BUSINESS ETHICS :
The study of moral values based on economic systems prevalent in different countries and across the globe is called as “Business Ethics”. In today’s changing environment this can also be recognized as corporate ethics.
Ethical Theories and Approach:
There are three categories of Ethical theories:-
1. Teleological Ethical Theory
2. Deontological Ethical Theory
3. High breed Theory (combination of 1 and 2)
1. Teleological Ethical Theory:-
This theory deals with an ethical decision by measuring the probable result or consequences. This theory is utilitarian which searches at it ends the greatest ‘good’ (or utility) for the greatest number, the system is analysed by application of cost benefit analysis i.e. to tally the costs vis-à-vis benefits (utilization) for the given decision. After analysis the best and most effective decision is finalized which also provides maximum, over all gain?
This system is easy to apply but has several complex problems. It is difficult to measure exact benefit. Utilitarianism is a strong theory and simple and flexible and liberal; easier to describe human decision making process. Its weakness is possible result of injustice in relation to distribution of goods. No one has greater weightage than other and its effect is that an individual may suffer greater loss or harm compared to others who gain.
Distributive Justice- According to philosopher John Rawls (Harvard) distributive justice terms that ethical decisions are to distribute goods and services and as such it is too difficult to find out exact method to distribute goods and services and service with sense of equity.
For equitable distribution of good and service, Rawls is of the view to built cooperative system in which benefits shall be distributed unequally only if it benefits all. He points out that ethical justice can be made by Capacity of Decision (we act upon) to enhance cooperation between the members of the (cooperative) society. Here, even if you are ignorant, you will take a just decision under framework.
Example:-
When Bhakhra Nangal dam was created, a decision to acquire land for creating dam, canal and roads did create a harm (loss) to a few farmers whose land was taken over but due to this project a fewer were harmed where as the entire state of Punjab turned in to a most economically strong groups and here is how evil to a few created economical and social good to several.
In a crime when a few dacoits are killed in encounter it provides peace to thousands and lacs of people in the area by arresting crime. There are several such examples daily happening around you.
2. Deontological Ethical System:
This system embraces rules or principles that govern decisions. Kent (German Philosopher) during year 1752- 1804 developed rule based ethics and under this, the rightness of an act depends little on the result of the act (since governed by rule). Kent believed in the key moral concepts of good will. In his views, a moral person having good will renders a decision based on what is right without caring for a decision. A suitable example will be that if a student has desire to cheat in examination has an excellent moral and if another student has desire to cheat in examination but did not cheat due to fear of being caught, he is morally unworthy. A proper ethical decision does not take in to account whether the loser is a pauper or king. Kent was of the view that every person having good will (moral) should act on the basis of universal law and it is also termed as universalisation. Example being “Do not steal” is a rule which limits that act and “do not steal, you will go to jail” is not a rule.
Kentian rule recognizes universal rights such as freedom to speech, consent, privacy etc. The Chinese scholar Confucious (551 B.C) spelt out rules with which one should live and these rules are very simple and straight and are:-
Confucius Rule of Life (5th B.C.)
1. What you do not wish to be done to yourself, do not do to others
2. Do not wish for quick results, nor look far small advantages. If you see quick results, you will not attain the ultimate goal. If you are led astray by small advantages, you will never accomplish great things. [Gita- you have right to perform Karma and do not have right to results- “Karmanye ……… ma phalesu kada chana”
3. When you are someone of worth, think of how you may emulate. When you see someone unworthy, examine your own character.
4. Wealth and rank are what people desire, but unless they are obtained in the right way, they may not be possessed. (Mahabharata- what happened when Kauravas did not give share of wealth to Pandwas- all vanished in war)
5. Feel kindly towards everyone, but be intimate only with virtuous.
The second deontological approach is based on religion or religious prospective. Here religion is stronger than rule and provides the foundation for a moral life built on religion. In Arabian/gulf countries the rules are born from the origin of religion.
3. Hybrid Theories:
It is a mix of both the theories described above. It is a means for decision making i.e. take a decision you like or do what you want. While making a decision identify the greatest good and the greatest good is that which is greatest good realized by the decision maker and is hybrid. This theory will be clear from the story “ A King asked for hot water in a glass tumbler, the glass cracked, again he asked for a very cold water in another glass tumbler. It again cracked. To solve the problem he asked Birbal (one of his nine Ratnas) to solve the problem- Birbal served hot water mixed with cold in the tumbler, it did not crack” and was awarded for this act. This is how Hybrid Theory works.
How to deal with decisions taken at top level- The fundamental is that the top level officials in government departments and managers and CEOs of corporate daily take a decision that forms a shape of ethical or unethical results. The golden rule is “An evil to a few and gain or advantages to several is the golden principle of decision making”, here a mention can be made of one of the decisions by Chief Minister of Punjab- Pratap Sing Karon to built Bhakhara Nangal Dam and Canals resulted in to loss to a few villagers by accommodating the project but today more than 99% villages are enjoying the benefits of it. Due to this project the economic face of the then Punjab, now Punjab and Haryana changed and Punjab is fulfiling by its agriculture revolution a majority of food need of India.
Ethics: Certain important concepts:
Ethics involves a discipline that examines good or bad practices within the context of a moral duty. Moral conduct is the behavior that indicates which is right and wrong. Business ethics include practices and behaviors that are good or bad, in other words ethical or unethical.
There are many concepts of ethics and some of them are discussed below:
(1) Utilitarianism: Action is morally right. If, the total net benefit of the action exceeds the total net benefit of any other action. In other words, the result of the action is more favorable than unfavorable to everyone.
(2) Egoism: The theory which treats self-interest as the base of morality. Two forms of ethical egoism can be identified as individual and universal, which include other’s interest only from the point of the assessors’ self interest. It is mainly self-centered, and importance is given to self pleasure and gain and avoids pressure and pain.
(3) Rights: A Right is considered as a person’s just claim or entitlement.
1. Legal rights : defined by a system of laws
2. Moral rights : based on ethical standard – principles of right or wrong
3. Justice : Justice is the decision which could arise from the application of rules, policies, or laws that apply to a society or a group