Values and Ethics Unit i

8/3/2019 Values and Ethics Unit i

http://slidepdf.com/reader/full/values-and-ethics-unit-i 1/14

VALUES

Values are the basic convictions that a specific mode of conduct or end state of existence is personally or socially preferable to an

opposite or converse mode of conduct or end state of existence.

Values can be defined as those things that are important to or valued by someone. That someone can be an individual or,

collectively, an organization. One place where values are important is in relation to vision. One of the imperatives for

organizational vision is that it must be based on and consistent with the organization's core values. Values are what we, as a profession, judge to be right. They are more than words-they are the moral, ethical, and professional attributes of character.

According to Milton Rockeach, Values are beliefs that guide action and judgement across a variety of situations.

According to Edward Springer, Values are the constellations of likes, dislikes, view points, rational and irrational judgments,

prejudices and association patterns that determine a person’s view of the world.

Values contain a judgemental element i.e. whether something is right, good or desirable.

Values have both content attribute (which refers to the fact that a mode of conduct is “important”) and the intensity attribute

(“how important it is”).

We get values from parents, teachers, friends etc. Values are more or less stable. Example – To be honest and to be responsible is

taught to us from childhood.

When an individual joins an organization, he comes with some notions about what “ought” and what “ought not to be”. Thesenotions are always guided by an individual’s values of what is “right” and what is “wrong”.

Personal values - Values are one's judgments about what is important in life. Values are an integral part of every culture. Along

with worldview and personality, they generate behavior. Being part of a culture that shares a common core set of values creates

expectations and predictability without which a culture would disintegrate and its members would lose their personal identity and

sense of worth. Values tell people what is good, beneficial, important, useful, beautiful, desirable, appropriate...etc. They answer

the question of why people do what they do. Values help people solve common human problems for survival. Over time, they

become the roots of traditions that groups of people find important in their day to day lives. Values can be positive or negative

some are destructive. To understand people of other cultures, we must come to understand the values, beliefs and assumptions.

Cultural values - Groups, societies, or cultures have values that are largely shared by their members. The values identify those

objects, conditions or characteristics that members of the society consider important; that is, valuable. In the United States, forexample, values might include material comfort, wealth,competition, individualism or religiosity. The values of a society can

often be identified by noting which people receive honor or respect. In the US, for example, professional athletes at the top levels

in some sports are honored (in the form of monetary payment) more than college professors.

Values are related to the norms of a culture, but they are more global and abstract than norms. Norms are rules for behavior in

specific situations, while values identify what should be judged as good or evil. Flying the national flag on a holiday is a norm

but it reflects the value of patriotism. Wearing dark clothing and appearing solemn are normative behaviors at a funeral. In certain

cultures they reflect the values of respect and support of friends and family. Different cultures reflect different values. Over the

last three decades, traditional-age college students have shown an increased interest in personal well-being and a decreased

interest in the welfare of others. Values seemed to have changed, affecting the beliefs, and attitudes of college students.

Factors in value formation

1. Value – forming Institutions - There are various institutions in the society which inculcate values in an individual. Four

major institutions which proved the basic sources of values for person and organizations: family, school, state, and

religion. A key characteristic of all these basic value-forming sources is their interrelatedness. The values fostered by

each reinforces the values of the others, and together they exert many influences on the value patterns exhibited both bythe individuals and organizations.

The basic process of value formation by these institutions is that they prescribe what is good or bad for an individual

Good behaviour is rewarded and reinforced and bad behaviour is punished.

1



2. Organisational values - Organisation, where the individuals work, also shape their values though in a lesser degree. An

organization has its own values which are reflected in the form of collective values of individuals who join it. Individuals

have their own values. They prefer to work in organizations whose value system matches their own value system.If thei

value systems do not match, they leave the organization or adjust to the values of the organization

3. Peer and Colleagues- An individual develops and applies beliefs, attitudes and values derived from the group of peers

and colleagues with whom he is associated. An individual in a work group tends to conform to the group’s norms a

long as he values the friendship and approval of his associates or fear the possibility that they will cut him from rights,

privileges, and benefits they can offer. Values strengthen, protect, and solidify a given group, and while departure from

values may invoke no immediate penalty, a sense of estrangement may follow. Therefore, the individual tries to follow

that group norm of behaviour.

4. Work and career- Work consists of the tasks or responsibilities associated with a particular job or position in an

organization. An individual’s experience over a period of time constitutes his career. In an occupational career, the

individual follows a related, progressive series of jobs, positions, or stages of development. Work and career createsspecial values.Each work will have its own values and person performing the work will follow that values, For example

in an organization, sales people, accountants, engineers will have different values according to their specialties.

5. Professional Codes- Professional codes are the ethical normsfor managers in business organizations. There are three

types of codes available in an organization. First is the so-called company creeds or philosophies which usually coverthose basic philosophies and behaviours that

govern the business. Sometimes documents are prepared to build the company’s image by showing the company’s concern

for ethical behaviour in the society. Second, a code is found in company’s operational policies which set up guides to action

that have an ethical content. Policy guidelines may be for various activities like recruitment and selection, selling, handling

customer complaints, etc. Third, since people belong to various professions, they are also governed by code or conduct

framed by their associations. Such codes have been devised by various professional bodies like All India Management

Association, Institute of Company Secretaries of India, Institute of Chartered Accountants of India, Institute of Cost and

Works Accountants of India. These codes are consonant with customs, beliefs, social values, public laws, and generallydesirable behaviour. The enforcement of these codes is by various sanctions such as fines or even the expulsion of deviant

members.

6. Situational factors – Situations keep changing and an individual changes his values as the situation demands. For

example, an individual who faces the threat of loosing a job may commit unethical acts to save his job.

7. Personal factors – Personal attributes like ability, intelligence, education level also determine an individual’s values.

For example, if one is intelligent it may result in faster understanding of values.

Value systems of Indian managers

Researchers have attempted to identify the value systems of Indian managers. Their major findings are presented below.

1. Managers tend to have value orientation towards economic, theoretic, political, social, aesthetic, and religious in tha

order.

2. Managerial values tend to be existential, conformistic, manipulative, sociocentric, tribalistic, and egocentric.

3. Indian managers are more pragmatist than moralist. There are generally some acceptable unethical practices in business

like nepotism bribes, gifts, personal favours, unfair competitive practices, dishonesty in customer relations, and persona

benefits.

4. In terms of work values, Indian managers tend to: (i) be money oriented during early days of their career and later shif

to matters like job satisfaction, and finally at the end of the career, to intangible values like status; (ii) attach highimportance to values like loyalty and obedience; and (iii) be ambitious, and believe to a large extent in the fate, without

allowing this belief to directly interfere in doing day-to-day working.

Indian managers give importance to various occupational values in the order of: to be free from supervision, adventurous

experiences/challenges, social status and prestige, to exercise leadership and control over others, opportunities to work with

people, chances to earn a good deal of money, and stable and secure future.

Indian enterprises today face conflicts, tensions, low efficiency and productivity, absence of motivation and lack of work culture

This may be attributed to the fact that Indian managers are moving away from the concept of values and ethics. They are more

concentrated on maximization of wealth. Hence, are deviating from value – based managerial behavior.

2



The Indian managers need to develop some values and beliefs that will facilitate them to attain the ultimate goals of profit,survival and growth. These are –

1) Utilization of available resources – The first lesson in the management science is to choose wisely and utilize optimally

the scarce resources if one wants to succeed in his venture. For example, Before the Mahabharata war, Duryodhana

chose Sri Krishna’s large army for his help while Arjuna selected Sri Krishna’s wisdom for his support.

2) Attitude towards work – Managers have to develop the visionary perspective in their work. They have to develop a sense

of larger vision in their work for a common good.

3) Work commitment – Managers have to work with dedication. Managers’ performance should not only be based upon the benefits reaped, but also the quality of performance.

The state of “nishkama karma” is the right attitude to work because it prevents the ego and mind from thinking about future

gains or losses.

Managers should promote team work, dignity, cooperation, harmony, trust, sacrificing lower needs for higher goals, seeing

others in you and yourself in others. The work should be one with detachment and supremacy of organizational goals must be

realized as against the narrow perspective of personal success and achievement.

Value-based managers should do the following –

• Cultivate a sound philosophy of life

• Strive for excellence through “Work is worship”• Identify with inner core of self sufficiency

• Pursue ethico-moral righteousness

4) Vision – Managers need to have a long term vision, should be practical, dynamic and capable of translating dreams into

reality. They should have a spontaneous zeal to help others.

In brief, managers should possess the following values –

• Forming a vision and planning the strategy to realize such a vision

• Cultivating the art of leadership

• Striving for institutional excellence and building an innovative organization

•

Developing human resources• Service to customers

• Team building and team work

• Delegation, motivation and communication

• Reviewing performance and taking corrective steps whenever required.

• Loyalty to company

Values of Japanese Management –

The following list of values have been identified by R.T. Pascale and A.B. Athos –

• National service through industry

• Fairness

• Harmony and cooperation• Struggle for betterment

• Courtesy and humility

• Adjustment and assimilations

• Gratitude

Values of western managers –

The western managers are endowed with the following value set –

• Western managers follow a proper code of conduct and work in a structured formal atmosphere with no place of

modesty in their behavior.

3



• Western managers are very professional with excellent analysis power, high professional education and

specialization.

• A belief in superior quality and service

• Western managers value principles as they consider it as the best strategy to win.

• Western managers are imperialistic in their approach and professional efficiency and work discipline are important

to them.

• A belief in the importance of people as individuals and dignity of labour.

• Western mangers are accountable and are held responsible for what they do of their position.

• Explicit belief in and recognition of the importance of economic growth and profits.

•

Western managers have respect for the public good like parks free of litter, clean roads etc. They are better sociallyresponsible people. It is relatively a corruption free society and it is difficult to bribe a police officer.

• Western managers have a perfect combination of two important values – loyalty to family and loyalty to community

• Western value system teaches honouring contracts.

• In the west, people are more professional and do not let personal relations interfere with their professional dealings

For example, they do not hesitate to punish a colleague for incompetence, even if he is a friend.

• Western value system is such that they are more responsible for their community and society and are ready to solve

societal problems proactively.

Values Across Cultures

Values differ across cultures & an understanding of these differences helps in working with people across cultures.

Hofstede’s Framework for assessing Cultures:

Accoring to Geert Hofstede, managers & employees vary on a five value dimensions of national culture. –

1) Power Distance – A national culture attribute which describes the extent to which a society accepts that power in

institutions & organizations is distributed unequally.

2) Individualism V/s Collectivism – Individualism is the degree to which people in a country prefer to act as individuals

rather than as members of groups.

Collectivism is a tight social framework in which people expect others in the group to look after them & protect them.

3) Quantity of Life V/s Quality of Life - Quantity of life it is the degree to which values such as assertiveness, &

materialism characterize the societal values.

Quality of Life – Is the degree to which people value relationships & show sensitivity & concern for the welfare ofothers.

4) Uncertainty Avoidance – The degree to which people in a country prefer structured situations. The extent to which a

society feels threatened by ambiguous & uncertain situations & tries to avoid them.

5) Long Term V/s Short Term Orientation – People with long-term orientation look to the future & value thrift &

persistence. A short term orientation emphasizes the past & present, respect for tradition & fulfilling social obligations.

Chacteristics of Values

• Part of culture – Values are elements of culture and culture is the complex of values, attitudes, ideas which shape human

behavior in the society.

• Learned responses – Human behavior represents learned phenomenon. Human beings have to learn everything about

how to be human from experience. This is because human beings live in a society having certain cultural characteristics

which prescribe to behave in a particular way. The individual is either directly rewarded for adopting those responses

which are considered appropriate or alternatively punished for not adopting the responses. Through this process, the

individuals are socialized or encultured, i.e. the responses of a set of culture become his own set of response tendencies.

4



• Inculcated – Values are inculcated and are passed through generation to generation. Such transmission starts from the

family from where the socialization process starts. Apart from family, educational, religious, and ethnic institutions also

transmit cultural values from one generation to another.

• Social phenomenon – Values are a social phenomenon, i.e. values are shared by aggregates of people living in organized

society.

• Gratifying responses – Values exist to meet the biological and other needs of the individuals in the society. The society

rewards behaviours which are gratifying for its members.

• Adaptive process – Culture is adaptive, either through a dialectical process or evolutionary process. Dialectic or sharply

discontinuous change occurs when the value system of a culture becomes associated with the gratification of only one

group in the environment. In this case, other classes of the society reject the logic of the value system. In evolutionary

process, the change occurs slowly as a gradual process.

ETHICS

The word ‘Ethics’ has originated from Greek word ‘ethos’ which means character, norms, morale and ideas prevailing in a

group / society. Ethics is study of moral behavior.

i) Ethics may be defined as the normative science of conduct and conduct is a collective name for voluntary actions.

ii) Ethics is a mass of moral principles or set of values about, what conduct ought to be. They give an idea what is righor wrong, true or false, fair or unfair, just or unjust, proper or improper, e.g. honesty, obedience, equality, fairness

etc.

iii) According to Dale S. Beach, Ethics refers to a set of moral principles which should play a very significant role in

guiding the conduct of managers and employees in the operation of any enterprise.

There is one quotation Ethics always says, “Not I but thou”. Its motto is, ‘Not self, but non-self. The senses says, ‘Myself first”,

but ethics says, “I must hold myself last”. Thus all codes of ethics are based upon this renunciation, destruction not construction

of the individual in the material plans. Ethics has a two fold objective: It evaluates human practices by calling upon mora

standards; it may give prescriptive advice on how to act morally in a specific kind of situation.

a) The first aim implies analysis and evaluation. It leads to an ethical diagnosis of past actions and events. The

analysis consists of clarifying standards and lines of argument. Ethics is basically an area dealing with moral

judgment regarding voluntary human conduct. Moral judgment requires most standards by which to judgehuman conduct. Moral standards are also related to moral obligation, or the duty to do what we consider to be

‘right’ and ‘proper’

Normative ethics set itself a second and more creative purpose. Ethics develop rational methods for answering

the present and future issues. In order to achieve this second objective one has to be well informed.

b) The second objective is to provide therapeutic advice. It suggests solutions and policies facing the present

dilemmas and future dangers based on well – informed opinions. This prescribes moral behaviour and makes

recommendations about how to or how not to behave.

Development of Ethics

The word ‘ethics’ is indirectly derived from a Greek word “Ethos” which means custom. According to Jack Griffin there are three periods in the history of Ethics.

1) Greek Period 500 BC – AD 500

2) Medieval Period AD 500 – AD 1500

3) Modern Period AD 1500 onwards

1) Greek Ethics - In this period the man who performed his duties as citizen was regarded as a good man. Socrates, Plato

and Aristotle are the founders of this period. Cyrenaics and Epicureans were two groups which were not in favour of

5



Plato and Aristotle. Cyrenaics believed that good life was not a part of human nature and Epicureans believed that goodthings are those which satisfy the human desires. There was no link between pleasure and goodness which satisfy the

human desires.

2) Medieval Ethics - Medieval period emphasized on the inner aspect of morality because of the spread of Christianity in

Europe. It helped to increase inner aspect of morality.

3) Modern Ethics - Modern ethics believes that right and wrong depends on the result of our actions and particularly on

their power of satisfying our desires and causing pleasure to ourselves and others.

Values vs Ethics

The terms “values” and “ethics” are not interchangeable. Ethics is concerned with how a moral person should behave, whereasvalues concern the various beliefs and attitudes that determine how a person actually behaves.

Ethics involves learning what is right or wrong, and then doing the right thing – but “the right thing” is not nearly as

straightforward as conveyed in a great deal of business ethics literature.

Many ethicists assert there is always a right thing to do based on moral principle, and others believe the right thing to do depends

on the situation. Many philosophers consider ethics to be the science of conduct. Twin consultants Dough Wallace and John Peke

explain that ethics includes the fundamental ground rules by which we live our lives. Philosophers have been discussing ethics

for at least 2500 years, since the time of Socrates and Plato. What becomes an ethical guideline today is often translated to a law

regulation or rule tomorrow. Values, which guide how we ought to behave, are considered moral values, e.g., values such as

respect, honesty, fairness, responsibility, etc., Statements around how these values are applied are sometimes called moral orethical principles.

Business Ethics

Business Ethics are the desired norms of behaviour exclusively dealing with commercial transactions whereas moral values are

deep seated ideas and feelings that appear as behaviour or conduct. Values cannot be measured.

These values act a base for thoughts, actions, skills and behaviour will make good character i.e. integrity which is called in west

part and dharma in the rest. The values help to create good persons, good managers and good organizations in the society. Human

beings having good character are also self motivated, self disciplined and are good leaders.

Ethical issues occur frequently in management and in the absence of ethics, scams, fraud, bribery and exploitation are common.

Ethics requires a manger to be honest with himself and society. The managers performance and quality reflect in the success of a business. Sometimes ethical issues occur as management dilemmas because they represent a conflict between an organization’s

economic performance and its social performance.

Business ethics is nothing but the applications of ethics in business. Business are carried on by human beings only. Whatever is

true for human beings, same is also for business.

A business or company is considered to be ethical only if it tries to reach a trade-off between perusing its economic objectives and

its social obligations.Two broad areas of business Ethics

1. Managerial Mischief – According to Madsen and Shafritz, “managerial mischief” includes illegal, unethical, or

questionable practices of individual managers or organization as well as the cause of such behaviours and remedies to

eradicate them. Practically speaking business ethics is a matter of dealing with dilemmas that have no clear indication ofwhat 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.

Some myths about Business Ethics

1. Myth: Business ethics is more a matter of religion than management” : This is not true. Altering people values or souls

isn’t the aim of an organizational ethics programme. The aim of organization ethics programme is to manage values andconflicts among them.

6



2. Myth: Our employees are ethical so we don’t need attention to business ethics: Most of the ethical dilemmas faced bymanagers in the workplace are highly complex. When the topic of business ethics comes up, people are quick to speak of

the Golden Rule, honesty and courtesy. But when presented with complex ethical dilemmas, most people realize there’s

a wide “grey area” when trying to apply ethical principles.

3. Myth: Business ethics is the new policeperson on the block: Many believe business ethics is a recent phenomenon

because of increased attention to the topic in popular and management literature. Business ethics has got more attention

recently because of the social responsibility movement that started in the 1960s.

4. Myth: Ethics can’t be managed: Actually, ethics is always “managed” – but, too often, indirectly.

5. Myth: Business ethics and social responsibility are the same thing: The social responsibility movement is one aspect of

the overall discipline of business ethics. Madsen and Shafritz refine the definition of business ethics to be: Writing abou

social responsibility often do not address practical matters of managing ethics in the workplace, e.g. developing codes,updating polices and procedures, approaches to resolving ethical dilemmas, etc.

6. Myth: Our organization is not in trouble with the law, so we’re ethical: One can often be unethical, yet operate within the

limits of the law, e.g., withhold information from superiors, fudge on budgets, constantly complain about others, etc.

However, breaking the law often starts with unethical behaviour that has gone unnoticed.

Features of Business Ethics –

• Business ethics is an umbrella term which covers all business practices which are desirable from a society’s point of

view.

• It draws a distinction between what is right or wong fair or unfair, just or unjust.

• Ethics are broader than law. Ethics aim at perfection in the conduct of life. Thus, it guides the law markets to have

perfect rules for all human behavior. Legal obedience is an ethical content that ensures long-run survival of business

annnd its prosperity.• Ethics aims at fair and reasonable treatment to all.

• Business ethics create self-imposed discipline on the part of managers.

• It defines not just what business managers do (descriptive ethics) but also why they should be doing so (normativeethics)

• It is an important component of CSR that demands business houses to engage in behaviours that are socially responsible.

Business ethics as a management discipline – Business ethics has come to be considered now a management discipline

especially since the birth of social responsibility movement in the 1960s. In that decade, social awareness movements raised

expectations of business to use their massive financial and social influence to address social problems such as poverty, crime,

environmental protection, equal rights, public health and improving education. An increasing number of people asserted that

because businesses owed it to our country to work to improve society, the word “stockholder” was replaced with “stakeholder”

which include employees, customers, suppliers and the wider community.

The emergence of business ethics is similar to other management disciplines. For example, organizations realized that they

needed to manage a more positive image to the public and so the recent discipline of public relations was born. As commerce

became more complicated and dynamic, organizations realized they needed more guidance to ensure their dealing supported the

common good and did not harm others – and so business ethics was born.

Today, ethics in the workplace can be managed through use of codes of ethics, codes of conduct, roles of ethicists and ethics

committees, policies and procedures, procedures to resolve ethical dilemmas, ethics training, etc.

Scope of Business Ethics

The ground rules of individual company and societal behaviour laid down by business ethics are:-

a) Societal level :

— Concern for poor and down trodden — No discrimination against any particular section or group

— Concern for clean environment

— Preservation of scarce resources for prosperity

— Contributing to better quality of life

b) Stockholder’s level

i) Employees – The employees must get security of job, better working conditions, better recommendation, participate

in management and welfare activities.ii) Customers – Customers need better quality of goods and services at reasonable price. They need not be cheated with

discriminatory prices, false claims about products in advertisements.

7



iii) Shareholders – Shareholders must be ensured for capital appreciation, steady and regular dividends, disclose of alrelevant information. Protection of minority shareholder’s interests and interest at times of mergers, amalgamation

and takeovers must be ensured.

iv) Banks and others lending institutions – They need guarantee and safety of borrowed funds, prompt repayment of

loans etc.

v) Government – Government has to follow with rules and regulation. Honesty in paying taxes and other dues.

c) Internal Policy Level

The internal policy level must be based on fair practices relating to recruitment, compensation, lay offs, perks promotion

etc. Also there should be ways to motivate employees to aim at better and higher things in life.

d) Personal Policy Level

The personal policy level must be framed in order to not to misuse others for personal ends, not to indulge in politics togain power, not to split promotional chances of others etc.

Relevance of ethics in business

Ethics are important in business because of the following reasons –

• Business practices affect our lives, so businesses should perform such actions which are morally right and those that do

not affect the lives of people at large. Disasters like Bhopal Gas Tragedy can be disastrous for people within and outside

the business organizations.

• Business houses operating in global markets must have common standards of employment , which is possible only i

they have a uniform code of ethics.

• Globalisation can prove to be disadvantageous for small economies. However, if there is a uniform code of business

ethics, these economies can favourably operate in developed countries.

• There is an increasing awareness in society that business houses must work for the benefit of society. Along with the

government’s responsibility, it is equally the responsibility of the business houses to look after the social programmes

pertaining to education, hospitals, employment, old age homes etc.

• A business organization is pressured by various environmental factors as well to behave ethically. Pressure from

consumer forums keeps the business firms to stay away from undesirable trade practices like hoarding and profiteering.

Similarly, trade unions may also put pressure on business firms to pay fair wages, provide for labour welfare, encourage

participation etc.

• Firms themselves prefer to regulate their activities and address issues that are morally justified , else it will have to face

government interference and regulations. That is why firms avoid unethical practices like adulteration, vercharging

black marketing, producing inferior quality goods etc.

• In almost every sphere of business activity, laws have been enacted which declare certain business practices as illega

and prohibited. Obedience to such laws is ethical.

• Business firms believe that if they follow ethical business practices, it will lead to higher profits and prosperity in the

long run. For example, if a firm maintains quality, pays taxes honestly, cares for the welfare of employees, its profits are

bound to grow in the long run

Barriers to Business ethics

• Chain of command – If employees know that their managers are not following ethical behavior, they will hesitate to

report the matter to managers for fear of being misunderstood and penalized.

• Group membership – Emergence of informal groups in the formal organization structure leads to the development of a

group code of ethics. An unethical behavior by a particular group member is often ignored by others due to a strong

bonding and sense of loyalty towards one another.

8



• Ambiguous priorities – If company’s policies are unclear, it becomes difficult to understand what is ethical and

unethical and employees’ behavior cannot be rightfully directed in such a case.

Overcoming barriers to business ethics

• Organisational objectives and policies should be clearly laid down so that each organizational member works towardseffective attainment of these goals in an efficient manner.

• Ethical actions of top managers will promote ethical behavior throughout the organization.

• Penalties and threats for non-conformance to ethical behaviour can help in reducing unethical activities in the

organization. Formal procedures to lodge complaints will help subordinates to report unethical behaviour of superiors to

the concerned committees.• Courses should be offered by educational institutes and training must be provided in business ethics which will help in

creating conscientious business managers.

Management of ethics

Management is a process consisting of activities of planning, organizing, actuating, and controlling, performed to determine and

accomplish the stated objectives with the use of human beings and other resource.

Management is defined as the process by which a co-operative group directs actions towards common goals.

Every small (like a family, temple etc) or big (like a school, college, business house) organization needs management.

Management is viewed as a process whereby human and non-human resources are integrated and directed towards achievement of

the organizational goals, whether profit or service, through various functions of management i.e. planning, organizing, staffing,directing and controlling.

Process of Management

Management is the process of getting things done through others. Following functions are performed by managers –

Planning – Planning involves selecting missions and objectives and the actions to achieve them; it requires decision

making, i.e., choosing from among alternative future courses of action. Planning is done at all levels of management. A

higher levels, plans are long-term in nature and at lower levels, they are short-term in nature. It basically involves setting

targets and objectives to be achieved, devising means and ways to achieve them and selecting the best action to achieve

the goals.

Organising – Organising is the structure and process by which a cooperative group of human beings allocates its tasks

among its members, identifies relationships and integrates its activities towards common objectives.

It involves –

• Identification and classification of objective

• Grouping of activities necessary to attain the objectives

• Assignment of each grouping to a manager with the authority (delegation) necessary to supervise it.

• Provision for coordination horizontally and vertically in the organization structure.

Directing – Directing is telling people what to do and seeing that they do it to the best of their ability.

According to Urwick and Brech, Directing is the guidance, the inspiration, the leadership of those men and women that

constitutes the real core of responsibility of management.

It refers to bringing plans into action by motivation, communication, leadership, supervision and team building of theorganizational members.

Staffing – Staffing means identifying human resource needs, filling the organizational structure and keeping it filled with

competent people. According to Massie, “The staffing function includes the process by which the right person is placedin the right organizational position.”

9



Controlling – Controlling is determining what is being accomplished, that is, evaluating the performance and, if

necessary applying corrective measures so that the performance takes place according to the plans. Controlling involves

checking existing actions against some desired results determined in the planning process.

Managerial Performance

Managerial performance is the extent to which managerial action does or doesn’t produce the required results. Managerial

performance constitute of the following elements –

• Goals – Goals are defined as the conditions that a manager wants to control , and are those that he basically sets for

himself. For example, to launch a new product on time, to reduce cost of an existing production line. At a given time, amanager may have multiple goals.

• Perceptions – The manager knows of the conditions that he is trying to control by way of his perceptions or beliefs

Problems may arise even when a lot is known about the goal. Reports can be late, they may contain errors and hence

they may affect the perceptions of the managers.

• Actions – Managerial work involves getting the work done through others. Besides just the people being involved, there

are other processes, procedures, equipment, facilities, budgets and a lot of other factors. The manager has the role to act

and also intervene, i.e., to change things to achieve and maintain certain controlled conditions (results). Hence, the

manager is an interventionist as that forms the core of managerial work.

•Disturbances - To achieve the results, managers take actions, but, there are other factors (referred to as disturbances) aswell that may come in the way of achieving the desired results like funding may be withdrawn, budgets may be cut, key

employees leave,staff may be reassigned, new regulations are imposed, colleagues play corporate games, key customer

defect, economy falls and units may be reorganized. These disturbances may be minor or major.

Managers must manage these disturbances by obtaining extra funding, gaining support, borrowing critical staff etc.

• Controlled conditions - Managers are responsible for achieving and maintaining certain conditions called as “results”

In a way, they are expected to control these conditions. For example, financial results like meeting a budget, reducing

the costs associated with an operation etc; operational results like maintaining or increasing the productivity or qualityetc. Controlling them rests on setting corresponding goals, perceptions, taking actions or intervening and managing the

disturbances that arise.

All controlled conditions finally make the performance architecture of the organization.

Ethical issues

Ethical issues require managers to work in an honest way. Managers have to maintain a balance between ethical, economic, and

social aspects of business. For example, when downsizing a large number of people, the managers must do it in consistent with

the company’s values, humanity as well as the financial aspects of it.

Managers must take care of the following while dealing with ethical issues –

• Managers must maintain a balance amongst the multiple ethical alternatives that they might have. All of them cannot be

considered in totality.

• Ethical issues have mixed results. They may be socially acceptable but not economically feasible. Hence, their social and

financial costs must be considered while making ethical decisions.

• Ethical issues have their own risks and costs, they always do not result in positive consequences. Hence, managers mus

be judicious in dealing with them.• Ethical issues may affect personal lives of managers, hence, they a balance needs to be maintained by them between their

personal and organizational values.

Benefits of Managing Ethics in the Workplace

The following list describes various types of benefits from managing ethics in the workplace:

1. Attention to business ethics has substantially improved society - Some decades ago, children in our country worked 16

hour days. Disabled workers were condemned to poverty and often to starvation. Trusts controlled some markets to the

extent that prices were fixed and small business choked out. Price fixing crippled normal market forces. Employees were

terminated based on personalities. Influence was applied through intimidation and harassment. Then society reacted and

10



demanded that businesses place high value on fairness and equal rights. Anti-trust laws were instituted. Governmentagencies were established. Unions were organized. Laws and regulations were established.

2. Ethics programmes help maintain a moral course in turbulent times - Attention to business ethics is critical during

times of fundamental change. During times of change, there is often no clear moral compass to guide leaders throughcomplex conflicts about what is right or wrong. Continuing attention to ethics in the workplace sensitizes leaders and

staff to how they want to act – consistently.

3. Ethics Programmes cultivate strong teamwork and productivity - Ethics programmes align employee behaviours with

the top-priority ethical values preferred by leaders of the organization. Ongoing attention and dialogue regarding values

in the workplace builds openness, integrity and community – critical ingredients of strong teams in the workplaceEmployees feel strong alignment between their values and those of the organization. They react with strong motivation

and performance.4. Ethics Programmes support employee growth and meaning - Attention to ethics in the workplace helps employees face

reality, both good and bad – in the organization and themselves.

5. Ethics programmes are an insurance policy – They help ensure that policies are legal. Ethical principles are often state-

of-the-art legal matters. These principles are often applied to current, major ethical issues to become legislationAttention to ethics ensures highly ethical policies and procedures in the workplace. A major intent of well-designed

personnel policies is to ensure ethical treatment of employees, e.g., in matters of hiring, evaluating, disciplining, firingetc.

6. Ethics programmes help avoid criminal acts “of omission” and can lower fines : Ethics programmes tend to detec

ethical issues and violations early on so they can be reported or addressed. When an organization is aware of an actual or potential violation and does not report it to the appropriate authorities, this can be considered a criminal act, e.g., in

business dealings with certain agencies, such as the Defence Department.

7. Ethics programmes help manage values associated with quality management, strategic planning and diversitymanagement – Ethics programmes identify preferred values and ensuring organizational behaviours are aligned with

those values. This effort includes recording the values, developing policies and procedures to align behaviours with

preferred values, and then training all personnel about the policies and procedures. This overall effort is very useful for

several other programmes, including quality management, strategic planning and diversity management. Total quality

Management includes high priority on certain operating feedback. Ethics management techniques are highly useful for

managing strategic values e.g., expand market share, reduce costs, etc. McDonell Douglas integrates their ethic

programmes into their strategic planning process. Ethics management programmes are also useful in managing diversity

Diversity is much more than the colour of people’s skin – it’s acknowledging different values and perspectives. Diversity programmes requires recognizing and applying diverse values and perspectives – these activities are the basis of a sound

ethics management programme.

8. Ethics programmes promote a strong public image - Attention to ethics is also strong public relations. However

managing ethics should not be done primarily for reasons of public relations. The fact that an organization regularly

gives attention to its ethics can portray a strong positive image to the public. People value those organizations that value people more than profit, and those that are striving to operate with the utmost of integrity and honour. For example

Johnson and Johnson handled the Tylenol Crisis.

9. Overall Benefits of ethics programmes - Managing ethical values in the workplace legitimizes managerial actions

strengthens the coherence and balance of the organisation’s culture, improves trust in relationships between individuals

and groups, supports greater consistency in standards and qualities of products, and cultivates greater sensitivity to the

impact of the enterprise’s values and messages.”

Ethos of Vedanta in Management

Ethos refers to the characteristic spirit and beliefs of community people and the way they react to various problems and situations

in life. It refers to habitual character of a group or community. Ethos means reputation. Ethos is a Greek word meaning personality, self character. Ethos emphasizes the public image rather than the private self. A person’s ethos is created through

language and action.

There is no one Indian culture, but there is indeed one Indian ethos at the level of the vendantic structure. There exists a close

relationship between spiritual and worldly life of a human being, referred to as the holistic approach. Vedantic ethos is capable o

enriching and elevating the economic and managerial processes in organizations.

Each society draws lessons from its own culture-specific areas. The body of knowledge which derives solutions from the rich

Indian system of ethics are known as Indian Ethos in Management. Indian management draws its lessons from its religions like

Hinduism, Buddhism etc. Indian management shows the path towards Indian Ethos.

The Mahabharta talks of 4 ways of dealing with people –

Saam (treating equally)

11



Daam (rewarding)Dand (punishment)

Bhed (discrimination)

In Mahabharta, even Krishna tells Arjuna that it his duty to kill his enemies for the upkeep of Dharma.

Management teaches how good values pay better dividends, how honesty helps to grow in industry and business, how cooperation

and not competition could be better growth strategies.

Business houses like The Excel Industries, Poona; The Nagarjuna Group, Hyderabad; The Vivek Group, Chennai; Yash Paper

Mills, Ayodhya etc follow Indian Ethos.

Even big businessmen, CEOs opine that management studies should be linked to Vedas. Vedic Wisdom, Puranas, Yoga

Meditation are key for success in ethical based management and have every solution to present day business problems. The

management principles based on ancient Indian wisdom include the following –

• Each soul is potentially divine – Each soul is potentially divine. Discovering divinity is the purpose of work. There are

2 concepts –

Aham Brahmasi – I have immense potential and I can make the impossible possible.Tatvam Asi – You are that supreme. Everybody can make himself a genious.

One must unleash the infinite potential of the self. Each one of us has an immense potential. We are born with a supercomputer

our brain; sterosystem, the ears; audiovisual unit and the best camera, the eyes. Each soul has immense power of self

development. Indian ancient wisdom emphasized on people rather than machine or plant size. Management is helping others to produce extraordinary results.

• Holistic Management – Holistic view of ethics looks at things in its totality. It demands all points of view. The holistic

principle, Atmano Mokshaya Jagat Hittayace i.e. for one’s own emancipation or development and for the good of the

humanity helps to have a comprehensive view of things. In Indian Ethos, the word “Om” is the sound symbol of

wholeness, completeness.

• Principle of Cooperation vs Competition – If the two principles of cooperation and competition are followed in one’s

life, then competition will be a barrier against progress. It is said that competitions are only momentary and extraneous

efforts. Even when all competition has ceased, the perfect nature behind will make us go forward. Hence, competition is

not necessary to progress. However, the principle of cooperation does not seem to work in reality. For it to develop, ego

should be managed. The two concepts of ego-less cooperation are “Lok Sanghraha” and “Nishkam Karma”. There

should be a balance between cooperation and competition.

From SS to

Lok Sanghraha means working for the welfare of the world.

• Combining Subjective and Objective – Subjective is intangible (sukshma) and is more important than

Objective which is tangible and concrete(sthula). Creator is subjective, Creation is objective. Human and ethica

values like purity of mind, truth etc are subjective. Our body, senses etc are objective. But our soul, i.e. Aatma s

intangible and subjective. In Hinduism, Lord Shiva has three eyes. The third eye is the eye of wisdom and

intuition. A manager must develop his third eye of vision, foresight and intuition (Gyana Chakshu)

Management is not getting things done through others but helping ordinary people to produce extra ordinaryresults.

• Karma Yoga – The word “Karma” is derived from Sanskrit word “Kri” which means “to do”, and “Yoga”

translates to Union. Hence, Karma Yoga translates to the path of union through action. By doing karma, we are

conforming to the laws of nature (Prakriti) and its attributes. And it is in the very nature of karma to bring itsresults. Hence, we should work with the spirit of “Nishkam Karma” (detached involvement) rather than “Sakam

Karma” (attached involvement). Nishkam karma is inspiration and Sakam Karma is motivation. The essence of

Karma Yoga is to work for the good of the world as well as remain non-attached to personal gains from the

work. Its benefit will be –

12

Selfish

Motto

“Lok Sanghraha”

“Nishkam Karma”



The worker will achieve “sammatwa”. Sammatwa is the prerequisite for the union of the individual

mind and the universal mind.

It will reduce disequilibrium impact of dualities or “dwandhas” faced by worker in his work-life

(success vs failure)

The Indian Ethos in Management can be summarized as –

All work is an opportunity for doing good to the world.

Worship people not only with material things but also by showing respect to their everpresent divinity within.

He who works with a calm and even mind achieves the most.

Strength and Inspiration for excelling in work comes from the Divine, God within, through prayer, holy readings andunselfish work.

By mutual cooperation, respect and fellow feeling, we all can enjoy the highest good of material and spiritual.

As we think, so we become, and so we succeed.

Regard the other person as a divine being.

Infinite happiness and infinite peace comes to them who see the Divine in everyone.

• ATTITUDES & VALUES

The values of a person tell about his ideas about what is good or bad, what is right or wrong or desirable or undesirable. They

reflect a moral tone. For example, “Workers should be honest to their work” is a statement of value.

“The honest workers are good” is an evaluative statement and reveals the attitude of the person towards the honest workers. A

person holds an honest worker to be good because of his values that workers should be honest towards their work.

Types of Values

According to Rokeach Value Survey (RVS), Values are of 2 different types –

1. Terminal Values – These refer to desirable end-states of existence. These are the goals that a person would like to achieve

during his or her lifetime. These are –

Happiness, satisfaction in life

Knowledge and wisdom

Peace and harmony in the world

Pride in accomplishmentProsperity, wealth

Lasting friendshipRecognition from peer

Salvation, finding eternal life

Security, freedom from threat

2. Instrumental Values – These refer to preferable modes of behavior, or means of achieving one’s terminal values. These are –

Assertiveness, standing up for yourself

Being helpful or caring towards others

DependabilityEducation and intellectual pursuits

Hard work and achievement

Obedience, following the wishes of others

Open mindedness, receptivity to new ideas

Self-sufficiency, independence

Values and Behaviour

As children, we are embedded with certain values about what is good, bad, right or wrong by our parents, educational institution

and social groups. These values become a part of our behavior and personality when we grow up.

Similarly, in the business world, the manager or non- manager, every person whose behavior is value-based shapes the culture o

the organization. How good an organization is depends upon how good are the people who are managing it. Value system is a

combination of all values than an individual should have. Values help in developing the attitudes, perceptions and motives that

13



shape the behavior of individuals working in the organization. This develops a sound organizational culture that enhances theimage of the organization in the society.

The richness of our values and culture also has an influence on the way we do business –

• There is a shift towards individualism and comparatively less sensitive and less socially responsible attitude of people

Corruption, tax evasion, cheating and bribery are more common today. For example, contractors bribe officials and

construct low-quality roads and bridges.

• Public apathy – Apathy in solving community matters has held us back from progress, which is otherwise within our

reach. We are not serious about solving problems that exist around us. For example, nothing was done about the problemof drought which existed around 40 years ago in India, although an irrigation expert, Dr. K.L. Rao had suggested

creation of a water grid connecting the rivers of North and South India.

• Accountability – Indian managers are less accountable as compared to those in the west. This is so in the case of people

in senior posts as well.

• Decision making – Indian managers lack decision making ability and expertise. They always tend to look upto

somebody else to take decisions.

• Less professional dealing – Managers in the west are extremely professional as compared to those in the east. Even

Indian managers tend to work in a narrow perspective i.e. personal perspectives. There is less sincerity attached to

timeliness and meeting deadlines. Indian managers do not seem to respect the other person’s time. Deadlines are alsotypically not met, and peeeooople seem to have accepted this as the norm rather than an exception.The May Group Research has also found that the Indian CEOs are not too much concerned with personal relationships, reputation

and cultural change but are more focused on growth, innovation and creativity.

14

Documents

Values and Ethics Unit i