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ETHICS

The word ethics is derived from the Greek word ethikos meaning custom or

character.

Ethics reflects a societys notions about the rightness or wrongness of an act. It

involves evaluation & application of certain moral values that a society or culture

has come to accept as its norms.

It is generally described as set of principles or moral conduct.

Ethics is branch of philosophy & is considered a normative science because it is

concerned with the norms of human conduct.

Its object is the study of both moral & immoral behavior in order to make wellfounded judgments & to arrive at adequate recommendations.

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Principles of Personal Ethics

Personal values are the conception of what an individual or a group regards as desirable.

Personal ethics refer to the application of these values in everything one does.

Principles of personal ethics are:

Concern & respect for the autonomy of others

Honesty & the willingness to comply with the law

Fairness & the ability not to take undue advantage of others.

Benevolence & preventing harm to any creature

People are motivated to be ethical for the following reasons:

Most people want to maintain a clear conscience & would like to act ethically undernormal circumstances

It is natural for the people to ensure that their actions do not cause any injury, whether

physical or mental to others.

People are obliged to obey the laws of the land

Social & material well being depends on ones ethical behavior in society.

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Morality & Law:

Philosopher James Rachels suggests two criteria fulfilling a minimum conception of

morality-reason & impartiality.

By the use of reason, Rachels means that a moral decision must be on reasons

acceptable to other rational persons.

The criterion of impartiality, is fulfilled when interests of all those affected by a moral

decision are taken into account, with of course, the recognition of finite knowledge ofthe repercussions of any ethical.

People tend to confuse legal & moral issues:

An action can be illegal, but morally right.

For instance, during freedom struggle many wanted freedom fighters (criminals

according to the colonial rulers)had hidden themselves in the houses of patriotic

Indians to save themselves from prosecution & imprisonment.

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An action that is legal can be morally wrong.

For instance, a profit earning co. anxious to retain its top brass may sack

hundreds of its workers to save enough money to pay the former with a viewto getting their guidance & managerial expertise.

How areMoral Standards formed?

There are some moral standards that many of us share in our conduct in

society.

These moral standards are influenced by a variety of factors:

Moral principles we accept as a part of our upbringing

Values passed on to us through heritage & legacy, the religious values that

we imbibed from childhood

The valued that were showcased during the period of our education

The behavior pattern of those around us

The explicit & implicit standards of our culture

Our life experiences.

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Characteristics ofMoral Standards

Moral Standards set claims on human behavior, they express a criterion for what

ought to be done

In general, all moral standards deal with matters (that are thought to be) of

serious consequence for human well being.

They also deal with the well being of animals, and the respect we owe to our

natural environment.

Moral standards cannot simply be established or changed by the decisions of

particular authoritative bodies.

All moral standards are supposed to override self-interest.

All moral standards are based on impartial considerations.

All moral standards are associated with special emotions and a special

vocabulary.

When people act contrary to a moral standard, strong emotions of dissent arise

in others. Normal persons with an internalized set of norms & belief are quite liableto react this way.

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However it is dangerous simply to apply our own moral norms when we judge the

behavior of people with a different conventional moral code. This practice is called

ethnocentrism. i.e we take our own moral code to be the only valid code.

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Business ethics is a sum total of principles & code of conduct businessmen areexpected to follow in their dealings with their fellowmen such as stockholders,

employees, customers, creditors, & comply with to enact the laws of the land and to

protect all these stakeholders.

It is the application of general ethical ideas to business behavior.

Ethical Business behavior is expected bythe public:

It facilitates & promotes good to societyImproves profitability

Fosters business relations & employee productivity,

Reduces criminal penalties from public authorities & regulators

Protects business against unscrupulous employees & competitors

Protects employees from harmful actions by their employer

Allows people in business to act consistently with their personal ethical beliefs

A business or company is considered to be ethically only if it tries a trade off between

its economic objectives & its social obligations, such as society where it exists, to its

people for whom it pursues economic goals ; to the environment from where it takes

its resources & the like.

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What is notBusiness Ethics?

Ethics is different from religion

Though all religions preach high ethical/moral standards generally, they do not

address all the types of problems people confront today.

Fro instance, cyber crimes & environment-related issues are totally new In the

context to most religions

Ethics is not synonymous with Law:

Legal systems may vary from society to society depending upon its social,

religious & cultural beliefs.

For instance, the United states law forbids companies from paying bribeseither domestically or oversees, however, in other parts of the world, bribery

is an accepted way of doing business.

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Ethical Standard are different from Cultural Traits:

Some cultures many be ethical, but many of them are not.

For instance, our system of castes reflects an unethical streak inasmuch as it tends totake for granted that some people are superior to others in Gods creation.

Ethics is different from Feelings:

Our ethical choices are based on our feelings. Most of us feel bad when we indulge in

something wrong. But many, especially hardened criminals, may feel good even when

they do something bad.

Ethics is not science in the strictest sense ofthe term

Science is not prescriptive & does not tell us what we ought to do in certain situations

leading to ethical dilemmas.

But ethics being prescriptive offers for how humans ought to act under such

situations.

Moreover just because something is scientifically or technologically possible, it may

not be ethical to do it; human cloning for instance.

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Code ofConduct & Ethics forManagers:

Managers must observe the following ethical values:

Integrity

Impartiality

Responsiveness to the public interest

Accountability

Honesty

Transparency

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Normative Theories

Ethics is a normative study, that is investigation that attempts to reach normative

conclusions.

It aims to arrive at conclusions about what things are good & bad, or what actions are

right or wrong.

In other words, normative theories aims to discover what should be, & would include

sentences like companies should follow corporate governance standards or managersought to act in a manner to avoid conflicts of interests.

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Ethical theories in relation to business:

Egoism:

the view that associates morality with self-interest is referred to as egoism.

Therefore it is said that egoism is an ethical theory that treats self interest as the

foundation of morality.

Egoism contends that an act is morally right if & only if it best promotes an agents(persons, groups or organizations) long term interests.

Normally the tendency is to equate egoism with individual personal interest, but it is

equally identified with the interest of the organization or of the society.

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Decisions based on egoism mainly are intended to provide positive consequences to a

given partys interest without considering the consequences to the other parties.

It does not mean that an egoist will act against the interest of the society.They may be able to safeguard their interest without hurting the interest of others.

When an organization performs or safeguards its interest without hurting the interest of

others, then we can say that the organization acts ethically.

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Psychological Egoism:

Egoism asserts that the only moral obligation we have is to ourselves, though it doesnot openly suggest that we should not render any help to others.

However we should act in the interest of others, if that is the only way to promote

our own self-interest.

Ethicists who propose the theory of egoism have tried to drive their basic moralprinciple from alleged fact that humans are by nature selfish creatures.

They assert that all actions of men are motivated by self-interest & there is nothing

like unselfish actions.

To them, even the so-constructed self sacrificial act like, say, whistle blowing in anorganization to bring to the notice of the top brass the unethical acts practiced down

the line, or by top executives, is an attempt by the whistle-blower to either take

revenge or become a celebrity.

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Utilitarianism: Ethics ofWelfare

Two names associates with utilitarian philosophy;

Jeremy Bentham (1748-1832) who is generally considered as the founder of

traditional utilitarianism,

John Stuart Mill (1806-1873), philosopher cum classical economist

The utilitarian principle holds that an action is right from an ethical point of view if &

only if the sum total of utilities produced by that act is greater than the sum total of

utilities produced by any other act the agent could have performed in its place.

When utilitarianism argues that the right action for a particular occasion is the one

that produces more utility than any other possible action, it does not mean that the

right action is the one that produces most utility for the person who performs the

action.

On the contrary, an action is right as pointed by J.S.Mill., if it produces the most utility

for all the persons affected by the action.

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Influences & Implications ofthe theory:

When utilitarians say that practicing the theory will lead to the greatest happiness

for the greatest number, we should include the unhappiness or pain that may beencountered along with the happiness

Ones actions will affect other people in different degrees & thus will have different

impact

Since utlitarians assess actions with regard to their consequences, which cause

different results in diverse circumstances, anything might, in fact, be morally right in

some circumstances.

Maximization of happiness is the objective of utilitarians not only in the immediate

situation, but in the long run as well.

Utilitarians agree that most of the time we do not know what wold be the future

consequences of our actions

Utilitarianism does not expect us to give up our own pleasure while choosing among

possible actions.

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Problems ofthe Theory:

One major problem with the utilitarian theory concerns the measurement of utility.

Utility is a psychological concept & is highly subjective. It differs from person to person,place to place, time to time. Therefore, it cannot be the basis for a scientific theory.

A second problem concerns the intractability to measurement that arises while dealing

with certain benefits & costs. For example how can one measure the value of life &

health.

Another problem of this theory concerns the lack of predictability of benefits & costs.

If they cannot be predicted, they cannot be measured.

Lack of clarity in defining what constitutes benefits and what constitutes cost. This

lack of clarity crates problems, especially with respect to social issues that are given

different interpretations by different social or cultural groups.

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