38 Teaching of Human Values in Business Schools

epgp books

 

  • Learning Outcomes Introduction
  • Domain of Ethics
  • Business ethics as a discipline
  • Need for business ethics
  • Importance of human values in business organization
  • Teaching of ethics in business schools
  • Summary

 

1.      LEARNING OUTCOMES

 

After studying this module, students will be able to understand:

  • Meaning of human values or ethics Business ethics as a discipline
  • Importance of human values in business organization Teaching of ethics in business schools

 TEACHING OF HUMAN VALUES IN BUSINESS SCHOOLS INTRODUCTION:

 

Today this idea is fast gaining ground that business cannot be transacted for any long time without taking into consideration the finer nuances of ethics, values and ethos. Business ethics has emerged as a distinct discipline in itself which supplement the entire management discipline. Business ethics has come to be considered a management discipline, especially since the birth of the social responsibility movement in the 1960s.In that decade, social awareness movements raised expectations of businesses to use their massive financial and social influence to address social problems such as poverty, crime, environmental protection, equal rights, public health and improving education. And increasing number of people asserted that because businesses were making a profit from using our country’s resources, these businesses owned it to our country to work to improve society as well. Many researchers, business schools and mangers have recognized this broader constituency and in their planning and operations have replaced the word “stockholder” with “stakeholder,” meaning to include employees, customers, suppliers and the wider community. The emergence of business ethics is similar to that of other management disciplines.

 

DOMAIN OF ETHICS:

 

Ethics

 

The word “Ethics” is derived from the Greek word “Ethos”, which means custom, usage or habit. The word ethics also means character, beliefs and standards that pervade a group, a community or a group of people. Ethics concerns attempts to distinguish right from wrong, good from bad and constitution of desirable conduct in a particular set of social circumstances. In fact, the term ethics refers to value-oriented decisions and behavior.

 

Business Ethics

 

Business ethics, also known as corporate ethics, is a set of applied ethics or professional ethics that examines ethical principles and morals, or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole.

 

Fundamental Rules of Ethics

 

The following are the forms of the golden rules in ethics. Each of these forms the basis of all human values.

 

(i)   Everything you want others to do to you, you should do to others.

 

(ii)   Do not do to others anything, which you do not wish them to do to you.

 

(iii)   Do not do anything to others that, if done to you, would cause harm to you.

 

Nature of Ethics

 

Ethics are central to our functioning in the organizations. The nature of ethics is as follows:

 

(i)   A Normative Science: It is science because ethics has certain set rules which need to be followed. Ethics is said to be a normative science because it deals with ideals. Ethics is concerned with the ideals of good. A normative science determines norms, ideals,standards or values. But ethics is not a natural or pure science like Physics and Chemistry.

 

(ii) Self- imposed: Ethics is a code of conduct and behavior which we need to adhere to ourselves only. Ethical principles are self-imposed. The laws of the state are externally imposed on the individual by the state. Non-compliance of laws may attract punishment. We follow a moral principle not because of hope of reward or fear of punishment but because we consider that to be our duty.

 

(iii) Morality: Ethics has moral connotations. Morality is the essence of ethical behavior and it should be reflective. Any conduct is based on social rules and understanding of duties. In case where there is a conflict of duties, conventional morality fails totally. Conventional morality ensures well being and survival of society.

 

(iv)   Discipline: Ethics are observed in the spirit of self- discipline. Ethics follows the rule of discipline. Discipline is necessary for ethics and it plays a vital role in ethics. Ethics contains principles, rules and regulations.

 

BUSINESS ETHICS AS A DISCIPLINE

 

When organizations realized that they needed to radiate a more positive image to the public, the recent discipline of public relations was born. When organizations realized that they needed to manage their human resources in a more efficient way, the recent discipline of human resources was born. Similarly, as commerce became more complicated and dynamic organizations realized they needed more guidance to ensure that their dealings supported the common good and did not harm others, business ethics was born. Note that 90% of business schools now provide some form of training in business ethics. Today, ethics in the workplace can be managed through use of codes of ethics, codes of conduct, roles of ethicists and ethics committees, policies and procedures, procedures to resolve ethical dilemmas, and ethics training etc.

 

NEED FOR BUSINESS ETHICS

 

The recent scandals of Enron, WorldCom, Tyco, Adelphia, Rite Aid, HealthSouth, Arthur Andersen, Earnest and Young, JP Morgan, Merrill Lynch, Morgan Stanley, Xerox, and Boeing Corporation and the most recent case of Lehman Brothers filing for bankruptcy of the 158-years-old company and the Rs. 78,000 million fraud by Ramalinga Raju, the CEO of Satyam Computers, clearly illustrate the perilous consequences of corporate misconduct and impropriety. The insatiable greed for money and lust for power not only ruined these organizations but also wounded the society at large. They have done irreparable damages to creditors, employees, competitors and the shareholders especially small investors. The scandals, scams, irregularities and violations committed by the business organizations are highly damaging to the trust of society. The two major scams of Harshad Mehta and Ketan Parekh in the Indian stock market and major brokerage houses such as Smith Barney and Merrill Lynch in the United States have betrayed small investors with inflated stock recommendations. The fraud and financial irregularities performed by Ramalinga Raju, the CEO of Satyam Computers, clearly gives an idea about the indifferent attitude of the promoter towards the small investors. The root cause of the entire crises is ethical breakdown or moral failure, not market failure.

 

With the growing number of corporate scandals coming into light of late, business schools all over the world are becoming conscious of the fact that traditional value-free management education is to be blamed for this disgrace. Now it is well known fact that the corporate misconduct and criminality is caused due to lack of training of students in business ethics. Many business agencies, institutions and Accreditation Boards have acknowledged that the amoral culture of business schools is one of the key factors leading to the degeneration of business values and thus wreaking disastrous consequences for the corporate world. In fact, the personal values that students imbibe from their families get stifled by the value-free education they get in business schools. In fact, business schools kill their potential of becoming ethical leaders. Therefore, the need of the hour is to instill values and ethics among business students at business schools so that business frauds and malpractices are avoided in future. Hence the study of business ethics becomes very important today.

 

VALUES FROM ANCIENT INDIAN EDUCATIONAL SYSTEM

 

The ancient Indian education system was basically aimed at personal growth of individual. Indian education system is the oldest in the world and has some qualities, which we are proud of and which do not exist anywhere else in the world. The ancient Indian education system aspired not only to give theoretical knowledge but also to make an individual modest, so that he can get “Mukti” i.e. salvation. The ultimate plan of human society of that age was the achievement of supreme i.e. “Brahma”, which was customary in the entire visible world. A man should employ himself in “Karmopasna” i.e. work is worship and thus purify his inner senses and gain the supreme. Education in its historicity in the Indian context relates to primacy of a classical tradition based on the ancient textual materials; mainly the Semites, Brahmanas, Aranyakas and the Upanishads. Gurukula, Guru-shishya parampara, Varna, Akshararambha, Dhvija are some familiar terms denoting the setting, the teacher-student interaction, social stratification and the two stages of initiation to knowledge seeking in ancient Indian education system.

 

TEACHING OF ETHICS IN MANAGEMENT SCHOOLS

 

Today, at the national and global level, ethics have acquired a distinct niche and have been included as a major course in the management education. It in a sense is the soul of the business operations. As an academic discipline, business ethics emerged in the 1970’s. Business ethics is a part of the philosophy of business, the branch of philosophy that deals with the philosophical, political and ethical underpinnings of business and economics. Business ethics operates on the premise, for example, that the ethical operation of a private business is possible. Very often it is held that business is not bound by any ethics other than abiding by the law.

 

Milton Friedman is the pioneer of this view. He held that corporations have the obligation to make a profit within the framework of the legal system, nothing more. Friedman made it explicit that the duty of the business leaders is, “to make as much money as possible while confronting to the basic rules of the society, both those embodied in the law and those embodied in ethical custom” Ethics for Friedman is nothing more than abiding by “customs and laws”. The reduction of ethics to abidance of laws and customs however has drawn serious criticisms.

 

Koehn Dary in his presidential address to Society of Business Ethics said, “Business Schools instill wrong values or ignore issues critical to developing integrity.” Therefore, business schools must have ethics in curriculum so as to lead to stronger ethical systems in the corporate world. Of late, some common changes that business schools have made to strengthen ethical training are:

 

(i) Instituting mandatory courses on ethics, professional responsibility, or corporate social responsibility.

 

(ii) Integration of ethical concepts into non-ethics classes, such as accounting and management.

 

(iii)   Promotion of service learning.

 

(iv)   Honour codes and implementing these codes.

 

(v)   Implementing an oath, which is publicly sworn in.

 

 

Debate on Teaching of Ethics

 

The root problem of decaying business ethics lies in what schools are currently teaching.The sorts of competitive strategy frameworks taught as part of the MBA curriculum impart  values  that  are  in  opposition  to  good  business  ethics.  In  the  contemporary scenario, ethics are very important.

 

Teaching of ethics includes:

 

(i)   Stimulating moral thoughts

 

(ii)   Developing problem-solving skills

 

(iii)   Creating a sense of moral obligation

 

(iv)   Recognising ethical dilemmas

 

(v)   Tolerating or reducing ambiguity

 

However, the key question is how one acquires ethics. There are some skills that one can learn by reading books or by training, e.g. how to run a computer, how to do calculations etc. but can one learn ethics by reading books or by training or by attending classes? There are some arguments regarding this issue.

 

Arguments in favour of teaching ethics

 

(i)    Values are relative: Values are relative and these are different for different people. Every individual holds one value as the prime, most significant and precious for his existence. Another one upholds some other value. This does not mean we have only one value to go with. However, our preferences are different and subjective. Accordingly, the interests we serve of the organization differ. Someone upholding honesty, for example, will not tolerate any dishonest behavior, even for the larger good of the organization.

 

(ii)   Values shaped by external environment: Values are developed under the influence of external environment also. Values cannot be fully developed on their own; they develop in a conducive environment. We need to therefore, assess the environment and take due precaution to let our values develop and prosper. Values need time to take root in one’s personality; it is not an overnight process.

 

Arguments against teaching ethics

 

(i)   People are born with certain values: People have a set value system of their own.

 

Values are inborn. They cannot be enhanced by reading or training. One’s conditions at birth are responsible for the establishment of certain values in that individual. Unless that condition and upbringing are changed, values cannot and should not be taught externally.

 

(ii)    Values are cultured in home: Values are imparted in families at home. This is an extension of the previous cause. A child’s first contact is with his parents and not the society. Therefore, upbringing or education by parents plays an important role in the definition of one’s values. A truly moral person is the one who developed a moral disposition through the development of right habits and behavior in the formative years.

 

(iii)  Values are eternal: Values are eternal and absolute. There cannot be external values. Ethics are internal character traits such as loyalty, sensitivity, justice, compassion and honesty. These may be reinforced in an academic course but they really do not originate there. These cannot be added on to one’s person, like clothes.

 

SUMMARY:

 

Business ethics has emerged as a distinct discipline in itself which supplement the entire management discipline. Business ethics has come to be considered a management discipline, especially since the birth of the social responsibility movement in the 1960s.In that decade, social awareness movements raised expectations of businesses to use their massive financial and social influence to address social problems such as poverty, crime, environmental protection, equal rights, public health and improving education. And increasing number of people asserted that because businesses were making a profit from using our country’s resources, these businesses owned it to our country to work to improve society as well. When organizations realized that they needed to manage their human resources in a more efficient way, the recent discipline of human resources was born. Similarly, as commerce became more complicated and dynamic organizations realized they needed more guidance to ensure that their dealings supported the common good and did not harm others, business ethics was born. Note that 90% of business schools now provide some form of training in business ethics. Today, ethics in the workplace can be managed through use of codes of ethics, codes of conduct, roles of ethicists and ethics committees, policies and procedures, procedures to resolve ethical dilemmas, and ethics training etc.

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REFERENCES

  • Pramod Sharma, “Business Ethics and Corporate Values: An Indian Perspective” Ravitanaya Publications, Shimla, 2017
  • S.K Bhatia, “Business Ethics and Corporate Governance” Deep & Deep Publications, New Delhi, 2004
  • A.C. Fernando, “Business Ethics and Corporate Governance” Pearson Publication, 2013 Harris & Hartman, “Organizational Behavior” Jaico Publication House, 2002
  • French, Bell & Vohra, “Organization Development” Pearson Prentice Hall Publication, 2009
  • S B Gogate, “Human Values & Professional Ethics” Vikas Publishing House, New Delhi, 2011