ETHICS AND ORGANIZATION Organizational Ethics is the ethics of an organization, and it is how an organization ethically responds to an internal or external

stimulus. Organizational ethics is interdependent with theorganizational culture. Although, it is akin to both organizational behavior (OB) and business ethics on the micro and macro levels, organizational ethics is neither OB, nor is it solely business ethics (which includes corporate governance and corporate ethics). Organizational ethics express the values of an organization to its employees and/or other entities irrespective of governmental and/or regulatory laws.

An organization is formed when individuals from different backgrounds and varied interests come together on a common platform and work towards predefined goals and objectives. Employees are the assets of an organization and it is essential for them to maintain the decorum and ambience of the workplace.

What is organization Ethics ?

The way an organization should respond to external environment refers to organization ethics . Organization ethics includes various guidelines and principles which decide the way individuals should behave at the workplace. It also refers to the code of conduct of the individuals working in a particular organization. Every organization runs to earn profits but how it makes money is more important. No organization should depend on unfair means to earn money. One must understand that money is not the only important thing; pride and honour are more important. An individuals first priority can be to make money but he should not stoop too low just to be able to do that. Children below fourteen years of age must not be employed to work in any organization. Childhood is the best phase of ones life and no child should be deprived of his childhood . Employees should not indulge in destruction or manipulation of information to get results . Data Tampering is considered strictly unethical and unprofessional in the corporate world. Remember if one is honest, things will always be in his favour. Employees should not pass on companys information to any of the external parties. Do not share any of your organizations policies and guidelines with others. It is better not to discuss official matters with friends and relatives. Confidential data or information must not be leaked under any circumstances. There must be absolute fairness in monetary transactions and all kinds of trading. Never ever cheat your clients. Organizations must not discriminate any employee on the grounds of sex, physical appearance, age or family background. Female employees must be treated with respect. Dont ask your female employees to stay back late at work. It is unethical to discriminate employees just because they do not belong to an affluent background. Employees should be judged by their work and nothing else. Organization must not exploit any of the employees . The employees must be paid according to their hard work and efforts. If individuals are working late at night, make sure overtimes are paid. The management must ensure employees get their arrears, bonus, incentives and other reimbursements on time. Stealing office property is strictly unethical. Organization must take care of the safety of the employees . Individuals should not be exposed to hazardous conditions.

Never lie to your customers. It is unprofessional to make false promises to the consumers. The advertisements must give a clear picture of the product. Do not commit anything which your organization cant offer. It is important to be honest with your customers to expect loyalty from them. It is absolutely unethical to fool the customers. The products should not pose a threat to environment and mankind. Employees on probation period can be terminated anytime but organizations need to give one month notice before firing the permanent ones. In the same way permanent employees need to serve one month notice before resigning from the current services. Employees cant stop coming to office all of a sudden.

BASIC NEED AND IMPORTANCE

The Importance of Ethics in Organizations

by Luanne Kelchner, Demand Media
Ethics are the principles and values an individual uses to govern his activities and decisions. In an organization, a code of ethics is a set of principles that guide the organization in its programs, policies and decisions for the business. The ethical philosophy an organization uses to conduct business can affect the reputation, productivity and bottom line of the business.
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Leadership Ethics
The ethics that leaders in an organization use to manage employees may have an effect on the morale and loyalty of workers. The code of ethics leaders use determines discipline procedures and the acceptable behavior for all workers in an organization. When leaders have high ethical standards, it encourages workers in the organization to meet that same level. Ethical leadership also enhances the companys reputation in the financial market and community. A solid reputation for ethics and integrity in the community may improve the companys business.

Employee Ethics
Ethical behavior among workers in an organization ensures that employees complete work with honesty and integrity. Employees who use ethics to guide their behavior adhere to employee policies and rules while striving to meet the goals of the organization. Ethical employees also meet standards for quality in their work, which can enhance the companys reputation for quality products and service.

Ethical Organizational Culture

Leaders and employees adhering to a code of ethics create an ethical organizational culture. The leaders of a business may create an ethical culture by exhibiting the type of behavior they'd like to see in employees. The organization can reinforce ethical behavior by rewarding employees who exhibit the values and integrity that coincides with the company code of ethics and disciplining those who make the wrong choices.

Benefits to the Organization

A positive and healthy corporate culture improves the morale among workers in the organization, which may increase productivity and employee retention; this, in turn, has financial benefits for the organization. Higher levels of productivity improve the efficiency in the company, while increasing employee retention reduces the cost of replacing employees.

Most of us would agree that it is ethics in practice that makes sense; just having it carefully drafted and redrafted in books may not serve the purpose. Of course all of us want businesses to be fair, clean and beneficial to the society. For that to happen, organizations need to abide by ethics or rule of law, engage themselves in fair practices and competition; all of which will benefit the consumer, the society and organization. Primarily it is the individual, the consumer, the employee or the human social unit of the society who benefits from ethics. In addition ethics is important because of the following: 1. 2. Satisfying Basic Human Needs: Being fair, honest and ethical is one the basic human needs. Every employee desires to be such himself and to work for an organization that is fair and ethical in its practices. Creating Credibility: An organization that is believed to be driven by moral values is respected in the society even by those who may have no information about the working and the businesses or an organization. Infosys, for example is perceived as an organization for good corporate governance and social responsibility initiatives. This perception is held far and wide even by those who do not even know what business the organization is into. Uniting People and Leadership: An organization driven by values is revered by its employees also. They are the common thread that brings the employees and the decision makers on a common platform. This goes a long way in aligning behaviors within the organization towards achievement of one common goal or mission. Improving Decision Making: A mans destiny is the sum total of all the decisions that he/she takes in course of his life. The same holds true for organizations. Decisions are driven by values. For example an organization that does not value competition will be fierce in its operations aiming to wipe out its competitors and establish a monopoly in the market. Long Term Gains: Organizations guided by ethics and values are profitable in the long run, though in the short run they may seem to lose money. Tata group, one of the largest business conglomerates in India was seen on the verge of decline at the beginning of 1990s, which soon turned out to be otherwise. The same companys Tata NANO car was predicted as a failure, and failed to do well but the same is picking up fast now. Securing the Society: Often ethics succeeds law in safeguarding the society. The law machinery is often found acting as a mute spectator, unable to save the society and the environment. Technology, for example is growing at such a fast pace that the by the time law comes up with a regulation we have a newer technology with new threats replacing the older one. Lawyers and public interest litigations may not help a great deal but ethics can.

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Ethics tries to create a sense of right and wrong in the organizations and often when the law fails, it is the ethics that may stop organizations from harming the society or environment.

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Jana Matthews, Founder and CEO, Boulder Quantum Ventures There has been a lot of attention paid to ethics in business lately. Of course, most of that focus has been on the lack of ethics in business.

Even worse, the drive to "get ethics" is now a huge push. I cringe at the thought of a quick fix for something so fundamental as a company's ethical behavior. Ethics are a foundation of a good company, and while they can be fixed, the best companies begin with a solid ethical footing.

For entrepreneurs, ethical behavior is often overlooked as the chaos of everyday business obscures the philosophical side of your company. But fear not, it is far easier to reconnect to a solid ethical footing than it is to attempt an "ethics transplant."

Many business experts treat ethics like a sermon on the mount. Although it's hard not to preach a bit when it comes to ethics and morals, I've tried to identify some things to think about, in addition to recommendations on how to behave ethically. It's interesting to consider how good ethical behavior reflects smart business practices, but maybe that's exactly why the great companies are just that.

Consider these eight elements that comprise the ethical bedrock of an awesome organization:

Respect:
As an entrepreneur building a business, you need to respect yourself and surround yourself with people you can respect. Remember, strong respect doesn't mean you can fly on auto-pilot. While you can assume your people will do their job as well as they can, they do need coaching, training and direction, but respect and trust make it easier for you to avoid micro-managing them.

Do not hire or do business with people you don't respect, or who don't respect you. These are the types of people who ultimately don't respect their colleagues, customers, vendors, or themselves. When existing relationships weaken, take action. Do your best to rebuild mutual respect, but it can no longer be rebuilt, let the person go.

Honor:
Good people are a fundamental part of good ethics. They are also great ambassadors for doing things right. Give special attention to strong performers and people who exemplify the spirit of your organization. Most companies recognize top achievers and producers. Go beyond quotas and sales figures. Point out, and show your gratitude to the people who exhibit exemplary behavior, and who have made sacrifices on your behalf. These are people who have helped you be successful, and you need to acknowledge and honor their contributions publicly, as well as privately.

Integrity:
hen it comes to integrity, it is impossible to avoid sounding preachy or parental. Do not lie, steal, or cheat. Make your word your bond and always stand by your word. When you are wrong, own up to it and make good on the deal. Treat others as you'd want to be treated.

Do not hire or retain people who do not have integrity. Other employees, customers and vendors will not trust them. That lack of trust is like a virus; eventually they will not trust you either.

Make sure no one is selling the company's values short to make a quick buck. After all, making a bad deal to meet a quota or target is not only unethical, it's often unprofitable in the end.

Customer focus:
A company is nothing if it does not have customers. More to the point, if a company does not produce what people want and will pay for, there is no point to that company. A focus on your customers reinforces the responsibility you have to the market. Your decisions affect your people, your investors, your partners and ultimately, your customers. Serving all of these people is part of your ethical responsibility. Selling your customers short not only risks compromising your ethics, it also risks the long-term health of your company.

Results-oriented:
You wouldn't be an entrepreneur if you weren't focused on results already, but ethics factor into results too. Don't aim for results at any cost. Work on achieving your results within your company values. Results should be attained in the context of developing something that customers want, and producing and delivering it at a price that is fair to all the parties involved.

Good managers clearly identify the results they expect, then support their employees and help them achieve those results. They provide feedback on performance in an effort to help the employee achieve their potential, and the results the company needs for success. In a good company (and an ethical company), results are more than just numbers. They are benchmarks and lessons for the future as well as goals for the present.

Risk-taking:
So far, you might be feeling that ethical companies are timid and mousy, scared of doing the wrong thing. That is simply not true. Organizations that thrive, prosper and grow do so by taking risks. They do not stick to the safe path. Great companies innovate, they think "out of the box", and they try new things. They re-invent themselves and they reward the risk-takers. As long as you stick to your philosophical guns, risk-taking poses no threat to your ethics.

Great companies attract employees who are willing to take risks, and they encourage, support and reward them for taking calculated risks. When the risks pay off, they share the rewards with those who produced. When the risks do not pay off, they take the time to analyze what went wrong, and learn what to do better next time.

Think about this; Who would you rather be surrounded by when you are taking risks: people who you trust and respect, or the sharks and snakes?

Passion:
Great organizations are comprised of people who have a passion for what they are doing. These are people who are working for you for the thrill and challenge, not merely putting in time to collect a pay-check. They are excited, driven, and believe that their work and efforts can make a difference.

Without the passion burning within them, people put in a minimal effort, getting paid and going home. These people are role models to others: why work so hard when you can come in late and leave early?

People can demonstrate their excitement in many ways, so be aware that extra effort on a project or working on the weekend shows passion as much as enthusiastic cheerleading.

Persistence:
People in awesome organizations have the will to persist. They will keep working even when results are not what they hoped, or when customers refuse to buy. Their persistence is tied to their passion for what they are doing and a belief that this group of people, this company, has the best chance of "making it" of any company they could join. And so, they work harder, They continue to take risks. They behave with honor and integrity. They keep their focus on the customer's needs and wants. And, they are not satisfied until they achieve the goals and results that are expected.

You, as the leader, need to put a lot of time and effort into hiring people who share these values. Talk to your team about the importance of these values to the strategy, plans and decisions made. You need to clearly draw the line which separates "what's allowed" from "what's not allowed" in the company. And, when someone steps over the line, the leader needs to tell them they stepped over. Depending on the person (and the incident), give them another chance and get them to change their behavior, or let them go. Taking no action is unacceptable.

Sticking to your beliefs might be the ultimate representation of good ethics. And not surprisingly, it doesn't just make good sense from an ethical standpoint, but it makes great business sense.

INFLUENCE OF POWER AND POLITICS LEADERS INFLUENCE CORPORATE CULTURE

Organizational leaders use their power and influence to shape corporate culture. Power refers to the influence that leaders and managers have over the behavior and decisions of subordinates. An individual has power over others when his or her presence causes them The status and power of leaders is directly related to the amount of pressure that they can exert on employees to conform to their expectations. A superior in an authority position can put strong pressure on employees to comply, even when their personal ethical values conflict with the superiors wishes. For example, a manager might say to a subordinate, I want the confidential data about our competitors sales on my desk by Monday morning, and I dont care how you get it. A subordinate who values his or her job or who does not realize the ethical questions involved may feel pressure to do something unethical to obtain the data. There are five power bases from which one person may influence another: (1) reward power, (2) coercive power, (3) legitimate power, (4) expert power, and (5) referent power.33 These five bases of power can be used to motivate individuals either ethically or unethically. REWARD POWER Reward power refers to a persons ability to influence the behavior of others by offering them something desirable. Typical rewards might be money, status, or promotion. Consider, for example, a retail salesperson who has two watches (a Timex and a Casio) for sale. Lets assume that the Timex is of higher quality than the Casio but is priced about the same. In the absence of any form of reward power, the salesperson would logically attempt to sell the Timex watch. However, if Casio gave him an extra 10 percent commission, he would probably focus his efforts on selling the Casio watch. This carrot dangling and incentives have been shown to be very effective in getting people to change their behavior in the long run. In the short run, however, it is not as effective as coercive power. COERCIVE POWER Coercive power is essentially the opposite of reward power. Instead of rewarding a person for doing something, coercive power penalizes actions or behavior. As an example, suppose a valuable client asks an industrial salesperson for a

bribe and insinuates that he will take his business elsewhere if his demands are not met. Although the salesperson believes bribery is unethical, her boss has told her that she must keep the client happy or lose her chance at promotion. The boss is imposing a negative sanction if certain actions are not performed. Every year 20 percent of Enrons workforce was asked to leave as they were ranked as needs improvement or other issues were noted. Employees, not wanting to fall into the bottom 20 percent went along with the corporate culture, which might include complacency toward corruption.34 Coercive power relies on fear to change behavior. For this reason, it has been found to be more effective in changing behavior in the short run than in the long run. Coercion is often employed in situations where there is an extreme imbalance in power. However, people who are continually subjected to coercion may seek a counterbalance by aligning themselves with other, more powerful persons or by simply leaving the organization. In firms that use coercive power, relationships usually break down in the long run. Power is an ethical issue not only for individuals but also for work groups that establish policy for large corporations. LEGITIMATE POWER Legitimate power stems from the belief that a certain person has the right to exert influence and that certain others have an obligation to accept it. The titles and positions of authority that organizations bestow on individuals appeal to this traditional view of power. Many people readily acquiesce to those who wield legitimate power, sometimes committing acts that are contrary to their beliefs and values. Betty Vinson, an accountant at WorldCom, objected to her supervisors requests to produce improper accounting entries in an effort to conceal WorldComs deteriorating financial condition. She finally gave in to their requests, being told this was the only way to save the company. She and other WorldCom accountants eventually plead guilty to conspiracy and fraud charges. She was sentenced to five months in prison and five months of house arrest.35

Such staunch loyalty to authority figures can also be seen in corporations that have strong charismatic leaders and centralized structures. In business, if a superior tells an employee to increase sales no matter what it takes and that employee has a strong affiliation to legitimate power, the employee may try anything to fulfill that order. EXPERT POWER Expert power is derived from a persons knowledge (or the perception that the person possesses knowledge). Expert power usually stems from a superiors credibility with subordinates. Credibility, and thus expert power, is positively related to the number of years that a person has worked in a firm or industry, the persons education, or the honors that he or she has received for performance. Others who perceive a person to be an expert on a specific topic can also confer expert power on him or her. A relatively low-level secretary may have expert power because he or she knows specific details about how the business operates and can even make suggestions on how to inflate revenue through expense reimbursements. Expert power may cause ethical problems when it is used to manipulate others or to gain an unfair advantage. Physicians, lawyers, or consultants can take unfair advantage of unknowing clients, for example. Accounting firms may gain extra income by ignoring concerns about the accuracy of financial data that they are provided in an audit. REFERENT POWER Referent power may exist when one person perceives that his or her goals or objectives are similar to anothers. The second person may attempt to influence the first to take actions that will lead both to achieve their objectives. Because they share the same objective, the person influenced by the other will perceive the others use of referent power as beneficial. For this power relationship to be effective, however, some sort of empathy must exist between the individuals. Identification with others helps boost the decision makers confidence when making a decision, thus increasing his or her referent power. Consider the following situation: Lisa Jones, a manager in the accounting department of a manufacturing firm, has asked Michael Wong, a salesperson, to speed up

the delivery of sales contracts, which usually take about one month to process after a deal is reached. Michael protests that he is not to blame for the slow process. Rather than threaten to slow delivery of Michaels commission checks (coercive power), Lisa makes use of referent power. She invites Michael to lunch, and they discuss some of their work concerns, including the problem of slow-moving documentation. They agree that if document processing cannot be speeded up, both will be hurt. Lisa then suggests that Michael start faxing contracts instead of mailing them. He agrees to give it a try, and within several weeks the contracts are moving faster. Lisas job is made easier, and Michael gets his commission checks a little sooner. The five bases of power are not mutually exclusive. People typically use several power bases to effect change in others. Although power in itself is neither ethical nor unethical, its use can raise ethical issues. Sometimes a leader uses power to manipulate a situation or a persons values in a way that creates a conflict with the persons value structure. For example, a manager who forces an employee to choose between staying home with his sick child and keeping his job is using coercive power, which creates a direct conflict with the employees values

Ethics of human resource management

The ethics of human resource management (HRM) covers those ethical issues arising around the employer-employee relationship, such as the rights and duties owed between employer and employee. Discrimination issues include discrimination on the bases of age (ageism), gender, race, religion, disabilities, weight and attractiveness. See also: affirmative action, sexual harassment. Issues surrounding the representation of employees and the democratization of the workplace: union busting, strike breaking. Issues affecting the privacy of the employee: workplace surveillance, drug testing. See also: privacy. Issues affecting the privacy of the employer: whistle-blowing. Issues relating to the fairness of the employment contract and the balance of power between employer and employee: slavery, indentured servitude, employment law. Occupational safety and health.

Business ethos principles practiced by Indian Companies:Indian companies are guided by certain rules of conduct in the form of ethical and moral standards. Some of the business ethos principles, practiced by Indian companies are listed below:

1. Principle of `sacrifice An individual is trained by the principle of `sacrifice through the process of `give and take policy. A person, who is willing to sacrifice part of his bread or effort, commands a superior place in the organization. 2. Principle of `harmony An individual is trained in such a way that to avoid conflicts and friction one should be guided by certain set of moral conducts and principles. 3. Principle of `non-violence This principle protects an organization from strikes and lockouts and unnecessary avoidable conflicts. 4. Principle of `reward The one who performs well are encouraged to do so. This implies that the activities of individuals need to be monitored and encouragement in th form of `rewards may cultivate the spirit of higher productivity among groups. 5. Principle of `justice The one who works hard is `rewarded and the one who fails to do so is `punished. This is essence the principle of Justice. 6. Principle of `taxation The one who is taxed more is encouraged to stay fit for a longer period by proper appreciation and encouragement. This principle applies to individuals who are hardworking and productive. 7. Principle of `Integrity An integrated mind is more productive. Groups are encouraged to stay united in order to reap the benefits of division of labour. 8. Principle of `Polygamy This is nothing but the wedding of two different cultures by absorption or takeover