ETHICS

Practicing Ethical Behavior

and
Social Responsibility
 A concept of right and wrong
conduct
beyond legal compliance

Ethical principles are implicit agreements

that represent who you are and what you
stand for — what others expect to rely on
 Ethical Behavior and Social
Responsibility
The importance of these issues are
increasing in business life
Social Responsibility: the idea that
business has certain obligations to
society beyond the pursuit of profits.
Ethics
– Ethics: the principles and standards of moral
behavior that are accepted by society as
right versus wrong
– Business ethics: the application of moral
standards (right or wrong) to business
situations
 Why Should Organizations
Behave Ethically?
 Prevent harm to others, avoid
reputational harm and reduce
potential liability
 Fulfill public expectations and
improve external relations
 Protect organization from others
(employees, competitors, etc.)
 Improve workforce productivity
but protect employees if needed
from their employers
 Promote personal morality
 Educational Institutions
also have established ethics
codes for their students, Eg

"We Will Not Lie, Steal Or Cheat, Nor

Tolerate Among Us Anyone Who Does"
President
Lincoln
said:
Honor is
better
than
honors.
 Reasons for Ethical Problems in
Organizations

 Personal Gain and Selfish Interest

 Competitive Pressure on Finances

 Organizational Goals vs. Personal Values

 Ethics in the workplace
Businesses are responsible to many people
including
– Stakeholders: groups to whom business has a
responsibility (colleagues, employees,
Supervisors, investors, etc.).

– Businesses must keep these people in mind

when deciding the ethics (behaviour) of a
company.
 Stakeholders
Customers
Government
Stockholders
Employees
Society
 Ethics in the workplace
In business, besides obeying all laws and
regulations, practicing good ethics means:

Competing Fairly and Honestly

Communicating Truthfully

Not Causing Harm to Others

– Investment scams
– cheating on expense accounts
– Conflict of Interest
Factors Influencing Ethical Behavior
Although many factors influence the ethical
behavior of businesspeople, the following three
have the most impact: cultural differences,
knowledge, and organizational behavior.

Cultural Differences
– What may be considered unethical in one country may
be an accepted practice in another culture.

Knowledge
– A well-informed person is in a position to make better
decision and avoid ethical problems.
Factors Influencing Ethical Behavior
Organizational Behavior
– Organizations that strongly enforce company codes of
conduct and provide ethics training help employees
recognize and reason through ethical problems.
– Companies with strong ethical practices (ethics
training, newsletters on ethics) set a good example for
employees to follow.
– Code of ethics: defines the values and principles that
should be used to guide decisions.
– Companies can establish a system for reporting
unethical or illegal actions at work.
– Whistle-blowing: an employee’s disclosure to the
media or government authorities of illegal, unethical,
or harmful practices by the company.
 ETHICAL MINDS AND STANDARDS

The UN Global Compact - ten principles

1. Support human rights.

2. Not allow human rights abuses (directly or indirectly
indirectly through stakeholders e.g. managers, staff,
suppliers, customers etc.)
3. Accept trade unions and collective bargaining.
4. No forced or compulsory labour
5. No child labour.
6. No employment discrimination
7. Environmental responsibility
8. Environmental protection
9. Environmentally friendly technologies.   
10. No corruption – by any stakeholders
 How do You Make Ethical
Decisions?
Ask your self a series of questions to determine if a
decision is ethical:
– Is the decision legal? (Does it break any laws?)
– Is it balanced? (Is it fair to all concerned?)
– Can you live with it? (Does it make you feel good about
yourself?)
– Is it feasible? (Will it actually work in the real world?)

Does it respect stakeholders?

– Will outsiders approve? (Does it benefit community members,
etc.?)
– Will supervisors approve? (Did management receive accurate
information?)
– Will employees approve? (Will it affect employees positively?)

Does it follow a logical approach?

– Does it produce the greatest good for the greatest number of
people?
– Does it uphold individual, legal, and human rights? (Does it
protect people’s interests)
– Does it uphold principles of justice? (Does it treat people
fairly?)
Corporate Ethics & Compliance Program

– Do the Right Thing: Policies &

Procedures - Principles of
Business Conduct
– Ethics & Compliance Staff and
Volunteers
– Risk Assessment
– Continuing Education
– Integrity Line
– Community Leadership
Social Responsibilities in Business
Social responsibility: the idea that business has
certain obligations to society beyond the pursuit
of profits—developed in the early 20th century.
Current climate indicates that ethics in business
is important to consumers
Many investors and managers now support a
broader view of social responsibility
Social responsibility can be balanced with an
efficient business, and strong profits, but it is
challenging for companies.
 Business’s Efforts to Increase
Social Responsibility
Responsibility to society and environment: Businesses must
often balance the needs of investors, society, and
consumers.

Responding to environmental issues demonstrates the careful

balance business must attempt to maintain as they seek to
please:

– consumers (who want quality products)

– workers (who need safe surroundings and fair wages)

– society (which needs as little pollution as

– investors (who want lower costs, efficient production, high

profits)
DEVELOPING GUIDELINES FOR FUTURE BUSINESS
SUSTAINABILITY

1. Recognize that ethical standards are

necessary for business sustainability, to
prevent Global Business becoming a Mafia-
warfare, with unlimited harm done to
others, in the name of profit and survival.

2. Recognize ethics as part of HONEST

business responsibility to Society, which
requires validation in annual Financial and
Non-financial audit and reporting.
On we go … together?
The reputation of a thousand years may be
determined by the conduct of one hour.
Japanese proverb
Can you make
a difference?
Thank you for your attention