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MODULE 1
Introduction To Ethics:
The term “ethics” is derived from the Greek word “ethos" which refers to character
or customs or accepted behaviors
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Using these ethical standards, a person or a group of
persons or an organization regulate their behavior to distinguish between what is
right and what is wrong as perceived by others
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# Ethics is the study of moral decisions that are made by us in the course of
performance of our duties
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# Ethics is concerned with truth and justice, concerning a variety of aspects like the
expectations of society, fair competition, public relations social responsibilities and
corporate behavior
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It applies to all aspects of business
conduct and is relevant to the conduct of individuals and entire organizations
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These norms, values, ethical, and unethical practices are the principles that guide a
business
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NATURE OF BUSINESS ETHICS
The nature of business ethics refers to the standard characteristics of human
behavior;
• Code of Conduct: Code of conduct is a set of principles and expectations that
are considered binding on any person who is member of a particular group
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•

Protects the social group: Business ethics protects the various social groups
of consumers, employees, small businesses, governments, shareholders,
creditors, etc
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It gives social, cultural, economic, legal, and other business limits
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•

Volunteer: Business ethics should be a volunteer
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Business ethics will be like self-discipline
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CHARACTERISTICS
1
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It is the knowledge through which human behavior is learnt in a
business situation
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Ancient concept: Business ethics is an ancient
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3
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Many of the problems in ethics arise due to not giving dignity to individual
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Otherwise they develop immortality in the business conduct
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Related to human aspect: Business ethics studies those activities, decisions
and behaviors which are concerned with human aspect
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5
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But it is a fact that social
responsibility of business and its policies is influenced by the business
ethics
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Many behaviors will fall in the classification including
corruption, mail and wire fraud, discrimination and harassment, insider trading,
conflicts of interest, improper use of company assets, ethical relations with others,
disciplinary action, fraud, illegal business donations, patent infringement, etc
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The confidential information of the company are not to be used for
achieving personal gain neither are they to be disseminated directly or
indirectly to friends, family members, and other outsiders who may in turn
trade on or misuse the information
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• Conflict of Interest:
Conflict of interest arises when one private interest interferes or appear to
interfere in any way with the interest of the organization
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# Accepting any valuable thing from organizations customers and
suppliers
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ETHICAL REASONING
Ethical reasoning pertains to the rights and wrongs of human conduct
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Commonly, ethical differences occur

as a result of individual interpretation of a subject or event, or may be political or
religious in nature
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Individuals are able to act in such as way as to enhance or decrease the
quality of the lives of others, and generally know the difference between helping and
harming
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• Highlighting acts that harm the well-being of other people
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A code of conduct is important for managers in every industry, as a workforce
can’t move forward without integrity from its leaders
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Not only do
managers who create their own code of conduct benefit their workers, but they
also often benefit the entire company’s public image
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They also need to know and follow the
laws of the government, particularly as they pertain to business
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• Accountability: Good managers expect their workers to take responsibility
for their actions and overall performance, and demand the same of
themselves
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•

Integrity: Managers who perform their jobs with a high level of integrity are
widely the best type of supervisors to work for
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These managers also make their goals clear and assist
employees when it comes to reaching those goals
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Good managers show their workers how jobs are best performed, then
monitor workers and offer suggestions and tips
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They include,
• Consequential Theory: Those that determine the moral rightness or wrongness
of an action based on the actions consequences or results
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Consequential theory is also further divided into two parts
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Egoism: The view that morality coincides with the self-interest of an

individual or an organization
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This model takes into account harms,
benefits and rights for a person’s own welfare
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For example, a
company provides scholarships for education to needy students with a
condition that the beneficiary is required to compulsorily work for the
company for a period of 5 years
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Utilitarianism:- The utilitarian ethical theory is founded on the ability to
predict the consequences of an action
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One
benefit of this ethical theory is that the utilitarian can compare similar
predicted solutions and use a point system to determine which choice is more
beneficial for more people
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Indian Ethos

ETHOS Vs
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Whereas, Ethics means expected standards in terms of your personal and social
welfare
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NEED OF INDIAN ETHOS
• Management attitude: Top management must have firm belief in valueoriented holistic management of business
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Eg: employees, customers, citizens,
and shareholders and fulfill the social responsibility
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• Humanizing organization: There are three aspect of humane organization
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# Man-machine equation
# Inner Management- Spiritual and mental
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• Interiorizing(Self) Management: The manager is first man, and then a
manger
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The first
need is to understand and know himself
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We should prepare
a sheet of our strengths and weakness
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INDIAN WORK ETHICS
Work ethic is a value based on hard work and diligence
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Workers exhibiting a good work ethic in theory would be selected for better

positions, more responsibility and ultimately promotion
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Five Characteristics of a Good Work Ethics

# Reliability:
Reliability goes hand in hand with a good work ethic
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Individuals with a strong work ethic often want
to appear dependable, showing their employers that they are workers to whom they
can turn
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# Dedication:
Those with a good work ethic are dedicated to their jobs and will do anything they
can to ensure that they perform well
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They also often put in extra hours beyond
what is expected, making it easy for their employers to see that they are workers
who go beyond the rest of the workforce and truly dedicate themselves to their
positions

# Productivity:
Because they work at a consistently fast pace, individuals with a good work ethic
are often highly productive
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This high level of productivity
is also due, at least in part, to the fact that these individuals want to appear to be
strong workers
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# Cooperation:
Cooperative work can be highly beneficial in the business environment, something
that individuals with a strong work ethic know well
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These individuals commonly
respect their bosses enough to work with any individuals with whom they are paired
in a productive and polite manner, even if they do not enjoy working with the
individuals in question
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This
means they are self-disciplined, pushing themselves to complete work tasks instead
of requiring others to intervene
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To demonstrate their strong character, these workers embody these
positive traits daily, likely distinguishing themselves from the rest
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A code of ethics document may outline the
mission and values of the business or organization, how professionals are supposed
to approach problems, the ethical principles based on the organization's core values,
and the standards to which the professional is held
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• A code of ethics sets out an organization's ethical guidelines and best practices
to follow for honesty, integrity, and professionalism
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• In some industries, including banking and finance, specific laws govern
business conduct
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ETHICS TRAINING:

The purpose of Ethics Training is "to enable employees to identify and deal with
ethical problems developing their moral intuitions, which are implicit in everyday
choices and actions"
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Training in Ethics helps the members of an organisation judge the moral legitimacy
of their decisions, enabling them to apply moral principles and values in business
decision-making
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Therefore,

implementing ethics training does not only mean informing employees about
choices made by the management of the company, but also putting each individual
corporate member in a position to understand, interiorise and contribute to the
corporate mission achievement through a conscious orientation of their own
choices and everyday behavior
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Committees
typically are made up of executives from various departments and an outside
third-party consultant who chairs the committee
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The oversight process of the Ethics Committee of an organization involves the
following areas to be addressed by it:
# Review of the definitions of standards and procedures
The Committee should review the organization’s areas of operation, the activities
that require a formal set of ethical standards and procedures
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This method should ensure that employees
understand as well as accept the ethics program
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# Facilitate Compliance
The ethics Committee has the responsibility for overall compliance
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It
should serve as the court of last resort concerning interpretations of the
organization’s standards and procedures
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And, there should be regular follow-ups to ensure that
compliance recommendations are understood and accepted
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This includes the oversight of background investigations on
employees and applicants who are being considered for such positions
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This includes the distribution
of documents (codes of conduct, for example) to ensure that every employee
understands and accepts the organization’s ethical guidelines
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# Monitor and audit compliance
Compliance is an ongoing necessity and the ethics committee should design
controls which monitor, audit and demonstrate employees’ adherence to

published standards and procedures
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# Enforcement of disciplinary mechanism
Disciplinary provisions should be in place to ensure consistent responses to
similar violations of standards and procedures (as against applying different
standards to different employees based on their position, performance, function,
and the like)
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# Analysis and follow-up
When violations occur, the ethics committee should have ways to identify why
they occurred
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ETHICS OFFICER:The Ethics Officer serves as the organization's internal control point for ethics
and improprieties, allegations, complaints, and conflicts of interest and provides
corporate leadership and advice on corporate governance issues
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An audit is systematic
when it entails typical steps like planning, defining a framework, fieldwork
(collecting information and obtaining evidence) using established methods, analysis,
judgment, reporting, and documentation
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This is the case when the
auditor is not part of the scope, clientele, or user of the audit
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A systematic, independent, and objective

examination and evaluation provides essential conditions for the users of an ethics
audit to trust the conclusions of an audit
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• It must be an information, that is not available for public
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• Release of information must be something that is done voluntarily as
opposed to being legally required
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Types of Whistle Blowing;
1
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For example, an employee at one
branch of a chain of coffee shops who report wage and hour violations at their
store to the company’s Corporate headquarters is an Internal Whistle Blowing
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EXTERNAL WHISTLE BLOWING:
An external whistle blower, in contrast, is an individual who reports wrong
doing to sources outside his or her company, such as law enforcement or the
media
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When a whistle blower does not act in good faith, he or she is not
protected by the Whistleblower Protection Act and thus not protected from
demotion or termination
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CYBER WHISTLE BLOWING:In recent years, a new type of Whistle Blower, the Cyber Whistle Blower, has
arisen as an advocate for consumer and employee protection in online spheres
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LEGAL SUPPORT TO WHISTLE BLOWERS:
1
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In United
States, both Federal and State Laws are aimed at protecting those who
undertake Whistle Blowing
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However, even with support, the potential whistle blower must still
contemplate a difficult and dangerous path
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The Primary Protection Law is the Federal Whistle Blower Protection
Act of 1989
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Another Federal Law is the False Claim Act, which has been around
since 1863
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Many state governments have passed their own Whistle blower
protection acts
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In India, we don’t have Whistle blower protection law as yet, However
the Public Interest Disclosure and Protection of Informers Bill, 2002 is
being examined
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Blow the whistle at the right time
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Blow the whistle according to the company policy
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Keep a record of your whistle blowing
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Only blow the whistle on unlawful activity
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Remember to report not to investigate
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Use a regulator if you must

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