Podcast
Questions and Answers
What is a common opinion held by some CEOs?
What is a common opinion held by some CEOs?
- Ethics is the only imperative for corporate management.
- Increasing market capitalization is not important.
- The end justifies the means. (correct)
- Profit is the only yardstick of efficiency.
What is a consequence of a corporation behaving ethically?
What is a consequence of a corporation behaving ethically?
- Suppliers are not affected by ethical behavior.
- Only customers are affected by ethical behavior.
- Loyalty, quality, and productivity from employees increase. (correct)
- Loyalty and quality from employees decrease.
What is an example of a company that has benefited from ethical practices?
What is an example of a company that has benefited from ethical practices?
- WorldCom
- Infosys (correct)
- Tata Steel (correct)
- Enron
What is an outcome of running a business ethically?
What is an outcome of running a business ethically?
What happens when a corporation exercises care in meeting responsibilities to employees?
What happens when a corporation exercises care in meeting responsibilities to employees?
What is a characteristic of organizations that work on synergy and delegation?
What is a characteristic of organizations that work on synergy and delegation?
Why do employees behave ethically when treated ethically?
Why do employees behave ethically when treated ethically?
What is a consequence of applying ethics in business?
What is a consequence of applying ethics in business?
What is corporate governance defined as by the Phoenix School of Management?
What is corporate governance defined as by the Phoenix School of Management?
What is a critical aspect of corporate governance in a public company?
What is a critical aspect of corporate governance in a public company?
Who bears a special responsibility for promoting integrity throughout an organization?
Who bears a special responsibility for promoting integrity throughout an organization?
What is a key principle of corporate governance?
What is a key principle of corporate governance?
What is a characteristic of a well-governed company?
What is a characteristic of a well-governed company?
What is a goal of corporate governance?
What is a goal of corporate governance?
What does corporate governance involve?
What does corporate governance involve?
Why is transparency important in corporate governance?
Why is transparency important in corporate governance?
What is the essence of ethics in a profession?
What is the essence of ethics in a profession?
What is the consequence of not practicing basic principles of integrity in business?
What is the consequence of not practicing basic principles of integrity in business?
What is the purpose of transparency in business operations?
What is the purpose of transparency in business operations?
What are business ethics related to?
What are business ethics related to?
What is the relationship between values and ethics?
What is the relationship between values and ethics?
What is a value?
What is a value?
Where do individuals imbibe their personal values from?
Where do individuals imbibe their personal values from?
What is the consequence of having a benign attitude to welfare in an organization?
What is the consequence of having a benign attitude to welfare in an organization?
What is a key distinction between ethics and religion?
What is a key distinction between ethics and religion?
What is the focus of business ethics?
What is the focus of business ethics?
What is a key characteristic that business managers should possess?
What is a key characteristic that business managers should possess?
What is a significant change in the business environment in recent times?
What is a significant change in the business environment in recent times?
What is a key factor that contributes to a business organization's success in the global market?
What is a key factor that contributes to a business organization's success in the global market?
What is the emphasis of business ethics in today's world?
What is the emphasis of business ethics in today's world?
What is the primary concern of good corporate governance?
What is the primary concern of good corporate governance?
What is the consequence of prioritizing shareholders' interests over environmental laws?
What is the consequence of prioritizing shareholders' interests over environmental laws?
What is the most effective way to promote ethical conduct in corporate governance?
What is the most effective way to promote ethical conduct in corporate governance?
What is the purpose of disclosing directors' interests in contracts?
What is the purpose of disclosing directors' interests in contracts?
What is the limitation of statutory provisions in ensuring corporate governance?
What is the limitation of statutory provisions in ensuring corporate governance?
What is the role of auditors in corporate governance?
What is the role of auditors in corporate governance?
What is the consequence of weak regulatory frameworks in corporate governance?
What is the consequence of weak regulatory frameworks in corporate governance?
What is the primary responsibility of the board and top management in corporate governance?
What is the primary responsibility of the board and top management in corporate governance?
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Study Notes
Constraints to Ethical Practices
- Choosing an ethical alternative and benefiting from it may take time, which can be a constraint.
- Some CEOs prioritize profit and market capitalization over ethics, believing that the end justifies the means.
Benefits of Ethical Practices
- Companies that follow ethical practices can double their profits and show increased market capitalization.
- Examples of successful companies that follow ethical practices include Tata Steel and Infosys in India.
Importance of Ethics in Business
- Running a business ethically is good for sustaining business and makes sense.
- Ethical behavior prompts other business associates to behave ethically as well.
- Honesty, integrity, and transparency are the touchstones of business ethics.
Corporate Governance
- Corporate governance refers to a set of policies and procedures that guide a company's affairs and relationships with stakeholders.
- It involves codes, rules, and structures to direct and control business and non-business organizations.
- Transparency, integrity, full disclosure of financial and non-financial information, and protection of stakeholders' interests are essential aspects of corporate governance.
Ethical Practices in Corporate Governance
- Good corporate governance should consider all stakeholders, not just shareholders.
- Corporate governance should come from within and not be imposed by regulators.
- There should be statutory provisions for enforcing ethical conduct, but companies should also go beyond these rules to serve stakeholders.
- Members of the board and top management should ensure that ethical practices are followed both in letter and in spirit.
Ethics and Business
- Ethics involves systemizing, defending, and recommending concepts of right and wrong behavior.
- Ethics is different from religion, law, cultural traits, and feelings, and is not a science.
- Business ethics is the application of ethical principles of integrity and fairness, and concentrates on the benefits to all stakeholders.
- Business managers should have integrity, impartiality, and responsiveness to public interest, accountability, and honesty.
Development of Business Ethics
- Ethics was part of theological discussion before 1960.
- Later, writers like Raymond Baumbart, Richard T. De George, and others contributed to the development of business ethics.
- Academic pursuits, the Church, B-schools, and consumer movement also added to the development of business ethics.
Globalization and Business Ethics
- In today's world, business is synonymous with ethical business.
- With globalization, business organizations have to compete for a share in the global market on their own internal strength, particularly on the strength of their human resource, and on the good-will of their stakeholders.
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