Value and Ethics

S. K. Joshi
[email protected]

Lesson 02
Lesson's Objectives
 Define Value & familiar with types of value
 Identify the formation of value
 Define Ethics
 Familiar with the formation of Ethics
 Define Business Ethics
 Identify the importance of Business Ethics
 Identify relationships between ethics and
organization
Value
 As we knew the firm is determined by its
values
 Edwerd Spranger define the value as "the
constellation of standards, or qualities,
characteristics, or ideas that determine a
person's view of the world
 Those standards/idea, qualities are likes,
dislikes, viewpoints, inner inclinational,
rational and irrational judgments,
prejudices, and association patterns
 Value
Then values provide the basic foundation
for understanding a person’s personality
perception and attitudes.

Value Beliefs Perception Attitudes Behavior interest and

personality
Importance of Value
 A powerful force affecting behavior
 Values contain a judgmental element in that
they carry an individual's ideas as to what is
right or desirable
 Provide a way to understand organization
 Help to differentiation
 Determine the retention
Personal Value
 Personal values denote a sense of right or
wrong, good or bad, and other judgmental
criteria based on our strong sense of what
the ideal ought to be
 Personal values serve five purposes in
organizations
 Value serve as standards of behavior
 Guidelines for decision making and conflict
resolution
 Value effect our thought & action
 Influence on employee motivation & perception
 Influence on attitude and behavior
Formulation of Our Value
 40% value is genetically determined
 Balance is given by the environmental
factors
 Culture
 Parental dictates
 Teachers
 Friends and other situations
Workforce Value
 At the workplace
 Old value: Hard work, conservative-
traditional, loyalty to the employer
organization.
 Today value: Job satisfaction, leisure time,
loyalty to relationship, flexibility to career
 Negative value: Anger, ,meanness,
arrogance (overconfidence),crookedness-
wicked, greed/lust
 Positive value: Integrity, honesty,
truthfulness, kind heartedness, humility
Business Value
 Scholars identified ten fundamental shared values for
successful organization
Truth
Mentoring Openness
Giving credit Risk taking
Honesty Social
Caring conscience
Trust Responsibility &
accountability

Firm can manage itself through values and core values

Office Technology

Is it wrong to use company e-mail for personal reasons?

Is it wrong to use office equipment to help your children or
spouse do schoolwork?
Is it wrong to play computer games on office equipment
during the work day?
Is it wrong to use office equipment to do internet shopping?
Is it unethical to blame an error you made on a technological
glitch?
Gift and Environment
• What’s the value at which a gift from a supplier or client
becomes troubling?
• Is an Rs.10000 gift to boss unacceptable?
• Is an Rs.10000 gift from the boss unacceptable?
• Is it OK to take an Rs.5000 pair of cricket match tickets from
suppliers?
• Is it OK to take an Rs.120 pair of theater tickets?
• Is it OK to take an Rs.1000 holiday food basket?
• Is it ok to take a Rs.2500 gift certificate?
• Can you accept Rs750 prize won at a raffle at a supplier
conference?
Truth and Lies
•Due to on the job pressure. Have you ever abused or lied about
sick day?
•Due to on-the job pressure have you ever taken credit for
someone else’s work or idea?
Ethics
 There is no agreement to define ethics
means
 E.g.:
 Helpless Boy from everything asked “Priest
I will give you an apple if you tell me where
god is”?
 Priest replied, “I will give you two apples if
you tell me where he is not?”
 Value…Ethics…
Ethics
 Ethics is derived from the Greek word
“ethos” which means customs, habitual
usage, conduct and character.
 Ethics is an individual’s personal beliefs
regarding what is right and wrong or good
or bad.
 Ethics involves a discipline that examines
good or bad practices within the context of
a moral duty
Formation of Personal Ethics
 Persons ethics are formulated through the
operation of five key forces in the
individual’s environment.
 Family influences
 Peer influences
 Experiences
 Value and Morals
 Situational factors
Ethics
Philosophers today usually divide ethical
theories into four general subject areas:
◦ Descriptive ethics
◦ Meta ethics
◦ Normative ethics
◦ Applied ethics
Descriptive ethics
It is closely related to anthropology, sociology,
and psychology and leans heavily on them.
◦ It consists of studying and describing the
morality of a people, culture, or society.
◦ It compares and contrasts different moral
systems, codes, practices, beliefs, principles,
and values.
Meta ethics
Meta ethics investigates where our ethical
principle come from, and what they mean.
That attempts to discover the origin or cause of
right and wrong.”
◦ It discuss about the theoretical meaning and
reference of moral propositions and how their
truth values may be determined;
◦ questions such as “What is goodness?”
Normative ethics
Normative ethics, about the practical
means of determining a moral course of
action.
This may involve articulating the good
habits that we should acquire, the duties
that we should follow.
Question as “what should one do?”
Applied ethics
Applied ethics ,consider about how moral
outcomes can be achieved in specific
situations;
And applied ethics involves examining
specific controversial issues, such as
abortion, infanticide, animal rights,
environmental concerns, homosexuality,
capital punishment, or nuclear war.
Ethics and Moral
Moral is similar to ethics and many
people use the two words
interchangeably and derived from the
Latin “mores”, means custom or habit.
And morals are based on religious beliefs
and social influence and group norms.
Ethics & Moral
Ethics and morals both relate to “right”
and “wrong” conduct. However, ethics
refer to the series of rules provided to an
individual by an external source. E.g. their
profession. On the other hand, morals
refer to an individual’s own principles
regarding right and wrong.
 Ethics Morals
What is it? The rules of conduct recognized Principles or habits with
in respect to a particular class of respect to right or wrong
human actions or a particular conduct. It defines how
group, culture, etc. it defines things should work according
how thing are according to the to an individual’ ideas and
rules. principles.
Source Social system/ external Individual / internal
Why we do it? Because society says it is the Because we believe in
right thing to do. something being right or
wrong.
What if we don’t do We will face peer/ societal Doing something against
it? disapproval, or even be fired one’s morals and principles
from our job. can have different effects on
different people, they may
feel uncomfortable, remorse,
depressed etc.
Flexibility Ethics are dependent on others Usually consistent, although
for definition. They tend to be can change if an individual’s
consistent within a certain beliefs change.
context, but can vary
Ethics, value, Moral
Ethics are rules that help us tell the difference
between right and wrong. They encourage us to
do the right thing.
Values tell us what is important. They help us
make decisions about right and wrong.
Morals are rules we use to decide what is good
or bad.
1960s 1970s 1980s 1990s 2000+
Environment Employee Bribery and Unsafe work Emerging
al issues militancy (us illegal practice in technology
vs. them) contracting third world issues cyber
practices countries crime privacy
Employer/em Human rights Deceptive Increased Intellectual
ployee issues (forced advertising corporate property

Business Ethics Time line

tensions labor, low Inability for theft
wages, work personal
environment) damage
Civil rights & Firms start Financial Financial International
race relation practice of fraud (savings mismanagem corruption
issues covering up & loan ent & fraud
not scandals)
confronting
issues
Changing Federal Transparency Federal Sarbannes
work ethics Corrupt issues arise sentencing oxley Act
Practices Act Guidelines (2002)
passes (1977) for Org
(1991)
Drug use Compliance Defense Global UN
escalated & legal to Industry Sullivan Convention
values Imitative Principles Against
orientation (1986) (1999) Corruption
(2003)
 Sources of Ethical Norms
Regions of
Fellow Workers Opposites
Country

Family Profession
The
Individual
Conscience
Friends Employer

The law Religious Beliefs Society at large

Ethics and Law
Law often represent an ethical minimum
Ethics often represents a standards that exceeds
the legal minimum
Frequent Overlap

Ethics Law
Concepts of Ethics
Developed by moral philosophers over
generations and used to distinguish ethical from
unethical behavior. But each ethical concept has
problems
The 4 Concept of Ethics
◦ Relativism
◦ Egoism
◦ Utilitarianism
◦ Deontologism
Relativism
There is no universal standard by which
morality can be judged
At here what is correct for one society may be
wrong for another
And Ethics and morality are relative
Relativism
There are no absolutes/limits-murder, slavery,
torture, rape are also accepted
Always directed to be meant by a society as a
sub-societies
Leads to conclusion – each person’s opinion is
correct
Nothing that anyone does is morally wrong
Egoism
It is one ought to act in his or her own self
interest and when it is ethical behavior is that
which promotes one’s own self interest. And it
does not mean should not obey laws – only do so
if in self interest
Ethical egoism is the view that what a person
ought to do is always what they judge to be in
their individual best interest to do.
Psychological egoism is the view that everyone, in
fact, always does act from a self-interested
motive
Utilitarianism
The morality of an action can be determined by
its consequences.
And an action is ethical if it promotes the
greatest good for the greatest number
The benefits of the Action is higher than its cost
means the behavior is ethical otherwise it is
unethical
Restrictions against the majority to protect a
minority is not utilitarian
In the eyes of a utilitarian, any action is justified
if it works towards the greatest utility.
Deontologism
Derived from the Greek world for Duty
Actions are not justified by their
consequences.
Factors other than good outcomes
determine the rightness of actions
Macro & Micro Ethics
Micro-ethics Macro-ethics
(individual focus)

De George in Roddis Actions of individual The role of individual in

(1993) considered person. industry and other
organizations,
professional, societies,
and responsibilities of
the profession

Ladd (1991) Professional Problems confronting

relationships between members of a
individual professionals profession as a group
and other individuals in their relationship to
who are their clients, society
colleagues, employers

Vanderburg (1995) Microlevel analysis – of Macrolevel analysis- of

individual technologies technology as a whole
 Business Ethics Typologies

Micro Macro
Normative Values/Norms & Norms & Principles and
Principles for a Fair economic System
Organizational – i.e. Distributive Justice
Decisions

Descriptive Codes, Standards of Public Policy & the

Conduct, & Compliance Legalization of Business
Systems for Ethics –
Organizations i.e.U.S.Sarbannes Oxley
Act, EU Privacy Laws
Development Of Ethics
Different cultures have different
standards of what is good and what is
bad, but humans tend to go through a
certain process in learning to apply their
ethics and cultural morels to their own
behavior.
Contributors
◦ Piaget – Cognitive – development Theory
◦ Kohlberg – Conventional Approach
PREMORAL PERIOD (up to 4-5)
◦ Preschool children show little awareness of
rules, purpose of the game is to take turns
and have fun and Parents and older children
are more tolerant of kid’s behavior.
◦ At the end of this stage (~4 -5) children
become more aware of the “rules” by
watching older people and imitating their
behavior.
MORAL REALISM (6-10)
Children at this stage tend to think of
rules in terms of MORAL ABSOLUTES is
“right” always means following the rules
The child also believes in IMMANENT
JUSTICE is any violation of society rules
will be caught and punished
In SUM: rules exist outside of themselves.
Wrong is whatever adults forbid and
punish. Rules MUST NOT be questioned.
AUTONOMOUS MORALITY (11 on)
Older, more autonomous (independent)
children begin to understand that social
rules are arbitrary
They exist because agreements have
been made. And it is at this stage that
rules begin to be challenged
At this stage the INTENTION of the
individual begins to have an impact
(punish kid who was stealing jam)
Kohlberg Contribution
Kohlberg proposed 3 stages of moral
development, with each stages consisting
of 2 distinct sub stages.
◦ Level 1: preconvention morality (1&2)
◦ Level 2: conventional morality (3&4)
◦ Level 3: post-conventional morality (5&6)
Level 01
Stage 01, - punishment & obedience
orientation
◦ Goodness or badness of an act is based on its
consequences.
Stage 02, - instrumental orientation
◦ Person conforms to rules in order to gain
rewards or to satisfy personal needs,
Level 02
Stage 03: “Good-boy/good-girl” orientation
◦ Moral behavior is that which pleases, helps, or is
approved by others. And actions are evaluated
on the basis of intent with one objective is to be
thought of as a “nice” person
Stage 04: Authority and social-order-
maintaining morality
 Accept and conforms to social rules and
conventions because of a belief that rules and
laws maintain an order which is judged good or
moral
 Law and order mentality
Level 03
Stage 05: Social contract morality.
◦ Flexibility begins in moral reasoning with a
sense of having to live up to the law, but an
understanding that laws can be wrong
Stage 06; Universal ethical principles
◦ “Highest” stage of moral reasoning right and
wrong defined on a personal belief or self-
chosen ethics
◦ Belief in abstract principles which override all
others (life, liberty, equality)
Business ethics
Business Ethics means conducting all
aspects of business and dealing with all
stakeholders in ethical manner…
A specialized study of right and wrong
applied to business policies, institutions
and behaviors; where moral standards
apply to social systems and organizations
that produce and distribute goods and
services.
 Business Ethics: Today vs. Earlier
Society’s
Expectations
of Business
Ethics
Expected and Actual
Levels of Business

Ethical
Problem
Ethics

Actual
Ethical Problem Business
Ethics

1950s Time Early 2000s

Business ethics
Three basic topics covered:
◦ Systematic Issues – Raised question about
economic, political, legal or other social
systems within which business operate
◦ Corporate Issues – raised question about a
particular company
◦ Individual Issues – Questions about a
particular individual within an organization,
their behavior & decisions
A model to Identify Business Ethics
Business Ethics
Managerial Mischief Moral Problems
Illegal act Micro level problems
(Individual
consideration)
Questionable Macro level problems
Practices (organizational
consideration)
Business ethics
At the Practices of Business Ethics have to
consider
◦ Profits versus higher wages
◦ Expansion versus development
◦ Production versus pollution
◦ Supplier benefits versus consumer
prices/lower costs
◦ Survival of the business versus needs of
stakeholders
Business ethics
Solutions for Business ethics
◦ Taxation
◦ Self Regulation
◦ Subsidies
◦ Government/EU regulation
◦ Legislation
◦ Pressure Groups
◦ Improve competition and contestability of
markets
◦ Social Environmental Audits
Significance of Business ethics
Attract customers to the firm’s products,
thereby boosting sales and profits
Make employees want to stay with the
business, reduce labor turnover and therefore
increase productivity
Attract more employees wanting to work for
the business, reduce recruitment costs and
enable the company to get the most talented
employees
Attract investors and keep the company’s
share price high, thereby protecting the
business from takeover.
Significance of Business ethics
The need for a company to behave
“ethically” is described in terms of a
company’s need to interact productively
with its stakeholders.
“Behavior that is trusting, trustworthy,
and cooperative, not opportunistic, will
give the firm a competitive advantage”.
Sustainable global competitive advantage
occurs when a company implements a
value-creating strategy which other
companies are unable to imitate.
Significance of Business ethics
It facilitates the delivery of quality
products in an honest, reliable way.
This approach can enhance work life by
making the workplace more fun and
challenging.
It can improve relationships with
stakeholders and can instill a more
positive mindset that fosters creativity
and innovations among the stakeholders.
Thank you!