Business ethics and spirituality at work place

Varinder Head, Department of Commerce,N.J.S.A. Govt College, Kapurthala

Why we need ethics?• Image of the company is most important.• It has been found that corporations won the

legal battles, but lost the image.• Executives are learning that trust, integrity

and fairness do matter and are crucial to the bottom line figures.

• People do not view organization as source of economic benefits, but place to find meaning.

• The growing number of corporate frauds can damage the interest of the various stakeholders in the company.

Potential benefits of ethical compliance

• Instill confidence among various stakeholders especially minority investors, foreign investors, etc.

• Attract investors• Attract talented employees• Contribute to stability and growth

Five most rewarding minds of future-Howard Gardner

1. Disciplined mind2. Creative mind3. Synthesizing mind4. Respectful mind5. Ethical mind

Accountant’s role in checking frauds

• Accountant’s role in checking frauds is doubtful because of their collaboration with the persons managing the company.

• One study shows that accounts hardly find 14.1% frauds committed.

• Osama Bin Laden’s new Career Path: If I am to do real damage to the America, I have got to give up terrorism and become an accountant. (Quinn Mills)

Osama Bin Anderson

EBIT-Earning Before Irregularities and TamperingCEO-Chief Embezzlement OfficerCFO-Corporate Fraud OfficerNAV-Normal Andersen ValuationP/E-Parole EntitlementEPS-Eventual Prison SentenceD Quinn Mills, Wheel, Deal and Steal, 2003.

Failure of legal systems• Of course there is law for the protection of various

interest groups like minority shareholders, independence of directors, employees, etc. But law has more or less failed to check the bad things.

• More the law is more loopholes are • Legal approach aims at prevention of unlawful

conduct and following of rules and regulations.• In fact law is the minimum floor, ethics are the

roof to the touched and spirituality is beyond those rules of law as well as do and do nots of morality.

Nature of ethics

• Ethics are the subject that deal with human beings. Human by their nature are capable of judging between right and wrong, good and bad behavior. Thus, the question of ethics arises, as the human beings are associated with values and morals.

• Ethics are normative as they guide or control the actions.

Nature of ethics

• Ethics are more science than art. It is systematic knowledge about moral behavior and conduct of human beings.

• Ethics are more normative science.• Ethics deal with human conduct that is

voluntary and not forced by any persons or circumstances.

• Ethics are relative to time and place.

Ethics and existentialists perspective

• Existentialist philosophy views existence comes first and essence later on as man’s interaction with the contemporary world.

• Man is basically free, society is arbitrary. • Freedom means responsibility.• Ethics are the responsible use of freedom.• Here Victor Frankl :Man’s Search for meaning

Objectives of Business Ethics

• To establish moral standards and norms of the behavior.

• To judge and assess the human behavior in the organization in the light of those established norms.

• To balance the conflicts of various stakeholders.• To foster the growth, success and survival of

the business on long term basis.

Ethical problems of business

• Most businesses encounter two types of ethical problems:-overt and covert

• Overt ethical problems deals with bribery, theft, collusion, etc.

• Covert ethical situations occur in corporate acquisitions, marketing, and personnel policies, capital investments, etc. They are more complex and conflicting.

Stages of ethical consciousness in business

1. Law of jungle.2. Anything for profit3. Profit maximisation in the short run4. Profit maximisation in the long run5. Stakeholder concept6. Corporate citizenship

Why ethical lapses occur

1. Bad apple 2. Bad barrel3. Competitive pressures4. Opportunity pressures5. Narrow interpretation of morality.

Right consciousness : right actions always proceed from right consciousness.

Establishing ethical standards

1. Eternal law: religious beliefs.2. Utilitarian theory: Bentham and J.S. Mill, conduct

should benefit the largest number of people.3. Universalist Theory: Immanual Kant: not outcome

but intentions. Eliminate self interest: (a) to act only in ways that one should wish all others to act, faced with the same set of circumstances, (b) to treat other people with dignity and respect.

Establishing Ethical standards

4. Distributive Justice: John Rawl, Justice: each person according to his contribution and competence.

5. Personal freedom: existentialist perspective. Freedom with responsibility( ability to respond)

Implementing and maintaining Ethical standards

1. Create a company credo2. Develop a code of ethics3. Enforce the code fairly and consistently4. The right people5. Conduct ethics training.6. Set an impeccable ethical example at all times.7. Create a culture that emphasize two way

communication.8. Involve employees in establishing ethical

standards.

A ethical framework

1. Recognize the ethical dimensions involved in the dilemma or decisions.

2. Identify the key stakeholders involved and determine how the decision will affect them.

3. Generate alternative choices and distinguish between ethical and unethical responses.

4. Choose the best ethical response and implement it.