PREPARED BY: MEGHA SWETA BARNWAL

ETHICS
Ethics refers to the study of good and evil, right and

wrong, and just and unjust actions of business people. Business ethics is the same as the generally accepted norms of good or bad practices. If dishonesty is immoral in society, then any business person practicing dishonest act is treated as indulging in unethical actions.

VALUES
Important and enduring beliefs or ideals shared by

members of a culture about what is good or desirable and what is not. Values exert major influence on the behaviour of an individual and serve as a broad guidelines in all situations. Values provide the basis for judgments about what is important for the organization to succeed in its core business.

SOURCES OF BUSINESS ETHICS

RELIGION

LEGAL SYSTEMS

BUSINESS ETHICS

CULTURE

IMPORTANCE OF ETHICS
Ethics corresponds to basic human needs. Its mans

basic nature that he desires to be ethical, not only in his private life but also in his business affairs where being a manager, he knows that his decisions may effect the lives of thousand of employees. Values create credibility with the public. A company perceived by the public to be ethically and socially responsive will be honoured and respected even by those who have no intimate knowledge of its actual working.

Contd
Values gives the management credibility with its

employees. Values are supposed to be a common language to bring the leadership and its people together. Values help better decision making. Ethical attitude helps the management make better decisions, that is, decisions which are in the interest of public, their employees, and the companys own long term good, even though the decision making is slower. Ethics can be grouped together. A company which is inspired by ethical conduct is also profitable. Value-driven companies are most likely to be successful in the long run, though in the short run, they may lose money.

Contd..
Laws cannot protect the society, but ethics can. Ethics

are important because the government, law and lawyers cannot do everything to protect the society. Technology develops faster than the government can regulate. An ethically oriented management takes measures to prevent pollution and protect workers health even before being mandated by law.

ETHICAL DILEMMAS
FACE TO- FACE ETHICS

These arise mainly because there is a human element in most business transactions. For example, a purchasing agent of a company develops personal relationship with the sales representative who sells/supplies to the company.
CORPORATE-POLICY ETHICS You and R&D department has modernized one of your

products .It is not really new and improved. But you know printing these statements on the package and using it in advertisement will increase it sales. What you do?

Contd
You are interviewing a former product manager who

just left a competitors company. You are thinking of hiring him. He would be more than happy to tell you the competitors plans for the coming years. What would you do? You produce an anti-dandruff shampoo that is effective with one application. The purchasing agent hinted that he would be influenced by a gift. Your assistant says that the product would turn over faster if the instruction on the label recommended two applications. What would you do?

Contd
You are working for a cigarette company and till now you

have not been convinced that smoking cigarettes causes cancer. A recent report has come across your desk that clearly establishes the connection between smoking and cancer. What would you do? FUNCTIONAL AREA ETHICS Financial statements are expected to present true and fair picture about the business, but they do not do so. Marketing lends itself to several ethical issues. Pricing, promotions, advertising and product information are the areas of unethical practices.

HR ETHICAL ISSUES
JOB DISCRIMINATI ON EMPLOYEE RESPONSIBILITY CASH AND INCENTIVE PLANS PERFORMANC E APPRAISAL

PRIVACY ISSUES

ETHICA L ISSUES

SAFETY AND HEALTH RESTRUCTURING AND LAYOFFS

RACE AND DISABILITY

PRIVACY AND ETHICAL ISSUES

INFORMATION TECHNOLOGY

GENETIC TESTING

PRIVACY AND ETHICAL ISSUES

AIDS TESTING

DRUG TESTING

WHISTLE BLOWING

MANAGING ETHICS
Top management
Code of ethics

CODE OF CONDUCT IN TATA

FOR THE COMPANY To supply goods and services of the highest quality standards to ensure total satisfaction of customers. FOR THE EMPLOYEES Conduct themselves professionally with honesty, integrity, as well as high moral and ethical standards. To be fair and transparent and to be seen so by third party. Not derive any benefit from any information about the company or group which constitutes inside information.

To engage only in activities beneficial to the national interest of the country they operate in.

To be fully transparent in accounting and financial reporting standards.

Report to the management any actual or possible violation of the code or an event that the employee becomes aware of, that could effect the business or reputation of the employees company or any other company belonging to the Tata group
Permits employees to pursue an active role in civic or political affairs as long as it does not affect the business or interests of the company or the group.

To fully strives for the establishment and support of a competitive open-market economy and to the abhor unfair trade practices.

Contd
Ethics committees.
Whistle Blowing. Policy. Ethics Training Programmes.

ETHICS AND LAW

The foreign exchange regulation Act,1973, now

replaced by FEMA. The companies Act,1956. The monopolies and restrictive trade practices Act,1969,now replaced by competition Act,2002. The consumer protection Act,1986. The environment protection Act,1986. The essential commodities Act,1955.

WAYS OF RESOLVING ETHICAL ISSUES

First,He or she can consider three well known principles to

resolve an ethical issue: moral idealism, intuitionism, utilitarianism. Moral idealism:- postulates that certain acts are good and others are bad. Pursue those acts which are good and avoid the bad ones Intuitionism:-leaves it to the individual HR practitioner to sense the moral gravity of the situation. If he or she can feels that his or her motives are good and that they do not intend to hurt anyone, he or she is taking an intuitive approach to morally difficult situations.

Contd
Utilitarianism:- seeks to establish the moral locus not

on the act or the motives but on the consequences. If the consequences represent a net increase in the societys happiness, or at least not a decrease, the act is morally right. Second, consider some decision tactics that illuminate moral choices. One such device is to engage in imaginary conversations with a hypothetical opponent as an antidote or certitude. Have a debate with an intelligent person who takes a different view.

Contd
Third, write down some pros and cons in the form of a

balance sheet. The balance sheet approach helps decision making by presenting information in an organized way. Fourth, sort out ethical priorities before problem arise. Prioritization shall help consider alternatives when one is not under stress. Fifth, one should commit oneself publicly on ethical issues. He or she should identify potential areas of ethical conflict and make clear his or her opposition to padding expense accounts, stealing supplies from the company, bias in performance appraisal or unjust laying-off of employees.