In the quest for achieving greater competitiveness and market share businesses use all sorts of

strategies to win and defeat their competitors. These approaches may be classified into two
categories. The first category is based on ethical practices. This include using innovation,
better productivity and high value addition to outwit one’s competitors. However, many
businesses also use unscrupulous approach involving cheating, lying, and many other types of
illegal tactics. The first approach is healthy and ethical while the second one is unhealthy and
unethical. However many businesses are also using the second approach to achieve their
goals. One negative result of this phenomenon is the negative influence on the managers who
in order to get ahead in their careers adopt unethical methods. Granted that many people can
succeed through these negative tactics, but the question is - is it the only way? The answer is
definitely no and as such managers should opt for a better and nobler approach, which is the
approach of an ethical manager.

WHAT IS AN ETHICAL BEHAVIOUR?

The ethical behaviour of a manager is that behaviour which aligns with legal, moral, societal,
spiritual and human values. All actions which go against these values will be regarded as
unethical.

All managers must opt for the ethical paradigm and acquire qualities commonly practised by
good managers. The following are some of the qualities commonly possessed by ethical
managers:

HONESTY AND INTEGRITY:

Honesty is still the best policy which must be practised by all good managers. Honest
managers are those who whole heartedly commit themselves towards positive organisational
goals, take care of the interest of employees, and provide excellent goods and services to their
customers. Honesty is a highly desirable quality. Ironically, even employers who are not
themselves seek for honest people. A manager must maintain his/her integrity by working
hard, taking care of organisational resources, and protecting the interests of all stake holders.

PROFESSIONALISM:

Closely related to honesty and integrity is a quality called professionalism. Though difficult
to define, it may be described as work behaviour of a person which aligns with the rules and
regulations of the organisation and one’s profession. Maintaining secrecy, loyalty to one’s
employer, refraining from actions which may harm the company a person is working for etc
are some of the traits of a professional person.
HUMANITY:

Treating all human beings with dignity and respect and living as a good global citizen by
contributing to the welfare of humanity and safeguarding environment falls under humanity.
A humane manager is a person who believes that one of the purposes of his/her life is to help
others without seeking a reward in return.

SPIRITUALITY:

Spirituality is one’s belief in something bigger and nobler than oneself. All motivation
theories have at a greater length discussed human needs and its relations with human motives.
However very few have written about spiritual needs of human being. I believe that the
highest level of human needs is not self actualisation but attaining spiritual enrichment and
satisfaction. This is at the top of the five human needs mentioned by Abraham Maslow in his
famous Needs Hierarchy motivation theory. Spirituality is a state of mind which enables us to
get connected to the greatest power through deeds. Spiritual deeds will include non for profits
projects like philanthropical works etc.

The core of good management is ethics, However, sadly today’s managers face a dilemma of
how to succeed without indulging in foul play and unfair means. Rather blindly following the
crowd good managers can carve their own and a better niche by practising managerial ethics.
If all managers become ethical, it will lead to ethical organisations catapulting a universal
society based on good moral values and sound business ethics.

Ethical investment has been a growing aspect of business investment since the 1970s,
although arguably the first types of ethical businesses can be traced back to the Quaker and
Methodist movements of the 1800s.

Traditional profit-based business models, which arose and came to dominate global
commerce from the beginnings of industrialisation, inherently do not require a socially
responsible element, other than compliance with the law, and a reflection of public reaction
for pragmatic marketing (and ultimately profit) purposes.

Ethical business or investment is concerned with how profit is made and how much profit
is made, whereas traditional profit-centred free-market based business is essentially only
concerned with how much profit is made.

Traditional profit-centred business seeks to maximise profit and return on investment with no
particular regard for how the profits are made and what the social effects of the business
activities are.

The ethical approach to business and investment seeks to maximise profit and return on
investment while minimising and avoiding where possible negative social effects.
In this context 'social' and 'socially responsible' include related factors such as:

 the environment
 sustainability
 globalization effects - e.g., exploitation, child-labour, social and environmental
damage anywhere in the world
 corruption, armed conflict and political issues
 staff and customers relations - for instance education and training, health and safety,
duty of care, etc
 local community
 and other social impacts on people's health and well-being


Ethical Principles

Beneficence

The principle of beneficence guides the ethical theory to do what is good. This priority to "do
well” makes an ethical perspective and possible solution to an ethical dilemma acceptable.
This principle is also related to the principle of utility, which states that we should attempt
generate the largest ratio of good over evil possible in the world. This principle stipulates that
ethical theories should strive to achieve the greatest amount of good because people benefit
from the most good.

Least Harm

This is similar to beneficence, but deals with situations in which neither choice is beneficial.
In this case, a person should choose to do the least harm possible and to do harm to the fewest
people.

Respect for Autonomy

This principle states that an ethical theory should allow people to reign over themselves and
to be able to make decisions that apply to their lives. This means that people should have
control over their lives as much as possible because they are the only people who completely
understand their chosen type of lifestyle. Each man deserves respect because only he has had
those exact life experiences and understands his emotions, motivations and body in such an
intimate manner.

Justice

The justice ethical principle states that ethical theories should prescribe actions that are fair to
those involved. This means that ethical decisions should be consistent with the ethical theory
unless extenuating circumstances that can be justified exist in the case.
Ethical Theories

Ethical theories are based on the previously explained ethical principles.

Rights

In the rights ethical theory the rights set forth by a society are protected and given the highest
priority. Rights are considered to be ethically correct and valid since a large or ruling
population endorses them. Individuals may also bestow rights upon others if they have the
ability and resources to do so. For example, a person may say that her friend may borrow the
car for the afternoon. The friend who was given the ability to borrow the car now has a right
to the car in the afternoon.

Virtue

The virtue ethical theory judges a person by his character rather than by an action that may
deviate from his normal behavior. It takes the person's morals, reputation and motivation into
account when rating an unusual and irregular behavior that is considered unethical.

One weakness of this ethical theory is that it does not take into consideration a person's
change in moral character. For example, a scientist who may have made mistakes in the past
may honestly have the same late night story as the scientist in good standing. Neither of these
scientists intentionally plagiarized, but the act was still committed. On the other hand, a
researcher may have a sudden change from moral to immoral character may go unnoticed
until a significant amount of evidence mounts up against him or her.

Kohlberg's Theory of Moral Development

Kohlberg's theory of moral reasoning is a stage theory. In other words, everyone goes
through the stages sequentially without skipping any stage. However, movement through
these stages are not natural, that is people do not automatically move from one stage to the
next as they mature.

In stage development, movement is effected when cognitive dissonance occurs ... that is
when a person notices inadequacies in his or her present way of coping with a given moral
dilemma.

Level One: Pre-conventional Morality

• Stage 1: Punishment-Obedience Orientation

The concern is for self - "Will I get into trouble for doing (or not doing) it?" Good behaviour
is associated with avoiding punishment.

• Stage 2: Instrumental Relativist Orientation

The concern is "What's in it for me?" Still egocentric in outlook but with a growing ability to
see things from another person's perspective. Action is judged right if it helps in satisfying
one's needs or involves a fair exchange.
Level Two: Conventional Morality

• Stage 3: Good Boy-Nice Girl Orientation

The concern is "What will people think of me?" and the desire is for group approval. Right
action is one that would please or impress others. This often involves self sacrifice but it
provides the psychological pleasure of 'approval of others.' Actions are also judged in relation
to their intention.

• Stage 4: Law and Order Orientation

The concern now goes beyond one's immediate group(s) to the larger society to the
maintenance of law and order. One's obligation to the law overrides one's obligations of
loyalty to one's family, friends and groups. To put it simply, no one or group is above the
law.

Level Three: Post-Conventional Morality

• Stage 5: Social Contract Orientation (utilitarianism)

The concern is social utility or public interest. While rules are needed to maintain social
order, they should not be blindly obeyed but should be set up (even changed) by social
contract for the greater good of society. Right action is one that protects the rights of the
individual according to rules agreed upon by the whole society.

• Stage 6: Universal Ethical Principle Orientation (Kant)

The concern is for moral principles ... an action is judged right if it is consistent with self-
chosen ethical principles. These principles are not concrete moral rules but are universal
principles of justice, reciprocity, equality and human dignity.
Case Study (source Internet, www.scu.edu)

Business Ethics Scenarios

1. Receiving a Holiday Gift:

A supplier sends a basket of expensive foodstuffs to your home at Christmas with a card:
"We hope you and your family enjoy the 'goodies.'". What action(s) might you want to take?

2. Sales Expense:

The purchasing manager for a large company agrees to give you an order (their first),
expecting you agree to make a $200 donation to his favorite charity, a local youth sports
team. How do you respond?

3. Sales Expense Reimbursement:

A customer executive from Southeast Asia will visit your HQ facility and meet with your
executive team. Your independent Southeast Asian agent requests that you reimburse the
customer for his expenses, including expenses that could violate your company's policies.
The agent will reimburse you. How do you proceed?

4. References:

A large, prospective client calls you and asks about a competitor's reputation. One of your
long time customers had a very bad experience with this competitor. What information do
you share with the prospect? How do you respond to the prospect call?

5. Gratuities:

A customer has a large sailing yacht on a vessel that your company will be discharging. The
customer is present and is watching the off-loading operation.

The five stevedores you manage pull off a very tricky maneuver, safely transferring the yacht
to the trailer. The customer is elated, and reaches into his pocket, pulling out a big wad of $50
bills. What do you do?

6. Conflict of Interest:

As department manager, you are hosting an informal celebration in the office. The food
budget is $200. Your next door neighbor has just started her own catering business and asks
to supply the food. Since she is just starting out, she'll do it at cost and provide extra items at
no charge. What might you want to consider?
7. More Competition:

You are in a head-to-head battle with your arch competitor, Evil Enterprises. One of your co-
workers approaches you. He has recently joined your company after having worked for a
second competitor for several years.

He suggests, "I made notes on all of Evil's bids when I could get the data. They use some
clear cost standards. Would you like me to bring my notes to the office tomorrow and let you
look through them?"