BE Group 12

Does corporate code of ethics help to improve corporate Behaviour?

Analysis into WHY corporate code of ethics does not significantly improve corporate
behavior-

The basic question in ethics is not: How close to the edge of the cliff can I go
without falling? but rather How can I stay away from the edge? - Bogdan M.
Negru

Globalization and business ethics are linked as they affect a companys ability
to commit to its shareholders, in particular to external investors, and preserve
the trust needed for further investment and growth BUT then there is
Slippery slope

Let us analyze the following scenario assuming that corporate code of ethics is in
place

Imagine that one day someone in your organization walks in with a copy of
your chief competitor's bid on a big contract. He swears he got it legally, but
you aren't sure. And whether he did or didn't, it's still proprietary information.
Are you going to use it in developing your bid?

Or what if someone in sales is up against some very tough quarterly
objectives, but she can make them by concealing from a customer that the
product he's interested in will be made obsolete by a new line in six months.
Should she do it?

Or what if you hear that another very productive manager fired a fairly decent
worker and replaced him with the inexperienced son of a friend?

The question arises: Is this within these executives' "managerial prerogatives"?

If one is like 3 out of 4 of the nation's major corporations, you have a code of conduct
that might give your employees help with some of these situations. If one is like 1 out
of 3, he would also offer ethics training in his company which probably helps
employees work through some difficult cases.

Codes of conduct and code education are slowly permeating many corporate cultures,
both helping employee understanding of their organizations values as well as
improving employee attitudes toward management.
For example, in a recent LRN Ethics Study, eight out of ten employees say
their organization has a written code of conduct or code of ethics, and of those,
the vast majority (83%) believe that their management genuinely wants to
promote ethics and integrity in the organization.

Key ethics-related actions (ERA s) observed in organizations with strong ethical
cultures include -
(1) Management communicating ethics as a priority,
(2) Management setting a good example of ethical conduct,
(3) Co-workers considering ethics when making decisions, and
(4) Co-workers talking about ethics in the work they do

Though the following grounds have been set-

The Sarbanes-Oxley law, passed during 2002, requires corporations to set an
anonymous system for employees to report fraud and other unethical
activities.
The Ethics Resource Centers National Business Ethics Survey revealed that
in organizations with all four programs in place viz: Written standards, ethical
training, ethics advice lines and system for anonymous reporting had a greater
likelihood (78%) of reporting unethical behavior

Ethics walk is not consistent with ethics talk

Rewards: How they frame the ethical culture

The matter of rewarding employees for ethical behaviour is the least well developed
part of current ethics programs.
what employees are rewarded for is one of the main factors that determines
how strong the temptation will be for them to bend or break the rulesor even
the law.
However, the greatest ethical danger occurs when raises, bonuses and
promotions depend on unrealistic objectives

Creating a formal program, by itself does not guarantee effective ethics management.
Recall that ENRON had an ethics code, and the board voted to bypass its
conflict-of-interest policy

Could a formal ethics office have helped Arthur Andersen?

It is easy for formal ethics offices to be marginalized if they dont have the complete
support of the organizations leadership and if they are inconsistent with the broader
culture. In fact Andersen still had ethics policies in place and talked about ethics in
formal documents but the approach to ethics management had not kept pace.

The moral dimension was not part of the equation in case of Ford Pinto. Such
ethical fading, a phenomenon first described by Ann Tenbrunsel and her colleague
David Messick, takes ethics out of consideration and even increases unconscious
unethical behavior regardless of whether code of ethics is in place or not.

Managing Ethics and Legal Compliance: What Works and What Hurts?

Survey of employees at six large American companies found that

what hurts effectiveness most are an ethics/compliance program that
employees believe exists only to protect top management from blame and an
ethical culture that focuses on unquestioning obedience to authority and
employee self-interest.
Research conducted for the Lockheed-Martin Corporation in the late 1990s 14
revealed three statistically significant predictors of unethical conduct:

1. pressure to perform that is, to meet productivity goals;
2. observed misconduct; and
3. job dissatisfaction.

Ethical lapses among business students

In a shocking study published in 2006, Don McCabe of Rutgers University
and fellow researchers found that MBAs cheat more than other graduate
students in the U.S. and Canada. Professor McCabe agreed that the self-
selecting personality that goes for an MBA already carries within itself the
potential for iffy behaviour
Of course, this kind of stuff stings those who have lofty goals especially in
light of recent accusations that business schools are the problem for having
matriculated too many unethical captains of industry. Several commenters
took umbrage at McCabes conclusions

[Henry] Kissinger supposedly once said that the reason that academic arguments
are so loud is because the stakes are so low. I argue that business people and students
cut corners legally, ethically, and morally because the stakes are so high. As
long as the personal stakes are so high, even those MBAs pre-tested and pre-certified
as ethical will be prone to ethical lapses, even if they have ethics. Call me cynical.
Peter






References

http://hbr.org/product/managing-ethics-and-legal-compliance-what-works-
and-what-hurts/an/CMR146-PDF-ENG
http://hbr.org/product/managing-ethics-and-legal-compliance-what-works-
and-what-hurts/an/CMR146-PDF-ENG
http://www.lmu.edu/Assets/Colleges%2BSchools/CBA/CEB/Essays/Corporat
e%2BEthics.pdf
http://hbr.org/2011/04/ethical-breakdowns/ar/1

Abinash Part

In this Era, where Software became the backbone of almost every Industry.
IT Industries itself should commit themselves in making the analysis, specification,
design, development, testing and maintenance of software a beneficial and respected
profession. In addition to their commitment to the health, safety and welfare of the
public or stakeholders.
IT Industries adhere to the following Principles:
1. PUBLIC IT Industries should act consistently with the public interest. It means:
Software Engineers should acccept complete responsibility of their Own
Work.
Encouraged to volunteer their professional skills to good causes.
Moderate the behaviour of the software engineer, the employer, the client with
the public good.
Software should only be approved if they are found to be safe and does not
diminish the quality of life.The Ultimate effect of the work should be in the
Public good.

2. CLIENT AND EMPLOYER As Clients are Important driving force in IT
Industries.So It should act in a manner that is in the best interests of their client and
employer consistent with the public interest. So It Should:
Provide services only in their areas of competence, being honest and forthright
about any limitations of their experience or education.
Not knowingly use software that is obtained or retained either illegally or
unethically.
Use the property of a client or employer only in the ways properly authorized,
and with the client's or employer's knowledge and consent.
Any proffessional Information gained should be kept private.

3. PRODUCT - IT Industries should ensure that their products and related
modifications meet the highest professional standards possible. Software Engineers
should:
Strive for high quality, acceptable cost and a reasonable schedule, ensuring
significant tradeoffs are clear and accepted by the employer and the client, and
are available for consideration by the user and the public.
Identify, define and address ethical, economic, cultural, legal and
environmental issues related to work projects.
Ensure that they are qualified for any project on which they work or propose
to work by an appropriate combination of education and training, and
experience.
Ensure an appropriate method is used for any project on which they work or
propose to work.

4. JUDGMENT - IT Industries should maintain integrity and independence in their
professional judgment. Software Engineers should:
Temper all technical judgments by the need to support and maintain human
values
Maintain professional objectivity with respect to any software or related
documents they are asked to evaluate.
Not engage in deceptive financial practices such as bribery, double billing, or
other improper financial practices.
Disclose to all concerned parties those conflicts of interest that cannot
reasonably be avoided or escaped.

5. MANAGEMENT IT Industries managers and leaders shall subscribe to and
promote an ethical approach to the management of software development and
maintenance. Managers and Leaders should :
Ensure good management for any project on which they work, including
effective procedures for promotion of quality and reduction of risk.
Ensure that software engineers are informed of standards before being held to
them.
Assign work only after taking into account appropriate contributions of
education and experience tempered with a desire to further that education and
experience.
Ensure realistic quantitative estimates of cost, scheduling, personnel, quality
and outcomes on any project on which they work or propose to work, and
provide an uncertainty assessment of these estimates.
Attract potential software engineers only by full and accurate description of
the conditions of employment.
For Personal benefit should not prevent someone from taking a position for
which that person is suitably qualified.
Ensure that there is a fair agreement concerning ownership of any software,
processes, research, writing, or other intellectual property to which a software
engineer has contributed.
Provide for due process in hearing charges of violation of an employer's policy
or of this Code.
Not ask a software engineer to do anything inconsistent with this Code.
Not punish anyone for expressing ethical concerns about a project.

6. PROFESSION - IT Industries should advance the integrity and reputation of the
profession consistent with the public interest. Software Engineer should:
Help in developing an organizational environment favorable to acting
ethically.
Promote public knowledge of software engineering.
Extend software engineering knowledge by appropriate participation in
professional organizations, meetings and publications.
Support, as members of a profession, other software engineers striving to
follow this Code.
Not promote their own interest at the expense of the profession, client or
employer.
Obey all laws governing their work, unless, in exceptional circumstances, such
compliance is inconsistent with the public interest.
Avoid associations with businesses and organizations which are in conflict
with this code.

7. SELF - IT Industries should participate in lifelong learning regarding the practice
of their profession and shall promote an ethical approach to the practice of the
profession. Software Engineers should:

Further their knowledge of developments in the analysis, specification, design,
development, maintenance and testing of software and related documents,
together with the management of the development process.
Improve their ability to create safe, reliable, and useful quality software at
reasonable cost and within a reasonable time.
Improve their ability to produce accurate, informative, and well-written
documentation.
Improve their understanding of the software and related documents on which
they work and of the environment in which they will be used.
Improve their knowledge of relevant standards and the law governing the
software and related documents on which they work.
Improve their knowledge of this Code, its interpretation, and its application to
their work.
Not give unfair treatment to anyone because of any irrelevant prejudices.
Not influence others to undertake any action that involves a breach of this
Code.

Taking an example of Tata consultancy services Ltd, the biggest IT MNC of India.
We can say that Co-orporate Code of Ethics is very helpful in improving Company
and that also where you you have to deal with lot of global clients and they are the
main contributer of the Company revenue.Thats why TCS became the most succesful
Indian IT company.

TCS follows the below Code of Ethics in day to day work. Such as
1. It is committed in all actions to benefit the economics development of the
countries in which it operates and doesnt engage in any activity that would
adversely effect their objective in doing so.
2. It maintains and prepare its all account fairly and accurately in accordance
with the accounting and financial reportng standards.
3. The internal accounting and audit procedure fairly and accurately reflect all
the companys business transaction and disposition of assets.
4. It purely strive for the establishment and support of a competitive open market
economy in India and abroad and co-oprate in the effort to promote the
progressive and judicious liberilisation of trade by a country.
5. It markets its product and services on its own merits and doesnt make any
unfair and misleading satatements about competitors product and services.
6. It provided equal oppurtunities to all its employee and all qualified apllicants
for emplyment without regards to their race, caste religion, cplour, marital
status, sex, age, nationality, disability and veteran status.
7. TCS and their employee never niether receive nor make, directly or indirectly
any illegal payments, remuneration, gifts, donation or comparable benefits that
are intendended to, or percieved to obtain business or uncompetitive favours
of the cnduct of the business.
8. It doesnt support directly or indirectly any Political parties which can cause a
unfair means.
9. It provide a safe and healthy working environment, with following all
regulations regarding the preservation of the environment of the territory it
operates.
10. TCS is commited to supply the Services of highest Quality standards backed
by the efficient and reliable support system.
11. It is commite to enhance the shareholders value and comply with all
regulationa and laws which govern shareholders rights.
12. Every employee of TCS on behalf of the company deals with professionalism,
honesty, integrity as well as high moral and ethical standards.
13. An employee of a Tata company shall not engage in any business, relationship
or activity, which might detrimentally conflict with the interest of his company
or the Group.
14. An employee of a Tata company and his immediate family shall not derive
any benefit or assist others to derive any benefit from the access to and
possession of information about the company or the group which is not in the
public domain and thus constitutes insider information.


References:
http://www.acm.org/about/se-code

http://www.tcs.com/about/heritage_values/codes_conduct/Pages/default.aspx