Business Ethics and Value Systems By Dr. Mruthyunjaya

Ethics is just a concept or a thought that stands for Virtue-based discipline of the human mind. Based on its observations, studies, discussions/interactions and experience, the human mind keeps continuously acquiring knowledge and refining the same as and when new information or data is available to enrich its data bank about various issues and aspects. The human mind also keeps differentiating between right and wrong or between virtues and vices. This differentiation enables it to direct and monitor actions and responses to circumstantial situations around.  Next, it analyses the acquired data through a thorough introspection to draw a clear demarcation line between right and wrong or between virtues and vices. Moreover, the normal human mind strives to acquire information regarding absolute righteousness about different issues for this purpose.

Absolute righteousness stands for the highest order of virtues and occupies the innermost strata of the human mind. The sensitive human mind always aligns itself with the virtue side of the spectrum and directs all actions and responses of people, whether instantaneous or planned and well thought over to draw the key driving force only from the inner strata of virtues’ spectrum and ensures that all actions have the backing of the nobility of thought. Ethics, thus, happens to be the camouflaging virtue of the key driving force behind all actions of people.  This nobility of thought, also known as Morale, always distances itself from the influence of external parameters. And hence, the first thought of people would always be virtue-based because it originates from an un-impacted, virgin, purest and noblest knowledge about an issue, fact or a phenomenon. 

When we say that both Ethics and Morale stand for Virtue-based discipline of the human mind, how can they be different from each other? 

A close examination reveals that there is only a hairline thick border between   Ethics and Morale. While morale does not get impacted by external parameters and stays firm in its alignment with the innermost core of the virtues spectrum, ethics, on the contrary, tends to get impacted by many external parameters easily but still tries to align itself with at least the outer strata of the virtues spectrum. While morale finds a firm footing in the inner core of the virtues’ sphere, ethics has its base at the outer strata of the virtues sphere. Ethics could therefore be described as the synthetic output of synergistic interactions between many first seed thoughts that govern the overall macro-conscience of the human mind. Since the human mind keeps continuously learning from experience and exposure to realities of life, its concept of rights and wrongs also gets refined and enriched as and when it updates its knowledge bank. Similar to knowledge evolution, Ethics, namely the concepts of Rights and Wrongs, also traverses through the three phases of evolution, namely Nucleation of First Seed of Ethical Thought, Growth and Refinement of the first Ethical Thought and Crystallisation of the thought to derive Clear Concepts of Ethics.

Society ensures that all follow the righteous path without exception and reference to personal and/or collective discomfort or inconvenience and meticulously followed such a highly disciplined social order until a few decades back. People had no option but to follow the ethical dictum of society.  The ethical way of carrying out all activities has remained the norm of society for a long time.

Over a period of time, human greed steadily corroded the nobility of thoughts and actions and concepts of Competitive Material Comfort steadily overweighed the basic social norms of spiritual, emotional and ethical requirements. Implantation of this first seed of Knowledge Corruption (Mother of all Unethics!) gave rise to the onset of the phenomenon of Unethics, and people started coming more and more under the influence of many external parameters while deciding about an issue. 

The innovative human mind did not take much time to invent many novel routes to circumvent the righteous, ethical path to dig into the very vitals of value structures across society. Traditional value structures that stood the test of time for generations steadily got completely eroded and collapsed. The welfare of the general public remained a mere paper exercise of executives, far from reality. Ethical Requirements had to be administered and enforced. Thus originated the concept of Business Ethics, Professional Ethics, etc., intending to formulate, refine, administer, monitor and enforce ways and means of practising a business activity or a profession. The word Profession embraces all fields and walks of life across society, including voluntary and social services.

As an ever receiving beneficiary, the social responsibility and the accountability associated with a business enterprise or a profession demanded certain plough back in terms of intellectual and economic development of the society. This concept gave rise to the onset of Value Systems for business establishments. With further passage of time, the concept of value systems grew stronger by evolving and embracing concepts of Corporate Governance and Environmental Ethics. 

Many theories came up to explain and justify ethical dictums evolved from time to time. Knowledge Theory is one of the most ancient theories developed by traditional Indian scholars on the concept that Ethics is an ever evolutionary process and that the first seed of the Knowledge-Driven Concept of Righteousness should be sown and implanted in the human mind right in its tender age and nourished all through the younger age for an everlasting impact (The Foundation Principle). This theory upheld and propagated in Bhagavad-Gita states that one should discharge one’s duty-bound responsibility with total dedication and sincerity as demanded by the righteousness (truth) associated with the act of execution without fear or favour. 

This theory provided a good base for developing many other ethical theories that came to be known from time to time. Some of these theories use these concepts but explain them differently. Lawrence Kohlberg’s Theory, Carol Gilligan’s Theory, Consequentialism Theory, Utilitarian Theory, Virtue Theory. Deontology Theory, Duty Theory, Right’s Theory, Immanuel Kant’s Theory, Utilitarian Theory, Non-consequentialism Theory, Social Contract theory, etc., are some of the more popular ethical theories that caught the attention of intellectuals across the society.  Collectively they emphasised a supra-legal moral model built on five broad principles, namely Harm principle (avoiding unwarranted harm to people), Fairness principle (fairness of all actions and activities, to be fair to people and society), Human rights principle (respecting human rights), Autonomy principle: (non-interference in personal choices of people) and Veracity principle (freedom from deceptive practices). They also emphasised that the law merely specifies the lowest common denominator of acceptable behaviour and that organisations should work more towards establishing harmony, congeniality and comfort for all in the society. 

In today’s socio-economic context, one can say that any act of a person, whether an individual, a professional or an organisation, can be declared ethical if it is driven by Pure (Unadulterated, Virgin) Knowledge, unquestionable nobility-guided righteousness and is driven by Totality of fairness to all concerned. When these three basic criteria are met, then it would automatically address total compliance to the laws of the land (legal norms), stipulations and/or statutory guidelines set by concerned governments, local or global or both as may be applicable and guards the genuine interests and/or requirements of the society, local or global or both, as may be applicable and the mankind as a whole without jeopardising the moral ethos of the societies concerned or the individuals involved in the process. Above all, the objective or cause behind an action should also be very fair and noble. For business establishments, the concept of fairness should primarily embrace direct (external) customers, the impacted society and/or social establishments, the workforce of the organisation, business investors, business establishments, the impacted environment (Local and Global).

But the excessive human greed induced by uncontrolled desire to acquire and enjoy more and more of, rather un-limited, earthly comforts does not allow people to stay ethical. Business establishments readily get inflected by unethical practices. Some of the more common reasons for such unethical thoughts and acts are following: 

a. Concealing an inevitable unholy activity arising from: 

  • lack of nobility of purpose
  • very stringent local
  • legal stipulations
  • impractical social accountability requirements of the region
  • very high safety requirements
  • non-availability of sincere, honest and skilled workforce, etc.  

b. Concealing the heinous act of taking-over the responsibility to dispose-off toxic and hazardous wastes from other bigger industries and disposing them off, locally, in different names and in different forms without concern for the safety of the local environment and the people around.  

  • Resorting to innovatively identified operation short-cuts to circumvent situations of execution limitations
  • Concealing the act of not addressing certain social obligations 
  • Pursuing partly-developed technology without regard to personal and environmental safety aspects
  • Participating in development of special hacking-programmes to steal the precious data of other organisations

c. Getting involved in the generation and disposal of huge quantities of lethal weapons and warfare equipment (which add to growing social imbalance across the society due to concentration of power in a few pockets) under cover of various technical jargons. 

None of these unholy activities could be pursued without the support of administrative and law enforcement and controlling authorities. Organisations would first buy their goodwill through monetary favours (hard cash or cash in-kind and/or service). Once this act is successfully carried out, they get full licence to continue perpetuating their unholy activities. Some of the broad categories of these unethical activities are given below. Each one of them manifests in its own unique way. In fact, human imagination is the only limitation for the manifestation of unethical practices. Some of the common forms of unethical practices are given below. Business establishments should learn to carefully recognise and identify all these forms of unethical activities and guard themselves against the same. 

Social offence – Influencing a change in society’s guarded and/or conventional practices, customs and traditions. 

Cultural Offence – Implanting a different culture and influencing a change in the prevailing culture.

Legal Offence – Bypassing legal requirements and statutory stipulations through different means, including misconceptions and misguidance. 

Socio-economic Offence –  Adversely impacting either immediate and/or long-term effects and/or both on social wellbeing through some actions like adverse impact on general health, community welfare, environment, etc. It is becoming a cause for the steady creation of a situation that forces society to spend more to maintain its normal health status. 

Environmental offence – Merciless usage and uncontrolled exploitation of all-natural resources is a standard form of environmental offence practiced by most organisations.  Such acts could deprive the posterity of their basic right to know about virgin Nature’s generosity.  It could also create a situation that might force them to take to voyages to other planets in search of materials to support their existence. 

Another critical area is the unabated burning of precious fossil fuels, which would cause environmental pollution. This, in turn, results in a frequent outbreak of newer health problems caused by newer and newer forms of micro-organisms (bacteria, virus, fungus, etc.) and results in high economic costs to the society and forces the scientists to keep continuously identifying newer and newer bio-active chemicals to fight these newer micro-organisms.

Intellectual Offence – The mischievous human mind keeps identifying innovatively newer ways and means to commit the intellectual offence. One very common form of intellectual offence is either offering a wrong interpretation or offering an interpretation that may not have any relevance to the context of data generation. Some people take to this route to convey certain pre-contemplated wrong messages. Pre-targeted intellectuals readily fall prey to such ill-conceived motifs and keep spreading those wrong messages. Focussing on partly developed knowledge and sharing only a small portion of specific knowledge with biased objectives is another intellectual offence. One more heinous intellectual offence is direct participation in developing new knowledge for dedicated use in anti-social activities. However, another form of intellectual offence is not acknowledging the source of knowledge but using the same for personal gains.

Biological offence – 

  • Meddling with nature’s bio-diversity and bio-sphere, 
  • Meddling with natural vegetative and other bio-species, 
  • Participating in biological warfare through spreading of certain harmful/dreadful viruses, microbes, weeds, macro- and micro-organisms, 
  • Introducing certain unknown weeds in places with wrong objectives, 
  • Subjecting living species for experimentation. 

Pressure groups – 

  • Political groups that have sufficient muscle power and money power to put pressure on the public to leverage their specific interests, 
  • Social groups/societies that have sufficient muscle power and money power to put pressure on the public for a cause which the group conceives and believes right for some leveraging purposes.

Faith groups – 

  • Religious faith groups that can exert some influence on People in moulding their thought processes or collective behaviour/attitude, 
  • Forming collective groups to propagate certain cults or beliefs, 
  • Fanaticism/terrorism practised by some hardcore elements and faith groups can exert a forceful and/or harmful impact on people.

Pseudo-service groups – Private and/or public societies configured to collectively leverage pre-meditated selfish motives under the guise of service to society.

Dr. H. C. Mruthyunjaya, PHI Learning author is a Consultant (Corporate Systems). Dr. Mruthyunjaya was formerly a research scientist in Indian Institute of Science (IISc), Bangalore. He has over 35 years of professional experience in the fields of R&D, technology and knowledge management. He has authored two books in the fields of R&D and quality management.Author of  over 50 review articles in various fields of Quality Management and Business Management including invitation articles on Technology Management and Knowledge Management

PHI’s book Business Ethics and Value Systems by Dr. Mruthyunjaya deals with some fundamental issues associated with business ethics and value systems. It presents the views of different schools of thought on this subject and dissects the phenomenon of corruption to expose its root causes.

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