Why ethical problem
occurs in business
Personal gain and selfish interest
Competitive pressure on profits
Conflicts of interest
Cross-cultural contradictions
Lack of transparency and accountability in
public/pvt. Sector
Poor regulation of political contributions
Why ethical problem
occurs in business
Low public sector wages
Weak enforcement of laws and regulations
Lack of free and independent media
Excessive discretionary authority of public officials
Ethical problems
occurred in India
CASE1-Ethical Issues of KFC
KFC entered India in 1995 and has been in midst of controversies since then.
The regulatory authorities found that KFC's chickens did not adhere to the
Prevention of Food Adulteration Act, 1954. Chickens contained nearly three times
more monosodium glutamate (popularly known as MSG, a flavour enhancing
ingredient) as allowed by the Act.
Since the late 1990s, KFC faced severe protests by People for Ethical Treatment of
Animals (PETA), an animal rights protection organization.
PETA accused KFC of cruelty towards chickens and released a video tape showing
the ill-treatment of birds in KFC's poultry farms.
However, undeterred by the protests by PETA and other animal rights
organizations, KFC planned a massive expansion program in India
Ethical problems occurred in India
WHAT ARE THE ISSUES KFC MUST HAVE STUDIED BEFORE?
[Link] the significance of cultural, economic,
regulatory and ecological issues while establishing business in a
foreign country
[Link] the need for protecting animal rights in
developed and developing countries like India
[Link] the importance of ethics in doing
business
[Link] the reasons for protests of PETA
[Link] solutions for KFC's problems in India
LETTER WRITTEN BY RAMALINGAN
SATYAM SCAM
“It was like riding a tiger, not
knowing how to get off without
being eater,” while referring to the
widening gap between the real and
artificial numbers in the company’s
books”.
Managing Ethical Behaviour at workplace
Why to follow ethical behaviour
To meet demands of business stakeholders
About three-fourths of employees surveyed in 2007 believe their
firms are considering the environment, employee well-being, and
the interests of society and the community.
Meeting demands of stakeholders is good business
To enhance business performance
Research shows linkage between ethically responsible
behavior and favorable corporate financial performance
Imparts trust, promoting positive alliances among
business partners
To comply with legal requirements
– Two legal requirements provide direction for companies
interested in being more ethical in their business operation
To prevent or minimize harm
Overriding principle that business should “do no harm”
Examples include not harming society with toxic
waste, protecting business from unethical employees
and unethical competitors
To promote personal morality
Knowing one works in a supportive ethical climate
contributes to sense of psychological security
People want to work for companies that do the right
thing
Indian companies followed ethical behaviour
Indian companies followed unethical behaviour
Managing ethical behaviour at workplace
1. Develop a workplace policy based on your company’s
philosophy, mission statement and code of conduct.
2. Incorporate the policy into your performance alert
them to their responsibilities to uphold professional
standards throughout their job performance and
interaction with peers and supervisors.
3. Revise your employee handbook to include the policy
and provide copies of the revised handbook to
employees. Obtain signed acknowledgement forms
from employees that indicate they received and
understand the workplace ethics policy.
Managing ethical behaviour at workplace
4..Provide workplace ethics training to employees.
Utilize varied instruction methods to engage employees
in learning how to address and resolve ethical dilemmas.
[Link] learning, or role-play, is an effective way
to facilitate workplace ethics training.
[Link] ethics simulations involve scenarios about
the misappropriation of company funds, personal values
related to improper workplace relationships and the
organization’s compliance with regulatory controls.
Managing ethical behaviour at workplace
[Link] an neutral authority in charge of handling
employees’ informal concerns pertaining to workplace
ethics.
[Link] hotlines are an effective way to assure
employees’ anonymity, which is a concern for employees
whose alerts are considered “whistleblowing” actions.
[Link] from making employment decisions, such as
termination or suspension, in connection with
whistleblowing or an employee’s right to protected
activity under whistleblowing laws or public policy.
[Link] legal advice for employee reports of workplace ethics issues
that increase your organization’s liability under federal, state or municipal
employment law.
[Link] your workplace policy consistently when addressing workplace
issues and employee concerns about workplace ethics.
[Link] the same business principles in every circumstance, regardless of
the perceived seriousness or the level of employees involved.
Communicate the same expectations for all employees – whether they
are in executive positions or front-line production roles – and approach
every issue with equal interpretation of the company policy.
• To meet demands of business stakeholders
• To prevent or minimize harm
• To comply with legal requirements
• To prevent or minimize harm
• To promote personal morality
• Develop a workplace policy
• Incorporate the policy into your performance
• Revise your employee handbook
• Provide workplace ethics training to employees.
• Experiential learning, or role-play,
• Experiential learning, or role-play,
• Designate an neutral authority in charge
• Confidential hotlines
• Refrain from making employment decisions
• .Apply your workplace policy consistently
