Prossional Ethics Notes CH-1 To CH-6 by Dbrathod

PROFESSIONAL ETHICS
PROSSIONAL ETHICS
CHAPTER- 1
Points to be covered
Concepts and theories of Business Ethics: Definitions of Ethics, Personal ethics and Business
ethics, Morality and law, How are moral standards formed? Religion and Morality, Morality,
Etiquette and Professional codes, Indian Ethical Traditions.
AN INTRODUCTION TO ETHICS
Ethics is not a recent discovery. Over the centuries philosophers in their struggle with
human behavior have developed different approaches to ethics, each leading to different
conclusion. The word ―Ethics‖ which is coined from the Latin word ‗Ethics‘ and Greek word
‗Ethikos‘ pertains to character. Ethics is thus said to be the science of conduct. As a matter of
fact it deals with certain standard of human conduct and morals. The field of ethics involves
systematizing, defending and recommending concepts of right and wrong behavior. Ethics is
a mass of moral principles or set of values about what is right or wrong, true or false, fair or
unfair, proper or improper what is right is ethical and what is wrong is unethical.
MEANING AND DEFINITION OF ETHICS

1. Peter F. Drucker writes— ―There is only one ethics, one set of rules of morality, one code
that of individual behavior in which the same rules apply to everyone alike.‖
2. Philip Wheel Wright says— ―Ethics is the branch of philosophy which is the systematic study
of selective choice, of the standards of right and wrong and by which it may ultimately be
directed.
3. Swami Vivekananda has set the tone for ethics. He says- ―Supreme oneness is the
rationale of all ethics and morality. Ethics cannot be derived from the mere sanction to
any personage. Some eternal principle of truth has the sanction of ethics. Where is the
eternal sanction to be found except in the only infinite reality that exists in you and us
and in all, in the self, in the soul?‖ Discussion on ethics cannot be completed without
Swami‘s views on ethics. He suggested ethics as the degree of faith in oneself.
Ethics comes from the attainment of freedom, renunciation, which comes only when the
individual attain a superior strength. According to Swamiji— ― The difference between
weakness and strength is of a heaven degree; the difference between virtue and vice is that
of a degree; the difference between and hell is that of a degree, all differences in this world
are of degrees and not a kind of characteristics.‖
―An individual is an infinite circle whose center is every where and circumference no
where ethics disappears in the situations where people recon to the thinking,‖ I am pure,
others are impure. So in short, we can say that ethics goes beyond the immediate facts
that pertain to a moral question— What the situation is, it addresses the question of what
ought to be?
The inner content of individual, the character of individual can lead ethical
individuality to ethical collectivity. The ethical, the right thing to do, is action that best
serves the ideas of honesty, integrity, morality and good management practices.
Compiled by DBR Page 1

PROFESSIONAL ETHICS
NATURE AND OBJECTIVES OF ETHICS

The liberalization and globalization being sweep changes in the concept of doing business,
but the major by-product like corruption, favoritism and nepotism, deterioration of human
values, series of scam in business, govt. policies and society are also produced in the 21st
century.
There is a loss of faith in instruments of society. Business houses are becoming big with
control of large resources, human, financial and technical but their surviving purposes to
society are always having the doubtful values. Day by day innocent Indians are losing
their faith in laws, courts and govt.
At one side business enterprise are coping up with intense emerged competition and on
the other side they are violating the principles of proper public conduct.
In the wake of mounting scandals corporations, all around the world are adopting ethical
conduct, code of ethics. They are excellent organizations, which have shown a spurt of
activity towards evaluation of goals, concepts, values management and conduct.
Ethical issues are more critical today than they have ever been. Similarly the increased
interest with ethics in India is also related to many issues as nexus between business,
crime, politics, a series of scams , sordid events of the past few years in the public affairs of
the country which have led many in the country to believe that the country is approaching
destruction unless it reforms ethics. In terms of practically applied the terms ethics and
values became an important concern in the U.S. in the eighties. But fortunately the
application of ethics in theory and practice in new millennium is gaining momentum
rapidly. As the all India council foe technical education which regulates the management
education in India has in December 1995, recommended the inclusion of business ethics as
a course in management studies curriculum.
OBJECTIVES OF ETHICS
The objectives of ethics are as below:
1. The very basic objective is to define the greatest good of man and establish a
standard for the same.
2. Set/Establish moral standards/norms of behavior.
3. An overall study of human behavior: what is moral or immoral should be assessed.
4. Apply judgement upon human behavior based on these standard and norms.
5. Suggest moral behavior, Prescribes recommendations about Do‘s and Don‘ts.
6. One‘s opinion or attitude about human conduct is expressed in general.
NATURE OF ETHICS
The nature of ethics can be explained by these points:
1. The concept of ethics is applied to human beings only as they have freedom of
choice and means of free will. They can only decide the degree of ends they wish to
pursue and the means to achieve the ends.
2. The study of ethics is nothing but a field of social science in which a set of
systematic knowledge about moral behavior and human conduct is learned.
3. Ethics deals with human conduct which is voluntary not forced by circumstances or
humans. So we can say that at the ground level ethics deals with moral judgement
regarding set directed human conduct.
4. The science of ethics is a normative science. It is a search for an ideal litmus test of
proper behavior. Normative science involves arriving at moral standards that
PROFESSIONAL ETHICS
regulate right and wrong conduct.
 Ethical theories.
1. Utilitarianism seeks to produce the most utility, defined as a balance between good and bad
consequences of an action, taking into account the consequences for everyone affected.
Utilitarianism : It holds that those actions are good that serve top maximize human well-
being. Emphasis in utilitarianism is not on maximizing the well-being of the individual but
rather on maximizing the well-being of society as a whole and as such it is somewhat a
collectivist approach.
E.g. Dam construction

Two Parts
Act utilitarianism : focuses on individual actions rather than rules.
Rule utilitarianism : differs from act utilitarianism, moral rules are most important.
2. Duty Ethics : It contends that there are duties that should be performed regardless of
whether these acts bad to the most good.
 Duty Ethic and Right ethics are similar to each other.

 They hold that those actions are good that respect the rights of the individual. Here
good consequences for society as a whole are not the only moral consideration.
 Immanew kant says moral duties are fundamental ethical actions are those which can
be written down as duties. Be honest, don't' cause suffering for others, be fair to others.
3. Rights ethics : They emphasize that we all have moral rights, and any action that violets
these rights is ethically unacceptable. Here overall good of the actions is not taken into
account.
 Right ethics was formulated by John Locke statement : humans have the right to life,
liberty and property. People have fundamental rights that other people have duty to
respect.
4. Virtue ethics : Regards actions as right that manifest good character traits (virtues) and
regards actions as bad that display bad character traits (vices) ; this ethical theory focuses
on the type of person we should strive for to be virtue ethics is interested in determining
what kind of people we should be.
 Virtue is defined as moral distinction and goodness. A virtuous perons exhibits good and
beneficial qualities.
 actions are considered right if they support good character traits and wrong if they
support bad character traits.
 focuses on words such as responsibility, honesty, competence, loyalty, trustworthiness,
fairness, caring, respect, citizenship.

PROFESSIONAL ETHICS
BRANCHES OF ETHICS
01. Normative Ethics
02. Meta Ethics
03. Applied Ethics
04. Moral Ethics
05. Descriptive Ethics
01. Normative Ethics : (Largest branch)
 Classifies actions as right and wrong.

 regards ethics as a set of norms related to actions
 how individuals can figure out the correct moral actions that they should take
 Socrates & John stuart mill (Philosophers)
 norm = standard – It is the attempt to find a single test or criterion for what constitutes
moral behaviour and what does not.
 bridges the gap between meta-ethics & applied ethics – how to judge right from wrong.
02. Meta Ethics : Meta = beyond, after
 the shedy of origin and meaning of ethical concepts

 seeks to understand the nature of ethical properties and judgments
 where the ethical notions came from and what they mean – whether there is an ethical
system independent of our own opinions that could be applied to any situation
 investigates whether our ethical principles are merely social inventions ? – Do they involve
more than expressions of our individual emotions ?
 focuses on universal issues, the will of God, the role of reason in ethical judgments.
03. Applied Ethics :
 applies normative ethical theories to specific controversial issues.

 shedy of applying theories from philosophers to ethics in everyday life.
 medical ethics, engineering ethics, legal ethics, political ethics, environmental ethics.
04. Moral Ethics :
 questions how individuals develop their morality, why certain aspects of morality differ
between cultures and why certain aspects of morality are generally universal.
 Moral ethics rarely change within a culture / religion
 not related to professional work
 influenced by society culture and religion.

PROFESSIONAL ETHICS
05. Descriptive Ethics :
 More specific in its approach.

 focuses on how human beings actually operate in the real word rather than theorizing on
how they should operate.
 Study of people's views about moral belief
 Analyses peoples moral values, standards and bahaviour
 based on data and facts
 Ask what actually is.
HOW ARE MORAL STANDARDS FORMED?
There are some moral standards that many of us share in our conduct in society. These moral
standards are influenced by a variety of factors such as the moral principles we accept as part of
our upbringing, values passed on to us through heritage and legacy, the religious values that we
have imbibed from childhood, the values that were showcased during the period of our education,
the behaviour pattern of those who are around us, the explicit and implicit standards of our
culture, our life experiences and more importantly, our critical reflections on these experiences.
Moral standards concern behaviour which is very closely linked to human well-being. These
standards also take priority over non-moral standards, including one's self-interest. The
soundness or otherwise of these, of course, depends on the adequacy of the reasons that support
or justify them.
ETHICS AND RELATED TERMS : To understand ethics thoroughly, we need to see its
relevance with some quite similar terms:
(A) Ethics and Morality: a morality is a set of rules to guide the actions of an individual
human-being. Rand says about it –―a code of value to guide man‘s choice and
actions.‖ So ethics and morality would seem to be synonymous but exactly it is not
so. As morality refers to the rules and guidelines which an individual or a group has
about what is right/wrong, good or evil same as ethical principles also give an idea
about right or wrong, true or false.
Really speaking, to differentiate between ethics and morality is a difficult task as
human behavior is influenced by emotions and sentiments. As many big
organizations and big businessmen have no predetermined ethics but they may
evaluate the good conduct of business on the basis of customs, expectations of
society, some beliefs. But in way ethics is not merely the code of conduct based on
customs, conventions and the accepted courtesies of a society but it is the code of
conduct developed by proper testing to guide the human behavior. In short, Ethics and
morality, for all purpose may be assumed to mean the same.
(B) Ethics and Religion: Though ethics is not synonymous to religion morality is a
primary force in shaping our ethics.
Thomas M. Garrett writes— ―The religion derive their moral percepts not only from
human experience but from divine revelation. It must rely on the unaided human
reason.‖
Ethics gets idea from religion and thorough experiments it approves them as- ―code
of conduct.‖ The development of ethics is dependent on the religious morality. The great
historian Arnold J. Toynbee writes—―No society could succeed without any religious
aim. Mere desire for prosperity cannot motivate a person for building up an enduring
PROFESSIONAL ETHICS
dynamic and progressive nation.‖

Needless to say, about the vital role of ethics in our economic life which could be
activated on the basis of religious principle?
(C) Ethics and Law: Hosmer (1995) says – Respect for law as an ethical value–
What is law? Law is a code of conduct which the authority in power prescribes for
society. It is concerned with the minimum regulation necessary for public order
which is enacted by govt. So Govt. gives shape to only those minimum social
obligations, customs or traditions which are essential to be complied with by the
people. It basically differs from ethics in its option to use force when necessary and
in fact it is backed by power.
The most important divergence between ethics and law is that ethics concentrate on
the do‘s and laws on the don‘ts. Ethics is a much wider term than law.
The required ethical behavior may not be covered by the law at all. ‗look after the
aged‘, ‗be considerate to your workers‘, ‗Teach well to your students‘, ‗Do not tell a
lie‘, Obey your elders‘,— will fall within the circle of ethics but not within that of
law.
(D) Ethics and Values: Moral values are deep-seated ideas and feelings that manifest
themselves as behavior or conduct. These values are not so easy to measure or
express in words.
There is very thin line which distinguishes between ethics and values both drive
what is right and what is wrong in human conduct and what ‗ought to be‘. But then
also a relationship can be derived between value and ethics like this
Law + Knowledge = Ethics
So as, we know the consequences of our actions, we can convert values into rules of behavior
that can be derived as ethics.
PERSONAL ETHICS AND BUSINESS ETHICS

Personal ethics refer to the set of moral values that form the character and conduct of a person.
Organization ethics, on the other hand, describes what constitutes right and wrong or good and
bad, in human conduct in the context of an organization. It is concerned with the issue of
morality that arises in any situation where employers and employees come together for the
specific purpose of producing commodities or rendering services for the purpose of making a
profit. An organization can be described as a group of people who work together with a view to
achieving a common objective, which may be to offer a product or service for a profit.
Organization ethics, therefore, deals with moral issues and dilemmas organizations face both
in business and non-business settings that include academic, social and legal entities.
ETIQUETTE AND PROFESSIONAL CODES

Etiquette is an unwritten code or rules of social or professional behaviour such as medical
etiquette. Morality can be also differentiated from law which consists of statutes, regulations,
common law and constitutional law. Morality is different from professional codes of ethics
which are special rules governing the members of a profession, say of doctors, lawyers and so
on. Morality is not necessarily based on religion as many people think. Although we draw our
moral beliefs from many sources, for ethicists the issue is whether these beliefs can be
justified.
PROFESSIONAL ETHICS
When people work in organizations, several aspects of corporate structures and functions
tend to undermine a person's moral responsibility. Organizational norms, group commitment
to certain goals, pressure to conform and the diffusion of responsibility can all make the
exercise of personal integrity in the context of an organization difficult. Moral principles
provide confirmatory standard for moral judgements. This process, however, is not mechanical.
Principles provide a conceptual framework that guides people in making moral decisions.
Careful thoughts and reflection with an open mind are very necessary to work from one's moral
principle to make a moral judgement. A person can hold a moral or ethical belief only after
going through a process of "a conscientious effort to be conceptually clear, to acquire all
relevant information, and to think rationally, impartially and dispassionately about the belief
and its implications."
MANAGEMENT AND ETHICS

Management of any business involves hundreds of decisions. Ethical issues occur in all
decision making processes. Conflicts and ethical dilemmas are part and parcel of such
processes. There arises a continuous conflict between the goals of an organization and
various issues relating to its day-to-day management. The success of any business
organization
INTRODUCTION TO BUSINESS ETHICS

In any organization from top executive to bottom line employees, ethics is considered as
everybody business. It is not just only achieving high level of economic performance but also to
conduct one of business‘s most important social challenges, ethically at the same time. Here
what we get a combination of two familiar words—‗Ethics and Business‘ in
‗Business Ethics‘. Different meaning is given to business as follows:
• Business ethics are the application of general ethical rules to business behavior.
• Business ethics are rules of business by which propriety of business activity may be judged.
By Cater Mcnamara— ―Business ethics is generally coming to know what is right or wrong in
the workplace and doing what is right—this is in regard to effects of products/ services and in
relationship with stake holders‖.
―Attention to ethics in workplace sensitizes managers and staff to know they should act so that
they retain a strong moral compass. Consequently, business ethics can be strong preventive
medicine.‖
According to John Donaldson- Business ethics in short can be desired as the systematic study of
ethical matters pertaining to business industry or related activities, institutions and beliefs.
Business ethics is the systematic handling of values in business and industry.
Business ethics are the rules of business by which the propriety of business activity may be
judged.Business ethics concentrate on moral standard as they apply to business policies,
institutions and behavior. It is a specialized study of moral right or wrong. It is a form of applied
ethics. Business ethics are nothing but the application of ethics in business. It proves that
business can be and have been ethical and still make profits. Today more and more interest is
being given to the application of ethical practices in business dealings and the ethical
implications of business.
The 3 C‘s of Business ethics:
1. Compliance: (The need for compliance of rules including):

PROFESSIONAL ETHICS
• Laws
• principles of morality
• policy of the company
2. The Contribution (Business can make to the society):
• The core values
• Quality of products/services
• Employment
• Usefulness of activities to surrounding activities
• QWL
3. The Consequences of business activity:
• Toward environment inside and outside the organization
• Social responsibility toward shareholders, bankers, customers and employees of
organization.
• Good public image, sound activity- good image.
NEED AND OBJECTIVES OF BUSINESS ETHICS

Need of business ethics:
1. Business operates within the society.
2. Every business irrespective of size exists more on ethical means or in total regards to
all its social concern to survive long.
3. Business needs to function as responsible corporate citizen in the country.
OBJECTIVES OF BUSINESS ETHICS

According to Peter Pratley–Business ethics has twofold objectives-‗it evaluates human
practices by calling upon moral standards, also it may give prescription advice on how to act
morally in a specific kind of situation‘.
(A) Analysis and Evaluation

Ethical analysis and ethical diagnosis of past events, happenings, clarifying the standards,
uncover the moral values, habits of thought.
How to evaluate the situation? Ethics provides rational methods for answering the
present situation and related future issues. A well equipped information is a must to achieve this
second objective, a careful assessment of relevant information will lead to balanced
judgments.
(B) Approaches to Resolve Ethical Dilemmas
It provides therapeutic advice when facing the present dilemmas and future dangers. Only
the condition which requires a true i de n ti fi ca tio n of relevant stakeholder and a clear-cut
understanding of crucial issues at stake.
SIGNIFICANCE OF BUSINESS ETHICS

―Good business ethics promotes good business‖
This statement is supported by the research findings of some well known authorities–
Raymond Baumhart, Brener and Molander, and Strom and Ruch. It was clear from their
findings that only those businesses can develop on a long term bases which conducts activities

PROFESSIONAL ETHICS
on ethical grounds.
Once ‗Robert Day‘ has said that good ethics not only promotes professionalism in
management but it purifies the inner mind of every business man.
Another writer Thomas Donaldson (Ethics in business- a new look) has observed that-
―there are some key reasons why business ethics is vital and why ethics plays a key role in
business.‖
(1) Positive Consequences

Business depends on the approval of the society, acceptance of rules, mutual trusts and
confidence. Prof. Robert Day writes—―when ethical conduct is displayed, it puts some kind of
trust and confidence in relationship.‖ So business with ethics always leads to positive
consequences.
(2) Goodwill of the Business and Businessman
Good ethical behavior will increase the goodwill of both business as well as the businessman.
Strong public image is a symptom of success in the long run. On the other hand, once an
organization‘s image is tarnished it would have direct consequences on sales, profits, morale or
day-to-day running of the business.
(3) Protection—Both Sides
If ethical implications are there in organization businessmen act more sincerely and the level
of commitment would be higher. Ethics protects people in dealing with each other. Prof.
Robert Day writes ―Good ethics is sound business insurance.‖
(4) Self-satisfaction
In the dynamic world, businessmen are seeking self satisfaction, mental relief, free from
anxiety, release tension. To attain the inner satisfaction certain people consider only good
ethics can promote good business.
As a businessman is first a member of the society than a businessman, so some do not
implement a decision which stands on unethical ground because it wouldn‘t provide the
satisfaction to their sub-conscious mind.
(5) Encourage Others
When a few people start following ethics side by side to profit making, they encourage,
motivate others and set examples for them. As Prof. Learned and Associates writes—
―Businessman who follows the ethical principles in the conduct of business, motivates others
also, to follow the same principles.‖
(6) Success and Development
Ethical conduct of business leads to development and series of success. Learned writes—
‗A sincere person who does hard work becomes ethical and always succeed in his efforts but
an unethical person cannot‘.
(7) New Management
In the era of global economy, new principles are required in new management. Prof. ‗Day‘
writes that management cannot become a profession so far as it does not follow good ethics.
An important feature of a profession is that it has a laid down code of conduct which remains
on all the principles of ―service to humanity. So to run the good business in modern scenario
you have to develop and follow ethics.
INDIAN ETHOS
Ethos is a discipline that examines ones morality or the moral standard of the society.
PROFESSIONAL ETHICS
Ethics means expected standards in terms of personal and social welfare. It includes
honesty, morality, responsibility etc. India has rich ethical traditions which envisioned in
the scripture of land like the BAGAVADGITA, the Upanishads etc. the rich Indian
scriptures speak the performance of right duty at right time in right manner.
NEED OF INDIAN ETHOS
Indian ethos are needed because of following reasons, Management attitude Humanizing
organization, Need of Indian ethos, Interiorizing management, Self introspection Self-
dynamiting meditation, Role of feeling
1. MANAGEMENT ATTITUDE
Top management having firm belief in values oriented involving whole in the
management. Profit is earned through service and satisfaction of all stakeholders,
employees‘ customers and fulfillment of social responsibility.
2. HUMANIZING ORGANISATION
Looking at the three aspects of humane organization i,e., inter personal relations, man
machine equation and inner management through mental and spiritual growth of
individual.
3. INTERIORIZING (SELF) MANAGEMENT

Self management are management by consciousness .when the soul manager the other
four members of human being namely the body mind, intellect and the heart , the
conflict these four have amongst them can be resolved.
4. SELF INTROSPECTION
It concentrates on self study, self analysis and self critics to locate areas of frictions
and disharmony a self examination of one‘s thoughts emotions, sensation, passion and
desire to reduce and subdue the ego.
5. SELF DYNAMYSING MEDITATION
A dynamic meditation is meditation of transformation of lower consciousness into
higher consciousness and hence called transformation meditation. This will helpful to
tackle multiple problems.
6. ROLE OF INTUITION(FEELING)
Intuition is the act of coming to direct knowledge without any reasoning. Intuitive
skills enable one to cope with confidence the fluctuating changes in environment.
ELEMENT OF INDIAN ETHOS : Indian ethos is better than other ethos in other countries.
INDIAN BELIEVE,
 Ego sublimation rather than ego assertion

 Sacrificing spirit rather than fighting spirit.
 Team achievement rather than individual achievement
 Self control rather than outside control

PROFESSIONAL ETHICS
 Concept of duties rather than concept of rights

 Yielding rather than dominating
EXAMPLES OF INDIAN ETHOS
1. TRIKARANASUDDHI-Purity and unity of thought, word and deed.

2. PAROPAKARARDHAM IDA SHAREERAM-the body is meant for serving others. By this
everyone serves others.
3. YAGNAYA CHARATHA-Treating job as a sacred offering. Don’t treat job as useless
one.
4. ARASPAR DEVOBHAV-respect the others person as a divine being.
SUMMARY
This chapter defines ethics as some standardized form of conduct or a mass of moral
principles about what conduct ought to be. To understand ethics it is necessary to study the
relation of ethics with some similar terms like ethics and morality, ethics and law, ethics and
value and ethics and religion. Ethics in business and management is gaining momentum day
by day. Business ethics are the application of general ethical rules to business behavior. The
significance of business ethics in 21st century scenario is remarkable; this chapter throws
light on some practical ethical principles which can be directly followed by companies.
CASE STUDY – 1
Sanjay Verma was an MBA; He had specialized in Marketing and Advertising. He has just
joined XYZ Ad Agency, though a competent and innovative person with outstanding performance
during his stay at the MBA institute, yet he got this job with great difficulty due to recession
in the job market. He had somehow managed to find this job through a contact of his uncle.
The chairman of the company wanted him to somehow persuade a well known newspaper to
avoid reporting on a controversial corruption charge against him and instead write a
favorable editorial. Raman was not convinced that his chairman was clean in the case; on the
other hand, the newspaper was willing to accommodate the chairman, if the organization
came out with a large size advertisement in his favor.
Recently, Sanjay‘s father died leaving his wife and three sisters on the verge of marriage with
Sanjay alone in a disastrous condition to help himself and his family.
What should Sanjay do?
CASE STUDY – 2
Amit was a young and dynamic manager at ABC Private Ltd. and was recently married.
Due to nature of his job, he had to do lot of traveling and therefore unable to devote his time
for his wife. At one time he was away for 25 days tour only to return for a day and again go for
10 days tour. This situation led to differences in his married life, turning to serious note. Once
he took his wife along with him to tour and found that he and his wife could stay in hotel

PROFESSIONAL ETHICS
within permissible limits of his lodging and boarding allowance with no extra burden on his
company. Thus he was away for work for a good part of the day but could spend time with his
wife in the evening. This situation worked out perfectly for himself and his wife and their
relations became very good. Therefore he started taking his wife along with him on his tours. Is
it ethical on part of Amit?
QUESTIONS:
1. Elaborate the term ethics.

2. Explain in detail the meaning, nature and objective of ethics.
3. What is business ethics? What are the needs for business ethics?
4. ―Good business ethics promotes good business‖. Explain the significance of business
ethics in 21st century scenario.
CHATER-2
Business Ethics: Principles of personal Ethics, Principles of Professional ethics, Evolution of

Ethics Over the years, Honesty, Integrity and Transparency are the touchstones of Business Ethics,
Distinction Between Values and Ethics, Roots of unethical Behaviour, Ethical Decision – Making
INTRODUCTION :
The study of ethics has become an important ingredient of the syllabus of management schools
in recent years. This is because of ethical issues that have come to the forefront as a result of
many well-known failures of corporates. The fraudulent activities of these corporates have
resulted in the defrauding of stockholders, consumers, employees, creditors and governments
to varying degrees. It has therefore become important that students of B-schools as future
managers of business should imbibe ethical values. Ethics reflects a society's notions about the
tightness or wrongness of an act. Ethics also involves the evaluation and application of certain
moral values that a society or culture has come to accept as its norms. It is generally described
as a set of principles or moral conduct. Business ethics, therefore, is a sum total of principles
and code of conduct businessmen are expected to follow in their dealings with their fellowmen
such as stockholders, employees, customers, creditors, and comply with to enact the laws of the
land and to protect all these stakeholders.
The word 'ethics' is derived from the Greek word ethikos meaning custom or character. The
Concise Oxford English Dictionary defines ethics as the treating of moral questions. But this
definition is imprecise and leaves a number of loose ends. Whose morals? Which moral
questions? Business ethics covers diverse areas ranging from labour practices, free and fair
trade, health concerns, euthanasia to animal welfare, environmental concerns, to genetic
modification, to human cloning. Perhaps the definition provided by the Chambers Dictionary
comes closest to providing a workable definition: 'Ethics is a code of behaviour considered

PROFESSIONAL ETHICS
correct.' What the society considers correct may have been arrived by the crystallization of
consumer pressure on corporations and governments and regulator)' forces. It is the science of
morals describing a set of rules of behaviour. Business ethics itself is an offshoot of applied
ethics. The study of business ethics essentially deals with understanding what is right and
morally good in business.
Ethics is a branch of philosophy and is considered a normative science because it is
concerned with the norms of human conduct, as distinguished from formal sciences such as
mathematics and logic, physical sciences such as chemistiy and physics, and empirical sciences
such as economics and psychology. As a science, ethics must follow the same rigours of logical
reasoning as other sciences. Ethics, as a science, involves systemizing, defending and
recommending concepts of right and wrong behaviour.
The principles of ethical reasoning are useful tools for sorting out the good and
bad components within complex human interactions. For this reason, the study of ethics
has been at the heart of intellectual thought since the time of early Greek philosophers, and its
ongoing contribution to the advancement of knowledge and science makes ethics a relevant, if
not vital aspect of management theory.
PRINCIPLES OF PERSONAL ETHICS
Personal values are the conception of what an individual or a group regards as desirable.
Personal ethics refer to the application of these values in everything one does. Personal ethics
might also be called morality, since they reflect general expectations of any person in any
society, acting in any capacity. These are the principles we try to encourage in our children and
expect of one another without needing to articulate the expectation or formalize it in any way.
The principles of personal ethics are:
1. Concern and respect for the autonomy of others,

2. Honesty and the willingness to comply with the law of the land.
3. Fairness and the ability not to take undue advantage of others.
4. Benevolence and preventing harm to any creature.
People are motivated to be ethical for the following reasons:
1. Most people want to maintain a clear conscience and would like to act ethically under
normal circumstances.
2. It is natural for people to ensure that their actions do not cause any injury, whether
physical or mental to others.
3. People are obliged to obey the laws of the land.
4. Social and material well-being depends on one's ethical behaviour in society.

PROFESSIONAL ETHICS
PRINCIPLES OF PROFESSIONAL ETHICS

 A profession is a vocation or calling, especially one that involves a specific branch of
advanced learning or a branch of science, for example, the profession of a doctor, advocate,
professor, scientist or a business manager. A professional is one who is engaged in a
specified activity as one's paid occupation like a salaried business manager who is paid for
his specific skill in managing the affairs of the business enterprise he is engaged in.
 There are certain basic principles people are expected to follow in their professional career
These are the following:
 impartiality: objectivity;
 openness: full disclosure;
 confidentiality: trust;
 due diligence/duty of care;
 fidelity to professional responsibilities; and
 avoiding potential or apparent conflict of interest.
WHAT IS BUSINESS ETHICS?
 Ethics is a conception of right and wrong behaviour, defining for us when our actions are
moral and when they are immoral. Business ethics, on the other hand, is the application of
general ethical ideas to business behaviour. Ethical business behaviour is expected by the
public, it facilitates and promotes good to society, improves profitability, fosters business
relations and employee productivity, reduces criminal penalties from public authorities and
regulators, protects business against unscrupulous employees and competitors, protects
employees from harmful actions by their employer, and allows people in business to act
consistently with their personal ethical beliefs. Ethical problems occur in business for many
reasons, including the selfishness of a few, competitive pressures on profits, the clash of
personal values and business goals, and cross-cultural contradictions in global business
operations. Ethical issues, such as bribery and corruption, are evident throughout the
world, and many national governments and international agencies are actively attempting
to minimize such actions through economic sanctions and international codes of ethical
behaviour. Although laws and ethics are closely related, they are not the same: ethical
principles tend to be broader than legal principles. Illegal behaviour by business and its
employees imposes great costs on business itself and the society at large.
 To be precise, 'Business ethics is the art and discipline of applying ethical principles to
examine and solve complex moral dilemmas'. Business ethics proves that business has been
and can be and ethical and still make profits. Until the last decade, business ethics was
thought of as being a contradiction in terms. But things have changed; today more and
more interest is being shown to the application of ethical practices in business dealings and
the ethical implications of business. 'Business ethics is that set of principles or reasons
which should govern the conduct of business whether at the individual or collective level,'1

PROFESSIONAL ETHICS
 Ethical solutions to business problems may have more than one right answer or sometimes
no right answer at all thus logical and ethical reasoning are tested in that particular
business situation. A business or company is considered to be ethical only if it tries to reach
a trade-off between its economic objectives and its social obligations, such as obligations to
the society where it exists and operates; to its people for whom it pursues economic coals; to
the environment, from where it takes its resources; and the like
 Business ethics is based on the principle of integrity and fairness and concentrates on the
benefits to the stakeholders, both internal and external. Stakeholders include those
individuals and groups without which the organization does not have an existence. It
includes shareholders, creditors, employees, customers, dealers, vendors, government and
the society.
WHAT IS NOT BUSINESS ETHICS?
It is also equally important clarify what is not ethics.
ETHICS IS DIFFERENT FROM RELIGION
Though all religions preach high ethical/moral standards generally, they do not address all the
types of problems people confront today. For instance, cyber crimes and environment-related
issues are totally new in the context of most religions. Moreover, many persons today do not
subscribe to religious beliefs and have turned agnostics. But ethics applies to all people,
irrespective of their religious affiliations.
ETHICS IS NOT SYNONYMOUS WITH LAW
Generally, a good legal system may incorporate many moral/ethical standards. However, there
are several instances where law deviates from what is ethical. Legal systems may vary from
society to society depending upon its social, religious and cultural beliefs. For instance, the
United States law forbids companies from paying bribes either domestically or overseas:
however, in other parts of the world, bribery is an accepted way of doing business. Similar
contradictions may be seen in child labour, employee safety, work hours, wages, discrimina-
tion, and environmental protection laws. Law can be corrupted and debased by dictators and
made to cater to serve interests of narrow groups. Sometimes, law could be unreasonable and
even stupid, as for instance, it is illegal in Israel for a hen to lay an egg on a Friday or
Saturday.^ It is also slow to respond to ethical needs of the society. People are often sceptical
about the objectives of any legal system and comment 'Law is an Ass\ while few people
question ethical standards
ETHICAL STANDARDS ARE DIFFERENT FROM CULTURAL TRAITS

PROFESSIONAL ETHICS
It is said that when in Rome, do as the Romans do, leads to an unethical cultural behaviour.
Some cultures may be ethical, but many of them are not. They may be quite oblivious to ethical
concerns. For instance, our system of castes reflects an unethical streak in as much as it tends
to take for granted that some people are superior to others in God's creation.
ETHICS IS DIFFERENT FROM FEELINGS
Our ethical choices are based on our feelings. Most of us feel bad when we indulge in
something wrong. But many, especially hardened criminals, may feel good even when they do
something bad. Most people when they do something wrong for the first time, may feel bad, but
if they find it to be beneficial or if it brings them pleasure, they may make it a habit without
feeling any remorse.
ETHICS IS NOT A SCIENCE IN THE STRICTEST SENSE OF THE TERM
We draw data from the sciences to enable us make ethical choices. But science is not
prescriptive and does not tell us what we ought to do in certain situations leading to ethical
dilemmas. But ethics being prescriptive offers reasons for how humans ought to act under such
situations. Moreover, just because something is scientifically or technologically possible, it may
not be ethical to do it; human cloning, for instance.
ETHICS IS NOT JUST A COLLECTION OF VALUES
Values are almost always over simplifications, which rarely can be applied uniformly. Values
lend to be under-defined, situational by nature and subject to flawed human reasoning such
that by themselves they cannot assure true ethical conduct. Consider the sought-after value of
employee loyalty. Should employees be loyal to co-workers, supervisors, customers, or
investors? Since it may be impossible to be absolutely loyal to all the four simultaneously, in
what order should these loyalties occur? Employers who demand employee loyalty rarely can
answer this question completely or satisfactorily.
CODE OF CONDUCT AND ETHICS FOR MANAGERS
Having gone through the definitions of what is and what is not ethics, let us see now how
ethics and values should form ihe bases of the code of conduct thai ought to govern the
behaviour of business managers. In Ihe exercise of their duties and responsibilities, managers
must observe the following ethical values:
• Integrity; Integrity is the cornerstone of all values. A business manager should be morally
upright. It is this characteristic that distinguishes professional manager from a
mercenary,
• Impartiality: A manager should look at and treat all aspects of an issue in a fair and
unprejudiced manner.

PROFESSIONAL ETHICS
• Responsiveness to the public interest: Though a manager is paid to serve the interests of
the stockholders of the company, public interest is no less important. In fact, managers
should consider it as of paramount importance, if they have to be successful in their
tasks.
• Accountability; Accountability is one of the basic characteristics of a good business
manager. Business managers are responsible for all their actions and are accountable to
all the stakeholders—stockholders, creditors, employees, consumers, government and the
society at large.
• Honesty; A cardinal ethical value that a manager should possess is this quality.
Managers should be fair Just and sincere both in character and behaviour. They should
not indulge in cheating or stealing and should be free of deceit and untruthfulness.
• Transparency: Good business managers should be transparent and set standards for
others to follow. They should be frank and open. Their actions should be easily discussed
and understood by others. What values are to individuals, ethics is to business.
EVOLUTION OF ETHICS OVER THE YEARS
If we trace the history of ethics in business, we would realize that ethics had been a part of
theological discussions prior to 1960. Before the 1970s, there were a few writers like Raymond
Baumhart who dealt with ethics and business. Ethical issues were mostly discussed as part of
social issues. Men of religion and theologians continued writing and teaching on ethics in
business. Professors in B-schools wrote and continued to talk about corporate social
responsibility (CSR) the handmaid of ethics. However, the catalyst that led to the field of
business ethics was the entry of several 'philosophers, who brought ethical theory and
philosophical analysis to bear on a variety of issues Norman Bowie dates the genesis of
business ethics as November 1974, with the first conference on the subject held at the
University of Kansas. In 1979, three anthologies on business ethics appeared. They were (i)
Ethical Theory and Business by Tom Beauchamp and Norman Bowie; (ii) Ethical Issues in
Business: A Philosophical Approach by Thomas Donaldson and Patricia Werhane; and
(iii)Moral Issues in Business by Vincent Berry. In 1982, Richard De George brought out
Business Ethics, while Manuel G. Velasquez published his Business Ethics: Concepts and
Cases. All these books created a lot of interest on the subject and business ethics courses were
offered in several management schools. The emergence of business ethics, however, was not
restricted to textbooks and courses in B-schools. By 1975,
business ethics became institutionalized at many levels through writings and conferences. By
the 1980s, the subject was taught in several universities in the United States and Europe.
There were also, by this lime, many journals of business ethics, apart from centers and
societies established to promote ethical practices.
By the year 1990, business ethics as a management discipline was well-established. Although
the academicians from the start had sought to develop contacts with the business community,

PROFESSIONAL ETHICS
the history of the development of business ethics as a movement in business, though related to
the academic developments, can be seen to have a history of its own/9
Parallel to these academic pursuits, around the time from the 1960s to the 1980s, the
Consumers1 Association in Britain multiplied its membership and campaigned hard on issues
such as consumer rights, quality, safety, price, customer service and environmental concerns.
The late 1980s and early 1990s saw increased concern for the environment and by 1989
environment was the issue of greatest concern in Britain. In 1988, more than 50 per cent of the
people in West Germany called themselves green consumers, that is. those who preferred to
select one product over another for environment-friendly reasons. The United States followed
with 45 per cent, Australia with 27 per cent. Great Britain with 14 per cent, which within one
year shot up to 42 per cent.
Simultaneously with these developments or even anticipating them, religion also lent its
powerful voice. Catholic teachings such as Papal Encyclicals emphasized the need for morality
in business, such as workers' rights and living wages as in Rerum Novarumof Pope Leo XIII.
Some of the Protestant seminaries developed ethics as part of their curriculum. During (he
1960s, there was a rise of social issues in business and many business practices came under
social scrutiny during this period. President John F Kennedy's Consumer Bill of Rights
reflected a new era of consumerism. During the 1970s, professors teaching business began to
write about business ethics and philosophers began to involve themselves in the theoretical
evolution of the subject. Businessmen became more concerned with their public image and
addressed ethics more directly. From this historical development, we can see that business
ethics as a field of study and research is a fairly nascent subject.
IMPORTANCE AND NEED FOR BUSINESS ETHICS
Ethics is closely related to trust. Most people would agree on the fact that to develop trust,
behaviour must be ethical. Ethical behaviour is a necessity to gain trust. Trust will be used as
an indicator variable of ethics. Basically, trust is three-dimensional that is, trust in supplier
relationships, trust in employee relationships and trust in customer relationships. In such a
situation, the entire stakeholders of the company are taken care of If the company is able to
maintain (his trust relationship with the internal as well as external stakeholders, then we can
call that company as an ethical company.
Trust leads to predictability and efficiency of business. Ethics is all about developing trust and
maintaining it fruitfully, so that, the firm flourishes profitably and maintain good reputation.
Lack of ethics would lead to unethical practices in organizations as well as in personal life. One
wonders why sometimes even educated, well-positioned managers or employees of some
reputed companies act unethically. This is because of lack of ethics in their lives. We can point
out to numerous examples of companies whose top managements are involved in unethical

PROFESSIONAL ETHICS
practices, for example, Enron and WorldCom, in 2002 and a host of others including
investment bankers Lehman Brothers and Merrill Lynch in 2008.
Applying ethics in business makes good sense because it induces others to follow ethics in their
behaviour. Ethics is important not only in business but also in all aspects of life. The business
of a society that lacks ethics is likely to fail sooner or later. People as investors and members of
civil society are concerned about unethical and anti-social development in organizations. The
collapse of the Global Trust Bank, the UTI fiasco and the spat between the Ambani brothers
caused concern to the investing and general public. A study of business ethics helps us unravel
the underlying forces—why these things happen? What are their implications and what are the
options available to solve the problems that arose? Business ethics enables us 'assess the
benefits and problems associated with different ways of managing ethics in organizations. It
helps us assess the role of business in contemporary society. Even as business contributes to
the growth of the society by offering products and services, enhancing incomes and standard of
living, providing jobs, paying taxes to the government and being the facilitator for economic
development, its functioning often raises several ethical issues such as pollution,
environmental degradation, and corrupt practices. That go to the heart of the social role of
business. By enabling people to understand these malpractices and the consequent
repercussions, business ethics seeks to improve the welfare of the society by offering a social
and political platform for remedial and sometimes proactive action.
There are thousands of companies which, notwithstanding the poor image business community
as a whole has among the public, have succeeded in making profit and enhanced public esteem
by following ethical practices in their realm of business. Some of such companies are: Johnson
& Johnson, Larsen & Toubro, Wipro, Infosys and Tata Steel They have gained the trust of the
public through ethical practices. In India, the House of Tatas, for instance, adheres to, and
communicates key ethical standards in several ways. The Tata Code of Conduct affirms that
'The Tata name represents more than a century of ethical conduct of business in a wide array
of markets and commercial activities in India and abroad. As the owner of the Tata mark, Tata
SOILS Ltd. wishes to strengthen the Tata brand by formulating the Tata Code of Conduct,
enunciating the values (that have governed and shall govern the conduct and activities of
companies associating with or using the Tata name and of their employees.)
SIGNIFICANCE OF BUSINESS ETHICS
Events in corporate of America, Europe, and in many emerging economies at the beginning of
the new millennium and more recently at the far end of 2008, have demonstrated the
destructive fall-outs that take place when the top management of companies do not behave
ethically. Lack of ethics has led highly educated, resourceful and business savvy professionals
in mega corporations such as Enron, Tyco, Waste Management. WorldCom and Adelphia
Communications to get themselves into a mess. In India too, we have had several instances of

PROFESSIONAL ETHICS
highly successful corporations such as ITC and Reliance getting into severe problems when the
top brass misled them to unethical practices. Recently, the chairman of the South Korean
automobile giant, Hyundai, Chung Mong-Koo was arrested and jailed for diverting billion of
rupees from the company as bribe to government officials.
If we analyse the reasons as to why such unethical practices take place in corporations, we
may come across several dimensions to the discussion on the importance and significance of
business ethics. There are quite a few businessmen and entrepreneurs who are of the opinion
that business and ethics do not go hand in hand, as there is no proven evidence that following
ethical practices does bring profits to the firm. They think that a company may not be in a
position to reap the full benefits offered by the business environment if they were to worry
about how ethically they should run the organization. It may not be able to take advantage of
the opportunities provided by circumstances if they have to worry about ethical considerations
all the time. Besides, the choice of an ethical alternative among many other alternatives and
getting due benefits after investing on ethical practices may take time, which may act as a
constraint. There are others to whom making profit and increasing market capitalization are
the only imperatives and yardsticks of efficiency and successful corporate management. To
them, the end justifies the means. There are hundreds of CEOs who hold this opinion and act
unethically, though many of them were proved wrong when nemesis caught up with them as in
the cases of top executives of WorldCom and Enron.
Real-life situations have shown that use of ethical practices in business does create high
returns for companies. There have been many empirical studies that have shown that
companies that follow ethical practices are able to double their profits and show increased
market capitalization compared to companies that do not adhere to ethics. In our own country.
Tata Steel and Infosys are two classic examples that illustrate this line of thinking.
Running a business ethically is good for sustaining business. Applying ethics in business
also makes good sense. The corporation (that behaves ethically prompts other business
associates, by its good example, to behave ethically as well). Organizations work on synergy
and delegation. It is the feeling of the oneness with the company, which is called as a feeling of
ownership, that enhances the sincerity of a worker in an organization. Organizations cannot
work in a manner where the employees are not given due importance in their affairs. For
example, if a management exercises particular care in meeting all responsibilities to employ-
ees, customers and suppliers, it usually is rewarded with a high degree of loyalty, quality and
productivity. Likewise, employees who are treated ethically will more likely behave ethically
themselves in dealing with customers and business associates. A supplier who refuses to
exploit his advantage during a seller's market condition retains the loyalty and continued
business of its customers when conditions change to those of a buyer's market. A company like
Sakihi Masala Pvt. Ltd, that does not discriminate against elderly or handicapped employees
and uses every opportunity to convince them that they are wanted as much as others, discovers
that they are fiercely loyal, hardworking and productive.

PROFESSIONAL ETHICS
There is a cultivated belief in society for thousands of years, may be due to religious
influence or an unwavering faith in morality, that a 'good man‘ who steadfastly tries to be
ethical is bound to overtake his immoral or amoral counterpart in the long run. A plausible
explanation of this view on ethical behaviour is that when Individuals Operate with a
conviction on the ethical soundness of their position, their minds and energies are freed for
maximum productivity and creativity. On the other hand, when practicing unethical
behaviour, persons find it necessary to engage in exhausting subterfuge, resulting in
diminished effectiveness and reduced success. They were either too blinded by self-interest or
simply did not care that they were not following the standards that they had set for their
subordinates. The top management of organizations, who takes personal pay cuts in difficult
financial times for their organizations are respected by everyone. Companies should have the
flexibility of adjusting cost structures during bad times, replace old factories with new ones, or
change technology in ways that would require fewer people to do the work. These decisions
should be taken after ensuring that those affected are empathized with and are provided
adequate financial support.
Managers may face situations where they are not sure, or are perplexed about the ethical side
of their actions. If a company believes that profits are more important than environmental
protection, the decision of its manager to halt a process on account of his concern about its
impact on the environment might not be appreciated by the company. It is up to the manager
to analyse whether the proposed action would be in terms with the goals of the firm and take a
decision accordingly.
Moral or ethical behaviour can neither be legislated nor taught in a vacuum. Authority, it is
said, cannot bring about morality. The best way to promote ethical behaviour is by setting a
good personal example. Teaching an employee ethics is not always effective. One can explain
and define ethics to an adult, but understanding ethics does not necessarily result in behaving
ethically. Personal values and ethical behaviour are taught at an early age by parents and
educators.
The innate human belief that ethical, moral or good behaviour will find its reward ultimately is
deeply ingrained in people's psyche. This is demonstrated in stage plays and films where the
'virtuous' hero wins over the 'wicked villain. The fact that people would rarely accept the
success of evil or unethical forces over the ethical or good ones has been demonstrated time and
again by the failure in box office of such plays or films depicting such an unconventional
formula.
Ethics are important not only in business but also in all aspects of life because it is an essential
part of the foundation on which a civilized society is built. A business, as much as a society,
that lacks ethical principles is bound to fail sooner than later

PROFESSIONAL ETHICS
HONESTY, INTEGRITY AND TRANSPARENCY ARE THE TOUCHSTONES OF

BUSINESS ETHICS.
"Moral authority comes from following universal and timeless principles like honesty,
integrity, and treating people with respect." - Stephen Covey
Ethical corporate behaviour is nothing but a reiteration of the ancient wisdom that 'honesty is
the best policy. The success of an organization is built off of the trust of customers, employees
and the general public. It is required to be followed not because of legal requirements but
because it is the right thing to do. The dramatic collapse of some of the Fortune 500 companies
such as Enron and WorldCom or the well-known auditing firm Andersen showed that even
successful companies could ultimately come to grief, if their managers did not practice the
basic principles of integrity. For every profession 'we would think of a code of conduct or a set
of values, which has a moral content and that would be the essence of ethics for that
profession. There should be transparency in operations leading to accountability, which should
ensure safety and protect the interest of all stakeholders. Which resulted in corporate collapse
due to unethical behaviors and business practices. The integrity of a business affects all
customer groups and every area of business operations. That is why it is important to
incorporate honesty, integrity and transparency as core corporate value. These values will lead
to accountability and protect interest of various stake holders in business. Hence, honesty,
integrity and transparency are considered as touchstone of business ethics.
HONESTY
Honesty is the backbone of trust and trustworthiness. Honesty requires us to speak and act
only in ways that create and justify trust. It seems simple concept but it is very difficult to be
honest in every business decision by business man. Honesty is a broader concept than some
realise and it is applicable in personal and social life. An honest business man tells the
truth, is sincere, does not deceive, mislead, act devious or tricky, does not betray a trust,
doesnot withhold important information in relationships of trust, does not steal, and does not
cheat. There are two dimensions of honesty:
■ honesty in communication; and
■ honesty in conduct.
It means, businessman shall observe honesty while he is engaged into any type of
communication and his conduct (i.e., action, decision-making and plan).

PROFESSIONAL ETHICS
INTEGRITY
"Real integrity is doing the right thing, knowing that nobody's going to .know whether you did
it or not." - Oprah Winfrey
Integrity is one of the fundamental values that employers seek in the employees that they hire.
It is the hallmark of a person who demonstrates sound moral and ethical principles at work.
Integrity is the foundation on which co-workers build relationships, trust, and effective intetw
relationships. A person who has integrity exhibits his values in relationships with coworkers,
customers, and stakeholder. Honesty and trust are central to integrity. People who
demonstrate integrity draw others to thein because they are trustworthy and dependable are
principled and you can count on them to behave in honorable ways even when no one is
watching are principled enough that they perform even when no one even knows about their
performance. Integrity is demonstrated in large ways and in small daily activities and
practices.
TRANSPARENCY
Transparency is the practice of openly and honestly disclosing information to stakeholders

in the organisation such as investors, employees and customers.In many cases, transparency
is considered a principle and duty. Reporting financial position to shareholders and
investors is principle as well as duty to be followed by auditor of company.
Example :
WorldCom (WCOM) was the United States' second largest long distance phone company
(AT&T was largest company). From 1999 May 2002, the company used fraudulent
accounting methods to mask its declining financial condition by painting a false picture of
financial growth and profitability to maintain the price of Worldcom's shares. This was
because many senior employees were holding huge stocks of WorldCom shares. The fraud
was carried out by underreporting of cost and expenses. Over US $7 Billion expenses were
ignored. Inflating revenues with bogus accounting entries from 'corporate unallocated
revenue account!. Oyer US $2 Million of revenue was overstated. US Securities Exchange
Commission (SEC) launched an investigation into these matters on June 26, 2002. In July,
2002; WorldCom filed for bankruptcy petition. Corporate collapse of WorldCom has caused
due to lack of transparency and unethical practice followed by top management of company
PROFESSIONAL ETHICS
VALUES AND ETHICS IN BUSINESS
Business ethics are related to issues of what is right and 'what is wrong' while doing business.
The constituents of business ethics include adherence to truth, a commitment to justice and
public integrity. What values are to individuals, ethics are to business.
Personal values as we have seen earlier, refer to a conception of what an individual or group
regards as desirable. A value is a view of life and judgement of what is desirable that is very
much part of a person's personality and a group's morale. Thus, a benign attitude to labour
welfare is a value which may prompt an industrialist to do much more for workers than what
the labour law stipulates. Service-mindedness is a value which when cherished in an
organization would manifest in better customer satisfaction. Personal values are imbibed from
parents, teachers and elders, and as an individual grows, values are adapted and refined in the
light of new knowledge and experiences. Within an organization, values are imparted by the
founder-entrepreneur or a dominant chief executive and they remain in some form, even long
after that person's exit.
J.K.D. Tata once said this when asked to define the ‗House of Tatas‘ and what links that forge
the Tata companies together: ―I would call it a group of individually managed companies
united by two factors: First, a feeling that they are part of a larger group which carries the
name and prestige of Tatas, and public recognition of honesty and reliability—trustworthiness.
The other reason is more metaphysical. There is an innate loyalty, a sharing of certain beliefs.
We all feel a certain pride that we are somewhat different from others. These several values
that J.R.D. Tata refers to have been derived from the ideals of the founder of the group,
Jamsedji Tata.
Business ethics operate as a system of values relating business goals and techniques to meet
specific human ends of society. It also means realization of the personal dignity of human
beings. A major task of leadership is to inculcate personal values and impart a sense of
business ethics to the organizational members. At one end, values and ethics shape the
corporate culture and dictate the way how politics and power will be used and at the other end,
clarify the social responsibility in the organization.
A typical dilemma faced by people in business is to decide whelher to reconcile the pragmatic
demands of work which often degenerate to distortion of values and unethical business
practices, or to listen to the call of the "inner voice* which somehow* prevents them from using
unethical means for achieving organizational goals. This dilemma stems from the fact that
apparently the value system of the organization has already been contaminated beyond
redemption. Some analysts attribute this to the acceptable behaviour in society at a particular
point of time or justify it in terms of the rapid transition of a developing society where social
mechanisms become obsolete. For instance, many multinational companies (MNCs) in India
indulge in some undesirable practices such as resorting to payment of speed money, bribery,
use of substandard inputs, evasion of excise duties and corporation taxes, etc.. which they

PROFESSIONAL ETHICS
would be wary of doing in their home countries because of the stigma and penally attached to
such activities. Besides, the dire need to make a profit in a fiercely competitive environment
also makes them indulge in such malpractices.
Corruption in industry, which is a major by-product of degradation of values and ethics, is
also related to the inability of industry to stand up to the discretionary powers of a regulatory
system designed and administered by an unholy alliance of bureaucrats and politicians. But
repeated observations have shown that excellent organizations—besides other values—have
explicit belief in, and recognition of the importance of economic growth and profits, and are
driven by values rather than avarice. It has been possible for Indian companies such as
Infosys, Tata Steel, Asian Faints,. Bajaj Auto and Wipro to excel on the basis of super-ordinate
goals—a set of values and aspirations and corporate culture. Managers, therefore, have to
provide the right values and ethical sense to the organizations they manage.
Take for instance, such issues as consumers being taken for a ride on matters such as
warranty, annual maintenance contracts, consumers being asked to pay very high prices for
components, discriminating prices, and management‘s collusion with union leadership. FBMA
violations, insider trading, lack of transparency, lack of integrity and unfair presentation of
financial statements, feeding top managements only with information they want to hear,
window dressing of balance sheets, backdating of contracts, manipulation of profit and loss
accounts, hedging and fudging of unexplainable and inordinate expenditures and resorting to
suppressio veri. suggestio falsi and continuous upward revaluation of assets to conceal poor
performance, etc These are only the tips of the iceberg.
VALUES, ETHICS AND BUSINESS STRATEGY
Personal values and ethics are important for all human beings. They are especially important
for business managers as they are custodians of the immense economic power vested in
business organizations by society. However, can managers prevent their personal values from
affecting business strategy formulation and implementation? This is a tricky question.
It is often observed from failed corporations that management executives while working
out their business strategy are guided generally by what they personally want to do, rather
than what they have been directed to do by the board, or the company policy in the absence of
any direct supervision. As a result, somewhere down the line, the right connection between
values, ethics and strategy is lost while their managing business. However, it is vitally
necessary that business managers should be guided as much by values and ethics as by
economic reasons. Guided by this, it can be added that 'purity of mind, can come only from
having the right connection between values, ethics and strategy. It is imperative that
executives take business decisions not only on the basis of purely economic reasons but on
ethical and moral values as well.
'Using ethical considerations in strategic decision making will result in the development of
most effective long-term and short-term strategies. Specifically, ethical criteria must be
PROFESSIONAL ETHICS
included as part of the strategic process before-profit decisions rather than after-profit
decisions' this will enable the company maximize profits and enhance the development of
strategy and its implementation.
DISTINCTION BETWEEN VALUES AND ETHICS
At this point, ii is necessary to differentiate between values and ethics. Values are personal in
nature (e.g., a belief in providing customer satisfaction and being a good paymaster) while
ethics is a generalized value system (e.g.. avoiding discrimination in recruitment and adopting
fair business practices). Business ethics can provide the general guidelines within which
management can operate. Values, however, offer alternatives to choose from. For example,
philanthropy as a business policy is optional. An entrepreneur may or may not possess this
value and still remain within the limits of business ethics. It is values, therefore, that vary
among managers in an organization and such a variance may be a source of conflict at the time
of business strategy formulation and implementation.
Managers have to reconcile divergent values and modify values, if necessary. A typical
situation of value divergence may arise while setting objectives and determining the
precedence of different objectives. One group of managers (may be a coalition) may be
interested in standardization of production-oriented objectives and mass production while
another group may stress marketing-related objectives product quality and variety, small-log
production, etc. These interests may be legitimate in the sense that they arise from their
functional bias. It is for the chief executive to reconcile the divergent values. Obviously, this
can best be done in the light of strategic requirements and environmental considerations.
Modification of values is frequently required for business strategy implementation. A
particular business strategy, say of expansion, may create value requirements such as stress
on efficiency, risk-taking attitude, etc; Implementation may be sub-optimal if existing values
do not conform to these requirements. In such cases, modification of values is necessary. But
what was said of corporate culture is true tor values too; they are difficult, if not impossible, to
change. A judicious use of politics and power, redesigning of corporate culture., and making
systematic changes in organizations can help modify values gradually.
ROOTS OF UNETHICAL BEHAVIOUR

What is Unethical Behaviour?
Unethical behavior refers to the behavior of people to do not confirm with the acceptable
standards of social and professional behavior. Such behavior may include making long-
distance calls from the office, duplicating the enterprise's system software to use at home,
projeetihg a false report on the number of. worked hours-, or falsifying business records.
There can be numerous factors that cause unethical- behavior in th eemployees of an
enterprise. Identifying these causes of unethical behavior in the workplace could prevent
problems and minimise damages. Such factors are shown in diagram and discussed in detail
as follows:

PROFESSIONAL ETHICS
People often wonder why employees indulge in unethical practices such as resorting to lying,
bribery, coercion, conflicting interest, etc. There are certain factors that make the employees
think and act in unethical ways. Some of the influencing factors are 'pressure to balance work
and family, poor communications, poor leadership, long work hours, heavy work load, lack of
management support, pressure to meet sales or profit goals, little or no recognition of
achievements, company politics, personal financial worries, and insufficient resources'. The
statistical data given by Ethics Officers Association in 1997 show how certain practices or
factors contribute to unethical behaviour.18
Balancing work and family 52 per cent

Poor leadership 51 per cent
Poor internal communication 51 per cent
Lack of management support 48 per cent
Need to meet goals 46 per cent
From the above statistics it is very much evident that conflicting interests lead to most of the
unethical practices.
Individual Moral Standards : The moral standards and sound personal values of a person
exercisea significant impact on ethics in the workplace.. An employee has to make a choice
between right and wrong in differentsituations. His ethical behaviour affects his reputation
within the company as well as the reputation of his company. His choices and actions depend
upon his personal beliefs and value as well as reflect the understanding of his ethical
responsibility as an employee
Decision Making Process : studies show that employees may behave unethically because
they fail to ask the relevant is this decision or action ediical? Sometime, decisions are made
based on economic logic, without consideration for ethics.
No Code of Ethics : Employees are more likely to do wrong if they donot know right. Without
a code of ethics, they may be involved in unethical A code of ethics is a proactive approach to
addressing unethical behavior. Code of ethics establishes an organisation's values and sets
boundary for adhering to those values. Everyone is accountable.

Unrealistic performance expectation : Pressure to meet unrealistic goal and
performance may force employees to engage into unethical behaviour in
Opportunity to Engage in Misconduct : In case the company fails to provide good
examples and direction for appropriate workplace conduct, confusion and conflict will develop
and will result in the opportunity for unethical behaviour. If punishments for undesirable

PROFESSIONAL ETHICS
behaviour are not implemented, each individual may misuse the opportunities available to him
since there is no system of punishment.
Influence of Managers and Co-workers : Managers and co-workers exert significant

control on one's choices at workplace through authority. For gaining- consistent ethical
compliance in the company's workplace, activities and examples should be set by co-workers
along with the rules and policies established by the company.
Leadership : If business leaders fail to act in an ethical manner, other employees may
act ethically. Ethical behavior starts at the top. Employees follow their leaders, and to
most significant factor in ethical leadership is personal character. That's why it is rightly
said that "Actions speak louder than words".
WHY DOES BUSINESS HAVE SUCH A NEGATIVE IMAGE?
The fact that by and large business has a negative image cannot be overstressed. Books,
journals, movies and TV shows invariably depict business in bad light. Even though
businessmen may not want to be unethical factors such as competitive pressures, individual
greed, and differing cultural contexts generate ethical issues for organizational managers.
Further, in almost every organization some people will have the inclination to behave
unethically (the ethical egoist) necessitating systems to ensure that such behaviour is either
stopped or detected and remedied/19
WHY SHOULD BUSINESSES ACT ETHICALLY?
An organization has to be ethical in its behaviour because it has to exist in the competitive
world. We can find a number of reasons for being ethical in behaviour, few of them are cited
below; most people want to be ethical in their business dealings. Values give management
credibility with its employees- Only perceived moral righteousness and social concern bring
employee respect. Values help better decision making. There are a number of reasons why
businesses should act ethically:
• to protect its own interest;

• to protect the interests of the business community as a whole so that the public will
have trust in it;
• to keep its commitment to society to act ethically;
• to meet stakeholder expectations;
• to prevent harm to the general public;
• to build trust will key stakeholder groups;
• to protect themselves from abuse of unethical employees and competitors;
• to protect their own reputations;

PROFESSIONAL ETHICS
• to protect their own employees; and

• to create an environment in which workers can act in ways consistent with their
values.
Besides, if a corporation reneges on its agreement and expects others to keep theirs, it will be
unfair. It will also be inconsistent on its part, if business agrees to a set of rules to govern
behaviour and then to unilaterally violate those rules. Moreover, to agree to a condition where
business and businessmen tend to break the rules and also gel away with It is to undermine
Ihe environment necessary for running the business.
Hard decisions which have been studied from both an ethical and an economic angle are more
difficult to make, but they will stand up against all odds, because the good of the employees,
public interest, and the company's own long-term interest and those of all stakeholders would
have been taken into account.
Ethics within organizations is a must. It should be initiated by the lop management, and
percolate to the bottom of the hierarchy. Then alone, will the company be viewed as ethical by
the business community and the society at large. 'Further, a well-communicated commitment
to ethics sends a powerful message that ethical behaviour is considered to be a business
imperative/*0 If the company needs to make profit and to have a good reputation, it must act
within the confines of ethics. Ethical communication within the organization would be a
healthy sign that the company is marching towards the right path. Internalization of ethics by
the employees is of utmost importance. If the employer has properly internalized ethics, then
the activities that individuals or organizations carry out will have ethics in them.
ETHICAL DECISION-MAKING
Ethical decision-making is a very tough prospect in this dog-eats-dog world. However, in the
long run all will have to fall in and play fair. The clock is already ticking for the unscrupulous
corporations. In this age of liberalization and globalization, the old dirty games and unethical
conduct will no longer be accepted and tolerated. Norman Vincent Peale and Kenneth
Blanchard have prescribed some suggestions to conduct ethical business.
• Is the decision you are taking legal? If it is not legal it is not ethical
• Is the decision you are taking fair? In other words, it should be a win-win-equitable
risk and reward.
• Follow the Eleventh Commandment—Though shall not be ashamed when found,
meaning when you are hauled up over some seemingly unethical behaviour, if one's
conscience is clear, then there is nothing to be ashamed of.

PROFESSIONAL ETHICS
CHAPTER-3
ETHICAL DILEMMAS, SOURCES AND THEIR RESOLUTIONS:
What is an Ethical Dilemma, Sources of Ethical Behaviour, Code of Personal Ethics for Employees,
How to Resolve an Ethical Problem, How to Resolve Ethical Dilemmas.
INTRODUCTION
When we talk of the problems arising in ethical decision making as discussed in last chapter,
we refer to ethical dilemmas, situations in which business men face lots of choices and no
clear cut right answer. Businessmen, decision makers do find dilemmas arising out of the
eternal conflict between ends and the means. There are easy answers to ethical dilemmas.
Some situations like whether to lie or not, stealing, cheating are easy to be answered but some
situations in the practical field when there are so many choices, which seem equally arguable
but represent a fake picture of neither clarity nor simplicity. Now let‘s make this form clear
that what ethical dilemmas actually are?
MEANING AND DEFINITIONS

An ethical dilemma is hard to identify as it is very specific in nature and many situational
factors are embedded in it. Ethical dilemma occurs in the type of situations when one has to
choose between right V/s right sorts. Some great men have defined ethical dilemma as —
According to ‗Doug Wallace’— an ethical dilemma exists when one is faced with having to
make a choice among following alternatives—
(a) Significant value conflict among differing interests.
(b) Real alternatives those are equally justifiable.
(c) Significant consequences on stakeholders in the situations.
ww.‖
‗P. Kidder‘ says–―They are genuine dilemmas precisely because each side is firmly rooted in
one of our basic, core values four such dilemmas are so common to our experience that they
stand as models, patterns or paradigms,‖ they are—
(i) Truth versus loyalty (ii) Individual versus community (iii) Short term versus long term
(iv) Justice versus mercy
In general‘ we say ethical dilemmas are complex judgments on the balance between the
economic performance and the social performance of an organization.
Some examples of ethical dilemmas are—
Examples :
Ramesh Yadav was a marketing officer with a Multinational company. This company used to
follow the American system of contributing equally irrespective of their designation. Once, his
boss Mr. Anil Sharma invited some office employees out to lunch to celebrate Sunil‘s
Promotion to sales manager. Each employee equally contributed Rs. 175/- for the lunch and
the bill was paid by Mr. Sharma. Two days after the lunch Ramesh found out that his boss
Mr. Sharma had killed the company for the entire lunch. Now Mr. Yadav is in ethical
dilemma, how to handle the situation?
Joseph H. Boyett and Jimmie T. Boyett have cited ethically questionable situations in business

PROFESSIONAL ETHICS
as either practices involving out right illegal activities, such as stealing of company‘s
products/practices, misuse of power, application of personal expenses to contract budgets. But
these situations offer a clear choice between right or wrong. Ethical issues are just the part of
routine practice but they are characterized by less frequent by legal issues. Again dilemma
contract with the way ethical issues arise because the basic characteristics are different.
Dilemmas are very specific in nature and hard to identify issues generally easy to name and
not specific. Assigning right/wrong, good/bad are quite easy for ethical issues but for dilemma
multiple values with multiple opinion what is right for one party may be wrong for the other.
The most important difference between ethical issue and ethical dilemma is when a person
finds himself in ethical dilemma, he wants to do the right things but do not know what it is or
do not have the capacity to do it but for ethical issue, an individual can do right things if they
want to do and have the intentions.
SALIENT FEATURES OF ETHICAL DILEMMA :

An ethical dilemma is very specific in nature and having some special and salient features like—
1. Uncertain outcomes
One can‘t he sure about the consequences result from most ethical choices.
2. Multiple choices and Alternatives
Like ethical issues in which these are simply two choices ‗yes‘ or ‗not‘ here in ethical
dilemma, situations are different decision makers find more than two alternatives which
have to be considered.
3. Mixed consequences
Ethical dilemmas and problems in management when solved the outcomes oppose to each
other. One decision but considered as favorable by one party and unfavorable by another
party, for example, a decision of termination of 10% workforce and increment in the
salaries of remaining 90% workforce.
4. Direct/indirect involvement
What will happen to particular situation in which people face ethical dilemma, one side one
person is directly involved and on the other side another is just reviewing from distance
and not directly involved, obviously ethical decision are more difficult to make when person,
personally involved in it. For example, what would you do when your immediate boss
wants from you to make false TA/DA bills and transfer the benefits to him? So would you
follow him or blow the whistle against him? In both the cases you will be in problem.
5. It is a general belief that ethical decisions reduce economic profits of the company but they
don‘t directly impact on managers salary or their other prospectus. So executives
sometimes choose the path where profit margin might reduce, keeping themselves on safer
sides. Thus to conclude we say that ethical dilemmas are very complex in nature. Selection
of any one choice among several is quite difficult as well as risky.
APPROACHES AND METHODS OF RESOLVING ETHICAL DILEMMAS

Infect, there are no easy ways, approaches, methods which help practically to resolve ethical
dilemma. As the degree of complexity increase, the risk to choose and apply the approaches
and methods will become more.
There are some classical approaches and traditional methods develop in resolving ethical
dilemmas explained as follows:-

PROFESSIONAL ETHICS
1. Utilitarian (end-based approach)

The utilitarianism system was originated by the British thinker Jeremy Bentham (1748–
1832). It aims at creating the greatest degree of benefits for the largest number of people.
According to this system, a human conduct is considered as good if it results in benefits for
society and bad if it generates harm to the society. In-fact Utilitarianism is a special version
of ―Teleology‖. Teleology emphasize mainly upon the outcomes of on individual‘s action and
not on the intent of the individual. That‘s why it is called as ―Consequentialism‖ or end based
ethics
2. Universalism (rule based)

The approach of universalism is based on the duties and obligations of an individual
(Deontology). The moral worth on individual action should be judged by the intention of the
person, not by the outcome of the action. It assumes that good intentions always result in good
outcomes, ultimately if not immediately.
‗Immanuel Kant‘ (1724–1804) proposed the ―Categorical Imperactive‖ — One should act only in
ways that one would wish all others to act faced with the same set of circumstances, and also to
treat others with dignity and respect. Everyone‘s value is equal. Hence no one‘s rights should be
subordinated to those of others.
3. Care-based Approach
You have to reserve the dilemma keeping in mind that you have an obligation to care for those
with whom you have close relationship or who cares for you. You must care for them just to
maintain a strong bond in the relationship but some great-men put some argument against it
that it would create favoritism while working with those you have valuable relationship as well
as it can degenerate into unjust favoritism and sacrifice of own needs to care for children,
parents, spouse and friends with whom you have close relationships.
4. Virtue Ethics
‗Peter Partley ‗ (The essence of business ethics) Says — ―Virtue ethics can be represented as a
mental construction with prudence. More exactly this metal construction has two ceilings – one
is crowned by private prudence and the other by public prudence. The image describes how we
can distinguish two sphere of excellence, public and private well being one should make every
effort to gain a wider understanding of corporate private and social well being. Or In general
we say that when a person follows virtue ethics that means while performing any action he/ she
should develop a morally virtuous character.
Methods of resolving ethical dilemmas
Ethical dilemmas occur in organization in different forms, framework and structure so single
unique and standard method can not be applied to resolve them. Each and every organization
has its own strategies, planned procedure for dealing with ethical dilemma. Generally a
committee of top level managers is being setup to select suitable approach and method to solve
ethical dilemma. Some methods have been given by great men like –
1. ‗Rushworth Kidder‘– A nine steps procedure for dealing with ethical dilemma.
2. ‗Wallace and Pakel‘– Ten steps of decision making.
3. ‗Laura L. Nash‘ – Presented twelve questions to address ethical dilemmas.
4. Nine steps for dealing with ethical dilemma (by Rushworth Kidder) (extract from how
good people make choices - ―Resolving the dilemmas of ethical living, William/ Morrow,
New York, 1995).
1. Define the problem and clearly recognize the moral issues in it.

PROFESSIONAL ETHICS
2. Determine who will affect by the decisions? What would be your role?
3. Until and unless ethical dilemmas can be reduced to common issues which are
though difficult but manageable it is hard to resolve them for this one has to
collect the information and facts how the problem occurred.
4. Isolate the illegal issues involved in the problem by testing right versus
wrong.
5. Now the time has come to make the toughest choice
which is right versus right paradigms such as —
Justice V/s mercy
Short term V/s long term
Truth V/s loyalty
Individual V/s community
6. At this stage you can select any one appropriate approach to resolve dilemma like
• Care based
• Rule based
• End based
or virtue ethics ( already discussed earlier )
7. Find out if there is any another way out of situations.
8. Decide and Act — finally select an approach which you find the most suitable,
decide that and take action.
9. Review of the decision—
Apart from these (mentioned above) methods ‗Hosmer‘ has given five things
which should be followed to make ethical issues and dilemmas much simpler than
ever—
(i) The decisions taken by managers must be with intense care as their
consequences may affect the organization as well as the society.
(ii) Ethical choices are full of mixed outcomes. One side social benefits and
other side financial revenue.
(iii) If you see from an upper layer you will find there are clear cut two
alternatives ‗Yes‘ or ‗not‘ but actually most of the ethical issuer have
multiple alternatives equally arguable.
(iv) How ethical decisions and personal implications are related with each
other?
Mostly ethical decisions have personal implications though the common
belief says ethical decisions are isolated from executive‘s careers.
(v) The degree of uncertainty is very high in ethical issues, uncertain
consequences with full of risks and doubts are embedded in ethical
decisions.
PLATINUM STANDARD OF ETHICS

‗Scoft W. Ventrella‘ (Executive excellence, July, 2001) provides a platinum standard of
ethics for dealing with ethical dilemma as follows :
1. Ask yourself— Whose problem it is? Is it a case of conflicting interests or a question of right
and fairness? In the ‗ Power of Ethical Management ‗Norman Vincent Peale and Ken
Blanchard ask:
(i) Is it legal or illegal? What you are doing is in line with policy or against policy then

PROFESSIONAL ETHICS
don‘t do it and. (ii) How much fairness is there? If it provides benefits to few one, don‘t do it.
(iii) At the end what is my self analysis? How will I feel about myself?
2. Does the decision accurately reflect the kind of person you are? Does your character match your
decisions? Do you follow—Practice what you preach?
3. Be careful and aware of what actions you show and try to imagine the situations that if all
your deals, actions, phone calls being observed, recorded and further reported what would be
the outcomes.
4. Keep your words – How firmly you fulfill your commitment. Is it the way you make
promises lightly, sometimes fulfills and sometimes not. If so then some practices will be
followed by your subordinates and associates. So try to say no it you can‘t complete it or
don‘t want to complete it or do not know how to do it.
5. Develop and Sustain integrity – The most powerful value is integrity which is–
1. Courage (telling the truth). 2. Self discipline and control. 3. Goodness—honesty,
morality, kindness, fairness, generosity.4.Centering power—which provides us with the
navigational tools, how to pass the fuzzy ethical landscape. 5. Living by inner truth and
inner mind to remain yourself incorruptible, clean from kick-backs etc. let your mind be
guided by conscience.
SUMMARY
Ethical dilemmas are the particular situations in which decision makers face difficult choices
with no clear-cut right answers exist. Because of some special and different features like
uncertain consequences, multiple alternatives etc. Managers and executives have to be very
careful handling ethical dilemmas. Though some traditional methods have been developed
which help decision makers to handle the complex situations and make an ethical decision.
CASE STUDY-1
Mr. Rahul Tandon, VP (HRM) for a manufacturing firm ‗XYZ.‘ The firm is undergoing a major
change in direction. The rapid changes in the Industries as well as competitors dynamic
policies and plans, put a big pressure over the firm to adapt in the new environment. In this
changing environment, Mr. Tandon is thinking of hiring some young, energetic and advanced
persons who would be able to cope up the dynamic and changing situation. ‗XYZ‘ has organized
a walk in interview for new recruitments Ms. Isha Patil, well qualified as well as experienced
in the similar field has appeared for the interview. She has just left one of the competitor‘s
company because of some personal reasons. Mean- while in the interview she indirectly gave
the hints that she would be happier to tell you all the competitors‘ plans and policies.
Question :
What would Mr. Tandon do?
CASE STUDY-2
Mr. Rakesh Sinha was working as an officer in the excise deptt. of a reputed steel company.
He was from a very reputed and good family.
The steel company was reportedly involved in excise evasion of its goods. Excise evasion by the
company resulting in dealer selling steel which was not excise paid. Mr. Sinha along with his
boss were directly involved in excise evasion. Their philosophy being that, they are doing it
not for good of their own but for the company.
The govt. had recently raided few companies practicing excise evasion lying in the vicinity of

PROFESSIONAL ETHICS
the steel company. Therefore, Mr. Sinha was under tremendous stress these days. Even he
knew that his name would come in the list, as one of the company‘s executive to be interrogated.
Mr. Sinha‘s wife, knowing about the entire situation advised him to get out of such activity or
else quit the company.
Question :
Mr. Sinha was in dilemma, what should he do?
CHAPTER-4
Decision – marking in Business: Ethical Models that Guide Decision making, Which
Approach to use, Ethical Decision Marking with Cross -holder conflicts and competition, Applying
Moral Philosophy to Ethical Decision Making, Kohlberg’s Model of Cognitive Moral Development,
Influences on Ethical Decision Making, Personal values and Ethical Decision Marking
Introduction:
As we all know that the real identity of a manager is to make decisions regularly and correctly. As
Alvin Toffler says—"The very speed of change introduces a new element into management, forcing
managers to make more and more decisions at a faster and faster pace. Now a days management
simply has become the process of decision making. All the parts of management pass through
decision making toward goal achievement like.
Achivement
What ever decision of any kind has been taken by any manager has some ethical implications. Here
we are going to make the concept ethical decision making clear to the world and show them How
Ethics is involved in decision making.
ETHICAL DECISIONS (INDIVIDUAL/COMMUNITY) IN ORGANIZATION
Most people believe that when they work in group /community, it matters about who are ethical /
unethical. They find that if they are ethical by themselves, they might be considered as ethical, or
ethically poor or unethical by others.
"Reinhold Niebuhr" (1932), a famous American Theologist, felt that ethical standard fails when
Individual work together in a group because their egoistic impulse get compounded. There can be
complex psychological reasons for varying levels of ethicality of groups".
The great thinker, Father of Nation, Gandhiji also realized and believed in ethics of the means,
rather than ends and often tread to lonely path. Tagore too extolled in his famous Bengali poem

PROFESSIONAL ETHICS
"Ekla Chalo Re" (Strike the lonely furrow). On the other hand "Karl Kautsky" (1906, the Marxist
philosopher, observed that the larger the conglomeration of people, the higher is their ethicality).
So by seeing this history, we find whether a person works alone or be a part of a group but ethics is
in the roots. Neither we can say Tagore philosophy is always right nor we can say karl kutsky's
views match with reality.
A typical characteristic of the functioning of a group or organization is that each member has
different role to perform. As they perform different functions with different responsibilities so they
cannot be evaluated on same yard sticks.
In short, we understand that ethical decision making is a very complex and difficult task. There
cannot be a single standard or process which can be followed by each and every one at different
stages in an organization. As organizations are not simply mass of people working together but they
are an ever present feature of human culture in which persons interact for objectives. The people
who work in the organizations are the moral agents, they make collective decisions and act on them,
they follow certain rules explicit / implicit, codes of conduct, regulations and their actions based on
the followed behavior can be subjected to ethical appraisal.
STRUCTURE OF ETHICAL DECISION MAKING
Identify the problem
1
Generate alternative solutions
___________ I ___________
Evaluate Alternatives using cost - benefit approach
_______ I _______
Select the solution
____________ I ____________
Implement the chosen solution!
A logical fire steps analytical structure (Kitson and Campbell 1996) has been developed to help
out the students how they should make the decisions?
Identification of the present situation is the basic foundry and most crucial step. A manager
must understand the very nature of the problem or circumstances. Again ethical considerations are
involved in alternations generated by decision maker. Now evaluations and selection depend upon so
many factors it involves ethical reasoning of the decision maker which is explained in the next part.
HOW TO USE ETHICAL REASONING
An individual can use the following methods of ethical reasoning:
1. Utilitarian Criteria
This ethical concept was developed by England's "Jermy Bentham" and ' John Stuart Mill' The goal
of utilitarian is to provide greatest good for greatest number which is guided by the value, "Utility".
Decisions are purely made on the basis of their outcomes or consequences.
"It attempted to make ethical evaluation precise by aggregating the happiness of everyone
affected and deducting their unhappiness". This is the guiding principle of modern decision making.
To be on safer side decision makers choose utilitarian criteria which helps them to go for some
important decisions like termination, closing down plants, laying off large no. of employees, raising
prices in the best interest of the organization. Many people have contradictory view and they argue
that perspective needs to change. Therefore further some more criteria have been developed to guide
the decision makers to develop ethical standards based on non-utilitarian criteria

PROFESSIONAL ETHICS
2. Rights Criteria
The focal point of decision making process should be Rights Decisions should be consistent with
fundamental rights and liberties as laid in the constitution like-right to speech, right to due process.
Example-As whistle blowing is the latest phenomenon occurring in the modern corporate
world of 21st century. So if decision makers use rights criteria, a good protection can be given to
whistle blowers, when they blow the whistle against some wrong doers.
Distributive Justice Criteria

This ethical reasoning has been given by John Rawls (1971). It sees 'justice value as a most likely
outcome of an ethical process of decision making. The essential feature of this concept is
transparency and full participation of those affected in the decision process.
This requires individuals to impose and enforce rules fairly and impartially, so there is
equitable distribution of benefits and costs.
4. Social Contract Criteria

It suggests that empirical and normative or what is and what ought to be must be combined. It
integrates two contracts.
1. General social contract among economic participants that defines the ground rules for
doing business.
2. A more specific contract among specific members of a community that covers acceptable
ways of behaving, so when the managers have to determine what is right wrong they need
to look at the existing ethical norms.
Studies have shown that utilitarian is consistent with objectives and goals like efficiency,
productivity and high profits.
But because of changing world of management, this opinion, perspective should also be
changed. Now society demands to follow non-utilitarian criteria, managers must fix some ethical
standards ' Joseph Massie' says that, "number of generally accepted virtues, such as happiness,
lawfulness, consistency, integrity and loyalty, may be in specific situation conflict with one another".
Thus managers typically face moral dilemmas in their decisions and actions. He has given two
approaches to moral questions —
(i) Natural law— This approach considers that certain ultimate values are matters of natural law.
Under this view; certain actions are always wrong because they break some basic intuitive law. (ii)
Situational law— To determine whether an action is right or wrong, it totally depends upon the
situation in which the action occurs. This view holds that an action under one set of circumstances
and in one environment would be right, whereas the same action under another set of circumstances
and in another environment would be wrong.So far we have learned bout ethical reasoning; again we
come to the structure of decision making. As in general the most important factors which make the
structure of decision making are
DECISION MAKING –ENDS –MEANS –MOTIVES – FORESEEABLE OUTCOME
Ethical and unethical actions are largely a function of both the individual's characteristics and the
environment in which he works.
The following model explains the ethical/unethical decision making behavior—
Stage 1: Moral Development

PROFESSIONAL ETHICS
change subsequently. The ability to deal with moral issues develops as they move through their
lives.
The process of examining one's moral standards and of applying them to concrete situations
includes two parts:
1. A person's ability to use and vertically evaluate his/her moral standards, which develops in
the course of person's life.
2. Reasoning processes through which these moral standards are employed and evaluated.
The highest one's moral development is the less dependant he is on outside influence.
For Example — Managers with higher stage of moral development place increased values
on the rights of others and regardless of majority's opinion, they are likely to challenge
organization practices which they believe are personally wrong.
Stage 2: Organization Environment

Whether the work ethics/organization ethics align with personal ethics. Does the organization
encourage and support ethical behavior by rewarding it or discourage unethical behavior by
punishing it? If an individual shows highly ethical behavior at his end and if he finds blanks from
organization side, and no valuation of his ethicality, then gradually he will be demotivated towards
following ethics. The other side of the coin is a new comer in an ethical organization, though
personally not so ethical, slowly moulds in the morally strong environment. Some examples of these
kinds are — high moral behavior by senior management, written codes of ethics, ethics training,
performance appraisal, that evaluates every aspects, visible rewards and promotions to whom
showing high moral and ethical behavior, simultaneously visible punishment for those who act
unethically. All these factors really foster high ethical decision making.
Stage 3: Locus of Control

Locus of control is a particular personality trait which measures the extent to which people believe
they are self-responsible for the happenings and events in their lives.
Locus of control
Internal External
Meaning—believes what happens to them Meaning—believes what happens to them is
in life is fully because of their own actions. because of luck or chance.
Consequences—believe in themselves; Consequences—rely on external influence,
follow their own internal standards of right less likely to take responsibilities.
/ wrong to guide the behavior.
In short we say that people with strong moral sense, having internal locus of control, are more
likely to make ethical decisions.
PROBLEMS IN ETHICAL DECISION MAKING
It we say or assure that unethical behavior in organization is just because of some wrong doers or
some greedy people, some bad individuals who are always behind money, then some where we would
be wrong.
Now-a-days, people who look decent, who seem to be ethical, do involve in unethical practices,
though they don't think of doing anything illegal or immoral but they get backed into doing some
thing unethical by systems and practices of their own firms. The sources of ethical problems are
various and varied:

PROFESSIONAL ETHICS
• Due to globalization, as companies deal with other countries where cross cultural diversity
issues arise. Managers working in MNC'S find it very difficult to standardize ethical
standards as they do change as society change.
• Some times the decision makers do not follow what they must follow as they have conflict
in individual values v/s organizational goals.
• Individual moral standards affect whole organization decisions if they are morally strong,
ethical decisions would be the outcomes.
• If the decision makers/managers/policy makers who are greedy, look for short cut routes to
earn in earliest possible time, they have an upper hand on the moral values, therefore
ethically the decision process would be corrupt.
• Competitive pressure is also the main cause which forces decision makers to choose such
path where they have to kill their morals, values and move on unethical path just to cope
up with the competition.
• Poor decisions without deep thinking of implications.
• Ambiguous situations create problem which put the manager in dilemma as to which
decision they should make and follow
• Pressures of budget systems.
GUIDELINES FOR MANAGER FOR ETHICAL DECISION MAKING

1. Individual codes of conduct —
Here we mean by a man's personal code of ethics. What one finds moral, right and ethical.
He/she will choose that option.
2. Industry ethical codes —
The ethical climate in the industry provides inspirational guidelines and a list of do not's
like —
• Non deceptive ads.
• Fair dealing with customers
• Safety measures
• Quality products.
3. Professional managers who are more ethical do not go for any compromises.
4. Sometimes govt. rules and regulations bound people to follow all laws as well as ethics.
5. Corporate code of ethics —
Companies own rules, values and beliefs guide managers to follow ethics path in decision
making.
6. If the decision makers understand the following process they would definitely
follow ethics
Larger the organization ► Higher the ethical conduct
Long term survival Result in great public goodwill and high profits image
ethical decision making has become an important aspect of every organization. Managers by
learning a well defined ethical decision making process can make decisions ethically sound.
By judging the suitability of utilitarian criteria or right criteria or justice criteria, they
should show brilliant ethical reasoning. Though a nos. of problems are emerging as the
complexities in business are multiplying, yet some guidelines have been developed to help
out the decision makers to make good ethical decisions.

PROFESSIONAL ETHICS
Question : Ethical decision making with cross holder conflicts and competition.
Ethical decision making become more challenging and complex when it involves conflicting interest
of various stake holders. It is the responsibility of a business to balance the interest of all of them.
Different group of stakeholders have different priorities.
- Shareholders expect more profit and return.

- Employees require good working condition.
- Customers expect accurate and reliable products.
Conflicts arise when the needs of some stakeholders compromise the expectations of others.
Sometimes, business has to make some choices which the stakeholders may not like at all
organization.
Organization has objective of maximizing profits and enhance shareholder value. A company tries
to keep the labor cost under control. This may make the employees (another group of stakeholders)
unhappy. The most efficient companies successfully manage the self-interest and expectations of
their stakeholders. This situation indicates conflicts of interest of employees Vs. investors
To manufacture more units, the company may run factory beyond permissible limit of carbon
emission. This will help company to manufacture goods in large quantity. They increase profit
through it but fail in environment care. Carbon emission will adversely affect and create pollution
adversely affecting health of the people residing in the same area.
Although, there is no clear-cut guidelines available to deal with this kind of situation. Barry in 1986
suggested some of the ethical decision making.
1. Select or give preference to more important obligation between two or more conflicting
obligations.
2. Select an action of higher ideal when two or more ideas conflict.
3. Select an action that produce the greater good or less harm, when the effect are mixed.
This guidelines should be used in combination with various ethical and moral principles, code of
conduct applicable and various approaches like right, justice, virtue etc. The decision maker or
businessman should use his experience, moral judgment and customary practice followed in the
industry.
Kohlberg's Model of Cognitive Moral Development
Lowrence Cohlberg agreed with Jean Piaget's theory of moral development, but he wanted to
develop his ideals further.
He used Piaget's storytelling technique to tell people stories involving moral dilemmas. In each
case, he presented a choice to be considered.
According to Kohlberg's Theory of moral Development, there are 6 stages of moral development,
known as Kohlberg's stages of moral development.
Kohlberg identified 3 district levels of moral reasoning.
Pre-conventrol Punishment and disobedience orientation

PROFESSIONAL ETHICS
Instrumental – Relativist orientation
Conventional Good-boy-Nice girl
Law and order orientation
Post conventional Social contract orientation
universal ethical principles
Kohlberg experimented through Heinz Dilemma. He asked questions based on the case studies, to
various age group people. He was not only interested in knowing the answer but also the reasons or
logics behind them.
01. Level 1 : Pre-conventional Morality.

The pre-conventional stage is associated with the first two Kohlberg's stages of moral
development : obedience and self-interest.
At the pre-conventional level (around 9 years) we do not have a personal code of morality.
They are interested in securing their benefits. This is their idea of morality.
They do so by avoiding punishments and pleasing others to get benefits. There are no other
ethical concepts available to them.
Level 1 can be divided in 2 stages

Stage 1 obedience and punishment orientation.
The child or individual is good in order to avoids being punished because if a person is
punished, he must have done something wrong.
Stage 2 Individualism and Exchange

At this stage, children recognize that there is not just one right view. Different individuals
have different viewpoints.
02. Level 2 : Conventional Morality :

The conventional level morality is associated with conformity and Law and order. This is
the stage when children learn about rules and authority.
They learn that there are certain "conventions" that govern how they should / should not
behave. Further, they learn to obey them too. Here moral principles and legal principles are
not differentiated. Whatever is handed to them by authority is right and not following it is
certainly "bad". Some people stay at this stage of morality for whole of their lives, deriving
principles from social and religious authority figure and never thinking about morality for
ownself.
Level 2 is divided into 2 stages

Stage 3 Good interpersonal relationships.
The individual is good in order to be seen as being a good person by others. Therefore,
answer relates to approval of others.
Stage 4. Maintaining the social order.

PROFESSIONAL ETHICS
The individual becomes aware of the wider rules of society, so judgments concern obeying
the rules in order to uphold the law and to avoid guilt.
03. Level 3 : Post-conventional Morality
The post conventional level is associated with social contract orientation and universal
human ethics. By now, an individual has learnt that there is a difference between what is
right and what is wrong from a moral perspective and rules.
This can be further divided into 2 stages.
Stage : 5 Social contract and Individual Rights.

The child or individual becomes aware that while rules/Laws must exist for the good of the
greatest number, there are times when they will work against the interest of particular
individuals. Such issues are not always clear-cut.
Stage 6 : Universal Principles
People at this stage have developed their own set of moral guidelines which may or may not
fit the law, such principles apply to everyone. E.g. human rights, equality. The person will be
prepared to act to defend these principles even if it means to go against the society. But very
few people reach this stage.
Question : Factors affecting Ethical decision making.
Business ethics comprises principles and standards that guide individual and work-group behavior
in the field of business. Stakeholders determine these conventions and they may change over the
period of time. The most basic of these standards have been codified as laws and regulations.
Business Ethics go beyond legal issues.
Since individuals in the business may not embrace the same set of values, the conflicts may take
place. Such questionable decisions and actions may result in disputes, which need to be resolved
through negotiation or litigation. If the ethical standards are codified into meaningful policies, the
business people can be reduce the possibility of legal problems. Business decisions involve complex
discussions which may not had to clarity. Consistent and reliable relationships with all the
stakeholders must be maintained and shared.
The ethical decision making process can help individuals and business design strategies to prevent
misconduct.
Four of the important component of ethical decision are:
1. Individual factors
2. Organizational relationships
3. Opportunity
4. Issue Intensity
01. Individual factors

Ethical decision making process is affected by personal moral philosophy, stage of moral
development, motivation, experience and achievement, long term and short-team goals,

PROFESSIONAL ETHICS
personality and professionalism, knowledge, education demographics like gender, age,

geography etc.
Moral philosophies are those principles and rules that individuals apply in during what is
right and wrong. They can be classified as consequentialism, ethical formalism or justice.
Consequentialist philosophies consider a decision to be right or acceptable if it

accomplishes a desired result such as pleasure, knowledge, career growth, the realization of
self-interest or utility. It can be further divided into utilitarianism and egoism.
Ethical Formalism Focuses on the right of individuals and on the intentions associated with
a particular behavior rather than on its consequences.
Justice theory relates to evaluations of fairness, or the disposition to deal with perceived
injustice to others.
McClelland identified three different social needs that may motivate an individual in an
ethical decision making. Power, affiliation and achievement.
In addition to above factors age, gender, experience socialization etc. also have their
influence on ethical decision making. Level of education and professionalism are two
individual elements affecting ethical decisions. The decision making skill will be different
from the person's education as a professional person is bound by the code of conduct of the
business unit.
02. Organizational factor:

The culture of the organization, as well as superiors, peers and subordinates, can have a
significant impact on ethical decision making. Organizational or corporate culture can be
defined as a set of values, beliefs, goals, norms, and rituals shared by members or employees
of an organization. Firm's overall culture establishes ideals that guide a wide range of
behavior for members of the organization, white its ethical climate focuses specifically on
issues of right or wrong. Strong work place ethics create ethical culture and pressuring
employees to follow it, while weak work place ethics culture to follow it, while weak work
place ethics.
Other important factors are superiors, peers and subordinates who influence the ethical
decision-making process.
Interaction between corporate culture and executive leadership helps to determine the
ethical value system.
The more a person is exposed to unethical activity by others, the more likely it is that he will
behave unethically. Superiors and co-workers can be create organizational pressure in
creating and solving ethical issue:
Reward system in the organization also influence ethical decision making because generally
people tend to do what they are rewarded for.
Authority also influence ethical decision making. As they do what they are told to do or
what they are being told to do.

PROFESSIONAL ETHICS
03. Opportunity
If an individual takes advantage of an opportunity to act unethically and escapes
punishment or gains a reward, that person may repeat such acts when circumstances
favour them.
04. Issue Intensity

Ethical intensity is the degree of importance of an issue for an individual and group. There
are six factors involved in it; harm, consensus of wrong, probability of harm speed of result,
proximity to victim, concentration of effect.
Question : What is the relation of personal values and Ethical decision making?
In an ideal world, ethics should play the ultimate role when making a decision. If ethics are
principles which guides one's behavior then, ideally, all the decisions should be made entirely based
on ethics. Unfortunately, such is not always the case.
A few problems arise when one tries to make an ethical decision, especially as a leader.
1. Ethics may mean different things to different people for example, somebody's ethics are
based on religious and spiritual beliefs, while others ethics are based on Law and personal
understanding. But still, there are some ideals or behaviors where all agree upon like
stealing from someone or murder someone is wrong.
2. Additionally, there are times when it might be easier for a leader to make an unethical
decision to get an immediate gain or complete the wants of an organization. But, the true
character of leader is tested when they are confronted with such a decision. Because such
decisions are not easy to take. Recognizing that not all decisions are ethical, one's moral
principles act as guide for such behavior.
Therefore, ethics do (and should) play a major in decision making.
Communication is the key in relation to personal ethics. Personal ethics should be communicated
through one's actions, ethical beliefs should be communicated through decision making. Personal
values may conflict with ethical decision making if those personal values are different than the
organizational norms of the business or institution. Before a leader makes an ethical decision, they
should make sure that the decision is based on the organizational norm rather than their own value
system. What informally regulates the inner workings of the business community is a set of
principles that dictate behavior.
The book "Making Ethical Decisions" provides us six pillars of character.
1. Trustworthiness
2. Respect
3. Responsibility
4. Fairness
5. Caring
6. Belongingness
01. Trustworthiness:
It includes a variety of behavirour : honesty, integrity, reliability and loyalty.

PROFESSIONAL ETHICS
1.1 Honesty : It is the fundamental ethical value, it is associated with people of honour,
we admire honest people. It can be overtly seen in honesty in communication and
honesty in conduct.
1.1.1 Honesty in communication means to convey the trust as best as we know it

and avoid misleading or deceit. It includes truthfulness, sincerity or non-
deception and frankness :
1.1.2 Honesty in conduct prohibits stealing, cheating, fraud and playing tricks.
Such acts are considered to be violation of trust and fairness.
1.2 Integrity : Integrity means sameness in the behaviour when an ethical person act at
work, at home, in public or alone. He takes time for self-reflection so that the events,
crises, and necessities of the day do not determine the course of their moral life,
they stay in control. Integrity may be adversely affected by self-interest, self-
protection, self-deception and self-righteousness.
1.3 Reliability : The ethical decision making and promise-keeping need fulfillment of
our commitments. Further, it is important to avoid bad-faith excuses, avoid unwise
commitments, avoid unclear commitments. These mean that one should not try to
rationalize non-compliance for escaping commitments. One should weigh carefully
what they are willing and likely to take up before they make any commitment.
Further, the other person should understand what they have promised and
committed to do.
1.4 Loyalty : Loyalty is about promoting and protecting the interest of people,
organization and affiliation. One should prioritize loyalties as it is often difficult ot
address them all simultaneously. It also requires us to keep secretes and
information learned in confidence. Further, the employees and public servants have
an additional responsibility of making all professional decisions on merit, and not on
personal interest. Here the goal is to maintain the trust of the public.
02. Respect :
Respecting is honouring the essential worth and dignity of all people, including oneself we
are morally obligated to treat everyone with respect regardless of who they are and what
they have done. We have the responsibility to e the best we can be in all situations, even
when dealing with unpleasant people. It focuses on courtesy and decency.
A respectful person treats others with consideration conforming to accepted notions of

taste and propriety and does not resort to intimidation (frightening), coercion (compulsion)
and violence except in extraordinary and limited situations to teach discipline, maintain
order and achieve social justice.
03. Responsibility:
Being responsible means being in charge of our work we do, the duty, we have and the
choices we make. It also means that we recognize what we do and what we don't do.
Responsibility rests of the following pillar:
Accountability, pursuit of excellence, diligence, perseverance continuous improvement and

self-restraint.

PROFESSIONAL ETHICS
04. Fairness:
Fairness refers to a range of morally justifiable outcomes rather than discovery of one fair
answer open and unbiased process done with impartiality and equity leads to fairness.
Decisions should be unbiased with favoritism and prejudice. It is important to take
advantage of weakness, and ignorance of others.
05. Caring :
Caring is the soul of ethics. Ethics is ultimately about our responsibilities towards other
people one should consciously cause no more harm than is reasonably necessary.
06. Belongingness:
The concept of belongingness includes how we ought to behave as a part of a community.
The good citizen knows the laws and obeys them. Citizens do more than their fair to make
society work, now and for future generation. They conserve resources, recycle them, and
controgute to community.
QUESTIONS
1. "People are generally moral agents in an ethical organization". Explain.

2. Discuss the ethical decision making process with suitable examples.
3. Comment on the ethical issues arising out of day to day of business decisions.
4. Ethical problems do occur in businesses, explain reasons, sources and some guidelines to
mangers to make ethical decisions.

PROFESSIONAL ETHICS
Unit - 5
Q.1 What is moral philosophy and what are the theories associated with it ?
Ans. Moral philosophy is the branch of philosophy that contemplates what is right and wrong. It
explores the nature of morality and examines how people should live their lives in relation
to others. It is a person's principles and values that define what is moral and immoral.
Making decision requires a person to evaluate the "rightness" or morality, of choices in
terms of his own principles and value.
There is no single moral philosophy that everyone accepts. Individual moral philosophies
are often used to justify decisions and explain actions. But it is not possible to apply
individual moral philosophies in complex corporate culture. While working in company or a
team, all persons are not considering our own philosophy. Individuals learn decision
making approaches / philosophies through their cultural and social development. The
following are the theories associated with moral philosophies :
(1) Economic value orientation

(2) Idealism
(3) Realism
(1) Economic value Orientation : (Monetary value)

It is associated with values that can be quantified in monetary terms. According to this
theory, people may justify their action as ethical if an act produces more monetary value
than its effort.
(2) Idealism : (what could be)

It is a moral philosophy that places value on ideals as products of the mind. It refers to the
efforts required to account for all objects in nature and experience and to assign to them a
higher order existence. Research shows positive correlation between idealistic thinking and
ethical decision making.
(3) Realism : (what actually is)

It is a view that an external word exists independent of our perception of it. Realists work
under the assumption that human is not inherently benevolent and kind. Human is
inherently self-centered and competitive. Each person is always guided by his own self-
interest. Research shows a negative co-relation between realistic thinking and ethical
decision making.
Q.2 Which are the moral philosophies ?
Ans. Several moral (Ethical) theories / philosophies are discussed here.

(1) Consequentialism:
Consequentialism is an ethical theory that judges whether or not something is right
by what its consequences are. For example telling a lie is wrong but if telling a lie

PROFESSIONAL ETHICS
could help to save a person's life, as per the consequentialism theory it is right thing
to do.
Two forms of consequentialism are :
 utilitarianism : It judges consequences by a "greatest good for the greatest

number" standard.
 Hedonism : It says "something is good" if the consequences produces pleasure
or avoids pain.
But consequentialism is sometimes criticized because it can be difficult or even

impossible to know what the result of an action will be. In certain situations,
consequentialism can lead to decisions that are objectionable.
(2) Utilitarianism:
This is the end-oriented approach, developed by John Stuart Mill. It is an ethical
theory that determines right from wrong by focusing on outcome. It is a form of
consequentialism. It holds that the greatest ethical choice is the one that will
produce the greatest good for the greatest number. It is the moral framework that
can be used to justify military force or war. It is also the most approach to moral
reasoning used in business because of the way in which it accounts for costs and
benefits.
There are two types of utilitarianism.

(1) Act utilitarianism
(2) Rule utilitarianism
(1) Act utilitarianism: Precisely to the definition of utilitarianism – a person

performs the acts that benefit the most people, regardless of personal
feelings or the societal constraints such as laws.
(2) Rule utilitarianism: takes into account the law and is concerned with
fairness
(3) Hedonism:
Hedonism is a belief that pleasure, or absence of pain, is the most important
principle in determining the morality of a potential course of action. Hedonism is a
type of consequentialism having several forms.
(1) Normative Hedonism : It is the idea that pleasure should be people's

primary motivation.
(2) Motivational Hedonism : Only pleasure and pain cause people to do what
they do.

PROFESSIONAL ETHICS
(3) Egotistical Hedonism : It needs a person to consider only his or her pleasure
in making choices.
(4) Altruistic Hedonism : It says that the creation of pleasure for all people is the
best way to measure if an action is ethical.
Regardless of the type of hedonism, critics do not approve of it as a guide for

morality because hedonism ignores all other values, such as freedom or fairness,
equality.
(4) Deontology:
It is also known as duty-oriented approach. It is an ethical theory that uses rules to
distinguish right from wrong. It is often associated with the German philosopher
Immanuel Kant.
He believed that ethical actions follow universal moral Laws such as "Do not Lie,
Don't steal, Don't cheat" Deontology is simple to apply. It states that people should
follow their obligations and duties when engaged in decision making as it is
considered ethically correct. Being right or wrong depends on formal moral criteria
and not on the basis of consequences. This tends to fit well with our natural
intuition about what is or is not ethical .Deontology does not require weighing the
costs and benefits of a situation. This avoids subjectivity and uncertainty because
one has to follow the rules and regulations only. Despite having strengths, rigidly
following deontology can produce results that many people find unacceptable.
(5) Relativism:
Moral relativism is the idea the there is no universal or absolute set of moral
principles. It is a version of morality that advocates "to each her own", and those
who follow it say, "who am I to judge?". Relativism is a belief that something might
be right for you but wrong for me. Basically, it means that each person becomes his
/ her own judge, deciding what is right and good.
Moral relativism can be understood in several ways:
Descriptive moral relativism, which is also known as cultural relativism, which says
a general truth that moral standards are culturally defined. There may be a few
values which seem universal like honesty and respect but many differences are
found across culture like hitting children or polygamy.
Meta-ethical moral relativism :- This states that there are no objective grounds for
preferring the moral values of one culture over another.

PROFESSIONAL ETHICS
Societies make moral choices based on their unique beliefs, customs and practices.
People tend to believe that the right moral values are the values that exist in their
own culture.
Normative Moral relativism : It is the idea that all societies should accept each
other's differing moral values given that there are no universal moral principles.
However, most philosophes disagree. It also means that it allows moral relativism as
"when in Rome, do as the Romans do".
(6) Virtue Ethics:

Virtue ethics is a philosophy developed by Aristotle and other ancient Greeks. It is a
quest to understand and live a life of a moral character.
David Jordan says that wisdom in known what to do and virtue is doing it.
Virtues are developed through learning and practice. Ancient philosopher Aristotle
suggested, a person can improve his character by practicing self-discipline, while a
good character can be corrupted by repeated self-indulgence our ability to be fair,
courageous and compassionate develops through training and practice. A person
can cultivate his habits to be honest, brave, jsut, generous and thereby become
honorable and moral.
Virtues are habits. Once they are acquired, they become characteristic of a person.
He will be naturally disposed to act in ways that are consistent with moral
principles. The virtuous person is the ethical person. According to Aristotle, by
improving virtuous habits, people will likely make the right choice when faced with
ethical challenges. Virtue ethics help us to understand what it means to be a
virtuous human being. It gives us a guide for living life for resolving ethical
dilemmas without giving us specific rules.
The weakness of virtues ethics is it does not consider a person's change in moral
character. Different cultures may value certain virtues more than others, but
generally virtues refer to such traits as honesty, kindness, patience, civility,
compassion, self-reliance, loyalty, fairness, courage, tolerance, conscientiousness,
generosity, temperance, self-control, prudence.
Aristotle says that the best virtues lie in the balance. Excess of deficiency in the main
character are considered as vices.
Deficiency Balance Excess

Cowardice Courage rashness
miserliness Generosity Extravagance
sloth ambition greed
secrecy Honesty loquacity
indecisiveness self-control impulsiveness

PROFESSIONAL ETHICS
(7) Justice:
Prof. John Rawl developed theory of distributive justice. Justice for many people
refers to fairness, but it also means different thing to different people. This theory
damands that decision makers should be guided by fairness, equity as well as
impartiality. They should be arranged in such a way that a they give advantage to
everyone. All can achieve the positions and offices without any injustice.
Various types of justice are as mentioned below:
(1) Distributive justice : It refers to the equitable allocation of assets of society.

(2) Environmental justice : It is the fair treatment of all people with regard to
environmental burdens and benefits.
(3) Restorative / corrective justice : It seeks to make whole those who have
suffered unfairly.
(4) Retributive Justice : It seeks to punish wrongdoers objectively and
proportionately.
(5) Procedural justice : It refers to implementing legal decisions in accordance
with fair and unbiased processes.
Q.3 Applying moral philosophy (Theory) to Ethical decision:

Ans. So many ethical theories about right or wrong make it difficult to decide which theory to
apply for decision making in business ethical issues. Most ethics experts agree that one
theory cannot be applied to every business, even every area in the same business. In fact, it
defers from case to case. Each ethical theory has its own strengths and weakness. No theory
can substitute for a commitment to ethical values and the use of moral imagination. Some
theories fir obviously in certain situations. E.g. Kantian theory demands that one respects
people as independent agents. This works well when we deal with human resource issues.
Utilitarianism which promotes the greatest good for everyone involved, works well in
determining how to treat the environment. Virtue ethical theories are ideal for discussing
the character of an ethical leader or ethical employee.
Q.4 Cognitive Development

Ans. Moral development focuses on emergence, change, and understanding of morality from
infancy to adulthood. Morality develops across a lifetime and is influenced by an
individual's experiences and their behavior when faced with moral issues through different
period's physical and cognitive development. Jean Piaget's theory of cognitive development
suggests that children more through four different stages of mental development. His
theory focuses not only on understanding how children acquire knowledge but also on
understanding the nature of intelligence. Piaget believed that children take an active role in
the learning process, acting much like little scientists as they perform experiments, make
observations and learn about the world. As kids interact with the world around them, they
continually add new knowledge, build upon existing knowledge, and adapt previously held

PROFESSIONAL ETHICS
ideas to accommodate new information. Piaget's stage theory describes the cognitive
development of children. It involves changes in cognitive process and abilities. He believed
that early development involves processes based upon actions and later progresses to
changes in mental operations.
(1) Stage-1 Sensorimotor (Age Birth to 2 years)

This is the period of dramatic growth and learning. While interacting with their
environment, they continually make new discoveries about how the world works.
Children not only learn to perform physical actions like crawling and walking, but
also learn language from the people with whom they interact. Piaget broke this
stage into a number of different sub-stages. It is during the final part of the sensory
motor stage that early representational thoughts emerge. By learning that the
objects are separate and district entities and they have an existence of their own
outside of individual perception, children are able to learn the names and woods of
objects.
(2) Stage-2 The preoperational Stage : (Age 2 to 7 years).

The foundations of language development may have been laid during the previous
stage, but it is the emergence of language that is one of the major hallmarks of the
preoperational stage of development. Here, kids learn through pretend play, but still
struggle with logic and taking the point of view of other people. They also find it
difficult of understand the ideal of constancy. Here children begin to think
symbolically and learn to use words and pictures to represent objects. They tend to
be egocentric and do not understand the ideas of others. They start being better in
language and thinking.
(3) Stage-3 The Concrete operational stage (7 to 11 years)

Here children are very concrete and literal in their thinking, they become much
more skillful at using logic. The egocentrism begins to fade out and they start
thinking about how other people might view a situation. The start understanding
that their thoughts are unique to them and everybody need not share their thoughts,
feelings and opinions.
(4) Stage-4 The formal operational age. (11 years onwards)

The final stage of Piaget's theory increase in logic, the ability to use deductive
reasoning and an understanding of abstract ideal. They become capable of seeing
multiple potential solutions to problems and think more scientifically about the
world aroudn them. Piaget suggested that there is a qualitative change in how
children think as they gradually process through these four stages.
Q.5 Types of unethical practices.
Ans. White collar Crime :

PROFESSIONAL ETHICS
White collar crime is also known as corporate crime. It refers to financially motivated non-
violent crime committed by business and government professionals. It is committed by,
who, often by virtue of their occupations, exploit social, economic or technological power
for personal or corporate gain.
It was first defined by the sociologist Edwin Sutherland as "a crime committed by a
professional in his or her capacity in the professional world against a large corporation,
agency or other professional entity".
The motivation for these crimes is to obtain or avoid losing money, property or services or
to secure a personal or business advantage.
The most common white collar crimes are various types of fraud, embezzlement, tax
evasion and money laundering. They also include ponzi scheme and securities fraud such as
insurance trading, insurance fraud and tax evasion.
Characteristic of white collar crime:

(1) Most white collar crimes involves the use of deceit, concealment, rather than the
application of force or violence, for the illegitimate gain of money, property or
services.
(2) They typically involve abuse a position of trust and power.
(3) While collar crime is often more difficult to detect than other types of crimes
because losses may not be apparently to victims but also because the crimes can
involve sophisticated schemes and concertos
Types of White collar crime:
(1) Financial Fraud:

Fraud makes up the vast majority of the white collar crimes. It is the act of deceiving
an individual for monetary advantage. Manipulation of negotiable instruments like
cheque-bouncing, securities, bank deposits etc. by fraud committed with bank.
(2) Securities Fraud:

It is carried out in many different forms but one common type is “insider trading”.
Here, someone with inside information about a company or investment trades on
that information in violation of a duty or obligation. In USA, it is also known as “self-
dealing”.
Another type of securities fraud takes place when someone seeks investment in a
company by knowingly misstating the company’s prospects, health or finances. By
attracting an investor to put up money based on false or misleading information, the
company and individuals within it commit securities fraud. False or misleading

PROFESSIONAL ETHICS
statements in public reports from publicly traded companies also can constitute
securities fraud.
(3) Embezzlement:
Embezzlement is the act of inappropriately taking money from an individual to who
you owe something.
(4) Tax Evasion:

Tax evasion is when an individual attempts to bypass paying taxes that they are
normally obligated to pay.
It can range from simply filing tax forms with false information to illegally
transferring property sl as to avoid tax obligations.
(5) Money Laundering:

Money laundering is the criminal act of filtering illegally obtained money through a
series of transaction designed to make the money appear legitimate. In India, money
laundering is known as Hawala transactions.
(6) Other white collar crimes:

6.1 Obstruction of justice, false statements, and witness tampering.
6.2 Bribery and extortion, means of influencing persons in power in public or

private institutions.
Bribery involves the giving of something & extortion is threat made to

obtain a benefit.
6.3 Computer crimes: a mean by which white collar criminals exploit

technology. Credit card fraud, identity theft, illegally accessing and
tempering with other user’s files.
Impact of white collar crimes:

Although white collar crime has traditionally been viewed as less serious than other types
of crime, by the end of the 20th century, there was a growing recognition of the significant
harm it causes.
The cost of the corporate crime to society is many times than that of organized crime or the
common street crime. It cannot be measured in monetary damage alone because corporate
crimes can also pose health risk, compromise safety, cause injuries and fatalities, bring
harm to arldlife and the environment and bad to org. failures and associated job losses.

PROFESSIONAL ETHICS
Unit - 6
Necessity of Human Values
 Human values are necessity in today’s society and business world.

 Human values are the features that guide element when one interacts with other human.
 They have many positive characters that create bonds of humanity between people and
thus have value for all human beings. They are strong positive feelings for the human
essence of the other. These human value have the effect of bonding, comforting, reassuring
and procuring serenity.
Types of Human Values
(1) Truth
 Truth is eternal and unchanging.
 Being truthful means being completely honest in what we say, feel and do with others
and ourselves.
 An honest life is happier, simpler and easier, whereas being untruthful erodes their
integrity and leads to conflict.
 Dishonesty is often caused by a fear of the consequences of openly acknowledging the
truth.
 If employees do something wrong, they know that by being truthful, they will have to
face a telling off, anger and disapproval, so the immediate temptation is to evade the
truth.
 In this dilemma, manager needs to help them to be honest, by extending patience and
understanding to them. Manager can show them that misdeeds can be forgiven but
dishonesty is far more damaging.
 Honest and openness creates atmosphere of healthy communication and trust. In turn,
these attributes are the foundations of good relationships, which make a healthy and
ethical organization.
(2) Love
 Love, the supreme value, is more than attraction and fondness or romantic attachment.
It is pure, unselfish giving that is unconditional.
 Loving relationships in an organization create an atmosphere in which employees feel
cared for, secure and valued.
 Love can be expressed as kindness, friendship, understanding, acceptance and
sincerity.
 It gives confidence to employee and they feel as family member of the organization.
(3) Peace
 Peace is a state of being quiet, calm and free from emotional disturbance.
 It is very different from the frustrated state of boredom or restlessness.

PROFESSIONAL ETHICS
 Negative emotions, such as anger and frustration, which manager sometimes hold
inside create conflict in the organization and employees.
 Peace cultivates the virtue of patience, gentleness, self-control and thoughtfulness.
 To create peaceful atmosphere, manager must appreciate positive elements of
employees.
(4) Right Conduct
 Good behavior is essential for a harmonious life, whether at home or at organization.

 Managers are the first example from whom employees learn and they are very quick in
learning from behavior of his superior. Right conducts help managers to work
constructively with those around us.
 Each act of kindness and consideration, which employees and managers perform,
builds their sense of self-esteem and self-confidence.
(5) Non-Violence
 If managers are sensitive to life in all its forms, then they will learn to take care of
everything around them.
 The absence of this appreciation leads to many of the most difficult problems faced in
organization. Violence, whether in the form of bullying, racism or in gangs, is rooted in
prejudice, ignorance and fear.
 Manager must develop feelings of brotherhood or sisterhood towards all people, breaks
down barriers and allows him to see all those around us as human beings, deserving of
love, appreciation and respect.
 Non-violence as a concept extends to all life around us, including a commitment to
protecting our environment from harm through pollution and using the earth’s
resources prudently.
THE LAW OF KARMA
Karma is the Sanskrit word for action.
 It is equivalent to Newton's law of 'every action must have a reaction'.

 When we think speak or act, we initiate a force that will react accordingly. This returning
force maybe modified, changed or suspended, but most people will not be able eradicate it.
 This law of cause and effect is not punishment, but is wholly for the sake of education or
learning.
 A person may not escape the consequences of his actions, but he will suffer only if he
himself has made the conditions ripe for his suffering. Ignorance of the law is no excuse
whether the laws are man-made or universal.
 To stop being afraid and to start being empowered in the worlds of karma and
reincarnation, here is what you need to know about karmic laws.

PROFESSIONAL ETHICS
(1) The Great Law
 "As you sow, so shall you reap." This is also known as the "Law of Cause and Effect".
 Whatever we put out in the universe is what comes back to us.
 If what we want is happiness, peace, love, friendship – Then we should be happy,
peaceful, loving and a true friend.
(2) The Law of Creation
 Life doesnot just Happen, it requires our participation. You must be an active
participant in life; you cannot simply glide by and expect things to fall into place.
 We are one with the universe, both inside and out.
 Whatever surrounds us, gives us clues to our inner state.
 Be yourself, and surround yourself with what you want to have present in your Life.
(3) The Law of Humanity
 What you refuse to accept, will continue for you.

 If what we see is an enemy, or someone what a character trait that we find to be
negative, then we ourselves are not focused on a higher level of existence.
(4) The Law of Growth
 "Wherever you go, there you are".

 For us a GROW in spirit, it is we who must change – and not the people, places or things
around us.
 The only given we have in our lives is OURSELVES and that is the only factor we have
control over.
 When we change who and what we are within our heart our life follows suit and
changes too.
(5) The Law of Responsibility
 Whenever there is something wrong in my life, there is something wrong in me.

 A universal truth is that we mirror what is around us, and what is around us mirrors
what and who we are.
 We must take responsibility what is in our life.
(6) The Law of Connection
 Even if something we do seems inconsequential, it is very important that it gets done

as everything in the Universe is connected.
 Each step leads to the next step, and so forth and so on
 Someone must do the initial work to get a job done.

PROFESSIONAL ETHICS
 Neither the first step nor the last are of greater significance, as they were both needed
to accomplish the task.
 Past-Present-Future they are all connected
(7) The Law of Focus
 You cannot think of two things at the same time.

 When our focus is on spiritual values, it is impossible for us to have lower thoughts
such as greed or anger.
(8) The Law of Giving and Hospitally
 If you believe something to be true, then sometime in your life you will be called upon
to demonstrate that particular truth.
 Here is where we put what we CLAIM that we have learned, into actual PRACTICE.
(9) The Law of Here and Now
 Looking backward to examine what was, prevents us from being totally in the HERE
AND NOW.
 Old thoughts, old patterns of behaviour, old dreams...
 It prevents us from having new ones.
(10) The Law of Change
 History repeats itself until we learn the lessons that we need to change our path.
(11) The Law of Patience and Reward
 All Rewards require initial toil.

 Rewards of lasting value require patient and persistent toil.
 True joy follows doing what we are supposed to be doing, and waiting for the reward to
come in on its own time.
(12) The Law of Significance and Inspiration
 You get back from something whatever YOU have put into it.
 The true value of something is a direct result of the energy and intent that is put into it.
 Every personal contribution is also a contribution to the whole.
 Lack luster contributions have no impact on the whole, nor do they work to diminish it.
 Loving contributions bring life to, and inspire, the whole.
QUALITY OF WORKING LIFE (QWL)
 Quality of work life involves three major parts:

PROFESSIONAL ETHICS
 1. Occupational health care: Safe work environment provides the basis for people to
enjoy his work. The work should not pose health hazards for the employees.
 2. Suitable working time: Companies should observe t he number of working hours
and the standard limits on overtime, time of vacation and taking free days
before national holidays.
 3. Appropriate salary: The employee and the employer agree upon appropriate
salary. The Government establishes the rate of minimum salary, the employer
should not pay less than that to the employee. Work represents a role which a
person has designated to himself. On the one hand, work earns one's living for the
family, on the other hand, it is a self-realization that provides enjoyment and
satisfaction.
 Work-Life Quality - defined, as the balance between an employee's work demands
and outside interests or pressures -is a long-standing but ever-evolving area of
corporate social responsibility.
 Some organizations view QWL as important, but do not formally link it to their
strategic or business plans.
 Nature and Scope of Quality of Work Life:
 Quality of work life is the quality of relationship between employees and total
working environment.
 A Great Place to work is where "You Trust the people you work for, have pride in
what you do, and enjoy the people you work with."
 Quality of work life represents concern for human dimensions of work and relates to
job satisfaction and organizational development.
 Ethics of Vivekananda
 Ethics, according to Vivekananda, is nothing but a code of conduct that helps a man to
be a good citizen of the world.
 The world needs good citizens for the betterment of the people.
 Without good citizens, no system, social or practical can functions in right ways.
 All the systems are developed to offer better conditions for people who want to
manifest their inner qualities to get the chance to realize their real nature.
 According to Swamiji, -The basis of all systems social or political rests upon the
goodness of men.
 No nation is great or good because parliament enacts this or that , but because its
men are great and good, people often work for the same ends but fail to recognize
the fact.
 One must admit that law, government, politics are phases not final in any way.
 There is a goal beyond them where law is not needed.

 All great Masters teach t he same thing Christ saw that the basis is not law, that
morality and purity are the only strength.From this excerpt, it is followed that ethics

PROFESSIONAL ETHICS
or morality has something more than laws of a country that governs the people.We
feel the necessity of laws, government, or politics for better governance, for the
development of the society. But all these facts have some limitations. They can act
only as means, not as ends.
 End is something more, that lies beyond these facts.
 They can help us to reach the goal to some extent.
 Ethics is also a mean to reach the goal, but it lies beyond laws.
 The strength of morality is greater than those facts.
 Laws, politics can force a man to act accordingly
 But they have no power to help a human being to manifest his/ her perfection that
resides in the core of their hearts.
 There is infinite power in our heart, but we are not aware of it.
 That is why we are exercising laws to keep the society intact.
 Laws are nothing but bondage. We have to overcome t his bondage.
 So, we have to follow the codes of ethics.
 Ethics will help us finally to reach the goal.
 Ethics of Gandhiji
 Mahatma Gandhi is a great ethical values philosopher. Here we will discuss some
ethics suggested by them.
Non-Violence
 Mahatma Gandhi expresses that non-violence is free from physical and

psychological violence in living.
 Violence is hurting killing damaging physical and psychological sense.
 Non-violence develops vegetarianism and respect for all life.
 Non-violence prevents wars murders, exploitations, inequalities and injustices in the
world.
 Non-violence is a discovery of truth. Non-violence is the means to truth.
Truth
 Truth is the law of our being. Truth is God. Truth is which is.
 Truth and non-violence are as old as the hills. Truth is a virtue. Truth is in fact
self- revealing, but that we have become blind on account of our ignorance.
 Mahatma Gandhi explicitly mentions the six deadly enemies which cause prejudice,
malice and ill-will to arise, on account of which the person is unable to see or feel the
truth.
 These deadly enemies are desire, anger, greed, attachment, pride and jealousy
 Therefore, in order to practice truth one must constantly endeavor to oneself from
these evils, one must cultivate moral purity and courage and must not allow these
enemies to cloud his vision.

PROFESSIONAL ETHICS
Non-stealing
 Non-stealing 1s not to take by thought , word and action anything to which one 1s
not entitled.
 Non-stealing is a good moral quality.
 Non-possessiveness
 Non-possessiveness is rejection by thought, word and deed. Non-possessiveness is
restricted to satisfaction.
 Non-possessiveness is non-acceptance.
 Mahatma Gandhi feels that the tendency to possess things is the cause of all evils.
 Therefore, one must cultivate the discipline of living with what one has.
Character
 Mahat
 Character comes from within.
 Character is the key to success.
 A man of character will make himself worthy of any position he is given.
 Character, not brains, will count at the crucial moment.
 Character is any day more eloquent than speech.
 Character must be above suspicion and truthful and self-controlled.
 Life Moral Teachings
 True disarmament cannot come unless the nations of the world cease to exploit one
another.
 Morality is finding out t he true path and fearlessly following it.
Ethics of Aurobindo
Man possibly seeks for God in all the higher powers of his life.He sets out to arrive at his highest
and most perfect self and the moment he touches upon it, the self in him appears to be one with
some great soul that is God.According to Sri Aurobindo to grow into harmony with its eternal nat
ure of light , love strength and purity is t he aim of ethics.Ethics, Sri Aurobindo says, is one of the
means by which we arrive at the knowledge of t he workings of God through nature and through
life.Ethics must eventually perceive that the law of good which it seeks is t he law of God and
depends on the being and nature of t he Master of the law.Ethics deals only with the desire soul and
the active, outward, dynamic part of our being. Its field is confined to character and action.It
prohibits and exhibits certain actions, desires and impulses.It also inculcates certain qualities in the
act, such as truthfulness, love, charity etc.When it has got this done and assured a base of virt ue, its
work is finished.Different t heories of ethics such as hedonistic theory, sociological theory etc. have
suffered from the defect of idea.
These theories have been built upon the truths of some one aspect of man's being, on the truth of
the individual in isolation from society and vice-versa.
But Sri Aurobindo points out, "The ethical being escapes from all these formulas, it is a law to itself
and finds its principle in its own eternal nature which is not in its essential character a growth of
evolving mind, even though it may seem to be that in its eart hly history, but a light from t he ideal, a

PROFESSIONAL ETHICS
reflect ion in man of t he Divine.Sri Aurobindo says that our ethical impulses begin in the infra
rational and take their rise from the subconscious.They arise as an instinct of obedience to an
understood law.At first man obeys the law without any question.
He believes that these are the laws created by higher powers than himself and his race which are to
be endured and cannot be violated.
Later on, reason labors to use the ethical impulses intelligently and t urns the instincts to et hical
ideas.
It corrects the crude and erring misprisions of man's ethical instincts, shows the relations of his
clashing moral ideas, tries to compromise between their conflicting claims and arrange system of
ethical action.
And all t his, says Sri Aurobindo, is a necessary stage of our advance.The high fulfilment of ethics
comes when t he being of man attains the level of divine nature.At this level, it is not his actions that
standardize his nature, but his nature that gives value to his actions. He is no longer laboriously virtuous
or artificially moral, but naturally divine.That is why Sri Aurobindo says, 'Rising from the infra
rational beginnings t hrough its intermediate dependence on the reason to a supranational
consummation, the ethical is like the aesthetic and the religious being of man a seeking after the
eternal. " This view takes account of the whole man, as a progressing, developing being seeking the
fulfilment of his tendencies.Sri Aurobindo puts emphasis on the necessity of spiritual
transformation.He says that the supreme thing in us is the spirit, "the wide ground upon which a
divine life of the human being can be with security founded." This spirit is not the intellect or will.It
is higher than reason.It is concealed behind the coatings of our nature.It is the secret seed of
divinity.
The spiritual change must be accomplished first in the individual and in a great number of
individuals before it can lay any effective hold upon t he community.
Therefore, Sri Aurobindo says, two conditions are to be satisfied in order that the spiritual change
may be effected.
First, there must be the individual and the individuals who are able to see, to develop, to recreate
themselves in the image of the Spirit and to communicate both their idea and power to the mass.
Secondly, there must be at the same time a mass, a society which is capable of receiving and
effectively assimilating ready to follow and arrive at an image of the Spirit.
According to Sri Aurobindo, a spiritual human society would try to realize three essential truths of
existence, viz. God, Freedom and Unity.
When man is able to see God and possess him, then he will know real freedom and arrive at real
unity.
The aim of a spiritual age of mankind will be able to diminish as far as possible the element of external
compulsion in human life by awakening the inner divine compulsion of the spirit.
In a spiritualized society, the divine whom an individual sees in himself, he sees equally in all others
and as the same Spirit in all.
Not only to see and find the Divine in oneself, but to see and find the Divine in all, not only to seek
one's own individual liberation or perfection but to seek liberation or perfection of others is the
complete law of the spiritual being.
Ethics of Tagore

PROFESSIONAL ETHICS
Rabindranath Tagore had vast knowledge and there was perhaps no aspect of Indian life which
escaped his searching eyes.He was a novelist, dramatist, educationist, penetrating social reformer
and politician and gave his views about all that which concerned India. Some of his significant
ideas are as under:
Spiritual Humanism
The center of Tagore's philosophy was man of god.Even his concept of God was influenced by
the humanism inherent in his outlook.The supreme reality thus according to Tagore, essentially
human and could be realized only through love of man.Love of God was thus translated into love
of human.Tagore in fact sought the origin of spiritual aspirations and the concept of god in the
spirit of the unity expressed by the primitive man.In a discussion with Einstein, Tagore said, if
there is any truth absolutely unrelated to humanity then for us it is absolutely non-
existing.Tagore thus firmly believed that truth could be realized only in human society.
His political ideas
Politically Tagore believed that each nation and individual must have certain rights and through
those rights he should be in a position to 'his personality.At the same time he stressed people
should have power and strength enough to realize their rights as without that strength it was
impossible to retain rights even if extended by the rulers. He also stood for the individuals
saying that States existed for the individual and its activities should aim at giving maximum
freedom for attaining that liberty. He couldn't reconcile himself with the then prevailing trend
of British rule which was impersonal in character and which denied freedom, spiritual,
economic and political, to the vast majority of the Indians.According to him freedom could be
possible by adopting the policy of decentralization of authority and giving, more powers to local
self-government institutes.
His social ideas
Socially, Tagore believed that Indian society has very much degenerated mostly because of the
policy of our social rulers who didn't care to preserve our social institutions and allowed them to
degenerate.
He felt that social and political institutions should go side by side.He had faith in social solidarity
and belief in ancient Indian culture and civilization. According to him political life was only a
specialized aspect of social life and both could not be separated from each other. He quoted
from Indian history that India always represented the synthesis of vanous philosophies and
was very much broad-based.Therefore he believed that constructive efforts should be made to
revive our ancient Indian culture.
His idea about education
He was educationally a revolutionary and strongly believed that there should be a system of
education suited to India. It should be the system in which the cultures of east and the west
should unite and where there should be a platform for understanding each other.
In the words of G. Ramchandran, "Gurudev never accepted that the object of education was
simply the accumulation of knowledge. He unhesitatingly proclaimed that education should give
all-round human personality in which the physical, the intellectual, t he aesthetic and spiritual
growt h would be harmonized into one integral process.He, therefore, emphasized freedom and
joy as of basic importance in the education of boys and girls. This meant elimination of physical
punishment , examination and therefore of fear and everything humiliating restriction from
Shanti Niketan system rather pattern of education".

PROFESSIONAL ETHICS

Prossional Ethics Notes CH-1 To CH-6 by Dbrathod

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Prossional Ethics Notes CH-1 To CH-6 by Dbrathod

Uploaded by

Copyright:

Available Formats

PROFESSIONAL ETHICS

MEANING AND DEFINITION OF ETHICS

Compiled by DBR Page 1

NATURE AND OBJECTIVES OF ETHICS

regulate right and wrong conduct.

E.g. Dam construction

 Duty Ethic and Right ethics are similar to each other.

Compiled by DBR Page 3

01. Normative Ethics

02. Meta Ethics

03. Applied Ethics

04. Moral Ethics

05. Descriptive Ethics

01. Normative Ethics : (Largest branch)

 Classifies actions as right and wrong.

02. Meta Ethics : Meta = beyond, after

 the shedy of origin and meaning of ethical concepts

03. Applied Ethics :

 applies normative ethical theories to specific controversial issues.

04. Moral Ethics :

Compiled by DBR Page 4

05. Descriptive Ethics :

 More specific in its approach.

HOW ARE MORAL STANDARDS FORMED?

dynamic and progressive nation.‖

Law + Knowledge = Ethics

PERSONAL ETHICS AND BUSINESS ETHICS

ETIQUETTE AND PROFESSIONAL CODES

MANAGEMENT AND ETHICS

INTRODUCTION TO BUSINESS ETHICS

Compiled by DBR Page 7

NEED AND OBJECTIVES OF BUSINESS ETHICS

OBJECTIVES OF BUSINESS ETHICS

(A) Analysis and Evaluation

SIGNIFICANCE OF BUSINESS ETHICS

Compiled by DBR Page 8

(1) Positive Consequences

3. INTERIORIZING (SELF) MANAGEMENT

 Ego sublimation rather than ego assertion

Compiled by DBR Page 10

 Concept of duties rather than concept of rights

EXAMPLES OF INDIAN ETHOS

1. TRIKARANASUDDHI-Purity and unity of thought, word and deed.

Compiled by DBR Page 11

1. Elaborate the term ethics.

Business Ethics: Principles of personal Ethics, Principles of Professional ethics, Evolution of

Compiled by DBR Page 12

1. Concern and respect for the autonomy of others,

People are motivated to be ethical for the following reasons:

Compiled by DBR Page 13

PRINCIPLES OF PROFESSIONAL ETHICS

WHAT IS BUSINESS ETHICS?

Compiled by DBR Page 14

WHAT IS NOT BUSINESS ETHICS?

It is also equally important clarify what is not ethics.

ETHICS IS DIFFERENT FROM RELIGION

ETHICS IS NOT SYNONYMOUS WITH LAW

Compiled by DBR Page 15

CODE OF CONDUCT AND ETHICS FOR MANAGERS

Compiled by DBR Page 16

Compiled by DBR Page 17

IMPORTANCE AND NEED FOR BUSINESS ETHICS