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There is a strong tradition in business that insists that business should not be concerned with ethics. As Milton Friedman, a vociferous proponent of this position, has put it: The social responsibility of business is to its shareholders. . . . The business of business is business (1970). The core concern of business proponents of the market economy argue is in attempting to secure the best possible return on any investment. Any dilution of this focus will lead to the corruption of what is a finely balanced system. Businesses that seek to be ethical as well as profitable will probably fail economically, following which the whole community may suffer. Rather, let the invisible hand guide the market and all will prosper. Any constraint on the freedoms of the market be they motivated by ethical angst or vote-seeking government policy will just mess everything up. Concern has surfaced from a variety of sources: from consumer groups, political groups, religious and charitable organisations. A case can be made that negative consequences flow from poor ethical standards: While short-term goals may be achieved through the cut-throat tactics of free market principles, in the long run business will survive better if good standards of conduct are maintained; Ethical business creates a positive environment in which to buy and sell, as corruption, poverty and lack of respect for the environment generate problems for the business community in the long term; Finally, people neither hold moral values nor have religious beliefs to guide the conduct of their lives. Why should the area of business be exempt?
The unethical practice of HRM itself has also hit public attention: Off-shoring and exploiting cheap labour markets; Using child labour; Reneging on company pension agreements; Longer working hours; Increasing work stress; The use of disputed and dubious practices in hiring and firing of personnel.
Ethics is personal.
Employee Rights
In the context of ethical human resource management, HR managers must view employees as having basic rights. Such a view reflects ethical principles embodied in the U.S. Constitution and Bill of Rights. A widely adopted understanding of human rights, based on the work of the philosopher Immanuel Kant, as well as the tradition of the Enlightenment, assumes that in a moral universe, every person has certain basic rights:
Right of free consent People have the right to be treated only as they knowingly
and willingly consent to be treated. An example that applies to employees would be that employees should know the nature of the job they are being hired to do; the employer should not deceive them.
Right of privacy People have the right to do as they wish in their private lives, and
they have the right to control what they reveal about private activities. One way an employer respects this right is by keeping employees personal records confidential.
Right to due process If people believe their rights are being violated, they have
the right to a fair and impartial hearing.
One way to think about ethics in business is that the morally correct action is the one that minimizes encroachments on and avoids violations of these rights.
HR interest in ethics
The welfare concept
HR people have long held a strong interest in ethics, although it was usually caricatured as welfare. HR specialists do not have separate places and conventions of work which they leave in order to advise managements. They are employed in no other capacity than to participate closely in the management process of the business. They do not even have the limited degree of independence that company accountants have, as their activities are not subject to external audit, and it is ludicrous to expect of them a fully-fledged independent, professional stance. The change in general management orientation during the 1980s and 1990s towards the idea of leaner and fitter, flexible organisations, downsizing, delayering, outplacement and all the other ideas that eventually lead to fewer people in jobs and fewer still with any sort of employment security have usually been implemented by personnel people. HR and personnel managers cannot behave like Banquos ghost and be silently disapproving of their colleagues actions. What they can do is to argue vigorously in favour of what they see as the best combination of efficiency and justice, but they can onlyargue vigorously if they are present when decisions are made. If they are not generally on side, they do not participate in the decision making and they probably do not keep their jobs. Either they are a part of management, valued by their colleagues, despite their funny ideas, or they are powerless. There are no ivory towers for them to occupy, and no more employment security for them than for any other member of the business.
organisation structures do more for employee well-being than paternalistic welfare programmes ever did.
Myths about Ethics Five myths about ethics prevail in literature. They are
Source of Ethics
Religion
It is one of the oldest foundations of ethical standards. Religion wields varying influences across various sects of people. It is believed that ethics is a manifestation of the divine and so it draws a line between the good and the bad in the society. Depending upon the degree of religious influence we have different sects of people; we have sects, those who are referred to as orthodox or fundamentalists and those who are called as moderates. Needless to mention, religion exerts itself to a greater degree among the orthodox and to lesser extent in case of moderates. Fundamentally however all the religions operate on the principle of reciprocity towards ones fellow beings!
Culture
Culture is a pattern of behaviors and values that are transferred from one generation to another, those that are considered as ideal or within the acceptable limits. No wonder therefore that it is the culture that predominantly determines what is wrong and what is right. It is the culture that defines certain behavior as acceptable and others as unacceptable. Human civilization in fact has passed through various cultures, wherein the moral code was redrafted depending upon the epoch that was. What was immoral or unacceptable in certain culture became acceptable later on and vice versa. During the early years of human development where ones who were the strongest were the ones who survived! Violence, hostility and ferocity were thus the acceptable. Approximately 10,000 year ago when human civilization entered the settlement phase, hard work, patience and peace were seen as virtues and the earlier ones were considered otherwise. These values are still pt in practice by the managers of today! Still further, when human civilization witnessed the industrial revolution, the ethics of agrarian economy was replaced by the law pertaining to technology, property rights etc. Ever since a tussle has ensued between the values of the agrarian and the industrial economy!
Law
Laws are procedures and code of conduct that are laid down by the legal system of the state. They are meant to guide human behavior within the social fabric. The major problem with the law is that all the ethical expectations cannot be covered by the law and specially with ever changing outer environment the law keeps on changing but often fails to keep pace. In
business, complying with the rule of law is taken as ethical behavior, but organizations often break laws by evading taxes, compromising on quality, service norms etc.
Importance of Ethics