Values and ethics foundation of business Education

Dr. D. Mukhopadhyay
Corporate ethical values constitute integral part of corporate culture which makes an organization different from others. The term ‘corporate’ is used here more in generic but not in legal sense and accordingly it stands for any organization that remains engaged in production and distribution of want removing goods and services . Ethical values are considered to be the guiding parameters for doing business in theory but in many cases it is found that practice of relevance and significance of ethical values in day to day running of the commercial operations of a business just remain in papers and they are seen to be quite far from reality. Truly speaking, the organizations who have made a mark in the business world are observed to have been enormously influenced by corporate ethics and values and one of such Indian industrialists is Tata Sons Ltd. Ethics and values are the strength of business and it is not simply for compliance but a subject of serious practice . Corporate values tremendously have directly or indirectly bearings over the quality of products or services the company deals in. Corporate ethical values influence organizations’ advertising contents, pricing policies, treatment of employees in the organization, treatment of suppliers rights, and last but not the least performing the Corporate Social Responsibilities (CSR).
Theoretically speaking, corporate ethical values are associated with the loyalty commitments of the firms to the society in general and the shareholders, government, trade unions etc. in particular. A firm should not do certain things which are socially prohibited or certain things which are detrimental to securing social wellbeing. Society and business has a symbiotic relationship and one is not independent of other. It is a matter of great regret that corporate commitments is declining at an alarming pace and many industry houses presume that doing business within the circumference of ethical business practice is impossible and consequently, they invite and indulge unwanted commercial practices which lead them to the door of economic tsunami and disaster and in this connection, the practice of Satyam Computers Services Ltd. is a glaring example of unethical value based corporate practices.
The corporate fraud committed by Satyam Computer Services Ltd is about corporate governance and fraudulent auditing practices allegedly in connivance with financial auditors and accountants. The company misrepresented its accounts both to its board, stock exchanges, regulators, investors and all other stakeholders.
This is a fraud that misled the market and other stakeholders by lying about the company’s financial health. Even basic facts such as revenues, operating profits, interest liabilities and cash balances were grossly inflated to show the company in good financial health. As a consequence, the company suffered from mistrust of the society and it was financially bailed out by another corporate house which is known to all. Corporate culture is multifaceted construct. It is the embodiment of customs, beliefs, values and knowledge of ethics which play a prominent role to make a firm accomplish its budgeted goals. Values have dominant influence in directing the actions of individuals in the companies’ day to day economic affairs in particular and the society in general. Simply speaking, for society, values define the core aspects of human civilization and the behavioral pattern of people in society is also reflected in the civilization. It has been mentioned elsewhere that corporates and society are keenly dependent of each other and how a business promoter shall behave in discharging his or her executive role depends on the society he or she comes from.
Corporate governance is the internal mechanism or contrivance whose capability and efficiency determine the commercial success for a business and corporate ethics binds the corporate governors for acting in honest and fair ways so that governance would not lead a business to the stage of Satyam Computers Services Ltd. but those business houses can exist as ‘going concern’. Moreover, it is the responsibility of a healthy corporate governance to create and maintain a positive ethical business environment so that nothing detrimental to the interest of the society is encouraged .The researchers are of the views that failure to maintain a befitting ethical climate and to provide the employees with appropriate models of practicing ethical behavior leads to incur a high cost for the business organizations. The ethical culture seems to be effective when organizational stakeholders are found to be motivated to behave ethically. Decision making is the most important function of any management and the same should be within the four walls of ethics and values so that wrong acts and omissions shall be recognized as wrong actions and right acts shall be considered to be known as the right actions of the management. It is mentioned earlier that management of an organization is a decision making organ which is responsible for designing the road map of the corporate success and when decision making process is subject to having been influenced by the essence of corporate ethics and values, it is able to generate desired fruits in the best interest of the organization
To call a spade a spade, ethics acts as a deterrent in order to prevent an organization from committing any civil as well as criminal wrongs. Corporate governors’ judgment with reference to utilization of social goods if not ethics and value based, is expected to make the business climate disastrous. It is mentionable that values form an important constituent for ethical behavior. Values may significantly be assessed on both the organizational and individual levels. The harmonic link between the values of an organization and values of an individual is known as ‘ person-organizational fit’ or simply ‘congruence’. Organizational ethics refers to a set of values that are considered to be the determinants of organizational distinctiveness. It is worth mentioning that business must be conducted with the strength of strong ethical values otherwise it will sink in the ocean of social trust deficit. The debacle of Enron, Tyco, World .Com., Adelphia, Arthur Andersen, Merrill Lynch, Morgan Stanley, Lehman Brothers and Satyam Computers stands for the shocking episodes of corporate misconduct. The insatiable lust and greed for monetary power not only ruined those business houses like house of cards but injured the society at large. It has been transpired on investigation into the committed frauds of these companies that there were series of glaring violations of legal as well as ethical norms which form the cardinal backbone of the business in any country in the world. These financial frauds caused irreparable injuries to the customers, employees, creditors and last but not the least shareholders who virtually called as the owners of the company. Indian business climate was earlier polluted by security scams caused by Harshad Mehta and Ketan Parekh. Smith Barney as well as Merrill Lynch have badly cheated small investors with inflated stock recommendations. The financial frauds and irregularities committed by large business houses across the globe offers a clear view about the peculiar and indifferent attitudes of the business promoters towards the small and medium investors and thousands of their employees and the root cause for the financial frauds committed by the companies is due to ethical breakdown of the concerned companies. All of these financial scandals happened due to having value free education in the field of Commerce, Management, Economics, and Behavioral Sciences. In simplicity, Ethics protects the business and society by providing stability and sustainability. People in general started to believe that ‘Business and Ethics are incongruous’ and this the cause of down fall of business. It is worth mentioning that business is not separate from society but it an integral part of the society. Business has certain fundamental duties and responsibilities towards the society. It is therefore a high time to take into consideration that conceptual knowledge of moral theories and ethical value based education only can resolve the ethical problems the corporate houses come across today. The Business Schools all over the country should prepare their students to overcome various ethical and moral problems through inclusion and teaching a sufficient quantum of value based education and Ethics so that they would start to think that business has something to do with Ethics and value based education and profit is not everything for long term sustainability.
(The author is Professor of Management, School of Business & Dean-Faculty of Management, Shri Mata Vaishno Devi University, Katra)