Ethics, Values

And
Corporate Social
Responsibility
Unit: 1
Introduction
1.What is Ethics & Ethical Standards

2.Historical perspective on Ethics.

Introduction:
1.Social business ethics : 1000to 1600 BC
Bhagavad Gita: Krishna told that

“Manager must look upon the task that ha has

been set, or that he sets himself, not in terms
of personal gain or profit but purely in terms
of its fulfillment and the satisfaction that he
gets out of that”.
Buddha: He wanted to emphasize was that
“No harm must be done in quest of personal
gain”.

Arthashastra:
It lays down as a duty of a manager to keep
complete accounts; It also mentions that he
should be subject to an audit, that his
accounts should be looked at time and again
for their clarity and truthfulness.
Akbar and Operational Frame work:
The framework in which one operates has to
be well defined, otherwise due to vagueness
that leads to loss of ethics.

British Period:
British govt, operating till 1947, they gave
India a complex but a good system of rights,
obligations, duties, an operational
framework etc.
 Historical perspective on Ethics
Treat all men with fairness and justice

Do to others as you would have them do to you

Always treat individuals with respect and dignity

Love your neighbour as you love yourself

Always ask: “Will it hurt anyone?’

Be always honest with yourself and with others .

What is Ethics & Ethical Standards
Ethics:
Ethics is
-- a set of standards or a code, or
-- value system,
-- worked out from human reason and experience,
-- by which free human actions are determined as
ultimately right or wrong, good or evil.

If an action agrees with these standards, it is ethical,

if not then it is unethical.
Ethical Standards:

Human goals [When it is reached it

should give happiness]

Striving to reach the goals

When goal changes or when it is not achieved then

our ethical standards are also changes which
determining the right and wrong actions.
Unit 2:
Business Ethics In Practice
1.Ethics of Multinational Business
2.Ethics of Leading Indian Companies
3.Ethics in public sector& Govt organizations
4.Ethical codes- Conflict of Interest
5.Accountability to the public
6.Non –Abuse of official position.
1.Ethics of Multinational Business
Ethics is important in any international
business.

Non- Societal norms like murder, stealing,

lying and breaking contracts are condemned
in all the countries.

Business would survive and flourish on the

trust that contracts will be honoured, that
goods promised would be delivered and that
those who receive goods would pay for
them.
Norms for the Multinational Corporations:
Norms:
1.The norm to do NO intentional direct harm and is applied
to all.

2.The activities of the Multinationals must benefit the host

country. The activities have to be morally justified.

3.The human rights of the workers and consumers in the

host country should always be respected.
[ which includes paying adequate wages, safe working
conditions etc.]
4. To promote the development of just background
institutions internally, within the country as well
as on the international level.

5.Multinations have to respect the laws of a host

country and to respect its culture and local values,
keeping in view that these d o not violate human
rights or impose immoral laws.
 United Nations has formed a code of conduct on
transnational corporations.
Ethical standards such as
-- Respect for human rights and fundamental
freedom,

-- Abstention from corrupt practices,

-- Consumer protection

-- Environmental protection etc.

Ethics in Govt organizations
1.Set an example by the transparently blameless
conduct of its own affairs.

2.Legislate for, regulate and police the conduct of

organizations

3.Encourage organizations to adopt effective

voluntary codes of conduct without the heavy
hand of legislation

4.Stimulate national/international debate on moral

aspects of govt, and life of society as a whole.
Ethics in Public sector
-- Style of service is a common problem.

-- Quality of service issues are ethical issues

in public utilities services.

-- Public Sectors should treat individuals with

feelings, rather than as numbers on a
register.
Ethical Codes:
Company should establish a code of ethics and
which can be taken as an indication that serious
efforts could be made in the organization to
ensure good conduct.

In many western countries, organizations

introduced codes because their leaders wish to
maintain or improve standards of behaviour quite
apart from the pressures of the law.
 Ethical Codes - Conflict of Interest
The executive/ officers of the PSE should uphold
the following points.
1.They should uphold the rule of law and respect for
human rights.

2.They should maintain the highest standards of

honesty/decency and integrity.

3.They should conduct themselves in such a manner

that the public feels that the decisions taken on the
recommendations made by them are objective and
transparent.
 And are not calculated to promote improper gains
for the political party in power or for themselves
or for anyone else.

4. They should not seek to frustrate or undermine

the policies, decisions and actions taken in the
public interest by the management by declining or
nonparticipation from action which flows from
the management decision.

5. If any officer required by the superior authority to

act in a manner which is illegal or against the
prescribed rules and regulations, (or)
If any illegal violation comes to his/her notice, they
should decline to implement the instruction, and
also bring the facts to the notice of the chairman/
MD of the enterprise or administrative ministry
concerned.

6.The religion, region caste, caste, language of the

executive will have no influence on the working in
his official capacity.
 Accountability to the Public
1.Ministries should away from any decisions which
is going to benefit any particular person or party
at the expense of the public interest.

2. Ministries should make known any clash of

interest when there is conflict between public and
private interest.

3.Ministries should be alert to any potential conflict

of interest, financial and they should disclose to
their superiors.
4. They should maintain their independence, dignity
and impartiality by not approaching politicians
and out outsiders in respect of service matters or
private benefit.
 Non –Abuse of official Position.
Ministers/ Executives/ Officers of PSE
1.They should be consistent, equitable and honest in
dealing with the public, with particular care for
the weaker sections of the society and should not
even be or appear to be unfair or discriminatory.

2. They should accept the obligation to recognize

and enforce customers right for speedy redress of
grievances and commit themselves to provide
services of stated and standard to customers.
3. They should respect the right of public to
information on all activities and transactions of
the organizations except in certain reasons.
Unit 3:
Employee Right to Privacy and Management
Information practices.
1. The challenge for HR Managers
2. Natural values of justice
3. Injustice of rules
4. Implementation
5. Decisions
 The challenge for HR Managers
Personal Data: Personal data are considered a
unique category of data controlled by the
human resources department.
Personal data which includes
--Salary information,
--Job, Address information
--Private information
Information dept has no independent access to
personal data. But they have to get viewing
access from HR dept.
The Challenges are,
1.The fundamental question of who should have to
access to what personal information and under
what conditions.
2.HR managers need to assume much greater
responsibility for educating and training, all staff
members who use personal data on the
company’s privacy and access controls.

Policies may need to be expanded as evolving

technology introduces new means of obtaining,
working with, communicating about, and storing
personal data.
3. HR Managers need to assume greater
responsibility for data security. Physical security
within the workplace, disk back–ups, installing
pass words and user authentication systems etc.

4.HR Managers need to determine whether their

organization’s most sensitive personal data should
be computerized at all and, if so, whether
restricting such data to highly localized, special
database should be appropriate or not.
5. In response to a general increase in the
accessibility of computer data, human resources
managers need to build up managerial controls
directed at preventing and detecting the
unauthorized use of data.
 Natural values of justice
The ‘Natural values of justice’ cooperate to promote
individual well being.

Cooperation: To include the ways of not interfering

with or bothering each other and also of
developing accepted procedures for engaging in
conflict and competition.

An individual can survive physically with a certain

minimum of food and shelter but, not
psychologically, if that minimum is below the
socially defined level of livability.
Even the minimum standard of human dignity and
the will to live competently is both absolute and
relative.

An individual can tolerate only a certain degree of

inconsistency, rejection, isolation, abuse or terror
from his group before he no longer will be
willing or competent to cooperate, his doorstep of
tolerance for such practices will undoubtedly
decrease if he sees that others are not treated
similarly.
Justice requires effective social cooperation:
There are undoubtedly some minimal conditions of social
order and group integrity that are necessary to individual
well being and human dignity.

Famine, drug addiction, theft, civil disorder and violence

are often prevalent in societies that are characterized by
-- Lack of planning,
-- ineffectual leadership,
-- Chaotic organization
-- poorly developed communication networks
-- insufficient allocation of resources for the development
and utilization of its productive capabilities.
 Emotional stress and disturbances are most
prevalent in those societies which are the most
neglected and most poorly organized.

Injustice of rules

Injustice of Implementation

Injustice of Decisions Making.

Unit 4:
Values And Objectives
1.The 5 Principles of Ethical Power for Individuals
2.Desired Values
3.The ‘Graves Model’
Values and Objectives
Values: deeply held preference for a mode of
acting, being or achieving, Integrity, achieve
material prosperity.

The 5 Principles of Ethical Power for Individuals

1.Purpose
2.Pride
3.Patience
4.Persistance
5.Perspective
1.Purpose
Seeing oneself as being an ethically sound person.

2.Pride
I don’t need the acceptance of other people to feel
important.

3.Patience: believe in things will eventually work

out well.
Having patience and peace with what comes their
way.
4.Persistance
Consistent with ones intentions and never give up.

5.Perspective
Get oneself focused and allows them to listen to
ones inner self and to see things more clearly.
Desired and Desirable Values:
Desired Values:
Desired values are the actual ones, which guide the
person’s life.
The actual behaviour of a majority of the members
of that society.

Desirable Values: Ideals that a person would like to

tend to. It represents the norm of right behaviour
as prescribed by the religions, leaders, traditions
and culture of that society.
The ‘Graves Model’
Clare Graves: Stated that individuals evolve through
different levels.
They are;
1.Tribalistic
2. Egocentric
3.Conformist
4.Manipulative
5.Sociocentric
6.Existential
Level: 1.Tribalistic:[ Need for Stability]
-- the prime end value of this level is safety.

-- at this level, ‘one shall live accordingly to the

ways of one’s elders.

-- People at this level are strongly influenced by,

submit to authority figures.

--people have a great fear of the unknown and

consequently a low-risk taking ability and a high
need for protection.
Level 2: Egocentric [Personal survival and
self-assertion/contention]
- Reacts violently against the constraints empowered on
him by the society.

- His attitude is ‘To hell with the rest of the world,

I am for myself’.

- Has a hostile attitude towards his environment, a high

degree of suspicion and mistrust and strong hatred for
constraints.

- May indulge in selfish and dishonest behaviour.

Level 3:Conformist [Traditional person, Follower]
-- Men see that things don’t happen the way they
want, and that life is not in their control.

-- He starts attributing his life, his place in the

society, his sufferings and happiness to a
supernatural design( Eg.Theory of Karma)

- The theme of this state is ‘one shall perform the

role certified to one with absolute perfection and
ignore immediate desires in order to reach
everlasting happiness later.
- Since their emphasis is on perfect performance of
their roles, they have low tolerance for ambiguity
and have difficulty in accepting people whose
values differ from their own.
Level 4 : Manipulative
-Needs to gain mastery over the universe rather than
become its servant.

- People at this level of existence have a high need

for achievement.

- They undertake any amount of manipulations to

achieve their goals.
Level 5: Socio centric [ Need for Affiliation]

-- Need to belongingness, to be accepted, to love

and be loved.

-- Cooperation stands out as more value than

competition.
Level 6: Existential [Maslow’s Self-actualization]
-- The human mind attains freedom from its earlier
deficiency models and is ready to experience and
express.

-- Individuals at this level is more liable to

understand his environment in relational terms, in
point of view rather than in isolation.
Unit 5:
Ethical Issues in General Management
1.Ethics in Advertising,
2.Warranties, Written Contracts
3.Protection of Trade Secrets- Misappropriation
4.Handling of Ethical Dilemmas
5.Ethical Auditing
6.Computer Ethics- Software Piracy.
Warranties, Written Contracts.
Written contracts are helps to reduce costly disputes.
It can be appear in formal documents, on the front or
back of invoices, in letters or in proposals.

Warranties: [Guarantee, Assurance]

Business people often explicitly guarantee that their
products and services will meet certain
specifications.
Protection of Trade Secrets- Misappropriation
The law recognizes that your trade secrets are
precious assets, and it protects them by prohibiting
their use by any one else.
You must prove that the information you desire to
protect qualifies as a trade secret.

Information may qualify as a Trade Secret:

Information may be, Financial, technical, non
technical data, a formula, Pattern Compilation,
Programme, Device, Method, Technique, drawing,
or process.
Misappropriation:
Misappropriation happens when a person acquires
your trade secret by improper means.

It includes theft, bribery, misrepresentation, breach

of confidential relationship, breach of any
agreement to keep the information secret or by
espionage.
Handling of Ethical Dilemmas
Strategies for the HR Professionals to deal with the
ethical dilemmas that arise in their course of their
duties:

1.Recognizes the obligation to develop a code of

ethics.

2. Develop such code of ethics which is built on the

recommendations of individuals in the profession.
3.Define the parameters of the HR professionals
duties. Negotiate an agreement with management
that identifies the rights and concerns of the HR
Staff, the employees, and the company.

4.Educate employees about the practice of employee

counselling.

5.Develop guidelines for documentation and record-

keeping. Deciding upon what will be recorded,
who will have the access of records, how long
they will be kept and how they will be used.
6.It is important to expand the code of ethics be
researched and drafted.

7.Keep informed about current legislations and

relevant court decisions.
 Ethical Auditing:
Making a available detailed audit reports to the
general public.
Following points has to be considered before
launching an audit.
1.Purpose
2.Type and Topics
3.Context
4.Process
5.People
6.Analysis and Reporting
7.Follow-up.
1.Purpose
Is it require to meet demands from a customer, or a
client or an owner.

2.Type and Topics:

Eg: Audit of policies/ procedures
Audit of actual performance
Audit of customer / other stakeholders perception
Audit of specific issues or problem areas
Also,
- To keep auditing compliance with the rule book.
- or the audit is carried out to know the attitudes
towards corporate environmental impact, (or)
- Understanding of health hazards (or)
- To explore in depth the values of people relative
to all your major categories of stakeholder.
3.Context:
- Is the organization accustomed to audits for other
purposes?

- Is there commitment from the top to act on the

findings?
4.Process:
Is it paper- based using questionnaires? Or
Is it face to face interviews?
5.People:
1.Consultants
2.Change agent
6.Analysis and Reporting: Process the data by
oneself, or by an outside agency.
7. Follow –up;
Outline plans for discussing and developing action
programmes.
 Computer Ethics - Software Piracy
Software piracy is the unauthorized duplication
of computer software.
They are;
1.Soft lifting
2.Uploading and downloading
3.Software counterfeiting
4.OEM unbundling
5.Harddisk loading
6.Renting
1.Soft lifting:
Purchasing a single licensed copy of software and
loading it onto several computers contrary to the
license terms.

2.Uploading and downloading:

3.Software counterfeit[ Fake, imitation, forged]

Illegally duplicating and selling copyrighted
software in a form designed to make it appear
legitimate.
4.OEM unbundling: Selling standalone software that
was intended to be bundled with specific
accompanying hardware.

5.Hard disk loading: Installing unauthorized copies

of software onto the hard disks of personal
computers, often as an incentive for the end user
to buy the hardware from that particular hardware
dealer.

6.Renting:Unauthorized selling of software for

temporary use, like video.
Unit 6:
Business Ethics and Media
1.Print Media &Ethics

2.Electronic Media &Ethics – the Web ethics.

 Journalists organizations have code of
conduct in addition to those imposed by
government. They are,
Codes of Ethics for Journalists
1. Seek Truth and Report It.
Test the accuracy of information from all sources
and exercise care to avoid unintended error.
The public is entitled to as much information as
possible on sources' reliability.
Avoid misleading news events.
Support the open exchange of views, even views they
find disgusting / horrible.
Give voice to the voiceless; official and unofficial
sources of information can be equally valid.

2.Minimize Harm
Ethical journalists treat sources, subjects and
colleagues as human beings deserving of respect.

Journalists should:
Show compassion for those who may be affected
adversely by news coverage. Use special sensitivity
when dealing with children and inexperienced
sources or subjects.
Be sensitive when seeking or using interviews or
photographs of those affected by tragedy or grief.

Be cautious about identifying juvenile suspects or

victims of sex crimes.

Be sensible about naming criminal suspects before

the formal filing of charges.

Balance a criminal suspect’s fair trial rights with the

public’s right to be informed.
3. Act Independently
4. Be Accountable
 Electronic Media &Ethics – the Web ethics
Global information’s are transformed through
1.Fax machine
2.Email
3.Internet
4.Web page
Unit 7: Ethics of the Environment
1.Scope of Environmental Ethics
2.Scipe for companies
3.Role in reducing global warming.
 Scope of Environmental Ethics
Environmental Problems due to
-- Increase in population
-- Exploitation of resources
-- Air, water and soil pollution.
And India is failed on the family planning, poverty
alleviation and environmental protection etc.
Environmental destruction in;
1. Land 4. Dams 7. Health.
2.Water 5.Atmosphere
3.Forests 6.Habitat
1.Land:
depopulated -forest areas.
Occupation of land for indl.
Urbanization /Industrialization
Migration
Growth of population

2.Water:
-- Not utilizing the highest rain falls
-- Deforestation
-- Negligence on the part of soil conservation
-- monsoon water disappears into the sea.
-- water pollution
-- Scarcity of groundwater [70,000 tube wells
added every year]
--Pollution water in river/ lakes
-- Fishing had been affected.
-- Flood damage due global meltdown etc.
3.Forests:
India is losing 1.3 million hectares of forest every
year.
- Deforestation, Soil erosion
- Construction of Dams by deforestation
- Droughts due to deforestation

4.Dams:
-- affected the lives of local people.
-- Wildlife destruction.
5.Atmosphere
-- Acid rain in developing countries
-- Increase in vehicles and pollution
-- pollution leads to health problems etc.

6.Habitat
-- Urban population / slum population
-- Lack of amenities leads to dirty prone to sickness
-- Due to tourisms also forest have destroyed.
Unit :8
Leadership & Ethics
1.Responsibilities of Managers
2.Approach to ethical Decision making
3.Key ethical concepts for leaders
4.Ethical Attitudes of India Managers
Ideas of Work:
1.Managers are leaders of men.
If the managers adopt for themselves a higher set
of ideals, develop a visionary purpose in life and a
missionary in action, then the entire organization
becomes surcharged with effectiveness.

The development of the individual to achieve the

development of the organization is necessary and
it really means developing the man in the
manager.
Management Decision making:
-- Learning to be more important

-- People working together for achieving common

objectives constitute an organization. The higher
the common objective of the organization and the
higher the values and ideals of its managers, the
greater is the commitment of the workforce.

-- Creating a Training and Development oriented

organizational culture.
Values of Work:
Each manager is potentially perfect and the purpose
of life is to manifest this perfection within. This
perfection can be achieved through work itself if
we have the right perspectives and perform the
work with the right attitudes.

-- Need for values

-- Education and Training

Responsibilities of Managers:
-- Managers have a responsibility towards religion by
providing the right environment at workplaces.

-- Work your best in the situation you are placed

-- Working without a Motive

-- Right attitudes to work

-- Law of cause and Effect

-- Be a Master and not a Slave

Unit 9:
Ethical Issues in New Economy Areas
1.Ethical Issues in Bio technology
2.Ethical & Genetic engineering
3.Ethical issues in Public Health, Closing.
4.Euthanasia
Unit 10:
Ethics in Research
Case Study.
 Ethics in Research
It involves the application of fundamental ethical
principles to a variety of topics involving
scientific research.

These include the design and implementation of

research involving human experimentation, animal
experimentation, various aspects of scientific
misconduct (such as fraud, fabrication of data and
plagiarism), whistle blowing; regulation of
research, etc.
Scientists trust that the results reported by others are
valid. Society trusts that the results of research
reflect an honest attempt by scientists to describe
the world accurately and without bias.

There are many ethical issues to be taken into

serious consideration for research.

Sociologists need to be aware of having the

responsibility to secure the actual permission and
interests of all those involved in the study.
They should not misuse any of the information
discovered, and there should be a certain moral
responsibility maintained towards the participants.
There is a duty to protect the rights of people in
the study as well as their privacy and sensitivity.

The confidentiality of those involved in the

observation must be carried out, keeping their
anonymity and privacy secure.
Any research on violence or abuse should provide
for such services or have pre-existing liaisons with
such services before embarking on a study.

The investigators have also safeguarded privacy,

confidentiality, and have been sensitive to culture
and gender.

The most important ethical implication will be to

ensure that they should visualize child protection
laws, policies, and systems soon become a reality
in our country.
 Important aspects of Ethics in Research
Social Responsibility
Strive to promote social good and prevent or diminish social
harms through research.

Non-Discrimination
Avoid discrimination against colleagues or students on the
basis of sex, race, ethnicity, or other factors that are not
related to their scientific competence and integrity.

Competence :Maintain and improve your own professional

competence and expertise through lifelong education and
learning; take steps to promote competence in science as a
whole.
Legality :Know and obey relevant laws and institutional and
governmental policies.

Animal Care :Show proper respect and care for animals when
using them in research. Do not conduct unnecessary or
poorly designed animal experiments.

Human Subjects Protection

When conducting research on human subjects, minimize
harms and risks and maximize benefits; respect human
dignity, privacy, and autonomy; take special precautions
with weak populations; and strive to distribute the benefits
and burdens of research fairly.
 Ethical Decision Making in Research
Although codes, policies, and principals are very
important and useful, like any set of rules, they do
not cover every situation, they often conflict, and
they require considerable interpretation.

It is therefore important for researchers to learn

how to interpret, assess, and apply various
research rules and how to make decisions and to
act in various situations. The vast majority of
decisions involve the straightforward application
of ethical rules.
Unit 11:
Corporate Social Responsibility.
1.Brief History.
2.Concepts.
3.Practices.
CSR:
1.Meaning
2.Factors constitute good governance
3. Best Practices for Corporate
4. Socially Responsible organization
5.Accountability.
6.Indicators of Social Responsibility.
1.Meaning:
Corporate governance can be defined as a set of
systems and processes which ensured that a
company is managed in the best interests of all the
stakeholders.

2.Factors constitute good governance.

Directional leadership and control has to be
exercised by a representative board of directors,
business executives and professional non –
executive members.
a) Independent directors have a major role to play in
promoting good corporate governance and if
certain practical steps are taken to ensure the right
composition of the board, adherence to standards
and best practices, and accurate disclosures and
reviews of audit plans, then there is a greater
chance of good governance.

b) Adherence to governance standards is important

to regulators and exchanges because of
competition for foreign group investment.
3. Best Practices for Corporate
1.There should be transparency of major decisions
particularly accounting practices.

2. Minimize the conflict of interest of various

stakeholders. Performance of business success
should be based on identified and measurable
parameters of outstanding customer service.

3.Non- compromising ethical organization.

eg: Payment to relatives
-- Personal contact with suppliers
-- Disclosure of privileged information
-- Accepting gifts and entertainment from third
parties.

4.An Indian organization must be to perform the

duty of an active corporate citizen. In the medium
and long run, it will be good for the company,
employees and the communities in which the
business operates. Employees should be able to
take pride in their organization.
Employees should provide a Certificate of
Compliance. The signing of this certificate
signifies that the employee has read the statement,
and agrees to abide by it.

Socially Responsible organization

It calls for greater respect for the needs of staff,
customers, local communities and the
environment for fair pricing of imported goods
from third world countries, policies covering the
recruitment of racial and ethnic minorities etc.
Accountability.
Acc to Ralph Estes, For accountability, it is
important to measure corporate success in terms of
corporation’s public purpose. It must show the
effects on and returns to all stakeholders and not
just the returns to the stockholders. Such approach
to accounting will enable an organization to,
-- Reflect upon their behaviour
-- come up with a mechanism for achieving
best practices in all its activities.
-- Monitor what they are doing.
 6.Indicators of Social Responsibility.
1.Any firm that routinely ignores or violates internal
or professional codes of ethics is at risk. Paying lip
service to professional standards encourages
unethical behaviour within the firm.

2.Any short term gain is usually overshadowed by

long term financial loss that follows the disclosure
of unethical behaviour.

3.Any firm that treats its employees differently than

its customers encourages unethical behaviour.
4. Any firm that is unfair or arbitrary in its
performance appraisal standards at risk. A lack of
standardization leads to the kind of favouritism
and it creates a serious morale problem.

5. Any firm that has no procedures or policies for

handling ethical problems is at risk.

6. Any firm that provides no mechanisms for

internal whistle –blowing is at risk.
7. Any firm that lacks clear lines of communication
within the organization encourages unethical
behaviour.

8.Any firm that encourages people to leave their

personal ethical values at the office door is at risk.
Examples of a company stakeholders
Stakeholders Examples of interests
Owners private/shareholders Profit, Performance,
Direction
GovernmentTaxation, VAT, Legislation, Low
unemployment
Senior Management
staffPerformance, Targets, Growth
Non-Managerial staffRates of pay, Job security
Trade UnionsWorking conditions, Minimum wage, Legal
requirements
CustomersValue, Quality, Customer Care, Ethical products
CreditorsCredit score, New contracts, Liquidity
Local CommunitiesJobs, Involvement, Environmental
issues, Shares
 Company stakeholder mapping
A narrow mapping of a company's
stakeholders might identify the following
stakeholders:
Employees, communities, shareholders,
creditors, investors, government, customers.