Assignement of business ethics

Student Name: Roshan Thakkar

Submitted : Priyanka Sharma

Aruna Manharlal Shah

Ans:

In the new millennium, every element of business environment in India has been changing.  This transformation
may be the result of economic liberalization, privatization & globalization that has been introduced in 1991.In
the process of this transformation, every organization started searching for new ways and means of achieving
excellence. It is clear that mere Financial performance can't be a basis for measuring company's excellence.

Corporate Excellence is defined as the ability of the company to outsmart Competitors consistently over a long
period of time.  In this context, successful organizations are different from excellent organizations.  Success
may be of one dimensions but excellence is of multiple dimensional in the company* .    In the ever-changing
business environment, the following are the critical areas that facilitate the company to achieve excellence

(1) BUSINESS PROCESS REENGINERING:-

As the business scenario is fast changing day by day, to meet the ever-changing demands of the market the
organizations need to restructure & redesign their Business processes. The BPR facilities sweeping changes in
all the functional areas of the organization.  It reinvents the way the business is carried out, and ultimately helps
the company to engender corporate excellence. As, striving to become excellent is a continuous process,
corporate excellence can't be a Destination, it is a journey.

(2) GROWTH – SUSTAINABLE DEVELOPMENT: -

The corporate objective of mere growth may just lead to maximization of sales Revenue or profits, which don't
help the organization to be excellent.  Many organizations are growing at a rapid speed, but they failed to
develop consistently.  Hence the companies need to redefine their objectives towards sustainable development.

(3) CORE – COMPETENCE: -

A unique strength either in technology or in the processing of functional areas, that an organization enjoys
exclusively and which can't be copied by the competitors is called – Core Competence. This unique strength
helps the company to get competitive advantage over a long period of time, which in turn facilitates the
company to excel.

Core competencies contribute significantly to customer benefits and satisfaction, which is a primary aim of any
business.  Core competencies help the firm in a multifaceted manner.  A company can achieve competence
superiority only by means of core competence, and it will lead to corporate excellence.

E.g.: Honda has got its core competence in the design and manufacturing of automobile engines.

(4) RESOURCE UTILIZATION: -

Excellence in organization can be achieved through proper utilization of the basic Human, Physical & financial,
resources. New and advanced technologies have to be adopted in all the functional areas like – production,
marketing, finance, HRD, of the organization.  Organizations need to strengthen their Research and
Development departments in order to embrace latest technologies.

(5) E-COMMERCE: -

As the competition in business area is growing rapidly the business organizations started redefining their
business activities. According to Fortune Magazine – "Electronic Commerce is the new industrial order.  It will
change the relationship between consumers & Producers.

As Electronic Commerce involves the exchange of products, Services, and information of payment through the
electronic medium of computers & networks, it facilitates the continuum relation between the company and the
customer, which is a pre requisite for a company to excel.

(6) CRM  (CUSTOMER RELATIONSHIP MANAGEMENT): - 

In the process of achieving corporate excellence in the present day highly competitive market, the organizations
ability to compete depends on its relationship with its target customers.  The basis for continuity of relation
between the company and the customer, over a period & time is value maximization to customers, which will
lead to customer loyalty.  In an attempt to achieve corporate excellence the organizations should try to develop
strong Customer Relationship Management.

(7) SOCIAL CONSCIOUSNESS:-

Organizations can achieve corporate excellence by means of contributing to the well being of the society.  As
the customers are becoming aware of the cause and effect of polluted environment, all the business firms should
have a concern for society, by introducing ecologically friendly products or services.

Many companies in India are redesigning their business activities, giving importance to society and are
launching Non-Government Organizations.

Example :- Satyam Computers of Hyderabad started Byrraju Foundation, which is    specialized in the field of
rural development. Emergency ambulance services by the name 108 has been a mega hit in various districts of
Andhara Pradesh. 

Dr. Reddy's Laboratories of Hyderabad floated Dr. Reddy's Foundation in field of youth welfare and
development.

(8) BUSINESS ETHICS :-

In order to achieve excellence, the companies should have basics positive values and attitudes. Ethics deals with
what is wrong and what is right in various disciplines of the organization. Unethical practices may yield short
term gains but organization can't be successful in the long run. The organization should develop and formulate
the right approaches and strategies to excel. Because it is to be noted that being right in ethical behavior always
pays off.
Besides the above said elements, there are certain areas by which corporate excellence is facilitated in the
modern business world. Young entrepreneurs and business mangers must pay attention to all these areas in
order to see their organization excel

(a) EXCELLENCE THROUGH MANUFACTURING :-

In the manufacturing area, a new concept called – World Class Manufacturing ( WCM ) has emerged recently.
The companies adopting WCM are able to introduce the products and services very much closer to the needs
and wants of the costumer. This helps the company to be successful because WCM has the following
characteristics

I).   Products of high quality 

(b) EXCELLENCE THROUGH MARKETING MIX :-

In the ever changing, highly competitive business field new directions have to be shown in order to strive &
ultimately to achieve corporate excellence.

All organizations, irrespective of the product they offer and the service they provide are always in search of
achieving excellence.  The basic area of concern to accomplish corporate excellence is effective management of
Marketing Mix of the company. Innovation in product attributes, reasoning in prices, wide spread & easy reach
in placing, the right distribution networks, objective in promotion, are the fields that a firm seeking excellence
should concentrate on.

(c) EXCELLENCE THROUGH HRM:-

Among all the organizational resources, the human resources are the most vital and require constant
refinement.  Organizational objectives and strategies must match with HR strategies. Since the change is the
fundamental element in achieving corporate excellence, change management is to be backed by human
resources of the firm. The change can be facilitated by means of HR activity- Training. Hence the training
programmes in the new age business organizations should focus on - Team work, leadership, initiation,
interpersonal communication.

(d) EXCELLENCE THROUGH INFORMATION :-

In this present networking era, information has become a major resource after physical, financial, human
resources of the organization. Proper management of information is the best way to get competitive advantage.
Computer based information systems help the organization to convert raw data in to meaningful information,
which helps the manger in taking effective decisions, which in term improve business performance and
ultimately lead to corporate excellence. Information systems like TPS (Transaction Processing System), MIS
(Management Information Systems), DSS (Decision Support Systems), ESS (Executive Support Systems) if
used intelligently helps the organization to reach the pinnacle in the competition.
Q.2 Apporaches for developing various orientation towards ethical business
behavior?
Ans :

Bartels defines ethics as the pile of moral principles and values determined by society. He points
out ethics guides people what good or bad is, and what correct or wrong is and what duties and
responsibilities are (1). As Akarsu says in one newspaper article, ethics is universal, it is thinking
on moral and also moral attitude. This attitude is to see every living being as equal (2). It means
to behave by angle of human rights and respect to man, and survival right is the first.

According to the philosophies, environment means humanity. Today's ethics approaches note
depending on keeping human wants under pressure for the benefits of all human beings. By these
words environment includes not only men, but also animals, plants, i.e., the nature.

Ethics occurs by relations of humans with themselves, and their physical and social environment.
Therefore, the origin of the problems and solution is human. The philosophies note many
approaches in these relations. These approaches can be grouped into three groups:

- The human-oriented approach

- The living oriented approach

- The environment oriented approach

Every approach describes one of parts of the whole environmental ethics. But the common point
of these approaches is that all human beings and their equal rights take place in the ecosystem.
By the new approach in the concept of deep ecology it is accepted that the diversity of the
ecosystem has an internal value and no one has any right to decrease this diversity and
difference.

For centuries, people have established a lot of establishments to achieve these goals. Human
beings have seen that producing something by cooperation is more productive and effective than
doing it alone, so they have established enterprises. They have seen unlimited needs, increasing
wants and scarcity of objects and they have also seen establishing enterprises as a way of
producing more. But in this century humans saw a lot of impacts from our living. Air, water and
soil pollution, the danger of consuming natural resources, acid rain, gas, dust and liquids
industries caused, soiling of natural foods, industrial pollution and dangerous wastes, just to
mention a few problems we face.

These environmental problems make us reconsider the goals of organizations and their
responsibilities to the society and nature. The organizational goals are often not environmentally
friendly. In some events the goal of the establishment is opposite to the environment and
sometimes organizational activities damage the environment in achieving the goals. In this
process, we should emphasize the reasons why they should have responsibility. First, they use
environmental resources and resources are limited. Second, they damage the environment by
their activities. Third, they use common assets of mankind.

Finally, the enterprises have various forces to influence the environment: Economic force, social
and cultural force, technological force, politic force, forces on individuals and physical
environment (3).

In spite of these impacts and forces of establishments, there is no social control system on the
activities of enterprises. This point emphasizes business ethics terms as an institutional
framework, i.e., social ethics. As an institutional term, social ethics means searching ethical
norms to protect the social benefits, and determining the possibilities for achieving a kind
society. Then, business ethics means, the norms, duties, responsibilities, courses of actions of
enterprises to protects the benefits of whole society.

In a broader view, because of the impacts on the natural and social environment, business ethics
concepts determine the responsibilities towards ecosystem. It is the common denominator of
business ethics and environmental ethics is the interrogation of relations and dilemmas between
economy and nature, man and society.

According to the common classification of conceptual approaches on business ethics, there are
three approaches (4). The first approach reconciles ethical values with economic goals. The
second approach gives priority to the ethical values. According to Ulrich, a new
multidimensional goal system should replace to the profit maximization. And the third approach
is pragmatic approach. In this approach, the attitudes model of business managers is the focus of
interests.

The last two approaches are very important for us to develop a new concept and term on business
ethics. The approach which gives priority to the ethical values is important, because the
enterprises are not a purpose, they are only a tool which we use to get benefits. If this tool causes
various damages on the ecosystem to get profit, then we should revise our organizational goals,
targets and activities. A pragmatic approach is characterized with the importance of individual
conscience and discussion of alternative individual courses of actions.

Therefore, these two approaches define the new term business ethics as an institutional concept.
This concept includes both organizational responsibility and individual duties as business
managers, also covered the ecosystem. We can name this concept as "environment oriented
business ethics" or "enterprise ethics".

As determined above, if people are the focus of the problems and solution, educating people
becomes our great responsibility. People should be educated as a member of business
organizations. This education process should begin in childhood and continue during our life.
In recent years, ethics especially with regards to the ethical beliefs of business leaders and
managers, have received tremendous attention. The ethical behaviours and orientation of
business leaders are of major concerns to the public. With many corporate scandals in the west
(WorldCom, Enron, Arthur Andersen) as well as in Malaysia (Transmile), ethical issues have
taken more prominence and importance over the last ten years.

Why is there such a concern over ethical behaviours of corporate leaders? This may be due to the
fact that unethical behaviour is damaging on many levels. At societal level, unethical behaviour
creates a negative image of businesses. For example the unethical behaviour of those at Enron
not only cost many organizations and people a great deal of money directly but also affected
those who had invested in the stock market. At the organizational level, due to the unethical
behaviour of its managers, Arthur Andersen lost many of its clients and had to sell parts of its
businesses around the world. Finally at the individual level, the unethical behaviour of former
Enron CEO Kenneth Lay and many top executives had resulted in their imprisonment. These
individuals may never hold high level corporate positions again.

Many future business leaders received their professional training and education at either the
public or private universities. The current business students at institutions of higher learning
would one day become future corporate leaders and entrepreneurs. However, it would be
interesting to find out what is the ethical orientation of these future business leaders. Are they
more accepting to unethical behaviours or are they less tolerant to unethical behaviours? There is
a need therefore, to study the ethical stance of the current business students on their acceptance
of ethical and unethical situations. Knowing the ethical orientation of future business leaders
would provide researchers the means to address ethical issues early, while they are still in
universities. Through early warning signals and preventive measures, it is hoped that the
occurrence of corporate scandals in the future could be minimized.

Interest in ethical attitudes of business students who are likely to be future business leaders is on
the increase (Borkowski and Ugras, 1992; Etzioni, 2002; Jennings, 2004). This is probably due
to the major corporate scandals that started coming to light in the late 1990s and the first decade
of the 21st century. It is evident that unethical behavior on the part of corporations can lead to
financial failure and also profound impact on its stakeholders and stability of society as a whole
(Giacalone and Jurkiewicz, 2003). Crane (2004) found that business students want to be taught
skills and tools to help manage difficult and problematic ethical situations.

In order to better understand ethical orientation among future business leaders in Malaysia, an
exploratory study was conducted to assess consumer ethical ideologies and beliefs about
potentially questionable consumer behaviours. This current study would look at whether
consumer’s ethical ideology (Machiavellian, Relativism and Idealism) would have an impact on
the students’ perceptions of a variety of consumer actions and practices.
Machiavellianism

There were many studies that examined Machiavellianism, including the degree of
Machiavellianism among current and future business executives (Hegarty and Sims, 1978;
Chonko, 1982; Hunt and Chonko, 1984). In describing Machiavellianism, Hunt and Chonko
(1984) noted that the label Machiavellian has become a negative label, indicating at least an
unethical way of manipulating others to accomplish one’s objectives. However, Christie and
Geis (1970), based on their studies, cautioned against this interpretation. More appropriately,
Machiavellian persons possess a kind of cool detachment that makes them less emotionally
involved with others or with saving face in potentially embarrassing situations. Therefore, the
more Machiavellian the individual, the less ethical they are and vice versa. Thus, this is an
appropriate construct to examine in relation to consumers’ ethical beliefs.

Idealism and Relativism

Forsyth (1980) conceptualized two evaluative dimensions that have long been used to classify an
individual’s ethical and moral judgments: idealism and relativism. Idealism refers to the degree
to which an individual believes that the right decision can be made in an ethically questionable
situation. Idealistic individuals believe that there is a morally correct alternative that will not
harm others. Less idealistic individuals may make decisions irrespective of the impact on others.
Relativism, on the other hand, refers to the rejection of universal rules in making ethical
judgments and focuses on the social consequences of behavior. High relativists evaluate the
current situation and use this as the basis for making a judgment. Low relativists believe that
standard rules can be applied regardless of the issue at hand.

Consumer Ethics

Muncy and Vitell (1992) define consumer ethics as “the moral principles and standards that
guide behavior of individuals or groups as they obtain, use and dispose of goods and services.”
Early models of marketing ethics (Ferell & Gresham, 1985; Hunt & Vitell, 1986) focused on
ethical practices within the areas of marketing research, marketing management, sales,
advertising and social marketing. In the early 1990s, Vitell and Muncy noticed a lack of attention
to the buyer side of the buyer-seller dyad and asserted that research on consumer ethics was
almost non-existent. They found only three significant studies that empirically examined
consumer ethical judgments (Davis, 1979; De Paulo, 1987; Wilkes 1978). Furthermore they
found that these studies were limited to small samples, had a narrow scope and lacked emphasis
on the attitudinal characteristics of the consumer. As a result they developed a scale to measure
consumer ethics (Muncy & Vitell, 1992; Vitell & Muncy, 1992).
The consumer ethics scale developed by Muncy and Vitell (1992) looks at how consumers react
differently to different types of ethical situations. They also specified four distinct dimensions
relating to the following situations, specifically – (1) actively benefiting from illegal activities,
(2) passively benefiting, (3) actively benefiting from deceptive but legal practices and (4) no
harm activities.

In a recent revision, Vitell and Muncy (2005) modified the original scale and added a new
dimension that measures consumers’ desire to recycle products and “do good.” In this study, the
original consumer ethics scale developed by Muncy and Vitell (1992) was adopted to measure
consumer ethical beliefs instead of Vitell and Muncy (2005) scale

Gender

Beltramini, Peterson and Kozmetsky (1984) found that female college students were more
concerned with ethical issues than their male counterparts while Thoma (1985) found that
females were generally more ethical than males. However, Rest (1986) did not find the
differences between gender to be significant. In Ford and Richardson’s (1994) review of fourteen
studies analyzing behavior by gender, there were seven studies that reported females behaving
more ethically than males, while another seven studies found no relationship between gender and
ethical behavior. The 47 meta analysis studies by Borkowski and Ugras (1998) yielded 49%
significant, 34% not significant and 17% mixed findings regarding the relationship of gender and
ethical behavior.

The link between Machiavellianism, Idealism and Relativism to Consumer Ethics

There were several past studies that look at the effect of Machiavellianism, Idealism and
Relativism (independent variables) towards consumer ethics (dependent variable). Using an
Asian sample from Japan, Erffmeyer et al. (1999) surveyed a total of 258 Japanese consumers.
They found that Machiavellianism philosophy was significantly related to all four consumer
ethics dimensions such that those who were more Machiavellian tended to believe that the
various consumer practices were less wrong. In contrast, those consumers who were more
idealistic will be inclined to think all four consumer ethics dimensions were more wrong.
However, a relativistic philosophy was only related to the “passively benefiting” and “no harm/
no foul” dimensions. In these cases, the more relativistic that the consumer appeared to be, the
less wrong the perception of the consumer action. Table 1 below summarizes some previous
studies and their major findings.