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Morality and Ethics in Corporate World

Morality and Ethics in Corporate World


Introduction :
In todays world of development the company form of organisation is said to be the most beneficial one and after availing the development how to sustain the same is of much significance. Two important principles that could help one sustain the same are Morality & Ethics.

Defination :
Morality : It is differentiation of intentions, decisions and actions between those that are good and those that are bad. Ethics : It is a branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong conduct. So in order to develop an organisational structure that has a strong resistivity in the competitive edge, it must have the above said to principles at its base. Although morality and ethics have no major point of difference among themselves. The word ethics has the word ethos which means character at its root whereas the word mos which means customs is at the root of Moral. Although
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Morality and Ethics in Corporate World

there is not much difference between the words moral & ethics we can have a good point in differentiating character & customs for deriving at what is good and what is bad. Many people have misconception that ethics is based on religion but what is ethics is not defined in any of the religion but is what an individual has in his/her mind and what he thinks about a particular thing and classifies it into either good or bad. We still could make out a small point that philosophy in morality is ethics that is, morality can be derived out of ethics. Therefore ethics can be considered as the parent of morality. Talking about morality and ethics in the context of a corporate world, it is must that a company that has development of themselves and the development of the country as its final mission it is surely got to have Morality and Ethics as is Milestone. In todays world economy there are many companies who claim that their morals and ethics are strong enough so as to guide the entire organisation and the nation as well. The principle of trusteeship as defined by Mahatma Gandhi is a businessman has to act only as a trustee of the society for whatever he has gained from the society. Everything finally belongs to the society. Therefore it is the duty of all the business entrepreneurs and the corporate entities to inculcate the feeling of returning the society what they want and in all the ways as is desirable.

Arguments in favour of business ethics :


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Morality and Ethics in Corporate World

1.Ethics helps to promote a strong public image : An organisation that pays attention to its ethics can portray a strong and positive image to the public. People see such organisation as valuing people more than profit and striving to operate with the integrity and honour. 2.Strong teamwork and greater productivity : Ongoing attention and dialogue regarding values in the workplace builds openness, integrity and community, all critical ingredients of strong teams in the workplace. Employees feel a strong alignment between their values and those of the organization resulting in strong motivation and better performance.

3.Improved society : A few decade ago, children and workers were ruthlessly exploited. Then society reacted and demanded that businesses place high value on ethics, fairness and equal rights resulting in framing of anti-trust laws, establishment of government agencies and recognition of labour unions. 4.Easy acceptance of change : At times when the organization has to change because of the change in the way a society works ethics works out to be good guiding compass so as to guide the entire organisation the entire cycle of change.

Morality and Ethics in Corporate World

5.Ethics can help reduce criminal acts of omission and thus helps the entity reduce the amount of fines that it is required to pay in case there are no ethical principles in the organisational structure. 6.Ethics help organisation : managing values associated with the entire

With the help of the ethics at the base of the organisational structure the business entity is surely going to face less issues relating to fluent business administration and will surely help solving business related problems at a faster speed. And thus add into the success of the entire organisation and as said by gandhiji to the entire society as well.

Arguments against business ethics :


1. Wastage of money and resources :The business structure and the organisation has to deal with many other peoples and entities such as suppliers, customers, government and many other also who will surely like that the business entity with whom they deal with has a good moral and ethical values so as to entertain good relationship with that business enterprise so as to have a good overall image and thereby add to the success of the organisation and also to the individual knowledge and success.
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Morality and Ethics in Corporate World

2. Misconception regarding ethics : Many a times peoples have a misconception in their mind that ethics are based on different religions and has to be the same in all the people of same religion but it is not the same. The ethics as discussed above is what an individual thinks is good or bad and how he classifies a particular thing into good or bad. Which as per the scientific terminology is what different between all the peoples of the society and there are very less chances of the said being the same therefore there is a misconception which discourages ethical principles and ethical people. 3. Attitude of peoples : The attitude of the people in common parlance is what hinders the person who are already thinking in the correct direction and thus discourages such persons in the society and therefore the progress of the society in the correct manner restricts resulting into bad management of an enterprise or an organisation which would further result into flaws in the management framing achievable objectives and achievable targets which the enterprise has the capabilities achieving. Coming to the monetary benefits that a business organisation will get by the way of following good moral & ethical values so as to get the organisation at its base are as follows: Loyal customers : The organisation that runs its daily managerial activities by some pre defined ethics and morals will have the customers who would
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Morality and Ethics in Corporate World

like such characteristics and such principles because such factors are liked by each and every type of human beings which would thus result into loyalty among the society.

Easy achievement of the predefined targets :


The ethics and morality among the organisational environment would surely result into making loyal customers and thereby making a targeted sector of the economy who are always there to help you in achieving the enterprises objectives and goals. Easy targeting of new market segments : The ethics of the organisation if liked by each and every people of the society than it will automatically result into easy targeting of the market segment which already has another competitor working out there. Good source of advertisement : It is always said that there is no other best source of marketing and advertisement as the source of mouth publicity. Talking about mouth publicity it is the type of advertisement where the current customers of the organisation do the publicity by appreciating out qualities to other customers and other segmentd of the market. Extra quality : The organisation that works by keeping ethics and moral as its pillars will surely have an upper hand over other organisations in the same filed or segment of the market thus helping us generating a good surplus over what other organisations in the
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Morality and Ethics in Corporate World

same field. Which would thus result into a good awareness among the society thereby creating good amount of extra qualities incomparison to other organisation of the society. Building confidence in the employees : The employees if such organisation would stay ahead of all the employees of the other enterprise and thus would generate a good amount of confidence in them because of the superiority they have in comparison to other organisations. There are several other advantages over and above the ones mentioned herein above which would be adding like a feather in the hat or like adding a cherry on the cake.

Remedial measures so as to ensure accurate working on ethics :


Independent director : In the current companies bill 2012, which was presented and passed in the lok sabha had insertion of a new provision which stated that every company has to have one independent organization. who would work independently and the one who would be having no influence on the others and also on the working of the organization. The above mentioned provision was inserted so as to ensure that each and every corporate form of organisation has a person who is there to ensure accurate and best way of working and running the organisation.

Morality and Ethics in Corporate World

The main reason for such provision is although for a whole lot of new problems being faced by the organisation we can surely say that one reason for introducing such provision is so as to ensure proper functioning of the organisation in an ethical and based on some moral principles as are framed by the organisation and easy achievement of such targets and objectives. The director of the organisation is as per the rules of this provision required to have one director who works completely independently and for the betterment of the organisation and not as all the other directors do in conformity so as to ascertain fulfilment of the organisational targets and goals. The duties and rights of such management representative is already underlined and predefined as per the provisions of the companies act 1956 which will maintain the code of conduct of such independent directors resulting into better control over the management procedures of the organisation and better and easier fulfilment of its targets. Creation of committee who works on ethics only : The organisation really needs a committee who has the work of framing the ethical principles and seeing to it that the same have been and are being followed by the management so as to ensure a good working of the organisational structure and an excellent accomplishment of the institute and enterprise as well. Thus a committee which has maintenance of the ethical principles and morals are a must for the organisation so as to ensure utilisation of the resources and securing optimum and the
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Morality and Ethics in Corporate World

best possible position for the entire organisation and for the society as a whole. Insertion into the object clause : The organisation must have a clause inserted into its object clause of the memorandum of organisation and articles of association so as to ensure that object of the organisation is fulfilled along with all the ways which are ethical and moral so as to ensure the successful working and successful management of the organisation and attain the targets as are pre determined and easy management of the same. Therefore we can conclude that if proper steps have been taken by the business enterprises and if appropriate actions have been taken properly than the organisation is surely going to flourish in its daily functioning and will surely have a long term benefit which no other organisation would be having. __________________________________________________________