Assignment on Corporate Ethics

Group- 03

Kawsar Ahmed Badhon (Leader)

ID No-11805053
Department of Management studies,
Comilla University.
 Corporate Ethics

Submitted to
Dr. G. M. Azmal Ali Quaosar
Associate Professor, Management Studies

Submitted by

Name ID No

Kawsar Ahmed Badhon 11805053

Zakia Nur Munmun 11805033
Jannatul Ferdouse 11805039
H.M Tareq Aziz 11805041
Najmatul Jannat 11705043
MD.Emon Hawlader 11805045
Md Mohsin Mian 11805047
Ayeshi Bhowmick 11805049
Rifa Sadia Vabna 11805051
Tanjuma Shahrin Preonty 11805055
Mst. Sadia Akter 11805057
Sanjida Jahan 11805059
Sultan Al Nahian 11805061
Paromi Chakma 11805063

Date of Submission- 2 April ,2023

 Corporate Ethics(Badhon)
Corporate ethics are a set of beliefs to which a company adheres that govern its behavior in the
ways it conducts business.

Corporate ethics can be defined in several ways: conceptually, operationally, officially, and
actually. Conceptual arguments about the definition of organizational ethics focus on questions of
stakeholder status and are defined by two theories, stakeholder theory and social contracts theory.
Operational approaches to increasing ethical behavior in organizations may be more or less
proactive and are structured around organizational mission and legal compliance. Official ethical
standards articulated by organizational leaders may include ethical codes, but they are arguably
less important than actual ethical expectations, which are closely intertwined with organizational
culture. Each of these approaches to understanding corporate ethics will be addressed in turn,
followed by discussion of cultural differences in values that undergird ethical norms and codes of
conduct.

Corporate Culture
Corporate culture refers to the values, beliefs, and behaviors that determine how a company's
employees and management interact, perform, and handle business transactions. Often, corporate
culture is implied, not expressly defined, and develops organically over time from the cumulative
traits of the people that the company hires.

A company's culture will be reflected in its dress code, business hours, office setup, employee
benefits, turnover, hiring decisions, treatment of employees and clients, client satisfaction, and
every other aspect of operations.

Status of corporation(Vabna)
A corporation's status can refer to its standing in the state where it was incorporated, or to the tax
classification it elects with the Internal Revenue Service. Generally, states broadly categorize
businesses incorporated under their laws as active or inactive. The status of a corporation refers to
its legal standing and level of recognition in the eyes of the law.

Corporations can have different statuses depending on various factors, such as the jurisdiction
where they were incorporated, their tax status, and their compliance with regulatory requirements.
Some common types of corporate statuses include:

1. Active: This refers to a corporation that is currently in good standing with the state or
country in which it was incorporated, and is legally authorized to conduct business.

2. Inactive: This refers to a corporation that is no longer active or has ceased operations, but
has not officially dissolved or been terminated.

3. Delinquent: This refers to a corporation that has failed to comply with certain regulatory
or filing requirements, such as failing to file annual reports or pay taxes on time.

4. Dissolved: This refers to a corporation that has completed the process of winding up its
affairs and has been officially terminated.

5. Nonprofit: This refers to a corporation that is organized for charitable or educational

purposes and has been granted tax-exempt status by the Internal Revenue Service (IRS).

Five Easy Steps to Maintaining Corporate Status

1. Hold Shareholders' and Directors' Meetings

2. Document Shareholders' and Directors' Corporate Decisions

3. Maintain a Separation Between the Corporation and the Owners/Officers/Directors

4. Keep Detailed Financial Records

5. File a Separate Corporate Income Tax Return

 Collective responsibility (munmun- Full paragraph is your topic,
give example if possible)
(Collective responsibility is widely applied in corporations, where the entire workforce is held
responsible for failure to achieve corporate targets (for example, profit targets), irrespective of the
performance of individuals or teams which may have achieved or overachieved within their area.

Collective responsibility refers to a situation where individual members of a group are held
responsible for the group’s actions as a whole. Once a position has been agreed and voted on then,
members must abide by that position.

The board of directors can only be successful if each member plays their part well. So, board
members must learn to hold each other accountable for the organization’s outcomes. This means
that in terms of the board as a collective entity, responsibility will be shared between individual
members for their actions.)

Corporate Ethical decision making

Jannatul Ferdouse
Making ethical business decisions requires discipline. It is a method for locating and dealing with
problems in a commercial setting. Of course, that happens in a lot of other circumstances. Making
ethical business decisions also cannot be reduced to only "doing the right thing." More is involved
than that.

Step 1: Define the Problem Clearly

According to the Business Ethics Resource Center, it’s vital to include a decision making
framework when you’re dealing with ethical questions in your business. This is a process or
set of rules that helps you determine how to make the best decision. The first step of the
ethical decision making process is to understand what problem or dilemma you’re up
against. Keep in mind that this may not be the same as the question asked of you to make a
decision.

Step 2: Do Your Research

After identifying what the ethical problem is, you need to conduct research into the issue.
This is where it’s important to look for resources within and outside your company that can
provide specific expertise related to the decision you need to make. It may include consulting
with other business executives at your company, talking to Human Resources professionals
or even reviewing your company policy handbooks, according to Status.

Step 3: Consider Your Options

Now it’s time to brainstorm solutions for your problem, according to HubSpot. In this step,
it’s vital to look at what has previously been done at your company in addition to out-of-the-
box solutions. Consider similar previous scenarios and how they have been handled, so you
can get an idea of the outcome. However, you also have to look outside your business to the
larger industry and see what others are doing in these kinds of situations.?

Step 4: Evaluate Your Potential Solutions

Once you have selected a few possible answers to your ethical question, it’s time to evaluate
each solution. HubSpot suggests understanding the positive and negative aspects of each.
Focus on the outcome of each decision and how it will affect your business in the short and
long term. Not only that, but how will each decision affect people within your company, your
customers and your partners?

Step 5: Come to a Decision

Now that you’ve done the research, brainstormed solutions and evaluated the many options,
it’s time to come to a decision. This is the hardest step in the ethical decision making
framework because it has lasting effects for your company. It’s important to feel confident
in your choice because you have weighed all your options carefully.

Step 6: Implement Your Decision and Evaluate Its Effects

Once you’re confident in your choice, work with your team to bring your decision to reality.
This may include developing a business strategy, creating an action plan, devising a new
company policy or holding a meeting about the new changes. Put your ethical choice into
practice and then review the effects it has on your business.

H m tareq
Use the PLUS Ethical Decision-Making Process

Having a step-by-step system for making ethical decisions is key to making sure you consider all
of your options. In addition to that, be sure to use the PLUS model for evaluating your ethical
dilemmas, according to Status.

PLUS is an acronym that stands for:

• Policies and Procedures: All ethical decisions for your business should align with your
company’s rules and regulations.

• Legal: This element is fairly black and white, though there can be shades of gray as well
when it comes to the law. Is the decision you’re looking to make legal or does it violate
any laws?

• Universal: This criterion is about your business’ core values and company culture,
according to HubSpot. Is the decision going against any of your business’ values and what
you stand for?

• Self: How do you feel about the decision? If the decision is in line with your company
policies but gives you an uneasy feeling, it’s possible that it goes against what you
personally believe to be fair and honest.

Ethical Extent of Access to Corporate Information

(Najma)
What should be the Ethical extent of access to corporate information

The extent of access to corporate information that is considered ethical can vary depending on the
specific context and industry. However, in general, access to corporate information should be
limited to those who have a legitimate business need for it, and who are authorized to access it.

Here are some ethical principles that can help guide decisions about access to corporate
information:

1. Need-to-know principle: Information should only be disclosed to those who have a

legitimate need to know it in order to perform their job duties or make informed business
decisions.

2. Confidentiality principle: Confidential information should be protected from unauthorized

access, use, or disclosure. This includes personal information about employees or
customers, as well as sensitive financial or strategic information.

3. Transparency principle: Employees should be informed about the types of information that
are collected, how they are used, and who has access to them. Transparency can help build
trust and ensure that employees understand the importance of protecting confidential
information.

4. Data security principle: Appropriate measures should be taken to protect corporate

information from unauthorized access, theft, or destruction by implementing security
protocols, restricting access to sensitive information.

5. Compliance principle: Access to corporate information should comply with applicable

laws, regulations, and industry standards. This includes data protection laws, privacy
regulations, and industry-specific guidelines.

By following these ethical principles, organizations can ensure that access to corporate information
is limited to those who have a legitimate need for it, and that the confidentiality, integrity, and
security of corporate information are protected.

Ethical rational of restructuring and takeover

 (Emon)

What is Corporate Restructuring?

Corporate restructuring is the process of reorganizing a company's management, finances, and

operations to improve the efficiency and effectiveness of the company. Changes in this area can
help a company increase productivity, improve the quality of products and services, and reduce
costs. They can also help a company better serve the needs of its customers and shareholders.
Restructuring businesses may also result in the closure of underperforming or unprofitable
business units.

5 Corporate Restructuring Strategies to Consider: The ideal way to restructure a

corporation depends on its specific conditions and attributes, as well as the purpose for the
reorganization. The following are five company reorganization strategies used to create
profitability:

1. Mergers and Acquisitions (M&A)

A merger is when another firm takes over an existing company, or a new company is formed by
merging two or more existing companies. Though firms in financial trouble commonly employ
M&A transactions, there's generally a potential for business synergies that may be generated by
uniting the two businesses rather than a result of financial insolvency.

2. Reverse Merger

Reverse mergers allow private firms to become publicly traded without the necessity for an initial
public offering (IPO). In a reverse merger, a private firm acquires a controlling stake in a publicly-
traded company and gains control of the board of directors as a result.

3. Divestiture

Divestiture is the act or process of transferring ownership of a company's non-core assets to another
party. With the sale of one or more of a company's subsidiaries, divisions, or other business units,
a company undergoes a significant reorganization.
4. Joint Venture

A joint venture is the creation of a new firm between two or more companies. Each of the
participating firms agrees to provide specific resources and to split the costs, earnings, and control
of the new company formed as a result of the collaboration.

5. Strategic Partnership

With the strategic alliance, businesses may work together while maintaining their own identities
in order to generate commercial synergies

Ethics and Corporate governance

(Mohsin)
Corporate governance, according to Investopedia, “is the system of rules, practices, and processes
by which a firm is directed and controlled” and is usually managed by a company’s board of
directors. The four P’s, or key categories of corporate governance, are people, process,
performance, and purpose.

Corporate governance rules are important because they outline a company’s ethical beliefs and
provide a working roadmap for a company's objectives and activities. In short, these plans affect
and influence every aspect of a company’s daily operations and management.

What is the role of ethics in corporate governance?

Today’s business industry, according to many public opinion polls, is not highly trusted. Therefore,
it’s more important than ever for today’s companies to set well-defined, actionable governance
plans that are rooted in the ethical values of integrity, honesty, and openness as they conduct their
operations.
Doing so encourages positive behaviors that lead to long-term business success and sustainability.
It also helps companies gain increased trust, the intangible—but very valuable—social and cultural
currency by which companies can:

• Become authorities in the space to drive business and capture market share

• Garner repeat business

• Gather support, funding, and positive public opinion

All of these measures can boost a company's revenues and long-term viability.

Corporate ethical virtues model

(Ayeshi Bhowmick)
The Corporate Ethical Virtues Model (CEVM) is a framework developed by Alejo Jose G. Sison,
a professor of ethics and corporate social responsibility, to guide companies in developing a strong
ethical culture. The model identifies seven ethical virtues that companies should cultivate in order
to promote ethical behavior and decision-making:

1. Integrity: This virtue requires a commitment to honesty and fairness, and a refusal to
engage in deceitful or fraudulent behavior.

2. Responsibility: Companies should take responsibility for their actions and the impact they
have on stakeholders, including customers, employees, suppliers, and the community.

3. Empathy: This virtue requires companies to consider the perspectives and needs of others,
and to show compassion and understanding towards stakeholders.

4. Respect: Companies should treat all stakeholders with respect and dignity, and strive to
build relationships based on trust and mutual understanding.

5. Trustworthiness: Companies should be reliable and dependable, and honor their

commitments to stakeholders.
 6. Citizenship: This virtue requires companies to be good corporate citizens, and to contribute
to the well-being of the community and society at large.

7. Courage: Companies should have the courage to do the right thing, even in the face of
difficult challenges or pressure to act unethically.

(Preonty)
There are other models of ethical virtues that have been developed for the corporate
environment. Here are a few examples:

1. The Ethical Decision-Making Model (EDM): Developed by Linda Treviño and Katherine
Nelson, this model emphasizes the importance of ethical decision-making processes in
organizations. It involves several steps, including recognizing the ethical issue, gathering
information, considering alternatives, and making a decision that is consistent with ethical
principles.

2. The Ethical Leadership Model: This model emphasizes the role of leaders in promoting
ethical behavior in organizations. Ethical leaders are characterized by their honesty,
fairness, and transparency, and they set a positive example for employees to follow.

3. The Ethical Culture Model: This model emphasizes the importance of creating a strong
ethical culture in organizations. It involves establishing clear ethical standards, providing
training and education on ethical practices, and promoting accountability and transparency
throughout the organization.

Each of these models provides a different perspective on how companies can promote ethical
behavior and decision-making in the corporate environment. By incorporating these models into
their ethical frameworks, companies can develop a comprehensive approach to promoting
responsible and ethical business practices.

Factors that lead to questionable unethical practice

(Sadia)
What is an Unethical Behavior?

The Civil Service Commission of Philippines defined an unethical behavior as any behavior
prohibited by law. An unethical behavior would therefore be defined as one that is not morally
honorable or one that is prohibited by the law. Many behaviors will fall in the classification
including corruption, mail and wire fraud, discrimination and harassment, insider trading, conflicts
of interest, improper use of company assets, bribery and kickbacks, compliance procedures, ethical
relations with others, disciplinary action, fraud, illegal business donations, patent infringement and
product liability (Barrcus & Near, 1991, 12).

False Communications: False communications fall into various categories. They include
falsification of auditor’s or controller’s report or any form of manipulation that does not tell the
whole truth. These include cheating on tax returns or inappropriate depreciation schedule and
wrong expenses (Brennan Jr., Valtz, Shallenberger & Stanton, 1961, 164).

Collusion: Collusion, especially with competitors, to fix prices, is an unfair business practice
today. This could be considered stealing from customers. However, there are differences of
opinion on whether or not price fixing is stealing from customers (Brennan Jr., Valtz,
Shallenberger & Stanton, 1961, 174).

Gifts and Kickbacks: Some organizations do not allow their employees to receive gifts from
clients during normal course of business. Those who do, generally provide guide lines on
limitations as to the amount an employee can receive as gift. Sometimes a buyer may request for
kickbacks or entertainment which, if not provided, may lead to the loss of the customer.
Some more(Sanjida)
Conflict of Interest: Conflict of interest occurs when one’s private interest interferes or appears
to interfere in any way with the interest of the organization. According to Sliglitz, it can be argued
that there is no conflict of interest because, based on Adam Smith’s view, the individuals, when
pursuing their own self- interest are actually pursuing the general interest of society (Sliglitz, 2003,
2).

Unethical practices in the Health Care Sector

There are three common unethical practices in the Health Care Sector. The first is refusing to
provide health care services to the patients who have no medical insurance. Some Health Centers
do not admit patients who have no insurance unless they can provide evidence that they have the
ability to pay for the health service.

Insider Trading

Insider trading is an unethical behavior which occurs when a person who has access to confidential
information uses or shares the information for securities trading purposes or any other purpose
except the conduct of regular company business. The confidential information of the company is
not to be used for achieving personal gain neither are they to be disseminated directly or indirectly,
to friends, family members and other outsiders who may in turn trade on or misuse the information.

Factors that lead to questionable unethical practice

(Nahian)
There are several factors that can contribute to questionable and unethical practices in the corporate
environment. Here are some examples:

1. Pressure to meet financial targets: Companies may set aggressive financial targets to meet
investor expectations, and employees may feel pressure to meet these targets to avoid
negative consequences such as job loss or reduced compensation. This pressure can lead
 to cutting corners or engaging in unethical behavior, such as falsifying financial reports or
engaging in insider trading.

2. Lack of oversight and accountability: When there is little oversight or accountability for
employees' actions, they may be more likely to engage in unethical behavior. For example,
if there is no system in place for reporting unethical behavior or no consequences for such
behavior, employees may feel they can get away with it.

3. Toxic company culture: A company culture that values result over ethics can lead to
unethical behavior. When unethical behavior is tolerated or even rewarded, it can become
the norm. This can happen when there is a "win at all costs" mentality or when employees
are not held accountable for unethical behavior.

4. Conflicts of interest: When employees have personal interests that conflict with the
interests of the company, they may be more likely to engage in unethical behavior to serve
their own interests. For example, an employee with a financial interest in a supplier may
be more likely to award that supplier a contract, even if it is not in the best interest of the
company.

5. Lack of training and awareness: Employees may engage in unethical behavior simply
because they are not aware that their actions are unethical. Companies that do not provide
adequate training on ethical practices may be more susceptible to unethical behavior. For
example, if employees are not trained on how to handle confidential information, they may
inadvertently disclose it to unauthorized parties.

These factors are not exhaustive, but they do provide an idea of the various factors that can
contribute to questionable and unethical practices in the corporate environment. It is important for
companies to be aware of these factors and take steps to mitigate them, such as implementing
strong ethical guidelines, providing regular training on ethical practices, and creating a culture that
values ethics and accountability.

Why Do Employees Make Unethical Decisions? (Paromi)

1. Pressure to Succeed
Employees may choose to act unethically based on unrealistic expectations to succeed. For
example, a salesperson may make false claims to secure a deal to meet their quota. With Wells
Fargo, employees opened up fake accounts and credit cards in their client’s name to make quota.
The quota, however, was unrealistic and almost impossible to make without cutting corners. In
order to keep in good standing with their managers and keep their jobs, employees may make
unethical decisions.

2. Employees Are Afraid to Speak Up

Another reason employees don’t report unethical behavior is that they are fearful of the
consequences. For one, employees may fear retaliation from their coworker who they are
reporting. The employee might also fear getting a bad reputation among his or her coworkers. On
top of this, many employees are don’t know how their supervisor will react.

3. Lack of Training

Many organizations make the mistake of assuming their employees understand which behaviors
are unethical. Employees may not know an activity they see on a daily basis is unethical or illegal.
For example, a employee may not know that giving a potential client tickets to a sporting event
could constitute a bribe.

4. There’s No Policy for Reporting

Employees also need to know how to report potential ethics violations. Having a policy in place
helps keep the information from falling into the wrong hands. For instance, if your organization’s
process is to go straight to HR, this prevents the employee from first going to his boss. Also, some
employees may wish to stay anonymous.

5. Managers Setting Bad Examples

Many instances of unethical behavior stem from the examples set by the employee’s manager.
Managers should always be conscious of their actions and how employees view them. For
example, a manager may lie to a customer about a contract. If the employee witnesses this, they
may assume they are free to do the same.