VALUESVALUES Values defined as beliefs that guide actions and Values defined as beliefs that guide actions and

judgment across a variety of situations.judgment across a variety of situations.

Values represent basic convictions that a specific Values represent basic convictions that a specific mode of conduct is personally or socially preferable mode of conduct is personally or socially preferable to an opposite mode of conduct. (Businessman is to an opposite mode of conduct. (Businessman is expected to give true information about his product expected to give true information about his product rather than making false claims)---rather than making false claims)---RokeachRokeach

The word value derived from French word ‘valoir’ The word value derived from French word ‘valoir’ means worth ,merit, usefulness, importance of a means worth ,merit, usefulness, importance of a thing. thing.

Features of values.Features of values. Values are comprehensive standards Values are comprehensive standards

that direct conduct in a variety of that direct conduct in a variety of ways.ways.

Values guides us to take specific Values guides us to take specific positions on societal issues.positions on societal issues.

Values provides standards of morality.Values provides standards of morality. Values are most central to the core of Values are most central to the core of

person.person.

Values have two attributes-- content Values have two attributes-- content and intensity. The content attribute and intensity. The content attribute stresses that a particular conduct is stresses that a particular conduct is important. The intensity attribute important. The intensity attribute specifies how important that particular specifies how important that particular conduct is.conduct is.

Values are not fixed, they change over Values are not fixed, they change over time.time.

Many values are relatively stable and Many values are relatively stable and enduring. This is because of the way in enduring. This is because of the way in which they are originally learned.which they are originally learned.

We have a hierarchy of values that We have a hierarchy of values that form our value system.form our value system.

Types of valuesTypes of values Rockeach’s classificationRockeach’s classification::1.1. Terminal values : It reflects what a Terminal values : It reflects what a

person is ultimately striving to achieve.person is ultimately striving to achieve.( comfotable life, family security, Inner ( comfotable life, family security, Inner harmony , self respect….)harmony , self respect….)

2.2. Instrumental values : relates to means Instrumental values : relates to means for achieving desired ends. It is a tool for achieving desired ends. It is a tool to acquire terminal values. ( Honest, to acquire terminal values. ( Honest, courage, imaginative Independent, courage, imaginative Independent, ambitions,)ambitions,)

G.W Allport’s ClassificationsG.W Allport’s Classifications1.1. Theoretical : interest in the discovery of Theoretical : interest in the discovery of

truth through reasoning and systamatic truth through reasoning and systamatic thinking.thinking.

2.2. Economic : Interest in usefulness and Economic : Interest in usefulness and practicality, including accumulation of practicality, including accumulation of wealth.wealth.

3.3. Aesthetic : Interest in beauty,form and Aesthetic : Interest in beauty,form and artistic harmony.artistic harmony.

4.4. Social : interest in human relationship.Social : interest in human relationship.

Political : Interest in gaining power Political : Interest in gaining power and influencing others.and influencing others.

Religious : Interest in unity.Religious : Interest in unity.

Formation of valuesFormation of values Family factorsFamily factors Social factorsSocial factors Cultural factorsCultural factors Personal factorsPersonal factors

Business valuesBusiness values Business values consist of the Business values consist of the

principles which define what principles which define what constitute good business,what constitute good business,what objectives should be pursued and objectives should be pursued and whose interest the business shoud whose interest the business shoud serve.serve.

Honesty in dealings,service to Honesty in dealings,service to customers,innovation, gender customers,innovation, gender equality..equality..

Levels of business Levels of business valuesvalues

Individual levrelIndividual levrel Group levelGroup level Organizational valuesOrganizational values Environmental valuesEnvironmental values

Relevance of values in managementRelevance of values in management

Guide to decision and action : Guide to decision and action : values tells the manager what is values tells the manager what is right goal and right path.right goal and right path.

Ends-means relationship : socially Ends-means relationship : socially worthwhile goals and sound worthwhile goals and sound business practices.business practices.

Standards of conduct : values Standards of conduct : values constitute the norms and standard constitute the norms and standard of good business. what is good of good business. what is good business…business…

Social responsibility : business Social responsibility : business values advocate to accept such values advocate to accept such responsibility.responsibility.

Corporate values : Behavioural Corporate values : Behavioural norms to guide the activities of norms to guide the activities of members of an organisation. members of an organisation. “Customer is king” “ People “Customer is king” “ People are our biggest asset”are our biggest asset”

Read value system of Indian managers( p209, L.M Prasad, Read value system of Indian managers( p209, L.M Prasad, OB)OB)

Secular v/s Spiritual values in Secular v/s Spiritual values in management.management.

Secularism is the doctrine that Secularism is the doctrine that morality should be based solely with morality should be based solely with regard to the well-being of mankind in regard to the well-being of mankind in the present life to the exclusion of all the present life to the exclusion of all consideration drawn from belief in consideration drawn from belief in God.God.

Primary emphasis on the material and Primary emphasis on the material and cultural improvement of human being.cultural improvement of human being.

Respect for and search for all truth Respect for and search for all truth whatever be its source which can be whatever be its source which can be tested in reality to observe whether it tested in reality to observe whether it leads to human betterment.leads to human betterment.

Concern for this age or worldConcern for this age or world An independent rational morality which An independent rational morality which

does not base itself on faith in divine.does not base itself on faith in divine. Today it is western management.Today it is western management. Nature and worker is exploited an Nature and worker is exploited an

demoralized. Profit is ultimate aim.demoralized. Profit is ultimate aim.

spiritual valuesspiritual values Human happiness is one of the ultimate Human happiness is one of the ultimate

objective for which industrial enterprise objective for which industrial enterprise exist –spiritual values.exist –spiritual values.

Self development is much richer notion.Self development is much richer notion. Management has to reply not only on Management has to reply not only on

intellect, but also on the development of intellect, but also on the development of soul.soul.

Spiritualism shows the goal and Spiritualism shows the goal and materialism supplies tools.materialism supplies tools.

(Must ref p52-54,Ethics in mgt. Ghosh)(Must ref p52-54,Ethics in mgt. Ghosh)

A frame work for ethical A frame work for ethical decision making in decision making in businessbusiness Ethical issue Intensity : It can be defined Ethical issue Intensity : It can be defined

as the relevance of an ethical issue in as the relevance of an ethical issue in the eyes of the individual / work group / the eyes of the individual / work group / organisation. Issues are communicated organisation. Issues are communicated as being high in ethical importance could as being high in ethical importance could trigger increase in employees ethical trigger increase in employees ethical issue intensity. If individuals perceive an issue intensity. If individuals perceive an ethical issue as important, less likely to ethical issue as important, less likely to engage in questionable behaviour.engage in questionable behaviour.

Individual factors : People who face Individual factors : People who face ethical issues often base their ethical issues often base their decisions on their values and decisions on their values and principle of right or wrong. It is principle of right or wrong. It is learned through the socialization learned through the socialization process with family , social group, process with family , social group, formal education.formal education.

Organisation factors : Organisations Organisation factors : Organisations values have grater influence. values have grater influence. Corporate culture & significant Corporate culture & significant others ( coworkers, Peers….)others ( coworkers, Peers….)

Opportunity : It describes conditions Opportunity : It describes conditions in organisation that limit or permit in organisation that limit or permit ethical or un ethical behaviour.ethical or un ethical behaviour.

Business ethics evaluation and Business ethics evaluation and intention : ethical dilemmas arises in intention : ethical dilemmas arises in problem solving situations in which problem solving situations in which decision rules are often vague or in decision rules are often vague or in conflict. There is no substitute for conflict. There is no substitute for the employee’s own critical thinking the employee’s own critical thinking and ability to accept responsibility and ability to accept responsibility for his own decision.for his own decision.

Block diagram Block diagram

Ethical issueIntensity

IndividualFactors

OrganisationalFactors

Opportunity

Business ethics evaluation &

Intentions

Ethical or Unethicalbehaviour

WhistleWhistle BlowingBlowing Whistle blowing is the voluntary release Whistle blowing is the voluntary release

of nonpublic information, as a moral of nonpublic information, as a moral protest, by a member or former protest, by a member or former member of an organisation outside the member of an organisation outside the normal channels of communication to normal channels of communication to an appropriate audience about illegal / an appropriate audience about illegal / immoral conduct in the organisation or immoral conduct in the organisation or a conduct in the organisation opposed a conduct in the organisation opposed in significant way to the public interest.in significant way to the public interest.

Whistle blowing means an Whistle blowing means an employee’s disclosure to the employee’s disclosure to the public of alleged organisational public of alleged organisational misconduct, often after futile misconduct, often after futile attempt to convince attempt to convince organisational authorities to take organisational authorities to take action against the alleged abuse.action against the alleged abuse.

Features Features It can be done by a member of an It can be done by a member of an

organisation.organisation. It relates to an action that take place It relates to an action that take place

within an organisation..within an organisation.. It is generally evidence of some It is generally evidence of some

significant kind of misconduct on the part significant kind of misconduct on the part of an organisation or some of its of an organisation or some of its members.members.

Informatio0n is passed to news media, Informatio0n is passed to news media, government and public interest group.government and public interest group.

It must be undertaken as a moral protest. It must be undertaken as a moral protest. It is done voluntarilyIt is done voluntarily

Types Types Internal whistle blowing : when a Internal whistle blowing : when a

disclosure is made within the disclosure is made within the organisation.organisation.

External whistle blowing : where a External whistle blowing : where a disclosure is done publically.disclosure is done publically.

Personal whistle blowing : It includes Personal whistle blowing : It includes the act of disclosure where a person the act of disclosure where a person or class of person is subjected to or class of person is subjected to immoral behaviour or exploitation.immoral behaviour or exploitation.

Government whistle blowing : Government whistle blowing : Unethical practices adopted by Unethical practices adopted by the officials of government the officials of government /departments./departments.

Corporate whistle blowing : Corporate whistle blowing : unethical practices in business.unethical practices in business.

(Ethics ,Chabra,p239-251)(Ethics ,Chabra,p239-251)

Ethical relativismEthical relativism Relativists tends to believe that Relativists tends to believe that

there are no universal right and there are no universal right and wrong that can be rationally wrong that can be rationally determined– It simply depend on determined– It simply depend on the person making decision and the person making decision and culture in which the are located.culture in which the are located.

(BE, Andrew Crane)(BE, Andrew Crane)

Matrix for global relativist Matrix for global relativist when making cross cultural when making cross cultural ethical decisionethical decision

home country perceptionhome country perceptionethicalethical unethical unethical

Ethical Ethical ethicalethical

Ethical Ethical unethicalunethical

Fore

ign

coun

try

perc

epti

on

ethical

unethical

Ref BE,o.c. Ferrell p221

Ethics managementEthics management Business ethics management is Business ethics management is

the direct attempt to formally or the direct attempt to formally or in formally manage ethical issues in formally manage ethical issues or problems through specific or problems through specific policies, practices and policies, practices and programmes. ( 2006 Wal-Mart )programmes. ( 2006 Wal-Mart )

Components of Business ethicsComponents of Business ethics

Mission or values statement :This Mission or values statement :This statements frequently include social statements frequently include social goals of one kind or another and may goals of one kind or another and may specify a commitment to operate in an specify a commitment to operate in an ethical fashion. (‘Create better every day ethical fashion. (‘Create better every day life for every one’ --- IKEA Swedish life for every one’ --- IKEA Swedish furniture giant).furniture giant).

Code of ethics : These are explicit Code of ethics : These are explicit outlines of what type of conduct is outlines of what type of conduct is desired and expected of employees from desired and expected of employees from an ethical point of view within a certain an ethical point of view within a certain organisation, profession or industry.organisation, profession or industry.

Reporting/advice channels :gathering Reporting/advice channels :gathering information on ethical matters and information on ethical matters and providing employees with providing employees with appropriate channels for reporting or appropriate channels for reporting or receiving advice regarding ethical receiving advice regarding ethical dilemmas can be vital.dilemmas can be vital.

Risk analysis and management : risk Risk analysis and management : risk management techniques trend to management techniques trend to focus more on easily identifiable focus more on easily identifiable leaga risks and more quantifiable leaga risks and more quantifiable ethical risk. ( pollution ,product ethical risk. ( pollution ,product liability)liability)

Ethics managers, officers, Ethics managers, officers, committees : organisational ethics committees : organisational ethics programmes must have oversight programmes must have oversight by high-ranking persons known to by high-ranking persons known to respect legal and ethical standards.respect legal and ethical standards.

Ethics consultants : External Ethics consultants : External cosultants are appointed to manage cosultants are appointed to manage certain areas of business ethics. certain areas of business ethics. (KPMG, PricewaterhouseCoopers.)(KPMG, PricewaterhouseCoopers.)

Ethics education and trainingEthics education and training Stakeholders consultation, dialogue Stakeholders consultation, dialogue

and partnership programme.and partnership programme. Auditing, accounting and reporting : Auditing, accounting and reporting :

appraisal of ethical programmeappraisal of ethical programme

((BE, Andrew Crane, p170-174BE, Andrew Crane, p170-174))

Ethics audit Ethics audit An ethics audit is a systematic An ethics audit is a systematic

evaluation of an organisation’s evaluation of an organisation’s ethics program and performance ethics program and performance to determine whether it is to determine whether it is effective. effective.

The audit provides an opportunity The audit provides an opportunity to measure the conformity to the to measure the conformity to the firm’s desired ethical standards.firm’s desired ethical standards.

The auditing processThe auditing process Secure commitment top managers and Secure commitment top managers and

board of directors.board of directors. Establish a committee to oversee the Establish a committee to oversee the

ethics audit: Ideally, the board of ethics audit: Ideally, the board of directors’ financial audit committee directors’ financial audit committee would oversee. But in most of the firms would oversee. But in most of the firms by ethical officers. sometimes by by ethical officers. sometimes by consultant.consultant.

Define the scope of the audit process, Define the scope of the audit process, including subject matter areas including subject matter areas important to the ethic audit: it includes important to the ethic audit: it includes types of business, risk face by the firm, types of business, risk face by the firm, opportunities to manage.opportunities to manage.

Review the organisation’s mission, Review the organisation’s mission, policies, goals, and objectives and define policies, goals, and objectives and define its ethical priorities : It should include an its ethical priorities : It should include an examination of both formal documents (It examination of both formal documents (It makes explicit commitment with regard makes explicit commitment with regard to ethical, legal & social responsibility) to ethical, legal & social responsibility) and less-formal documents (marketing and less-formal documents (marketing materials , work policies).materials , work policies).

Collect and analyze relevant information Collect and analyze relevant information in each designated subject matter area : in each designated subject matter area : Observing data collection process Observing data collection process ( stakeholder consultation), examining ( stakeholder consultation), examining internal and external documentsinternal and external documents

Have a result verified by an Have a result verified by an independent agent : social / independent agent : social / ethics audit consultant, a financial ethics audit consultant, a financial accounting firm that offers social accounting firm that offers social auditing process, a non profit auditing process, a non profit special interest group. special interest group.

Report the findings of audit Report the findings of audit committee and, if approved, to committee and, if approved, to managers and stake holders.managers and stake holders.

((BE, O.C.Ferrell p 210BE, O.C.Ferrell p 210 ) )

Ethics committeeEthics committee

A committee is a formal group of A committee is a formal group of individuals assigned to a specific individuals assigned to a specific task. Only a very few organisations task. Only a very few organisations have a committee specifically have a committee specifically devoted to ethics.( Motorola—devoted to ethics.( Motorola—Business ethics compliance Business ethics compliance committee). An ethic committee can committee). An ethic committee can gather information on functional gather information on functional areas of business. CEO or manager in areas of business. CEO or manager in charge selects committee.charge selects committee.

Ethics officersEthics officers Organizational ethics programs must Organizational ethics programs must

have oversight by high-ranking have oversight by high-ranking persons known to respect legal and persons known to respect legal and ethical standards. They are referred as ethical standards. They are referred as ethics officers. They are responsible ethics officers. They are responsible forfor

Managing ethics and legal compliance Managing ethics and legal compliance programprogram

Assessing the needs and risks of Assessing the needs and risks of organisation wide ethics program.organisation wide ethics program.

Developing and distributing a Developing and distributing a code of conduct.code of conduct.

Conducting training program.Conducting training program. Cofidentential service to answer Cofidentential service to answer

employeesemployees Taking actions for violationTaking actions for violation

Ethics trainingEthics training1.1. Help employees identify the ethical Help employees identify the ethical

dimensions of a business decisiondimensions of a business decision2.2. Give employees a means to address Give employees a means to address

ethical issueethical issue3.3. Help employees understand the Help employees understand the

ambiguity inherent in ethical situation.ambiguity inherent in ethical situation.4.4. Make employees aware that their Make employees aware that their

actions define the company’s ethical actions define the company’s ethical posture both internally and externally.posture both internally and externally.

5.5. Provide direction for employees to find Provide direction for employees to find managers or others who can help managers or others who can help them resolve ethical conflict.them resolve ethical conflict.

6.6. Eliminate the belief that Eliminate the belief that unethical behaviour is ever unethical behaviour is ever justifiable by stressing thatjustifiable by stressing that

Stretching the ethical boundaries Stretching the ethical boundaries result in unethical behaviourresult in unethical behaviour

Whether discovered or not , an Whether discovered or not , an unethical act is just that.unethical act is just that.

An unethical act is never in the An unethical act is never in the best interest of the companybest interest of the company

The firm is held responsible for The firm is held responsible for the misconduct of its members.the misconduct of its members.

Ethical issues around the Ethical issues around the globeglobe Sexual and racial discrimination Sexual and racial discrimination Human rightsHuman rights Price discriminationPrice discrimination BriberyBribery Harmful productsHarmful products Pollution an natural environmentPollution an natural environment Telecommunication issuesTelecommunication issues Intellectual property protectionIntellectual property protection World Trade OrganisationWorld Trade Organisation(BE, O.C. Ferrell p230-43)(BE, O.C. Ferrell p230-43)

Ethical bodies Ethical bodies Transparency internationalTransparency international has has

developed a Bribe payers Index to developed a Bribe payers Index to indicate the degree to which indicate the degree to which international corporations are engaging international corporations are engaging in paying bribes in specific market.in paying bribes in specific market.

Foreign Corrupt Practice Act ( FCPA) Foreign Corrupt Practice Act ( FCPA) prohibits US companies from offering prohibits US companies from offering or providing payment to officials of or providing payment to officials of foreign governments for the purpose of foreign governments for the purpose of obtaining or retaining business abroad.obtaining or retaining business abroad.

American Association for Retired American Association for Retired Persons (AARP) on age Persons (AARP) on age discrimination.discrimination.

Canada ,International code of Canada ,International code of ethics ( BE, O.C. Ferrell p222)ethics ( BE, O.C. Ferrell p222)

Texas Instruments code of ethicsTexas Instruments code of ethics Ethics officers association (US)Ethics officers association (US) Ethics Practitioners ForumEthics Practitioners Forum Consumer Protection ActConsumer Protection Act