Business Ethics

Meaning:
The term ‘Business Ethics’ refers to the system of moral principles and rules of the conduct applied
to business. Business being a social organ shall not be conducted in a way detrimental to the
interests of the society and the business sector itself. Every profession or group frames certain do’s
and do not’s for its members. The members are given a standard in which they are supposed to
operate. These standards are influenced by the prevailing economic and social situations. The codes
of conduct are periodically reviewed to suit the changing circumstances.

Definitions:
Business Ethics is generally coming to know what is right or wrong in the work place and doing
what is right. This is in regard to effects of products/services and in relationship with the stake
holders.” —Cater Mcnamara

“Business ethics in short can be defined as the systematic study of ethical matters pertaining to the
business, industry or related activities, institutions and beliefs. Business ethics is the systematic
handling of values in business and industry.” —John Donaldson

There is no unanimity of opinion as to what constitutes business ethics. There are no separate ethics
of business but every individual and organ in society should abide by certain moral orders.

Sources of Business Ethic:

In every society there are three sources of business ethics-Religion, Culture and Law. The HR
manager in every organisation, thus, has to be well versed with the unique system of values
developed by these three sources.

These sources are discussed as follows:

1. Religion:
Religion is the oldest source of Religion is the oldest source of ethical inspiration. There are more
than ethical inspirations. 1, 00,000 religions which exist across the whole world, but all of them are
in agreement on the fundamental principles. Every religion gives an expression of what is wrong
and right in business and other walks of life. The Principle of reciprocity towards one’s fellow beings
is found in all the religions. Great religions preach the necessity for an orderly social system and
emphasize upon social responsibility with an objective to contribute to the general welfare. With
these fundamentals, every religion creates its own code of conduct.

2. Culture:
Culture is the set of important understandings that members of a community share in common. It
consists of a basic set of values, ideas, perceptions, preferences, concept of morality, code of conduct
etc. which creates distinctiveness among human groups. When we talk about culture we typically
refer to the pattern of development reflected in a society’s pattern of knowledge, ideology, values,
laws, social norms and day to day rituals. Depending upon the pattern and stage of development,
culture differs from society to society. Moreover culture is passed from generation to generation.
Culture facilitates the generation of commitment to something larger than one’s individual self
interest.

Culture encourages the members of the organisation to give priority to organizational goals over
and above their personal interests. Culture also serves as a sense making and control mechanism
that guides and shapes the attitudes and behaviour of people. Managers have to run an industrial
enterprise on the cutting edge of cultural experience. The tension that their actions create makes the
business ethically more complex.
3. Law:
The legal system of any country, guide the human behaviour in the society. Whatever, ethics the law
defines are binding on the society. The society expects the business to abide by the law. Although it
is expected that every business should be law abiding, seldom do the businesses adhere to the rules
and regulations. Law breaking in business is common eg. Tax evasion, hoarding, adulteration, poor
quality & high priced products, environment pollution etc.

Importance of Business Ethics:

1. Corresponds to Basic Human Needs:
The basic need of every human being is that they want to be a part of the organisation which they
can respect and be proud of, because they perceive it to be ethical. Everybody likes to be associated
with an organisation which the society respects as a honest and socially responsible organisation.
The HR managers have to fulfill this basic need of the employees as well as their own basic need
that they want to direct an ethical organisation. The basic needs of the employees as well as the
managers compel the organizations to be ethically oriented.

2. Credibility in the Public:

Ethical values of an organisation create credibility in the public eye. People will like to buy the
product of a company if they believe that the company is honest and is offering value for money. The
public issues of such companies are bound to be a success. Because of this reason only the cola
companies are spending huge sums of money on the advertisements now-a-days to convince the
public that their products are safe and free from pesticides of any kind.

3. Credibility with the Employees:

When employees are convinced of the ethical values of the organisation they are working for, they
hold the organisation in high esteem. It creates common goals, values and language. The HR
manager will have credibility with the employees just because the organisation has creditability in
the eyes of the public. Perceived social uprightness and moral values can win the employees more
than any other incentive plans.

4. Better Decision Making:

Respect for ethics will force a management to take various economic, social and ethical aspects into
consideration while taking the decisions. Decision making will be better if the decisions are in the
interest of the public, employees and company’s own long term good.

5. Profitability:
Being ethical does not mean not making any profits. Every organisation has a responsibility towards
itself also i.e., to earn profits. Ethical companies are bound to be successful and more profitable in the
long run though in the short run they can lose money.

6. Protection of Society:
Ethics can protect the society in a better way than even the legal system of the country. Where law
fails, ethics always succeed. The government cannot regulate all the activities that are harmful to the
society. A HR manager, who is ethically sound, can reach out to agitated employees, more effectively
than the police.

Definition of Business Policy

Business Policy defines the scope or spheres within which decisions can be taken by the subordinates
in an organization. It permits the lower level management to deal with the problems and issues
without consulting top level management every time for decisions.
Business policies are the guidelines developed by an organization to govern its actions. They define
the limits within which decisions must be made. Business policy also deals with acquisition of
resources with which organizational goals can be achieved. Business policy is the study of the roles
and responsibilities of top level management, the significant issues affecting organizational success
and the decisions affecting organization in long-run.
Features of Business Policy

An effective business policy must have following features-

1. Specific- Policy should be specific/definite. If it is uncertain, then the implementation will

become difficult.
2. Clear- Policy must be unambiguous. It should avoid use of jargons and connotations. There
should be no misunderstandings in following the policy.
3. Reliable/Uniform- Policy must be uniform enough so that it can be efficiently followed by
the subordinates.
4. Appropriate- Policy should be appropriate to the present organizational goal.
5. Simple- A policy should be simple and easily understood by all in the organization.
6. Inclusive/Comprehensive- In order to have a wide scope, a policy must be comprehensive.
7. Flexible- Policy should be flexible in operation/application. This does not imply that a
policy should be altered always, but it should be wide in scope so as to ensure that the line
managers use them in repetitive/routine scenarios.
8. Stable- Policy should be stable else it will lead to indecisiveness and uncertainty in minds of
those who look into it for guidance.

Difference between Policy and Strategy

The term “policy” should not be considered as synonymous to the term “strategy”. The difference
between policy and strategy can be summarized as follows-

1. Policy is a blueprint of the organizational activities which are repetitive/routine in nature.

While strategy is concerned with those organizational decisions which have not been
dealt/faced before in same form.
2. Policy formulation is responsibility of top level management. While strategy formulation is
basically done by middle level management.
3. Policy deals with routine/daily activities essential for effective and efficient running of an
organization. While strategy deals with strategic decisions.
4. Policy is concerned with both thought and actions. While strategy is concerned mostly with
action.
5. A policy is what is, or what is not done. While a strategy is the methodology used to achieve
a target as prescribed by a policy.

Strategy is an action that managers take to attain one or more of the organization’s goals. Strategy
can also be defined as “A general direction set for the company and its various components to
achieve a desired state in the future. Strategy results from the detailed strategic planning process”.

A strategy is all about integrating organizational activities and utilizing and allocating the scarce
resources within the organizational environment so as to meet the present objectives. While
planning a strategy it is essential to consider that decisions are not taken in a vaccum and that any
act taken by a firm is likely to be met by a reaction from those affected, competitors, customers,
employees or suppliers.

Strategy can also be defined as knowledge of the goals, the uncertainty of events and the need to
take into consideration the likely or actual behavior of others. Strategy is the blueprint of decisions
in an organization that shows its objectives and goals, reduces the key policies, and plans for
achieving these goals, and defines the business the company is to carry on, the type of economic and
human organization it wants to be, and the contribution it plans to make to its shareholders,
customers and society at large.

Features of Strategy

1. Strategy is Significant because it is not possible to foresee the future. Without a perfect
foresight, the firms must be ready to deal with the uncertain events which constitute the
business environment.
2. Strategy deals with long term developments rather than routine operations, i.e. it deals with
probability of innovations or new products, new methods of productions, or new markets to
be developed in future.
3. Strategy is created to take into account the probable behavior of customers and competitors.
Strategies dealing with employees will predict the employee behavior.

Strategy is a well defined roadmap of an organization. It defines the overall mission, vision and
direction of an organization. The objective of a strategy is to maximize an organization’s strengths
and to minimize the strengths of the competitors.

Strategy, in short, bridges the gap between “where we are” and “where we want to be”.

Roles of Chief Executive Officer

NOTE: References to a Boards of Directors in the following are in regard to chief executive officers
of corporations, whether for-profit or nonprofit.

Leader

 Advises the Board

 Advocates / promotes organization and stakeholder change related to organization mission
 Supports motivation of employees in organization products/programs and operations

Visionary / Information Bearer

 Ensures staff and Board have sufficient and up-to-date information

 Looks to the future for change opportunities
 Interfaces between Board and employees
 Interfaces between organization and community

Decision Maker

 Formulates policies and planning recommendations to the Board

 Decides or guides courses of action in operations by staff

Manager

 Oversees operations of organization

 Implements plans
 Manages human resources of organization
 Manages financial and physical resources

Board Developer

 Assists in the selection and evaluation of board members

 Makes recommendations, supports Board during orientation and self-evaluation
  Supports Board's evaluation of Chief Executive

Responsibilities of Chief Executive Officer

There is no standardized list of the major functions and responsibilities carried out by position of
chief executive officer. The following list is one perspective and includes the major functions
typically addressed by job descriptions of chief executive officers.

1. Board Administration and Support

Supports operations and administration of Board by advising and informing Board members,
interfacing between Board and staff, and supporting Board's evaluation of chief executive

2. Program, Product and Service Delivery

Oversees design, marketing, promotion, delivery and quality of programs, products and services

3. Financial, Tax, Risk and Facilities Management

Recommends yearly budget for Board approval and prudently manages organization's resources
within those budget guidelines according to current laws and regulations

4. Human Resource Management

Effectively manages the human resources of the organization according to authorized personnel
policies and procedures that fully conform to current laws and regulations

5. Community and Public Relations

Assures the organization and its mission, programs, products and services are consistently
presented in strong, positive image to relevant stakeholders

6. Fundraising (nonprofit-specific)

Oversees fundraising planning and implementation, including identifying resource requirements,

researching funding sources, establishing strategies to approach funders, submitting proposals and
administrating fundraising records and documentation

A CEO's story

We would like to illustrate how dynamic envisioning works with the story of a CEO – let’s call him
Alex – with whom we have worked closely for many years. Alex was a management consultant
when the founders of a privately owned conglomerate offered him a senior executive role. After a
series of acquisitions, they decided to create a stand-alone energy company and Alex was the natural
choice for CEO.

The young CEO’s brief was simple: Turn this collection of assets into a business, without any extra
capital. But Alex was more ambitious than that. His vision was to create the country’s best-run
company in terms of performance, systems, management, talent and reputation… within five years.
He wanted the business to be an employer of choice, a supplier of choice and (given his brief from the
owners) a borrower of choice. He shared all this with the organisation.

On a more personal level, his ambition was to prove himself as a CEO and make his family proud of
him. The company’s HQ was in the region he came from, not the nation’s capital. He wanted to build
 his hometown’s economy and prove that it could be home to a great company and attract executives
of top international calibre.

In his first year, attracting top executives is exactly what he set about doing. At the same time, he
put in place a transparent system of reporting and improved the performance of the company’s
various components by reducing waste and cutting costs.

In his second year, Alex concentrated on building the newly recruited talent into a team, consulting
them on all key decisions. He also reached out to people in all parts of the organisation, invested in
new technology and introduced modern policies, procedures and governance practices. Along the
journey, he also saw some of his own limitations, notably in image and public speaking. So he got
himself a coach, some new suits and attended courses at INSEAD and Harvard.

By the third year, all the basics were in place. Alex was able to refine his vision and focus on more
sophisticated practices, such as company-wide talent development as well as health, safety and
environmental (HSE) management.

By the fourth year, the company had adopted some world-class practices. There was a corporate
university, a bottom-up innovation programme and a new compensation system for managers, based
on both performance and development. Alex was not only investing in the training of his people but
of his suppliers and customers. Based on his recommendations, the board also reorganised the
corporate governance system.

By the beginning of the fifth year, Alex had received several awards for being the country’s best
CEO and the company had been ranked the nation’s top employer for two years in a row. The
management team had also won an award for being number one in the country. The shareholders
were making 30 percent annual return on their investment. The vision had become a reality a year
ahead of schedule.

Walking the talk

Our respondents shared specific practices that help business leaders to develop and keep updating
organisational vision. We would like to describe just four of them.

 One of our clients calls the first practice a “walking vision”, which comes from the idea of “walking
the talk”. We just call it personification of vision. In other words, the CEO becomes a living
representation of what her vision is about. If it’s about excellence, the CEO strives to excel in
everything she does. If it’s about collaboration, she makes collaboration her way of work. Diego
Bolzonello sums it up: “You must be an example to others and understand the meaning of your
actions [for them]”.
 The second practice is sometimes called a “talking parrot”. But it simply boils down to reiteration
of vision. Good CEOs use every opportunity to articulate their vision: regular management team
meetings, corporate conferences, shop-floor walkabouts and occasional encounters in the office
corridors. They may use different words each time, but they keep sending the same message about
where the company is going and what it stands for.
 The third practice is operationalisation of vision. According to Richard Rushton of Distell Group
(South Africa), the CEO is “fundamentally required to shape the future” and part of this future is
internal. Corporate rules, policies and procedures, working methods and products… they all speak
without having a mouth – and effective CEOs make good use of them to promote the vision. If your
vision is “to be number one in the world in the shoe business”, as Diego Bolzonello claims for Geox,
you have to make sure that you reward excellence rather than mediocrity. And you must recruit and
promote ambitious people, giving them freedom to create and innovate.
 The fourth practice is instrumentalisation of vision. Nishi Vasudeva of Hindustan Petroleum
(India) describes it as follows: “a broader vision and a feeling for external factors, so that you can fix
difficulties as they arise”. To explain this more fully, good CEOs encourage their people to use the
corporate vision as a benchmark for all kinds of decision making. When a VP of marketing asks for
advice about who to hire as head of marketing for the Northern European region – an INSEAD
MBA with two years’ experience working for the company’s main competitor or an industry veteran
– the CEO’s first question should be: “Who would fit our vision better?” The same logic applies to
investment projects, acquisitions or divestitures, as well as new products or services.

Setting, communicating and updating a vision for the business is the first and foremost role of the
CEO. This vision provides the rest of the organisation with direction, meaning and culture – and
becomes a decision-making benchmark for all managers. It may evolve but needs to be deeply
embedded in the entire organisation at all times.

Impact on Business Culture

Professionals err when thinking that, in today’s shrinking world, cultural differences are no longer
significant. It’s a common mistake to assume that people think alike just because they dress alike; it’s
also a mistake to assume that people think alike just because they are similar in their word choices in
a business setting. Even in today’s global world, there are wide cultural differences, and these
differences influence how people do business. Culture impacts many things in business, including

 The pace of business;

 Business protocol—how to physically and verbally meet and interact;
 Decision making and negotiating;
 Managing employees and projects;
 Propensity for risk taking; and
 Marketing, sales, and distribution.

There are still many people around the world who think that business is just about core business
principles and making money. They assume that issues like culture don’t really matter. These issues
do matter—in many ways. Even though people are focused on the bottom line, people do business
with people they like, trust, and understand. Culture determines all of these key issues.

The opening case shows how a simple issue, such as local flavor preferences, can impact a billion-
dollar company. The influence of cultural factors on business is extensive. Culture impacts how
employees are best managed based on their values and priorities. It also impacts the functional areas
of marketing, sales, and distribution.

It can affect a company’s analysis and decision on how best to enter a new market. Do they prefer a
partner (tending toward uncertainty avoidance) so they do not have to worry about local practices
or government relations? Or are they willing to set up a wholly owned unit to recoup the best
financial prospects?

When you’re dealing with people from another culture, you may find that their business practices,
communication, and management styles are different from those to which you are accustomed.
Understanding the culture of the people with whom you are dealing is important to successful
business interactions and to accomplishing business objectives. For example, you’ll need to
understand

 How people communicate;

 How culture impacts how people view time and deadlines;
 How they are likely to ask questions or highlight problems;
 How people respond to management and authority;
 How people perceive verbal and physical communications; and
 How people make decisions.
To conduct business with people from other cultures, you must put aside preconceived notions and
strive to learn about the culture of your counterpart. Often the greatest challenge is learning not to
apply your own value system when judging people from other cultures. It is important to remember
that there are no right or wrong ways to deal with other people—just different ways. Concepts like
time and ethics are viewed differently from place to place, and the smart business professional will
seek to understand the rationale underlying another culture’s concepts.

For younger and smaller companies, there’s no room for errors or delays—both of which may result
from cultural misunderstandings and miscommunications. These miscues can and often do impact
the bottom line.

Where Do Our Values Come From?

Just as people look to history to understand political, technical, and social changes, so too do they
look for changes in thinking and philosophy. There’s a history to how thinking has evolved over
time. What may or may not have been acceptable just a hundred years ago may be very different
today—from how people present themselves and how they act and interact to customs, values, and
beliefs.

Ethics can be defined as a system of moral standards or values. You know from the discussion
in Section 3.1 "What Is Culture, Anyhow? Values, Customs, and Language" that cultural
programming influences our values. A sense of ethics is determined by a number of social, cultural,
and religious factors; this sense influences us beginning early in childhood. People are taught how to
behave by their families, exposure to education and thinking, and the society in which they live.
Ethical behavior also refers to behavior that is generally accepted within a specific culture. Some
behaviors are universally accepted—for example, people shouldn’t physically hurt other people.
Other actions are less clear, such as discrimination based on age, race, gender, or ethnicity.

Culture impacts how local values influence global business ethics. There are differences in how much
importance cultures place on specific ethical behaviors. For example, bribery remains widespread in
many countries, and while people may not approve of it, they accept it as a necessity of daily life.
Each professional is influenced by the values, social programming, and experiences encountered
from childhood on. These collective factors impact how a person perceives an issue and the related
correct or incorrect behaviors. Even within a specific culture, individuals have different ideas of what
constitutes ethical or unethical behavior. Judgments may differ greatly depending on an individual’s
social or economic standing, education, and experiences with other cultures and beliefs. Just as in the
example of bribery, it should be noted that there is a difference between ethical behavior and normal
practice. It may be acceptable to discriminate in certain cultures, even if the people in that society
know that it is not right or fair. In global business ethics, people try to understand what the ethical
action is and what the normal practice might be. If these are not consistent, the focus is placed on
how to encourage ethical actions.

While it’s clear that ethics is not religion, values based on religious teachings have influenced our
understanding of ethical behavior. Given the influence of Western thought and philosophy over the
world in the last few centuries, many would say that global business has been heavily impacted by
the mode of thinking that began with the Reformation and post-Enlightenment values, which placed
focus on equality and individual rights. In this mode of thinking, it has become accepted that all
people in any country and of any background are equal and should have equal opportunity.
Companies incorporate this principle in their employment, management, and operational guidelines;
yet enforcing it in global operations can be both tricky and inconsistent.
UNIT II

Types of Ethical Issues

According to the Ethics & Compliance Initiative’s 2018 Global Benchmark on Workplace
Ethics, 30% of employees in the U.S. personally observed misconduct in the past 12 months, a
number close to the global median for misconduct observation. These ethical breaches often occur
unreported or unaddressed, and when totaled, can command a hefty cost. Unethical practices
spurred more than half of the largest bankruptcies in the past 30 years, like Enron, Lehman
Brothers, and WorldCom, and can take a larger economic toll, estimated at $1.228 trillion,
according to the Society for Human Resource Management.

These numbers suggest you’ll likely encounter ethical dilemmas in your workplace. Here are five
ethically questionable issues you may face in the workplace and how you can respond.

Unethical Leadership

Having a personal issue with your boss is one thing, but reporting to a person who is behaving
unethically is another. This may come in an obvious form, like manipulating numbers in a report or
spending company money on inappropriate activities; however, it can also occur more subtly, in the
form of bullying, accepting inappropriate gifts from suppliers, or asking you to skip a standard
procedure just once. With studies indicating that managers are responsible for 60% of workplace
misconduct, the abuse of leadership authority is an unfortunate reality.

Toxic Workplace Culture

Organizations helmed by unethical leadership are more often than not plagued by a toxic workplace
culture. Leaders who think nothing of taking bribes, manipulating sales figures and data or
pressuring employees or business associates for “favors” (whether they be personal or financial), will
think nothing of disrespecting and bullying their employees. With the current emphasis in many
organizations to hire for “cultural fit,” a toxic culture can be exacerbated by continually repopulating
the company with like-minded personalities and toxic mentalities. Even worse, hiring for “cultural
fit” can become a smokescreen for discrimination, which can result in more ethical issues and legal
ramifications.

Discrimination and Harassment

Laws require organizations to be equal employment opportunity employers. Organizations must

recruit a diverse workforce, enforce policies and training that support an equal opportunity
program, and foster an environment that is respectful of all types of people. Unfortunately, there are
still many whose practices break with EEOC guidelines. When discrimination and harassment of
employees based on race, ethnicity, gender, disability or age occurs, not only has an ethical line been
crossed but a legal one as well. Most companies are vigilant to avoid the costly legal and public
ramifications of discrimination and harassment, so you may encounter this ethical dilemma in more
subtle ways, from seemingly “harmless” off-color jokes by a manager to a more pervasive “group
think” mentality that can be a symptom of a toxic culture. This could be a group mentality toward
an “other” group (for example, women aren’t a good fit for our group). Your best response is to
maintain your personal values and repel such intolerant, unethical or illegal group norms by offering
an alternative, inclusive perspective as the best choice for the group and the organization.

Unrealistic and Conflicting Goals

Your organization sets a goal—it could be a monthly sales figure or product production number—
that seems unrealistic, even unattainable. While not unethical in and of itself (after all, having driven
leadership with aggressive company goals is crucial to innovation and growth), it’s how employees,
and even some leaders, go about reaching the goal that could raise an ethical red flag. Unrealistic
objectives can spur leaders to put undue pressure on their employees, and employees may consider
cutting corners or breaching ethical or legal guidelines to obtain them. Cutting corners ethically is a
shortcut that rarely pays off, and if your entire team or department is failing to meet goals, company
leadership needs that feedback to revisit those goals and re-evaluate performance expectations.

Questionable Use of Company Technology

While this may feel like a minor blip in the grand scheme of workplace ethics, the improper use of
the internet and company technology is a huge cost for organizations in lost time, worker
productivity and company dollars. One survey found that 64% of employees visit non-work related
websites during the workday. Not only is it a misuse of company tools and technology, but it’s also a
misuse of company time. Whether you’re taking hourly breaks to check your social media news feed
or know that your coworker is using company technology resources to work on freelance jobs, this
“little white lie” of workplace ethics can create a snowball effect. The response to this one is simple:
when you’re working on the company’s computer on the company’s time, just don’t do it, even as
tempting as it may be.

BRIBES

Bribery is the act of offering someone money or something valuable in order to persuade them to do
something for you.

How can Corruption and Bribery be Prevented?

Embedding an anti-corruption mind-set in place of unethical thought processes is not an overnight

process. Creating a culture of integrity and openness requires the long-term commitment of leaders
(the ones responsible for setting the workplace standards that employees will follow) to adopting an
ethical approach to the way they do business.

The Ministry of Justice has published 6 principles which companies should follow to prevent and
deal with bribery and corruption:

1. Proportionate Procedures

Procedures for preventing bribery should be in place which are proportionate to the size of the
company. This includes an anti-bribery policy, anti-bribery training for staff, and anti-bribery rules
by which people must abide.

Anti-bribery rules and procedures include:

 A whistleblowing helpline – this should be available to all employees and they should be
encouraged to use it if need be.
 Receipts being demanded for all payments made.
 Not accepting cash payments.
 Pooling gifts.
 Staff, agents, and contractors being given training on anti-bribery measures and
procedures.

All procedures should be clear, practical, accessible, and effectively implemented and enforced
throughout the company.
2. Top Level Commitment

Senior members’ attitudes will rub off onto those lower down the corporate ladder. They represent
the company, and need to show that it has a zero-tolerance approach to bribery and corruption so
that employees also adopt this perception and are less susceptible to unethical practices.

Promoting anti-bribery procedures, such as encouraging employees to use the company’s

whistleblowing helpline, will show dedication to preventing unethical behaviour. Likewise,
reviewing the bribery prevention policies and ensuring everyone is familiar with them on a regular
basis will reinforce the company’s commitment.

3. Risk Assessment

Your company should be able to determine what specific risks of bribery it may be faced with.
Remember, if a member of the business is the one receiving a bribe they are equally accountable. Are
there any employees at particular risk of being bribed? Are they aware of what to do if offered a
bribe? Can they differentiate between a bribe and a goodwill gesture?

The Say No Toolkit is an app designed to aid employees with making difficult decisions regarding
bribery. It helps them understand the situation they’re in better and offers them advice on how to
respond.

4. Due Diligence

What industry is your company a part of? Finances? Manufacturing? Media? Depending on what
work activities people engage in as part of their trade or profession, different risks of bribery could
exist. Seniors need to undertake research to discover what these are and respond appropriately.

5. Communication

The foundation of a company with strong ethics is its ability to communicate its anti-corruption
agenda openly and transparently to people. Employees should feel confident in their ability to
prevent bribery and should know that senior management will support them if they lose contracts or
business as a result of opposing corrupt practices.

Whistleblowing procedures should be very clearly explained to staff. Engaging in roleplay to

simulate instances where an employee faces bribery may even help heighten their ability to respond
to such situations under pressure.

This will all help communicate to employees that the company takes anti-corruption procedures
seriously and isn’t simply aiming to tick the compliance box.

6. Monitoring and Reviewing

Putting in place procedures without checking to see whether they are actually being adopted or even
working in practice is like putting up a smoke alarm without checking that its battery is attached
and that it actually emits sound. They need to be regularly reviewed to ensure that they’re effective
and that employees still have a strong understanding at all times.

Reinforcing policies on a regular basis will help them become deeply ingrained in employees’ minds.
They will become an integral part of the company’s culture, which will eliminate the possibility of an
ethical lapse.
The fact of the matter is, companies need to fight this issue from the inside out. Many companies
worldwide are actively taking steps to address bribery, but it is still a global issue.

If corrupt attitudes are not addressed more proactively, they will continue to burrow deeper into
people’s minds and continue to negatively influence others, leaving the business with nothing to
show except demoralised employees and greed-driven relationships.

Coercion

Improper use (or threat of improper use) of authority, economic power, physical force, or other such
advantage, by a party to compel another to submit to the wishes of its wielder. Agreements entered
into, or testaments signed, under coercion are considered illegal and invalid.

Coercion Theory
Coercion theory is the study of the development of aggressive and antisocial behaviors in children.
Essentially, coercion theory refers to the endless cycle of aggression that develops in a child and is
inadvertently fostered by his parents. The child exhibits aggressive behavior, and his parents have
no idea how to control it.
So, they get frustrated and respond with aggression, which makes the child even more frustrated
and aggressive. The child’s behavior then continues to escalate, and the parents’ frustration
continues in kind, until the child is of school age and begins displaying these behaviors outside of the
home as well.
What Is Workplace Coercion?
Workplace coercion can change the value and belief system of an organization and create an
unhealthy work environment. When organizations allow workplace coercion to run rampantly,
employees may become demoralized and the organization may find it difficult to use its human
resources effectively. While workers may learn to work with the difficult situations and may try to
adapt, constant undue distress can lead to excessive absences and high turnover rates.

Definition
Workplace coercion involves using power or strength to force employees to behave in a certain way.
Patrick Bratton, in the essay “When Is Coercion Successful?,” writes: “Coercion uses threats to
influence the behavior of another,” making the other “choose to comply rather than directly forcing”
compliance. Employers use coercive tactics for many reasons, including attempts to motivate low-
performing employees to produce better results or to increase company attendance at meetings.
Whatever the objective, workplace coercion offers threats of punishment if employees do not comply
with the given directive. Threats of punishment can include demotions, isolation from group
activities, poor reviews and mediocre assignments.
Effects
Coercion limits employee choices and can be both effective and ineffective. When using coercion to
direct and motivate employees, managers may use threats of termination, negative performance
reviews and low wage increases to coerce punctual attendance or increased production. These
threats may motivate employees to perform according to company standards. However, coercive
tactics can backfire. Coercion involves telling employees what to do and promises punishment if
employees do not follow directives. It does not allow employees to share in making decisions.
Employees working under coercive management styles may be resentful and may choose other
employment. Coerced employees also may follow directives even when they know the directives will
not accomplish the objective
Forms of Coercion
Workplace coercion can occur in complex forms that involve authoritative status, deception,
physical power and a range of tools such as showing favouritism, discrimination and denial or
provision of rewards. For example, managers who direct employees without allowing the staff to
share in workplace decisions use an authoritative style of management to coerce results. Also,
employees who appear to be bigger or stronger than others may use their size to intimidate other
employees, forcing the smaller or weaker employee to perform certain tasks. Workplace coercion
also can take psychological forms, which involves manipulating workers in a variety of nonphysical
ways, including peer pressure, providing misleading information, assignment of unachievable targets
and making false promises.
Warning
Just as employees can pursue any job opportunity that meets their interests, employers can seek
employees who fit their needs and fire those who do not. Employers typically can hire or fire at will,
but they must abide by discriminatory laws. If employees believe they are victims of discrimination,
they can file complaints with the U.S. Equal Employment Opportunity Commission. Employers may
not use workplace coercion to retaliate against employees who file discrimination charges with the
EEOC. Workplace coercion becomes illegal when it is used to prevent employees from exercising
their rights.
What Is Deception?
Deception refers to the act—big or small, cruel or kind—of causing someone to believe something
that is untrue. Even the most honest people practice deception, with various studies showing that
the average person lies several times a day. Some of those lies are big (“I’ve never cheated on you!”)
but more often, they are little white lies (“That dress looks fine,”) that are deployed to avoid
uncomfortable situations or spare someone's feelings.

Deception isn’t always an outward-facing act. There are also the lies people tell themselves, for
reasons ranging from healthy maintenance of self-esteem to serious delusions beyond their
control. While lying to oneself is generally perceived as harmful, some experts argue that there are
certain kinds of self-deception—like believing one can accomplish a difficult goal even if evidence
exists to the contrary—that can have a positive effect on overall well-being.

Trust is the bedrock of social life at all levels, from romance and parenting to national government
and international treaties. Deception always undermines it.

Is It Possible to Spot a Liar?

Researchers have long searched for ways to definitively detect when someone is lying. One of the
best-known methods, the polygraph test, is based on the theory that lying alters normal
psychophysiologic patterns that can be detected by sensitive machinery. Although popular
in crime dramas and movies, the test has long been controversial, with no evidence that there are
definitive fluctuations in physiology. Evidence suggests that those with certain psychiatric disorders
like Antisocial Personality Disorder cannot be accurately measured by polygraph or other
commonly used lie detection methods.

Many experts propose that liars reveal themselves in "tells," major and minor changes in body
language or facial expressions. But evidence indicates that observable signs of lying can be
unreliable, and deception detection—even by psychologists—is no greater than chance.

Detection of deception is essential for law enforcement, and the search for reliable methods is ever-
ongoing. Many interested parties have shifted their focus away from outward signs of lying to the
use of interview techniques that reveal lying. Research suggests that, in strategic situations, the
number of words, the type of words, the repetition of words can all help trained interviewers detect
deception.
Why We Lie
No one likes being deceived, and when public figures are caught in a lie, it can become a major
scandal. But while many people pride themselves on their scrupulous honesty—and try to distance
themselves from individuals who are more comfortable with falsehoods—the truth is that everyone
lies, for a variety of reasons. In fact, some experts suggest that a certain amount of deception may be
necessary for maintaining a healthy, functioning society. The formal study of deception was once the
domain of ethicists and theologians, but more recently, psychologists have turned their attention to
why people lie, and the conditions that make them more likely to do so.

Theft
Contemporary Workplace Ethics- Theft

1. Theft is defined as taking possession of something that doesn’t belong to you. Workplace theft
also includes time theft as well as misuse of an employers’ assets.
2. Employee theft is variable in definition and severity, and should be outlined clearly in the
workers handbook even when it clearly is unlawful to prevent disputes in legal ramifications.
3. Employers, employees, customers, clients and even the general public are affected by theft in the
workplace.
4. Punishment ranges in severity as the crime does. From minor embarrassment, to loss of job, to
fines and or imprisonment.
5. The best course of action as an employer is to set clear guidelines, state them in writing and
adhere to them. As an employee is to read your handbook, follow the rules and the laws.

Types of Workplace Discrimination

Employment discrimination happens when an employee or job applicant is treated unfavorably

because of his or her race, skin color, national origin, gender, disability, religion, or age.

It is illegal to discriminate in any facet of employment, so workplace discrimination extends beyond

hiring and firing to discrimination that can happen to someone who is currently employed.

What Is Employment Discrimination?

It is illegal to discriminate based on race, religion, gender, or national original when hiring or in the
workplace. Federal contractors and subcontractors must take affirmative action to guarantee equal
employment opportunity without regard to these factors. Executive Order 11246 is enforced by the
Office of Federal Contract Compliance Programs (OFCCP).

In addition, Title VII of the Civil Rights Act of 1964 makes it unlawful to discriminate in hiring,
discharge, promotion, referral, and other facets of employment, on the basis of color, race, religion,
sex, or national origin. This is enforced by the Equal Employment Opportunity
Commission (EEOC).

Discrimination vs. Harassment

Harassment is a form of discrimination. As with discrimination, there are different types of

harassment, including unwelcome behavior by a co-worker, manager, client, or anyone else in the
workplace, that is based on race, color, religion, sex (including pregnancy), nationality, age (40 or
older), disability, or genetic information.

Different Types of Employment Discrimination

Workplace discrimination occurs when an individual is adversely discriminated against due to any
number of factors. In addition to the reasons listed above, employees and job applicants can also be
discriminated against because of disabilities, genetic information, pregnancy, or because of their
relationship to another person.

Review this list of the different types of employment discrimination, examples of workplace
discrimination, and tips for handling workplace discrimination issues.

 Age
 Gender
 Race
 Ethnicity
 Skin Color
 National Origin
 Mental or Physical Disability
 Genetic Information
 Relationship to someone who may be discriminated against
 Pregnancy or Parenthood

Examples of Employment Discrimination

Employment discrimination could occur in any number of situations, including:

 Stating or suggesting preferred candidates in a job advertisement

 Excluding potential employees during recruitment
 Denying certain employees compensation or benefits
 Paying equally-qualified employees in the same position different salaries
 Discriminating when assigning disability leave, maternity leave, or retirement options
 Denying or disrupting the use of company facilities
 Discrimination when issuing promotions or lay-offs

Discrimination Legislation and Issues

Age Discrimination
Age discrimination is a practice specifically protected by law. With a few rare exceptions, companies
are forbidden from specifying an age preference in job advertisements. Employees must receive the
same benefits regardless of age, the only exception being when the cost of providing supplemented
benefits to young workers is the same as providing reduced benefits to older workers. Also, age
discrimination in apprenticeship programs or internship opportunities is illegal.

Religious Discrimination
It is illegal for employers to discriminate based on an individual's religious customs. Businesses are
required to reasonably accommodate an employee's religious beliefs, as long as doing so doesn't have
excessive negative consequences for the employer.

Gender Discrimination
When paying a salary to men and women of the same qualifications, responsibility, skill level, and
position, employers are forbidden to discriminate on the basis of gender. Also, businesses are
forbidden from lowering one gender's salary in order to equalize pay between men and women.

Pregnancy-Based Discrimination
Additionally, pregnancy-based discrimination is illegal. Employers are required to handle pregnancy
in the same way that they would handle a temporary illness or other non-permanent condition that
would necessitate special consideration. Job seekers have the same rights as employees, and both are
protected by the Pregnancy Discrimination Act (PDA) passed in 1978.
Hostile Work Environment
A hostile work environment is created when harassment or discrimination interferes with an
employee’s work performance or creates a difficult or offensive work environment for an employee
or group of employees.

Unlawful Discrimination and Harassment

It's important to note that discriminatory practices can occur in any aspect of employment. It is
illegal for an employer to make assumptions based on race, gender, or age-related stereotypes, and
it's also unlawful for an employer to assume that an employee may be incapable because he or she is
disabled.

Additionally, companies are prohibited from withholding employment opportunities from an

employee because of his or her relationship with someone of a certain race, religion, or
ethnicity. Unlawful discrimination also includes harassment based on legally protected personal
traits, including (but not limited to) race, gender, age, and religion.

Employment Discrimination Complaints

Under United States laws, companies are prohibited to subject employees to unfair treatment or
blatant discrimination based on these legally protected characteristics. Also, it is illegal for an
employer to retaliate against a person who has filed a complaint about discrimination or participated
in an investigation.

While not all unfavorable treatment constitutes unlawful discrimination, any employee who believes
that he or she has experienced workplace discrimination can file a complaint with the EEOC (The
Equal Employment Opportunity Commission).

Distribution of EEOC Complaints

The EEOC reported the following breakdown regarding the types of complaints for discrimination
that were fielded by the agency in 2018:1

 Retaliation: 39,469 (51.6% of all charges filed)

 Sex: 24,655 (32.3%)
 Race: 24,600 (32.2%)
 Disability: 24,605 (32.2%)
 Age: 16,911 (22.1%)
 National Origin: 7,106 (9.3%)
 Color: 3,166 (4.1%)
 Religion: 2,859 (3.7%)
 Equal Pay Act: 1,066 (1.4%)
 Genetic Information: 220 (0.3%)