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Business Ethics Topics:

» WHAT IS BUSINESS ETHICS?


» FORMULATION OF ETHICAL VALUES
» BENEFITS OF ETHICS MANAGEMENT
» CORPORATE GOVERNANCE
WHAT IS BUSINESS ETHICS?
Let’s start with “what is ethics?” Simply put, ethics involves learning what is right or
wrong, and then doing the right thing but “the right thing “is not nearly as
straightforward as conveyed in a great deal of business ethics literature. Most ethical
dilemmas in the workplace are not simply a matter of “Should Bob steal from Jack?”
or “Should Jack lie to his boss?”

The concept has come to mean various things to various people, but generally it’s
coming to know what is right or wrong in the workplace and doing what’s right-this is
in regard to effects of products/services and in relationship with stakeholders. Wallace
and pekel explain that attention to business ethics is critical during times of
fundamental change-times much like those faced now by business, both nonprofit and
for –profit .In times of fundamental change, values that were previously taken for
granted are now strongly questioned. Many of these values are no longer followed.
Consequently, there is no clear moral compass to guide leaders through complex
dilemmas about what is right or wrong. Attention to ethics in the workplace sensitizes
leaders and staff to how they should act .Perhaps most important, attention to ethics in
the workplaces helps ensure that when leaders and managers are struggling in times of
crises and confusion, they retain a strong moral compass. However, attention
to business ethics provides numerous other benefits; as well as listed later in this
document. Note that many people react that business ethics, with its continuing
attention to” doing the right thing”. Only asserts the obvious (“be good,” “don’t lie”
etc.), and so these people don’t take business ethics seriously. For many of us, these
principles of the obvious can go right out the door during times of stress.
Consequently, business ethics can be strong preventative medicine. Anyway, there
are many other benefits of managing ethics in the workplace. These benefits are
explained later in this document.

RELATIONSHIP BETWEEN BUSINESS AND ETHICS


Functional Area Ethics: Functional areas of business are likely to confront ethical
issues. Accounting is a critical function of any business. Accounting statement reveal
to the managers and owners about the financial soundness of a company. Managers,
investors, regulating agencies, tax collectors and absolute requirements of the
accounting function. Professional accounting organizations have evolved generally
accepted accounting standards whose purpose is to establish uniform standards for
reporting accounting data. When they are followed, these standards ensure a high
level of honest and ethical accounting disclosures. Rarely are they followed in
practice.

Ethical dilemmas crop up in purchasing departments where strong pressure are felt to
obtain the lowest possible prices from suppliers and where suppliers and where
suppliers too feel a similar need to bag lucrative contracts ,Bribes, kickbacks and
discriminatory pricing are temptations to both the parties.

Marketing is another area of the ethics issue. Pricing, promotions, advertising,


product information, relations between agencies and their clients and marketing
research are potential areas of ethical dilemmas. Then there is thee area of
sophisticated communication technology which is grossly abused or misused to
realize one’s ambitions.

ETHICS TRAINING PROGRAMMES


Nearly all Companies which take ethics seriously provide training in ethics for their
manager and employees and employees. Such training programs acquaint company
personnel with the official company policy on ethical issues, and they show how
those policies can be translated into the specifics of every day decision making .Often
simulated cases based on actual events in the company are used to illustrate how to
apply ethical principles to on the job problems.

FORMULATION OF ETHICAL VALUES


Depending on the size of the organization, certain roles may prove useful in
managing ethics in the workplace. These can be full-time roles or part-time functions
assumed by someone already in the organization. Small organization certainly will not
have the resources to implement each the following roles using different people in the
organization. However, the following functions point out responsibilities that should
be included somewhere in the organization.
1. The organization’s chief executive must fully support the program:
2. Consider establishing an ethics committee at the board level:
3. Consider establishing an ethics management committee:
4. Consider assigning/developing an ethics officer:
5. Consider establishing an ombudsperson:
6. Note that one person must ultimately be responsible for:
7. Review any values needed to adhere to relevant laws and regulations:
8. Review which values produce the top three or four traits of a highly ethical and
successful product or service in your area, e.g. for accountants:
9. Identify values needed to address current issues in your workplace:
10. Identify any values needed, based on findings during strategic planning:
11. Consider any top ethical values that might be prized by stakeholder:
12. Collect from the above steps, the top five to ten ethical values which are high
priorities in your Organization:
13. Examples of ethical values might include:
a) Trustworthiness; Honesty, integrity, promise keeping, loyalty.
b) Request; Autonomy, privacy, dignity, courtesy, tolerance, acceptance.
c) Responsibility; Accountability, pursuit of excellence.
d) Caring; Compassion, consideration. Giving, sharing, kindness, loving.
e) Justice and fairness; Procedural fairness, impartiality, consistency, equity, quality,
due process.
f) Civic virtue and citizenship; Law abiding, community service ,protection of
environment.
14. Compose your code of ethics.
15. Include wording that indicates all employees are expected to conform to the valus
stated in the cod of ethics:
16. Obtain review from key members of the organization:
17. Announce and distribute the new code of ethics (unless you are waiting to
announce it along with any new codes of conduct and associated policies and
procedures):
18. Update the code at least once a year:
19. Note that you cannot include values and preferred behaviors for every
possible ethical dilemma that might arise:
20. Examples of a code of ethics:

BENEFITS OF ETHICS MANAGEMENT


Many people are used to reading or hearing of the moral benefits of attention
to business ethics. However, there are other types of benefits, as well. The following
list describes various types of benefits from managing ethics in the workplace.

1. Attention to business ethics has substantially improved society.

2. Ethics program help maintain moral course in turbulent times.

3. Ethics programs cultivate strong teamwork and productivity.

4. Ethics program support employee growth and meaning.

5. Ethics programs are an insurance policy they help ensure that policies are legal.

6. Ethics programs help avoid criminal acts ’of omission’ and can lower fines.

7. Ethics programs help manage values associated with quality management, Strategic
planning and diversity management this benefit needs far more attention.

8. Ethics programs promote a strong public image.

9. Overall benefits of ethics programs.

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