Business Ethics in Ancient-Indian-Texts.pptx

Business-Ethics-in-Ancient India

1. Business Ethics

2. MEANING OF BUSINESS The term business refers to an organization or enterprising entity engaged in commercial, industrial, or professional activities. The purpose of a business is to organize some sort of economic production (of goods or services).

3. Introduction Ethics reflects a society’s notions about the rightness or wrongness of an act. Ethics also involves the evaluation and application of certain moral values that a society or culture has come to accept as its norms. It is generally described as a set of principles or moral conduct. The word ‘ethics’ is derived from the Greek word ethikos meaning custom or character. The Concise Oxford English Dictionary defines ethics as the treating of moral questions. But this definition is imprecise and leaves a number of loose ends. Whose morals? Which moral questions? Business ethics covers diverse areas ranging from labour practices, free and fair trade, health concerns, euthanasia to animal welfare, environmental concerns, to genetic modification, to human cloning. Perhaps the definition provided by the Chambers Dictionary comes closest to providing a workable definition: ‘ Ethics is a code of behaviour considered correct .’ Ethics is a branch of philosophy and is considered a normative science because it is concerned with the norms of human conduct, as distinguished from formal sciences such as mathematics and logic, physical sci - ences such as chemistry and physics, and empirical sciences such as economics and psychology. As a science, ethics must follow the same rigours of logical reasoning as other sciences. Ethics, as a science, involves sys- temizing , defending and recommending concepts of right and wrong behaviour

4. Definition of T.M. Garrett : Business ethics is a study of the moral rightness or wrongness of the acts involved in the production, distribution and exchange of economic goods and services .

5. MEANING OF BUSINESS ETHICS Business ethics refers to implementing appropriate business policies and practices with regard to arguably controversial subjects. Some issues that come up in a discussion of ethics include corporate governance, insider trading, bribery, discrimination, social responsibility, and fiduciary responsibilities . Business ethics, therefore, is a sum total of principles and code of conduct businessmen are expected to follow in their dealings with their fellowmen such as stockholders, employees, customers, creditors, and comply with to enact the laws of the land and to protect all these stakeholders.

6. What is Business Ethics? Moral Principles Values that guide behaviour of individuals and organisations in business Fair Dealings Honest transactions, respect for people and environment, social responsibility Sustainable Success Decisions that are financially sound and socially responsible for long-term growth

7. True or False? Is the following statement true or false? “Ethics has to do with whether my feelings are right or wrong.” True – but we must realise that sometimes our feelings can cloud are judgement and make it difficult to see both sides.

8. True or False? Is the following statement true or false? “Ethics has to do with my religious beliefs.” True – it can be linked to religious beliefs, but remember it is much more than this.

9. True or False? Is the following statement true or false? “Being ethical is doing what the law always requires.” True – people and business have to follow law, but remember that some laws may be unethical.

10. True or False? Is the following statement true or false? “Ethics consists of the standards of behaviour our society expects.” True – but remember that society is sometimes unpredictable and cruel.

11. WHAT IS NOT BUSINESS ETHICS? E THICS IS D IFFERENT F ROM R ELIGION E THICS I S N OT S YNONYMOUS W ITH L AW E THICAL S TANDARDS A RE D IFFERENT F ROM C ULTURAL T RAITS E THICS I S D IFFERENT F ROM F EELINGS E THICS I S N OT A S CIENCE IN THE S TRICTEST S ENSE OF THE T ERM E THICS I S N OT J UST A C OLLECTION OF V ALUES

12. Four Pillars of Ancient Indian Business Ethics Dharma Ethical duty and righteousness - moral obligation to act according to duty Artha Pursuit of wealth balanced with ethical principles - prosperity without immorality Karma Consequences of actions - belief that individuals are rewarded or punished based on deeds Ahimsa Non-violence - avoiding harm to others whilst promoting peace and harmony

13. Arthashastra: The Ancient Business Manual 1 Honesty & Transparency Emphasises fairness in dealings, warns against corruption 2 Social Responsibility Encourages philanthropy and community welfare contributions 3 Environmental Sustainability Wise resource use, avoiding practices that harm nature 4 Ethical Leadership Leaders prioritising community welfare over self-interest

14. Bhagavad Gita's Business Wisdom Karma Yoga Performing duties selflessly without attachment to results - ethical actions without personal gain motivation Dharmic Conduct Acting according to ethical duty, avoiding actions against moral principles Compassionate Treatment Treating others with respect, kindness and empathy whilst avoiding harmful practices Continuous Learning Pursuing knowledge and self-improvement for ethical decision-making

15. Epic Lessons: Ramayana & Mahabharata Yudhishthira's Ethics Honesty and fairness in business Duty towards employees and customers Building stakeholder trust Avoiding deceitful practices Rama's Leadership Compassion and empathy Strong stakeholder relationships Employee dignity and respect Community welfare priority

16. Modern Ethical Challenges & Ancient Solutions Corruption Solution: Dharma principles emphasise honesty, transparency and considering impact on others Environmental Degradation Solution: Ahimsa and sustainability concepts promote harmony with nature Worker Exploitation Solution: Fair labour practices balanced with dharmic pursuit of artha Social Inequality Solution: Compassion, empathy and karma consciousness for community welfare

17. Vaishya Ethics in Dharmashastras Honest Dealings Fair business practices, keeping promises, fulfilling contracts without fraud Dharmic Conduct Business according to moral principles, considering impact on others Social Responsibility Contributing to community welfare through philanthropic activities Continuous Improvement Pursuing knowledge, skills development and learning opportunities

18. Timeless Wisdom for Modern Business Enduring Principles Dharma, honesty, compassion and social responsibility remain relevant across millennia Sustainable Success Ethical behaviour creates lasting prosperity whilst contributing to societal welfare Universal Application Ancient Indian ethical frameworks provide solutions for contemporary global business challenges "By applying these timeless principles, we can create a more just and sustainable business world."

19. Ethics is closely related to trust. Most people would agree on the fact that to develop trust, behaviour must be ethical. Ethical behaviour is a necessity to gain trust. Trust will be used as an indicator variable of ethics. T rust is three-dimensional, that is, trust in supplier relationships, trust in employee relationships and trust in customer relationships. Business ethics enables us ‘assess the benefits and problems associated with different ways of managing ethics in organizations’. It helps us assess the role of business in contemporary society. Even as business contributes to the growth of the society by offering products and services, enhancing incomes and standard of living, providing jobs, paying taxes to the government and being the facilitator for economic development, its functioning often raises several ethical issues such as pollution, environmental degradation, and corrupt practices. By enabling people to understand these malpractices and the consequent repercussions, business ethics seeks to improve the welfare of the society by offering a social and political platform for remedial, and sometimes proactive action. Why is business ethics important?

20. Why is business ethics important? Business ethics ensure that companies operate according to all applicable laws. This maintains the company's respect among its peers and customers and protects it from legal liability. A company's ethics also help it attract quality team members. Businesses that care for their teams according to the highest ethical standards are often attractive to job seekers. Ethical treatment can also increase employee retention and reduce hiring and training costs. A business that treats its customers or clients ethically can build trust and create longstanding relationships. These customers are likely to return and may recommend the business to people within their sphere of influence. Also, a business known for its effective ethical principles can gain respect and elevate the quality of its brand.

21. We can point out to numerous examples of companies whose top managements are involved in unethical practices, for example , Enron and WorldCom, in 2002 and a host of others including investment bankers Lehman Brothers and Merrill Lynch in 2008. Earlier it was said that ‘ business of business is business’. In the contemporary scenario where ethics has got its due importance, the slogan has taken the form: ‘the business of business is ethical business’ . Applying ethics in business makes good sense because it induces others to follow ethics in their behaviour . The Tata Code of Conduct affirms that ‘The Tata name represents more than a century of ethical conduct of business in a wide array of markets and commercial activities in India and abroad. As the owner of the Tata mark, Tata Sons Ltd., wishes to strengthen the Tata brand by formulating the Tata Code of Conduct, enunciating the values that have governed and shall govern the conduct and activities of companies associating with or using the Tata name and of their employees’

22. Enron (2001–2002): Enron, once considered an innovative energy giant, collapsed due to widespread accounting fraud. The company used  mark-to-market accounting  to record projected profits from long-term contracts as if they were immediate earnings. At the same time, it created  special purpose entities (SPEs)  to hide mounting debts and losses from investors. These deceptive practices painted a false picture of profitability and stability, luring investors while masking the company’s true financial health. When the fraud was exposed, Enron filed for bankruptcy, wiping out employee pensions, jobs, and billions in shareholder value. WorldCom (2002): WorldCom, a leading telecommunications company, engaged in one of the largest accounting scandals in history. Its executives fraudulently classified routine operating expenses—such as fees paid to lease telephone lines—as capital investments. This allowed them to artificially inflate profits by nearly  $11 billion . The manipulation gave the illusion of growth and profitability, misleading investors and regulators. Eventually, the fraud came to light, leading to the company’s bankruptcy and massive financial losses for shareholders and employees. Lehman Brothers (2008): Lehman Brothers, a global investment bank, played a central role in the 2008 financial crisis. The firm relied heavily on mortgage-backed securities tied to risky subprime loans and used an accounting trick called  Repo 105 . This method temporarily moved billions of dollars off its balance sheet to make the company appear less leveraged and more financially stable than it truly was. When housing markets collapsed and the risks became visible, Lehman could no longer sustain itself and filed for bankruptcy—the largest in U.S. history—sending shockwaves across global financial markets. Merrill Lynch (2008): Merrill Lynch, another major investment bank, was deeply involved in selling  toxic mortgage-backed securities . While aggressively promoting these products to investors, the firm downplayed the risks associated with subprime mortgages. Even as losses mounted, the company awarded its executives large bonuses, reflecting a culture of short-term profit over long-term responsibility. The mounting losses eventually forced Merrill Lynch into a hurried sale to Bank of America, highlighting how unethical practices and misaligned incentives contributed to the broader financial meltdown.

23. Need for Business ethics Survival of the Business Unit Growth of Business Unit Earning Goodwill Improving the Confidence Maintaining Inter-relationship Solving Social Proble ms

24. Principles of Business Ethics

25. Types of Business Ethics

26. Factors which necessitate ethical behavior in business Ours is an industrial society and its values tend to become those of the entire culture. There is a growing awareness among the public. The society insists the business leaders to shoulder the responsibility for maintaining their welfare. If an organization fails to live upon the expectations of the society, it will lose its market share, its prestige and reputation. Unethical practices shall lead to Government control ultimately through legislation. Hence, prevention is better than cure.

27. Basis Ethics  Values Meaning Ethics can be defined as a study of moral behavior and defining what is right and wrong in the behavior of an individual. Values are deeply-held beliefs and principles that individuals or groups consider important and desirable.  Scope Ethics are often concerned with distinguishing between right and wrong conduct within a particular domain, such as professional ethics or medical ethics. Values encompass a broader range of principles that guide attitudes, behaviors, and decision-making across various aspects of life, including personal, professional, and societal domains. Consistency Ethics are uniform everywhere. Values are not consistent and differ from person to person.  Origin Ethics may derive from cultural, religious, philosophical, or legal sources and are often formalized into codes of conduct, professional standards, or legal regulations. Values are shaped by a combination of factors, including cultural upbringing, family background, education, and personal experiences, and may not necessarily have a moral or ethical component. Application Ethics provide a framework for evaluating behavior and making decisions, especially in morally ambiguous situations or dilemmas. Values serve as guiding principles that influence behavior and attitudes, shaping individual or collective priorities and preferences. Outcome Ethics determines the extent of rightness or wrongness. Level of importance is determined through values. Examples Examples of ethical principles include honesty, integrity, fairness, respect for others, and responsibility. Examples include personal integrity, social justice, environmental sustainability, freedom, equality, loyalty, compassion, and tolerance.