LECTURE 4

1. Organizational Culture

What are the Components of Organizational Culture?

There are many factors which contribute to an organization’s culture, but only three
fundamental components:
1. Workers’ conduct in the workplace,
2. The attitudes, temperaments, and cohesiveness of staff, and
3. The vision and values of staff and leadership.

What is the three-fold method for analyzing organizational culture?

1-Workers’ conduct in the workplace.

How company employees interact together, treat each other, value each other, esteem
each other, and interact makes up their conduct, and employee conduct contributes
strongly to fundamentals such as teamwork and workplace efficacy. Community and
fairness as two strong elements of a great place to work. When employees treat each
other well, they form bonds of friendship which extend beyond mere co-worker relations
and they develop a cohesiveness that makes them strongly effective as a team and for the
organization

1- The attitudes, temperaments, and cohesiveness of staff.

Some aspects may seem to overlap with the first, but in fact are distinct and different.
Second method for analyzing culture is clarified in what is said. Just as actions are
important, so are words. This comes across in many ways such as the general attitude
of individual employees, but also in the way they speak about work assignments,
management, and each other. The temperament of individuals is important in how it
influences the way they handle emotions, regulate their behavior, and generally, how they
feel about those around them A staff is said to work cohesively if teamwork is esteemed
highly and if they communicate effectively

3-The vision and values of staff and leadership.

Final method for analyzing culture examined these by analyzing what staff believed. If
employees of a company share a common vision and common values, the team will work
together more effectively since they’ll be sharing in a common purpose.

Why Organizational culture is important?

Organizational culture is important because it is the primary factor for determining how
well an organization executes on every other aspect of organizational performance.
Culture may also be the most important competitive advantage because it is the hardest to
copy.

7 Reasons why organizational culture is important

1) It defines your company’s internal and external identity
2) Organizational culture is about living your company’s core values
3) Your culture can transform employees into advocates (or critics)
4) A strong organizational culture helps you keep your best people
5) A well-functioning culture assists with onboarding
6) Your culture transforms your country into a team
7) Culture impacts performance and employee wellbeing

What is Corporate Culture?

Corporate culture refers to the values, beliefs, and behaviors that determine how a
company's employees and management interact, perform, and handle business
transactions. Often, corporate culture is implied, not expressly defined, and develops
organically over time from the cumulative traits of the people that the company hires.

KEY TAKEAWAYS

 Corporate culture refers to the beliefs and behaviors that determine how a
company's employees and management should interact and perform.
 It can affect employee hiring and retention, performance and productivity,
business results, and company longevity.
 Corporate culture is influenced by national cultures and traditions, economic
trends, international trade, company size, and products.
 Corporate culture represents the core values of a company’s ideology and
practice.
 The four types of corporate culture are clan culture, adhocracy culture, market
culture, and hierarchy culture.

Types of Corporate Culture

 Clan culture is known for effective collaboration.

 Adhocracy culture is known for its ability to create and innovate.
 Market culture is known for its competition
 Hierarchy culture is known for temperance and control.

1) Clan Culture: Clan cultures are about teamwork and collaboration. In such a culture,
those in management function as enthusiastic mentors who provide guidance to
subordinates. Good relationships, encouragement, trust, and participation are key
aspects. The contribution potential of every employee is a component of a clan culture.
Also, clan culture can easily adapt to change and implement needed action quickly.
Pros of Clan Culture:

 A company with a clan or collaborative culture feels like a family.

 All the employees know each other and consider their coworkers friends.
 Employees tend to have many interests in common and share a similar worldview.
 Employees tend to stay with the organization for a long time.
 Customers are also loyal and partnerships last.
 Everyone is valued equally, given the chance to participate, and has the
opportunity to provide feedback.
 A happy team who genuinely enjoys working together.
 Improved communication between employees.

Cons of Clan Culture:

 Too much collaboration or unnecessary chatter, which can send productivity into
a nosedive.
 Inability to make tough decisions because other people’s feelings are of such high
priority.

Example of Clan Culture:

Zappos, online shoe and clothing retailer, is often praised for having a positive culture –
so much so that the company’s CEO literally wrote a book on their culture of happiness.
With “build a positive team and family spirit” as one of their ten core values, they best fit
the clan culture model.

2) Adhocracy or Creative Culture:

 An adhocracy is the most creative type of culture.

 Everyone is expected to be an innovator and should be experimenting constantly
with new ideas.

Pros of Adhocracy culture:

 Adhocracy cultures put an emphasis on company growth and on bringing new

products or services to the market fast.
 An enormous amount of innovation and growth.
 Increased psychological safety, which means employees feel secure trying new
things.

Cons of Adhocracy Culture:

 A seeming lack of stability because so much is invested in new initiatives.

 Sense of intimidation for newbies who don’t have the expertise to work quickly
and aggressively.
 Businesses with a creative culture have the opportunity to see great profit margins
— but there’s also the chance that their products (or even the entire enterprise)
will fail completely.
 The atmosphere can become highly competitive. Whereas some workers enjoy
being challenged, others find the pressure stressful.
 A seeming lack of stability because so much is invested in new initiatives.
 Sense of intimidation for newbies who don’t have the expertise to work quickly
and aggressively.

Example of Adhocracy Culture;

- Google didn’t become one of the most well-known tech companies in the world by
resting on its laurels. The company is all about innovating to improve search and launch
new offerings, which means their culture is best described as an adhocracy culture.

- Facebook is another good example of adhocracy culture, although their “move fast and
break things” mentality has had to shift recently due to increased consumer vigilance.

3) Market or Compete Culture: A market culture is also called a “compete culture,”

because the emphasis is placed on results. To put it simply, people want to win and
accomplish what they set out to do.
Employees are highly goal-focused and leaders are tough and demanding in order to
achieve the success metrics the company has defined. It can be a high-pressure
environment, but simultaneously rewarding when that hard work pays off with real,
measurable results.

Pros of Market Culture:

 Employees are driven and highly motivated to achieve their goals.

 Improved performance for the company, because everybody is committed to

success.

Cons of Market Culture:

 Encouraging constant competition can lead to a toxic work environment.

 Employees can experience stress and even burnout as a result of the constant
pressure.

Example of Market Culture:

Amazon often made headlines for a company culture that can only be described as,
relentless. Employees have spoken openly about the fact that they’re expected to deliver
results and climb the ladder, no matter the personal cost. While Amazon would likely
refute these claims, the company’s obvious emphasis on success means they still fit the
market culture mold. One of Amazon’s leadership principles is to “deliver results.”
“Leaders focus on the key inputs for their business and deliver them with the right quality
and in a timely fashion,” the company says of their values. “Despite setbacks, they rise to
the occasion and never settle.”

4) Hierarchy or Control Culture: A hierarchy culture also known as a “control culture”

applies to work environments that are more structured and process-oriented. Most
activities and decisions are dictated by existing procedures, rather than a lot of innovation
and freethinking. Leaders are in place to ensure that their teams run like well-oiled
machines, and they place the bulk of their focus on stability, results, and reliable
delivery.

Pros of Hierarchy Culture:

 There’s a lot of clarity in communication and expectations because nearly

everything is prescribed.

 Employees experience a greater sense of security and predictability.

Cons of Hierarchy Culture:

 Prioritizing procedures over people can make the environment feel inflexible and
even unsupportive.
 Too much rigidity can stifle innovation and growth because people are afraid to
think outside of the box.
 Companies with hierarchy culture are less dynamic than those with some other
types of cultures, this makes a hierarchy culture unsuitable for industries where
innovation is paramount.

Example of Hierarchy Culture:

1. Political systems

Political systems are hierarchical cultures as they have the president at the top, then the
vice president, and so forth. Just like the military, political systems ensure everyone
understands their role and is able to perform well. However, as mentioned above, such
detailed hierarchy systems can make the process of decision making overly complicated,
often delaying action.

2. Ecommerce businesses
The hierarchical structure can work well for large ecommerce businesses (take Amazon
as an example) because it allows for the company to be organized into smaller teams
under separate management for a more precise service that ensures attention to detail.

3. Schools

Schools are places of learning and growth that have a hierarchical culture to maintain
order and structure. This type of culture encourages respect for authority figures, such as
teachers and administrators.

For instance, in the classroom, teachers are expected to be respected by students for their
knowledge and experience. When it comes to decision making on issues related to
curriculum or disciplinary action, teachers often have more power than students do.

Furthermore, administrators may also determine who has access to certain resources
within the school building such as after-school activities or special classes available only
to certain grade levels.
Lecture 5
Team culture

Team culture: Is the collection of values, beliefs, attitudes, and working practices that
make up a company culture. A team’s culture defines how the work environment looks,
how a team works together to achieve their common goals. Consider all the ways your
team interacts, the team values, the shared values, and the things of importance to the
group. That’s your team culture.

A strong team culture is one that focuses on collaboration. The best way to demonstrate
this type of workplace culture is when there are several opportunities for employees to
work within a team.

What is Team Culture's Three Pillars?

Values, attitudes, and objectives are the three basic foundations of a team culture that
underpin all team functioning and performance

What is good team culture? A good culture is one in which team members collaborate,
share knowledge, communicate and most importantly support one another. When people
feel supported and know that someone has their back they’re able to do great things. It’s
like having a safety net that allows you to ask questions, have confidence, speak up and
take on a challenges. Not only does this benefit the company, but it benefits your own
personal growth. “Strong Culture = Trust = Autonomy + Efficiency”

What are the elements of a good team culture?

 Clearly defined purpose and goals

 Alignment on team values & working practices
 Space for personal and professional growth
 Regular opportunities for open, honest discussion
 Flexible working hours
 Wellbeing programs
 Supportive policies on illness and vacation
 Opportunities for cross-function collaboration and connection
 Team code of conduct
 Transparent, communicative management
 Thoughtful systems for feedback
 Time and space to have fun as a team

What is the types of team culture?

Humanistic/Helpful culture Employees are managed in a participative and person-centered way.
Members are expected to be supportive, constructive and open to influence
when interacting with others.

Affiliative culture Priority is placed on constructive interpersonal relationships.

Employees are expected to be friendly, open and sensitive to the
Satisfaction of their colleagues.

Approval culture Conflicts are avoided and interpersonal relationships are pleasant - at least
superficially. Employees feel that they should agree with, gain the
Approval of, and be liked by, others.

Conventional culture This culture is conservative, traditional and bureaucratic. Employees are
expected to conform, follow the rules, and make a good impression.

Dependent culture Organizations with this type of culture are hierarchically controlled and
Non-participative. Centralized decision-making is common and
Employees do only what they are told. They clear all decisions with
superiors.

Avoidance culture Successes are not rewarded, but mistakes are punished. This negative
reward system leads members to shift responsibilities to others and avoid
any possibility of being blamed for a mistake.

Oppositional culture Confrontation prevails and negativism is rewarded. Employees gain status
and influence by being critical and are encouraged to oppose co-workers'
ideas

Power culture This type of culture is characteristic of non-participative organizations

structured on the basis of the authority inherent in employees' positions.
Members believe that they will be rewarded for taking charge and
controlling subordinates.

Competitive culture Winning is valued, and employees are recognized and rewarded for out-
performing one another. People function in a "win-lose" framework and
believe that they must work against (instead of with) their colleagues to be
noticed. This culture promotes turning one's job into a competition, and
appearing to never lose.

Competence/Perfectionistic Perfectionism, persistence and hard work are valued. Employees feel that
culture they must avoid all mistakes, keep track of everything and work long hours
to attain narrowly-defined objectives.

Achievement culture Goal achievement and quality performance are valued. Employees set
challenging but realistic goals, establish plans to reach these goals and
pursue them with enthusiasm.

Self-actualization culture Creativity, quality (versus quantity), task accomplishment and individual
growth are valued. Employees are encouraged to gain enjoyment from
their work, develop themselves, think in unique and independent ways,
And take on new and interesting activities.
What are the benefits of a good company culture?

 Improved motivation
 A happier, more engaged team
 Retention of top talent
 Better communication and collaboration
 Improved surfacing of problems and challenges
 Increased trust between team members
 Purposeful, value-based decision making
 Improved autonomy and efficiency
 Personal and professional growth
 Supportive working environment

How to improve team culture?

 Define your purpose

 Create your culture and put it into writing
 Clarify how you want to work together
 Build trust
 Develop shared understanding
 Appreciate one another
 Have fun together

Individual culture
What is individual ethics?

Personal ethics refers to the ethics that a person identifies with in respect to
people and situations that they deal with in everyday life. Professional ethics
refers to the ethics that a person must adhere to in respect of their
interactions and business dealings in their professional life.
How is individual culture and ethics related to business?

Ethics at an individual level may seem to involve only the individual but it is
a holistic process. There may be high pressure from co-workers, managers,
or any other constituent of business culture to be unethical. Individuals may
hate such pressures, and tend to work avoiding the dilemmas.

Why is ethics related to culture?

Culture reflects the moral and ethical beliefs and standards that speak to how
people should behave and interact with others.

How does ethics relate to the individual?

Ethics is what guides us to tell the truth, keep our promises, or help someone
in need. There is a framework of ethics underlying our lives on a daily basis,
helping us make decisions that create positive impacts and steering us away
from unjust outcomes.

Ethics at the Individual Level

Ethics is a subject of social science that is related with moral principles and
social values. 'Business Ethics' can be termed as a study of proper business
policies and practices regarding potentially controversial issues, such as
corporate governance, insider trading, bribery, discrimination, corporate
social responsibility, and fiduciary responsibilities.
Businesses must abide by some basic principles. It should provide quality
goods and services at reasonable prices to their consumers. It must also
avoid adulteration, misleading advertisements, and other unfair malpractices.

Business Ethics – Definition

There are many definitions of business ethics, but the ones given
by Andrew Crane and Raymond C. Baumhart are considered the most
appropriate ones.
According to Crane, "Business ethics is the study of business situations,
activities, and decisions where issues of right and wrong are addressed."
Baumhart defines, "The ethics of business is the ethics of responsibility. The
business man must promise that he will not harm knowingly."

Ethical Behavior at the Workplace

What does it mean to be unethical in the workplace? It may include taking

personal phone calls during your duty time; asserting that the "check is in
the mail," when it is still in the making; and even stealing office supplies for
personal use.
Organizations usually create an ethical standards’ code or a manual is
handed over when a new employee joins, which generally lists the rules and
guidelines which needs to be adhered at all times.
Many issues prevent business people from being completely ethical,
consistent, and fair. Ethics is a dynamic issue and sometimes it is difficult to
decide at the specific moment what is considered ethical and what is not.

Ethical Lapses and Organizational Culture

Business ethics includes human qualities of, and it does not provide the
angelic qualities. Therefore, if a businessman is overwhelmed, there is a
possibility that ethical rules will be twisted. It is known as "ethical lapse,"
which is a short-term and quite rare occurrence.
Ethics at an individual level may seem to involve only the individual but it is
a holistic process. There may be high pressure from co-workers, managers,
or any other constituent of business culture to be unethical. Individuals may
hate such pressures, and tend to work avoiding the dilemmas.

Basic Attributes of Ethical Workers

To be ethical in the workplace, the workers must have some common

attributes. The most influential attributes are the following −
Dedication
Dedication is one of the most important attributes of an ethical worker.
Companies do seek results, but most employers look for an honest effort
from employees who can be considered a “natural” at the job. When an
employee joins the workforce, he/she is agreeing to offer the best for helping
the company to flourish.
Integrity
Integrity, or displaying honest behavior at all times, is a very important
attribute. Integrity might mean, being honest in reporting or being
transparent while reporting cash transactions.
Accountability
Accountability means to be responsible towards the time and duty during
working hours. It also means accepting responsibility, gathering yourself and
willingly working towards an acceptable resolution. Taking initiative and
being punctual also comes under this purview.

Collaboration

Teamwork and collaboration are valuable attributes. As most companies

believe that if morale is high and everyone co-works, success will follow.
Therefore, it is important for employees to be team players.
Conduct
Employee conduct is a very important value in ethics. Employees must treat
others with respect, and show appropriate behavior. Wearing proper attire,
using fine language and conducting them with professionalism are part of
the job.
Being a Better Worker
Understanding how to be a better person in the workplace is a good starting
point for a commitment to always doing the right thing.
Trusting Relationships
It is important to build trust in workplace relationships. By allowing people
to open up, share information and feel comfortable in communicating are
signs of a trustworthy employee. Honesty, fairness and avoiding rumors are
some basic qualities.
Team Cohesiveness
The ethical commitments of employees have a positive effect on team and
department performance apart from enhancing individual performance. An
ethical employee is a better team player, who always makes positive
contributions for teams and never hinders the group progress.
Value to Employers
Trust in their employees is a very important quality of companies. An
unethical employee can drive entire company in legal trouble, or it can
destroy the hard-earned reputation. Ethical employees working for any
company are the employees who adhere to ethics policies and use ethical
reasoning in making decisions.
Personal Wellness
Ethical employees always increase value of an employer in public domain.
Unethical acts can weigh people down with guilt and paranoia, making them
hostile and fearful. Employees who spread unethical rumors or lies about
others can have a paranoia as they try to remember which lies they told to
whom and when.

Core Values

According to Martin Seligman, some core virtuous values influence ethical

behavior and appear to have universal appeal. These are −
 Wisdom and Knowledge
The talent to gather information and convert it to something useful is a
great quality. Wisdom is capitalizing one’s experience to interpret
information and being knowledgeable to produce wise decisions. A
prerequisite to be knowledgeable is knowing what to do and being able to
differentiate between the right and wrong.
 Self-Control
It is important to have the ability to avoid unethical temptations. The
decision to take the ethical path needs enough commitment to the value
of good ethics. Ethical people usually say “no” to the individual gain if it
is irrelevant to institutional benefit and goodwill.
 Justice and Fair Guidance
Fair treatment of people is important. Justice is served when a fair return
is gained in return for the energy and effort expended. Certain individuals
give special treatment without regard to objective criteria by which to
judge fairness.
 Transcendence
It is the recognition of something beyond oneself more permanent and
powerful than the self. When one lacks transcendence, he may tend
towards self-absorption. Leaders motivated by self-interest and the
exercise of personal power have limited effectiveness and authenticity.
 Love and Kindness
The expression of love and kindness is always productive. Research
shows that there are different types of “love.” In an organizational
context, love means intense positive reaction to co-workers, groups
and/or situations. An organization “with heart” allows love, compassion
and kindness among and between people.

 Courage and Integrity

It is important to have the courage to act ethically and with integrity. These
values let us decide right from wrong and acting accordingly. They impel

One to act in the right manner without considering personal consequences,

even when it is tough and needs benevolence.

HRM Ethics

Out of all organizational issues or policies, ethical considerations are the

most difficult to deal with. Issues arise in employment, remuneration and
benefits, industrial relations and health and safety
Important Clusters of HRM related with Ethics
Some HRM issues are more important than the rest because we, as human
beings, are more responsible for the development and empowerment of the
human resources involved in the operation and management of
organizations. Some of these issues are discussed below.
Cash and Compensation Plans
There are some general ethical issues pertaining to the employee salaries,
executive perquisites and compensations and the annual incentive plans, etc.
The HR department is often under pressure to increase the band of base
salaries. There is always an increased pressure upon the HR function to pay
out more incentives to the top management and provide justification for the
same to retain them.
Further, ethical issues arise when HR deals with long-term compensation
and incentive plans by consulting with the CEO or an external consultant.
There is a pressure on the HR managers on favoring the interests of the top
management in comparison to that of the other employees and stakeholders.
Race, Gender, and Disability
There are several examples of organizations where, until recently, the
employees were treated differently based on the race, gender, origin, and
their disability. This is not the case anymore since the evolution of laws and
a regulatory framework standardized for the employee behavior. In ethical
organizations, the only factor of appraisal is performance.
Employment Issues
Human resource managers face many dilemmas in hiring employees. One
particular dilemma stems from the pressure of hiring one, who has been
recommended by a friend or someone from the family of a top executive.
Another major dilemma arises due to employees who are later found to have
fake documents. Both of the issues are critical. In the first case, the person
may have been trained and filling the position is critical. In the second case,
the person may be efficient in his work and have the right kind of attitude.
Both the situations are tough and HR managers face such cases day in and
day out.
Privacy Issues
All human beings working with any organization have their personal life. An
employee needs the organization to directly or indirectly protect his/her
personal life. This personal life includes things like the religious, political
and social beliefs etc.
There are many ethical issues in HR that are related to health and safety,
restructuring and layoffs and employee responsibilities. A debate is still
going on whether some activities are ethically permitted and why some are
not. Layoffs, for example, are not considered unethical as they were thought
of in the past.

Business Ethics - Workplace Violence

Workplace violence is an action of physical violence, harassment,

intimidation, or any other type of disruptive behavior that takes place at the
worksite. It includes all forms of behavior, starting from threats and verbal
abuse to various forms of physical assaults and even the act of homicide.
Workplace violence can affect and engage employees, clients, customers
and/or visitors.

Risk Prone Areas

Violence can occur anywhere, anytime, and everyone is at risk. There are
various factors that may increase the risk of violence for select workers or at
certain workplaces. The factors include jobs that involve exchanging money
with the public and places where people have to work with volatile, unstable
people. Places where one has to work alone or in isolated sites are also
vulnerable.
Places of providing services and care, and places where alcohol is served
may also increase the potential occurrence of violence. Working late at night
or in areas with high crime rates are also more prone to violence.
Workers who exchange money with the public, delivery drivers, healthcare
professionals, customer service agents, public service workers, law
enforcement personnel, and those who work alone or in small groups are at
higher risks.

Preventive Measures

The risk of assault can be prevented or minimized if employers take

appropriate precautions. A zero-tolerance policy for workplace violence is a
good way to start with.
By taking their worksites into consideration, employers can find out the
methods for reducing the likelihood of incidents occurring. A well-written
and implemented Workplace Violence Prevention Program, combined with
engineering controls, administrative controls, and training can help to reduce
workplace violence issues.

Types of Aggressive Behaviors

We can categorize aggressive behavior into three types −

 Disruptive Behavior − It disturbs a normal workplace environment.
Disruptive behavior may include screaming, swearing, waving arms,
punching gestures, verbally abusing colleagues, and denying response
to a legitimate request for information.
 Threatening Behavior − It includes moving very close to a person
aggressively or making oral or written threats to people or property.
 Violent Behavior − It includes physical assaults, which may be
unarmed or armed. It also includes any action, a reasonable person
would believe is potentially violent.
For example, throwing stuff, pounding on a desk or door, smashing
workplace objects, or threatening to hurt or shoot another person fall within
violent behavior.
In general, how to deal with employee performance problems or
interpersonal conflict?
 Quick intervention is the key. Letting problems faster is a recipe for
violence.
 Checking with the firm’s HR department to find the proper role in
handling the situation is desirable.
 Determining all the facts of the situation is desirable. This information
should be secured from all parties engaged in the conflict.
 Set clear expectations for need of quick resolution of the conflict
 When all parties have agreed for a solution, monitoring its
implementation and getting re-involved is necessary.

Warning Signs

Always be on the lookout for the following warning signs of probable

workplace violence. The signs of troubling behavior include −
 Being upset over a recent work or personal incident
 Suspicious behavior
 Appearing unprepared at work
 Withdrawing from normal work and after-work activities
 Yelling or being verbally abusive to others
 Not following a supervisor’s directions
 Blaming workers for problems at work or at home
 Being suspicious of others
 Having grudges
 Using alcohol or showing up to work drunk
 Having an inappropriate romantic attachment at workplace
 Following a supervisor or colleague
 Threatening to take violent action against a supervisor
 Developing an unusual fascination with weapons
 Being fined or booked for a violent act outside work
 Disclosing plans to hurt or attack people at work
Attitudes that might suggest potentially violent actions include −
 Desiring to stay alone
 Acting morally superior or self-righteous
 Having a sense of personal entitlement
 Getting abused, or feeling wronged, or victimized
 Believing that no other options exist except violence
Knowing about imminent violence and violent behaviors can help minimize
the occurrence of workplace violence.

Features of Business Ethics

There are eight major features of business ethics −
 Code of Conduct − Business ethics is actually a form of codes of
conduct. It lets us know what to do and what not to do. Businesses
must follow this code of conduct.
 Based on Moral and Social Values − Business ethics is a subject that
is based on moral and social values. It offers some moral and social
principles (rules) for conducting a business.
 Protection to Social Groups − Business ethics protect various social
groups including consumers, employees, small businesspersons,
government, shareholders, creditors, etc.
 Offers a Basic Framework − Business ethics is the basic framework
for doing business properly. It constructs the social, cultural, legal,
economic, and other limits in which a business must operate.
 Voluntary − Business ethics is meant to be voluntary. It should be
self-practiced and must not be enforced by law.
 Requires Education & Guidance − Businessmen should get proper
education and guidance about business ethics. Trade Associations and
Chambers of Commerce should be active enough in this matter.
 Relative Term − Business ethics is a relative term. It changes from
one business to another and from one country to another.
 New Concept − Business ethics is a relatively newer concept.
Developed countries have more exposure to business ethics, while
poor and developing countries are relatively backward in applying the
principles of business ethics.

Principles of Business Ethics

The principles of business ethics are related to social groups that comprise of
consumers, employees, investors, and the local community. The important
rules or principles of business ethics are as follows −
 Avoid Exploitation of Consumers − Do not cheat and exploit
consumer with measures such as artificial price rise and adulteration.
 Avoid Profiteering − Unscrupulous business activities such as
hoarding, black-marketing, selling banned or harmful goods to earn
exorbitant profits must be avoided.
 Encourage Healthy Competition − A healthy competitive
atmosphere that offers certain benefits to the consumers must be
encouraged.
 Ensure Accuracy − Accuracy in weighing, packaging and quality of
supplying goods to the consumers has to be followed.
 Pay Taxes Regularly − Taxes and other duties to the government
must be honestly and regularly paid.
 Get the Accounts Audited − Proper business records, accounts must
be managed. All authorized persons and authorities should have access
to these details.
 Fair Treatment to Employees − Fair wages or salaries, facilities and
incentives must be provided to the employees.
 Keep the Investors Informed − the shareholders and investors must
know about the financial and other important decisions of the
company.
 Avoid Injustice and Discrimination − Avoid all types of injustice
and partiality to employees. Discrimination based on gender, race,
religion, language, nationality, etc. should be avoided.
 No Bribe and Corruption − Do not give expensive gifts,
commissions and payoffs to people having influence.
 Discourage Secret Agreement − Making secret agreements with
other business people to influence production, distribution, pricing etc.
are unethical.
 Service before Profit − Accept the principle of "service first and
profit next."
 Practice Fair Business − Businesses should be fair, humane, efficient
and dynamic to offer certain benefits to consumers.
 Avoid Monopoly − No private monopolies and concentration of
economic power should be practiced.
 Fulfil Customers’ Expectations − Adjust your business activities as
per the demands, needs and expectations of the customers.
 Respect Consumers Rights − Honor the basic rights of the
consumers.
 Accept Social Responsibilities − Honor responsibilities towards the
society.
 Satisfy Consumers’ Wants − Satisfy the wants of the consumers as
the main objective of the business is to satisfy the consumer’s wants.
All business operations must have this aim.
 Service Motive − Service and consumer's satisfaction should get more
attention than profit-maximization.
 Optimum Utilization of Resources − Ensure optimum utilization of
resources to remove poverty and to increase the standard of living of
people.
 Intentions of Business − Use permitted legal and sacred means to do
business. Avoid Illegal, unscrupulous and evil means.
Follow Woodrow Wilson's rules − There are four important principles of
business ethics. These four rules are as follows −
 Rule of publicity − According to this principle, the business must tell
the people clearly, what it tends to do.
 Rule of equivalent price − the customer should get proper value for
their money. Below standard, outdated and inferior goods should not
be sold at high prices.
 Rule of conscience in business − the businesspersons must have
conscience while doing business, i.e. a morale sense of judging what is
right and what is wrong.
 Rule of spirit of service − the business must give importance to the
service motive.

Example of Unethical Business Practices

Satyam Computers, a global IT company, was defamed in a notorious list of

companies involved in fraudulent financial activities. The list includes
names such as Enron, WorldCom, Parmalat, Ahold, Allied Irish, Bearings
and Kidder Peabody.
Satyam’s CEO, Ramalinga Raju, accepted his role in a broad accounting
impropriety that had overstated the company’s net revenue and profit. The
company had earlier reported a cash reserve of approximately $1.04 billion
that actually existed only in books but not in reality.
Cultural Affairs
UNESCO

UNESCO is the United Nations Educational, Scientific and Cultural

Organization.

It was born on 16 November 1945.

UNESCO has 195 Members and 8 Associate Members.
Is governed by the General Conference and the Executive Board.
The Organization has more th 50 field offices around the world and its
headquarters are located in Paris.
WHAT IS UNESCO?
UNESCO refers to peace and security by promoting international
cooperation in education, sciences, culture, communication and information.
UNESCO promotes knowledge sharing and the free flow of ideas to
accelerate mutual understanding and a more perfect knowledge of each
other's lives.

UNESCO’s mission:
Is to contribute to the building of a culture of peace, the eradication of
poverty, sustainable development and intercultural dialogue through
education, the sciences, culture, communication and information.

UNESCO works to create the conditions for dialogue among civilizations,

cultures and peoples, based upon respect for commonly shared values.
It is through this dialogue that the world can achieve global visions of
sustainable development encompassing observance of human rights, mutual
respect and the alleviation of poverty, all of which are at the heart of
UNESCO’s mission and activities.

UNESCO focuses on a set of objectives in the global priority areas “Africa”

and “Gender Equality”

And on a number of overarching objectives:

Attaining quality education for all and lifelong learning.

Mobilizing science knowledge and policy for sustainable development.
Addressing emerging social and ethical challenges.
Fostering cultural diversity, intercultural dialogue and a culture of peace.
Building inclusive knowledge societies through information and
communication.

UNESCO’s Vision: Political and economic arrangements of governments

are not enough to secure the lasting and sincere support of the peoples.
Peace must be founded upon dialogue and mutual understanding. Peace
must be built upon the intellectual and moral solidarity of humanity.

UNESCO develops educational tools to help people live as global citizens

free of hate and intolerance.
UNESCO works to ensure that every child and every citizen has access to
quality education.
By promoting cultural heritage and the equal dignity of all cultures.
UNESCO fosters scientific programmes and policies as platforms for
development and cooperation.
UNESCO stands up for freedom of expression, as a fundamental right and a
key condition for democracy and development.
UNESCO helps countries to adopt international standards and manages
programmers that foster the free flow of ideas and the exchange of
knowledge.

UNESCO's founding vision was born in response to a world war marked by

racist and anti-Semitic violence. Seventy years later and many liberations
struggles later, UNESCO’s mandate is more relevant than ever. Cultural
diversity is under attack and new forms of intolerance, rejection of scientific
facts and threats to freedom of expression challenge peace and human rights.
In response, UNESCO's duty remains to reaffirm the humanist missions of
education, science and culture.

Priority Africa

UNESCO's global priorities are Africa and Gender Equality. As such,

UNESCO and development partners are attentive to 54 African countries
with a stronger and better targeted strategy. The African Renaissance is
underway, with the adoption of the African Union's Agenda 2063 and the
2030 Agenda for Sustainable Development paving the ground for the
African Economic Community.
Priority Gender Equality

UNESCO believes that all forms of gender-based discrimination are

violations of human rights, as well as a significant obstacle to the
achievement of the 2030 Agenda for Sustainable Development and its 17
Sustainable Development Goals.
“Our message is clear: women and men must enjoy equal opportunities,
choices, capabilities, power and knowledge as equal citizens. Equipping
girls and boys, women and men with the knowledge, values, attitudes and
skills to tackle gender disparities is a precondition to building a sustainable
future for all.”

“Important Definitions”

1. What Is Capitalism?
Capitalism is an economic system where the means of production are owned
by
private individuals. "Means of production" refers to resources
including money
and other forms of capital. Under a capitalist economy, the economy is
substantially run by individuals who own and operate private companies.
Decisions over the use of resources are made by the individual or individuals
who own the companies.
Pros and Cons of Capitalism
Pros:
 Encourages competition: In capitalist societies, it's survival of the
fittest when it comes to businesses. New businesses are frequently
created and compete with others in the same industry. A competitive
market means that higher-quality goods and services are being
produced and provided.
 Provides consumers with choices: One by product of the competitive
market is that consumers have more options to choose the products
and services they prefer.
 Potential for economic growth: With more businesses and more
choices, there’s more spending by consumers, which means that
companies can hire more. All of these factors can lead to economic
expansion.
Cons
 More inequality: Again, the basic premise of capitalism is survival of
the fittest. People who don’t have in-demand skills may have a hard time
catching up once they fall behind. The gap between the rich and the poor
widens; the rich get richer, and the poor get poorer.
 Lack of social safety net: There might not be as many provisions for
social benefits programs such as universal health care in capitalist
societies.
 Opportunities for corruption: In capitalism, there isn’t always a
separation of government and private business. That means wealthy
business owners may lobby for favor among politicians, further
increasing the gap between those with power and those without.

2. What Is Socialism?
Socialism is an economic system where the means of production, such as
money and other forms of capital, are owned to some degree by the public
(via
the state). Under a socialist system, everyone works for wealth that is in turn
distributed to everyone.
A socialist economic system operates on the premise that what is good for
one
is good for all and vice versa. Everyone works for their own good and for
the
good of everyone else. The government decides how wealth is distributed
among public institutions.
Pros and Cons of Socialism
Pros
 Reduces income inequality: In socialism, wealth is distributed among
the population, and relative poverty is reduced.
 Social stability and infrastructure: With programs such as universal
basic income, universal health care, and tax-funded education, individuals
may be less likely to fall upon hard times.
 Greater rights for workers and individuals: Socialism protects
workers from exploitation, because they own the means of production.
There are often strict labor laws in place as well.
Cons
 Depends on cooperation: In socialism, the idea is that everyone is
working together toward the same goals. However, there is no guarantee
that individuals will always want to cooperate with each other.
 Government may abuse power: The government decides how wealth
should be distributed, but a corrupt government could mean that
resources and wealth are not distributed fairly.
 Fewer rewards for innovation: Socialism doesn’t depend on
competition, which means that workers and businesses might not be
interested in continually improving their products and services.

3. What is Orientalism?
Orientalism is the idea that people in the West are very quick to make
assumptions and judgments about Easterners when they are not able to fully
understand and identify with their way of life. Due to the fact that Western
scholars made assumptions about Eastern living they felt justified in creating
these stereotypes when in actuality a previous bias towards eastern
civilization
was at the forefront of these assumptions and judgments.
Orientalism is also known as the representation of the East (especially the
Middle East), in a stereotyped way that expresses a colonialist attitude.
Edward
Said, a Palestinian intellect, criticized how Orientalism effected Western
attitudes toward the East. Said claims when Western scholars and historians
studied Eastern cultures they could not understand them because they were
very
different from their own culture. Therefore, information about the East
transmitted back to the West was bias, sabotaged, and incorrect from the
reality.
Said realized colonialism was not only through armies, violence, and
conquering territory but it was also displayed through literature and
narrative.
Orientalists were able to concoct their own ideas about the East and amplify
their inaccurate concoctions to the masses through literature and other media
outlets. They depicted the people of the East as sensual, exotic, barbaric,
uneducated, and desperate for colonial assistance.

4. What is Communism?
Communism is a political and economic ideology that positions itself in
opposition to liberal democracy and capitalism, advocating instead for a
classless system in which the means of production are owned communally
and
private property is nonexistent or severely curtailed.
KEY TAKEAWAYS
 Communism is an economic ideology that advocates for a classless
society in which all property and wealth are communally-owned, instead
of by individuals.
 The communist ideology was developed by Karl Marx and Friedrich
Engels and is the opposite of a capitalist one, which relies on democracy
and production of capital to form a society.
 Prominent examples of communism were the Soviet Union and China.
While the former collapsed in 1991, the latter has drastically revised its
economic system to include elements of capitalism.

5. What is Colonialism?
 Colonialism is the process of a country taking full or partial political
control of a dependent country, territory, or people.
 Colonialism occurs when people from one country settle in another
country for the purpose of exploiting its people and natural resources.
 Colonial powers typically attempt to impose their own languages and
cultures on the indigenous peoples of the countries they colonize.
 Colonialism is similar to imperialism, the process of using force and
influence to control another country or people.
 By 1914, a majority of the world’s countries had been colonized by
Europeans.
Examples of Colonialism:
- Israel in Palestine
- The Scramble for Africa
- Britain in India
- China in Tibet
- Portuguese in Brazil

6. What is post-colonialism?
Broadly a study of the effects of colonialism on cultures and societies. It is
concerned with both how European nations conquered and controlled
"Third
World" cultures and how these groups have since responded to and
resisted
those encroachments. Post-colonialism, as both a body of theory and a study
of
political and cultural change, has gone and continues to go through three
broad
stages:
1. an initial awareness of the social, psychological, and cultural
inferiority enforced by being in a colonized state
2. the struggle for ethnic, cultural, and political autonomy
3. a growing awareness of cultural overlap and hybridity