What is ethics?
Ethics is a branch of Philosophy which addresses questions about morale; i.e about concepts with a moral dimension to find out what is bad or good, right or wrong. An ethical statement can assert that some particular thing or action is right or may be wrong. Ethics can bring about the difference between good and bad characters or dispositions. It may propound few principles which help in more detailed judgments of these sorts, might be inferred- we can take it for the generalised form of happiness or try to minimize the total suffering of all sentient beings. That it is correct for everyone to look after themselves. Every such statement expresses ethical judgments which embodies generality in different degrees . [J L Mackie 1977]
Business ethics is that which examines ethical principles, morale or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole.
However, there is two different schools of thought in the case of business ethics- one is theoretical and the other one is empirical, points out the importance of ethical judgement in the field of business through different parameters.(Hunt and Vitell,1986,1992)emphasises on the ethical judgement which comes out from a person from his empathy towards deontology and teleology(study of design to lead to a final stage) as his individualistic approach which lead to formulate through cognitive input regarding his intention in behaviour and finally behaviour as a whole.Rest(1986) stresses on four component model comprising of -it is the judgement comes from the justification from the moral values which has an interaction between an individual’s perception of issue related to ethics and how it is been given a shape with regard to how to behave. Jones (1991) goes for a contingent model whereas it is the moral intensity which drives decision making in an ethical way and the decision process is the same as outlined by Rest.
However in the empirical literature,O Fallond and Butterfield (2005) has found ethical judgement has been a dependant variable with respect to various antecedents like sex of the respondents, education, nationality,race, issue importance,deontological and teleological evaluation etc.
John R Sparks, Yu Pan, Etihical Judgements in Business ethics and Research -Definition and Research Agenda, http://web.ebscohost.com/ehost/detail?vid=4&hid=9&sid=abebe556-be59-4fce-ad12-064b605c3480%40sessionmgr11
Origin of Ethics:
The systematic study of what is morally right or wrong can determine that ethics might have originated when humans started to lead the best way of life. This reflective stage emerged once morality creeped into the human society, usually in the form of customary standards of right and wrong conduct. Such customs lead this process of reflection, even if it found them waiting. Ethics also began to come into the picture with the invent of moral codes. [http://www.britannica.com/EBchecked/topic/194023/ethics]
The concept of ethics historically comes from two different thoughts the Greeks ,Hobbes defines it as egoistic prudence,while on solitude the question of conflict did not arise but when a man comes in contact with the other man ,conflict starts and to restore a social order the rules were evolved without giving any chance of reluctance. However on the other part, the christian teaching has extended on morality to correct our imperfect nature in the line of will of god.these are the most simplified version and cannot cover up complex facts.
Noel Preston,Charles sampford and Camel Connors-Encouraging ethics and challenging corruption/http://books.google.co.uk/books?hl=en&lr=&id=17i10ZZu8O4C&oi=fnd&pg=PA3&dq=origin+of+ethics&ots=q50x9tAay9&sig=g3myDyIt_iPahQO2QG0KBkGRxPE#v=onepage&q=origin%20of%20ethics&f=false
The history of Business ethics can vary depending on the situation or the object under discussion. The history also depends a lot on the historian, the way he or she conceives the subject, what facts he or she seeks to discover or has at hand, and the relative importance the historian gives to those facts. The term ‘business ethics’ is used in a lot of different ways Business ethics encompasses all the applications pertaining to what are the moral needs and ethical norms of everyday. ( De George, nd),Religion has a condsiderable influence on the behaviour of business persons and they derive their ethical norms from the religion. and apply these norms in their business activities. Business ethics focuses on the moral or ethical actions of individuals. Many people discussing business ethics, immediately resort to examples of immoral or unethical activity by individuals or by an organization. It also includes the criticism of multinational corporations which make use of child labor or level of low wage of employees in the less developed countries or who utilize suppliers that run sweat shops.
Chandra and Pai (2009) explain that for every individual there are certain factors that affect the way an individual take decisions. They feel that power, centralization of workflow, substitutability of activities, uncertainty of inputs and routinization are the various factors are responsible for controlling the ethical contingencies of any individual. A general framework was being produced by Flanagan(2009) regarding the ethical decision making process. He believes that the characteristics of the decision maker which includes motivation, locus of control, ego strength, knowledge, experience, risk taking abilities, Machiavellianism, etc. and the significant influences such as the organization, work, law, economics, professionalism, technology, family, friends or other opinion leaders are responsible for any decision outcome. These outcomes can be in the form of rewards, performance, satisfaction, feedback, promotion or learning.
Aims and objectives of the Research
a) Find out the level of ethical awareness amongst the employees in private and public sector companies.
b) Comparison of ethical behaviour between private and public sector employees
c) Role of management in improving ethical behaviours.
d) To what extent the employees in the public and private sector organisation understand the intensity of corruption.
e) How can an employee define corruption in his own terms?
f) what are the measures taken by the management to educate the employees about the unethical behaviour?
The Indian industrial sector opened up in late 1990s when the various developed countries entered India through modes like FDI etc ,with the relaxation of rules and modifications made in the foreign policies along with the age of outsourcing and boom in IT and BPO sectors , lot of foreign companies outsourced their processes to the developing countries especially to India and China .There is a significant shift in the policy of banking sector with the opening up of Indian markets to the private sector banks as the banking sector was already characterised by a considerable presence of public sector sector banks along with a sizeable number of co-operative banks.
In another side ,foreign multinational banks in 2009 were looking towards an opportunity to open up the market further so that they can make an entry into the emerging market .Now there was scenario where in loans were available at a very low interest rates. The capacity to spending of the public is increased and they spent more than what they actually earned ,by relying more on easily available loans they began to buy cars and purchased houses which was prior to the Banking boom was beyond their imagination. This is at the micro level fuelled corruption in the private sector banks as the executives who sanctioned the loans inflated the income statement of these people to prove the financial soundness and in return they indulge in malpractice by entertained by bribery from the clients.This was very common at the grass root level in the developing nations but in macro level it is high multitude decay of ethics and corruption at high level.
There have been many a books which have been written on ethics and corruption , everyday we read in news papers articles, journals about companies and government agencies who are found guilty in scams. With respect to literature on ethics and corruption it’s a sea out there. Where the data from which can be inculcated here in the research is very less, as there are several life experiences which can just be an eye opener, which cannot be found in books or have references.
Different ethical theories involve differing procedures, implications, and justifications. Ethical theories are based on ethical principles, they emphasize on different aspects of an ethical dilemma. They also lead to ethically correct resolution staying within the guidelines of ethical theories.
Banks (2001) has expanded the ethical theories into two types-(1)whereas one is concerned with the action which is principle based ie respect and recognition of owners right to their decision and choices which is deontological and
(2)the other one which is oriented with utilititarianism which encompases the role of the moral agent and to examine a relationship between the virtue and care in ethical framework.
(Source-Rujla Osmo,Ruth Landau,The role of ethical theories in decision making by social workers,Social Work edition,Volume 25,Number-8(2006),Pages-863-876)
This theory emphasizes on main duty what is to be ethically correct.This theory further elaborated to analyze ethical perplexity where people should follow their obligations and duties in a strict way. (Rainbow C,1996,pp372) As for example ,a dentologist will stick to his promises agreed to a friend and abide by the law. A person who follows this theory will produce very consistent decisions since they will be based on the individual’s set duties. People with special character are chosen t to perform special duties and obligations. For example, It may have obligation to protect his little sister to cross a busy road together. (http://www.bio.davidson.edu/people/kabernd/Indep/carainbow/Theories.htm ]
The capability to foresee the outcome of an action is the major concern for the utilitarian ethical theory. To an utilitarian, the choice that is ethically correct is the option that provides the greatest benefit to the most people. (Mill S 1963)
The ethical theory derives one benefit by applying a point based system to gauge which choice will bring more benefit for a more number of people and an utilitarian can compare similar solution which can be predetermined.Logic and rational shoul be imputed in the argument in connectionwith decision and can be examined case wise.
(Mill S 1963)The utilitarianism can be divided into two parts ,one is act utilitarianism and the other is rule utilitarianism.The act utilitarianism is same as the discussed above and this form of utilitarianism is associated with the benefit of the mass irrespective of any binding of law. The fairness is the utmost virtue of rule utilitarianism and it goes by the law. Rule utilitarianism benefits are that it values justice and also includes the beneficence at the same time. Most people are benefitted through the fairest and most just means in rule utilitarian.
Further, Hinman (1994) has pointed that Rights theory is the most contemporary theory of ethics and according to utilitarian theory it is the final outcome which has a close relationship with morality however deontologist goes for the correct intention and Rights theory belives that it is the correlation between of duties to respect the others right. introduces the rights and virtues theory stresses on character as the primary factor.
(Source-Rujla Osmo,Ruth Landau,The role of ethical theories in decision making by social workers,Social Work edition,Volume 25,Number-8(2006),Pages-863-876)
Ethical theories in private and public sector companies :
Different ethical perceptions, principles and judgments developed as a result of the differences between public and private-sector organizations. (Sampford C,1998)Unified ethic is instructional and makes possible careful analysis of the proper place of public sector ethics in the context of business, higher education, health care, and law. The public administrators are well-suited to serve as moral exemplars for other professions and for all citizens. . (Sampford C,1998) The notion that public service ought to be the model for ethical conduct in the professions (rather than the other way around) is supportable and provokes new thinking about moral agency and ethics. (Preston N,2002)They provide the necessary foundation for studying public sector ethics by focusing on traditional models arising from moral philosophy. The unified ethic illuminates ethical implications of public administration. It also constructs and culminates by offering an alternative framework for studying ethics. Reay (2009) defines ethics as “a set of principles concerning proper conduct.” But many authors believe that the definition of ethics changes from one individual to another or from one business to another and everyone has his own definition of ethics depending upon their own set of moral conducts. It is believed that the sense in the moral code comes to ones mind with a judgement whether it is right or wrong,or what is acceptable and what is not acceptable. There are those who think that this moral code should be the same for everyone – but it simply cannot be, because all think differently, and all have different upbringings, backgrounds, and experiences. But ethical code of conduct matters to us in every field of life in today’s world.
The salient features of established ethics models: deontological, teleological, intuitionism and virtue theory are combined to make public administration a moral enterprise. It is a moral enterprise because its sole purpose is to serve public values and public purposes. Moral agency is a part of the profession of public administration. In other words, public administrators must strive always to do that which is morally right. This becomes more important since public administrators are under greater public scrutiny than their private sector counterparts and are more than likely to be held accountable for the decisions they make. (Preston N,2002)Both political and administrative practice are embedded with ethical theories and so are inseparable from governance. (Anne Bois C,2000) says The prime importance of Citizens and public servants are to work towards the promotion, co-operative and meaningful relationships that involve moral examination, theoretical practice ,different ethical decision making models shows difference in the etical perceptions and comes out with different form of findings ,
It is through the better communication which can ignite the awareness in factions which eventually led to the difference which is comparative in sense in terms of moral reasoning of personnel in the public as well as private sector. [http://www.accessmylibrary.com/article-1G1-20583851/do-public-sector-and.html].
For instance ,it is expected that a public administrator who is bounded by oath is tend to be more deontologist than others which have less attachment to it and are driven by the interest in total in nature as in the case of groups which has a special interest and represents the business. However there might be a difference in motivation between the career officials and the elected officials as the former one concentrates more on his duty and principles while the later is concerned about the consequences as he has to safeguard his re-election. Such kind of person will provoke for more stability and fairness in general in greater quantity and in a challenging situation.An important part of it is whether the public-private personnel will perceive a consequential matter or inclined towards its deontological tendencies.These possibilities will lead to a point of decision to judge the nature of public administration.
Understanding the ethical decision-making process and its moderating factors helps to incorporate ethics in private and public institutions.
Ethical leadership is characterized by having good characters, getting to know one’s core values and having the courage to live them in all parts life. [http://www.businessballs.com/ethical_management_leadership.htm]
Foundations for various modern concepts for work, business and organizations are provided by Ethical principles. The modern concept of ethical organizations encompasses many related issues like corporate social responsibility (CSR) – or simply social responsibility, fair-trade, sustainability, social enterprise, well-being at work and life balance and many more aspects of good modern leadership. There are no clear cut definitions or rules of ethics that can define them.
In most of the literatures realting to ethical leadership it is the uprightness of the leader which is been stressed and also across the culture it has been on the high priority list and has been an inevitable trait of leadership(Yukl,2001) Ethical leadership also presumed to be consisting of personal traits such as worthy of trust ,honesty while making a decision should practice fairness and honesty which should be present in both personal and professional life of the leader. At the same time leader should exhibit externally in an active manner to influence its followers through its agenda by setting a role model,by communicating ,rewarding and if needed penalise them.(Brown and Trevino,2006)has propounded that the ethical leadership is a normative science at the conjunction of action of a person or personal relationship in between them and finally promoted this kind of conduct in two different way to communicate ,strengthen and decide(Brown et al,2005)
Ethical leadership has greater proximity in finding the potential through which they can influence the organisation and people who work for them.But leadership theory is based on value and inner assumptions exploring how they can be influenced as there is no neutral ground for leader as per ethics,but there is a difference between ethics and behaviour.This difference arises due to value judgement of the person, stages through which moral development takes place, intentions takes birth from their consciousness, freedom of choice and how they can use the ethics and no ethics and finally it is the judgement and leadership which influences the quality(Gary Yukl,2001)(Source-Ethical Integrity in Leadership and Organizational Moral Culture,
John C. Thoms,University of Sydney, Australia
Volume 4, Number 4 (November 2008)
Page-419 – 442,Sage Publication)
The 4-V Model of Ethical Leadership explains the relationship between beliefs and values and behaviors and actions. The theory has the main intention to bring advancement of common good. (Grace B,1999) model tries to find out position of personal passions which lead to belief and ethics in the research for formal leadership .Leaders work to create an open, two-way conversation, thereby maintaining a charitable understanding of different views, values, and constituents’ opinions. They are open to others’ opinions and ideas because they know those ideas make the organization they are leading better. By having “the right values” or being a person of “strong character,” the ethical leader can set the example for others and withstand any temptations that may occur along the way. At the same time one cannot ignore the value of good character and values which are right as in reality the leadership in ethics far more complicated. and the stakes are much higher.
Grace B(1999),In every field of business, the ethical behavior is very important. But in the field of business services, the role of ethics is even greater as it is directly related to human’s life. But Murthy (2007) reveals that for the economic and business benefits, some businessmen are neglecting their code of ethics. Although, Nundy (2000) argues that it is only a small portion of the businessmen who do not follow the code of ethics and are bringing a disgrace to the whole community of corporates but still unethical practices are going on in different sectors in various forms.
Carroll and Buchholtz (2008) explains that ethics is basically a distinct section to meet the creria for bad and good with a duty of mral bound and obliged and these of moral conducts are even true for the business systems in any part of the world. They divide the ethics into two key branches of moral philosophy as descriptive and normative ethics. They further explained descriptive ethics is a branch that is concerned with describing, characterizing and studying the morality of a people, an organization, also what is behind a culture and society.However there is a control parameter to find out of difference and similarity in the moral codes,what is there in the system,practice which draws beliefs and values.Therefore, in descriptive ethics, the key focus remains on learning. But on the other hand, the normative ethics is
A systematic approach of supplying and to adjudge the moral tendencies to think and justify.To unveil,develop and establish basic principals in a right way is the motive behind these ethics and finally mould the behaviour,actions and decide what to do.It is here that the business system, particularly in the developing countries, go wrong at following the normative ethics and they violate the ethical code of conduct for their individual benefits.
Carroll and Buchholtz (2008) has explained three approaches to ethics as conventional approach (based on how normal society views ethics in today’s environment), principles approach (based upon the use of ethics principles or guidelines to direct behavior, action and policies) and ethical tests approach (based on short practical questions to guide ethical decisions guiding the behavior). But seeing the business practices as a concern, the conventional approach to ethics is essentially an approach where one can compare a decision, practice or policy with prevailing norms of acceptability and say whether the practice followed is ethical or unethical.
The conventional approach defines some of the sources of norms that come to bear on the individual and that might give an idea for the unethical behavior of the businessmen around the world today.
Carroll and Buchholtz (2008)
The various sources that may influence a businessman to follow up an unethical practice may include family, friends, law, religious beliefs, society, employer, profession, culture and fellow workers. Each of these attributes contributes in one or the other way to force the business Enterprises to follow the unethical practices for their individual benefits either business or economic. One of possible example for motivating a professionals to follow unethical practices can be an urge to earn more money to satisfy the needs of the family members. This urge of getting more money leads him to follow unethical practices to earn quick money.
But there exists a reason for the unethical behavior of the business Enterprises because whenever he or she makes a decision about what is being ethical (right, just, fair), the conventional approach comes into picture. The decision being taken consists of three elements where in the first step, the observation is of the decision, action and the existing practice in the workplace. After that the practice is compared with the prevailing norms of acceptability and then the recognition of the value judgments with the prevailing norms of acceptability. This means for the same set of actions, the two persons have different ways of looking it as they have different et of prevailing norms of acceptability
Feiglstok (2009)The diagram for ethical decision making gives a wider view for an individual decision regarding ethics. The diagrams depicts the business Enterprises following the unethical practices can be put in the area . This is an area where the corporates get a profit following the unethical practices but they need to be very cautious while doing the unethical work. The various business enterprises in the developing countries are ready to take such a risk because of the inefficient legal system in these countries. They take benefit of the existing lenient laws in these countries and follow the unethical practices to make quick money.
Weaver (2009 )The business enterprises usually follow the principle of Smith’s Market Ethic which says that take selfish actions and be motivated by personal gains in business dealings. But as the reason of their actions for unethical behavior, they follow the Bentham/Mill’s Utilization Ethic Principle which asks an individual to determine whether the harm in an action is outweighed by the good. So, these parctioners have numerous reasons which can outweigh the unethical action by a good cause.
Weaver (2009) reveals that a recent survey conducted by the American Management Association and the Human Resource Institute identified the top three factors that would cause people to break the ethical standards. The factors included the pressure to meet unrealistic objectives or deadlines, career advancement and protecting their livelihood. In case of the business Enterprises the later two reasons play a very important role for encouraging following the unethical practices. For establishing their practice in a very short span of time and for increasing the volumes of clients coming to visit them, these business Feiglstok (2009) supports the ethics in an organization by
Which reveals that the ethichs outweighs heavily the non ethical form of business.Integrity and truthfulness has a number a reasons for a right decision making.
This includes the honesty towards work and various humanitarian reasons. He also believes that working for an organization in an ethical manner or working as individual for the profession in an ethical manner gives self satisfaction to an individual which cannot be obtained even if one earns good money by following the unethical practices.
Unethical Practices in Industry
Decade’s back, business was considered as a good profession and almost all corporates were not money minded people. But the time has changed and all wants to be established in their life very quickly and for that they will choose the short cut. (Theyyunni, 2008). So, young and inexperienced business Enterprises have started following the path of short cut by taking the unethical path which is beneficial in terms of business as well as economics. Although Watts (2008) criticizes the unethical behavior of the business Enterprises by quoting “Not All Money is Good Money” but still it depends upon business Enterprises to take their own ethical decisions.
In many of the developing countries, The public sector employee has a intuition that they can work in the private sector which can bring a hefty amount with facilities and if they practice privately with legal binding which is strict or controlled. Public offices may operate their own private offices and manage the income from them, or may allow work for private gain on their premises, as when corporates admit private clients and are paid directly by them. (Mills, Bennett, & McPake, 1997) This overlapping of the private and public sectors gives birth to the existence of certain unethical practices for the personal benefits by certain individuals.
Garrett’s principle of proportionality supports the view of the business Enterprises in developing countries around the world by saying these Enterprises have a proportional reason for the unethical practices which are very much needed along with the ethical practices that are followed. It believes one such proportionate reason is the low wage to business sector. Smith (1999) says that with reference to NHS in UK, the professional bodies and the government departments have a very little to say on these unethical practices. Nundy (2000) gives emphasis to a cover up for the medical facilities and at the same time provide a protective shield to the public from incorrupt and inefficient corrupt business practice.
Unethical Practices in India
The position of India has not been impressive in the worldwide corruption perception index(CPI) ,as it is ranked 74 with a drop in the two rank among the 180 countries in the world disclosed by independent international agency.In comparison to India countries like Srilanka,Maldives, Pakistan,Libya,Iran and Nepal had a higher magnitude of corruption as they are ranked even lower.But China was ranked 72 in the last year alongwith India but due to fall in the position of India ,china is two position better.
With the fast development of various sectors in India, the unethical practices are also increasing in the business sector in India. Sharma (2004) has however preached that the public sector in India need to be strengthened and restructured in an urgent manner. Apart from quacks and outright fakes, even qualified business practitioners know that they can get away with malpractice because clients do not know their rights. With the exponential growth of the private sector, there is an urgent need for regulation to protect users. (Sharma, 2004)
Dev and Rao (2009) support the allegations of Sharma by quoting that the recent expansion of the private sector and the increased investment in the field of the curative services and the various sophisticated business equipments have increased the corruption in the private practices in the business sector in India. They explain that the payment to touts who get the clients for offices and to the corporates who refer clients has become a common practice in India Colclough (1997) explains commission to corporates who prescribe expensive investigations and procedures which are often unnecessary as another form of unethical practice and corruption in business sector in India. Dev and Rao (2009) criticize the unethical Indian corporates in the private sector putting them responsible for kickbacks, overbilling and expensive procedures.
Phadke (2009) reveals though the client knows about the malpractice but he is afraid to bargain or to show lack of trust because of the fear that this might adversely affect the person’s attitude towards the client and in turn, may affect the quality of the service provided. The picture of the business sector gets more clear while having a look at the PEST Analysis done by Holtz (2008) who alleges the lower annual per capita ($ 20) spending of the Indian government on of the public sector i.e the healthcare and the under-developed private health insurance in India which spends only 1% of the total spending on healthcare as major political reasons for the unethical practices in India
Sharma (2004) critically argues the claims made by the other authors and says that majority of the population in the various developing countries is uneducated about the governmental structure of business sector and moreover, the inaccessibility of the services in a rural area with densely populated areas can be treated as primary reasons for the increased importance of the business Enterprises which further leads to following up of unethical practices by few individuals. Holtz (2008) shares a different view and feels that low wages to employees and staff in government services are the primary reasons responsible for the existence of the unethical practices in the business sector. Cygnus Business Consulting & Research Pvt. Ltd. (2008) criticizes the governments for having access to less high-tech equipments with them as compared to private organizations. One of the other i