Business Ethics

Project
Prefered Code of Ethics in Russia

Russia is a transcontinental country located Eastern Europe and Northern Asia . It is also
known as Russian Federation . Russia , was once a part of Soviet Union . Russia is world’s
largest country by land size. It was once a part of U.S.S.R but became an independent country
in December 1991.

Russia is a county spanning 11 different time zones due ti its expansion over two different
regions, some part in Eastern Europe and some in Northern Asia . Due to its area expanding
to two regions , there are more than 120 ethnic groups in Russia . All ethnic groups speak
different languages and their cultural traditions also differ from each other. So it won’t be
wrong to say that the culture of Russia is a mixture of different culture’s traditions.

Russian culture as a very long history . Their culture encompasses of different rituals and
have deep roots in literature and classical music .Russian Culture puts stress on maintaining
strong interpersonal relationships and caring a lot for their family and friends . They care a lot
for their homeland too as they had faced a very bad time before getting an independent
nation. During the time of communism, the Russian families faced a very cruel time and that
left them depending a lot on interpersonal relationship and specially their families. Therefore
their culture had a very strong component of caring for their families and maintaining strong
relationships with them. Their culture comprised of different religious beliefs . Most followed
religion in Russia is Christianity .Islam is the second most followed religion in Russia . The
people of Russia are collectivist . They try to work together in every matter to collectively
solve daily life issues .

Preferred Code of Ethics and Etiquettes in Daily Life :

Ethics can be defined as the measure of good and bad and a moral duty towards society.
Ethics involves a person’s behavior and the way in which he perceives what is morally right
and wrong.

 Russians put a great stress on giving respect to elders. They consider it ethically
wrong to argue with an elder or try to speak in a louder tone with elders.
  They consider it their moral duty to help others and offer help to whoever is in
trouble.
 Russians rely a lot on knowledge . They consider it ethically wrong to argue or speak
about any matter until and unless they have full knowledge about it.
 Russian are very sensitive towards disrespectful attitude or tone. They consider it
morally wrong to taunt or use disrespectful tone with anyone nor do they like if
anyone uses disrespectful tone while communicating with them.

Preferred Code of Ethics in Businesses of Russia :

In order to keep the country’s ethical behavior right , it is really important to incorporate
ethical values in your business cultures. Businesses have to keep in mind the acceptable
behavior and practices in the society and they should incorporate those values in their
corporate culture as well. Ethical practices were incorporated at national level in 1912.The
first code of ethics were implemented by Russian Business Community in 1912 . The code of
ethics that was introduced included various principles for which all the businesses were
encouraged to follow.

7 Ethical principles were introduced at that time . They are explained as follows.

1) Showing uttermost respect towards legislative authorities (Government)

No business can run properly without taking in consideration legal laws and maintaining
good relations with the government. This was one of the ethical principles that was
introduced in 1912.

2) Honesty , Trustworthiness and Truthfulness

The core aim of a business has always been to generate profits and for generating profits ,
businesses take whatever step can bring more profits to the no matter whether they lie to their
customers or be dishonest with them regarding their products or services. The second ethical
principle that was introduced was based on moral aspects like honesty , trustworthiness and
truthfulness . These principles encouraged businesses to stay honest in their services and
dealing , never lie to anyone either employees or customers or other stakeholders and staying
so pure in their business processes and dealings that leads towards building trust among
stakeholders.
 3) Showing Respect towards the employees of the company :

It is really important to give respect to your coworkers and employees in order to improve
business processes efficiency and in building strong relationships with each other. The third
principle that was introduced by the Russian Business Community in 1912 was to show
respect towards employees of your business. Employees don’t only want monetary response
for their services but they also want appreciation and support of their colleagues and upper
level management. Therefore it is important to show respect towards your employees and
give them full support so that they can enhance their productivity and help business in
generating more revenues.

4) Always Stick to your words :

Running a business mostly requires it to be diplomatic in their dealings with stakeholders ,

but in order to build trust it is important to stick to your words , because once a business fails
to keep their words for instance , if a company promised to delivery high quality and certified
goods but they failed to do so , so it will badly harm the company’s image in the minds of
stakeholders or it can even destroy company’s revenues.

5) Never over-assume your capacities :

It is important to know your capacities. A Business should never over-assume the means of
productions they have , they should always keep in mind the capacity they have got.

6) Be Purposeful :

A business should be very clear with their goals. A target in mind helps a company run more
efficiently. They should always keep some ethical goals for which they should shape up their
organization to acheve those goals as well as business goals.

And last but not the least, their code of ethics encouraged respecting property rights.

Leadership:

Leadership is considered as one of the most important element of the organization culture, the
culture performance and the image of that organization. In case of Russia they are more
focused towards the ancient sort of leadership so the Russian business have strong leaders
with autocratic leader ship style.
In Russia Business decision are solely made by the leaders without the involvement or
interference of any other body.

This is one of the reason that in the organization rules are strictly followed by the employees
as the ruling body is only the leader.

Hierarchy:

In Russia a strong hierarchy is observed everyone in the organization has a Specific position
and the division of work in the organization is very clear.

Russian Business hierarchy is somehow different from the other countries in Russia the top
level management is considered is the only ruling and decision making authority in the
organization, a very little or no involvement of the lower level management is observed.

Even the middle level management is given very little power.

Transparency:

The profitability of the organization and it's market reputation highly depends upon the image
and trust that organization is creating among the public and its stakeholders. So for an
organization this is very important to create an image that the public can trust on and for this
purpose the organization needs to have transparency and it's internal environment and the
stakeholders .

The Russian business is one of the great example of creating transparency between the
organization and the stakeholders as Russia believes to have no hidden fact form the
stakeholders this is the reason that Russia is one of the countries who's organizations are
trusted worldwide .

Russian Business observe strict policies on transparency in the information. Not only this is
an important thing for the stakeholders but keeping transparency in the shared information is
also very important part of Russian Business Culture.

Fairness and Impartiality:

Fairness and impartiality are two factors that are very important for an organization both
factors contribute a lot in developing ethical and disciplined environment of the organization
without any sort of conflicts.

Other then this for a better productivity of employees and a better performance
In case of Russia The Russian organizations having strong policies of fairness and
impartiality that omit the center of unfair decision-making in the organization or impartiality
in the organization .

As the Russian organizations depends highly on the top level management so decisions are
mostly made by the top level management or the leaders so apparently a lot of chances of
making some unfair decision is overcome .As their leaders have a little bit of interaction with
the employees so the factor of biasness is also Overcome.

Stake Holder Orientation:

The basic aim of an organization is to earn profits but in case of Russia obviously one of the
main aim of the business is to earn profit but other than this they have strong concern for the
public their investors ,suppliers and other stakeholders.

Russian businesses works on the concept of socialism that basically aims to benefit both the
society and the business as well they believe that an organization have a strong link with the
environment they also believe the fact that the resources that they are having are taken from
the society so this should be their duty to pay back to the society and its other stakeholders as
well.

That is why Russian businesses have very strong relations with the public and their internal
activities and this is one of the reason that Russian businesses and a great name in the market
worldwide.

Shareholder Orientation:

In the Russian culture shareholders are given a high level of respect and the organization tries
two fulfill as much as possible expectations .

In Russia transparency is kept between the shareholders and the organization so that
shareholder can access each and every information regarding the company and the ongoing
conditions of the business so that they can have a clear image of what actually is going with
their investments.

Working Conditions:
There has been very continuous change in the Russian business working conditions since the
last few years right now the Russian businesses have very cooperative and nice working
conditions. as this is something very important for the performance of the employees and to
enhance their productivity the working conditions of the organization should be very
comfortable and appropriate. And not only of this but keeping the working conditions for the
employee not sufficient and comfortable this is even ethically wrong and for the purpose
under the Russian business laws the employer is actually held responsible in case the
employee is not getting officiant working Condition because in Russia this is considered to be
a basic right to get convenient, comfortable and sufficient working condition.

Under the Russian laws according to Article 37 the business has the Duty to oversee the
working criteria in a way that the working needs of the employees are fulfilled and it is the
duty of the employer to provide the employee a sufficient, comfortable and convenient
working environment.

And even in the Russian business Culture the regulations and laws protecting the rights of
employees in term of Working conditions is very strictly considered.

Since last few years following are some implementation that are done on the working
conditions of the Russian businesses.

Ban on Forced Child Labor:

Child labor has always been a very great issues in the businesses of different countries but In
Russia there is strict ban on the forced child labor Moreover there are specific laws and
regulation on the forced child labor.

In Russia this is considered that every child has the right of playing and having quality
education and a indiscriminate life so for this purpose Russian businesses avoid any sort of
child labor so that they can make sure that every child is having a quality life Moreover
different organizations do several corporate social responsibilities activity for supporting a
quality life of a child.

Prohibition of Discrimination at Work Place:

the 21st century is a time when the nature of businesses as I really changed now the focus of
an organization is not only to make profit but also to consider the rights of the employees and
the stakeholders as well organization usually prefer to hire employees from the same area or
of the same nationality but now the time has totally changed as this is the era of globalization
so now businesses are conducted at a very larger scale.

so in order to make the workplace and the working conditions efficient this is very necessary
for the organization to make sure that no discrimination is done in the workplace on the basis
of caste Creed or nationality. you do globalization and the increasing reputation of Russia in
terms of business different countries now consider working with Russia so in order to make
the image more better they need to make sure that the working conditions the rules and
regulations of the business are equally important and equally applied on everyone in the
organization.

Retributive Justice:

And is it really important ethical code of conduct that is preferred in Russia is retributive
justice Russia has not always been very good in terms of business ethics as previously it was
known for one of the most unethical business country do too many different practices but
now organizations has considered business ethics is one of the most important part of a
business as now they believe then business ad takes us not only necessary for the behavior
and conduct of the employees but this is also very important in order to stand in the market,
gain reputation in the market and to make your organization compatible with the other
international businesses as well because if a business is not having a good reputation then no
one would prefer investing in that company.

through retributive justice Russian businesses tries to discourage wrong behaviors in the
business as much as they can for this purpose they have introduced annual assessments of the
employees by offering them different promotion and many more exciting benefits .

the main aim of this is to minimize wrong behaviors such as in completion of the work
regularly attending business meetings late habitually, So not only these carrots are used to
keep the employees on track but different sticks are also being utilized in order to keep the
employees in track like down grading written warnings dismissal or terminations of the
employees .

Russian Achievements in term of Business Ethics:

Russia in terms of business ethics has a very dark history as rich as never been considered a
very good example of a country implementing business ethics in it's different businesses there
are many reasons behind all this that includes lack of democracy in the organization wrong
strategic decisions and initially business ethics was something that was only a written
document in the organization and this was even done just for formality.

In fact Russia is considered to be in one of the most worst country in terms of business ethics
Is according to many service Russia has been listed among the top countries that are having
issues like lying bribery corruption and many more like this.

the positive side of Russian business is they are now showing very fast pace in adopting the
culture and activities that helps an organization to maintain its business ethics and
organization repute good.

Russian business is improving day by day and now they have created so much repute in the
market that now many countries of willing to work with Russia.

Till now this cannot be inferred that Russia is a very good country in terms of business ethics
but it has actually improved a lot and if it would keep the same pace of improving then soon
Russia would also be getting different in term of getting recognized by the world in terms of
business ethics.

Laws and Acts in Russia for maintaining Business Ethics

 Russian Laws against Anticompetitive Behaviors:

There are so many organizations in the market providing same product or products of same
categories so there is a lot of competition among the organizations in the market and the
successful organization is the one that succeeds in making a reputation And a place in the
market.

Many Organization For the purpose of making a good reputation And a place in the market
tries to do some activities that help them to create a good position in the market and for this
purpose they tried to take competitive advantage by introducing new products or services or
doing something extraordinary from that of their competitors.

But sometimes in order to instead of working in a competitive environment, organization tries

to eliminate the competition by certain acts. this actually reduces the competition Or
sometimes eliminate the competition in the market leading towards the monopoly of that
certain organization.

In Russia there exists strong regulations against anti-competitive behaviors of organizations

to avoid any sort of monopolistic behavior of the organization and to regulate a proper and
fair competition among the organizations in the market.

In Russia there exists strict laws and acts that regulate fair competition among the
organizations.

In Russia the act that is created against anti competitive behaviors of the organization is
Federal law 135-FZ this law ensure that there is no anticompetitive behavior that organization
is observing, and all the organizations are working in a fair competitive environment.

 Russian Laws against false Advertisements:

Advertisements plays a very important role in marketing a product and attracting the
customers towards your product. The better your product will be advertised the more
customers would be attracted towards your product but organizations should always keep in
consideration the fact that only advertising a product in an attractive way is not important but
this is also very important to keep whatever you have advertised regarding the product is true.
It shouldn’t be containing anything that is misleading or is having some features which are
not really the original features of that products.
Many organizations use the technique of falsified or misleading advertisement to gain
customer attention but ethically this scenario is very wrong as you are directly misleading the
customers expectation so many customers fail to find all the features if they purchase a
product on the features of the advertisement that was misleading is also very Unethical.
According to the article 4 of the Russian Government this is considered to be very unethical
and illegal to advertise a product and to mislead the customers.
This article also allow the consumers the right of having exactly what was seen in the
advertisement.
In Russia the tradition Of misleading advertisement is strictly prohibited.

 Law for Data Protection:

In the present time most of the organization rely on the information systems and Internet for
Making their operational activities efficient but while using Internet and information systems
the organization should always keep in consideration that there are so many customers
attached with them so is the responsibility of the organization to make sure that the customer
data that the organization is having is protected.
Whatever type of information the organization is having regarding the customers must be
protected by proper safeguards and protection systems.
In Russia there exist very strict rules and regulation regarding the privacy of the consumer’s
data according to the federal law NO. 323 end 146 it is the responsibility of the organization
to have the consumer data fully protected and organizations that are utilizing the consumer’s
data need to ensure that the consumer data is protected.

 Laws on Whistle Blowing in Russia:

In many cases the whistle blowing act is apparently Profitable and beneficial for the law
regulating institutes, but Ethically whistle blowing is wrong in some cases if the information
that is conveyed is confidential and is having no wrong intentions
In order to avoid the whistle blowing activities The Russian government has made strict laws
that allows the organization To avoid whistle blowing and the one violating all these Law
under the federal law of combatting Corruption But this law specifies that this is for the
people who are involved in some unethical whistle blowing that is directly or indirectly
harming the business while on the other hand the law also covers the fact if the whistleblower
is helping the law making agencies and institutes in finding out some illegal activity or
corruption In some organization Then that whistleblower would be granted free legal aid end
protection.
The law for whistle blowing is one of the most important act for the Russian business.

Most Ethical Company in Russia :

Gazprom

Gazprom is one of the most ethical companies in Russia . It is not only one of the most
ethical but it is one most highly profitable firms of Russia . Gazprom is an oil and gas
company featured in the 40 largest companies of the world . Gazprom came into being in
1989 and has always worked really hard to ensure ethical conduct in their business . Gazprom
PJSC Gazprom has been so much committed towards strategic philanthrophy. Though Russia
is ranked in some unethical countries of the world but still Gazprom has always earned
recognition for its continuous efforts for the betterment of the society. If we talk about
ensuring ethical conduct in the operations of the company , they have corporate governance
department that esures that the company is committed and obeying corporate citizenship , its
4 points that include social , legal , philanthropic and ethical compliance .

Philanthropic acts of Gazprom :

Educational Development Program :

Gazprom is committed towards initating programs of educational development every year.

They contibute some percentage of their annual revenue towards educational development
programs. The top management believes that in Russia , their is alot of need to enpower the
educational sector because the growth of any country highly depends upon investing in the
educational sector .

Contributing towards Health Sector :

Gazprom has also been committed towards the health sector of Russia. They contribute
money towards the improvement of hospitals in the areas where their company operates .
They invest on the welfare of the people of Russia because their management feels nothing
can be more important than the health of all their stakeholders and not only stakeholders but
all the people living in Russia.

Contributing towards Science Projects:

Gazprom contributes a huge amount of money for research projects that are being conducted
in Russia . For example they contribute money for the research work that is being conducted
for making vaccines or medicines for different diseases or health disorder.

Gazprom Philanthropic Acts in COVID-19 :

Gazprom is working very aggressively towards the Russia's fight with COVID . Gazprom has
contributed 13 Million Russian Ruble for purchasing of Precautionary equipments like
Masks, Covid attire , sanitizers etc. They are contributing money to hospitals for this purpose
. Apart from this , they are heavily investing money right now in the research that is being
conducted for making the vaccine for treating COVID-19 .

Gazprom Corporate Social Responsibility Program :

The "Home Towns " Corporate Social Responsibility Program :

Gazprom Company has a Corporate Social Responsibility Program named "Home

Towns Project that aims towards improving the lifestyle of the people of Russia and
running environmental welfare programs .

Gazprom Company has included all Social Welfare Initiatives as a part of their Corporate
Culture . Gazprom Company work closely with the local government , in order to conduct all
philanthropic programs including Sciene Projects , Educational Programs , Supporting
Physically Disabled people and Supporting Sports communities etc .They conduct volunteer
programs in which all individuals who are willing to participate can easily be a part of those
initiatives . More than 5000 people from the society are working in the volunteer programs
that are being conducted by Gazprom . Not only this , the employees of Gazprom also
contribute few work hours annualy in the volutneer activies and volunteer programs .

Ethical Areas Which Require Consideration :

Russian legal laws have always emphasized upon maintaining ethical conduct in the
businesses . Russian Government always had a code of conduct and an ethical guideline for
businesses to run properly while maintaining ethical standards . Though , just like all
countries Russian legal laws were also in place for ethical compliace in the businesses of
Russia but still Russia has been ranked in some of the world’s most unethical countries . This
is due to many underlying reasons . Having legal laws in place is never enough to ensure
legal compliace in the organizations . It is important to have a system in place that can
monitor whether the businesses are running ethically right or not . It is necessary for
businesses to have a code of ethics in place . After that it is important to make that code of
ethics a part of corporate culture in order to impement it . Thirdly it is important to train your
employees regarding ethical issues and make sure they are aware of the code of ethics that are
being implemented in the organization . In Russian Businesses , it is observed that in most of
the organizations code of ethics is just a formal paper that remains on the tables of top level
management and it is rather never implemented . Code of ethics is never useful until it is
properly implemented or if the employees are not made aware of the code of ethics . Due to
lack of Proper policies and programs to ensure ethical conduct in businesses, many
underlying unethical acts are seen in the businesses like corruption, bribery , lying , misuse of
resources etc. .

Misuse of Resources:

One of the major area which needs consideration in Russian Businesses is Misuse of
Resources. As earlier mentioned, Code of Ethics is just a formal paper in the organizations
and in most organizations it is never implemented, so the employees are not accountable for
any of their unethical behavior as no such law exist in the company and employees are never
made aware of what are the acceptable behaviors in the organization and which actions are
discouraged . Therefore employees basically miss-use the official resources, for instance the
employees use official internet for personal purposes and waste their official hours in social
networking activities . Apart from misuse of internet , it is observed that they use their
official computer equipment’s like printer and scanner etc. for personal use as well . A survey
was conducted few years ago which revealed that more than 50 percent employees use
official printer and scanner etc. for printing documents to apply in other companies too .
These unethical behaviors take place due to poor enforcement of ethical code of conduct in
the organizations and this is one of the important areas which should be overcome as soon as
possible to avoid misconduct in the organizations .

Bribery :

Bribery is the act of performing unethical , illegal and unjust tasks in exchange of money .
Bribery is one of the worst possible factor that could exist in the organization , it not only
ruins the company’s image but this is something which the legal laws don’t allow as well and
if it is reported than the organization can face severe crisis or can ruin the image of the
company upto a huge extent . It is seen in Russian Businesses that bribery is very common
for getting things done . Russian business people are involved in taking bribery for doing the
work of people . Though Russian laws are in place in order to punish those involved in bribe
giving/taking acts but it is seen that in most cases no one reports to the government that any
organization is taking bribe or if the people are paying the organization, bribe , the reason
why most people are indulged in this unethical act is that economically Russia is a very
strong country and most people just want to get their work done no matter even if they have
to pay money to the organizations to make their work done . This is another hurdle that
Russia is facing in terms of business ethics and it should be overcome in order to ensure
ethical practices in the organization.

Corruption:

Corruption one of the bad barrel that can be something very negative for the Culture and
climate of an organization.

Russia being a Country working with ancient norms based on power and strong leadership
but still there is no use of such power in an organization if some un ethical activity is part of
that organization culture as in case of Russia Corruption and bribery are highly present in the
organizations that ultimately damage the image of the organization.

Lack of Proper System for the protection of Whistleblower :

Whistleblowing refers towards leaking or disclosing company’s confidential information to

the public or government authorities. Whistleblowing can be ethical as well as unethical,
whistle-blowing is considered unethical if the employee leaks company’s information to
outsiders in order to benefit his close ones or his relatives etc. whereas whistleblowing is
considered ethical if the employee takes risk and informs the government authorities about
any unethical conduct or act that is being taken place in his organization. In Russia
Whistleblower protection law exists, but through researches it is seen that the system
designed by the government to protect the privacy of the whistleblower is lacking a lot and
needs improvement because many people are afraid to report to the government because it
has been seen that the news many government officials are having relations with higher
authorities of organizations so whenever any employee takes the risk of informing the government ,
though government ensures to keep this thing in private and not to disclose it but still it has been
observed that the organization comes to know about this act of his employees and hence they fire or
suspend the employee or sue him with huge penalties just because he leaked company’s information
outside even though he had signed a contract with the organization about never disclosing confidential
information to outsiders. Therefore, there is a huge need a of system that protects the privacy of the
whistleblower so that no one hesitates to inform government about the unethical conduct being taking
place in the organizations which can help a lot in improving the ethical standards of the businesses of
Russia.

Conclusion:
The 21st century is the era of competition as in the present time everyone is in the race of
getting successful by adopting different factors and performing different activities whether in
term of business whether in term of technology.

Russia has always been a country that has a very strong Demographics and natural resources
as well in fact Russia is considered among the most powerful countries of the world but all
these factors are futile if this country is failing to make it's businesses ethical and creating a
good repute in the market if a country is not having a good image in term of business that that
country comes under the least priority of foreign investors that Are one of the most important
source of getting good capitals for the businesses.

with no doubt pressure has been a country with having very bad image in terms of business
ethics but Russia is trying to improve first businesses in term of business ethics very regularly
at very fast pace this is the reason that now russia is again gaining a good repute in the market
and is also attracting many Countries attracted towards investing In Russia.

In fact Russia has identified it's shortcomings in term of ethical problems that were arising in
the organizations including practice is like lying misuse of resources corruption bribery and
not implementing on the ethical code of conduct of the organization.

Rich is now also implementing the compliance orientation and the value of this orientation to
improve the ethical practices in the organization by enforcing those practices by legal
obligations and making lead made rules and regulations for the organization void many
organizations are also adopting the practice of value based orientation as they are more
focused towards dictating the culture ethical practices by implementing it in front of the
employees and everyone creates a shared value so in this way the rules and regulation and the
culture of organization is communicated in a better way to the employees.

they are also using the carrot and stick approach to minimize the factor of opportunity for
doing unethical activities in the organization and to reduce the number of Bad Barrels as
much as possible.

this is very evident by the recent research is that now Russia is taking the matter of their
declining business ethics very seriously and they have started very strict and acceptable
implementations in the organizations.