This is made for CSRHVE course of GGSIPU Delhi

1. M O R A L V A L U E S
A N D E T H I C S
U N I T I

2. VALUES: CONCEPT
• According to M. Haralambos, “A value is a belief that something is good and
desirable”.
• According to R.K. Mukherjee, “Values are socially approved desires and goals that are
internalized through the process of conditioning, learning or socialization and that
become subjective preferences, standards, and aspirations”.
• According to Zaleznik and David, “Values are the ideas in the mind of men compared
to norms in that they specify how people should behave. Values also attach degrees of
goodness to activities and relationships”
• According to I. J. Lehner and N.J. Kube, “Values are an integral part of the personal
philosophy of life by which we generally mean the system of values by which we live.
The philosophy of life includes our aims, ideals, and manner of thinking and the
principles by which we guide our behavior”

3. VALUES: CONCEPT
• According to T. W. Hippie, “Values are conscious or unconscious motivators and
justifiers of the actions and judgment”
• A value is a shared idea about how something is ranked in terms of desirability,
worth or goodness. Sometimes, it has been interpreted to mean “such standards by
means of which the ends of action are selected”.
• Sometimes, it has been interpreted to mean “such standards by means of which the
ends of action are selected”.
• Thus, values are collective conceptions of what is considered good, desirable, and
proper or bad, undesirable, and improper in a culture.

4. VALUES: TYPES
TERMINAL VALUES
• The reflect a person’s preferences
regarding the “ends” to be achieved.
• For e.g –prosperity, achievement,
world peace, freedom, equality,
wisdom etc.
• They are the goals individuals would
like to achieve during their lifetime.
INSTRUMENTAL VALUES
• They represent the “means” foe
achieving desired ends.
• For e.g – ambition & hard work, open
mindness, competence, cheerfulness,
courage, honesty, responsibility, etc.
• They indicate how you might go about
achieving your important end-states
depending on the relative importance
your attached to the instrumental
values.

5. VALUES: TYPES
Terminal Values Instrumental Values
A comfortable life (a prosperous life) Ambitious (hardworking)
An exciting life (a stimulating, active life) Broadminded (open-minded)
A sense of accomplishment (lasting contribution) Capable (competent, efficient)
A world of peace (free of war and conflict) Cheerful ( lighthearted, joyful)
A world of beauty (the beauty of nature and the arts) Clean (neat, tidy)
Equality (brotherhood, equal opportunity for all) Courageous (standing up for your beliefs)
Family security (taking care of loved ones) Forgiving (willing to pardon)
Freedom (independence, free choice) Helpful (working for the welfare of others)
Happiness ( contentedness) Honest (sincere, truthful)
Inner harmony (freedom from inner conflict) Imaginative (daring, creative)
Mature love (sexual and spiritual intimacy) Independent (self-reliant, self-sufficient)
National security (protection from attack) Intellectual (intelligent, reflective)
Pleasure (an enjoyable, leisurely life) Logical (consistent, rational)
Salvation (saved, eternal) Loving (affectionate, tender)
Self-respect(self-esteem) Obedient (dutiful, respectful)
Social recognition (respect, admiration) Polite (courteous, well-mannered)
A true friend (close companionship) Responsible (dependable, reliable)
Wisdom ( a mature understanding of life) Self-controlled (restrained, self-disciplined)

6. VALUES : TYPES
• Theoretical: Interested in the discovery of truth through
reasoning and systematic thinking.
• Economic: Interest in usefulness and practicality, including the
accumulation of wealth.
• Aesthetic: Interest in beauty, form and artistic harmony.
• Social: Interest in people and love as a human relationship.
• Political: Interest in graining power and influencing people.
• Religious: Interest in unity and understanding the cosmos as a
whole.

7. FORMATION OF VALUES
Genetics
Culture
Teachers &
Parental
Dictates
Friends &
Surroundings
Values

8. VALUES IN MANAGERS
• Accountability
• Integrity
• Reliability

9. VALUES FOR INDIAN MANAGERS
• Respect for individual
• Cooperate & trust
• Non- jealousy
• Purification of mind
• Top Quality Product/ Service
• Work is worship
• Non covetousness
• Ethical & moral soundness
• Self discipline & self restraint
• Customer satisfaction
• Creativity
• Inspiration to give
• Renunciation & detachment
from selfish demands

10. BUSINESS ETHICS
• Set of rules or principles that the organization should follow
• Code of Conduct
• Ethics, a standard is set for the organization to regulate their behavior.
This helps them in distinguishing between the wrong and the right part
of the businesses.
• Indian Concepts of Business Ethics:
1. Integrity
2. Loyalty
3. Leadership
4. Fairness
5. Respect & Concern

11. SCHOOLS OF ETHICS
Virtue Ethics
• How to LiveYour Life
• What kind of person
do I want to be?
• What virtues bring
me closer to this
goal?
• Which vices prevent
me from achieving it?
• Is my behavior
consistent with being
a moral person?
Consequentialist Ethics
• What is good?
• What is impact of my
behaviour?
• Am I doing more
good or harm by my
behavior?
• Is my behavior
making the world a
better place?
Deontological Ethics
• Is it right?
• What are my ethical
principles telling me I
should do?
• What does reason
require of me
regarding my
treatment of others?
• What duties do I
owe?
• How do I decide
between conflicting
duties?

12. ETHICAL DECISION MAKING
• Decision Making- Personal standard of right and wrong
• Ethical Decision Making- It’s a cognitive process that considers
various ethical principles, rules and virtues or the maintenance of
relationships to guide or judge individual or group decisions or
intended actions.

13. FRAMEWORK FOR UNDERSTANDING
ETHICAL DECISION MAKING
Ethical or
unethical
behaviour
Profession or
Business Ethics
evaluation &
Intentions
Ethical issue &
its intensity
Individual
factors
Organisational
factors
Opportunity

14. ETHICAL DECISION MAKING PROCESS
Identify
ethical
process
Collect
relevant
information
Evaluate
information
Consider
alternatives
Make a
decision
Act or
implement
Review the
action

15. ETHICAL DECISION MAKING PROCESS
Alternate
Actions
Stakeholders
Decision
Making
Evaluate Impact
Context
or Facts
Pick optimal
Choice

16. CORPORATE SOCIAL RESPONSIBILITY
(CSR)
• Daan, Seva, Zakat
• Giving Back to Society
• Corporate Social Responsibility is the continuing commitment by business to behave ethically
and contribute to economic development while improving the quality of life of the workforce
and their families as well as of the local community and society at large
• The 2013 Companies Act for the first time mandates that private corporations join public
sector firms in annual donations for Corporate Social Responsibility (CSR). All firms with net
worth above Rs 500 crore, turnover over Rs 1,000 crore, or net profit over Rs 5 crore are
required under Section 135 to spend at least 2% of their annual profits (averaged over 3 years)
and establish a CSR committee to oversee the spending

17. HISTORICAL PERSPECTIVE OF CSR
Time period Economic currents State role Corporate CSR
1850-1914 Industrialisation Colonial, extraction Dynastic charity
1914-1947 Trade barriers for new
industries
Colonial, exploitative Support freedom
struggle
1947-1960 Socialism,
protectionism
Five year plans Support new state;
launch own rural
initiatives
1960-1990 Heavy regulations Licence raj;
development failures
Corporate trusts
1991-2013 Liberalisation Shrinking in production;
expanding in social
provision
Family trusts, private-
public partnerships,
NGO sponsorship
2013-present Globalisation Need to manage
inequality; new reforms
to liberalise further
Introduction of
mandatory 2% rule

18. EMERGING THEORIES OF CSR
•Stakeholder Theory
•Business Ethics Theory
•ShareholderValue Theory

19. STAKEHOLDER THEORY

20. STAKEHOLDER THEORY: PRINCIPLES
• The principle of entry and exit: According to this principle, there
must be clear rules that delineate.
• The principle of governance: This principle is concerned with how
the rules governing the relationship between the stakeholders and the
firm can be amended.With unanimous consent, any changes.
• The principle of externalities: This is concerned with how a group
that does not benefit from the actions of the corporation has to suffer
certain difficulties because of the actions of the corporation.

21. STAKEHOLDER THEORY: PRINCIPLES
• The principle of contract costs: Each party to a contract should
either bear equal amounts when it comes to cost, or the cost they bear
should be proportional to the advantage they have in the firm.
• Agency principle: This principle states that the manager of a firm is an
agent of the firm and therefore has responsibilities to the stakeholders as
well as the shareholders.
• The principle of limited immortality: This principle deals with the
longevity of a firm. To ensure the success of the organization and its
owners alike, it is necessary for the organization to exist for a prolonged
period of time.

22. CAROLL’S CSR PYRAMID
Philanthropic:
Be a Good Corporate Citizen
Ethical:
Be Ethical in all Processes
Legal:
Obey Law
Economical:
Be Profitable

23. CORPORATE CITIZENSHIP
• Good corporate citizenship integrates social, ethical,
environmental, economical and philanthropic values in core
decision making process of business.
• More akin with concept of CSR & Sustainability
• It involves the act of proactively addressing business and
society issues, while buiding stakeholders partnership.

24. CORPORATE CITIZENSHIP MODEL
Stakeholders
Outcome
CSR
Strategic
Philosophy

26. BUSINESS ETHICS THEORY
The business ethics theory is based on wider social obligation and the moral duty
that business has towards society (Bigg, 2004). This theory justifies CSR on 3 varied
but interrelated ethical grounds:
• Changing and emerging social responsiveness and social expectations to particular
social problems.
• Eternal or intrinsic ethical values always inspired by Kantian ethics and denoted as
some normative and universal principles like social justice, fairness and human
rights
• Corporate citizenship i.e. corporation as a better citizen in a society to contribute
to social well being.
• The business ethics theory views CSR more as philanthropic and ethical
responsibilities rather than legal and economic responsibilities. CSR initiates where
legal obligation declines.

27. SHAREHOLDER VALUE THEORY
• Milton Friedman (1970) strongly argued to maximize financial returns of
shareholders.
• Friedman stated that, ‘There is one and only one social responsibility of business -
to use its resources and engage in activities designed to increase its profits so long
as it stays within the rules of the game, which is to say, engages in open and free
competition without fraud.’
• Three assumptions of theory:
1. Externalization of cost
2. Self interest as prime human motivator
3.The firm as a Nexus of Contracts in service of profitability

28. CSR & REGULATORY ISSUES
• The Companies Act, 2013, a successor to The Companies Act, 1956, made CSR a
compulsory act. Under the notification dated 27.2.2014, under Section 135 of the
new act, CSR is compulsory for all companies- government or private or otherwise,
provided they meet any one or more of the following fiscal criterions:
1.The net worth of the company should be Rupees 500 crores or more
2.The annual turnover of the company should be Rupees 1000 crores or more
3.Annual net profits of the company should be at least Rupees 5 crores.
• If the company meets any one of the three fiscal conditions as stated above, they are
required to create a committee to enforce its CSR mandate, with at least 3
directors, one of whom should be an independent director

29. RESPONSIBILITIES OF COMMITTEE:
• Creation of an elaborate policy to implement its legally mandated CSR activities. CSR
acts should conform to ScheduleVII of the Companies Act, 2013.
• The committee will allocate and audit the money for different CSR purposes.
• It will be responsible for overseeing the execution of different CSR activities.
• The committee will issue an annual report on the various CSR activities undertaken.
• CSR policies should be placed on the company’s official website, in the form and
format approved by the committee.
• The board of directors is bound to accept and follow any CSR related suggestion put
up by the aforementioned committee.
• The aforementioned committee must regularly assess the net profits earned by the
company and ensure that at least 2 percent of the same is spent on CSR related
activities.
• The committee must ensure that local issues and regions are looked into first as part
of CSR activities.

30. FEATURES OF CSR REGULATIONS
• Quantum of money utilized for CSR purposes are to be compulsorily included in
the annual profit-loss report released by the company.
• The CSR rules came into force on 1st April 2014 and will include subsidiary
companies, holdings and other foreign corporate organizations which are involved in
business activities in India.
• CSR has been defined in a rather broad manner in Schedule VII of Companies Act,
2013. The definition is exhaustive as it includes those specific CSR activities listed in
Schedule VII and other social programmes not listed in schedule VII, whose inclusion
as a CSR activity is left to the company’s discretion.

31. SCHEDULE VII IN COMPANIES ACT 2013
• Eradicating hunger and poverty, promotion of education and employment,
livelihood enhancement projects, promoting gender equality, women
empowerment, hostels for women and orphans, old age homes, day care,
environmental sustainability, protection of flora and fauna, contributions to PM
relief fund, measures to benefit armed forces veterans, war widows and
dependents, promotion of sports, and rural development projects.
• http://ebook.mca.gov.in/Actpagedisplay.aspx?PAGENAME=17923

32. ISSUES IN CSR
• The shrinking Role of Government
• Demands for Greater Disclosure
• Increased Customer Interest
• Growing Investor Pressure
• Competitive Labour Market
• Supplier Relations

33. CHALLENGES TO CSR
• Lack of community
participation in CSR activities
• Need to build local capacities
• Issues of Transparency
• Non- availability of well
organized NGOs
• Visibility Factor
• Narrow perception towards
CSR initiatives
• Non- availability of clear CSR
guidelines
• Lack of consensus on
implementing CSR issues