Principles And Practices Of Banking full notes

An effective control system requires clear and realistic standards, timely information and feedback, and economy (benefits should exceed costs). It should be flexible to changing conditions, objective and accurate, and must lead to corrective action. It should also be acceptable to employees to avoid resistance and fear.

Fayol stated that managerial work consists of Planning, Organising, Commanding, Coordinating and Controlling. Planning decides the future course of action; organising arranges resources; commanding directs subordinates; coordinating harmonises activities of departments; and controlling ensures performance matches the plan.

Business ethics refers to moral principles and standards that guide behaviour and decision-making in business. It deals with what is right and wrong in business conduct and aims to ensure fairness, honesty, responsibility and respect for stakeholders.

Ethical issues in business: Common ethical issues include bribery and corruption, which distort decisions and harm public trust; false advertising and misleading claims, which cheat customers; discrimination and harassment at workplace, which violates human dignity; unsafe working conditions and exploitation of labour; environmental pollution and ignoring safety norms; misuse of customer data and breach of privacy; and manipulation of accounts, insider trading and other dishonest practices.

Steps to promote ethical behaviour: Organisations should frame and communicate a clear code of ethics and policies. Ethics should be strengthened through training and awareness programmes. Top management must demonstrate ethical leadership and set an example. A fair reward and punishment system should encourage ethical behaviour and discourage misconduct. Whistle-blower mechanisms with protection should be provided so employees can report wrongdoing. Strong internal controls, transparency, audits and compliance monitoring should be used to prevent fraud. By combining policies with culture and leadership, ethical behaviour becomes a normal part of organisational life.