PARA 13.2 HRM (IC90) One Liner, Chapter 11: Ethics

PARA 13.2 HRM (IC90) One Liner, Chapter 11: Ethics

Insurance exams offered by the Insurance Institute of India (III), consist of various papers either in Life or Non Life or Combined. Here we are providing ONE LINER IC 90, HRM Chapter 11: Ethics for para 13.2 and III exam . These questions will be very helpful for upcoming promotional exam in 2020.

IC 90, Human Resource Management is a very important topic in insurance promotional exam. This IC 90, Human Resource Management paper comes in all GIPSA exams which makes it very important.

IC 90, Chapter 11: Ethics

  • Ethics, Law and Values
  • Evaluating Ethics
  • The Ethical Dilemma
  • Business Ethics
  • The Spiritual Basis
  • Managing Ethics

Ethics, Laws and Values

1.Ethics: Ethics deals with issues of right and wrong. The principles of right conduct are not always explicitly stated. They are implicitly known. There would be general awareness of what constitutes proper behaviour. It is clearly not right to “cheat”.

2.Ethics is not law: Ethics deals with rights and wrongs; what is proper and what is not. Propriety is different from legality, which is what the law lays down. Ethics is not a matter of law. The case of haggling referred to in the earlier paragraph will not attract the provisions of any law.

3.Values: Ethics is related to values. Values are standards of right and wrong. Individuals have values.

Values are learnt from contacts and experiences with persons who articulate values. Values are learnt from the mother‟s knees, (listening to fables and fairy tales), school, dinner table conversations, literature, stories of heroes, legends and spiritual discourses.

  • Values influence opinions and actions.
  • Values are guiding principles that determine one‟s evaluation of what is right or wrong.
  • Values constitute the foundations of one‟s discipline. They are deep rooted, fundamental beliefs.
  • In the aggregate, values constitute the character of an individual. They lay down one‟s standards of propriety and righteousness.
  • When anything happens contrary to these standards, it hurts. The conscience pricks. Conscience is the custodian of values.

Evaluating Ethics

4.Morality: The words “ethics” and “morality” would seem to be synonymous. Both refer to the aspects of good and evil, rights and wrongs. What is moral, is apparently also virtuous. What is immoral is wrong and improper.

5.Religion: Religious teachings have strong influences in the creation of values and therefore in the determination of ethics. All religious texts have the same basic themes, although details of practices and rituals, commanded more by priests and commentators, might suggest variations.

The basic themes are:

  • To recognise the universality of all living beings; to do good and do no harm to others;
  • Not to be arrogant but to be humble;
  • To avoid the extremes of greed, lust, anger, hatred etc.;
  • Not to get lost in the trivialities of the material world but to hold oneself accountable to a Supreme Almighty;
  • That the consequences (both good and bad) of one‟s actions are unavoidable; and so on

6.Intentions: Intentions matter in ethics. If the intention is to do harm, the action is wrong and unethical.

  1. Selfishness: It is not wrong to be selfish. Most of us do what we do, because we derive some benefit from it. The benefit may be financial or in material terms or just satisfaction and happiness. We work for the money that it gets us. When we go to see a play, it is just entertainment. When we attend a satsang, a religious discourse, it may be just enlightening.

The Ethical Dilemma

8.The Ethical Dilemma: Every dilemma is not an ethical dilemma. Dilemmas become ethical only when questions of values, of proprieties are involved.

Every person has multiple roles. He is a member of more than one collective; social, professional, occupational, religious, etc. These collectives and roles have different values. It is when a person‟s choices are from two different roles simultaneously, that ethical dilemmas tend to surface.

9.A dilemma exists when a choice has to be made between alternatives.Making choice between alternatives is called “decision making”. All decisions are not dilemmas.

10.Individuals find different ways to resolve ethical dilemmas. No choice is fully justifiable. What is done is to justify the choice to oneself with a statement of rationalisation. The statements used to rationalise are of the following nature.

  • It is not really wrong (it is within reasonable limits) It is in the interest of the organisation
  • It is expected
  • It will not be found out
  • The company will protect me
  • It won’t hurt anybody
  • Others are doing so
  • It would save money or make money There is no other way
  • Others will understand It is not that important
  • I am only following instructions I am only doing a job
  • I am not responsible for the decisions I will be excused.

Business Ethics

11.Business Ethics: The norms of behaviour (values) sanctioned by society distinguish between a business deal and a non-business transaction.

12.Profit is proper only in business: If a person has brought an article costing price X from another city,it is wrong, unethical,to give it to a friend at a price higher than X, unless he is doing business.

13.Grey areas: There are several grey areas. It is usually considered ethical to pay commission to a person who has been of help in concluding a difficult transaction. Sometimes, such commission is called consulting fees, which is also legitimate. It may also be called “kickback”. That word suggests that something is wrong with that payment.

14.Perception: Observance of the standards of ethics or violation thereof, depends also on how one perceives fairness and equity. As an employee, one has an obligation to the organisation and that is expressed by carrying out the policies, programmes and directions of the top management.

15.If some of these are, in one‟s judgment, improper or detrimental to the interests of say, any of the stakeholders, what should one do? Go public on the information? This is called “Blowing the whistle”.

16.Ethics and Governance: Questions of business ethics have been the focus at various fore. Proprieties are talked about as issues of good corporate governance. Codes on “Corporate Governance” have been drafted and adopted.

17.Organisational Values: Organisations, like all collectives, have values. These are not the aggregate or resultant of the values of its members but have evolved since their inception. Individuals in organisational roles have to conduct themselves in accordance with organisational values, which may sometimes, be opposed to their individual values. They may be actively engaged in organisational activities which they may personally consider unethical.

  1. Values of an organisation determine its ethical behaviour: Values of an organisation, determine its ethical behaviour; not the laws / rules of the industry. Disputes about code violations, which are adjudicated upon by internal adjudicators, only show how violations can happen without being very apparent.

19.Ethical decisions: Ethics in business does not lie in the number of directors, or the rules governing its business. These are in the nature of legalities while ethics relates to proprieties. Ethics is observable in the decisions made by the individuals on behalf of the organisation. Some decision may have opposite impacts on different components of the environment.

The Spiritual Basis

20.Individuals determine corporate values. Some individuals have more influence than others in determining corporate values. A strong spiritual base helps to exercise significant influence.

20.1)Spirituality is different from religiosity: Spirituality is the very essence of all religions and thus unites mankind. Common people however, understand religion in terms of rituals and practices. These are ordained by the priests and commentators and these tend to divide people along sectarian boundaries.

20.2)Spirituality consists of an awareness that man is just an element in the huge universal system, in which there is place for, not only every living being, but also for the trees and plants and mountains and seas.

20.3)True spirituality prompts one to see every other being as of value, as an extension of oneself: the whole universe as one mighty expression of a common existence.

20.4)Spirituality provides the strongest base for ethical behaviour.

Justice and fairness automatically manifest, when one deals with another on the basis of love and concern. Given the basis of love and concern, there can be no exploitation or discrimination.

  • Substandard products will not be sold.
  • Mistakes in production or processing will be avoided; or if still occurring, apologised and made amends for.
  • Profits will be made as legitimate reward for entrepreneurship.
  • There will be no profiteering, which is exploitation of the other’s compulsions. Costs will not be cut at the expense of safety considerations.
  • The marketing orientation that sees service to and satisfaction of the customer as the crucial focus, is essentially ethical.

20.5)Spirituality helps one to retain faith in the performance of duty: Spirituality helps one to retain faith in the performance of duty being its own reward, being beneficial in the long run, and to see non-performance of duty (including abuse of authority) being harmful in the long run, both to self and the organisation. Those benefits include happiness and peace of mind; equanimity, stature in the eyes of the colleagues. Doing one‟s duty is its own reward.

20.6)Spirituality is concerned with strengthening (focussing) one’s mind.

Managing Ethics

23.Individuals in organisations have to:

24.Managements of organisations establish ethical standards through policy instructions:

What the organisation does, will speak more loudly than what it says in statements, as to what its ethical standards are. In evolving these standards and deciding on appropriate actions, the questions to be asked will be of the following nature:

  • Are the actions injurious to customers individually or society as a whole?
  • Is public interest being held more valid than self-interest?
  • What is happening at pressure points viz. places where products are returned, complaints are recorded, claims are being made, defects are reported, quality is checked, grievances are heard?
  • Are control mechanisms based on trust or on coercion or on need to improve or to find fault?

25.It would help to have a code of ethics, which states in principle, its standards of right or wrong Preparation of such a code requires that the top management think through its responsibility and what values it wants to uphold.

Following are some of the items included in the code of ethics of some firms as strictly prohibited.

  • Non-adherence to safety and quality standards Extortion
  • Kickbacks
  • Illegal political payments
  • Use of inside information
  • Violation of any law
  • Bribery
  • Falsification of accounts
  • Moonlighting
  • Revealing company secrets

26.Role of Organisations: Organisations are managed for effectiveness. Effectiveness, in the sense of achieving results for the organisation‟s growth, may point to the need for violation of law or falsification of accounts or support of an illegal activity. Bribes are paid but not shown as such. Various dubious methods are adopted to evade taxes.

27.Ethical behaviour is that which satisfies oneself as well as others.

  • Business managed ethically will not dehumanise workers, will enhance self esteem for all persons, employees and customers. Being ethical, helps to enhance satisfactions of customers and improve public image.
  • The rewards system communicates. While giving rewards, the ethical nature of the performance should not be ignored.

28.Code of behaviours outside the place of work

  • An intriguing question is about the application of the codes of behaviour outside the place of work.
  • There are behaviours outside the place of work that may relate to work.
  • These would be of the nature of divulging corporate secrets.

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