Business EthicsAbigan, PaulIgot, Sarah

What is business ethics?

set of principles of conduct within organizations that guide decision making and behavior

“Good business ethics is a prerequisite for good strategic management; good ethics is just good business!”

Business Ethics and Strategists

There is a rising tide of consciousness about the importance of business ethics

Strategists (e.g. CEOs and business owners) are individual primarily responsible for ensuring that high ethical principles are espoused and practices in an organization.

All strategy formulation, implementation and evaluation decisions have ethical ramifications

Business Ethics and Strategists

being unethical can be expensive (examples: fake medical study, misleading advertising and labeling, causing environmental harm, poor product or service safety, padding expense accounts, insider trading, dumping banned or flawed products in foreign markets, not providing equal opportunities to women and minorities, overpricing, moving jobs overseas, sexual harassment)

Code of Business Ethics

Examples of unethical activities that plague online commerce:

1. internet fraud

2. hacking into company computers

3. spreading viruses

4. identity theft

Code of Business Ethics

due to ethical issues related to product safety, employee health, sexual harassment, AIDS in the workplace, smoking, acid rain, affirmative action, waste disposal, foreign business practices, cover-ups, takeover tactics, conflicts of interest, employee privacy, inappropriate gifts, security of company records has accentuated the need for strategists to develop a clear code of ethics

Code of Business Ethics

A document that provides behavioral guidelines that cover daily activities and decision within an organization

merely having a code of ethics is not sufficient to ensure ethical business behavior

periodic ethics workshops are needed to ensure that the code is read, understood, believed and remembered

punishments for violating and reward for upholding a code can reinforce the firm's business ethics

Ethics Culture and Role of Strategists and Managers

ethics cultures needs to permeate in an organization

many organizations have developed a code-of-conduct manual outlining ethical expectations and giving examples of situations that commonly arise in business

Whistle-Blowing – policies that require employees to report any unethical violations they discover or see in the firm

Heidi Mendoza – Carlos Garcia Plunder case

George Rabusa – Pabaon controversy

Jun Lozada – NBN-ZTE controversy

Clarissa Ocampo – Jose Velarde Erap Plunder Case

Vidal Doble – Hello Garci scandal

Local examples of whistleblowing

Ethics Culture and Role of Strategists and Managers

Ethics Culture and Role of Strategists and Managers

strategists take the moral risks of the firm, thus they are responsible for developing, communicating, and enforcing the code of business ethics for their organization

managers also have an integral part, to provide ethics leadership by constant example and demonstration.

Because managers are in the position to influence and educate people, it is their responsibility to develop and implement ethical decision making

“Trees die for the top.” - no one should ever become a strategist unless he or she is willing to have his or her character serve as the model for subordinates

Ethics and Strategic Decision Making

history has proven that the greater the trust and confidence of people in the ethics of an institution or society, the greater is its economic strength

more and more firms believe that ethics training and an ethics culture create strategic advantage

ethics training programs should include messages from CEO or business owners emphasizing ethical business practices. The development and discussion of codes of ethics, and procedures for discussing and reporting unethical behavior

Ethics and Strategic Decision Making

firms can align ethical and strategic decision making by incorporating ethical considerations into longterm planning, integrating ethical decision making into performance appraisal process, encouraging whistle-blowing, monitoring departmental and corporate performance using ethical issues

Bribery

Bribery

Bribery is the act of offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or other person in discharge of a public or legal duty

Bribe is gift bestowed to influence a recipient's conduct (can be money, good, right in action, property, preferment, privilege, emolument, object of value, advantage, or merely a promise or undertaking to induce or influence the action, vote or influence of a person in a official or public capacity

Bribery under Philippine constitution

Can be found in:

Revised Penal Code TITLE VII

CRIMES COMMITED BY PUBLIC OFFICERS

Chapter 2 MALFEASANCE AND MISFEASANCE IN OFFICE section 2

http://www.dpwh.gov.ph/about_us/reforms/graft_n_corruption/pdf/Revised%20Penal%20Code1.pdf

Love affairs at work

many firms have policies that prohibit relationships between superior and subordinate

other firms require individuals to inform their supervisors whenever there is a romantic relationship begins with a coworker

Love affairs at work

for european firms, romantic relationships are viewed as personal matters and most firms have no polices but they are increasingly adopting explicit, American style sexual harassment laws (example of an explicit, american style sexual harassment law?)

Example: World Bank regard sexual relations between managers and an employee as “de facto conflict of interest which must be resolved to avoid favoritism.” World Bank President Paul Wolfowitz was forced to resign due to a relationship he had with a bank staff (year?)