JAIIB PPB Unit 46 - Ethics at the Individual Level

JAIIB PPB Unit 46 - Ethics at the Individual Level (Year: 2019)


Ethics is the science of morals; it is that branch of philosophy that deals with human character and conduct. It is treaties on morals distinguished between right and wrong. The ethical conduct confirms with what a group or a society considers “right behavior”. It is a set of moral choices, rules and codes of conduct that governs behavior.

Theoretical ethics, sometimes called normative ethics, is about discovering and delineating right from wrong; it is the consideration of how we develop the rules and principles (or norms) used to judge and guide meaningful decision-making. Theoretical ethics is supremely intellectual in character, and, being a branch of philosophy, is also rational in nature. Theoretical ethics is the rational reflection on what is right, what is wrong, what is just, what is unjust, what is good, and what is bad in terms of human behavior.

Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.


Norms are expectation of proper behavior not the requirement of that behavior. Norms are the ways an individual expects all the people to act in a given situation. They are inconsistent and universal. Norms are not published, may not be obeyed and cannot be enforced except by sanctions of a group who use penalties as disapproval or exclusion.

Norms are informal guidelines about what is considered normal (what is correct or incorrect) social behavior in a particular group or social unit. Norms form the basis of collective expectations that members of a community have from each other, and play a key part in social control and social order by exerting a pressure on the individual to conform.


Values are collective representations of what constitutes a good life or a good society. For e.g. health, self respect, tolerance, freedom etc. values is a term referring to things that people consider good or bad, right or wrong, desirable etc. Values are the potent source of conflict and cooperation.

Values are important and lasting beliefs or ideals shared by the members of a culture about what is good or bad and desirable or undesirable. Values have major influence on a person’s behavior and attitude and serve as broad guidelines in all situations.


Beliefs in an ethical code are standards of thought. Beliefs are criteria of abstract thought that does not necessarily evoke action. It may instigate or forces certain quest in the environment that coheres one to behave in a certain manner. Beliefs are among the most primitive and central of mental constructs, and yet there is little agreement as to what they are or how they should be construed. They are basic to our understanding of a wide range of central phenomena in modern psychology. For example our beliefs are key components of our personalities and senses of identity, and our expressions of beliefs often define us to


Integrity, said author C.S. Lewis, “is doing the right thing, even when no one is looking.” Integrity is a foundational moral virtue, and the bedrock upon which good character is built. Acting with integrity means understanding, accepting, and choosing to live in accordance with one’s principles, which will include honesty, fairness, and decency. A person of integrity will consistently demonstrate good character by being free of corruption and hypocrisy.

Integrity is revealed when people act virtuously regardless of circumstance or consequences. This often requires moral courage. Indeed, integrity is the critical connection between ethics and moral action.


Ethical executives are honest and truthful in all their dealings and they do not deliberately mislead or deceive others by misrepresentations, overstatements, partial truths, selective omissions, or any other means.

Promise-Keeping & Trustworthiness

Ethical executives are worthy of trust. They are candid and forthcoming in supplying relevant information and correcting misapprehensions of fact, and they make every reasonable effort to fulfill the letter and spirit of their promises and commitments. They do not interpret agreements in an unreasonably technical or legalistic manner in order to rationalize non-compliance or create justifications for escaping their commitments.


Ethical executives are worthy of trust, demonstrate fidelity and loyalty to persons and institutions by friendship in adversity, support and devotion to duty; they do not use or disclose information learned in confidence for personal advantage.

They safeguard the ability to make independent professional judgments by scrupulously avoiding undue influences and conflicts of interest. They are loyal to their companies and colleagues and if they decide to accept other employment, they provide reasonable notice, respect the proprietary information of their former employer, and refuse to engage in any activities that take undue advantage of their previous positions.


Ethical executives and fair and just in all dealings; they do not exercise power arbitrarily, and do not use overreaching nor indecent means to gain or maintain any advantage nor take undue advantage of another’s mistakes or difficulties.

Fair persons manifest a commitment to justice, the equal treatment of individuals, tolerance for and acceptance of diversity, the they are open-minded; they are willing to admit they are wrong and, where appropriate, change their positions and beliefs.

Concern for Others

Ethical executives are caring, compassionate, benevolent and kind; they like the Golden Rule, help those in need, and seek to accomplish their business objectives in a manner that causes the least harm and the greatest positive good.

Respect for Others

Ethical executives demonstrate respect for the human dignity, autonomy, privacy, rights, and interests of all those who have a stake in their decisions; they are courteous and treat all people with equal respect and dignity regardless of sex, race or national origin.

Law Abiding

Ethical executives abide by laws, rules and regulations relating to their business activities.

Commitment to Excellence

Ethical executives pursue excellence in performing their duties, are well informed and prepared, and constantly endeavor to increase their proficiency in all areas of responsibility.


Ethical executives are conscious of the responsibilities and opportunities of their position of leadership and seek to be positive ethical role models by their own conduct and by helping to create an environment in which principled reasoning and ethical decision making are highly prized.


Ethical executives acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, their colleagues, their companies, and their communities.


Morals are the prevailing standards of behavior that enable people to live cooperatively in groups. Moral refers to what societies sanction as right and acceptable.

Most people tend to act morally and follow societal guidelines. Morality often requires that people sacrifice their own short-term interests for the benefit of society. People or entities that are indifferent to right and wrong are considered amoral, while those who do evil acts are considered immoral.

While some moral principles seem to transcend time and culture, such as fairness, generally speaking, morality is not fixed. Morality describes the particular values of a specific group at a specific point in time. Historically, morality has been closely connected to religious traditions, but today its significance is equally important to the secular world. For example, businesses and government agencies have codes of ethics that employees are expected to follow.

Some philosophers make a distinction between morals and ethics. But many people use the terms morals and ethics interchangeably when talking about personal beliefs, actions, or principles. For example, it’s common to say, “My morals prevent me from cheating.” It’s also common to use ethics in this sentence instead.

So, morals are the principles that guide individual conduct within society. And, while morals may change over time, they remain the standards of behavior that we use to judge right and wrong.

Conflict of Interest

A conflict of interest arises when what is in a person’s best interest is not in the best interest of another person or organization to which that individual owes loyalty. For example, an employee may simultaneously help himself but hurt his employer by taking a bribe to purchase inferior goods for his company’s use.

A conflict of interest can also exist when a person must answer to two different individuals or groups whose needs are at odds with each other. In this case, serving one individual or group will injure the other.

In business and law, having a “fiduciary responsibility” to someone is known as having a “duty of loyalty.” For example, auditors owe a duty of loyalty to investors who rely upon the financial reports that the auditors certify. But auditors are hired and paid directly by the companies whose reports they review. The duty of loyalty an auditor owes to investors can be at odds with the auditor’s need to keep the company – its client – happy, as well as with the company’s desire to look like a safe investment.

So, those of us who wish to be ethical people must consciously avoid situations where we benefit ourselves by being disloyal to others.


A dilemma is a tough choice. When you're in a difficult situation and each option looks equally bad, you're in a dilemma.

Dilemma is from a Greek for "double proposition." It was originally a technical term of logic, but we use it now for any time you have a problem with no satisfactory solution. If you're at the mall choosing between red or blue socks, that's not really a dilemma. But if you have to choose whether to save your cat or your dog from a burning building, that's an awful dilemma.

Decision-Making Models: The Golden Rule

This most basic and useful ethical theory, sometimes called the “Rule of Reciprocity,” has a long history:

Confucius (500 B.C.): “What you do not want done to yourself, do not do to others.”
Aristotle (325 B.C.): “We should behave to others as we wish them to behave to us.”
From the Mahabharata (200 B.C.): “Do nothing to thy neighbor which thou wouldst not have him do to thee thereafter.”
Jesus (30 A.D.): “As ye would that men should do to you, do ye also to them likewise.”
The Golden Rule is valid for a great range of decisions, personal or professional. Even in the most difficult situation, application of the “do unto others” standard often reveals what actions are ethical and which are not. If you don’t want to be deceived, don’t deceive others. If you want others to keep their commitments to you, keep your commitments to them.

Treating others Better Than They Treat You

Cynics claim that the Rule will not work in the “real world.” They suggest that to survive one must “do unto others before they do unto you.” This, of course, becomes a self-fulfilling prophesy fueling an anti-ethical, everyone-for-himself ethos. Of course, many people do not live by the Golden Rule; they do not treat others fairly, honestly or with compassion. The challenge to an ethically committed person is to overcome this fact of life and do what is right in spite of, even because of, the failure of others to do so.


The Golden Rule, however, falters in situations that involve a complex network of stakeholders with conflicting interests. It provides no guidance on how to choose among them.

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