​Arguments Supporting Business Ethics

• Ethics applies to all human activities.

• Business cannot survive without ethics.
• Ethics is consistent with profit seeking.
• Customers, employees, and people in general care about ethics.
• Studies suggest ethics does not detract from profits and seems to contribute to profits.
• To meet demands of business stakeholders
• To enhance business performance
• To promote personal morality
Arguments Against Business Ethics
• In a free market economy, the pursuit of profit will ensure maximum social benefit so business ethics
is not needed.
• A manager’s most important obligation is loyalty to the company regardless of ethics.
• So long as companies obey the law they will do all that ethics requires.
• An ethical company cannot be competitive and viable.
• Employees, as "loyal agents," - obligated to serve their to advance the employer's self-interes.
​GLOBALISATION AND BUSINESS ETHICS
Business ethics (also corporate ethics) “is a form of applied ethics or professional ethics
that examines ethical principles and moral or ethical problems that arise in a business environment.
It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire
organizations”.
Ethical decision making is an obligation in business, in government, in education and in
our daily lives. Ethics has gained more significant place in the competitive business environment.
World has faced many ethical issues, where 1960 was a time of social unrest, 1980 was the decade
of financial scandals and 1990 saw the world becoming a “Global Village”. Though business
grew and the environment offered more markets and many opportunities, but with it also came
duplication of products, child labour, money laundering, environment issues and many other
business malpractices. To add to more of these unethical practices the New Millennium faced the
tsunami of business crimes. Cyber crimes, sexual harassment in work places, intellectual property
and patent thefts to name a few. To address these serious issues, this era understood the need and
significance of incorporating Business ethics as part of their strategic business programs and
alliances. With the involvement of business ethics as a part of business strategic decision making,
many companies have gained a competitive advantage, good will and recognition in the global
business world. They have attracted a good workforce and cater to a healthy organization climate.
All this has ultimately led to good profits and a healthy competition in the business world.
​Formal Communication
In formal communication, certain rules, conventions and principles are followed while
communicating message. Formal communication occurs in formal and official style. Usually
professional settings, corporate meetings, conferences undergoes in formal pattern. In formal
communication, use of slang and foul language is avoided and correct pronunciation is required.
Authority lines are needed to be followed in formal communication.
Informal Communication
Informal communication is done using channels that are in contrast with formal
communication channels. It’s just a casual talk. It is established for societal affiliations of
members in an organization and face-to-face discussions. It happens among friends and family. In
informal communication use of slang words, foul language is not restricted. Usually. Informal
communication is done orally and using gestures. Informal communication, Unlike formal
communication, doesn’t follow authority lines. In an organization, it helps in finding out staff
grievances as people express more when talking informally. Informal communication helps in
building relationships. Informal channel of communication is also known as Grape wine.
Downward communication
Communication which flows from the superior to subordinates is referred as downward
communication. It is needed,• To get things done
• To prepare for changes
• To discourage misinformation and suspicion
• To let the people feel the price of being relatively well informed.
Upward communication
It flows from a subordinate position to superior position. That I s, the subordinate work
performance report, their opinions, ideas and suggestions, complaints and grievances of
subordinates, etc.,.
​Total Quality Management Principles: The 8 Primary Elements of TQM
Total quality management consists of organization-wide efforts to install and makepermanent a
climate in which an organization continuously improves its ability to deliver high- quality products
and services to customers.Total quality management can be summarized as amanagement system for a
customer-focused organization that involves all employees in continualimprovement. It uses strategy,
data, and effective communications to integrate the qualitydiscipline into the culture and activities of
the organization. Many of these concepts arepresent in modern Quality Management Systems, the
successor to TQM. Here are the 8 principles of total
quality management:
1. Customer-focused
The customer ultimately determines the level of quality. No matter what an organization
does to foster quality improvement—training employees, integrating quality into the design
process, upgrading computers or software, or buying new measuring tools—the customer
determines whether the efforts were worthwhile.
2. Total employee involvement
All employees participate in working toward common goals. Total employee commitment can only be
obtained after fear has been driven from the workplace, when empowerment has occurred, and
management has provided the proper environment. High-performance work systems integrate
continuous improvement efforts with normal business operations. Self-managed work teams are one
form of empowerment.
3. Process-centered
A fundamental part of TQM is a focus on process thinking. A process is a series of steps
that take inputs from suppliers (internal or external) and transforms them into outputs that
are delivered to customers (again, either internal or external). The steps required to carry out
thecprocess are defined, and performance measures are continuously monitored in order to
detect unexpected variation.
4. Integrated system
Although an organization may consist of many different functional specialties often organized into
vertically structured departments, it is the horizontal processes interconnecting these functions that
are the focus of TQM.
5. Strategic and systematic approach
A critical part of the management of quality is the strategic and systematic approach to achieving an
organization’s vision, mission, and goals. This process, called strategic planning or strategic
management, includes the formulation of a strategic plan that integrates quality as a core component.
6. Continual improvement
A major thrust of TQM is continual process improvement. Continual improvement drives an
organization to be both analytical and creative in finding ways to become more competitive and more
effective at meeting stakeholder expectations.
7. Fact-based decision making
In order to know how well an organization is performing, data on performance measures are
necessary. TQM requires that an organization continually collect and analyze data in order to improve
decision making accuracy, achieve consensus, and allow prediction based on past history.
8. Communications
During times of organizational change, as well as part of day-to-day operation,
effective communications plays a large part in maintaining morale and in motivating employees at
alllevels. Communications involve strategies, method, and timeliness.
​1. Formal Organisation: It is an organizational structure which clearly defines the duties,
responsibilities, authority and relationship as prescribed by the top management. It
represents the classification of activities within the enterprise, indicate who reports to
whom and explains the vertical flow of communications which connects the chief
executive to the ordinary workers.
1. Informal Organisation: It is an organizational structure which establishes the relationship
on the basis of the likes and dislikes of officers without considering the rules, regulations
and procedures. The friendship, mutual understanding and confidence are some of the
reasons for existing inf
Formal Organisation
1.It is created deliberately
2.Authority flows from top to bottom
3.It is created for technological purpose
4.It is permanent and stable
5.It gives importance to terms of
authority and function.
6. It arises due to delegation of authority
7.Duties and responsibilities of workers
are given in writing
8. Formal organization may grow to
maximum size
Informal Organisation
1. It is spontaneous.
2. Informal authority flows from top to
bottom or horizontally.
3. It arises from man‘s quest for social
satisfaction
4. There is no such permanent nature and
stability
5. It gives importance to people and their
relationship.
6. It arises due to social interaction of
people
7. No such written rules and duties.
8. Informal organisation tends to remain
smaller.ormal organization.
​Features of MBO
The following are the important features of MBO
1. MBO is an approach and philosophy to management and not merely a technique.
2. MBO gives emphasis opn objectives.
3. MBO is concerned with the participation of concerned managers I objective setting and
performance reviews.
4. MBO reviews performance periodically.
5. Objectives in MBO provide guidelines for appropriate systems and procedures. MBO
establishes a community of interest and a shared sense of vision among all the managers.
Benefits of MBO
The benefits of MBO can be seen as follows
1. MBO helps in better managing the orgaisational resources and activities.
2. Since organizational objectives are defined very clearly in MBO, they help in relating the
organization with its environment.
3. MBO provides greatest opportunity for personnel satisfaction because opf their participation in
objective setting and rational performance appraisal.
4. MBO stimulates o9rganisational change and provides a frame work and guidelines for
organizational change.
Problems and Limitations of MBO
Each organization is likely to encounter specific problems in MBO practice but some of the
common problems are as follows
1. MBO is a time consuming and costly process
2. Manager‘s failure to teach MBO philosophy
3. Problems in objective setting
4. more emphasis on short term objectives
5. Danger of inflexibility in the organization in a dynamic environment
6. MBO creates frustration among managers
What is business ethics
Business ethics is nothing but the application of ethics in business. Business ethics is the application of
general ethical ideas to business behaviour. Ethical business behaviour facilitates and promotes good
to society, improves profitability, fosters business relations and employee productivity.
​SCOPE OF BUSINESS ETHICS
Ethics in Compliance
Compliance is about obeying and adhering to rules and authority. The motivation for being
compliant could be to do the right thing out of the fear of being caught rather than a desire to be
abiding by the law. An ethical climate in an organization ensures that compliance with law is
fuelled by a desire to abide by the laws. Organizations that value high ethics comply with the laws
not only in letter but go beyond what is stipulated or expected of them.
Ethics in Finance
The ethical issues in finance that companies and employees are confronted with include:
• In accounting – window dressing, misleading financial analysis.
• Related party transactions not at arm’s length
• Insider trading, securities fraud leading to manipulation of the financial markets.
• Executive compensation.
• Bribery, kickbacks, over billing of expenses, facilitation payments.
• Fake reimbursements
Ethics in Human Resources
Human resource management (HRM) plays a decisive role in introducing and
implementing ethics. Ethics should be a pivotal issue for HR specialists. The ethics of human
resource management (HRM) covers those ethical issues arising around the employer-employee
relationship, such as the rights and duties owed between employer and employee.
The issues of ethics faced by HRM include: • Discrimination issues i.e. discrimination on the bases of
age, gender, race, religion,
disabilities, weight etc. • Sexual harassment. • Affirmative Action. • Issues surrounding the
representation of employees and the democratization of the
workplace, tradeization. • Issues affecting the privacy of the employee: workplace surveillance, drug
testing. • Issues affecting the privacy of the employer: whistle-blowing. • Issues relating to the fairness
of the employment contract and the balance of power
between employer and employee. • Occupational safety and health.
​Most Common Barriers to Effective Communication
1. Physical Barriers: this has to do with poor or outdated equipment used during
communications, background noise, poor lighting, temperatures that are too hot or too cold.
2. Attitudes: emotions like anger or sadness can taint objectivity. Also being extremely
nervous, having a personal agenda or “needing to be right no matter what” can make
communications less than effective. This is also known as “Emotional Noise”.
3. Language: this can seem like an easy one, but even people speaking the same language can
have difficulty understanding each other if they are from different generations or from
different regions of the same country. Slang, professional jargon and regional colloquialisms
can even hurt communicators with the best intentions.
4. Physiological Barriers: ill health, poor eyesight or hearing difficulties, pain.
5. Problems with Structure Design: companies or institutions can have organization structures
that are not clear, which can make communications difficult. Also to blame for faulty
communications are bad information systems, and lack of supervision or training of the
people involved.
6. Cultural Noise: people sometimes make stereotypical assumptions about others based on
their cultural background.
7. Lack of Common Experience: it’s a great idea to use examples or stories to explain a point
that is being discussed. However, if the speaker and the audience cannot relate to these
examples because they do not have the same knowledge or have not shared the same
experiences then this tool will be ineffective.
8. Ambiguity and Abstractions Overuse: leaving things half-said, using too many
generalizations, proverbs or sayings, can all lead to communications that are not clear and
that can lend themselves to misinterpretations.
9. Information Overload: it takes time to process a lot of information and too many details can
overwhelm and distract the audience from the important topics. Keep it Simple, Sweetie.
10. Assumptions and Jumping to Conclusions: This can make someone reach a decision about
something before listening to all the facts.
11. Psychological barriers can be described as the cause of distorted communication because of
human psychology problems. Psychological barriers may be ; Attitude and opinions,
Emotions, Filtering and distortion of message, Status difference, In attention, Closed mind,
Fields of experience.
​FEATURES OF KAIZEN

Kaizen is defined as a continuous effort by each and every employee (from the CEO to field staff) to
ensure improvement of all processes and systems of a particular organization. So the important
features are
1. One of the most notable features of kaizen is that big results come from many small changes
accumulated over time..
2. It aims at continuous improvement of process
3. Implementing Kaizen tools is not the responsibility of a single individual but Involves every member
who is directly associated with organisation.
4.Every employee contributes his own suggestions to improve work.
5.Kaizen is a philosophy that focuses both on the process and results.
6. It is a process that, when done correctly, humanises the work place, eliminates unnecessary hard
work (both mental and physicall, teaches people how to do rapid experiments using scientific methods
and how to eliminate waste in business process.
7. It is process oriented and not goal oriented way of thinking.
8. It focuses on improvement of all components of production and business process particularly on
such factors as stimulation and involvement of workers and medium ranking managers in the process
of decision making.
Objectives of Kaizen
Basically Kaizen takes processes, systems, products, and services apart, then rebuilds them in a better
way.
1.To Eliminate waste or activities that add cost and not value
2.Just in time delivery
3.Production load levelling of amount and types
4. Standardised work
5.Paced moving lines and right sided equipment
Staffing
Staffing, as the next function of management, consists of a selection of appropriate staff for the
organization to reach a goal / goals easier and more efficient. According to today‘s experienceis well
known that it is difficult to financially evaluate, quality and efficient staff. Staff is one of the more
valuable, if not the most valuable resource in any successful organization. For this reason, good
planning of personnel policies, as a function of management, and corresponding execution of that
selection of high quality people is becoming increasingly important. The task of this management
function is to set rules related to employment and personnel policies. Staffing basically involves
matching jobs and individuals. This may require a number of functions like manpower planning,
recruitment, selection, training and development, performance appraisal,promotion transfer, etc. The
responsibility for staffing rests on all managers at all levels of the organization. It increases as one
goes up in the organizational hierarchy. In order to facilitate the effective performance of staffing
function, personnel department is created in large organizations.
Features of MBO
The following are the important features of MBO
1. MBO is an approach and philosophy to management and not merely a technique.
2. MBO gives emphasis opn objectives.
3. MBO is concerned with the participation of concerned managers I objective setting and
performance reviews.
4. MBO reviews performance periodically.
5. Objectives in MBO provide guidelines for appropriate systems and procedures. MBO
establishes a community of interest and a shared sense of vision among all the managers.
​Frederick Taylor and Scientific Management
Frederick Winslow Taylor is generally acknowledged as “the father of scientific
management.”His experiences as an apprentice, a common labourer, a foreman, a master mechanic
, and then the Chief Engineer of the Steel company gave Taylor ample opportunity to know at first
hand the problems and attitudes of workers and to see the great opportunities for improving the
quality of Management
Taylor principal concern throughout most of his life was that of increasing efficiency in
production, not only to lower costs and raise profits, but also to make possible increased pay for
workers through their higher productivity. Taylor saw productivity as the answer to both higher
wages and higher profits, and he believed that the application of Scientific methods, instead of
custom and rule of thumb, could yield the productivity without the expenditure of more human
energy or effort.
Taylor‘s famous work entitled the “The Principles of Scientific Management” was
published in 1911.Scientific Management is not any efficiency device, in its essence, scientific
management involves a complete mental revolution on the part of the working man in any
particular establishment or industry – and is equally complete mental revolution on the part of
those on the management side. The great mental revolution that takes place in the attitude of two
parties is that together they turn their attention towards increasing the surplus than dividing the
surplus.
​Fishbone Diagram
Fishbone diagrams are causal diagrams. It was created by Kaoru Ishikawa in 1968. The diagram is also
known as Ishikawa diagram.
Types of Fishbone diagram
• Simple fishbone
In its basic form, the Ishikawa diagram has no predetermined affinities or categories of causes, so we
can decide affinities that may be unique to our organisation.
• 4S Fishbone
It classifies information about physical about potential causes into four common categories- Suppliers,
Systems, Surroundings and Skills.
• 6M Fishbone
This variation, enable us to organise causes logically into 6 categories- Man, Materials, Machine,
Methods, Measurements, and Mother Nature.
8P Fishbone
This variation divides causes into 8 categories- Procedures, Policies, Place, Product, People, Processes,
Price, and Promotion.
Advantages of Fishbone Diagram
•Display relationship clearly and logically.
•It helps in maintain team focus.
•It facilitate brain storming.
•It show all causes of problem simultaneously.
•It stimulates problem solving.
•It allow for prioritisation of relevant causes.
•It helps to identify root cause of a problem.