INDIAN ETHOS AND BUSINESS ETHICS

Syllabus:

Unit Unit Name No. of

No. Lectures
Unit Introduction to Indian Ethos & Understanding Values in Business: 15 Marks
1: • History & Relevance, Principles Practiced by Indian Companies.
• Role of Indian Ethos in Managerial Practices, Management Lessons
from Vedas, Mahabharata, Bible and Quran.
• Kautilya’s Arthashastra, Indian Heritage in Business, Management-
Production and Consumption.
• Ethics v/s Ethos ,
• Indian v/s Western Management,
• Work Ethos and Values for Indian Managers
• Relevance of Value Based Management in Global Change- Impact
of Values on Stakeholders,
• Value System in Work Culture
• Stress Management-Meditation for mental health, Yoga.
Understanding
Unit the ethical needs & ethical dilemma: 15 marks
2: • Understanding the need for ethics, Ethical values, ethical codes,
Ethical Principles in Business.
• Theories of Ethics, Absolutism verses Relativism,
• Teleological approach, the Deontological approach, and Kohlberg’s
six stages of moral development (CMD).
• Managing Ethical Dilemma; Characteristics, ethical decision
making, ethical reasoning, the dilemma resolution process; ethical
dilemmas in different business areas of finance, marketing HRM
and international business

.
Unit- 1: Introduction to Indian Ethos & Understanding Values in Business:
• History & Relevance, Principles Practiced by Indian Companies. - In the book
• Role of Indian Ethos in Managerial Practices, Management Lessons from Vedas,
Mahabharata, Bible and Quran. In the Book
• Kautilya’s Arthashastra, Indian Heritage in Business, Management-Production and
Consumption. In the book
• Ethics v/s Ethos -In the book
• Work Ethos and Values for Indian Managers
• Relevance of Value Based Management in Global Change- Impact of Values on Stakeholders
• Value System in Work Culture- In the book
• Stress Management-Meditation for mental health, In the book
• Yoga. –
Yoga: Its Origin, History and Development:

Introduction: The Practice of Yoga is detailed in the ancient literature of more than 2000
years ago. Yoga in the Indian tradition refers to unification of man with the supreme. The
supreme is not conceptualised as ultimate power and the source of all energy. Yoga is
essentially a spiritual discipline based on an extremely subtle science, which focuses on
bringing harmony between mind and body. It is an art and science of healthy living. The
word ‘Yoga’ is derived from the Sanskrit root ‘Yuj’, meaning ‘to join’ or ‘to yoke’ or ‘to
unite’. As per Yogic scriptures the practice of Yoga leads to the union of individual
consciousness with that of the Universal Consciousness, indicating a perfect harmony
between the mind and body, Man & Nature.

Modern scientists claim that a person who feels this unity with all of existence is practising
yoga and is known as a yogi because they have experienced the liberated condition of mukti,
nirvana, or moksha. Thus, the goal of yoga is self-realization, which paves the way for "the
state of liberation" (Moksha) or "freedom" (Kaivalya) through overcoming all forms of pain.
The primary goals of yoga practise shall be health and peace, as well as living freely in all
spheres of life. The term "yoga" also describes an internal science that includes a range of
techniques by which people might realise this connection and gain control over their future.
A "immortal cultural outcome" of the Indus Saraswati Valley civilization, which dates back
to 2700 B.C., yoga is commonly regarded as.
Importance of Yoga: in the book
Unit -2: Understanding the ethical needs & ethical dilemma:
• Understanding the need for ethics, Ethical values, ethical codes, Ethical Principles in
Business.
Need or importance of Ethics:
1. Stop business malpractices: Some unscrupulous businessmen do business malpractices
by indulging in unfair trade practices like black marketing, artificial high pricing,
adulteration, cheating, selling duplicates or harmful products. Business ethics helps to stop
these malpractices and safeguard society. It creates healthy environment for everyone.
2. Survival of business: Ethics are mandatory or compulsory for survival of any business.
The businessmen who do not follow it will only have short term success, but fail in the
long run. So it is always better to follow appropriate code of conduct to survive in the
competitive market. Hence ethic is essential for survival of business.
3. Safeguarding consumers’ right: the consumer has many rights such as right to health
and safety, right to be informed, right to choose, right to be heard, right redress etc. But
 businessmen do not respect and protects the rights of their consumers. Business ethics are
must to safeguard these basic rights of the consumers.
4. Protecting employees and shareholders: Business ethics are required to protect the
interest of employees, shareholders, competitors, dealers, suppliers, customers
government, etc. It protects them from exploiting each other through unfair trade practices
like cheating or frauds. Ethics compels each entity participating in the business activity to
properly execute its role by adhering the established code of conduct. Since everyone is
disciplined and function appropriately, business grows well in the long run.
5. Develops good relations: Business ethics are important to develop good and friendly
relations between business and society. This will result in regular supply of good quality
goods and services at low prices to the society. It will also result in good profits for
businesses thereby resulting in the growth of the economy. If the economy keeps growing,
it ultimately improves the standard of living.
6. Creates good image: Business ethics creates good image for the business or businessmen.
If businessmen follow all ethical rules, then they will be fully accepted and not criticised
by the society. The stakeholders always support those businessmen who follow the
necessary code of conduct and avoids engaging in unscrupulous activities.
7. Smooth functioning: If the business follows all the business ethics, then employees,
shareholders, consumers, dealers, and suppliers will all be happy. So, they will give full
cooperation to the business. This will result in smooth functioning of business activities.
So, the business will grow, expand, and diversify easily and quickly. The satisfaction of all
involved parties is necessary for the smooth functioning of a business. Business ethics
maintains this safe level of satisfaction and protects the business from being dysfunctional.
Conclusion
Without ethical standards no matter how small or big a business may be, it simply can’t
withstand generosity of time, market situations and its customers. Ethics are those
supporting pillars on whose foundation the integrity, stability, and prosperity of business
stand tall and upright with dignity. Higher these standards of ethics stronger and rigid is
the support.

Ethical Values:
Ethical values can help build character and business.
1. Trust worthiness: A person who is trustworthy has these behaviours, acts with
integrity, is honest and does not deceiving, keep his or her promise, is consistent, is
loyal to those that are not present, is reliable, is credible, has a good reputation.
2. Respect: A person who is respectful is open and tolerant of differences, is considerate
and courteous, deals peacefully with anger, disagreements, or insults, use good
manners.
3. Responsibility: A person who is responsible for acts with self-discipline, thinks before
acting, understands that actions create certain consequences, is accountable for actions.
4. Fairness: A person who is open minded and listens to others, takes turns and shares,
does not lay the blames on others needlessly, is equitable and impartial.
5. Caring: A person who is caring expresses gratitude to others, forgives others, Helps
people in need, is compassionate.
6. Citizenship: A good citizen is one who cooperates, shares information, stays
informed, is a good neighbour, protects the environment, obeys the law and seeks the
common good for the most people.
Code of Ethics:

A code is a statement of policies, principles, or rules that guide behaviour. Certainly, codes of

ethics do not apply only to business enterprises; they should guide the behaviour of persons

in all organizations and in everyday life. Code of ethics specifies how an organization expects

its employees to behave while on the job.

Developing code of ethics can be a useful way to promote ethical behaviour and clarify

company expectations of employee conduct in various situations and makes clear that the

company expects its people to recognize the ethical dimensions in decisions and actions.

An increasing number of companies are developing codes of ethics and implementing ethics

training workshops and seminars. However, when faced with a question of ethics, managers

tend to ignore codes of ethics and try to solve their dilemma on their own.

Simply stating a code of ethics in not enough, and the appointment of an ethics committee,

consisting of internal and external directors, is essential for institutionalizing ethical

behaviour.

Such a committee may perform functions as holding regular meetings to discuss ethical

issues, dealing with grey areas, communicating the code to all members of the organization,

checking for possible violations of the code, enforcing the code, rewarding compliance, and

punishing violations, reviewing, and updating the code, and reporting activities of the

committee to the board of directors.

The management of a company that wants to improve its employees’ ethical behaviour

should not only develop a comprehensive code of ethics, but also communicate the code in its

training programs, performance appraisal system, in policies and procedures, and through its

own action.

It may also want to do the same for those companies with which it does business. For

example, Reebok International has developed a set of human rights production standards for

the manufacturers that supply the company with its athletic shoes on a contract basis.
Principles of Business Ethics

There are generally 12 business ethics principles:

1. Leadership: The conscious effort to adopt, integrate, and emulate the other 11
principles to guide decisions and behaviour in all aspects of professional and personal
life.
2. Accountability: Holding yourself and others responsible for their actions.
Commitment to following ethical practices and ensuring others follow ethics
guidelines.
3. Integrity: Incorporates other principles—honesty, trustworthiness, and reliability.
Someone with integrity consistently does the right thing and strives to hold
themselves to a higher standard.
4. Respect for others: To foster ethical behaviour and environments in the workplace,
respecting others is a critical component. Everyone deserves dignity, privacy,
equality, opportunity, compassion, and empathy.
5. Honesty: Truth in all matters is key to fostering an ethical climate. Partial truths,
omissions, and under or overstating don't help a business improve its performance.
Bad news should be communicated and received in the same manner as good news so
that solutions can be developed.
6. Respect for laws: Ethical leadership should include enforcing all local, state, and
federal laws. If there is a legal grey area, leaders should err on the side of legality
rather than exploiting a gap.
7. Responsibility: Promote ownership within an organization, allow employees to be
responsible for their work, and be accountable for yours.
8. Transparency: Stakeholders are people with an interest in a business, such as
shareholders, employees, the community a firm operates in, and the family members
of the employees. Without divulging trade secrets, companies should ensure
information about their financials, price changes, hiring and firing practices, wages
and salaries, and promotions are available to those interested in the business's success.
9. Compassion: Employees, the community surrounding a business, business partners,
and customers should all be treated with concern for their well-being.
10. Fairness: Everyone should have the same opportunities and be treated the same. If a
practice or behaviour would make you feel uncomfortable or place personal or
corporate benefit in front of equality, common courtesy, and respect, it is likely not
fair.
11. Loyalty: Leadership should demonstrate confidentially and commitment to their
employees and the company. Inspiring loyalty in employees and management ensures
that they are committed to best practices.
12. Environmental concern: In a world where resources are limited, ecosystems have
been damaged by past practices, and the climate is changing, it is of utmost
importance to be aware of and concerned about the environmental impacts a business
has. All employees should be encouraged to discover and report solutions for
practices that can add to damages already done.
• Theories of Ethics, Absolutism verses Relativism

Ethical theory is the systematic effort to understand moral concepts and justify moral

principles and theories. Applied ethics deals with controversial moral problems, such as

questions about the morality. One can divide ethical theory into two basic categories: those

theories that aim at achieving some result that is labelled the fundamental aim or good and

those theories that aim at discerning which laws of action are the right or good.

Some of the philosophical ethical theories commonly called to include:

 Utilitarianism, which says that the right thing to do in any situation is whatever will “do

the most good” (that is, produce the best outcomes) taking into consideration the interests of

all concerned parties.

 Kantianism (or Deontology more generally), which says that—as a matter of respect—

there are certain absolute (or nearly absolute) rules that must be followed (for example, the

rule that we must respect people’s privacy, or respect other people’s right to make decisions

about their own lives).

 Social Contract Theory (or “contractarianism”), which says that, in order to figure out what

ethical rules to follow, we ought to imagine what rules rational beings would agree to in an

“ideal” decision-making context.

 Virtue Theory, which says that we ought to focus not on what rules to follow, but on what

kinds of people (or organizations!) we want to be, and what kinds of ethical examples we
ought to follow.

Absolutism verses Relativism

What is Absolutism?
Absolutism maintains that moral values are fixed regardless of time, place, and the people
concerned. Under moral absolutism is graded absolutism which views a certain standard as
either greater or less than another moral absolute. For instance, the guideline, “Do not lie” is
less important than “Do not kill”.
Its advantages include the critical evaluation of ethics and observing equality since rules
apply to people from different walks of life. For instance, lying is immoral and saying the
truth should be always practiced. However, it does not seem suitable to measure all
individuals using the same moral yardstick as life has grey areas. One popular example of
absolutism is Kantian ethics (developed by Immanuel Kant, a German philosopher) which
put forward that an action is only good if the principle behind it is moral.

What is Relativism?
Relativism asserts that moral standards are dependent on contexts since nothing is innately
right nor wrong. This kind of view is more applicable to the current society as the value of
tolerance is being advocated. For instance, it is immoral in some countries for women to go
outside without covering their faces while it is perfectly normal in most territories.
Relativism’s advantages include acknowledging diversity and grey areas. On other hand, its
disadvantages include reducing a behaviour’s value from being “morally correct” to merely
being “socially acceptable”.
The following are the major classifications of relativism:
• Moral relativism: variety in moral standards across various peoples and
cultures
• Truth relativism: what is true is dependent on a certain outlook.
• Descriptive relativism: the distinctions between groups are simply depicted;
they are not judged.
• Normative relativism: morality is evaluated based on a certain framework.

Difference between Absolutism and Relativism

1.Moral Guidelines
In absolutism, the moral guidelines are distinct while those of relativism are dependent on the
contexts of various situations.

2.The Value of Tolerance

Relativism is more closely associated with the value of tolerance since the differences in
background are considered. On the contrary, absolutism does not investigate diversity as it
strictly adheres to the moral guidelines; hence, its critics argue that this perspective covers
way for discrimination.

3.Intrinsic Values
Unlike relativism, absolutism holds that acts are intrinsically right or wrong. For instance,
since absolutists believe that killing is intrinsically wrong, a woman who killed a rapist in
self-defense is condemned as immoral. On the other hand, a relativist understands
the crime of passion involved in the situation and views the woman as moral.

4.Religion
As compared with relativism, moral absolutism is more associated with religion since
religious doctrines often endorse specific ethical guidelines.

5.Advantages

The advantage of absolutism includes the ability to critically evaluate the ethics of different
situations while that of relativism is the capacity to tolerate diverse kinds of beliefs.

6.Disadvantages

The disadvantages of absolutism include the inability to consider the context of situations and
value the gray areas of morality while that of relativism is reducing being “morally correct”
to merely being “socially acceptable” and that the lines between what is right and wrong may
become too vague.

7.Major Categories

The major categories of relativism are moral, truth, descriptive, and normative while
absolutism does not have major categories.

8.Consequences

Absolutism does not consider consequences as its moral belief are deontological or only
based on the indicated rules whereas relativism is teleological or values the results of one’s
actions. For instance, absolutism views Robin Hood as immoral since stealing is bad;
however, relativism sees him as moral since he steals from a corrupt individual and gives
money to the poor.
Summary of Absolutism verses Relativism
• Both absolutism and relativism are philosophical concepts on moral values.

• Absolutism asserts that moral values are fixed regardless of time, place, and the
people concerned.
• Unlike in absolutism, the value of tolerance is stressed in relativism.
• Unlike relativism, absolutism believes that values are inherently right or
wrong.
• As compared to relativism, absolutism is more connected with religion.
 • The advantage of absolutism is its capability to essentially evaluate a
situation’s morality while that of relativism is its position to consider gray
areas.
• The drawback of relativism is the possible reduction of what is morally correct
to being merely socially acceptable while that of absolutism is not believing the
context.
• Relativism has key categories while absolutism has none.
• Unlike absolutism, relativism considers consequences.
• An example for absolutism is Kantian Ethics and that of relativism is
Situational Ethics.

Absolutism

V/s

Relativism

Comparison Absolutism Relativism

Moral guidelines Definite Dependent on context

The value of Emphasized Not emphasized

Tolerance

Intrinsic values Acts are intrinsically right or Acts are influenced by other
wrong external factors

Religion More associated Less associated

Advantages Critically evaluates moral Considers gray areas

standards

Disadvantages Does not consider the context May lessen “morally correct” to
 “socially acceptable”

Major Categories No categories Moral relativism, truth relativism,

descriptive relativism, normative
relativism

Consequences Not considered The end may justify the means

Moral theory Kantian Ethics Situational ethics

examples

Theological Approach

The term theology, in Greek means discourse about or study of gods or divine things. It was
not originally distinguished from philosophy about gods and divine matters, and for some
contemporary thinkers. These kinds of issues raised regarding the relationship of science and
religion depend in many respects on one's conception of theology as it pertains to rationality,
authority, and the communities and sources of theology.

Deontology Approach

Deontology is an ethical theory that says actions are good or bad according to a clear set of
rules. Its name comes from the Greek word deon, meaning duty. Actions that align with these
rules are ethical, while actions that don’t aren’t. This ethical theory is most closely associated
with German philosopher, Immanuel Kant.

His work on personhood is an example of deontology in practice. Kant believed the ability to
use reason was what defined a person.

From an ethical perspective, personhood creates a range of rights and obligations because
every person has inherent dignity – something that is fundamental to and is held in equal
measure by each and every person.
This dignity creates an ethical ‘line in the sand’ that prevents us from acting in certain ways
either toward other people or toward ourselves (because we have dignity as well). Most
importantly, Kant argues that we may never treat a person merely as a means to an end (never
just as a resource or instrument).

Ethical Dilemma

We are faced with ethical dilemmas almost every day, both at the individual level and at the

societal level. Ethical Dilemmas arise due to conflict of interest or due to ignorance of what is

the correct thing to do in a given situation. Both, the individual and the community face

dilemmas.

In many situations, the right action may be evident. However, there may be many tricky

situations where it may not be possible to decide the right actions. Ethical theories help us

win over such situations.

A major reason for ethical dilemmas is the conflict of moral principles. As we decide to take

action based on one or more moral principles that apply in a given situation, we come to

know that it conflicts with other moral principles that need to be followed. For example,

telling a lie or hiding the truth is against moral principles.

However, there can be situations where telling a lie or hiding the truth may be the correct

thing to do according to some ethical theory. Dilemmas generally occur because of such

conflicts among moral principles. We face a dilemma when our moral beliefs, such as –

duty, rights, principle, and values, come into conflict in each situation.

Another reason for ethical dilemma is the lack of clarity in a given situation. It may not be

clear whether a particular act is immoral or not. In addition, the professional may not be able

to decide whether it is ethical or not. Such situations frequently arise due to vagueness of the

particular act.
Yet another reason for dilemmas can be situations where there is no agreement on what is the

right course of action. There is no vagueness about the situation but many people feel

differently about the right thing to be done.

All options have takers and each of them have good reasons to believe that morally what they

think is what is right. How one analyses and interprets the situation and how one formulates

the solution come into question. There is then a need to discuss and arrive at the best option

in the given situation.

Theories of theology are sometimes distinguished by what they take to be the most important

sources for theology and the roles those sources play. The commonly cited sources are

scriptures, such as the Vedas, the Hebrew and Christian Bibles, and the Quran; historical

traditions as expressed in creeds, commentarial texts, and special teachings; experience,

usually contextualized, as in mysticism, popular piety, and liberation movements for the poor

or marginalized; and reason, as in philosophy, the arts, imaginative literature, sciences,

common sense, and practical endeavours such as politics and law.

Kohlberg’s Stages of Moral Development

Lawrence Kohlberg formulated a theory asserting that individuals progress through six
different stages of moral reasoning from childhood to adulthood.

He grouped these stages into three broad categories of moral reasoning, pre-conventional,
conventional, and post-conventional. Each level is associated with increasingly complex
stages of moral development.

Kohlberg suggested that people move through these stages in a fixed order and that moral
understanding is linked to cognitive development.

Level 1 – Preconventional Morality

Preconventional morality is the first level of moral development, lasting until approximately
age eight. During this level, children accept the authority (and moral code) of others.

Preconventional morality is when people follow rules because they don’t want to get in
trouble or they want to get a reward. This level of morality is mostly based on what authority
figures like parents or teachers tell you to do rather than what you think is right or wrong.
Stage 1. Obedience and Punishment Orientation. The child/individual is good to avoid
being punished. If a person is punished, they must have done wrong.

Stage 2. Individualism and Exchange. At this stage, children recognize that there is not just
one right view handed down by the authorities. Different individuals have different
viewpoints.

Level 2 – Conventional Morality

Conventional morality is the second level of moral development (8 years old to early
adolescence), characterized by accepting social rules and the expectations of others
concerning right and wrong.

We internalize the moral standards of valued adult role models at the conventional level
(most adolescents and adults).

Authority is internalized but not questioned, and reasoning is based on the group’s norms to
which the person belongs.

Stage 3. Good Interpersonal Relationships. The child/individual is good to be seen as

being a good person by others. Therefore, answers relate to the approval of others.

Stage 4. Law and Order Morality. The child/individual becomes aware of the wider rules
of society, so judgments concern obeying the rules to uphold the law and avoid guilt.

Level 3 – Postconventional Morality

Postconventional morality is the third level of moral development and is characterized by an

individual’s understanding of universal ethical principles.

Postconventional morality is when people decide based on what they think is right rather than
just following the rules. This means that people at this level of morality have their own
ethical principles and values and don’t just do what society tells them to do. At this level,
people think about what is fair, what is just, and what values are important.

Stage 5. Social Contract and Individual Rights. The child/individual becomes aware that
while rules/laws might exist for the good of the greatest number, there are times when they
will work against the interest of particular individuals.

The issues are not always clear-cut. For example, in Heinz’s dilemma, the protection of life is
more important than breaking the law against stealing.

Stage 6. Universal Principles. People at this stage have developed their own set of moral
guidelines, which may or may not fit the law. The principles apply to everyone.
E.g., human rights, justice, and equality. The person will be prepared to act to defend these
principles even if it means going against the rest of society in the process and having to pay
the consequences of disapproval and or imprisonment.

Kohlberg doubted few people had reached this stage.

Ethical Dilemma

Managing Ethical Dilemma

What is Ethical Dilemma?

An ethical dilemma (ethical paradox or moral dilemma) is a problem in the decision-making

process between two possible options, neither of which is absolutely acceptable from an
ethical perspective. Although we face many ethical and moral problems in our lives, most of
them come with relatively straightforward solutions. Ethical conundrums, on the other hand,
are exceedingly challenging problems that are difficult to resolve. Finding the best solution in
these circumstances is therefore crucial for everyone. Almost every area of a person's life,
including social, professional, and personal, has the potential to present an ethical issue.

Characteristics of Ethical Dilemma

1. A choice must be made between two courses of action.

2. There are significant consequences for taking either course of action.

 3. Each of the two courses of action can be supported by one or more ethical
principles.

4. The ethical principles supporting the un-chosen course of action will be

compromised.

5. It cannot be resolved solely through a review of scientific or empirical data.

6. One cannot think logically or decide about the problem, and there are
differences of opinion.

7. The results of the problem must be affecting more than the immediate situation.

Ethical Decision making

Ethics focuses on decision making process for determining right and wrong, which
sometimes is a matter of weighing the pros and cons or the competing values and interest.
Morality is the code of behaviour usually based on religious views, which often inform our
ethical decisions.

Ethical decision-making refers to the process of evaluating and choosing among alternatives
in a manner consistent with ethical principles. In making ethical decisions, it is necessary to
perceive and eliminate unethical options and select the best ethical alternative.
We can distinguish between four views of ethical behaviours which help in ethical decision
making. They are as follows:
1. Utilitarian view: It is based on the notion that ethics should deliver the greatest
number of people.
2. Individualism view: this view seeks to advance the long-term self – interest of
individuals.
3. Moral right view: This emphasizes respect for and protection of the fundamental
right of people.
4. Justice view: Ethical behaviour or decision should treat people impartially and fairly
according to the guiding rules and standards.

The process of making ethical decisions requires:

• Commitment: The desire to do the right thing regardless of the cost.

• Consciousness: The awareness to act consistently and apply moral convictions to
daily behaviour.
• Competency: The ability to collect and evaluate information, develop alternatives,
and foresee potential consequences and risks.

Good decisions are both ethical and effective:

• Ethical decisions generate and sustain trust; demonstrate respect, responsibility,

fairness and caring; and are consistent with good citizenship. These behaviours
 provide a foundation for making better decisions by setting the ground rules for our
behaviour.
• Effective decisions are effective if they accomplish what we want accomplished and if
they advance our purposes. A choice that produces unintended and undesirable results
is ineffective. The key to making effective decisions is to think about choices in terms
of their ability to accomplish our most important goals. This means we must
understand the difference between immediate and short-term goals and longer-range
goals.

Ethical decisions are influenced by three keys factors: Individual moral standards, the
influence of managers and co- workers and the opportunity to engage in misconduct. While
one may have great control over personal ethics outside the workspace, co-workers and the
management exert significant control on one’s choice at work.

Ethical Reasoning

Ethical reasoning is the ability to identify, assess, and develop ethical arguments from a

variety of ethical positions.” For the purposes of this application, it may be useful to think of

an ethical reasoning course as one that incorporates ethical questions into the intellectual

work required in the course. Ethical questions concern judgments of right and wrong, good,

and bad, as well as matters of justice, fairness, virtue, and social responsibility. Ethical

reasoning helps determine and differentiate between right thinking, decisions, and actions and

those that are wrong, hurtful and/or harmful— to others and to ourselves. Ethics is based on

and motivated by facts, values, emotions, beliefs, emotions, and feelings. Ethical actions are
based on honest reasoning of facts based on moral principles and standards.

Three Criteria in Ethical Reasoning

The following criteria can be used in ethical reasoning:

1. Moral reasoning must be logical. Assumptions and premises, both factual and
inferred, used to make judgments should be known and made explicit.
2. Factual evidence cited to support a person’s judgment should be accurate, relevant,
and complete.
3. Ethical standards used in reasoning should be consistent. When discrepancies are
found in a person’s ethical standards in a decision, one or more of the standards must
be modified.
Resolving Ethical Dilemmas:

When one faces an ethical dilemma, depending on the complexity of the problem, one has to

make an attempt to find a solution based on accepted ethical principles. Lack of clarity,

conflicting principles, and many other factors make it difficult to decide upon the appropriate

action.

Solutions must be case specific, but may generally involve the following steps:

1. Formulate some core ethical principles that you would like to follow, if you have not done

so already.

2. Collect all related facts of the case.

3. Perform an ethical analysis of the given situation wherein you analyse the ethical factors

that dominate the problem and the ones that tend to conflict.

4. While it may be difficult, prioritize the ethical factors in the order that you think should

take precedence.

5. Having formulated your ideas; it may be desirable to discuss with some people close to

you about the case and the consequences you think any decision or action would have.

6. Having accepted inputs from them, you can now formulate your plan of action, noting

down all the moral consequences of the solution.

The following approaches to solve an ethical dilemma were determined:

• Refute the paradox (dilemma): The situation must be carefully analyzed. In some
cases, the existence of the dilemma can be logically proved false.
• Value theory approach: Choose the alternative that offers the greater good or the
lesser evil.
• Find alternative solutions: In some cases, the problem can be reconsidered, and new
alternative solutions may arise.
Some examples of ethical dilemma include:
1.Taking credit for others’ work.
2.Offering a client a worse product for your own profit.
3.Utilizing inside knowledge for your own profit.
Ethical dilemmas in different business areas of finance, marketing, HRM and
international business
A business demonstrates ethical behaviour when its decisions and its actions embody justice,
truthfulness, and fair dealing with its stakeholders. While ethics are always important, ethical
issues in corporates are of exceptional importance because of the trust consumers place in the
products and services they use on a daily basis. There is an inverse relationship between
ethical problems and government regulation. As a business chooses to behave ethically, the
need for statutory or regulatory government intervention is lessened.

The four common ethical problems in business are a lack of integrity, problematic
organizational relationships, conflicts of interest, and deceptive advertising. These are not
mutually exclusive, and more than one of the four dilemmas can be present in the same
situation.
There exist many different ethical issues in an organization or at the workplace. Some of
them are as follows:
• Identifying the conflict issues in the organization and trying to avoid them.
• Deciding different methods to motivate employees.
• Managing fairness in employee performance appraisals
• Protecting secret information of the organization
• Identifying the areas of interest of customers, employees, suppliers, owners and the staff.
• Acting against the reports of complaints in the organization.
• Handling different problems of employees.
• Taking corrective action against employees.

The following are some of the major ethical challenges an organization faces in ethical
management of Human Resources.
1.Harming Some While Benefitting Others: HR managers do much of the screening while
the hiring process is still on. By its very nature, screening leaves some people out and permits
others to move forward. In short, the ones left out will be affected by not getting the job, no
matter how much they need it.HR managers can neglect the emotionalism of such situations
by adhering strictly to the skill sets and other needs of the position.

2. Equal Opportunity: The HR managers must regularly monitor the company's hiring
practices making sure there is no discrimination in the hiring process based on ethnicity,
sexual orientation, race, religion and disability. However, simply abiding with Equal
Employment Opportunity Commission (EEOC) guidelines does not guarantee ethical
behaviour. For example, if an HR manager recommends a candidate in order to fill a quota,
that decision is unethical, because it will remove other applicants that may be more qualified.
3. Privacy: Privacy is always a sensitive matter for an HR manager. Though a company
culture may be friendly and open and motivates employees to freely discuss personal details
and lifestyles, the HR manager has an ethical obligation to keep such matters private. This
specifically comes into play when the competing company calls for a reference on an
employee. To remain ethical, HR managers must abide with the job-related details and leave
out knowledge of an employee's personal life.

4. Compensation and Skills: HR managers can suggest compensation. While these

recommendations may be based on a salary range for each position, ethical dilemmas arise
when it comes to compensating employees differently for the same skills.

For example, a highly sought-after executive may be able to negotiate a higher salary than
someone who has been with the company for several years. This can become an ethical
problem when the lower-paid employee learns of the discrepancy and questions whether it is
based on characteristics such as gender and race.

5.Opportunity for New Skills: If the HR department selects who gets training, it can run
into ethical issues. As training is a chance for development and broadened opportunities,
employees who are left out of training may debate that they are not being given equal
opportunities in the workplace.

Ethical dilemmas in different business areas of finance

1. Adoption of proper accounting policies

2. Proper valuation of assets

3. Fair disclosure of relating to financial affairs of organisations

5. Ethical audit practices

6. Not practicing creative accounting

7. Optimum utilization of finance

Ethical Issues in Sales and Marketing

1. Understanding of customers

2. Marketing of safe and useful products snacks

3. Fair and adequate information about services within the rules and regulations.

4. True and fair advertisement

5. Correct weights and measures

6. Not supplying injurious products for commercial gain

7. Ensuring stability in pricing

Ethical dilemmas in different business areas of international business

International business is when an organization carries out its operations, such as

manufacturing, selling, marketing, or sourcing from across national borders. International
business can also include global governmental and international agencies exchanging
physical and intellectual assets. On the other hand, ethical issues refer to an occurrence in
which a business faces a moral conflict that needs to be taken care of. For example, a
situation where a decision has been made, or an activity attracts questionable moral
standards. Ethical issues characteristically involve conflicting with the given society's norms
and, at times, with the legal provisions.

Ethical issues in international business include:

1.Child labour

2.Workplace diversity

3.Working standards

4.Human rights

5.Equal employment opportunity

6.Trust and integrity

7.Environmental preservation

Multinational corporations are constantly confronted with moral dilemmas concerning these
ethical issues. At times there is an apparent right course of action that such organizations
might choose. Still, the situation in the area of operations might make it difficult to determine
what is ethically acceptable.
Objectives Questions with answers:

(1)Multi Choice Questions (MCQs)

1. _______is based on the notion that ethics should deliver the greatest number.

(a) Utilitarian view (b)Individualism view (c) Moral right view (d) Justices view

2. _______view seeks to advance the long term self -Interest of individuals.

(a) Utilitarian view (b)Individualism view (c) Moral right view (d) Justices view

3. _______ view emphasizes respect for and protection of the fundamental right of people.

(a) Utilitarian view (b)Individualism view (c) Moral right view (d) Justices view

4. __________view emphasises on ethical behaviour or decision should treat people

impartially and fairly according to the guiding rules and standards.

(a) Utilitarian view (b)Individualism view (c) Moral right view (d) Justices view

5. What is right or wrong is consistent in all places or circumstances is called ethical ______.

(a) Subjectivism (b)Relativism (c) Absolutism (d) feminism

6. ________is the study of principles, rules, or theories that guide our actions and
judgements, to determine what is morally right or wrong.

(a) Normative ethics (b)Descriptive ethics (c) Analytics ethics (d) Applied ethics

7. According to ________emotions influence decision making.

(a) Contextual ethics (b) Contemporary ethics (c) Cognitive ethics (d) Virtue ethics

8. _________emphasises the role of one’s character and the virtues that one’s character
embodies for determining or evaluating ethical behaviour.

(a) Contextual ethics (b) Contemporary ethics (c) Cognitive ethics (d) Virtue ethics

Answers:

1 2 3 4 5 6 7 8
a b C d c a c d

Short questions:

1.Ethical Dilemma
2. Ethical decision making

3. Absolutism

4. Relativism

5. Theological theory

Long Answer Questions:

1.Explain various Ethical theories

2. What is ethical decision making? What is its relevance to business?

3. What do you understand by ethical dilemma? How to overcome that?

4. Explain the steps in ethical decision making.

5. Explain the ethical dilemma in different business areas of finance, marketing, HRM and
international business.