IIBF PPB ETHICS IN BANKS AND FINANCIAL INSTITUTIONS
Business Value: This term is used unofficially and is meant to refer to the core principles and standards which guide the way a business is operated. The term ‘value’ sums up everything that your business stands for and what makes the business unique and special from other businesses.
Business ethics: Ethics are some of the established principles and Standards which are there to guide the behavior that should be followed in the business world.
Business Ethics vs. Business Values
|Business Ethics||Business Values|
|These are the guidelines provided to address situations where questions related to morality are being raised.||The principles and ideals with the help of which one makes a judgment of what’s more important.|
|These fall under the purview of the moral principles system.||Values prompt thinking.|
|Here we try to decide what is morally correct or incorrect in the given situations.||Values define what we want to be or what we want to achieve.|
|We try to conclude the extent of rightfulness and wrongfulness of the available options.||They highlight the level of significance.|
Myths vs Reality:
|Entrepreneurs are Essentially Inventors||Entrepreneurs are Ideators|
|There have been many aspirations that have died only because of this myth because entrepreneurship is usually taken to be something that requires invention.
For instance, Ola or Uber disrupted travel while Oyo disrupted Hotel scenarios.
|As an entrepreneur, you get to travel a journey that although basic and simple is highly remarkable. Entrepreneurs, basically I need to fill the gap existing in the economy and to fill it with the right idea.
The journey of building an Empire starts right from finding this cap and that is when innovation and invention falls in the way.
|Entrepreneurs are Mainly Motivated by Money||Entrepreneurs are Motivated by Passion|
|Although money is a big element in the business game but is not the end game. It falls under the very narrow view when an entrepreneur starts with business. There lie things bigger than money such as passion and purpose which every budding entrepreneur holds.||Entrepreneurs are instinctively made up of risks and live their life on the edge. Their phones might be smaller but their visions are wider. The first few years of establishing a business are taken to reach a break-even point (passions being the main motivator) and once the execution is getting handled right, then profits become the part of the business too.|
|Entrepreneurs Have to be Risk-takers||Entrepreneurs Have to be Challenge-takers|
|It is a myth that an entrepreneur has to take risks when it comes to entrepreneurship. Risk is only a part of the broader vision while there are many other things that are under entrepreneurship.||Entrepreneurs are constantly facing challenges by taking risks as well as avoiding some of them. They have the attitude of a go-getter and are always ready to face adversity in the face of obstacles and cut-throat competition.
There is nothing as strong as will.
|Entrepreneurs are Born||Entrepreneurs are Made|
|No individual is born with some in-born bucket of ideas. The statement that entrepreneurs are born is the biggest of myths. This method has taken so many opportunities from thousands of people because they thought they were not born entrepreneurs. Having intelligence, family blood, and high scores has never guaranteed success.||There is nothing that can be compared with dedication, courage, and willpower. No person is born with entrepreneurship qualities as it has been seen that the great entrepreneurs have had no fortune in the Bloodline. There is no shortcut to hard work.|
Ethics are a set of rules which an organization should morally follow.
In the field of business, ethics are the code of conduct that a business is expected to follow when doing its business. Ethics for any business organization and relate the behavior of the people working in it.
Ethics of the people working in an organization to differentiate between what is wrong and what is right.
While observing Business Ethics all these values and principles are compromised and they also help in guiding their organization’s behavior.
Important Topic:- IIBF JAIIB DB&F PPB NEW SYLLABUS & LATEST STUDY MATERIAL 2022
Today, businesses need to have a balance between the needs of stakeholders of increasing their wealth, and businesses need to make a profit. In maintaining these balances, businesses are also required to make trade-offs.
To deal with such scenarios, an organization frames some rules and principles for the people working in the organization.
These framed rules & principles ensure that while getting money for the business, individuals and societies remain unaffected as a whole. These ethics reflect my organizational psychology.
PRINCIPLES OF BUSINESS ETHICS
- Integrity: The principles are tested when there is great pressure to go for the right thing instead of increasing the profits. Here, the top executives must demonstrate courage and personal integrity by doing the right things.
These are the principles that need to be held upright honorably while fighting for the beliefs in what is right. To honor their principles they should never back down.
- Loyalty: Ethical behavior is ingrained with the element of trust. And to gain the trust of someone, one needs to demonstrate their loyalty.
The business executives must be worthy of this trust while being loyal to their institutions and executives. At the time of adversity, one should see the friendships, support, and devotion towards their duty.
- Honesty: The executives who look over the ethical aspects in the organization, also need to be honest in dealing with their regular work. They should be truthful and must not deceive or mislead others by giving them wrong information. Any partial truths, misrepresentations, and overstatements should be avoided and there should not be any selective admission on their part.
- Respect & Concern: Both of these terms are the forms of behavior in the organization. Respect & concern are like two sides of one coin. When one person is ethical, he or she is kind, compassionate, and caring.
- Fairness: Not only does one need to be fair in their dealing but one should also restrain himself or herself from using their power wrongly.
Executives should not use any in a decent manner for any other way to gain any sort of advantage over the other. And it should be seen that no undue advantage is being taken because of the mistakes of others.
- Leadership: Any ethical executive should be a leader to others and should be able to handle his or her responsibilities while being aware of the opportunities because of the opposition. They have to be proper role models for others in the organization.
ETHICAL FOUNDATION OF BANKING: FINANCE DEPENDS ON TRUST
Need and Importance of Ethics in Banking
There is a need to deliver High-Quality Services to banking customers. These Quality Services are driven by ethical standards and therefore they should be able to maintain the same standards in the work culture, management, and with the behavior of the employees.
Banks work on the basis of public trust. Warranting the safekeeping of money deposited by the bank customers is a challenging task that depends on the country’s economic condition and whether or not the economy is open and any developments happening in other countries.
Ethics help in dealing with dilemmas
Any kind of business however well placed it is, has to face moral dilemmas once in a while in the course of the business. And banking business is no exception.
Banks have to deal with complex dilemmas in their decision-making process. Most of the time it’s not about deciding what is right and what is wrong but what is right and what is less right.
This makes the adherence to a strong set of moral principles necessary to help the employees in navigating through the ethical choices available to them while taking important decisions.
Guards Reputation/ Goodwill
Having ethical practices in place helps in safeguarding the interest of depositors as well as maintaining the stability of the system which in turn reserves the banks’ reputation.
Having employees adhere to ethical practices works as a preventive measure against breaches of the law.
Helps avoid risk
A proper code of ethics which is being followed by the superiors all the time helps in maintaining high ethical standards. You also work as preventive and corrective measures against any unethical practices that mind my practice by the staff members.