Ethics Project Report3

8/6/2019 Ethics Project Report3

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CHAPTER 1:

INTRODUCTION

In today¶s era people are becoming materialistic, considering their own self and trying to get

successes through any mean, the ethics that has to be followed by one is no where in the current

scenario. Ethics have last place whether it is related to ones life or business. People are losing

confidence day by day towards business the current business the current scam which is occurring

demoralized people from ethical point.

So business should be one by taking in consideration all the aspects of ethics Business ethics

should be given more importance.

Basically ethics are more related to truth, reality and morality in the business organization which

shows that what should be done and what should not be done by any form to conduct its

activities on the principle of morality the code of ethics should be effective and mention the

values that important to top management and the conduct of business such integrity,

responsibility and reputation. Thus, the code should be such that is being properly developed and

implemented.

Business always tries to get success at any at any cost whether ethical or unethical and does give

rise to crime. Mostly it occurs due to unreflective approach to life. So to avoid this ethic should

be properly implemented.

For gaining confidence of people, to get good image in front of society, to run the business

successfully. Business ethics should be followed always. Though critical situation might

occur but after a span it will disappear and a success will be in your hand definitely.

The credibility of the term 'Business Ethics' has come into question, in recent times as

'business ethics' is increasingly being considered an oxymoron. It is generally believed that

business and ethics cannot coexist and organizations are said to thrive on unethical practices.

Business ethics, as far from being a contradiction in terms, has become one of the most



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important areas of managerial competence and responsibility. The ethics question warrants

exploration on several levels: -

1. At the macro- level: focusing on the ethical rightness of the system.

2. At the corporate-level: focusing the decisions that impact others.

3. At the individual-level: within an entity.

1.1 Meaning and definition of Ethics and Values

Business Ethics is a specialized study of moral rights and wrong. It concentrates on how moral

standards apply to particularly business policies, institutions and behavior.

³Business Ethics is an art or science of maintaining harmonious relationship with society, its

various groups and institutions as well as reorganizing the moral responsibility for the rightness

or the wrongness of business conduct´ ± Wheeler

³Businessman¶s integrity so far his conduct or behavior is concerned in all fields of business as

well as towards the society and other business´ ± Dr. Satish Mamoria & Dr. CB Mamoria

The most important professional ethics is expressed by the Hippocratic Oath of the Greek

physician: premium non nocere (³Not knowingly do harm´). This dictum suggests that a

professional should evaluate his decisions /actions will not produce harmful effects on others.

The simplest definition of ethics and moral values would be to not distinguish between the two

and say that they describe what is right and what is wrong in human behavior and what ought to

be. Business ethics are the desired norms of behavior exclusively dealing with commercial

transactions. Moral values are deep seated ideas and feelings that manifest themselves as

behavior or conduct. If we know the consequences of our actions we can convert values into

rules of behavior that can then be described as ethics, i.e, Values + Knowledge = Ethics

In the business world, ethics often are displaced by greed when there is a periodic frenzy of

rising stock market prices. Inevitably, a steep downturn then inflicts losses on investors and on

businesses with a concomitant reduction in the work force. An excessive competitive spirit tends



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to induce unethical business practices so the business world becomes a battlefield where the

normal rules are flouted, skirted or simply disregarded. The ensuing instability is bad for the

economy and for the government.

Values are those things/ideas/people that are important to us, central concepts that give meaningto our lives, a set of guiding principles that help us make decisions and chose a path.

Values are the things in our lives that shape our behavior and define who we are. The stronger they are, the less willing we are to change or compromise them.

Values are things (tangible or intangible) that we find of great significance.

A value is a principle, standard or quality considered worthwhile or desirable. Values are beliefsthat people have which serve as the basis for their decision-making. Value commits a person toaction.

Values are a cohesive system of beliefs, which are freely chosen by the individual, prized, publicly affirmed, and acted upon.

A principle, standard, or quality considered worthwhile or desirable(www.dictionary.reference.com)



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1.2 NATIONAL FERTILIZERS LIMITED ±A PROFILE

Incorporation

NFL, schedule¶A¶and a Mini Ratna Category 1 Company was incorporated on 23rd AUG 1974 for

implementation of two Fertilizer Plants, based on gasification technology. Of feed stock/LSHSat

Bathinda in Punjab and Panipat in Haryana having an installed capacity of 5.11 lakh tones of Urea

.In April 1978, the Nangal group of Plants of Fertilizer Corporation of India (FCI) were transferred

to NFL consequent upon reorganization of FCI .The govt of India, in 1984, entrusted the Company

to execute the country¶s first inland gas based Fertilizer project of 7.26 lakh tonnes Urea capacity in

district Guna of Madhya Pradesh, This project on completion, received the first prize for

³excellence in project management ³ from the Ministry of Program Implementation, Govt of

India. Expansion of Vijaipur plant was initiated in 1993 for doubling its annual production capacity.

The deppt. Of Fertilizers has received the annual installed capacity of Vijaipur Plant from 7.26 lakh

tonnes of Urea to 8.26 lakh tonnes with effect from 1st April 2000.

In order to sustain and enhance the Company¶s growth, NFL successfully completed the

revamping of Urea Plant at Nangal.with the re-rating of installed capacities of Vijaipur Plant and

revamping of Urea Plant at Nangal, the total installed capacity of Urea of NFL has increased to

32.20 lakh tonnes.

NFL is the second largest producer of nitrogenous fertilizers in India. The company µs

contribution towards Urea production in the country during 2002-03 is estimated at 17.1%

against 16.6% last year.NFL has been making profit consistently. The Company during 2002-03,

recorded pre-tax profit of Rs.48.33 crores during

2001-02

. However, the increase in profit duringthe year is on account of past periods arrears of subsidy pertaining to 7th & 8th pricing period

The Company during 2002-03, produced 32.12 lakh tonnes of Urea, thereby achieving a capacity

utilization of 99.4% based on the re-assessed capacity.

PRODUCTS



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NFL produces two popular brands of chemical fertilizers: KISAN KHAD (Calcium

Ammonium Nitrate), KISAN UREA. Beside this it manufactures and markets the products i.e.

Liquid oxygen, Liquid nitrogen. It¶s by products are Sulphur, Nitric Acid, Methanol, Argon.

PANIPAT UNIT

The Panipat Unit of NFL.is situated on National Highway No. 1 and Delhi-Amritsar railway

trunk route. Panipat city is about 90 km from Delhi and is covered in National

Capital Region. Panipat is a historical city, which was the scene of three historical battles.

Panipat is also famous for its handloom industry.

The Govt. of India approved the Panipat project on 10th

February 1975 for implementation.Prime consultants for design, engineering, erection and commissioning of the plant were M/s

Toyo engineering corporation of Japan and M/s engineers India Ltd. Starting from the zero-date

30.4.75, the feed in was achieved on 1.9.78 ie.within 40 months of the zero ±date. The Unit went

in commercial production from 1.9.79. The total cost of the project was rs.221.33 crores.



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Performance of the Unit in all areas of its performance has also been acknowledged. It has won

number of awards and recognitions in the field of production, productivity, safety, welfare,

innovation, environment protection, skills etc. The Unit is well known for its commitment

towards environment protection and social welfare in the region.

Panipat Unit is considered the show window of the company. The Unit being near to national

capital, it hosts a number of distinguished guests and visitors from with and outside the country.

The visitors show keen interest in the functioning of the plant and appreciate the progress made

by the fertilizers industry in the country.

SALIENT FEATURES OF THE PLANT

1) Annual Capacity : 5,11,500 MT

In terms of Urea 2,35,290 MT in terms of Nit.

2) Annual Requirement of Raw Materials:

I. Fuel-oil/LSHS : 3,00,000 M.T.

II. Coal : 5,45,000 M.T.

III. Power : 2,18,000 M.W.H

IV. Water : 5,630 Million Gallon

3) Estimated Cost : Rs. 182.88 crores

4) Foreign Exchange : Rs. 56.45 crores

5) Capacities of the Plant :

I. Ammonia : 900 M.T. per day

II. Urea : 1,550 M.T.per day

III. Steam Generation : 3 boilers each of 150 MT/hr.

IV. Captive Power Plant : 1 boiler of 210 MT/hr

2 Turbo generation of 15 *2 =30

MWH

6) Land : 442Acres- Plant

131 acres- Township



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NFL produces two popular brands of chemical Fertilizers, ie Kisan Urea. &Kisan Khad.NFL has

signed a memorandum of understanding with the govt. of India in 1991-92. All the years, after

signing the MOU, Govt.has rated the performance of the company as µexcellent¶. Company has

been performing at high level of capacity utilization.

PLANTS UNDER PANIPAT UNIT

AMMONIA UREA OFFSITES SMC

PLANT PLANT &

UTILITIES

1.3 GENERAL BUSINESS ETHICS OF NATIONAL FERTILIZER LIMITED

This part of business ethics overlaps with the philosophy of business, one of the aims of

which is to determine the fundamental purposes of N.F.L. If a company's main purpose is

to maximize the returns to its shareholders, then it could be seen as unethical for a

company to consider the interests and rights of anyone else.

Corporate social responsibility or CSR: an umbrella term under which the ethical rights

and duties existing between companies and society is debated.

No issues regarding the moral rights and duties between a company and its shareholders:

fiduciary responsibility, stakeholder concept v. shareholder concept.

Select capable people and improve their knowledge and skills on organized basis.

Motivate and enthuse the employees to achieve higher productivity with team spirit.





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Every professional has its own ethical standards i.e, rules of conduct and individuals conducting

that activity are expected to follow such ethical standards honestly. In this sense, medical

practitioners, lawyers, engineers, teachers, chartered accountants, etc, have ethical standards and

concerned professionals are expected to follow them unscrupulously. The same is the case with

businessmen and business enterprises. In fact, everyone needs some framework of values to

guide personal behaviour. The dual source of ethical, social and political standards is both

natural and necessary.

The most important professional ethics is expressed by the Hippocratic Oath of the Greek

physician: primum non nocere (³Not knowingly do harm´). These dictums suggest that a

professional should evaluate his decisions and ensure that his decisions/actions will not produce

harmful effects on others. A businessman, for example, should not use unfair trade practices as

they are always harmful to customers.

Business ethics suggests certain golden rules which are fair to all and should be followed by

businessmen. Business ethics is a part of social responsibility which the businessmen have to

honour in practice. It is the application of ethical values to business. Business ethics from the

Legal point of view ³If it is legal, it is ethical too´ is their approach. This is inadequate and even

dangerous over-simplification of the concept of business ethics. Sometimes line of demarcation

between ethical and unethical is very thin.

There are two theories when we talk about nature of ethics:

The theory of moral unity essentially advocates the principles that business actions

should be judged by the general ethical standards of society. There exists only one ethical

standard which applies to business and to non-business situations.

Second theory is the theory of amorality, which argues that business can be amoral, and

the actions of businessmen need not be guided by general ethical standards. Managers

may act selfishly because the market mechanism distills their actions into benefits to

shareholders and society at large. Adam Smith argued that the µinvisible hand¶ of the

market assures that by ³pursuing his own interest frequently promotes that of the society

more effectively than when he really intends to promote it.´ In this way, capitalism



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provides moral justification for the pursuit of profit through behavior which is not

purposefully ethical.

1.6 VALUES IN BUSINESS

To ensure that employees can and will act with integrity. Organizations need a strong and

consistent set of values that dictate appropriate individual actions. Navigating the complexities of

a situation requires a reliable compass. We can plot that "north" by determining clearly our own

core values. We have to identify - and articulate - what we believe is important to us and to our

companies. Our core values drive our behaviors, and our behaviors tell the world who we are and

what we stand for.Identifying and adhering to core-values compass point provides a standard that

will make decisions easier, consistent and justified.´ - Parkinson, J. Robert, Thinking clearly,

remembering values key to making the call, Milwaukee Journal Sentinel, March 22, 2004.

What are the core values that are fundamental to the success of any individual or

organization?

� Honesty: Being straightforward, sincere, truthful, free of fraud, deception or

misrepresentation.

± Builds/Maintains Trust

± Fosters Community

± Makes Communication more Efficient & Effective

± Demonstrates Respect for the Dignity of Others

� Respect:To give particular attention to, show consideration for, or hold in high or special

regard . Every man is to be respected as an absolute end in himself; and it is a crime

against the dignity that belongs to him as a human being, to use him as a mere

means for some external purpose.

� Responsibility : Moral Leaders take responsibility for their own actions/failures and

those of their companies and they demand accountability from their subordinates

Involves a commitment to competent quality performance. Implies fidelity to promises



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and other commitments and not making promises that cannot be kept, such as committing

to unrealistic delivery dates. Also calls for acknowledgment of implicit commitments,

such as the protection of confidences.

� Fairness : just, equitable, impartial, unbiased, objective. Involves a elimination (or at

least a minimalization) of one's own feelings, prejudices and desires, so as to achieve a

proper balance of conflicting interests. Implies an equitable distribution of burdens and

benefits. John Rawls argues in A Theory of Justice that rules are fair if they are rules that

the people operating under them would have agreed to, had they been given an

opportunity to accept or reject them beforehand.

� Compassion : sympathetic consciousness of another's distress together with a desire to

alleviate it; fellow feeling, the emotion of caring concern; the opposite of cruelty, based

on the idea of sibling love.

� Perseverance : steadfast determination to continue on despite adversity usually over a

long period of time. Nothing in the world can take the place of perseverance. Talent will

not; nothing is more common than unsuccessful men with talent. Education will not; the

world is full of educated derelicts. Genius will not; unrewarded genius is almost a

proverb. Persistence and determination alone are omnipotent

� Courage : The first place to start is for every individual to become aware of their core

values and to have the courage and discipline to live out of them in all aspects of their

lives. : the ability to disregard fear; bravery. The Latin root of this word is cur, which

means heart. Courage literally means to ³take heart´. Fear exists along a continuum.

Courage involves recognizing a reasonable amount of fear or nervousness, facing it and

then taking an intelligent risk.

Moral courage involves standing up for one¶s principles, in spite of possible adverseconsequences to such things as reputation or emotional well-being.

Many organizations have statement stating there mission. All mission statements incorporate

value relating to the conduct of its affairs. This may be express in terms similar to the

following.Honesty and Trust in all relations with customers, shareholders, business partners.



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Recognizing and respecting the needs of individuals.

Becoming the showcase for the productive.

The customer matters most.

Behold safety and health as our highest values.

Never to take or bribes.

No false billing, invoicing or documentation.

All rejects on quality to be followed carefully.

100% testing of finished products.

1.7 HOW VALUES EVOLVE?

Values are stated in formal statements. The real values are those that are practiced. Senior

personnel sitting together prepare the formal statements. They embody perhaps the ideals. The

real ones evolve during the pressure of operations, through processes of decision making. The

decision makers therefore create the real values.

The one mechanism to generate the uniform value system within an organization would be to

discuss decisions, not merely in terms of economic consequences, but also in terms of value that

they represent. There are some companies that have shown strong value system, fairly uniformly

held and operated by all decision makers in this cases, it is notice that the values had been led

down by the founders, usually one. The values pervade not merely the business activities, all

processes within.

Value at individual level includes:

Faith Self respect

Competitiveness Creativity

Devotion towards work Tolerance

Sacrifice Courtesy

Honesty Civil sense

Humility Absence of egoism

Poise Simplicity

Reason Truth



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Social conscience

Co-operation

Live and let live

Concern

Care

Mutual trust

Love

Team-spiritedness

Effectiveness

Productivity

Forgiveness Cleanliness

Values that can be imparted to members of organization collectively include:

Harmony

Resourcefulness

Discipline

Dharma

Equity

Brotherhood

Unity

Peace

Efficiency

Excellence

Morale

Risk bearing

Sharing

Every human being, at every moment, both in personal life is faced with a dilemma of selecting or

choosing this path or that one. In individual life one face several dilemmas. For example, taking a

chilled to hospital, attending on the guests, attending party, going to movie with a friend, preparing

material for the next days job and host of other dilemmas. In organizational life, one face several

dilemmas for instance attending to his job, attending the work he likes, attending the work that

satisfies boss, appeasing colleagues, doing something for the sake of subordinates, helping out of

way due to several reason like corruption, favoritism, and nepotism, etc. in all such situation, if the

man is clear with his values there will be less predicament, confusion, filing of loosing something

to the other and frustration. It is because the values created convictions even in critical situations.

A value to an individual is what a compass to a navigator both in personal and organizational life.

1.8 FEATURES OF BUSINESS ETHICS:

1. Refers to code of conduct.



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Business ethics is the code of conduct which businessmen should follow while

conducting their normal business activities.

2. Based on moral and social values.

Business ethics is based on well accepted moral and social values. It suggests moral

principles/rules of conduct for businessmen. They include self-control, service to society, fair

treatment to social groups and not to harm/exploit others.

3. Facilitates protection of social groups.

Business ethics gives protection to consumers and other social groups such as

shareholders, employees and the society at large. Business should give priority to social interest

or social good. Such ethical approach creates good name and status to business and facilitates its

expansion.

4. Provides basic framework.

Business ethics provides the framework within which business is to be conducted. It

suggests a legal, social, moral, economic and cultural limit within business is to operate. It

suggests what is good and what is bad in business.

5. Needs willing acceptance for enforcement.

Business ethics cannot be enforced by law or by force. It must be accepted as self-

discipline by businessmen. It should come from within. Businessmen should go for ethical trade

practices on their own and not by force of law.

6. Education and guidance required for introduction.

Businessmen should be given proper education, guidance and training in order to

motivate to follow ethical business practices. Trade associations and chambers of commerce

have to play a positive role in this regard.

7. Not against profit making.

Business ethics is not against fair profit making. However, it is against profiteering by

cheating and exploiting consumers, employees or investors. It supports expansion of

business activities but by fair means and not through illegal activities activities or corrupt

practices.



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8. Acts as µsummum bonum¶ of human life.

Ethics, as a science seeks to determine the µsummum bonum¶ of human life. It passes

judgments of value upon human actions with references to the moral values. Judgments of value

are judgments of what ought to be. Such judgments may be different from the judgments of facts

as they are judgements of what is.

1.9 IMPORTANCE OF BUSINESS ETHICS:

Business ethics is important as it has wider social significance. Society will get true benefits of

business activities only when business is conducted by respecting ethical values. In addition, it is

important as it offers the following advantage to the businessmen, consumers, and employees.

Advantages to businessmen/ managements/ business:

1) Orderly functioning:

Business ethics ensures orderly functioning of a business enterprise due to less

public criticism.

2) Favorable social image:

It creates good social image for business through alertness as regards social

responsibilities.

3) Guidance to businessmen:

Business ethics offers guidance to businessmen in decision making for social good

and not simply for profit maximization.

4) Support from employees:

Management gets support and cooperation from employees as regards future plans

and programmes of the company.

5) Creates social consciousness:

Due to business ethics, businessmen are made conscious as regards honesty and

social obligations ion business. It will lead to high level of corporate governance.

Respect to ethical values will create socially responsible business obligations.

6) Facilitates business expansion:



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Business ethics facilitates the expansion and growth of business activities due to the

support and cooperation from different social groups.

7) Encourages fair business:

Business ethics encourages businessmen to use fair business practices for the

protection of consumers and the society. It is concerned with morality in business.

Ethics is a system of moral values and ethics suggests the extent to which moral

values are respected in the conduct of business activities. Businessmen should

conduct business activities with self-control. This is necessary for the protection of

consumers and the society at large.

Advantages to consumers and the society at large:

1) Consumer protection:

Business ethics offers protection to consumers through the use of fair business

practices by businessmen.

2) Protection of consumer rights:

Due to business ethics, the rights of consumers are honored and protected. This

avoids their exploitation and ensures their safety and welfare.

3) Pro-consumer business:

Due to business ethics, business activities become pro-consumer friendly and this

gives satisfaction and pleasure to consumers.

4) Control of business malpractices:

Due to business ethics, consumers do not suffer as a result of business

malpractices, which are dangerous and troublesome to consumers.

5) Protection to environment:

Due to business ethics, pollution will be avoided or at least minimized.

Businessmen can make positive contribution in maintaining ecological balance by

respecting laws made for pollution control and ecological balance.



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Advantages to employees/workers:

1) Fair deals:

Employees get justice and fair deal when ethical rules and standards are followed

while dealing with them.

2) Fair wages:

Employees get fair wages and other monetary and non-monetary benefits, their

exploitation is also avoided.

3) Fair treatment:

Employees are treated with dignity and this raises their moral and mental

satisfaction.

4) Benefit of profit sharing:

Employees get a share of profits of the company in the form of bonus/ profit sharing or

other special monetary benefit. Business ethics involves protection of consumers and other social

groups, honor and respect to social responsibilities and conduct social relations for the growth of

business. This will lead to more expansion and diversification of business activities. Reasonable

profit is possible even when ethical practices are respected/honored by businessmen.

It is rather unfortunate that in the present world, in the pursuit of economic objectives, moral

and ethical scruples fall prey to neglect and finally decay. Moreover concern for such scruples is

considered as pursuit of outdated values. Businessmen should decide what is good and what I

bad and act accordingly. By following this rule, they can make their business ethical and also

beneficial to them and also to the society at large.

Business ethics is important as it offers long-term benefits. It is rightly said, ³Truth and

Ethics are more important to build, business and development, than just profits and

growth´. Business ethics may not give quick profit or quick expansion of business. However, itcreates good image of the business and facilitates its development over a long period. Ethical

business creates favorable atmosphere for public confidence and government support.



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Ethics is a leadership issue. Poor ethics can sap business production and long-term results. Here

is a concise list of ethical behavior.Ten Commandments of Ethical Business Behavior have their

roots in "Ethics: Easier Said than done," by Michael Josephson.

1 Be honest: To be honest means to be truthful, sincere, forthright, straightforward, frank and

candid. You should have zero personal tolerance for lying, stealing, cheating, deceiving or acting

deviously.

2. Have integrity: Always be principled, honorable, upright and courageous, acting upon your

convictions. Strive not to be unscrupulous or two-faced with a philosophy that the-end-justifies-

the-means.

3. Keep your word: Be worthy of others' trust by keeping promises, fulfilling commitments and

abiding by the spirit as well as by the letter of an agreement. Shy away from the temptation to

rationalize non-compliance or create an excuse to break a commitment on the basis of technical

or legalistic interpretations of agreements.

4. Maintain fidelity: Be faithful to your employees, family, friends and country, and never

disclose information earned in confidence. Scrupulously avoid undue influences and conflicts of

interest lest they cloud your ability to make independent and impartial decisions.

5. Always be fair: Be open-minded, willing to admit errors and change positions. Demonstrate a

commitment to justice, with equal treatment of all, and a tolerance for diversity. Never take

undue advantage of another's mistakes or adversities.

6. Care for others: Be kind, sharing and compassionate; share, give of yourself and serve others.

Help those in need and avoid actions that will bring harm to others.

7. Respect others: Demonstrate respect for human dignity, privacy and the right of self-

determination of all people. Be courteous, prompt and decent. Provide others with information

they need to make informed decisions and do not patronize, embarrass or demean.

8. Be a responsible citizen: Obey just laws (and protest unjust ones). Exercise democratic rights

and privileges responsibly by participation, social consciousness and public service. When in a



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position of leadership, openly respect the democratic decision-making process, avoid

unnecessary secrecy or concealment of information and ensure others have the information they

need to make intelligent decisions and exercise their rights.

9. Rigorously pursue excellence: Pursue excellence in all you do. Be diligent, reliable,

industrious and committed in meeting personal and professional responsibilities. Perform all

tasks to the best of your ability while developing and maintaining a high degree of competence.

Be well informed and well prepared. Never be content with mediocrity, and never strive to win

"at any cost."

10. Always be accountable: Being accountable means accepting responsibility for decisions and

the foreseeable consequences of actions and inactions, and for setting an example for others.

Employers, along with parents, teachers, professionals and public officials have a special

obligation to lead by example and to safeguard and advance the integrity and reputation of their

companies, families, professions and the government. Avoid even the appearance of impropriety

and take whatever actions are necessary to correct or prevent inappropriate conduct by others.

The consequences of lost ethics are summed up well in an ancient Chinese proverb, "He who

sacrifices his conscience to ambition burns a picture to obtain the ashes."

Ethics and Business:

Business and ethics are generally opposing in nature. A Businessman¶s main motive is to earn

profits and ethics emphasizes on the rightness or the wrongness of business conduct and tries to

maintain a harmonious relationship with society and environment. Generally emphasis on one

aspect leads to compromise in the other. If we were to consider the two as sets then they will

meet in a very small area to form a intersection. This is the area where business should ideally

function.

Can Ethics be applied to Corporations/Companies?



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Modern corp. are organizations that the law treats as immortal fictitious µpersons¶ who have the

right to sue and be sued, own and sell property, enter into contracts, all in their name.

Organizations neither feel pain nor pleasure nor cannot except act through human beings. The

above facts have become the basis of contradicting opinions regarding the applicability of ethics

to business.

However it is almost unanimously accepted that ethics can be and should be applied to business.

Since the actions and the inactions of an organization have serious repercussions on the society

and environment, therefore they are morally responsible for it.

1.10 UNETHICAL BUSINESS PRACTICES:

Business practices, which are legally, socially and morally not fair, are termed as unethical

business practices. They are basically used for profit maximization at the cost of exploitation of

poor consumers who feel that they are treated to ethical business practices. However, the

consumer protection act, 1986 puts control on such practices. Businessmen should be aware of

these unethical business practices as they can bring in bad name of the firm as well the

entrepreneur. Consumers can oppose these practices individually and collectively.

These unfair practices affect the consumers but also the employees, shareholders,

government and the society at large. Their main purpose is to exploit the specific social group for

profiteering. For example, artificial scarcity, price rise, adulteration and misleading advertising

are unethical practices in the case of consumers while low wages, bad working conditions and

absence of welfare facilities are unethical pratices in regard to employees. The usual unethical

practices in India noted are as follows:

1) Giving false, confusing and misleading advertisements of the products and

services.

2

)

Supplying inferior quality goods to consumers.3) Disregard to labour laws and other rights of the employee¶s including the right to from

trade union and right to make strike.

4) Exploitation of child labour and women workers.

5) Charging high prices by creating artificial scarcity for profit maximization.

6) Supplying inadequate information on the packages.



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7) Lack of safety measure to workers and not give them the benefits of permanent

services.

8) Over invoicing.

9) Inadequate measures in regard to pollution control and violation of legal provisions

relating to pollution control.

10) Paying low rate of dividend.

11) Formation of business combinations for avoiding competition and creating

monopolies.

12) Creating inconveniences to local people due to growing industrial activities without due

care to local community.

13) Avoiding payment of taxes as per existing laws.

14) Using unfair sales promotion techniques.

15) Giving bribes, gifts, donations, and payment of kickback money to politicians and

government officers for certain benefits.

16) Misbranding, hoarding and black-marketing.

17) Disregard to business laws, government policies and misuse of facilities and incentives

offered by the government.

18) Providing inefficient services to bank depositors/customers.

19) Misuse of funds and mismanagement of the company with which the shareholders are

closely linked.

20) Paying low wages, providing inferior quality welfare facilities and indecent treatment

to employees.

21) Adulteration and short weights and measures.



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1.11 PROFESSIONAL ETHICS

Professional ethics covers the myriad practical ethical problems and phenomena which arise out

of specific functional areas of companies or in relation to recognized business professions.

ETHICS OF ACCOUNTING INFORMATION

Creative accounting, earnings management, misleading financial analysis.

Insider trading, securities fraud, bucket shop, forex scams: concerns (criminal)

manipulation of the financial markets.

Executive compensation: concerns excessive payments made to corporate CEO's.

Bribery, kickbacks, and facilitation payments: while these may be in the (short-term)

interests of the company and its shareholders, these practices may be anti-competitive or

offend against the values of society.

ETHICS OF HUMAN RESOURCE MANAGEMENT

The ethics of human resource management (HRM) covers those ethical issues arising around the

employer-employee relationship, such as the rights and duties owed between employer and

employee.

Discrimination issues include discrimination on the bases of age (ageism), gender, race,religion, disabilities, weight and attractiveness. See also: affirmative action, sexual

harassment.

Issues surrounding the representation of employees and the democratization of the

workplace: union busting, strike breaking.



23

Issues affecting the privacy of the employee: workplace surveillance, drug testing.

Issues affecting the privacy of the employer : whistle-blowing.

Issues relating to the fairness of the employment contract and the balance of power

between employer and employee: slavery, indentured servitude, employment law.

Occupational safety and health.

ETHICS OF SALES AND MARKETING

Marketing which goes beyond the mere provision of information about (and access to) a product

may seek to manipulate our values and behavior. To some extent society regards this as

acceptable, but where is the ethical line to be drawn? Marketing ethics overlaps strongly with

media ethics, because marketing makes heavy use of media. However, media ethics is a much

larger topic and extends outside business ethics.

Pricing: price fixing, price discrimination, price skimming.

Anti-competitive practices: these include but go beyond pricing tactics to cover issues

such as manipulation of loyalty and supply chains. See: anti-competitive practices,

antitrust law.

Specific marketing strategies: greenwash, bait and switch, shill, viral marketing, spam

(electronic), pyramid scheme, planned obsolescence.

Content of advertisements: attack ads, subliminal messages, sex in advertising, products

regarded as immoral or harmful

Children and marketing: marketing in schools.



24

ETHICS OF PRODUCTION

This area of business ethics deals with the duties of a company to ensure that products and

production processes do not cause harm. Some of the more acute dilemmas in this area arise out

of the fact that there is usually a degree of danger in any product or production process and it is

difficult to define a degree of permissibility, or the degree of permissibility may depend on the

changing state of preventative technologies or changing social perceptions of acceptable risk.

Defective, addictive and inherently dangerous products and services (e.g. tobacco,

alcohol, weapons, motor vehicles, chemical manufacturing, bungee jumping).

Ethical relations between the company and the environment: pollution, environmental

ethics, carbon emissions trading.

Ethical problems arising out of new technologies: genetically modified food, mobile

phone radiation and health.

Product testing ethics: animal rights and animal testing, use of economically

disadvantaged groups (such as students) as test objects.

ETHICS OF INTELLECTUAL PROPERTY, KNOWLEDGE AND SKILLS

Knowledge and skills are valuable but not easily "ownable" objects. Nor is it obvious who has

the greater rights to an idea: the company who trained the employee or the employee

themselves? The country in which the plant grew, or the company which discovered and



25

developed the plant's medicinal potential? As a result, attempts to assert ownership and ethical

disputes over ownership arise.

Patent infringement, copyright infringement, trademark infringement.

Misuse of the intellectual property systems to stifle competition: patent misuse, copyright

misuse, patent troll, submarine patent.

Even the notion of intellectual property itself has been criticised on ethical grounds: see

intellectual property.

Employee raiding: the practice of attracting key employees away from a competitor totake unfair advantage of the knowledge or skills they may possess.

The practice of employing all the most talented people in a specific field, regardless of

need, in order to prevent any competitors employing them.

Bioprospecting (ethical) and biopiracy (unethical).

Business intelligence and industrial espionage.

It must be understood that ethics and ultimate aim of business are in most cases contradictory.



26

TWO BROAD AREAS OF BUSINESS ETHICS

1. Managerial mischief . Madsen and Shafritz, in their book "Essentials of Business Ethics"

explain that "managerial mischief" includes "illegal, unethical, or questionable practices

of individual managers or organizations, as well as the causes of such behaviours and

remedies to eradicate them." There has been a great deal written about managerial

mischief, leading many to believe that business ethics is merely a matter of preaching the

basics of what is right and wrong. More often, though, business ethics is a matter of

dealing with dilemmas that have no clear indication of what is right or wrong.

2. Moral mazes. The other broad area of business ethics is "moral mazes of management"

and includes the numerous ethical problems that managers must deal with on a daily basis,

such as potential conflicts of interest, wrongful use of resources, mismanagement of

contracts and agreements, etc.

1.12 FOUR VIEWS OF ETHICS



27

1.13 ENHANCED PERFORMANCE, PRODUCTIVITY, AND COMPETITIVE

POSITION:

It increases effectiveness and efficiency by enabling all stakeholders to work together

closely on the basis of respect, shared values, and mutual trust. Such efforts lead to what

one author calls ³invisible savings´ by reducing employee conduct that is harmful to the

enterprise but difficult to detect. If ethics and values are there then many of the costs of

monitoring and supervision can be reduced. Product quality may improve and transaction

costs, such as contracting, may decline. For example, many large, complex enterprises

(LCEs), most of which have business ethics, are developing preferred supplier lists to

reduce the number of suppliers that they deal with. To ensure that there is no interruption

in supplies and services, these LCEs require that their supply chains adopt the same good

management practices that they follow, including a business ethics program.

Since, in the minds of most employees, ethics are essentially a matter of fairness; a

business ethics often increases employee morale. Better the essential elements of a

business ethics and values may help members of often distinct organizational cultures

manage their differences until they find common ground. These elements include core

beliefs, standards, and procedures; high-level personnel responsible for the program; and

dedicated resources to help employees seek advice. Enterprises undergoing privatization

should also consider the advantages of a business ethics program as a means to reduce the

risks associated with this transition process.

Profitability & Morality

Frequently the impression of most people is that ethics and profits are mutual, opposed to

one another and that if a company is ethical, it may forget about making profits. People

also frequently seem to believe that a profitable company must necessarily be unethical.

This is like saying that a company can make profits only through unethical means.

Nothing can be more have ethical companies made profits, but more importantly it is,

only ethical companies which discharged its social responsibilities, that have survived

competition and turbulent changes through the years and have contributed to social

welfare and have contributed to flourished undiminished.



28

In fact, considered from all angles, it is unethical, NOT to make profit. It is unethical, for

a company, to make losses. Because, a company which can not make profits and makes

losses, misutilises scarce national resources can not pay back creditors, does not make

wealth for its shareholders, make huge liabilities, upsets the economy, promotes

inefficiency and most importantly, can not, at any cost discharge its social responsibility,

meet its welfare commitments and jeopardises the future of its employees. Such a loss-

making company becomes a nuisance and a burden to the economy and has not right to

exist in the market place. Moreover, it has no business to force its employees into

economic insecurity, which is highly unethical.

Thus instead of profits being contradictory to ethics, business ethics dictates that the first

responsibility of business is to remain profitable and generate revenue from the

shareholders and the society. Rather, it is unethical, not to make profits. Hence, the first

and foremost ethical obligation of every business is to make profits for its shareholders,

for its employees, for its creditors and most importantly, for itself, so that it can discharge

its social responsibilities and welfare commitments. But how much profits to make, the

means and methods of making it, and at what cost- that is the ethical question.

No business, however great or strong or wealthy it may be at present, can exist on

unethical means, or in total disregards to its social concern, for very long. Resorting to

unethical behaviour or disregarding social welfare is like calling for its own doom. Thus

business needs, in its own interest, to remain ethical and socially responsible. As V.B.

Dys in "The Social Relevance of Business " had stated-

"As a Statement of purpose, maximising of profit is not only unsatisfying, it is not even

accurate. A more realistic statement has to be more complicated. The corporation is a

creation of society whose purpose is the production and distribution of needed if the

whole is to be accurate: you cannot drop one element without doing violence to facts."

Business needs to remain ethical for its own good. Unethical actions and decisions may

yield results only in the very short run. For the long existence and sustained profitability

of the firm, business is required to conduct itself ethically and to run activities on ethical

lines. Doing so would lay a strong foundation for the business for continued and



29

sustained existence. All over the world, again and again, it has been demonstrated that it

is only ethical organisations that have continued to survive and grow, whereas unethical

ones have shown results only as flash in the pan, quickly growing and even more quickly

dying and forgotten.

Business needs to function as responsible corporate citizens of the country. It is that

organ of the society that creates wealth for the country. Hence, business can play a very

significant role in the modernisation and development of the country, if it chooses to do

so. But this will first require it to come out from its narrow mentality and even narrower

goals and motives.

Business

Ethics

Shared

Values

TrustSocial

Capital

Economic

Growth



30

1.14 RATIONALE OF THE STUDY

From the 16

th

century, trading is existing in India. So everyday a new company is arising. Somecompanies are opting ethical ways and some are opting unethical ways to make high profits.The

examples of the companies who believe in their values and adopted ethical ways to do business

are: NTPC¶s core values are Business ethics, Customer focus Organizational & professional pride,

Mutual respect and trust, Innovation and speed Total quality for excellence.

They have their business ethics that they never negotiate on their quality, never gives bribe at any cost.

Employees have pride being associated with NTPC & keep on innovating the technologies. This is why

they are progressing rapidly.

Tata has always been values-driven. These values continue to direct the growth and business of

Tata companies. The five core Tata values underpinning the way they do business are: Integrity,

Understanding, Excellence, Unity, responsibility. That¶s why they are able to stand out in the

market and making huge profits.

On the other hand the companies who have adopted unethical ways to do business are :KPMG

Xerox fraud case revealed in 2002,it had improperly classified over $6 billion in revenue, leading

to an over statement of earnings by nearly $2 billion. It implies that they had lost their ethics and

values. Not only KPMG Xerox fraud case, there are several other companies like Satyam, Tenet

Healthcare, Bank America etc. who were indulged in fraud cases, which inspired the researcher

to identify the impact of ethics and values on organization¶s performance.

The reason behind choosing N.F.L. is that there is lot of private sector companies but very few

public sector companies. N.F.L is one of those few public sector companies. Mostly Private

companies have professional managers. They keep their ethics and values up to the mark. But the

Public Sector Companies feels neglected, may be because bureaucratic functioning lacks

commitments to ethics and values. So the researcher has chosen National Fertilizer Limited.

Being the resident of Panipat the researcher is fascinated to identify the impact of ethics and

values on the performance of National Fertilizer Limited, Panipat.



31

1.15 REFRENCES OF CHAPTER 1:

1. en.wikipedia.org/wiki/Ethics

2. www.ethics.org/resource/definitions-values

3. www.professionalethics.ca/

4. www.nationalfertilizers.com/

5. www.websukat.com/POM-managerial-ethics.htm

6. trade.gov/goodgovernance/adobe/bem_section_1/chapter 2.pdf



32

CHAPTER 2:

REVIEW OF EXISTING LITERATURE

Source: Dr. M.Thenmozhi(Indian Institute of Technology Madras)¶Éthics´

Ethics in business are nothing but the do¶s and don¶ts by the business users in the business. In

other words it could be referred as set of principles a business man ought to follow.´There

should be business ethics´ means that the business should be conducted according to certain self

recognized moral standards. Few unethical elements in the present day business are cheating,

stealing, lying, bribing, corrupting etc. Business user must realize is the management and

ownership must be separated because the owners always tend for profit maximization where as

the managers case for ethics as they work for fixed salaries.

The study and examination of moral and social responsibility in relation to business

practice and decision making in business is known as ³Business Ethics´

In the past primary objective of the business was profit maximization but the present

perspectives on business objectives is not maximization.

It is profit maximization in long run besides fulfilling the ethics in the business.The business is

regarded as social institution formal integral part of social systems.The business is viewed as

subsystem to the social system.This is because any type of social system is influenced by:

The way the business functions

The organization of business

Innovations

Transmission and diffusion of information

New ideas etc.

They have either direct or indirect effect on society.

Source:Journal of business ethics

Work place spirituality has been defined as á framework of organizational values evidenced in

the culture that promote employees experience of transcendence through the work

process,facilitating their sense of being connected to others in a way that provides feeling of

completeness and joy´ (Giacalone and jurkiewicz,2003).Individuals are seeking to merge their



33

personal and professional values,desiring to achieve personal fulfillment through their

labor (Block,1993)

Peters and Waterman (1982) identified several values which were related to performance and

excellence in the marketplace. Their findings, though questioned by some authors, have received

widespread acclaim in the business community

(Carroll, 1983, and Hitt and Ireland, 1987). They studied a group of American firms which

were widely recognized as being superior performers in their industries for many years. Their

findings indicated that excellent firms possess a distinct and identifiable set of organizational

values which included beliefs about superior quality and service, being the best, innovation, the

importance of people as individuals, the importance of the details of execution, the importance of

informality to enhance communication, and the importance of a profit orientation and goal

accomplishment.

Values: Commitment, Satisfaction, and Cohesion

Many authors have investigated a variety of issues relating to commitment, satisfaction, and

cohesion. Most managers would probably agree that the presence of these individual behaviors

and attitudes has a direct impact on organizational performance. Hence, it would be desirable for

an individual or work force to possess these traits.

P rof. K.V. Bhanu Murthy, University of Delhi (April 2007),´ Business Ethics and Corporate

Responsibility ± A New P erspective´

Business Philosophy is a driving force of a particular business. For instance, the ³Business

Philosophy´ of Tata¶s might be to develop a business that is quality conscious and produces

products that are within the reach of the common man. On the other hand, Philosophy of

Business explains the moral principles that underlie business as a domain. It goes into the

purpose of business and the ethical basis and consequences of business. Therefore, ³Business

Philosophy´ relates to the vision of a company whereas ³philosophy of business´ is an area of

study. It is a sub-discipline of philosophy. There has a controversy over the need for business

ethics. The controversy had a misplaced emphasis. Today it is most urgently felt that different

dimensions, namely, social responsibility, environmental accountability and governance must be



34

brought under one umbrella of business ethics. The top management must bring about

organizational transformation so as to make such a trifocal approach sustainable. However, the

major challenge is of evolving a strategy for laying down standards that take care of major issues

and provide standards that are measurable, objective and universal.

Rania Ahmed Azmi (2006),´ Business Ethics as Competitive Advantage for Companies

In the Globalization Era´

Companies that adhere to a strong ethics policy are likely to enjoy a long-term competitive

advantage. the importance of building a strong ethical culture is integral to the reputation, growth

and finances of any organization. It builds a brand that attracts the best talent and creates trust

among the stakeholders. Although companies are primarily business organizations run for the

benefit of shareholders, they have a wide-ranging set of responsibilities to their own suppliers,

customers and employees, to the communities in which they are located, and to society at large.

Most corporations recognize these responsibilities and make a serious effort to fulfil them while

trying to utilize their business ethics as a source of competitive advantage. This has been defined

as the ³hidden logic of business ethics.´ The research has explored the growing issue of business

ethics particularly as a competitive advantage. They have analyzed that business ethics as a

threat to business competitiveness, when ethical failure diminishes the reputation of a company

and its products, locally and globally. In certain markets companies¶ records of positive or

negative ethical conduct determine their ³licence to operate´ in some market.

An integrity approach to business can yield strengthened competitiveness: it facilitates the

delivery of quality products in an honest, reliable way. This approach can enhance work life by

making the workplace more fun and challenging. It can improve relationships with stakeholders

and can instill a more positive mindset that fosters creativity and innovations. The purpose of

ethics is to enhance our lives and our relationships both inside and outside of the organization.



35

László Zsolnai, Corvinus, University of Budapest - Business Ethics Center, ³GENUINE

BUSINESS ETHICS´

Business ethics and corporate social responsibility are often seen as instruments for improving

the functioning of a corporation, to add value to business like other tools. Ethics is fundamental

to and relevant at all levels of economic activity, from the individual and the organizational to

the societal and the global. Yet there is a paradox in the proposition that higher standards of

behavior in today¶s world will automatically lead to higher profits and better performance. If the

aim of top executives is merely to use ethics to achieve greater efficiency their efforts will

ultimately fail. Superficially motivated business ethics initiatives rightly called, window

dressing. Often prove counter-productive. They are perceived as cheating by the stakeholders

who will react accordingly. Sometimes no ethics at all is better than opportunistic actions.

Business ethics can provide strategies to counteract organizational use of moral disengagement

strategies. One approach is to monitor and publicize corporate practices that produce detrimental

effect on humans. Another approach is to increase the transparency of the discourse through

which corporate policies and practices are born. Instituting clear lines of accountability inhibits

moral disengagement. Exposing sanitized language that masks reprehensible practices is another

corrective. The affected parties need to be confronted and their concerns publicized and

addressed.

David Burress 1979

Business ethics, especially among top managers, has become a topic of concern to the public and

business community. As a result, much attention has focused on the development of moral

reasoning in corporate individuals. Past research examining individual and business decision

behavior, indicates that several variables such the level of moral reasoning, perceived ethical

climate, education, age, management level, work tenure, industry types and gender have a

significant impact on individual decisions.



36

Mary W. Vilcox and Thomas O. Mohan

Business ethics is a form of the art of applied ethics that examines ethical rules and principles

within a commercial context, the various moral or ethical problems that can arise in a business

setting, and any special duties or obligations that apply to persons who are engaged in

commerce. Business ethics can be both a normative and a descriptive discipline. As a corporate

practice and a career specialization, the field is primarily normative. In academia descriptive

approaches are also taken. The range and quantity of business ethical issues reflects the degree to

which business is perceived to be at odds with non-economic social values. Historically, interest

in business ethics accelerated dramatically during the 1980s and 1990s, both within major

corporations and within academia. For example, today most major corporate websites lay

emphasis on commitment to promoting non-economic social values under a variety of headings

(e.g. ethics codes, social responsibility charters). In some cases, corporations have redefined their

core values in the light of business ethical considerations. Catching business ethics in action,

however, remains a seldom-spotted nugget for in reality it depends on the characters of the

characters.

Nikolay A. Dentchev1 and Derrick P . Gosselin1,2

1Ghent University, Ghent, Belgium

2University of Oxford (James Martin Institute), United Kingdom

Contemporary theorizing on business ethics is been predominantly approached through a

normative approach. Business ethics focuses on the moral adequacy of corporate activities

(Goodpaster, 1997). In this context, it is often argued that managers are obliged to pay more

attention to the moral implications of their actions. Business ethics has not only moral, but also

strategic implications for business organizations. According to them, more attention should be

devoted to addressing the managerial risks of business ethics.



37

James A. Brickley, Clifford W. Smith, Jr. and Jerold L . Zimmerman (2000),´ Business Ethics

and Organizational Architecture´, FR 00-14

A company¶s reputation for ethical behavior, including its perceived integrity in dealing with

customers, suppliers, and other parties, is part of its brand name capital; as such, it is reflected in

the value of its securities (just as individuals¶ human capital is based in part on their reputations

for ethical behavior. Although they have not argued that these market incentives alone are

sufficient to ensure ethical behavior, their analysis of these costs helps explain why ethical

behavior is so widely observed in markets: ethical behavior frequently is profitable By credibly

promising to act ethically, a firm can differentiate their product and increase their demand²

potentially by a substantial amount. Their analysis suggests that a board of directors concerned

with the ethical conduct of the firm¶s employees should spend less time exhorting the human

resource manager to search for honest employees (like Diogenes search for an honest man). They

should identify potential incentive problems between the firm and its customers, creditors, or

employees. Once identified, attention can be focused on the constructive resolution of the

incentive problems.

Susan M. Anstead(1999),´ Law Versus Ethics in Management´

A relationship exists between law and ethics. In some instances, law and ethics overlap and what

is perceived as unethical is also illegal. In other situations, they do not overlap. In some cases,

what is perceived as unethical is still legal, and in others, what is illegal is perceived as ethical.

Managers must evaluate not only what is legal, but what they, their employees, and society

consider ethical as well. Important here is that companies must also consider what behaviors

their customers will and will not accept. No company wants to be forced to defend itself over

ethical issues involving wages, the environment, working issues, or human relations. Managers

play a vital role in a company's legal and ethical performance. It is in part their responsibility to

ensure that their employees are abiding by Federal, State, and Local laws, as well as any ethical

codes established at the company. But most importantly, the managers must provide a positive



38

example to their employees of proper behavior in light of laws and ethical codes. They must also

consider the ethics of their employees and customers.

The word ethics is derived from the Greek word ethos (character), and from the Latin word

mores (customs). Together they combine to define how individuals choose to interact with one

another. In philosophy, ethics defines what is good for the individual and for society and

establishes the nature of duties that people owe themselves and

one another. The following items are characteristics of ethics:

y Ethics involves learning what is right and wrong, and then doing the right thing.

y Most ethical decisions have extended consequences.

y Most ethical decisions have multiple alternatives

y Most ethical decisions have mixed outcomes.

y Most ethical decisions have uncertain consequences.

y Most ethical decisions have personal implications.

It is important to note that there is also a difference between ethics and morality. Morality refers

both to the standards of behavior by which individuals are judged, and to the standards of

behavior by which people in general are judged in their relationships with others. Ethics, on the

other hand, encompasses the system of beliefs that supports a particular view of morality.

Dolan S. L , Garcia S, Diegoli S, Auerbach A´ Organizational Values as "Attractors of

Chaos´: An Emerging Cultural Change to Manage Organizational Complexity´, ³Journal of

Economics literature classification: D23, M14, and O33´.

Basic beliefs and values that form its organizational culture are the parameters that will lead the

company to its success (or not) in long term. Values will guide people¶s behaviour and work

conduct into achieving the desired results, just as do the attractors. Honesty, loyalty, sympathy,

and money are all values that people use to conduct their lives. Values are always a consequence

of human internal beliefs, and that's why, to produce changes in a company, one must start re-

evaluating people¶s beliefs to incorporate new values into their working lives. Values can also be

categorized into two main groups: finals and instrumentals. Final values can be explained as

existential objectives, or, the answer to the question, ³What do you/your company intends to



39

be/achieve in the future?´ The answer, often embodied in the corporate mission statement, can be

economic benefits, excellence in products and services, customer or employee satisfaction,

personal fulfillment, happiness, and so on. To achieve these final values, one must define the

instrumental ones. Actually, it's necessary to clarify the set of the instrumental values that will be

used to reach the future. Instrumental values can be organized in two groups: ethical and

competence values (Rockeach, 1973). The ethical values refer to the conduct, the means that are

justified to achieve the final values). Usually, these are associated with social values such as

honesty, integrity, sincerity, and loyalty. Competence values are more individualistic and have to

do with the personal impression of what is necessary to achieve final values, or to be

competitive. Examples include creativity, patience, flexibility, order, intelligence, and health.

The all above studies describe simply business ethics and values and impact of ethics and values

on different aspects of organization. But there are little references explaining the impact of ethics

and values on organizational performance, particularly on any public sector unit as N.F.L. It

stimulates the researcher to go for such a study.



40

CHAPTER 3:

OBJECTIVES OF STUDY

The main objective of the study to know the meaning of business ethics, its importance and tofind out the impact of ethics on the performance of National Fertilizer Limited, Panipat. But the

more specific objectives are as follows:

To study:

Why business should adopt ethics in their practices?

The impact of ethics on performance of N.F.L.

The impact of ethics on employee¶s satisfaction of N.F.L.

The extent to which ethics are prevailing in N.F.L.

To find out:

Ethical and non-ethical issues in N.F.L.



41

CHAPTER 4 :

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. It may beunderstood as a science of studying how research is done. We study the various steps that are

generally taken by a researcher in studying the research problem. Research is a human activity,

based on intellectual investigation and aimed at discovering, interpreting and revising human

knowledge on different aspects of world.

4.1 RESEARCH APPROACH ± Qualitative approach used for this research.

4.2 RESEARCH DESIGN-The researcher has adopted Descriptive Research Design, as it

involves observing and describing the behavior of a subject without influencing it in any way. 4.3 PERIOD OF STUDY-10 years

4.4 SAMPLING UNIVERSE-From a statistical point of view, the term µuniverse¶ refers to the

total of the terms or units in any field of inquiry &the attributes that are the objects of study.

Here sampling universe is National Fertilizer Limited.

4.5 SAMPLE UNIT- National Fertilizer Limited, Panipat

4.6 SAMPLING TECHNIQUE-The researcher has adopted Non-probability sampling

technique because the sample is taken deliberately by researcher, by using his own judgement

and as per convenience.

4.7 SAMPLING TOOL ± Percentage Method and pie charts.

4.8 SAMPLE SIZE 50

4.9 Sample Composition:

Managers: 19

Personnel Officer: 5

Accounts Officer: 9



42

Personal Assistant: 8

Senior Assistant: 9

4.10 SOURCES OF DATA

Primary Data

For obtaining the primary data for the project, the researcher propose to use one

research instrument i.e. Questionnaire.

Secondary Data

The researcher propose to get the secondary data from

(a) Various journals and reports published in National Fertilizer

Limited.

(b) Newspapers, Books, Magazines, Research papers, Internet.

The primary and secondary data were comprehensive enough to supply information to

make logical and balanced assessments and conclusions on study.



43

CHAPTER 5 :

DATA ANALYSIS AND INTERPRETATION:

Q1. Does the organization recruits staff on the basis of family ties and friendship?

Q2. Is there any discrimination in the organization on the basis of:

Age,Colour,Gender,Religion.

14%

80%

6%

Percentage of respondents

Agree

Disagree

Neither agree Nor disagree

RATING SCALE NO. OF RESPONDENTS

Agree 7(14%)

Disagree 40(80%)

Neither agree Nor disagree 3(6%)


Agree 10(20%)

Disagree 40(80%)



44

Q3. Do you manipulate performance indicators to reach targets?

20%

80%


Agree

Disagree

16%

74%

10%


Agree

Disagree



Agree 8(16%)

Disagree 37(74%)




45

Q4. Do you give out personal or organizational information to others?

Q5. Do you criticize your organization to others?


Agree 3(6%)

Disagree 44(88%)



Agree 0

Disagree 46(92%)


6%

88%

6%


Agree

Disagree




46

Q6. Does the organization condone false or misleading advertisement to increase sales?

0%

92%

8%


Agree

Disagree



Agree 0(0%)

Disagree 46(92%)




47

Q7. Do the senior executives blame sub-ordinates for their own mistakes?

0%

92%

8%


Agree

Disagree


2%

84%

14%


Agree

Disagree



Agree 1(2%)

Disagree 42(84%)




48

Q8. Does the top management rewards employees differently?

Q9. Are there any conflicts in the interest of organization and employees?

10%

82%

8%


Agree

Disagree



Agree 5(10%)

Disagree 41(82%)



Agree 3(2%)

Disagree 42(84%)




49

Q10. Do the senior executives ask the staff to carry out tasks which they are disagreedwith?

2%

84%

14%


Agree

Disagree


14%

72%

14%


Agree

Disagree

Neither agree Nor

disagree


Agree 7(14%)

Disagree 36(72%)




50

Q11. Do you treat equal clients unequally?

Q12. Do you meet the targets at all costs?

8%

84%

8%


Agree

Disagree



Agree 4(8%)

Disagree 42(84%)



Agree 29(58%)

Disagree 16(32%)




51

Q13. Is there proper transparency in policies and action?

58%

32%

10%


Agree

Disagree


80%

14%

6%


Agree

Disagree



Agree 40(80%)

Disagree 7(14%)




52

Q14. Do you utilize your potential to the best you can?

Q15. Is the organization committed to the quality standards?

96%

2%2%


Agree

Disagree



Agree 48(96%)

Disagree 1(2%)



Agree 43(86%)

Disagree 4(8%)


86%

8%6%


Agree

Disagree




53

Q16. Is the organization having comfortable work environment?

Q17. Do you think ethical goals and objectives are as important as production, quality and

financial goals and objectives?

80%

6%14%


Agree

Disagree



Agree 40(80%)

Disagree 3(6%)



Agree 43(86%)

Disagree 3(6%)




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Q18. Do you know your roles and responsibilities properly?

86%

6%

8%


Agree

Disagree


98%

2% 0%


Agree

Disagree



Agree 49(98%)

Disagree 1(2%)




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Q19. Is there team based culture in the organization?

Q20. Do you think there is a relationship between ethics, values and economic

performance?

86%

6%8%


Agree

Disagree



Agree 43(86%)

Disagree 3(6%)



Yes 46(92%)

No 1(2%)

Don¶t Know 3(6%)



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Q21. Are you satisfied with the operational safety provided by the organization?

92%

2% 6%


Yes

No

Don¶t know

86%

0% 14%


Yes

No

Up to some extent


Yes 43(86%)

No 0(0%)

Up to some extent 7(14%)



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Q22. Are you proud of being the part of NFL?

Q23. Please rate the ethics and values in the organization using the keys provided.

92%

0%8%


Yes

No

Up to some extent


Yes 46(92%)

No 0(0%)

Up to some extent 4(8%)


Excellent 29(58%)

Good 20(40%)

Average 1(2%)

Poor 0(0%)



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8%

40%

2% 0%


Excellent

Good

Average

Poor



59

CHAPTER 6:

FINDINGS AND CONCUSION

The researcher has found that:

Ethics and values are prevailing in N.F.L at very high extent (around 80%).

There are more or less 90% ethical practices and 10% unethical practices prevailing in

N.F.L.

There is fair recruitment in the organization.

There is least discrimination on the basis of age, colour, gender, religion.

Employees are fully satisfied with their jobs.

Organization never compromise with the quality standards. Employees utilize their potential to the best they can.

Employees are loyal and honest to the organization.

Employees are fully satisfied with the operational safety provided by the organization.

Employees are proud of being part of N.F.L.

As a result the performance of National Fertilizer Limited is consistently high till now.



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61

Second Best National Productivity Award by National Productivity

Council (NPC) in 1993-94, Panipat.

Golden Peacock Innovation Award from IOD, N. Delhi. 2005,Panipat.

Best Energy Conservation Implementation Gold Award by Institutional

Green Land Society, Hyderabad. 1999-00, Panipat

Haryana State Safety & Welfare Award 1999-00, Panipat

Prime Minister¶s Shramvir Award to four employees for Unconventional repairs of Air

Compressor Blades, panipat

CONCLUSION:

From the analysis and findings, it is being concluded that ethics and values are prevailing in the

organization at a very high extent. Employees are fully satisfied with their jobs. Ethics makes for

an efficient economy. Ethics is good in itself, ethics and profit go together in the long run and

ethics alone can protect the society. National Fertilizer Limited, Panipat is an ethically

responsible organization which has developed a culture for caring for the people and for the

betterment of society as a whole. Ethics has a considerable influence on the economy for

efficient and smooth functioning.

It is being concluded that

³ Organizations can earn Profit with Morality´



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CHAPTER 7 :

SUGGESTIONS AND RECCOMENDATIONS:

There should be proper transparency in policies and action.

There should not be any conflicts in the interest of organization and employees.

There should be healthy work environment.

Senior executives should not ask the staff to carry out tasks which they are disagreed

with.

Organization should take care that the equal clients should not be treated unequally.

A bit more efforts should be done to provide best operational safety.



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CHAPTER 8:

LIMITATIONS OF THE STUDY:

The study is affected by non availability of proper information.

Biasness of the respondent creates problem in the study.

Time frame for the study is limited.

Finance problem is also a buzz in the study.

Sample size is not too large.

The study is limited to panipat plant only but unable to analyze the whole National

Fertilizer Limited.



64

BIBLIOGRAPHY:

Text:

Anubhavananda, Swami,Éthics in ManagementÉd.2007,Ane Books India,

New Delhi.

Kothari, C.R., Research M ethodology, 2nd ed., New Delhi: New Age

International (P) Limited, 1985

E-Books:

Berry, J. (1989). Imposed ethics--emics--derived ethics: The operationalisation of a compelling idea. International Journal of Psychology, 24, 721-735.

Christina Soh:how IT creates business values:A process theory synthesis.

Hosmer, Larue Tone; T he E thics of M anagement ; Richard D. Irwin, Inc.; 1997.

McNamara, Carter; C omplete Guide to E thicsM anagement .

Hoffman, W. M. and J.M. Moore (1982) ³What is Business Ethics? A Reply toPeter.

Drucker,´ Journal of Business Ethics 1: 293±300.

Cazalot, Clarence (2005). ³Creating Competitive Advantage through BusinessEthics´, Executive Speeches Journal, April/May issue.

Donaldson, T. (1994). When integration fails: The logic of prescription anddescription in business ethics. Business Ethics Quarterly, 4(2), 157-170.

James A. Brickley, Clifford W. Smith, Jr. and Jerold L. Zimmerman (2000),´Business Ethics and Organizational Architecture´, FR 00-14

László Zsolnai, Corvinus, University of Budapest - Business Ethics Center,

³GENUINE BUSINESS ETHICS´.

Prof. K.V. Bhanu Murthy, University of Delhi (April 2007),´ Business Ethics and

Corporate Responsibility ± A New Perspective´



65

ANNEXURE

QUESTIONNAIRE

This questionnaire is designed to encourage discussion of ethical issues and to definitions of ethical and unethical practices and to find out the impact of ethics and values on performance of National Fertilizer Limited, Panipat.

All of your responses are confidential. This survey will take just few minutes of yours.So please

answer them honestly:

Employment Details:

Name: Date of Birth:

Designation: Department:

Date of joining: Experience:

Q1. Does the organization recruits staff on the basis of family ties and friendship?

Agree Disagree Neither agree Nor disagree

Q2. Is there any discrimination in the organization on the basis of:

Agree DisagreeAge

Colour

Gender

Religion

Q3. Do you manipulate performance indicators to reach targets?




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Q4. Do you give out personal or organizational information to others?


Q5. Do you criticize your organization to others?

Yes No Sometimes

Q6. Does the organization condone false or misleading advertisement to increase sales?


Q7. Do the senior executives blame sub-ordinates for their own mistakes?


Q8. Does the top management rewards employees differently?


Q9. Are there any conflicts in the interest of organization and employees?


Q10. Do the senior executives ask the staff to carry out tasks which they are disagreed with?


Q11. Do you treat equal clients unequally?


Q12. Do you meet the targets at all costs?


Q13. Is there p roper transparency in policies and action?


Q14. Do you utilize your potential to the best you can?Agree Disagree Neither agree Nor disagree



Q15. Is the organization committed to the quality standards?


Q16. Is the organization having comfortable work environment?


Q17. Do you think ethical goals and objectives are as important as production, quality andfinancial goals and objectives?


Q18. Do you know your roles and responsibilities properly?


Q19. Is there team based culture in the organization?


Q20. Do you think there is a relationship between ethics, values and economic performance?

Yes No Don¶t know

Q21. Are you satisfied with the operational safety provided by the organization?

Yes No Up to some extent

Q22. Are you proud of being the part of NFL?

Yes No Up to some extent

Q23. Please rate the ethics and values in the organization using the keys provided.Excellent

Good

Documents

Ethics Project Report3