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BE-P05
(PGP 2006-08 : Term-IV)

BUSINESS ETHICS
(Faculty: Dr. B.P. Patra)

OBJECTIVE OF THE COURSE:

The recent scandals of Enron, WorldCom, Tyco, Adelphia, Rite Aid, Health South, Arthur Andersen, Earnest & Young, J.P Morgan, Merrill Lynch, Morgan Stanley, Xerox, and Boeing Corporation, clearly illustrate the perilous consequences of corporate misconduct. The insatiable greed 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 (particularly the small investors). The two major scams (Harshad Meheta and Ketan Parekh) in the Indian stock market and major brokerage houses like; Smith-Barney and Merrill-Lynch in USA betrayed small investors with inflated stock recommendations. This clearly gives an idea about the indifferent attitude of the stock brokers towards the small investors. The root cause of the entire crisis is ethical -break down (or moral failure) not market failure.
In order to prevent the risk associated with moral failure students need to develop a clear understanding of the ethical issues. The main aim of the course is to sensitize the students to different ethical issues entailed in contemporary business. This course will help them to identify and resolve the ethical problems. It will also motivate them to act ethically/rationally in business decision-making as well as other areas of life. Of course, the objective of the course is neither character building, nor providing any specific solution to wipe out unethical business behavior. Rather, the primary purpose of this course is to prepare the students to prevent unethical activities that affect business (both in macro and micro level). This course will also focus on the fact that acting ethically “pays.” Nonetheless, acting ethically and acting in the best interests of oneself and one’s company, far from being exclusive, are complementary. There is therefore, every reason to act ethically, and this course is devoted to explore the ethical truth in the professions through the use of critical and logical analysis. Conceptual clarity of some basic moral conduct concepts like; right, wrong, good, bad, just, unjust, obligation, responsibility, virtue, vice and lucid exposition of moral theories will provide them the support to take effective decision . Thus this course will work as a useful tool (i.e. by critical thinking and sound moral reasoning) and help the students to become efficient managers. As a result they will be enabled to:
· Take-up responsibility by using sound moral judgment.
· Walk the Talk by creating value (for stake holders), which are morally rich.
· Put together “doing right things” and “doing right things for business”.
· Encounter the environment of scandal and bad behavior with moral courage and not hide behind the old excuse of “the business of business is business”.

COURSE CONTENTS:

Sessions:
Session 1
General Introduction:
Two Origins of Economics, Origin and Development of Management, Long Term Owners Value

Session 2
What is ethics?
i) Ethical thinking? (ii) Nature of ethics, (iii) Ethical Relativism
(iv) Fact and Value

Session 3
Ethics and Business:
(i) Why be Moral?
(ii)Why be moral in business?
(iii)The myth of amoral business.
(iv)The evolution of business ethics.
(v) From stock holders to stake holders (brief focus on governance and ethics)

Session 4
Moral Development
(i)Kohlber’s 6 stages of moral development
(ii) Morality and Law

Session 5&6
Ethical Theories:
(i)Utilitarianism (J.S.Mill)
(ii)Deontology (I.Kant)
(iii)Virtue Theory (Aristotle)

Session 7
Theories of Economic Justice:
(i)Distributive Justice (John Rawls)
(ii) Libertarian Justice (Robert Nozick)

Session 8&9
Ethical Issues in Functional Areas of Business :( Marketing, Advertising, and Finance) (iii) Fairness and Efficiency in Financial Market (Insider Trading and Green mail)
(iv) Truth in Advertising

Session 10
Workers Right and Duties within the Firm
(i) Whistle blowing
(ii) Work place Safety, (iii) Discrimination (based on sex, race and cast)

Session 11
Indian Value System
(i) An Over View of Indian Philosophical Tradition (both Orthodox &Heterodox systems) and its relevance to contemporary business.
(ii) The Four Purusarthas: Artha(Wealth),Kama (Desire),Dharma(Moral Principles)and Moskha (Salvation)
APPROACHES TO CASE ANALYSIS IN BUSINESS ETHICS:
(i)Rational Approach (ii) Transrational Approach (iii) Goodpaster’sApproach

Sessions 12- 15
Case Analysis

Sessions16-20
HBR, Articles Presentation

PEDAGOGICAL METHODS:

All these issues will be discussed conceptually and relevant case studies will be provided to students for critical examinations. This will help them to reflect on the ethical aspect of the problem and develop their own vision with regard to moral problems involved in business. In order to achieve this goal it is essential for students to take part in class discussions and reflect on various ethical issues. Interactive method will be adopted while delivering the lectures. Involvement of the students is necessary for a better understanding of the course. Clear understanding of the moral theories, will assist the students to analyze the articles/cases (given for discussion in the class) through the lenses of moral theories. Ultimately they will be able to see real-life cases in a new light and will find ethical analysis less wearisome in their work place.
Students will analyze the following cases in the class.

Cases:
1. Parable of the Sadhu, by Bowen H. McCoy, Harvard Business Review , Sept - Oct 1983.
2. Why Good Managers make Bad Ethical Choices, Three cases are given here to illustrate the point.(i)MANVILLE CORPORTAION,(ii)CONTINENTAL ILLINOIS BANK and(iii)E.F HUTTON.
by Saul W. Gellerman in Andrews Kenneth R.(ed) Ethics in Practice: Managing the moral corporation, Harvard Business School Press, 1989. pp - 18 - 26. More details on these cases will be provided to students from other sources.
3. Marketing Infant Formula in Less Developed Countries.
Source: Hoffman and Moore, Business Ethics: Readings and Cases in Corporate Morality, McGraw Hill 1984. pp - 427-37
4. The Bhopal Tragedy
5. Toy Wars.
Sources: Case 4&5: Velasquez Manuel G. Business Ethics: Concepts; and Cases, Prentice Hall 1992, pp. 3 - 6, &pp. 433 - 437
6 Insider Trading: The HLL case
7. Asian Paints: The Ethical Dimension
8. Product Re-call: The virtuous Behavior of Maruti Udyoga.

9. Tata Tea Funding ULFA:An Ethical Analysis
Source:These four Cases are developed by students of XIMB and moderated by Dr.B.P.Patra.The main sources of information were News Paper Articles and Business periodicals.
10. The Case of the Willful Whistle Blower
11. Burroughs Welcome and the pricing of AZT 12. Beach-Nut and No-Apple-Juice Apple Juice. 13. Prisoner's dilemma.
14. Moneylenders in the Temple:Calvi,Banco Ambrosiano. 15. Parable of Leadership(source:HBR,July-August,1992)
16 . Waste Management Corporation
17. Arthur Andersen
18. Tyco
19. World Com.
20. Enron

Source: Monks and Minow, Corporate Governance, 3rd Edn., 2004, Blackwell Publishing
Text Book
Velasquez, Manuel G. Business Ethics; Concepts and Cases, (5th edition) Pearson Education, 2005

REFERENCE BOOKS

Boatwright John R., Cases in Ethics and the conduct of Business , Prentice hall, Englewood Cliff, New Jersey 1995

Buchholz Rogene, A. Fundamental Concepts and problems in Business Ethics, Prentice Hall,
Eaglewood Cliffs, New Jersey, 1989.

Donaldson, Thomson & Werhane Patrica, H., Ethical Issues in Business : A philosophical
Approach, (Fourth Edition) Prentice Hall Englewood Cliff, New Jersey, 1993

George Richard T.De. Business ethics, (Third Edition) MacMillan Publishing Company New
York, 1990.

Frankena William K., Ethics, (Second Edition) Prentice Hall of India, New Delhi, 1973.

Sen., A. Ethics and Economics, Oxford University press, 1987.

Shaw William H. Business Ethics (4th edition), Thomson /Wordsworth,2002

Evaluation Criteria

Quizzes: 20%
Quizzes will be of objective type and will be based on lecture notes and class discussion.

Mid Term Examination 20%
The mid term examination (close book) will be subjective and will cover all the topics covered till the mid term.

End Term Examination: 35%
The final examination will involve analysis of small cases and few subjective questions.

Group Assignment: 10%
The assignment consists of the preparation of a written report and class presentation of the topic of assignment. The instructor will assign articles for review to each group.
All students within the group will be given the same mark on presentation and written report.
Case Analysis (Group Presentation) on “Business, Society and Deviant practices”: 10%
Both the instructor and the class will grade the case analysis. It will be based on:

1. Description of Case facts.
2. Use of moral theories
3. Clarity of thoughts
4. Handling of counter arguments
The instructor will allot cases to each group for analysis.
Class Participation 5%

The nature of the course is such that much of the learning comes form the students’ participation in the class discussion. Basically it is a critical thinking class. Better understanding of the course is possible through your thoughtful deliberations in the class.
Attendance is compulsory.

**Any team member absent on the day of their group presentation will get 0 in the component

Created By: Bijoy Kar on 06/12/2006 at 12:33 PM
Category: PGP-II Doctype: Document

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