ETHICS IN BUSINESS MANAGEMENT

FACTORS IN FLUENCING BUSINESS ETHICS 1. Individual Factors (1) Knowledge (2) Values (3) Morals (4) Personal goals (5) Personality

2. Social Factors (1) Cultures (2) Family (3) Education (4) Media

3. Code of conduct 4. Corporate Cultures 5. Ethical Climate of the Industry 6. Role of Government in Business Ethics 7. Legal system 8. Religion 9. Society expectations 10. Leadership

ETHICAL ORGANIZATION An ethical organization exhibits a number of key characteristics, such as honesty, integrity, accountability, respect, loyalty and concern. CHARACTERISTICS OF AN ETHICAL ORGANIZATION 1. Mission and Vision Driven 2. Management Focus 3. Honesty 4. Integrity

5. Accountability 6. Respect 7. Loyalty 8. Concern 9 5. Accountability 6. Respect 7. Loyalty 8. Concern 9. Leadership Effectiveness 10. Long-term perspective 11. Honor 12. Customer focus

13. Results-oriented 14. Risk-taking 15. Passion 16. Persistence

Important factors of building an ethical infrastructure in the organization 1. Commitment from Top Management 2. Code of Ethics 3. Communicating Ethics 4. Ethics Training 5. Establishment of ethics committee 6. Ethics Officer 7. Response and Enforcement 8. Rewarding ethical acts and punishing unethical ones

9. Audits, Revisions and Refinements 10. Involvement of the employees at all the levels

CODE OF CONDUCT AND ETHICS FOR MANAGERS 1. Honesty 2. Accountability 3. Integrity 4. Respect 5. Flexibility 6. Separation of Private and Company Matters 7.Transparent Management of Information and Accounting 8. Fair Treatment

9. Upholding the Law 10. Responsibility towards different stakeholders

CAUSES OF UNETHICAL BEHAVIOR A. Individual Factors 1)Certain personality traits. 2)Certain ethical philosophical beliefs/values. 3)Propensity or tendency to rationalize/morally disengage. 4)Low cognitive moral development 5)Poor ethical decision-making 6)Misguided loyalty

B. Organizational/Situational 1)Unethical organizational climate or culture 2)Weak and/or unethical leadership/supervision 3)Certain job characteristics C. Situational factors D. Other factors 1. Organizations favour their own interest above the well-being of their customers, employees, or the public. 2. Organizations reward behavior that violates ethical standards, such as increasing sales through false advertising.

3. Organizations encourage separate standards of behavior at work than at home, such as secrecy and deceit versus honesty. 4. Individuals are willing to abuse their position and power to enhance their interests, such as taking excessive compensation for themselves off the top before other stakeholders receive their fair share. 5. Managerial values exist that undermine integrity, such as the pressure, managers exert on employees to cover up mistakes or to do whatever it takes to get the job done. 6.Organizations and individuals overemphasize the short-term results at the expense of themselves and others in the long run. 7.Organizations and managers believe their knowledge is infallible (incapable of making mistakes) and miscalculate the true risks, such as when financial managers invest organizational funds in high-risk trading options.

WAYS TO PREVENT UNETHICAL BEHAVIOUR 1. Create a Code of Conduct 2. Continuous review of the code 3. Lead by Example 4. Reinforce Consequences 5. Appreciation to the employees 6. Reward system 7.Ethics training 8. Communication and Meetings

9. Immediate Correction and coaching 10. Hire for Values 11 9. Immediate Correction and coaching 10. Hire for Values 11. Build a Culture of Transparency, Openness and Communication 12. Whistle - blowing 13. Empower employees