Sandeep SinghReader

School of Management Sciences, Varanasi

e-mail:spiritualcentre@smsvaranasi.com

BUSINESS ETHICSand

SPIRITUALITY

“Business ethics is rules, standards, codes, or principles which provide guidelines for morally right behavior and truthfulness in specific situations.” (Lewis)

“Business ethics is the study of business situation, activities, and decisions where issues of right and wrong are addressed.” (Crane and Matten)

“Business ethics refers to clear standards and norms that help employees to distinguish right from wrong behaviour at work.” ( The Ethics Resource Centre)

“Business ethics has to do with the extent to which a person’s behaviour measures up to such standards as the law, organizational policies, professional and trade association codes, popular expectations regarding fairness and what is right, plus one’s own internalized moral standards”. ( William Sauser)

“Business ethics is disciplined normative reflection on the nature, meaning and context of business activity. As such it deals with comprehensive questions about the justice of the economic context in which business operates and about the nature, function, structure and scope of business in that context, as well as with more specific issues raised by the relationship of business to government, the consumer, its employees, and society at large”. ( Hoffman and Moore)

“Business ethics is a study of moral standards and how these apply to the systems and organizations through which modern societies produce and distribute goods and services, and to the people who work within these organizations. Business ethics, in other words, is a form of applied ethics. It includes not only the analysis of moral norms and moral values, but also attempts to apply the conclusions of this analysis to that assortment of institutions, technologies, transactions, activities, and pursuits that we call business.” (Manuel Velasquez)

• Framework- Set of rules, standards, codes, principles, philosophy etc. to be followed for ethical decision making in business.

• Internal development of ethical traits-Development of virtues, values, morality and inner conscience.

• Situation- Business situations demanding ethical judgements.

• Behaviour- Ethical behaviour from the legal, stakeholder and humanity point of view.

Nature of Business Ethics

Complex Dynamic

Interdependent Subjective

• Complex because of no common consensus • Dynamic because of dynamic nature of business

decision making • Interdependent because ethical decision making

is dependent on many factors and one’s decision affect others.

• Subjective because the frameworks referred for ethical decision making are usually normative and are varied in nature. These frameworks differ from people to people and organization to organization.

There may be varied

arguments regarding business ethics but one

commonly accepted

fact is that intensity of ethics in business

will always be limited to the extent

of ethical behaviour shown by those

who are involved in business.

So the human factor is the key.

Significant Developments in Business Credited to Business Ethics

• Profit is no more considered as the sole objective of business.

• Instead of maximization of shareholders wealth now the focus of business organizations is on stakeholder approach.

• Many large business organizations are involved in socially responsible activities.

• Environmental issues are now openly discussed by business world.

• Framework of Corporate Governance has improved considerably.

Many business organizations have already framed their ethical code of conduct and are strictly following it.

Business ethics is no more considered as an undesirable transgression into the functioning of business organizations. Instead organizations themselves are taking it seriously and now consider it as good for business.

Perceptions Regarding Business Ethics

Rules, Standards or Codes Governing an Individual or

Organization

Rules, Standards or Codes Governing an Individual or

OrganizationMorality, Virtues,

Values Morality, Virtues,

Values Clarity of Right and

WrongClarity of Right and

Wrong

Honesty, IntegrityHonesty, Integrity

Character, ConscienceCharacter, Conscience

Situational and Temporal

Situational and Temporal

Being True to Oneself

Being True to Oneself

Stakeholder Approach

Stakeholder Approach

Objectives of Business Ethics

Arguments ‘against’ the Business Ethics

• Milton Friedman, a Nobel laureate had suggested that there is no need for business people to bring ethical factors into their managerial decision making. He believed that when they have occupied the role of business then automatically they are supposed to throw away their role of autonomous moral agent in favour of making efforts for fulfilling the purpose of shareholders. According to Friedman there is one and only social responsibility of business and that is to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which to say, engages in open and free competition without deception or fraud.

John Ladd believes that by virtue of basic nature of business organization the possibility of ethical evaluation of its actions is ruled out. Ladd argues that there are specific goals of business which are meant to be achieved and these goals are non-moral. So, business organizations should be evaluated from the point of view of achieving those specific goals successfully or not instead of from the point of view of ethics or morality.

Another argument against the business ethics is that the organizations and corporations can’t be held morally responsible for anything, simply because they don’t act, it’s the individuals who act.

According to free economy promoters, the market regulate itself without any need for externally induced controls. So let the rules of the economy and free markets work instead of the rules of ethics.

Arguments ‘for’ the Business Ethics

• Those who argue for the business ethics are of the view that the profit is not the only motive of business; business organizations deserves ethical reasoning; business does not enjoy any special status and morality is as much applicable to it as to any one else; and rules of ethics and morality are as much intrinsic to business as the rules of economy and free markets. The acts of bribery, corruption, and deception in business are strongly criticized in this view.

• As the organizations are run by individuals they are as much liable for ethical judgements as any individual. They can’t get away by stating their impersonal nature.

• The special status for business free from ethical evaluation is also opposed by many economists, philosophers, academicians, and other ethicists. They argue that ethics and business can’t be separated and there is no ethical relativism between business and others.

• Peter Drucker argues that ethical code remains same for everybody whoever he may be. It is same for rich, poor, kings, business leaders, managers, mighty or meek.

• For business to operate successfully and in accepted manner these social interactions should provide mutual benefits and for that ethics is one key element that make these interactions mutually fruitful.

• Against the argument of allowing rules of economy and free markets to operate without ethical considerations, ethicists argue that businesses operate in a society and their actions have both direct and indirect impact on the society and so many cases of fraud, corruption, and bribery have come up in recent times doing excessive harm to the society that relevance of ethics to business is more than ever. Rules of free markets in no way can justify fraud, corruption, bribery, deception, and other immoral acts.

Three Role of Business Ethics

The first role of business ethics is to do three level investigation

The second role is to develop theoretical foundations of universal nature for business ethics on the basis of three level investigation or study such as:

RulesRules

Standards Standards

CodesCodes

PrinciplesPrinciples

TheoriesTheories

VirtuesVirtues

Normative StatementsNormative Statements

ModelsModels

Importance of Business Ethics

Morality and Ethics

Morality is concerned with understanding of what is right and wrong behaviour. In the study of business ethics many people treat the concept of ethics and morality as same. There is no harm in it. However treating them as different but strongly inter-related is a better approach in enriching the field of business ethics. Morality could be considered as one of the subject matter of study in business ethics.

Difference between Morality and Ethics

Ethics Morality

1. Ethics is the study of framework such as standards, Morality is right action, conduct or behaviour

principles, rules or codes and traits for ensuring

right action, behaviour or conduct.

2. Ethics is the philosophical study of morality Morality is the subject matter of ethics

3. Ethics encompasses morality Morality is the sub-field of ethics

4. Ethics attempts to bring rationalization to morality Morality gets rationalization through ethics

5. Ethics tries to systemize morality Morality becomes systematic through ethics

6. Ethics legitimizes morality Morality gets legitimized through ethics

7. Ethics is covert as well as overt Morality is overt

Rest Model of Moral Behaviour

Kohlberg Model of Moral Development

Virtues and EthicsThe word virtue is derived from the Greek word

‘arete’ which is translated as excellence.Virtues are the good moral habits that are

acquired over a period of time by repeatedly choosing the good.

Virtues play an important role in the decision making process of individuals and that is why virtues are important from the ethics point of view.

The foundation of morality lies in the development of virtues.

Good character traits or moral habits, when learned and practiced repeatedly, gets cultured or internalized in the people and takes the form of virtues.

Right conduct, action or behaviour of an individual which we call morality can be temporal but through the development of virtues righteousness becomes a habit.

Virtues imply that there is a set of qualities which will make people fulfill their functions as people, properly and well. Without virtue, people are unable to do justice with their tasks.

For Aristotle, the difference between doing something and doing it well or excellently lies in virtues. In other words, we do not display virtue when we do something that happens to be good, but we must act with a deliberate desire to perform our function as human beings properly.

Aristotle on Virtues

Spirituality and Business EthicsSpirituality is integral and holistic, incorporating

within itself the material, moral and cultural values.

There is a misconception regarding spirituality that spiritual value is opposed to the material one.

The term ‘spiritual’ as also the Sanskrit substitute “Atmika” or “Adhyatmik” literally meaning any thing that pertains to the spirit (the Self or soul or atman).

There are virtues and values associated with spirit (Atman) as its very nature, provided the Atman (spirit) is in natural state, freed from impurities.

Impurity here means something that is mental – it is ego and selfishness and raga (infatuation or favoritism) and Dvesa (abhorrence or enmity). So, purity would really mean freedom from these mental impurities, and not rejection of material life.

For the practice of value it is not necessary to have metaphysical (ontological) presupposition about the spirit (the Self) – neither for the practice of morality, nor for the spirituality. One can practice morality, for example, even without believing in the higher Self (the higher spirit) or God.

One can practice the spiritual values just with phenomenal and limited self, present in the body, even without accepting any extraordinary metaphysical status of the existing self.

The Budhist and the Jaina way of life is highly spiritual and yet there is no belief in God there.

In the Brahmana (Vedic) tradition too, half of the philosophical schools (Vaisesika, Samkhya and Mimamsa) do not believe in God and yet they present a moral and spiritual way of life to follow, although the definition of morality and spirituality differs from school to school.

However, faith in God or the Higher Self strengthens the moral and spiritual attitude, and facilitates the ethico-spiritual living. So, faith in the metaphysical spiritual reality is also a value – a supplementary value.

Two Aspects of SpritualityWhile defining spirituality, we have to understand

that there are two aspects of spirituality – a negative aspect and a positive aspect, and the two aspects are complementary to each other. Negatively, spirituality means melting or effacing the ego, and positively it means realizing one’s unity with others (or in other words, having universal love).

Ego is the principle of differentiation of oneself from others; ego rests on the feeling of otherness (what in the spiritual philosophy is technically called ‘dvaitabhava’ or ‘bheda-bhava’).

Ego takes place when I do not consider the so-called others as ‘me’ or ‘my own’ and cut myself off from them and confine myself to my own individuality.

In the ego-state we wish only the good of ourselves and not the good of others, we impose ourselves on others and even exploit others for our own end. Selfishness and ego are like the two sides of one and the same coin.

Ego is the foundation and the root cause of all evil, of all immorality.

If spirituality negatively means effacement of the ego, and if the ego means separating oneself from the others and confining oneself to one's own individuality and taking into consideration only oneself and the others, then it becomes easy to understand the positive meaning of spirituality as what in the spiritual philosophy is technically called 'Advaita-bhava' or 'Abheda-bhava' which means feeling of one's unity with all.

Spirituality is the state of consciousness in which the feeling of otherness is gone and the feeling of affinity and unity with the so-called others is established.

The feeling of unity can be explained with the help of examples. One such example is that of the loving mother. The mother feels that the children are her own or herself; the happiness and suffering of the children are the happiness and suffering of the mother. The bodies of the children are separated from the mother, and in that sense the children are 'others' to her, but in her consciousness or in her feeling they are not others. What she does good for the children, she thinks she is doing for her own self, as she feels that the children are herself or her own. This is what is called love. Thus love is the meaning of spirituality; love is 'the' spiritual value.

Love is considered as 'the' spiritual value. But love should be distinguished from such mental states and situations that are falsely taken to be love. For example, infatuation, possessiveness, selfish attachment, etc are not love. Love may be understood as the opposite of selfishness.

In love which is the spiritual value, there is natural synthesis of what is called 'Sreya' (the good) and 'Preya' (the pleasant). Love is actually the two in one – the good and the pleasant both at once.

In love the good of oneself and the good of others become one, as the 'others' too become one's own. Morality becomes natural in love, as one would not exploit the beloved person and, on the contrary, would do good to him/her.

Thus the spiritual value (love) satisfies the demands of Dharma (morality) and Sukha (pleasure or happiness) both at once. It gives immense pleasure and satisfaction to oneself on the one hand, and on the other hand one becomes spontaneously inclined to do good to the so called others.

Egolessness and love or the feeling of unity-are the two negative and positive meanings of spirituality. The two meanings are complementary to each other, or it would be more true to say that the two denote one and same state of consciousness. One cannot be loving without being egoless, because the very meaning of ego is the separation of oneself from others and more the ego is tight, the less loving we are.

There is inverse relationship between love and ego.

That is why Kabir, the great mystic poet, has said; "If you want to drink the nectar of love and also want to keep up your ego, this is impossible like putting two swords in one and same sheath“.

Karuna (compassion), Bhakti or Bhaktiyoga (surrender to God or surrender to Truth), Jnana or Jnanayoga (Advaita-bhava or realization of one's unity with all beings), Karmayoga (doing all work with the sense of being the instrument of God or with the sense of selfless duty) – all these are co-relates or corollaries of the central spiritual value which negatively means egolessness and positively means love or unity of oneself with all.

Difference Between Spirituality and Morality

In the general Western tradition, morality is accepted as the highest value. (However, there are strong exceptions also, for whom spirituality is the highest value.). But in the Indian tradition, spirituality is taken to be the highest or the ultimate value. This is not because the moral value is underrated - not at all; the moral value (Dharma) is rated very high and is taken to be absolutely necessary for life–both individual and social. But spirituality is placed even above morality (or above mere morality) because spirituality (Adhyatma) naturally incorporates morality (Dharma) within itself; it is the state of natural morality. Moreover, the morality present in spirituality is free from its possible minus points, namely (i) the ego, (ii) the effort or exertion of the will, and (iii) the dichotomy of Sreya and Preya. Mere morality, although valuable in itself, is a dry value, in order to be more effective and more satisfying, it has to be saturated with spirituality.

Understanding Moral and Spiritual Impurity

There are two types of impurity–the moral impurity and the spiritual impurity.

Unscrupulous life of deceit, dishonesty, corruption including various kinds of crime, etc. – all these come under the category of moral impurity.

There may be persons who are free from these impurities (the moral ones) and yet they may be suffering from another kind of impurity which is equally bad, sometimes even worse. This is what is called 'Ahamkara' (ego).

Ego is the spiritual impurity. The moral impurity harms and hurts others; ego too hurts,

sometimes even more deeply. Therefore, it is necessary to free oneself not only from the moral impurities but also from ego.

One cannot be called pure-hearted unless one is free from both these impurities. The life of values cannot become perfect with moral perfection alone; the spiritual value of egolessness (resulting in love) must also be incorporated; then alone the life of values world become complete.

Spiritual Lessons for Business Leaders

Acquisition of material wealth (Artha) and satisfaction of desires (Kama) become unhealthy only when they are done selfishly and egoistically.

Remove the feeling of possessiveness (mamatva) towards the wealth and become unattached (Anasakta) with the wealth. Then enjoy the wealth in an unattached manner, and in the unattached state of consciousness. Then you will find that you enjoy the wealth far better.

The psychology of relishing or enjoying is that if we are strongly attached, the degree of relishment or enjoyment is very low; whereas if we are unattached, the enjoyment is much better.

It can be safely proposed that only an unattached person can really enjoy the world; the attached (Asakta) person accumulates and possesses but does not enjoy.

The purity of money means that it is spent not only for your good but for the good of all (of course, including yourself). The society has share in your earning because you are indebted to the society, and you can clear your debt to the society by parting with the extra money and giving the society their share.

One who appropriates all money for oneself without giving others their due share, is virtually a thief (“… yo bhunkte stena eva sah …”) or "... such a person is a thief and deserves punishment …" (“ … sasteno dandamarhati”) or, "…those who cook only for themselves, eat sin…" (bhunjate te tvaghnan papa ye pacantyatma karmat”).

Spiritual Lesson for Corporate Social Responsibility

• Serve the people not in charity but in love

• Charity is moral act but service with love is spiritual act.

• The act of charity may generate ego, but the service done out of love reduces or melts the ego.

Make Material Life SpiritualBy cultivating proper attitude towards Nature and

the world, the material life itself can be made spiritual and the so-called dichotomy between the material and the spiritual be abolished.

Really there is no dichotomy between the two, we have created the dichotomy by vitiating the world of matter. It is we who have made the material life impure by our ego and selfishness.

If the material life is freed from the ego and selfishness, it itself would become spiritual; in fact, originally it 'is' spiritual, the impurity is introduced from our side.

" Love gives and forgives, selfishness gets and forgets".

(Sai Baba)