Regulation of Business Ethics in India
Businessmen observe business ethics on account of the consequences that would result due to their non-compliance. Here, some of the regulations are presented briefly:
1. Legislative Measures
Enforcing the legislative measures is one of the ways of making businessmen to follow business ethics. The purpose of enforcing the Acts is to protect the public interests including the business and the businessmen. The Companies Act, Consumer Protection Act, M.R.T.P. Act, Environmental Pollution Act, and the like are some of the legislative measures.
2. Goodwill of Business Unit
Generally, businessmen work hard to earn goodwill by adopting the principles of business ethics. Thereafter, they follow the same practice to maintain the earned goodwill.
3. Social Status of Businessman
Businessman thinks that he gets recognition from the public in a place where he does business. It is always ethical for a businessman to keep social status. Then, he enjoys social status continuously by avoiding unjust or immoral business activities.
4. Trade Union
There are a number of trade unions functioning in India. A trade union may be a registered or unregistered one. Trade union has to suffer a break if business ethics are not properly followed. Trade union acts as a watchdog to ensure observation of business ethics.
5. Business Association
Business association also guides the business as how to observe business ethics, stating the reasons for doing so. A business unit may be isolated from the business association if the particular business unit fails to comply with ethics.
6. Consumer Movement
Now-a-days, the consumer movement has developed so much to protect consumer interests. As a matter of fact, business ethics deals with morality in the business environment. Nevertheless, consumer movements take active part in the adoption of business ethics.
For example, if a purchased product is not up to the standards as specified, the consumer movement claims damages or takes steps to replace the product to the consumer and insists the business unit to maintain the quality as specified by it.
Business ethics of Indian Managers
A of 115 business executives, attending the middle and senior management programme of the I.I.M., Ahmedabad and belonging to different industries, ages, educational standards, religious affiliations and income groups, has revealed some notable results regarding Indian managers’ attitude towards “Business Ethics“.
The findings are given below. A new realization has been dawned upon businessmen about their responsibilities towards the employees, shareholders, etc.
Most of the Indian business managers believe in good business ethics; various circumstances like unnatural competition, Policy of the company and a excessive rules and regulations often prevent the mangers from putting this belief into practice.
1. ‘Buying business’ by way of bribes as gifts and personal favor are a major concern for managers. Personal problems also caused anxiety, but mostly due to a conflict of the head and heart when emotions came in the way of responsible decision-making.
2. Before executing an action, managers generally analyze the of decision making.
3. Managers emphasis the importance of company policy primarily in influencing ethical action. A man’s personal code of conduct is considered secondary.
4. The influence of supervisors, through whom the company policy is most often transmitted, was considered important in influencing ethical action.
5. Dishonest methods used by competitors and the unethical climate in the industry were often cited as deterrents to the honest transaction of business.
6. Corruption and greed of government officials, , , and suffocating regulations were considered obstacles to ethical business behavior.
7. The attitudes and reactions of the older business managers to situations demonstrated a greater ethical awareness than those of younger ones.
8. The size of the company, by and large, had no discernible influence on ethical decision making by managers.
9. Managers were dissatisfied with the idea that profits should be the only guidelines for a businessman in decision-making.
10. Formal education and training to managers did not seem to have stimulated the desire to act honestly.
11. The ethical attitudes of the managers who belong to a religion which was more organized were no better than those in whose religion there is no much scope for guidance.
12. Certain areas (construction, engineering, research and development, banking, investment and insurance) seemed more prone to encouraging unethical practices than others.
13. A majority of the managers welcomed the idea of a code of conduct and felt it would help to improve the ethical climate in the country.
14. Managers felt that the management of each company (i.e., self-regulation) would be the authority best suited to enforce the code.