e&g - session 1 - values & ethics in organizations

8/7/2019 E&G - Session 1 - Values & Ethics in Organizations

1/32

Ethics & Governance

Topic 1 - Values & Ethicsin Organizations

Prof. Sandeep Hegde


2/32

Ethics & Governance - Syllabus Values and Ethics in Organizations

Values and Vision Statements (6 hours)

Stakeholders Model (4 hours)

Code of Ethics (4 hours)

Ethical Dilemmas (8 hours) Ethical Decision Making (8 hours) Corporate Governance & CSR (5 hours)

Environmental issues and TripleBottom Line Organizations (5 hours)


3/32

Ethics & GovernancePedagogy

Class discussions

Group discussions

News Paper Clips and articles Video based discussions

Case Study (This would be our main focus

for this course) Team Project Presentation


4/32

Internal Evaluation Scheme

Internal Assessment 30 Marks

Marks for class participation 10 (for classbehavior, proactive participation and

knowledge sharing) Mid Trimester test 10

Team Presentation 10

Trimester end examination 70 Marks


5/32

Trimester end paper pattern(70 Marks 2 hours duration)

One liners (10 X 1Mark) no options given10 Marks

Expected to write simple one line definition or explain theterm given in your own words

Short Answertype questions (4 X 5 Marks) 4 out of 6 Questions20 Marks

Expected to give argumentative discussion based on theory

with some industry examples to supplement yourarguments Case Study (2 3 pages in length) with 2 questions of 15 marks

each. 30 Marks Expected to relate the case to theories covered in the entire

syllabus. Theoretical illustrations a must. Using thetheoretical illustration one must explain the case and bringout solutions or recommendations. Citing industryexamples to illustrate your point would be highlyappreciated.

Situational type of question ora news paper clip related totheoretical concepts. 10 Marks

Discussion oriented answer with argumentative pros and

cons. Your personal viewpoints carry weight.


6/32

Prescribed Text Business Ethics: Concepts and Casesby Manuel G. Velasquez (6th ed) Essentials of Management by Harold

Koontz and Heinz Wiehrich (6th ed) Environmental Management by Bala

Krishnamoorthy www.greenpeace.org www.cse.org www.tata.com


7/32

Ethics Vocabulary

Morals

Virtue

Integrity

Responsibility

Obligation

Honesty

Courage

Self-Respect

Accountability

Professionalism

Character

Ideals

E t h i c sE t h i c s


8/32

What is meant by ethics?

Consists of moral principles governing theright and wrongs of human conduct.

Is about the principles of right and wrong

accepted by individuals or social groups. A code of behaviour considered morally

correct.

Code of moral principles that guide theaction of people and groups.

Ethical behaviour is doing what is morallyright


9/32

Business ethics

Business ethics are the principles and standardsthat:- Define acceptable conduct in business- Should underpin decision making

An alternative definition is: the moral values

which govern business behaviour andrestrains companies from pursuing the interestof the shareholder at the expense of all otherconsiderations

Some activities might be profitable and legal butnevertheless are considered to be unethical

An ethical decision is one that is both legal andmeets the shared ethical standards of thecommunity


10/32

Is ethics the same as the law?

- No - although the law should reflect the ethical views ofsociety there are certain activities permitted by lawwhich some individual or groups in society orindividual might regard as unethical.- Ethical considerations are about what is right andwhat is wrong- The law is about what is lawful and what is unlawful

The following business activities are legal but might poseethical dilemmas for individuals:

Profiting from gambling

Selling goods manufactured by low wage in developingcountries

Engaging in the fur trade

Experimenting on animals


11/32

What is the starting point ofBusiness Ethics

Mission A strategic plan starts with a clearly

defined business mission.

Mintzberg defines a mission as follows: A mission describes the organisations

basic function in society, in terms ofthe products and services it producesfor its customers.


12/32


13/32


14/32


15/32


16/32

TATA Group and TBEM

Jamshedji Tata, said ... Be sure to lay wide streets planted with

shady trees, every other one of a quick-growingvariety. Be sure that there is plenty of space forlawns and gardens. Reserve large areas forfootball, hockey and parks. Earmark areas forHindu temples, Mohammedan mosques andChristian churches

.he created a VISION, a key element of TBEM


17/32

TATA Group and TBEM

JRD Tata said The wealth gathered by Jamshetji Tata and

his sons in half a century of industrial pioneeringformed but a minute fraction of the amount by

which they enriched the nation. The whole ofthat wealth is held in trust for the people andused exclusively for their benefit. The cycle isthus complete, what came from the people hasgone back to the people many times over

.he articulated ourMISSION again, a keyelement of TBEM


18/32

A perfect value consists in doing without witness allthat we could have done in front of the entire world

- Nobel Laureate Gabriela Mistral


19/32

Values and Vision

Values form the foundation of a businesssmanagement style.

Values provide the justification of

behaviour and, therefore, exertsignificant influence on all majorbusiness decisions.


20/32

NESTL CORPORATE BUSINESS PRINCIPLES Nestl is committed to the following business principles in all countries taking

into account local legislation, culture and religious practice:

Nestl's business objective, and that of management and employees at alllevels, is to manufacture and market the company's products in such away as to create value that can be sustained over the long term forcustomers, shareholders, employees, business partners and the largenumber of national economies in which Nestl operates.

Nestl does not favour short-term profit at the expense of successful long-term business development, but recognizes the need to generate profit

each year in order to maintain the support of the financial markets, andto finance investments.

Nestl believes that, as a general rule, legislation is the most effectivesafeguard of ethical conduct, although in certain areas, additionalguidance to management and employees, in the form of voluntarybusiness principles, is beneficial in order to ensure that the higheststandards are met throughout the organization.

Nestl is conscious of the fact that the success of a corporation is areflection of the professionalism, conduct and ethical values of itsmanagement and employees, therefore recruitment of the right peopleand ongoing training and development are crucial.

Nestl recognizes that consumers have a legitimate interest in the companybehind the Nestl brands, and the way in which the Nestl company

operates.


21/32

Creating Shared Value

Creating Shared Value is afundamental part of Nestl's way of doingbusiness that focuses on specific areas of

the Company's core business activities namely water, nutrition, and ruraldevelopment where value can best becreated both for society and shareholders.


22/32

Values

Terminal Values A lifelong goal or objective that an individual

seeks to achieve (e.g., success or happiness)

Instrumental Values (virtues) A mode of conduct that an individual seeks to

follow (e.g., honest or capable)

Value System The terminal and instrumental values that are

guiding principles in an individuals life.


23/32


24/32

Foundation of TBEM - CoreValues

Visionary Leadership Organizational & Personal Learning Agility Valuing Employees & Partners Managing for Innovation Customer- Driven Excellence Focus on the Future Management By Fact Focus on Results & Creating Value Social Responsibility & Citizenship Systems Perspective


25/32

TATA - Values and purpose The Tata Group is one of India's oldest, largest and most

respected business conglomerates. The Group's businesses arespread over seven business sectors. It comprises 96 companies,operates on six continents and employs 350,000 people.

Core values The Tata group has always been a values-driven organisation. These

values continue to direct the group's growth and businesses. The five core

Tata values underpinning the way we do business are: Integrity: We must conduct our business fairly, with honesty andtransparency. Everything we do must stand the test of public scrutiny.

Understanding: We must be caring, show respect, compassion andhumanity for our colleagues and customers around the world, andalways work for the benefit of the communities we serve.

Excellence: We must constantly strive to achieve the highest possiblestandards in our day-to-day work and in the quality of the goods and

services we provide. Unity: We must work cohesively with our colleagues across the group andwith our customers and partners around the world, building strongrelationships based on tolerance, understanding and mutual cooperation.

Responsibility: We must continue to be responsible, sensitive to thecountries, communities and environments in which we work, alwaysensuring that what comes from the people goes back to the people manytimes over.


26/32

1950

Much

Little

1960 1970 1980 1990

Phase I Phase II Phase III

Gestation and Innovation Development

and Expansion

Maturity and

Institutionalization

AmountofAttention

Growth of attention to Values & Ethics


27/32

Historical Phases of SocialResponsibility

Social ResponsibilitySocial Responsibility1900s1900s 1930s1930s1960s1960s

Social ResponsibilitySocial Responsibility1900s1900s 1930s1930s1960s1960s

Phase One:Phase One:Profit-MaximizingProfit-Maximizing

ManagementManagement

Businesss primaryBusinesss primaryresponsibility to societyresponsibility to society

is to underwrite theis to underwrite the

countrys economiccountrys economicgrowth and to overseegrowth and to overseethe accumulation ofthe accumulation of

wealth.wealth.

Phase One:Phase One:Profit-MaximizingProfit-Maximizing

ManagementManagement

Businesss primaryBusinesss primaryresponsibility to societyresponsibility to society

is to underwrite theis to underwrite thecountrys economiccountrys economic

growth and to overseegrowth and to overseethe accumulation ofthe accumulation of

wealth.wealth.

Phase Two:Phase Two:TrusteeshipTrusteeshipManagementManagement

Corporate managersCorporate managersneed to maintain anneed to maintain anequitable balanceequitable balance

among the competingamong the competinginterests of all groupsinterests of all groupswith a stake in thewith a stake in the

organization.organization.

Phase Two:Phase Two:TrusteeshipTrusteeshipManagementManagement

Corporate managersCorporate managersneed to maintain anneed to maintain anequitable balanceequitable balance

among the competingamong the competinginterests of all groupsinterests of all groups

with a stake in thewith a stake in theorganization.organization.

Phase Three:Phase Three:Quality-of-LifeQuality-of-LifeManagementManagement

Managers have to doManagers have to domore than achievemore than achieve

economic goals, buteconomic goals, but

they should manage thethey should manage thequality-of-life by helpingquality-of-life by helpingdevelop solutions fordevelop solutions for

societys ills.societys ills.

Phase Three:Phase Three:Quality-of-LifeQuality-of-LifeManagementManagement

Managers have to doManagers have to domore than achievemore than achieve

economic goals, buteconomic goals, butthey should manage thethey should manage thequality-of-life by helpingquality-of-life by helping

develop solutions fordevelop solutions forsocietys ills.societys ills.

100%


28/32

1800

25%

50%

75%

%

1900 2000

Phase One:Profit Maximization

Phase Two:Trusteeship

Phase Three: Quality of Life

Proportion of

Firms Adopting

Each Perspective


29/32

Corporate Values Statements

Describes the core values the companywants its employees to exhibit including:

How employees are to treat one another

How employees are to treat customers andstockholders


30/32

How Are Tatas ShowingCommitment ?

The Tata Group Purpose statement

Our Purpose in Tata is to improve the Quality of Life inthe communities we serve. We do this through Leadership insectors of National Economic Significance to which we bring aunique set of capabilities. This requires us to grow

aggressively in focused areas of business.

Our heritage of returning to society what we earn evokesTrust among consumers, employees, shareholders and thecommunity. This heritage will be continuously enriched byformalizing the high standards of behavior expected from

employees and companies. The Tata name is a unique asset representing Leadership

with Trust. Leveraging this asset to enhance Group synergy andbecome globally competitive is the route to sustained growth andlong term success.


31/32

British Telecom Group- defining its values:

BT's activities are underpinned by a set of values that all BT peopleare asked to respect:- We put customers first- We are professional- We respect each other- We work as one team- We are committed to continuous improvement.

These are supported by our vision of a communications-rich world -a world in which everyone can benefit from the power ofcommunication skills and technology.

A society in which individuals, organisations and communities haveunlimited access to one another and to a world of knowledge, viaa multiplicity of communications technologies including voice,data, mobile, internet - regardless of nationality, culture, class oreducation.

Our job is to facilitate effective communication, irrespective ofgeography, distance, time or complexity.


32/32

References

Essentials of Management AnInternational Perspective by HaroldKoontz and Heinz Weihrich

Business Ethics: Concepts and CasesSixth Edition. By ManuelG. Velasquez.

www.tata.com

e&g - session 1 - values & ethics in organizations

Documents