Business Ethics For BE

An introduction to Ethics
Prepared by
Amitom Prakash Pandey, 9300752449
MEDI-CAPS INSTITUTE OF TECHNOLOGY AND MANAGEMENT,
INDORE,
MBA (Systems andCore Faculty)
(With Thanks to Professor K. Prabhakar,KSR College of Technology,Tamilnadu, India )
Amitom_pandey@rediffmail.com Page 1
Syllabus
Ethics & Moral Values, objectives of ethics, Moral, Values, Code of Ethics, Types of Ethics.
Culture ,Organizational Culture ,Types ,Ethical philosophies –Utilitarianism, Policy & work
Ethos, Professional ,Non Professional ,Quasi Professional,ACM & IEEE Professional code of
ethics. Code of ethics & tools with their limitation.
Introduction
Young engineer graduating from university has many career choices. He or she can choose
to be an entrepreneur, join a small firm or a multinational organization. Each of these organizations
operates in business environment that is totally different before two decades. In a globalized era the
frame work in which organizations work also have undergone a lot of change. The product life
cycles are shortened, downsizing, and lean and mean manufacturing, outsourcing has become some
of the competitive strategies of organization. Organizations have no more stable and predictive
environment. In this scenario, the young engineer is faced with many dilemmas.
A simple example is should I leave present employer and go for another in a foreign country
for better salary and perquisites. If I stay here, what is the guarantee that I will be offered continued
employment? The course on ethics will not provide any yes or no answers to these questions. It
provides an inside compass that will empower an engineer to take appropriate decisions. This write
up is meant for teachers who are planning to teach course on “Engineering Ethics”. The framework
for the write up is in the context of organizations. Therefore, the student trained in ethics, which
joins an organization, which has an established policy of ethical governance such as Tata Motors or
a start up organization, will be comfortable with both. While he will understand and appreciate the
Tata Motors commitment, he will be in a position to provide inputs on the path that organization
has to take in the direction of ethics. No originality is claimed for providing the write up. Many
sources are consulted to provide the write up, the author is thankful to all and provided bibliography
at the end and no originality is claimed for authorship and an eclectically approach has been
undertaken. However, for all the mistakes and error the author is totally responsible and will be
thankful if they are sent to his email. kprksr@gmail.com andamitom_pandey@rediffmail.com
If we examine the current literature on ethics, the focus is on guidelines given by

philosophers, academics and social critics. However, leaders, managers and engineers require more
practical information about managing ethics. Managing ethics in the workplace holds tremendous
benefit to all including engineers, managers, organizations and society. This is particularly true
today when it is critical to understand and manage highly diverse groups, with different values in
the workplace and operating in globalized economic conditions.
The most frequent forms of business ethics literature today typically include:
a) philosophical, requiring orientation and analysis;
b) anthologies requiring review and integration;
c) case studies, requiring analyses to synthesize; and
d) Focus on social responsibility, which includes many examples of good and bad actions taken
by organizations.
However, if we do not attempt to study ethics at undergraduate level, we may expose our
engineers to myths about ethics, e.g., "Ethics is simply to do what's right" or saying just “do good”.
Some times many engineers may believe ethics is irrelevant because in business we cannot talk of
ethics and training in ethics may avoids the real-to-life complexities in leading organizations.
Note: - This content is prepared for no cost form student, they can publish and copy it without any
permission but with a request that the name of the authors must not be deleting in any type.
Types
Normative
Ethics
Changing
Environment Personnel
andCircumstances Professional
Philosophic
Development
(As Utilitarianism)
Virtues and Rights

Standards and Policies
Morals andValues
Genetically
andHereditar
y
Excluding
culture
Culture, Religion, Tradition
Phases of Development of Ethics
Organizational Culture
Introduction.
Culture means the way of life, It is shared values philosophies, ideologies,
assumptions, beliefs, expectations, attitude and norms that knit a community together .All of those
are interrelated psychological values that reveal a group that how to approach t h e decisions. We
can say that culture is an Integration of human group ideas, customs and Tradition in unfilled
pluralistic systems.
Cross by defines the culture as “Pattern of behavior”,Juran defines culture as
Creation of values ,beliefs ,and behavior necessary for success”. Culture is a manifest in behavioral
norms, hidden assumptions, and human nature, each occurring at a different level of depth.
In general a culture is the collective manifestation of human nature __the
collection of human dynamics, wants, motives and desires that make a group of people unique.
We can define organizational culture as the shared belief of top managers in a
company have about how they should manage themselves and other employees and how should
they conduct there business. Organizational culture is an amalgam and summary of the ways in
which activities are conducted and the standards and values are adopted.
Edgar emphasized organizational culture as a pattern of basic assumption
invented, discovered and developed by a given group as it learns to cope with its problem of
external adaptation and internal integration that has worked well enough to be considered as
valuable and self esteemed.
Characteristics of culture-
• Learnt –culture is learnt rather then genetics or heredity.

• Shared –Members of a group and organization share culture.
• Continuous-it is cumulative in its development and passes on from one generation to
another.
• Symbolic-It is based on human capacity to symbolize, to use one thing to represent another
as the kesaria color for Hindus or bhagwa,Green for muslims andKhalsa Sign or 786 that
symbolized Allah.
• Integrated (Internal)-It is composite, Interrelated, Interdependent, so a change in one area will
affect others.
• Adaptive (External)-Culture is based on human qualities of adaptivity, creative innovation and
imagination.
• Regular-When participants interact with each other; they use common language, terminology and
accepted forms of behavior.
• Norms-Culture exhibits its distinctive standards of behavior.
• Dominant values –Culture highlights certain dominant values that are advocated and accepted by
residents.
• Rules-The formal rules that underline the constitution of the society. The informal rules that govern
the interaction and transaction of individuals.
Components of culture-
Customs
ART
Society
Way of
Life
Characteristics of organizational culture –
1-Aggressiveness 8-Risk taking and innovative

2-Communication Patterns 9-Integration
3-Conflict Tolerance 10-Management Support
4-Control 11-People orientation
5-Direction 12-Result orientation
6-Identity 13-Reward
7-Individual initiatives 14-Team orientation
Types of culture
Archetype
People & Pioneering

Power Culture Task culture Role culture Tribe’s culture
Person culture culture
Power Culture- This is where the key relationship exists between the person who wield
power and influences and those who work for them. The source of power is at the centre and
everyone else drawn their strength, Influence and confidence from the centre that requires
continuous support to ensure prosperity and viability. Example –the culture of an organization
where Architecture is From Top management, Middle Management and Peers. Army is also
examples of this culture.
People and Place culture- This culture exists in the people itself, where a group has
decided that it is in overriding interest to bind or form together and produces an organization for
its own benefit .The Key relationship is therefore between people and binds them with common
intrinsic interest. Example – the canteen culture or the culture of an chat place of students, or a
group which is developed by a common intrinsic approach as Shivsena ,SIMI, Bajrang dal.also the
Indore Picnic with “DAAL BAATI”.
Task culture - This culture can be seen in a team where all the skill sets and knowledge are
parallel to each other ,and extreme target oriented conditions with Time limit ,We can see this
culture in Project Teams ,Marketing Teams or a software development team ,The emphases are
on fulfillment of job with customer satisfaction, productivity, New market development. This type
of culture is dynamic, flexible and adaptive.
Role culture- It is found where organization have gained a combination of size,

departmentalization, Permanence, and where the ordering of activities and preservation of
knowledge, experience and stability ,permanence and efficiency .The key relationship is based on
superior subordinate style of relationship. The Key purpose is order, stability, permanence and
efficiency .Example –In Medicapes The C.E.D.,The Principal, The HOD ,Lecturers,Professors,TPO.
Tribes Culture- When an organization creates any tribal concept or accepts any Tribal
functionality ,the culture created is called the Tribes culture ,This is usually accomplished by a top
person with very strong vision ,andits purpose is to unlash strong creative forces and generate
high level of unity ,enthusiasm ,ethics ,energy and fun The best example is of Bal thakrey the
superior of Shivsena Group, another example is Navratra Parb at Gujraat and Ganpati of Bombay
,also Nakhrali dhandi of Indore .
Pioneering Culture- where there is competition between groups or individuals and

development ,target orientation in mind with quality improvement ,with day to day question in
mind that how to be pioneer in the crowd ,the culture created is called the pioneering culture ,as
Medi-caps is providing you an pioneering culture also for student development and quality
improvement ,and infra development.
Entrepreneurial culture – This culture is developed where the new ventures try to create
there new markets, new opportunities with the enthusiasm, energy, creativity, dynamism, vision
and Risk on own shoulders the culture created is called the entrepreneurial culture. Example Anil
Dheeru bhai ambani –RIM, Reliance money etc.
Major example can be taken for our campus Medi-caps –With Power culture in
administration, Pioneering culture in quality assurance in education, task culture in faculty teams
& students for fulfillment of course content & project submission, people and place culture in
canteen, role culture in departments, and entrepreneurial culture in owner’s work style.
Work Culture
Work culture is work related activities by which the norms and policy are created in an
organization. Work culture is the combination of attitude, relationship, developed capabilities,
habits and other behavioral attitudes that characterized the nature of the organization.
Bhaduri identified major characteristics of work culture in Indian context as discipline,
Teamwork andco-operation, communication and consultation, delegation andauthority, activation
levels of individuals and groups, entity, a sense of belongingness and response of individuals.
Work culture can be classified in three parts
1-Soft Culture,2- Technocratic Culture, 3-Work centric Culture.
Value
VALUES
Temporal Universal
Values Values
Cultural Political Economical Corporate Social Human Moral Spiritual
“Value is a principle, standard or quality regarded as worthwhile or

respective within a community”
“Value is a quality of anything that makes it desirable of something that is
prized, held in respect, or esteemed”
“The encyclopedia of social science refers to value, as interest, pleasure,
likes, preference, duties, moral obligation, desires, wants, needs & many
other social orientations”
SOCIAL VALUES
VALUES
Introduction:-
Social values refer to human or moral values or principles that are essentially desirable for the
wellbeing of an individual, a group or a society. Some of the important social values are:
• Truth and Honesty.
• Generosity.
• Patriotism.
• Respect for seniors or Elders.
• Justice and Kindness.
• Tolerance.
• Cooperation.
• Excellence.
•
NATURE AND CHARACTERISTICS OF SOCIAL VALUES

The nature and characteristics of basic human values is explained as follows:
1) Values are inculcated:

Human are not born with values. The values are developed through learning, observation,
and/or social interaction. The values are generally learnt through parents, religious leaders, teachers,
and other senior members of the society.
2) Well Accepted Principles:

The basic human values are well accepted principles by the members of a particular society.
The values guide the behavior and actions of the members of the society. The values enable the
members to conduct their activities in ethical and dignified manner.
3) Time-tested Existence:
For centuries, certain basic human values have stood the test of time. In all human societies,
since the early days of civilization (which dates back to 5000 B.C), basic human values were
accepted. The values of truth, respect for seniors, cooperation, justice, excellence, etc; are well
accepted and practiced for several centuries by the members of all societies the world over.
4) Basis of Human Values:

Almost all basic human values are based on religious beliefs and practices. However, in
modern societies, certain values are reinforced through deliberate efforts of certain people. For
instance, the constitution of India in its preamble advocates Justice (social, economic and
political) to all citizens of country.
5) Classification of Values:
The human values can be classified as:
• Moral and social values:

The moral values reflect the ethical aspects of human life. The social values guide the
behavior of an individual in a particular society. The social values may differ from one
society to another and form one period to another within the same society.
• Traditional and Modern Values:

Most of the human values are traditional in nature. They have been in existence since the
ancient time. Such values include honesty and truth, concern for others, respect for seniors, etc.
There are certain values that have been strengthened in modern affluent societies, such as
material values or values relating to wealth and comfort. The value of excellence is given great
importance in developed countries.
• Intrinsic and Instrumental Values:

The intrinsic values are considered as ends in themselves such as honesty and truth,
whereas, the instrumental values are means to attain certain ends or goals. For instance, the
value of excellence acts a means of attaining recognition and rewards in the society.
The human values can also be classified as:
6) Values Reflect Character:

Values reflect the character of a person. Character is the sum total of one’s values. It is
said that values are responsible for the consistency of one’s behavior.
7) Values Change Gradually:

All values of a person may not remain the same all the time. They may change but
gradually. However, at times, a person’s values may change suddenly due to same forced
circumstances. For instance, an honest person may indulge in dishonest act when faced with
traumatic situation or unavoidable circumstances.
(Values are dynamic, judgemental, stable, and intrinsic)
IMPORTANCE OF SOCIAL VALUES
1) Values Foster Economic Progress:

Certain basic human values foster economic progress of a society. The fair dealing
would enable a county to progress, whereas, corrupt practices will keep a nation backward or
underdeveloped, as is the case of most of the developing nation. In western countries, the level of
economic development is high due to excellence, and less degree of corruption. Therefore, we can
say that there is a direct relationship between values and economic progress.
2) Values Foster Social Development:
Certain basic human values such as cooperation and generosity do foster social
development. The social development in terms of education, health, and family welfare can get a
boost due to the practice of basic human values.
3) Values Improve Social Relations:

It is true that basic human values tend to improve social ties or relations. For
instance, respect for parents, teachers and seniors help to develop good social and emotional
relations. The healthy relationships are vital for the well being of individuals, groups, and entire
society.
4) Values Facilitate Regional Cooperation:

Human values such as cooperation and tolerance can help to facilitate regional
cooperation. For instance, the regional cooperation among the states of a nation or among
different nations can help to improve economic and social development of the entire region.
5) Values Generate Love, Peace And Happiness:

Values tend to generate love, peace and happiness in the society. For instance, the
values of respect and concern for others, cooperation, etc; develop a spirit of togetherness.
Conflicts can be solved through mutual understanding and as such there can be love, peace and
happiness.
6) Values Improves Standard of Living:
Basic human values help to improve standard of living of a society. For instance, the
value of excellence enable people to develop new products, processes, etc. such innovations
enable people to enjoy new and better varieties of good and services, which add to the standard
of living oh the people.
SOCIAL VALUES AND BUSINESS ORGANISATIONS
The role of business organizations in social values is stated as follows:
A. Truth and honesty:

Truth is one of the most important basic social values. One should conduct his/her
activities in a truthful and honest manner. One should avoid faking or lies. Business organization
should conduct there business activities in honest manner. There should not cheat the customers.
They can practice truth and practice in the following ways:
• Adoption of correct weights and measures.
• Provide good quality products.
• Charge the right prices, etc.
B. Justice and kindness:
Business firms must do justice, and show kindness wherever possible. For instance,
they should provide justice and kindness to their employees. They should pay reasonably good
salaries to their staff, and provide them with good working conditions.
C. Generosity:
Business firms must be generous. They should contribute generously to social
development activities such as health, education, and family welfare. Generosity on the part of
business firms can help to uplift the standards of the society. They should also be generous to their
employees by providing good wages/salaries, and proper welfare facilities.
D. Tolerance:
Business firms should practice the social value of tolerance. They should tolerate the
competitors. They should be involved in healthy competition, and not in unfair competition.
They should not duplicate the products of competitors. They should not malign or spoil the
name of the competitors through unethical or unhealthy practices.
E. Patriotism:
Business firms should support and encourage patriotic activities in the society. They
should not encourage anti-social activities. They should not provide financial and other support
to anti-social elements. They should work for peace and harmony in the society.
F. Cooperation:
Business firms should follow the social value of cooperation. Cooperation involves:
• Positive attitude.
• Team spirit.
• Good relationships.
Business firms should always develop positive attitude towards and good relationship with their
customers, employees, and other members of the society. They should encourage team spirit in the
organization and discourage divide and rule policy.
G. Respect for seniors:

Business firms should respect seniors or elders in the society. They may provide
special facilities or privileges to senior members of the society. For instance, some of the
chemist shops provide medicines to senior citizens at concessional rates. Also, railways and
airlines provide concessional fare rates to senior citizens.
H. Excellence:
Business firms must also practice the social virtue of excellence. Business firms
should encourage excellence within the organization by providing special encouragement to
employees who come up with innovative ideas and suggestions. The innovative employees must
be duly rewarded. Also, a business firm may encourage excellence in the society. They may
sponsor individuals or teams to excel well in the field of sports, education, and so on.
Virtues
It is a trait value as being good (the opposite is vise ) Virtue refers to excellence ,virtue is an
operative habit essentially good, the four cardinal of virtues are – Justice
Courage,Wisdom,Moderation. Three supernatural virtues are Faith, Helpfulness, and unselfishness.
Rights and Duties

A right is an individual’s entitlement to something. A person has a right when that person is
entitled to have others act in a certain way or is entitle to have others act in a way toward him or
her.
When the legal system entitles the person that right is called by Legal right .This entitlement can
also be derived from moral standards that are independent and they are the rights which is
possessed by all humans and they are known as Moral Rights, Rights are powerful device whose
main purpose is to enable the individual to choose freely whether to pursue certain interests or
activities and to protect there choices. As a legal right in India is “Right to speak in public place”
and a moral right is “To serve humanity”
A duty is something which is accepted by an individual in relation to working conditions,
contracts or agreements with another individual or group.
Utilitarianism
Utilitarianism is an approach of decision making its an philosophy which is developed by
Epicurus, Benthem and Mill. This approach of decision making is also called the “Consequentialist
approach” and “Utilitarian approach”. It is the principle that actions are right if they are useful for a
majority/Highest degree of satisfaction to those affected or related with the decision. It is
sometimes called by the name Consequential principle because it forces on the consequence of
actions not on how these consequences are achieved by the people, but sometimes unfortunately
these decision results in unethical behavior. This principle says that decisions must be made by the
greatest amount of its utility.
Jeremy Bentham is known as the founder of this decision making approach,Benthem
believed that all pleasures physical or intellectual are equal valued ,so while making a decision
nothing should be neglected, one decision will be ethical only and only if it will satisfy both The
Mind and Physic.
John Stuart mill enriched this concept with the consideration to higher pleasure of mind in
decision making. John Stuart mill was a person of parliament with great humanistic approach, a
strong defender of individual liberty and the first who advocated woman’s equality.
Summarization
“An action is right from an ethical point of view if and only if the sum total of the utilities produces
by that act is greater then the sum total of utilities produced by any other act the agent could have
performed in its place.”
“Achieve greatest goods from the greatest numbers without making an intrinsic value judgment
about the decision itself.”
“The value of a thing or an action is determined by its utility.”

“All actions should be directed toward achieving highest level of satisfaction and happiness with
greatest number of people”
Business Ethics
Introduction.
The term ethics is derived from the Greek word ‘ethos’ which means
character. Ethics is the branch of the social science, which deal with concepts such as right and
wrong, good and bad, fair and unfair, just and unjust, legal and illegal, moral and immoral, proper
and improper in respect of human actions. It is a science of morality which guides the actions of
individuals or groups. In short, ethics refers to code of conduct, like “10 commandments” that
guides day-to-day behavior of individuals in dealing with one another.
What is ethics?
Ethics involves learning what is right or wrong, and then doing the right thing -- but "the
right thing" is not nearly as straightforward as conveyed. Most ethical dilemmas in the workplace
are not simply a matter of yes or no. For example Azim Premji tells all his employees whatever that
is, “Grey is Black”. That means even if there is some kind of doubt about a transaction, do not go
for it. We have to answer a question is there are always a right thing or ethics depend on situation?
We may consider ethics to be the "Science of Conduct.” Ethics includes the fundamental
ground rules by which we live our lives. Philosophers such as Socrates and Plato have given
guidelines for ethical behavior. Many ethicists consider emerging ethical beliefs to be legal
principles, i.e., what becomes an ethical guideline today is made into to a law, regulation or rule.
Therefore following law of the land is one of the basic virtues of ethics. Values, which guide how
we ought to behave, are moral values, e.g., values such as respect, honesty, fairness, responsibility,
etc. Statements around how these values are applied are sometimes called moral or ethical
principles.
Definition of Business Ethics.
Thomas M. Garett defines “Business ethics is primarily concerned with

relationship of business goals and techniques to specific human needs.”
Other definitions
“Ethics are behavioral norms, or Patterns that varies from individuals view, and are related to
decision making criteria whether the decision is right or wrong. Ethics evolves the learning of good or
bad, and also can be considered as a code of conduct.”
“Ethics is the explicit philosophical reflection on moral belief and practices; it is the study of
individuals and collective moral awareness, judgment, character and conduct.”
The work Ethos:

The work ethos is the prevalent decomposition/Fundamental outlook towards work or the
value system with regard to the working environment and community’s value system, whether it is of an
individual or a workgroup.
The Stakeholder Concepts:
The stakeholders are those individuals or entities which are related to the organization
directly or indirectly, affecting it and affected by, and linked together for any objective.
The stakeholders can be segregated as primary, secondary, social, and non-social. The
following groups are identified for understanding purpose.
Stakeholder
Primary Social Primary Non Social Secondary Social Secondary Non

Stakeholder Stakeholder Stakeholder Social Stakeholder
)Local communities )the natural

)Suppliers and environment )Government and
Business Partners )Non human Civil Society )Environmental
species pressure groups
)Customers )Social and third
)Future world pressure )Animal welfare
)Investors groups and unions pressure groups
Generations
)Employees and )Media and
Managers communications
)Trade bodies
)Competitors
NEED AND IMPORTANCE OF BUSINESS ETHICS
The following points explain the need for and importance of business ethics:
I. Protection of Consumer rights:

Consumer is the centre of all business activities. In fact, business is essentially meant
for satisfaction of consumer wants. Unfortunately, consumers are the most neglected and
exploited group. The application of business ethics will help to confer and implement
consumer rights. Business ethics can be used to check malpractices like adulteration, unfair
trade practices and to make the working of business consumer oriented.
II. Social Responsibility:

Business ethics is a means of making business socially responsible for its actions.
Exploitation of consumers, employees, discriminate use of natural resources, etc; is quite
common in all types of business. Compliance to ethical standards will ensure (a) protection of
consumer rights, (b) public accountability, (c) protection of worker’s interests, and (d) proper
utilization of natural resources.
III. Concept of Socialism:

The concept of socialism in business states that gains of a business must be shared
by all and just by the owner of business. Profit is a sing of business skill and talent. Profit is
also a result of group efforts. Employees, shareholders, consumers, Suppliers and others
contribute to the success of the business. Therefore, success should be shared by all concerned.
IV. Interest of Industry:

Business ethics are necessary to safeguard the interests of small scale business firms.
The tendency of big business firms is always to dominate the market and drive away the small
scale industries out of the market. Small scale units can establish their position and fight for
their rights if the industry follows a code of ethics.
V. Consumer Movement:
The growth in consumer movement is also another important factor that has
necessitated the need for business ethics. The spread of education and awareness among
consumers about their rights has made the business community to conduct business on ethical
principles.
VI. Better Relations With the Society:

Business ethics is needed to develop good relations between business and society.
The relationship of business with society has various dimensions such as its relations with
shareholder, employees, consumers, distributors, competitors and government. Business ethics
will help to promote and protect the interest to various groups.
VII. Buyer’s Market:

There has been a structural change in the concept of business. The concept of profit
has been gradually taken over by consumer satisfaction. The large scale production and
increased competition in the market has changed the business scene from a seller’s market to a
buyer’s market. In a changed situation, business ethics is needed to redefine the traditional
concept of profit and replace it by a balance between profit and consumer satisfaction.
VIII. Beneficial to Business and Society:

Ethics suggests what is good and bad, right and wrong, ethical and unethical, etc; to
businessmen. It also brings an element of honesty, sincerity, fairness, and human touch to
business activities. Society is also benefited by the introduction of business ethics. It ensures
healthy and competitive business atmosphere, consumer and labor welfare, and improvement
in social, economic and cultural values of the society.
CONCEPT OF BUSINESS ETHICS

The business ethics code of an organization may contain the following aspects:
1. Business Ethics towards Employees:

• Payment of right wages and salaries.
• Provision of proper facilities.
• Proper personnel policies relating to promotion, performance appraisal, transfers,
etc;
2. Business Ethics Towards Customers:

• Right pricing.
• Ethical promotion including advertising.
• Provision of proper information about products etc.
3. Business Ethics Towards Competitors:

• Fair competitive practices.
• Restraining from maligning competitors names.
• Restraining from instigating employees, suppliers or dealers or competitors etc.
4. Business Ethics Towards Government:
• Timely filing returns and other records.
• Payment of proper dues including taxes.
• Supporting Government in social development activities, etc;
5. Business Ethics Towards Suppliers:
• Proper supply contact.
• Timely payment of dues.
• Restraining from pressure tactics on the dealers, etc;
6. Business Ethics Towards Dealers:
• Timely delivery of products.
• Proper dealer’ contact.
• Restraining from pressure tactics on the dealers, etc;
7. Business Ethics Towards Shareholders/Stakeholders:
• Provision of proper information.
• Timely payment of dividend.
• Restraining form insider trading on the stock markets, etc;
8. Business Ethics Towards Financial Institutions:
• Proper information about firm’s financial position.
• Timely repayment of advances and interest, etc.
Codes of Ethics
A code generally describes the highest values to which the company aspires to operate.
Many ethicists note that it is the developing and continuing dialogue around the code's values that is
most important.
Sometimes, employees react to codes with suspicion, believing the values are "motherhood
statements and codes are for window dressing”. However, when managing a complex issue,
especially in a crisis, having a code is critical.
Developing Codes of Ethics
In the case of a large organization e.g., includes several large programs or departments, we
have to develop an overall corporate code of ethics and then a separate code to guide each of
departments.
Codes should not be developed out of the Human Resource or Legal departments alone, as it
is sometimes done in organizations. Codes are insufficient if intended only to ensure that policies
are legal. All staff must see the ethics program being driven by top management.
One of the essential variables in the development of codes is the organizational culture.
1. Organizational Culture - review to get a basic understanding of "personalities" of organizations

2. Strategic Planning - specific to developing a Values Statement
1. Valuing Diversity - to consider that there are other values and perspectives
Following guidelines may be useful while developing codes
codes of
ethics:
1. Review any values need to adhere to relevant laws and regulations; this ensures organization is
not violating any of them.( Various laws given by both state and Central Governments have to
be followed such as Factories Act, Workmen Compensation Act etc)
2. Review which values produce the top three or four traits of a highly ethical and successful
product or service in a particular functional area, for example for accountants: objectivity,
confidentiality, accuracy, etc. Identify the values produce behaviors that exhibit these traits.
3. Identify values needed to address current issues in workplace. Appoint one or two persons to
interview staff to collect descriptions of major issues in the workplace. Collect descriptions of
behaviors that produce the issues. Consider those issues that are ethical in nature, e.g... Issues in
regard to respect, fairness and honesty. Identify the behaviors needed to resolve these issues.
Identify values that generate preferred behaviors. There may be values included here that some
people would not deem as moral or ethical values, e.g., team-building and promptness, but for
managers, these practical values may add more relevance and utility to a code of ethics.
4. Identify any values needed, based on findings during strategic planning. Review information
from SWOT analysis (identifying the organization's strengths, weaknesses, opportunities and
threats). What behaviors are needed to build on strengths, minimize weaknesses, take advantage
of opportunities and guard against threats?
5. Consider any top ethical values that might be prized by stakeholders. For example, consider
expectations of employees, clients/customers, suppliers, founders, members of the local
community, etc.
6. Collect from the above steps, the top five to ten ethical values that are high priorities in
organization.
7. Examples of ethical values might include the following
a) Trustworthiness: honesty, integrity, promise keeping, and loyalty

b) Respect: autonomy, privacy, dignity, courtesy, tolerance, and acceptance
c) Responsibility: accountability, pursuit of excellence
d) Caring: compassion, consideration, giving, sharing, kindness, loving
e) Justice and fairness: procedural fairness, impartiality, consistency, equity, equality, and due
process
e) Civic virtue and citizenship: law abiding, community service, and protection of environment.
8. Compose code of ethics; attempt to associate with each value, two example behaviors which
reflect each value.
9. Include wording that indicates all employees are expected to conform to the values stated in the
code of ethics. Add wording that indicates where employees can go if they have any questions.
10. Obtain review from essential members of the organization. Get input from all members of
organization.
11. Announce and distribute the new code of ethics (unless you are waiting to announce it along
with any new codes of conduct and associated policies and procedures). Ensure each employee
has a copy and post codes throughout the facility.
12. Codes are not static and they are dynamic. The most important dimension of codes is
developing them, not the code itself. Continued dialogue and reflection around ethical values
produces ethical sensitivity and consensus. Therefore, revisit codes at least two or three times a
year.
13. We should note that we cannot include values and preferred behaviors for every possible ethical
dilemma that is likely to arise.
It has been observed that it is better to evolve one’s own ethics based on culture of or the
organization. All ethical values are attractive to include in a code; however, we have to prioritize
those that provoke behaviors needed in organization at a specified time.
Ethics Tools:
Codes of Conduct
"Codes of conduct specify actions in the workplace and codes of ethics are general guides to
decisions about those actions," codes of conduct contain examples of appropriate behavior to be
meaningful.
Ethics Tools: Policies and Procedures
1. Update policies and procedures to produce behaviors preferred from the code of conduct,
including, e.g., personnel, job descriptions, performance appraisal forms, management-by-
objectives expectations, standard forms, checklists, budget report formats, and other relevant
control instruments to ensure conformance to the code of conduct. In doing so, try to avoid
creating ethical dilemmas such as conflicts-of-interest or infringing on employee's individual
rights.
2. There are numerous examples of how organizations manage values through use of policies and
procedures. For example, we are most familiar with the value of social responsibility. To
produce behavior aligned with this value, organizations often institute policies such as recycling
waste, donating to local charities, or paying employees to participate in community events. In
another example, a high value on responsiveness to customers might be implemented by
instituting policies to return phone calls or to repair defective equipment within a certain period
of time. Consider the role of job descriptions and performance appraisals. For example, an
advanced technology business will highly value technical knowledge, creativity and systems
thinking. They use job descriptions and performance appraisals to encourage behaviors aligned
with these values, such as rewarding advanced degrees, patents, and analysis and design skills.
3. Include policies and procedures to address ethical dilemmas. See the next section, "Ethics
Tools: Resolving Ethical Dilemmas," to select a method which is most appropriate to your
organization's culture and operations.
4. Include policies and procedures to ensure training of employees about the ethics management
program. See a following section, "Ethics Tools: Training."
5. Include policies and procedures to reward ethical behavior and impose consequences for
unethical behavior.
6. Include a grievance policy for employees to use to resolve disagreements with supervisors and
staff.
7. Consider establishing a hotline for ethics. This function might best be provided by an outside
consultant, e.g., an employee in the same organization with different department, or an ethics
counselor etc. Alternatively, provide an anonymous suggestion box in which personnel can report
suspected unethical activities, and do so safely on an anonymous basis.
Ethics Tools: Resolving Ethical Dilemmas
Definition of an Ethical Dilemma. Perhaps too often, business ethics is portrayed as a matter
of resolving conflicts in which one option appears to be the clear choice. For example, case studies
are often presented in which an employee is faced with whether or not to lie, steal, cheat, break
terms of a contract, etc. However, ethical dilemmas faced by managers are often more real-to-life
and highly complex with no clear guidelines, whether in law or often in religion.
An ethical dilemma exists when one is faced with having to make a choice among these
alternatives.
Some Examples of Complex Ethical Dilemmas
1) A customer asked for a product from us today. After telling him our price, he said he could not
afford it. I know he could get it cheaper from a competitor. Should I tell him about the
competitor -- or let him go without getting what he needs? What is the guideline for us? The
societal interest or the personal interest?
2) Our company prides itself on its merit-based pay system. One of our employees has done a
tremendous job all year, so he deserves strong recognition. However, he has already paid at the
top of the salary range for his job grade and our company has too many people in the grade
above him, so we cannot promote him. What should I do?"
3) Our company prides itself on hiring minorities. One Asian candidate fully fits the job
requirements for our open position. However, we are concerned that our customers will not
understand his limited command of the English language. What should be done in these
circumstances?
4) My boss told me that one of my employees is among several others to be laid off soon, and that
I'm not to tell my employee yet or he might tell the whole organization which would soon be in an
uproar. Meanwhile, I heard from my employee that he plans to join his daughter in an engineering
college. What should I do?"
5) My computer operator told me he had noticed several personal letters printed from a computer
that I was responsible to manage. While we had no specific policies then against personal use of
company facilities, I was concerned. I approached the letter writer to discuss the situation. She told
me she had written the letters on her own time to practice using our word processor. What should I
do?"
6) A fellow employee told me that he plans to quit the company in two months and start a new job,
which has been guaranteed to him. Meanwhile, my boss told me that he wasn't going to give me a
new opportunity in our company because he was going to give it to my fellow employee now. What
should I do?"
The following tools can be used in such circumstances

1. Feedback
2. Listening
3. Questioning
4. Conflict (interpersonal)
5. Negotiating
6. Valuing Diversity
Professional ,Non Professional & Quasi Professional
A professional is a person in a profession that requires certain types of skilled work,

requiring formed training or education.
“A professional is a worker require to posses a body of knowledge derived from extensive
academic study or Experience”
Criteria
1- The highest educational back ground

2- Expert & specified knowledge.
3- Excellent practical and literary skills.
4- High quality of work.
5- High standards of professional ethics.
A non professional is an unskilled person who is not working on any thing that requires skills &
technical knowledge & a quasi professional is that entity that is working on a professional
requirement apparently but not really Example –Voice answerer of telesales or railways.
ACM Professional & IEEE Code of Ethics

Summary
Engineering Ethics is one of the most important disciplines that need to be thought to the
students to adopt ethical behavior with respect to organizations. It promotes healthy society and
fulfilling experience for individual. In the globalized era, we find that “Ethics will be one of the
enablers of competitiveness”. Expects them to meet, about what their peers strive for, and about
what to expect of one another. In addition, the code should inform the public about the
responsibilities that are important to the profession. Adopted by the Computer Society and the
ACM—two leading international computing societies—the code of ethics is intended as a guide for
members of the evolving software engineering profession. The code was developed by a
multinational task force with additional input from other professionals from industry, government
posts, military installations, and educational professions.
SHORT VERSION: PREAMBLE

The short version of the code summarizes aspirations at a high level of abstraction. The clauses
that are included in the full version give examples and details of how these aspirations change the
way we act as software engineering professionals.
Without the aspirations, the details can become legalistic and tedious; without the details, the
aspirations can become high-sounding but empty; together, the aspirations and the details form a
cohesive code. Software engineers shall commit themselves to making the analysis, specification,
design, development, testing, and maintenance of software a beneficial and respected profession.
In accordance with their commitment to the health, safety, and welfare of the public, software
engineers shall adhere to the following eight Principles:
1. Public. Software engineers shall act consistently with the public interest.
2. Client and employer. Software engineers shall act in a manner that is in the best interests of
their client and employer, consistent with the public interest.
3. Product. Software engineers shall ensure that their products and related modifications meet the
highest professional standards possible.
4. Judgment. Software engineers shall maintain integrity and independence in their professional
judgment.
5. Management. Software engineering managers and leaders shall subscribe to and promote an
ethical approach to the management of software development and maintenance.
6. Profession. Software engineers shall advance the integrity and reputation of the profession
consistent with the public interest.
7. Colleagues. Software engineers shall be fair to and supportive of their colleagues.
8. Self. Software engineers shall participate in lifelong learning regarding
Summary
Engineering Ethics is one of the most important disciplines that need to be thought to the
students to adopt ethical behavior with respect to organizations. It promotes healthy society and
fulfilling experience for individual. In the globalized era, we find that “Ethics will be one of the
enablers of competitiveness”.
References:
Kaushal, L. Shyam(2006). “Business Ethics-Concept, Crisis and solutions” 24,25,40,45,70

Berenbeim, R. E. (1992, Spring). "The Corporate Ethics Test". Business and Society Review, 31(1),
77-80.
Brenner, S. N. (1992). "Ethics Programs and Their Dimensions". Journal of Business Ethics,
11,391-399.
Buchholz, R. A. (1989). "Fundamental Concepts and Problems in Business Ethics". In Madsen, P.,
& Shafritz, J. M. (Eds.) (1990). "Essentials of Business Ethics". New York: Penguin Books.
Carroll, A. B. (1990). "Principles of Business Ethics: Their Role in Decision-Making and in Initial
Consensus". Management Decision, 28(8), 21-23.
Dean, P. J. (1992). "Making Codes of Ethics 'Real'." Journal of Business Ethics, 11, 285-290.
Deborah, B. (1991, January/February). "Asking for Help: A Guide to Using Socially Responsible
Consultants". Business Ethics Magazine, pp. 24-29.
Francis, David R. (1991, June). "Prevent Trouble by Improving Ethics". Christian Science Monitor,
p. 9.
Fulcrum Consulting Group, 1093 Snelling Ave. South, Saint Paul, MN 55116. Phone 1-800-55-
ETHIC.
Gandz, J. & Bird, F. G. (1989, Autumn). "Designing Ethical Organizations". Business Quarterly,
54(2), 108-112.
Genfan, H. (1987, November). "Formalizing Business Ethics". Training and Development Journal,
pp. 35-37.
Josephson Institute of Ethics, 310 Washington Boulevard, Suite 104, Marina del Rey, California.
Phone 310-306-1868.
Kirrane, D.E. (1990, November). "Managing Values: A Systematic Approach to Business Ethics".
Training and Development Journal, pp. 53-60.
Madsen, P., Ph. D., & Shafritz, J. M., Ph. D. (Eds.). (1990). "Essentials of Business Ethics". New
York: Penguin Books.
McDonald, G., & Zepp, R. (1990). "What Should Be Done? A Practical Approach to Business
Ethics". Management Decision, 28(1), 9-13.
Nash, L. (1981). "Ethics Without the Sermon". Harvard Business Review, (59).
Navran Associates Management Consultants, 3037 Wembley Ridge, Atlanta, GA. Phone 404-493-
8886.
Reynolds, L. (1992, July/August). "The Ethics Audit. Business Ethics Magazine", pp. 20-22.
Strong, K. C., & Meyer, G. (1992). "An Integrative Descriptive Model of Ethics Decision Making".
Journal of Business Ethics, 11, 89-94.
Thompson, T. (1991, Spring). "Managing Business Ethics". Canadian Public Administration, 34(1),
153-157.
Toffler, B. (1991, Winter). "Doing Ethics: An Approach to Business Ethics Consulting". Moral
Education Forum, 16(4), 14-20.

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An introduction to Ethics

If we examine the current literature on ethics, the focus is on guidelines given by

Virtues and Rights

Phases of Development of Ethics

• Learnt –culture is learnt rather then genetics or heredity.

Characteristics of organizational culture –

1-Aggressiveness 8-Risk taking and innovative

People & Pioneering

Role culture- It is found where organization have gained a combination of size,

Pioneering Culture- where there is competition between groups or individuals and

Cultural Political Economical Corporate Social Human Moral Spiritual

“Value is a principle, standard or quality regarded as worthwhile or

NATURE AND CHARACTERISTICS OF SOCIAL VALUES

1) Values are inculcated:

2) Well Accepted Principles:

4) Basis of Human Values:

• Moral and social values:

• Traditional and Modern Values:

• Intrinsic and Instrumental Values:

6) Values Reflect Character:

7) Values Change Gradually:

(Values are dynamic, judgemental, stable, and intrinsic)

IMPORTANCE OF SOCIAL VALUES

1) Values Foster Economic Progress:

3) Values Improve Social Relations:

4) Values Facilitate Regional Cooperation:

5) Values Generate Love, Peace And Happiness:

6) Values Improves Standard of Living:

SOCIAL VALUES AND BUSINESS ORGANISATIONS

The role of business organizations in social values is stated as follows:

A. Truth and honesty:

G. Respect for seniors:

Rights and Duties

“The value of a thing or an action is determined by its utility.”

Definition of Business Ethics.

Thomas M. Garett defines “Business ethics is primarily concerned with

The work Ethos:

The Stakeholder Concepts:

Primary Social Primary Non Social Secondary Social Secondary Non

)Local communities )the natural

I. Protection of Consumer rights:

II. Social Responsibility:

III. Concept of Socialism:

IV. Interest of Industry:

VI. Better Relations With the Society:

VII. Buyer’s Market:

VIII. Beneficial to Business and Society:

CONCEPT OF BUSINESS ETHICS

1. Business Ethics towards Employees:

2. Business Ethics Towards Customers:

3. Business Ethics Towards Competitors:

Developing Codes of Ethics

1. Organizational Culture - review to get a basic understanding of "personalities" of organizations

7. Examples of ethical values might include the following

a) Trustworthiness: honesty, integrity, promise keeping, and loyalty

Ethics Tools: Policies and Procedures

Ethics Tools: Resolving Ethical Dilemmas

The following tools can be used in such circumstances

A professional is a person in a profession that requires certain types of skilled work,

1- The highest educational back ground

ACM Professional & IEEE Code of Ethics

SHORT VERSION: PREAMBLE

Kaushal, L. Shyam(2006). “Business Ethics-Concept, Crisis and solutions” 24,25,40,45,70