Professional Ethics

( Engineering )
EG2501

Week - 13

Edmodo.com
Class code: ve9vei
Recap week-12

What have we learnt in week-12

1. Understand what is an organisational culture and its importance

2. Understand engineer’s dilemma on loyalty : employer or profession

3. Tutorial: Bhopal UC plant case study

 Organisation Culture

Ulrich..organisational values…..

An organisation’s culture is defined as the norms, expectations, patterns , unwritten

rules and rituals inside the company. These internal patterns shape our experience and
determine if we are inside or outside the company.

“ The value of the organisation’s culture is not the identity of those inside the organisation
looking out but how that identity captures the mind, feet and heart of the customers
we serve….”

Importance of Organisational Culture

Engineers must have an understanding of the organisation culture where they are employed
So that they understand
1. how they frame issues under the influence of the organisation
2. how they can act effectively , safely and in morally responsible way
 Mangers vs Engineers

Engineers – function
❖ Use their technical knowledge and training to create structures, products and processes
❖ Have dual loyalty – to the organisation and to his profession.

Managers – function
❖ Direct activities of the organisation, including activities of the engineers.
❖ View as custodian of organisation . concern with current and future well being.

Michael Davis – Hitachi Report – found companies fall into one of the 3 categories

1. Engineer Oriented Companies :Quality takes priority over others , except safety
❖ relationship to managers as one in which negotiation or arriving consensus

2. Customer Orientated Companies: as per above with 4 significant differences

I. managers focus on business factors such as cost and timing whilst engineers focus
on quality and safety
II. More emphersises on business consideration
III. Safety outranks quality , quality sacrificed to get product out of door
IV. Communication bit difficult since manager suspicious of engineers withhold info

3. Finance Orientated Companies: firms are more centarlised,

❖ engineers is another resource and advisory function.
 Topics Schedule (guide)
The module covers the following topics:
•W1-2 intr Aug General Introduction
•W2-3 Aug Basic Concepts of Ethics, Values, Virtues and Trust
•W3-6 Aug Theoretical Ethical Framework W4 issue assign#1 23/8 Done

•W7-9 Sept Duty of Care and Obligations of (Engineering) Professional

- Public Safety, Health and Welfare
- Sustainability and Environmental Ethics
• W9-10 Sept/Oct Ethics and Law
- Code of Ethics For (Engineering) Professionals W7 issue assign #2 13/ 9 Done
- Prevention of Corruption Legislation W7* assign #1 due 15Sept Done
Sept16-23 semester break
• W 10-11 Oct Common Ethical Issues and Concerns
•W 11 Oct Ethical Dilemmas and Moral Reasoning
• W12 Oct Ethics and Compliance W12* coursework #2 due 20Oct
- Creating Ethical Excellence
- Employee Code of Conduct
- Compliance Program
- Ethics Audit

• W12-13 Oct Ethical Leadership

• W13/14 Nov Corporate Social Responsibility
• W15 Nov Revision Week
• W16 Examination (good luck) 19 Nov – 1 Dec
 Intended Learning Outcome ( ILO lecture # 13)

Whistle-blowing , Audits and Leadership

1. Organisational disobedience: whistle blowing. What , Why , When and How

2. Understands what, why and when an audit is conducted

3. Have an overview of a typical audit processes

4. Aware of some of the Organisational Leadership model

 Responsible Organisational Disobedience

Engineers encounter dilemma – to be both loyal employees and responsible professionals

1. Disobedience by Contrary Action

❖ Engineer’s actions outside their workplace objectionable to Managers
i. Particular action or perhaps lifestyle of employee reflects unfavourably or
ii. Some activities of employee contrary to Co’s interest
Eg. Lifestyle offensive within community , member of political group

2. Disobedience by Nonparticipation
❖ Engineer refuse to participate in projects based on conscience or his belief that
the project violates professional standards.
Eg. Working on military projects or using animals testing or impacting environment

3. Disobedience by Protest
❖ Engineer may found action of the employer to be so objectionable that they believe
mere nonparticipation in the objectionable activity is insufficient – that it need to
be reported : “whistle blowing”
Eg Chelsea Manning on USA army activities in Iraq War

WARNING….all there above may have negative consequences on Engineer’s future

 Whistle - Blowing: A Harm Prevention Justification

Whistle Blowing is act by an employee of informing the public or higher management of

unethical behaviour by an employer or supervisor. Either anonymous or acknowledged

Morally justifiable and permissible provided:

1. the harm that will be done by the product to public is serious and considerable
2. the employee reported their concerns to the superior , and
3. getting no satisfactory response from immediate superiors , and exhaust
available channels within the organisation

When should whistle blowing Attempted

1. Need. Clear and important harm can be avoided by blowing whistle

2. Proximity. Clear position to report on the problem. Hearsay is not adequate

3. Capability. Reasonable chance of success in stopping the harmful activity

4. Last Resort. No one else more appropriate and all ogher lines of action within shutoff
 Preventing Whistle – Blowing

Employer seek to minimise the need for employee to blow whistle by allowing clear process
to air grievances within the organisation.

1. Strong Corporate Ethic Culture

❖ Leader shows clear commitment of ethical behaviour including mandatory training
❖ Managers set tone for ethical behaviours

2. Clear Line of Communication

❖ Openness allows employee to express concern and be heard

3. Access to independent senior authority within Organisation

❖ Have meaningful access to senior authority to bring their concern forward
❖ Guarantee of no retaliation

4. Culture of Willingness of Management to admit mistakes

❖ Admit mistakes publicly if necessary
❖ Award /Recognition for fostering ethical behaviour of the company

Be Warn: Whistle-blowing is a career changing move.

Know what you are about to do and consequences of your intention
 Basic Concepts

What is an Audit?

A (systematic) process for obtaining (traceable) or verifying evidence

❖ To determine compliance (or extent of compliance) to agreed audit criteria or

requirements, such as policies, systems, procedures, accounts and records.

❖ Evidence could be records, statements of fact (written or oral) which must be

evaluated and reported objectively to determine the extent to which the audit
criteria are fulfilled

❖ Types of Audits – Internal , External , planned or unscheduled

 Basic Concepts
Examples of Internal Audit

❖ Operational Audits
❖ Examine the extent of operation’s compliance to procedures and systems
❖ e.g. HSE (Management) Audit, Quality Audit, Information Security

❖ Compliance Audits
❖ Assess extent of compliance to rules and regulations (e.g. code of conduct)
programs, systems, processes and set improvement or corrective steps,
❖ conducted prior to mandatory regulatory or certifying audit
❖ e.g. Quality , Financial Controls, Information Security , Ethics

❖ Investigative (or Forensic) Audits

❖ Performed when appropriate, e.g. following a serious breach of procedure (e.g.
unethical behaviour) or regulation (e.g. Fraud, before external authority takes
over).

Examples of External Audit

❖ Certifying Audits - such as Financial Audits (by auditing firms) and Quality or
Environmental management (by certifying bodies e.g. ISO)
 Ethics Audit
What Is It:
Systematic evaluation of an organization’s ethics program and performance to determine its
effectiveness and/or compliance to internal, industry’s or national ethical standards or code
of ethics.
Objectives:
• Assess adequacy of an organisation’s ethics-related practices, policies, and procedures
• Assess gap between an organisation’s ethics program vs industry’s or national ethical
standards or code of ethics.

When:
• At regular intervals, as part of compliance program (legal ,ethical , social, etc) or
• own business improvements
• Prior to establishing an organisation’s ethics program
• Prior to launching a new product or project
• When entering into a new venture
• As part of a recovery measure from an ethical disaster

Benefits:
• Provide benchmark or comparison of overall effectiveness of ethics initiatives
• Identify potential ethical risks areas and improve legal and ethical compliance
• Provide priority ranking for asset allocation and program development
• Demonstrate positive impact of ethical initiatives on organisation’s overall performance
 Audit Process

Generally, all audits follow similar process (steps).

Beginning with auditee (leadership or management team)’s buy in or agreement for audit
objectives and scope

And ending with auditee (leadership or management team)’s buy in or commitment

to audit actions and recommendations
 Example Of Ethics Auditing Process
Process Step
Obtain Management Commitment
Review Policies & Procedures
Review Previous Audits and Breaches
Interview leaders
Interview employee
focus group
Analyse Ethical Issues &
Identify Ethical Concerns
Record findings, recommend
responses and improvements
Secure Management Ownership
Description of Key Step
Obtain company’s agreement to the scope of audit and
their commitment to the audit process & methodology.
Review the company's formal codes of ethics, ethics
training programs and compliance policies for legal and
industry guidelines regarding ethics
Look into past breaches of ethics through past
audits, records and online news reports
Ask the company’s executives to discuss any legal or
ethical issues the company has experienced.
Nonetheless, conduct independent investigation
Select a group of employees, based on demographics (ethnic
background, age, gender etc) and separately , individually and most
importantly confidentially, ask them to describe own personal
experiences, that of co workers and executives. Remind them honest
answers will help improve their organisation
Identify the different, and sometimes competing ethical concerns
posed by the situation/project. Analyse the issues that might
underlie those concerns. Obtain and clarify facts
Record and rank non compliances.
Recommend responses and ways for improvements based on
industry best ethics program. Highlight good practices
Report findings and commit company’s management
(and audit committee) to owning them
HOW TO CARRY OUT AN AUDIT
 Audit Preparation

1) Research into the organisation’s background, history and recent reports

Obtain and study the organisation’s structure

2) Agree your means to acquire and/or verify key information/data

1) Organisation’s brochure, website etc
2) Obtain previous audit reports
3) Media reports

3) Up front investigation :
- Were there the ethical issues (reported, raised, identified)?
- What were the ethical concerns?
- Has any step been taken to address them?
- Were they adequate? Effective?

4) Formulate your auditing methodology e.g.

- Interview: Identify key people/stakeholders to be interviewed &
Formulate your questions
- Site visits
- Formal presentation by management/staff to auditors

5) Agree scope, timing and ownership of audit

6) Present and write report (incl.action points and their timelines)
Some pointers/questions that may be useful: Ethics Audit
Reporting Checklist
What are the first steps?

How would we go about doing the audit

Where do we find key information?
Who are the key internal people?
Who are the key stakeholders?

Who are key decision makers?

Who is the audit owner?

What questions to ask?

Who could provide the answers?

What are the ethical issues (reported, raised, identified)?

What are the ethical concerns?
What steps have been taken to address them?
Are they adequate? Effective?

What are your recommendations?

What is your overall rating?
 Example of Audit Report

Example of Cover Page

Name of Project/Site: New Island Refinery

Name of Audit: Ethics Audit
Date of Audit: x/x/x
Names of Auditors: Mr. Could, Ms. Lead

Objectives and Scope of Audit:

1) Assess compliance of new oil and gas JV to company’s ethical principles
2) Identify gaps and recommend measures to address them

Scope:
E.g.
- Overall management and operations of JV
- Project X, including shareholders, management and staff, procedures and works site

Timing:

Principal Auditee

Audit Owner:
 1. Summary: Contents of Report
(Scope, Key Findings, etc)
2. Introduction:
(Company’s/Organisation’s business, its mission, main activities, etc)
3. Background
(audit methodolgy, scope of audit, audit criteria, treatment of results etc)
4.Discussion/Analysis of Findings
5.Key Findings
Ethical Principle/Canon Issue/Concern

1)
2)

6. Conclusions and Recommendations

Ethical Issue/Concern Recommended Due Date
Principle/Canon Actions/Measures
Honesty /Dishonesty - Verify tender award process 3 months
Not the cheapest tender.
Accounting For Uncertainty Investigate effect on 6 months
and Societal Impact: humans/environment
Harmful effect of chemical

8. Overall Finding/Rating: (Good, Satisfactory, Unacceptable) ??

-Unacceptable.
-E.g Immediate management involvement recommended.
 Ethics in Leadership

We have learnt that the ethical environment in an organisation is built and developed
by a leader as he/she has an influential role in the organization and due to the fact
that leaders have an influence in developing the organisational values.

In other words, the key to having an ethically-run organisation is employing morally

upstanding leaders.

Leaders who display “ethical” behaviours would reflect good image of the
organisation or company and in turn, attract and retain the best talents (employees)
and customers’ loyalty

Exercise:
Who or what comes to mind when we talk about Ethical Leaders?
Think about “persons” in leadership positions in your life.
What qualities do they have that make you want to look up to them?
Ethical leadership revolves around two main aspects:
(a) The actions and behaviour of leaders; and
(b) the personality and character (attributes) of leaders.

5 key attributes of an ethical leader are:

Manifests honesty:
The core of integrity is honesty or truthfulness.
Ethical leader must displays integrity in every situation especially through leading by
example and is open about policies and changes that affect the organisation, employees,
customers and other stakeholders.

Respects others: Continually shows respect, especially to all employees regardless of

their backgrounds, particularly before exercising authority as a manager.

Serves others: shows willingness to render assistance, especially to employees (and

other stakeholders) so that they can achieve, improve and grow

Shows justice: Continually behaves with fairness, especially in treating employees and
others in sensitive situations.

Builds community: promotes openness and encourages interactions and

communications within the organisation and with key stakeholders..
 Responsibilities of Leader in Organisation

Key responsibilities of leader’s in organisation

1. Establish organisational goals

2. Promote teamwork to achieve organisational goal
3. Develop sense of loyalty in subordinate
4. Provides subordinates with interesting and challenging works
5. Encourage and support continuing professional development
6. Maintain lines of communication with subordinates
7. Provide reasonable compensation for all works
8. Encourage subordinate input
9. Provide fair and accurate performance assessment

Ethical Roles of a Leader

1. Setting goals and direct organisational planning

2. Establishing structure to meet organisational goals
3. Exercising power to efficiently facilitate delivery of goals
4. Serve as organisational spokeperson
5. Directing performance of subordinates
6. Acting as role model for organisational values
Exercise
Background:

Jaur Pte Ltd is a large multinational company that is well known for its low cost digital products, including
smart phones. It prides itself in its contributions to connect people through affordable communications,
giving those living in less developed parts of the world access to digital revolution that has allowed them
to keep up with living standards once only enjoyed by citizens of advance countries.

Jaur Pte Ltd manufactures all its products in undeveloped or developing nations in Africa and South
America, where literacy and wages are much lower than in say, Europe or USA. Locating its plants in
these parts of the world have also allowed it to make gains from cheaper access to rare minerals, which
many of its products are made from. Strategically, the laws and regulations in these countries, such as
those pertaining to minimum wages and HSE standards, are often non stringent or non existent.

As a senior employee of Jaur Pte Ltd , you have been sent to Country Rezyu, where one of its plants
Is located. Country Rezyu has not regulated any law on minimum wage but requires that any person working
for foreign organisations must be eighteen or older. Your remit is to determine compliance in the operation
of the plant to normal European ethical standards.
In the course of your facts finding in the plant, you have come across the following instances.
a) Ms Ayul is one of the female workers in the assembly section. She is 17 years old and is the
only member in her family physically able to work, all her three siblings having been
diagnosed with mental illnesses or suffering from deformities as result of ground water
contamination by wastes produced by a mining company near her village that has since ceased
operation . Both her parents were killed in a logging accident last year

b) Mr Kesia will turn 18 in ten months time and works in the production line.
He is the only child in his family and both his parents were made redundant two years ago,
when the logging company they worked for lost their operating licence for environmental
law violations. Unemployment in their locality is high and even if there were job openings,
which are rare, they were told that they are too old to be employed. They thus have to rely
on Mr Kesia for their only source of income.

c) Mrs Kerez was a victim of sexual harassment by her immediate supervisor last year.
Earlier this year, the management gave her a promotion in a different part of the plant.
She has thus wanted her case to be put under wrap and not be reported since then.

Questions:
What ethical issues and their underlying concerns can you identify from the case above?
Which ones of the above audit findings should you include in your audit report?
Give your ethical reasonings.