ETHICS & CSR
Reference books
 Business Ethics: An Indian Perspective by Prof.
P.S. Bajaj / Dr. Raj Agrawal
 Business Ethics: Text & cases by C.S.V. Murthy
 A Study in Business Ethics by Rituparna Raj
 Business Ethics concepts and cases by Manuel
G. Velasquez
Ethics: What Does It Really Mean???
 Derived from Greek word ‘Ethicos’ meaning
Character or Manners
 Science of character of a person expressed as
right or wrong conduct or action.
 Set of moral principles prescribing code,
explains what is good and right, or bad and
wrong.
Meaning of Ethics
Character
of a man
Decided by
Conduct
of a person
Leads to
Series of
Actions
Taken
together
Considered As
By which
we can
Judge
again
Good or
Bad,
Right or
wrong,
Moral or
Immoral
Known as
Moral
Judgement
Moral
Standards
Requires
Ethics can be termed as the
science of character of a
person expressed as right or
wrong conduct or action
Objective of Ethics
 Studies
human behavior and makes
assessment about them as moral or immoral
evaluative
 Establishes moral standards and norms of behavior
 Makes judgment upon human behavior based on these
standards and norms
 Prescribes moral behavior and makes recommendations
about how to or how not to behave
 Expresses an opinion or attitude about human conduct in
general
Business Ethics: What Does It Really
Mean???
 comprises principles and standards that guide
behavior in the world of business
 According to John Donaldson “Business Ethics
can be described as the systematic study of
moral (ethical) matters pertaining to business,
industry or related activities, institutions, or
practices and beliefs. It is the systematic
handling of values in business and industry.”
Views on relationship between Business
& Ethics
Unitarian View: Business & morality cannot be separated and it
must play by the rules of ethics of the community.
Moral Structure
Business
Moral Ethics
Separatist view of Ethics
 Proposed by Adam Smith and Milton Friedman:
Business is a distinct entity and does not include
ethics and morality
Business
Ethics
Integration view of ethics
 Proposed by Talcott Parsons
Law
Government
Business
Market Systems
Morality
&
Ethics
Business
Ethics
Society
Business Ethics
When business people speak about “business ethics” they
usually mean one of three things:
1.
Avoid breaking the criminal law in one’s work related
activity
2.
Avoid action that may result in civil law suits against
the company
3.
Avoid actions that are bad for the company image
Businesses are especially concerned with these three
things since they involve loss of money and company
reputation.
Relationship between law and moral
standards
 Laws and moral standards overlap to a certain extent
 Law represents a minimum set of standards for producing a desired
human behaviour
 Ethics often represents a standard that exceeds the legal minimum
Frequent Overlap
Ethics
Law
Common Unethical Acts...
 lying and withholding needed information
 abusive or intimidating behavior
 misreporting time worked
 discrimination and sexual harassment
 stealing
 breaking environmental and safety laws
 falsifying records
 drug or alcohol abuse
 giving or accepting bribes
Why Misconduct Is Not Reported...

belief that nothing will be done

fear of retaliation

fear of being viewed as a troublemaker
Why ethical behavior is important???
 Business is a subsystem of society
 Empowers all stakeholders concerned
 Reduction in cost of friction with social
environment
 Important for organizations leaders because
they influence the ethical climate for the rest.
Why Ethical problems occur?
 Personal gain
 Individual values widely differ with organizational goals
 Managers values and attitudes
 Competitive pressures
 Cross-Cultural contradictions
Sources of Ethical Norms
Fellow Workers
Culture
Family
Regions of
Country
Profession
The Individual
Conscience
Friends
The Law
Employer
Religious
Beliefs
Society at Large
Encouraging Ethical Conduct
 Ethics Training
 Key features of effective ethics training programs
 Top management support.
 Open discussion.
 A clear focus on ethical issues.
 Integration of ethics into the organization.
 A mechanism for anonymously reporting ethical
violations.
 Reward ethical conduct.
Encouraging Ethical Conduct
(cont’d
 Whistle-Blowing
 The reporting of perceived unethical matters.
 Reducing the fear of retaliation against whistleblowers
 Anonymous hotlines and web sites
 Personal, confidential guidance
 Ethical Advocate
 An ethics specialist who plays a role of critical
questioner in top-management’s decision-making.
 Serves as the Board of directors’ social conscience.
 Helps prevent groupthink and blind conformity
Encouraging Ethical Conduct
(cont’d)
 Code of Ethics
 Published statement of moral expectations for
employee conduct
 Requirements for an effective ethics code
 Must describe specific practices as unethical
(e.g., kickbacks, payoffs, gifts, falsification of records,
and misleading product claims).
 Must be firmly supported and fairly enforced by
top management.
THANK YOU !