LECTURE NOTES

ON

PROFESSIONAL PRACTICE, LAW AND ETHICS

IV B. Tech I semester (JNTUH-R18)

RSREDDY Compiled by
Mr. R. Srinivasa Reddy
Assistant Professor

VIGNAN INSTITUTE OF TECHNOLOGY AND SCIENCE

VIGNAN HILLS, DESHMUKHI VILLAGE, POCHAMPALLY (MANDAL)
YADADRI BHUVANAGIRI (DISTRICT) – 508284,TS
Sponsored by Lavu Educational Society
(Approved by AICTE and Affiliated to JNT University, Hyderabad)

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 UNIT 1 – PROFESSIONAL PRACTICE AND ETHICS:

INTRODUCTION:
 The word Ethics is derived from Greek word “ETHOS” which means character, habit,
customs, behaviour.
 Ethics is also called ‘moral philosophy’
Definition: Mackenzie defines ethics as ―the study of what is right or good in human conduct‖ or ―the
science of the ideal involved in conduct‖. It is a branch of philosophy, specially the moral philosophy that
studies the evolution of concepts; such as right or wrong behaviour. So, it is clear that ethics is the study
which determines rightness or wrongness of actions.
“ethics may be defined as the systematic study of human actions from the point of view of
their rightfulness or wrongfulness, as means for the attainment of the ultimate happiness”

Ethics then, we may say, discusses men’s habits or customs, or in other words their characters, the
principles on which the habitually act and considers what it is that constitutes the rightness or wrongness
of these principles, the good or evil of these habits. These terms however, “Right” and “Good”, seems to
require a little explanation.

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a. Right:- The term Right is derived from the Latin rectus, meaning ‘straight’ or ‘according to
rule’. When we a say, then, that conduct is right, we mean primarily that it is according to rule.

b. Good:- The term Good is connected with the German gut. A thing is generally said to be good
when it is valuable for some end. Thus, a particular kind of medicine are said to be good for
this or that complaint. Similarly, when we speak of conduct as good, we may mean that it is
serviceable for the end we have in view.

Morals :
 Morals is derived from the Latin word ‘mores’ meaning custom, or habit
• It refers to the values, ideas and beliefs of an individual which are used to determine the
goodness/badness or rightness/wrongness of thoughts, behaviour and action

Values
• Values refer to a set of enduring beliefs, attitude and preferences of an community/ institution/ society

• Value is what the community/institution/society attaches worth to or give significance to; values can
be good (virtues) or bad (vices)

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• They are personal and specific to community/institution/society; values serve as standards by which a
community/institution/society determines if a particular thing (object, idea, policy, etc.) is good or bad,
desirable or undesirable, worthy or unworthy

Ethics Morals
Origin Greek word ’ethos’ meaning Latin word ‘mores’ meaning
character custom/habit
What are they? Accepted set of principles and Values, ideas and beliefs which are
standards to guide thoughts, used to determine the
behaviour and actions goodness/badness or
rightness/wrongness of thoughts,
behaviour and action
At what level they exist? Society, institution and Individual
individual
Where do they come from? Social system – external Individual-internal
Why we follow it? Because society says it is the Because we believe in something
right thing to do being right or wrong

Flexibility and acceptability The principles and standards are Intuitive and subject; varies from
supported by consistent and individual to individual lesser

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well founded reasons; rational
and objective; hence
general/universal acceptance
acceptance

Ethics Values
Guidelines and standards for conduct of Beliefs and preferences of a community/society
individual/institution/society
It is a system of moral principles which helps in It is the stimuli of our thinking that defines our
making the right choices priorities/attitude
It is consistent; rational and objective It is subjective and differs from community to
community and society to society

Importance of ethics: Why do we need ethics at all? Individual level Intrinsic value:
• As a guide to a good and fulfilling life; being ethical is a part of what defines us as human beings; we
are rational, thinking, choosing creatures; we have the capacity to make conscious choices; every rational
human being has a reason to cultivate virtues and develop a strong moral character

• Self realization and self actualization (Maslow’s Need Hierarchy)

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• “In considering why I should be ethical, I should take a long term view of myself, of what I should
be, and seek the answer to the question of what I should do in that light. Developing a habit of taking
bribes, for example, will corrupt my very being and rob me of my mental peace.” (Aristotle)

• Instrumental value: Knowledge of ethics helps in resolving ethical dilemmas; right v/s right dilemmas

Societal level:
• Societies and civilizations rise and fall due to ethical/unethical behaviour of either the leaders or
commoners (Roman empire, Mughals, Arab Spring, case of Japan)

• Without ethics, society would be reduced to the type of animal behaviour that is seen in nature. Hunt,
kill, feed and fornicate.

NATURE OF ETHICS:

Ethics is a normative science.

Ethics is a normative science. It is concerned with what ought to be done rather than what is the case. It
differs from positive science. A positive science, natural science or descriptive science is concerned with
what is. It deals with facts and explains them by their causes. In positive science there is no question of
judging its objects in any way. But ethics does not deal with fact. Rather it deals with value. Therefore,
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it is clear that ethics is concerned with judgments of value, while positive science deals with judgments
of facts. That is why ethics is not a positive science but a normative science. Normative ethics deals with
standards or norms by which we can judge human actions to be right or wrong.

Ethics- Not a practical science-

Ethics cannot properly be described as practical. It must content itself with understanding the nature of
the ideal, and must not hope to formulate rules for its attainment. Hence most writers on ethics have
preferred to treat it as a purely speculative, rather than as a practical science.

Ethics-Not an Art-
If ethics is not strictly to be classed as practical sciences, it ought to still less to be described as an art.
Yet the question has sometimes been raised, with regard both to logic and to ethics. Logic has
sometimes been called the art of thinking, and though ethics has perhaps never been described as art of
conduct.

Concepts of Ethics
Ethics, also known as philosophical ethics, ethical theory, moral theory, and moral philosophy, is a
branch of philosophy that involves systematizing, defending and recommending concepts of right and
wrong conduct, often addressing disputes of moral diversity. The term comes from the Greek word
ethos, which means "character". The super field within philosophy known as Axiology includes both
ethics and Aesthetics and is unified by each sub-branch's concern with value. Philosophical ethics
investigates what is the best way for humans to live, and what kinds of actions are right or wrong in
particular circumstances. Ethics may be divided into four major areas of study:
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SCOPE OF ETHICS :
1. Ethics deals with voluntary actions. We can distinguish between human actions and actions
Of human:
2. human actions are those actions that are done by human consciously, deliberately and in
view of an end.
3. Actions of human may not be willfully, voluntarily, consciously and deliberately done but all the
same they are done by human (e.g. sleeping, walking, etc.).

4. It is the intention which makes the difference between human action and action of human. In
ethics we deal only with human actions.

A Brief History of Ethics

Ethics is as old as humanity. The first ethical precepts were certainly passed down by word of
mouth by parents and elders, but as societies learned to use the written word, they began to set
down their ethical beliefs. These records constitute the first historical evidence of the origins of
ethics.

Natural Behaviour

Even when observing the animal kingdom, there are clear signs of rules of behaviour.
The young monkey does not mess with the “big daddy” and when lions are feeding off a freshly killed
carcass the hyenas keep a good distance. All of this behaviour appears to be instinctual or intuitive but it
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serves the very clear purpose of maintaining order within the animal kingdom.
Human Behaviour
Human ethical behaviour has been observed from the earliest recorded data and anthropological and
archeological studies have indicated that all primitive tribes have very definite rules of behaviour.
Christopher Boehm (1982) has hypothesized that the incremental development of moral complexity
throughout hominid evolution was due to the increasing need to avoid disputes and injuries in moving to
open savannah and developing stone weapons. Human morality, though sophisticated and complex
relative to other animals, is essentially a natural phenomenon that evolved to restrict excessive
individualism and foster human co-operation. Group morality develops from shared concepts and beliefs
and is often codified to regulate behaviour within a culture or community.
Mythology
Perhaps the existence of mythology arose out of the need to regulate society and this was much easier to
do when the stories were fascinating and the members of the community could identify with the
mythological characters. Out of these myths grew rules of behaviour and conduct which contributed
towards controlled and ordered living.
Areas of ethical study
There are three broad areas of ethical study:

• Meta-ethics, which focuses on the meaning of ethical terms themselves (for instance, ‘what is
goodness?’), and on questions of how ethical knowledge is obtained (for instance, ‘how can I distinguish
what is good from what is bad?’), rather than on the more applied question of ‘what should I do in a
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particular situation?’. Meta-ethics is therefore concerned with the nature of ethical properties,
statements, attitudes and judgments. Meta-ethics examines such themes as what moral questions mean,
and on what basis people can know what is ‘true’ or ‘false’.
• It is the branch of ethics that deals with the philosophical questions about the nature of ethical theory
itself
• It addresses questions such as ‘what is good?’; ‘what is bad?’; ‘what is right?’; ‘what is wrong?’;

• Normative ethics, in contrast, is the study of ethical acts. It therefore focuses explicitly on questions of
‘what is the right thing to do?’ in general. Normative ethics is concerned with questions of what people
ought to do, and on how people can decide what the ‘correct’ moral actions to take are.
• It is the branch of ethical philosophy that examines how one should act

• It investigates the standards and principles to assess the rightness/wrongness or goodness/badness of

actions

• It entails different ethical theories and principles that help us to assess the goodness/badness or
rightness/wrongness of thoughts, behaviour and actions; they guide us to make right decisions in cases of
ethical dilemmas

• Knowledge of normative ethical theories neither necessary nor sufficient for ethical conduct; however,
normative theories have the same relation with ethical decision making that the study of grammar has with
the ability to speak a language
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• Knowledge of normative ethics facilitates the process of ‘Ethical/Moral Reasoning’

• Applied ethics, which is concerned with how people can achieve moral outcomes in specific situations.
Therefore, it is concerned with the philosophical examination of particular – and often complex – issues
that involve moral judgments. Areas such as bioethics, environmental ethics, development ethics and
business/corporate ethics may be regarded as areas of applied ethics. (The distinction between normative
and applied ethics, however, is becoming increasingly blurred.)

• Environmental ethics: Balance between development and environment; ethics of climate change

• Bio-ethics: Abortion (pro-life v/s pro choice), Euthanasia (Slippery slope argument), Embryonic Stem
Cell Research

• Social Ethics (LGBT, Prostitution, betting, prohibition, juvenile justice act)

• Ethics of death penalty

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PROFESSIONAL ETHICS:
A - Profession:
Definition : PROFESSION is defined as any occupation/job/vocation that requires advanced expertise
(skills and knowledge), self-regulation, and concerted service to the public good. It brings a high status,
socially and economically.
What is a Professional?

The term professional refers to anyone who earns their living from performing an activity that requires a
certain level of education, skill, or training. There is typically a required standard of competency,
knowledge, or education that must be demonstrated (often in the form of an exam or credential), as well
as adhering to codes of conduct and ethical standards.

Types of Professionals

There are many different types of professionals. Whether they are athletes or business people, there are
many categories and groups, which are listed below.

Types of professionals include:

 Accountant Commercial Banker  Research Analyst

 Teacher RSREDDY  Engineer  Midwife

 Technician  Lawyer  Mechanic

 Laborer  Psychologist  Dentist

 Physical  Pharmacist  Electrician

 Dietitian  Consultant

Professional Standards

Professional standards are a set of practices, ethics, and behaviors that members of a particular
professional group must adhere to. These sets of standards are frequently agreed to by a governing body
that represents the interests of the group.

Examples of professional standards include:

 Accountability – takes responsibility for their actions

 Confidentiality – keeps all sensitive information private and away from those who shouldn’t
have access to it
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  Fiduciary duty – places the needs of clients before their own
 Honesty – always being truthful
 Integrity – having strong moral principles
 Law-abiding – follows all governing laws in the jurisdictions they perform activities
 Loyalty – remain committed to their profession
 Objectivity – not swayed or influenced by biases
 Transparency – revealing all relevant information and not concealing anything

The scope of professional ethics envelopes diverse activities like

1. Engineering as a social experimentation

2. Engineers responsibility for safety
3. Role of engineers, managers, consultants etc.
4. Rights of engineers
5. Moral reasoning and ethical theories
6. Responsibility to employers
7. Global issues and concerns

The characteristics of a Profession are:

 Advanced Expertise: Many professions require sophisticated skills (do-how) and theoretical

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knowledge (know-how and why). Formal education, training, continuing education updating are
needed.
 Self regulation: Professional societies play important role in setting standards for admission to
profession, drafting codes of ethics, enforcing standards of conduct and representing the
profession before the public and government.
 Public good: The occupation provides some important public good, by concerted efforts to
maintain ethical standards. For example – a physician promotes health, a lawyer protects the
legal rights, an engineer provides a product or project for use by the public towards their health,
welfare and safety.
B – Professional:
relates to a person or any work that a person does on profession and which requires expertise (skills and
knowledge), self-regulation and results in pyblic good. The term professional means a ‘Person’ as well
as a ‘Status’.
C – Professionalism:
It is the status of a professional which implies certain attitudes or typical qualities that are expected of a
professional. According to Macintyre, Professionalism is defined as the services related to achieving the
public good, in addition to the practices of the knowledge of moral ideas.
The short definition is that professionalism means behaving in an ethical manner while assuming and
fulfilling your rightful responsibilities in every situation every time, without fail.

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The fundamental characteristics of a profession:
1. Great responsibility

Professionals deal in matters of vital importance to their clients and are therefore entrusted with grave
responsibilities and obligations. Given these inherent obligations, professional work typically involves
circumstances where carelessness, inadequate skill, or breach of ethics would be significantly damaging
to the client and/or his fortunes.
2. Accountability

Professionals hold themselves ultimately accountable for the quality of their work with the client. The
profession may or may not have mechanisms in place to reinforce and ensure adherence to this principle
among its members. If not, the individual professional will (e.g. guarantees and/or contractual provisions).
3. Based on specialized, theoretical knowledge

Professionals render specialized services based on theory, knowledge, and skills that are most often
peculiar to their profession and generally beyond the understanding and/or capability of those outside of
the profession. Sometimes, this specialization will extend to access to the tools and technologies used in
the profession (e.g. medical equipment).

4. Institutional preparation Professions typically require a significant period of hands-on, practical

experience in the protected company of senior members before aspirants are recognized as professionals.
After this provisional period, ongoing education toward professional development is compulsory. A

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profession may or may not require formal credentials and/or other standards for admission.

5. Autonomy

Professionals have control over and, correspondingly, ultimate responsibility for their own work.
Professionals tend to define the terms, processes, and conditions of work to be performed for clients (either
directly or as preconditions for their ongoing agency employment).
6. Clients rather than customers

Members of a profession exercise discrimination in choosing clients rather than simply accepting any
interested party as a customer (as merchants do).
7. Direct working relationships

Professionals habitually work directly with their clients rather than through intermediaries or proxies.
8. Ethical constraints

Due to the other characteristics on this list, there is a clear requirement for ethical constraints in the
professions. Professionals are bound to a code of conduct or ethics specific to the distinct profession (and
sometimes the individual). Professionals also aspire toward a general body of core values, which are
centered upon an uncompromising and un-conflicted regard for the client's benefit and best interests.
9. Merit-based

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In a profession, members achieve employment and success based on merit and corresponding voluntary
relationships rather than on corrupted ideals such as social principle, mandated support, or extortion (e.g.
union members are not professionals). Therefore, a professional is one who must attract clients and profits
due to the merits of his work. In the absence of this characteristic, issues of responsibility, accountability,
and ethical constraints become irrelevant, negating any otherwise-professional characteristics.

10. Capitalist morality

The responsibilities inherent to the practice of a profession are impossible to rationally maintain without
a moral foundation that flows from a recognition of the singular right of the individual to his own life,
along with all of its inherent and potential sovereign value; a concept that only capitalism recognizes,
upholds and protects.

PERSONAL ETHICS:
Personal ethics refer to a person‘s personal or self-created values and codes of conduct. From the very
beginning, these ethics are instilled in an individual, with a large part having been played by their parents,
friends, and family. Common examples may include honesty, openness, commitment, unbiased behavior,
and sense of responsibility. What a person develops regarding fairness or learns during childhood remains
with him all through his life and is reflected by his actions and words. No matter if he is talking to a friend
or his relatives or an elderly, his ethics would be clear from what he says and how he says it. A person‘s
personal ethics are revealed in a professional situation through his behavior.

Why Study Professional Ethics? RSREDDY

A professional ethics course is a means to increase the ability of future engineers, managers to first
recognize and then responsibly confront moral issues raised by
technological activity.

The most important goal is to develop the ethical autonomy, i.e. the skill and the habit of thinking
rationally and critically about the ethical issues.

Personal vs. Professional Ethics:

What‘s the difference between personal and professional ethics?

The ethics that you adhere to in your personal life and those that you comply with in your professional
life are different in certain aspects. Without certain ethics, human beings would be incomplete and
shallow. Thus, they have different systems of ethics in different places.

The biggest difference between personal and professional codes of conduct is perhaps the strictness with
which people conform to them. The values that you define for yourself are up to you to be followed or not
to be followed. However, those defined in a company or by a profession must be followed by you, since
breach of these principles or rules may harm your reputation and status. But if you do not adhere to your
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personal ethics, it might hardly make a difference, depending on the circumstances. Even then, you must
keep in mind that violation of your own rules may harm others around you.

Comparison Chart: Personal Ethics Professional Ethics

Includes your personal values and moral Rules imposed on an employee in a
company, or as member of
qualities. a profession, e.g. doctor or lawyer.
Incorporated by family, friends and Learnt when you are a part of a professional
setting or when
surroundings since your childhood. you are being trained or educated for working
there.
Examples: honesty, care, and sincerity. Examples: no gossiping, time management,
punctuality,
confidentiality, transparency.
Not conforming to these may harm or Not adhering to these may harm your
professional reputation.
hurt others.
Your personal needs are satisfied by Your professional needs are satisfied by
following these.
following these.

Engineering Ethics RSREDDY

Engineering is defined as ‘the creative application of scientific principles to design or develop structures,
machines, apparatus, processes, or works utilizing them singly or in combination; or to construct or operate
the same with full cognizance of their design; or to forecast their behavior under specific operating
conditions; all as respects an intended function, economics of operation or safety to life and property’.
Engineering therefore is about transforming science into useful products for human comfort. Engineering
is something that engineers do, and what they do has profound effects on others.
• Engineering Ethics is the study of moral decisions that must be made by engineers in the course
of engineering practice.
• The correct answer to an ethical problem will not be obvious.
• Will require some analysis using ethical theories.
• There will not be a single correct answer.
• Will have multiple correct solutions, with some solution being better than others.

Approach
There are conventionally two approaches in the study of ethics:
1. Micro-ethics which deals with decisions and problems of individuals, professionals, and companies.

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2. Macro-ethics which deals with the societal problems on a regional/national level. For example, global
issues, collective responsibilities of groups such as professional societies and consumer groups.

There are two different senses (meanings) of engineering ethics, namely the Normative and the
Descriptive senses.

The normative sense includes:

(a) Knowing moral values, finding accurate solutions to moral problems and justifying moral judgments
in engineering practices, Study of decisions, policies, and values that are morally desirable in the
engineering
(b) practice and research, and
(c) Using codes of ethics and standards and applying them in their transactions by engineers. The
descriptive sense refers to what specific individual or group of engineers believe and act, without justifying
their beliefs or actions.

Purpose/Scope:
The scopes of engineering ethics are twofold:
1. Ethics of the workplace which involves the co-workers and employees in an organization.

2. Ethics related to the product or work which involves the transportation, warehousing, and use, besides
the safety of the end product and the environment outside the factory.

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Engineering Ethics is the activity and discipline aimed at

(a) understanding the moral values that ought to guide engineering profession or practice, resolving moral
issues in engineering, and justifying the moral judgments in
(b) engineering.
(c) It deals with set of moral problems and issues connected with engineering.

WHY ENGINEERING ETHICS?

The objectives of this course on ‘Professional Ethics and Human Values’ are:
(a) to understand the moral values that ought to guide the Engineering profession,
(b) resolve the moral issues in the profession, and
(c) justify the moral judgment concerning the profession.

It is intended to develop a set of beliefs, attitudes, and habits that engineers should display concerning
morality. The prime objective is to increase one’s ability to deal effectively with moral complexity in
engineering practice.
Alternatively, the objectives of the study on Professional Ethics may be listed as:

(A) Improvement of the cognitive skills (skills of the intellect in thinking clearly)
1. Moral awareness (proficiency in recognizing moral problems in engineering)
2. Cogent moral reasoning (comprehending, assessing different views)

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3. Moral coherence (forming consistent viewpoints based on facts)
4. Moral imagination (searching beyond obvious the alternative responses to issues and being receptive
to creative solutions)
5. Moral communication, to express and support one’s views to others.

(B) To act in morally desirable ways, towards moral commitment and responsible conduct
6. Moral reasonableness i.e., willing and able to be morally responsible.
7. Respect for persons, which means showing concern for the well-being of others, besides oneself.
8. Tolerance of diversity i.e., respect for ethnic and religious differences, and acceptance of reasonable
differences in moral perspectives.
9. Moral hope i.e., believe in using rational dialogue for resolving moral conflicts.
10. Integrity, which means moral integrity, and integrating one’s professional life and personal
convictions.
ISSUES IN ENGINEERINGETHICS:
Common Issues:
Common Morality
Decision-Making Process
Engineering Code of Conduct Engineering Education
Humane Technologies International Law
Professional Development

MORAL ISSUES

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It would be relevant to know why and how do moral issues (problems) arise in a profession or why do
people behave unethically? The reasons for people including the employer and employees, behaving
unethically may be classified into three categories:
 Resource Crunch
 Opportunity
 Attitude

Code of ethics:
Ethical codes are adopted by organizations to assist members in understanding the difference between
'right' and 'wrong' and in applying that understanding to their decisions. An ethical code generally implies
documents at three levels: codes of business ethics, codes of conduct for employees, and codes of
professional practice.

FUNCTIONS OF CODE OF ETHICS:

1) It can express a shared commitment on the part of a professional society’s members to strive to satisfy
certain ethical standards and principles.

2) It can help foster an environment in which ethical behavior is the norm

3) It can serve as a guide or reminder in specific situations

4) A code can be a valuable academic and educational legacy for an organization.

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Code of ethics for any profession is a guide of principles designed to help professionals conduct business
honestly and with integrity. A code of ethics document may outline the mission and values of the business
or organization, how professionals are supposed to approach problems, the ethical principles based on the
organization's core values and the standards to which the professional will be held. A statement
encompassing the set of rules based on values and the standards of conduct to which practitioners of a
profession are expected to conform can become a code of ethics. Ethics code is generally different from
code of conduct pertaining to discipline and personal moral behavior. Both are distinct but can overlap.

Codes of conduct
Professional codes of conduct draw on these professional ethical principles as the basis for prescribing
required standards of behaviour for members of a profession. They also seek to set out the expectations
that the profession and society have of its members.
The intention of codes of conduct is to provide guidelines for the minimum standard of appropriate
behaviour in a professional context. Codes of conduct sit alongside the general law of the land and the
personal values of members of the profession.

Professional codes of conduct provide benefits to:

 the public, as they build confidence in the profession’s trustworthiness
 clients, as they provide greater transparency and certainty about how their affairs will be handled
 members of the profession, as they provide a supporting framework for resisting pressure to act

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inappropriately, and for making acceptable decisions in what may be ‘grey areas’
 the profession as a whole, as they provide a common understanding of acceptable practice which
builds collegiality and allows for fairer disciplinary procedures
 others dealing with the profession, as the profession will be seen as more reliable and easier to deal
with.

Ethical Codes of Conduct Let us look at the definition of engineering ethics: “Engineering ethics is the
development of and compliance with currently accepted engineering ethical codes of conduct.” Ethical
codes of conduct, or moral codes, are simply compilations of ethical actions that act as guides to our lives.
For example, the individual ethical actions “Help your neighbor,” “Do not kill people,” and “Do not steal”
may be collected in one moral code to help guide a person to live an ethical life. Each individual ethical
action in a moral code could be justified using the Utilitarian or Kantian approach. Moral codes describe
the ethical actions that we can base our behavior on through our intuitive use of these approaches.
Engineering codes of ethics are based upon general codes of ethics. The engineering codes of ethics are
simply compilations of ethical actions that act as a guide in professional practice. Every moral rule in
these codes could be justified using either the Utilitarian or Kantian approach. Every engineering code of
ethics leaves room for an engineer to make virtuous choices within his profession while instructing the
engineer in the most ethical actions and procedures. It is critical that all engineers comply with the various
accepted codes. Although most of the different engineering codes share similar ideals, nearly every major
engineering association has its own code that specifically addresses the issues that its members are likely
to encounter in the course of their duties. In unit 4, we shall focus different codes of ethics including the
National Society of Professional Engineers (NSPE) Code of Ethics.
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Responsibilities of Professional Managers

Professional Managers tasks includes the following:

(i) Providing Direction to the Firm: The first task, envisioning goals, is one of the tasks that
should never be delegated. It is the ability to define overarching goals that serve to unify people
and focus energies. It’s about effectively declaring what’s possible for the team to achieve and
compelling them to accomplish more than they ever thought it was possible.
(ii) Managing Survival and Growth: Ensuring survival of the firm is a critical task of a
manager. The manager must also seek growth. Two sets of factors impinge upon the firm’s
survival and growth. The first is the set
of factors which are internal to the firm and are largely controllable. These internal factors are
choice of technology, efficiency of labour, competence of managerial staff, company image,
financial resources, etc. The second set of factors are external to the firm, like government
policy, laws and regulations, changing customer tastes, attitudes and values, increasing
competition, etc.
(iii) Maintaining Firm’s Efficiency: A manager has not only to perform and produce
results, but he has to do
so in the most efficient manner. The more output a manager can produce with the same input,
the greater will be the profit.

(iv) Meeting the Competition Challenge: A manager must anticipate and prepare for the increasing
competition. Competition is increasing in terms of more producers, products, better quality, etc.

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(v) Innovation: Innovation is finding new, different and better ways of doing existing tasks. To plan and
manage for innovation is an on-going task of a manager. The manager must maintain close contact and
relation with customers. Keeping track of competitor’s activities and moves can also be a source of
innovation, as can improvements in technology.

(vi) Renewal: Managers are responsible for fostering the process of renewal. Renewing has to do with
providing new processes and resources. The practices and strategy that got you where you are today
may be inadequate for the challenges and opportunities you face tomorrow.

(vii) Building Human Organization: Man is by far the most critical resource of an organization. A good
worker is a valuable asset to any company. Every manager must constantly look out for people with
potential and attract them to join the company.

(viii) Leadership: Organizational success is determined by the quality of leadership that is exhibited. “A
leader can be a manager, but a manager is not necessarily a leader,” says Gemmy Allen (1998). Leadership
is the power of persuasion of one person over others to inspire actions towards achieving the goals of the
company. Those in the leadership role must be able to influence/motivate workers to an elevated goal and
direct themselves to the duties or responsibilities assigned during the planning process. Leadership
involves the interpersonal characteristic of a manager’s position that includes communication and close
contact with team members. The only way a manager can be acknowledged as a leader is by continually
demonstrating his abilities.

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(ix) Change Management: A manager has to perform the task of a change agent. It’s the manager’s task
to ensure that the change is introduced and incorporated in a smooth manner with the least disturbance
and resistance.

(x) Selection of Information Technology: Today’s managers are faced with a bewildering array of
information
technology choices that promise to change the way work gets done. Computers, the internet, intranets,
telecommunications, and a seemingly infinite range of software applications confront the modern manager
with the challenge of using the best technology. Some of the critical responsibilities of a professional
manager are towards customers, shareholders, employees, suppliers, distributors and retailers, industry
and competition, union, government and society. Therefore in brief it is the responsibility of a manager to
take care of the above mentioned things by handling or directing them with a degree of skill.

Conflict of Interest
A conflict of interest arises when what is in a person’s best interest is not in the best interest of another
person or organization to which that individual owes loyalty.

For example, an employee may simultaneously help himself but hurt his employer by taking a bribe to
purchase inferior goods for his company’s use.

What is a Conflict of Interest?

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A conflict of interest happens when an individual involved in multiple interests finds themselves in a
decision-making situation where serving one of those interests would harm another. Interests include
many different types of commitments, duties, obligations, and values, such as:

 Contractual or legal obligations (to business partners, vendors, employees, employer, etc.)
 Loyalty to family and friends
 Fiduciary duties
 Professional duties
 Business interests

Three Common Types of Conflicts of Interest

Many different types of corruption stem from conflicts of interest that arise between an individual’s
professional duties and direct or indirect interests.

Nepotism

Nepotism happens when an individual in charge of a hiring process chooses to award a job offer to
someone in their own family or with whom they have a personal relationship. In this case, the
individual’s duty to their employer (choosing the most qualified or best candidate for the role) may
conflict with their loyalty to a family member (choosing a family member to receive the benefits of the
job instead of an unknown person).
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Self-Dealing

A corporate fiduciary is legally obligated to act in the best interests of the corporation and its
shareholders. When a fiduciary acts in their own best interests instead of in the best interests of their
client, this is known as self-dealing. Self-dealing involves a conflict of interests between an individual’s
fiduciary duties (legal obligation to the client) and financial interests (desire for personal financial gain).

Business Relationships

Many conflicts of interest stem from personal business interests. An individual who works for two
businesses in the same industry, or who works for the public sector while maintaining interests in
companies that bid on government contracts may experience a conflict of interest when their job duties
and business interests come into competition. In addition, a conflict of interest could be sitting on the
board of another company, owning stock in another company, and deciding which vendor gets a
contract.

What is an Example of a Conflict of Interest?

Conflicts of interest can appear in any decision-making process where the individual making the
decision has multiple interests at stake. Some common situations could include:

 Hiring an unqualified friend or relative to fill a position instead of the most qualified candidate.



owns stock. RSREDDY
Preferentially awarding a government contract to an organization in which you or someone you know

Performing part-time or contract-based work for a competitor organization

A famous conflict of interest took place in 1967 when a group of Harvard scientists were paid by the
Sugar Association to publish a paper that minimized the relationship between heart health and sugar
consumption. These scientists violated their obligation to publish truthful and reputable research in order
to support their personal financial interests.

How to Handle an Employee Conflict of Interest

Organizations should establish a clear Conflict of Interest policy that describes how such conflicts will
be handled. Employees should be encouraged to talk to their managers and voluntarily disclose any
perceived conflicts of interest.

When a public or private sector employee experiences a conflict of interest, they may resolve the
situation by choosing to either:

1. abandon one of the conflicting roles, or

2. recuse themselves from the relevant decision-making process

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

Gift vs Bribe
What are gifts and bribes?
Defining gifts and bribes may seem like a simple-minded activity, but, try posing the question another
way, and you will see why this is an important issue in government ethics: What is the difference
between a gift and a bribe? A gift is something of value given without the expectation of return; a bribe
is the same thing given in the hope of influence or benefit.

Because it is often impossible to determine the expectation of the giver, all federal, state, and local
officials, both elected and appointed, are governed by rules restricting gifts. In some cases, gifts over a
certain amount are disallowed; in others, they must simply be reported. These rules can vary
significantly from locality to locality, indicating disparities in each legislature's understanding of when a
gift becomes a bribe.

Gifts and bribes can be actual items, or they can be tickets to a sporting event, travel, rounds of golf, or
restaurant meals.

Basic difference is:

Gift is given to someone without any expectation in return. Value of gift are often based on closeness in

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relation, time of gifting, economic condition of giver and receiver.

Bribe is given with expectation of favour toward giver. Its economic value is incoherent to closeness in
relation, timing (inappropriate timing) and costly. Business gifts may be a Costly Cricket match ticket,
desk clock, sweets or even a cash envelope. Timing of such gifts makes them bribe. Suppose a gift from
someone just before you are going to roll-out a tender, a calendar and desk accessories with bold name
of pharma companies to doctor. Such things are actually bribe and not gift. Many MNC organizations
have come up with norms and structures already.

Some norms which are still needed are:

1. Reporting to department about any gifts that is received from whom, value and date details. This
part is already applicable to judicial judges in India.
2. Any gifts above certain monetary values should be avoided.
3. No gifts received with brand name should be put on desk as it will tarnish the image of
official/public servant for lenient toward certain brand.
4. Provision of filing gift tax by receiver. IT department should tally the gift received as mentioned
in department books and filed by receiver. Failure to file tax for gift should be taken seriously.
5. Scrutiny of gifts received by officials regularly and checking of property declaration regularly.
Repeated gift from same person should be brought under Directorate Enforcement radar.

Bribes are complex thing for receiver because it puts him into moral dilemma for how to return the
favour and makes them corrupt once they receive.
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Penalties for breaching environment
There are potential penalties and other implications for a business if it breaches environmental
legislation. Understanding the regulator’s approach to the enforcement and prosecution of environmental
offences should enable businesses to minimise their risk of being prosecuted. It should also help to
reduce the level of any penalties if the business is prosecuted and minimise any reputational damage to
the business.

Negligence
The definition of negligence is carelessness or not paying attention, causing someone or something to
be at risk of being harmed

In the general sense, the term negligence means the act of being careless and in the legal sense, it
signifies the failure to exercise a standard of care which the doer as a reasonable man should have
exercised in a particular situation.

In Blyth v. Birmingham Water Works Co, Negligence was defined as the omission to do something
which a reasonable man would do or doing something which a prudent or reasonable man would not do.

It can be characterized in three forms-

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Nonfeasance: It means the act of failure to do something which a person should have done. For example,
failure to carry out the repairs of an old building when it should have been done.

Misfeasance: It means the act of not doing an action properly when it should have been done properly.
For example, Doing the repairs of an old building but doing so by using very poor quality materials
creating a major probability of a collapse which injures people.

Malfeasance: It means the act of doing something which should not have been done in the first place
itself. For example, using products that are not allowed and combustible to carry out the repairs of an old
building, therefore, converting the building into a firetrap leading to an accident.

Deficiencies in state-of-art:

VIGIL MECHANISM :
The Vigil Mechanism extends to anyone who has and reports insider knowledge of illegal activities
occurring in an organization. It can be employees or directors, who somehow becomes aware of illegal
activities taking place in a business either through witnessing the behaviour or being told about it. The
revealed misconduct may be classified in many ways

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A Vigil Mechanism is thus an internal framework on access to the appropriate designated authority, by
persons who wish to report on unethical or improper practices. This Mechanism is intended to create a
platform for alerting the management of the company or those charged with the Governance of the
company about potential issues of serious concern, by ensuring confidentiality, protection and expedient
action.
SCOPE
This Mechanism covers:
ˆ Malpractices which have taken place/suspected to have taken place
ˆ Misuse or abuse of authority
ˆ Fraud or suspected fraud
ˆ Violation of company rules, policies as well as Regulatory laws
ˆ Manipulation in operations of business
ˆ Negligence causing danger to public health, wealth and safety
ˆ Misappropriation of monies
ˆ Any other matters or activities on account of which the interest of the Company is likely to be affected.

DEFINITIONS
1. “Mechanism” means the Vigil Mechanism as framed by the Company.
2. “Company” as mentioned in the Mechanism means Unimoni Financial Services Limited.
3. “Committee” in this Mechanism shall mean the Audit Committee constituted by the Board of
Directors of the Company.
4. “Board” means the Board of Directors of the Company.
5. “Alleged Misconduct” shall mean and include all the wrongful doings as listed out in the “Scope”
of this Mechanism.
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6. “Employee” means all the present employees and Directors of the Company.
7. “Vigil Officer” means an officer of the Company nominated by the Managing Director (MD) to
receive the complaints and confidential information regarding the alleged misconducts from the
employees, maintaining records thereof, placing the same before the Audit Committee for its
disposal and concluding the investigation with final decisions thereof.
8. “Secured Disclosure” means a concern or a complaint raised by an employee or group of
employees of the Company, through a written communication and made in good faith which
discloses or demonstrates information about any activities mentioned under the title “SCOPE” with
respect to the Company. However, the Secured Disclosures should be factual and not speculative or in
the nature of an interpretation/ conclusion and should contain as much specific information as possible
and also backed by the requisite proof to allow for proper assessment of the nature and extent of the
concern.
9.“Suspect” as mentioned in the Mechanism means a person or group of persons against or in relation to
whom a Secured Disclosure is made or evidence gathered during the course of an investigation.
10. “Informer/Complainant” is an employee or group of employees who make a Secured Disclosure
under this Policy.

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 Whistle blowing:
Main features
 Identity protection. Clear distinction between the registration process and the reporting process, for a
correct separation of data to protect the whistleblower's anonymity;
 Users. ...
 Automatism. ...
 Third parties. ...
 Privacy. ...
 Configuration.

Steps to File a Whistleblower Claim

1. Step 1 – Get Evidence. This is the most important step in your whistleblower claim. ...
2. Step 2 – Presenting the Evidence. ...
3. Step 3 – Government Investigation. ...
4. Step 4 – The Decision.

What causes whistle blowing?

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Whistleblowing is the transmission of an unfavorable situation discovered in the organization to either
internal or external authorities. ... Organizational reasons include business ethics and the expectation of
subsequent promotion. Social reasons encompass social benefits, social justice, and religious belief.

When was the whistleblower Act passed?

Whistleblower Protection Act

An Act to amend title 5, United States Code, to strengthen the protections available to
Long title
Federal employees against prohibited personnel practices, and for other purposes.

Nicknames Whistleblower Protection Act of 1989

Enacted by the 101st United States Congress

protected disclosure
A protected disclosure is a qualifying disclosure under the Employment Rights Act 1996 that is made
by a worker that they reasonably believe shows serious wrongdoing within the workplace. This will
typically relate to some form of dangerous or illegal activity that the person has witnessed at work.

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Who is covered by a protected disclosure?

To be covered by a protected disclosure the whistleblower must be a worker. However, “worker”

has a special and wide meaning, providing protection not only to employees, but also to agency
workers, apprentices and trainees.

What is the Protected Disclosures Act 2014?

The Protected Disclosures Act 2014 aims to protect people who raise concerns about possible
wrongdoing in the workplace. ... It provides for redress for employees who are dismissed or otherwise
penalised for having reported possible wrongdoing in the workplace.

Introduction to Goods and Services Tax (GST)

GST is the most ambitious and remarkable indirect tax reform in India’s post-Independence history. Its
objective is to levy a single national uniform tax across India on all goods and services. GST has replaced
a number of Central and State taxes, made India more of a national integrated market, and brought more
producers into the tax net. By improving efficiency, it can add substantially to growth as well as
government finances. Implementing a new tax, encompassing both goods and services, by the Centre and
the States in a large and complex federal system, is perhaps unprecedented in modern global tax history.

GST is a tax on goods and services with comprehensive and continuous chain of set-off benefits up to the
retailer level. It is essentially a tax only on value addition at each stage, and a supplier at each stage is

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permitted to set-off, through a tax credit mechanism, the GST paid on the purchase of goods and services.
Ultimately, the burden of GST is borne by the end-user (i.e. final consumer) of the commodity/service.

With the introduction of GST, a continuous chain of set-off from the original producer’s point and service
provider’s point up to the retailer’s level has been established, eliminating the burden of all cascading or
pyramiding effects of an indirect tax system. This is the essence of GST. GST taxes only the final
consumer. Hence the cascading of taxes (tax-on-tax) is avoided and production costs are cut down.

Salient Features of GST in India The salient features of GST in India have been highlighted below:
1. Supply as the base: GST would be applicable on “supply” of goods or services as against
the
2. erstwhile concept of tax on the manufacture of goods or on sale of goods or on provision
of services. 2. Destination-based tax: As opposed to the previous principle of origin-based
taxation, GST would be based on the principle of destination-based consumption taxation.
3. Dual GST: The Centre and the States would simultaneously levy tax on a common base.
The GST to be levied by the Centre would be called Central GST (CGST) and the GST to
be levied by the States (including Union territories with legislature) would be called State
GST (SGST). Union territories without legislature would levy Union territory GST
(UTGST).
4. Inter-State supply: An integrated GST (IGST) would be levied on inter-State supply of
goods or services. This would be collected by the Centre so that the credit chain is not
disrupted. Imports of goods and services would be treated as inter-State supplies and would

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 be subject to IGST. (This would be in addition to applicable customs duties). Para 2.2
Introduction to GST 10 taxmann®
5. Central taxes subsumed: GST would subsume the following taxes that were levied and
collected by the Centre: Central excise duty; Additional duties of excise; Additional duties
of customs (commonly known as countervailing duty); special additional duty of customs
(SAD); service tax; and cesses and surcharges insofar as they relate to supply of goods or
services.
6. State taxes subsumed: GST would subsume the following taxes that were levied and
collected by the State: State VAT; Central Sales Tax; purchase tax; luxury tax; entry tax;
entertainment tax (except those levied by the local bodies); taxes on advertisements; taxes
on lotteries, betting and gambling; and State cesses and surcharges insofar as they relate to
supply of goods or services.
7. Applicability: GST would apply to all goods and services except alcohol for human
consumption. GST on five specified petroleum products (crude, petrol, diesel, aviation
turbine fuel, natural gas) would be applicable from a date to be recommended by the GST
Council.
8. Threshold for GST: A common threshold exemption would apply to both CGST and SGST.
Taxpayers with an annual turnover of ` 20 lakh (` 10 lakh for special category States (except
J&K) as specified in article 279A of the Constitution) would be exempt from GST. A
compounding option (i.e. to pay tax at a flat rate without credits) would be available to
small taxpayers (including to manufacturers other than specified category of manufacturers
and service providers) having an annual turnover of up to ` 1 crore (` 75 lakh for special
category States (except J&K and Uttarakhand) enumerated in article 279A of the
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Constitution). The threshold exemption and compounding scheme is optional.
9. Exports: All exports and supplies to Special Economic Zones (SEZs) and SEZ units would
be zero-rated.
10. Input tax credit: Credit of CGST paid on inputs may be used only for paying CGST on the
output and the credit of SGST/UTGST paid on inputs may be used only for paying SGST/
UTGST. In other words, the two streams of input tax credit (ITC) cannot be cross utilized,
except in specified circumstances of inter-State supplies for payment of IGST. (For details,
see the Chapter on Input Tax Credit).
11. Electronic filing of returns: There will be electronic filing of returns by different class of
persons at different cut-off dates. Various modes of payment of tax available to the
taxpayer including internet banking, debit/credit card and National Electronic Funds
Transfer (NEFT)/Real Time Gross Settlement (RTGS).
12. Tax deduction on payment made: While the provision for TDS has not been notified yet, it
is obligatory on certain persons including government departments, local authorities and
government agencies, who are recipients of supply, to deduct tax at the rate of 1% from the
payment made or credited to the supplier where total value of supply, under a contract,
exceeds ` 2,50,000.
13. Tax collection at source by E-commerce operators: While the provision for TCS has not
been notified yet,it is obligatory for electronic commerce operators to collect ‘tax at
source’, at such rate not exceeding 2% of net value of taxable supplies, out of payments to
suppliers supplying goods or services through their portals.
14. Refund: Refund of tax can be sought by taxpayer or by any other person who has borne the
incidence of tax within two years from the relevant date. Refund is to be granted within 60
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 days from the date of receipt of complete application and interest is payable if refund is not
sanctioned within 60 days.
15. Anti-profiteering clause: An anti-profiteering clause has been provided in order to ensure
that business passes on the benefit of reduced tax incidence on goods or services or both to
the consumers.

Proposed benefits of GST

The implementation of GST is expected to bring in various benefits as discussed below:

1. Dynamic common market: GST would make India a dynamic common market and result in generation
of positive externalities. By ensuring uniformity of indirect tax rates across the country, it will
substantially improve the ease of doing business.
2. Elimination of cascading effect: Under GST, provision of seamless input tax credit across transactions
will avoid tax cascading, eliminate double taxation and improve resource allocation.
3. Efficiency: Subsuming of all major indirect taxes will result in the removal of inefficient taxes. With as
single tax to be paid, manufacturers will become more competitive and this could lead to growth in
exports.
4. Reduced compliance costs: Harmonisation of tax rates and laws along with seamless input tax credits
and a sound IT infrastructure is expected to lead to reduced compliance costs. As all the taxpayer services
like registrations, payments, returns etc. will be available online, the compliance process would become
simpler.
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5. Reduction in tax evasion: Uniform rates of taxation would reduce the incentive for tax evasion by
eliminating rate arbitrage opportunities between neighbouring states and that between intra-State and
inter-State sales

Role of Stakeholders in Business Organization

A stakeholder is a person who has an interest in the company, IT service or its projects. They can be the
employees of the company, suppliers, vendors or any partner. They all have an interest in the organization.
Stakeholders can also be an investor in the company and their actions determine the outcome of the
company. Such stakeholder plays an important role in defining the future of the company as well as its
day-to-day workings.

Types of Stakeholders

 Internal Stakeholders: They are a part of the management of the company and have voting powers. They
are the major investors in the company and a part of the board of directors. Therefore they have all the
powers that other higher-level management have and can change the direction of the company.

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 External Stakeholders: Unlike internal stakeholders, their major role is to invest or disinvest in the
company. They hardly can bring any change in the company’s direction. They do not take part in any
internal operations or decision making of the company.

Roles of Stakeholders

 Direct the Management: The stakeholders can be a part of the board of directors and therefore help in
taking actions. They can take over certain departments like service, human resources or research and
development and manage them for ensuring success.
 They Bring in Money: Stakeholders are the large investors of the company and they can anytime bring
in or take out money from the company. Their decision shall depend upon the company’s financial
performance. Therefore they can pressurize the management for financial reports and change tactics if
necessary. Some stakeholders can even increase or decrease the investment to change the share price in
the market and thus make the conditions favorable for them.
 Help in Decision Making: Major stakeholders are part of the board of directors. Therefore they also take
decisions along with other board members. They have the power to disrupt the decisions as well. They
and bring n more ideas a threaten the management to obey them. The stakeholders also have all the powers
to appoint senior-level management. Therefore, they are there in all the major decision-making areas.
They also take decisions regarding liquidations and also acquisitions.
 Corporate Conscience: Large stakeholders are the major stakeholders of the company and have
monitored over all the major activities of the company. They can make the company abide by human
rights and environmental laws. They also monitor the outsourcing activities and may vote against any

 RSREDDY
business decision if it harms the long term goals of the company.
Other Responsibilities: Apart from the above four major roles they also have some other roles to play in
the company. They can identify new areas for market penetration and increased sales. They can bring in
more marketing ideas. They also attract other investors like honeybees in the company. They can be a part
of a selection board or a representative for the company. Moreover, they can take all the major social and
environmental decisions.

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