For BBA/BPLM-III

Semester I
1.1 Meaning and Origin
introduction
The word “Ethics” which is coined from the
Latin word ‘Ethics’ and Greek word ‘Ethikos’
pertains to character/acceptable mode of
conduct. Ethics is thus said to be the science
of conduct. As a matter of fact it deals with
certain standard of human conduct and
morals.
The field of ethics involves systematizing, de-
fending and recommending concepts of right
and wrong behavior. Ethics is a mass of moral
principles or set of values about what is right
or wrong, true or false, fair or unfair, proper
Meaning and origin
However, The word ethics has a number of
meanings.
 Merriam-Webster’s Collegiate Dictionary
gives several definitions of ethics, including:
● the discipline dealing with what is good and
bad and with moral duty and obligation
● a set of moral principles or values
● a theory or system of moral values
● the principles of conduct governing an indi-
vidual or a group.
Meaning and origin
Ethics, in all of these definitions, is con-
cerned with right or wrong behavior. Spe-
cifically ethics has been termed as the study
and philosophy/way of life of human beha-
viour/conduct, with an emphasis on the de-
termination of right and wrong ( Ferrell,
O.C).
It present a set of principles recommending
the behaviour code that explains what is good
and right and probably what is bad or wrong.
Meaning and origin
Philip Wheel Wright says— “Ethics is the branch of
philosophy which is the systematic study of selec-
tive choice, of the standards of right and wrong
Objective of ethics
The objectives of ethics are as below:
1. The very basic objective is to define the
greatest good of man and establish a standard
for the same.
2. Set/Establish moral standards/norms of be-
havior.
3. An overall study of human behavior: what is
moral or immoral should be assessed.
4. Apply judgement upon human behavior
based on these standard and norms.
5. Suggest moral behavior, Prescribes recom-
Nature of ethics
The nature of ethics can be explained by these
points:
1. The concept of ethics is applied to human be-
ings only as they have freedom of choice and
means of free will. They can only decide the
degree of ends they wish to pursue and the
means to achieve the ends.
2. The study of ethics is nothing but a field of
social science in which a set of systematic
knowledge about moral behavior and human
conduct is learned.
Nature of ethics
3. Ethics deals with human conduct which is
voluntary not forced by circumstances or hu-
mans. So we can say that at the ground level
ethics deals with moral judgement regarding
set directed human conduct.
Business ethics
After defining ethics, let us now define
what is business ethics.
Ethical issues are more critical today than
they have ever been. The liberalization and
globalization being sweep changes in the
concept of doing business, but the major by-
product like corruption, favoritism and nepo-
tism, deterioration of human values, series of
scam in business, govt. policies and society are
also produced in the 21st century.
Business ethics
At one side business enterprise are coping up
with intense emerged competition and on the
other side they are violating the principles of
proper public conduct.
In the wake of mounting scandals corpora-
tions, all around the world are adopting ethi-
cal conduct, code of ethics.
Business ethics
Today more and more interest is being given to
the application of ethical practices in business
environment.
Business ethics is the application of general ethi-
cal rules to business behavior. it is the application
of ethics in business.
Business ethics involve companies/organizations
(for profit ones) acting with an awareness of the
need for complying with rules, such as the laws of
the land, the customs and expectations of the
community, the principles of morality, the policies
of the organization, and such general concerns as
the needs of others and fairness.
JUSTIFICATION OF ETHICS IN
BUSINESS
In the philosophical tradition-go back to An-
cient Greece platos discussions of justice,
Aristotles writtings on trade and
commerce(justice transactions)
In the modern period John Locke defended
private property as a natural right, Adam
smith a moral philosopher-wealth of nations
and the theory of moral sentiments
John Stuart mill, Immanuel Kant, Hegel, Karl
Marx all wrote on the issue of justice in eco-
nomic matters. These justifies that, business
should be practiced on ethical grounds
Business ethics
Business ethics has only existed as an
academic field since the 1970s. During the
1960s, corporations found themselves in-
creasingly under attack over unethical
conduct. As a response to this, corpora-
tions - most notably in the US - developed
social responsibility programmes which
usually involved charitable donations and
funding local community projects.
Business ethics
This practice was mostly ad hoc and unorgan-
ised varying from industry to industry and
company to company. Business schools in
large universities began to incorporate ‘social
responsibility’ courses into their syllabi
around this time but it was mostly focused on
the law and management strategy.
When philosophers became involved they
brought ethical theory to bear on the relevant
ethical issues and business ethics became a
more institutionalised, organised and integral
part of education in business. Thereafter an-
nual conferences, case books, journals and
text books were more regular and estab-
lished.
Business ethics
The 3 C’s of Business ethics:
1. Compliance: (The need for compliance of rules
including):
• Laws
• principles of morality
• policy of the company
2. The Contribution (Business can make to the
society):
• The core values
• Quality of products/services
• Employment
• Usefulness of activities to surrounding activi-
business ethics
3. The Consequences of business activity:
• Toward environment inside and outside the
organization
• Social responsibility toward shareholders,
bankers, customers and employees of organiza-
tion.
• Good public image, sound activity- good im-
age.
Levels of business ethics
Because ethical problems are not only an in-
dividual or personal matter, it is helpful to see
where issues originate, and how they change.
Business leaders and professionals manage a
wide range of stakeholders inside and outside
their organizations. Understanding these
stakeholders and their concerns will facilitate
our understanding of the complex relation-
ships between participants involved in solving
ethical problems
So business ethics should start from individ-
ual level, organizational level, societal level
and international level
1.2 Theories of Ethics
i. Consequentialism theory -from the word
consequences i.e outcome, effect, results or
impacts. This maintains that the majority of
an action depends on the non-moral con-
sequences that the action brings about. Mor-
ality of an action consists of the ratio of good
to evil that the action produces (which one
outperform another?)good must outperform
evils. If a particular action have big/many
immoral consequences should not be per-
formed. We should perform right and only
right action in terms of good and evil, as each
individual defines good and evil, and right
1.2 Theories of Ethics
ii. Utilitarianism (from the word utility, i.e
satisfaction) states that the moral standard
should be promotion of the best longterm in-
terests of everyone concerned. Act Utilitari-
anism states that the right utilitarian act is
the one that produces the greatest ratio of
good to evil for all concerned. Rule utilitari-
anism teaches us that certain actions almost
always have a great utilitarian value and thus
general rules are formulated to help us see
that we follow these rules of action. A few
doctors decide that a number of experiments
on a few people, even if most of them died,
would be worth it if they could find a cure for
Theories of ethics
iii.Values Clarification (Philosophical Re-
lativism)
Teaches that the most important aspect is not
what you believes, but being aware of one’s
own feelings, beliefs, and values systems.
This theory emphasize that value is a relative
term and not a absolute (universally uniform)
term.
What is moral to you may not be moral to an-
other person.
Example of these are transcultural and intra-
1.2 Theories of Ethics
• iv. Legalistic Moralism (Moral Absolut-
ism) states that there are pluralities of abso-
lutes (or norms) with each one covering an
area of human experience. These absolutes
never conflict with each other.
• An action that is evil under one absolute is
evil under every other absolute and could
never be seen as good under any absolute.
• This theory emphasize that most morals are
absolute and are not relative throughout the
world.
Think of corruption? are some societies accept-
ing it?
1.2 Theories of Ethics
Why should a person be held responsible for
committing a crime if the crime was a lesser
norm? Is it wrong for a man to steal money to
purchase a life-saving machine for his child
who is dying? Perhaps the system is at fault
and not the person.
Moral absolutism is the ethical view that cer-
tain actions are absolutely right or wrong re-
gardless of other contexts such as their con-
sequences or the intentions behind them.
Graded absolutism is moral absolutism but
clarifies that a moral absolute, like "Do not
kill," can be greater or lesser than another
1.2 Theories of Ethics
v. Ethical Realism (as espoused by Rein-
hold Neibuhr) (the lesser of two evils) states
that when absolute norms come into conflict
(as they will eventually do) one must decide
which to follow. Each solution offers limited
alternatives, so the solution which produces
the less of two evils is the one to be chosen.
Thus there is an excusable and pardonable
sin because people did not cause that di-
lemma by their own acts. Every decision will
have some sinful consequence of which God
will forgive. Thus people must make the
choice that is the lesser sin and then ask
God’s forgiveness.
1.2 Theories of Ethics
vi. Cognitive Moral Development (as es-
poused by Lawrence Kohlberg) states that
ethics education is possible. Just as people
develop mentally, physically, and emotionally,
they develop a moral cognizance.
vii. Ethical Hierarcicalism (Graded Abso-
lutism) is the view that there are many uni-
versal norms, but they are not all intrinsically
equal. Thus when a conflict takes place, we
must obey the “higher” norm…we choose the
greater of the two goods. For example:-
Persons are more valuable than things
God is more valuable than an incomplete per-
1.2 Theories of Ethics
A complete person is more valuable than an
incomplete person
An actual person is more valuable than a po-
tential person
Potential persons are more valuable than ac-
tual things (fetus vs appendage)
Many persons are more valuable than a few
persons
Personal acts which promote personhood are
better than those which don’t
1.2 Theories of ethics
viii. Deontology
There are ethical theorists for whom the end
does not justify the means who maintain the
actions themselves are to be judged in spite of
the consequences. These ethicists are called
deontologists. This name comes from the Greek
word deontos, which means “what must be
done,” sometimes translated into “obligation”
or “duty.” The foremost deontologist was the
eighteenth-century philosopher Immanuel
Kant.
1.2 Theories of ethics
The deontological class of ethical theories
states that people should adhere to their
obligations and duties when engaged in deci-
sion making when ethics are in play. This
means that a person will follow his or her
obligations to another individual or society
because
upholding one’s duty is what is considered eth-
ically correct. For instance, a deontologist
will always keep his promises to a friend and
will follow the law. A person who adheres to
deontological theory will produce very consis-
1.3Ethical questions
Questions to ask to justify an action if it is
ethical
1. does the action benefit me or society?
2. did I promise to perform the action?
3. is it fair or just?
4. does it violate someone's rights?
Why business ethics?
“Doing the right thing” matters to fi rms,
taxpayers, employees, and other stakehold-
ers, as well as to society. To companies and
employers, acting legally and ethically means
saving billions of dollars each year in lawsuits
settlements, and theft.
1.3 Why Business Ethics
There are practical reasons why owners and
managers should embrace a business ethics
program as part of its management practice;
Enhanced reputation and goodwill; Reduced
risks; Reduced costs; Protection from unethi-
cal employees and agents; Enhanced perfor-
mance, productivity, and competitive position;
Expanded access to capital, credit, and for-
eign investment; Increased profits and sus-
tained long-term growth; Increased interna-
tional respect. Some of these issues are dis-
cussed in the preceding sections
1.3 Why Business Ethics
i. Enhanced reputation and goodwill
A business ethics program contributes to the
enterprise’s reputation for integrity. By giving
adequate guidance to employees and agents,
it ensures that they know what is responsible
business conduct. By helping form reasonable
expectations among its stakeholders, it mini-
mizes disputes with customers and other
stakeholders and increases stakeholder satis-
faction.
ii. Reduced risks
Business ethics program helps organizations
develops processes with which it identifies,
assesses, and manages the full range of fac-
tors that might pose a risk to social and fi-
1.3 Why Business Ethics
The processes include assessing risks, estab-
lishing adequate standards and procedures,
training, and monitoring and auditing sys-
tems. These processes help owners and man-
agers plan, organize, and control the day-to-
day operations of an enterprise to minimize
risks to its capital, earnings, and reputation.
They include management of risks associated
with accidental losses, as well as operational
risks such as those arising from financial
mismanagement, fraud and embezzlement,
corruption, and loss of reputation.
1.3 Why Business Ethics
iii. Reduced costs
These includes cost of bribery, kickback, and
other forms of illegal or corrupt conduct, full
cost including management effort to allocate
time to work with officials, to maintain a sec-
ond set of books, and to deal with the threat
of extortion and blackmail. The real cost is
the risk to reputation and pride in the enter-
prise and the reduced prospects for partici-
pating in a market economy. Business Ethics
program can help today’s organizations avoid
such kind of hurting costs.
1.3 Why Business Ethics
iv. Protection from unethical employees and
agents
v. Enhanced performance, productivity, and
competitive position;
vi.Expanded access to capital, credit, and for-
eign investment;
vii.Increased profits and sustained long-term
growth;
viii.Increased international respect.
1.3 Code of Ethics/conduct
A code of ethics is a reference tool that
provides guidance to both employees and
managers on how to implement and practice
business ethics in the workplace. A code
should embody both business standards (such
as customer satisfaction, a high quality of
products, safety, and employee rights) and
values (such as mutual trust, respect, and
honesty). Code of conduct gives guidance on
the ethical standards that are required by dif-
ferent groups in the world system.
1.3 Code of Ethics/conduct
Code of ethics would cover a multitude of
subjects which are unacceptable such as:
Conflict of Interest- A conflict arises when
an employee, officer, or director of an enter-
prise performs an action that will interfere
with that individual’s ability to perform his or
her official duties eg personal gain or gain for
friend/relative, accepting gifts from vendors,
Hiring friend/relative as an employee or con-
tractor.
1.3 Code of Ethics/conduct
Personal Use of Goods, Services and Staff
Resources- Office supplies, cabinets, Univer-
sity equipment/vehicles, computing re-
sources, using clerks for private businesses.
Hiring/Staffing Practices- Falsifying hours
worked, timekeeping, misrepresenting work
performance on performance evaluation, not
communicating work performance issues to
employee, use of child labour, hiring relatives.
1.3 Code of Ethics/conduct
Business standards (such as customer sat-
isfaction, a high quality of products, safety,
and employee rights) and values (such as mu-
tual trust, respect, and honesty).
Travel- falsifying fares and tickets.
Tanzania procurement need to follow code of
conduct like those issued by National Board
of Auditors and Accountants (NBAA) and
other like by International Financial Report-
ing Standards/International Accounting Stan-
dards (IFRS/IAS) and International Standards
on Auditing (ISA),NBMM.
code of ethics in public service
in Tanzania
A Code of Ethics and Conduct for the Public
Service is being issued for the first time since
our independence in 1961. During the colo-
nial rule a Code of Ethics and Conduct was
inherent in different laws and regulations.
this approach continued even after indepen-
dence. Since these laws and regulations were
not easily available to all public employees
people were generally unaware of expected
ethical conduct.
Code of ethics in Tanzania
Besides stipulating clearly the standard of
behaviour, the code also aims to enhance eth-
ical performance and to regain public confi-
dence.
The Code will also enable Public Servants to
participate fully in fulfilling the mission of the
Public Service, which is to deliver quality ser-
vice to the people of Tanzania efficiently, ef-
fectively and with the highest standard of
courtesy and integrity.
Code of ethics in Tanzania
In order for the Public Service to be efficient and
respected Public Servants must behave and con-
duct themselves in a manner as stipulated below:-
1. Respect all Human Rights and be courteous;
2. Perform diligently and in a disciplined manner;
3. Promote team work;
4. Pursue excellence in service;
5. Exercise responsibility and good stewardship;
6. Promote transparency and accountability;
7. Discharge duties with integrity, and
8. Maintain political neutrality
1.4 Institutionalizing Ethics
Managers, especially top managers do have a
responsibility to create an organizational en-
vironment that fosters ethical decision mak-
ing by institutionalizing ethics. This means
applying and integrating ethical concepts
with daily actions in several ways like:
i. By establishing an appropriate company
policy or a code of ethics,
ii.By using a formally appointed ethics commit-
tee, and
iii.By teaching ethics in management develop-
ment programs.
1.4 Institutionalizing Ethics
The three ways are suggested to be used al-
together because critics point out that ethics
codes alone do little to reduce unethical con-
duct.
1.5 Governance
At the organizational level, governance refers
to the establishment of policies, and continu-
ous monitoring of their proper implementa-
tion, by the members of the governing body
of an organization.
It includes the mechanisms required to bal-
ance the powers of the members (with the as-
sociated accountability), and their primary
duty of enhancing the prosperity and viability
of the organization.
At the national level governance refers to the
exercise of economic, political and adminis-
trative authority to manage a country’s affairs
at all levels.
1.5 Governance
“It comprises the mechanisms, processes and
institutions through which citizens and
groups articulate their interests, exercise
their legal rights, meet their obligations and
mediate their differences”.
2.1 Meaning of CSR
2.1 Meaning of CSR
The entirety/whole meaning of CSR can be
recognized from the three words contained
within its title phrase: ‘corporate”, 'social,’
and ‘responsibility.’ Therefore, in broad
terms, CSR covers the responsibilities corpo-
rations (or other for-profit organizations)
have to the societies within which they are
based and operate.
CSR=Corporate/company/business+social/
community/public/+responsibility/duty/task/
accountability.
2.1 Meaning of CSR
Corporate and social responsibility is some-
times described as being a tacit/unstated con-
tract between business and a community,
whereby the community permits the business
to operate within its jurisdiction to obtain
jobs for and from the residents and revenue
through taxation. Additionally, the community
expects the business to preserve the envi-
ronment and to make the community a better
place to live and to work through charitable
activities.
2.1 Meaning of CSR
More specifically, CSR involves a business
identifying its stakeholder groups and incor-
porating their needs and values within the
strategic and day-to-day decision-making
process. Stakeholders are the shareholders
(owners), customers, employees, suppliers,
governments, community in which the com-
pany does business, banking community and
other lenders, society at large and any other
with interest in the organization.
2.2 Arguments behind CSR
Arguments offered in favor of CSR can be
broadly split into two camps, moral and eco-
nomic.
a. Moral Argument
While recognizing that profits are necessary
for any business entity to exist, all groups in
society should strive to add value and make
life better. Businesses rely on the society
within which they operate and could not exist
or prosper in isolation. They need the infra-
structure that society is provided and live
with, its source of employees, not to mention
2.2 Arguments behind CSR
CSR it is a recognition on the part of the
business that ‘for profit’ entities do not exist
in a vacuum, and that a large part of any suc-
cess they enjoy is as much due to the context
in which they operate. It is due to the atmos-
phere of tranquility offered by the society, in
the absence of which everything that a com-
pany want to do is disrupted.
2.2 Arguments behind CSR
b. An economic argument for CSR-It is an
argument of economic self interest that
there are very real economic benefits to
businesses pursuing a CSR strategy and is
designed to persuade those business man-
agers who are not persuaded by the moral
case. They believe the actions corporations
take today to incorporate CSR throughout
the organization represent a real point of
differentiation and competitive market ad-
vantage on which future success can hinge.
2.2 Arguments behind CSR
In today’s brand-driven markets, CSR is a
means of matching corporate operations with
stakeholder values and demands, at a time
when these parameters can change rapidly.
2.3 Origin of CSR
The derivation of the word company? Two
Latin words, cum and panis, which mean
breaking bread together. CSR emphasize the
need for companies to share their profit to a
wide array of stakeholders as mentioned
above.
For the healthy growth of the organization,
all stakeholders groups must be served ade-
quately. Of all the stakeholders, in the past
corporations paid little attention to the com-
munities in which they operated; today, how-
ever, the importance of service to community,
employees, suppliers and to society is widely
2.3 Origin of CSR
The community can for example may force a
company to refrain from activities that are
detrimental to the environment. Employees
will not care for their customers if they do not
believe their company cares about them. Ris-
ing supply costs may force price increases
that will reduce the company forecasted sales
volume and profit at large. As part of corpo-
rate social responsibility, many companies
have adopted the triple bottom line philoso-
phy. This means that they try to support or
“earn positive returns” in the economic, so-
cial, and environmental spheres of sustain-
2.4 Examples of CSR Issues
Environmental protection-proper waste
disposal, planting tree.
Offering employees opportunities for
advancement and self-improvement-
sponsoring different training opportuni-
ties, better salaries etc.
Provision of employment opportunities
to the communities.
2.4 Examples of CSR Issues
Solving social problems such as poor health
facilities and education services
Timely payments of suppliers
Production of quality goods and services
Patriotism-this include issues such as volun-
tary payments of various taxes to the respec-
tive authorities.
2.4 Examples of CSR Issues
Fair trade-paying fair prices for goods
bought by companies from farmers. For ex-
ample having a “farm direct” program that
cuts out middlemen to deliver higher prices
to farmers.
Diversity-one sub-area of the issue of ‘diver-
sity’ involves the equal treatment of men and
women. Provision of equal employment op-
portunities, leave and rewards. Today some
laws have incorporated paternity leave for
men, or in their jobs ads some companies
state that XXX is equal opportunity employer
and women are highly encouraged to apply.
2.4 Examples of CSR Issues
Corporate governance-Transparency
is the key to encouraging trust in the
managers selected to run a company on
behalf of the shareholders. It is also vi-
tal to maintaining confidence within
other stakeholder groups and the gen-
eral public. The issues of accurate fi-
nancial statements, executive compen-
sation, and independent oversight, have
become particularly sensitive and im-
portant for companies to get right.
2.5 Why is CSR Important?
CSR is an important business strategy
because, wherever possible, consumers
want to buy products from companies
they trust; suppliers want to form busi-
ness partnerships with companies they
can rely on; employees want to work
for companies they respect; and NGOs,
increasingly, want to work together
with companies seeking feasible solu-
tions and innovations in areas of com-
2.5 Why is CSR Important?
Satisfying each of these stakeholder groups
allows companies to maximize their commit-
ment to another important stakeholder group-
their investors, who benefit most when the
needs of these other stakeholder groups are
being met.
Three trends make CSR unavoidable prac-
tice.
Changing social expectations
Consumers and society in general expect
more from the companies whose products
they buy. This sense has increased in the light
2.5 Why is CSR Important?
which reduced public trust of corporations,
and reduced public confidence in the ability
of regulatory bodies and organizations to con-
trol corporate excess. A society in need of
work and inward investment is likely to en-
force strict regulations and penalize organi-
zations that might take their business and
money elsewhere.
Increasing affluence
Affluent consumers can afford to pick and
choose the products they want. Companies
have nothing to do than producing right
2.5 Why is CSR Important?
Globalization
The growing influence of the media, to sees
any ‘mistakes’ by companies and brought
immediately to the attention of the public. In
addition, the Internet fuels communication
among like-minded groups and consumers-
empowering them to spread their message
(twitter, facebook-while giving them the
means to co-ordinate collective action (i.e. a
product boycott). In such an environment, a
company behaving morally is not a choice
but a must do action.
 2.6 Integrating CSR
Key steps on the road to integrating CSR
within all aspects of operations include:
1.Ensure the commitment of top management,
and particularly the CEO, is communicated
throughout the organization
2.Appoint a CSR position at the strategic deci-
sion-making level to manage the development
of policy and its implementation
3.Develop relationships with all stakeholder
groups and interests (particular relevant
NGOs)-stakeholders meetings, seasonal/
 2.6 Integrating CSR
4. Incorporate a Social or CSR Audit within the
company’s annual report.
5. Ensure the compensation system within the
organization support the CSR policies that
have been created.
6. Any anonymous feedback/whistle-blower
process, ideally overseen by an external om-
budsperson, will allow the CSR Officer to op-
erate more effectively.
3.1 Introduction
 3.1 Introduction
There are various definitions on what
constitute a moral character. Moral
character has been defined as (1) a
sense of obligation/duty toward stan-
dard /acceptable of a social collective/
community; (2) a sense of responsibility
for acting out of concern for others; (3)
a concern for the rights of others; (4) a
commitment to honesty in interpersonal
relationships; and (5) a state of mind
that causes negative emotional reac-
 3.2 Components of Moral Character
There are varying views on these
components. Common are:-
i. Ethical Sensitivity/awareness-indi-
vidual’s ability to recognize that a sit-
uation contains a moral issue. Recog-
nizing a moral issue requires the indi-
vidual’s awareness that his/her ac-
tions have the potential to harm and/
or benefit other people. Later re-
search broadens this definition, sug-
gesting that moral sensitivity is the
decision maker’s recognition that a
 3.2 Components of Moral Character
E.g knowing that selling or leasing
goods or services to the organization or
institution in which you are employed
or agent is prohibited while you are in
a procurement office, this is moral
awareness.
Knowing that 1,2,3 and 4 are things
which are not acceptable at my office
or community.
 3.2 Components of Moral Character
ii. Ethical Judgment
• The consideration of possible alterna-
tive actions and the rationale for select-
ing one or more as best; formulating
and evaluating which possible solutions
to the moral issue have moral justifica-
tion.
• This step in the process requires rea-
soning through the possible choices
and potential consequences to deter-
mine which are ethically sound.
 3.2 Components of Moral Character
For example weighing these alterna-
tives when the company is in need of
computer.
a.Supply computer to the company via
my own unknown company.
b.Supply computer to the company via
my friend’s company.
c.Supplying computer via open tendering
procedure.
 3.2 Components of Moral Character
iii. Ethical Motivation/intention-the
selection of moral values most relevant
in the situation and the commitment to
act on that selection; also refers to the
intention to choose the moral decision
over another solution representing a
different value. This component of the
ethical decision- making process in-
volves committing to choose the moral
value. For example, an individual may
recognize two solutions to a dilemma,
one that results in an increase of per-
sonal power/prosperity and one that is
 3.2 Components of Moral Character
In this instance, moral motivation is
the individual’s intention to choose the
value of morality over the value of
power.
For example deciding not to sell or
lease goods or services to the organiza-
tion or institution in which you are em-
ployed or agent because you aware
that it is not allowed indicates moral
motivation.
 3.2 Components of Moral Character
iv. Ethical Action-or moral courage
refers to an individual’s behavior. This
component is the individual’s action in
the situation. This step involves
courage, determination, and the ability
to follow through with the moral deci-
sion.
These are also termed as the elements
of ethical decision making process
which will be discussed in the detail
later.
3.2 Honesty and Integrity as elements of
Moral Character
i. Honesty refers to a aspect of moral
character and connotes positive and
honorable attributes such as integrity,
truthfulness, and straightforwardness,
including straightforwardness of con-
duct, along with the absence of lying,
cheating, theft, etc. Furthermore, hon-
esty means being dependable, fair, and
sincere. Honesty is valued in many ethnic
and religious cultures. "Honesty is the
best policy" is a proverb of Benjamin
Franklin; "Honesty is the first chapter in
the book of wisdom" .
 3.2 Honesty and Integrity as elements of
Moral Character
How to be honesty
i. Figure out why you lie and who you lie to.
We've all lied at one time or another, to different
people, to ourselves, and for different reasons.
But coming up with a systematic plan for becom-
ing more honest will be difficult unless you try to
define those reasons and those people for your-
self.
ii.Anticipate behaviors that will make you feel
guilty. To break the chain of embarrassment and
lying, it's important to learn to anticipate things
that you'll likely feel guilty about in the future,
and avoid those behaviors. When you lie, you're
 3.2 Honesty and Integrity as elements of
Moral Character
You can either get comfortable with the
truth, or abandon the behavior that makes
you embarrassed.
iii. Stop comparing yourself to others.
Sometimes we lie to make ourselves seem
bigger and better than we really are. Be-
cause we're constantly competing and
comparing ourselves to others, any inade-
quacies can be most-easily overcome with
a quick and creative lie. If you stop feeling
competitive with others and give yourself
the value you deserve, you won't feel the
need to lie to bring yourself up, because
 3.2 Honesty and Integrity as elements of
Moral Character
iv. Accept the consequence and decide
to face them. Be ready for anything bad
which may happen because you did not
lie. These may just be temporary conse-
quences but in the long run you will
prosper. Even if there will be some con-
sequences at the end of the admission,
it'll be the honest consequences that you
deserve.
v. Do things that make you feel pride.
You don't have to lie if you feel good
3.2 Honesty and Integrity as elements of
Moral Character
 Getting super-drunk every night might
make you feel good for a couple hours,
giving you pleasure, but the ice-pick in
your brain the next morning at work will
have you feeling embarrassed and guilty
when you can't make it into work. Take
care of yourself, mentally and physically.
Don't do things you're embarrassed to
do.
 3.2 Honesty and Integrity as elements of
Moral Character
v. Avoid situations in which you'll have
to lie for others. Be wary when someone
tells you something in confidence that you
know that you should share with someone
else (e.g., knowledge of a crime, a lie, or a
harmful act against another). Hearing
such information puts you in a difficult po-
sition, especially when the truth eventu-
ally emerges and reveals to the affected
person that you knew all along.
 3.2 Honesty and Integrity as elements of
Moral Character
If someone begins a sentence with "Don't
tell so-and-so about this, okay?" be pre-
pared to offer your own disclaimer: "If it's
something that I'd want to know about
were I them, then please don't tell me. I
don't want to be responsible for anyone's
secrets but my own."
 3.2 Honesty and Integrity as elements of
Moral Character
ii. Integrity- Integrity refers to the quality
of having or observing strong moral
principles.
 It involves putting your values/ethics
into action; doing the right thing when
no one else is looking without personal
gain or benefit; and accepting a potential
personal cost.
 Integrity stretches to all aspects of an
employee's job. An employee with in-
tegrity fosters trusting relationships with
 3.2 Honesty and Integrity as elements of
Moral Character
• Coworkers value the employee's ability to
give honest feedback.
• Clients trust the employee's advice.
• Supervisors rely on the employee's high
moral standards, trusting him not to steal
from the company or create problems.
3.2 Honesty and Integrity as elements of
Moral Character
 3.2 Honesty and Integrity as elements of
Moral Character
Integrity Pacts- One means of ensuring
more transparency in government procure-
ment and contracting is called an integrity
pact, a concept developed by the NGO Trans-
parency International in the mid-1990s. In
the context of government procurement, an
integrity pact is a formal pact or agreement
between a government office inviting tenders
and the enterprises intending to participate.
By signing such an agreement, an enterprise
commits itself to participate in the tendering
process in a legal and transparent way.
 3.2 Honesty and Integrity as elements of
Moral Character
In particular, it pledges not to offer, pay, ac-
cept, or seek bribes of any kind during the
tender. The government office, in turn, com-
mits that its officials will not demand or ac-
cept any bribes. The key component of an in-
tegrity pact is transparency. All offers and
payments made by an enterprise should be
reported to members of the pact. The pact
has preapproved sanctions for violations.
Sanctions include denial or loss of the con-
tract, forfeiture of bid security, liability for
damages, or blacklisting by the government
 3.2 Honesty and Integrity as elements of
Moral Character
Use of the integrity pact is slowly developing
on a global basis, hindered by the expertise
and funds needed to encourage governments
and enterprises to enter into the agreement.
Transparency International has facilitated in-
tegrity pacts in Argentina, Benin, Colombia,
and Panama.
 3.3 Moral Character Dev. Process
Moral development is the process
through which children/individuals de-
velop proper attitudes and behaviors
toward other people in society, based
on social and cultural norms, rules, and
laws.
Factors in the moral development and
behavior
Heredity/inheritance
Early childhood experience
Modeling by important adults and older
 3.3 Moral Character Dev. Process
Peer influence-how are they behaving?
The general physical and social envi-
ronment-what is the culture of people
around you?
The communications media-what are
they saying? Is there any laws to con-
trol the contents?
What is taught in the schools and other
institutions
Specific situations and roles that elicit
corresponding behavior
3.3 Moral Character Dev. Process
Approaches in Moral Development
Process
First, we can ignore it completely
which assumes the issue is outside the
bounds of proper curriculum. The in-
terest by professional organizations
and the public suggests that this view is
inappropriate.
Second, we can take a "values neutral"
stance and provide opportunities for
students to clarify and defend their own
values without making recommenda-
3.3 Moral Character Dev. Process
This is the position taken by the advo-
cates of the values clarification move-
ment and assumes that in important
ways no values or character traits are
more valid than others.
A third approach is to teach stu-
dents a specific process to follow
when making decisions and putting
these into action. This is the ap-
proach of the analysis view used in
values education and assumes moral
3.3 Moral Character Dev. Process
Another (fourth) cognitively-oriented
approach is to engage students in dis-
cussions of relevant moral issues with
the expectation that students who hear
their peers discuss the issue from a
higher level will gravitate to that posi-
tion.
A fifth approach is to teach students a
given set of values and accompanying
appropriate actions. This is the position
taken by the inculcation approach to
3.3 Moral Character Dev. Process
This approach assumes a set of absolute
values agreed upon by society that are un-
changing and that be applied equally ap-
propriately in all situations.
A final approach is to use the inculcation,
values education, analysis, and moral de-
velopment approaches described above.
This combination of approaches is much
more likely to impact the two important
aspects of character not included in values
education-volition/desire and action.
3.3 Moral Character Dev. Process
There are various views on moral de-
velopment process. Among the famous
view is that given by Kohlberg's
stages of moral development. The
theory which holds that moral reason-
ing, the basis for ethical behavior, has
six identifiable developmental stages,
each more adequate at responding to
moral dilemmas than its predecessor.
The six stages of moral development
are grouped into three levels: pre-con-
ventional morality, conventional moral-
3.3 Moral Character Dev. Process
Level I: Pre-conventional Morality
 Orientation: Behavior is motivated by antici-
pation of pleasure or pain.
Stage 1: Punishment and Obedience Orien-
tation
What could be called a "pre moral" stage,
what an agent will do is determined by calcu-
lating the immediate physical consequences
that might result not the moral value of an
action. By deferring to power, the agent's
overarching goal is to avoid physical punish-
ment. Thus, at stage one, obedience not
moral sentiments/opinions or hesitation char-
3.3 Moral Character Dev. Process
Stage 2: Instrumental Exchange (Personal
Reward/Punishment) Orientation
An individual does what is necessary and
makes concessions to superiors but only as
required to satisfy one’s self-interest. Thus,
right conduct consists of that which instru-
mentally satisfies one’s self-interest which, in
turn, equate moral decision making to a mar-
ketplace where a moral agent seeks to maxi-
mize personal rewards and minimize punish-
ments. At this stage, an agent is not worried
so much about obedience to one's superiors
but more so how to accrue rewards from
3.3 Moral Character Dev. Process
Perhaps the rationale, once again a pre-moral
rationale, is best stated by the saying “If you
scratch my back, I’ll scratch yours" and jus-
tice is “Do unto others as they do unto you”.
At stage two, a moral agent values people
solely in terms of their utility and revenge is
viewed as a moral duty.
Level ii: Conventional Morality
 Orientation: Behavior motivated by the ac-
ceptance of the rules and standards of one’s
group.
3.3 Moral Character Dev. Process
Stage 3: Interpersonal Conformity Orienta-
tion
A moral agent acts not from any personal
moral sensibility but in order to gain approval
from what is valued by others because what
is “good” and “right” is defined as conformity
with the behavioral expectations of one’s so-
ciety or peer group. The moral worth of con-
duct is irrelevant. What counts, morally
speaking, is that one's conduct gratify or help
others or simply that “Everybody is doing it
because the moral agent's goal is to earn ap-
proval from these others. A “sin” or "bad"
3.3 Moral Character Dev. Process
Retribution at this stage is collective for ex-
ample, the group will avoid an individual and
punishment is intended to deter other mem-
bers of the group from engaging in similar
conduct.
Stage 4: Law and Order Orientation
Morality involves respecting rules, laws, and
duly-constituted authority as well as defend-
ing the given social and institutional order for
its own sake. A moral agent's responsibility
is directed toward the welfare of others by
upholding the status quo.
3.3 Moral Character Dev. Process
At stage four, justice normally refers to crim-
inal or forensic justice, with the demand that
wrongdoers be punished by paying a debt to
society, what is called "retributive justice."
Furthermore, law abiders must be rewarded
because of the strict requirements of justice.
Injustice, then, is the failure for one’s merits
to be rewarded or for others demerits to be
punished
3.3 Moral Character Dev. Process
Level iii: Post-conventional or Principled
Morality Orientation: Universal moral
principles
Stage 5: Prior Rights and Social Contract
Orientation
Moral agents act out of a sense of mutual
obligation and the public good and right con-
duct tends to be defined in terms of general
individual rights and in terms of standards
critically examined and agreed upon by the
whole society. Moral conduct in a specific sit-
uation is not defined by referencing a check-
list of rules, policies, or contractual obliga-
tions but is dependent upon logical applica-
3.3 Moral Character Dev. Process
I can not steal because the law prohibit this
but because I feel bad for the person am
stealing from.
I can not sleep with my sister because my so-
ciety say it is immoral.
I can not employ a 12 years girl because it is
contrary to the law but because it contrary to
the rights of this child.
3.3 Moral Character Dev. Process
Stage 6: Universal Moral Principles Orienta-
tion
An individual who reaches this stage acts out of
universal principles based upon the equality and
intrinsic worth of all human beings. This is the
“Golden Rule” model of moral decision making.
A list of rules inscribed in stone is no longer
necessary because the individual is motivated by
universal moral principles.
I can not steal because the law prohibit this but
because no culture in the world encourage steal-
ing.
I can not sleep with my sister because my soci-
ety say it is immoral, because most parts of the
3.3 Moral Character Dev. Process
4.1 Meaning of Corporate Governance
Corporate governance refers to the system/
framework that a corporation establishes to
structure relations among managers, directors,
and shareholders and between the enterprise and
civil society.
The term “corporate governance” has been also
used broadly to refer to the direction and control
of companies from the viewpoint of the responsib-
ilities of the board of directors (World Bank,
1999).
Such governance measures are necessary when
government charters provide limited liability to
shareholders, which separates ownership of the
enterprise from responsibility for day-to-day op-
erations. Where there is such separation of own-
ership and management without accountability,
4.1 Meaning of Corporate Governance
Managers are, in such cases, able to use the
assets of the enterprise to their own pur-
poses. Corporate governance practices are
built on the ethical premise that the leaders
of an enterprise have an obligation to be fair,
transparent, accountable, and responsible in
their conduct toward shareholders and civil
society.
 Corporate governance can also be described
as the way a company manages itself in order
to ensure fair and equitable returns to all
shareholders and other financial stakehold-
ers. It may also refer to the rules and incent-
ives by which shareholders control and influ-
ence a company’s management so as to max-
4.1 Meaning of Corporate Governance
CG strive to answer the following questions
i.Who can rightfully claim the power to govern
an enterprise?
ii. How can the board of directors and man-
agement best protect the rights of sharehold-
ers, especially minority shareholders?
iii.How can the board of directors best guide
management to meet the reasonable expecta-
tions of shareholders?
iv.What code of ethics must be followed by the
management?
4.2 Principles of Corporate Governance
1. Fairness, referring to the equitable treat-
ment of all shareholders;
2. Transparency, i.e., the process of disclosing
information on a company’s perform-
ance and important information to share-
holders, the board of directors, workers,
government, suppliers, consumers, and the
general public.
3. Accountability based on a system of checks
and balances(condemn bad acts and poor
performance internally) and sound auditing
practices;
4. Responsibility for decisions and actions
through clearly defined roles and duties
for owners, shareholders, directors and
4.3 Preconditions for effective CG
i. The corporate values, codes of conduct and
other standards of appropriate behaviour
and the system used to ensure compliance
with them;
ii. A well-articulated corporate strategy
against which the success of the overall en-
terprise and the contribution of individuals
can be measured;
iii. The clear assignment of responsibilities and
decision-making authorities, incorporating a
hierarchy of required approvals from indi-
viduals to the board of directors;
4.3 Preconditions for effective CG
iv. Strong internal control systems, including
internal and external audit functions, risk
management functions independent of busi-
ness lines, and other checks and balances;
v. Special monitoring of risk exposures where
conflicts of interest are likely to be particu-
larly great, including business relationships
with borrowers affiliated with the bank, large
shareholders, senior management, or key de-
cision-makers within the firm (e.g. traders);
4.3 Preconditions for effective CG
vi. The financial and managerial incentives, to
act in an appropriate manner offered to se-
nior management, business line management
and employees in the form of compensation,
promotion and other recognition;
vii. Appropriate information (about compliance
and standards) flows internally and to the
public, and
viii. A well-functioning board of directors who
have the skills, the time, and the access to in-
formation needed to discharge its responsibil-
ities effectively.
ix. Establishment of a mechanism for the inter-
action and cooperation among the board of
4.4 Principles of CG-Disclosure
Though there are many principles of CG, let us
talk about one principle of Information Disclo-
sure. Where is the information to be
disclosed ?
i.The Stockholders
ii.The board of directors
iii.The Government
iv.The Workers
v.Suppliers
vi.Consumer
vii.The General Public
4.3 Principles of CG-Disclosure
As said earlier a company has moral obligation
of disclosing various information to different
stakeholders including:-
The Stockholders-information on the man-
agement of the corporation, its financial posi-
tion (net sales of the company, net earnings, re-
turn on shareholder’s equity, earnings per
share, dividends, working capital, and the as-
sets and liabilities of the corporation), and its
general plans in the future. Such information
can be offered through annual reports in cor-
poration’s meeting.
The board of directors-these are the legal
4.3 Principles of CG-Disclosure
Shareholders appropriate information, as well
as honest service in their interests. Yet board
members need not make public everything they
learn. Board of directors they have right to in-
dependent access to the information they de-
sire.
Government-to know that the corporations
are complying with the law.
Workers-conditions of workers, their rights,
benefits and obligations, policy of the corpora-
tion in areas in which they have moral con-
cerns. If they do not wish to work for a com-
pany that practice discrimination, they should
4.3 Principles of CG-Disclosure
Suppliers-the corporation from moral point
of view, should disclose to its suppliers what-
ever is necessary to make the contracts be-
tween them fair. This is also emphasized in
the Public Procurement Regulation, section
10 which emphasize Transparency and Fair-
ness to tenderers.
Consumers-consumers should be informed
of any danger posed by the use of the product
they purchase. If a product is caustic, they
should be so informed. If it is poisonous, they
should be warned. If it is defective, they
should be notified in some ways before it is
purchased. They should know the contents of
4.3 Principles of CG-Disclosure
General Public-the term general public in-
cludes more than simply a corporation’s cus-
tomers or potential customers. A public is any
group that has an actual or potential interest
in or impact on a company’s ability to achieve
its objectives. Public outside the organization
need to be informed on issues concerning en-
vironment impact, pollution, and the possible
dangers of the operation to the surrounding
population. Whether it is a new factory, a nu-
clear-powered plants, farming activities, the
public must be informed on any immediate
and remote dangers.
4.3 Principles of CG-Disclosure
Disclosure should include, but not be
limited to, material information on:
The financial and operating results of the
company.
Audited financial statements showing the fi-
nancial performance and the financial situa-
tion of the company (most typically including
the balance sheet, the profit and loss state-
ment, the cash flow statement and notes to
the financial statements) are the most widely
used source of information on companies.
4.3 Principles of CG-Disclosure
Company objectives.
In addition to their commercial objectives,
companies are encouraged to disclose poli-
cies relating to business ethics, the environ-
ment and other public policy commitments.
Such information may be important for in-
vestors and other users of information to bet-
ter evaluate the relationship between compa-
nies and the communities in which they oper-
ate and the steps that companies have taken
to implement their objectives.
4.3 Principles of CG-Disclosure
Major share ownership and voting rights.
One of the basic rights of investors is to be
informed about the ownership structure of
the enterprise and their rights vis-à-vis the
rights of other owners. Countries often re-
quire disclosure of ownership data once cer-
tain thresholds of ownership are passed. Such
disclosure might include data on major
shareholders and others that control or may
control the company, including information on
special voting rights, shareholder agree-
ments, the ownership of controlling or large
blocks of shares, significant cross sharehold-
ing relationships and cross guarantees.
Companies are also expected to provide in-
4.3 Principles of CG-Disclosure
Members of the board and key execu-
tives, and their remuneration.
Investors require information on individual
board members and key executives in order
to evaluate their experience and qualifica-
tions and assess any potential conflicts of in-
terest that might affect their judgement.
Board and executive remuneration are also of
concern to shareholders. Companies are gen-
erally expected to disclose sufficient informa-
tion on the remuneration of board members
and key executives (either individually or in
the aggregate) for investors to properly as-
sess the costs and benefits of remuneration
plans and the contribution of incentive
4.3 Principles of CG-Disclosure
Material foreseeable risk factors.
Users of financial information and market
participants need information on reasonably
foreseeable material risks that may include:
risks that are specific to the industry or geo-
graphical areas; dependence on commodities;
financial market risk including interest rate
or currency risk; risk related to derivatives
and off-balance sheet transactions; and risks
related to environmental liabilities.
4.3 Principles of CG-Disclosure
Material issues regarding employees and
other stakeholders.
Companies are encouraged to provide infor-
mation on key issues relevant to employees
and other stakeholders that may materially
affect the performance of the company. Dis-
closure may include management/employee
relations, and relations with other stakehold-
ers such as creditors, suppliers, and local
communities.
4.3 Principles of CG-Disclosure
Some countries require extensive disclosure
of information on human resources. Human
resource policies, such as programmes for
human resource development or employee
share ownership plans, can communicate im-
portant information on the competitive
strengths of companies to market partici-
pants.
4.3 Principles of CG-Disclosure
Governance Structures and Policies
Companies are encouraged to report on how
they apply relevant corporate governance
principles in practice. Disclosure of the gov-
ernance structures and policies of the com-
pany, in particular the division of authority
between shareholders, management and
board members is important for the assess-
ment of a company’s governance.
5.2 Introduction to HRM
5.2 Introduction to HR
Human Resource Management is a business
function that is concerned with managing re-
lations between groups of people in their ca-
pacity as employees, employers and man-
agers. ‘Human resource management' occu-
pies the sphere of activity of recruitment se-
lection, orientation, performance appraisal,
training and development, industrial relations
and health and safety issues where ethics
really matters.
5.2 Types of Moral Theories in HR
Three basic types of moral theories/principles in
the field of normative ethics have been de-
veloped.
Firstly, the Utilitarian theory which suggests that
plans and actions should be evaluated by their
consequences. The underlying idea is that plans
or actions should produce the greatest good for
the greatest number of people.
Secondly, Individual Rights theory, the theory
based on rights which holds that all people have
basic rights. Examples are rights to freedom of
conscience (sense of rights or wrong), and due
process -fair trial, (fair treatment before the law),
freedom of movement, physical security, freedom
5.2 Types of Moral Theories in HR
The individual rights principle includes more
than legal rights; it also includes human
rights that everyone is granted as a moral
norm of society. For example, access to edu-
cation and knowledge isn’t a legal require-
ment everywhere, but most of us believe that
it is a human right. One problem with indi-
vidual rights is that certain individual rights
may conflict with others. The shareholders’
right to be informed about corporate activi-
ties may ultimately conflict with an execu-
tive’s right to privacy, for example.
5.2 Types of Moral Theories in HR
Thirdly the theory of justice which demand that
decision makers be guided by fairness and equity,
as well as impartiality., known as “Distributive
justice” . This principle suggests that people who
are similar in relevant ways should receive simi-
lar benefits and burdens; those who are dissimi-
lar should receive different benefits and burdens
in proportion to their dissimilarity. For example,
we expect that two employees who contribute
equally in their work should receive similar re-
wards, whereas those who make a lesser contri-
bution should receive less. A variation of the dis-
tributive justice principle says that inequalities
are acceptable where they benefit the least well
5.2 Types of Moral Theories in HR
Thus employees in risky jobs should be paid
more if this benefits others who are less well
off. One problem with the distributive justice
principle is that it is difficult to agree on who
is “similar” and what factors are “relevant.”
Most of us agree that race and gender should
not be relevant when paychecks are distrib-
uted. But should rewards be determined
purely by an employee’s performance? Or
should effort, seniority, and other factors also
be taken into account?
5.3 Responding To Ethical Situations
To respond to situations with ethical ele-
ments, the following guides are suggested for
thought:
i. Does the behavior or result achieved comply
with all applicable laws, regulations, and
government codes?
ii.Does the behavior or result achieved comply
with all organizational standards of ethical
behavior?
iii.Does the behavior or result achieved comply
with professional standards of ethical behav-
5.3 Responding To Ethical Situations
To respond to situations with ethical el-
ements, the following guides are suggested
for thought:
i. Does the behavior or result achieved comply
with all applicable laws, regulations, and
government codes?
ii.Does the behavior or result achieved comply
with all organizational standards of ethical
behavior?
iii.Does the behavior or result achieved comply
with professional standards of ethical behav-
5.3 Responding To Ethical Situations
What the preceding three points make clear
is that just complying with the laws does not
guarantee ethical behavior. Laws and regula-
tions cannot cover every situation that HR
professionals and employees will face. In-
stead, people must be guided by values and
personal behavior “codes,” but employers
have a role to play through HR management.
5.3 Unethical Practices in HRM
Unethical issues that may arise in the employment re-
lationship, includes:-
Issues affecting the privacy of the employee: work-
place surveillance through the use of psychometric
tests to electronic surveillance of work patterns
through the application of ICT, drug testing;
Issues relating to the fairness of the employment con-
tract and the balance of power between employer and
employee: slavery, indentured servitude, employment
law;
Lack of occupational safety and health;
All issues related to the hiring and firing of employ-
ees. An employee or future employee can not be hired
or fired based on race, age, gender, religion, or any
other discriminatory act;
5.3 Unethical Practices in HRM
Off-shoring and exploiting ‘cheap’ labour
markets;
Using child labour;
Reneging on company pension agreements;
Longer working hours;
Increasing work stress;
Increased job insecurity
5.3 Unethical Practices in HRM
Employee drug or alcohol abuse,
Falsification of records
5.4 Ethical Practices in HRM
HR professionals are responsible for adding value
to the organisations they serve and contributing
to the ethical success of those organisations. Ac-
cept professional responsibility for individual de-
cisions and actions, also advocates for the profes-
sion by engaging in activities that enhance its
credibility and value.
As professionals must strive to meet the highest
standards of competence and commit to
strengthen their competencies on a continuous
basis,
HR professionals are expected to exhibit indi-
vidual leadership as a role model for maintaining
the highest standards of ethical conduct,
5.4 Ethical Practices in HRM
Human resource professionals are ethically re-
sponsible for promoting and fostering fairness
and justice for all employees and their organisa-
tions,
HR professional must maintain a high level of
trust with their stakeholders. They must protect
the interests of their stakeholders as well as their
professional integrity and should not engage in
activities that create actual, apparent or potential
conflicts of interests,
HR professionals must consider and protect the
rights of individuals, especially in the acquisition
and dissemination of information while ensuring
truthful communications and facilitating informed
5.5 Ethical Practices in HRM
Instill in the employees and the public a
sense of confidence about the conduct and in-
tentions of my employer.
Maintain loyalty to my employer and pursue
its objectives in ways that are consistent with
the public interest.
Uphold all laws and regulations relating to
my employer’s activities.
Improve public understanding of the role of
human resource management.
5.2 Dimensions in HR Ethics
Managers are facing many situations that re-
quire ethical judgements, and often there are
no easy answers. Ethical issues in manage-
ment, including HR issues, often have five
dimensions:
i. Extended consequences: Ethical decisions
have consequences beyond the decisions
themselves. Closing a plant and moving it to
another location to avoid unionization of a
workforce has an impact on the affected
workers, their families, the community, and
other businesses.
5.2 Dimensions in HR Ethics
ii. Multiple alternatives: Various alternatives ex-
ist in most decision-making situations, so the is-
sue may involve how far to “bend” rules. For ex-
ample, deciding how much flexibility to offer em-
ployees with family problems, while denying
other employees similar flexibility, may require
considering various alternatives.
iii. Mixed outcomes: Decisions with ethical di-
mensions often involve weighing some beneficial
outcomes against some negative ones. For exam-
ple, preserving the jobs of some workers in a
plant might require eliminating the jobs of oth-
ers. For example introduction of a new machine
to be operated by one person instead of several.
The result would be a mix of negative and posi-
tive outcomes for the organization and the af-
5.2 Dimensions in HR Ethics
iv. Uncertain consequences: The consequences
of decisions with ethical dimensions often are not
known. Should employees’ personal lifestyles or
family situations eliminate them from promotion
even though they clearly are the most qualified
candidates?
v. Personal effects: Ethical decisions often affect
the personal lives of employees, their families,
and others. Allowing foreign customers to dictate
that they will not have a female or minority sales
representative call on them may help with the
business relationship short term, but what are
the effects on the employees denied career op-
portunities?
5.2 Dimensions in HR Ethics
iv. Uncertain consequences: The consequences
of decisions with ethical dimensions often are not
known. Should employees’ personal lifestyles or
family situations eliminate them from promotion
even though they clearly are the most qualified
candidates?
v. Personal effects: Ethical decisions often affect
the personal lives of employees, their families,
and others. Allowing foreign customers to dictate
that they will not have a female or minority sales
representative call on them may help with the
business relationship short term, but what are
the effects on the employees denied career op-
portunities?
6.1 Introduction
 6.1 Introduction
Marketing ethics is viewed as important be-
cause of marketing’s interface with many di-
verse stakeholders. Marketing is a key func-
tional area in the business organization that
provides a visible interface with not only cus-
tomers, but other stakeholders such as the
media, investors, regulatory agencies, chan-
nel members, trade associations, as well as
others. It is important when addressing mar-
keting ethics to recognize that it should be
examined from an individual, organizational,
and societal perspective.
 6.1 Introduction
Examining marketing ethics from a narrow
issue perspective does not provide founda-
tional background that provides a complete
understanding of the domain of marketing
ethics.
Written regulations cannot possibly cover all
potential marketing abuses, and existing laws
are often difficult to enforce. However, be-
yond written laws and regulations, business is
also governed by social codes and rules of
professional ethics. Enlightened companies
encourage their managers to look beyond
what the regulatory system allows and simply
 6.1 Introduction
These socially responsible firms actively seek
out ways to protect the long-run interests of
their consumers and the environment.
The recent rash of business scandals and in-
creased concerns about the environment
have created fresh interest in the issues of
ethics and social responsibility. Almost every
aspect of marketing involves such issues.
 6.1 Introduction
By definition marketing ethics is defined as
marketers’ standards of conduct and moral
values. Ethics concern matters of right and
wrong: the responsibility of individuals and
firms to do what is morally right.
For marketers, ethics in the workplace refers
to rules (standards, principles) governing the
conduct of organizational members and the
consequences of marketing decisions (Ferrell,
2005).
 6.1 Introduction
From a normative perspective approach is
defined as “practices that emphasize trans-
parent, trustworthy, and responsible personal
and organizational marketing policies and ac-
tions that exhibit integrity as well as fairness
to consumers and other stakeholders. Mar-
keting ethics focuses on principles and stand-
ards that define acceptable marketing con-
duct, as determined by various stakeholders
and the organization responsible for market-
ing activities.
6.2 Ethical Issues in Marketing
6.2 Ethical Issues in Marketing
i. Ethics in Product Strategy
Product quality, planned obsolescence, brand
similarity, and packaging all raise ethical is-
sues.
Feeling the competition, some marketers
have tried packaging practices that might be
considered misleading, deceptive, or unethi-
cal. Larger packages take up more shelf
space, and consumers notice them. An odd-
sized package makes price comparisons diffi-
cult. Bottles with concave bottoms give the
impression that they contain more liquid than
6.2 Ethical Issues in Marketing
Are these packaging practices justified in the
name of competition, or are they deceptive?
Growing regulatory mandates appear to be
narrowing the range of discretion in this
area.
How do you evaluate the quality of a product
like a soft drink? By flavor or by ingredients?
Citing several studies, some consumer advo-
cates say that the ingredients in soda-mainly
the high sugar content-can be linked to obe-
sity in consumers, particularly children. Not
surprisingly, the beverage industry disagrees,
arguing that lack of exercise and a poor diet
6.2 Ethical Issues in Marketing
Another criticism is that products lack the
quality they should have. One complaint is
that products are not made well and services
not performed well. A second complaint is
that some products deliver little benefit. For
example, some consumers are surprised to
learn that many of the ‘healthy’ foods being
marketed today, such as cholesterol-free
salad dressings, low-fat frozen dinners and
high-fibre bran cereals, may have little nutri-
tional value. A third complaint concerns
product safety. Product safety has been a
problem for several reasons, including manu-
6.2 Ethical Issues in Marketing
Planned obsolescence-critics have charged
that some producers follow a programme of
planned obsolescence, causing their prod-
ucts to become obsolete before they need re-
placement. For example, some critics charge
that some producers continually change con-
sumer concepts of acceptable styles in order
to encourage more and earlier buying. An ob-
vious example is constantly changing mobile
phone versions. Other producers are accused
of holding back attractive functional features,
then introducing them later to make older
models obsolete. Critics claim that this prac-
6.2 Ethical Issues in Marketing
Poor service to disadvantaged consumers-
marketing has also been accused of poorly
serving disadvantaged consumers. Critics
claim that the urban poor often have to shop
in smaller stores that carry inferior goods and
charge higher prices. Marketing’s eye on
profits also means that disadvantaged con-
sumers are not viable segments to target. The
high-income consumer is the preferred tar-
get.
6.2 Ethical Issues in Marketing
ii. Ethics In Distribution
Two ethical issues influence a firm’s deci-
sions regarding distribution strategy:
1. What is the appropriate degree of con-
trol over the distribution channel?
2. Should a company distribute its prod-
ucts in marginally profitable outlets that
have no alternative source of supply?
The question of channel control typically
arises in relationships between manufactur-
ers and franchise dealers.
6.2 Ethical Issues in Marketing
For example, should an automobile dealer-
ship, a gas station, or a fast-food outlet be
forced to purchase parts, materials, and sup-
plementary services from the parent organi-
zation? The second question concerns mar-
keters’ responsibility to serve unsatisfied
market segments even if the profit potential
is slight. Should marketers serve retail stores
in low-income areas, serve users of limited
amounts of the firm’s product, or serve a de-
clining rural market? These problems are dif-
ficult to resolve because they often involve
individuals rather than broad segments of the
6.2 Ethical Issues in Marketing
Deceptive packaging includes exaggerating
package contents through subtle design, not
filling the package to the top, using mislead-
ing labelling, or describing size in misleading
terms.
6.2 Ethical Issues in Marketing
iii. Ethics in Promotion
Promotion raises many ethical questions, be-
cause it is the most direct link between a firm
and its customers. Personal selling has always
been a target of criticism-and jokes about un-
trustworthiness. Salespeople are sometimes
accused of high-pressure selling that per-
suades people to buy goods they had no
thought of buying. It is often said that cars,
insurance, property and home improvement
plans are sold, not bought. Salespeople are
trained to deliver smooth, canned talks to en-
tice purchase. They sell hard because com-
6.2 Ethical Issues in Marketing
Marketers know that buyers can often be
talked into buying unwanted or unneeded
things.
A key question is whether industry self-regula-
tory or trading standards bodies, consumer pro-
tection laws and consumer-interest groups are
sufficiently effective in checking and curbing
unsavory sales practices. In this modern era, it
is encouraging to note that one or more of
these can work to the advantage of consumers.
Or, where deceptive practices are carried out,
regulators will catch out wrongdoers, who will
invariably pay the penalties for irresponsible
marketing. In most cases, marketers have little
6.2

Ethical Issues in Marketing
Marketing to children has been under close
scrutiny for many years because children have
not yet developed the skills to receive market-
ing messages critically. They simply believe ev-
erything they see and hear. For example, snack
foods, candy, soda, and other junk foods are for
sale in abundant quantities in many parts
throughout the country, where children are a
captive audience. The ethical question here is
whether such activities are tailored to them.
Some companies are taking a stance against
promoting certain products to children for ex-
ample plans to cut back advertising on fatty
and sugary foods to children, adding new logos
6.2 Ethical Issues in Marketing
Modern marketing is also accused of pushing up
prices because of heavy advertising and sales
promotion. Differentiated products-cosmetics,
detergents, toiletries-include promotion and
packaging costs that can amount to 40 per cent
or more of the manufacturer’s price to the re-
tailer. Critics charge that much of the packaging
and promotion adds only psychological value to
the product rather than real functional value. Re-
tailers use additional promotion -advertising, dis-
plays and sweepstakes -that add even more to re-
tail prices.
Brandname products may cost more, but brand-
ing gives buyers assurances of consistent quality.
6.2 Ethical Issues in Marketing
Heavy advertising adds to product costs but is
needed to inform millions of potential buyers of
the availability and merits of a brand.
Deceptive promotion includes practices such as
overstating the product’s features or perfor-
mance, luring the customer to the store for a
bargain that is out of stock, or running rigged
contests.
6.2 Ethical Issues in Marketing
iv. Ethics in Pricing
Pricing is probably the most regulated aspect of a
firm’s marketing strategy. As a result, most un-
ethical price behavior is also illegal. Some as-
pects of pricing, however, are still open to ethics
abuses. Deceptive pricing includes practices such
as falsely advertising ‘factory’ or ‘wholesale’
prices or a large price reduction from a phone
high retail than the reality when the customer is
before the shopping counter.
Credit card companies often walk a fine line be-
tween ethical and unethical pricing practices.
While consumers are almost always informed of
credit card terms on their agreements, the print
is usually tiny and the language hard to under-
7.1 Introduction
 7.1 Overview
ICT (information and communications techno-
logy-or technologies) is an umbrella term that
includes any communication device or applic-
ation, encompassing: radio, television, cellu-
lar phones, computer and network hardware
and software, satellite systems and so on, as
well as the various services and applications
associated with them, such as videoconferen-
cing and distance learning. Information tech-
nology is impacting all walks of life all over
the world. ICT developments have made pos-
sible a transition in information storage, pro-
cessing, and dissemination, from paper to vir-
tual and from atoms to bits, which are now
 7.1 Overview
Computerized databases are extensively used
to store all sorts of confidential data of polit-
ical, social, economic or personal nature to
support human activities and bringing various
benefits to the society. However, the rapid
development of ICT globally also has led to
the growth of new forms of national and
transnational crimes. These crimes have vir-
tually no boundaries and may affect any coun-
try across the globe. Thus, there is a need for
awareness, policy formation, and enactment
of necessary legislation in all countries for
the prevention of computer related crime.
 7.1 Overview
Globally, internet and computer-based com-
merce and communications cut across territ-
orial boundaries, thereby creating a new
realm of human activities, and undermining
the feasibility and legitimacy of applying laws
based on geographic boundaries. The new
boundaries, which are manifested in the mon-
itor screens, firewalls, passwords, intruder
detection, and virus busters, have created
new personalities, groups, organizations, and
other new forms of social, economic, and
political groupings in the cyber world of bits.
Traditional border-based law making and law
 7.1 Overview
Cyber systems across the globe have many
different rules governing the behaviour of
users. Users are completely free to join or
leave any system whose rules they find com-
fortable or uncomfortable. This flexibility may
at times lead to improper user conduct. Also,
in the absence of any suitable legal frame-
work, it may be difficult for System Adminis-
trators to check on frauds, vandalism or other
abuses, which may cause the lives of many
online users to be miserable. This situation is
alarming because any element of distrust for
the internet may lead to people avoiding do-
 7.1 Overview
The use or misuse of the internet as a me-
dium of communication may in some situ-
ations lead to direct damage to real physical
society. Non-imposition of taxes on online
transactions may have its destructive effect
on physical businesses, and also government
revenues. Terrorists may also make use of the
web to create conspiracies and violence. Wide
and free sharing of ideologies, beliefs, convic-
tions, and opinions between different cultures
might cause physical and emotional stress
and confusion that might lead to physical vi-
olence.
 7.2 ICT Ethical Issues
Analysing and evaluating the impact of a new
technology, such as ICT, can be very difficult.
ICT does not only involve technological as-
pects, but also epistemology since the main
component of ICT is information which rep-
resents data, information, and knowledge.
ICT assists and extends the ability of mankind
to capture, store, process, understand, use,
create, and disseminate information at a
speed and scale which had never been
thought possible before. Some of the impact
and changes of ICT are obvious, but many are
subtle. Benefits and costs need to be studied
 7.2 ICT Ethical Issues
Various ethical issues that have arisen from
the adoption of ICT, such as the application of
automated teller machines are summarized
hereunder.
l. Unemployment
The automation of work has caused creative
destruction by eliminating some vocations
and creating new ones. How does this affect
the employment or unemployment of the
work force of a nation?
 7.2 ICT Ethical Issues
2. Crime
Stolen and counterfeit ATM cards are used to
steal millions of dollars each year throughout
the region. The anonymity of the machines
makes some crimes easier and creates many
new types of crimes.
3. Loss of privacy
Transactions are transmitted and recorded in
databases at banks, hospitals, shopping com-
plexes, and various organizations, in the pub-
lic or private sector. The contents of elec-
tronic communications and databases can
provide important and private information to
 7.2 ICT Ethical Issues
4. Errors
Information input into the databases is prone
to human and device error. Computer pro-
grammes that process the information may
contain thousands of errors. These errors can
create wrong and misleading information
about individuals and organizations. Informa-
tion and programme errors might result in
financial loss, or even the loss of lives.
 7.2 ICT Ethical Issues
5. Intellectual property
Millions of dollars of software is illegally
copied each year all over the world. This
phenomenon has a great impact on the soft-
ware industry in the region. Local and foreign
software industries need consumers support
all over the world to maintain the progress of
technology. Most importantly, for the sake of
growth in indigenous ICT innovation and in-
vention, local software industries in Asia-Pa-
cific need local support in protecting their in-
tellectual property rights and investment.
 7.2 ICT Ethical Issues
6. Freedom of speech and press
How do the constitutional rights of individuals in
terms of the freedoms of speech and press apply
to electronic media? How seriously do the prob-
lems of pornography, harassment, libel, and cen-
sorship on the net affect individuals and society?
What government initiatives have been used in
handling this crisis?
7. Digital Divide
How does ICT affect local community life? The
increasing use of computers has increased the
separation of rich and poor, creating a digital di-
vide between the information “haves” and “have-
nots.” What subsidies and programmes have
 7.2 ICT Ethical Issues
8. Professional Ethics
How well trained and ethical are our ICT pro-
fessionals in dispensing their duties? Faulty
and useless systems that cause disasters and
hardships to users might be built by incompet-
ent ICT professionals. In dispensing their du-
ties ICT professionals must demonstrate their
best practices and standards as set by profes-
sional bodies for quality assurance.
 7.3 UNESCO’s Info-Ethics Programme
The development of digital technologies and
their application in worldwide information
networks are opening vast new opportunities
for efficient access to and use of information
by all societies. All nations can fully benefit
from these opportunities on the condition that
they meet the challenges posed by these in-
formation and communication technologies.
Thus, United Nations Educational, Scientific
and Cultural Organization(UNESCO’s) Info-
Ethics Programme was established for the
principal objective of reaffirming the import-
ance of universal access to information in the
public domain, and to define ways that this can
 7.3 UNESCO’s Info-Ethics Programme
It seeks to address the areas of ethical, legal
and societal challenges of cyberspace, as well
as privacy and security concerns in cyber-
space. It aims to encourage international co-
operation in the following aspects:
i. Promotion of the principles of equality, justice
and mutual respect in the emerging Informa-
tion Society;
ii.Identification of major ethical issues in the
production, access, dissemination, preserva-
tion and use of information in the electronic
environment; and
iii.Provision of assistance to Member States in
 7.3 UNESCO’s Info-Ethics Programme
Through the UNESCO programme Code of
Ethics for the Information Society was de-
veloped which cover various agreements in-
cluding:-
i. Internet in particular and ICTs more generally
should be recognized as a key public service
for building a people-centred, inclusive and
development-oriented information society and
are crucial to promote the exercise and enjoy-
ment of universally recognised human rights
and fundamental freedoms.
2. Every person irrespective of where they live,
their gender, education, religion, social status
shall be able to benefit from the Internet and
 7.3 UNESCO’s Info-Ethics Programme
Everyone shall be able to connect, access,
choose, produce, communicate, innovate and
share information and knowledge on the Inter-
net.
iii. Affordable access to the Internet should serve
as a tool for development, social cohesion and
for enabling everyone’s potentials. Active so-
cial participation in public life through the use
of Internet and other ICTs shall be enabled on
a non-discriminatory basis.
iv. Information should be made available, access-
ible and affordable across all linguistic, cul-
tural and social groups and to both genders,
including people with physical, sensory or cog-
 7.3 UNESCO’s Info-Ethics Programme
Internet and other ICTs shall serve to reduce di-
gital divide and deploy technology and applica-
tions to ensure inclusion.
v. Technological and methodological standards, ac-
cess solutions, portability and interoperability
shall allow the widest possible access to content
and content production, and encourage the evolu-
tion and improvement of the Internet and other
vi. ICTs to bring about greater inclusion and over-
come forms of discrimination. Creation, preserva-
tion and processing of, and access to, educational,
cultural and scientific content in digital form
should be encouraged, so as to ensure that all cul-
tures can express themselves and have access to
 7.3 UNESCO’s Info-Ethics Programme
vii. Everyone should have a freedom of associ-
ation on the Internet and ICT-mediated as-
sembly. Member States should take preventive
steps against monitoring and surveillance of
assembly and association in a digital environ-
ment.
viii. Member States and respective stakeholders
should take all steps to develop trustworthy In-
ternet and other ICTs ensuring security, reliab-
ility and stability of critical and pervasive ap-
plications and services.
ix. Member States should encourage and extend
the availability of information in the public
domain, recognize and enact the right of uni-
 7.3 UNESCO’s Info-Ethics Programme
Publicly-relevant information should be placed
in the public domain and disseminated online
in an easily accessible way using compatible
and open formats.
x. Media and information literacy is a funda-
mental prerequisite for access to information,
the exercise of cultural rights and the right to
education through use of Internet and other
ICTs. It is essential to ensure that all user
groups have the knowledge and skills to act
and make informed and clear consent-based
choices using Internet and ICTs so that they
can be fully responsible members of the in-
formation society.
 7.3 UNESCO’s Info-Ethics Programme
xi. Everyone has a right to freedom of expres-
sion, participation and interaction on the In-
ternet that should not be restricted, except in
those narrowly defined circumstances that are
based on internationally recognized laws and
universal human rights standards.
8.1 Introduction