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BBBBBUUUUUSSSSSIIIIINNNNNEEEEESSSSSSSSSS EEEEETTTTTHHHHHIIIIICCCCCSSSSS AAAAANNNNNDDDDD CCCCCOOOOORRRRRPPPPPOOOOORRRRRAAAAATTTTTEEEEE GGGGGOOOOOVVVVVEEEEERRRRRNNNNNAAAAANNNNNCCCCCEEEEE 102 III 22/101 VII 33 D.D.C.E. Education for All UTKAL UNIVERSITY Directorate of Distance & Continuing Education Bhubaneswar Reprint 2009 Copyright © Vikas® Publishing House Pvt Ltd, 2007 All rights reserved. No part of this publication which is material protected by this copyright notice may be reproduced or transmitted or utilized or stored in any form or by any means now known or hereinafter invented, electronic, digital or mechanical, including photocopying, scanning, recording or by any information storage or retrieval system, without prior written permission from the Publisher. Information contained in this book has been published by VIKAS® Publishing House Pvt. Ltd. and has been obtained by its Authors from sources believed to be reliable and are correct to the best of their knowledge. However, the Publisher and its Authors shall in no event be liable for any errors, omissions or damages arising out of use of this information and specifically disclaim any implied warranties or merchantability or fitness for any particular use. Vikas® is the registered trademark of Vikas® Publishing House Pvt. Ltd. VIKAS® PUBLISHING HOUSE PVT LTD A-22, Sector-4, Noida - 201301 (UP) Phone: 0120-4078900 • Fax: 0120-4078999 Regd. Office: 576, Masjid Road, Jangpura, New Delhi 110 014 • Website: www.vikaspublishing.com • Email: [email protected] D.D.C.E. Education for All ABOUT THE UNIVERSITY Founded in 1943, Utkal University is the 17th University of the country and the first of Orissa. It is the result of the efforts of Pandit Nilakantha Dash, Maharaja Krushna Chandra Gajapati, Pandit Godavarish Mishra and many others who envisioned a progressive education system for modern Orissa. The University started functioning on 27 November 1943, at Ravenshaw College, Cuttack. It originated as an affiliating and examining body but shifted to its present campus spread over 400 acres of land at Vanivihar in Bhubaneswar, in 1962. A number of Postgraduate Departments and other centres were established in the University campus. There are presently more than two hundred general affiliated colleges under the University. It has eleven autonomous colleges under its jurisdiction, twenty-eight constituent postgraduate departments, 2 constituent law colleges and a Directorate of Distance & Continuing Education. It boasts of a centre for Population Studies, a School of Women’s Studies, an Academic Staff College, a pre-school and a high school. The University also offers a number of self-financing courses. NAAC accredited since 2003, with B++ status and a score little over 80%, Utkal University is recognized by the UGC. It is a member of the Indian Association of Universities and the Commonwealth Association of Universities. DIRECTORATE OF DISTANCE & CONTINUING EDUCATION UTKAL UNIVERSITY : VANI VIHAR BHUBANESWAR:-751007. From the Director’s Desk The Directorate of Distance & Continuing Education, originally established as the University Evening College way back in 1962 has travelled a long way in the last 52 years. ‘EDUCATION FOR ALL’ is our motto. Increasingly the Open and Distance Learning institutions are aspiring to provide education for anyone, anytime and anywhere. DDCE, Utkal University has been constantly striving to rise up to the challenges of Open Distance Learning system. Nearly ninety thousand students have passed through the portals of this great temple of learning. We may not have numerous great tales of outstanding academic achievements but we have great tales of success in life, of recovering lost opportunities, tremendous satisfaction in life, turning points in career and those who feel that without us they would not be where they are today. There are also flashes when our students figure in best ten in their honours subjects. In 2014 we have as many as fifteen students within top ten of honours merit list of Education, Sanskrit, English and Public Administration, Accounting and Management Honours. Our students must be free from despair and negative attitude. They must be enthusiastic, full of energy and confident of their future. To meet the needs of quality enhancement and to address the quality concerns of our stake holders over the years, we are switching over to self instructional material printed courseware. Now we have entered into public private partnership to bring out quality SIM pattern courseware. Leading publishers have come forward to share their expertise with us. A number of reputed authors have now prepared the course ware. Self Instructional Material in printed book format continues to be the core learning material for distance learners. We are sure that students would go beyond the course ware provided by us. We are aware that most of you are working and have also family responsibility. Please remember that only a busy person has time for everything and a lazy person has none. We are sure you will be able to chalk out a well planned programme to study the courseware. By choosing to pursue a course in distance mode, you have made a commitment for self improvement and acquiring higher educational qualification. You should rise up to your commitment. Every student must go beyond the standard books and self instructional course material. You should read number of books and use ICT learning resources like the internet, television and radio programmes etc. As only limited number of classes will be held, a student should come to the personal contact programme well prepared. The PCP should be used for clarification of doubt and counseling. This can only happen if you read the course material before PCP. You can always mail your feedback on the course ware to us. It is very important that you discuss the contents of the course materials with other fellow learners. We wish you happy reading. (S.P. Pani) DIRECTOR UTKAL UNIVERSITY SYLLABI-BOOK MAPPING TABLE Business Ethics and Corporate Governance Syllabi Mapping in Book Unit-I Ethics and Business Ethics, Concepts Values and Ethics. Unit 1: Introduction to Ethics (Pages 3-25) Unit-II Ethical Corporate Behaviour, Its Development, Ethical Unit 2: Organizational Ethics Leadership. (Pages 27-40) Unit-III Ethical Decision-making, Ethical Dilemmas in Organization, Unit 3: Ethical Decisions (Pages 41-111) Social Responsibility of Business and Corporate Governance. Unit-IV Ethic in Functional Area, Marketing, Finance, Human Resource Unit 4: Ethical Issues in the Functional and Information Technology. Area (Pages 113-131) Unit-V Environmental Ethics, Corruption and Gender Issues—Gender Unit 5: Environmental Ethics, Corruption Ethics, Sexual Harassment and Discrimination. and Gender Issues (Pages 133-141) CONTENTS INTRODUCTION 1 UNIT 1 INTRODUCTION TO ETHICS 3-25 1.0 Introduction 1.1 Unit Objectives 1.2 Ethics and Business Ethics 1.3 Ethical Concepts 1.4 Ethical Values 1.5 Business Ethics 1.6 Summary 1.7 Answers to ‘Check Your Progress’ 1.8 Exercises and Questions 1.9 Further Reading UNIT 2 ORGANIZATIONAL ETHICS 27-40 2.0 Introduction 2.1 Unit Objectives 2.2 Ethical Corporate Behaviour 2.3 Development of Ethical Corporate Behaviour 2.4 Ethical Leadership 2.5 Summary 2.6 Answers to ‘Check Your Progress’ 2.7 Exercises and Questions 2.8 Further Reading UNIT 3 ETHICAL DECISIONS 41-111 3.0 Introduction 3.1 Unit Objectives 3.2 Ethical Decision Making 3.3 Ethical Dilemmas in Organization 3.4 Social Responsibility of Business 3.5 Corporate Governance 3.6 Summary 3.7 Answers to ‘Check Your Progress’ 3.8 Exercises and Questions 3.9 Further Reading UNIT 4 ETHICAL ISSUES IN THE FUNCTIONAL AREA 113-131 4.0 Introduction 4.1 Unit Objectives 4.2 Ethics in the Functional Area 4.3 Ethics in Marketing 4.4 Ethics in Finance 4.5 HR and Information Technology 4.6 Summary 4.7 Answers to ‘Check Your Progress’ 4.8 exercises and Questions 4.9 Further Reading UNIT 5 ENVIRONMENTAL ETHICS, CORRUPTION AND GENDER ISSUES 133-141 5.0 Introduction 5.1 Unit Objectives 5.2 Environmental Ethics 5.3 Corruption 5.4 Gender Ethics 5.5 Sexual Harassment and Discrimination 5.6 Summary 5.7 Answers to ‘Check Your Progress’ 5.8 Exercises and Questions; 5.9 Further Reading INTRODUCTION Introduction For a very long time, there has been a real and a significant need for a good textbook on NOTES business ethics and corporate governance. This textbook covers the issues related to corporate governance, business ethics, risk management and ethical decisions. It tries to answer questions like, • What is corporate governance? • What is ethics and business ethics? • How is risk managed in corporate governance? This textbook is primarily intended for students of management in undergraduate, graduate and diploma courses in universities and colleges. However, we know that many such students are already managers anyway, who are undertaking part-time and distance education programmes of study. Hence, this book is written with the manager and the potential manager in mind. When we look at the general scenario of Continuing Education in our country, we see that there is a tremendous potential and opportunity for providing flexible forms of learning, that complement the professional practices of managers and executives. For instance, when the learning has to be implanted by stand-alone resources (such as this textbook), one has to devise innovative means of imparting knowledge and skills. We have attempted to do precisely this: by presenting the learning material through a content exposition approach. In this approach, we begin with an introduction to the topic of the unit; then, we outline the learning objectives of the unit; and then we present the details of the contents in simple and easy-to-learn manner. At the end of each unit, we have a summary for quick recollection. Finally, we have carefully posed review questions to check your progress as you complete each unit of learning. Obviously, how well a job we have done will be determined by you, the reader, as you go through the materials herein. We would be most grateful for critical comments and constructive suggestions to continually improve and refine the learning resources and educational value of this textbook. How This Book Is Organized This book is divided into five units: Unit 1 This unit explains the ethical concepts and its different models. It also explains the different ethical theories and role of ethical actions in organizations. In addition, this unit defines the concept of social responsibility. Unit 2 This unit discuss ethical behaviour as applicable to organizations. It also explains the significance of ethical leadership. Self-Instructional Material 1 Introduction Unit 3 This unit discuss the process of decision-making in organizations and the decision making models. It also discusses the ethical dilemmas faced by organizations and the social responsibility of business. NOTES Unit 4 This unit deals with ethics in the areas of marketing, finance, human resource management, and information technology. Unit 5 This unit gives a general overview of ethical issues in relation to the environment. It generally discusses the issues of corruption, gender ethics and sexual harassment. 2 Self-Instructional Material