Ethas
Gemmz law. s
entermal
to the a
Coprat
and
Ethics and Sociai 45
that is optional; and so, it is Responsibility
44 ethics e
of to
system principles.
appear such
e t y
(i) The Fairness Principle: Al
reoised follow
business.rol
our
business practices shouid be tair.
wndes
in
to
b u s i n e s s p e o p l e
only
(ii) Human Rights Principle:
obbgatins the
urs,
social
Pusinesses shersld respect human
oral as national
saietv,
to e x p e t our .5/oup
unreasonabie
(iv) Autonomy Principle: Businesses shuld not rigntt e
pluralistic infringe
by a
majonity-endorsed inchude
cuuraly
law.
These
of
rationally reflective choices of
in a are the (v)
that in safe
c o n i a i n e d

obibgahions safety,
Veracity Principle: Pusinessespeople. their
moral
already product unifyine
8 shonld not be deceptive in
are advertising
those
that
In tact,
the practices
a
are practices.
honesty itself.
delines
for and firng The indisvidua
the l a w
These principles are too general and do
hiring is not tell specificaly what
and fair dverse
soTety counts
dihiors
as harm, untairnes5, or violation of
our
within their subgroups, but they.are human rights. Does al damage to the
busnesses obligations of the
force
of the bgroups. And,.dearly
subgro to
bound by social
environment constitute harm? Does it violate an ernployee's right
sness
maye 2 s T a t i o n
with these on those oti:
tside if the employer places hidden surveillance cameras in prrvacy
ane's are not binding an employee
ntingent
upon those
subgroups
subgrOup, its only mo.
noral
ounge
area? Does child-oriented advertising mislead children and thus violate the
withun to any
mral
duties belong principle of veracity?
business
does not at large, which are
Ifa of society
suberoups. within
The above principles are abstract in nature.
those the context They broadly mandate
w i be against harm, and endorse autonomy as well. Because they are abstract, it
gations indeed prom
ethics may
the law. business ompt
dictated by to
There are two kn will be difficult to apply them to concrete situations and,
foliowng legal approachprescribed by law.
as
key consequently, they
Strictly the law requires. Fire will not give clear guidance in complex situations. An alternative
to do
the right thing to what First, approach
sinesses the
morality solely moral condemnati
is to forget abstract and focus, instead, on the concrete situations that
behind tion
with restricting law will lag affect the particular interests of consumers, workers, stakeholders, or the
problems context, the For example, in #h
the best legal business practices.
eren n community.
legal c l a m s about the
miraculoe
unscrupulous yet
of c e r t a i n make exaggerated The recent stakeholder
could prohibit
comparies Now, gOvernment
regulations approach to business ethics attempts to do this
past drug systematically. The stakeholders include principle holds that businesses
of their products. e n a c t m e n t of
a law, there will he
curative properties to the
cdaims. Thus, prior deemed immoral, yet the
should consider all stakeholders' interests that are affected by a business
will be practice. The stakeholders include employees, suppliers, customers,
any ex2ggerated when a business practice
of time problem since changes in
a period
would be a coninuing creditors, competitors, governments, and communities. Accordingiy, this
wil be legal. This would s o o n present new
practice
and marketing strategies legislation. approach emphasises the various parties affected by a business practice.
products, technology, addressed by existing
that would not be laws
But it is limited since its proponents have no clear formula to
questionable practices whose business-related prioritise
to countries
only
Secondly, morality aPplies The situation may be different for developin
the various interests. Should all stakeholders' interests be treated
equally
conscientious. or have special
are morally priority? Another way of looking at concrete moral
laws and regulatory agencies.
countries with less sophisticated the law, either in their
obligations in business is to list them issue by issue. This is the strategy
assume an obligation beyond behind corporate codes of ethics that address
Corporations that that most outsiders specific topics such as
or in practice,
take on responsibilities confidentiality of corporate information, conflicts of interest, bribes, and
corporate codes is found in the mission
would designate as optional.
A good example political contributions.
includes the following:
statement of Ben & Jerry's
Ice Cream, which
4. Social approach: This
The third approach to business ethics is
approach enables the company in to operate
3. Moral obligations approach: such a way that it actively recognises the central role that business
plays in
factor that is extermal to both profit
that morality must be introduced as a the structure of society by initiating innovative
ways to improve the quality
motive and law. This is the view of most philosophers of business ethics. It of life of a broad community.
is expressed most clearly in a well-known business ethics essay as "Proper
ethical behaviour exists on a plane above the law. The law merely specifies
the lowest common denominator of acceptable behaviour.
2.6 FACTORS THAT INFLUENCE ETHICS
The most convenient way to explore this approach is to consider, among
other. The five Ethical considerations vary by class, structure, economic group, industry.
supra-legal moral principles suggested by philosophers
) Harm Principle: Businesses should avoid causing unwarranted professional group, and so on. Business ethics has to be on par with the
ethical code of the society in which it operates and it is essential that
harm. a business enterprise adhere to well-established ethics. The factors that
2Gene R. Laczniak (1983), "Business Ethics: A
Business,
create the basis for ethical consideration are: (i) values, (i) culture, and
PP. 23-29.
Manager's Primer", Jan-March,
(ii) transformation. These are now briefly described.
 R e s v m s z h i l i t y

Sanal

Ethis
and
Ethics and Social Responsibility 47
Grermamr.

the
image.
They
are
c o
not
n s t i t
fixed
u e n t e
hey have
created
improved life style and the quaity of ife which, in turn, has
a change in the culture and cuitural values by effecting a
the its h.hd
to
Values
a c c r e t i o n s
and
cucially
in siness revolutionary change in ethical standards. According to Aiwin Boskoff,
siety
or

are
additions with
the
Values
are
so
create
credibilit
.h
"Social change refers to inteligible process in which we discoversignificant
Vakues aong culture.
They create alterations in the structure and functioning of determinate social system.
hange the b u s i n e s s

and
a
c o n c e r m

e"Ore
is the
undergo
Change only permanent feature on man's sociai life and social systerm
s u h s t a n c e

to the This
s u c r e s

for the value

s in the torm ot transformation.
c o n s e g e n t h v .

a c c o u n t a b i l i t y .

also add
r e l a t i o n s h i p s
as
wil
certainly and
indirectly
involved
An
They
r e s p o n s i b i l i t y

and conee
the public.
moral directly and
socially cemed
is intim
redibility
by those
who
are
to be
ethically
who
have no
2.7 IMPORTANCE OF ETHICSs
in the publix those wile
c o n f i d e n c e

perceived
by even by the
credibility

respected
enhance

ono Basic human needs: Ethics corresponds to basic human needs. Mst
o r g a n i s a t i a n

and This
will
creates
a feeling of
honoured
functioning.
It busi people want to be ethical not only in their private lives but also in their
will be
of its
actual
its
employees.
i n d i v i d u a l ,
derives iness
part of the organisa tion because they
with
knowiedge and An
of business as a business attairs. They want to be a
goal. mission
ethical
c o m . m a n

perceive its purpose and activity to be beneficial to society. The basic

organisation

the a the
both havng such a s located, the type of
is
among
empioyees
mulitode ofsources where
the
business

needs are probably one of the most cogent reasons for ethical concern on
alues rom nabon
with reo.. the part of organisations.
n s t i t u t i o n ,
the
active,
and its
nature.
institutionalised
zard
sacial
which it is
have
become functione.
ons: Credibility among the public: Ethics creates credibility with the public.
n values important
ndustry of time, two stron
to be ethically and sociaily concerned
perform become
Over a period These
values
and
svst
(i) A company perceived by the public
and socety. t a c t o r in the will be honoured and respected even by those who have no intimate
e n v i r o r m e n t

business business
the key
ale
rights, but it
to to become
guide
fom as a business. They has
certain
knowledge of its actual working. Gaining the confidence of the community
has c e r t a i n righte
in
for people
Business

with society.
is vital to the business sector. Public opinion is the most powerful torce m
u m , society
n o t i v a t o r s

business
and, in attiud
of It is higher standards of ethical
society. way of achieving
Value-ethical
reiationsip to society activity. alwat. a democratic a
responsibilities business
to decisions are
has
certain
in regard Ethical behaviour.
respansibilities decision-making. Value addition n
ad
in better and
e n v i r o r 1 m e n t .

and its decisiom

on-
Credibility with the employees: Ethics provides a common language for
helps
marnagement
society
of public, organisation when perceived by
in the
best
interests
enable
will
an
aspects of the aligning a company's leadership and its people. Ethics, The
employees as genuine, creates common goals, values, and language.same
decision-making poitico-legal

based
ettical
economic,
social, and
the
a k e r to
look into
management has credibility with its employees because it enjoys the
c o m p a n ys decisicn-making with the public. It creates harmony and oneness among the employees.

Better decision-making: Ethics helps in better decision-making. Ethical

system aspect of ot the
decisions made by the company will always be in the interest
Culture humans. The
of
the
erviron1ment
for h u n a n beings to This s
Culture is described as
that make it
possible
from one shareholders, others stakeholders, public, and their employees.
of relationships of the species all aspects
culture is he
e
a c c u m u l a t e d learning
of learning
because respect for ethics will force the management to consider
the accumulations

ceate a soriety to pass

to make
the of a question-economic, social and ethical.
continue
the ofher and acquires as a
teelings which man
a
gererstion to
activities, the ethical attitude of thoughts, and
Culture reiers to differences separate
Cultural and developing 2.8 ETHICS IN MANAGEMENT
memcer of the sciety. is given to building
Much mre enphasis issues.
different pesrje. to the abstract concept and
whie muh s emphasis is gveri Ethics are principles of conduct used to govern the decision-making
relatinsip is
behaviour of an individual or group of individuals. The management
concerned with making decisions within an organisation. Ethics of the
Transtormation
culture and
andkher reasun for the change in individual or group who make decisions have significant implications
for
is yet
Transiorrnation
viewing travelling, to conmunication, the organisation's stakeholders, employees, customers,
shareholders,
in relaton
in the ethics and ethical
Transírmation
vzhs.
playing evvisayes a change
wrking and
shopprg these areas have
and developrments in patterns, and consequences,
American
practin. The pheromasi gowth Alwin Boskoff (1965), "Social change: sources,

a t t a srial change annzgt public,

sciety and business. These Sociological Review, VolL 30, No. 2.
ragt
 hus und 5mial Vesponsinlity 49
der

dl laige.
1 js
nplait
decu" anibal9) ae asay authority, rules, procedures, techriues ano
4
annd the
publiu e l l i u s is
à wsjlle imen omlolo, Jwma) ilepersma) rommunicatiums, specialisatin of
lhe
govemnienl, A de f
making
des1os
divisjm o Jalour, ønd yanisalional membership. funchms,
upplieis,
etius
tr de
ision
making
mduct
lo be
used m
udivudual
riglhts Organisations
houndaries, ny are they completely independent. They are the pimary
have
of of
d
inle
prnuiples siuch s s
justie, base.
outhnes
the decisions
means by which soiely yets its work done and its reeds satisfied. They
hal appoahes: niaking
pbulosophual
mvolves
aut cons vilally allect lives of millions of people who work in varied capacites.
based on ol juslne speak
The princaple h e laws
olders' riglhts, and Chris Argyris (1956) percejves that alJ
organisations have three core
consislency.
u l i l i l a r i a n i s n i .

stakelhold
willh
withoul
bias and s t i a r e h o l d e r s '
and other activities:
iruth,
salely,
prolection,
produd
of the
concern bul th.
the . Achieving objective-values
environmental prolecthon the problems
on solving
not only revolution
led to increase in 2.Maintaining the internal system-viability
Ethics
focuses
the
organisational
Second, the cornor
porate 3.Adapting to external environment-public viability
at large. First, of all types.
to dominat. Change is a necessary way of life for all organisations. The number of
society of
organisalions
and led ate
and power enlerprise
number,
size
the scale
of
business
revolution saw tho decisions the organisalion has to make increases day by day. Their impact
expanded managerial
revolution Third, the active control is growing. The fundamental determinants of the relationship between
corporalions. over
business who took
modern big managers
business, SOciely and organisation are the values and culture. The areas of
of a class
of prolessional revolution separated ownershin
Fourth, the property change are:
emergence
corporations. within lhe corporation
of large property rights
and diffused in the moral order 1. Technological innovations
and management about a change
revolution brought 2. Shifts in market
the capitalist
Finally, the public
role of business and the patterns
enlarged 3. Greater competition both national and international
of capitalism and greatly 4. Changes in governmental
economic role of govemment.
socio-economic
environment, the focus of business
5. New management tools
regulations
In this is a reaction to the
changed
Social responsibility 6. Changes in
ethics is on social
responsibility.
technological, social
and political background,especially social environment.
and the economic, The need for constant innovation is inevitable. Changes also are
goals of the society
forces that mould the society. inevitable; however, resistance to change is endemic. Response to change is
conditioned by the individual's attitude. A successful change includes three
2.9 ORGANISATIONAL ETHICS
which implies
aspects: (i) unfreezing the present level, (i) moving to a new level, and
from the word 'organism' (ii) freezin8 group or, individual in new level. An organisational change
The word 'organisation' originated focuses on the group and not on the individual.
The business environments,
a structure of
interrelated and integrated parts.
form an
with individuals and the society or community,
together a world without Common Unethical Practices
an activity. One cannot imagine
organisation perform
to
and medical
get formal education, hospital
no We may now enumerate some of the most common unethical practices
organization-no schools to a

clubs or association, no political parties, prevalent with driety. These may be seen in relation to:
clinics to get medical attention, no
no government, no firms! There would be only two extremes-community 1. The Consumers
and The between the two is wide. Organisation is needed to
society.
gap (a) Adulteration
narrow down the gap. It is one of the vital social inventions of mankind and
an enormous number and variety of organisations characterise modern
(b) Spurious products
(c) Duplicates
societies.
(d) Injurious products
The organisations definitely have objectives or goals, according to the () Deceptive advertisements
purpose for which they are formed. All organisations are formed with a
2. The Employees
purpose, for the people, sociely or community taking into account the
environments such as economic, social, political, and legal. (a) Low salaries
are so crucial and
Organizations,
invariably affect the quality of human life in (b) Poor working conditions
contemporary society. Their study, thus, is an important aspect of human (c) Exploitation
life. Thus, an (d) Employees being made to sign for the than what they are actualy paid.
organisation may be defined as a human group deliberately
and consciously created for the attainment of
certain goals with rational
coordination of closely relevant activities. Chris Argyris (1956), Scholarly Articlesfor Argyris, New Ilaven: Lahour and Management
mechanisms for Otherwise, they are the major
achieving man's goals, The minimal characteristics of an
Centre, Yale University
 boral
Berponsdblity

Efhics and Social Responsibility 51

grd
1Dhice
onuna,

How does the business value employees? The company's

o p o r l u C o m m u n l h y

Employees:
the should the focused on: working conditions, recruitment,
Govenment
and
nolicies
and training, rewards, health, safety and security, equa
3he support development
0ortuníties, retirement, redundancy, discrimination, and harassment.
( u y T a x e V a s i o n
polilical
to buy
money
() Pollutiom of
or
Customer relations: These incude customer satisfaction, quality
c i n u l a t i u m

and
o ) B r i b e s

or service dealt, fair pricing, and after-sales service.

oroduct
environn.

Institutionslising of Ethlcs elhical

an
operale
in
code of e i hics, The laws of and community are to be
desires
to
a policy
and
Soclety/community: society
serionusly ufp and
ensurino
the Environmental protection, pollution abatement, and energy
business
that
ethics by
drawing
wilh
is on respected. to
A mafifutiomalise
alllevels
of what
going are to be followed. In short, standard and quality of life are
hao to omuemed at
bul a
blueprint
be printed
aand conservalíion
CO

all is
nothing should
be improved.
Tamiliarising
Code of ethks code
ethical
be appointed fo
or
1he and
ethics, from ihe point of view of business
may
reno
i m p l e m e n t a t i o m

adopted, c o m m i l e e

Business
be
tollowed
and
An
elhics
nof only has to port Government: on all
o mcened. commillee

to provide information to the government

to all thosr oulslde,
The for betlerment businessmen, are (i) set up by
matters, (i) follow the guidelines, policies and standards
iulaled
and sugBestions

twaining
within
and
keeping pace
withofler
th required
ullering management
to lime legitimately due to the
periodnally
to the top
code Irom time
preached,
Ethics and
nd the government, and (ii) Pay taxes that are
review
the and
lo praclised of the stream.
hut also has ethics has to be become part
government.

hanges,
Huniness
intemalised so that ihey
be
A Growing Global Role
have to
morality

of Ethlcs
for peace and
Development
Programme
oI another will not The world has entered century with unprecedented changes
a
thread
code or that employees
copylng
require is the buzzword tolay. Business is the silken
Globalisation
standard
progress.
what areas theare:
a
is needed. The
Merely endorsing out in of ethics
to find followed that binds the whole world. Therefore, globalization
suffice. It is important to
the steps
be
need is envisaged in the following areas:
In this connection,
business ethics policy.
uidance. Ihe
personality to endorse they aflect different .Stable and honest govemments
Select a prominent issues as
framework, which
addresses
.Transparency and openness to promote honesty in governments
The usual ones are:
Choose a of the company.
sharelholders Commitment to internationally recognised human rights
constituents or and local/national
customers, suppliers,
shareholders, employees,
even
include competitors. Developmental programmes for environmental protectior, pollution
community.
Some might drawn from all control, and energy conservation
with a sample
needs piloting-perhaps .Evolution of a world code of ethics for business.
The cole locations.
levels tronm ditferent distributed in booklet form,
îramed should be Factors influencing businessmen to make ethical
decisions
The code of conduct concerned.
and sent to all
The code should be published The Board should be
A man's personal code of ethics
matters of governance.
Values and ethics are Government regulations
notitied to involve themselves
for ethical policing.
should be introduced in all .Ethical environment of the industry
Practical of the code in action evamples Company's policies and procedures
anas
.Behaviour of superiors in the company
Iraning pogrammas tor all concerned.
Review mechanism should be established. .Behaviour and attitude of associates in the company
A mde master neeis to be appointed. .Professionalism in management
decisions
Facets of Business Ethics Factors influencing businessmen to make unethical
Stakaholders shareholders or other providers of money: Transparency High tax rates of the government
and openness in all dealings. providing adequate information to the Ethical climate of the industry
shareholders stakeholders, and investment protection and return on
nvastmani.
Financial stress
Behaviour of superiors in the company
 53
Ethies and Social Responsibility
of the corporate mission statement as "Be Informed. Be Involved. Make A
52 Responsibllty
business enterprise
b u s i n e s s

ente.
i .
A
A pifference." This new ethical standard and social attitude are blooming
Social
ew
ar.
just s
and
everywhere.
o b l i g a t l i o n s
entinly
Ethics an and of busine s lo
is not has rights r e s p o n s i b i l i t y
m s p v w n s i b i l h t y
sunh, it the
Srial As and
veist soxietyv.
ot the
o n n t r y .
citiren
ofa and
saiety
It
slhould
c o n t .
to 2.10 ETHICAL ASPECTS IN MARKETINGG
social.
o
r e q u i r e m e n t s
Business
and and
citizen. n e n d sa s p r t s - i n d i v i d u a l inplies a
the r e s p o n s i b i l i t y
Marketing consists of the
o r g a n i e s n e
performance of business activities that direct
u n d e r s t a n d
has two
social
busimess
or
ha the
flow of goods and services from the producer or manufacturer to
Business Conceptually,
activities.
Social the
r e s t r a m s
nvis.
saial that harmtul
Varnious commnity and
policies, consumer or the user. The following are some of the distinct functions of
the d e s t r u c t i v e
as
for and goal
causing cost,
to the d e s i : marketing8:
n c e m
from atitude, refers
behaviour as bevoOns
responsibility
interreted
nsponsibility
is
Davis,
social
at least
partially ond the .Product development
Acording
to
Keith
busine
for
reasons
obligation of bu.
busines .Distribution
taken by the interes. It is the coODeras
and
actions
economic
or
technical
such as morale, .Pricing
values
firm's
direct human Social responsibili Promotion
and develop
worktorce.
its red
to
nurture among self-realisation impact and Sales
and its positive
motivation, through e c o n o m i c survival
assumes
business ensure
a to
the obligation
on society.
It is necessary customers, supnli liers Marketing Ethics
employees,
negative impact educated and healthy environment.
for solve the
s o c i a l and ntal Professional associations and accrediting bodies have identified guidelines
business cals to help
it must take steps for ethics in marketing. The laws and regulations are generally designed to
and services,
that exist today. heavily
influenced by h
problems with himself is
he lives. Social protect the consumer from unethical practices by businesses. The American
Man's relationship within which Marketin8 Association's code has outlined the responsibilities in the
The c
institutions
core social individual.
with in each following heads:
relationships values, ethics
generate and education. Any
institutions help of belonging,
the community in both economi 1. Responsibility of the marketer6: Marketers must accept responsibility
institutions a r e the family, nic
and developments
necessitate n e w approaches the organisations for the consequences of their activities and make every effort to ensure that
changes business and
scenario that
result in the their decisions, recommendations, and actions function to identify, serve, and
and social has brought forth mass
industrial revolution
these changes. The satisfy all relevant publics, customers, organizations, and society.
adapting to in the increase of businese
modernisation resulting
production and of n e w types of business 2. Honesty and fairness: Marketers shall uphold and advance the
has led to the emergence
activities. Which in tum
form of organisafions. It is toda integrity, honor and dignity of the marketing profession.
or company
organisations-corporate type
the world as an appropriate
type of business 3. Rights and duties in the marketing exchange process: The
accepted throughout business.
with the large volume of to expect that (i) products and services are safe
organisation to cope up is the fact that business participants should be able
Overriding all business society relationship and fit for intended uses; (i) communications about offered products and
social values which both society and business
operates in an environment of services are not deceptive; (iii) all parties intend to discharge their
of business refers to its role in resolving
possess. Social responsibility obligations, financial and otherwise, in good faith; and (iv) appropriate
current social issues over and above legal requirements. The
problems and internal methods exist for equitable adjustment and/or redress of
as a whole has been through five revolutions in the twentieth
economy
method of and
grievances concerning purchases.
century, which have transformed its basic structure
4. Organisational relationships: Marketers should be aware of how
functioning. their behaviour influences the behaviour of others in organisational
The changes that are taking place in the internal and external
environments in which the business operates give rise to a re-identification relationships. They should not demand, motivate, or apply coercionto
encourage unethical behaviour in their relationships with others. They must
SKeith Davis (1983), "An
expanded view of the social responsibility of business", in
Beauchamp, H.L. and N.E. Bowie (Eds.), Ethical Theory and Business, Prentice Hall,
Cliffs, NJ, pp. 94-97. Englew0od 6 http://exchanges.state.gov/forum/journal/busintro.htm
 55
Rrsvnsibrlily

Snral

that
Ethics and Social Responsibility
Tthns
armd
behaviour
so
they
Gorermmer,

a c e p t a b l e
the indue
ustry, lssues for Television Ethics
r a t e
the c o m p a n y ,

and the
s l a n d a n d s

players:
have d
have
ditterent
i f f e r e n t needs
Normally, the media ethics experts encounter the following questions:
key
ethical three always
of of almast

e
a w a r e

viewpoints

groups
.What happens when a television channel carries information that
the three arise.
raognise

Since
these likely to offends a viewer or a group of viewers?
are

and soaieth conflicts

.What can parents do to ensure their children are not exposed to
ethcal

and wants
compan
offensive or inappropriate television programming?
in
Marketing
account
of the .What kind of and how much advertising should a television carry
Conflicts
on
is differo
a rence When does news reporting on television become
Ethical

possibly
arise
in
marketing

be (i)
when
there

the i n d u s t r y and
sensational
.When should the forernment censure violence and sex on television?
conflicts
Thev may company,
Ethical
and the
soiety.
three groups
(the
contlict
with the
organisati
ation. These questions will be addressed in this chapter
industry,
needs ol the values
An example
of
the
between
the one's
personal
possible
outcome.

have for ma Television networks usually try to exercise professional judgment

and
and (i)
when
of
interest
is a
Cigarettes tany also try not to offend viewers. Some teievision networks have published
saciet)
case, a
conflict
tobacco
industry.
of people
around the of conduct to guide their efforts. In cases where a television station
In either conflict is
the
Many
thousands

economy
has codes
does offend a viewer or a group of viewers, iaws are in place to guide both
of world
So, the
business.
fist tvpe
been a
lucrative
industry. cigarette
ettes
decades
in the
tobacco
and
tobacco.
However,
the offended party and the offender. Laws take over when ethical questions
empioyed smokino
world are on
cigarettes that cigarette s are not resolved between people representing two sides of an issue. When
somewhat
dependent documented
proot is an ethicai
is This a programme or an advertisement offends a television viewer, several
been There diseases.

society.
to and other
are
harmful
health, causing
cancer

Seel.
list of some of the ways in which
outcomes might occur. The following is a
to
harmful marketers.
leader in the company viewers have, in the past, used their right to object to television
for cigarette when a
'Cures' for or advertising, and
registered their concerns about the ethics
occurs
canflict
type of financial profit)
The second
conflict,
from false
advertising.
of ethical programming
personal gain
(usually a that falls
into
this category
those who may
of television:
a
one type
of product convinces

fatal diseases are a

marketer
profit, not be a cura
1. Write a letter of complaint to the concerned authority
make a that may
conflict: in
their greed to disease to buy a producther family) choose 2. Bring a legal suit against the television network or a specific
incurable may
members of
his or
dying from
an
be and marketine
department or individual employed by the network
ill person (or from promoting
desperately 3. Contact a consumer group and register a complaint. The group, then,
s a v e him dying
Ethical dilemmas facin
But a
to
it in an effort ethics.
to purchase of marketing tobacc may present the concerns of several viewers on the same topic in
such products
violate rules
fall into o n e
of three categories: (i) more public ways
professionals today and (ii) green marketing
marketing consumer privacy, 4. Letters to a local newspaper complaining about the programme or
and alcohol promotion, (i)
advertising
Guide
for Ethical Marketing 5. Informal complaints (usually verbal, in a meeting with represent
Standards
functions:
atives of the television network)
have four
Ethical standards 6 A public demonstration
practices
1. To help identify acceptable 7. Formal complaints tlrough a court of law.
control
2. Foster internal
3. Avoid confusion
4. Facilitate a basis for
discussion. 2.12 WHISTLEBLOWING
to
2.11 MASS cOMMUNICATION AND ETHICS-TELEVISION Whistleblowing' is the term used to define an
individual's decision
actions
disclose the information regarding unethical, immoral or illegal
accessible and
Today, there is little doubt that television widely is the most to an authority. Whistleblowing may lead to good or bad result.
Television ethics, therefore,
powerful educational and informational force. television is the
is of particular interest to many. For more and more people, Benefits
about the world. Because it
way by which they get news and information
is one form of media used to transmit information and entertainment, it is The benefits of carefully considered whistleblowing can lead to the end
whole
particularly prone to ethical concerns. of unethical business practices. The lives of individuals and
 Reymslulily

Sninl
and
Cowrmanr,
2hns

danmage
lo the vironment ha
envir

Ethics and Social Respomsiblity 57

idual. Some exampples y
s e v e r e
Some
o p w a t r ndividual.
and
saved

by
one

Sed
c o n u o

Guldellnee for Whlatleblowlng

communilies
hare
whistleblower
been
caused
s i g n i l f i c a n l

given
belou lo
eren
by which
whistleblowing are FSA, UK has issued guidelines on the effect of whistleblowing, which can
stopped violations

en
ethical
in be accessed on ts url http://www.fsa.gov.uk, The following will heip an
r e s u l e d

s e r i o u s

that
have employee determine if a situation merits whistleblowing
waste
b u s i n e s s e s

lovic
of

1.
Dumping
eypense
repor
and
firing 1, Magnltude of consequences: An individual considering whistie
bAlowing
an
must ask himself or herself these
2
Padding
laws
on
hiring
salely documented ness and even
illnese
questions:
3
Violating
laws
on
workplace

led lo .How much harm has been done or might be done to victims:
which
Delying laws
.Will the victims really be "beneficiaries"?
4.
Breach
of
healh
beneficial to so
ficial to sociely. The
5 polenlially
If only one person is or wil be harmed, it is not normally a situation
are practices
death. whistleblowers
u n e l h i c a l

imn that warrants whistleblowing

The
shul
actions

down
of
businesses
that

employee
engaged
who
wilnesses

belore
unelhical

ing the decision

making the
business
.

2. Probeblity of effect: The probability that action willactuallytke place

have an
time, carefully

Al the want to
same lhink
of
istleblowing are often
w h i s t l e b l o w i n e

and will cause harm to many people must be considered. The person should
at
work may
The
c o n s e q u e n c e s

criminal tion,
action or eve be very sure that the action in question will actually happen. He must have
practices authority. civil or

to
inform it lo an include
possible
may
to follow the
want to
the follow rule of absolute proof that the event will occur and, by the action, or people or the
extreme
and may
Furthermore,
an
employee
issues of
whistlei wing with the environment will be harmed,
discuss with:
imprisonment.

of
command",
that is,
before
deliberaling
on lhe
maler
anyone 3. Temporal Immedlacy: The whistleblower must consider the length of
chain
first, time between the present and the posibly harmful event and, at the same
supervisor whistlehlo.
immediate
is
time, must also consider the urgency of the problem in question. If there
whistleblowing,

else. information
about
counlries and inw
deal of in many immediate consequences of the unethical practice, the stronger is the case
A great and their
presence and evaen the
c h e m i c a l industry,

and protection, tobacco industry, for whistleblowing, For example, the effects of toxic waste dumping
nights the Web. Thes
hese days, SMS (Sh
(sporls, Wide
professions the World pri Proximlity: The physical closeness of the potential victims must be
is
available on
various agencies
govemment or
rivate 4.
govermment)

messages
are used by
whistleblowing. considered. The question arises about matters of emotional proximity or
Mail Service) on
in which the ethical question relates to victim wilth some
awareness
in the public situations a
lo create emotional atachment to the whistleblower.

Disadvantages martyrs
for public interass 5.Concentratlon of effort: A person must determine the intensity of the
unethical practice or behaviour. The question is how much intensity does
selfless
seen as
commonly as persons sola
Whistleblowers are
Others View them the specific infraction carry.
accountability. low-profile and recei
eceive
and organizational are of very
and fame. They
glory danger orthreat
form of
pursuingpersonal under some
no attention. They are always whistleblowing has occured 2.13 BUSINESS EDUCATION-ETHICS AND NEW
little or
cases where
punishment for garmishment by th
been
There have demotion, wage PROFESSIONALS
such as termination, suspension,
others employees. Depending
on
and/or harsh mistreatment by whistleblowers to be ostracized considered for business
employer, for These are some of the questions normally
circumstances, it is
not uncommon
the or future potential employers, education:
discriminated against by
by their co-workes, is a campaign directed What can academic institutions do to educate students about ethics?
even fired from their
organization. Mobbing
from the organisation. What do companies do to educate employees aboutethics?
whistleblowers
of eliminating them
with the goal
of individuals or groups to use How do employees leam to do a job better and do it ethically?
Workplace buling is the tendency co-worker which How do governments support training for ethical business practices?
unreasonable behaviour against
a
persistent, aggressive or and even physical abuse face conflict
includes such tactics as verbal, non-verbal, Where do employees get information when they a

therefore takes a wide variety of forms, from maintaining ethical

between keeping a competitive edge and
Bullying in the workplace destruction of
being rude or belligerent to screaming cursing, assault. property standards?
or

or work social ostracism, and even physical

product,
 Responsibilitv

Social
and
Ethus
the comn- Ethics and Social 59
law and pany Pespomsibility
G o r e r m a n o r ,

58
Corporate by for On
Employers
are
required
with
opportunities

traie What is Intellectual Property

training: employees Some of these
the
On-the-job
code to provide ethical
c o n c e r n s .

profeseg
tntellectual property is the information that makes it
Business assets are protected by lawspossible
employee's
oWn
ethical job-related
of the to earn money. businesses for
in specific part
job training considered
to be a

training
helps
employees
attend people who cr created the
property
which state that the
have exclusive ghts to use that-for any
of topics
opportunities
are
ethical
on a variely purpose, but most often for profit. right
On-the-job discussions
or victinm
development.
participate
in
bein8
perpetrators ms of A trademark is a
symbol or brand that is owned by the
and and avoid person who
workshops behaviour
reated it. A patent guarantees that an inventor owns the
influence
workplace
Wide Web: made from an invention. A rights to protit
of the
World
In copyright means legal and exclusive rights to
harassment. use
Wide Weh s written material, either published
programmes
on the
ethical

leam that
the World
a ime after the death of the author.
or
unpublished. For a
specific partial of
unethical
Training
workshops,
employees
ethical and some
The Intellectual property comprises two branches: (1) industrial
such training
have many
uses,
some

information
which can be used and (ii) artistic property. Industrial property refers chiefly to
property
new tool that
can
massive
quantities of are
trained in ethical
Web inventions,
trademarks, industrial designs and appellations of origin. For example, the
available
Employees
Web makes
and
unethical
purposes.
Coca Cola Company owns a symbol that is known around the world for the
for ethical soft drink that it produces. Patents and copyrights are chiefly for literary,
issues: The human Resou.
use. ethical musical, artistic, photographic and audiovisual works. For example, on the
discussion groups
on discussions on ton
Employee
employee informal
back of a compact disc (CD) box, there is information (in very small print)
organises informal settin
Personnel departmernt In these about the patent and copyright for the music on that CD.
management.
accordance with t
or
c o n c e r m to
the
and in is a great increase in the amount of international
of relevance
leam how to
address ethical
issues

and other
matters are aired Nowadays, there
business conducted around the world, which means more complex
employees Moral issues
code of conduct. discussions about intellectual property. More international business creates
company's
these informal settings. new challenges for intellectual property experts. The primary purpose of is
education and training on
These involve employee to WIPO address this challenge. While in one country there are laws
Personnel services: environment, or corporat
concerns
related to health, protecting the rights of inventors and artists, there may not be such laws in
such as ethical
topics another country. How to resolve ethical and legal conflicts about intellectual
decisions and employee counselling.
philanthropy
property a may different countries? What legal guidance is available to
resolve different ethical and legal issues across national borders? What may
PROPERTY AND ETHICS
2.14
INTELLECTUAL be a violation of intellectual property in one country may not be so in
another.
buildings, etc.), is a
the other property (lend, There are many counterfeit or pirated products around the world. Some
Intellectualproperty, like involved in creating new ideas
who
countries do not allow such products to be bought and sold; while other
are
for those
matter of great importance particularly in science,
information in any field of study or work, countries permit their sales. Music is an easily counterfeited product.
and concerm for information,
entertainment. In this 21st century, A number of artists have actively pursued "CD bootleg operations"
technology and become more significant
than ever. and
ideas and artistic expressions
have (individuals and groups who counterfeit compact discs). Video piracy
about intellectual property will provide current book piracy are other areas.
Gaining more knowledge related to intellectual property. Such A great emphasis is laid, on the activities and resources
of WIPO on
information on laws and issues In 1998,
chances for ethical business practices
worldwide.
promoting cooperation with the developing countries. August
information can increase which were
Property Organization (WIP0)
Intellectual
is an WIPO had over 170 States as its members. Six additional States,
The World administered by it. Today, its has
headquarters in Geneva, Switzerland.
with not yet members, participated in treaties
intergovernmental organisation the countries of the world.
United Nations Organisation 184 member states, i.e. over 90 per cent of
It is one of the 16 specialised agencies of the
of intellectual
(UNO). WIPO i_ responsible for promoting the protection
States, and for
property throughout the world through cooperation among 2.15 ETHICAL INVESTING
various multilateral treaties dealing with the legal and
administering the for those who want to be
been concern
administrative aspects of intellectual property. Investing money has always than ever, investing one's money is a

financially responsible. Now,

more
 R e s p o n s i b i l i t y

Soial
and

Gorermaner,
Ethics
i n d i v i d u a l s
st
in the 21stcentury Ethics and Social Responsibility 61
Corporate and
there a r e are ethical
60 Companies However,
ays .The companies are performing well as financial investments.
aswell.
compani

responsibility
make
more
money.
i n v e s t o r s
to help and .The companies products do not cause illness, disease or death;
Social to to
will u s e their
money professional
it. takino
destroy or damage the environment; or treat people with disrespect.
there a r e about

this and decisions

resources,
nto
of doing make
ethical
financial

with the How to choose

ethical investments?
to allocating
criteria, f
the in.
the 1. First, the focus on the effects of the company's products and services.
individuals

to both
both investor
means
social
investing and returns
to
Ethical
For example, if these cause people to be healthy, improve
economic
social
C o n s i d e r a t i o n
both
financial
and
environment, and empower people; company is considered as highly
the
the potential
maximising ethical. Investment in a company should be done only on the basis
a n d t h e investee.
I n v e s t m e n t s of its ethics in combination with its financial performance.
for
Ethical
the following:
2. Second, the benefits of investing in a company. How might the
include invested causes? For example, if the
Requirements

requirement, money support ethical

For ethical
investments,

analyst
investment in an agriculture-based company is likely to improve the
financial
professional which you consider
for standard of living of the farmers of the place where the company
certifñed companies
1. A
about the
companyor operates, one might want to invest in that company.
Information
2. investments
investment ethical

Criteria to guide you

in choosing
2.16 ETHICS IN FINANCIAL SERVICES
3.
its brief. financial
important component of the
discussed

Now these
are
Financial services constitute an
financial analysts will help vou
os
network of financial institutions,
Certified professional analysts, like all system of any country. They, through the
Financial analysis: investment:
financial
financial markets and financial instruments, serve the needs of individuals,
decisions
about protfessional grOun and importance,
institutions and corporates. Considering thier nature
a
make ethical competent by
must be recognised
as
minimally competent in services are regarded as the fourth element of the financial system.
professionals, skills as being financial
certify their United States, financial on the quality of
Orderly functioning of the financial system depends
who
(usually peers) are paid
for. In the
order to do the work they certified and licensed.
financial services. Their objectives include: (i) fund raising; (i) funds
investors are economic
and (v)
analysts or professional
commission or
association guides certification deployment; (ii) specialised services (iv) regulations,customer (investor)
A professional
standards
financial analysts. It is guided growth. These are characterised by intangibility,
individuals who
want to be Financial services comprise four major
and licensure of Practice. These
Standards are education, stability, and growth. and
Standards of market players, instruments, institutions
a set of
rules called certification purposes. In constituents, namely:
by financial analysts
for
regulatory bodies.?
established and used by financial analysts in their work.
can be divided into money
market and capital
handbook that guides The financial markets
addition, there is a advice in order to know how short-term securities and capital markets
more than good market. Money markets trade
However, people need need current Financial markets are a critical component of a
responsible way. They trade long-term securities.
and where to invest money in a socially are the cornerstones of
the free market. Free
and accurate information about investments. developed economy. They facilitate the well-being of the
market economy and financial system
make ethical investments
Information about companies: In order to society.
about the stock market, the companies financial services
current and accurate information
Unethical practices: Some of the unethical practices in
that sell stocks, and how they use invested money is necessary. The Internet
include:
has become a powerful worldwide tool for the purpose. Anyone who has in the securities which
their firm
access to the Web can get detailed and up-to-the-second information on any 1. Money managers trade personally
holds in portfolio.
and all factors that influence socially responsible investing. Even offhand securities before recommending
them,
comments made by high-profile leaders in a particular region or locality can 2. An investment advisor buys have risen based on the
out after the prices
influence the stock market in that region and beyond. Such comments are and then sells them
recommendations.
likely to be important to the ethically conscious investor.
Criteria for ethical investing: Ethical investing means that we should Markets, Thomson Leaming, Singapore.
Financial Services and
select investments that meet two criteria: Guruswamy, S. (2004),
 Nh as llegal d
acnvaties d
that
evolved
n
t
aytal
surphs
and
make the
nganies thev
o

whee
n s mvohad in . hu
Zet
and a g n s ciient
the
mmkees
aks at the
e R
ierae he agens side info
&
a w n s
eat e n e i t
ànvenves
m
tradng the nasis
traing shar to
idee NK the aquired
uy
aaqaree,
URuy
defines, is "the
netial
selling
aieerent mart
Ar a hger prnt.
the takNEr did
further.
hange,
in evchange, theac
tne àcquirer

nintormation
information before t
Professional Ethics
vpse NN n
unties
S tradin
Gum jpamgang
ianveos ers in an underwriing before
orders in a n
undenwritine

r soiciirg uy
mes pudlic

REVTEW QUESTIONS
Introduction CONTENTS
ethics from
vahues Engineering ethics
Duiierentiate Software engineering
1 Decine echis code of ethics and professional practice
.Principles of medical ethics
2Eumine the sigraticanee ot ethics customers
practices against and
ana
.Ethics of
What are the cmmon
unethical
practising company secretaries
Review questions
piloyee
the types of business ethics
business ethics? Explain
4. What is
determining the soial responsibility of
criteria for
5 Analyse the
business
ethics? 3.1 INTRODUCTION
& What are the approaches to
attributes of ethics. Protessionalism is a matter of high degree of generalised and systeTmatic
7. State the major
on theoretical know ledge and
& Discuss the factors that
influence ethics knowledge It involves skill based hen

vahues
it isappled the profession.
to he who takes it beromes a professional
Write a
note about Professions such as medicne, engineering. and accounting require
benefits and disadvantages speialised knowledge in the
1a What is whistleblowing? State the respective fields Professionals are placed in
an advisory capacity and assume responsibility to their service They are
under obligation when they accept their assignment as professionals. They
have a fiduciary relationship with their clients, therefore, they are expected
to render services which are indispensable not only to their clients but also
to the society at large. They are strongly committed to their occupation and
to the co-protessionals.
Following are some of the ethical practices that professionals adhere to
3.2 ENGINEERING ETHICS
As members of this
Engineering is an important and learned profession.
Dawnes John and Joardan Gaodman (195) Momy's Compiete Cande to Personal Funance and to exhibit the highest standards of honesty
bmzestm.mt Terms, Rardon's Educational Series Woodbury. New York profession, engineers are expected
63
 Resyonsibiliy

Socral

EIhus
and
on the
qual:

ality Professional Ethics 65

impact roOf
Gorvrmamr,
vilal
and
e n g i n e e r s

e
C o r p o r a t e

direct
by the entire project, provided
each technical segment is signed
64 has a s e r v i c e s
provided

be
dedicated

sealed only by
the qualified
and
m u s t per the
must

engineers who prepared segment.

p r o e s s i o n

the and
The
equily, 10. Shall issue public statements only in an objective and truthui
A c o r d i n g l y , E n g i n e e r s

integrity.
and and w e l l a r e .
adherence
people. faimess,
and
for all safety,
requires
manner.
lite i m p a r t i a l i t y ,

health, b e h a v i o u r
that

be
public
Shall objective and truthful in professional reports, statements,.or
honesty,

of the p r o f e s s i o n a l
11.
of
testimony. They shall include all relevant and pertinent information
protection
conduct.

s t a n d a r d

under a principles
of
ethical

in such reports, statemernts, or testimony, which should bear the date

highest

duties,
shal: indicating when it was current.
Fundamental Principless
professional

of the public:
12. May express publicly technical opinions that are founded upon
of their wellare
fulfillment

and knowledge of the facts and competence in the subject matter.

in the health,
Engineers, the safety, competence;

13. Shall issue no statements, criticisms, or arguments on technical

paramount of their mann.
hold areas truthful er;
senvices only in objective
and matters that are inspired or paid for by interested parties, unless they
an
perform
s t a t e m e n t s
only in faithful agents
or trustees;
have prefaced their comments by explicitly identifying the interested
public client as
issue

employer
or
parties on whose behalf they are speaking, and by revealing the
act for each acts;
and ethically,
and lawfull. existence of any interest the engineers may have in the matters.
deceptive responsibly,
avoid
themselves
honourably, and
usefulness of
14. Shall act for each employer or client as faithful agents or trustees.
reputation,
conduct
enhance the honour, 15. Shall disclose all known or potential conflicts of interest that could
to
so as
influence or appear to influence their judgment or the quality of their
profession.
services.
16. Shall not accept compensation, financial or otherwise, from more
Rules of Practice welfare of the publia
health, and
paramount
the safety, than one parties for services on or pertaining to the same project,
all
Engineers
shall hold
the engineers:
unless the circumstances are fully disclosed and agreed to by
requirements, that are in confo
To meet such documents interested parties.
those engineering
1. Shall approve only standards.
17. Shall not solicit or accept financial or other valuable consideration,
prior consent
the
mity with
applicable
or
information
without
directly or indirectly, from outside agents in connection with the
reveal facts, data, authorised or required by law or work for which they are responsible.
2. Shall not as

of the client or employer except of

18. In public service as members, advisors, or employees a
in business
the code.
of their
names or associates
governmental or quasi-governmental body or department shall not
permit the
use
3. Shall not believe is engaged in participate in decisions with respect to services solicited or provided
or firm that they
with any person
ventures
enterprise. by them or their organisations in private or public engineering
fraudulent or dishonest
of engineering by a person practice.
4. Shall not aid or abet the unlawful practice
or fim.
violation of this Code, shall report
19. Shall not solicit or a contract from a governmental
accept on
body
officer of their organisation serves as a member.
5. Having knowledge of any alleged
which principal
a or
bodies and, when relevant, also 20. Shall avoid deceptive acts.
thereon to appropriate professional
authorities in
and cooperate with the proper
to public authorities, 21. Shall not falsify their qualifications or permit misrepresentation of
or assistance as may
be required.
furnishing such information their or their associates' qualifications. They shall not misrepresent or
areas of their competence. of prior
6. Shall perform services only in the exaggerate their responsibility in or for the subject matter
education
Shall undertake assignments only when qualified by the
or
7. assignments. Brochures or other presentations incident to
involved.
experience in the specific technical fields solicitation of employment shall not misrepresent pertinent facts
8. Shall not affix their signatures to any plans or documents dealing
concerning employers, employees, associates, joint venturers, past
or

with subject matter in which they lack competence, nor to any plan
accomplishments.
or document not prepared under their direction and control. 22. Shall not offer, give, solicit, or receive, either directly or indirectly,
9. May accept assignments and assume responsibility for coordination the award of a contract by public
any contribution to influence
of an entire project and sign and seal the engineering documents for
authority, or which may be reasonably construed by the public as
 R e y v m w / i l i t y
oial
and
of a c
(vmamY,

Thix
aWardimg
" Iafesatonal 1thie
the
c o n s h l o r a t l o n
Not promola or
i n t h u e n c i n g
. artong, withnut the consent of all
p u e
intent
o V a l u a b l e
percenta
or interested parlies,
eflect
or
or
other
c o m n s i o n ,
eu for new mployment or practice in
the any gift b o n a fido comnectim witha bgee ifi prje
for whlel th
having paya
t0 a raVea
engneer has
ofler
not not
They
shall
They
shall
work,
encept
agenCy
agoney
relahd gained partieular and speia)sen
work. to
s e v u r e
or
or
marketing
markeling knowlodge,
tosur ornder conmercial
lee in H. Nol, withoul lhe cmsunt of all interested
adverbary inlerest in 4mneti with fparticipat
brokerage e s t a l b l i s h e d
parties, in
or a
bona
fude
eprnenl an
spen ifiu prnat
a
by them. or proceeding n whieh he has yained parti ular perialise
the
englneors
nhall/may
nhall/.
knowledy behalf of
on a former lient or enployer
the highest
Professlonal Obligatione
ho
of the
profession
highest
ntandarda of
noneaty 19, Not he inflirnCed n twir prolessimal dulies
hy comfli ting interests,
standards by the 20. Nol accept nanca orther cmsideratims, ineudinz free
keep the
relations
To their
in all
or aller
Whe facts engneering deslgns, from material r equipment suliers r
1.Beguided not
distort
specilylg their produt
and integrily. and shall Wil be belleved to
their
errors
when a
project
2.
Acknowledge
or
employers 21. Not accept commissions or akwanes, diretly or indirectly, vm
3.
Advise their clients detriment of
detriment
their regular
their roe contraclors
or other
parties dealing with lients n enplyers t
be not successful.
to the the engneer In comncinm with wnk fon vwhiuh the engjrwer is
outside
employment
accepting any
outside
engineerin responsible,
4. Not accept Before employers.
to their
interest.
work or
will notify it by false.or 22. Not alfempt to obfain empleryment r advaneemert or profrseiomal
employment,
they
engineer
from another employer engagements by tuntriuthfully eriticisiny, othr engjneers, or by ther
an
to attract improper or questionahle methods,
Not attempt
5.
misleading pretences.
of the dignity nd
and
own
interest at the expense 23. Not request, propose, or accept a conmissiom om a centingpnt basis
their under circumstances in which their judgnent may be rornpremisei
6. Not promote
of the profession.
24. In salaried positions, accept part-tine engjneering work nily tro th
interest.
integrity the public
strive to
serve
guidance foOr extent consistent with policies of the employer and in accordaree
7. At all times, in civic affairs; career
to participate health, and wel1. with ethical considerations,
opportunities of the safety,
8. Seek advancement
work for the
youths; and 25. Not, without consent, use equiprment, supplies, JaboratorY, or offiee
of the community.
that a r e not
facilities of an employer to carry on outside private practice
being and/or specifications
sign, or seal plans If the client
9. Not complete, engineering
standards.
26. Not attempt to injure, maliciously or falsely, directly or indirectly, the
with applicable conducts, they
shall notifv professional reputation, prospects, practice, or emnploynet of other
in conformity unprofessional
insists on such further service o n the
employer
authorities and
withdraw from engineers. Engineers who believe others to be guilty of unethical or
it to the proper information to the proper authority
illegal practice shall present such
project. and appreciation of for action.
extend public knowledge 27. In private practice, not review the work of another engineer for the
10. Endeavour to
its a c h i e v e m e n t s .
engineering and in order same client, except with the knowledge of such engineer,
o r unless
11. Strive to adhere to
the principles sustainable development
of the connection of such engineer with the work has been terminated.
environment for future generations. entitled to
to protect the 28. In governmental, industrial, or educational employ be
deceives the public.
or practice that review and evaluate the work of other engineers when so required
12. Abstain from all conduct
material misrepresentation of
13. Avoid the use of statements containing by their employment duties.
material fact. make engineering
a fact o r omitting a 29. In sales or industrial employ, be entitled to
consistent with the foregoing. of other
14. Advertise for recruitment of personnel comparisons of represented products with products
consistent with the
15. Prepare articles for the lay or technical press suppliers.
to the author for activities,
foregoing but such articles shall not imply credit 30. Accept personal responsibility for their professional
work performed by others. seek indemnification for services
provided, however, they may where the
for other than gross negligence,
16. Not disclose, without consent, confidential information
the business affairs or technical processes of any present or former
concerming arising out of their practice
otherwise be protected.
engineer's interests cannot
client or employer, or public body on which they serve.
 R r s y r o n s i b i l 1 l y
Social
Ethics and
Goremaner,
of
neering,
enginee
Corporate the practice
68 laws in
registration oration, or mership
Conform
with State a
corporati
3. Product: Shall ensure Professional Ethics 69
31. with a
nonengineer,
meet the highest that
their
association
products and related modifica
Judgment: Shall professional
acts.
32. Not
use
credit is d
is due,
..
and 4.
maintain standards sible.
unethical whom
"cloak" for those to
as a work to
for engineering of others. professional judgment. integrity and
33. Give
credit
will recognise
the proprietary
interests
or persons who ma
may be
5.
Management: it they are independence in tneir
the person
promote an ethical managers
approach to theleaders, shall subscribe
writings, or
34.
Whenever
possible,
name
for designs,
inventions,
or
other development and maintenance. to and
individually
responsible
6. Profession: Shall management of software
that the designs r o n advance
client, recognise profession consistent with thethe integrity and
accomplishments.
public interest. reputation
supplied by
a
duplicated for
be duplicated tor others of the
35. Using designs
of the
client and may
not 7. Colleagues: Shall be fair to and
8. Self: Shall supportive of their
the property
participate in colleagues.
to the lifelong learning regarding and
without express permission.
connection with which he n ethical approach
others in
work for or other
recordoy
practice of the promote an
36. Before
undertaking
plans, designs,enter
inventions,
into a positive agreent
profession.
make improvements,
or patents,
ment 3.4 PRINCIPLES OF
may justify copyrights MEDICAL ETHICS
regarding ownership. exclusivelh 0
and notes referring The medical profession has
developed primarily for thelong subscribed to body of ethical statements
records,
designs, data, property. The
emni a
37. Engineer's the employer's
an employer's
work are
for use of the information for.
any profession, physician must benefit of the patient. As member of the
a a
indemnify the engineer foremost, Society, other healthrecognise his responsibility
professionals, and to self. patients and
should to first
purpose.
than the original Medical
purpose
other
development throughout
their carea
ers practices, today's, are not the
same as
their professional Improper management of they were decades ago.
38. Continue
current in their specialty
fields by engagine
diseases and problems. And,technological know-how has led to several newer
and should keep education co to handle
professional practice,
participating in
continuing ses,
professiona drugs and surgical techniques have beenthese problems newer medicines,
literature, and attending nal technology, the formulated. With the advent of
reading in the technical
are used only
responsibility to assure that the
for the benefit of advances made in this field
meetings and seminars.
mankind and for nothing else is laid on the
shoulders of the medical
professionals. The American Medical Association
CODE OF ETHICS ANn (AMA) has a set of standards of conduct which
SOFTWARE
ENGINEERING
honourable behaviour of define the essentials of
3.3
PROFESSIONAL PRACTICE physician shall. physicians. According to the AMA
principles, a
1. Be dedicated to
central and growing
role in commerce, industrv providing
and respect for human competent medical care, with compassion
Computers have a and society at large. dignity and
government, medicine,
education, entertainment, 2. Uphold the standards of rights.
by teaching, to the
direct participation or
professionalism, be honest in all
Software engineers contribute, by maintenance and professional interactions, and strive to report
certification, physicians deficient in
analysis, specification, design, development, becomes increasingly dominant in
character or
competence, or engaging in fraud or deception, to
As software appropriate entities.
testing of software systems.
the IT industry and, indeed, in everything
else, there is an obvious need for 3. Respect the law and also recognise a
responsibility to seek
its professional-level recognition.
Software engineers shall commit in those
requirements which are contrary to the best interestschanges
of the
beneficial and respected one. In patient.
themselves to making their profession a
and welfare of the 4. Respect the
accordance with their commitment to the health, safety rights of patients, colleagues, and other health
shall adhere to the following principles: fessionals, and safeguard patient confidence and privacy withinpro
the
public, they constraints of the law.
1. Public: Shall act consistently with the public interest. 5. Continue to study,
2. Client and Employer: Shall act in a manner that is in the best apply, and advance scientific knowledge,
maintain a commitment to medical education, make relevant
interests of their client and employer consistent with the public information available to patients, colleagues, and the public, obtain
interest. and use the talents of other health professionals when
consultation,
indicated.