This is in the context of corporate governance and fulfilling stakeholders' expectation.
Answer should be from heart which may or may not be consistent with head. When heart & head has consistency, you are following ethical path.
Mind is always be first when you in the jungle of competition if we don t take decision mind base we have to loss .............
It is for sure not mind alone or heart alone or both. I think is should be a combination of mind, heart, past experiences, knowledge, situation in hand, the person or problem you are dealing with at the moment, instinct, intuition and the context that it occurred within.
In addition, when handling a serious situation there should be different viewpoint, the best to fit the situation must be the first option. Different scenarios should be made directed to the best solution outcomes. I would go for one with least cost, least loss and yet best outcomes.
Being ethical in business is responsibility. It is being wise; studying all the outcomes before taking any decision that might have negative effects of any party later on. Ethics is a moral philosophy it is a complex word that many has lost lately. It implicates many deep meanings of the word. It stands for credibility, reliability, honesty and much more that many business companies has lost in the past couple of years.
Thank you for pointing out this topic which is an existing problem that we face daily not only in our lives but in the contemporary global business.
Yes, ‘fulfilling stakeholders' expectation’ must be thought carefully. Ethics is a major aspect in the success or failure of companies.
One can’t be ethical towards his stakeholders ‘expectation yet manipulate in his department and vice versa. It is either you have ethics or you don’t. Example of a case, the Enron scandal, it might not be the right example but wouldn’t you consider that the auditor’s ethics played a main role in its bankruptcy?
We should know the difference between good and bad thing , when we know about ,what is good and what is bad for society , then definately we will get the answer of business ethics .
It depends on the school of thought that one belongs to
Deontological theories - a matter of heart
Normative/ telelogical theories - a matter of head
Just plain and simple enlightened 'self'-interest. The conduct must be that which sustains the order you would like to see sustained in the society. Heart must guide the correct action but Head must think about properly communicating your motivation! The guiding principle must always be the right conduct which is defined in Sanskrit as "Dharayati Iti Dharmah" or that which sustains is the right conduct. This is also reflected in Biblical saying, "Do unto others as you would have them do to you".
Ethics are a noble thing, whether in heart or mind ... it is, it is either you have it or you don't. Furthermore, I think if you have it in heart you would have it in mind.
I thank Dr Jaharkanti for pointing up this discussion, many seem to forget its value and importance nowadays. We need it.
Unless it is in heart... one cannot implement it through head...
Ethics in business is considered to be bone of contention till date because business houses think that we meant for earning profit ... may be by any means.
From the stakeholders point of view (Intelligent Stakeholders) I think Business ethics becomes sensitive issue which visionary organizations are using as a strategy.
Dear Parag,
I agree it used for profit only, it is assumed that increasing the profit is the first aim of managers in order to please the shareholders, but I am sorry didn't get your point of stakeholders, kindly explain what you mean ?
Thank you
Head and heart works together and it is impossible to separate from each other. Head is to think and mind is to activate thinking process. Business houses are also ethical although profit is a motive for them. When people think it is wrong or right to do a certain thing, it shows a matter of ethics. Corporate Social Responsibility, Greening the environment are becoming popular these days. Dima has clearly indicated that people are becoming individualistic and the issue of ethics is eroding in the present society. For the sake of gain, people are committed to do the wrong things. But, i feel that unethical behavior is always punished in the long run.
Dear Dima
A stakeholder is an individual or a group that has one or more of the various kinds of stakes in a business such as - employees, customers, business partners, investors, suppliers and vendors, the government, and the community/Society.
As per as my views are concerned ethics starts with fair/rational dealings with employees, customers & so on.
The organisation is Said to be ethical one when it protect & respect the Interest of above stakeholders.
For example, In India TATA seems to be the most ethical organisation because their business stands on certain moral principles since its birth.
Ethics involve both. If we look back at Enron, Ken Lay had an ethics statement in his employee manual which he wrote and signed; however although he knew of good ethics he did not have the heart to follow through. Instead corruption and greed took over the heart and the end result was the downfall of a company. I think that in times past economics was prioritized over ethics in business teachings; leading to the conundrum is the dollar more important on all counts or is earning the dollar ethnically more important? Thus on one hand one must understand the business aspects of ethics and on the other they must qualitatively balance the heart of ethics with the business needs. In today's world earning the dollar by doing the least environmental and social harm (good ethics) is the key to developing a successful business.
I like the stakeholder perspective suggested by Parag. I think if companies adopted this view, significant gains can be made in the area of ethical behaviour. The shareholder perspective tends to be behind the quest for profits at all costs, even if the behaviour is unethical. Ofcourse the behaviour of companies is also a reflection of the makeup of its executives and their ability to balance between heart and mind, for instance the heart might desire huge returns at all costs so as to secure significant financial rewards for executive, but reason (the mind) might suggest that certain activities would risk the long term reputation and sustainability of the business and are therefore not acceptable.
Ethics teach us what is right. No one knows ethics as a birth right; however, some of us are born with a natural feeling of ethical behavior. With that being said, ethics are a set of rules, goals, or aspirations that are inherited from the orientation of culture, belief systems, or values that are taught from generation to generation ( the mind or head) and assimilated through the heart based on your personal orientation and what that means to you (i.e. your sense of reality). What is acceptable behavior to one group is unacceptable to another. In business, understanding your stakeholders ethics can aid in building your supply and value chains. Furthermore, the cost savings along the supply and value chain are greatly attributed to relationships interconnected by the virtues of ethical behavior.
Ethics can be viewed as a code of conduct that is established from a logical or philosophical perspective ("head") to facilitate effective human interactions in all contexts (including business), but the emotional ("heart") component of ethics has a strong influence on human actions. How a person approaches a situation from an ethical perspective will depend on which 'school' of ethics is most aligned with their emotional/instinctual outlook.
The two schools of ethics can be described as either the relativistic or absolutist ethical schools. A person who believes that ethical principles are influenced by the current situation and context will tend to be more 'fluid' in business situations (e.g., If bribery is the only way for me to be competitive for this contract, since other competitors are engaged in bribery, I will do so to ensure that I remain in the competition.). For those who believe that there are a fixed, immutable set of ethical principals that should be applied to all situations, they will generally be more unwavering in their actions (e.g., If bribery is the only way for me to be competitive, even though other competitors are engaged in bribery, I will NOT engage in bribery because it is illegal and bribery does not support the stated standard that contracts are awarded through merit [best idea/best implementation/best price].).
In summary, a person's relativistic or absolutist ethical framework (heart) will influence their decision-making (head) in business interactions.
It depends on a value scale that is active in the society. if the value is consensually accpted, most often it becomes a rule, law...legally confirmed and obligatory, but when it is a trend, than etic principles are implemented for the purpose of marketing, brending, pr and similar. rarely it is a qustion of heart
I agree. The very word 'Ethics' is derived from the Greek word for 'social convention'. Un-ethical behaviour is, thus, behaviour that places the organization outside the value frame of the society it operates in, and to which its stakeholders, including employees and customers belong. It seems hard to argue how that can ever be a winning long-term strategy, not least because many employees are usually less productive when their private and professional roles clash and pose individual moral dilemmas all the time.
As for head and heart, a lot of societal norms are unwritten rules, and hard to capture in analytical words and numbers. Accounting for such norms requires a human's intuitive understanding of social interactions (which is part of what you describe as 'heart') as well as conscious reflection on the social environment (the 'head').
Excellent exposure by all my colleagues. I would like to add here, that the upbringing environment with all its influential forces (influence of peers, religious beliefs, nurturing ethics via education, ...) are factors to be considered. An attachment to religious beliefs will enforce the absolutist behavior (at least in our side of the world), while strong influence of peers will enforce relativist behavior.
This field is under heavy study and results are sensitive to many external and internal factors.
You can access one paper where I studied Ethics in one higher education institution in Lebanon.
Although ethical behavior is influenced by variety of factors, for me at the end it comes down to my heart - whether its right and fair. When we make the issue of ethics more complicated, less likely its to be transferred to the next generation of students. Mind will obviously play a role because it will help decide the fairness issue for a larger population.
Hi Suneel
I like the way you put it at the end. Simple is beautiful. However, our role as researchers will always evolve in order to understand the bond between the heart and the mind.
I studied Head & Heart comparisons across universities in the U.S for over 20 years using the Maccoby survey instrument and found responses to be closely linked to observable unethical behaviors such as cheating. Perceptions of the importance of honesty, compassion, independence, and critical attitudes toward authority seemed especially relevant.
Jack Ruhe, Saint Mary's College, Notre Dame, Indiana
It is a matter of both... also, sometimes it is hard to evaluate if a certain act is ethical or honest or not, moreover, unethical behavior/dishonesty may be beneficial sometimes and, in some cases, harm nobody, thus, it is not easy to draw the line between what is right or wrong. Have a look at this book: http://www.emeraldinsight.com/books.htm?issn=1877-6361&volume=10
2. L’etica e l’economia… un rapporto vitale
«La sfera economica non è né eticamente neutrale né di sua natura disumana e antisociale. Essa appartiene all’attività dell’uomo e, proprio perché umana, deve essere strutturata e istituzionalizzata eticamente». In queste parole Benedetto XVI raccoglie quanto da sempre la Chiesa, nella fedeltà al Vangelo, ha insegnato sul rapporto tra etica ed economia e cioè che essendo l’economia un’azione dell’uomo, essa trae la sua eticità dall’agire stesso dell’uomo, dalla sua coscienza morale e dalla sua responsabilità personale e sociale. Nell’agire economico, autenticamente umano e quindi pienamente cristiano, è possibile vivere relazioni di amicizia e di socialità, di solidarietà e di reciprocità, di dono e di gratuità.
These two articles may be useful:
Hausken, K. (1996), “Ethics and Efficiency in Organizations,” International Journal of Social Economics 23, 9, 15-40.
Hausken, K. (1996), “Self-Interest and Sympathy in Economic Behavior,” International Journal of Social Economics 23, 7, 4-24.
Article Ethics and efficiency in organizations
Data Self-Interest and Sympathy in Economic Behavior Internationa...
Dear Jaharkanti,
Recently I came across a discussion of business ethics on RG. I wanted to point out that business ethics may be difficult to grasp, because business entities often do not follow the same ethical standards in all circumstances. Thus, I recalled the case of Starbucks: the firm really stresses ist fair trade policy towards suppliers from third world countries, which, no doubt, evidences business ethics. But on the other hand, it was involved in a messy tax avoidance dispute with UK tax authorities back in 2012 / 2013, which is, no doubt, not ethical at all. To bring the tax controversy to an end, Starbucks voluntary agreed to pay a certain amount of tax, which it was not obliged to under the (legal) tax models it used to avoid UK taxes. Well, Starbacks pronounced the payment, but the voluntary character of the paymanet caused an even greater public outcry. The public was wandering, why Starbucks did not give up its tax avoidance technics, but regarded taxes as a voluntary contribution. To sum up, business ethics is not an easy topic with Dr. Jekyll and Mr. Hyde going hand in hand.
Paul
It is a very crucial point to discuss, thank you Jaharkanti for sharing this discussion.
Different views, nevertheless, there is always a line between what is right & what is wrong no matter how hard it is and this should be the base of our decision making for the favor of all parties which is only fair.
It is a decision that has to be taken at the end of the day. Therefore, any harm done to any of the parties involved should be eliminated if not removed. When the company is at a risk, One should be smart enough, equipped with the knowledge, right information etc.needed to overcome this obstacle / barrier to move forward with the least causalities possible.
I wonder if in some cases giving the people concerned the freedom (in some cases if possible to be involved) to brain storming a way out, or maybe the choice to give solutions to the problem at hand?
Of course, there are numerous cases so it could not be applicable to all. This way it might, by time, make the employees & managers better act before getting into the ethical issue critical stance at the first place.
To end up, as I mentioned earlier: Ethics are a noble thing, whether in heart or mind it is either you have it or you don't.
Thank you,
Ethics are crucial in any institution as it permits having a good management