Ethics in the Workplace

A Rights Based Approach

Author International Training Adviser, AIBF (International Expert in Capacity Building and Institutional Development) March 2012

Sohailuddin ALAVI

Author’s Profile

ALAVI, Sohailuddin
He is a capacity building and institutional development expert. He brings learning through working internationally for more than 28 years. Through the years he has unleashed skills in document writing, proposal development, critical thinking and creativity. His career spans over 28 years of learning In his initial career he has worked in a Pakistani bank as trainer, coordinator and training manager for management development programs for almost 15 years. Later he established his own institutional management and training consultancy. As consultant he has had conducted numerous management training workshops both in Pakistan and Afghanistan. Besides, he has had worked on many institutional development projects in the corporate, development sector and the Govt. departments, as consultant. He has taught for more than ten years in the undergraduate and post graduate programs of Shaheed Zulfikar Ali Bhutto Institute of Science and Technology, Faculty of Management Sciences and Karachi University Business School, Pakistan. He has written extensively in management, leadership, organization-behavior; business ethics, and entrepreneurial development for professional magazines, authored books and training manuals.

Personal Contact Details: Email: sohailuddinalavi@yahoo.com Public Profile: http://pk.linkedin.com/pub/alavi-sohailuddin/44/ab4/997 Cell No. 00 92 (0) 333 213 87 42 Karachi, Pakistan

Ethics in the Work Place

Ethics in the Workplace
A Rights Based Approach

Table of Contents Foreword Critical Incident Corporate Personality Introduction to Ethics Ethical vs. Unethical Mindsets Ethics and Managerial Behaviors Ethics in Business Setting Managing Ethical Dilemmas in Workplace Equal Employment Opportunity and Gender Mainstreaming Role of Ethics in Eliminating Poverty 03 04 05 08 16 19 24 28 33 40

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Ethics in the Work Place

Foreword
I take this opportunity to share my views on Ethics. What it is all about; is it a responsibility or a choice; and, what makes us being ethical or otherwise shall remain the focus throughout the discussions that follow in this booklet. Is ethics a dress code; etiquette and mannerism, cultural rituals; righteous deeds; traditions; etc? In my opinion the answer is a big NO. To me Ethics is an acknowledgement of equal human rights. It is about protecting one’s own rights as well as honoring other’s rights in all walks of life; personal, social, professional and economic. The religion of Islam from the times of Prophet Adam SAW to the last Prophet Muhammad SAW has acknowledged, endorsed, and protected equal human rights for all. As in the Noble Quran,  HE says, “If you protect [save] life of a human being, it would be as if you have saved the lives of the entire human race, and vice versa”.  HE says, “Oh believers [those who accept the truth] eat not each others’ wealth unjustly”

I would like to dedicate this booklet to my Parents, family members, the Institute of Banking and Finance (AIBF) and the Universities where I studied and taught.

Sohailuddin Alavi
March 12, 2012

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Ethics in the Work Place

Critical Incident:

Seeing is Believing
We believe what we see, and more precisely we believe what we want to see. This is a true legacy of living our lives the way we live. A brief narrative explains it all… When we are children we see and live around our parents and begin to believe that everything we get attached to (used to) is going to be around forever. But as we grow, we begin to indulge in our academic and then professional pursuits. There we find new persons and things that make our lives more meaningful and joyful as well. So once again we begin to belie ourselves that all that is around us is going to stay forever. Marriage further strengthens our involvement in people and things around us, and our urge to maintain status quo forever is further increased. Then comes a time to withdraw from the professional stream and sit back at home. It is the time we begin to critically rationalize our past and find no alternate but to accept that nothing in this world is forever. Then a question comes in our minds – why were we sent to this world for so little time? At this point in time our denial of this very reality, conscious or unconscious, all of a sudden becomes meaningless (childish more precisely):  Do we live our lives with clarity of purpose?  Do we clearly understand our ultimate destination?  Do we conduct our lives to embrace inevitable successfully? Allah send us all in this world for a short time only (some may live for few hours or even less and some may live for many years, as Allah deems fit) to establish evidence as to who will worship HIM (have faith i.e. accept nothing but truth alone and observe taq’wa i.e. refrain from the prohibited). And HAS promised (desired) HIS paradise for all mankind, who so ever wish (will) to embrace truth and abide by Allah’s code of life, a place to dwell in forever. Allah is all knowledgeable and aware of HIS mankind and that exists, existed in the past, or will ever come into existence.
   But of mankind there are some who say: Our Lord! Give us (Your bounties) in this world!” and for such there will be no portion in the Hereafter. (Verse 2:200. The Noble Quran) And of them there are some who say: “Our Lord! Give us in this world that which is good (tau’feeq to do righteous deeds) and in the Hereafter that which is good (His blessings and Paradise) and save us from the torment of the Fire!” (Verse 2:201. The Noble Quran). Beautified is the life of this world for those who disbelieve, and they mock at those who believe. But those who obey Allah’s Orders and keep away from what He has forbidden, will be above them on the Day of Resurrection. And Allah gives (of His Bounty, Blessings, Favors, and Honors on the Day of Resurrection) to whom He wills without limit. (Verse 2:212. The Noble Quran)

 

Allah by HIS leave guided those who believed to the truth of that wherein they differed. Allah guides whom HE wills to the straight path (Verse 2:213, The Noble Quran).

Or think you that you will enter Paradise without such (trials) as came to those who passed away before you? They were afflicted with sever poverty and ailments and were so shaken that even Allah’s Messenger and those who believed along with him said, “When (will come) the Help of Allah?” Yes! Certainly, the Help of Allah is near! (Verse 2:214 The Noble Quran) And those on the Left Hand – how (unfortunate) will be those on the Left hand? In fierce hot wind and boiling water, And shadow of black smoke, (That shadow) neither cool, nor (even) pleasant, Verily, before that, they indulged in luxury (in their previous life), And were persisting in great sin (Verses 56:41 to 46. The Noble Quran) Your Lord (O Muhammad SAW) has neither forsaken you no hates you. And indeed the Hereafter is better for you than the Present (life of this world). (Verses 93:3 & 4. The Noble Quran)

Moral: The trick of increasing one’s chances to succeed is “Believing-the-unseen and following the truth not desires (lust)”. Our life is an opportunity given only once to take it or leave it. Thus those who live this life with a strong orientation for the eternal destination will insha’Allah embrace success at their destination.

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Ethics in the Work Place

Corporate Personality
Introduction Since long business organizations are considered interdependent on their permeable environment i.e. customers; suppliers; regulators; employees; investors; and, the local community. Conventionally, however, the scope of corporate citizenship was rather confined to the community. In other words, the role of corporate citizenship used to be defined outside the business – a typical philanthropic orientation. As the world of work becomes more and more integrated within its permeable environment; the need for transparency, fairness, and equity has become much significant both from the point of view of corporate image and its continuity. It is true to say that in the conventional perspective citizenship role was more of a choice. In the emergent perspective, however, it is more of a moral and legal corporate obligation resulting into discrete responsibilities vis-à-vis various stakeholders in the permeable environment. Put it differently, it obligates upon business enterprises to demonstrate responsible behavior towards their stakeholders while pursuing their business goals – doing business responsibly The corporate must adhere to the following dimensions in discharging its moral and legal obligations: 1. Responsibility: 2. Responsiveness: 3. Performance: To recognize its obligation and accountability to the Stakeholders [Reflect in its strategic vision, goals, values etc.] To demonstrate actions and activities in conformation of the above [Align its business policies and processes] To actually produce outcomes and results that conform to the moral and legal obligation in a betting manner [Achieve transparency, fairness, and equity in performance, products, services, and programs]

Principles ALLAH Jale-shahnaho SAYS in Quran, “Time is witness, all men (women) are in loss except those who believe in truth; do righteous [perform their responsibilities] and are positive of the future; and advise others to do righteous [perform their responsibilities] and be positive of the future… Principle: Be responsible and hope for the better

ALLAH Jale-shahnaho SAYS in Quran, “Oh! Believer in your wealth is the share of your parents, family, relatives, and others… Principle: Share your benefits [profits] with the community; the customers, employees, and other stakeholders; and the future generation.

ALLAH Jale-shahnaho SAYS in Quran, “Oh! Believers, help each other in righteous (constructive) endeavors… Principle: Create networks, Support, and Synergize

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ALLAH Jale-shahnaho SAYS in Quran, “Oh! Believers, when you measure you must measure just right… Principle: When you give; give just value for money and when you take; take just value for money.

ALLAH Jale-shahnaho SAYS in Quran, “Oh! Believers, when you make promises, you must adhere to them… Principle: Live the promises and honor the commitments, always.

ALLAH Jale-shahnaho SAYS in Quran, “Oh! Believers do not eat each other’s wealth (property) in unjust manner… Principle: Create and sustain Win-Win relationships

ALLAH Jale-shahnaho SAYS in Quran, “The suppressed people ask ALLAH ALMIGHTY to send HIS slaves (believers) who may help them in times of distress and difficulty … Principle: Do Benevolence; Walk an extra mile.

ALLAH Jale-shahnaho SAYS in Quran, “Oh! Believers do not do mischief or acts of immorality (vulgarity) and do not cross the limits set by ALLAH… Principle: Uphold socio-moral values; promote safe environment; and protect lives.

Corporate Citizenship and Profitability* It is often thought that if an enterprise adheres to its responsibilities in letter and spirit the consequence would be reduced profits. However, real life examples advocate altogether a reverse relationship. According to a survey of local organizations in Pakistan only, profits seem to improve as the organizations became more responsible. Some critical incidents are cited below to augment the above:  National Bank of Pakistan considered its citizenship role as central to the change management program initiated by its management regime. For instance, implementation of Basel agreement to improve transparency; empowering the women employees as a part of gender mainstreaming; introduction of micro loans; and, patronization of social activities are but a few initiatives that NBP management had recently initiated. All this has helped in improving bank’s image and the position in the market; satisfaction and commitment of the employees; increase in quality loan portfolio etc.  Chirate cement factor in the capital city of Islamabad when installed a recycling plant to eliminate the usual pollution enabled them to increase their productivity, as they were able to reproduce cement from the recycled waste.  Standard Chartered Bank has been able to improve upon its corporate image by demonstrating philanthropic attitude towards the young girls by sending them to schools.  Younus Bros. commonly referred to as YB Group has improved upon their corporate image by establishing a state-of-the-art Tabba Institute of Heart Diseases.  Ariel Washing Detergent once ran a societal campaign whereby they committed to donate certain amount of their earnings from each bag of detergent sold. The society responded to their campaign positively by preferring their detergent over others.
* The author is from Pakistan where he has done extensive work in the corporate sector. Hence the examples quoted above mostly relate to Pakistani corporate arena.

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Ethics in the Work Place

Many similar examples abound both in the local and in international world of work that suggest a positive relationship between corporate citizenship and profitability. Corporate Citizenship and the Capitalism Capitalism is an economic system, which is rather neutral vis-à-vis CSR concept. It neither mandates nor blocks Corporate Citizenship initiatives at the business process level or at the philanthropic level. Thus ideally capitalistic enterprises, which are socio-morally cognizant, can contribute towards the betterment of the permeable society preferably by playing a proactive role or at least avoiding dysfunctional impact. Moving Forward: It is imperative to create an enabling environment where each enterprise is rather encouraged to adopt Corporate Citizenship culture in a substantive manner rather then continuing to commit their time and resources more from the ritualistic orientations alone.  An enabling environment would essentially require the followings:  Awareness, conceptual clarity, and consensus building  Policy directions  Reinforcements to provide encouragement and prevent lapses Conclusion: Corporate Citizenship emerges as a multidimensional concept that essentially instills socio-moral discipline in various business processes, such as product design and quality, pricing, promotion, delivery, after sales commitment, etc. Besides the above, it also advocates essential requirements to continually meet and exceed the needs and expectations, respectively, of stakeholders. Thus Corporate Citizenship is not just spending on a few philanthropic ventures in the community, but it is also a culture of doing business in a socially and morally responsible [correct] manner. Consequently, the chances of growth and sustainability of a cognizant enterprise increase many times in today’s’ transparent world of business.

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Ethics in the Work Place

Introduction of Ethics
Chambers English dictionary defines the word ethics as “The study of right and wrong”. Conventionally, criteria for the right and wrong have been dictated by three elements: Religion, Society, and Individual perceptions. However, on the basis of Allah’s guidance cited below, we are able to understand that ethics is an implication of need for recognizing and protecting universal human rights. The rights based approach to ethics shall dominate discussion in this and following units.

Rights Based View of Ethics
ALLAH All Mighty has promised to provide livelihood to everyone in this life (world) in accordance to HIS absolute knowledge and wisdom. At the same time, HE has promised equitable rewards (or punishments) in the life hereafter, in accordance to every one’s intentions and actions in this life, which are in fact matter of individual’s choice. He can choose to follow the righteous path and earn Allah’s blessings or otherwise. From the citation above, we conclude that our life has two aspects, namely the Self and Behavior. Self relates to one’s existence hence entails every human equal rights, see table 1.1 below. Behavior on the contrary relates to the chosen intentions and efforts of individuals (or societies) hence entitle equitable rewards (or punishments). This follows that behaviors that protect one’s own rights and also the rights of other individuals and of the society are to be considered virtuous and vice versa. At this point it is, however, important to note that although nothing can deprive an individual from his or her right, however non-virtuous behaviors do justify eclipsing the rights of the individual in compensation of his or her non-virtuous behavior. For instance, it is an innate right of all the individuals to inherit their assets of their parents, hence it is not ethical for parents to deny this right to all or any of their off spring. On the contrary, although to live is a universal right of all, but killing a murderer in compensation of the violation of the slain-person’s right to live is surely just. Thus we can say that acknowledging and protecting universal human rights provide the basis for ethical code of conduct – disciplined behavior. This concept of rights based ethics is not contradictory to the conventional prescriptive approach of righteous behavior, but a contemporary version that uses descriptive approach to provide the rationales of right and wrong. Some examples are appended to illustrate the concept rather loudly:

Rights
To live To self esteem To earn To privacy To equal opportunities Value for money

Ethical Behavior
To live a quality life: safe, healthy, and successful. To command self respect, dignity and independence. To earn fair share of livelihood by upholding one’s own rights and the rights of others too. To avail personal security, individuality of beliefs and assumptions, etc. To access similar opportunities, available to others. To claim fair services and benefits for the money paid.

Unethical Behavior
To compensate quality of life either by choice or compulsion. To compromise self esteem either by choice or compulsion. To earn by exploiting/ undermining one’s own or others’ rights To practice double standards of privacy: One person’s privacy is violated for others’ advantage To discriminate in accessing opportunities amongst individuals or groups. To settle for less value or secure higher value services and benefits for the money paid.

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Conventional Views of Ethics
Religion is one of the main elements, and perhaps the greatest force that sets out the criteria for ethical behaviors throughout the world. Religion enables us to distinguish between right from wrong by telling us what right behavior is and what isn’t. For instance, religion may tell us that killing a person unduly is something grossly unethical and helping someone is something greatly ethical. However, what may be ethical according to one religion may be highly unethical according to another religion. For instance, hunting to satisfy ones’ legitimate needs is regarded as ethical in Islam, Christianity and other religions of the world. However, in Jain religion the same act is grossly unethical. Different societies have been dictating what the ethical codes of conduct are and what aren’t, right from the primeval era. However, what may be regarded as a highly ethical behavior in one society may be regarded as highly unethical in another. For instance cohabiting is highly despised in Eastern societies, but is generally an accepted behavior in the European and North American societies. Conventionally, social legacies, customs and traditions determine the code of conduct in a society. But in the contemporary societies marked by freedom of choice, greater emphasis on human rights, continues change in life styles, and of all technological and knowledge revolution are some of the emerging forefront variables that determine the socio-moral conduct at a given point in time. Personal Perception just like the religion and society that have since long dictated and discriminated the right behaviors against the behaviors that are wrong, personal perception also influences individuals’ judgment of behavior. For instance, one person may personally think that there is nothing wrong bribing as long as one gets his needs achieved, but another person may have a completely different opinion about the same issue. She may accept giving bribe for something that is legal but would not consider it ethical to bribe for illegal things. Yet another person might even consider bribing unethical altogether. Factors that might influence individual perception may be his or her moral values; goals and expectations; circumstances; and, immediate environment; etc. Establishing universal code of ethics remains a challenge, for different religions, societies and individuals shall always deal with the issues from different perspectives. Thus the universal applicability of ethical codes remains a matter of choice rather than righteous deeds. On the contrary, when ethics is viewed as an instrument of acknowledging and protecting human rights, its universal acceptability increases many times and so its practical usage.

Roots of Morality
Empathy: Islam promotes “Choosing for others what one chooses for himself”, as a principle of empathy. Should you lie to keep from hurting a friend’s feelings? Should you keep a promise to visit a sick friend or accept a last-minute invitation to a dinner party instead? When should a lifesupport system be kept going for someone who would otherwise die? The roots of morality are to be found in empathy. It is empathizing with the potential victims; someone in pain, danger, or deprivation and the urge to sharing their distress moves people to act to help them. Putting oneself in another’s place leads people to follow certain moral principles. There is a natural progression in empathy from infancy onward. At one year of age a child feels in distress herself when she sees another fall and start to cry, her rapport is so strong and immediate that she puts her thumb in her mouth and buries her head in her mother'’ lap, as if she herself were hurt. After the first year, when infants become more aware that they are distinct from others, they actively try to soothe another crying infant, offering them their teddy bears, for example. As early as the age of two, children begin to realize that someone else’s feelings differ

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from their own, and so they become more sensitive to cues revealing what another actually feels; at this point they might, for example, recognize that another child’s pride might mean that the best way to help them deal with their tears is not to call undue attention to them. Empathy underlies many facets of moral judgment and action. One is empathic-anger, which is “the natural feeling of retaliation rendered by intellect and sympathy applicable to those hurts which wound us through wounding others”; this instinct is called the “guardian of justice”. Another instance in which empathy leads to moral action is when a bystander is moved to intervene on behalf of a victim; the research shows that the more empathy a bystander feels for the victim, the more likely it is that he will intervene. There is some evidence that the level of empathy people feel shades their moral judgments as well. For example, studies in Germany and the United States found that the more empathic people are, the more they favor the moral principle that resources should be allocated according to individuals’ rights.

Moral Development is a personality dimension, which influence ethical choices. It refers to an individual’s awareness and values that he or she attaches to the moral obligations in general. It is interesting to note that generally moral maturity coincides with age. In the Noble Quran ALLAH Al Mighty says, “When MY slave [man or women] attains the age of forty, he or she reverts back to ME…”. The moral is as one gets older he or she becomes more and more disciplined [harness behaviors] and this is what ALLAH Al Mighty ordains HIS slaves. The figure forty perhaps should not be taken in absolute terms but as a metaphoric benchmark. ALLAH knows better. We can find explanation of the finality of this Quranic wisdom in the research that correlated the organizations’ sustainability to the age of CEOs [Decision makers]. This was published in the NEWS Week many years ago, wherein the researcher compared the Japanese organizations with US organizations and concluded that the Japanese organizations are more sustainable then US organizations. The researcher cited age factor as main contributor to this effect. Japanese organizations were managed by aged executives, while US organizations were managed by much younger executives.
Lawrence Kohlberg* identified several stages of moral development [These stages should be visualized on a continuum and not as discrete segments]. Accordingly, an individual’s moral outlook changes as his or her moral development matures to a higher stage: Level One: Pre-conventional Stage 1 Concern for physical consequences to self, especially to avoid punitive possibilities Stage 2 Concern for satisfaction of personal needs. Level Two: Stage 3 Stage 4 Level Three: Stage 5 Stage 6 Conventional Concern for others approval of one’s behavior: You are OK! Concern for conforming to legal boundaries / standards Post Conventional Concern for preventing (not violating) others rights and social contract (obligation), for conducting oneself in a morally correct manner. Concern for confirming to the ethical principles such as justice; fairness; and equal human rights etc.

Manifestations of Ethical Behavior: Behaviors to be precise are the decisions as well actions that individuals or groups make, either in the informal setting or formal setting. Obviously, any decision and/or action aim at a certain goal; be it financial, social, or simply psychological. It is important to understand that at many instances a lot of dysfunctional outcomes occur as a cost to get the desired goals. Most of the times, these costs are borne by third persons, hence not recognized at a conscious level. But ironically in quite a few situations the cost of dysfunctional outcomes is also inevitably paid by the

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person or group itself in addition to third persons, however, it is overshadowed by the immediate gains that appear humungous and vital. As the society [institutions] to be sustainable needs to be more just and equitable for everyone without discrimination, it becomes imperative to harness the conduct of individuals and groups so that the dysfunctional outcomes of their respective behaviors are eliminated altogether or at least contained to the minimum. Ethics or moral principles provide basis for the required harnessing of the behavior. Firstly, a behavior needs to be analyzed on two orientations, namely; moral and legal for declaring its acceptability or otherwise. The moral orientation represents acceptability or otherwise of a behavior from ethical perspective, while the legal orientation distinguishes behavior as either permissible in the law or not. Accordingly, four quadrants of typical behavior are identified – Accepted behaviors; Illicit behaviors; Immoral behaviors; and Condemned behaviors.
Fig. 4.1 Legal illegal Universally Accepted Behaviors: Just and Equitable. Illicit Behaviors: Grey

Ethical

Accepted behaviors are clearly identified as just and equitable by all standards, thus encouraged and supported universally. Illicit behaviors represent conduct, which may be ethical in it self but is not legalized. Such as, violating of a particular regulation in vogue, which may not be ethical in it self. For instance; to punish a convict without appropriate legal proceedings, because one does consider existing legal regime as just and fair. Similarly, otherwise ethical business transactions but executed outside the purview of the law are illicit, such as smuggling. In short, self proclaimed authority to make decisions and execute is an example of illicit behavior. Immoral behavior is opposite of the illicit behavior in nature, however, is also not acceptable. It represents behaviors that may be considered legalized but are not acceptable morally. Such as, legalization of bribery by certain countries or groups of individuals. Similarly, amendments in Usury Laws in the Europe to legalize interest transactions in the 14 th. Century is yet another example. Condemned behaviors are neither morally acceptable nor legalized. For instance, abortion in a majority of the countries; also biased discrimination in access to social, political and economic opportunities, such as, education, employment and access to loans and grants, etc. Furthermore, ethical [Just and equitable] conduct can be visualized into three generic behaviors, namely just-behaviors; compensatory-behaviors; and, deterring-behaviors. Just behaviors are such a conduct, which is just and equitable for all the stakeholders, offering winwin outcome. For example, a marriage whereby a women promises to associate herself with a man with full commitment and loyalty and the man commits his loyalty to the woman and promises to be responsible for her wellbeing and even both jointly take the responsibility for their offspring is a classical example. Likewise, a seller offers safe products at just prices and the consumer buys at just prices. Compensatory and deterring behaviors can be argued unethical when considered in isolation. But, when evaluated with reference to a particular context these behaviors prove to be ethical. Compensatory behaviors, as the title suggests, are actions and decisions that aim towards undoing or recompensing loss suffered by a person, group of persons, institution, or the society. For instance, positive discrimination in job opportunities for the minorities aims at compensating for their lack of access to such opportunities in the past. Similarly, companies paying damages to their customers for the losses they might have suffered due to non performance or unsafe performance of their products. Furthermore, punitive system of dealing with criminals such as putting a person in jail, cutting his or her hands for robbing someone, and even killing him for he or she has killed someone are a few examples. Deterring behaviors are actions that aim at

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Unethical

Immoral Behaviors: Annoying

Condemned Behaviors: Unjust and Inequitable.

Ethics in the Work Place

controlling and preventing dysfunctional or criminal practices from the society in general and amongst individuals in particular. Ironically, positive reinforcements alone are not effective in this regard. Presence of strong punitive reinforcements is also necessary to deal with such a menace rather successfully. It is these reasons that justify actions, which may appear unethical per se but when considered in the context of controlling and preventing much more threatening problems. Perhaps, death penalty if on one side provides psychological compensation to the heirs of the victim it also becomes a strong deterrence for the potential killers. At this point, it is imperative to note that the compensating and deterring behavior should neither be symbolic nor of greater magnitude than the suffering itself. Moreover, it should also conform to the legitimate boundaries. For instance, self proclaimed authority to over-ride an otherwise unethical law or to punish the criminal when the formal legal system is in place is not warranted. Instead, it is necessary to invoke the legal system for justice. From the above discussion, we may derive a few criterions for identifying ethical behavior: 1. Just [legitimate] actions and decisions that uphold the rights of the individuals, group and society at large. 2. Just [legitimate] actions and decisions that uphold the rights of select individuals or societies but do not undermine rights of other individuals or of the society. 3. Just [legitimate] actions and decisions that aim at upholding the rights of a particular set of individuals, community or the society in compensation of their earlier sufferings. 4. Just [legitimate] actions and decisions that envisage controlling and preventing bigger threats, even if these actions and decisions are relatively lesser evils.

Premise of Rights Based Ethics Now let us consolidate our discussion to this point by identifying the core principles of moral justice: Equality of rights Equitability of rewards for intentions and efforts Benevolence in mutual transactions

Conclusion
This presents a solid challenge to today’s business managers and their organizations: Developing rights-based-responsibility oriented culture. Furthermore, a paradigm shift is becoming inevitable from considering ethics as a social consideration besides profit and other commercial considerations in decision making to adhering ethics as guiding principles [environment] for profit and other commercial decisions. In the former paradigm, entrepreneurs make decisions that maximize their commercial advantages and if required rationalize ethical dimension to support their decisions. In the latter paradigm, entrepreneurs shall make commercial decisions that are just and equitable, as ethical principles would provide basis for and empower the entrepreneurs to make right decisions in the right way. _______________________________________________________________________________
1. 2. 3. Reference readings please consult Chapter III, Moral Standard, Business Ethics – a global managerial perspective, David J Fritzsche. Some parts of the text in this unit are taken from unknown websites. Marc D. Hauser, Ph.D. – Morality is natural.

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Exhibit 4.1

Normative Ethics Theory1
A normative approach to the study of ethics especially in business setting refers to the practice of prescribing certain universal norms as guiding principles to shaping the subject matter and harness the conduct of business firms within the ambiance of ethical framework. While recognizing the universality of ethical norms, it is accepted generally that the interpretations of the universal norms can be made differently in different cultures and regions. Thus it allows freedom at the individual level to interpret the universal ethos in a manner that is compatible to the local culture and practices. As evident from above, the normative theories concerning business ethics is more of a function of cultural orientation, generally accepted regional business practices and motivations, political and social system, and access to technology. The Social Contact Theory - Offers a prescriptive explanation of ethical behaviors - Recognize the flexibility of moral values among different cultures - Introduced three tier ethical norms: Hyper (Universal) Norms that are considered universal and for all times to come; Macro (community) norms; and, Micro (individuals’) interpretations of hyper or macro norms. Hyper norms are usually the basis of macro and micro norms. - Hyper norms generally comprise of global perception of rights and obligations; justice; equality; etc. These must never be violated. - Macro norms are the principles adopted by a regional community. - Micro norms deal with individuals’ operating in a community. Conflict of micro norms requires reference to Macro and/or Universal norms. - Two yardsticks are used to evaluate behaviors both at the micro and macro levels, namely; o Consequentialist Theory (Implication based) o Non consequentialist Theory (Principle based) - Implication based analysis of a business transaction in the context of its ethical quotient can be done from two perspectives, namely; Egocentric and Utilitarian. o Egocentric perspective focuses on self interest, however, without violating others interest. The manager operating from this perspective shall only be concerned for securing and optimizing the interest of his or her organization alone regardless of its implication on others. This however, does not mean that he or she may be able to exploit others rights. o Utilitarian perspective on the contrary emphases achieving greater net advantage over loss (negative). Individuals’ decisions are evaluated either on the basis of their action (behavior) or principle (generalized rule). If for example, an action of an employee (manager) is considered moral on the basis of its consequences, the decision will be taken as ethical. Similarly, if the moral principle suggests that Customer must be given full information prior to closing the deal, however, by violating the above principle a greater net advantage is gained then it will be Ethical to violate the principle in such situations only. Principle based analysis of a business transaction in the context of its ethical quotient can be done from different perspectives, namely; Rights Principles, and Justice Principles. o Rights principles grant to each individual certain rights for being humans – the human rights. These rights are associated with duties of others not to violate your rights and vice versa. As long as one is not violating others rights while pursuing his own rights, it is moral. For example, each individual is considered to have the following rights: To live, Safety, Trustfulness, Privacy, Freedom of conscience, Free speech, Private property, etc.

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Ethics in the Work Place

o Justice principles are based on universal norms of rights, fairness, and equality. The principles of justice can be divided into three distinct groups as follows: o Distributive Justice: The society has many resources, opportunities and obligations, which must be distributed among its members justly. Such as land, wealth, knowledge, jobs, education, leisure, health care, food, and other basics, respectively. Some of the ways distributive justice is considered to have been achieved are: Equal share to each person; Based on merit; Based on Efforts; Based on need; Based on social contribution. o Retributive Justice deals with punishments for violating moral or legal obligations. The emphasis is when a punishment is just and the nature of punishment. According to Aristotle, a person bears a moral responsibility of his or her behavior unless he or she is either forced to do so or is ignorant of the negative consequences. For example, farmers should not be punished for using pesticides on their harvest although it causes health hazards for the consumers eventually. Punishment should correspond to the severity of the crime. For example, if man has killed someone, the corresponding punishment is definitely that he should be killed. o Compensatory Justice is concerned with compensating the person injured by the wrongful act. Most of the people agree that the just compensation of the damage is to redress to status quo that existed prior to the act. However, problems with this approach arise when it is not possible to revert to the original position, such as in case of murder. The person cannot be brought back to life. As a principle, compensation will be to the extent it can be fairly estimated. However, for different persons the extent of fairness of the estimate may differ. Limitations of Normative Theories o A normative theory, however, fails to provide practical solutions to business managers faced with complex and abstract business behaviors (decisions and actions). In other words these theories provide easy solutions when the choice is between right and wrong. But fails to do so, when the manager is required to evaluate a behavior that can be interpreted both ways – moral or immoral – depending on the perspectives. Such as cut throat strategies where in one business entity attempts to service (or thrive) by deliberately making it impossible (or difficult) for its competitors to exist. Similarly, Govt. policies to curb imports with a view to provide protection to the local industries. This can be seen differently by the two parties. Likewise a business behavior that has simultaneously both positive and negative implications, such as Govt. policy towards cigarette industry. On one side it is positive for it is providing employment to larger number of population and a source of tax revenue for the Govt., while on the other hand it is considered a major cause of cancer and other fatal diseases amongst cigarette consumers.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Exhibit 4.2

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Ethical vs. Unethical Mindsets
Here we shall try to analyze factors that cause ethical behaviors and also the factors that hamper them. This analysis is based on the famous Moral Development model presented by Lawrence Kohlberg. We define Ethical-behavior as one that conforms to universal moral standards – pursue one’s rights without violating others’ rights. Put differently, it is about giving others their rights to get one’s own rights. The opposite of this is getting one’s own rights without concern for others’ rights. Sometimes, when persons are driven by their desires they even forego their own rights as they usually rationalize such behavior a matter of their free choice. For example, every human has a right to live but when people commit suicide they actually violate their right to live. Similarly, when we kill our time in activities that do not add value in our lives, we again violate our right. On the contrary, sometimes we consciously forego our rights for the sake of benefiting the group or some other individual, which is walking an extra mile [Eh’saan, Ye’saar]. For example, soldiers put their own lives at stake to protect the nation. While we all know that our behavior is a function of our immediate context, whether we maintain ethical orientation or not in our behaviors are largely ascertained by our perspective. A noble researcher, Lawrence Kohlberg, identified three levels of moral perspectives; namely, preconventional, conventional, and post conventional [please refer to previous unit]. Although he considered these as evolutionary stages of moral development, we would like to consider that these perspectives can exist concurrently in an individual. Thus we may get a combined influence of all the factors and sometimes one becomes more significant than the others. In the backdrop of above model, we can synthesize the factors that cause ethical (or disciplined) behaviors into four broad categories, namely; Fear – Rewards – Social Acceptance – Responsibility. a) Fear The term “Fear” refers to the perceived threat, such as loss; punishment; and, repercussions of not doing the desirable and/or doing the undesirable. In fact it offers an effective control mechanism within oneself that increases the chances of one being disciplined. It is commonly visible that we all at many instances spend in charity, do good things with the marginalized community, etc. with a hope that it will save us from losses. Not only this but in the world of work too, we see many companies spending humongous amount of resources in social responsibility. Doing so while they live by their social responsibility, they are also able to cast a friendlier relationship with the community hence reduce the chances of probable destructive reactions of the community onto them. Another manifestation of fear led ethical behavior is when people or organizations refrain from violating others’ rights or the regulations merely out of fear of punishment that might come onto them in the due course. For instance, in Saudi Arabia the administration live by the Islamic laws of punishing the offenders in public. Thus on one hand they establish justice and on the other they successfully cause deterrence amongst potential offenders. The impact of these practices, however look barbaric on the face, is equity and discipline. Organizations that enforce a just system of punishment in letter and spirit can also encourage discipline and honesty amongst employees, such as Armed Forces in Pakistan and other countries of the world.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Fear of repercussion is yet another strong driving force towards ethical conduct. Experiences provide evidence that a wrong always hits back. In Japanese culture, they have a proverb “KITA” which means if you violate someone’s rights, he or she will violate your rights later. As we all develop cognizance of repercussions, we automatically and in our own interest refrain from unethical conduct. For instance, it is obvious that speculation in the real estate has by and large caused hike in prices. Although, it seems advantageous for the speculative investors but in reality it also affects their own right of value for money when they buy properties again. In another perspective, hike in the prices of real estate inflicts inflation in general hence the speculative investor also suffers as a general consumer. This phenomena can be visualized in many other perspectives of one’s conduct be it personal, social or economical. Interestingly, ineffectiveness of the punishment; ignorance of the loss; and denial of the repercussions is but a destructive perspective that makes fear ineffective of encouraging disciplined and honest conduct. Rather it leads to indiscipline and dishonesty. For example, issuing warning letters to an employee on his or her misconduct but not making him or her pay the price for it is similar to putting the habitual criminal in jail for a term who considers it nothing but a time out. Similarly, ignorance [or as referred to as insanity in the Noble Quran] help consciously and unconsciously defy the reality. When we fail to see beyond the present or the mesmerizing effect of our desires impede our vision it is an unconscious ignorance while as we put our hard earned monies into stocks or other high risk investments knowingly by rationalizing; “No Risk No Return”, we rather consciously ignore the probable loss. Yet another example is of the political icons who feel no regrets for putting the lives of their supporters at stake for their personal advantage. We comfortably deny the repercussions through a typical blame-game. We always say this evil has happened to me or in the society at large because of others only; otherwise I did not do anything wrong. More so, pride also makes us complacent of our unethical conduct. We can define pride in simple words as our inability to accept the reality. It is referred to in the Noble Quran; “HE has put a big wall in front of them and behind them so that they see not.” Thereby we are able to continue without correction. Yet at another place this is what is referred to in the Noble Quran as, “For them Allah SWT has made their evil deeds look good to them”. Finally, sometimes it is the complacent attitude: I know it is wrong but I have no other way out. Furthermore, we try to balance our indiscipline and dishonesty in one situation by behaving highly ethical at another situation. For example, I do save money by not paying taxes in my business but I also spend much more in charity. May HE save us all. b) Rewards Valence for a particular incentive or reward has a bearing on the motivation, concluded by Vroom in the famous “Expectancy theory of motivation”. As we are able to anticipate and value the rewards the society in general and organizations in particular offer, we tend to discipline our conducts. For instance, if we feel that we will be justly compensated [promoted, given due increment, acknowledged etc.] for disciplined and honest performance or conduct then we will automatically be ethical. However, two conditions are critical here. Firstly, it is important that we must have high [valence] value for the reward and secondly getting it is assured. While rewards are instrumental in motivating disciplined and honest behaviors, perceived injustice and inequality [lack of merit] can harshly destroy the reward led discipline and honesty. For instance, when we feel that HE is not answering to our prayers [ may HE forbids us] then we move towards false deities in despondency.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

c) Social Acceptance Maslow acknowledges the need for social acceptance [self esteem] as superior to physiological and security needs. Most of the time we strive harder to build an advantageous image in the society. For instance, celebrities, politicians and intrapreneurs [entrepreneurs] seek to improve upon their social image in many ways. Portraying ethical conduct is yet one way to build an advantageous image in the society. A philanthropic trust created and managed by a corporate conglomerate or individuals is a befitting example here. Ironically, however, such an initiative may or may not reflect discipline and honesty in other dimensions of corporate and individual conducts. It is interesting to note that as societies in general and organizations in particular being to recognize individuals and employees, respectively, on the basis of their discipline and honesty it would amount to encouraging disciplined and honest conduct at large, for most of the time we strive harder to gain social acceptance through social conformance. Surely, social acceptance is a strong influence on our conduct. However, if materialism is too much emphasized or become a compulsion, as it happens in the capitalistic societies, the basis for our recognition hence success would change. Consequently, we would begin to consider ethics either as secondary, an unnecessary choice, or a hindrance or taboo towards a successful life. d) Responsibility Responsibility as manifested in values and principles refers to an acknowledgement by an individual of his or her obligation towards others. Lawrence Kohlberg describes responsibility as a mindset where our conduct is controlled by values and principles. Hence we conduct ourselves in response to our conscience without regard to the outcome – reward or punishment. At this stage the concept of important and not important is replaced by right and wrong and the process of rationalization is replaced by rationality. For instance, if we see the suffering of a person then we would rather attend to him first no matter even if we fear to lose an important opportunity for ourselves. Likewise, if we have a choice of either sitting with an important friend who has come after a long time or attend to the customer, a rationalized response would be to stay back with the friend for a while can wait. But a rational response would be attending to the customer first. Ironically, too much of our rights orientation causes subjectivity that in turn eclipses our sense of responsibility towards others. Consequently, we move into the so called competitive world where everyone has to be responsible for himself or herself, for survival of the fittest becomes the norm. Here everything that is advantageous for ourselves is pursued without concern for how it would affect others’ rights. Even at times, we rationalize sacrificing our own rights for our apparent advantage. For example, leveraging female employees to boost sales and pursuing unhealthy habits for immediate satisfaction but at the cost of one’s own life in the long run, respectively. Conclusion Fear, reward, social acceptance and responsibility are at the core of disciplined and honest conduct. As it is stated in the Noble Quran, “Those who fear standing in front of HIM on the Day of Judgment; seek no reward but from HIM alone and are patient [hopeful] unto HIM; fulfill their duties diligently to HIM and then after to their parents, the ruler and the people.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Ethics and Managerial Behavior
Paradigms: To analyze the state of ethics in a work place, it is imperative to examine the various forces operating on business managers’ (individuals’) decision making process and actions in a given work environment. The forces are identified as the given concept of ethics (principles); motivational orientation; organization’s demands and expectations; and, the emergent relationship preferences. Two paradigms can be identified to examine how these forces operate on an individual. The first paradigm can be seen as one, which considers all the forces converging on personal motivation at the centre. Even more importantly it considers ethics as one of the forces (dimensions) mentioned above. Manager’s preferred response (priority) for each dimension changes according to the situation would depend on how the manager can optimize his or her personal gain. Sometimes the manager feels more inclined to follow what the organization demands while at another point in time he or she may consider conforming to the emergent relationships or even ethics, if thinks that doing so will avail him or her higher personal gain. It is interesting to note that this paradigm does not present any significance for discipline, for every sort of behavior is right if it is adding value to personal gains. In this scenario one can observe that ethics are considered more of rituals, for this is an easier way to maintain congruence of ethical principles with motivation, emergent relationships, and organizational demands. The second paradigm is rather realistic but uncommon. It fully acknowledges motivation, emergent relationships and organizational demands as legitimate as long as these are within the ethical ambiance. Thus ethics is considered not as a dimension but as a basis of instilling discipline and harmony between different dimensions. Transition from first to the second paradigm entails internalization of ethical principles as behavior norms, for only then these can become meaningful and applicable in our work environment in a true sense. A suggested internalization is given below: Universal Ethics Justice Integrity Transparency Responsibility Loyalty Respect Legitimacy Benevolence Discipline Behavior Norms          Value for money Standard (unified) behavior Documentation and traceability Acceptance and Accountability Sincerity of efforts Describe do not judge Adhere to the laws and regulations Walk an extra mile Rationality

        

Ethical Behavior Model This model presents a typical set of influences that induces specific response to ethical dilemma facing mangers in a work setting. Working in reverse, we believe that the “perceived ethical dilemma” [PED] is the intervening variable that ultimately shapes managers’ specific response in a typical work setting. The perceived ethical dilemma in turn is affected by the nature of transaction itself, manager’s personality makeup, internal environment and the external environment. See figure 6.1

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Fig. 6.1 Conscience

Personality Make-up

Motivation Cognitions and Emotions

Transaction

Culture

Internal Environment

Management and Coworkers Reinforcements

Perceived Ethical Dilemma

Behavioral Response

Regulations

External Environment

Practices and norms Emergent Group

Perceived Ethical Dilemma: How clearly does a manager perceive the ethical dilemma would determine his or her response – higher the clarity higher will be the dilemma, hence the need to resolve. The perception is largely affected by subject matter of the transaction itself; manager’s unique personality make-up; and, internal and external business environments. Personal Maturity: Personal make-up represents the manager’s conscience level i.e. stage of moral development; personal motivation; and, cognitions and emotions. Conscience as described by Lawrence Kohlberg* has six distinctive manifestations, namely; concern for physical consequences to self, especially to avoid punitive possibilities, concern for satisfaction of personal needs, concern for others approval of one’s behavior, concern for conforming to legal boundaries / standards, concern for preventing (not violating) others rights and social contract (obligation), for conducting oneself in a morally correct manner, concern for confirming to universal moral principles such as justice; fairness; and equal human rights etc. Motivation represents manager’s personal preferences, expectations, and concerns that he or she may like to actively purse. On one extreme it could be highly needs-centric or on the other extreme needs could be well integrated with other components like fear, responsibility, and fun. Cognition is the information processing [thinking] capability of human brain. On one extreme it could be highly rational, on the other it could be dominantly impulsive [instinct-centric]. Emotions are the affective part, which enable or disable people to act in response to their cognitive thinking; this was concluded by Marc D. Hauser in his research titled, Morality is natural. External Environment: The external environment has its own role to play on organizational behavior at individual as well as group level. is an effective indirect influence on individuals’

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

behaviors. It consists of regulations in force, industry practices and norms, and the emergent relationship outside the work place. Decision Making No contemporary discussion of decision making would be complete without inclusion of ethics. It is because, only ethics provide integration between various rather competing considerations in a typical decision making scenario and help make just and equitable decisions. Remember, in Japanese culture it is rightly believed that you may prevail over others unjustly by virtue of your monopolistic situation but others would surely overturn your win into lose at a later date. Hence, decisions that are not just and equitable cannot be not ensure sustainable advantage. The Ethical Criteria: An individual can use three different criteria in making ethical choices. The first is the Utilitarian-criterion, in which decisions are made solely on the basis of their outcomes or consequences. The goal of utilitarianism is to provide the greatest good for the greatest number. This view tends to dominate business decision-making. It is consistent with goals like efficiency, productivity, and high profits. By maximizing profits, for instance, a business executive can argue he is securing the greatest good for the greatest number as he hands out dismissal notices to 15 percent of his employees. Another ethical criterion is to focus on the Rights. This calls on individuals to make decisions consistent with fundamental liberties and privileges as set forth by the religion; social contract or documents like the bill-of-rights. Emphasis on the rights in the decision-making entails respecting and protecting the basic rights of all individuals; such as the right to privacy, to free speech. A third criterion is to focus on Justice. This requires individuals to impose and enforce rules fairly and impartially so there is an equitable distribution of benefits and costs. It justifies paying people the same wage for a given job, regardless of their gender, background, age or even performance differences, and using standard variables across the board such as seniority or length of service in determining layoff decisions. Each of these three criterions has advantages and limitations:  Focus on utilitarianism promotes efficiency and productivity, but it can result in ignoring the rights of some individuals, particularly those with minority representation in the organization.  Use of rights as a criterion protects individuals from injury and is consistent with freedom and privacy, but it can create an overly legalistic work environment that hinders productivity and efficiency.  Emphasis on justice protects the interests of the under-represented and less powerful, but it can encourage a sense of entitlement that reduces risk taking, innovation, and productivity. _______________________________________________________________________________
1. Lawrence Kohlberg, Business Ethics – new challenges for business schools and corporate leaders, Peterson & Ferrell, Chapter 1, Framework for understanding organizational ethics.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Exhibit 6.1

Ethics in Typical Work Place
In an organizational world characterized by cutbacks, expectations of increasing worker productivity, and tough competition in the marketplace, it’s not altogether surprising that many employees feel pressured to cut corners, break rules, and engage in other forms of questionable practices. Members of organizations are increasingly finding themselves facing ethical chaos, situations where they are required to define right and wrong conduct. For example, should they blow the whistle if they uncover illegal activities taking place in their company? Should they follow orders they don’t personally agree with? Do they give an inflated performance evaluation to an employee they like, knowing that such an evaluation could save that employee’s job? Do they allow themselves to play politics in the organization if it will help their career advancement? What constitutes good ethical behavior has to be clearly understood. In recent times the line differentiating right from wrong has become blurred. Employees see people all around them engaging in unethical practices. When caught, they hear these people giving excuses like “Everyone does it,” or “You have to seize every advantage nowadays,” or “I never thought I’d get caught.” The root cause lies in the ignorance or denial of human rights. Managers and their organizations are responding to this problem from a number of directions. They’re writing and distributing codes of ethics to guide employees through ethical chaos. They’re offering seminars, workshops, and similar training programs to try to improve ethical behaviors. They’re providing in-house advisers who can be contacted, in many cases anonymously, for assistance in dealing with ethical issues. And they’re creating protection mechanisms for employees who reveal internal unethical practices. But what they are not doing most of the time is to make the employees responsible of their rights and of others’ too. In short, today’s managers need to create an ethically healthy climate for the employees, where they can conduct responsibly and confront a minimal degree of ambiguity regarding what constitutes right and wrong behaviors.
Source: Unknown website.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Exhibit 6.2

The Ethics and Organizational Politics
While there are no clear-cut ways to differentiate ethical from unethical politicking, there are some questions one should consider: Do self-serving interests to the exclusion of the organization’s goals motivate the political action? Does the political action respect the rights of the individuals affected? Is the political activity fair and equitable? The first question one needs to answer addresses self-interest versus organizational goals. Ethical actions are consistent with the organization’s goals. Spreading untrue rumors about the safety of a new product introduced by your company, in order to make that product’s design team look bad is unethical. However, there may be nothing unethical if a department head exchanges favors with her division’s purchasing manager in order to get a critical contract processed quickly. The second question concerns the rights of other parties. If the department head went down to the mailroom during her lunch hour and read through the mail directed to the purchasing manager, she would be acting unethically. She would have violated the purchasing manager’s right to privacy. The final question that needs to be addressed relates to whether the political activity conforms to standards of equity and justice. The department head that inflates the performance evaluation of a favored employee and deflates the evaluation of a disfavored employee has treated the disfavored employee unfairly. Unfortunately, the answers to these questions are often argued in ways to make unethical practices seem ethical. Powerful people, for example, can become very good at explaining selfserving behaviors in terms of the organization’s best interests. Similarly, they can persuasively argue that unfair actions are really fair and just. Immoral people can justify almost any behavior. Those who are powerful, articulate, and persuasive are most vulnerable because they are likely to be able to get away with unethical practices successfully. It’s a lot easier for the powerless to act ethically, for no other reason than they typically have very little political discretion to exploit.
Source: Unknown website.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Ethics in Business Setting
Introduction A typical business firm operates for profit maximization. Perhaps profit maximization as a goal does not directly conflict with the ethical principles. However, how it pursues its profit maximization i.e. what is sells and how it sells it can be consistent with or in conflict of the ethical principles. Thus we may say that it is possible for businesses to be profitable while practicing ethical principles in verbatim. However as a general view, this argument does not hold much ground and the general argument is that businesses cannot remain profitable while adhering to ethical principles in letter and spirit. Business Paradigms In an effort to integrate ethics in business conduct, two separate paradigms can be identified, namely; - Ethics considered as yet another dimension of conducting and evaluating business transactions, along with financial, economic, technological and social dimensions. - Ethics considered as a basis for governing the overall conduct of a business entity be it economic, financial, technological or social dimension. The first paradigm essentially attempts to introduce ethics in business transactions through a process of bargaining and compromise between several other dimensions as noted above, while the second paradigm look at business transactions either as ethical or unethical in totality both from the point of view of business subject matter and conduct, respectively. Moreover, in the first paradigm ethical principles tend to be independent set of norms having no direct influence and/or linkage with other dimensions of a business transaction. In the second paradigm, however, ethical principles provides basis for moral evaluation of business subject matter and conduct. In fact the two paradigms represent two different perspectives. Hence it will be wrong to out rightly classify all for-profit organizations either ethical or unethical. Instead it would be more appropriate to assess their business products [services] and business conduct on the generalized ethics criteria [please refer to previous chapter]. Business Products [Services] We see all sorts of business firms operating in the market, selling products and providing services of many types. The ethical focus here should be the subject matter of the product or service. Whether the product or service is legitimate or not; whether the product or service offers value to the consumers or not; whether the product or service is safe or not; whether the product or service is damaging for the environment and society in general or not; whether the product or service conforms to the social values and norms or not? These are a few pertinent questions before one can decide if it is within the ethical boundaries or not. Business Conduct Typical business conduct is reflected in the firms’ strategies. Generally firms follow either of the following two strategies to maximize their profits. Let us evaluate each strategy on the generalized ethics criteria. Cost Leadership: Business firms following this strategy aim to maximize their profits through increased efficiencies, lowered prices and volume. In doing so business firms usually commit to continuous improvements, enhance their capacity utilization, conserve resources, etc. However, some other business firms resort to lowering of product quality; paying less to the employees; using cheap but inappropriate raw materials and technology; etc.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

It is visible from the above that the business firms following the first set of practices pursue their profit maximization motive rather ethically. However, the business firms following the second set of practices make serious ethical violations. To name a few, these include the followings: - Reduced or less value for customer’s money - Uncertain or unsafe product performance - Employees’ not paid just and fair compensations - Work environment is hazardous both for the persons working inside the business firm and for the society in general [environment] Market Differentiation: This strategy is to be able to command premium prices based on superior product quality. On one side, business firms may invest in research and development, technology and systems to design and produce high quality products. Alternatively, business firms may only resort to improving perceived product quality rather than real product quality. This can be done through boasting commitments, negative propaganda of competitors’ products, exploiting customers’ instincts, attractive packaging, and even some times bribing the influencers and decision makers for instance by offering higher commission margins or promising direct rewards in cash or things, etc. Sometimes, business firms even leverage female effect to create impact in the market. There seems complete ethical consistency in practices referred to in the first part. However, practices referred to in the second part seem to have serious ethical issues. To name a few, these include the followings: - Customers pay more money than the value - Unrealistic commitments made to attract customers, which never come to life - Customers’ buying decisions [choices] are controlled [dictated] by the sellers - Rights of the competitors are violated - Exploitation of females when leveraged to sell products Besides the business strategies other dimensions of business conduct such as compliance to rules and regulations, HR practices, corporate citizenship, etc. have significant bearing on the ethical conduct of a business firm. To name a few common violations, these include: - Disrespecting the laws, culture and social values. - Evasion or undue circumvention of rules and regulations. Such as under / over invoicing of transactions, paying of lesser taxes and or wages etc. - Bribing to gain illegal advantage or even to speed up securing legal rights. - Unwarranted discrimination amongst different classes of employees in terms of offering job opportunities; compensation for similar work; career growth; etc. - Harassing customers, employees, suppliers, competitors and public to deprive them from their legitimate rights or to gain business advantages - Exploiting customers’, employees’, suppliers’, competitors’ and others’ needs, circumstances and positions, respectively, for own advantage - Damaging the environment, such as pollution and undue exploitation of natural resources for personal gains. - Practicing business values and norms against the cultural and social norms. Conclusion Business firms have the right to pursue profit maximization within the ethical framework. However, they need to take cognizance of the obstacles within and make affirmative interventions to overcome these obstacles. Such as, they must demonstrate in practice respect to the laws, cultural values and social norms; always produce and sell products and services that are legitimate, safe for consumption [usage] and environment friendly; and, maintain its business conduct disciplined [just and fair].

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Ethics in the Work Place

Exhibit 7.1 Significance of Ethics in the Contemporary Business Setting “Trees without roots cannot give fruits; and, People and organizations without discipline cannot give results” Now we know that ethics play an important role in providing an effective basis for instilling discipline in business pursuits as well as in social and personal conduct of an individual and society. Thus in broad terms we can say that significance of ethics lies in the significance of discipline, need for which requires no substantiation. Under the following two headings a few critical aspects of unethical scenario are traced with a view to exemplify further the need for ethics in business environment: 1. It is evidenced that an unethical action is always disadvantageous in the holistic perspective though usually cannot be seen so vividly otherwise… Present practice of pulling employees from the competitors to acquire their patent information; get hold of their customers; and least but not the last, to avail of the employee skills developed by the competitor thus do not spend on human development. The holistic effect of this practice can been seen as totally damaging for the businesses in general. For instance, with this practice being taken for granted now the competitor will reciprocate the same with you resulting in wage war, dysfunctional employee turnover, and monopolization by the employees. This also affects the commitment level of the employees to the employers, for they know that they will not be working with any of them for a very long time hence they do not feel responsible for the long term repercussions of their performance on the business but would only perform with a short term orientation. A current example is of the commercial banks. Credit officers seem more interested in booking more and more loans than the effect of the prospective loan on long term ROE and Risk profile. So is true for the business development officers mobilizing the deposits or other businesses. It is generally due to short term relationship with an organization. Unjust lay-offs by the employers distort the organization image and damages employees’ loyalty and conscience, for they feel just to cheat the employer in compensation of the employer’s unjust behavior with them or their colleagues. When firms sell their products by downsizing competitors’ products, the competitors would obviously reciprocate and at the end of the day both will lose their product competitiveness. When claimed quality standards are not met by the service provider or product supplier, then eventually customers lose confidence on the company and the service or product thus get ready to switch to the competitor. Bribery once becomes a culture leads to price war between competing firms, for each one would offer higher bribe than the other to get the business.

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Ethics in the Work Place

2. When behaviors in business are detached from principles, ethics become ritualistic and a culture of indiscipline and uncertainty emerges… A pat on employee’s shoulder or a loud appreciation of his or her efforts as noble (or even charitable) actions would be enough for the job well done, no need to compensate him or her in the just manner – a typical example of benevolent-autocratic behavior. A good attractive wrapper and/or effective promotion campaign, while the product being far from good (safe for use) is adequate to sell it successfully and sometimes even at a premium price. Similarly, selling a regular product by provoking social and/or ethical values of the customers. For instance, a detergent brand promoted its product by encouraging the buyers to buy their product and in return they committed to give certain amount in charity, while sugar coated it under the social marketing campaign. Likewise, some firms resort to providing exaggerated information thus raising the demand for their products. For instance, a vaccine manufacturing or selling firm promotes its product by creating exaggerated and sometimes wrong perceptions (especially negative) of the risks amongst its customers under the cover of social awareness program, etc. A negligible hazards-warning on the product is considered enough to continue producing and selling the harmful products such as Cigarettes, Chewing Tobaccos ( Pan Masala) and of course alcoholic and modern energy drinks. Employee downsizing (also referred to as right sizing) through golden handshake is designed to look much benevolent and beneficial for the employees. But indirectly they are given messages to avail this or they will still be out of the company without this later. A seller takes advantage of dire social or market conditions to charge unwarranted prices of his or her services or products, but rationalizes it as the effect of free market forces. However, in true sense it is rather an exploitative strategy. For instance, bird-flu has become a rain-cheque for the beef and mutton butchers. Earth quake too became a source of enhanced opportunities for the suppliers of relief items to charge monopolistic prices as well as for the shadow relief fund collector who made personal fortunes under the umbrella of social work. Somewhat similar behavior can be observed in poverty alleviation and other social works under which few firms and individuals optimize their business and personal advantages. A firm otherwise indulged in community exploitation such as polluting the environment; charging unwarranted (high) prices; monopolizing the opportunities; and least but not the last denying the just job compensation and work conditions, makes visible investments in building social facilities such as parks, hospitals, and schools in order to improve their public image.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Managing Ethical Dilemmas in Workplace
Amalgamated ethical compliance of managers in particular and other employees in general amounts to the overall organization’s ethical performance. In pursuit of ethical compliance organizations as a whole and individual managers and employees face ethical dilemmas, which if not dissolved and/or resolved appropriately will drag the ethical performance backwards putting the organization and individuals in awkward position both internally and externally, examples abound. See figure 8.1
Fig. 8.1

No Compliance

Dilemmas

Optimized Compliance The term “Ethical dilemma” refers to modern day business situations where the managers find themselves stuck between two rather unethical choices. It is interesting to observe that these situations can pose real dilemma or a disguised dilemma: For instance, reducing head counts or decreasing everyone’s pay package are two commonly considered alternates to make operations efficient is of course a real dilemma. But, in an attempt to increase profits managers usually consider two alternates; either to raise price [unjustly] or to reduce quantity or quality for the same price, which is perhaps a disguised dilemma for ethical alternates also exist to increase profits only if managers want to look for such ones. In context of above examples, we can generalize that the real dilemmas are the consequence of some uncontrollable events hence warrant resolution through a compromise – choosing a course that is relatively less unethical. However, the disguised dilemma situation as presented in the latter example has risen merely by the limited perspective hence can be dissolved by appropriately correcting the underlying factors. What causes dilemmas is an important inquiry one has to make to dissolve and/or resolve the dilemmas in a work setting. A holistic understanding of the relationship between the individual, his or her environment and its effect on individual mindset as well as on the occurrence of dilemma can be visualized from the following framework. Here I have attempted to unearth various bases of Ethical dilemma in the contemporary business environment. See figure 8.2
Fig. 8.2

Personality Profile Beliefs and values, Motivation, Moral development, Situation

Ethical Perspective - Living in the present only… - Motivation overpowers conscience… - Life is free: everyone is independent individual… - Scarce (negative) thinking - Follow the majority

Ethical Dilemma Essentially a choice between two rather undesirable alternates.

Environment Policies Systems Processes Emergent relationships

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

1. There are usually more than one probable out comes of a decision and one is usually not sure if the outcome of a decision would lead to our desired benefit or not. In such situations, motivation (need) to influence the decision to increase the chances of desired outcome over powers the other things. 2. Many a times we focus on immediate outcomes (achieving goals or avoiding costs): In such situations, the possibility of ignoring long term perspective (gains or losses) over immediate outcome increases. 3. Every one tends to work harder to achieve personal targets and it usually becomes rather difficult to secure personal targets without violating others’ interests: In such situations, one tends to rationalize personal advantages over others’ interest. 4. Scarcity of resources: One may perceive that if I share the resources with others, not enough would be left for me. 5. Everyone is pursuing his or her respective targets independently (violating ethical responsibilities): In such situations, an individual fails to uphold ethical principles. Interestingly disguised dilemmas arise as a consequence of inappropriate assumptions; incorrect directions; conflicting policies; and, displaced goals. Mostly the distortions are found at the organization’s level and occasionally at the individual manager’s/employee level. It is because the immediate work environment has more significant influence on the individuals than the individuals on their immediate work environment. However, rarely individuals by virtue of their coercive power are able to exert significant influence on their immediate work environment including their coworkers, especially the subordinates. In short, disguised dilemmas are practically avoidable. Real dilemmas, as the title suggests, are unavoidable for many reasons. The underlying causes could be continuing effect of wrong policies and practices in the past, coercive external environment – physical or psychological threat to the manager or organization, undue pressure on the manager either internally from the management or from outside – labor unions, suppliers, regulators, public, etc., regressing economic and market conditions – recession, adverse social and demographic changes in the immediate business environment, political instability, reduced demand from the customers, etc. and general increase in corruption affectively restricting all ethical options. In short, such dilemmas usually arise as result of actions and situations outside the permeable span of the manager (individual) and sometimes even outside the permeable control of the organization itself. Dealing with the Dilemma Classical theories like Consequentiality vs. Content theories and the famous Utilitarian theory provide practical advantage in making choice between the two evils, but fail to describe the factors that cause the dilemma. While these theories have advantage in handling real dilemmas, fail to provide basis for dissolving the disguised dilemma situations. Ironically dilemmas can hardly be eliminated in totality, which means organizations should aim at optimized ethical compliance instead of total ethical compliance. Thus managing it realistically would involve maximum dissolution of the disguised dilemmas and just resolution of the real dilemmas. Doing so, ethical compliance will be optimized in a given scenario.
Fig. 8.3
High

Ethical Dilemmas

Dissolution Effect

Resolution Effect

Low

Optimized Max. Ethical Ethical Compliance Compliance Low

Degree of Ethical Compliance

High

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Figure 8.3 explains the effect of dissolution and resolution of dilemmas on ethical compliance, diagrammatically. [X] Axis represents the degree of ethical compliance. [Y] Axis represents ethical dilemmas. It is evident that dissolution of disguised dilemmas is pushing the ethical compliance towards higher degree, while resolution of real dilemmas is deterring the ethical compliance to some extent as it usually involves compromise by choosing less unjust over more unjust options. Failure on part of the management [manager] to isolate the disguised dilemmas from the real ones would let them deal with every dilemma by a compromise, undermining their ability to optimize the ethical compliance. It will be so because disguised dilemmas would be tackled just like real dilemmas. Hence, it is concluded that ability to distinguish between real and disguised dilemmas is essential for handling the dilemmas efficiently and effectively. Real dilemmas are resolved sometimes through rationalized analysis of the contents and outcomes of a particular action. However, most the times political logic prevails in deciding a particular course of action. Classical theories broadly provide three pronged criteria for resolving the real dilemmas. Namely: Is the content [subject matter] of an action morally acceptable at large? Does the outcome of an action considered morally correct? Can the action be justified in terms of advantage to all or at least does not pose disadvantage to others. In short, an action is considered to be just if it is advantageous to all or at least does not prove to be disadvantageous for others; its subject matter is morally acceptable if not than at least its anticipated benefit[s] far exceed the unacceptable dimension of the subject matter. For example, killing a person remains unjust but if by killing a person lives of many more can be protected then no doubt it is just and fair, for if a murderer was not killed then s/he is likely to kill so many more in the future. Analogies to this abound in the business world. Disguised dilemmas on the contrary need to be dissolved through correcting the underlying perspective. In short, organizational directions and goals need to be harmonized with socio-moral values; paradigms should be revisited; etc. Similarly, employees’ [managers’] moral personality needs to be developed, motivations should be harnessed, and goals [targets] should be made realistic. All this can be effectively done through direct, indirect and semi-direct organizational interventions.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Exemplified Ethical Dilemmas

Exhibit 8.1

1. In the process of negotiating a multimillion-rupee contract with a foreign counterpart, a key government agent charges personal consulting fee. In return he promises to give special assistance to him in successfully biding the contract. It is clear that not only is such “fee” common practice, but that if bids were not routed through such consultants then the contract would certainly be awarded to one of the major competitors. 2. During a luncheon meeting, a representative of a major competitor for one of the key product lines suggested to her counterpart that the two companies should get on “an informal agreement” to set the jointly. The manager knows that the recent price competition has all but eliminated the premium profits for both of the companies. The new suggested price agreement would possibly help raise the profits to new heights by both of them. 3. A business firm sees an opportunity to hire a well known research scientist from a major competitor. The scientist had been involved in the development of a new product. When it will be introduced to the market later this year it will adversely affect the market share and profits. By hiring this scientist the firm can reduce its reaction time to the competitor’s product by almost 2 years. 4. In preparing a biannual report on the environment impact, the company analyst came across data, which show that the agricultural products manufacturing plant had been discharging high quantities of a toxic pesticide into the local river. The analyst investigated and found out that the discharge was due to a piece of malfunctioning equipment. The plan manager agreed to repair the equipment at a later date because it will cause a six to eight day shutdown of the plan, as currently it is operating at maximum capacity and cannot afford to bear any production loss due to high season. The analyst is aware that reporting this data will lead to stiff fine by the environment agency and increased opposition from the community upon the company. 5. Board of director of a large public sector organization is considering strategies to control rising costs. Currently the organization employs about 25000 employees in various cadres – Managerial 20%; Officers 30%; Workers 50%. The payments by cadre are Managerial 50%; Officer 20%; and Workers 30%. The organization plans to reduce its head count by 20% to 25%.. The proposed criterion for reducing the head count is proportionate to the cadre wise percentage.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Exhibit 8.2

Exemplary Corporate Moral Responsibilities
1. Shareholders / Investors  To do business in a manner that increases shareholders wealth  To conserve business resources  To remain profitable  Etc. 2. Customers / Suppliers  Value for money  Provide access to full information so to make informed buying decisions  Live the commitment  Make safe and healthy products  Respect values  Etc. 3. Employees  To pay just compensation  To provide safe and healthy working conditions  To provide for career development and growth opportunities to all without bias  To uphold self esteem and acknowledge efforts  To ensure security  Etc. 4. Community [society]  Equal employment opportunity  Respect, protect and promote the culture  Participate in socioeconomic mobilization and empowerment  Protect and promote healthier environment  Etc. 5. Government [Regulators]  Adhere and comply to government policies and regulations  Demonstrate integrity towards government levies  Work with the government towards addressing socio-moral issues in the society  Etc. 6. Future Generations  Make this world a better place for the next generations  Conserve and protect natural resources  Etc.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Equal Employment Opportunity and Gender Mainstreaming
Introduction The term “Equal Employment Opportunity” (EEO) is much vague and has been subject to varied interpretations, primarily as a result of different interpretations by the Courts of Law at different occasions. This has affected this term to be evolutionary rather than absolute. Moreover, the implementation (or interpretation) of EEO varies from country to country depending on the state of human rights in the respective countries. As a result many misnomers (misconceptions) abound the organizations. Misnomers (Misconceptions) of Equal Employment Opportunity

   

EEO is about compensating the hitherto deprived persons or classes of persons by affording them preferential status (opportunities) in the work organizations. EEO aims at achieving proportionate representation of persons and/or classes of persons representing different genders and ethnic background in a work organization, as of the society or community. EEO is about equating the women and men (boys and girls) in a work setting by disregarding their gender differences. EEO envisages equal (not equitable) treatment of persons or classes of persons.

Equal Employment Opportunity in Reality
The term “Equal Employment Opportunity” (EEO) refers to the organization’s commitment (sometimes legal obligation) to provide equal opportunity to all persons or classes of persons without fail and bias. This entails providing equal opportunity vis-à-vis entering into an employment; and, advancing in the career solely on the basis of occupational merit – potentials, competence, and performance. Potentials refer to a person’s readiness to develop competence (profess) and/or perform at a desired standard, in a particular (unique) profession. Scholastic accomplishments, general aptitude and attitude are reasonable indicators of a person’s potentials. Competence refers to a person’s knowledge, skills, experience and exposure that provide reasonable basis for his or her successful performance in a particular occupation. Performance refers to the quantitative and qualitative worth of output that a person is either capable of or actually accomplishes on the job.

Dimensions of EEO as per above

   

Equal opportunity to choose, enter and advance in a profession solely on the basis of occupational merit. Equal pay for similar work that entails equal competence, responsibility, risk, and performance. This excludes similar titles, hierarchical positions, etc. Unless otherwise compensation is based on length of service, seniority, designation, etc. Due consideration of situations/hardships arising out of a person’s or classes of persons’ natural or disadvantaged characteristics, in a manner that does not affect negatively on the interests and positions (rights) of other person or classes of persons. Prohibition of direct or indirect discrimination among persons and/or classes of persons on the basis of gender; ethnic background; age; in affording a job and/or advancement on the job on grounds other than merit. Unless otherwise it is an occupational necessity in certain

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

professions. Such lower age limit for retirement of pilots and also stock dealers. Similarly, special linguistic requirement to operate in a specific region. So is the religious back ground in certain professions, where contradictions may affect the performance of the person and/or organizational productivity, such as employing non-believers of ISLAM as butchers in Muslim Slaughter Houses. Discrimination The term discrimination refers to violation of interests and positions (rights) of a person or classes of persons, as proclaimed in the charter of Equal Employment Opportunity. The discrimination can manifest in two ways, namely; Direct Discrimination (Disparate Treatment), or Indirect Discrimination (Disparate Impact). Direct discrimination is considered to be intentional and explicit in organizations’ policies and systems. Such as, organization’s explicit commitment to a person or classes of persons on the basis of specific gender, age or ethnic background, while disregarding others. For example, in some organizations employment, especially at the senior level either by appointment or promotion, is available to a specific person or classes of persons, without merit and disregarding the others. Moreover, certain positions are ear marked for women or men; for young or older employees; etc. without regard to occupational correlation. Indirect discrimination is one that affects a person or classes of persons unintentionally and in an implicit manner as result of impact of certain business policies and practices. For instance, a late sitting culture may disable a person or classes of persons (most probably girls and women) to pursue and/or advance their careers in that particular organization or department. It is ironical to note that inequality in the work place is a long standing problem. We have basis to say that it has now taken the shape of complex syndrome, for it has multiple manifestations, multiple causes and multi-dimensional impact. Inequality exists between an employee or a class of employees vs. other employees (or stakeholders) and vice versa. Gender based inequality is but one prominent dimension, which is significantly impeding the organizational as well as individuals’ potentials from being unleashed to the optimum. Business Model for Equal Employment Opportunity This framework presents business model for equal employment opportunity. It implications are visualized at three levels vis-à-vis Business Characteristics, Business Environment, and Business Performance [Productivity].
Fig. 9.1

Gender Mainstreaming and Equal Employment Opportunity

Business Characteristics
Equal opportunity employer

Business Environment
Diverse competence base Improved work interactions Enriching work relationships Discipline at work

Business Synergy
Profitability Productivity Performance Competitive Image

Employee Diversity

High caliber human resources

Sustainable competitive advantage

Better working conditions

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Level 1 Business Characteristics: We have basis to argue that a true state of equal employment opportunity (EEO) is likely to lead to employee diversity particularly in terms of competencies, strengths and limitations, which would in turn help organizations foster higher caliber and sustainable human resource competence inventory. Ultimately, it proves out as most valued competitive advantage for an organization, particularly in today’s highly competitive markets. Level 2 Business Environment: As a consequence of positive effect of EEO the work environment is likely to become more harmonized and synergetic. Following this, the work environment would cultivate diverse competence base, improved work interactions, enriching work relationships, discipline, and last but not the least, even better (congenial) working conditions for all. Level 3 Business (synergy) Performance: As a logical correlation to the above, we have basis to say that positive business characteristics and environment, as envisaged above, are much likely to affect the business performance in a positive way and of course vice versa. The most likely advantages would be in the directions of people performance, organizational productivity and profits, and finally the competitive image. Evolution of Gender Mainstreaming as a Concept Initial recognition for the need to bring women (girls) in the mainstream of national economic activities led to popularization of the initiative titled as “Women in Development – WID”. This initiative was couched on the premise of correcting the then prevailing gender-inequality culture that had actually turned into a dysfunctional socioeconomic syndrome. As evident from its wordings, the roots of gender inequality were embedded in the wide spread assumption that men (boys) are superior to women (girls) in all respects. Hence men (boys) have right to dominate women (girls) virtually in all walks of life. However, ironically, the then emerging campaign of gender-equality i.e. WID was once again based on misnomer that men (boys) and women (girls) are absolutely equal. Because of this incorrect assumption, women’s capabilities were considered equal to men, while their gender-specific limitations were totally ignored. Hence this assumption also could not redress the gender-inequality in the socioeconomic context in letter and spirit. For instance, women (girls) were forced to do jobs, which were either over demanding for them being women (girls) or their gender-specific limitations were denied as in case of allowing maternity leave with benefits, etc. In nut shell jobs and/or work environment were not designed to make them compatible with women’s (girls’) capabilities and limitations but they were forced to either work under the similar conditions or quit. A third dimension i.e. gender-mainstreaming [synchronization], which offers more realistic and sustainable solution to gender-inequality is now practically replacing the old concept of genderequality as manifested in WID. This thinking has its foundations on the concept that men (boys) and women (girls) are neither unequal nor equal but both are unique i.e. “Equal in Status and Different in Competencies”. Meaning that both genders have equal socioeconomic status and command equal respect in the society and world of work but their competencies are somewhat unique to their respective gender and so are their respective limitations. This concept has led to the emergence of the “Gender Mainstreaming – GM” initiative, which has rather replaced the WID. Contrary to the earlier concepts, this seems to be based on pragmatic wisdom. Interestingly, this concept also correlates with the Muslim concept of men and women as in Koran-e-Hakeem it is clearly mentioned that, “Allah (SWT) shall reward people on their deeds, be it a woman or a man” and that “HE does not put burdens (testify) upon HIS slaves but to the extent each is capable of bearing”. Appended figure synthesizes the above thesis:

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Fig. 9.2
Gender Mainstreaming [Synchronization]
Positive [Moderate]

Gender Inequality

Perspective

Normative [Extreme] Perspectives

Gender Equality

The figure 9.2 synthesizes conceptual evaluation in two mindsets. One is the conventional mindset, which attempts to address the issues from a normative [extremist] perspective, suggesting deliberate movement from absolute inequality to absolute equality scenario. On the contrary emerging mindset subscribes to a positive [moderate] perspective, suggesting synchronization among men and women by recognizing the diversity in a rather positive manner. Hence one has basis to say that the latter stance is based on ground realities, while the former is based on sheer assumptions. It is evident that recognition of gender diversity [uniqueness] is not only more realistic but also promotes affirmative perceptions towards it, thus increases the chances of fostering higher gender-mainstreaming; making jobs more compatible; and, altering the permeable work environment for higher synergy (productivity). Besides, it is also likely to promote harmony between men (boys) and women (girls) in the social settings. In nutshell, it is loud and clear that gender mainstreaming [synchronization] is not only a social agenda and hence a corporate social responsibility but is a hard core business rationale, which is advantageous towards developing profitable and sustainable enterprises. Thus it is imperative that organizations should proactively make affirmative initiatives much beyond the mundane first aid approach such as providing pick and drop facility and women’s common room, etc for the woman (girl) employees but not doing much about their career prospects, job design, fair compensation, working conditions, special leave of absence, etc. Emergent Perspectives in Gender Mainstreaming Although the perceptual as well as real gap between women (girls) and men (boys) has been considerable reduced in the world of work both at the rank and file and managerial positions, however, such achievements are made by the individuals. Organizations are still lacking to sustain these arrangements on their own. Some core issues in this regard were identified during the ILO/EFP* study project that are reported below. Interestingly divergent perspectives operate in the world of work. It will be necessary to subscribe to the appropriate perspective in context of altering internal work environment of a work organization, prior to making any policy intervention [recommendation] In the author’s view the emerging perspectives include: The Political Perspective  Women do not have representation in business in accordance with their respective ratio in the overall population.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

The Social Perspective  Women face inequality, discrimination and bias in general due to lower social status and cultural taboos. The Organizational Perspective  Women are constrained to unleash their potentials to the optimum in their career, due to lack of favorable working conditions in business. According to a sizable number of respondents from the private sector organizations in Pakistan the term “Gender (Equality) Mainstreaming means ensuring equal opportunities to men (boys) and women (girls) for employment, growth, equity and sensitivity”. It was further noted by the respondents that, “Imperfect conditions prevail for all in general and for women (girls) in particular to choose, enter, sustain and progress in careers of their preference and potential in Pakistani work organization". Gender-inequality can be described by its various manifestations, such as follows: Lack of empowerment solely on the basis of gender  Lack of empowerment refers to the relative inability to make informed career decisions and take timely advantage of career opportunities and/or inaccessibility to economic resources necessary to sustain in career, such as higher education loans/grants/scholarships, and business financing in case of self employed individuals (women). Inter-gender disharmony  Disharmony denotes to the situation where men (boys) and women (girls) are discouraged and disabled to participate in and work interdependently as professionals in the work setting, solely on the basis of their gender. Gender based discrimination  Discrimination denotes to the culture where men (boys) and women (girls) are differentiated in terms of their potentials, ability to perform, and eligibility to progress on the basis of their gender alone, in the work setting Harassment  Harassment denotes to the behavior that causes violation of moral values and the individual rights of men (boys) and women (girls), in the work setting The variables responsible to foster gender inequality are both systemic incapability of the organizations themselves as well as influences of the social and cultural heritage. Nevertheless, the need for inter-gender equality is considered to be strategic in the work settings, for continuation of the inequality is surely resulting in less advantaged scenarios for individual employees and the enterprise. The restraining variables are clustered into three levels, as follows: Developmental Dimension  Family up bringing  Emotional weakness causing reduced confidence among women  Inadequate career orientation of women  Some women do not come forward [lack initiative] in certain special occupations / positions  Critical family role and responsibilities [Dual responsibilities]  Women’s own mindset to stay within the comfort zone  Self inflicted taboos and lack of motivation to progress  Physical limitations  Lack of awareness…

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Social Dimension  Culture: it’s a men’s world  Discrimination / Gender biasness  Inequality  Social pressure  Misconceptions wrongly connected to religion  Insufficient family support [encouragement] Systems [Organizational] Dimension  Fear that women are not suitable; closed thinking of the employers  Gender insensitive policies [Lack of policy focus usually leads to male dominance at work settings]  Fewer career prospects vis-à-vis choosing career of personal preference and potentials, pursing and progressing esp. in certain specific positions / occupations  Lack of appropriate infrastructure [Incompatible working environment such as vulnerability to potential harassment, restricted rights to privacy, special leaves of absence, transportation, and child day care facilities, etc.]  Uncertain job security  Unorganized as group in a typical work setting  Employers not willing to invest on women development  Organization apathetic attitude and social bias towards women, especially.  Lack of awareness (and cognizance) of gender issues on the part of employer The impact of continuing gender inequality is dysfunctional from the point of view of an individual and also from the organizational perspective. At the individual level it inhabits free choice hence unleashing of the potentials to the fullest as individuals. For instance:  Forced to opt for limited careers / limited opportunities  Lose confidence and self image leading to stress syndrome  Isolation – constrained access to power structure  Lack of access to opportunities and resources  Inability to choose, enter and pursue career of choice  Inability to pursue full time career  Professional growth is constrained / limited  Are considered relatively incompetent  Excessive dependency on male family members In     the organizational perspective, it results in: Unequal representation in the organizations Higher turnover in the organizations Lower productivity at work Ignorance of need for inter-gender synchronization

Conclusion It is imperative to inculcate an affirmative culture towards equal employment opportunity especially in the context of gender mainstreaming [synchronization] through creating an enabling environment in work organizations, where everyone can freely choose, enter and pursue his or her career to the top. This would, however, entail:  To ensure equal opportunities and equitable access to resources purely on potentials  To empower men (boys) and women (girls) to make their personal career decisions, and work the way they choose to.  To encourage equal participation of men (boys) and women (girls) in the work place on performance merit alone.  To provide learning and development opportunities to all alike

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

     

To alter the mind-set of women (girls) in particular and of their co-workers men (boys). To develop and implement awareness programs on equality and gender issues in the work setting To implement policies like equal employment opportunity; diversity; anti-harassment at work; and, equal remuneration for similar work To provide assistance to working females, especially, towards their critical family and social responsibilities To align business policies and regulations to foster gender mainstreaming To design conducive work environment, compatible jobs and flexible working hours

Developed as an outcome of the study

Model Policy Agenda

a) Proposed Values  Men and Women are free [encouraged] to engage themselves in productive endeavors, however, within the ambiance of moral discipline [Shariah]. Nevertheless, the responsibility of seeking livelihood for the family is essentially of Men  Gender diversity is a REALITY and ADVANTAGE.  Men and Women have EQUAL RIGHTS, DIFFERENT ROLES, manifested in their respective gender characteristics, and EQUITABLE ROLES and RESPONSIBILITIES both at work and in the society.  Men and Women must work together COOPERATIVELY, instead of competing, to unleash their respective potentials optimally thus creating synergy for the organizations in particular and society in general.  Gender related problems have always EXISTED in societies in general and in the organizations in particular.  Ignoring gender diversity and/or aiming at zero-problem is nothing but a DENIAL.  Organizations cannot change the supra system, but can and should MODIFY their permeable work environments by adopting neutral policies and equitable systems in their respective work settings. b) Vision “While recognizing the gender diversity in its letter and spirit, it is strength for all hence essentially the potential advantages need to be optimized by fostering a homogenous community in the work setting, within the ambiance of Islamic culture and society of Pakistan”. c) Goals  To promote a neutral environment in typical work settings, where men and women both can freely choose and perform to the best of their potentials without any inhibition, prejudice and bias.  Alter the environment to enable and empower the men and women alike, so that they can optimize their professional career opportunities / options, as they individually choose to do, within the ambiance of their individual preferences, ambitions, aspirations, values; and, Islamic social and cultural system of Pakistan d) Tentative Policy Directions  To develop a neutral performance based culture in the work settings.  To recognize gender differences as advantageous rather than a basis of superiority and/or inferiority among men and women, in the work setting  To encourage empathy, sensitization, and respect for men and women, in the work setting.  To ensure equal access to opportunities; equitable access to resources; and just reinforcements to men and women, in the work setting.

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place

Role of Ethics in Eliminating Poverty
In the modern times, poor is not only those who have no or little money. Instead, people who have money may also be poor. The modern perspective of poverty is much broader both in its scope and definition. It focuses on individuals’ ability to make choices in their lives; access economic and social opportunities equally; justice; and, last but not the least security of their future. In short, inability to secure one’s rights is poverty. A few formal definitions are appended for reference: 1. Difficult or lack of access to material, economic, social, and cultural resources by the masses. Furthermore, Lack of choices of services, deprivation of basic rights and security, vulnerability and general feeling of powerlessness to the masses.1 2. A multidimensional problem including deprivation of social justice, political and economic empowerment, and lack of equal opportunities to which every individual is entailed. 2 Here we shall examine the manifestations of unethical behavior as a basis of poverty in a society. This will allow us to unravel the ground realities of poverty hence address the menace rather realistically and on sustainable grounds. The Poverty Framework [figure 1.1] presents relationship between poverty and the manifestations of unethical practices prevalent in a society. It examines the same from three distinct dimensions, namely; Social and cultural, Political, and Economic. Social and cultural manifestations of unethical behavior can have following dimensions and many more: Weakened morals leading to ignorance and corruption… - Dominance of the select group leading to status incongruence… - Divorce of rights from responsibilities leading to role ambiguity and chaos… - Unequal education standards leading to social and cultural split… - Controlled judicial environment leading to justice for the few… - Individual orientations leading to exploitative socioeconomic practices … Political manifestations of unethical behavior can have following dimensions and many more: - Barriers to entry (and exit) for a common person leading to strengthening of interest groups of the elites in the Govt. and Corporate echelons… - Power orientations leading to high motivation to gain power for personal security and lip service for the masses… Economic manifestations of unethical behavior can have following dimensions and many more: - Scarce minds leading to unequal (inequitable) economic policies and practices… - Unequal socioeconomic development leading to injustice and deprivation… - Unequal distribution of economic resources (wealth) leading to concentration amongst few…

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

Ethics in the Work Place Figure 10.1

The Poverty Framework

The above manifestations are not exhaustive, however, it is clear that these unethical behaviors are at the root of poverty in a society, see figure 1.1. Here I would like to cite a verse from the Noble Quran in which Allah Al Mighty Has warned of poverty as direct consequence of interest based transactions, which are based on exploitation by those who have it of those who don’t. It says, “Interest reduces wealth and charity increases wealth…” Al Baqra. We therefore have basis to say that overcoming poverty on sustainable basis entails enforcing and encouraging ethical behavior in social, political and economic aspects of life. _____________________________________________
1.

2.

Official definition of poverty, Govt. of Pakistan Swiss Agency for Development and Cooperation

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Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012

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