Business ethics

Prajeesh E Menon, Kvm College Cherthala

Indian Ethos and Values

Prajeesh E Menon, Kvm College Cherthala

Introduction

Introduction Shakespeare said the world is a stage (he

meant acting - we are all actors) but today, the entire world is a stage not for acting but for business and marketing.

• You find business anytime, anywhere and in anything. And if there is “Business” (i.e. an economic activity where there are buyers, sellers and transactions for a consideration), there will be a “Market.”

• Except perhaps for a few hours at home ,you will always find yourself in some market place or other.

Prajeesh E Menon, Kvm College Cherthala

Types of Markets 1. The Retail Markets – Food, Vegetables,

fruits, groceries, books, medicines etc.2. Commodity Markets – food grains, Cotton,

jute etc.3. The Raw Materials Markets –Inputs for

finished products.4. The Finished Goods Markets 5. The Capital Goods Markets 6. The Labour Markets 7. The Financial Markets- stock market,

Banking, Insurance etc.8. The Service Sector Markets –

Transportation-air road, railways ,water Communications, Health, Hospitality, Entertainment ,Sports, Marriage Beauty etc..

9. International Markets- Export-Import etc.10.Cyber Market

Prajeesh E Menon, Kvm College Cherthala

Applicability of Business Ethics

The common concept is business ethics

concerns the corporate sector. Modern concept is it should cover:

• Ethics of companies & corporations.• Ethics of Public Accountants.• Ethics of Doctors and Medical profession.• Ethics of Lawyers and Law Firms.• Ethics of Public Administrators.• Ethics of Engineers• Ethics of Educators, Teachers &

Educational Institutions.• Ethics of traders, retailers and vendors.• Ethics of NGOs, Trusts and Institutions.

Prajeesh E Menon, Kvm College Cherthala

Definition of Business and Ethics

• Business is an economic activity , a transaction where an offer is made by a seller and the offer is accepted by a buyer for a consideration with the hidden agenda of a gain or profit .

• Ethics comes from the Greek word Ethos which means character of the individual or the culture of the community.

• Business ethics is a form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole. Applied ethics is a field of ethics that deals with ethical questions in many fields such as medical, technical, legal and business ethics.

Prajeesh E Menon, Kvm College Cherthala

History of Business EthicsBusiness ethics being part of the larger social

ethics, always been affected by the ethics of the epoch. At different epochs of the world, people, especially the elites of the world, were blind to ethics and morality which were obviously unethical to the succeeding epoch. History of business, thus, is tainted by and through the history of slavery history of colonialism and later by the history of cold war. The current discourse of business ethics is the ethical discourse of the post-colonialism and post-world wars. The need for business ethics in the current epoch had begun gaining attention since 1970s.Historically, firms started highlighting their ethical stature since the late 1980s and early 1990s, as the world witnessed serious economic and natural disasters because of unethical business practices. The Bhopal disaster, and the fall of Enron are instances of the major disasters triggered by bad corporate ethics.

Prajeesh E Menon, Kvm College Cherthala

.It should be noted that the idea of business

ethics caught the attention of academics, media and business firms by the end of the overt Cold War. Cold Wars, seen through pages of history were fought through and fought for American business firms abroad. Ideologically, promotion of firms owned by American nationals were presented as if it were freedom and the local resistance against the excess of American firms were labeled as communist upraising sponsored by the Soviet Block. Further, even legitimate criticism against unethical practice of the firms were presented as if it were infringement into the 'freedom' of the entrepreneurs by activists backed by communist totalitarians. This scuttled the discourse of business ethics both at media and academics. Overt violence by business firms have decreased to a great extent in the democratic and media affluent world of the day, though it has not ceased to exist. The war in Iraq is one of the recent example of overt violence by the liberal western states on the behalf of oil business interests

Prajeesh E Menon, Kvm College Cherthala

Plethora of Laws, Rules and Regulations to govern Business

• The Companies Act• The Income Tax Act• The SEBI Act• The Factories Act• The Environment Act• The Minimum Wages Act• The Provident Fund Act• The Hazardous Substances Act• The FEMA• The Consumer Protection Act etc.etc.

Prajeesh E Menon, Kvm College Cherthala

Indian Ethos: Ethical Heritage of India1

Treasure of Indian Philosophy and Ethical Values:

• The Vedas (4)- Rigveda, Samaveda,Yajur-veda, Atharvaveda (Nalayira Divya Prabhandham-Tamil)

• The Upanishads (123 books; 13 basic)• The Puranas (18)• The Greatest Epics -The Ramayana &

The Mahabharata• The Greatest Book of Philosophy-The

Gita• Indian Schools of Philisophy (6)• Buddhism, Jainism, Jataka

Tales,Panchatantra and a treasure of unparalled Sanskrit & Pali Literature, Ayurveda, Economics,Law, Logic etc.

Prajeesh E Menon, Kvm College Cherthala

.Many Hindu intellectual traditions were

classified during the medieval period of Brahmanic-Sanskritic scholasticism into a standard list of six orthodox (astika) schools (darshanas), the "Six Philosophies" (ṣad-darśana), all of which cite Vedic authority as their source:

1.Nyaya, the school of logic2.Vaisheshika, the atomist school3.Samkhya, the enumeration school4.Yoga, the school of Patanjali (which

provisionally asserts the metaphysics of Samkhya)

5.Purva Mimamsa (or simply Mimamsa), the tradition of Vedic exegesis, with emphasis on Vedic ritual, and

6.Vedanta (also called Uttara Mimamsa), the Upanishadic tradition, with emphasis on Vedic philosophy.

Prajeesh E Menon, Kvm College Cherthala

Ethical Principles of Indian Society –Individuals. Business and Governance

1.Aims of Life: Four Phases of Life- Brahmacharya(Duties as Student life), Grihastha (Duties as a Householder), Banaprastha (Pilgrimage and Meditation), Moksha (Salvation).

2. Duties of Life: Artha, Kama, Moksha, Dharma

Every individual including businessman and ruler must conduct himself according to DHARMA i.e. honesty, fairness, equity and with a sense of divine duty and Nishkam Karma.

3. Style of Living: Spiritualistic against Materialistic: Simple Living and High Thinking

4. Reverence for Elders: Matrideva bhaba, Pitrideva bhava, acharyadeva bhaba , Atithideva bhava

5.Attitude towards Self: Inner Happiness, peace of mind, Detachment, Yoga and Meditation. Chidanandam

6.Attitude to the World: Shanti, Sukham, Anandam-let there be peace evrywhere-to humans, to vegetation, to the universe.

Vasundhara Kutumbakam- the whole world is your family. ---Universalism

Prajeesh E Menon, Kvm College Cherthala

Indian Concept of IndebtednessFive Categories of Indebtedness (Rin)1.Devarin :-Indebtedness to supra-

human powers for the gifts of Sun, air, water light etc.

• 2.Rishi Rin :-Indebtedness to sages who leading a life of utter self denial, realised the highest truths and gave the wisdoms.

• 3.Pitri Rin :-Indebtedness to Parents and ancestors for their cumulative contributions to us.

• 4.Nri Rin :-Indebtedness to humanity at large, to countless people who have contributed to make existence a reality.

• 5.Bhuta Rin:-Indebtedness to all sub-human species - trees, animals, birds, fish, insects etc. for their incalculable gifts to us.

• Albert Einstein had the same concept.

Prajeesh E Menon, Kvm College Cherthala

Principles of the Gita• Raj Yoga, Gyan Yoga, Bhakti Yoga (the

Beauty of Surrender)• Karma Yoga -Nisham Karma-Egoless work

with Divine Duty.Karmanye aadhikaresthey maa phaleshu

kadachana• Soul is indestructible- as you discard old

clothes, the Soul discards the old body and enters into a new body.

• The cycle of death and birth is painful. You can avoid this cycle and achieve Moksha (Salvation) through Nishkam Karma and Surrender to God.

• Be Fearless and do your duty with Dharma .• Don’t fear death because death is certain

when one is born and birth is certain when one dies- so why worry?

• A person who can give up ego, power, pride, lust ,anger and taking favours, he only is qualified to think of achieving Brahma.

Prajeesh E Menon, Kvm College Cherthala

System of Education in Ancient India- Vedic System and Buddhist

SystemEssentials of Indian Philosophy:• The law of Karma, Rebirth and

Salvation (idea of liberation)-Brahmacharya, Grihastha, Baanprastha, and Moksha.

• Eight Schools of Thoughts or Philosophy.

• Common principles—simple living high thinking-nonattachment to material things.

• Difference with Buddhist philosophy.

Prajeesh E Menon, Kvm College Cherthala

Ethics of Buddhism-the principle of Suffering-existence, causes and cessation of sufferings.Eightfold Noble Path or Madhyapantha

1.Sat Vakya - Right Speech2.Sat Karma- Right Action (Right Conduct)3.Sat Chinta- Right Thinking (Right Resolve)4.Sat Cheshta—Right Effort 5.Sat Smriti- Right Remembrance (Right

Views) 6.Sat Jeevan- Right Livelihood7.Samyag Drisht- Right Perception

( Mindfulness)8.Smyag Samadhi- Right Meditation -

( Concentration).Short-cut principles for ordinary people-

don’t steal, don’t lie, respect ladies and abjure violence.

Prajeesh E Menon, Kvm College Cherthala

Ethics of Buddhist Economics

• Sustainable Growth-Planting and nurturing of trees and nature.

• Utilization of local resources• Full employment• ‘Dana’-gifts-and charities to others-profit-

sharing (ethics of the wealthy and the business class)

• Least expenditure on armies and promote development through non-violence (ethics of governance)

• Following Dharma by the Rulers (ethics of rulers)

Prajeesh E Menon, Kvm College Cherthala

Ethics of Jainism

1.Ahimsa (Abstinence from all injury)2.Satyam (Abstinence from falsehood)3.Asteyam (Abstinence from stealing)4.Brahmacharyam (Abstinence from self-

indulgence)5.Aparigraha (Abstinence from all

attachments)• Bondage of the soul: causes: anger, pride,

infatuation and greed.• Liberation of the soul: dissociation of the

soul from the matter.• Believes in the Theory of Karma and

Rebirth but not in God.

Prajeesh E Menon, Kvm College Cherthala

Swami Vivekananda-Philosophy & Ethics• Don’t forget that the poor, the down-

trodden, and the untouchables are your brothers & sisters.

• You will reach God by playing football rather than by reading the Gita.

• You can not preach religion to people with empty stomach-food and education come first before anything else. Education, education, & education for all- women’s freedom, enlightenment and freedom from superstition and blind faith.

• Service to Humanity .Those who are serving jiva i.e living beings are serving God.

• Building of a strong nation and character through education, economic and spiritual development.

Prajeesh E Menon, Kvm College Cherthala

Philosophy of Mahatma Gandhi

• Ahimsa- Non-violence ( imbibed Buddhism & Jainism & Tolstoy)

• Dharma- Moral Law (Gita)• Truth-Truth is God and God is Truth (Aristotle:

know Thyself)• Communal Harmony (Indian tradition of tolerance

and harmony)• Equality of all human beings and Women

(Western thoughts)• Harijans- up-liftment of the downtrodden

(Vivekananda)• Khadi & Village development- dev. from

grassroots (innovation)• Trustee for Industries & Industrial Houses

(innovation)• Sarvodaya & Community Development ( Marxism)

Prajeesh E Menon, Kvm College Cherthala

Philosophy of Rabindranath Tagore

• Universalism against Nationalism; • Humanism; Humanizing Education System

in natural environment (Shantiniketan); Agricultural development (Sriniketan);

• The religion of Man; • Peace and Non-violence; • Unity of Mankind,• Freedom and Fearlessness; • Truthfulness; “those who do injustice and

those who tolerate injustice are equally condemnable.”

• “Where the mind is without fear and the head is held high….”

• Tagore epitomized the entire Indian Culture of five thousand years. A unique example of Total Quality Management.

Prajeesh E Menon, Kvm College Cherthala

Ethics is all about distinguishing between:*Good & bad or good and evil

*Right & wrong*Morality & immorality*Rationality & irrationality*Justice & Injustice*Reason & unreason or prejudice *Fairness & unfairness*Truth and untruth

Prajeesh E Menon, Kvm College Cherthala

Human Values For Indian Managers• In spite of the fact that ancient India

set highest ethical, moral and spiritual standards, there is no evidence of those in Corporate governance.

• While Japan has largely retained their own cultural values in management

• Indian managers are governed by western values which are mainly materialistic.

• Need for moral regeneration and adopt an Indian Style of Management.

Prajeesh E Menon, Kvm College Cherthala

.• Basic Questions in Economics—WHAT, HOW and FOR WHOM—answers all questions.

• When there are plethora of Acts, Rules, Guidelines and Regulatory Authorities to regulate Business ,the question arises why should there be a separate set of Business Ethics?

• The answer is Acts and Rules are not enough-Business has to do much more than this and that brings us to the question of Morality and Moral Judgements.

Prajeesh E Menon, Kvm College Cherthala

Model of Management in the Indian – Socio-political

Environment• Role of Indian Ethos in Management : A Twenty- First Century Perspective

• Fragmentation of human consciousness accelerated by science and technology is a prime cause of the widespread fall in the level of human values reflected in our lives.

• Prospective scenario of the Future Organization:

• Stress -second nature of Executives• Total Quality Control-zero-defect product,

quality conscious production, increased creativity, reduced obesity, flattened hierarchy, customer satisfaction etc.

Prajeesh E Menon, Kvm College Cherthala

•Problems Relating to Stress in Corporate Management and Indian

Perspective• Age of Discontinuity (Peter Drucker)• Age of Uncertainty (J.K. Galbraith )• Age of Future Shock (Alvin Toffler )• Age of Anxiety ( Karl Albrecht )• STRESS :• Symptoms ,causes and Solutions• Environmental Factors & Life style• Indian Perspectives :Meditation,

Yoga, Mindfulness, Music, Self-introspection, Brain stilling, family values and bonding.

Prajeesh E Menon, Kvm College Cherthala

Module – IV , Ethics in Functional Areas

production

Prajeesh E Menon, Kvm College Cherthala

. Ethics of ProductionThis area of business ethics usually

deals with the duties of a company to ensure that products and production processes do not cause harm. Some of the more acute dilemmas in this area arise out of the fact that there is usually a degree of danger in any product or production process and it is difficult to define a degree of permissibility, or the degree of permissibility may depend on the changing state of preventative technologies or changing social perceptions of acceptable risk.

• Defective, addictive and inherently dangerous products and services (e.g. tobacco, alcohol, weapons, motor vehicles, chemical manufacturing)

Prajeesh E Menon, Kvm College Cherthala

.• Ethical relations between the

company and the environment: pollution, environmental ethics, carbon emissions trading

• Ethical problems arising out of new technologies: genetically modified food, mobile phone radiation and health.

• Product testing ethics: animal rights and animal testing, use of economically disadvantaged groups (such as students) as test objects.

• See also: product liability• Cases: Ford Pinto scandal,

Bhopal disaster, asbestos / asbestos and the law, Peanut Corporation of America