▪​ Ethical Decision-Making in Business

▪​ Module III

ETHICAL DECISION-MAKING FRAMEWORK IN BUSINESS

▪​ [Link] Issue Intensity
▪​ Relevance or importance of an ethical issue in the eyes of the individual,work group or
organisation.

▪​ Reflects the ethical sensitivity of the individual or work group

▪​ Spheres of influence-workplace,family,religion,legal system,community and profession

▪​ Organisations must identify areas of ethical issues,train employees, and sensitize

employees

▪​ 2. Individual factors
▪​ Age,Gender,educational qualification and nationality are the major influencers

▪​ Decided by moral philosophies and cognitive moral development

▪​ These individual differences affect the ethical judgment of managers to a great extent

▪​ Personal ethical issues involve honesty,conflicts of interest,discrimination,nepotism,theft

of organisational resource

▪​ Kohlberg’s Model of Cognitive Moral Development

STAGE FEATURES

[Link] avoidance Being ethical to avoid punishment

[Link] Purpose and Exchange Following norms for immediate rewa

 [Link] expectation and Conformity Doing good for sake of Relationship

[Link] system and conscience maintenance Duty and respect for authority is foc

[Link] contract orientation Sense of social obligation and commit

[Link] ethical principles Self-chosen ethical principles backed

▪​ [Link] Factors
​ Corporate culture​ -a set of values ,beliefs, goals,norms and ways of problem
solving shared among organisational members.

​ Ethical climate -character or decision processes employees use to evaluate their

responses to ethical issues.

​ Significant others​ -obedience to authority and those who have influence over
workgroup.
▪​ [Link] Opportunity
▪​ the conditions in an organization that limit or permit ethical or unethical behavior.

▪​ Individual job context is the main aspect

▪​ Ethical Decision Making Process
▪​ Heinz Dilemma-Worked out
▪​ ANALYSIS
▪​ People(ethical stance)
▪​ Identify dilemma-(compare with ideal)
▪​ What options -(Information needed)
▪​ Alternatives-(list down all)
▪​ Arguments-(evaluate based on theory)
▪​ Decision-(with justification)
▪​ Implementation-(How could the dilemma be dealt with)
▪​ Review-(period,method)

▪​ CASELETS
 ▪​ An IT manager is choosing a supplier of a large fleet of computers. One supplier’s product
is slightly inferior to the other, but the supplier offers the manager a free computer for
home use if the manager chooses the supplier.

▪​ A trainee at a design company is learning to use an expensive CAD program. Each day
she borrows the program’s CD-ROM and practices using the software. Notices in
company say that copying software is forbidden. One day, she copies the CD so she can
work on her training at home and become a more skilled worker.

▪​ Whistle Blowing
▪​ Making a disclosure , by a member or former member of organization, in the public
interest regarding unethical practice in workplace
▪​ The act of releasing information (as a form of moral protest) about the illegal and/or
unethical conduct of a business or organization that you are (or were) a member of.

▪​ Whistle blowers are protected by well-laid systems-Whistle Blowers Protection Act,

2011

▪​ Conditions

▪​ Loyalty to people at large and not to an individual or institution is the guiding principle.
A legitimate claim
The right motive
Exhausted alternatives
Done in good faith

▪​ Reference:
▪​ The Whistle Blowers Protection (Amendment) Bill, 2015

[Link] ETHICS
Defined as how moral standards are applied to marketing decisions, behaviours and
institutions.

Fairness in transactions
Freedom of stakeholders
Wellbeing with regard to social impact
ETHICAL AREAS IN MARKETING

Marketing Research
•​ Privacy protection
•​ conclusions must not be generalised based on smaller numbers.
•​ Confidentiality of data
•​ Avoid using data for unintended purposes.
•​ Maintain Integrity
•​ No sales,stress for research
Marketing Mix
•​ Products ensuring quality,utility and safety
•​ Fair Price avoiding price fixing,predation etc.
•​ Distribution without reciprocal dealing
•​ Promotion without false claims,surrogate ads,stereotyping etc.
•​ Process audits
•​ People with good moral background
•​ Physical evidence for positive influence.
Competition
•​ Fair practices
•​ No exploitation of stakeholders
•​ Compliance with laws and regulations.

[Link] ISSUES IN HR

Discrimination issues
Suppression of democratic rights in workplace
Privacy issues-personal and performance
Safety and health
Performance Appraisal

HR Role
•​ Top management should serve as role model
•​ Evolve code of ethics
•​ Ethics committee to advice on ethical issues
•​ Company journals with articles on ethics
•​ Ethics training
•​ Disciplinary system

[Link] IN FINANCIAL MANAGEMENT

Financial statements
Fraud reporting of revenues,asset valuation,liabilities and expenses etc
Misleading disclosures or omittance of needed information
Financial markets
 Deception and churning ,Insider trading,Hostile takeovers etc.
Information security

[Link] IN IT
Information handling
Password security,data confidentiality,hacking
Intellectual Property Rights
Software piracy,illegal use of algorithm,source code,trade secret..
Fraud communication
Spoofing,phishing
Cyber crimes
Cyber terrorism,internet extortion,stalking etc.

Robotics Ethics-The ethics inspiring the design ,development and employment of

intelligent machines.

[Link] IN PRODUCTION MANAGEMENT

Ethically produced goods are,those produced under conditions of
Progressive stakeholder relations,
Advanced environmental practices
Respect for human right

[Link]
Regarding NOC`s
Regarding land allocation
Regarding plant layout
Proper periodic inspection
Regarding implementation of rules

Organisation practices

Environmental policies in CSR

Rain water harvesting
Organizing camps to aware farmers
Water treatment plant
Industries should follow the rules/laws of govt. to preserve environment
Free pollution check by govt

ENVIRONMENTAL ETHICS
The discipline that studies about human relationship with natural environment and its contents.
Examines the ethical decisions regarding management,protection or endangerment of natural
environment.

Leads to sustainability ethics

PRINCIPLES OF ENVIRONMENTAL ETHICS

Extending human moral standards to non-humans
Animal rights
Land ethics

Radical ecology of changing human centred ethics to ecological system centred

Deep ecology - high interest in environment
Social ecology -no dominance of any species
Ecofeminism-connects women with nature

Gender Ethics
Equality irrespective of gender differences
Diversity training
Effective gender reporting
outlining gender policies ,programmes
Monitoring for continous improvement
Transparency

Environmental Management- Vedic times

▪​ Rig Veda speak on behalf of earth for its principle of replenishment "You give me and I
give you”
▪​ Earth has the same relationship with man as the mother with her child( Rig Veda
10-17-10)
▪​ The Panchabhutas- worship for sustenance,water is dominant
▪​ Water resources glorified as natural cleanser (Rig Veda 10-9-4)
▪​ Yajna cleans atmosphere through its medicinal smoke, and provides longevity, increasing
the crop production (Yajurveda 9.21)
▪​ maintenance of the season’s cycles that are likely to get altered due to the climate change
owing to inappropriate human actions (Samaveda)
▪​ Bhumi Suktha-Mother Earth was celebrated for all her natural bounties and particularly
for her gift of herbs and vegetation (Atharva Veda-12.34)

Environmental Management- Modern times

ISO 14001:2015 has the three primary goals of giving you a system that will:
Enhance environmental performance
Keep you in compliance with environmental regulations
Setting and meeting environmental improvement goals
Environmental Management System (EMS) is "a system and database which integrates
procedures and processes for training of personnel, monitoring, summarizing, and reporting of
 specialized environmental performance information to internal and external stakeholders of a
firm“.
National Environment Policy
-advocates use of Economic Principles in Environmental Decision making, and Innovation.
-Research& Education, Culture & Traditional Knowledge, Opportunities & Issues, Political,
Government & Non-government Institutional requirements, National & International
Commitments and Legal& Cultural Practices

ETHICS IN INTERNATIONAL BUSINESS

unique ethical climate of each market must be considered while framing code of ethics
include international employees in the process of creating ethics program.

Decide on a case-by-case basis which local customs to follow and which to avoid
following home country's ethical standards around the world, turn down opportunities in markets
with unfavorable ethical climates