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![Long termism in business
• Issues of corporate ethics have taken the form of short-termism vs. long-termism
• If businesses are focused on long term stability and growth, they are ethical:
Short term strategies, aimed at earning per share for the year in question,
compromise on longer interests
• Warren Buffet has often stressed on long term strategies
• Investigations into Fannie Mae suggested that the entire senior management was
intensively focused on earnings guidance
• Capital market orientation of companies force them to be tempted by short term
targets:
Increasingly, the entire system of how companies are evaluated by analysts,
investors and stock markets leads to a short term approach
McKinsey survey [March 2006] shows that companies are focused on short
term strategies due to market pressures](https://image.slidesharecdn.com/businessethics-191117082647/75/Business-ethics-4-2048.jpg)
Uploaded byPrabal Chauhan
Business ethics
This document discusses business ethics and provides information on several related topics. It defines business ethics as the written and unwritten codes that govern decisions and actions within a company. It also discusses three models of management ethics: moral, amoral, and immoral. Moral management follows ethical principles, while amoral management ignores ethics and immoral management actively opposes ethics. The document also outlines best practices for ethics, characteristics of an ethical organization, and guidelines for ethical managers. It discusses the roles and functions of ethics committees and the benefits of ethics audits and ethics programs.
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Business ethics
- 1. BUSINESS ETHICS Submitted to:- Submitted by :- Prabal Chauhan
- 2. So, What doyou mean by Ethics !! • Moral principles that govern a person's behavior or the conducting of an activity. • The branch of knowledge that deals with moral principles.
- 3. Business Ethics :- •Business ethics can be defined as written and unwritten codes of principles and values that govern decisions and actions within a company. In the business world, the organization’s culture sets standards for determining the difference between good and bad decision making and behavior.
- 4. Long termism inbusiness • Issues of corporate ethics have taken the form of short-termism vs. long-termism • If businesses are focused on long term stability and growth, they are ethical: Short term strategies, aimed at earning per share for the year in question, compromise on longer interests • Warren Buffet has often stressed on long term strategies • Investigations into Fannie Mae suggested that the entire senior management was intensively focused on earnings guidance • Capital market orientation of companies force them to be tempted by short term targets: Increasingly, the entire system of how companies are evaluated by analysts, investors and stock markets leads to a short term approach McKinsey survey [March 2006] shows that companies are focused on short term strategies due to market pressures
- 5. 3 Models ofManagement Ethics • Archie B. Carroll, an eminent researcher in the area of social responsibility, identified three types of management, depending on the extent to which their decisions were ethical or moral: Moral Amoral Immoral
- 6. Types of ManagerialEthics :- • Moral management strives to follow ethical principles and doctrines. • Moral managers strive to succeed without violating ethical standards. • They seek to succeed while remaining within the bounds of fairness and justice. • Such managers undertake activities which ensure that even though they engage in legal and ethical behavior, they continue to make a profit. Moral management
- 7. Amoral management • Thisapproach is neither immoral nor moral. It simply ignores ethical considerations. Amoral management is broadly categorized into two types. 1. Intentional. 2. Unintentional.
- 8. Immoral management • Immoralmanagement not only ignores ethical concerns, it also actively opposes ethical behavior. Organizations with immoral management are characterized by: • Total concern for company profits only. • Stress on profits and company success at any cost. Lack of empathy – managers are hardly bothered about others’ desire to be treated fairly. • Laws are regarded as hurdles to be removed or eliminated. • Strong inclination to minimize expenditure. • The basic principle governing immoral management is: “Can we make money with this action, decision, or behavior?” Thus, in immoral management, ethical considerations are immaterial.
- 9. Types of ManagerialEthics
- 10. Making Ethical Judgments Behavioror act that has been committed Value judgments and perceptions of the observer Prevailing norms of acceptability
- 11. Stages of MoralDevelopment :-
- 12. Implications of sixstages • The following conclusions can be drawn from the study of the six stages of moral development of managers: • Individuals move up these stages in a sequential manner. • The moral development of an individual may stop at any stage. • Most managers are at Stage 4 of moral development.
- 13. Best Practices inEthics and Compliance • Risk Assessment - create priorities; words and actions always consistent • Value-based, compliance-supported materials and activities • On-going, highly interactive, work group based education and training • Everyone held accountable—rewards and punishment are made transparent
- 14. The Ethical Organization 1.Clear Set of Values 2. Open and Effective Communication of Values 3. Leaders Exhibit the Values 4. Values embodied in policies and procedures 5. Open dialogue about value decisions 6. Accountability: everyone held to these values 7. Consistency: words and actions in sync
- 15. Ethical Guidelines forManagers • Obeying the law • Tell the truth • Uphold human dignity • Adhere to the golden rule • Allow room for participation • Always act when you have responsibility • Build a ethical culture by example setting
- 16. Ethics committee • Ethicscommittees perform the following functions: • Organizing regular meetings to discuss ethical issues. • Communicating the code to all members of the organization. • Identifying possible violations of the code. • Enforcing the code. • Rewarding ethical behavior and punishing those who violate the organization’s code of ethics. • Reviewing and updating the code of ethics. • Reporting the activities of the committee to the board of directors.
- 17. Ethics audits • Ethicsaudits involve the systematic assessment of the adherence of employees to the ethical policies of the organization. They aid in better understanding of the policies and also identify the deviations in conduct that require corrective action.
- 18. Benefits of ManagingEthics in the Workplace • Attention to business ethics has substantially improved society. • Ethics programs help avoid criminal acts “of omission” and can lower fines. • Ethics programs cultivate strong teamwork and productivity. • Ethics programs promote a strong public image.
- 19. Misconduct Observed inthe Workplace
- 20. GAINED POPULARITY IN1980’s AND 1990’s. CORPORATEs LIKE TATA’s , BIRLA’s , RELIANCE ARE PIONEERS IN FIELD OF BUSINESS ETHICS
- 21. Ethical Issues categories… •Conflict of interest • Fairness and honesty • Communications • Business relationships
- 22. Egoism… • Egoism revolvesaround the question “ I ought to act in the interest of myself” • It states that people must do what is best for themselves in order to live a morally correct life • In some cases of egoism, the idea of acting out one’s self interest sometimes even extends to overlooking other’s interests in order to satisfy your own.
- 23. Profit Making –AnObjective with AN ETHICAL DIMENSION • SURVIVAL • ONLY PROFIT IS NOT ACCEPTABLE • A FIRM NOT PERFORMING WELLIS CONSIDERED AS LIABILITY
- 24. SWAMI VIVEKANAND VIEWSON ETHICS • THE BASIS OF INDIAN SUBJECTIVITY LIES IN THE BELIEF OF GOD • HE SUGGESTED THE FUNDAMENTAL LAW OF ETHICS. • “DON’T INJURE OTHERS, LOVE EVERYONE AS YOUR OWNSELF UNIVERSE IS ONE”
- 25. Coke & Pepsiin India • Today, more from the world of product safety. This time the story is about Coke and Pepsi, and allegations that the versions of their products manufactured in India contain unacceptably high levels of pesticides. world’s biggest brand names, known for wooing customers around the world, are facing a credibility crisis in one of their crucial emerging markets.
- 27. Conclusion Ethics are importantnot only in business but in all aspects of life because it is an essential part of the foundation on which of a civilized society is build. A business or society that lacks ethical principles is bound to fail sooner or later.
- 28.