Ethics has been coined from the term ‘Ethikos’ which means character.

There is
another word ‘ morality ‘ considered as synonym of ethics.
The word morality has been derived from Latin language ‘moralis’ which
means behavior.

Ethics means “ the principles of conduct governing an individual or group

( Webster 1986).
Objective of Ethics:
a) Normative objective- It evaluates human behavior against moral standards.
It implies an ethical post mortem of already performed actions and
exhibited behaviors. (The normative objective of ethics is evaluative).
b) Descriptive objective-It is meant to provide prescriptive advice and
solutions on how to act and behave morally in a specific situation. (It is to
provide therapeutic advice on how to behave in a given situation).
• Ethics studies human conduct and evaluates these as moral or immoral
and right or wrong.
• Ethics sets moral standards and norms for human behavior.
• Ethics evaluates past behavior against standards and norms and, then
makes judgments upon human behaviors as right or wrong.
• Ethics prescribes moral standard behavior and also provides solutions
about how to behave in a given specific situation.
• Branches of ethics
• 1) Normative ethics- This is the largest branch of ethics which deals with
how individuals can decide the correct moral action that they should take
in a given situation of ethical nature.
• 2) Meta ethics- This branch seeks to understand the nature of ethical
properties and judgments such as if true values can be found and the
theory behind moral principles.
3) Applied ethics- This is the study of applying ethical theories developed
by various philosophers in our everyday life. For example, the area of ethics
such as Is it right to smoke in Public places?
4) Moral ethics- This branch of ethics raises questions such as How people
develop their morality? Why certain aspects of morality differ across
cultures? Why certain aspects of morality are generally universally
applicable?
5) Descriptive ethics- This branch of ethics focusses on application aspects
of ethics. Speaking alternatively, this branch of ethics studies how people
actually conduct in the real world.
• Ethics and Morality:
• The word “morality” is derived from the root ‘ moralities’ in
Latin which means “ manner” or “ behavior”. Ethics means
character, as stated earlier and morality means behavior or
conduct. Thus, ethics is internal and morality is external.
Ethics gets expression through morality, character is
externalized via behavior. Morality is judgment of what is
right or wrong, good or bad. For example, eating one’s
lunch is a moral, but stealing others lunch to eat is
immoral. Thus morality is standards of behavior or conduct.
• From Vandivier’s morality in this Goodrich case,
• Beliefs: 1) It is right to tell the truth and wrong to endanger the lives
of others.
• 2) Integrity is good and dishonesty is bad.
One lesson from Vandievier’s experience:

People have moral standards for their behavior, but people always do
not live up to the moral standards they hold.
 • One single fact and different moral judgments
The same fact Moral standard Moral Judgment

This mushroom is I want to stay in good I do not eat this

poisonous health mushroom.

This mushroom is I want to attempt suicide I do eat this mushroom

poisonous

This mushroom is I want to punish my boss I put this mushroom in

poisonous her/his soup.
• Characteristics of Moral standards:
• A) Generally moral standards deal with matters that we think of
serious consequences for human well being:- In India people feel the
matters like murder, child abuse, fraud, rape, enslavement cause
serious injuries to the wellbeing of society. Hence, people hold moral
standards against such matters and condemn these.
• B) Moral standards cannot simply be established or changed by the
law or authority:- Moral standards rest on justifications and reasons
the society feels these good for human wellbeing.
• C) Moral standards override self interest.
• D) Moral standards are based on impartial considerations.
• Business ethics: Business ethics attempts to apply general moral
principles to business activities in order to resolve, or at least clarify,
the moral issues which typically arise in business. (Vallance 1995).
• Objectives:
• Diagnostic Objective- The actual business practices are evaluated
against the standards set in this regard to judge them as moral or
immoral and good or bad, and right or wrong.
• Therapeutic objectives- The prescriptions are made how to conduct
business in right manner.
• Business ethics important:
• A) The todays business has more and far reaching impact on society
than ever before.
• B) Business and society have been coeval, inter dependent and go
side by side.
• C) The frauds, manipulations, bear far reaching impact on society and
environment.
• The separatist view:
• Involved in business should pursue sole objective of earning profit.
• Myths about BE:
• A) Business ethics is more focused on religion.
• B) Co’s assume that they select ethical employees.
• C) Business ethics is abstract philosophical concept.
• D) BE is based on legal compliance. E) BE equals CSR.
• F) No criminal investigation pending, the company is ethical.
• Let us catalogue some of major objections raised by different people
against dragging ethics into business organizations.
a) Ethics vs Claims:- If ethics is applied to business sphere, argues
Milton Friedman (1962) leads to conflicting claims between ethics
and profitability. It is argued that main function of business is
economic, i.e. profit not social or ethical. Hence, business should be
judged by economic criterion alone.
b) Ethics vs competitive advantage:- Another argument forwarded
against bringing ethics to the realm of business is its adverse impact
on competitive advantage of a business firm. The reason they say, is
not difficult to seek. Ethical conduct of business, i.e. business
actions for social good, involves cost. This cost is borne either by
consumers or the stockholders, i.e owners. In either of the case, the
competitive advantage of business gets adversely affected.
c) Ethics vs loyalty:- Another argument given against the
bringing of ethics into business sphere is based on loyalty.
They argue that the managers are involved in running the
enterprise.
d) Ethics vs Legitamacy:- It is argued that to be ethical it is
enough for business people merely to obey the law.
II. The Unitarian View:- This view subscribes the opinion that
business is just a sub-set of the society. Hence, the moral
principles that apply to society also apply to the business. As
such, business and morality cannot be separated and business
must abide by the moral code of society.
• III) The Integration View: - This view integrates the two – business
and ethics- in a symbiosis manner. According to this view, business is
an economic entity and, it has the right to earn profits.
Profit is an oxygen to business. No business can survive without profit.
Profit, is therefore, not a dirty word. And business being a subsystem of
society, morality and/or ethics is not dirty words as well.
• Code of Ethics:-
It is a formal statement of an organization’s primary values and the
ethical rules it expects its employees to follow in their conduct.
It is ensured that the codes are specific enough to make employees
know what they are supposed to do.
Mc Donnell Douglas:-
Integrity and ethics exist in the individual or they do not exist at all.
Corporation must strive to be-
Honest and trustworthy in all our relationships.
Reliable in carrying out assignments and responsibilities.
Truthful and accurate in what we say and write.
• Cooperative and constructive in all works undertaken.
• Fair and considerate in our treatment of fellow employees,
customers, all other persons.
• Law abiding in all our activities.
• Committed to accomplishing all tasks in a superior way.
• Economical in utilizing company resources.
• Dedicated in service to our company and to improvement of the
quality of life in the world in which we live.
• Clusters of variables found in various corporate codes of business
ethics:
Cluster 1: Be a dependable organizational citizen:
Comply with safety, health, and security regulations.
Demonstrate courtesy, respect, honesty and fairness.
Illegal drugs and alcohol at work prohibited.
Exhibit good attendance and punctuality.
Follow directives of supervisors.
Dress in business like attire.
• What is an ethical responsible organization?
• Characterized by certain features but not limited to the following:
• It is concerned not only with stockholders but all stakeholders of
the organization.
• It undertakes its responsibility to all stakeholders in the society as a
social contract and reciprocates for the benefits it draws from
society.
• It has a management structure to facilitate its ethical functioning.
• Ethical behavior is intrinsic to our business and has been
part of our legacy since inception, as envisioned by our
Founder, Jamsetji Tata. He believed that a business must
operate in a manner such that it respects the rights of all its
stakeholders and creates overall value for society.
• Each year, we observe the month of July as ‘Ethics Month’
across the organization to reinforce our ethical culture. This
year’s theme ‘Integrity Matters’ intends to further drive a
sense of personal commitment, amongst all stakeholders,
towards a better and ethical tomorrow.
• This comprehensive document serves as the ethical road map for
Tata employees and companies, and provides the guidelines by
which the group conducts its businesses.
• Tata companies have consistently adhered to the values and ideals
articulated by the Founder for over 150 years. The Tata Code of
Conduct was first formalized by Mr Ratan Tata. It articulates the
Group's values and ideals that guide and govern the conduct of our
companies as well as our colleagues in all matters relating to
business. Today, the Code is a bedrock on which we base our
individual, as well as leadership commitments to core Tata values.
• The Tata Code of Conduct outlines our commitment to each of our
stakeholders, including the communities in which we operate, and is our
guiding light when we are sometimes faced with business dilemmas that
leave us at ethical crossroads. The Code is also dynamic in that it has been
periodically refreshed in order to remain contemporary and contextual to
the changes in law and regulations. However it remains unaltered at its
core.
• Our stellar reputation and success as a business entity has been defined by
the powerful commitment and adherence to the core values and principles
expressed in this Code, by all our employees, directors and partners. I trust
every Tata colleague and Tata company will continue to not only comply
with the laws and regulations that govern our business interests around
the world, but will continue to set new standards of ethical conduct that
will generate deep respect and inspire emulation by others.
• N Chandrasekaran, Chairman, Tata Sons
February 21, 2017
• Dipankar Gupta (2006:42-43) has listed the following three abiding
principles of business ethics:-
• 1) Standardization 2) Workable 3) Driven from the top.
• 1) Standardization- Like other spectrum of human conduct,
standardization is the key to work and succeed. Standardization is
the first principle of business ethics. It means that all rules and
norms prescribed for business should be equally applicable to all the
favoritism and partiality should not be allowed at all.
• 2) Workable:- The second principle of business ethics is that the laid
down rules and norms should be workable and also show the
tangible benefits.
• 3) Driven from the top:- Business evidences reveal that ethics in
business works only when the top management demonstrates its
complete commitment to it.
• 1) Ethical conduct of business does not impair profitability instead
improves it. Explain with real examples. (10)
• Theories of Business Ethics:-
An action is right if and only if it produces the greatest balance of
pleasure over pain for everyone.
-- Jeremy Bentham.
Theory is opposed to practice in the sense latter involves “ doing” and
former involves “ no doing”. Foe ex: Medical theory involves
understanding the causes and nature of health problem, while
practice or use of medicine involves making the patient healthy.
Relevance of theory of BE:- Theory of BE helps
1) Serve and protest business interest.
2) Protects the interest of all stakeholders of business and, thus earn
trust and confidence of society in business activities.
• 3) Prevents damages and harms to society caused by business
operations.
• 4) Contribute to the wellbeing of society by discharging social
welfare activities.
Foundations of BE:-
1) Descriptive ethics- is defined as the presentation of the actual
ethical behavior of an individual or members of business
organization. It is used when one just wants to know and
understand the course of ethical behavior.
2) Analytical ethics:- It can be described as understanding the
reasons behind a course of ethical behavior took place. How an
ethical behavior took place.
• 3) Normative ethics:- As the term denotes, it is prescribed course of
action that ensures that the ethical behavior will take place
accordingly.
This deals with what and how one should conduct in future.
• Theories of BE:-
I. Teleological theories- The word ‘teleology’ means ‘end’ goal or purpose.
Teleological theory judges the rightness of an action based on its consequences
in terms of its ends, goals and purposes. In other words, a moral theory is
regarded as teleological when actions finally bring about good or happiness.
This theory is also referred to as “consequentialist” theory and generally
referred as “ no harm, no foul”.
This theory has three forms:-
a) Ethical Egoism- An action is morally right if the consequences of that action
are more favorable than unfavorable only to the agent performing the action.
b) Ethical Altruism- An action is morally right if the consequences of the action
are more favorable than unfavorable to everyone except the agent.
c) Utilitarianism-An action is morally right if the consequences of that action
are more favorable than unfavorable to everyone.
• Teleological theories characterized by certain strengths:-
a) One of the major strength of teleological theories is that they are very
much in accordance with general moral reasoning.
b) Use of objectivity in decision making is the second strength of this
theory.
There are three main types of theory brought under the rubric of
teleological theory of ethics.
a) Theory of Utilitarianism
b) Theory of Justice and fairness
c) Theory of virtue
• Theory of Utilitarianism:- This has evolved from the word ‘Utility”, where
one’s actions add to the overall utility of the community impacted by those
actions. It is founded on the ability to predict the consequences of an action.
To a utilitarian, an action is ethically right that produces the greatest number
of people. In other words, a utilitarian considers an act right if it is useful to
produce the best consequences overall.
• The above theory involves the following four theses:-
1. Consequentialism- This thesis holds that the rightness or goodness of any
action ultimately depends on the consequences it produces.
2. Hedonism:- This theory asserts that the utility of an action depends and is
determined by the pleasure it creates.
3. Maximalism:- As regards determining the maximum net pleasure, the
proponents of utilitarian theory, it can be done by sustracting the pain from
the pleasure.
• 4. Universalism:- The consequences produced by the action need to
apply to everyone not only to ourselves.
Utilitarian principle claims that we should choose the action most likely
to bring about greatest happiness of the greatest number.
Strengths:- Utilitarianism is characterized
a) It is probably the most widely understood and commonly applied
ethical theory.
b) It is founded on moral reasoning that the actions that yield pleasure
are judged as good or ethical.
c) It asserts ensuring the greatest good for greatest number of people.
d) The worth of each action is judged based on its merits.
Limitations: -
a) Utilitarianism is based the principle of the greatest happiness of the
greatest number. But it ignores that even though there is a majority of
people that are happy, there may be still a small minority not happy. It
does not ensure 100% of people being happy through an action.
Theory of Virtue ethics
The utilitarian theory which addresses to what actions are right.
Some philosophers like Aristotle have addressed not to what actions are right
but what kind of persons we should be to perform a right action.
The basic premise of virtue ethics is it should enable to lead rewarding and
successful lives also called by some “ the good life”.
A virtue is a positive trait or quality subjectively deemed to be morally
excellent and thus, is valued as a foundation of good being.

.
• According to Aristotle (1992), the good life is possible only for people
possessing the traits of good character that we call the virtues. The
prominent examples of virtues are honesty, loyalty, duty, patience,
perseverance, temperance, etc. According to Aristotle(1992) the good
life is possible only for people possessing the traits of good character
that we call the virtues. . He described virtue as character trait that
manifests itself in habitual action. The virtuous person is one who has
ideal character traits.
• The Virtue ethics has been developed in three main directions.
1) Eudaimonism- It implies performing one’s distinctive function
well. Aristotle argued that the distinctive function of we humans is
reasoning, (rational, cognitive) and so the life “worth living”, is
one which reason well.
2) Agent based theory- An agent based theory emphasizes that
virtues are determined by common sense intuitions (perceptions,
insights) that we as observers judge to be admirable traits in other
people.
3) Ethics of care.
Since, business is part of life, the virtues of successful living also
need to apply in the realm of business also.
• Objections raised against virtue ethics:-
a) One of the weakness of virtue ethics is that it does not take into
consideration the significant changes ina person’s moral character.
b) Ability to cultivate right virtues will be affected by number of
different factors some of which would be beyond a person’s control
due to his distinct background in terms of education, society, friends
and family.
• Theory of Justice:-
• The word justice is derived from the word ‘just’ which means fair or
appropriate. Accordingly, the word justice is regarded as equivalent
to the term fairness. In simple terms, justice means giving what is
due to one. However, absolute justice is divine and is very difficult to
achieve in the real world. As a matter of fact, we more often than
not come across to the realty what is termed as ‘relative justice’.
• The theory of justice (Rawls 1971) though based on social contract
notion, yet he takes a different view of justice as fairness in his
modelling device known as the “ original position”, has often been
compared to the state of nature or the pre-political condition of
humanity,.
He describes the veil of ignorance as,
“ No one knows his place in society, his social status, nor does anyone
knows his fortune in the distribution of natural assets, his intelligence,
strength and the like. I shall even assume that the parties do not know
their conceptions of the good or their special psychological propensities.
This principle of justice are chosen behind a veil of
Ignorance.
• The two principles , he thinks express our considered view about
justice behind a veil of ignorance,. The two principles are:
• 1) The Liberty principle- Each person is to have an equal right to the
most extensive total system of basic liberties compatible with a
similar for all.
• 2) Difference principle- Social and economic inequalities are to be
arranged so that they are both:
• to be of the greatest benefit to the least advantaged members of
society called the “ the difference principle”, and
• Attached to offices and positions open to everyone under conditions
of fair equality of opportunity (Rawls:1971).
• Rawls has divided various issues involved in justice and fairness into
three categories:-
• A) Distributive justice- This is the category concerned with the fair
and just distribution of social benefits among its members. The
benefits and losses in a society should be distributed equally.
• B) Redistributive justice- A defaulter should be awarded some form
of punishment to prevent him/her from doing similar type of wrong
activity.
• C) Compensatory justice- The compensation is given to the person
who has been caused harm or loss in any form.
• Virtue Ethics Theory Applied:  
• Rajat Gupta and Insider Trading
• The Players
• Rajat Gupta is an Indian American businessman who was the 
managing director of management consultancy McKinsey & Company
 and a business leader in India and the United States. Rajat Gupta also
served as corporate chairman, board director or strategic advisor to 
Goldman Sachs, Procter and Gamble and American Airlines, and non-
profits organizations, The Gates Foundation, The Global Fund and the 
International Chamber of Commerce.
• Rajat Gupta was convicted in June 2012 on insider trading charges. He
was sentenced in October 2012 to two years in prison, an additional
year on supervised release and ordered to pay $5 million in fines. His
trial began on May 22, 2012. On June 15, 2012, Gupta was found
guilty on thr
• Ethical Analysis
• Would a virtuous person have leaked the information to Raj
Rajaratnam? Rajat Gupta showed a failure of character:
• Integrity: Integrity is honesty and truthfulness or accuracy of a
person’s action. Rajat Gupta does not show integrity to his company
Goldman Sachs, where he was a Board of Director. Instead gives away
insider information for personal benefits.
• Trust: Rajat Gupta broke the trust to other Directors on Goldman’s
board and to of other people with whom he has done business. His
actions affect the relationship with McKinsley & Company.
• Fairness: Rajat Gupta’s actions are not fair for two reasons. First,
other investors who do not have the information on Buffett’s deal are
at a disadvantage. Second, he uses the information entrusted to him
to benefit himself and Rajaratnam.
• Honesty: He was not honest with Goldman Sachs and his fellow board
members to whom he implicitly promised not to share inside
information.
• Self-Control: If Rajat Gupta had self-control he would not have leaked
inside information to Rajaratnam for personal gain.
• ee counts of securities fraud and one count of conspiracy.
• What is Ethical Decision?
Ethical decision making can be defined as the process of evaluating
decisions, either pre or post, with respect to the moral standards of a
society’s culture.
Determinants of ethical decision making:-
A) Individual Factors B) Situational factors
Individual factors- It is the individual differences that make them
behave in a particular way when confronted with an ethical issue.
i) Gender ii) Age iii) Attitude iv) Education v) Personality
• Situational factors Individuals make different decisions in different situations.
i) Issue related factors ii) Context related factors
Issue related factors- Both the type of process one follows and decision one
makes greatly depend on the type of issue that one is dealing with.
If issue is insignificant may invite limited ethical consideration in making the
decision. Issue related factors relate either to moral intensity or moral framing
of the ethical issue one is confronted with.
Moral Intensity:- Moral intensity as a notion was initially proposed by Thomas
Jones (1931). It is just a way of using ethical decision making model to
incorporate the relative importance of the ethical issue to consider its influence
on the decision.
The moral intensity of an ethical issue depends on the following six factors.
i) Magnitude of consequences
ii) Social consensus
iii) Probability of effect
iv) Temporal immediacy- This is concerned with the speed with which the
consequences are likely to take place. Ex: Long term effect of smoking.
v) Proximity – This refers to the feeling of closeness the decision maker has for those
who would be affected by his/her decision. Ex- One may feel with more intensity
the poor working conditions in own factory than in others factory.
vi) Concentration of effect- This is the extent to which the consequences of one’s
action or decision are concentrated heavily on a few or sparsely on many.
There is a strong research evidence of first two.
• Moral Framing:- The moral intensity of a an issue is determined ,
according to jones, by six factors. At the same time, it is also
possible that the people placed in different context may perceive
the same intensity quite differently.
• Ex: Student assignment.
• Context related factors:- An organizational context.
• i) Reward system ii) Authority (What they are told by superiors)
• iii) Organizational culture. Iv) National culture.
• Ethical Decision Making Process
We always try to make decision out of alternative decisions which we
consider solves our problem in the best and most effective manner.
a) Identification of our problem
b) Development of alternative solutions to the problem
c) Evaluations of alternative solutions in terms of SWOT analysis.
d) Recommendation of the best solution amongst the alternative
solutions.
e) Implementation.
• The alternative ethical solutions to problem P are S1,,,,,,,,,,,,,,Sn.
The procedure to follow to make ethical decision S3 may include the
following stages.
i) Gather the facts carefully to determine whether there is ethical
problem.
ii) If there is a problem, try to state it as clearly as possible.
iii) Determine the problem has an ethical dimension.
iv) Identify those affected by the problem.
v) In many cases you will need to demonstrate the ethical problem
framework seriousness of your problem, since there is no need to
deliberate at the length of a insignificant problem.
• Vii) In many cases we are interested in determining what caused the
problem.
• Viii) Develop alternative solutions.
• Ix) Evaluate the alternative solutions in terms of their positives and
negatives.
• X) Decide the best solution out of the above alternative solutions that
provides maximum benefits.
• Xi) implement the solution or decision.
• Laura L Nash (1981) has suggested that examination of the following
12 questions helps in making ethical decision:
i) How you defined the problem accurately?
ii) How would you define the problem if you stood on the other side of
the fence?
iii) How did this situation occur in the first place?
iV) To whom and to what do you give your loyalty as a person and as a
member of the corporation ?
v) What is your intention in making this decision?
vi) How does this decision compare with the problem results?
vii) Whom could your decision or action injure?
• Viii) Can you discuss the problem with the affected parties before you
make the decision?
• Ix) Are you confident that your position will be as valid over a long
period time as it seems now?
• X) Could you disclose without qualm your decision or action to your
boss, your chief executive officer, the board of directors, your family,
society as a whole.
• Xi) What is the symbolic potential of your action if understood?
• Xii) Under what conditions would you allow exceptions to your stand?
• Limitations in making ethical decision :-
a) In a highly competitive global business environment, some
companies do not always follow ethical norms either due to non
awareness of these or conflicting moral standards between different
business environments.
b) Ethical decision making is also influenced by the absence of ethical
culture in the organization.
c) Organizational leadership itself may be lacking in ethical decision.
d) Profit maximization may influence.
• What is code of ethics?
Code of ethics is a set of rules or guides intended to establish moral
standards and decent behavior in those who practice it.
The code of ethics is the heart and soul of a company.
It is a communication tool that informs internal and external
stakeholders about what is valued by a particular organization, its
employees and management.
i) Contributes to the welfare of an organization
ii) respects the rights of all constituents affected by its operations.
• Why to have a code of ethics?
i) It creates a unanimous agreement of behaving and operating
among the organizational members.
ii) It improves team performance, especially when performance is
linked to the team’s business objectives and overall strategic
objectives of organization.
iii) It helps in improving cohesiveness and organizational culture.
iv) It improves communication among org members.
v) It raises ethical expectation of members.
vi) It helps create misconduct by members and enhances
accountability.
• Benefits of code of ethics:
• i) Increase in employee motivation, morale, and loyalty.
• Ii) Decrease in undesirable or questionable behavior of org
members.
• Iii) Guide how to make right decisions.
• Iv) Build trust within and outside organization.
• V) Increase in manager’s courage and confidence.
• Contents of code of ethics:-
JC Penney code of ethics:-
i) Serve the public to the extent possible, to its complete satisfaction.

ii) Ask a fair remuneration for the service we render to customers.

iii) Give emphasis on human development on continuous basis in our
business.
iv) Examine, test every policy, method, and act of the business
“ Does it square with what is right and just?”
Four ideals are :- Integrity, honesty, justice and Utility.
• The values and principles which have governed the manner in which the
Tata Group of companies and their employees have conducted themselves
were first formally articulated as the Tata Code of Conduct in 1998.This Code
was intended to serve as a guide to each employee on the values, ethics and
business principles expected of him or her in personal and professional
conduct. It is however important to consider the effect of the rapidly
increasing footprint of Tata Group companies across nationalities and
geographical boundaries on the Code, whilst retaining the ethos of the Tata
brand and reputation. This emergent global presence requires an
appropriate modification of the Code to ensure that it addresses and
encompasses diverse cultural, business and related issues universally across
our Group. I urge each employee to read the current version of the Tata
Code of Conduct and take pride in upholding the high standards of
corporate and personal behaviour on which the Tata Group’s reputation and
respectability have been built over the past 140 years. Ratan N.Tata
• Clause: 1 National interest The Tata Group is committed to benefit
the economic development of the countries in which it operates. No
Tata company shall undertake any project or activity to the
detriment of the wider interests of the communities in which it
operates.
• Clause: 2 Financial reporting and records A Tata company shall
prepare and maintain its accounts fairly and accurately and in
accordance with the accounting and financial reporting standards
which represent the generally accepted guidelines, principles,
standards, laws and regulations of the country in which the
company conducts its business affairs. Internal accounting and audit
procedures shall reflect, fairly and accurately.
• Clause: 3 Competition A Tata company shall fully support the
development and operation of competitive open markets and shall
promote the liberalization of trade and investment in each country
and market in which it operates. Specifically, no Tata company or
employee shall engage in restrictive trade practices, abuse of market
dominance or similar unfair trade activities.
• Clause: 4 Equal opportunities employer A Tata company shall
provide equal opportunities to all its employees and all qualified
applicants for employment without regard to their race, caste,
religion, colour, ancestry, marital status, gender, sexual orientation,
age, nationality, ethnic origin or disability. Human resource policies
shall promote diversity and equality
• Clause: 5 Gifts and donations A Tata company and its employees
shall neither receive nor offer or make, directly or indirectly, any
illegal payments, remuneration, gifts, donations or comparable
benefits that are intended, or perceived, to obtain uncompetitive
favors for the conduct of its business.
• Government agencies A Tata company and its employees shall not,
unless mandated under applicable laws, offer or give any company
funds or property as donation to any government agency or its
representative, directly or through intermediaries, in order to obtain
any favourable performance of official duties. A Tata company shall
comply with government procurement regulations and shall be
transparent .
• Political non-alignment A Tata company shall be committed to and
support the constitution and governance systems of the country in
which it operates. A Tata company shall not support any specific
political party or candidate for political office. The company’s conduct
shall preclude any activity that could be interpreted as mutual
dependence/ favour with any political body or person, and shall not
offer or give any company funds or property as donations.
• Clause: 8 Health, safety and environment A Tata company shall strive
to provide a safe, healthy, clean and ergonomic working environment
for its people. It shall prevent the wasteful use of natural resources
and be committed to improving the environment, particularly with
regard to the emission of greenhouse gases, and shall endeavour to
offset the effect of climate change in all spheres of its activities. A Tata
company, in the process of production and sale of its products and
services.
• Clause: 9 Quality of products and services A Tata company shall be
committed to supply goods and services of world class quality
standards, backed by after-sales services consistent with the
requirements of its customers, while striving for their total
satisfaction. The quality standards of the company’s goods and
services shall meet applicable national and international standards.
A Tata company shall display adequate health and safety labels,
caveats and other necessary information on its product packaging.
• Corporate citizenship A Tata company shall be committed to good corporate
citizenship, not only in the compliance of all relevant laws and regulations but
also by actively assisting in the improvement of quality of life of the people in
the communities in which it operates. The company shall encourage
volunteering by its employees and collaboration with community groups.
• Cooperation of Tata companies A Tata company shall cooperate with other
Tata companies including applicable joint ventures, by sharing knowledge and
physical, human and management resources, and by making efforts to resolve
disputes amicably, as long as this does not adversely affect its business
interests and shareholder value. In the procurement of products and services,
a Tata company shall give preference to other Tata companies, as long as they
can provide these on competitive terms relative to third parties.
• Clause: 17 Ethical conduct Every employee of a Tata company,
including full-time directors and the chief executive, shall exhibit
culturally appropriate deportment in the countries they operate in,
and deal on behalf of the company with professionalism, honesty
and integrity, while conforming to high moral and ethical standards.
Such conduct shall be fair and transparent and be perceived to be so
by third parties. Every employee of a Tata company shall preserve
the human rights of every individual and the community, and shall
strive to honour commitments. Every employee shall be responsible
for the implementation of and compliance with the Code in his/her
environment.Failure to adhere to the Code could attract severe
consequences, including termination of employment.
• Regulatory compliance Employees of a Tata company, in their business
conduct, shall comply with all applicable laws and regulations, in letter
and spirit, in all the territories in which they operate. If the ethical and
professional standards of applicable laws and regulations are below
that of the Code, then the standards of the Code shall prevail. Directors
of a Tata company shall comply with applicable laws and regulations of
all the relevant regulatory and other authorities. As good governance
practice they shall safeguard the confidentiality of all information
received by them by virtue of their position. Clause: 19 Concurrent
employment Consistent with applicable laws, an employee of a Tata
company shall not, without the requisite, officially written approval of
the company, accept employment or a position of responsibility (such
as a consultant or a director) with any other company, nor provide
freelance services to anyone, with or without remuneration. In the case
of a fulltime director or the chief executive, such approval must be
obtained from the board of directors of the company.
• Clause: 20 Conflict of interest An employee or director of a Tata company shall
always act in the interest of the company, and ensure that any business or
personal association which he/she may have does not involve a conflict of
interest with the operations of the company and his/her role therein. An
employee, including the executive director (other than independent director) of a
Tata company, shall not accept a position of responsibility in any other non-Tata
company or not-for-profit organisation without specific sanction. The above shall
not apply to (whether for remuneration or otherwise): a) Nominations to the
boards of Tata companies, joint ventures or associate companies. b)
Memberships/positions of responsibility in educational/ professional bodies,
wherein such association will benefit the employee/Tata company. c)
Nominations/memberships in government committees/bodies or organisations.
d) Exceptional circumstances, as determined by the competent authority.
• Components of code of ethics:-
• A) Relevancy - clarify employee’s desired behavior.
• B) Core values- issue related to legal matters.
• C) Plain language
• D) Specific directions.
• Process for preparing code of ethics:-
• Check questions?
• Is it legal? Is it balanced? How will it make me feel about myself?

Code development: -
i) Decide on goals and meaning of success
ii) Get leadership buy-in iii) Create a code development task force iv) Keep
leadership informed v) Draft your code of ethics
vi) Submit code to leadership for review vii) Field test the code and make any
final revisions. Viii) Have the code reviewed by legal counsel
ix) Obtain board approval for final draft
x) Decide on communication and education strategy
xi) Revise and update regularly.
• Guidelines for code of ethics:-
• i) be clear about the objectives that the code is intended to
accomplish .
• Ii) Get support from all levels
• Iii) be aware of latest developments in laws and regulations
• Iv) respond to real life questions and situations.
• V) Provide resources resources for further information and
guidance.
• Value of code of ethics:-
• Respect Integrity Communication Excellence
• Enablers of effective implementation of code of ethics:-
• Organizational culture
• a) Respect b) Responsibility c) Results
• Role of the leader and top management
• Integrity Intent Capabilities and Results.
• Role of employees in business ethics:-
• Ethics in HRM:-
The ethics in HRM covers those ethical issues arising around the employer-
employee relationship, such as the rights and duties owed between
employer and employee.
Employee privacy :-
An employee’s right what not be known about him/her others.
According to Warren and Brandies (1890) the right of privacy is “ the right
to be let alone- the most comprehensive of rights and the most valued by
civilized men. Second, it is expressed in terms of control over information
about oneself. Third, a more adequate definition of privacy means certain
facts about that individual are not known by others.
• Types of privacy:-
• Physical privacy-
• Psychological privacy- Is privacy with respect of person’s inner life,
i.e. one’s values, beliefs, feelings, emotions, thoughts, and desires.
• Social Privacy:- This refers to one’s freedom to interact with other
people in a manner and way one chooses.
• Informational privacy- Is determined by employees about, what,
when and how private information about them is released or made
to others.
• Why employee privacy ?
First, privacy ensures that others do not know the information
about us which, is known to others, would put us in an
embarrassment, shame, and cause harm to us.
Second, privacy does not allow others to interfere in our private
matters.
Third, Our private matters are not revealed to others.
Fourth, it protects people from being led to incriminate themselves.