Ethics
Business Ethics and Unethical Practices
The study of business ethics and its implications for different stakeholders have seen tremendous growth in the past few decades. There has also been a rise in the use and development of codes of ethics and announcements for ethical practices by many firms; however companies are still criticized for their unethical practices at different levels (Papers4you.com, 2006). Business ethics, according to the literature has been entrenched with the philosophical details of Ethics (Trevino & Nelson, 1999). Ethics has been defined as ‘the activity of examining the moral standards of a society, and asking how these standards apply to ones life and whether these standards are reasonable’ (Velasquez, 1998; p. 11).
The literature on business ethics is divided on its views about the motivation and reason for businesses to have an ethical dimension. Drawing upon Harrison (2001), there are two major schools of thoughts, firstly those who suggest that firms are profit generating institutions and therefore business ethics is yet another way to attract customers, secondly those who support corporate conscience and intrinsic motivation for the adoption of business ethics.
Business ethics has been considered very subjective in nature and according to Paul (2001) is considered a function of time and culture. It has been established that with the passage of time business ethics have evolved and also that the cultural values and norms drive business ethics within national and regional boundaries. One of the major studies regarding the national values has been conducted by Hofstede (1983). According to this research, which was only based on four indicators i.e. individualism, power distance, uncertainty avoidance and masculinity, there is a great deal of differences among values across different nations and consequently the business ethics. Globalization combined with standardization has made businesses financially efficient but at the same time poses questions regarding the standardized codes of business ethics across national boundaries.
Vinten (1991) has divided the business ethical issues at different levels i.e. international business, domestic business and professional ethics. At the international level ethical issues include free-masonry and socialism versus capitalism; at domestic level these include religious dimensions, social marketing and ethical education; and lastly at the individual level these include bribery, corruption and data protection (Papers4you.com, 2006).
Ethics of Legal Profession
Synopsis:
Ethics of Legal Profession
Introduction
The profession of law is honourable, and its members are expected to act in an honest and upright manner, and any deviation from these elementary principles is liable to e dealt with severely.
An advocate practising law is under a triple obligation:
An obligation to his clients to be faithful to them till the last, an obligation to the profession not to besmirch its name by anything done by him, and an obligation to the court to be and to remain a dependable part of the machinery through which justice is administered. It is beyond the scope of treatise on legal ethics to describe the aims and uses of examinations of witnesses or to state the rules as to how evidence shall be recorded. In examining witnesses the advocate should not forget that he is not merely the counsel of client but also an officer of the Court to further the ends of justice. Similarly, the advocate should maintain towards his opponent utmost cordiality. Clients and not counsels are litigants. The ill-feelings between clients should not be allowed to influence the conduct of their counsel. Says Daniel Webster: “lawyers on opposite sides of a case are like the two parts of shears, they cut what comes between them, but not each other”
In the same way, Law being a fraternity, the profession is entitled to loyal support of its members in the maintenance of this tradition. There are certain duties of advocates towards his profession also; like, professional courtesy, co-operation, equal consideration to all members of the profession, encourage junior brethren, should stand up for its dignity and privileges whenever there is occasion for it, he should expose corrupt or dishonest conduct in the profession. Similarly advocates should also owe certain duties towards his colleagues which is analysed in subsequent pages.
In the words of Chief Justice Marshall has observed;
“the fundamental aim of Legal Ethics is to maintain the honour and dignity of the Law Profession, to secure a spirit of friendly co-operation between the Bench and the Bar in the promotion of highest standards of justice, to establish honourable and fair dealings of the counsel with his client opponent and witnesses ; to establish a spirit of brotherhood in the Bar itself ; and to secure that lawyers discharge their responsibilities to the community generally.”
The Ethical Component of Business
Business owners face many struggles on the road to success. They must make decisions on a daily basis that could alter the likelihood of survival in today’s market. Some of the decisions are straight forward in nature and include things such as the business product or service, location of operation, the size of the target market (local, national, global, or other), and identifying sources of capital. Each of these decisions forces business owners to weigh pros and cons regarding benefiting the business, shareholder needs, legality issues, geographic concerns and other easily discernible matters. The decisions that tend to be more difficult in nature are the same decisions that seem to offer less formal guidance. These decisions involve ethics of business. Business owners at one time or another are often forced to identify a code of ethics for application in their daily business operations. Typically, at least some part the code of ethics designed for the business will vary from an individual’s personal ethics. A code of ethics is necessary for business owners and their employees to ensure everyone knows and understands which behavior is acceptable as right and wrong as it pertains to the individuals and the business as a whole.
The idea of good ethics is generally expected in the business landscape of the United States. A popular term used in conjunction with the idea of good business ethics is accountability. Accountability refers to the fact that every “person is responsible or answerable to someone.” (Robinson, 2009 Another common term with regard to ethics is liability. Liability insists that every person “is responsible for something or someone.” (Robinson, 2009) By looking at these two terms, the importance of good business ethics can be identified as something that affects coworker-manager relations, as well as customer-client relations. Because ethics can involve so many relationships in business, practicing ethics that support a prosperous business is essential.
TEM – Total Ethical Management
TOTAL ETHICAL MANAGEMENT – A SYSTEMS APPROACH
By
VIKRAM KARVE
A Manager must possess the requisite proficiency in analyzing and managing ethical situations in the contextual scenario which, at times, are quite complex.
There is, thus, a need for present day management education to prepare future managers to tackle such dilemmas and contingencies.
This author’s interactions with faculty, students and practicing managers reveal that very few management courses include Ethical Management in their curriculum and even those that do seem to view Managerial Ethics from a limited perspective restricted to just three aspects:
(i) Economic Analysis, based on impersonal market forces. The belief is that a manager should always act to maximize revenues and minimize costs, for this strategy, over the long term, will produce the greatest material benefits for society.
(ii) Legal Analysis, based on impersonal social and political processes. The belief is that a manager should always act in accordance with the law, and strictly implement rules and regulations. Relying on economic or legal analyses, either by themselves, or in conjunction with each other may help a manger seek shelter under the umbrella of “situational ethics”.
(iii) Philosophical Analysis, based on rational thought process. The view is that a manager should always act in accordance with principles of behaviour or beliefs that are “right” “proper” and “just”. Such black-and-white moral reasoning manifests itself in formulation of codes of conduct which, more often than not, are deceivable vessels full of promise but empty of intention.
Owing to this non-sytemic perspective of Managerial Ethics, the management student views the ethical domain as consisting of cut-and-dry unimplementable and unrealistic codes of ethics comprising platitudinous moral verbiage at one end of the spectrum, and the “loopholes” of situational ethics at the other end.
How then does one equip the management student to make the transition from the domain of codes of conduct and situational ethics, which are grossly inadequate to analyze and manage real-life ethical dilemmas, to a more holistic Total Ethical Management [TEM]
It is the author’s view that application of Systems concepts is sine qua non for implementation of Total Ethical Management [TEM] in a holistic manner.
The salient aspects of application of the Systems Approach in the context of TEM are described below in a nutshell.
ETHICAL DILEMMAS IN POSTMODERNISM
Dr.M.Susithra
The Dept. of Philosophy &Centre for Philosophical Research
The Madura College (Autonomous),Madurai-11,T.N.,India.
Introduction to Postmodern Thoughts:
A serious intellectual disorder that is widespread today amongst literary persons and even philosophers is Pomophobia (Postmodernism phobia). This is because postmodernism is always related with the notorious slogan ‘break the rules’. When it comes to ethics, postmodernism which is condemned as an intellectual terror is concluded to have nothing to say or do productively.
This is a bad reading of postmodernism. In this juncture this paper intends to surf the venture of postmodernism, so that a clear association between ethics and postmodernism could be brought to the floor.
It is quite known that ethics is a branch of knowledge concerned with moral principles. It deals with the judgments of what is right and wrong, good and evil and many do’s and don’ts. Various schools of thought according to their philosophical position prescribe ethical norms and there would be a linear cum structuralized construction in such moral codes. This is the status in both traditional and modernist thoughts. The point to be emphasized here is that, despite of its name modernity retains much of the traditional bearings. On one hand, it has strengthened some hazardous norms of tradition. On the other hand in spite of the progress in science, reason, technology, liberation, and freedom modernity has incepted many serious problems. What if modernity strengthens tradition is a major question and what has modernity to do with problems would be another question. Wars, terrorism, war on terror, genocide, holocaust, death camps and death squads are some of the burning political issues that the world is witnessing right from industrial revolution in the name of progression. Racism, casteism, and religious fundamentalism are worsening in these times with technocratic face which are no doubt the offspring of tradition. Apart from these issues in the present day there are unthinkable dilemmas around the problems of gender injustice, transgender inequality, and homosexual relationships in social and cultural sphere. In economic sphere the chaos and confusions over liberalization, privatization and globalization is a mammoth problem that has got questions around poverty, unemployment, under-employment, food crisis, junk technology etc. In the ecological sphere the globe confronts the threat of ecological disasters, like extinction of species, globalwarming, nuclear pollution, cyber pollution, gene manipulation, genetic engineering, human experimentation, euthanasia, human cloning etc.,
Airline Ethics
Introduction
Ethics are essential in the Airline industry because they are the framework that guides individuals in the process of making business decisions. They usually encompass three features i.e. an application of one’s professional skills, incorporation of one’s personal values and lastly, good judgment. Codes of ethics are formal declarations of the moral values that guide various companies. Therefore, in the field of ethics, one can analyze an industry such as an Airline industry through its practical implementations and also through its formal declarations.
Ethical guidelines
Conflict of interest as part of ethical guidelines/code of conduct
Almost all Airline companies have formal declarations of their codes of ethics. Usually, this can be categorized under a series of topics such as conflict of interest, asset protection and working together. Conflict of interest refers to those scenarios where employees or company representatives have to decide between their interests to their employer or their personal/investment/ relationship obligations. Usually, most Airline companies have highlighted some of the issues that can be labeled conflict of interests in their ethics code of conduct. (Frontier airlines, 2004)
For instance, conflict of interest comes about when Airline personnel receive gifts or rewards from suppliers/ consumers/ stakeholders for doing their job. Usually, most Airlines prohibit gifts especially when those gifts seem excessive. The reason behind this is that when a client gives an attendant an expensive piece of jewelry for receiving very good customer service, that attendant may be obliged to meet the consumer’s demands the next time the client reports even when those demands are not procedural. This is because by accepting lavish gifts, one puts himself/herself in a position where they feel obligated to meet the gift giver’s needs and this eventually compromises their moral obligations.
Conflict of interest may also occur when a member of staff finds that they have to work extremely hard with certain clients and they request those suppliers/clients for rewards for their services. This is a conflict of interest because an employee finds that they have to choose between maintaining a good name for their Airline or meeting their personal financial interests. Consequently, it becomes necessary for Airlines to clarify that this is a wrong thing.
A Role of Ethics and Social Responsibilities in Management
Ethics can be defined as a process of evaluating actions according to moral principal of values(A.Alhemoud). Throughout the centuries people were trying to choose between profit and moral. Perhaps, some of them obtain both, but every time it could have roused ethical issues. Those issues concern fairness, justice, rightness or wrongness; as a result it can only be resolved according to ethical standards.
Setting the ethical standards for the way of doing business in corporation is primarily task of management. Corporations have to maintain the same standards as an individual person and, in addition, corporations, as organizational units, have their own social responsibilities toward customers, employees and society. However, any business should keep it’s original purpose of functioning – making profit. Balancing the traditional standards of profitability and burden of social responsibilities is not an easy task. In recent years it has been a trend of setting standards of corporate ethics according to high degree of morale.
To be able to keep the ethical standards management must follow the law. However, there are some complications in enforcing it. The law affects and is affected by social forces and prevailing ethical standards. “Although the law can codify societies ethical
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Alhemoud, Ali ” Management Ethics is Smart Business.”
values, ethical decision making transcends the law in that 1) the law deals with actions not
with thoughts, and therefore it does not (and cannot) codify all ethical requirements; and
2) an individual or a group may perceive a given law as immoral, not as a guide to ethical behavior.” ( A. Alhemoud). How, then, a company can ensure that its code of ethics is both followed and enforced ? ” …Defense firm such as General Dynamics and TRW, and an information company, Dun & Broadstreet, have appointed internal ethics officers or ombudsmen. Whether employees have faith in these safeguards against corporate retaliation is hard to tell, though it is one step forward (The Economist August 19 1995)
The ethical codes of corporations that that get so important nowadays also did not come into being at once. They emerged from individual ethical standards and corporate consciousness. Moreover, the public demand for prosecution of any violations of corporate, professional and business ethics has been increased. Finally, mass media made possible for society reveal secrets that were kept from public before. So, the business conduct regulations were created to “draft guidelines for ethical conduct, develop a process for monitoring business practices and recommend ways to correct questionable activities.” (J.Byrne) All these measures were taken to balance various social responsibilities with the high degree of moral and sense of attainment.
ROI of Ethics and Compliance: Can You Measure It?
What measures would you use to measure the ROI of your company’s ethics and compliance program? At the ECOA’s “Great Debate,” the debate focused on whether or not the ROI of an ethics and compliance program could be measured. Debater information and their arguments are listed below, followed by a summary of my feelings related to the issues. Steve Priest and Jay Mumford (the debaters) debated the topic of what justifies the existence- and budget, of an ethics and compliance department. Some of the opinions expressed during the debate included that there’s a lack of empirical evidence to support determining the ROI of ethics and compliance, measuring the return through legal fees and fines avoided due to an ethics and compliance program and whether or not ethics and compliance proves that a company is better than another.
Here are my notes from the debate. Please note that each person was assigned a side in the debate, therefore, the people involved were defending the side they were assigned and not necessarily their personal opinions on the matter.
Argument from Steve Priest
Founder of the Ethical Leadership Group, Senior Advisor at Global Compliance.
Argument- Emphasizing ROI for ethics and compliance is problematic for your business.
Ethics program- goal is to help the company be more ethical. Contribute to an organization’s health, leading to improved employee engagement, trust, less EEOC claims and commitment- not necessarily the bottom line on an accounting sheet.
Can’t justify that a company that acts ethically performs better than a company that does business in a conniving way.
No empirical evidence to support the statement that ethics pays.
Despite the evidence, the speaker believes that ethics pays- along with most other businesses.
An ethics and compliance program must be sincere- if a company makes a commitment to ethics and compliance purely because they believe E&C is profitable.
When codes and training are viewed as “check the box” support from the workplace decreases.
Would you gut the E&C department because it can’t provide financial proof that it makes business better?
Ethics means that companies must always do the right thing, even if it is difficult, and costly, making it hard to prove it brings a profit to the business.
Argument from Jay Mumford
Ethics and compliance director at Accenture.
Argument- Ethics and compliance ROI is real in its value, adequate to make the case to senior management to support ethics and compliance.
The Neverending Battle: Ethics and Money
The pressure for companies to develop effective ethics and compliance programs continues to grow as legal developments force companies to take greater responsibility for their actions.The ethics and compliance department must compete with every other group in the organization for funding. In many cases, all that the top level decisions makers want to hear is about how ethics and compliance can save the company money – proving that it’s not just a cost centre. In times when organizations are careful with their money, it’s often decided that doallrs are better spent elsewhere than ethics and compliance. I don’t agree with this decision, as there’s a lot more to the benefits ethics and compliance brings to the table. To help ethics and compliance departments plead their case to decision makers, there’s been a push, demanding that the DOJ release information on the role of ethics and compliance when deciding the fate of a company during a legal battle.
Effectiveness of Ethics and Compliance Programs
The Ethics Resource Centre, Ethics and Compliance Officer Association and the Society of Corporate Compliance and Ethics teamed up to prepare a report for the DOJ. The focus of the report was to get the DOJ to provide more information about the role of ethics and compliance programs in enforcement decisions. In a press release issued by the ERC, it states:
“Ethics and compliance practitioners seek data from the U.S. Department of Justice that identifies how often an effective ethics and compliance program yields a direct return in enforcement decisions, according to a survey jointly conducted by the ERC, ECOA and the SCCE. We welcome the recent efforts by the DOJ to publicize cases where it has rewarded companies for having strong ethics and compliance programs, but the ethics and compliance community challenges the Department to take steps to be even more forthcoming with information.”
The press release also includes a list of some of the different types of data that ethics and compliance professionals would like to see the DOJ report. The list includes:
Descriptions—without identifying information—of individual cases in which ethics and compliance programs were a mitigating factor in enforcement decisions.
Information about what specific aspects of an ethics and compliance program factored into enforcement decisions.
Information about the benefits of an effective ethics and compliance program, such as helping avert a decision to prosecute or avoidance of other sanctions such as appointment of a monitor.
Money Matters