BUSINESS ETHICS: LEARNINGS FROM TOPIC READINGS

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Accordingly to the article, a myth that often clouded business thinking is that business and ethics do not mix. People in business are concerned with profits, with producing goods and services, with buying and selling. The economic system thought by some to be value -free.

They may not be immoral, but they are amoral that is not concerned with morals. Moralizing is out of place in business. Indeed, even good acts are to be praised not in moral terms but only in the cost/benefit language of "good business".

The myth of amoral business has a corollary that makes ethical paralysis almost inevitable. It is the dog-cat-dog rhetoric of the Darwinian Jungle 'survival of the fittest'.

Those who say that morality and business do not mix or are antithetical or business is amoral are at a wrong side. Because if everyone in business buyers, sellers, producers, management, workers and consumers acted amorally or even immorally then business would soon come to a halt. Business generally values its reputation. Business constitutes a very important part of the society. "Business is something which is not separate from society or imposed upon society rather it is an integral part of society and its activities.

Therefore business must have some social responsibility. By being socially responsible business could gain better public interest. Business must take a long run or enlighten, view of self-interest and help solve social problems.

Reading 2: A Conflict Case Approach to Business Ethics

Departing from frequent use of moral conflict cases in business ethics teaching and research, the paper suggests an elaboration of a moral conflict approach within business ethics, both conceptually and philosophically. The philosophical elaboration presents casuistry as a kind of practical, inductive argumentation with a focus on paradigmatic examples.

One standard definition of casuistry can be found in the Oxford English Dictionary: "Casuistry is that part of ethics which resolves cases of conscience, applying the general rules of religion and morality to particular instances in which circumstances alter cases or in which there appears to be a conflict of duties"

Casuistry has more or less implicit theoretical assumptions. Most important, perhaps, is the assumption of inductive reasoning. Moral decision making should be organized bottom up rather than top down, or with the words of Buchholz and Rosenthal claiming that "a sense of moral lightness comes not from indoctrination of abstract principles but from attunement to the way in which moral beliefs and practices must be rooted naturally in the very conditions of human existence." Beyond their main thesis that classical American Pragmatism could link principle and case approaches they show that moral reasoning demands a return to concrete situations as the very foundation for context-sensitive moral decision making. Casuistry is, essentially, a practical procedure for moral conflict management.

Reference readings

Book name/Journal

Author

Article Title/Chapter Title

Publication

Volume, Year

Page

Business Ethics

R.T.George

Ethics and Business

Macmillan Publishing

1982

Pg 1-18

Journal of Business Ethics

Johannes Brinkmann and Knut J. Ims

A Conflict Case Approach to Business Ethics

Springer Netherlands

Volume 53, Numbers 1-2 / August, 2004

123-136

Topic 2: Role of Individuals in upholding the Ethical values of the Organization

Reading 1: How Strong Are the Ethical Preferences of Senior Business Executives?

The Role of Senior executives and their Ethical preference

The article investigated the preferences for a selected set of 14 principles of ethical conduct, using a large sample of senior business executives in the United States. The executives were asked in a survey how much they agreed or disagreed with each of these principles as ethical guides in their own lives, as well as how they perceived the conduct of other executives in terms of the same principles.

Learnings from the study:

Executives consider the Golden Rule as the most favorable (mean of 6.22) and Might-Equals-Right Ethic the least (mean of 1.68).

Business executives, as individuals, believed that other executives were significantly less principled in their ethical conduct

Description of principles

The Golden Rule: Do unto others as you would have them do unto you. It includes not knowingly doing harm to others.

The Might-Equals-Right Ethic: Justice is defined as the interest of the stronger. What is ethical is what an individual has the strength and power to accomplish. Seize what advantage you are strong enough to take without respect to ordinary social conventions and laws.

Reading 2: Reasons to Be Ethical: Self-Interest and Ethical Business

The reading emphasized that the organizations need ethical managers to uphold the rising public expectations of morality in business. It attempts to explore the relationship between self-interest and ethical business practices through an examination of different sorts of prudential reasons for behaving ethically, some of them stated below

One which says that while it is possible and even probable that ethics pays for businesses in general over the long term, it will not for individual businesses on particular occasions

Those who do the right thing for the right reason can be relied upon to do that thing even at some cost to themselves. In contrast, those who act from ulterior motives will cease to do the right thing when it no longer accords with that self-serving reason.

It is the ability of campaigning groups to damage the self-esteem of (senior) managers by spreading a view of them as moral miscreants: people who have led the businesses they control into wrongdoing.

Reference readings

Book name/Journal

Author

Article Title/Chapter Title

Publication

Volume, Year

Page

Journal of Business Ethics

T. K. Das

How Strong Are the Ethical Preferences of Senior Business Executives?

Springer Netherlands

Vol. 56, No. 1 (Jan., 2005)

69-80

Journal of Business Ethics

John Kaler

Reasons to Be Ethical: Self-Interest and Ethical Business

Springer Netherlands

Vol. 27, No. 1/2, Sept 2000

161-173

Topic 3: The influence of the Ethical values of an organization on formulating the Company's Strategy

Reading 1: Is It Ethical to Use Ethics as Strategy?

Strategy, according to military science, is an unambiguous term. Strategy is the science and art of winning at war. Corporate Strategy however has come to be attributed with ecological disaster, product defects, bribery, windfall profits, or many other countless ills.

Increasingly research in the field of business and society suggests that ethics and corporate social responsibility can be profitable. Yet this work raises a troubling question: Is it ethical to use ethics and social responsibility in a strategic way? Is it possible to be ethical or socially responsible for the wrong reason?

Efforts need to be made to make corporate strategy as an instrument of social effectiveness and how well the practice of Corporate Strategy contributes to social welfare. The Harvard Business School model has always included among its four key elements of strategy formulation "corporate social responsibility."

From a utilitarian perspective, although ethics can create a monopoly position for a given firm, it does not prevent any other firm from developing the same kind of monopoly with respect to a given social project.

The deontological approach questions the motives of ethics-based and social strategy as inherently self-interested and not based on a sense of duty. Yet social strategy emerges from a sense of the conflicting duties that managers owe to both asset owners as well as other stakeholders. Social strategy is only a tool to comply with conflicting duties and is not itself a motivation.

Reading 2: Corporate Social Performance as a Business Strategy

Ethics-based social strategies embrace a large number of approaches that relate the firm to its social environment. Ethical problems in management "represent a conflict between an organization's economic performance (measured by revenues, costs, and profits) and its social performance (stated in terms of obligations to person both within and outside the organization)."

Therefore when companies become involved in social problems, they begin to make decisions that may not be in the best interests of society as a whole. Only freely elected representatives should be involved in decisions that affect the public interest. For example, in many countries corporate philanthropy is tax deductible. Instead of directing resources to areas that will most benefit the public good through government, tax-deductible philanthropy allows the firm to decide where to direct those resources in terms of its own interests.

Given the fact that these strategies must produce value for the firm, corporations tend to be conservative and direct funds toward popular and politically correct causes. Controversial causes do not receive support. Estimates are that 80% of corporate philanthropy is directed toward "safe issues". For example, AIDS has been long neglected by government, science, and business because of its relationship to the, for some, politically unpopular topic of homosexuality

There have been cases where Corporate Social performance (CSP) is being used as Business Strategy. Overall we find that there are various positive and negative effects of CSP on the competitiveness of organizations.

On the positive side, CSP can lead to improved stakeholder relationships, enhance corporate reputation, and strengthen the business model of the firm.

On the negative side, CSP can lead to reputation damage, misunderstandings and wrong perceptions.

Social and ethics-based strategies provide new and exciting opportunities to re-conceptualize the role of the firm in society. Certainly, such strategies are not without pitfalls, but they have the potential of increasing overall social welfare.

Reference readings

Book name/Journal

Author

Article Title/Chapter Title

Publication

Volume, Year

Page

Journal of Business Ethics

Bryan W. Husted, David B. Allen

Is It Ethical to Use Ethics as Strategy?

Springer Netherlands

Vol. 27, No. 1/2, Sept 2000

21-31

Journal of Business Ethics

Nikolay A. Dentchev

Corporate Social Performance as a Business Strategy

Springer Netherlands

Vol. 55, No. 4 (Dec., 2004)

397-412

Topic 4: Ethics in Marketing

Reading 1: A Paradigm for Development and Promulgation of a Global Code of Marketing Ethics

With regard to marketing, the general public perception is that within business, marketing is the area most prone to unethical practices. This is due to the fact that "... marketing is closest to the public view and, consequently, is subject to considerable societal analysis and scrutiny"

Also as more and more firms move into multinational marketing, ethical issues tend to increase." These issues have brought the role of multinational corporations to the forefront. Multinational corporations (MNCs) must have a code of conduct uniform across all the subsidiaries in different nations.

The rationale for this being those individual morals that address fundamental human rights and those that guide their ethical decision making tend to be similar in any nation. Also the major advantage for such a global code of marketing ethics is the consistency in the firms' actions when faced with different ethical dilemmas

Example of Ethical Marketing Practices:

One should not manipulate the availability of a product for the purpose of exploitation.

Coercion should not be used within the marketing channel.

Undue influence should not be exerted over the resellers choice to handle a product.

One should not engage in price fixing.

Predatory pricing should not be practiced.

Information regarding all substantial risks associated with product or service usage should be disclosed.

Any product component substitution that might materially change the product or impact the buyers purchase decision should be disclosed.

Products and services offered should be safe and fit for their intended uses.

Communications about products and services offered should not be deceptive.

False and misleading advertising should be avoided.

Sales promotions that use deception or manipulation should be avoided.

Reading 2: A content analysis of ethical policy statements regarding marketing activities

Many large corporations have published codes of business/marketing ethics. The focus of this article was to investigate the content of codes of ethics as prepared by Fortune 500 corporations.

In order to determine the written ethics policies of Fortune 500 firms, a letter (on university letterhead) was mailed to the CEO of each firm. The letter asked each CEO to send a copy of their firm's ethics policy to the researchers in a postage-paid return envelope which was provided. Out of the total of 500 letters that were mailed, 67 usable responses were generated.

Results

Of the 67 ethical policy statements that were received, 7 were considered to be excellent (very comprehensive and specific), 11 were very brief (in some cases one page), while the majority (49) had reasonably good coverage of most topics. It is inter esting to note that the misuse of funds/improper accounting was mentioned most often (66%) in the ethical policies examined, when in actuality such activity is illegal

Conflicts of interest were covered in a majority of the policy statements, and in some instances hypothetical cases were provided in order to aid employees regarding the application of the policy. Outside interests (i.e. employment and investments) which conflict with company interests were outlined specifically in most cases. Loyalty was described as an essential duty owed by an employee to the company, and the importance of being free from any outside influence was normally demonstrated in no uncertain terms. Most required employees who were even contemplating the creation of an interest which might conflict (or even appear to conflict) with company interests to notify the appropriate superior to record and determine if the activity is improper. In cases where it is decided that a relationship might prejudice company interests, the employee must eliminate the outside interest or terminate as an employee.

About half of the sample (48%) dealt with the topic of bribes and kickbacks. While such payoffs may be common or customary in some foreign environments, none of the firms in this sample condoned such behavior. The message was that we should not compromise our own marketing ethics to blend with another ethical culture. The best response to requests for bribes/kickbacks is to sell a good product at a fair price, and ultimately most people will like doing business with an ethical company. Beyond the topics which received good coverage in the ethical policy statements, it is interesting to note the topics which were not covered by a large percentage of the firms. Only 18% of the firms provided specific guidance with regard to advertising/promotion/PR. Those that did cover the topic often stated that advertising should present the qualities and advantages of a product truthfully and with good taste.

Reference readings

Book name/Journal

Author

Article Title/Chapter Title

Publication

Volume, Year

Page

Journal of Business Ethics

Kumar C. Rallapalli

A Paradigm for Development and Promulgation of a Global Code of Marketing Ethics

Springer Netherlands

Volume 18, Number 1 / January, 1999

125-137

Journal of Business Ethics

Robert E. Hite, Joseph A. Bellizzi and Cynthia Fraser

A content analysis of ethical policy statements regarding marketing activities

Springer Netherlands

Volume 7, Number 10 / October, 1988

771-776

Topic 5: Ethics in Advertising

Reading 1: Truth and Advertising

Advertising is not in itself immoral. The main purpose of advertising was once the introduction of something new or of some valuable improvement to an existing service or product. This has changed drastically and today's ads are there mainly to convince consumers to buy this from one seller rather than that from another, or to buy when there is not a need to buy at all. It consistently applies mind capturing pressures to convince of the necessity to own.

There has been an escalating and prolonged competition between companies doing business with their many products and varieties. The fight to get the consumer has become quite fierce - towards the shopper. In trying to outdo each other, commercial advertising has been expanded in frequency, ingenuity, intensity, and shrewdness. In recent years misleading ads have become quite common in merchandising.

The companies are using coercion and manipulation tactics in their advertising. Coercion involves force or the threat of force, either physical or psychological. Manipulation does not use force but involves playing upon a person's will by trickery or by devious, unfair or insidious means. Both take unfair advantage of a person and the use of either renders a transaction between the two parties an unfair of unjust one. Coercion and manipulation in advertising are therefore immoral

It is discouraging to see what some of the industry has become ethically, and how they are treating families and society in general. Business is overpowering consumers and looking to the future by attracting children to their wares with toys, tasteless commercials and shock appeal. The big players are showing how it's done professionally and successfully with expanding global profits. Unfortunately there are increasing adverse effects on our physical and mental well-being and the lowering of our social values in the process.

Reading 2: A Model of the Effects of Self-efficacy on the Perceived Ethicality and Performance of Fear Appeals in Advertising

The primary purpose of this study was to better understand the effects of consumers' perceived self-efficacy on their perceptions of the ethicality of a fear appeal and subsequent attitudes towards the ad, the brand, and purchase intentions. In this study, a total of 305 consumer responses were investigated to determine attitudes toward a fear appeal ad.

Result

The results of this study indicate that the use of strong fear appeals may not be perceived as unethical if consumers feel self-efficacious regarding the ad's recommended coping response. In other words, if the consumer feels he/she can use the product to effectively eliminate the threat posed by the ad, the ad is more likely to be perceived as ethical

Reference readings

Book name/Journal

Author

Article Title/Chapter Title

Publication

Volume, Year

Page

Business Ethics

R.T.George

Truth and Advertising

Macmillan Publishing

1982

Pg 185-201

Journal of Business Ethics

Robin L. Snipes, Michael S. LaTour and Sara J. Bliss

A Model of the Effects of Self-efficacy on the Perceived Ethicality and Performance of Fear Appeals in Advertising

Springer Netherlands

Volume 19, Number 3 / April, 1999

273-285

Topic 6: Ethical issues in Market Research

Reading 1: Use and Misuse of Quantitative Methods in Market Research

&

Reading 2: An Integrated Model for Ethical Decisions in Marketing Research

COMBINED LEARNING FROM THE READINGS

The following are the predominant ethical issues encountered in the Market Research Industry

Incomplete reporting : As the name implies, whenever a client firm, or researcher does not reveal the research results in their entirety, incomplete reporting has occurred.

Misleading reporting: This refers to the distortion of information. By distortion, it is meant that although the information presented to the public is correct, it leaves the public with an erroneous impression. For example, let's suppose a research project attempts to find out which brand of toothpaste is preferred by most dentists, and arrives at the following results: 90% of dentists surveyed express no preference, 5% prefer Brand A, 3% Brand B, and 2% prefer some brand other than A or B. If the client firm, which manufactures Brand A tooth paste claims in its advertising that more dentists prefer Brand A than any other toothpaste - this is misleading. Not because it is necessarily untrue, but because it leaves the public with the inaccurate conclusion that an overwhelming majority of dentists prefer Brand A, when in fact the majority of the dentists expressed no preference.

Conducting a survey as a guise to sell products ("sugging") or raise funds ("frugging"), and the invasion of the privacy of the respondent.

When a researcher submits a proposal to a prospective client, he/she should be confident in the knowledge that the client is seriously considering employing him/her to conduct the research project. Furthermore, the researcher should be secure in the knowledge that, should the potential client decide to employ another researcher, the client will not attempt to use the proposal to their advantage by turning it over to another firm to execute, thereby saving themselves money, and thus avoiding paying a firm for the development of a marketing research plan.

Following along the lines of improper solicitation, a researcher also has the right to expect that any research techniques that are proprietary or original to the researcher will not be revealed to other researchers or firms. This also means that the client firm should refrain from using such techniques for their own future use - even if the technique was used in a project previously commissioned from the researcher in question - without the express permission of the researcher who developed the technique.

This means that the client firm should not twist or distort the research findings to their own benefit at the expense of the researcher's reputation. Similar to the toothpaste example in the above Point 2.

Reference readings

Book name/Journal

Author

Article Title/Chapter Title

Publication

Volume, Year

Page

The Handbook of Social Research and Ethics

Bruce L Brown & Dawson Hedges

Use and Misuse of Quantitative Methods in Market Research

Sage

2009

Pg 373-384

Journal of Business Ethics

Naresh K. Malhotra, Gina L. Miller

An Integrated Model for Ethical Decisions in Marketing Research

Springer Netherlands

Vol. 17, No. 3 (Feb., 1998)

263-280

Research Methodology in Business

Rummel and Ballaine

Design of Research Projects

Harper and Row Publishers

1963

Pg 173-200

Topic 7: Ethical issues in Online retailing industry

Reading 1: Business Ethics and Ecommerce in contemporary society

&

Reading 2: The Role of Consumers' Trust in Online-Shopping

COMBINED LEARNING FROM THE READINGS

In the online retailing business there are mainly 2 types of uncertainty that exist for the buyers:

System-dependent uncertainty:. In the context of electronic commerce system dependent uncertainty primarily relates to potential technological sources of errors and security gaps or to put it economically to technology-dependent risks that cannot be avoided by an agreement or a contract with another party who is involved in the transaction. The smooth and secure processing of an online transaction depends on the functioning of the hard- and software that is used as well as on the security of the data exchange services including the cryptographic protocols that are used.

Transaction-specific uncertainty : Primarily concerns the quality of the products and services that are offered on the Web, which depends on the seller's ability and willingness to perform.

Mitigating this uncertainty by performing the below mentioned ethical activities to induce trust:

Information policies, aim at reducing information asymmetries between sellers and buyers by applying various communicative measures such as advertising, direct marketing and public relations. Providing adequate information about the product to the buyer to help him make an informed decision.

Guarantee policies comprise different instruments that guarantee compensation payments in a case of damages, such as taking back guarantees, warranties and finishing touches or repairs.

Reputation policies: Avoid opportunistic actions since in a certain market might yield short-term benefits, but there would be a long-term cost in the sense of a lack of trust that might inhibit future buyers. Retailers, who use the Internet as an additional distribution channel can take advantage of their good reputation, references or image transfers from real-world brands when addressing new customers via the Internet.

Reference readings

Book name/Journal

Author

Article Title/Chapter Title

Publication

Volume, Year

Page

Reimagining Business Ethics : Meaningful solution for a Global Economy

Kenneth Smith & John Paul Kawalek

Business Ethics and Ecommerce in contemporary society

Elsevier Science Ltd

2002

13-27

Journal of Business Ethics

Sonja Grabner-Kraeuter

The Role of Consumers' Trust in Online-Shopping

Springer Netherlands

Vol. 39, No. 1/2, Aug, 2002

43-50

E-commerce : The cutting edge of business

Kamlesh K Baja & Debjani Nag

Ecommerce in India

Tata McGraw Hill

1999

Pg 307-324

Topic 8: Ethical compromises in fast growing economy like China

Reading 1: An Empirical Investigation of the Ethics Position Questionnaire in the People's Republic of China

Given the dearth of previous research examining ethical ideology and position in the People's Republic of China, this study is largely exploratory in nature and offers some preliminary investigation which may serve to enlighten future research in the area. The main aims of the study were as follows:

To examine the factor structure of Forsyth's (1980) Ethics Position Questionnaire in a sample of managers from the PRC.

To investigate differences in ethical ideology between managers from two distinct geographic areas in the PRC, the North and the South, believed to represent diversity on a number of dimensions of economic and social modernisation.

Results

Factor analyses of the Ethics Position Questionnaire in the current study revealed two dimensions, which overlapped substantially with the Idealism and Relativism dimensions found by Forsyth's (1980) original study. Results indicated that the two dimensions of the Ethics Position Questionnaire were essentially orthogonal, which is consistent with the findings of previous studies. Thus, the results of this study attest to the reliability of the dimensions in a Chinese sample.

However, on inspection of the items loading more strongly on the factors, the first construct is defined by items such as "one should never psychologically or physically harm another person" and "it is never necessary to sacrifice the welfare of other people". Such themes, interpreted through a Chinese lens, may be consistent with Confucian notions of benevolence, and the importance of harmony in human relationships.The second construct in the Chinese sample likewise resonated strongly with Forsyth's "Relativism" construct. However the rejection of utilitarian approaches to determine decision making in a given situation, does suggest that the Chinese "brand" of Relativism may contain some distinct differences

It was found that significant differences in ethical ideology do exist between the two regions, with managers in the South scoring higher on "Idealism" than managers in the North. This observation may be suggestive of the higher levels of exposure to Western lifestyle practices and ideology enjoyed by coastal regions in the south east of China, in contrast to the more dogmatic and bureaucratic history of the country's capital, Beijing.

Reading 2: Using a Qualitative Approach to Gain Insights into the Business Ethics Experiences of Australian Managers in China

In China, the issue of business ethics has only received attention in recent years. Prior to 1978, the topics of free market economics and business in general were considered taboo. However, as a result of the series of economic reforms that first began in 1978, dramatic changes have swept through Chinese society. China's economy improved dramatically after the implementation of these reforms. However, China has also experienced a number of unforeseen side effects from its rapid economic development.

These consequences include the emergence of such ethical issues as corruption, intellectual property rights violations, pollution of the environment, unrest within the labor force, and social inequality among others.

China has attracted on-going criticism for reportedly high levels of corruption and inappropriate business practices. Transparency International, a body which compiles an annual index of corruption perceptions around the world, ranked China at 59 on a scale of 1-102 (least corrupt-most corrupt) in its 2002 index.

Commonly, identified ethical issues by Australian mangers in China could be labeled as:

bribery and facilitation

giving gifts

employee theft

nepotism and

non-adherence to contractual obligations.

tax issues

Some ways in which these experience managers devised ways to cope with the ethical issues that arose:

Not compromising own morals

Try to understand the motivation of the Chinese people

Talking to others

Adherence to company policy

The ways in which managers had adjusted provide valuable insight into potential approaches to be taken in training and preparation of managers for postings in China, and possibly other locations with an ostensibly non-Western business ethics environment.

Reference readings

Book name/Journal

Author

Article Title/Chapter Title

Publication

Volume, Year

Page

Journal of Business Ethics

Kylie Redfern, John Crawford

An Empirical Investigation of the Ethics Position Questionnaire in the People's Republic of China

Springer Netherlands

Vol. 50, No. 3 (Mar., 2004)

199-210

Journal of Business Ethics

Vivienne Brand, Amy Slater

Using a Qualitative Approach to Gain Insights into the Business Ethics Experiences of Australian Managers in China

Springer Netherlands

Vol. 45, No. 3 (Jul., 2003)

167-182

Topic 9: Understanding the ethical perspective of Whistleblowing

Reading 1: Whistleblowing in Organizations: An Examination of Correlates of Whistleblowing Intentions, Actions, and Retaliation

Whistleblowing on organizational wrongdoing has the potential for many positive outcomes for the organization. The article suggests that employees of higher tenure and job level are more likely to blow the whistle. It may be that younger employees or those of a lower job level are uncomfortable with reporting wrongdoing (particularly by those at a higher level in the organizational hierarchy). Similarly, these employees may lack sufficient power or knowledge to blow the whistle and effect change.

Organizations may consider targeting this group of employees for specific training focused on

what types of activities might be considered unethical/unsanctioned,

how reports of wrongdoing might be made, and

reemphasizing the organization's commitment to ethical practices, etc.

Perhaps such training might be delivered during the organizational orientation process. However, the organization should be certain that these espoused ethical values are consistent with those that are enacted on a daily basis. Incongruence between espoused and enacted values may lead to feelings of confusion and even suspicion within the targeted audience.

Similarly, research suggests that whistleblowers may not frequently be successful in stopping wrongdoing. A potential whistleblower may weigh this into his or her decision to actually blow the whistle. Third, our results suggest that role responsibility to blow the whistle is relatively unrelated to actual whistleblowing. Organizations should consider the possibility that the individuals in these positions (wrongly) believe their primary responsibility is to "save face" for the organization by, at times, covering up transgressions, or by dealing with wrong doing using other non-traditional or unsanctioned measures.

Further, even though these employees have been appointed to a "watchdog" role, they may still fear they would betray their organization by blowing the whistle; similarly, they may still fear unsanctioned retaliation for whistleblowing by coworkers or supervisors. Top management should ensure that the internal reporting channels are "free from leaks" and are manned by trustworthy individuals. Finally, when possible, organizations may consider publicizing when an incident of whistleblowing has led to positive change. This act may improve the likelihood that other potential whistleblowers will be motivated to alert top management of wrongdoing. It would be wise, however, to exercise caution that this practice does not foster unsanctioned retaliatory acts.

Reading 2: Workers' Rights, Obedience and Whistleblowing

Employee Right - Whistle blowing

Whistleblower statue prohibits an employer from taking any retaliatory action against an employee who objects to, refuses to participate in, or discloses any activity that is illegal and breaks the law of the state.

Retaliation may however take many forms, ranging from attempted coercion of the whistleblower to with draw accusations of wrongdoing to the outright exclusion of the whistleblower from the organization. Other retaliatory acts may include organizational steps taken to undermine the complaint process, isolation of the whistleblower, character defamation, imposition of hardship or disgrace upon the whistleblower, exclusion from meetings, elimination of perquisites, and other forms of discrimination or harassment.

Retaliatory acts may be motivated by the organization's desire to

(1) silence the whistleblower completely,

(2) prevent a full public knowledge of the complaint,

(3) discredit the whistleblower, and/or

(4) discourage other potential whistleblowers from taking action.

Retaliation is not always initiated by organizational top management. Rather, isolated acts of retaliation may be initiated by the whistleblower's supervisor or coworkers with or without (formal or informal) sanctioning by top management. Super visors may be motivated to retaliate against whistleblowers for a variety of reasons, but they frequently do so out of fear that a whistleblowing claim signals their inability to maintain order and compliance within their departments, or the fear that valid complaints will result in the restriction or cessation of their own operations or influence

What does the law say?

The Occupational Safety and Health Act is designed to regulate employment conditions relating to occupational safety and health and to achieve safer and more healthful workplaces throughout the nation. The Act provides for a wide range of substantive and procedural rights for employees and representatives of employees.

OSHA also administers the whistleblowing provisions of thirteen other statutes, protecting employees who report violations of various trucking, airline, nuclear power, pipeline, environmental, and securities laws.

Reference readings

Book name/Journal

Author

Article Title/Chapter Title

Publication

Volume, Year

Page

Journal of Business Ethics

Jessica R. Mesmer-Magnus, Chockalingam Viswesvaran

Whistleblowing in Organizations: An Examination of Correlates of Whistleblowing Intentions, Actions, and Retaliation

Springer Netherlands

Vol. 62, No. 3 (Dec., 2005)

277-297

Business Ethics

R.T.George

Workers' Rights, Obedience and Whistleblowing

Macmillan Publishing

1982

Pg 147-164

Topic 10: Studying the contribution of J.N.Tata toward Ethical Leadership

Reading 1: The Role of Religious and Nationalist Ethics in Strategic Leadership: The Case of J. N. Tata

J.N.Tata embodied ethical leadership and his ethic was a mixture of Parsee ethical principles and the principle of Swadeshi, which he combined for maximum effect.

Striking example of J.N.Tata's ethical conduct

A clear case is his sharing of "trade secrets" with other Indian cotton firms, "his principal aim being to raise the industry of his country generally onto a higher and more prosperous plane". A prosperous domestic industry meant that Indians were becoming more self-reliant even if Tata was giving away secrets, which would otherwise have become the basis for a sustained competitive advantage.

That he was able to transform the worn out Dharamsi mill into the profitable Swadeshi mill is a testament to his determination, expertise and courage as a caption of industry, even as it was a matter of bad business judgment to purchase such a run-down mill, especially given the relatively low profit margins on its cloth due to the intense competition from Britain. He subordinated high immediate profit from mill expansions for the sake of the industrialization of India.

His company sustained a loss for several years by providing life-enhancing benefits, such as schools, cultural centers, free medical help, and basic commodities at less than cost. He erected "model cottages and houses for his people which were in striking contrast to the filthy chawls of the day . His sympathy never faltered". Where ever Tata established a business, "he thought not only of his profits, but of the welfare of the people, inside and outside of the factory".

With regard to housing for Tata employees, the company not only built houses for its employees, but also allotted land to the workmen on long leases and at nominal rates, so that they could build their own houses. Loans are freely given to a maximum of 75 per cent of the cost of the building and repayable after ten years

With regard to food, the company subsidized its workers, buying a huge grain store, filling it with rice, and selling it to the workmen at gross cost

Reading 2: The Business Ethics of Jamsetji Nusserwanji Tata: A Forerunner in Promoting Stakeholder Welfare

This article examines the business practices of Jamsetji Nusserwanji Tata, the founder the Tata group of business in India in the 19th century, from the perspective of stakeholder welfare. J. N. Tata's societal and worldwide reputation surpassed the credibility typical of a businessman pursuing his strategic interests. The same can be attributed to the infusion of his Zoroastrian and Swadeshi principles into his exercise of strategic leadership, even and particularly at the expense of his immediate and intermediate financial interests.

Jamsetji Nusserwanji Tata was concerned about the welfare of all major stakeholder constituents. His business practices promoted the welfare of employees, customers, society, owners, competitors, environment and other stakeholders. He implemented several measures even before law mandated them thus acting as a forerunner in promoting stakeholder welfare. His business plans became the foundation for an economically strong India. Relevant research findings regarding each stakeholder constituent studied have been cited to show that the practices of Jamsetji Nusserwanji Tata have relevance to business even today.

Reference readings

Book name/Journal

Author

Article Title/Chapter Title

Publication

Volume, Year

Page

Journal of Business Ethics

N.F. Bews and G.J. Rossouw

The Role of Religious and Nationalist Ethics in Strategic Leadership: The Case of J. N. Tata

Springer Netherlands

Volume 39, Number 4 / September, 2002

377-390

Journal of Business Ethics

N. Sivakumar

The Business Ethics of Jamsetji Nusserwanji Tata: A Forerunner in Promoting Stakeholder Welfare

Springer Netherlands

Vol. 83, No. 2 (Dec., 2008)

353-361

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