Business Ethics - An Introduction
Codes of Ethical Conducts
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What are Business Ethics? There are different answers to this apparently simple
question. To a large extent, the answer depends on the perspective of the person
answering this question.
At the practical level, we can define business ethics as the principles and norms that
serve as a guide for good and bad conduct in business.
Your company might or might not have a specific, written code of ethical conduct that acts
as the ethical guidelines for employees. If it is available, you should obtain a copy of your
organization’s code of ethical conduct. Different organizations may use different names for
the code. For example, IBM calls it "IBM Business Conduct Guidelines", Google calls it
"Google Code of Conduct" and New York Times calls it "Ethical Journalism". This document
will provide an insight into the company’s values and the specific do's and don'ts.
In addition to getting a good grasp of your own organization's code of ethics, it may be
good to study the codes of ethics of some of the major organizations. Through careful
studies of these statements you will learn a lot more about ethical conducts in an
organizational settings.
A good example of a corporate code of conduct is that issued by IBM and the whole
statement can be found here. We shall use IBM's code to illustrate some of the points
about ethical conducts.
A company's code may specify how an employee is to conduct business. In addition to
basic requirement that an employee must be ethical and lawful in all business dealings
whether selling, buying or representing the company in any other capacity, there may also
be specific instructions.
In the case of IBM for example, the code strictly forbids reciprocal dealing where the
decision to buy from a specific supplier is strictly based on its merits and not influenced by
whether it is a buyer of IBM's product. Many organizations practice reciprocal dealing and
do not consider it as unethical.
Conflicts of interests often arise. A company may specify that an employee must not have
any financial interests in a company that has dealings with or competing with it. A conflict
of interest situation may not arise out of financial interest. We have to be careful that
while we attempt to eliminate a conflict of interests, we do not cause another conflict of
interest issue. A recent example is when Mr. Paul Wolfowitz, President of World Bank,
transferred his girlfriend out of the Bank to reduce conflict of interest, but because the new
terms were too much better than her old terms of employment, resulting him being
accused of infringement of code of ethics.
IBM is quite explicit in defining when a financial interest in another organization may lead
to conflicts of interest arise. It states:
"A financial interest is improper if your job, the amount of your investment, or the particular
company in which you invested could -- when viewed objectively by another person --
influence your actions as an IBM employee. In the case of a supplier or alliance company, if
you have anything to do, either directly or indirectly, in deciding whether IBM does
business with that company, you should not have any financial interest at all in the
company."
Some organizations explicitly disallow their employees to earn any income from working for
another party, while others allow it but with some limitations. However, there are
organizations such as universities, where professors are not only allowed to earn
additional incomes by providing consultancies, the amount of such additional income
earned may even be used to gauge the usefulness of the professors!
However, many ethical standards in business are implied, rather than being explicitly
stated in writing. Even in a big organization with huge resources, it is difficult to be
exhaustive in their codes. No written document could anticipate every possibility.
An implied ethical standard is one that has been derived from your own ethical standards,
or those of your family, friends, co-workers, and the community that you belong. It is
important to make careful
observation of the implied ethical standards at play within the organization.
Your belief influences your ethical standards. At the same time, your ethical standards also
influence your beliefs and how you make decisions.
It is very important to note that being ethical and being lawful are not the same.
At times, ethical considerations can conflict with the financial or other interests of you or
your company. Understanding how and why such ethical dilemmas arise will help you to
overcome them.
In order to make good decisions, you will also need to balance you personal ethics with
those of your organization.
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Please select from the list below other articles on ethics in this site:
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Here are some of the useful courses on Ethics that you may wish to consider signing up for:
Corporate Governance and Ethics
This online course on Corporate Control and Governance employs a stakeholder
management framework, emphasizing business' social and ethical responsibilities to both
internal and external stakeholders. A twin theme of business ethics demonstrates how
ethical or moral considerations have to be included when dealing with the public issues
facing organizations and during the decision-making process. This novel and innovative
program teaches companies and professionals how to lessen fraud losses as well as how
to effectively eliminate future frauds. This ethics course offers comprehensive coverage of
fraud detection, fraud warning signs, technological fraud detection tools, investigation
techniques (especially useful to auditors, security personnel, and managers), financial
statement screening, fraud risk in e-commerce, pro-active fraud risk and much more.
Ethics and Values - for Social Workers
There are questions of values and ethics everywhere in life. Each of us has his or her views
of what is right or wrong, or what is of greater inportance, hence having higher priority.
We usually do not consider ourselves as beginners when we deal with this topic of what
we consider as right or wrong. This course is an introduction to the topic, but new
questions and dilemmas related to ethics and values will arise in every piece of work you
undertake as a social worker.
Business Ethics
The functions of an ethics program are stated, ethics defined, and general characteristics
of the ethics program listed. Identify ethical standards for fairness and honesty, precise
record keeping, and complying with antitrust regulations. Identify ethical standards for
giving and receiving gifts, gratuities, and entertainment with customers and suppliers,
government and non-government personnel, and foreign officials. Identify standards for
managing conflicts of interest, financial standards, including preservation of assets,
restrictive trade practices, intellectual properties, and employee relations. Recognize the
duty to comply with and report suspected ethical violations, what disciplinary action could
result from failure to comply with or report violations, and how to raise ethical concerns
and seek additional counsel. Recognize the relevanc of ethics principles through learning
from case studies.
Ethical Issues for Bankers
Ethical Issues for Bankers prepares students to meet the ethical standards expected of
financial services professionals. Students will learn the general guidelines that determine
banking ethics, gain the knowledge and skills needed to perform ethical decision-making,
and be prepared to observe their institution's code of conduct and Federal laws. Students
will also explore typical ethical dilemmas that tend to occur in financial institutions, and
learn how to apply a thoughtful three-step approach to such dilemmas."
Ethics - Standards of Professional Conduct : Especially suitable for Engineers.
Many organizations, particularly smaller businesses, do not have a written set of standards
to provide guidance to their employees on ethical matters related to their job duties. While
each job title, company and industry deals with unique circumstances, there are some
standards of professional conduct for engineers that are considered the norm across a
broad range of job titles, companies and even industries. In matters such as conflicts of
interest, use and protection of employer's assets, and disclosure of proprietary
information, there are universal standards of accepted conduct for engineers working for
employers based in developed countries (although the detailed policies may vary between
companies).
The American Society of Civil Engineers (ASCE) has developed a document titled
"Standards of Professional Conduct" for its members. In addition to the aforementioned
examples of ethical issues, the ASCE's standards cover issues such as maintaining
accurate and complete records, outside employment/activities, acceptance of bribes or
kickbacks and whistle blowing. The ASCE's standards serve as an excellent model for
companies seeking to provide guidance to engineers on ethical matters related to their
position and the performance of their work tasks. It also provides a universal set of
principles to guide individual engineers on ethical matters in the absence of an employer
policy.
In this course, the student will be directed to ASCE's website to review the ASCE document
titled "Standards of Professional Conduct".
The student must take a multiple-choice quiz consisting of fifteen questions at the end of
this course to earn PDH credits.
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Brought to you by Jacob Gan, PhD (Michigan)
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