ETHICS IN BUSINESS STUDY NOTES
Ch topic Areas No. of Dates
no. lectures
1 Values Importance, Sources of Value Systems, Types, 2L
Values, Loyalty and Ethical Behaviour, Values
across Cultures.
2 Business Nature, Characteristics and Needs, Ethical Practices 2L
Ethics in Management.
3 The Ethical Universalism, Utilitarianism, Distributive Justice, 3L
Value Social Contracts
System
Individual Freedom of Choice, Professional Codes. 2L
4 Culture and Ethical Values in different Cultures, Culture and 2L
Ethics Individual Ethics.
5 Law and Relationship between Law and Ethics, Other Bodies 3L
Ethics in enforcing Ethical Business Behavior, Impact of
Laws on Business Ethics
6 Social Environmental Protection, Fair Trade Practices 3L
Responsibili
ties of Fulfilling all National obligations under various 2L
Business Laws, Safeguarding Health and well being of
Customers
7 Ethics and Code of Ethics in Business Houses, Strategies of 3L
Corporate Organizational Culture Building
Excellence
Total Quality, Customer Care, Care of the 3L
Employees as per Statutes, Objective and Optimistic
Approach.
PREPARED BY MR. ANTONY AMBIA Page 1
, CHAPTER 1
VALUES
Introduction:-
The study of values and ethics provides the following benefits for the management students-
Create awareness of social and professional values
Inculcate integrity
Helps to realize social responsibility
Helps to solve ethical dilemmas
Helps to make the organization a better place for work and development
VALUES
The sense of value is an essential attribute of the human consciousness. It is this sense which prompts
and guides the unceasing quest of the common thread of goodness in the good human being, the good
society and the good life. The word value expresses the qualitative significance or importance we
assign to ideas, feelings, activities, and experiences. According to Milton Rokeach, a leading
researcher of values, value is “an enduring belief that a specific mode of the conduct or end-state of
existence in personality or socially preferable to an opposite or converse mode of conduct or end-state
of existence.”
An individual’s value system is defined as an enduring organization of belief concerning preferable
modes of conduct or end-state of existence along a continuum of relative importance.
The value system we acquire and develop affects our attitudes, preferences, goals and aspirations. It
sets the standards and guidelines which govern our behaviour, the quality of relationship we build,
and the responses we make to life situations. Those who value money, status, power etc direct all
their efforts for achieving them ignoring the social, human and ethical implications. On the other
hand those who value morality, justice, kindness etc may decline even lucrative career options if it
requires compromising these values.
At the society level it is the commonly shared values of a social group which determine the quality of
life in it. In a society like ours, which value collectivism, it is the group needs of the family which get
preference over the individual needs.
A. Importance of Values:-
It influences the behaviour at individual and group levels.
A manager’s values affect the decision making process of the organization
A manager’s value system plays an important role in time of employee appraisal
It will help managers to resolve ethical dilemmas at work place
It is very important in making an organization socially responsible and acceptable to society.
B. Types of Values-
B.1. Instrumental values
B.1.a Assertiveness - It is linked to self-esteem and considered an important
communication skill.
B.1.b Dependability - Dependability is the reliability of a person to others because of his
integrity, truthfulness and trustfulness, traits that can encourage someone to depend on
him.
PREPARED BY MR. ANTONY AMBIA Page 2
, B.1.c Hard work – work with sincerity and devotion.
B.1.d Obedience - Obedience is behavior intended to comply with explicit demands of
authority. It differs from conformity, which is behavior intended to match that of others.
B.1.e Open mindedness - Ready acceptance of often new suggestions, ideas,
influences, or opinions.
B.1.f Truthfulness - The quality of being authentic.
B.2. Terminal values
B.2.a Satisfaction - The fulfillment or gratification of a desire, need, or appetite. Pleasure
or contentment derived from such gratification. A source or means of gratification.
B.2.b Peace and harmony - Peace is commonly understood to mean the absence of
hostilities. Other definitions include freedom from disputes, harmonious relations and the
absence of mental stress or anxiety, as the meaning of the word changes with context. On
the other hand harmony means agreement in feeling or opinion; accord.
B.2.c Prosperity - A state of health, happiness, and prospering
B.2.d Recognition - The confirmation or acknowledgment of the existence of an act
performed, of an event that transpired, or of a person who is authorized by another to act
in a particular manner.
B.2.e Security & safety – security means the quality or state of being safe and safety means
protection from harm.
Again we can classify values as follows-
1. Personal values- a person is known by the values he believes & practices.
2. Business values- a company becomes well known by its quality goods, services, growth,
revenue, social responsibilities etc.
3. Managerial values-the organizations use to provide training on the values and ethics
followed by that organization to make new entrants accustomed with the environment.
PREPARED BY MR. ANTONY AMBIA Page 3
, CHAPTER 2
BUSINESS ETHICS
Business ethics is a form of applied ethics that examines ethical rules and principles within a
commercial context; the various moral or ethical problems that can arise in a business setting; and
any special duties or obligations that apply to persons who are engaged in commerce.” Generally
speaking, business ethics is a normative discipline, whereby particular ethical standards are assumed
and then applied. It makes specific judgements about what is right or wrong, which is to say, it makes
claims about what ought to be done or what ought not to be done. While there are some exceptions,
business ethicists are usually less concerned with the foundations of ethics (metaethics), or with
justifying the most basic ethical principles, and are more concerned with practical problems and
applications, and any specific duties that might apply to business relationships.
1. Overview of issues in business ethics
A. General business ethics
This part of business ethics overlaps with the philosophy of business, one of the aims of
which is to determine the fundamental purposes of a company. If a company's main purpose
is to maximize the returns to its shareholders, then it could be seen as unethical for a
company to consider the interests and rights of anyone else.
Corporate social responsibility or CSR: an umbrella term under which the ethical rights and
duties existing between companies and society is debated.
Issues regarding the moral rights and duties between a company and its shareholders:
fiduciary responsibility, stakeholder concept v. shareholder concept.
Ethical issues concerning relations between different companies: e.g. hostile take-overs,
industrial espionage.
Leadership issues: corporate governance.
Political contributions made by corporations.
Law reform, such as the ethical debate over introducing a crime of corporate manslaughter.
The misuse of corporate ethics policies as marketing instruments.
B. Professional ethics
Professional ethics covers the myriad of practical ethical problems and phenomena which arise out of
specific functional areas of companies or in relation to recognized business professions.
C. Ethics of finance and accounting
Creative accounting, earnings management, misleading financial analysis.
Insider trading, securities fraud, bucket shop, forex scams: concerns (criminal) manipulation
of the financial markets.
Executive compensation: concerns excessive payments made to corporate CEO's.
Bribery, kickbacks, facilitation payments: while these may be in the (short-term) interests of
the company and its shareholders, these practices may be anti-competitive or offend against
the values of society.
D. Ethics of human resource management
The ethics of human resource management (HRM) covers those ethical issues arising around the
employer-employee relationship, such as the rights and duties owed between employer and
employee.
PREPARED BY MR. ANTONY AMBIA Page 4
Ch topic Areas No. of Dates
no. lectures
1 Values Importance, Sources of Value Systems, Types, 2L
Values, Loyalty and Ethical Behaviour, Values
across Cultures.
2 Business Nature, Characteristics and Needs, Ethical Practices 2L
Ethics in Management.
3 The Ethical Universalism, Utilitarianism, Distributive Justice, 3L
Value Social Contracts
System
Individual Freedom of Choice, Professional Codes. 2L
4 Culture and Ethical Values in different Cultures, Culture and 2L
Ethics Individual Ethics.
5 Law and Relationship between Law and Ethics, Other Bodies 3L
Ethics in enforcing Ethical Business Behavior, Impact of
Laws on Business Ethics
6 Social Environmental Protection, Fair Trade Practices 3L
Responsibili
ties of Fulfilling all National obligations under various 2L
Business Laws, Safeguarding Health and well being of
Customers
7 Ethics and Code of Ethics in Business Houses, Strategies of 3L
Corporate Organizational Culture Building
Excellence
Total Quality, Customer Care, Care of the 3L
Employees as per Statutes, Objective and Optimistic
Approach.
PREPARED BY MR. ANTONY AMBIA Page 1
, CHAPTER 1
VALUES
Introduction:-
The study of values and ethics provides the following benefits for the management students-
Create awareness of social and professional values
Inculcate integrity
Helps to realize social responsibility
Helps to solve ethical dilemmas
Helps to make the organization a better place for work and development
VALUES
The sense of value is an essential attribute of the human consciousness. It is this sense which prompts
and guides the unceasing quest of the common thread of goodness in the good human being, the good
society and the good life. The word value expresses the qualitative significance or importance we
assign to ideas, feelings, activities, and experiences. According to Milton Rokeach, a leading
researcher of values, value is “an enduring belief that a specific mode of the conduct or end-state of
existence in personality or socially preferable to an opposite or converse mode of conduct or end-state
of existence.”
An individual’s value system is defined as an enduring organization of belief concerning preferable
modes of conduct or end-state of existence along a continuum of relative importance.
The value system we acquire and develop affects our attitudes, preferences, goals and aspirations. It
sets the standards and guidelines which govern our behaviour, the quality of relationship we build,
and the responses we make to life situations. Those who value money, status, power etc direct all
their efforts for achieving them ignoring the social, human and ethical implications. On the other
hand those who value morality, justice, kindness etc may decline even lucrative career options if it
requires compromising these values.
At the society level it is the commonly shared values of a social group which determine the quality of
life in it. In a society like ours, which value collectivism, it is the group needs of the family which get
preference over the individual needs.
A. Importance of Values:-
It influences the behaviour at individual and group levels.
A manager’s values affect the decision making process of the organization
A manager’s value system plays an important role in time of employee appraisal
It will help managers to resolve ethical dilemmas at work place
It is very important in making an organization socially responsible and acceptable to society.
B. Types of Values-
B.1. Instrumental values
B.1.a Assertiveness - It is linked to self-esteem and considered an important
communication skill.
B.1.b Dependability - Dependability is the reliability of a person to others because of his
integrity, truthfulness and trustfulness, traits that can encourage someone to depend on
him.
PREPARED BY MR. ANTONY AMBIA Page 2
, B.1.c Hard work – work with sincerity and devotion.
B.1.d Obedience - Obedience is behavior intended to comply with explicit demands of
authority. It differs from conformity, which is behavior intended to match that of others.
B.1.e Open mindedness - Ready acceptance of often new suggestions, ideas,
influences, or opinions.
B.1.f Truthfulness - The quality of being authentic.
B.2. Terminal values
B.2.a Satisfaction - The fulfillment or gratification of a desire, need, or appetite. Pleasure
or contentment derived from such gratification. A source or means of gratification.
B.2.b Peace and harmony - Peace is commonly understood to mean the absence of
hostilities. Other definitions include freedom from disputes, harmonious relations and the
absence of mental stress or anxiety, as the meaning of the word changes with context. On
the other hand harmony means agreement in feeling or opinion; accord.
B.2.c Prosperity - A state of health, happiness, and prospering
B.2.d Recognition - The confirmation or acknowledgment of the existence of an act
performed, of an event that transpired, or of a person who is authorized by another to act
in a particular manner.
B.2.e Security & safety – security means the quality or state of being safe and safety means
protection from harm.
Again we can classify values as follows-
1. Personal values- a person is known by the values he believes & practices.
2. Business values- a company becomes well known by its quality goods, services, growth,
revenue, social responsibilities etc.
3. Managerial values-the organizations use to provide training on the values and ethics
followed by that organization to make new entrants accustomed with the environment.
PREPARED BY MR. ANTONY AMBIA Page 3
, CHAPTER 2
BUSINESS ETHICS
Business ethics is a form of applied ethics that examines ethical rules and principles within a
commercial context; the various moral or ethical problems that can arise in a business setting; and
any special duties or obligations that apply to persons who are engaged in commerce.” Generally
speaking, business ethics is a normative discipline, whereby particular ethical standards are assumed
and then applied. It makes specific judgements about what is right or wrong, which is to say, it makes
claims about what ought to be done or what ought not to be done. While there are some exceptions,
business ethicists are usually less concerned with the foundations of ethics (metaethics), or with
justifying the most basic ethical principles, and are more concerned with practical problems and
applications, and any specific duties that might apply to business relationships.
1. Overview of issues in business ethics
A. General business ethics
This part of business ethics overlaps with the philosophy of business, one of the aims of
which is to determine the fundamental purposes of a company. If a company's main purpose
is to maximize the returns to its shareholders, then it could be seen as unethical for a
company to consider the interests and rights of anyone else.
Corporate social responsibility or CSR: an umbrella term under which the ethical rights and
duties existing between companies and society is debated.
Issues regarding the moral rights and duties between a company and its shareholders:
fiduciary responsibility, stakeholder concept v. shareholder concept.
Ethical issues concerning relations between different companies: e.g. hostile take-overs,
industrial espionage.
Leadership issues: corporate governance.
Political contributions made by corporations.
Law reform, such as the ethical debate over introducing a crime of corporate manslaughter.
The misuse of corporate ethics policies as marketing instruments.
B. Professional ethics
Professional ethics covers the myriad of practical ethical problems and phenomena which arise out of
specific functional areas of companies or in relation to recognized business professions.
C. Ethics of finance and accounting
Creative accounting, earnings management, misleading financial analysis.
Insider trading, securities fraud, bucket shop, forex scams: concerns (criminal) manipulation
of the financial markets.
Executive compensation: concerns excessive payments made to corporate CEO's.
Bribery, kickbacks, facilitation payments: while these may be in the (short-term) interests of
the company and its shareholders, these practices may be anti-competitive or offend against
the values of society.
D. Ethics of human resource management
The ethics of human resource management (HRM) covers those ethical issues arising around the
employer-employee relationship, such as the rights and duties owed between employer and
employee.
PREPARED BY MR. ANTONY AMBIA Page 4
