BUSINESS AND ETHICAL VALUES DISSERTATION ETHICS IN TRANSPORTATION INDUSTRY
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CONTENTS TOPICS
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Introduction
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Ethics
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Business Ethics
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Issues in Business ethics
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Transport industry
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Ethical issues in Transport Industry
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Case Studies
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Conclusion
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References
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INTRODUCTION The corporate world – an integral part of our lives, the soul of a country’s economic growth, a world filled with hustle – bustle 24*7, a world that generates employment for every second person you meet... But, sadly, it is also the domicile of power games and foul play and this is the reason why a look at ‘ETHICS AND VALUES IN BUSNIESS’ is critical and relevant. Ethics involves learning what is right or wrong, and then doing the right thing -- but "the right thing" is not nearly as straightforward as conveyed. Most ethical dilemmas in the workplace are not simply a matter of yes or no. For example Azim Premji tells all his employees whatever that is, “Grey is Black”. That means even if there is some kind of doubt about a transaction, do not go for it. We have to answer a question is there are always a right thing or ethics depend on situation? We may consider ethics to be the "Science of Conduct.” Ethics includes the fundamental ground rules by which we live our lives. Philosophers such as Socrates and Plato have given guidelines for ethical behaviour. Many ethicists consider emerging ethical beliefs to be legal principles, i.e., what becomes an ethical guideline today is made into to a law, regulation or rule. Therefore following law of the land is one of the basic virtues of ethics. Values, which guide how we ought to behave, are moral values, e.g., values such as respect, honesty, fairness, responsibility, etc. Statements around how these values are applied are sometimes called moral or ethical principles. Of the Institutions that have contributed to the quality of human life, business ranks with science, art, and education. Business has created the wealth that has given unprecedented numbers of individuals’ financial control of their lives. It has expanded immeasurably the range of goods and services available to individuals. It has broken down countless centuries old barriers of racial, sexual, religious, and ethnic prejudice. And it has been the vehicle for countless numbers of individuals to develop their fullest potentials in achieving their dreams. In short, business has been a prime mover in making it possible for millions to pursue their lives in a wealthy, healthy, rational and exciting world. Yet no other human institution has been so plagued by suspicions of immorality. "Business ethics," the old joke goes, "Isn't that a contradiction in terms?" The credibility of the term 'Business Ethics' has come into question, in recent times as 'business ethics' is increasingly being considered an oxymoron. It is generally believed that business and ethics cannot coexist and organizations are said to thrive on unethical practices. Business ethics, as far from being a contradiction in terms, has become one of the most important areas of managerial competence and responsibility.
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The ethics question warrants exploration on several levels: 1. At the macro- level: focusing on the ethical rightness of the system. 2. At the corporate-level: focusing the decisions that impact others. 3. At the individual-level: within an entity. Goal of Theory of Ethics The goal of a theory of ethics is to determine what is good, both for the individual and for the society as a whole. Philosophers have taken different positions in defining what is good, on how to deal with conflicting priorities of individuals versus the whole, over the universality of ethical principles versus “situation ethics” in which what is right depends upon the circumstances rather than on some general law, and over whether goodness is determined by the results of the action or the means by which results are achieved
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What are Ethics? Ethics refers to a system of moral principles a sense of right and wrong, and goodness and badness of actions and the motives and consequences of these actions. As applied to business firms, ethics is the study of good and evils, right and wrong and just and unjust actions of businessmen. Ethics is a body of principles or standards of human conduct that govern the behavior of individuals and groups. Ethics arise not simply from man's creation but from human nature itself making it a natural body of laws from which man's laws follow. Ethics is a branch of philosophy and is considered a normative science because it is concerned with the norms of human conduct, as distinguished from formal sciences such as mathematics and logic, physical sciences such as chemistry and physics, and empirical sciences such as economics and psychology. Ethics is seen as an individual’s own personal attitude and a belief concerning what is right or wrong, good or bad. It is important to note that ethics reside within individuals and that organization doesn’t have ethics. People have ethics. Consequently, its definition and understanding varies from person to person. These are not absolute, but are relative. Ethical behaviors are in the eye of beholder. What is right or wrong is a personal individual matter, but is still influenced by socially accepted norms. Right, and proper and fair are the ethical terms. It expresses a judgment about behavior towards people they felt to be just. Ethics are useful tools for sorting out the good and bad components within complex human interactions. Business ethics does not differ from generally accepted norms of good or bad practices. If dishonesty is considers to be unethical and immoral in the society, then any business man who is dishonest his or her employees, customer’s shareholders, or competitors is unethical and immoral person.
Formation of ethics An individual’s ethics are formulated through the operation of forces in the individual’s environment. These are discussed in the succeeding paragraphs. • Family influences The formation of ethics begins when the individual is a child. Thus the family environment has a significant influence in determining what the child learns about good and bad, right and wrong.
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• Peer influences As the child develops contacts outside the home through home, school, play and work, peers exert considerable influence on the individual’s ethical beliefs. • Experiences As a person matures and develops as a human being, he or she will be exposed to many critical experiences that will be affect his or her ethical standards. • Values and morals One’s ethical standards are also greatly influenced by values and morals. People who place high value on money and material possessions may not have strong ethical standard regarding behaviors that facilitate the accumulation of that wealth. •
Situation Factors People often change their ethics in response to unknown situational factors. An employee, who is threatened with loosing a job that has been held for years, may commit unethical acts in order to save the job.
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Religion One of the oldest sources of ethical inspiration is religion. More than 1,00,000 different religion exist across the globe .Despite doctrinal differences, the major religion coverage on the believe that ethics is an expression of divine will that reveals the nature of right and wrong in business and others walks of life.
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The legal system Laws are rules of conduct, approves by legislatures, that guide human behavior in any society .They codify ethical expectations and change as new evils emerge. But law cannot cover all ethical expectation of society. Whenever ethics the law codifies, it is binding on businesses. The society expects businesses to abide by the law. Obeying the law is presumed to be ethical behavior .Law breaking in business is common. Taxes are evaded, hundred of employees die because of occupational disease, many perish because of industrial accidents, and million others receive disabling injuries on the job. The blame for these death and injuries had to be shared by employees and employers who fail to adhere to occupational health and safety laws. Consumer suffer because of poor quality and high priced products by the supplied by the businessmen .Businesses that degrade the environment by disregarding environment protection laws cause misery to the society.
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BUSINESS ETHICS According to an old joke “business ethics” is a contradiction in terms. For some this is only humor. For others there is a serious question: “ As business is by nature unethical, how can there be such a subject as business ethics?” Business Ethics is a form of the art of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions ~ Ethicism, is increasing. Simultaneously, pressure is applied on industry to improve business ethics through new public initiatives and laws. Definition of Business Ethics: Business Ethics is a specialized study of moral right and wrong. It concentrates on moral standards as they apply particularly to business policies, institutions, and behavior. Ethical Issues Relate to all Functional Areas in a business • Accounting • Finance • Management • Marketing • • • •
The major issues in business ethics can be classified into four areas: The relationship between business and consumers The relationship between employers and employees The nature and value of special forms of business organization—most notably, that of the corporation The nature and value of financial markets IMPORTANCE OF BUSINESS ETHICS Ethics is important to business in general and HR in particular, for several reasons as stated below: Ethics corresponds to basic human needs. It is men’s basic nature that he desires to be ethical, not only in his private life but also in his business affairs where, being a manager he knows that his decisions may affect the life of thousands of employees. Moreover, most people want to be the part of organization which they can respect and be proud of, because they perceive its purpose activities to be honest and beneficial to society. Most HR managers would like to respond to this need of their employees and, they (managers) themselves feel an equal need to be genuinely proud of the company they are directing. These bases ethical needs compel the organizations to be ethical oriented.
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Values create credibility with the public. A company perceived by the public to be ethical and socially responsive will be honored ands respected even by those who have no intimate knowledge of its actual working. There will be an instinctive prejudice in favour of its products, since people believe that the company offers value for money. Its public issues will attract an immediate response. Valued give the management credibility with its employees. Values are supposed to be a common language to bring the leadership and its people together.Organisational ethics, when perceived by employee as genuine, create common goals, values, and language. The HR management can have credibility with its employees simply because it has credibility with the people. Neither a sound business strategy, nor a generous compensation policy and fringe benefits can win employee credibility, but perceived moral and social uprightness can. Values help better decision making. Another point of great importance is that an ethical attitude helps the management make better decisions, that is ,decision which are in the interest of the public, their employees, and the company’s own long-term good, even though the decision making is slower. This is so because respect for ethics will force a management to take various aspecteconomic, social and ethical-in making decision. Ethics and profit go together. A company which is inspired by ethical conduct is also profitable. Value-driven companies are most likely to be successful in long run, though in the short run, they may lose money. Law can’t protect society, ethics can. Ethics is important because, law and lawyer cannot do every thing to protect society. Technology develops faster than the government can regulate. People in an industry know the dangers in the particular technology better than the regulatory agencies. Further, the government cannot always regulate all activities which are harmful to the society. Where law fails, ethics can succeed. An ethically-oriented management takes measures to prevent pollution and protects workers health even before being mended by law .An ethically sound HR manager, who can reach out to agitated employees, will quell a trouble more effectively than the police. FOUR VIEWS OF ETHICS
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1. UTILITARIAN VIEW of ethics says that: • Ethical decisions are made solely on the basis of their outcomes or consequences. • Greatest good is provided for the greatest number • Encourages efficiency and productivity and is consistent with the goal of profit maximization
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2. RIGHTS VIEW of ethics is concerned with respecting and protecting individual liberties and privileges such as the rights to privacy, free speech, and due process. Respecting and protecting individual liberties and privileges Seeks to protect individual rights of conscience, free speech, life and safety, and due process To make ethical decisions, managers need to avoid interfering with the fundamental rights of others 3. Theory of JUSTICE VIEW is where managers impose and enforce rules fairly and impartially and do so by following all legal rules and regulations. Organizational rules are enforced fairly and impartially and follow all legal rules and regulations Protects the interests of underrepresented stakeholders and the rights of Employees 4. INTEGRATIVE SOCIAL CONTRACTS theory proposes that ethical decisions be based on existing ethical norms in industries and communities in determining what constitutes right and wrong. Acts are moral when they promote the individual’s best long-term interests, which ultimately leads to the greater good • Individualism is believed to lead to honesty and integrity because that works best in the long run
Ethics has come to be considered a management discipline, especially since the birth of the social responsibility movement in the 1960s. In that decade, social awareness movements raised expectations of businesses to use their massive financial and social influence to address social problems such as poverty, crime, environmental protection, equal rights, public health and improving education. An increasing number of people asserted that because businesses were making a profit from using the planet’s resources, these businesses owed it to the planet to work to improve society. Ethical behavior starts at the top. Before a company can expect to be viewed s ethical in the business community, ethical behavior within its own walls-to and by employees-is a must, and top management dictates the mood. Ethical behavior by the leaders of an organization will inevitably set the tone for the rest of the company-values will remain consistent. Further, a well communicated commitment to ethics sends a powerful message that ethical behavior is considered to be a business imperative.
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BASIC ISSUES IN BUSINESS ETHICS
GENERAL BUSINESS ETHICAL ISSUES: • This part of business ethics overlaps with the philosophy of business, one of the aims of which is to determine the fundamental purposes of a company. If a company's main purpose is to maximize the returns to its shareholders, then it could be seen as unethical for a company to consider the interests and rights of anyone else. • Corporate social responsibility or CSR: an umbrella term under which the ethical rights and duties existing between companies and society is debated. •
Issues regarding the moral rights and duties between a company and its shareholders: fiduciary responsibility, stakeholder concept v. shareholder concept.
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Ethical issues concerning relations between different companies: e.g. hostile takeovers, industrial espionage.
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Leadership issues: corporate governance. 10
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Political contributions made by corporations. •
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Law reform, such as the ethical debate over introducing a crime of corporate manslaughter.
The misuse of corporate ethics policies as marketing instruments. THE MAJOR PRINCIPLES OF BUSINESS ETHICS:
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No discrimination should be done on the basis of caste ,color , and religion, The polices should be fair and transparent Proper provision of safety should be provided by the company to he employees There should be proper honesty, loyalty, and integrity in the employees. • The company’s resources should not be utilized by the employees for their personal usage Company should provide better environment condition • Information about employee’s personal lives, health, and work evaluations should be confidential Regular measurement of employee satisfaction should by company. • To neither give nor take any illegal payment, remuneration, gift, donation, or comparable, benefits to obtain business or favours. To comply with all regulations regarding preservation of the environment. • Employee should report to management any actual or possible violation of code or an event that could affect the business or reputation of the employee’s company. THEORETICAL ISSUES IN BUSINESS ETHICS • CONFLICTING INTERESTS Business ethics can be examined from various perspectives, including the perspective of the employee, the commercial enterprise, and society as a whole. Very often, situations arise in which there is conflict between one or more of the parties, such that serving the interest of one party is a detriment to the other(s). For example, a particular outcome might be good for the employee, whereas, it would be bad for the company, society, or vice versa. Some ethicists (e.g., Henry Sidgwick) see the principal role of ethics as the harmonization and reconciliation of conflicting interests. • ETHICAL ISSUES AND APPROACHES Philosophers and others disagree about the purpose of a business ethic in society. For example, some suggest that the principal purpose of a business is to maximize returns to its owners, or in the case of a publicly-traded concern, its shareholders. Thus, under this view, only those activities that increase profitability and shareholder value should be encouraged.
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Some believe that the only companies that are likely to survive in a competitive marketplace are those that place profit maximization above everything else. However, some point out that self interest would still require a business to obey the law and adhere to basic moral rules, because the consequences of failing to do so could be very costly in fines, loss of licensure, or company reputation. The economist Milton Friedman was a leading proponent of this view. Other theorists contend that a business has moral duties that extend well beyond serving the interests of its owners or stockholders, and that these duties consist of more than simply obeying the law. They believe a business has moral responsibilities to so-called stakeholders, people who have an interest in the conduct of the business, which might include employees, customers, vendors, the local community, or even society as a whole. They would say that stakeholders have certain rights with regard to how the business operates, and some would suggest that this includes even rights of governance. Some theorists have adapted social contract theory to business, whereby companies become quasi-democratic associations, and employees and other stakeholders are given voice over a company's operations. This approach has become especially popular subsequent to the revival of contract theory in political philosophy, which is largely due to John Rawls' A Theory of Justice, and the advent of the consensus-oriented approach to solving business problems, an aspect of the "quality movement" that emerged in the 1980s. Professors Thomas Donaldson and Thomas Dunfee proposed a version of contract theory for business, which they call Integrative Social Contracts Theory. They posit that conflicting interests are best resolved by formulating a "fair agreement" between the parties, using a combination of i) Macro-principles that all rational people would agree upon as universal principles, and, ii) Micro-principles formulated by actual agreements among the interested parties. Critics say the proponents of contract theories miss a central point, namely, that a business is someone's property and not a mini-state or a means of distributing social justice. Ethical issues can arise when companies must comply with multiple and sometimes conflicting legal or cultural standards, as in the case of multinational companies that operate in 20 countries with varying practices. The question arises, for example, ought a company to obey the laws of its home country, or should it follow the less stringent laws of the developing country in which it does business? To illustrate, United States law forbids companies from paying bribes either domestically or overseas; however, in other parts of the world, bribery is a customary, accepted way of doing business. Similar problems can occur with regard to child labor, employee safety, work hours, wages, discrimination, and environmental protection laws. It is sometimes claimed that a Gresham's law of ethics applies in which bad ethical practices drive out good ethical practices. It is claimed that in a competitive business environment, those companies that survive are the ones that recognize that their only role is to maximize profits. On this view, the competitive system fosters a downward ethical spiral.
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10 Benefits of Managing Ethics in the Workplace The following list describes various types of benefits from managing ethics in the workplace: 1. Attention to business ethics has substantially improved society. A matter of decades ago, children in our country worked 16-hour days. Workers’ limbs were torn off and disabled workers were condemned to poverty and often to starvation. Trusts controlled some markets to the extent that prices were fixed and small businesses choked out. Price fixing crippled normal market forces. Employees were terminated based on personalities. Influence was applied through intimidation and harassment. Then society reacted and demanded that businesses place high value on fairness and equal rights. Anti-trust laws were instituted. Government agencies were established. Unions were organized. Laws and regulations were established. 2. Ethics programs help maintain a moral course in turbulent times. Attention to business ethics is critical during times of fundamental change -- times much like those faced now by businesses, both nonprofit and for-profit. During times of change, there is often no clear moral compass to guide leaders through complex conflicts about what is right or wrong. Continuing attention to ethics in the workplace sensitizes leaders and staff to how they want to act -- consistently. 3. Ethics programs cultivate strong teamwork and productivity. Ethics programs align employee behaviors with those top priority ethical values preferred by leaders of the organization. Usually, an organization finds surprising disparity between its preferred values and the values actually reflected by behaviors in the workplace. Ongoing attention and dialogue regarding values in the workplace builds openness, integrity and community -- critical ingredients of strong teams in the workplace. Employees feel strong alignment between their values and those of the organization. They react with strong motivation and performance. 4. Ethics programs support employee growth and meaning. Attention to ethics in the workplace helps employees face reality, both good and bad -- in the organization and themselves. Employees feel full confidence they can admit and deal with whatever comes their way. Their most striking finding: the more emotionally healthy executives, as measured on a battery of tests, the more likely they were to score high on ethics tests. 5. Ethics programs are an insurance policy -- they help ensure that policies are legal. There is an increasing number of lawsuits in regard to personnel matters and to effects of an organization’s services or products on stakeholders. As mentioned earlier in this document, ethical principles are often state-of-the-art legal matters. These principles are often applied to current, major ethical issues to become legislation. Attention to ethics ensures highly ethical policies and procedures in the 13
workplace. It’s far better to incur the cost of mechanisms to ensure ethical practices now than to incur costs of litigation later. A major intent of well-designed personnel policies is to ensure ethical treatment of employees, e.g., in matters of hiring, evaluating, disciplining, firing, etc. “An employer can be subject to suit for breach of contract for failure to comply with any promise it made, so the gap between stated corporate culture and actual practice has significant legal, as well as ethical implications.” 6. Ethics programs help avoid criminal acts “of omission” and can lower fines. Ethics programs tend to detect ethical issues and violations early on so they can be reported or addressed. In some cases, when an organization is aware of an actual or potential violation and does not report it to the appropriate authorities, this can be considered a criminal act, e.g., in business dealings with certain government agencies, such as the Defense Department. The recent Federal Sentencing Guidelines specify major penalties for various types of major ethics violations. However, the guidelines potentially lower fines if an organization has clearly made an effort to operate ethically. 7. Ethics programs help manage values associated with quality management, strategic planning and diversity management -- this benefit needs far more attention. Ethics programs identify preferred values and ensuring organizational behaviors are aligned with those values. This effort includes recording the values, developing policies and procedures to align behaviors with preferred values, and then training all personnel about the policies and procedures. This overall effort is very useful for several other programs in the workplace that require behaviors to be aligned with values, including quality management, strategic planning and diversity management. Total Quality Management includes high priority on certain operating values, e.g., trust among stakeholders, performance, reliability, measurement, and feedback. Eastman and Polaroid use ethics tools in their quality programs to ensure integrity in their relationships with stakeholders. Ethics management techniques are highly useful for managing strategic values, e.g., expand market share, reduce costs, etc. Ethics management programs are also useful in managing diversity. Diversity is much more than the color of people’s skin -- it’s acknowledging different values and perspectives. Diversity programs require recognizing and applying diverse values and perspectives -- these activities are the basis of a sound ethics management program. 8. Ethics programs promote a strong public image. Attention to ethics is also strong public relations -- admittedly, managing ethics should not be done primarily for reasons of public relations. But, frankly, the fact that an organization regularly gives attention to its ethics can portray a strong positive to the public. People see those organizations as valuing people more than profit, as striving to operate with the utmost of integrity and honor. Aligning behavior with values is critical to effective marketing and public relations programs. “Ethical values, consistently applied, are the cornerstones in building a
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commercially successful and socially responsible business.” 9. Overall benefits of ethics programs: managing ethical values in the workplace legitimizes managerial actions, strengthens the coherence and balance of the organization’s culture, improves trust in relationships between individuals and groups, supports greater consistency in standards and qualities of products, and cultivates greater sensitivity to the impact of the enterprise’s values and messages. 10. Last - and most -- formal attention to ethics in the workplace is the right thing to do.
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TRANSPORTATION INDUSTRY Travel and transport forms the backbone of infrastructures- the major sector of any economy. Millions of people and businesses rely on an extensive, interrelated network. The transportation industry is in an era of unprecedented change. Marked by unending demands for increased services and severely limited budgets for infrastructure, the industry faces continuous challenges. The travel industry is exploring new horizons in the way it does business, thanks to technology. Today, with the help of technology the travel industry is creating new propositions for its customers. With the changing economic scenario, factors such as globalization of markets, international economic integration, removal of barriers to business and trade and increased competition have enhanced the need of transportation. It is one of the most important infrastructure requirement which is essential for the expansion of opportunities and plays an important role in making or breaking the competitive positioning. The logistics and transportation industry • Globally, the logistics industry is valued at US$ 3.5 trillion • The US, which contributes to over 25% of the global industry value, spends close to 9% of its GDP on logistics services • The Indian logistics industry is presently estimated at US$ 90 billion • The industry has generated employment for 45 million people in the country in comparison with the IT and ITes sector which employs approximately 4.3 million people. • It is forecast to grow at a compound annual rate (CAGR) of approximately 8% over the next 3-5 years.
TRANSPORTATION: It is the movement of people and goods from one location to another. Transport is performed by modes, such as air, rail, road, water, cable, pipeline and space. The field can be divided into infrastructure, vehicles, and operations. Infrastructure consists of the fixed installations necessary for transport, and may be roads, railways, airways, waterways, canals and pipelines, and terminals such as airports, railway stations, bus stations, warehouses, trucking terminals, refueling depots (including fueling docks and fuel stations), and seaports. Terminals may both be used for interchange of passengers and cargo, and for maintenance. Vehicles traveling on these networks may include automobiles, bicycles, buses, trains, trucks, people, helicopters, and aircraft. Operations deal with the way the vehicles are operated, and the procedures set for this purpose including financing, legalities and policies. In the transport industry, operations and ownership of infrastructure can be either public or private, depending on the country and mode.
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Passenger transport may be public, where operators provide scheduled services, or private. Freight transport has become focused on containerization, although bulk transport is used for large volumes of durable items. Transport plays an important part in economic growth and globalization, but most types cause air pollution and use large amounts of land. While it is heavily subsidized by governments, good planning of transport is essential to make traffic flow, and restrain urban sprawl. DIFFERENT MODES OF TRANSPORT: 1. Human-powered transport Human-powered transport is the transport of people and/or goods using human musclepower, in the form of walking, running and swimming. 2. Animal-powered transport Animal-powered transport is the use of working animals for the movement of people and goods. Humans may ride some of the animals directly, use them as pack animals for carrying goods, or harness them, alone or in teams, to pull sleds or wheeled vehicles. 3. Aviation The aircraft is the second fastest method of transport, after the rocket. Commercial jets can reach up to 875 kilometres per hour (544 mph), single-engine aircraft 175 kilometres per hour (109 mph). 4. Rail transport Rail transport is where a train runs along a set of two parallel steel rails, known as a railway or railroad. 5. Road transport A road is an identifiable route, way or path between two or more places 6. Ship transport Water transport is the process of transport a watercraft, such as a barge, boat, ship or sailboat, makes over a body of water, such as a sea, ocean, lake, canal or river 7. Other: Pipeline transport Cable transport Spaceflight LOGISTICS: It is the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers. Logistics involve the integration of information, transportation, inventory, warehousing, material handling, and packaging.
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ECONOMIC IMPACT OF TRANSPORT INDUSTRY: Transport is the key component of growth and globalization. It is a key necessity for specialization—allowing production and consumption of products to occur at different locations. Transport has throughout history been a spur to expansion; better transport allows more trade and a greater spread of people. Economic growth has always been dependent on increasing the capacity and rationality of transport. But the infrastructure and operation of transport has a great impact on the land and is the largest drainer of energy, making transport sustainability a major issue. Modern society dictates a physical distinction between home and work, forcing people to transport themselves to places of work or study, as well as to temporarily relocate for other daily activities. Passenger transport is also the essence of tourism, a major part of recreational transport. Commerce requires the transport of people to conduct business, either to allow face-to-face communication for important decisions or to move specialists from their regular place of work to sites where they are needed.
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ETHICAL ISSUES IN TRANSPORT INDUSTRY The success of transportation companies often rests with the trustworthiness of your employees. That’s because you’re obligated to deliver the products you’ve been entrusted with to their final destination on time, complete, and in good condition. Hence, ethics play a very important role in transportation industry. 1. Accurate travel logs There might be manipulations in the travel logs and documents that make room for corruption and unethical activities and transactions. Trade logistics is a fertile ground for rent-seeking activities: corruption and protected inefficient transportation services which in turn become a barrier to entry of modern operators. All these factors increase fragmentation and inhibit the emergence of a seamless supply chains needed by importers and exporters. Countries become trapped in vicious circles where inefficient regimes sustain low quality services (e.g. transport, customs broking) and high transport prices. 2. Safe practices for maintaining a fleet that will not be lured into the other risks prevalent within the transportation industry. Your cargo must arrive unharmed and without the issue of theft. Moreover, you need to know the employees operating your trucks, barges, and planes are using them for the purpose intended and not as a vehicle for illegal or unethical activities, such as the transport of drugs. Overloading and accidents due to overloading should also be considered. 3. Stringent regulations imposed within transportation industry by the government agencies which may be stringent but need to be followed. These may affect many of the hiring and personnel processes and decisions 4. Environmental issue: Transport is a major use of energy, and burns most of the world's petroleum. This creates air pollution, including nitrous oxides and particulates, and is a significant contributor to global warming through emission of carbon dioxide, for which transport is the fastest-growing emission sector. By subsector, road transport is the largest contributor to global warming. Environmental regulations in developed countries have reduced the individual vehicles emission; however, this has been offset by an increase in the number of vehicles, and more use of each vehicle. Some pathways to reduce the carbon emissions of road vehicles considerably have been studied. Energy use and emissions vary largely between modes, causing environmentalists to call for a transition from air and road to rail and human-powered transport, and increase transport electrification and energy efficiency.
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Other environmental impacts of transport systems include traffic congestion and automobile-oriented urban sprawl, which can consume natural habitat and agricultural lands. By reducing transportation emissions globally, it is predicted that there will be significant positive effects on Earth's air quality, acid rain, smog and climate change 5. Internal management practices Some employees or managers may be corrupt in giving tenders, urgency of work, doing manipulation in the stock to be carried, preferential dealings, etc. 6. External (market-related) a. Cartels - groups or unions among the workforce b. abuses of a dominant position c. abuse of buying power and/or attempts to monopolize d. anti-competitive mergers and acquisitions
SUGGESTIONS TO INCLUDE ETHICAL BEHAVIOUR IN TRANSPORT INDUSTRY •
Sufficient, rather than maximum profitability, which benefits shareholders, their employees, and suppliers and reinforces the firm’s long-term sustainability
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Provision of safe, efficient and comfortable transport services,
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Governments’ intervention in transportation matters to be dictated by its electoral mandate and defined set of principles (derived from this mandate, rather than ideology), only safety and security is truly in the ‘national interest’ in a liberalized market,
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Provision of the critical link facilitating tourism flows between an origin and a destination, thereby offering consumer choice at the origin, and enhancing tourism-specific economic activity and employment at both ends
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Employment background checks – Ensures compliance with the applicable laws and regulations, helps reduce workplace theft and violence, and verifies that drivers are qualified to handle their level of responsibility.
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Supplier/vendor screening – Verifies the capabilities and integrity of potential and existing suppliers – including business entities, key vendor employees, and vendor employees who work alongside your personnel or on your premises.
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Driving records - Better ensure that your drivers and operators have clean driving histories to help mitigate risks and reduce insurance costs. Kroll can also perform searches during the pre-employment process or after hire on an annual basis 20
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Substance abuse testing –Drug testing helps organizations reduce the incidence of drug and alcohol use and its impact in the workplace, on public transportation routes, and with your physical assets.
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Employment physicals – as per regulations , physical exams help organizations determine proper placement of employees and reasonable accommodation of qualified applicants.
CASE STUDIES
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Report Accuses Transport Canada of Security Problems and Unethical Management OTTAWA - Canada's marine security regulations are riddled with gaps that put the country at risk, says a federal bureaucrat in a never-before released report. Transport Canada hastily drafted marine security regulations, largely copied from U.S. rules, after the 9/11 terrorist attacks, writes an award-winning civil servant and former naval officer who has since left the department. Ian Bron, 41, served as Transport Canada's chief of marine security regulatory affairs and held several other jobs within the department between 2003 and 2006. So-called gaps identified in his December 2006 report could mean a lack of proper screening at marine facilities, and some vessels not being covered by security regulations. "It is the opinion of the author that this represents a significant risk to the health and economic security of Canadians by perpetuating vulnerabilities in the marine transportation sector," says the report, obtained by The Canadian Press under the Access to Information Act. "It is also the author's assessment that the soundness of the maritime security regime has been misrepresented to the Minister of Transport and to the Canadian public at large." Specific gaps are blanked out in the report obtained under the access act. But an uncensored version, parts of which were shown to The Canadian Press, lists gaps, including: -Authorized screening isn't done in marine facilities. -Barges aren't covered by marine security regulations. -Certain vessels are able to suspend security procedures. -Vessels and marine facilities circumvent the marine security regulations using declarations of security. -Domestic ferries aren't regulated. Bron, who was honoured with a deputy minister commendation for his work on marine security regulations in 2004, distributed the report before leaving Transport Canada for a job in the Public Works Department. Now he's embroiled in a court battle with his former superiors. Bron sent the report to the auditor general, Transport Minister Lawrence Cannon, the Public Service Integrity Office and Liberal Senator Colin Kenny, chair of the Senate committee on national security and defence. Catherine Loubier, Cannon's communications director, confirmed in an e-mail the transport minister knew of the report. "The minister was informed by his officials of the existence of that report and immediately took action, asking his officials to review it and assess it," she wrote. "This examination is ongoing and as it is before the Superior Court of Justice, I can't help you with further comments. What I can tell you is that Canada's marine transportation system is one of the safest and most secure transportation systems in the world." Transport Canada spokeswoman Julia Ukrintz said the department disagrees with the contents of Bron's report, but refused further comment on it. She cited several classroom and on-the-job training programs marine security inspectors must take before they receive their credentials. But the report says Transport Canada's marine security directorate lacks the resources and training to properly enforce its safety regulations.
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"Little or no action has been taken to address serious gaps in the regulations," the report adds. Earlier this month, Transport Canada angered officials in Owen Sound, Ont., by erecting a barbed-wire anti-terrorism fence along the local harbour. City council said the fence which is 60 metres long, stands more than two metres high and has gates at both ends - is unnecessary since the small port only sees an international ship once every few years. Bron's report was released under the access law the same day Transport Canada published another study giving the department high marks for its marine security initiatives. And it came to light after Natural Resources Minister Gary Lunn fired Linda Keen as head of the Canadian Nuclear Safety Commission for her handling of last year's Chalk River reactor shutdown, which led to a shortage of medical isotopes. Some say Keen's firing could send a chill through the government, with civil servants fearing reprisals if they break political lockstep. "I am a test case. What they want to do is find ways to shut me up," Bron said in an interview. "If they get away with this, you can kiss whistleblowing goodbye." Court documents filed last September allege Transport Canada senior management retaliated against Bron when he raised the issues in the report. The statement of claim says there have been "many instances of harassment" by management, although incidents are blanked out in the released report. The report also highlights "travel irregularities," such as trips to industry events with "little operational utility." It says management accepted expensive meals and drinks from industry representatives, and favoured some over others during consultations. Bron's statement says managers in Transport Canada's marine security directorate "routinely disclosed" sensitive information to industry representatives who lacked security clearance or background checks. Bron is suing the auditor general, two Transport Canada directors, an assistant deputy director and a director now with the nuclear safety commission. The lawsuit seeks $3 million in general damages and $1 million in aggravated and punitive damages. A statement of defence filed last November says Bron is not a whistle-blower because his allegations are "what he perceives to be injustices perpetuated against him and not about institutional wrong-doing that have a public interest component." It notes Bron faces a harassment complaint from his former superiors. None of the allegations has been proven in court. Transport Canada hired consulting firm Deloitte and Touche last May to probe issues raised in Bron's report, the defence statement says. Transport Canada says the investigation is ongoing and expected to end next month. Source: Canadian Press
2. The Security Impact: Conceptual Assessment of the PNG Air Transport Industry
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Casual Analysis of Security in PNG Air Transport Industry For the purpose of addressing complex public policy issues, a causal analysis needs to be performed to bring to light the factors that influence the criterion of economic efficiency, according to cause-and-effect reasoning. In this analysis security is referred to as measures taken to guard against and respond to danger from e.g.: terrorism, crime, sabotage, attack, or unethical behaviour from the lack of respect for life or property. As such, it is an important companion to Safety. However, for simplicity and comprehensibility in analyzing the impacts, Safety and Security issues in the Air Transport industry in PNG have been systematically isolated and only the Security issues have been delineated. The conceptualization will take the perception of the Government and focus on factors from policies and regulations, risk scenarios, security aspects in Air Transport industry, cost implications and its overall impact to the economic efficiency of the Air Transport industry in PNG. During this casual analysis, distinction had been made on certain factors and propositions. First, certain factors mentioned in the analysis are external factors; meaning that these factors are not within the control of either CAA or the Ministry of Transport but are under the governance blanket of the PNG Government. However, some are outside their scope of governance, which are from international organizations or from global pressure or trends such as international policies for regulations on aviations security. Informal organizations and technological advances can also be categorized under external factors outside the scope of the PNG Government control unless specifically indicated. Second, the direction of impact or influence can either be positive or negative depending on the correlation between each factor. For instance, price of services and products have a positive effect on revenue. If prices increase the revenue will increase and if price decrease the revenue will decrease. That is represented with a ‘+’ symbol. A negative correlation is represented with a ‘-‘ symbol. For instance, if security concern increases, it reduces the service adequacy and if security concern decreases, it increases the service adequacy. The symbol ‘?’ signifies that the correlation is implicit and that the impact can either be positive or negative depending on the certain situations that needs further enquiry. Third, not all factors are necessarily consider to be variables of which will increase and decrease. Example for a variable factor is end user demand. A nonvariable factor is local regulations and policies. Lastly, PNG Air Transport industry operators are considered here to be both those operating in the market for passengers and freights.
CONCLUSION Whenever and wherever there are meaningful discussions to create better socio-economic 24
conditions in the society or to make the world a better place to live in, the discussions invariably touch Business and Industry or Trade and Commerce also besides other areas of human activities. Those who run their business or industry on principles of honesty, integrity and justice are the ones who raise the prestige of their nation and are inspiring examples unto others. However, there are people who indulge into unfair, unjust, dishonest or socially harmful activities and do not believe in fairplay and excellence. Business has created the wealth that has given unprecedented numbers of individual’s financial control of their lives. It has expanded immeasurably the range of goods and services available to individuals. It has broken down countless centuries-old barriers of racial, sexual, religious, and ethnic prejudice. And it has been the vehicle for countless numbers of individuals to develop their fullest potentials in achieving their dreams. In short, business has been a prime mover in making it possible for millions to pursue their lives in a wealthy, healthy, rational and exciting world. Because business decisions often require specialized knowledge, ethical issues are often more complicated than those faced in personal life — and effective decision making requires consistency. Because each business situation is different, and not all decisions are simple, many organizations have embraced ethical codes of conduct and rules of professional ethics to guide managers and employees. However, sometimes selfregulation proves insufficient to protect the interest of customers, organizations, or society. At that point, pressures for regulation and enactment of legislation to protect the interests of all parties in the exchange process will likely occur. Maintaining a strong ethical culture is essential for complying with the laws and regulations, but this alone cannot be the motivation for ethical culture building. Beyond the large impact an organization’s culture has on the bottom line, the development of programs to foster ethical conduct must maintain a focus on fairness, encouragement, and communication at all employee levels. Along these lines, employees must be given the appropriate tools and models to align their behavior with company culture and engage in ethical decision-making. The attitudes, choices, and actions of business leaders play a primary role in the creation of an organization’s ethical culture and climate; expectations for employees’ ethical behavior can only be set as high as the organization’s leadership is willing to meet. A leader’s ability to consistently promote ethical conduct in an organization is critical to ensuring that employees understand how to make “doing what is right” a priority. Travel and transport forms the backbone of infrastructures- the major sector of any economy. Millions of people and businesses rely on an extensive, interrelated network. The transportation industry is in an era of unprecedented change. Marked by unending demands for increased services and severely limited budgets for infrastructure, the industry faces continuous challenges. With the changing economic scenario, factors such as globalization of markets, international economic integration, removal of barriers to business and trade and increased competition have enhanced the need of transportation. It is one of the most important infrastructure requirement which is essential for the expansion of opportunities and plays an important role in making or breaking the competitive positioning.
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Since it is so important to any economy, and employees ten times the number of people IT industry does i.e. arnd 43 million people, there is an increased need for ethics and morality in this industry. The success of transportation companies often rests with the trustworthiness of your employees. That’s because you’re obligated to deliver the products you’ve been entrusted with to their final destination on time, complete, and in good condition. Hence, ethics play a very important role in transportation industry. In our study, a number of ethical issues in transport industry were discussed and suggestions were given to improve and inculcate morality and ethicism in transportation industry. Thus it can be concluded that, Ethics are important not only in business but in all aspects of life because it is an essential part of the foundation on which of a civilized society is build. A business or society that lacks ethical principles is bound to fail sooner or later.
“Live in such a way that you would not be Ashamed to sell your parrot to the town gossip.” ~ Will Rogers
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