What is this Subject all about?
Ethics are your personal concept of right and wrong and no one but you can determine whether you choose to be ethical or not. These ethics are not legal acts or laws propagated by the judicial systems of a country but are simple concepts of what your own conscience supports.
Ethics should not be confused with morals either because morals are those basic values that are considered appropriate by society. It is the society and people around you who determine your morals but ethics are your very own and similarly the business ethics of any industry and organization are solely determined by the industry and organization themselves.
These ethics are a very important part of the syllabus for students of the banking and insurance course because the maximum amounts of scams and scandals occur because of fraudulent handling of money and excessive greed. In an industry like banking and insurance that deals with money day in and day out it is essential that the concept of ethical banking is ingrained within the students from the very beginning!
Corporate Governance on the other hand deals with the management of a company in a way that is beneficial to all of its stake holders and no one is cheated out in the bargain. A company’s stake holder can be anyone who is associated with the company; it can be an employee, creditor, debtor, customer, supplier, etc.
Both of these are closely related with each other and hence go hand in hand, the subject matter is extremely simple to understand and the answers need to be based on common sense and your own concept of right and wrong. It’s a lot like value education that you had taken up in school, just a corporate attitude towards it is considered.
What is the Syllabus for this subject?
- Business Ethics and Values
- Corporate Governance in Globalized Economy
- Code of Conduct in Business Houses
- Business Ethics an Important Tool in Building Business Reputation
- Corruption, Frauds and Scams in Financial Institutions
Some Important Concepts from the Subject explained in simple language:
- What are Business Ethics?
Business Ethics deal with the concept of right and wrong in a business. Also termed as corporate ethics this deals with the code of actions for professionals and business enterprises, it analyses the ethical problems that arise in a business and the methods that can be used to solve them. It is applicable to everyone in an organization, be the top level management, employees, suppliers, creditors, debtors, competitors, etc.
- What are Values?
Your personal values are your own concept of yourself and determine who you are. Similarly values in the business world are the core standards of the way you do your business. They sum up what your business stands for and what makes it unique in its self. Every business is different and has its own set of values, it is highly important to communicate these values with your staff and other stake holders while you conduct your business.
- What is Corporate Governance?
Imagine your company as a city and your employees as its residents, to makes sure that they all live happily and have a safe, stable and regulated life; the government sets up laws, rules and regulations that are to be followed by each and every citizen. Economic strata of society, level of education, caste, religion, etc does not matter while these rules are set; because they are generic in nature for the welfare of all citizens.
Similarly corporate governance is the set of rules, regulations and codes of conduct established by an organization for its efficient and fair functioning, to ensure that each stake holder is taken care of equally and no one looses out. Like in the infamous ‘Satyam Scam’, a lot of investors lost out on their hard earned money invested into the company and employees lost out on their jobs because of the greed of a few people at the top level, to avert scenarios like this a strong mechanism of corporate governance is needed.
Corporate governance is of high importance in a globalized economy because in today’s global business world we have to deal with a number of different countries who have their own set of governance values and to ensure that no one cheated out in the bargain, having strong roots of corporate governance is essential in a globalized economy.
- Business Ethics an Important Tool in Building Business Reputation
Before we try and understand business ethics and its impact on the business reputation, let’s take a closer look at ourselves. The 99 times you cleaned your room won’t be acknowledged by mom, but the one time you left it messy and stepped out for a party, it’s dooms day!
The lecture will go on for a month and at times if the mess was real bad, the implications may get as high as a ban on going out for a week or worse a loss in pocket money. This tells us how one mistake or negative impression sticks with us forever but a majority of positives can go unnoticed for ages.
Now we can recall the popular fast food giant KFC, one outlet in south India served spoilt chicken and bam their reputation falls drastically, social media is a buzz with messages on ‘YOU DON’T KNOW WHAT KFC SERVES YOU’ and stuff like that, ensuring that thy lose out on a lot of business. Eventually they did pick up, but the damage was done and losses were suffered.
Similarly popular theme park ‘Imagica’ suffered when one roller coaster failed mid ride and online retail giant Flipkart had to weep like a little girl when a customer found a Vim Bar instead of the Samsung galaxy phone he had ordered. So this tainted reputation goes a long way into damaging your business and once damages are done to your reputation, they absolutely cannot be undone.
You can pick up from where you left and build up, but it’s never going to get as good as new because that 1 ‘fail’ is always going to be remembered as compared to the 99 successful experiences, and this is exactly why you need a very strong set of ethics so that no slip occurs and no permanent damage is done.
How to Study this subject?
The best way to study this subject will be to solve a lot of case studies post reading a chapter and understanding the concepts well with the help of those cases. Scoring marks can be done easily if you understand your concepts well.
Study well and All the Best 🙂
BY AMI PANDYA
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