An Empirical Study on Business Ethics in Manufacturing Sector

Ethics involves distinguishing between what is right or wrong thereby making a correct choice. An organization should treat its internal as well as external stakeholders ethically. This research gives valuable insights on the prevailing ethical climate and potential organizational challenges in institutionalizing ethics and its management in the manufacturing sector. The present study is designed to analyze four parameters of ethical climate in the manufacturing sector with reference to different managerial levels, to identify the critical factor of the ethical code of conduct and to find correlations between four parameters of ethical climate. Descriptive research has been used and data are collected from 200 employees of three Indian companies of manufacturing sector using a well designed questionnaire. Analyzing data with SPSS, It has been found that overall good number of people believe that MBE (Management of Business Ethics) process is well implemented. People are well aware and trained and involved in the ethical process. Senior management is very much committed to promote the ethical environment in the organization and thus company values are well communicated to the employees. Concern resolution mechanism is well established in the organization. MBE in the organization is more prevalent in higher-level employees. Senior management commitment and reinforcement is very critical for CoC (code of conduct). Correlation between all the 4 parameters is positive and significant. But the parameters are not highly correlated with each other. Organizations need to work upon these parameters to promote an ethical climate in the organization by awarding or felicitating exemplary ethical behavior. More emphasis should be given on senior management commitment and reinforcement of the ethical behavior across all levels.