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BBA 1st Year Business Ethics Gandhian Philosophy of Wealth Management Short Question Answer

Q.15. Why good managers make bad ethical decisions?

Ans. Managers at various levels have been found very frequently to be indulging in unethical practices. When questioned, they always have a reason for their maipractices.

Following are some of the reasons that are offered as explanation for their immoral conduct

(1) 1 have to satisfy the inspector of the electricity board to maintain adequate power supplies in times of recurrent shortage.

(2) 1 am obliged to entertain and enrich purchase manager of a high value customer to keep him from switching over to our competitor.

(3) I have to fiddle around with year-end inventories to show a higher profit figure to the board of directors.

(4) 1 have to produce fake securities and bills receivable to procure ready cash.

(5) I have to over-invoice import bills and under-invoice export bills to oblige overseas owners.

(6) 1 have to sign the transfer order of an officer to satisfy the higher-level boss.

(7) I have to arrange for cash payments to govt officials from tax departments to keep them from creating trouble for the company.

(8) 1 have to manipulate data when preparing the project report to meet the hurdle rate of financial institution. These are invoked to circumvent the conflict between the instant, relative and enduring universal values (honesty, responsibility etc). This side-stepping is also an excuse at times to subvert personal ethics in favour of company goals, under the argument that personal values are inappropriate as standards for corporate decisions.

Q.16. What are the primary reasons for bad decisions taken by good managers?

Ans. Primary reasons for bad decisions taken by the good managers are as follows:

(1) No Correlation Between Managerial Ability and Ethics : There is actually nothing surprising about good managers taking bad ethical decisions because there, is not much co-relation between the two. Managerial ability is about planning, organising, developing! deploying/directing, co-ordinating and controlling a particular activity. Hardly do any of these functions requires ethical input. On the contrary, control function when dealing with human element, often requires employment of manipulations skill to extract best out of the people in the short-term.

(2) Greed as One of the Prime Reasons for Managers Taking Bad Ethical Decisions : Material success is high for most of the managers. This desire of achieving material success drives them towards unethical conduct.

(3) Short Term Focus is Another Reason: Ethical conduct is a sure but slow way to success. Managers lack patience and take short cut of unethical way to achieve quick material success. However, long-term consequences of such unethical conduct are often disastrous.

(4) Inadequate Moral Development is Another Reason : Many managers during their development process don’t get exposed to moral values and ethics of life and of moral development and remain at pre-conventional level where they are guided in their actions by rewards and punishments.

(5) Misplaced Loyalty: Many managers fall due to their misplace loyalty. These are people who are perfectly ethical in their personal conduct. However, they indulge in all sort of unethical practices as managers. That is because they attach more loyalty to their company rather than society. They take unethial decisions in order to benefit the company. They are ethical in their own right but not in popular sentiments of society who are at receiving end of their skewed loyalty. General Dyer is the blazing example of such a person. He was responsible for the Jallianwala Bagh massacre of 13th April 1919, in which thousands of marwed peaceful Indian people were gunned down on the order of Brigadier General Dyer

(6) Peer Pressure is Another Reason: A man living in an environment where unethical decisions are routine among peers, ethical conduct becomes a reason for ridicule and derision from the peer group.
(7) Company’s Policies are Next Reason: Many companies give little importance to ethical issues in their business. Profit is their only God. In order to retain their livelihood in such companies, many desperate managers yield to the pressure.

Q.17. What is the process of development of moral values?

Ans. Process of Development of Moral Values: Moral values are not born characteristics but are acquired gradually over a period of time. A newly born child has no moral values. He learns them from his surroundings as he grows . Some are taught to him by his family and teachers, some he acquires from reading religious literature and some he learns by observing and feeling. This process can be broadly categorised into three distinct categories:

(1) Pre-Conventional Level: Person follows the dictates of law and good behaviour out of fear of punishment or expectation of reward. In the early stage of childhood, he is taught by mother, father and teachers to follow certain rules and he does that more out of fear of punishment or for promised reward. This is pre-ethical stage or preparation stage for ethics

(2) Conventional Level : Person conforms to the behavioural standards to meet the expectations of peers and society to avoid ridicule and gain acceptance in the society.

(3) Post-Conventional (Principled) Level : Person develops a personal and internal set of standards and values which he is not willing to compromise even in the face of threat or personal loss. He sticks to these values for his own sake (about 20% of adults reach this stage fully or partially).

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