Business Ethics

ETHICS SUBMITTED BY: SIMRANJEET KAUR

BUSINESS ETHICS AND SOCIAL RESPONSIBILITY ◦ Social responsibility of business refers to its obligation to take those decision and perform those actions which are desirable in terms of the objectives and values of our society. ◦ Business ethics take into consideration responsibilities not just inside the workplace, but also within the environmental, cultural, and social structures of communities. They also deal with accountability issues involved in scientific research, consumer protections, and the overall structure of any business or corporation. ◦ Corporate social responsibility has been divided into four types that must be considered simultaneously, including ethical, legal, economic and philanthropic responsibilities to consumers and society.

EXAMPLES OF CSR ACTIVITIES 1) BMW BMW holds its pride in being one of the most socially responsible companies in its industry. BMW has set the bar high with a goal of helping over one million people by 2020. They plan to do this by creating programs such as “The Schools Environmental Education Development Project” to help raise awareness of social and environmental issues. BMW’s key to CSR success has always been alignment. They’re a great example of corporate social responsibility because of their balance between a good business model and helping social causes.

EXAMPLES OF CSR ACTIVITIES 2) Starbucks Coffee Since the beginning of its existence in 1971, Starbucks Coffee has always focused on ethical and social responsibilities. Starbucks aims at creating a product that is not only beneficial to its customers, but also to the environment. With the start of the C.A.F.E. program, Starbucks has set guidelines to increase product quality, social and economic responsibility, and environmental management. Partnering with Ethos Water, Starbucks is helping bring clean water to over one billion people who don’t have access to it. What separates Starbucks from its competitors is that they focus on society before themselves. Giving back to the community is a great factor to why the brand is so well known. It goes to show that companies with great giving programs are valued more than ones that don’t.

ETHICS AND VALUES ◦ Values are a set of principles that people cherish. They enhance the quality of individual and collective life. They involve personal and community discipline and sacrifice of immediate gratification needs. Quality of life is a product of physical, social, environmental, mental and spiritual health and wholeness. Values refer to intrinsic worth or goodness.

◦ Managers need to develop the following values:  Optimum utilization of resources  Attitude towards work  Work commitment  Willingness to take risk.

 Responsibility.  Integrity

EXAMPLES OF CORE COMPANY VALUES

EXAMPLES OF CORE COMPANY VALUES

EXAMPLES OF CORE COMPANY VALUES

ETHICAL AUDITS ◦ Ethics audit refers to an audit conducted in order to adjudge whether the organization is following the code of conduct goals and values that it has set for itself in the social sphere. ◦ It measures the culture and behaviour of an organization, and determines the extent to which its values are embedded across its people and processes. ◦ Common parameters which may be evaluated in an ethics audit include job satisfaction, awareness of the organization’s policy on equality and diversity, contribution towards the society, whether the processes of the organization follow ethical standards set by the society etc.

◦ Assessing the outcomes and achievements of corporate social responsibility in order to improve future outcomes is an example of ethics audit. Another example is performance related to company’s policies on whistle-blowers and grievance redress.

SIX STEPS TO HIGHLY EFFECTIVE ETHICS AUDITS ◦ Start with a detailed foundation. ◦ Develop metrics. ◦ Create a cross-functional team. ◦ Audit efficiently. ◦ Look for other issues. ◦ Respond consistently and communicate.

ETHICAL AUDIT PROCESS

ETHICS AND SPIRITUALITY ◦ Spirituality is personal ◦ It has to do with: – Authenticity – A factor integrating one’s personality – Meaning – Connectedness – Living from the core of one’s being ◦ It reflects one’s attitude towards – “living life” – “making sense of life” and – “seeking for relationships with others and ultimately with that which is transcendent”

BUSINESS AND SPIRITUALITY ◦ Embodying personal values of honesty, integrity, efficiency, and good quality work, treating co-workers and employees as a human being in a responsible, caring way. ◦ For some, it may mean, participating in spiritual study and activities such as prayer, meditation, or intuitive guidance at work. ◦ For some, it’s making their business socially responsible in how it impacts the environment, serves the community or helps create a better world. ◦ And for some it means, responsibility, integrity, moral, honesty, accountability, quality, cooperation, caring, service, intuition, loyalty, trustworthiness, respect, justice, guidance, motivation & passing benefits to concerned.

ADVANTAGES OF SPIRITUALITY IN WORKPLACE ◦ The organization will become purpose-driven and meaning-based. ◦ Management with a mission will replace management of efficiency and control.

◦ There will be a shift from fear-based culture to love-based culture. ◦ Management practices and decisions will be clearly consistent ◦ Spread of spiritual values such as integrity, honesty, love, hope, kindness, respect and nurturing

ETHICS AND MARKETING ◦ Marketing ethics is an area that deals with the moral principles behind marketing. ◦ Ethics in marketing applies to different spheres such as in product, pricing, Placing (Distribution), promotion & advertising etc. ◦ When an organization behaves ethically, customers develop more positive attitudes about the firm, its products, and its services. ◦ To create Values or trust with key stakeholders

◦ To build good image about the organization in the minds of customer, employees, shareholders and the society.

ETHICS AND P’s

UNETHICAL PRACTISES IN MARKETING ◦ Misleading statements ◦ Making false or deceptive comparisons about a rival product. ◦ *Inciting* fear or applying unnecessary pressure. (“Limited time offers) ◦ Exploiting emotions or a news event. ◦ Stereotyping or depicting women as sex symbols merely to draw attention to a product. ◦ Disparaging references to age, gender, race or religion. ◦ Doctoring photos or using photos that are not authentic representations. ◦ Plagiarizing* a competitor. ◦ Spamming, or sending unsolicited emails to potential customers.

ETHICS AND FINANCE ◦ Ethics in finance is one of the main things which everyone has to follow from small, medium and big level company. ◦ It is considered important as without financial component no business can run for a long time. ◦ Ethics in finance may vary from industry to industry but everyone is liable to do their work at utmost good faith.

CODE OF ETHICS IN FINANCE ◦ Act with honesty and integrity avoiding conflicts of interest in personal and professional relationship ◦ To provide information which is full, accurate, fair, objective, timely and understandable. ◦ To promote ethical behavior among other associates ◦ Respect the confidentiality of info acquired in course of business except authorized

◦ Adhere to and promote this Code of Ethics.

ETHICAL ISSUES IN FINANCIAL MARKETS ◦ Deception: Act of misrepresenting relevant information ◦ Churning: Excessive or inappropriate trading for clients account by a broker who has a control over the account with intent to generate commissions rather than to benefit client ◦ Unsuitability: Not all investments are suitable for every investors. For e.g. : certain high risk investments are inappropriate for retired or conservative investors ◦ Unfairness in markets: The gain of one may equal loss to other, though market exchanges are advantageous to both the parties