Professional Documents
Culture Documents
Business Ethics
Business Ethics
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What is ethics?
Doing the right thing.
Doing it the right way.
Doing it for the right reason.
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Business Ethics
Planning & Leadership
Aim at doing the right thing
Organizing
Do it the right way
Control
Do it for the right reason
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Evolution of Business Ethics
Business
Historically not known to be ethical
Profit before any thing else
Ethics
Religious influence
Social influence
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Why Business is being ethical now?
Stricter laws and regulations
Watch dogs
Realization that ethics is profitable
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How to enforce Ethics
Law
Industrial and professional codes
Internal codes
Wanting to be ethical
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Law
Words of law and spirit of law
Law cannot create honesty
Law cannot cover every thing.
Law, in terms of Corporate Governance,
includes Company Law, Code of Corporate
Governance, and CCG Regulations issued by
SECP.
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Professional Codes
Lesser force than law.
Professional associations e.g. ICAP force their
members to follow ethics, or face expulsion.
Professionals work for companies and force
companies to follow ethics.
Industrial associations also exhort their
members to be ethical.
PSX also has a Code for listed companies
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Internal Code
The most compelling reason for a company to
be ethical is its own board.
A company can become ethical only if its board
is willing to face the consequences and pay the
price of honesty.
Setting up a formal policy on ethics is essential.
Ethics should be part of every thing that a
company does. Doing certain things in name of
ethics is not enough.
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Advantages of BE
Improvement in image
Higher productivity among workers
Access to more and cheaper capital
Company helps society; society helps
company
Every one is a winner
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Impact on Employees
If the company is honest, employees tend to be
honest as well. This means better work
environment, better productivity, higher
efficiency.
Honest companies have lesser frauds and thefts.
Ethical companies attract better quality of staff.
Ethical companies are able to retain good staff.
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Areas where ethical standards
need to be applied
Ethics in Financial matters
Ethics in Human resources management
Ethics in Sales and Marketing
Ethics in production
Ethics in matters relating to property /
intellectual property.
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Characteristics of
an ethical organization
Formal code of ethics
Regular interaction with stakeholders
Obsessively fair to all, fight unfairness
forcefully
Managers responsible individually; do not hide
behind collective responsibility charade
Employees see a purpose in their work
Non-bureaucratic procedures
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Roots of individual
unethical behavior
Pressure of work and family life
Poor communication between company and
employees
Poor leadership of the company
Heavy work load; long working hours
Undue pressure / unrealistic targets
Politics, favoritism, nepotism
Personal traits & circumstances
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Handling these causes
All these causes can be handled by a good
management team by:
Fairness and equal treatment of all employees
Reasonable load of work
Reasonable targets
Good HR practices
Right choice of employees
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Aspects of corporate
unethical behavior
Bribery
Coercion
Conflict of interest: company & others
Tax evasion
Insider trading
Lack of regard for the society
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How to enforce ethics
in a company?
Decide to be ethical
Ethical decision making as norm for all
operations.
Draw up a formal Ethics Policy and let it be
part of normal operational manuals.
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Ethics Policy
Avoidance of conflict of interest at all levels
Honesty and integrity
Fairness in dealing with every one
Acting in good faith
Compliance with law
Encouraging ethical reporting: whistleblowing
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Pakistani Scene
Companies are not willing to be ethical
Those that are willing cannot afford to be
ethical.
Those that can afford, are not allowed by the
situation.
One has to bribe even to get one’s rights
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Rectifying the situation
Principal causes:
Company policies
Unethical industrial climate
Rampant corruption in government
Solution:
Bigger companies should start; others will follow
Gradually the business climate will change
Once business is honest; government will have to
get honest.
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Thank you
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