Tag: RBI Policy

Personal Ethics refers to a person’s personal morals and code of conduct. From the very beginning of a person’s understanding, these ethics are being instilled in the individual by their parents, family and friends. Without any personal ethics, the life of the human being is incomplete and shallow. As an example, we can consider an individual’s honesty, openness, sense of responsibility etc. The person with good personal ethics will automatically show his moral and virtues while talking to his friends, relatives and elderly people. A person’s personal ethics are revealed in an exceedingly professional situation through his behaviour.

• Instill a sense of trust and support in leaders: Leaders and other professionals who regularly behave in the same way no matter the situation are more likely to be trusted and supported by colleagues and employees. Individuals who follow a sound ethical code are easier to believe in and are more likely to establish credibility among others.
• Allow leaders to more effectively lead their teams: When a leader regularly follows a predictable and respectable code of ethics, their team is more likely to follow their lead and feel confident in the contributions they make to the organization as a whole.
• Give individuals a solid basis of which to determine the most appropriate action in any given situation: When a person has solid personal ethics, they are better able to make decisions and take action in situations that may otherwise seem challenging.
• Improve the decision-making process: A professional’s ability to make decisions is based on their personal and professional ethics and what they believe to be good or bad. Having strong ethics makes the decision-making process easier and more streamlined.
• Support motivation: Individuals with strong ethics are often easily self-motivated and willing to go the extra mile to accomplish a task or goal on time and in the correct manner.
• Set a standard of behavior: In the workplace and in life, ethics help establish an appropriate standard of behavior for individuals. This behavior is called ethical behavior and refers to a person’s ability to make sound decisions based on their ethical nature.

Nepotism and corruption are regarded as acts which are unethical and morally wrong. Corruption is the abuse of public resources, which can be monetary or non monetary in nature, for the private gains. Nepotism is favoring the people who are directly or indirectly related to the office bearer causing inequality in access to adequate means of livelihood.

They are considered unethical because:

1. Against the principles of equality enshrined in the constitution.
2. Private gain regarded more important than societal gain.
3. Gives rise to anti social elements in the society.
4. Undermines the rule of law.
5. Against the public service goals of impartiality, dedication, neutrality and public good.
6. Disregards the principles of socialism as advocated by DPSPs.

The effects of Nepotism on society are:

1. Further breeds malaise such as poverty, inequality, social tensions and political unrest.
2. Promotes the ‘getting the work done by hook or by crook’ culture.
3. Erosion of faith in the constitution and values enshrined within.
4. Generation of black money.
5. National security can be jeopardized by such acts in higher echelons of policy making.
6. Erodes the ethical values such as honesty, empathy, sincerity.
7. Nepotism also leads to corruption and vice-versa.

The basic concern about nepotism in business is that it contradicts typical customs in employment to hire and promote the most qualified candidate for a job. While a son, daughter or nephew may be the most capable employee, nepotism sometimes leads to relatives getting jobs when other candidates have stronger education and work experience. Even when a relative is most qualified, hiring him may give the impression of nepotism.

Business Structure

The ethics of nepotism in business have a lot to do with the business structure. A family business, often established as a sole proprietorship, partnership or S corporation, typically means you own and control the operation by yourself or with family members who are partners. If you partner with nonfamily members or formalize a corporation with shareholders, the business takes on a formal standing that is distinct from your involvement. In these cases, nepotism is more questionable because other parties have an ownership stake or vested interest in the operation.

Policy Consistency

In large companies, nepotism isn’t inherently wrong, although some people believe it is unethical in all cases. A 2009 Family Business Institute article noted that companies may benefit from nepotism if it consistently enforces fair policies. In a small organization, employees are often hired from internal referrals rather than formal job postings. Some companies encourage referrals of family members and friends to open positions. The ethics in this type of culture relate to the company’s consistency in accepting family referrals and giving candidates fair access to jobs.

Practical Matters

Along with the ethical nature of nepotism, you need to consider the practical business matters. While family businesses often establish legacies from multiple generations of family involvement, not all companies benefit from nepotistic behaviors. In some cases, well-meaning owners or operators hire underqualified, unmotivated family members that aren’t worth what they are paid. Even worse, they undermine the workplace culture and increase the burden on other staff. Balancing your desire to help family while managing a successful business is key.

Tracking Nepotism:

• Nepotism has a social origin. From ages, human species as been ‘nepotistic’ in the sense that it has been passing its socio-economic-political legacy to its next generations.
• Humans try to control the sources of prosperity-may it be movable or immovable property, social status, political power, for the benefit of its kith and kin.
• The divine theory of kingship in ancient and medieval ages was considered ethical and natural. The political power remained in a certain family based on the divine rights notion and the concept of primogeniture.
• The property has been transferred based on inheritance since the birth of institutions of family and kin.
• Profession-wise, there has been a division of labor and functional specialty of families/communities all-over the world.
• In the West, ancient philosophers like Plato talk about three different kinds of men with natural qualities to performs certain tasks.
• In India too, the root of family/community monopoly over a certain craft/business has been since the Post-Vedic period.
• The separation since the beginning of the post-Vedic period further transformed into caste-system which can be termed as a structural nepotism rooted in religious notions of purity and human qualities.
• Technically, the above systems cannot be called nepotism but the ideologies of functional specialty, the ability to gain that specialty and its kith and kin based monopoly was considered natural. The modern form of this social sanction is nepotism.
• The consequent social progress and rising complexity of structures in polity, economy, and social hierarchies, these natural traits claimed and monopolized by powerful sections everywhere.
• By this logic, nepotism is a close relative of monopoly. Nepotism leads to monopoly and monopoly breeds further nepotism.
• Everywhere around the world, the medieval feudal structure was nepotistic where certain families and kin claimed the monopoly over different socio-economic-political functions.
• This societal sanction to the idea of monopoly was challenged by the Renaissance and enlightenment and discarded by the political revolution of democracy.
• The freedom to choose ones’ own destiny without any societal and structural-institutional hindrance and the right to choose are the hallmarks of democracy.
• Here comes the problem with traditional genetic rights and placing family/related members in the positions of common ownership, hence the problem with nepotism.
• Today, democratic societies do not accept nepotism in the fields of common ownership and democratic decision making, political and administrative structures.
• This heightened belief in equality in every aspect is the basis of criticism of nepotism in today’s society.

Types of Nepotism

Placing one’s own relatives or the persons with whom one has conflict of interest at positions of power based on personal bias is nepotism. The types are

Political Nepotism

A politician promoting or placing his/her immediate and extended relatives in political posts.

Administrative nepotism

A government employee/bureaucrat appointing his acquaintance/relative on government jobs.

Contractors related to public authorities/representatives of the people getting government contracts.

Nepotism in Economic sectors

A majority owner of a joint-stock company promoting his son/daughter for ownership/highest decision-making positions.

Entertainment Industries

In open professional communities like film industries, producers, directors, production companies preferring industry kids over talented and hard-working outsiders.

Ethical concerns around nepotism

• The issue of nepotism comes with, among other downfalls, a degradation of the ethics and moral degeneration of society and institutions.
• The more dangerous issue is that nepotism is often left out of ethics codes because it does not seem unethical to the majority of the population. Another reason for leaving nepotism out is that it very so common in every society.
• Nepotism leads to serious harm to the principle of equality of opportunity in every field it is practiced.
• It leads to neglect of fairness as the principle of operation.
• In politics, there is a massive degradation of democracy and legitimacy of the rule of law to produce desired results of redistributive justice.
• The highest form of nepotistic structure is a kind of crony capitalism where dynasties in politics and the corporate world get together to appropriate resources and wealth that should in reality belong to the people in the country.
• In administrative structure, it hampers commitment to the rule of law, disbanding of integrity and impartiality.
• It creates a sense of despair in the victims of the nepotist system in politics, business, entertainment industry.
• The victims have to cope with the extreme stress of competition. They mostly either accept the condition and get adjusted to it or very few cannot sustain the shattering of innocent dreams and take the unfortunate route of suicide as in the case of Sushant Singh Rajput.
• Nepotism is harmful to the system itself, as devoid of quality and character in its flagbearers, the structure cannot sustain itself for long. The dynastic parties become fetters on the new movements and die soon, corporate offices bear losses, administration loses efficiency and art does not satisfy the art-lovers: films don’t do well at the box office and so on.

Impacts of nepotism

There is a loss of belief in democracy when the political spectrum is full of dynasts. It degrades the democratic system and democracy itself faces legitimacy crises. The result is extremist anti-state movements like Naxalite and Maoist movements.

• Corruption is a big fallout of nepotism. The symbiotic relationship of nepotism and corruption can be seen in the corruption perception index where most of the third-world countries with dynastic politics fare very badly.
• The nepotism also breaks the governance system as the dearth of quality administrators at every stage of hierarchy makes good governance impossible. Quality of human resources is the pre-condition of good governance.
• The economic development of a market dominated country suffers due to nepotism in corporate structures of big and small business houses. The interconnected economic sectors also suffer.
• Nepotism kills entrepreneurial zeal if the majority of investment is directed to create monopolies and nurture nepotism. The thriving startups either cannot sustain the competition or taken over by powerful conglomerates built on nepotism.
• The societal effect of nepotism can be seen in continuing caste and religious hindrances in progress. The relation between nepotism and caste lobbies in organizational structures is very subtle and that is not often discussed extensively.

Ethics is mainly known as the principle of moral conduct that makes a distinction between good and bad/ evil, right and wrong, virtue and non-virtue. The word ethics is derived from a Greek word ‘ethos’ meaning character. It is a branch of knowledge that governs right and wrong conducts and behaviours of an individual, profession, group or organization. It is a core of the professional and personal lives of people. Different scholars have defined ethics differently. However different their definitions might be, ethics is always concerned with morality and right vs wrong and good vs evil. It is applied universally. There is also ethics in professions such as journalism, advertising, education, medicine, etc.

Characteristics of ethics:

(i) Ethics is a set of moral standards and values acceptable in a society. It is relevant in the context of a society only.

(ii) Ethics guides human conduct or behaviour. If any member of the society behaves contrary to the norms and customs, society disapproves it. Moral principles serve as a guide for personal and professional conduct. Ethics checks people from taking decisions and actions which are harmful to society.

There are three main theories of ethics. First, the utilitarian theory suggests that actions become right or wrong on the basis of their consequence. Second, the theory of rights holds that all people have certain basic rights. Third, the theory of justice demands that actions must be fair and equitable.

(iii) Ethical principles are universal in nature. These prescribe obligations and virtues for everybody in a society. Ethics is important not only in business and politics but in every human endeavour.

(iv) Ethical standards differ from society to society. What is considered ethical behaviour in one society might be considered unethical in another. For example, abortion and artificial birth control is a taboo in most of the Islamic countries and catholic Christian communities. But these practices are fully ethical in China, Russia, Japan and many other countries. Similarly, euthanasia (mercy killing) is permitted in some countries but is strictly unethical in most countries.

(v) Ethics is normative or prescriptive in nature. It deals not with what is but what ought to be. It does not rest on feelings of approval or disapproval but on principles. For example, it may be unpleasant to fire an employee but morality may require it.

(vi) Ethical norms might not be legally binding. But these are more powerful than law because these have the sanction of society. When a person’s behaviour is inconsistent with the prevailing values and norms, it is called unethical. Ethics serves as a guide to law by highlighting its short comings.

(vii) Ethics relates to the behaviour of individuals and groups. The ethical norms do not apply to the behaviour of animals, birds, and insects. Only human beings have the capacity to guide and regulate their behaviour.

(viii) Ethics are not hard and fast rules. They are an expression of a society’s attitudes and beliefs. There is an element of discretion as a person has the option to adopt ethical norms. Ethics may differ from place-to-place and time-to-time.

(ix) There exist no sharp boundaries between ethical and non-ethical. Therefore, people often face ethical dilemmas wherein a clear cut choice is very difficult.

(x) Ethics aims at perfection in human conduct. It guides law makers in framing proper laws to regulate the behaviour of all citizens. Existing norms may contain valuable insights but ethics sets out to critics and test them in terms of ultimate norms.

(xi) The concepts of equity and justice are implicit in ethics. Fair and equitable treatment to all is its primary aim.

(xii) Ethics and morality are interrelated but not synonymous. In the words of Rogene A. Buchollz “Ethics deals with the formalisations of ethical principles in the abstract or the resolution of concrete ethical problems facing individuals in their daily life. Morality on the other hand generally refers to the tradition of belief that have involved over years. concerning right and wrong conduct, so that morality has its roots in belief of a society while ethics aim at formulating the principles to justify human behaviour.” According to Clearance C. Walton, “morality is the standards than an individual or group has about what is right and wrong good and evil.”

Scope of Ethics

Meta-Ethics: Meta-ethics comprises the area of situational ethics and deals with logical questions like ‘What do we mean by ‘freedom’ and ‘determinism’ etc. It delves into the nature of ethical properties, attitudes and judgements. For example, a media critic’s description of a TV series as ‘good drama’ does not necessarily denote that the program is morally sound. It is the function of metaethics to define such vague concepts in ethical terms. Some of the theories of Meta-Ethics are Naturalism, Non-Naturalism, Emotivism and Prescriptivism.

Applied Ethics: Applied ethics is the problem-solving branch of moral philosophy. It uses the insights derived from metaethics and the general principles and rules of normative ethics in addressing specific ethical issues and cases in a professional, disciplinary or practical field. Applied ethics is the vital link between theory and practice, the real test of ethical decision-making. Applied ethics often requires not only theoretical analysis but also practical and feasible solutions.

Some of the key areas of applied ethics are:

• Decision Ethics
• Professional Ethics
• Clinical Ethics
• Business Ethics
• Organizational Ethics
• Social Ethics

Normative Ethics: Normative ethics deals with standards or norms by which we can judge human actions to be right or wrong. It deals with the criteria of what is morally right or wrong. For example, if someone murders a person, everyone will agree that it is wrong. The question is: Why is it wrong to murder someone? There are a lot of different answers we could give, but if we want to specify a principle that stated why its wrong, the answer might be: Murder is wrong because when we kill someone, we violate their right to live. Another perspective might be to inflict unnecessary suffering on the person being murdered or their family is wrong, that’s why to kill a person is wrong. There are three elements emphasized by normative ethics:

• The person who performs the act (the agent)
• The act
• The consequences of the act

Importance of Ethics

Business ethics comprises various traits, such as; trustworthiness and transparency in customer services. Ethical business practices strengthen customer relationship that is of prime importance for long-term organizational success. It deals with retaining and creating a long-lasting impression in the minds of customers.

Such impressions help the enterprise to win the trust of customers and get more business. Business ethics plays a very crucial role in various management functions.

Principles:

Beneficence:

The beneficence principle enunciates a fundamental principle of ethical conduct. This essentially means doing good to others. According to this principle, all our thoughts and actions must be directed to ensure that others benefit from these thoughts and actions. This can be done without much difficulty. People generally tend to care more about themselves than others. Even small actions performed by us can be based on this principle.

As an example, consider a person parking his/her motor vehicle, a car or a motor cycle. He/She must park the vehicle in such a way that it does not block pedestrians walking on the road, prevent smooth flow of traffic, or obstruct another person‘s parked vehicle. Many times, people park their vehicle oil the road without caring about the inconvenience caused to others.

As another example, consider an unfortunate accident where a person has been hit by a vehicle and the driver of that vehicle has fled. The person has been badly injured and requires urgent help. What would you do? Here, doing good to others would mean mitigating the injured person’s suffering by ensuring that he/she gets immediate medical help.

Least Harm:

The second ethical principle to keep in mind is that our actions must result in the least harm to others. There can be situations where, even if we intend to do good to others, our actions may cause some harm to them. In such a situation, it is necessary to ensure that our actions are such that we cause the least harm to others.

Let us consider the case of a train accident. One’s duty in such an event is to help the injured passengers. He/She must get them out of the compartment; help the authorities take the injured to the hospital, and so on. On the other hand, sometimes it is seen that people use such incidents as an opportunity to steal the belongings of the injured, hapless people.

This is what doing harm is. The least good one can do in such situations is to prevent people from acting in such an unethical manner. Consider another example of a day-to-day occurrence. Young people travelling in a city bus are often seen grabbing a seat as soon as it is vacant, while a senior citizen or a woman accompanying a small child has to travel standing. It is your duty to offer your seat to such people if you are sitting.

If you are standing and a seat falls vacant, do not jump to catch that seat, taking advantage of their frailty or inability to move fast. Allow them to occupy that seat. This is the least that you can do.

Autonomy:

This principle essentially states that we need to respect the autonomy of others for performing actions. We should not impose our views on others. This principle assumes that every person knows what is good for himself/herself. One can also look at it from the point of view of the person performing the action, who decides that what he/she is going to do is good for himself/herself.

As an example, consider your own case. As a student you may have opted for a course based on your love for the subject. On the other hand, some of you may have taken up the course because your parents took the decision for you. They have invaded your autonomy to take decisions about yourself. This is a very common occurrence and many students end up pursuing a course for which they have no aptitude or do not like.

As another example, consider the case of arranged marriages in India. It is not uncommon to find parents deciding a partner for their sons/daughters based on factors such as family status or wealth, without caring for their children’s feelings or wishes. This is a clear invasion of the person’s autonomy. Taking the concurrence of the children before getting them married is a very important factor in the success of marriages.

Non-Violence or Peace:

This principle has become very relevant today. Violence has now pervaded all sections of society and has become its greatest bane. One of the basic ethical principles is to shun violence and to not support those who resort to it. Unless we adhere to this principle, no substantial progress can be made in ethical behaviour.

Our greatest concern is that there is a tendency to resort to violence in cases where many other options are available. There is also a nonchalant attitude to violence among people. This is a major cause for concern.

In an incident, a person was killed by a group. The police could not even investigate the case because in the violence that spread in the aftermath of this murder, many people were killed, a large number of houses were burnt, and hundreds were injured. In this case, there was violence for no particular reason.

In a case that was reported by the press, a group was collecting donations for a festival. The group approached a small shopkeeper and demanded Rs. 1000. The shopkeeper refused to pay more than Rs. 250. The group resorted to violence, beat him up, and ransacked his shop. It is to be remembered that donations, by their very nature, are voluntary.

However, extortion of money in the name of religious festivals and, in case someone refuses to pay, resorting to violence and causing bodily harm have become common nowadays. As a society, we have become violence- prone and there is an urgent need to curb this to prevent further damage.

Thus, commitment to peace and non-violence is a fundamental principle of ethics. There should be a commitment to not resort to violence and explore other better options to solve a problem.

Justice:

The principle of justice states that our actions must be such that they are fair to everyone concerned. All ethical decisions must be based on the principle of fairness. There can be situations where a deviation from past practice is required. All such cases must be analysed and justified before a decision different from earlier decisions is made.

For example, consider the many development-induced displacements that make headlines in the newspapers these days. The building of a dam, the requirement of a weapon-testing ground, the need for a nuclear power plant, or the need for an expressway might necessitate displacement of a community to clear land for such a purpose.

If you take the specific case of a dam, it is a necessary part of infrastructure development as it provides water for irrigation and electric power generation. The construction of a dam is, thus, for the common good of a large section of the society. However, thousands of people are displaced from their land and their means of livelihood threatened because of such a project.

It is generally found that the rehabilitation of people affected by such projects is shoddy. They are left in the lurch at the end of the project with, in some cases, inadequate compensation and in others, no compensation, land, or means to earn a living. Here, injustice is done to the thousands affected. Similar examples can be seen in many developmental projects.

Truthfulness:

Truthfulness is the quality of telling, adhering to, or upholding the truth. This appears to be a universal principle. Truthfulness also leads to other values such as trustworthiness and honesty. Mahatma Gandhi highlighted this principle when he undertook the freedom struggle and named it Satyagraha, desire for truth.

We will seldom find an example where not telling the truth gets us any real benefit. In the Upanishads, it is said asato ma sat gamaya, meaning ‘lead me from falsehood to truth’. Truthfulness is thus a universal principle propounded by all religious texts. In engineering measurements, it is mentioned that the true value of a quantity is not known.