Conceptual Framework Of Ethics & Realities In Business

Dr. Vijay Pithadia 

Generally, business and society have always been interlinked and interdependent. There can no business without society and no organization of society without business. Moreover, the developed and developing societies are in the process of reshuffling in a very radical way. Business satisfies the human requirements of the society and on the other hand society provides necessary resources to business. Modern executives are becoming aware of the fact that the success of their enterprises depends upon how best they adjust themselves to their new environment .There is a dramatic change from methods of improving the internal allocation of resources to developing strategies, which will have to be used to streamline to the changes that take place in the society.


The word 'ethics' is derived from the Greek word 'ethos' which refers to the character. According to Webster's new collegiate dictionary ethics defines as "the science of moral duty or the science of ideal human character" In the other words moral, principles, Codes and postulates are considered as ethics. According to Solomon and Hanson "ethics is thinking in terms of the larger picture not ignoring or neglecting ones own interest and well being but not over emphasizing ones own interest either.

Business Ethics

Ethics is invisible governing force behind every human conduct, may be that of an individual or that of an organization. It is a system of moral principles the basis for determining wrong and right actions. Business ethics are the principles, practices and philosophies that guide the business people in their day-to-day managerial decision making process of business and concerned primarily with the impact of decisions of the society, within and outside business enterprises.

Ethics, Employee & Morality

Employee is an integrated part of business activity and therefore, the point related to ethics having importance. An employee's role is complex one, consisting within itself a variety of roles. The role of peer, the role of superiors, the role of subordinates, the role of trade union leaders, and the role of representatives of concern to the outside world but few of the distinct roles and employee has to play simultaneously. In each role he/she is expected to follow ethics, these ethics are called as employee ethics. Morals are related to traditional beliefs, customs and conventions that guide man/woman's social behavior. A great difference exists between ethics and morality because ethics is always based on moral standard and code of conduct developed by proper testing to guide the human behavior and morality is related to accepted conducts, courtesies and conventions of the society.


Normally, it is expected that ethics and reality must be one and the same, but it is not so in most of the cases. The reason is people try to justify their own reasons for their actions. "Is it rational to eat human flesh"? When a question is asked to a cannibal he/she may replied that “It is better than killing thousands of people with an out of bomb" Even they may say that at least we are killing when we are hungry but your people are killing thousands of people for no fault of them in the name of war. "This is quite relevant today as the Americans who were talking about global peace and ethical values, non violence, friendliness, brotherhood are carrying out with war. For the sake of tone individual namely- OSAMA BIN LADEN almost outline. Afghanistan has gone Indians who take about more ethical values must keep their mouth shut because we have our brothers and sisters living in America.

Actually what constitutes good ethical behavior has never been clearly defined and in recent years the line differentiating right from wrong has become even more blurred. The root of unethical practices coming from such statements i.e. "Every one does it", I never thought I'd "You have to seize every advantage nowadays" Executives and their organization are responding to this problems from a number of directions. They are writing and distributing codes of ethics to guide employee through ethical dilemmas. In such condition they are creating protection mechanism for employee who reveals internal unethical practices. The root cause of most of the unethical practices is the difference in preaching and practices. Most companies talk about using the ethical means in their workshop and training sessions but force their persons to achieve the target by hook and crook. In some of the companies the prevailing culture and chain of command force the employees to employ unethical means. Today's manager and executives need to create an ethically healthy environment so that work efficiency, productivity and confront a minimal degree of ambiguity regarding what constitutes right and wrong behaviors.

Realities of Business & Society

It is true that reality of business and society has never been a subject for discussion for years. In fact the changing realities of business has made it imperative that executives should incorporate social and political concerns into their decision making process. Changing realities affects widely to the business and society. Business utilizes the available resources tactfully to get the desired results and contributes to the national prosperity. Business activity is influenced by the operation of economic forces of demand and supply as well as even the changes in the economic cycles. Labor and Customer is the two pillars upon which the entire building of business exits in the society. Similarly religion, culture and education are the background of the consumers, which affect their buying habits too, which in turn will have to be taken care by the business

Three Ethical Decision Criteria

According to classification of G.F. Cavanaugh et. al. [1981] an individual can use three different criteria in making ethical choices.

The first criteria may be known as Utilitarian. In which decisions are made solely on the basis of there out comes. The aim
of utilitarianism is to facilitate the greatest good for the greatest number. It is consistent with goals such as efficiency, productivity and high profits.

Second Ethical criteria are to focus on Rights. This calls on individual to make decisions consistent with fundamental liberties, right to privacy, to free speech and to due process.

When, third criterion is to focus on Justice. This requires individuals to impose and enforce rules fairly as well as impartially so there is an equitable distribution of cost and benefits. It justifies paying people the same wage for a given job, regarding of performance differences and using seniority as the primary determination in such situation. Mentioned criteria has advantages and liabilities a focus on utilitarianism promotes efficiency and productivity but it can result in ignoring the rights of some duals, particularly those with minority representation in the organization. The use as a criterion protects individuals from injury and is consistent with freedom Privacy. A focus on justice protects the interests of the underrepresented and less r full but it can encourage a sense of entitlement that reduces risk taking, ration and productivity.

To Summarize, ethics is the buzzword of the 1990s. Some people think, it is a fad and f tasks it seriously. Ethics however is not new and it has been with us for thousand of years, except that its importance is drawing on us only now in business. People of organizations are increasingly finding themselves facing ethical dilemmas in such situations they are required to define right and wrong conduct according to realities in ness.


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Paper presented at National Seminar on "Ethics and Management" organized by S. K. School of Business Management, North Gujarat University, Patan-384 265, January 11-12, 2002