CASIRJ Volume 5 Issue 7 [Year - 2014] ISSN 2319 – 9202
International Research Journal of Commerce Arts and Science http://www.casirj.com Page 131
BUSINESS ETHICS –‘THE NEED OF THE DAY ‘
Mr.Amit Gupta SBS Global Academy, JHU
ABSTRACT
Business Ethics relates to the behavior and obligations of business professionals. Its prime focus
on how an individual should conduct themselves in fulfilling the ethical requirement of business.
Business Ethics suggest a manager should be honest with stakeholder’s interest, society,
environment and themselves.
Commitment to ethics is most valuable asset firm can possess, it is most difficult to acquire and
maintain. Several companies have developed programmers’ and institutionalized them. Business
Ethics and profit go together in the long-run, for sustenance of organization. If a company want
to survive and grow, it has to discharge its obligations to the society. “In my view, this tide can
be turned only by deliberate and conscious actions of management at all levels. Each manager
needs to understand his/her own personal code of ethics for successful implementation of ethical
level for any business. So corporate have to pave the way for a stronger ethical foundation.
CASIRJ Volume 5 Issue 7 [Year - 2014] ISSN 2319 – 9202
International Research Journal of Commerce Arts and Science http://www.casirj.com Page 132
INTRODUCTION
The word Ethics has origin in Greek word “Ethics” which means character, norms, morals and
ideals prevailing in a group and society. Ethics is a mass of moral principles or sets of values
about what conduct ought to be. Ethics is a fundamental, personal trait which one adopts and
follows as a guiding principle or basic Dharma in one’s life. It implies moral conduct and
honorable behavior on the part of an individual.
Business Ethics are rule of business conduct by which the propriety of business activities may be
judged. Ethical principles are dictated by the society and underlie broad social policies. These
principles when known, understood and accepted, determine generally the propriety or
impropriety of business activities.
In the word of Carter McNamara “Business Ethics is generally coming to know what is right or
wrong in the work place and doing what is right-this is in regard to effect of products/ services
and in relationship with stakeholders.”
In short Business Ethics can be strong preventing medicine as it relates to the behavior of
manager. It focus is on people, how individuals should conduct themselves in fulfilling the
ethical requirement of business.
Thomas Donaldson believes that there is a growing realization all over the world that ethics is
vital for almost all type of organization and even for the progress of any society. Ethics makes
for an efficient economy, its ethics that can protect the society neither the government nor the
law. In a long rum ethics is a synonyms to profit as an ethically responsible company is the one
which develop a culture of caring for people and for the environment thus led to more
satisfaction among the man power.
CONCEPTUAL MODELS OF BUSINESS ETHICS
The conceptual model of
Business Ethics explains
that the problems
associated with Business
Ethics can broadly be
divided in two separate
areas:
The Moral
Business Ethics
Moral ProblemsMicro Level
Macro Level
ManagerialMischief
CASIRJ Volume 5 Issue 7 [Year - 2014] ISSN 2319 – 9202
International Research Journal of Commerce Arts and Science http://www.casirj.com Page 133
Problems: The manager faces many different moral problems while making decision in the
company these problems can be categories in two different section
1. Micro Level Problems: The problems faced by the front line managers while dealing with
individuals working in the company are taken as micro level problems. Some of such
problems are as follows:
i) Fairness in performance appraisals.
ii) Accepting gifts from subordinates.
iii) Unbiased treatment of employee’s grievances
iv) Maintaining Confidentiality of company’s information
2. Macro Level Problems: The problems faced by the top managers while dealing with
working environment in the company are taken as macro level problems. Some of such
problems are as follows:
i) Corporate social responsibility.
ii) Laying ethical standard such as code of conduct, KRA etc...
iii) Laying policies and practices for ethical decision making.
Managerial Mischief: Any unethical or questionable and illegal practices of individual or
mangers in the company are mounted as managerial mischief. Some of such problems are as
follows:
1. Fraud, Kickbacks, bribery, improprieties, illegal disposal of hazardous materials,
intentional violations of work place safety, stealing expense account cheating.
2. Dumping intoxicant, providing money or sexual flavor to buyers etc…
Apart from the above listed problems Business Ethics also faces an issue of Ethical Dilemma.
This is explained in the following part of the article.
ETHICAL DILEMMA?
Ethical Dilemma is a complex judgment on the balance between the economic performance
and the social performance of an organization. According to Rush worth kidder, in Ethical
Dilemma, the toughest choices are Right verses Right. He further added that dilemmas are
genuine precisely because each side of the dilemmas is firmly rooted in one of our basic, core
values. Four such dilemmas are so common to our experiences that they stand as models,
patterns or paradigms. They are
Truth versus loyalty
Individual versus community.
Short term verses long term
Justice verses mercy
CASIRJ Volume 5 Issue 7 [Year - 2014] ISSN 2319 – 9202
International Research Journal of Commerce Arts and Science http://www.casirj.com Page 134
There are four classical approaches in resolving ethical dilemmas –
a) Ends-Based Thinking (Utilitarianism): It is a theory in normative ethics holding that the
proper course of action is the one that maximizes utility, usually defined as maximizing
total benefit and reducing suffering or the negatives.
b) Rule-Based Thinking (Kantian theory): It refers to a deontological ethical theory ascribed
to the German philosopher Immanuel Kant. The theory, developed as a result
of Enlightenment rationalism, is based on the view that the only intrinsically good thing
is a good will; an action can only be good, therefore, if its maxim – the principle behind
it – is duty to the moral law. Central to Kant's construction of the moral law is
the categorical imperative, which acts on all people, regardless of their interests or
desires.
c) Care-Based Thinking: care base approach says that you have an obligation to care those
with whom you have valuable and close relationships. However the critics of the theory
suggest that this can degenerate into unjust favoritism and sacrifice of own needs to care
the kin and natives only.
d) Virtue Ethics: in virtue ethics an action is considered morally right if in carrying out the
action the person performing the action exercise, exhibits or develops a morally virtuous
character.
Hence to conclude, ethical decisions are not simple choices between right and wrong. They are
complex judgments on the balance between the economic performance and the social
performance of an organization.
BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY (CSR)
It is now a widely held view that a new era has dawned in which businesses must adopt a new
conception of their mission, purpose and conduct, by endorsing and implementing corporate
social responsibility. The primary role of business is to act as a vehicle for economic progress.
This role depends upon business enterprises operating within the framework of a competitive
market economy. If we ask businesses to achieve broader social goals, we risk undermining the
very system in which business activity leads to opportunity and prosperity.
The material prosperity created by the activities of business is threatened by the "global
Salvationist consensus" that has arisen in recent years and which seeks to change the role of
business via the doctrine of corporate social responsibility and this consensus is based upon a set
of fallacious beliefs about the nature of capitalism, profiteering and business ethics.
In the contemporary business world only thing that seems to be constant is change and the nature
of the competition is such that companies need to leverage on the way they manage change to
gain a competitive advantage. Moreover, the types of changes the companies experience vary in
CASIRJ Volume 5 Issue 7 [Year - 2014] ISSN 2319 – 9202
International Research Journal of Commerce Arts and Science http://www.casirj.com Page 135
nature as well, for instance, as industries consolidate, there are increasing number of mergers and
acquisitions, the pressures on organization to compete in a more global arena are leading to
different competitive pressures and more strategic alliances. Furthermore, rapid technological
changes are forcing organizations to embrace new technologies and change the way they work
and interface with suppliers and customers this lead to the emerging need for Business Ethics in
the modern era more than in traditional era.
NEED OF BUSINESS ETHICS IN MODERN ERA
Business Ethics is growing
with the emerging trend of
the society. The need of
Business Ethics is growing
and is one of the most vital
components of the modern
business environment. The
significance can be
explained as now-a-days
the society changes
drastically and so do the
perception and vision of the
people changes. The mind
set of individual of the
modern society has more inclination towards the concept of Quick Money rather than adopting
the fair means. The youth is getting divesting from the ethical part of their social obligation.
The Business houses need to take several small and big decisions on the cost of their social
ethical commitment in order to off shoot the cut throat competition in the short run goal
accomplishment.
The graph shows that, the difference between the actual and expected business ethics is directly
related with the time period as the time changes the difference also increases therefore the
modern manager has to figure it out the diverging gap of business ethics in order to maintain a
strong image in the market by understanding the concept of ethical decision making which assure
their strong indispensible image in the corporate world
CASIRJ Volume 5 Issue 7 [Year - 2014] ISSN 2319 – 9202
International Research Journal of Commerce Arts and Science http://www.casirj.com Page 136
IMPROVING ETHICAL DECISION MAKING
An ethical decision making process
involves a combination of three most
important pillar of Business Ethics
namely the ethical responsibility, the
economical responsibility and the
legal responsibility. The combination
of the above mention three effects
any managerial decision in any
organization.
The various combination of the above
listed pillar may also effect the
managerial decision to understand
let’s look on the abstract from the
Venn diagram
Citation from the Venn diagram
1: This area from the Venn diagram shows a perfect combination of the ethical responsibility, the
economical responsibility and the legal responsibility. So a manager should go for such decision.
It’s seems to be the most ideal situation for any business decision.
2a: This area from the Venn diagram shows a combination of economical and legal
responsibility a manger should precede in taking the decision but extra concern and care should
be taken.
2b: This area from the Venn diagram shows a combination of ethical and economical
responsibility but lacks in the section of legal responsibility, a manager should proceed to the
decision depending on the issue at stake.
3: This area from the Venn diagram shows a combination of ethical and legal responsibility but
lacks in the section of economical responsibility, a manager should find the ways for incurring
profit while taking such decisions.
CASIRJ Volume 5 Issue 7 [Year - 2014] ISSN 2319 – 9202
International Research Journal of Commerce Arts and Science http://www.casirj.com Page 137
MAKING ETHICAL JUDGMENTS
Furthermore the concept of
ethical judgment reflects the
ability of an individual in
framing an ethical decision.
The ethical judgment en-lights
a symbiotic relationship
between the behavior, norms
of acceptability and the value
judgment ability of the
observer.
Thing which may appear immoral to one may not be conceive the same by the others.
The perception and the value judgment is the most vital element in making an ethical
judgment.
Society directly or indirectly affects the norms of acceptability of an observer. The kind
of background, social interface and custom in which one belongs make its attitude
towards the acceptability of the norms.
The behavior of an individual is the pure blend of the above mentioned two elements.
What one percept and what one can accept makes the behavior of a person. A strong
behavior can be build with a strong perception and acceptance
A person with strong behavior can take a strong ethical judgment which help in maintaining a
strong ethical environment in any organization.
CONCLUSION
“Role of Ethics in Corporate Social Responsibilities”
Social responsibility is an idea that has been of concern to mankind for many years but over the
last two decades however it has become an increasing concern to the business world which has
resulted in growing interaction between governments, business and society as a whole.
In the word of Anderson, Jerry “the modern business must reflect legal, ethical, moral and social
consequences of their decisions.” Corporate Social responsibility is no longer defined by how
much money a company can contributes for charity; however it is an overall involvement of
companies in activities that improve the quality of people’s lives
Prevalling norms of
acceptibilty
Behavior or act to be
committed
Value judgement &
perception of observer
CASIRJ Volume 5 Issue 7 [Year - 2014] ISSN 2319 – 9202
International Research Journal of Commerce Arts and Science http://www.casirj.com Page 138
Ethics of multi- Corporation involves actions that are morally upright. It is quite common that
most of the activities that corporation are engaged in, may not meet the required ethical
standards. This is because much business tends to merely focus on profit making rather than any
other aspect.
Business Ethics is an upcoming issue mainly due to the sheer number of person’s involved.
Certain action may seem safe on small scale but it could be devasting when seen on large scale.
Corporate social responsibility makes it clear that its certainly unethical for the company to be
making profit at the expense of environment and other aspect of human life’s.
CSR ensures that corporate should therefore find better ways to handle their social obligation
towards the mankind.
Awareness and ethics are the critical factor that should be considered in the designing of CSR
programs. Beside education, the ethical parameter should be highlighted in making strategies for
the corporate social programs.
In Conclusion it will be correct to say that social responsibility investment combines investor’s
financial goals with their obligation and dedication to factors that ensure the overall well being
of society. These factors are not only aspects of corporate social responsibility but also a
showcase of the ethical standards of the society. From the above it can be concluded that social
corporate responsibility and the maintenance of high business ethical standards is not an option
but an obligation for all business.
REFERENCES
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[3] Bhatia, SK. Business Ethics and corporate governance [New Delhi]:2007
[4] Sethi, S. Prakash and Oliver F. Williams. Economic imperatives and ethical values in global
business: the South African experience and international codes today. Notre Dame, IN:
University of Notre Dame Press, 2001.
[5] Gunther, Marc. Faith and fortune: the quiet revolution to reform American business. New
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[6] De George, Richard T. The ethics of information technology and business. Malden, MA:
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