Introduction

aim is to define and examine the responsibilities of businesses and their agents as a part of the
general moral environment of a given society. The products of this field of research are sets
of rules and codes of conducts, which serve as a means of protection from the possible
infringements of moral codes as a result from the general activities and responsibilities of a
firm to its stakeholders (e.g. generating profits for shareholders and taxes to the government).
This paper will briefly explain the nature, aspects, scope and the growing importance of
business ethics in todays economy.I have also included the definitions of ethics, business
ethics and what does they mean. I Finally, it will describe several contemporary issues
related to business ethics like corporate social responsibility (CSR) and how they are different
from business ethics as well.

Ethics
Ethics is a branch of social science. It deals with moral principles and social values. It helps
us to classifying, what is good and what is bad? It tells us to do good things and avoid doing
bad things.
So, ethics separate, good and bad, right and wrong, fair and unfair, moral and immoral and
proper and improper human action. In short, ethics means a code of conduct. It is like the 10
commandments of holy Bible. It tells a person how to behave with another person.

What does Business Ethics mean?

In short, business ethics means to conduct business with a human touch in order to give
welfare to the society.
So, the businessmen must give a regular supply of good quality goods and services at
reasonable prices to their consumers. They must avoid indulging in unfair trade practices like
adulteration, promoting misleading advertisements, cheating in weights and measures, black
marketing, etc. They must give fair wages and provide good working conditions to their
workers. They must not exploit the workers. They must encourage competition in the market.
They must protect the interest of small businessmen. They must avoid unfair competition.
They must avoid monopolies. They must pay all their taxes regularly to the government.

Definition of Business Ethics

According to Andrew Crane,
Business ethics is the study of business situations, activities, and decisions where issues of
right and wrong are addressed.
According to Raymond C. Baumhart,

The ethics of business is the ethics of responsibility. The business man must promise that he
will not harm knowinfly.
According to Wikipedia,
Business ethics (also corporate ethics) is a form of applied ethics or professional 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 entire organizations.

Nature of Business Ethics

The characteristics or features of business ethics are:

Code of conduct : Business ethics is a code of conduct. It tells what to do and what
not to do for the welfare of the society. All businessmen must follow this code of
conduct.

Based on moral and social values : Business ethics is based on moral and social
values. It contains moral and social principles (rules) for doing business. This includes
self-control, consumer protection and welfare, service to society, fair treatment to
social groups, not to exploit others, etc.

Gives protection to social groups : Business ethics give protection to different social
groups such as consumers, employees, small businessmen, government, shareholders,
creditors, etc.

Provides basic framework : Business ethics provide a basic framework for doing
business. It gives the social cultural, economic, legal and other limits of business.
Business must be conducted within these limits.

Voluntary : Business ethics must be voluntary. The businessmen must accept

business ethics on their own. Business ethics must be like self-discipline. It must not
be enforced by law.

Requires education and guidance : Businessmen must be given proper education

and guidance before introducing business ethics. The businessmen must be motivated
to use business ethics. They must be informed about the advantages of using business
ethics. Trade Associations and Chambers of Commerce must also play an active role
in this matter.

Relative Term : Business ethics is a relative term. That is, it changes from one
business to another. It also changes from one country to another. What is considered
as good in one country may be taboo in another country.

New concept : Business ethics is a newer concept. It is strictly followed only in

developed countries. It is not followed properly in poor and developing countries.

Importance of Business Ethics

Long-term growth: sustainability comes from an ethical long-term vision which

takes into account all stakeholders. Smaller but sustainable profits long-term must be
better than higher but riskier short-lived profits.

Cost and risk reduction: companies which recognise the importance of business
ethics will need to spend less protecting themselves from internal and external
behavioural risks, especially when supported by sound governance systems and
independent research

Anti-capitalist sentiment: the financial crisis marked another blow for the credibility
of capitalism, with resentment towards bank bailouts at the cost of fundamental rights
such as education and healthcare.

Limited resources: the planet has finite resources but a growing population; without
ethics, those resources are repleted for purely individual gain at huge cost both to
current and future generations.

SCOPE OF BUSINESS ETHICS

Ethical problems and phenomena arise across all the functional areas of companies and at all
levels within the company.

1.Ethics in Compliance
Compliance is about obeying and adhering to rules and authority. The motivation for being
compliant could be to do the right thing out of the fear of being caught rather than a desire to
be abiding by the law. An ethical climate in an organization ensures that compliance with law
is fuelled by a desire to abide by the laws. Organizations that value high ethics comply with
the laws not only in letter but go beyond what is stipulated or expected of them.

2.Ethics in Finance
The ethical issues in finance that companies and employees are confronted with include:

In accounting window dressing, misleading financial analysis.

Related party transactions not at arms length

Insider trading, securities fraud leading to manipulation of the financial markets.

Executive compensation.

Bribery, kickbacks, over billing of expenses, facilitation payments.

Fake reimbursements

3.Ethics in Human Resources

Human resource management (HRM) plays a decisive role in introducing and implementing
ethics. Ethics should be a pivotal issue for HR specialists. 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.
The issues of ethics faced by HRM include:

Discrimination issues i.e. discrimination on the bases of age, gender, race, religion,
disabilities, weight etc.

Sexual harassment.

Affirmative Action.

Issues surrounding the representation of employees and the democratization of the

workplace, trade ization.

Issues affecting the privacy of the employee: workplace surveillance, drug testing.

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.

Occupational safety and health.

Companies tend to shift economic risks onto the shoulders of their employees. The boom of
performance-related pay systems and flexible employment contracts are indicators of these
newly established forms of shifting risk.

4.Ethics in Marketing
Marketing ethics is the area of applied ethics which deals with the moral principles behind
the operation and regulation of marketing. The ethical issues confronted in this area include:

Pricing: price fixing, price discrimination, price skimming.

Anti-competitive practices like manipulation of supply, exclusive dealing

arrangements, tying arrangements etc.

Misleading advertisements

Content of advertisements.

Children and marketing.

Black markets, grey markets.

5.Ethics of Production
This area of business ethics 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

Ethical relations between the company and the environment include pollution,
environmental ethics, and carbon emissions trading.

Ethical problems arising out of new technologies for eg. Genetically modified food

Product testing ethics.

The most systematic approach to fostering ethical behaviour is to build corporate cultures that
link ethical standards and business practices.

ADVANTAGES OF BUSINESS ETHICS

More and more companies recognize the link between business ethics and financial
performance. Companies displaying a clear commitment to ethical conduct consistently
outperform companies that do not display ethical conduct.
1. 1. Attracting and retaining talent
People aspire to join organizations that have high ethical values. Companies are able to attract
the best talent and an ethical company that is dedicated to taking care of its employees will be
rewarded with employees being equally dedicated in taking care of the organization. The
ethical climate matter to the employees. Ethical
Organizations create an environment that is trustworthy, making employees willing to rely,
take decisions and act on the decisions and actions of the co-employees. In such a work
environment, employees can expect to be treated with respect and consideration for their
colleagues and superiors. It cultivates strong teamwork and Productivity and support
employee growth.

2. Investor Loyalty
Investors are concerned about ethics, social responsibility and reputation of the company in
which they invest. Investors are becoming more and more aware that an ethical climate
provides a foundation for efficiency, productivity and profits. Relationship with any
stakeholder, including investors, based on dependability, trust and commitment results in
sustained loyalty.
3. Customer satisfaction
Customer satisfaction is a vital factor in successful business strategy. Repeat purchases/orders
and enduring relationship of mutual respect is essential for the success of the company. The
name of a company should evoke trust and respect among customers for enduring success.
This is achieved by a company that adopts ethical practices. When a company because of its
belief in high ethics is perceived as such, any crisis or mishaps along the way is tolerated by
the customers as a minor aberration. Such companies are also guided by their ethics to
survive a critical situation. Preferred values are identified ensuring that organizational
behaviours are aligned with those values. An organization with a strong ethical environment
places its customers interests as foremost. Ethical conduct towards customers builds a strong
competitive position. It promotes a strong public image.
4. Regulators
Regulators eye companies functioning ethically as responsible citizens. The regulator need
not always monitor the functioning of the ethically sound company. The company earns
profits and reputational gains if it acts within the confines of business ethics. To summaries,
companies that are responsive to employees needs have lower turnover in staff.

Shareholders invest their money into a company and expect a certain level of return
from that money in the form of dividends and/or capital growth.

Customers pay for goods, give their loyalty and enhance a companys reputation in
return for goods or services that meet their needs.

Employees provide their time, skills and energy in return for salary, bonus, career
progression, and learning.

Ten Companies With Best Ethical

Corporate Policies Worldwide
Its not often that companies are celebrated for good behavior. Here are corporations with
policies we can support:
1. Google

Although some may criticize the company, Google(NASDAQ:GOOG) regularly makes good
on its motto: Dont be evil. Through its Google Green Program, the company has donated
over $1 billion to renewable energy projects, and has decreased its own footprint by using
energy efficient buildings and public transportation. The company is also a staunch advocate
of free speech, which can be observed from its frequent conflicts with the Chinese
government. Google is also an open supporter of gay rights. Yet all this pales in comparison
to Googles status as a paragon for employee benefits. Just to name a few, Google employees
have access to free health care and treatment from on-site doctors, free legal advice with
discounted legal services, a fully stock snack pantry and onsite cafeteria (staffed by worldclass chefs, no less), and a free on-site nursery. With such a stellar record of social awareness
and positive employee relations, Google is easily the best example of ethics in the corporate
world today

2. Microsoft
Given the fact that it was started by Bill Gates, one of Americas most generous
philanthropists, it follows that Microsoft(NASDAQ:MSFT) would do well in following his
example. The tech company and its employees donate over $1 billion yearlyto charities and
non-profit organizations. If that wasnt enough, Microsofts management and employees
have also decided to tackle Americas IT professionals shortage through its TEALS program.
Through the TEALS program, Microsoft employees are encouraged to volunteer at local
schools to instruct students in computer science, in the hopes that it will inspire them to enter
the technology industry. Its only natural that Microsoft employees would be generous
people; in addition to being among the highest paid employees in America, they also enjoy a
plethora of perks, including 100% coverage on their health care premiums.
3. Intel
Since 1988, the computer chip manufacturer Intel(NASDAQ:INTC) has been trying to
bolster its reputation through its efforts to strengthen technological education. Through the
Intel Foundation, the company hosts the Intel Science Talent Search and the international
Science and Engineering Fair to help encourage STEM (science, technology, engineering,
and mathematics) education for young people. Intel is also interested in making these areas
more diverse; the company has many donation funds and programs to encourage girls and
underprivileged minorities to study in these fields. Employees of Intel also experience the
companys dedication to education through a very strange corporate perk the company
promotes or reassigns them to different fields and areas every 16 to 24 months, in the interest
of making sure that workers never become bored with their roles, and encouraging them to
explore new fields. Accepted employees are often told, Welcome to your next five jobs.
The other companies which top in practicing business ethics worldwide are Patagonia,
NuStar Energy, SAS Institute, Ultimate Software, Goldman Sachs, Starbucks and
Salesforce.com .
Two Indian companies among most ethical in the world:
1. TATA Steel

2. Wipro Limited

Social Responsibility
Man is a social animal and cannot live in isolation. He is expected to behave in a manner that
is socially and morally acceptable to others. The same applies to businesses. Though the
primary objective of any business is to earn maximum profits for the owners and
shareholders, it is also expected to conduct its operations in a manner that it fulfils its social
obligations also. For example, though it is not binding on any private sector company to
provide employment to the disabled or weaker sections of the society, it is considered to be a
part of the social responsibility of the company to absorb people from such sections of the
society. Similarly though there is not written law to compel a company to engage in acts to do
something to reduce pollution or to do something for the betterment of environment, taking
up projects to clean up environment are considered to be a part of the social responsibility of
the company.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) is a concept whereby organizations consider the
interests of society by taking responsibility for the impact of their activities on customers,
employees, shareholders, communities and the environment in all aspects of their operations.
This obligation is seen to extend beyond the statutory obligation to comply with legislation
and sees organizations voluntarily taking further steps to improve the quality of life for
employees and their families as well as for the local community and society at large.
Corporate social responsibility is related to, but not identical with, business ethics. While
CSR encompasses the economic, legal, ethical, and discretionary responsibilities of
organizations, business ethics usually focuses on the moral judgments and behavior of
individuals and groups within organizations. Thus, the study of business ethics may be
regarded as a component of the larger study of corporate social responsibility.
-Carroll and Buchholtz
Law
Under the Companies Act, 2013, any company having a net worth of rupees 500 crore or
more or a turnover of rupees 1,000 crore or more or a net profit of rupees 5 crore or more
should mandatorily spend 2% of their net profits per fiscal on CSR activities.The rules came
into effect from 1 April 2014.

Difference between Business Ethics and

Social Responsibility
Though business ethics and social responsibility seem to be overlapping, there has always
been a contradiction between the two. Companies, though they are committed to be socially
responsible for their behaviour have been found to be engaging in acts that cannot be called
ethical.

What is good for the society is sometimes not good for the business, and what is good for the
business is almost always not good for the society.
If the society is conscious, it responds in such a way that businesses are forced to behave
responsibly. The same applies to the administration and the judiciary of any country.
Selling of liquor and tobacco in any society is not against business ethics though it may be
against the principles of social responsibility. The same applies to lotteries and gambling. But
it is certainly against business ethics as well as against social responsibility to entice minors
to engage in smoking and drinking.

Conclusion
Ethics are the building block of our society and thus should be the building block of our
corporations. Henry Kravis states, If you build that foundation, both the moral and the
ethical foundation , as well as the businessthen the building wont crumble. It is not
essential to let greed cloud judgement.
It can be concluded that it is the high time business ethics should be practiced all over the
globe in the benefit of the common society as described in the paper. It is not only in the
favour of the mass but also has advantages for the corporate.

Importance of professional ethics

Professional ethics are as important as personal ethics. Many big well known companies have
suffered many destructive effects because the management of the company may have lacked
professional ethics. In order to have a successful business, it is important to run a business
ethically. However, the term "business ethics, when correctly interpreted, means standards of
behavior of every individual in a business, and not necessarily only standards of the business,
as a whole. Thus, a business or a society that lacks ethical principles is bound to fail sooner or
later. The main components of professional ethics are respect and honesty. Since all the
workers are a part of the company, they are expected to represent it ethically. This is why, for
the most part, business people usually speak of "we" or "us" rather than the more personal
"I". Professional ethics are also usually known as ethical business practices. Read on to
understand the need for professional ethics.
Need For Professional Ethics

Ethics means a code of conduct that directs an individual in dealing with others.
Business Ethics is a form of the skill that examines ethical moralities and honesty or
ethical problems that can arise in a business environment. It deals with matters
regarding morals, principles, duties and corporate governance applicable to a
company and its employees, customers, shareholders, media, suppliers, government
and dealers. This is what the famous Henry Kravis had to say about professional
ethics: If you don't have integrity, you have nothing. You can't buy accountability.

You can have all the money in the world, but if you are not a moral and ethical
person, you really have nothing.

Ethics are also related to the core of management practices such as human resource
management, accounting information, production, sales and marketing, intellectual
property knowledge and skill, international business and economic systems. In the
corporate world, the organizations culture sets standards for shaping the difference
between good or bad, right or wrong and fair or unfair. This quote by Albert Einstein
says it all: Relativity applies to physics, not ethics. The point being that it is
possible to make profits without having to negotiate on ethics. And over and above
the factor of correctness associated with ethics, an ethical business and its proprietors
only serve themselves, their clients and the whole enterprise much better in the final
reckoning.

Management gurus often preach on the advantage an ethical company has over their
competitors. A business is successful to the extent that it provides a product or
service that contributes to happiness in all of its forms these famous words by
Mihaly Csikszentmihalyi are a fitting description of this reality.

Lately, ethical issues in business have become more complicated because of the
international and diversified nature of many big corporations and because of the
difficulty of economic, social, global, political, legal, and administrative regulations
and peculiarities. Thus companies have to decide whether to stick to constant ethical
principles or to bend according to domestic standards and culture. It can be aptly
summed up in the words of John D. Rockefeller: I believe that every right implies a
responsibility; every opportunity an obligation; every possession a duty.

In every company, the managers should remember that leading by example is the first
and very important step in nurturing a culture of ethical conduct. Hence, the best way
to encourage ethical behavior is by setting a good personal example. Teaching an
employee ethics is not always effective. One can explain and define ethics to an adult,
but understanding ethics does not necessarily result in ethical behavior. John Mackey
once quoted that Business social responsibility should not be coerced; it is a
voluntary decision that the entrepreneurial leadership of every company must make
on its own.

Thus, ethics are important not only in business but in all the other parts of life because it is an
important base on which a civilized and cultured society is built. A business or society
without ethics and scruples is only headed towards self-destruction.
Professionalism is the conduct, aims or qualities that characterize or mark a profession or
professional person; it implies quality of workmanship or service. Every organization knows
that a professional reputation is the difference between success and failure and they seek to
keep their most professional staff.
Professionalism is all about success and influence; having a reputation for excellence and
being thought of as someone who exhibits professionalism under any circumstances can open
doors for you either in the workplace or in your personal ambition.

Following are ten golden rules to being professional in service to your organization:
Always strive for excellence; this is the first rule to achieving greatness in whatever
endeavor you undertake this is the quality that makes you and your work stand-out.
Excellence is a quality of service which is unusually good and so surpasses ordinary
standards, it should be made a habit for it to make a good impression on your bosses and
colleagues.
Be trustworthy; in todays society trust is an issue and any employee who exhibits
trustworthiness is on a fast track to professionalism. Trustworthiness is about fulfilling an
assigned task and as an extension- not letting down expectations, it is been dependable, and
reliable when called upon to deliver a service. In order to earn the trust of your bosses and
colleagues, worth and integrity must be proven over time.
Be accountable; to be accountable is to stand tall and be counted for what actions you have
undertaken, this is the blameworthiness and responsibility for your actions and its
consequences- good or bad.
Be courteous and respectful; courteousness is being friendly, polite and well mannered with
a gracious consideration towards others. It makes social interactions in the workplace run
smoothly, avoid conflicts and earn respect. Respect is a positive feeling of esteem or
deference for a person or organization; it is built over time and can be lost with one stupid or
inconsiderate action. Continued courteous interactions are required to maintain or increase
the original respect gained.
Be honest, open and transparent; honesty is a facet of moral character that connotes
positive and virtuous attributes such as truthfulness, straightforwardness of conduct, loyalty,
fairness, sincerity, openness in communication and generally operating in a way for others to
see what actions are being performed. This is a virtue highly prized by employers and
colleagues, for it builds trust and increases your personal value to all.
Be competent and improve continually; competence is the ability of an individual to do a
job properly, it is a combination of knowledge, skills and behavior used to improve
performance. Competency grows through experience and to the extent one is willing to learn
and adapt. Continuous self development is a pre-requisite in offering professional service at
all times.
Always be ethical; ethical behavior is acting within certain moral codes in accordance with
the generally accepted code of conduct or rules. It is always safe for an employee to play by
the rules. This is always the best policy and in instances the rule book is inadequate, acting
with a clear moral conscience is the right way to go. This may cause friction in some
organizations but ethical organizations will always stand by the right moral decisions and
actions of their employees.

 Always be honorable and act with integrity; honorable action is behaving in a way that
portrays nobility of soul, magnanimity, and a scorn of meanness which is derived from
virtuous conduct and personal integrity. This is a concept of wholeness or completeness of
character in line with certain values, believes, and principles with consistency in action and
outcome.
Be respectful of confidentiality; confidentiality is respecting the set of rules or promise that
restricts you from further and unauthorized dissemination of information. Over the course of
your career, information will be passed on to you in confidence either from the organization
or from colleagues- and it is important to be true to such confidences. You gain trust and
respect of those confiding in you and increase your influence within the organization.
Set good examples; applying the foregoing rules helps you improve your professionalism
within your organization but it is not complete until you impact knowledge on those around
and below you. You must show and lead by good example. Being a professional is about
living an exemplary live within and without the organization.
Professionalism is highly valued by every organization today and professionals
are hardly out of work. Apply the ten golden rules of professionalism and enjoy a
wonderful, professional and prosperous career

Unit 2
Respecting Elders :

Showing love and concern to our elders is the least that we can do for people who have made
us what we are
There is a very old saying as you sow, so shall you reap!! Neither is it new for us nor are
we unaware of what it means. We must ensure that our kids respect their elders. If we give
them the right kind of training, from the beginning only, it will get inculcated in their
behaviour and they will start practicing it as they grow. Our elders, be it our parents, teachers
or our uncles and aunts, expect only one thing from us, that is respect for them. It is not only
our responsibility but also our moral duty, to give them the respect that they truly deserve.
After all, they have spent their entire life, making our life meaningful.
There are very simple and few things that will not only make them happy, but will show our
respect for them.

Greeting- Always wish your elders, whenever and wherever you see
them-In India, we are taught from the beginning that whenever someone
visits us, we should always wish them. It should not be about the place; if
we see them in a public place, then too, it is our responsibility to wish
them to show them our respect.

They Are Knowledge Banks- Our elders always have more experience
of life, than us. We should teach our children, to learn and gain something
from their experience. It is going to help us in their future and maintaining
our present. They often say that our age is their experience, which holds
true.

Refrain from Interrupting- This is basic manners, whenever someone

speaks, we should never interrupt in between. The children should make it
a habit of listening to their elders before intervening. They should listen to
them carefully and completely, before giving their point of view.

Always Accompany Them to the Door When they Leave- This

etiquette is not only for the elders but for anyone who visits us. We should
always go with the guests till the door, to drop them and see them off.
This gives them the feeling that you were happy about their arrival. It is a
way to show them your courtesy and thank them for visiting you.

Dont Make Fun of Your Elders- A slip of tongue or a wrong name must
not prompt the kids to make fun of elders. Laughing it off, at times can be
okay but not always.

Humanity If someone elder to you enters a room, you should always get
up and offer your seat to him, even if there are other chairs vacant in the
room. You should go in for the other chair and not wait for them to do the
same.

Show Gratitude-Children should be grateful to their elders for all that

they have given them. They have devoted their entire life to make our life
more meaningful and special this should be understood and valued by
children.

Spend Time with Them- We must teach our children to spend some time
with their grandparents and not to leave them alone, during their old age.
They need our attention and love, to make them feel important.

Parents should also set good examples so that the children learn from them. Refrain from
using abusive language or high tones if you have an argument with elders of the family.
These matters can always be discussed in privacy, and there is no proof that raising voices
will make you right.
Children have impressionable minds, behave as youd like your children to behave.