Unit 1
Introduction
Q1) Explain business ethics.
A1)
Ethics is a subject of social science that is related with moral principles and social values. 'Business Ethics' can be termed as a study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities.
Businesses must abide by some basic principles. It should provide quality goods and services at reasonable prices to their consumers. It must also avoid adulteration, misleading advertisements, and other unfair malpractices.
A business must also perform other duties such as distributing fair wages, providing good working conditions, not exploiting the workers, encouraging competition, etc.
Definition:
There are many definitions of business ethics, but the ones given by Andrew Crane and Raymond C. Baumhart are considered the most appropriate ones.
According to Crane, "Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed."
Baumhart defines, "The ethics of business is the ethics of responsibility. The business man must promise that he will not harm knowingly."
Q2) Explain nature of business ethics.
A2)
There are many definitions of business ethics, but the ones given by Andrew Crane and Raymond C. Baumhart are considered the most appropriate ones.
According to Crane, "Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed."
Baumhart defines, "The ethics of business is the ethics of responsibility. The business man must promise that he will not harm knowingly."
Nature:
The business condition of the business and the product conditions that are being produced affects society so that people can discuss the nature of business ethics.
Therefore, it is compulsory to remember, business community self-employed, self-inspection, self-control, self-sacrifice, and the moral values of society and moral society.
2. Related words - Ethics is a term of relationship with the concept of morality and immorality. It is separate from a person, from society to society, from culture to culture, country to country is different. It helps to define moral and immoral words of business ethics.
3. Society’s interests - In these characteristics of business ethics, business ethics says that the business should first be nice for society and community and then social welfare is also a business objective.
There are various social obligations in order to protect the departments of an important institution of business and all formal or informal groups that contribute to the improvement of business or business-related directly or indirectly with organizations like employees, shareholders, consumers, and their stakeholders.
Business ethics help to determine the conditions and standards for understanding social affection or business relationships. Describes what it expects from community or society business and what the concept gives about the business.
4. Structure - Business is an organization that includes various social and economic rules and regulations. The business is always trying to limit its activities (formal or informal) within the range of social, cultural, regional, religious, and economic environments.
Business ethics is a kind of code of conduct that covers a person’s criteria and behavior guidelines, such as how to behave yourself, how to follow the criteria, how to improve yourself, etc.
It protects customers and other social members like shareholders, society, and employees to explain the nature of business ethics.
5. Not against profit-making- Business ethics is not against making a real or fair profit. However, it is against the profits that acquire fraud and exploit their customers, employees, and investors. It supports business activities but not through fair or fair media and illegal activity.
6. Willingness Requirement - Business ethics can not be compelled by law and other aspects. It must be accepted by any businessman as self-love. It should come from the inner part of the soul. Traders follow the guidelines of moral trade activities and not by any law.
Q3) Explain characteristics of business ethics.
A3)
There are eight major features of business ethics:
2 Based on Moral and Social Values: Business ethics is a subject that is based on moral and social values. It offers some moral and social principles (rules) for conducting a business.
3 Protection to Social Groups: Business ethics protect various social groups including consumers, employees, small businesspersons, government, shareholders, creditors, etc.
4 Offers a Basic Framework: Business ethics is the basic framework for doing business properly. It constructs the social, cultural, legal, economic, and other limits in which a business must operate.
5 Voluntary: Business ethics is meant to be voluntary. It should be self-practiced and must not be enforced by law.
6 Requires Education & Guidance: Businessmen should get proper education and guidance about business ethics. Trade Associations and Chambers of Commerce should be active enough in this matter.
7 Relative Term: Business ethics is a relative term. It changes from one business to another and from one country to another.
8 New Concept: Business ethics is a relatively newer concept. Developed countries have more exposure to business ethics, while poor and developing countries are relatively backward in applying the principles of business ethics.
Q4) Explain ethical theories.
A4)
There are generally three philosophical approaches or three ethical theories:
1. Utilitarian
2. Deontological
3. Virtue Theory
The first ethical system in normative ethics, utilitarianism, is often equated with the concept of ‘the greatest good for the greatest number’. The idea behind it is that ethical decisions are made on the basis of the consequences of the action, which is why it is also sometimes called consequentialism. The attraction of this ethical perspective may lie in the fact that it appears to be a way to weigh out the impact of behavior and determine the greatest good for the greatest number. While this idea initially may seem appealing, particularly with a field that has a core duty to the public, it does not provide a solid ethical framework for decision-making. There are three main concerns that seem to arise when public relations professionals rely on utilitarian ethics to make decisions.
First, rather than looking at the choice or action itself, decision-makers are forced to guess the potential outcomes of their choice in order to determine what is ethical. Grunig believes this is a faulty line of reasoning when he suggested that: “We believe, in contrast, the public relations should be based on a worldview that incorporates ethics into the process of public relations rather than on a view that debates the ethics of its outcomes.” In other words, ethics should be about the decision-making process, not just the outcome, which can’t be guaranteed.
Second, utilitarian ethics also “presents questions of conflict with regard to which segment of society should be considered most important” in weighing the “good” or outcome. In other words, if a solution drastically harms a minority group, would it be ethical if the majority benefited from that decision? This seems to contradict the goal of public relations to build mutually beneficial relationships, regardless of the number of people in a particular stakeholder group.
The third objection is that it is not always possible to predict the outcome of an action. Bowen points out that “consequences are too unpredictable to be an accurate measure of the ethics of a situation.” In other words, consequences of actions can be highly volatile or impossible, even, to predict. Using outcomes as a measurement of ethics will not, therefore, provide an accurate way for professionals to measure whether decisions are ethical. Professionals must be able to evaluate decisions and choices with concrete ethical guidelines instead of hoping that certain outcomes will result in them having made an ethical choice. Many scholars in public relations identify these issues, as well as others, as evidence that utilitarianism, sometimes called consequentialism due the concept relying on the consequence of a decision, is not as strong of a fit for public relations professional ethics.
2. Deontological:
The second prominent concept, deontological ethics, is associated with the father of modern deontology, Immanuel Kant. He was known for the ‘Categorical Imperative’ that looks for transcendent principles that apply to all humans. The idea is that “human beings should be treated with dignity and respect because they have rights.” Put another way, it could be argued that in deontological ethics “people have a duty to respect other people’s rights and treat them accordingly.” The core concept behind this is that there are objective obligations, or duties, that are required of all people. When faced with an ethical situation, then, the process is simply one of identifying one’s duty and making the appropriate decision. There are few challenges to this approach:
1) Conflicts that arise when there is not an agreement about the principles involved in the decision.
2) The implications of making a ‘right’ choice that has bad consequences
3) What decisions should be made when duties conflict. These challenges should be considered when relying on this as an ethical system.
However, despite these concerns, many have found that deontology provides the strongest model for applied public relations ethics. Bowen, for example, suggests that “deontology is based on the moral autonomy of the individual, similar to the autonomy and freedom from encroachment that public relations seeks to be considered excellent. That ideological consistency gives the theory posed here a solid theoretical foundation with the practice of public relations as well as a normative theory function.” Similarly, Fitzpatrick & Gauthier suggest, “practitioners need some basis on which to judge the rightness of the decisions they make everyday. They need ethical principles derived from the fundamental values that define their work as a public relations professional.” A key thought in this concept is the assumption that there needs to be some objective morals that professionals rely on in order to determine ethical behavior.
3. Virtue Ethics:
The third and growing area of philosophical reasoning with ethics is known as virtue ethics. It has gained more attention in public relations scholarship in recent years. This philosophy stems from Aristotle and is based on the virtues of the person making a decision. The consideration in virtue ethics is essentially “what makes a good person,” or, for the purpose of this discussion, “what makes a good public relations professional?” Virtue ethics require the decision-maker to understand what virtues are good for public relations and then decisions are made in light of those particular virtues. For example, if the virtue of honesty is most important for a good public relations professional, then all decisions should be made ethically to ensure honesty is preserved. While this theory is growing in popularity, there are several objections that can be made. First, in terms of the public relations profession, the focus on virtues of the professional themselves seems to miss the importance and role of obligations to clients and publics. The industry is not simply about what public relations people themselves, but ultimately the impact they have on the society. Additionally, it also can face the same obstacle as deontological ethics when having conflicting virtues. There may be a conflict if there is a virtue of loyalty to a client and honesty to the public.
Q5) Explain causes of unethical behavior.
A5)
The Civil Service Commission of Philippines defined an unethical behaviour as any behaviour prohibited by law. An unethical behaviour would therefore be defined as one that is not morally honourable or one that is prohibited by the law. Many behaviour will fall in the classification including corruption, mail and wire fraud, discrimination and harassment, insider trading, conflicts of interest, improper use of company assets, bribery
One of the most regularly revealed “bad behaviours” in the workplace isthe misuse of company time. This category includes knowing that one of your colleagues is directing personal business on company time, staff appearing late, extra breaks or fake timesheets. These negative behaviour patterns can rapidly spread to different workers. It can also cultivate hatred amongst colleagues, severely influencing morale and efficiency.
2. Unethical Leadership:
Having a personal issue with your boss or manager is a certain thing, yet reporting to a person who is acting dishonestly is another. This may come in a clear form, such as manipulating numbers in a report or sending company money on improper activities; nonetheless, it can also happen more subtly, through bullying, accepting inadequate gifts from suppliers, or requesting that you avoid a standard system just once. With studies demonstrating that managers are responsible for 60 percent of workplace wrongdoing, the abuse of leadership authority is a disastrous reality.
3. Lying to Employees:
The quickest way to lose the trust of your employees is to lie to them, but managers do it constantly. One out of every five workers report that their supervisor or manager has lied to them within the previous year.
4. Harassment and Discrimination:
Laws require associations to be equivalent to business opportunity employers. Organizations must select a various workplace, authorize policies and training that help an equivalent open-door program, and encourage a situation that is respectful of a wide range of people. Unfortunately, there are still numerous people whose practices break with EEOC rules and regulations. When harassment and discrimination of employees based on ethnicity, race, gender, handicap or age occur, has a moral line been crossed as well as a legitimate one also. Most companies are attentive to maintain a strategic distance from the costly legal and public implications of harassment and discrimination, so you may experience this ethical problem in more delicate ways, from apparently “harmless” offensive jokes by a manager to a more unavoidable “group think” mindset that can be a symptom of a toxic culture. This could be a group mindset toward an “other” group. Your best reaction is to keep up your qualities and repel such intolerant, illegal or unethical group standards by offering an option, inclusive aspect as the best decision for the group and the company
5. Violating Company Internet Policy:
Cyber-loafers and Cyber-shackers are terms used to recognize people who surf the web when they ought to work. It’s a huge, multi-billion-dollar issue for organizations. Every day at least 64 percent of employers visit sites that have nothing to do with their work.
6. Pressure to Succeed:
Employees may choose to act unethically based on unrealistic expectations to succeed. For example, a salesperson may make false claims to secure a deal to meet their quota.
Q6) Explain ethical abuses.
A6)
Corporate ethical/legal abuses include:
Q7) Explain work ethics.
A7)
Work ethic is a value based on hard work and diligence. It is also a belief in the moral benefit of work and its ability to enhance character.
Workers exhibiting a good work ethic in theory would be selected for better positions, more responsibility and ultimately promotion. Workers who fail to exhibit a good work ethic may be regarded as failing to provide fair value for the wage the employer is paying them and should not be promoted or placed in positions of greater responsibility.
Five Characteristics of a Good Work Ethics
Reliability - Reliability goes hand in hand with a good work ethic. If individuals with a good work ethic say they are going to attend a work function or arrive at a certain time, they do, as they value punctuality. Individuals with a strong work ethic often want to appear dependable, showing their employers that they are workers to whom they can turn. Because of this, they put effort into portraying -- and proving -- this dependability by being reliable and performing consistently.
Dedication - Those with a good work ethic are dedicated to their jobs and will do anything they can to ensure that they perform well. Often this dedication leads them to change jobs less frequently, as they become committed to the positions in which they work and are not eager to abandon these posts. They also often put in extra hours beyond what is expected, making it easy for their employers to see that they are workers who go beyond the rest of the workforce and truly dedicate themselves to their positions.
Productivity - Because they work at a consistently fast pace, individuals with a good work ethic are often highly productive. They commonly get large amounts of work done more quickly than others who lack their work ethic, as they don't quit until they've completed the tasks with which they were presented. This high level of productivity is also due, at least in part, to the fact that these individuals want to appear to be strong workers. The more productive they are, the more beneficial to the company they appear to those managing them.
Cooperation - Cooperative work can be highly beneficial in the business environment, something that individuals with a strong work ethic know well. Because they recognize the usefulness of cooperative practices - - such as teamwork -- they often put an extensive amount of effort into working well with others. These individuals commonly respect their bosses enough to work with any individuals with whom they are paired in a productive and polite manner, even if they do not enjoy working with the individuals in question.
Character - Those with a good work ethic often also possess generally strong character. This means they are self-disciplined, pushing themselves to complete work tasks instead of requiring others to intervene. They are also often very honest and trustworthy, as they view these traits as befitting the highquality employees they seek to become. To demonstrate their strong character, these workers embody these positive traits daily, likely distinguishing themselves from the rest
Q8) Explain code of conduct.
A8)
Code of conduct or what is popularly known as Code of Business Conduct contains standards of business conduct that must guide actions of the Board and senior management of the Company. The Code may include the following:
(A) Company Values.
(b) Avoidance of conflict of interest.
(c) Accurate and timely disclosure in reports and documents that the company files before Government agencies, as well as in Company's other communications.
(d) Compliance of applicable laws, rules and regulations including Insider Trading Regulations.
(e) Maintaining confidentiality of Company affairs.
(f) Non-competition with Company and maintaining fair dealings with the Company.
(g) Standards of business conduct for Company's customers, communities, suppliers, shareholders, competitors, employees.
(h) Prohibition of Directors and senior management from taking corporate opportunities for themselves or their families.
(i) Review of the adequacy of the Code annually by the Board.
(j) No authority of waiver of the Code for anyone should be given
The Code of Conduct for each Company summarises its philosophy of doing business.
Although the exact details of this code are a matter of discretion, the following principles have been found to occur in most of the companies:
a) Use of company's assets;
b) Avoidance of actions involving conflict of interest;
c) Avoidance of compromising on commercial relationship;
d) Avoidance of unlawful agreements;
e) Avoidance of offering or receiving monetary or other inducements;
f) Maintenance of confidentiality;
g) Collection of information from legitimate sources only;
h) Safety at workplace;
i) Maintaining and Managing Records;
j) Free and Fair competition;
k) Disciplinary actions;
To create a code of ethics, an organization must define its most important guiding values, formulate behavioral standards to illustrate the application of those values to the roles and responsibilities of the persons affected, review the existing procedures for guidance and direction as to how those values and standards are typically applied, and establish the systems and processes to ensure that the code is implemented and effective. Codes of ethics are not easily created from boilerplate. Ideally, the development of a code will be a process in which Boards and senior management actively debate and decide core values, roles, responsibilities, expectations, and behavioral standards.
Model Code of Business Conduct & Ethics
Commitment to ethical professional conduct is a MUST for every employee of the company in all of its businesses/units/subsidiaries. This code, consisting of imperatives formulated as statements of personal responsibility, identifies the elements of such a commitment. It contains many, but not all issues, employees are likely to face.
The code is intended to serve as a basis for ethical decision-making in the conduct of professional work. It may also serve as a basis for judging the merit of a formal complaint pertaining to violation of professional ethical standards.
It is understood that some words and phrases in a code of ethics and conduct document are subject to varying interpretations and that any ethical principle may conflict with other ethical principles in specific situations. Questions related to ethical conflicts can best be answered by thoughtful consideration of fundamental principles rather than reliance on detailed regulations. In case of conflict, the decision of the Board shall be final.
Q9) Explain public good.
A9)
Public good-
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. Retaining talented people is as big a challenge as getting them in the first place. Work is a means to an end for them, not an end in itself. The relationship they have with their employer must be a mutual, win-win one, in which their loyalty should not be taken for granted. Talented people will invest their energy and talent only in organizations with values and beliefs that match their own. In order to achieve this match, managers need to build cultures, compensation and benefits packages, and career paths that reflect and foster certain shared values and beliefs.
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 behaviors 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:
Business should act ethically not only to benefit itself and its reputation but also all the key stakeholders. 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.
Q10) Explain Definition & nature Business ethics, Characteristics of business ethics.
A10)
Ethics is a subject of social science that is related with moral principles and social values. 'Business Ethics' can be termed as a study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities.
Businesses must abide by some basic principles. It should provide quality goods and services at reasonable prices to their consumers. It must also avoid adulteration, misleading advertisements, and other unfair malpractices.
A business must also perform other duties such as distributing fair wages, providing good working conditions, not exploiting the workers, encouraging competition, etc.
Definition & nature Business ethics
There are many definitions of business ethics, but the ones given by Andrew Crane and Raymond C. Baumhart are considered the most appropriate ones.
According to Crane, "Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed."
Baumhart defines, "The ethics of business is the ethics of responsibility. The business man must promise that he will not harm knowingly."
Nature
The business condition of the business and the product conditions that are being produced affects society so that people can discuss the nature of business ethics.
Therefore, it is compulsory to remember, business community self-employed, self-inspection, self-control, self-sacrifice, and the moral values of society and moral society.
2. Related words - Ethics is a term of relationship with the concept of morality and immorality. It is separate from a person, from society to society, from culture to culture, country to country is different. It helps to define moral and immoral words of business ethics.
3. Society’s interests - In these characteristics of business ethics, business ethics says that the business should first be nice for society and community and then social welfare is also a business objective.
There are various social obligations in order to protect the departments of an important institution of business and all formal or informal groups that contribute to the improvement of business or business-related directly or indirectly with organizations like employees, shareholders, consumers, and their stakeholders.
Business ethics help to determine the conditions and standards for understanding social affection or business relationships. Describes what it expects from community or society business and what the concept gives about the business.
4. Structure - Business is an organization that includes various social and economic rules and regulations. The business is always trying to limit its activities (formal or informal) within the range of social, cultural, regional, religious, and economic environments.
Business ethics is a kind of code of conduct that covers a person’s criteria and behavior guidelines, such as how to behave yourself, how to follow the criteria, how to improve yourself, etc.
It protects customers and other social members like shareholders, society, and employees to explain the nature of business ethics.
5. Not against profit-making- Business ethics is not against making a real or fair profit. However, it is against the profits that acquire fraud and exploit their customers, employees, and investors. It supports business activities but not through fair or fair media and illegal activity.
6. Willingness Requirement - Business ethics can not be compelled by law and other aspects. It must be accepted by any businessman as self-love. It should come from the inner part of the soul. Traders follow the guidelines of moral trade activities and not by any law.
Characteristics
There are eight major features of business ethics:
2 Based on Moral and Social Values: Business ethics is a subject that is based on moral and social values. It offers some moral and social principles (rules) for conducting a business.
3 Protection to Social Groups: Business ethics protect various social groups including consumers, employees, small businesspersons, government, shareholders, creditors, etc.
4 Offers a Basic Framework: Business ethics is the basic framework for doing business properly. It constructs the social, cultural, legal, economic, and other limits in which a business must operate.
5 Voluntary: Business ethics is meant to be voluntary. It should be self-practiced and must not be enforced by law.
6 Requires Education & Guidance: Businessmen should get proper education and guidance about business ethics. Trade Associations and Chambers of Commerce should be active enough in this matter.
7 Relative Term: Business ethics is a relative term. It changes from one business to another and from one country to another.
8 New Concept: Business ethics is a relatively newer concept. Developed countries have more exposure to business ethics, while poor and developing countries are relatively backward in applying the principles of business ethics.
Q11) Explain Causes of unethical behavior and Ethical abuses.
A11)
Causes of unethical behavior
The Civil Service Commission of Philippines defined an unethical behaviour as any behaviour prohibited by law. An unethical behaviour would therefore be defined as one that is not morally honourable or one that is prohibited by the law. Many behaviours will fall in the classification including corruption, mail and wire fraud, discrimination and harassment, insider trading, conflicts of interest, improper use of company assets, bribery
One of the most regularly revealed “bad behaviours” in the workplace isthe misuse of company time. This category includes knowing that one of your colleagues is directing personal business on company time, staff appearing late, extra breaks or fake timesheets. These negative behaviour patterns can rapidly spread to different workers. It can also cultivate hatred amongst colleagues, severely influencing morale and efficiency.
2. Unethical Leadership
Having a personal issue with your boss or manager is a certain thing, yet reporting to a person who is acting dishonestly is another. This may come in a clear form, such as manipulating numbers in a report or sending company money on improper activities; nonetheless, it can also happen more subtly, through bullying, accepting inadequate gifts from suppliers, or requesting that you avoid a standard system just once. With studies demonstrating that managers are responsible for 60 percent of workplace wrongdoing, the abuse of leadership authority is a disastrous reality.
3. Lying to Employees
The quickest way to lose the trust of your employees is to lie to them, but managers do it constantly. One out of every five workers report that their supervisor or manager has lied to them within the previous year.
4. Harassment and Discrimination
Laws require associations to be equivalent to business opportunity employers. Organizations must select a various workplace, authorize policies and training that help an equivalent opendoor program, and encourage a situation that is respectful of a wide range of people. Unfortunately, there are still numerous people whose practices break with EEOC rules and regulations. When harassment and discrimination of employees based on ethnicity, race, gender, handicap or age occur, has a moral line been crossed as well as a legitimate one also. Most companies are attentive to maintain a strategic distance from the costly legal and public implications of harassment and discrimination, so you may experience this ethical problem in more delicate ways, from apparently “harmless” offensive jokes by a manager to a more unavoidable “group think” mindset that can be a symptom of a toxic culture. This could be a group mindset toward an “other” group. Your best reaction is to keep up your qualities and repelsuch intolerant, illegal or unethical group standards by offering an option, inclusive aspect as the best decision for the group and the company
5. Violating Company Internet Policy
Cyberloafers and Cybershackers are terms used to recognize people who surf the web when they ought to work. It’s a huge, multi-billion-dollar issue for organizations. Every day at least 64 percent of employers visit sites that have nothing to do with their work.
6. Pressure to Succeed
Employees may choose to act unethically based on unrealistic expectations to succeed. For example, a salesperson may make false claims to secure a deal to meet their quota.
Ethical abuses
Corporate ethical/legal abuses include:
Q12) Explain code of conduct and public good.
A12)
Code of conduct
Code of conduct or what is popularly known as Code of Business Conduct contains standards of business conduct that must guide actions of the Board and senior management of the Company. The Code may include the following:
(A)Company Values.
(b) Avoidance of conflict of interest.
(c) Accurate and timely disclosure in reports and documents that the company files before Government agencies, as well as in Company's other communications.
(d) Compliance of applicable laws, rules and regulations including Insider Trading Regulations.
(e) Maintaining confidentiality of Company affairs.
(f) Non-competition with Company and maintaining fair dealings with the Company.
(g) Standards of business conduct for Company's customers, communities, suppliers, shareholders, competitors, employees.
(h) Prohibition of Directors and senior management from taking corporate opportunities for themselves or their families.
(i) Review of the adequacy of the Code annually by the Board.
(j) No authority of waiver of the Code for anyone should be given
The Code of Conduct for each Company summarises its philosophy of doing business.
Although the exact details of this code are a matter of discretion, the following principles have been found to occur in most of the companies:
a) Use of company's assets;
b) Avoidance of actions involving conflict of interest;
c) Avoidance of compromising on commercial relationship;
d) Avoidance of unlawful agreements;
e) Avoidance of offering or receiving monetary or other inducements;
f) Maintenance of confidentiality;
g) Collection of information from legitimate sources only;
h) Safety at workplace;
i) Maintaining and Managing Records;
j) Free and Fair competition;
k) Disciplinary actions;
To create a code of ethics, an organization must define its most important guiding values, formulate behavioral standards to illustrate the application of those values to the roles and responsibilities of the persons affected, review the existing procedures for guidance and direction as to how those values and standards are typically applied, and establish the systems and processes to ensure that the code is implemented and effective. Codes of ethics are not easily created from boilerplate. Ideally, the development of a code will be a process in which Boards and senior management actively debate and decide core values, roles, responsibilities, expectations, and behavioral standards.
Model Code of Business Conduct & Ethics
Commitment to ethical professional conduct is a MUST for every employee of the company in all of its businesses/units/subsidiaries. This code, consisting of imperatives formulated as statements of personal responsibility, identifies the elements of such a commitment. It contains many, but not all issues, employees are likely to face.
The code is intended to serve as a basis for ethical decision-making in the conduct of professional work. It may also serve as a basis for judging the merit of a formal complaint pertaining to violation of professional ethical standards.
It is understood that some words and phrases in a code of ethics and conduct document are subject to varying interpretations and that any ethical principle may conflict with other ethical principles in specific situations. Questions related to ethical conflicts can best be answered by thoughtful consideration of fundamental principles rather than reliance on detailed regulations. In case of conflict, the decision of the Board shall be final.
Public good-
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. Retaining talented people is as big a challenge as getting them in the first place. Work is a means to an end for them, not an end in itself. The relationship they have with their employer must be a mutual, win-win one, in which their loyalty should not be taken for granted. Talented people will invest their energy and talent only in organizations with values and beliefs that match their own. In order to achieve this match, managers need to build cultures, compensation and benefits packages, and career paths that reflect and foster certain shared values and beliefs.
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 behaviors 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
Business should act ethically not only to benefit itself and its reputation but also all the key stakeholders. 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.
Q13) Explain Utilitarian.
A13)
The first ethical system in normative ethics, utilitarianism, is often equated with the concept of ‘the greatest good for the greatest number’. The idea behind it is that ethical decisions are made on the basis of the consequences of the action, which is why it is also sometimes called consequentialism. The attraction of this ethical perspective may lie in the fact that it appears to be a way to weigh out the impact of behavior and determine the greatest good for the greatest number. While this idea initially may seem appealing, particularly with a field that has a core duty to the public, it does not provide a solid ethical framework for decision-making. There are three main concerns that seem to arise when public relations professionals rely on utilitarian ethics to make decisions.
First, rather than looking at the choice or action itself, decision-makers are forced to guess the potential outcomes of their choice in order to determine what is ethical. Grunig believes this is a faulty line of reasoning when he suggested that: “We believe, in contrast, the public relations should be based on a worldview that incorporates ethics into the process of public relations rather than on a view that debates the ethics of its outcomes.” In other words, ethics should be about the decision-making process, not just the outcome, which can’t be guaranteed.
Second, utilitarian ethics also “presents questions of conflict with regard to which segment of society should be considered most important” in weighing the “good” or outcome. In other words, if a solution drastically harms a minority group, would it be ethical if the majority benefited from that decision? This seems to contradict the goal of public relations to build mutually beneficial relationships, regardless of the number of people in a particular stakeholder group.
The third objection is that it is not always possible to predict the outcome of an action. Bowen points out that “consequences are too unpredictable to be an accurate measure of the ethics of a situations.” In other words, consequences of actions can be highly volatile or impossible, even, to predict. Using outcomes as a measurement of ethics will not, therefore, provide an accurate way for professionals to measure whether decisions are ethical. Professionals must be able to evaluate decisions and choices with concrete ethical guidelines instead of hoping that certain outcomes will result in them having made an ethical choice. Many scholars in public relations identify these issues, as well as others, as evidence that utilitarianism, sometimes called consequentialism due the concept relying on the consequence of a decision, is not as strong of a fit for public relations professional ethics.
Q14) Explain Deontological.
A14)
The second prominent concept, deontological ethics, is associated with the father of modern deontology, Immanuel Kant. He was known for the ‘Categorical Imperative’ that looks for transcendent principles that apply to all humans. The idea is that “human beings should be treated with dignity and respect because they have rights.” Put another way, it could be argued that in deontological ethics “people have a duty to respect other people’s rights and treat them accordingly.” The core concept behind this is that there are objective obligations, or duties, that are required of all people. When faced with an ethical situation, then, the process is simply one of identifying one’s duty and making the appropriate decision. There are few challenges to this approach:
1) Conflicts that arise when there is not an agreement about the principles involved in the decision.
2) The implications of making a ‘right’ choice that has bad consequences
3) What decisions should be made when duties conflict. These challenges should be considered when relying on this as an ethical system.
However, despite these concerns, many have found that deontology provides the strongest model for applied public relations ethics. Bowen, for example, suggests that “deontology is based on the moral autonomy of the individual, similar to the autonomy and freedom from encroachment that public relations seeks to be considered excellent. That ideological consistency gives the theory posed here a solid theoretical foundation with the practice of public relations as well as a normative theory function.” Similarly, Fitzpatrick & Gauthier suggest, “practitioners need some basis on which to judge the rightness of the decisions they make everyday. They need ethical principles derived from the fundamental values that define their work as a public relations professional.” A key thought in this concept is the assumption that there needs to be some objective morals that professionals rely on in order to determine ethical behavior.
Q15) Explain virtue ethics.
A15)
The third and growing area of philosophical reasoning with ethics is known as virtue ethics. It has gained more attention in public relations scholarship in recent years. This philosophy stems from Aristotle and is based on the virtues of the person making a decision. The consideration in virtue ethics is essentially “what makes a good person,” or, for the purpose of this discussion, “what makes a good public relations professional?” Virtue ethics require the decision-maker to understand what virtues are good for public relations and then decisions are made in light of those particular virtues. For example, if the virtue of honesty is most important for a good public relations professional, then all decisions should be made ethically to ensure honesty is preserved. While this theory is growing in popularity, there are several objections that can be made. First, in terms of the public relations profession, the focus on virtues of the professional themselves seems to miss the importance and role of obligations to clients and publics. The industry is not simply about what public relations people themselves, but ultimately the impact they have on the society. Additionally, it also can face the same obstacle as deontological ethics when having conflicting virtues. There may be a conflict if there is a virtue of loyalty to a client and honesty to the public.
