Rule and importance of Business Ethics and Values in Business –

1. Control Business Malpractices: Business ethics directly influence

the operations of the business. It is the one which helps business
in deciding what is wrong and what is right. These ethics set
certain rules and principles to be followed strictly by business, and
their violation leads to a penalty. Implementation of these
principles ensures that business does not indulge in any unfair
practices like black marketing, providing misleading
advertisement, frauds in measures and weight, adulteration, etc.
Through business, ethics works on providing better products to its
customers at reasonable prices.
2. Better Relation with Employees: Employees are an important part
of the business and necessary for the survival of the business.
Business ethics ensures that business works for the welfare of its
employees working with it. The business should not only work for
the achievement of its objectives like profit maximization and
higher growth but should also focus on peoples working with it.
These ethics ensures that business provides better monetary
compensation and good working conditions to its employees,
active participation in decision making, addressing complaints,
and providing promotions as per their progress. This helps in
maintaining a good relationship with employees.
3. Improves Customer Satisfaction: The consumer is termed as king
in the market and is the one who decides the success or failure of
every business. It is important that the business fulfills the needs
of its customers. Business ethics provides principles for business
operations under which it is required to provide better quality
products at reasonable prices. It ensures that the business
provides better customer support and redressal of all complaints.
This helps businesses in improving the satisfaction levels of its
customers.
4. Increase Profitability: Business ethics improve the productivity
and profitability of every business. It sets certain rules to be
followed by every person working with the business. Every
employee is required to adhere to these rules and should focus on
its duties with sincerity. These ethics ensure that there is no
wastage of resources, and every resource is efficiently utilized.
This eventually leads to an increase in business profit in the long
run.
 5. Improves Business Goodwill: Business goodwill has an important
effect on capturing the market. Better goodwill businesses are
able to attract more and more customers. By implementing ethics
in its operations business aims at providing better service to the
market. Businesses that work ethically operate at the low-profit
base and with honesty. This develops a better image in front of
the public and is easily accepted by customers with fewer efforts.
6. Better Decision Making: Ethics in business helps them in making
better decisions timely. It provides certain rules and guidelines
that every business needs to follow in its operations. Every
decision is taken in light of the moral principles and social values
provide through these ethics. It helps businesses in deciding what
is right and what is wrong. Every person working within the
business is required to respect these ethics, violation of which
would lead to the penalty.
7. Protection of Society: Society is very important for the success of
every business. If a business does non vcx
8. consider the interests of its society, then it will harm its survival.
Business ethics direct that business should work for the welfare of
its society and take part in various infrastructural development
programs.
It ensures that business contributes actively to its corporate social
responsibility. A business should not perform any activity that
creates a problem for the society in which business exists.

What Is Business Ethics?

Business ethics is the study of appropriate business policies and practices
regarding potentially controversial subjects including corporate
governance, insider trading, bribery, discrimination, corporate social
responsibility, and fiduciary responsibilities. The law often guides business ethics,
but at other times business ethics provide a basic guideline that businesses can
choose to follow to gain public approval.

Impact of Business ethics on Policy and Business Strategy

1. Long-term growth: Sustainability comes from an ethical long-term vision which
takes into account all stakeholders. Smaller but sustainable profits long-term
must be better than higher but riskier short-lived profits.
2. Cost and risk reduction: companies which recognize the importance of business
ethics will need to spend less protecting themselves from internal and external
behavioural risks, especially when supported by sound governance -systems and
independent.
3. Anti-capitalist sentiment: the financial crisis marked another blow for the
credibility of capitalism, with resentment towards bank bailouts at the cost of
fundamental rights such as education and healthcare.
4. Limited resources: the planet has finite resources but a growing population;
without ethics, those resources are depleted for purely individual gain at a huge
cost both to current and future generations.
5. Creating Credibility:  An organization that is believed to be driven by moral values
is respected in the society even by those who may have no information about the
working and the businesses or an organization. Infosys, for example, is perceived
as an organization for good corporate governance and social responsibility
initiatives. This perception is held far and wide even by those who do not even
know what business the organization is into.

6.Improving Decision Making: A man’s destiny is the sum totals of all the decisions
that he/she takes in course of his life. The same holds true for organizations.
Decisions are driven by values. For example, an organization that does not value
competition will be fierce in its operations aiming to wipe out its competitors and
establish a monopoly in the market.

Role of CEO -

1. Develop strategic objectives and direction

Carrying the weight of the company on their shoulders, the CEO is responsible
for devising new strategic plans and policies to bring their visions to reality. By
setting out clear aims and objectives, the CEO helps employees and the BoD
to better understand upcoming expectations for business growth, both in the
short and long-run.v

2. Implement proposed plans

CEOs direct and oversee the business’s overall strategic direction, developing
high-quality business strategies and plans that align with both their short-term
and long-term objectives. It’s their duty to communicate their approach across
the company so as to ensure that its operations are working in accordance
with its overarching strategy, with the end goal of maximising profits,
increasing shareholder value, and improving market position.

3. Budgeting and forecasting

To the dismay of many, not all of a CEO’s financial responsibilities can be

passed on to the Chief Financial Officer (CFO). Rather, a yearly budget has to
first be set by the CEO to allocate capital in consideration of factors like net
income, cash flow, and the valuation they wish to achieve.

With the help of the CFO, CEOs then consider variables such as industry
fluctuations in calculating potential expenses, revenue, and profitability for the
upcoming year. Only then is the burden lifted, with the CFO managing cash
flow and performing fiscal and financial analysis throughout the year.

4. Public relations

The public naturally associates the CEO as being the face of the company,
making them an almost obligatory marketing tool. As the business’s primary
representative, the CEO is largely expected to exemplify model behaviour, with
their public values and actions, both good and bad, having a great impact on
the reputation of the company. For example, when Elon Musk smoked
marijuana live on The Joe Rogan  Experience podcast, it led to a 7% dip in
Tesla’s stock price, due to growing controversy and concern over the CEO’s
recent and rather bizarre behaviour.

5. Communicating with the Board of Directors

The board can easily become one of two things – a CEO’s greatest ally or the
cause of his/her demise. Just as expectations must be communicated to
employees, the board should be kept informed of important – and sometimes
difficult – business decisions through regular board meetings. Communication
between the board and the CEO is of the utmost importance, with
transparency being key.

6. Tracking company performance 

An executive understanding of the company’s performance, relative to other

competitors, is a key part of the CEO’s role. Actionable insights can be derived
from revenue growth, gross profit margins, and cumulative sales. These can
then be used to shape further key performance indicators (KPI) to
guide necessary adjustments and help the company meeting its new targets. In
addition, monitoring the market – whether that involves potential acquisitions
or significant regulatory developments in the industry – is crucial to helping the
company withstand outside forces and progress towards its long-term goals.

7. Establishing working culture

From interns to managers to senior executives, everyone looks up to the CEO

to a certain extent. Creating a healthy working culture means leading by
example. By exhibiting the same working attitudes, you expect of others, CEOs
will gain respect and serve as better motivation for employees to reciprocate
and do the same for them. A positive working environment should sit in line
with company values, visions, and goals. With a productive working culture –
and a clear set of company values, CEOs are able to better drive consistent,
high levels of performance across the whole company. 

Ethics Values

Ethics refers to a system of moral principles Values are associated with the
thought process, a person’s
sense of what is wrong and what
is right. 

Ethics aligns with a professional setup Values are associated with

personal aspects of a person

Ethics has 3 major areas of study – Meta-Ethics, Normative Ethics, Different types of values are
Applied Ethics. moral values, social values,
aesthetic values, religious
values, political values.
 Ethics will be consistent within a professional setup but would vary Values vary from person to
between 2 different organisations or institutions.  person; it need not be
consistent.

Ethics are determined by an institution, organisation and varied Values formed in a person are
professions. Ethics that are followed by medical professionals will be determined by family values,
different from ethics followed in the public administration domain religion, culture, community etc.

Ethics could act as a constraint. The action that needs to be taken in an Values could act as a catalyst for
organisation could be consistent with the values of a person, however, the necessary motivation in a
there could be chances that it cannot be executed as it may not align person.
with the ethical standards of the profession, organisation or institution.

Types of Ethics -

Personal Ethics

 Includes your personal values and moral qualities.

 Influenced by family, friends, culture, religion, education and many other factors.
 Examples: I believe racism is morally wrong. I am in favour of abortion.
 Personal ethics can change and are chosen by an individual.

Common Ethics

 Ethics that the majority of people agree on.

 Many philosophers argue there is no such ethics.
 Do we have the same ethics in the world? Do we have the same ethics in the U.S.?
Does everyone in your family share the same ethics?
 Examples: Murdering people for the sake of murder is wrong.
 Notice how this would change in the context of self-defence.
 Common ethics have to be very general to avoid disagreement.

Professional Ethics

 Rules imposed on an employee in a company, or as member of a profession. For

instance, journalists, doctors, lawyers, etc.
 Imposed when you are a part of a professional setting or when you are being trained
or educated for working for a specific profession.
 Examples: no gossiping, time management, punctuality, confidentiality, transparency.
  Not adhering to these may harm your professional reputation.

UNIT – 2

Types of ethical Issues -

1. Discrimination

One of the biggest ethical issues affecting the business world in 2020 is
discrimination. In the last few months, many corporations have come under fire
for lacking a diverse workforce, which is often down to discrimination. However,
discrimination can occur at businesses of all sizes. It applies to any action that
causes an employee to receive unequal treatment.

Discrimination is not just unethical; in many cases, it is also illegal. There are
statutes to protect employees from discrimination based on age, gender, race,
religion, disability, and more. Nonetheless, the gender and race pay gaps show
that discrimination is still rampant. Other common instances of discrimination
include firing employees when they reach a certain age or giving fewer
promotions to people of ethnic minorities.

2. Harassment

The second major ethical issue businesses face is harassment, which is often
related to racism or sexism. This can come in the form of verbal abuse, sexual
abuse, teasing, racial slurs, or bullying. Harassment can come from anyone in the
company, as well as from customers. In particular, it is an ethical issue for the
business if a supervisor is aware of harassment from a client and takes no action
to prevent it.

3. Unethical Accounting

Publicly-traded companies may engage in unethical accounting to appear more

profitable than they actually are. In other cases, an accountant or bookkeeper
may change records to skim off the top.
4. Health and Safety

Another type of ethical issue that is often protected by law is health and safety.
Companies may decide to cut corners to reduce costs or perform tasks faster. As
well as injuries, failing to take workers’ safety into account can lead to
psychosocial risks (like job insecurity or lack of autonomy), which can cause work-
related stress.

5. Abuse of Leadership Authority

Abuse of power often manifests as harassment or discrimination. However, those

in a leadership role can also use their authority to pressure employees to skip
over some aspects of proper procedure to save time (potentially putting the
employee at risk), punish workers who are unable to meet unreasonable goals, or
ask for inappropriate favors.

In addition, abuse of authority can extend beyond the workforce. Managers can
use their position to change reports, give themselves credit for the work of a
subordinate, misuse expenses, and accept gifts from suppliers or clients.

6. Nepotism and Favouritism

Nepotism is when a company hires someone for being a family member.

Favouritism occurs when a manager treats an employee better than other
workers for personal reasons.

Not only are nepotism and favouritism unfair, they are also disheartening to
employees. Workers often find they have to work much harder to receive a
promotion or other rewards.

7. Privacy

Employees have recently found that the distinction between work life and
personal life has become less clear. This is mainly due to the advances in
technology.

For one thing, employers may punish for posts on social media, particularly if they
complain about work conditions or the company as a whole. Employers may even
fire workers who post controversial statements that go against company values.
8. Corporate Espionage

The opposite to the above can also happen: workers can misuse company data.
An employee may steal intellectual property or provide a competitor with
information about a client. Usually, this is for monetary purposes, but it can also
help an employee secure a position at another firm.

Causes of Unethical Behaviour –

1. Poor Leadership

It is a common practice in offices where there conflict or clash arises between a boss and an
employee. Sometimes, the leaders prefer one employee over another, or one employee
takes the credit of the whole task and becomes a star in front of the boss. Due to this, an
environment of negativity evolves in the workplace. 

2. Poor Management

At the managerial level, it has been seen that if the manager is not sincere and working
professionally, then his subordinates also start acting in the same manner.

3. Discrimination (any specifically Gender)

According to labor law, no employee should be discriminated based on age, race, gender,
and all employees should be treated on a fair and just basis. But to some extent, in the
office environment, these laws are fulfilled and implemented. Inside office stories show
some kinds of poorly managed code. Some employees are harassed, and some face
discrimination based on gender. 

4. Poorly Managed Policies

If the policies regarding ethics have already been designed and mentioned in the office
manual but still not generating productive results, so the chances are higher, they are not
appropriately addressed. Employees can’t be blamed on this perspective. The concerned
department has not shown its responsibility; thus, managed and implemented the policies
poorly.

5. Wrong Practices

It’s been also observed that to gain small financial benefits for any reason, many employees
collect bribe from clients to have their task done or to disclose organizational secrets. In the
long term, this can affect the company’s reputation as well as affect their career.
6. Habitual to Steal

Many employees have a natural habit of stealing the company’s stationery for their personal
usages like pens, folders, papers, and other sorts of stuff. They often grab these items for
their family or have a habit of storing them at home.

Bribery –
In the business world, stories of bribery are all too common. The
term bribery means to give gifts of money, in cash or kind, to someone in order
to persuade them to make favourable and biased decisions for business gains.
In the U.S., bribery is considered an unfair business practice and is, therefore,
illegal. However, in many countries, bribery may not be considered corrupt and
is viewed as the normal way business is conducted.

Coercion

it is the use of or threat to use prejudice, property, or any other act to force
a party to enter into an agreement. It can happen physically or
psychologically; direct coercion, for instance, occurs when a man is
physically made to do something he doesn't want to do. The act can be
directed to a person, not just to the other party. It can also come from a
stranger to the contract.

7 forms of coercion
1. Physical
Physical coercion is when a workplace authority uses their physical body to threaten or
control a subordinate’s behavior. This can happen in the form of physical harassment,
such as pushing or hitting. 

2.Sexual
Sexual coercion involves one person manipulating another person into engaging in
sexual behavior. This type of coercion can take many forms. It can be blatant or more
subtle, such as sending lewd emails or unwanted touching.
3.Humiliating
The social power that a manager or boss possesses can be very compelling to
employees. Outwardly making fun of or humiliating someone at work is bullying and can
leave victims feeling weak. This is a form of coercive behavior.

4.Gaslighting
Gaslighting is a common form of emotional abuse . It involves a person causing
someone to question the validity of their concerns or even their reality in general.
5.Manipulative
Manipulation is a form of social coercion that can happen in any work
relationship. A person of authority might manipulate others by using passive
aggressive, underhanded tactics.

Deception -

Deception or falsehood is an act or statement that misleads, hides the truth, or

promotes a belief, concept, or idea that is not true. It is often done for
personal gain or advantage. Deception can involve dissimulation, propaganda
and sleight of hand as well as distraction, camouflage or concealment. There is
also self-deception, as in bad faith. It can also be called, with varying subjective
implications, beguilement, deceit, bluff, mystification, ruse, or subterfuge.

Theft –
1. Theft is defined as taking possession of something that doesn’t
belong to you. Workplace theft also includes time theft as well as
misuse of an employers’ assets.
2. Employee theft is variable in definition and severity, and should be
outlined clearly in the workers handbook even when it clearly is
unlawful to prevent disputes in legal ramifications.
3. Employers, employees, customers, clients and even the general
public are affected by theft in the workplace.

Unfair Discrimination –
  undermines your fundamental dignity, or
   denies you your human rights, or
   seeks to demean, humiliate you or create a hostile environment
making it difficult for you to work or study at Rhodes
Such behaviour is termed unfair discrimination and/or harassment. 
This type of behaviour can take many forms, some of which can easily be
identified as harassment and/or unfair discrimination while other behaviours
may be more subtle and acceptable to some but not to others.

UNIT – 3
Ethics Internal –
Internal ethical issues mainly involve the shareholders of a company, employees and the
management.

Promotion –

Promotions are designed to boost short-term sales by providing irresistible

value propositions to consumers. Coupons, holiday sales events, mail-in
rebates and givea ways all fall under the promotions category. The "bait and
switch" tactic is widely considered unethical, yet many companies still
practice this promotions technique. With bait and switch, a company
advertises a significant discount on a valuable product, but stocks only a small
number of that item in stores. Customers are lured in by the great deal, only
to discover that a completely different and often inferior product is being
promoted instead. Avoid this tactic at all costs. Even though it is legal, the
bait-and-switch tactic can tarnish your ethical reputation quickly.

Job Description –
A job description summarises the essential responsibilities, activities,
qualifications and skills for a role. Also known as a JD, this document describes
the type of work performed.
A job description should include important company details — company
mission, culture and any benefits it provides to employees. It may also specify
to whom the position reports and salary range.

An effective job advertisement will provide enough detail for candidates to

determine if they’re qualified for the position.

Employee Exploitation –
Employment exploitation or labour exploitation refers to situations where an
employee, either voluntarily or through some form of coercion, is working in
sub-par conditions or has their wages being held for work that’s being
completed. In more extreme cases, exploitation will also include instances with
the recurrent use of deception, force, or blackmail from employers.

Unfortunately, there are some ways for exploitation to be legal. It becomes

illegal when an employee oversteps the protections offered to workers. We’ll
cover the basic aspects of what can be constituted as employee exploitation by
expert workplace harassment lawyers and what you should do in either
situation.

Consumer -
Consumer ethics deals with issues pertaining to moral behaviour in consumer
markets. Because consumers are an integral part of the business process, it is
imperative to understand both the underlying motivations for their
propensities for buying ethical products and the reasons why some engage in
unethical practices, which may be helpful in curtailing many questionable
practices. S onsumer ethics deals with a variety of issues such as willingness to
benefit from questionable actions, consumer reaction to ethical transgressions
by sellers, the perception of company ethics and product purchase, willingness
of consumers to pay for socially acceptable products, and the emergence of
reasons for consumer boycotts of business organizations. In addition, research
has also investigated responsible consumer behaviour, attitudes, and
intentions to purchase specific ethical products, such ...

Fair Price –
Producers and retailers practice ethical pricing strategies to earn profits without defrauding
competitors or consumers. Despite that, competitor's prices, convenience, availability and other
factors affect consumer impressions of fair pricing.
Fales claim Advertisement –
False advertising is defined as the act of publishing, transmitting, or otherwise
publicly circulating an advertisement containing a false, misleading, or
deceptive statement, made intentionally or recklessly to promote the sale of
property, goods, or services.[1] A false advertisement can further be classified
as deceptive if the advertiser deliberately misleads the consumer, as opposed
to making an unintentional mistake. Many governments use regulations to
control false advertising.

Social Responsibility of business towards Shareholders –

i. As owners and shareholders invests their money in a business, it is the
responsibility of the business
enterprise to safeguard their investments and provide them fair and timely
returns.
ii.
Business organisations should provide complete and accurate information
about their progress and
financial position to their shareholders. This can be done through reports,
statement of profits, etc.
ili.
It is the responsibility of business organisations to minimise the wastage of
resources so that maximum
profits can be earned.
IV.
Business units should run the business efficiently. They should make maximum
utilisation of the available resources, with no or minimum wastage.

Social Responsibility of business towards employees –

1. Job security:
The security of the job provides mental peace and employees can work with
full dedication and concentration. Commitment to the work will raise their
morale and loyalty towards the organization.
2. Fair Remuneration:
The business should pay attractive salaries to all its employees. Other
incentives like bonuses, over time allowance, etc. should be given to them.
Remuneration should be fixed according to the nature of work. Suitable wage
plans providing increments and revision of wages is also essential.
3. Health and Safety Measures:
The business should protect the health and hygiene of employees. Canteen
facilities, medical facilities, and proper sanitation must be provided to the
workers. Proper maintenance of machines and premises
must be done to prevent accidents and to control pollution. Safety equipment
like hand gloves, safety shoes, helmets, goggles, masks, etc. should be
provided to concerned employees.
5. Good Working Condition:
The employees should be provided with good working conditions such as
adequate lighting, ventilation, drinking water etc Necessary steps should be
taken to avoid air, water, and sound pollution. There should be proper working
hours with lunch breaks and rest pauses etc
6. Recognition of Trade Unions:
It is the responsibility of the business organizations to maintain industrial
peace Employers must
Education and Training:
The organization should make every possible attempt to educate employees.
Guidance and methods of training depend on the nature of the job
'Introduction Training', 'Refresher Training' is conducted to keep employees
updated on the latest development. Training makes employees confident and
also it increases their efficiency
7. Workers Participation in Management:
The workers must be encouraged to take part in management by forming the
worker's committee.
Promotion and Career Opportunities.
The business should offer adequate opportunities for promotion to its talented
employees. They should give proper information about the qualifications,
skills, and experience required to Obtain promotion. It will increase awareness
among employees and they will also be motivated to take efforts
8. Proper Grievance Procedure:
there should be a proper grievance procedure to handle employees’
complaints All queries should be sorted quickly the employees must feel
satisfied. Investigations and necessary actions should be taken to settle their
grievances
9. Miscellaneous
a Fair treatment to all employees
b. To recognize, appreciate and encourage the special skills of employees.
C. how introduce a code of conduct.

Social Responsibility of business towards Customer -

1 The right to be sure about safety: The most basic consumer right is to be
sure about the safety of the product’s possession. The business organization
should taste the product and give direction to the consumer about its proper
use. If should also monitor the product’s safety that is sold to the customer.

1.2 The right to be informed: Customer has the right to receive available

information all relevant information belfry purchasing a product. The business
organization should inform the customer about the limitation, or any kind of
problem with the product. They should inform the customer about the harmful
effects of a product like, “smoking is injurious for health”

1.3 The right to choose: Customers have also the right to choose a variety of

products at competitive prices. They also have the right to buy a product of the
right quality at a fair price.

1.4 The right to be heard: The business firms should give the customers the
opportunity to be heard before taking major decisions regarding the
production of goods and services. The consumer relations depart must be
activated to learn about consumers, grievances.

1.5 After-sales service: After-sales service create faith among customers. It

grows the company’s goodwill.
1.6 Genuine advertisements: Fake advertising is very often today, it may have
some benefit for a certain period but in the long run, it will destroy a business.

1.7 Research and development: Research and development is the key to

business growth. It helps to increase the quality and decries the price of the
product or services.

1.8 Adverse effects: Company should aware of their customer if their product

or service have any adverse effects. It may decrease the sales volume but this
policy increases brand image and gain customer’s faith.