Abstract

Many large corporations have added ethical framework to their business processes as these organizations have realised that in long run an ethical business has a bright future. This includes customers, employees, vendors and the public. Every decision made by the business is based on the effect it may have on any one of these groups of people, or the environment surrounding it.

In organizations ethics go beyond the legal requirements; organizations understand that ethical framework helps in making supple decisions making and it also guides organizational behaviour and culture. Morality governs private, personal interactions. Ethics governs professional interactions. Law governs society as a whole, often dealing with interactions between total strangers. The legal environment in India includes various laws regulating business activities like Companies Act 2013, Consumer Protection Act, 2019 and many other such legislations, policies relating to licensing and approvals, foreign trade etc. Ethics are a set of moral values an individual/organization establishes for one own entity and own culture and behaviour whereas laws are structured rules utilized to govern the entire society.

A good example of how advertising can become responsible unethically is: Volkswagen’s campaign that promoted environmentally friendly “Clean Diesel” vehicles that had low-carbon emissions. In India, the National Green Tribunal (NGT) had penalised car manufacturer Volkswagen with a “conservative” fine of Rs 171.34 crore, for contributing to air pollution in Delhi through excess nitrogen oxide (NOx) emissions and for causing extensive health damage. The company admitted to having installed software that manipulated emissions readings to make its cars appear as if they were environmentally friendly. Volkswagen erred by misleading consumers with false claims.

There’s a huge difference between using marketing to paint a product or service in the best possible light by outright lying. With traditional advertising, it’s easier to monitor if companies are using misleading language to target customers. With digital advertising, anyone can run an ad and face minimal oversight.

Airlines are notorious for advertising low prices to entice travellers, but some of them manage to keep things on the ethical side by disclosing when Jetstar and Virgin Airlines decided to forgo this disclosure, they were fined $745,000 for marketing false low prices in their ads. Whereas customers had to pay additional fees involved to finalize the booking.

The Wikipedia defines ethics as a branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong behaviour. It is also known as moral philosophy. For all of us ethics means living our life responsibly; to review whether our actions are right or wrong. Ethical behaviour is that which is morally accepted as “good” and “right” as opposed to “bad” or “wrong” in a particular situation. All of us live in an ethical illusion about ourselves. The ethical illusions are discrepancies between how we think and how we behave and how we take an action. It also includes our sense of reasoning for our behaviour. Laws are the regulations established, and usually written, by a governing power. Ethics are the morals of a culture, and often, they define the laws of the land. The distinction is that, while you may obey the law, you might not always act ethically. It would be a rare case for something to be ethical, but against the law. An important point to keep in mind is that ethics do not have any associated punishments when broken. A law, however, specifically sets the types of repercussions that should occur or should it be broken.

The fundamental of any business firm cannot claim to be ethical firm if it looks at profits and numbers while ignoring the legitimacy. Today, businesses and industries increasingly find themselves facing external pressure to improve their ethical practices. The alert and well-informed customers today scrutinize business activities. Pressure groups are a good example of this. They are external stakeholders they focus on activities & fair practice of industries with direct and indirect actions which at times has forced some firms to close down their shutters.

Ratan Tata, the then Chairman of Tata Group of Companies, did something that is totally out of the world. He in fact taught the world some lessons in business ethics. After the November 2008 Mumbai attacks which were a series of terrorist attacks that took place in Hotels Taj and Oberoi were badly hit, Ratan Tata went all out to help every single person who was affected in Hotel Taj including those like the pav bhaji vendor outside the hotel. Each one was offered compensation running into several lakhs of rupees. The education of children of those affected, free medical facilities for those survivors at Tata hospital for the rest of their lives, total education of the 46 children who were affected by the bomb blast but survived, has been taken up by the Tata group. A Trust has been formulated to shoulder responsibility for the rehabilitation of the families of the victims. Ratan Tata himself visited the families of each of the 80 employees affected by the bomb blast, and offered compensation running into several lakhs of rupees. Such examples define business ethics. Leaders like Ratan Tata establish faith in customers. He calls himself an industrialist not a businessman.  He has strong attachment to his businesses yet an executive’s ability to make rational decisions.

For leaders at all level, it’s more important to learn how to make the right decision while dealing with different kinds of feelings rather than suppressing those feelings.

Some of the top B Schools such as IIMs in India and other top rung B schools in the world are revamping their syllabus adding business ethics as a core paper, adding projects on ethical values. The process of revamping is for also pondering over and challenging the standard of business wisdom practiced for decades. Ethics and social responsibility seem to be in limelight by some serious thinkers and practitioners.

Chairman of Wipro ltd, Azim Premji, is another example of modesty and a man who doesn’t believe in extravaganza. He annoyed several other fellow industrialists when he said that rich people should pay more taxes, in response to some budget proposal. Not stopping there, he justified his views in many interviews as well. WIPRO has spent upwards of some nine hundred crores in Karnataka and in Andhra Pradesh, where it has helped build school infrastructure, improve standards of education and so on. Its donations to several Government hospitals in Tamil Nadu is very much an example of the highest quality of business ethics.

In the world-famous Enron scandal, which was a series of events involving dubious accounting practices that resulted in the bankruptcy of the energy company, the accounting firm Arthur Anderson got shut down. Enron executives used fraudulent accounting practices to inflate the company’s revenues and hide debt of its subsidiaries. The Securities and Exchange Commission credit rating agencies (SEC), and investment banks were also accused of negligence and outright deception that enabled the fraud. I think it’s symptomatic of a breakdown of the ethical values of business over a period of perhaps 20 years, a gradual erosion of business ethics.

Business organizations dillydally from ethical practices because of compelling and persuasive day-to-day organizational practices. Ethics take a backseat because of the multifaceted processes and practices of businesses which leaves little time or penchant to divert attention to the moral content of organizational decision-making. Morality in business appears to be so ambiguous and qualitative in nature that it lacks substance in relation to business objectives and goals in today’s world. Business relies on quantitative performance than qualitative performance. The pace leaves hardly any time for the managers in reworking their decisions based on ethical framework. Hence the entire framework and thinking of the managers lacks ethical decision making.

Scams such as Satyam Case, Enron Case, I Gate Case, 2 G, 3G, Commonwealth games, Bofors, Fodder scam, IPL, Citibank the list can go on and on. Our memories are so short, that by the time we are fatigued with one scam there appears another scam. The big money, the lifestyles of cheaters, their overstated personas, and the glamour that comes with money feature more prominently in the young students of Business Management if the ethical frameworks in these and many other case studies are not tackled in the classrooms.

Conclusion

Dear friends Socrates, Plato and Aristotle sadly have no place in the twenty first century business environment. A yawning gap exists between philosophical knowledge and business practices. Each generation has learnt ethics and morality with a divergence. Morality is just a dictionary word. Yet, like it or not, there has and will continue to be a surge of interest in ethics.

As we face off the biggest pandemic in today’s modern memory, which is literally doctored and engineered in China, the fact is millions of lives are lost and life world is facing a chaos and disruption. Global economy is gone for a toss as never before. This pandemic is above all human crisis that calls for camaraderie. It has taught the world many lessons and one such lesson is about business ethics which starts with ethical communication.   

The importance of ethical communications has never been clearer. Much of the debate around media ethics in recent years has focused on far-reaching questions why business is important. The global COVID-19 pandemic has pushed ethical considerations back to the basics. Concerns about governmental transparency and corporate responsibility have become a fresh urgency. The implications are more immediate and those working in the media, now more than ever, have a responsibility for their role in shaping public debate.

As businesses go about their work, managers must continue to ask themselves whether it is their responsibility to communicate as they are. 

Businesses have a challenge on their hands. In an atmosphere of financial uncertainty, they have difficult decisions, first to make and then to communicate. They will have to consider both internal and external stakeholders. They must address concerns about safety and hygiene. They must clarify what they are doing in terms of business continuation and protocol. Before they get into the nitty-gritty of messaging, outreach and marketing spend, they must consider the ethical dimension of what they do.

With the global coronavirus outburst, business world is now grappling with ethical communication demanded by their consumers. The big brands of world are increasingly being tested for their moral backbone. Alert and observant consumers are refusing to support companies who are not honest in keeping their promises and are turning a blind eye to the complaints of customers. The Covid 19 pandemic has harnessed the power of social media like never before; customers are able to hold organizations directly and evidently accountable.

Prior to the pandemic, a paradigm shift towards digitization of the economy was already underway. The current scenario has accelerated the paradigm, as evidenced by the marked shift in spending towards digital businesses. As customers are already facing autonomy due to the virus, no longer they are willing to allow brands stay silent. They have a platform and a stronger network to discuss their issues.

The major principles governing communications, the correct and incorrect aspects of the same, the moral and immoral dimensions relevant to the communication are called ethics of communication. In other words, communication ethics is the notion that human beings are governed by morals which essentially affects communication. Simply any kind of moral good present in communication of any form is generally termed as communication ethics. It is important that whatever we communicate should be guided by certain ethical principles.

Amazon has been a crowned winner during the Covid crisis because its sales have soared due to the shutting of bricks-and-mortar shops and malls. It’s also interesting to note that its share price has risen by more than a third in the past few months. And, yet Amazon has been bitterly criticized although the most serious accusations are made against it the US and France rather than the UK. In France all Amazon warehouses were temporarily closed after a huge row about worker safety. In the US Amazon experienced lot of workers quitting due to over warehouse safety and conditions. Many of its workers pledged to stay home in protest because Amazon has failed to provide face masks, and has refused to pay sick leave (the US is one of the few wealthy countries in which companies are not required to), is not allowing workers proper time to wash their hands, and that too many people are working at once to allow for proper social distancing. The fight intensified after Amazon fired four workers who had publicly criticized safety measures. In progressive countries such as Us, UK and France customers gauge the behavior of companies. 

Even in India in a survey conducted by EY Earnest & Young presents response in favor of ethical communication. For example, at the onset of COVID-19 in India, an MNC promised its employees that the organization would retain all its employees during the hardship period but later started firing endless numbers of employees’ right from the lowest to the topmost rung of the ladder. This is a clear breach of trust and faith, no one who is still with the organization will ever trust the employer come what may. Any organization which breaches trust of any of its stakeholders, finds it difficult to get back the trust. Another survey conducted by Deloitte reports that employees do not need a perfect company but just want transparency and truthfulness more than anything else.

Ethical communication always helps organization in admitting openly that they fell short of their goals, they have committed some mistakes, which in long run lead to huge improvements and positive changes for the future which help to garner support from all stakeholders.

It is so important to acknowledge that clients cannot be cheated in the present problematic times; it is better to inform them the truth only. One of the news items in Miami News Times reported that a popular cruise line recently misled its guests about COVID-19 by having sales staff tell them the only thing they needed to worry about for their upcoming cruise was bringing enough sunscreen. The cruise line ignored the pandemic and the associated safety measures which the clients are worried about. Most of the customers who had booked for the cruise did not appreciate the irresponsible behavior of the cruise liner staff, and they decided to drop out of the cruise. Their response is a perfect example of what not to do during such difficult times. This response caused a media storm that generated negative press for the cruise line.

In acknowledging the current times, organizations can establish and build trust and confidence with others that can have a long-lasting impact. Avoiding the truth is bad practice for any business and providing relevant updates won’t cause a panic. When the state of the world returns to normal, individuals will remember how businesses responded to the pandemic and during this time of need.

The pandemic that has taken over our daily lives, businesses and society at large are forcing us to rethink how we react during times of crisis. Practicing empathy in statements, newsletters, social media announcements and other avenues of communication can help establish rapport with customers. It shows that businesses care. However, having empathy goes beyond a written statement.  It must be practiced in action. While many businesses choose to address COVID-19 solely online, on social media or with e-newsletters, it has been observed that organizations that pitch clients for stories on how to stay afloat throughout this pandemic, are appreciated the most. For instance, offering a client spokesperson for TV news segments to provide expert insight or resourceful information on what they are doing to stay in business can set an example for similar companies.

Conclusion: In a sea of statements, social media announcements and email newsletters, making presence felt is difficult. This is where sincere and realistic communication matters.

Ethics and morality are foundations of human society. Individuals, government, and organizations make decisions in line with the interests and values of the society. Ethics and morality set up path for excellence and they limit wrong doing in society in a world which is in true sense interdependent. Societies, nations and people must necessarily follow ethical behaviour. Ethics refer to rules provided by an external source, e.g., codes of conduct made by government, organizations, school and college etc. whereas morals refer to an individual’s own principles regarding right and wrong.

For example, nuclear ethics is a cross-disciplinary field of academic and policy-relevant study in which the problems associated with nuclear warfare, nuclear deterrence, nuclear arms control, nuclear disarmament, or nuclear energy are examined through one or more ethical or moral theories or frameworks. It is moral duty of every nation to safeguard their nuclear arsenal and fissile material from the reach of terrorists for the security and safety of others as well as their own, because they are responsible for climate change, destruction of mankind and ecology of planet.

Another example for moral behaviours: If we want to save our planet from the worst effect of climate change, we need to get our greenhouse gas emissions to zero by 2070: a target that requires immediate and drastic action, but, our indestructible addiction to fossil fuels makes this goal seem more and more unreachable. Can we make some stringent laws to drastically reduce the usage of fissile fuels? This is a moral issue. Moral reasoning is a thinking process with the objective of determining whether an idea is right or wrong. To know whether something is “right” or “wrong” one must first know what that something is intended to accomplish.

David Hume (April 1711 –  August 1776)  was a  Scottish Philosopher, historian, economist and author, who is best known even today for his highly significant system of philosophical empiricism, scepticism and naturalism. David Hume worked very hard to create a total naturalistic science of man that examined the psychological basis of human nature against philosophical rationalism. Hume believed that passion rather than reason governs human behaviour. He said that genuine knowledge must either be directly traceable to objects perceived in experience, or result from abstract reasoning.  There is a relationship between ideas which are derived from experience, he called the rest “nothing but literalism and illusion”, a dichotomy (a division or contrast between two things that are or are represented as being opposed or entirely different) which later was given the name of Hume’s Fork.

Hume’s fork shows us that we can have only two forms of lawful knowledge; relations of ideas and matters of facts. Matters of fact are source of substantive knowledge, facts that can tell us something new about the world. Knowledge in matters of fact is also a subsequent knowledge that is gained after experience and synthetic knowledge is something new about the world.

Our feelings or sentiments produce our actions, so much so that present actions resemble the past actions. We therefore can conclude that human actions depend on their beliefs which are in customary associations with human feelings. Clearly, rationality has no place in the account of morality. Being rational means acting wisely and efficiently to choose the appropriate means to advance one’s goals. Even though reasoning depends upon ideas and matters of fact, its most dramatic outcomes may come of out of feelings. All human actions flow naturally from human feelings, without any interference from human reason.

In major parts of the world, caste hierarchy is one of the oldest forms of social stratification. Deep down, the biggest features of casts is its ability to render a rigid and invasive hierarchical system of inclusion and exclusion. Whether it is India or America, people have not been able to get rid of the caste system. The caste system is based on deep feelings of people with an outcome of prejudice, stereotyping and pigeonhole mentality. Our emotional and intellectual mechanisms work together and sustain each other. Sometimes they cannot be separated at all. Rationality and empiricism (knowledge is based on experience) do not go hand in hand. Only ideas cannot be used to prove matters of fact; like it is pointless to prove existence of God.

We are experiencing progress in society because of some good institutions that have contributed to the quality of human life, scientific research, development in arts art, and education. Progressive businesses have given a lot to society because they have broken down myriad centuries-old barriers of racial, sexual, religious, and ethnic prejudice. And they have been the vehicle for countless numbers of individuals to develop their fullest potentials in achieving their dreams.  In short, some business organizations have been prime movers in making it possible for millions to pursue their lives in a wealthy, healthy, rational and exciting world. Good organization is built upon ethical business practices.

Corporate Governance which is offshoot of Business Ethics is based on the foundation that companies should engage in fair dealing with all of their stakeholders who are customers, employees, suppliers, and communities, as well as shareholders. Companies must engage in accordance with the expectations of the larger society in which they operate. An organization exists on its purpose in society. And an organization which exists on a shareholder-centric model also recognizes that it owes a lot to society, therefore, must minimize its negative externalities such as pollution and destruction of ecology.

And finally, for all individuals and organizations integrity is a choice, which depends to a large extent on culture, upbringing, peer influences, etc. it can’t be forced.  One who has strong and well-defined standards of integrity behaves with wholeness, integration, honesty, and does right by him and by others.

We see countless professionals giving up their integrity and morals for the sake of money and money is a big addiction. Wealthy people get imprisoned into their lifestyle and their need to impress the world.  It’s sad that people forget to create their legacy.

What is your legacy? It’s what you will be able to say about yourself when you’re old and look back at life. It’s about what you have stood for, given to the society, taught, imparted, and left behind. It’s not what you dreamed of being, but what you have been.  It’s not a dress rehearsal, but the reality of what you have left behind. Many professionals forget that they have this one chance to build a life that’s meaningful for them.  It’s sad that people compromise their legacy for a futile greed to grasp success, money, accolades and power.