Fernando Pages displayed by permission of Pearson Education India. C Fernando is a senior professor of economics and corporate governance and the Director of the Loyola Centre for Business Ethics and Corporate. Author, A. Edition, 2. Selected pages Title Page. Paranjey Patel marked it as to-read Dec 12, The a. Ethical Dilemmas Sources and Their Resolutions. Quite helpful a lot of information you can use if you have an essay, project or research. Rahul added it Sep 22, The Indian Scenario 20 1. It sensitizes readers on ethical principles and develops reasoning and analytical skills needed to apply ethical concepts to business decisions.
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It sensitizes readers on ethical principles and develops reasoning and analytical skills needed to apply ethical concepts to business decisions. Marketing Ethics 5 1. Suresh marked it as to-read Jan 01, In respect of the above ebook reported in your website as well as google engine, the said report presently is inaccurate as well as inadequate besides it is excessive in relation to the purpose for which it had been processed at the relevant time from FIR which stands closed since and in the light of the time that has a elapsed in respect of information of which is required to be deleted or modified according to the current information: Rahul added it Sep 22, Saniya marked it as to-read Mar 20, Lists with This Book.
An Indian Perspective introduces ethical concepts relevant to resolving moral buxiness in business. This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are as essential for the working of basic functionalities of the website. This can be interpreted to imply that they have independent ethical responsibilitiesDuska argues that stakeholders have the right to expect a business to be ethical; if business has no ethical obligations, other institutions could make the same claim which would be counterproductive to the corporation.
Ethical issues include the rights and duties between a company and its employees, suppliers, customers and neighbors, its fiduciary responsibility to its shareholders. Issues concerning relations between different companies include hostile take-overs and industrial espionage. Ethical standards of an entire organisation can be badly damaged if a corporate psychopath is in charge.
Functional business areas Finance Fundamentally finance is a social science discipline. The discipline borders behavioral economics, sociology, economics, accounting and management. It concerns technical issues such as the mix of debt and equity, dividend policy, the evaluation of alternative investment projects, options, futures, swaps, and other derivatives, portfolio diversification and many others.
It is often mistaken by the people to be a discipline free from ethical burdens. The financial crisis caused critics to challenge the ethics of the executives in charge of U.
Finance ethics is overlooked for another reason—issues in finance are often addressed as matters of law rather than ethics. Finance paradigm Aristotle said, "the end and purpose of the polis is the good life". Adam Smith characterized the good life in terms of material goods and intellectual and moral excellences of character Smith in his The Wealth of Nations commented, "All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.
Neoliberal ideology promoted finance from its position as a component of economics to its core. Proponents of the ideology hold that unrestricted financial flows, if redeemed from the shackles of "financial repressions", best help impoverished nations to grow. Neoliberals recommended that governments open their financial systems to the global market with minimal regulation over capital flows.
The recommendations however, met with criticisms from various schools of ethical philosophy. Some pragmatic ethicists, found these claims to unfalsifiable and a priori, although neither of these makes the recommendations false or unethical per se.
Raising economic growth to the highest value necessarily means that welfare is subordinate, although advocates dispute this saying that economic growth provides more welfare than known alternatives.
Since history shows that neither regulated nor unregulated firms always behave ethically, neither regime offers an ethical panacea. The claim that deregulation and the opening up of economies would reduce corruption was also contested.
Dobson observes, "a rational agent is simply one who pursues personal material advantage ad infinitum. In essence, to be rational in finance is to be individualistic, materialistic, and competitive. Within the discipline this rationality concept is never questioned, and has indeed become the theory-of-the-firm's sine qua non". Financial ethics is in this view a mathematical function of shareholder wealth.
Such simplifying assumptions were once necessary for the construction of mathematically robust models. However signalling theory and agency theory extended the paradigm to greater realism. Other issues Fairness in trading practices, trading conditions, financial contracting, sales practices, consultancy services, tax payments, internal audit, external audit and executive compensation also fall under the umbrella of finance and accounting. Outside of corporations, bucket shops and forex scams are criminal manipulations of financial markets.
Cases include accounting scandals, Enron, WorldCom and Satyam. Human resource management Human resource management occupies the sphere of activity of recruitment selection, orientation, performance appraisal, training and development, industrial relations and health and safety issues. Business Ethicists differ in their orientation towards labour ethics.
Some assess human resource policies according to whether they support an egalitarian workplace and the dignity of labor. A common approach to remedying discrimination is affirmative action. Once hired, employees have the right to occasional cost of living increases, as well as raises based on merit.
Promotions, however, are not a right, and there are often fewer openings than qualified applicants. It may seem unfair if an employee who has been with a company longer is passed over for a promotion, but it is not unethical.
It is only unethical if the employer did not give the employee proper consideration or used improper criteria for the promotion. Potential employees have ethical obligations to employers, involving intellectual property protection and whistle-blowing. Employers must consider workplace safety, which may involve modifying the workplace, or providing appropriate training or hazard disclosure. Larger economic issues such as immigration, trade policy, globalization and trade unionism affect workplaces and have an ethical dimension, but are often beyond the purview of individual companies.
Trade unions Unions for example, may push employers to establish due process for workers, but may also cost jobs by demanding unsustainable compensation and work rules. Unionized workplaces may confront union busting and strike breaking and face the ethical implications of work rules that advantage some workers over others.
None ensure ethical behavior. Some studies claim that sustainable success requires a humanely treated and satisfied workforce. Sales and marketing Marketing ethics came of age only as late as s. Marketing ethics is also contested terrain, beyond the previously described issue of potential conflicts between profitability and other concerns. According to Borgerson, and Schroeder , marketing can influence individuals' perceptions of and interactions with other people, implying an ethical responsibility to avoid distorting those perceptions and interactions.
Marketing ethics involves pricing practices, including illegal actions such as price fixing and legal actions including price discrimination and price skimming. Certain promotional activities have drawn fire, including greenwashing, bait and switch, shilling, viral marketing, spam electronic , pyramid schemes and multi-level marketing. Advertising has raised objections about attack ads, subliminal messages, sex in advertising and marketing in schools. Production This area of business ethics usually deals with the duties of a company to ensure that products and production processes do not needlessly cause harm.
Since few goods and services can be produced and consumed with zero risk, determining the ethical course can be problematic. In some case consumers demand products that harm them, such as tobacco products. Production may have environmental impacts, including pollution, habitat destruction and urban sprawl. The downstream effects of technologies nuclear power, genetically modified food and mobile phones may not be well understood.
While the precautionary principle may prohibit introducing new technology whose consequences are not fully understood, that principle would have prohibited most new technology introduced since the industrial revolution.
Product testing protocols have been attacked for violating the rights of both humans and animals. Property The etymological root of property is the Latin 'proprius'[] which refers to 'nature', 'quality', 'one's own', 'special characteristic', 'proper', 'intrinsic', 'inherent', 'regular', 'normal', 'genuine', 'thorough, complete, perfect' etc.
The word property is value loaded and associated with the personal qualities of propriety and respectability, also implies questions relating to ownership. A 'proper' person owns and is true to herself or himself, and is thus genuine, perfect and pure.
For instance, John Locke justified property rights saying that God had made "the earth, and all inferior creatures, [in] common to all men". In Utilitarian Jeremy Bentham stated, "property and law are born together and die together". One argument for property ownership is that it enhances individual liberty by extending the line of non-interference by the state or others around the person.
Seen from this perspective, property right is absolute and property has a special and distinctive character that precedes its legal protection. Blackstone conceptualized property as the "sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe". Slaves as property During the seventeenth and eighteenth centuries, slavery spread to European colonies including America, where colonial legislatures defined the legal status of slaves as a form of property.
During this time settlers began the centuries-long process of dispossessing the natives of America of millions of acres of land. Ironically, the natives lost about , square miles , km2 of land in the Louisiana Territory under the leadership of Thomas Jefferson, who championed property rights. Combined with theological justification, property was taken to be essentially natural ordained by God. Property, which later gained meaning as ownership and appeared natural to Locke, Jefferson and to many of the 18th and 19th century intellectuals as land, labour or idea and property right over slaves had the same theological and essentialized justification It was even held that the property in slaves was a sacred right.
Wiecek noted, "slavery was more clearly and explicitly established under the Constitution as it had been under the Articles". Taney in his judgment stated, "The right of property in a slave is distinctly and expressly affirmed in the Constitution". Natural right vs social construct Neoliberals hold that private property rights are a non-negotiable natural right.
Davies counters with "property is no different from other legal categories in that it is simply a consequence of the significance attached by law to the relationships between legal persons. Rose finds, "'Property' is only an effect, a construction, of relationships between people, meaning that its objective character is contestable.
Persons and things, are 'constituted' or 'fabricated' by legal and other normative techniques Singer observes, "A private property regime is not, after all, a Hobbesian state of nature; it requires a working legal system that can define, allocate, and enforce property rights. Custodians of property have obligations as well as rights. Michelman writes, "A property regime thus depends on a great deal of cooperation, trustworthiness, and self-restraint among the people who enjoy it.
Penner views property as an "illusion"—a "normative phantasm" without substance. Davies counters that "any space may be subject to plural meanings or appropriations which do not necessarily come into conflict". Private property has never been a universal doctrine, although since the end of the Cold War is it has become nearly so. Some societies, e.
When groups came into conflict, the victor often appropriated the loser's property. The rights paradigm tended to stabilize the distribution of property holdings on the presumption that title had been lawfully acquired. Property does not exist in isolation, and so property rights too.
Bryan claimed that property rights describe relations among people and not just relations between people and things Singer holds that the idea that owners have no legal obligations to others wrongly supposes that property rights hardly ever conflict with other legally protected interests.
Singer continues implying that legal realists "did not take the character and structure of social relations as an important independent factor in choosing the rules that govern market life".
Ethics of property rights begins with recognizing the vacuous nature of the notion of property. Intellectual property Intellectual property IP encompasses expressions of ideas, thoughts, codes and information. Boldrin and Levine argue that "government does not ordinarily enforce monopolies for producers of other goods. This is because it is widely recognized that monopoly creates many social costs. Intellectual monopoly is no different in this respect. The question we address is whether it also creates social benefits commensurate with these social costs.
The US Constitution included the power to protect intellectual property, empowering the Federal government "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries". Boldrin and Levine see no value in such state-enforced monopolies stating, "we ordinarily think of innovative monopoly as an oxymoron.
Further they comment, 'intellectual property' "is not like ordinary property at all, but constitutes a government grant of a costly and dangerous private monopoly over ideas.
We show through theory and example that intellectual monopoly is not necessary for innovation and as a practical matter is damaging to growth, prosperity, and liberty". Steelman defends patent monopolies, writing, "Consider prescription drugs, for instance. Such drugs have benefited millions of people, improving or extending their lives. Patent protection enables drug companies to recoup their development costs because for a specific period of time they have the sole right to manufacture and distribute the products they have invented.
The opposing argument is that the benefits of innovation arrive sooner when patents encourage innovators and their investors to increase their commitments. Roderick Long, a libertarian philosopher, observes, "Ethically, property rights of any kind have to be justified as extensions of the right of individuals to control their own lives.
Thus any alleged property rights that conflict with this moral basis—like the "right" to own slaves—are invalidated. In my judgment, intellectual property rights also fail to pass this test. To enforce copyright laws and the like is to prevent people from making peaceful use of the information they possess.
If you have acquired the information legitimately say, by buying a book , then on what grounds can you be prevented from using it, reproducing it, trading it? Is this not a violation of the freedom of speech and press? It may be objected that the person who originated the information deserves ownership rights over it.
But information is not a concrete thing an individual can control; it is a universal, existing in other people's minds and other people's property, and over these the originator has no legitimate sovereignty.
You cannot own information without owning other people". Machlup concluded that patents do not have the intended effect of enhancing innovation. Self-declared anarchist Proudhon, in his seminal work noted, "Monopoly is the natural opposite of competition," and continued, "Competition is the vital force which animates the collective being: to destroy it, if such a supposition were possible, would be to kill society"Mindeli and Pipiya hold that the knowledge economy is an economy of abundance because it relies on the "infinite potential" of knowledge and ideas rather than on the limited resources of natural resources, labor and capital.
Allison envisioned an egalitarian distribution of knowledge. Kinsella claims that IPR create artificial scarcity and reduce equality. Bouckaert wrote, "Natural scarcity is that which follows from the relationship between man and nature. Scarcity is natural when it is possible to conceive of it before any human, institutional, contractual arrangement.
Artificial scarcity, on the other hand, is the outcome of such arrangements. Artificial scarcity can hardly serve as a justification for the legal framework that causes that scarcity. Such an argument would be completely circular. On the contrary, artificial scarcity itself needs a justification" Corporations fund much IP creation and can acquire IP they do not create, to which Menon and others object.
Andersen claims that IPR has increasingly become an instrument in eroding public domain. International issues While business ethics emerged as a field in the s, international business ethics did not emerge until the late s, looking back on the international developments of that decade.
Many new practical issues arose out of the international context of business. Theoretical issues such as cultural relativity of ethical values receive more emphasis in this field. Other, older issues can be grouped here as well. Also on the basis of their respective GDP and [Corruption rankings].
The success of any business depends on its financial performance. Financial accounting helps the management to report and also control the business performance. The information regarding the financial performance of the company plays an important role in enabling people to take right decision about the company. Therefore, it becomes necessary to understand how to record based on accounting conventions and concepts ensure unambling and accurate records. Foreign countries often use dumping as a competitive threat, selling products at prices lower than their normal value.
This can lead to problems in domestic markets. It becomes difficult for these markets to compete with the pricing set by foreign markets. In , the International Trade Commission has been researching anti-dumping laws.
Dumping is often seen as an ethical issue, as larger companies are taking advantage of other less economically advanced companies. Economic systems Political economy and political philosophy have ethical implications, particularly regarding the distribution of economic benefits. John Rawls and Robert Nozick are both notable contributors. For example, Rawls has been interpreted as offering a critique of offshore outsourcing on social contract grounds, whereas Nozick's libertarian philosophy rejects the notion of any positive corporate social obligation.
Sanctions for violating the law can include a civil penalties, such as fines, pecuniary damages, and loss of licenses, property, rights, or privileges; b criminal penalties, such as fines, probation, imprisonment, or a combination thereof; or c both civil and criminal penalties.
Very often it is held that business is not bound by any ethics other than abiding by the law. Milton Friedman is the pioneer of the view. He held that corporations have the obligation to make a profit within the framework of the legal system, nothing more. Friedman made it explicit that the duty of the business leaders is, "to make as much money as possible while conforming to the basic rules of the society, both those embodied in the law and those embodied in ethical custom".
Ethics for Friedman is nothing more than abiding by 'customs' and 'laws'. The reduction of ethics to abidance to laws and customs however have drawn serious criticisms. Counter to Friedman's logic it is observed that legal procedures are technocratic, bureaucratic, rigid and obligatory where as ethical act is conscientious, voluntary choice beyond normativity.
Law is retroactive. Crime precedes law. Law against a crime, to be passed, the crime must have happened. Laws are blind to the crimes undefined in it.
Also, law presumes the accused is innocent until proven guilty and that the state must establish the guilt of the accused beyond reasonable doubt. As per liberal laws followed in most of the democracies, until the government prosecutor proves the firm guilty with the limited resources available to her, the accused is considered to be innocent.
Though the liberal premises of law are necessary to protect individuals from being persecuted by Government, it is not a sufficient mechanism to make firms morally accountable. Implementation As part of more comprehensive compliance and ethics programs, many companies have formulated internal policies pertaining to the ethical conduct of employees.
These policies can be simple exhortations in broad, highly generalized language typically called a corporate ethics statement , or they can be more detailed policies, containing specific behavioural requirements typically called corporate ethics codes. They are generally meant to identify the company's expectations of workers and to offer guidance on handling some of the more common ethical problems that might arise in the course of doing business.
It is hoped that having such a policy will lead to greater ethical awareness, consistency in application, and the avoidance of ethical disasters. An increasing number of companies also require employees to attend seminars regarding business conduct, which often include discussion of the company's policies, specific case studies, and legal requirements. Some companies even require their employees to sign agreements stating that they will abide by the company's rules of conduct.
Many companies are assessing the environmental factors that can lead employees to engage in unethical conduct. A competitive business environment may call for unethical behaviour. Lying has become expected in fields such as trading. An example of this are the issues surrounding the unethical actions of the Salomon Brothers. Not everyone supports corporate policies that govern ethical conduct. Some claim that ethical problems are better dealt with by depending upon employees to use their own judgment.
Others believe that corporate ethics policies are primarily rooted in utilitarian concerns, and that they are mainly to limit the company's legal liability, or to curry public favour by giving the appearance of being a good corporate citizen.
Ideally, the company will avoid a lawsuit because its employees will follow the rules. Should a lawsuit occur, the company can claim that the problem would not have arisen if the employee had only followed the code properly.
Sometimes there is disconnection between the company's code of ethics and the company's actual practices. Thus, whether or not such conduct is explicitly sanctioned by management, at worst, this makes the policy duplicitous, and, at best, it is merely a marketing tool. Jones and Parker write, "Most of what we read under the name business ethics is either sentimental common sense, or a set of excuses for being unpleasant.
For instance, US Department of Commerce ethics program treats business ethics as a set of instructions and procedures to be followed by 'ethics officers'.
Business ethicists may trivialize the subject, offering standard answers that do not reflect the situation's complexity. Author of 'Business Ethics,' Richard DeGeorge writes in regard to the importance of maintaining a corporate code, "Corporate codes have a certain usefulness and there are several advantages to developing them.
Second, once adopted a code can be used to generate continuing discussion and possible modification to the code. Third, it could help to inculcate in new employees at all levels the perspective of responsibility, the need to think in moral terms about their actions, and the importance of developing the virtues appropriate to their position.
One of the catalysts for the creation of this new role was a series of fraud, corruption, and abuse scandals that afflicted the U. This led to the creation of the Defense Industry Initiative DII , a pan- industry initiative to promote and ensure ethical business practices. The DII set an early benchmark for ethics management in corporations. The membership grew rapidly the ECOA now has over 1, members and was soon established as an independent organization.
Although intended to assist judges with sentencing, the influence in helping to establish best practices has been far-reaching. In the wake of numerous corporate scandals between and affecting large corporations like Enron, WorldCom and Tyco , even small and medium-sized companies have begun to appoint ethics officers.
They often report to the Chief Executive Officer and are responsible for assessing the ethical implications of the company's activities, making recommendations regarding the company's ethical policies, and disseminating information to employees. They are particularly interested in uncovering or preventing unethical and illegal actions. This trend is partly due to the Sarbanes—Oxley Act in the United States, which was enacted in reaction to the above scandals.
A related trend is the introduction of risk assessment officers that monitor how shareholders' investments might be affected by the company's decisions. The effectiveness of ethics officers is not clear.
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