business ethics in word

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³Values are the rules by which we make decisions about right and wrong, should and shouldn't,good and bad. They also tell us which are more or less important, which is useful when we

have to trade off meeting one value over another´

For e.g, someone who believes that honesty is important will likely to act honestly in mostsituation. An employee who values a sense of accomplishment generally try to do his best in

each task for which he is responsible.

Values not only enhance the quality of life of individuals of society ,but they also make thesociety a better place to live.some comman individual/organizational values include the

following,

- Honesty and truth

- R espect

- Self fulfillment

- Social responsibility

- Security

- Creativity- loyalty

DIFFERENCE BETWEEN VALUES AND ETHICS:

Values are the fundamental beliefs that an individual or group holds to be true. Every person hasa value set which impacts the lenses through which they view the world. People often turn to

their value system when making decisions. These values are the guiding principles in a person¶slife. Societies also have a value system which guides the direction of its people and the laws

which they intact. For example, in the United States freedom, liberty, and the pursuit of happiness are guiding values that reflect what we as a people hold to be important. The

constitution and others laws serve to protect those values.

Values are also what people hold to be important to them. A person value system is oftencomplex. In a society there are many value systems that sometimes can conflict with one

another. In order to have a more orderly society or organizational ethics is used to create acommon value system that can apply to an organization as a whole.

Ethics are the more formalized rules or guidelines of an organization or society. The rules acompany adopts, or the laws of a nation are examples of ethical codes of conduct. Ethical

decisions are based on a set of core values that are codified. Ethical behavior is then determinedrather or not an individual or group lived up to the code. Ethics is generally referred to as the

moral code of a person or group. This code is based on the values that are considered to beimportant. Therefore, it can be argued that ethics is the development of a system that serves to

protect a person or groups core values.

Ethics has been applied to a wide range of issues, from family, crime, war, personal, and business conduct. Ethics serve to create a broad set of standards that can apply across large sets



of values to create a common description of moral behavior. Having ethical standards isimportant for enacting a set of rules and guidelines that can encompass core beliefs of a diverse

group. Even though everyone has a different set of values, ethics serves to bring common valuesthat most would hold to be true. Creating ethical guidelines is extremely important for having a

functioning organization or society.

Values and ethics together is what create the moral code of a person or group. Morality is simplythe values and ethics of a society. Morality serves to determine what is right and wrong behavior

and these morals are created from the ethical and value norms of a group.

BENEFITS OF MANAGING ETHICS IN THE WORKPLACE

Many people are used to reading or hearing of the moral benefits of attention to business ethics.

However, there are other types of benefits, as well. The following list describes various types of

benefits from managing ethics in the work place.

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 fixingcrippled 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.

As noted earlier in this document, Wallace and Pekel explain that attention to business ethics is

critical during times of fundamental change -- times much like those faced now by businesses,

both nonprofit or for-profit. During times of change, there is often no clear moral compass toguide 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 andcommunity -- critical ingredients of strong teams in the workplace. Employees feel strong



alignment between their values and those of the organization. They react with strong motivationand performance.

4. Ethics programs support employee growth and meaning.

Attention to ethics in the workplace helps employees face reality, both good and bad -- in theorganization and themselves. Employees feel full confidence they can admit and deal withwhatever comes their way. Bennett, in his article "Unethical Behavior, Stress Appear Linked"

(Wall Street Journal, April 11, 1991, p. B1), explained that a consulting company tested a rangeof executives and managers. 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 ethicstests.

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 tocurrent, major ethical issues to become legislation. Attention to ethics ensures highly ethical policies and procedures in the 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. Drake and Drake (California Management R eview, V16, pp.107-123) note that ³an 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 practicehas significant legal, as well as ethical implications.

6. Ethics programs help avoid criminal acts ³of 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 ethicsviolations. However, the guidelines potentially lowers 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 withthose 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 planningand 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 managingstrategic values, e.g., expand marketshare, reduce costs, etc. McDonnell Douglas integrates their

ethics programs into their strategic planning process. Ethics management programs are alsouseful 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 ethicsmanagement program.

8. Ethics programs promote a strong publicimage.

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 thoseorganizations 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 publicrelations programs. Consider how Johnson and Johnson handled the Tylenol crisis versus how

Exxon handled the oil spill in Alaska. Bob Dunn, President and CEO of S

an Francisco-basedBusiness for Social R esponsibility, puts it best: ³Ethical values, consistently applied, are the

cornerstones in building a commercially successful and socially responsible business.

9. Overall benefits of ethics programs:

Donaldson and Davis, in ³Business Ethics? Yes, But What Can it Do for the Bottom Line?´

(Management Decision, V28, N6, 1990) explain that managing ethical values in the workplacelegitimizes 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.



ETHICS MANAGEMENT PROGRAMS

About Ethics Management Programs Organizations can manage ethics in their workplaces by

establishing an ethics management program.

Ethics programs convey corporate values, often using codes and policies to guide decisions and behavior, and can include extensive training and evaluating, depending on the organization. They

provide guidance in ethical dilemmas.

A corporate ethics program is made up of values, policies and activities which impact the

propriety of organization behaviors.

San Francisco-based Business for Social R esponsibility, adds: "Balancing competing values andreconciling them is a basic purpose of an ethics management program. Business people need

more practical tools and information to understand their values and how to manage them."

BENEFITS OF MANAGING ETHICS AS A PROGRAM

There are numerous benefits in formally managing ethics as a program, rather than as a one-shot

effort when it appears to be needed. Ethics programs.

y Establish organizational roles to manage ethics

y Schedule ongoing assessment of ethics requirements.

y

Establish required operating values and behaviors

y Align organizational behaviors with operating values

y Develop awareness and sensitivity to ethical issues

y Integrate ethical guidelines to decision making.

y Structure mechanisms to resolving ethical dilemma.

y Facilitate ongoing evaluation and updates to the program

y Help convince employees that attention to ethics is not just a knee-jerk reaction done toget out of trouble or improve public image.



GUIDELINES FOR MANAGING ETHICS IN THE WORKPLACE

The following guidelines ensure the ethics management program is operated in a meaningfulfashion:

1.Recognize that managing ethics is a process.

Ethics is a matter of values and associated behaviors. Values are discerned through the process of

ongoing reflection. Therefore, ethics programs may seem more process-oriented than mostmanagement practices. Managers tend to be skeptical of process-oriented activities, and instead

prefer processes focused on deliverables with measurements. However, experienced managersrealize that the deliverables of standard management practices (planning, organizing, motivating,

controlling) are only tangible representations of very process-oriented practices. For example,the process of strategic planning is much more important than the plan produced by the process.

The same is true for ethics management. Ethics programs do produce deliverables, e.g., codes,

policies and procedures, budget items, meeting minutes, authorization forms, newsletters, etc.However, the most important aspect from an ethics management program is the process of reflection and dialogue that produces these deliverables.

2. The bottom line of an ethics program is accomplishing preferred behaviors in the

workplace.

As with any management practice, the most important outcome is behaviors preferred by theorganization. The best of ethical values and intentions are relatively meaningless unless they

generate fair and just behaviors in the workplace. That's why practices that generate lists of ethical values, or codes of ethics, must also generate policies, procedures and training that

translate those values to appropriate behaviors.

3. The best way to handle ethical dilemmas is to avoid their occurrence in the first place.

That's why practices such as developing codes of ethics and codes of conduct are so important.Their development sensitizes employees to ethical considerations and minimize the chances of

unethical behavior occurring in the first place.

4. Make ethics decisions in groups, and make decisions public, as appropriate.

This usually produces better quality decisions by including diverse interests and perspectives,

and increases the credibility of the decision process and outcome by reducing suspicion of unfair bias.

5. Integrate ethics management with other management practices.

When developing the values statement during strategic planning, include ethical values preferredin the workplace. When developing personnel policies, reflect on what ethical values you'd like



to be most prominent in the organization's culture and then design policies to produce these behaviors.

6. Use cross-functional teams when developing and implementing the ethics management

program.

It¶s vital that the organization¶s employees feel a sense of participation and ownership in the program if they are to adhere to its ethical values. Therefore, include employees in developingand operating the program.

7. Value forgiveness.

This may sound rather religious or preachy to some, but it¶s probably the most importantcomponent of any management practice. An ethics management program may at first actually

increase the number of ethical issues to be dealt with because people are more sensitive to their occurrence. Consequently, there may be more occasions to address people¶s unethical behavior.

The most important ingredient for remaining ethical is trying to be ethical. Therefore, help

people recognize and address their mistakes and then support them to continue to try operateethically.

8. Note that trying to operate ethically and making a few mistakes is better than not trying. Some organizations have become widely known as operating in a highly ethical manner, e.g.,

Ben and Jerrys, Johnson and Johnson, Aveda, Hewlett Packard, etc. Unfortunately, it seems thatwhen an organization achieves this strong public image, it's placed on a pedestal by some

business ethics writers. All organizations are comprised of people and people are not perfect.However, when a mistake is made by any of these organizations, the organization has a long way

to fall. In our increasingly critical society, these organizations are accused of being hypocriticaland they are soon pilloried by social critics. Consequently, some leaders may fear sticking their

necks out publicly to announce an ethics management program. This is extremely unfortunate.It's the trying that counts and brings peace of mind -- not achieving an heroic status in society.



KEY ROLES AND RESPONSIBILITIES IN ETHICS MANAGEMENT

Depending on the size of the organization, certain roles may prove useful in managing ethics in

the workplace. These can be full-time roles or part-time functions assumed by someone alreadyin the organization. Small organizations certainly will not have the resources to implement each

the following roles using different people in the organization. However, the following functions points out responsibilities that should be included somewhere in the organization.

1. The organization's chief executive must fully support the program.

If the chief executive isn't fully behind the program, employees will certainly notice --

and this apparent hypocrisy may cause such cynicism that the organization may be worseoff than having no formal ethics program at all. Therefore, the chief executive should

announce the program, and champion its development and implementation. Mostimportant, the chief executive should consistently aspire to lead in an ethical manner. If a

mistake is made, admit it.

2. Consider establishing an ethics committee at the board level.

The committee would be charged to oversee development and operation of the ethics

management program.

3. Consider establishing an ethics management committee.

It would be charged with implementing and administrating an ethics management

program, including administrating and training about policies and procedures, andresolving ethical dilemmas. The committee should be comprised of senior officers.

4. Consider assigning/developing an ethics officers.

This role is becoming more common, particularly in larger and more progressiveorganizations. The ethics officer is usually trained about matters of ethics in the

workplace, particularly about resolving ethical dilemmas.

5. Consider establishing an ombudsperson.

The ombudsperson is responsible to help coordinate development of the policies and

procedures to institutionalize moral values in the workplace. This position usually is

directly responsible for resolving ethical dilemmas by interpreting policies and procedures.

6. Note that one person must ultimately be responsible for managing the ethics

management program.



ETHICS TOOLS

1. CODES OF ETHICS

According to Wallace, "A credo generally describes the highest values to which the companyaspires to operate. It contains the `thou shalts.' A code of ethics specifies the ethical rules of

operation. It's the `thou shalt not¶s." In the latter 1980s, The Conference Board, a leading business membership organization, found that 76% of corporations surveyed had codes of ethics.

Some business ethicists disagree that codes have any value. Usually they explain that too muchfocus is put on the codes themselves, and that codes themselves are not influential in managing

ethics in the workplace. Many ethicists note that it's the developing and continuing dialoguearound the code's values that is most important.

Developing Codes of Ethics

Note that if your organization is quite large, e.g., includes several large programs or departments,

you may want to develop an overall corporate code of ethics and then a separate code to guide

each of your programs or departments.

Also note that codes should not be developed out of the Human R esource or Legal departments

alone, as is too often done. Codes are insufficient if intended only to ensure that policies arelegal. All staff must see the ethics program being driven by top management.

Note that codes of ethics and codes of conduct may be the same in some organizations,

depending on the organization's culture and operations and on the ultimate level of specificity in

the code(s).



GUIDELINES WHEN DEVELOPING CODES OF ETHICS.

1. Review any values need to adhere to relevant laws and regulation.

this ensures your organization is not (or is not near) breaking any of them. (If you are

breaking any of them, you may be far better off to report this violation than to try hide the problem. Often, a reported violation generates more leniency than outside detection of an

unreported violation, particularly per the new Federal Sentencing Guidelines.) Increase priority on values that will help your organization operate to avoid breaking these laws

and to follow necessary regulations.

2. Review which values produce the top three or four traits of a highly ethical and

successful product or service in your area.

e.g., for accountants: objectivity, confidentiality, accuracy, etc. Identify which values produce behaviors that exhibit these traits.

3. Identify values needed to address current issues in your workplace.

Appoint one or two key people to interview key staff to collect descriptions of major

issues in the workplace. Collect descriptions of behaviors that produce the issues.Consider which of these issues is ethical in nature, e.g.., issues in regard to respect,

fairness and honesty. Identify the behaviors needed to resolve these issues. Identify whichvalues would generate those preferred behaviors. There may be values included here that

some people would not deem as moral or ethical values, e.g., team-building and

promptness, but for managers, these practical values may add more relevance and utilityto a code of ethics.

4. Identify any values needed, based on findings during strategic planning.

R eview information from your SWOT analysis (identifying the organization's strengths,

weaknesses, opportunities and threats). What behaviors are needed to build on strengths,shore up weaknesses, take advantage of opportunities and guard against threats?

5. Consider any top ethical values that might be prized by stakeholders.

For example, consider expectations of employees, clients/customers, suppliers, funders,members of the local community, etc.

6. Collect from the above steps, the top five to ten ethical values which are high

priorities in your organization (see item #7 below for examples) example of ethical

value might include.



The following list is the "Six Pillars of Character" developed by The Josephson Instituteof Ethics, the united stated has been given some contexts are:,

a) Trustworthiness: honesty, integrity, promise-keeping, loyalty.

b) R espect: autonomy, privacy, dignity, courtesy, tolerance, acceptance.

c) R esponsibility: accountability, pursuit of excellence.

d) Caring: compassion, consideration, giving, sharing, kindness, loving.

e) Justice and fairness: procedural fairness, impartiality, consistency, equity, equality, due

process

f) Civic virtue and citizenship: law abiding, community service, protection of

environment.

7. Compose your code of ethics; attempt to associate with each value, two example

behaviors which reflect each value

Critics of codes of ethics assert that they seem vacuous because many only list ethicalvalues and don't clarify these values by associating examples of behaviors.

8. Include wording that indicates all employees are expected to conform to the values

stated in the code of ethics.

Add wording that indicates where employees can go if they have any questions.

9. Obtain review from key members of the organization.

Get input from as many members as possible.

10. Announce and distribute the new code of ethics (unless you are waiting to announce

it along with any new codes of conduct and associated policies and procedures).Ensure each employee has a copy and post codes throughout the facility.

11. Update the code at least once a year.

As stated several times in this document, the most important aspect of codes is

developing them, not the code itself. Continued dialogue and reflection around ethical



values produces ethical sensitivity and consensus. Therefore, revisit your codes at leastonce a year -- preferably two or three times a year.

12. (Note that you cannot include values and preferred behaviors for every possible

ethical dilemma that might arise.

Your goal is to focus on the top ethical values needed in your organization and to avoid

potential ethical dilemmas that seem mostly likely to occur.)

2. CODES OF CONDUCT

"Codes of conduct specify actions in the workplace and codes of ethics are general guides todecisions about those actions," explains Craig Nordlund, Associate General Counsel and

Secretary at Hewlett Packard. He suggests that codes of conduct contain examples of appropriate

behavior.The Conference Board found that codes of conduct are increasingly sophisticated and focused atlower levels in companies. Departments frequently have their own codes. Be careful, though. An

organization could be sued for breach of contract if its practices are not in accord with its policies. That¶s why legal departments should review codes of conduct and other ethics policies.

Also, that¶s why it¶s critical for organizations to review their policies at least once a year toensure they are in accordance with laws and regulations.

Developing a Code of Conduct

Note that if your organization is quite large, e.g., includes several large programs or departments,

you may want to develop an overall corporate code of conduct, and then a separate code to guideeach of your programs or departments. Consider the following guidelines when developing codesof conduct:

1. Identify key behaviors needed to adhere to the ethical values proclaimed in your code of

ethics , including ethical values derived from review of key laws and regulations, ethical behaviorsneeded in your product or service area, behaviors to address current issues in your workplace,

and behaviors needed to reach strategic goals.

2. Include wording that indicates all employees are expected to conform to the behaviors

specified in the code of conduct.

Add wording that indicates where employees can go if they have any questions.

3. Obtain review from key members of the organization.

Be sure your legal department reviews the drafted code of conduct.



4. Announce and distribute the new code of conduct.

(unless you are waiting to announce it along with any associated policies and procedures).Ensure each employee has a copy and post codes in each employee's bay or office.

5. (Note that you cannot include preferred behaviors for every possible ethical dilemmathat might arise.)

6. Examples of topics typically addressed by codes of conduct include.

preferred style of dress, avoiding illegal drugs, following instructions of superiors, being reliable

and prompt, maintaining confidentiality, not accepting personal gifts from stakeholders as aresult of company role, avoiding racial or sexual discrimination, avoiding conflict of interest,

complying with laws and regulations, not using organization's property for personal use, notdiscriminating against race or age or sexual orientation, and reporting illegal or questionable

activity. Go beyond these traditional legalistic expectations in your codes -- adhere to what's

ethically sensitive in your organization, as well. (Note that, as with codes of ethics, you may be better off to generate your own code of conduct from scratch rather than reviewing examplesfrom other organizations.)

POLICIES AND PROCEDURES

Optional: also see in the Free Management Library at http://www.managementhelp.org:Policies (Personnel) - review to understand how to develop and apply personnel policies

1. Update policies and procedures to produce behaviors preferred from the code of

conduct,

including, e.g., personnel, job descriptions, performance appraisal forms, management-by-objectives expectations, standard forms, checklists, budget report formats, and other relevantcontrol instruments to ensure conformance to the code of conduct. In doing so, try to avoid

creating ethical dilemmas such as conflicts-of-interest or infringing on employee's individualrights.

2. There are numerous examples of how organizations manage values through use of

policies and procedures. For example, we're most familiar with the value of social responsibility. To produce behavior

aligned with this value, organizations often institute policies such as recycling waste, donating tolocal charities, or paying employees to participate in community events. In another example, a

high value on responsiveness to customers might be implemented by instituting policies to return phone calls or to repair defective equipment within a certain period of time. Consider the role of

job descriptions and performance appraisals. For example, an advanced technology business willhighly value technical knowledge, creativity and systems thinking. They use job descriptions and

performance appraisals to encourage behaviors aligned with these values, such as rewardingadvanced degrees, patents, and analysis and design skills.

3. Include policies and procedures to address ethical dilemmas.



See the next section, "Ethics Tools: R esolving Ethical Dilemmas," to select a method which ismost appropriate to your organization's culture and operations.

4. Include policies and procedures to ensure training of employees about the ethics

management program.S

ee a following section, "Ethics Tools: training.

5. Include policies and procedures to reward ethical behavior and impose consequences for

unethical behavior.

6. Include a grievance policy for employees to use to resolve disagreements with supervisors

and staff.

7. Consider establishing an ethics ³hotline´.

This function might best be provided by an outside consultant, e.g., lawyer, clergyperson, etc.

Or, provide an anonymous "tip" box in which personnel can report suspected unethical activities,and do so safely on an anonymous basis.

8.Once a year, review all personnel policies and procedure.

If yours is a small organization, consider including all staff during this review. Take a full day

for all staff to review policies and procedures, and suggest changes too.

Ethical Dilemmas

Definition of an Ethical Dilemma

Perhaps too often, business ethics is portrayed as a matter of resolving conflicts in which one

option appears to be the clear choice. For example, case studies are often presented in which an

employee is faced with whether or not to lie, steal, cheat, abuse another, break terms of acontract, etc. However, ethical dilemmas faced by managers are often more real-to-life and

highly complex with no clear guidelines, whether in law or often in religion.

As noted earlier in this document, Doug Wallace, Twin Cities-based consultant, explains that oneknows when they have a significant ethical conflict when there is presence of

a) significant value conflicts among differing interests,

b) real alternatives that are equality justifiable, and

c) significant consequences on "stakeholders" in the situation.



An ethical dilemma exists when one is faced with having to make a choice among thesealternatives.

Real-to-Life Examples of Complex Ethical Dilemmas

· "A customer (or client) asked for a product (or service) from us today. After telling him our price, he said he couldn't afford it. I know he could get it cheaper from a competitor. Should I tellhim about the competitor -- or let him go without getting what he needs? What should I do?"

· "Our company prides itself on its merit-based pay system. One of my employees has done a

tremendous job all year, so he deserves strong recognition. However, he's already paid at the topof the salary range for his job grade and our company has too many people in the grade above

him, so we can't promote him. What should I do?

· "Our company prides itself on hiring minorities. One Asian candidate fully fits the jobrequirements for our open position. However, we're concerned that our customers won't

understand his limited command of the English language. What should I do?

· "My top software designer suddenly refused to use our e-mail system. He explained to me that,

as a Christian, he could not use a product built by a company that provided benefits to the partners of homosexual employees. He'd basically cut himself off from our team, creating a

major obstacle to our product development. What should I do?

· "My boss told me that one of my employees is among several others to be laid off soon, andthat I'm not to tell my employee yet or he might tell the whole organization which would soon be

in an uproar. Meanwhile, I heard from my employee that he plans to buy braces for his daughter and a new carpet for his house. What should I do?

· "My computer operator told me he'd noticed several personal letters printed from a computer

that I was responsible to manage. While we had no specific policies then against personal use of company facilities, I was concerned. I approached the letter writer to discuss the situation. She

told me she'd written the letters on her own time to practice using our word processor. Whatshould I do?"

"A fellow employee told me that he plans to quit the company in two months and start a new jobwhich has been guaranteed to him. Meanwhile, my boss told me that he wasn't going to give me

a new opportunity in our company because he was going to give it to my fellow employee now.What should I do?"



TRAINING

The ethics program is essentially useless unless all staff members are trained about what it is,how it works and their roles in it. The nature of the system may invite suspicion if not handled

openly and honestly. In addition, no matter how fair and up-to-date is a set of policies, the legal

system will often interpret employee behavior (rather than written policies) as de facto policy.Therefore, all staff must be aware of and act in full accordance with policies and procedures (thisis true, whether policies and procedures are for ethics programs or personnel management). This

full accordance requires training about policies and procedures.

1. Orient new employees to the organization's ethics program during new-employee

orientation.

2. Review the ethics management program in management training experiences.

3. Involving staff in review of codes is strong ethics training.

4. Involving staff in review of policies (ethics and personnel policies) is strong ethicstraining.

5. One of the strongest forms of ethics training is practice in resolving complex ethical

dilemmas.

Have staff use any of the three ethical-dilemma-resolution methods in this guidebook andapply them to any of the real-to-life ethical dilemmas also listed in this guidebook.

6. Include ethical performance as a dimension in performance appraisals.

7. The best ethics trainer:

Bill Goodman, Chief Human R esource Officer at Aveda, describes, "We start our

training even in our job ads," then adds, "but the best trainer is the behavior of our

leaders."

8. Give all staff a copy of this free "Complete Guide to Ethics Management."



Business ethics in Functional business areas

Finance

Fundamentally, finance is a social science discipline. The discipline borders behavioral

economics, sociology, economics, accounting and management. It concerns technical issuessuch as the mix of debt and equity, dividend policy, the evaluation of alternative investment projects, options, futures, swaps, and other derivatives, portfolio diversification and many

others. It is often mistaken to be a discipline free from ethical burdens. The 2008 financialcrisis caused critics to challenge the ethics of the executives in charge of U.S. and European

financial institutions and financial regulatory bodies. Finance ethics is overlooked for another reason²issues in finance are often addressed as matters of law rather than ethics.

Finance paradigm

Aristotle said, "the end and purpose of the polis is the good life".Adam Smith characterized

the good life in terms of material goods and intellectual and moral excellences of character.Smith in his The Wealth of Nations commented, "All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of

mankind."

However, a section of economists influenced by the ideology of neoliberalism, interpretedthe objective of economics to be maximization of economic growth through accelerated

consumption and production of goods and services. Neoliberal ideology promoted financefrom its position as a component of economics to its core. Proponents of the ideology hold

that unrestricted financial flows, if redeemed from the shackles of "financial repressions",besthelp impoverished nations to grow. The theory holds that open financial systems accelerate

economic growth by encouraging foreign capital inÀows, thereby enabling higher levels of savings, investment, employment, productivity and "welfare", along with containing

corruption. Neoliberals recommended that governments open their financial systems to theglobal market with minimal regulation over capital flows. The recommendations however,

met with criticisms from various schools of ethical philosophy. Some pragmatic ethicists,found these claims to unfalsifiable and a priori, although neither of these makes the

recommendations false or unethical per se. R aising economic growth to the highest valuenecessarily means that welfare is subordinate, although advocates dispute this saying that

economic growth provides more welfare than known alternatives. Since history shows thatneither regulated nor unregulated firms always behave ethically, neither regime offers an

ethical panacea.

Neoliberal recommendations to developing countries to unconditionally open up their

economies to transnational finance corporations was fiercely contested by some ethicists. Theclaim that deregulation and the opening up of economies would reduce corruption was also

contested.

Dobson observes, "a rational agent is simply one who pursues personal material advantage adinfinitum. In essence, to be rational in finance is to be individualistic, materialistic, and



competitive. Business is a game played by individuals, as with all games the object is to win,and winning is measured in terms solely of material wealth. Within the discipline this

rationality concept is never questioned, and has indeed become the theory-of-the-firm's sinequa non". Financial ethics is in this view a mathematical function of shareholder wealth.

Such simplifying assumptions were once necessary for the construction of mathematically

robust models However signaling theory and agency theory extended the paradigm to greater realism.

Other issues

Fairness in trading practices, trading conditions, financial contracting, sales practices,consultancy services, tax payments, internal audit, external audit and executive compensation

also fall under the umbrella of finance and accounting. Particular corporate ethical/legalabuses include: creative accounting, earnings management, misleading financial analysis

insider trading, securities fraud, bribery/kickbacks and facilitation payments. Outside of corporations, bucket shops and forex scams are criminal manipulations of financial markets.

Cases include accounting scandals, Enron, WorldCom andS

atyam.

Human resource management

Human resource management occupies the sphere of activity of recruitment selection,

orientation, performance appraisal, training and development, industrial relations and healthand safety issues. Business Ethicists differ in their orientation towards labour ethics. Some

assess human resource policies according to whether they support an egalitarian workplaceand the dignity of labor.

Issues including employment itself, privacy, compensation in accord with comparable worth,

collective bargaining (and/or its opposite) can be seen either as inalienable rights or asnegotiable. Discrimination by age (preferring the young or the old), gender/sexual

harassment, race, religion, disability, weight and attractiveness. A common approach toremedying discrimination is affirmative action.

Potential Employees have ethical obligations to employers, involving intellectual property protection and whistle-blowing.

Employers must consider workplace safety, which may involve modifying the workplace, or

providing appropriate training or hazard disclosure.

Larger economic issues such as immigration, trade policy, globalization and trade unionismaffect workplaces and have an ethical dimension, but are often beyond the purview of

individual companies.



Trade unions

Unions for example, may push employers to establish due process for workers, but may alsocost jobs by demanding unsustainable compensation and work rules.

Unionized workplaces may confront union busting and strike breaking and face the ethicalimplications of work rules that advantage some workers over others.

Management strategy

Among the many people management strategies that companies employ are a "soft" approach

that regards employees as a source of creative energy and participants in workplace decisionmaking, a "hard" version explicitly focused on control

[97]and Theory Z that emphasizes

philosophy, culture and consensus.[98] None ensure ethical behavior.[99] Some studies claimthat sustainable success requires a humanely treated and satisfied workforce.

[100][101][102]

Sales and marketing

Main article: Marketing ethics

Marketing Ethics came of age only as late as 1990s. Marketing ethics was approached from

ethical perspectives of virtue,deontology, consequentialism, pragmatism and relativism.

Ethics in marketing deals with the principles, values and/or ideals by which marketers (and

marketing institutions) ought to act.[106] Marketing ethics is also contested terrain, beyond the previously described issue of potential conflicts between profitability and other concerns.

Ethical marketing issues include marketing redundant or dangerous products/services

transparency about environmental risks, transparency about product ingredients such asgenetically modified organisms[110][111][112]

possible health risks, financial risks, security risks,etc., respect for consumer privacy and autonomy,

[]advertising truthfulness and fairness in

pricing & distribution.

Marketing allegedly can influence individuals' perceptions of and interactions with other

people, implying an ethical responsibility to avoid distorting those perceptions andinteractions.

Marketing ethics involves pricing practices, including illegal actions such as price fixing and

legal actions including price discrimination and price skimming. Certain promotional

activities have drawn fire, including greenwashing, bait and switch, shilling, viral marketing,spam (electronic), pyramid schemes and multi-level marketing. Advertising has raisedobjections about attack ads, subliminal messages, sex in advertising and marketing in

schools.



Production

This area of business ethics usually deals with the duties of a company to ensure that products and production processes do not needlessly cause harm. Since few goods and

services can be produced and consumed with zero risk, determining the ethical course can be

problematic. In some case consumers demand products that harm them, such as tobacco products. Production may have environmental impacts, including pollution, habitatdestruction and urban sprawl. The downstream effects of technologies nuclear power,

genetically modified food and mobile phones may not be well understood. While the precautionary principle may prohibit introducing new technology whose consequences are

not fully understood, that principle would have prohibited most new technology introducedsince the industrial revolution. Product testing protocols have been attacked for violating the

rights of both humans and animals

Property

Main article: Private property, and Property rights

The etymological root of property is the Latin 'proprius which refers to 'nature', 'quality',

'one's own', 'special characteristic', 'proper', 'intrinsic', 'inherent', 'regular', 'normal', 'genuine','thorough, complete, perfect' etc. The word property is value loaded and associated with the

personal qualities of propriety and respectability, also implies questions relating toownership. A 'proper' person owns and is true to herself or himself, and is thus genuine,

perfect and pure.



INTERNATIONAL ISSUES

While business ethics emerged as a field in the 1970s, international business ethics did notemerge until the late 1990s, looking back on the international developments of that decade.

[205]

Many new practical issues arose out of the international context of business. Theoretical issues

such as cultural relativity of ethical values receive more emphasis in this field. Other, older issues can be grouped here as well. Issues and subfields include:

y The search for universal values as a basis for international commercial behaviour.y Comparison of business ethical traditions in different countries. Also on the basis of their

respective GDP and [Corruption rankings].y Comparison of business ethical traditions from various religious perspectives.

y Ethical issues arising out of international business transactions; e.g., bioprospecting and biopiracy in the pharmaceutical industry; the fair trade movement; transfer pricing.

y Issues such as globalization and cultural imperialism.y Varying global standards²e.g., the use of child labor.

y

The way in which multinationals take advantage of international differences, such asoutsourcing production (e.g. clothes) and services (e.g. call centres) to low-wage

countries.y The permissibility of international commerce with pariah states.

The success of any business depends on its financial performance. Financial accounting helps themanagement to report and also control the business performance.

The information regarding the financial performance of the company plays an important role in

enabling people to take right decision about the company. Therefore, it becomes necessary tounderstand how to record based on accounting conventions and concepts ensure unambling and

accurate records.

Foreign countries often use dumping as a competitive threat, selling products at prices lower thantheir normal value. This can lead to problems in domestic markets. It becomes difficult for these

markets to compete with the pricing set by foreign markets. In 2009, the International TradeCommission has been researching anti-dumping laws. Dumping is often seen as an ethical issue,

as larger companies are taking advantage of other less economically advanced companies.



IMPACT OF GLOBALIZATION ON BUSINESS ETHICS.

The first of these problems concerns the kind of national stereotyping which results from a static

view of the impact of national culture on ethical values and behaviors. Globalization has broughtabout a greater involvement with ethical consideration and most importantly, achieving a

competitive advantage through business ethics.This study focuses on managers and employees perceptions of ethical business practices in their

organizations, and explores whether these perceptions are similar or different in four largest

developing countries, commonly referred to as BRICs (Brazil, Russia, India, and China).

We compared the data on BRICs with data obtained in G7 countries (Canada, France, Germany,

Japan, Italy, UK and the USA). We used data collected from more than 15,000 managers and

employees of business organizations as part of the 2009 Work Trends survey of work-related

attitudes and behaviors, conducted by the Kenexa Research Institute. The study demonstrated thatthere were significant differences among BRICs countries, with respondents from India and Brazil

providing more favorable ethics ratings than respondents from China and Russia.

Business ethics impact on,

Shareholder

Employees

Consumers

Suppliers and competitors

Civil society ( pressure group, NGOs, local communication)

Government and regulation.

y Globalizations is a severe challenge to the cultural identity and economy of national countriescreating more new challenges to diverse societies, nations and cultures. World economy isbecoming more integrated. Sudden opening has already become a prerequisite for theacceptance of open trade policy and liberalisation of finance and capital flows. This has

increased international competition and accelerated the shift from national to global markets. If acountry liberalizes trade, allows free flow of capital, facilitates conditions of migration, then itretains the possibility of being inside the process, enjoying the fruit of economic andtechnological progress and having conditions for political initiatives. It goes without saying, thatthe state wealth directly depends on the state of sustainable development and participation ininternational economic interchange observing the principles of ecological ethics.



y The ability of local producers to compete and find a niche in the world commodity and labour market, the conformity of national laws and institutions on the international level stimulate a faster integration and sustainable development. Thus openness, competitiveness and ecological ethicsare the crucial components for the successful and harmonious integration into the worldeconomics.

y

Fast economic development does not conflict with environmental and social dimensions of sustainable development, but, on the contrary, creates a strong precondition for the reduction of income inequality, poverty and a negative impact on environment.

y The transition economies form the specific group of countries passing difficult and challengingtransformation processes. Moreover, in these economies cultural ethical factors do not transformas quickly as economic or political ones.



CASE STUDY

Manav Saxena had joined Bhagat Enterprise only a few days back as the Purchase Manager and

he was going through the employees conduct manual. He was attracted by the clause, prohibitingacceptance of gifts by the employees of the purchase department. It read as follows:

³Purchase department employees shall not accept gifts from vendors. This is to ensure that novendor is given any special treatment and the employees work only in the best interest of the

firm at all times. Any deviation from the above would be dealt with severely and could meandismissal from the firm.´

Manav remembered his experience with his previous firm, Giant Corporation, where he had

worked from 1970 for six years as purchase head prior to joining the Bhagats.

It was only six months since he was with the Giants when it was New Year. With the New Year came some inconsequential gifts like ball pens and key chains. The rule in the firm was that an

employee could accept no gift worth more than R s 25. One day one of the vendors brought threewall clocks, one for the MD, one for the GM, and one for Manav. The vendor explained that as

his firm had purchased the clocks in bulk they cost only R s 25 each and as such there should not be any hesitation in accepting the same. He added that in any case he is going to accept the

Giant¶s calendar and dairy for his firm in return. Manav found it hard to believe that the clockswere only worth R s 25. He decided to take the matter to the MD of the firm.

The MD had one look at the clocks and called his secretary to take one of the clocks meant to be

given to the MD to be placed on the wall in his office and told Manav to distribute others asdesired by the vendor explaining that in bulk the clocks would cost about R s 25 only. Manav had

taken the clock and given to his wife and it became the center point in their living room. In later years with the Giants he had taken gifts of dubious value always proclaimed worth less than R s

25. To keep his conscience clear he would make sure to give some gift from his firm to thevendor¶s salesman in return. Manav in fact stopped feeling any remorse on receiving the gifts

and in fact he started looking forward to the festive season in anticipation of some nice gifts. (Inhis heart he knew that none of the gifts could be

of less value than R s 3000.) Now again it was festive time and in the new firm he was not sure how he should react to the

gifts, which had become such a part of business calendar in India¶s corporate world. He wasmusing on the matter when R ajan the Executive Assistant to the MD walked in. R ajan wanted toknow if any gifts had started arriving or not.

He confirmed that it has been the practice with the previous purchase manager also to accept thegifts and distribute them to the important persons of the firm like himself. He added that not a

word about the matter should be discussed with the MD; otherwise there was every chance of that being thrown out of the firm. But if he did not accept the gifts, he would annoy quite a lot of

his colleagues.



Manav was wondering if this was just a ploy of the MD to test his integrity, as the MD¶ssecretary would be in the MD¶s confidence. At the same time Manav could not risk taking a

chance of annoying a large number of his new friends in the firm.

Sure enough, next day a vendor came with ten baskets, each having three bottles of scotch

whiskey, return air tickets for four to any destination in India with four nights five star hotel staythrown in. The total value of each of the gift baskets was nearly two lakh. His secretary toldManav that this was just the beginning and the gifts were also quite cheap compared to gifts from

other vendors. Manav wondered if his predecessor was thrown out of the firm on account of thegifts he was receiving from the vendors, which were amounting to large amounts and were

practically bribes. Manav had no one to guide him at the moment.

QUESTION

Please give your sincere advice to Manav in his hour of predicament?

business ethics in word

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