Cdreams-LMS Template-Onli12ne - MBA.pptx

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1. Business Ethics SBV OPEN - O nline P rogram for E ducatio N

2. What is Business Ethics ? "Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed.“- Andrew Crane

3. Meaning of Ethics 4 Character of a man Conduct of a person Series of Actions Good or Bad, Right or wrong, Moral or Immoral Moral Standards Decided by Leads to Taken together Considered As Known as Moral Judgement Requires By which we can Judge again

4. *Business ethics refers to moral principles and social values that business should adopt in its code of conduct. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations . *Business Ethics is the set of moral rules that govern how businesses operate, how business decisions are made , how employees are treated and how they serve the customers

5. Scope of Business Ethics

6. Ethics in compliance Business ethics play an efficient role in the compilation of business activities with legal rules and regulation. It ensures that business adheres to all established laws and any of its operations don’t go unlawful. It reduces any chance of facing any unfavorable action by authorities like payment of fines and penalty. Business following ethics in their operations frames strategies and policies in accordance with established rules and regulations. All activities are monitored and ensured that they go in accordance with framed policies.

7. Ethics in Human Resource  Ethics helps in improving the employer-employee relations and overall productivity of the business. Ethics related to human resource are introduced and implemented by Human resource management in business. HRM covers all ethical issues related to employer-employee affecting their relationship. The various issues covered are Discrimination issues, sexual harassment, employee privacy issues, salary and wages issues, safety and health issues . Ethics aims at overcoming all these issues so that employees are happy and motivated towards their roles. This booms the overall performance and reduces the risk.

8. Ethics in Finance Finance is a crucial part of every business and is needed for its successful operations. Finance should be properly managed by every business; otherwise, it may have adverse effects. Ethics aims at controlling and handling all finance issues faced by companies and employees. The various ethical issues included are accounting related, like window dressing and improper window dressing, insider trading, fake reimbursements, overbilling, bribery, kickbacks, etc.

9. Ethics in Production Ethics in business helps in monitoring and controlling the overall production activities. It ensures that production processes do not adversely affect the business. Ethics frames production policies by considering organization goals, objectives and various environmental factors. The various ethical issues covered are defective and dangerous products, environmental ethics and pollution issues, Issues arising out of new technologies and product testing issues. Implementation of ethics controls these issues and fosters overall productivity.

10. Ethics in Marketing Marketing is an important part of every business organization. It is the means through which it improves the sales and profitability of the business. Marketing practices should be ethical and should avoid the adoption of any unfair means. Implementation of ethics ensures that all marketing programmes are moral-ethical. The various ethical issues covered are pricing issues like price discrimination and price skimming, misleading advertisements, black marketing, anti-competitive practices, wrong advertisement content etc.

11. Objective of Ethics Studies human behavior and makes evaluative assessment about them as moral or immoral Establishes moral standards and norms of behavior Makes judgment upon human behavior based on these standards and norms Prescribes moral behavior and makes recommendations about how to or how not to behave Expresses an opinion or attitude about human conduct in general

12. Code of conduct :  Business  ethics is a code of conduct. It tells what to do and what not to do for the welfare of the society. All businessmen must follow this code of conduct. Based on moral and social values  : Business ethics is based on moral and social values. It contains moral and social principles (rules) for doing business. This includes self-control, consumer protection and welfare, service to society, fair treatment to social groups, not to exploit others, etc. Gives protection to social groups  : Business ethics give protection to different social groups such as consumers, employees, small businessmen, government, shareholders, creditors, etc. Provides basic framework  : Business ethics provide a basic framework for doing business. It gives the social cultural, economic, legal and other limits of business. Business must be conducted within these limits. Nature of Business Ethics

13. Voluntary : Business ethics must be voluntary. Businessmen must accept business ethics on their own. Business ethics must be like self-discipline. It must not be enforced by law. Requires education and guidance : Businessmen must be given proper education and guidance before introducing business ethics. Businessmen must be motivated to use business ethics. They must be informed about the advantages of using business ethics. Trade Associations and Chambers of Commerce must also play an active role in this matter. Relative Term : Business ethics is a relative term. That is, it changes from one business to another. It also changes from one country to another. What is considered as good in one country may be taboo in another country.

14. Importance of Business Ethics 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. Cost and risk reduction : companies which recognise 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 research 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. Limited resources : the planet has finite resources but a growing population; without ethics, those resources are repleted for purely individual gain at huge cost both to current and future generations.

15. TYPES OF BUSINESS ETHICS

16. META-ETHICS : Meta-ethics is the study of the origin and meaning of ethical concepts. It involves the examination of ethical terms such as justice and morality as broad concepts for a society. It talks about the nature of ethics and moral reasoning. It is the least precisely defined area of moral philosophy as compared to normative ethics and applied ethics. Metaphysical issues- concerning whether morality exists independently of humans or not and, Psychological issues- concerning the mental basis of our moral judgments and conduct.

17. 2. DESCRIPTIVE ETHICS: Descriptive ethics describes how people behave and what sorts of moral standards they claim to follow. People use descriptive ethics as a way to judge particular actions as good or bad based on social contract of a particular society. Descriptive ethics also change over time. For ex- the acceptability of racism changed in the United States over the course of generations.

18. 3. NORMATIVE ETHICS: Normative ethics is the study of principles, rules or theories that guide our actions and judgments to determine what is morally right or wrong. THE GOLDEN RULE- ‘We should do to others what we would want others to do to us’. (For ex- we do not want our neighbour to steal our car, then it is wrong for us to steal their car.) Other normative theories focus on a set of foundational principles or a set of good character traits.

19. 4. APPLIED ETHICS: Applied ethics is the branch of ethics which consist of the analysis of specific, controversial, moral issues such as abortion, animal rights, etc. It is subdivided into groups such as Medical ethics Sexual ethics Business ethics Environmental ethics The issue needs to be controversial where there significant groups of people both for and against the issue at hand.

20. Ground Rules of Business Ethics

21. HONESTY : Ethical executives are honest and truthful in all their dealings and they do not deliberately mislead or deceive others by misrepresentations, overstatements, partial truths, selective omissions, or any other means. INTEGRITY : Ethical executives demonstrate personal integrity and the courage of their convictions by doing what they think is right even when there is great pressure to do otherwise; they are principled, honorable and upright; they will fight for their beliefs. They will not sacrifice principle for expediency, be hypocritical, or unscrupulous.   PROMISE-KEEPING & TRUSTWORTHINESS : Ethical executives are worthy of trust. They are candid and forthcoming in supplying relevant information and correcting misapprehensions of fact, and they make every reasonable effort to fulfill the letter and spirit of their promises and commitments. They do not interpret agreements in an unreasonably technical or legalistic manner in order to rationalize non-compliance or create justifications for escaping their commitments.

22. LOYALTY : Ethical executives are worthy of trust, demonstrate fidelity and loyalty to persons and institutions by friendship in adversity, support and devotion to duty; they do not use or disclose information learned in confidence for personal advantage. They safeguard the ability to make independent professional judgments by scrupulously avoiding undue influences and conflicts of interest. They are loyal to their companies and colleagues and if they decide to accept other employment, they provide reasonable notice, respect the proprietary information of their former employer, and refuse to engage in any activities that take undue advantage of their previous positions. FAIRNESS : Ethical executives and fair and just in all dealings; they do not exercise power arbitrarily, and do not use overreaching nor indecent means to gain or maintain any advantage nor take undue advantage of another’s mistakes or difficulties. Fair persons manifest a commitment to justice, the equal treatment of individuals, tolerance for and acceptance of diversity, the they are open-minded; they are willing to admit they are wrong and, where appropriate, change their positions and beliefs.

23. CONCERN FOR OTHERS : Ethical executives are caring, compassionate, benevolent and kind; they like the Golden Rule, help those in need, and seek to accomplish their business objectives in a manner that causes the least harm and the greatest positive good. RESPECT FOR OTHERS : Ethical executives demonstrate respect for the human dignity, autonomy, privacy, rights, and interests of all those who have a stake in their decisions; they are courteous and treat all people with equal respect and dignity regardless of sex, race or national origin. LAW ABIDING : Ethical executives abide by laws, rules and regulations relating to their business activities. COMMITMENT TO EXCELLENCE : Ethical executives pursue excellence in performing their duties, are well informed and prepared, and constantly endeavor to increase their proficiency in all areas of responsibility.

24. LEADERSHIP : Ethical executives are conscious of the responsibilities and opportunities of their position of leadership and seek to be positive ethical role models by their own conduct and by helping to create an environment in which principled reasoning and ethical decision making are highly prized. REPUTATION AND MORALE : Ethical executives seek to protect and build the company’s good reputation and the morale of its employees by engaging in no conduct that might undermine respect and by taking whatever actions are necessary to correct or prevent inappropriate conduct of others. ACCOUNTABILITY : Ethical executives acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, their colleagues, their companies, and their communities.

25. FUNCTIONAL AREAS HRM OPERATIONS FINANCE MARKETING FUNCTIONAL AREAS

26. ETHICS IN

27. HUMAN RESOURCE MANANGEMENT HRM can be understood in simple terms as employing people, Developing their resources, utilising ,maintaining and compensating their services in tune with the job and organisational requirements With the view to contribute to the organisation , individuals and the Society. OR HRM is the process of planning, organising , directing and controling Human activities to achieve the organisational goals and individual Goals. MEANING

28. MEANING OF ETHICS Ethics are those values which has been imbibed within an individual on reinforced externally that help him to distinguish between right and wrong and act accordingly. There can be several source of ethics like religion,organisational culture, legal obligations, et c.

29. ETHICS IN HRM Ethics in HRM indicates the treatment of employees with ordinary decency and distributive justice. The ethical business contributes to the business goals as the employees will feel motivated and they will work with effectiveness and efficiency.

30. AREA OF HRM ETHICS Basic human rights,civil and employement fights Safety in the work place Privacy Justifiable treatment to employees(equal opportunity) Respect, fairness and honesty based process in the workplace.

31. ROLE OF HR IN PROMOTING ETHICS 1.Improve recruitment and selection 2. Conduct ethical training 3.Ensure that there are no pitfalls in performance appraisal 4.Rewards and disciplinary system 5.Improve and facilitate two way communication 6.Avoid any kind of discrimination among the employees based on certain factors like caste, religion , colour ,culture , etc. 7.Equal opportunities must be given to every employee for his advancement and development.

32. ETHICS IN MARKETING

33. WHAT IS ETHICS ??? Ethics is the art and science of determining good and bad or right and wrong moral behaviour of a single or group of people.

34. WHAT IS MARKETING ?? “ Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit” PHILIP KOTLER

35. MARKETING ETHICS It is an area that deals with the moral principles behind marketing. It applies to different spheres such as in product, pricing, placing (distribution), promotion and advertising etc.

36. WHY WE NEED ETHICS IN MARKETING ? Customers develop more positive attitudes To create values or trust. To build good image about the organisation.

37. MARKETING ETHICS INCLUDES

38. ETHICAL ISSUES IN MARKETING Product and packaging Price Placing (distribution) Promotion (advertising and branding)

39. ETHICS IN OPERATIONS MANAGEMENT

40. OPERATIONS MANAGEMENT Operations management refers to the approach of managing, designing, improving, and operating business processes or systems that are focused on producing or delivering goods and services.

41. ETHICS IN OPERATIONS MANAGEMENT Ethics IN OPERATIONS , generally defined in terms of the social, communal and environmental responsibilities. Ethics refers to a system of moral principles of an individual. Ethics refers to the rules of conduct. The customer is directly involved in the operations. Any mistake in the service that are provided will result in a loss of trust and loyalty of the customers.

42. Ethics in production is a subset of business ethic ethic Cost efficiency is sometimes achieved at the cost of quality Poor processes and technology is used to keep the cost down, this is especially true for small players who cannot afford economies of scale. Environmental concerns Safety and health of workers with proper care Disposing of waste products and recycling programs CONTD.....

43. CONTD..... An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain i.e. Suppliers Contractors Distributors Sales agents

44. ETHICS IN FINANCE

45. FINANCIAL SECTORS IN INDIA FINANCIAL REGULATORS IN INDIA RBI,IRDA,SEBI MARKETS COMMODITIES, EQUITIES, DEBT, FOREIGN EXCHANGE PLAYERS BROKERS, FIRMS, BANKS, FINANCIAL INSTITUTION, FII, MUTUAL FUND, MANAGERS, INVESTORS, EXCHANGES, DEPOSITORIES, CUSTODIAN, REGISTRAR

46. FINANCE & ETHICS INSIDER TRADING HOSTILE TAKEOVER DECEPTION CHURNING SUITABILITY EQUITY AND EFFICIENCY REMOVE UNFAIRNESS IN MARKETS

47. INSIDER TRADING Act of buying and selling a company’s stock on the basis of ‘inside’ information about the company. Insiders are directors, members of management, employees, internal auditor, connected person. Insider trading is illegal.

48. HOSTILE TAKEOVER The acquisition of one company (called the target company) by another (called the acquirer) that is accomplished by going directly to the company's shareholders or fighting to replace management to get the acquisition approved.

49. DECEPTION Act of cheating/deceiving . Provide information truthfully, understandable, non misleading way.

50. CHURNING Excessive or inappropriate trading for a client account by a broker who has control over the account with the intent to generate commissions rather than to benefit the client.

51. SUITABILITY Recommend only suitable securities and financial products

52. EQUITY & EFFICIENCY Main aim is to ensure efficiency. Maximum output with minimum input.

53. FAIRNESS IN MARKETS FRAUD & MANIPULATION EQUAL INFORMATION EFFICIENT PRICING

54. Myths about business ethics…

55. CASE STUDY NIKE ‘CONSIDERED’- AN ENVIRONMENTAL SUSTAINABILITY INITIATIVE US based Nike launched an eco-friendly shoes in 2005 under a newly created product line called ‘Considered’. It took several steps like phasing out sulfur hex a fluoride, recycling shoes and manufacturing waste to design sports surfaces and working along with several NGOs to reduce its environmental impact. Nike, ‘Considered’ is an innovative concept where designers were encouraged to design shoes using less amount of harmful adhesive and more of recycled material . Nike had developed an index called ‘Considered Index’ using which Nike’s designers could get a ranking based on the environmental friendliness.

56. Nike aimed at making its own facilities and business travel climate neutral by 2011. It had set a target of making all its footwear meet the minimum standard of ‘Considered Index’ by 2011, its apparel by 2015 and sports equipment by 2020.

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58. THANK YOU