Business Ethics and Corporate Social Responsibility(MGMT4231) Chapter Four 2016 E.C.

CHAPTER FOUR

ETHICS OF BUSINESS: MANAGEMENT AND LEADERSHIP

Chapter objectives

Dear students at the end of this chapter you are expected to:
 Describe statement of value and its benefits
 Differentiate between code of conduct and code of ethics
 Illustrate ethics training, ethics audit and consultants

Introduction to Ethics of business

Business Ethics is a study of moral standards and how these apply to the social systems and
organizations through which modern societies produce and distribute goods and services and
to the behaviors of the people who work within these organizations. Business ethics, in other
words, is a form of applied ethics. It not only includes the analysis of moral norms and moral
values but also attempts to apply the conclusions of these analyses to that assortment of
institutions, organizations, activities and pursuits that we call business. As this description of
business ethics suggests, the issues that business ethics covers encompass a wide variety of
topics. To introduce some order into this variety, it helps if we distinguish three different
kinds of issues that business ethics investigates: systemic, corporate and individual. Systemic
issues in business ethics are ethical questions raised about the economic, political, legal, and
other social systems or institutions within which businesses operate. These include questions
about the morality of capitalism or of the laws, regulations, industrial structures and social
practices within which businesses operate.

Corporate issues in business ethics are ethical questions raised about a particular
organization. These include questions about the morality of the activities, policies, practices
or organizational structure which an individual company takes. Finally, individual issues in
business ethics are ethical questio0ns raised about a particular individual or particular
individuals within a company and their behaviors and decisions. These include questions
about the morality of the decisions, actions or character of such individuals. It is helpful when
analyzing the ethical issues raised by a particular decision or case to sort out the issues in
terms of whether they are systemic, corporate or individual issues. Often the world presents
us with decisions that involve a large number of extremely complicated and interrelated kinds
of issues that can cause confusion unless the different kinds of issues are first carefully sorted

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out and distinguished from each other. Moreover, the kinds of solutions that are appropriate
in dealing with systemic or corporate issues are not the same as the kinds of solutions that are
appropriate in dealing with individual issues.

If a company is trying to deal with a systemic issue such as a government culture that
permits bribery then the issue must be dealt with on a systemic level; that is, it must be dealt
with through the coordinated actions of many different social groups. On the other hand,
corporate ethical issues can be solved only through corporate or company solutions. If a
company has a culture that encourages moral 1wrongdoing, for example, then changing that
culture requires the cooperation of the many different people that constitute the company.
Finally, individual ethical issues need to be resolved through individual decisions and,
perhaps, individual reforms.

Ethical leadership

Leaders using an ethical form of leadership communicate ethical standards and encourage
ethical conduct. They also provide a model of ethical behavior and set an example for
others in the corporation. Unethical behavior is opposed and is dealt with promptly and
appropriately. Decisions are made that consider the needs of different stakeholders, and
encouragement is given to supporting worthy community activities including through
volunteerism. The operations of the corporation reflect support for socially responsible
activities, for example, designing safe products, treating employees fairly, and reducing
pollution and other threats to the environment.

Leadership styles have been extensively researched, but the styles applicable to ethics of
business have not, according to Christensen et al. They reviewed research on leadership
and identified possible styles or forms applicable to the ethics of business and corporate
social responsibility. These forms are:

Responsible leadership
Servant leadership and
Ethical leadership

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Responsible leadership- The concept of responsible leadership has two different

orientations, a narrow one focused on financial performance and an extended one with a
stakeholder view. The latter is consistent with corporate social responsibility where the
corporation is not run to only make profits, but thinks of profits as an outcome likely to
result from managing a purposeful and responsible business. Business is considered as a
means, not an end, in addressing social problems and serving stakeholders in need. With
this form of leadership, a manager might base actions on religious or spirituality beliefs.
Servant leadership- The servant leadership emphasizes concern for others, and combines
the motivation to lead with the need to serve others. Characteristics of this form include:
empowering and developing of people, acting authentically, showing of humility, and
providing direction. Managers practicing this form act as stewards who work for the good
of the whole while creating value for relevant stakeholders. Focus is on all stakeholders
and a wider set of goals than only profits. Social responsibility or sustainability is more
likely included with the focus on disenfranchised stakeholders or maybe the environment.
Most importantly the response of servant leadership is greater engagement with
stakeholders, for example, including greater commitment, job satisfaction, and
empowerment by employees. Survival of the corporation is important but so is
responsibility to the community and meeting the needs of stakeholders.

Ethical leadership- Leaders using an ethical form of leadership communicate ethical

standards and encourage ethical conduct. They also provide a model of ethical behavior and
set an example for others in the corporation. Unethical behavior is opposed and is dealt
with promptly and appropriately. Decisions are made that consider the needs of different
stakeholders, and encouragement is given to supporting worthy community activities
including through volunteerism. The operations of the corporation reflect support for
socially responsible activities, for example, designing safe products, treating employees
fairly, and reducing pollution and other threats to the environment.
Ethical Management/ethical leadership is crucial to business success. Most business owners
must create a code of ethics for their business and adhere to its principals, or their business
will not achieve the success it might have the potential for. Every time a new business is
launched anywhere in the world, whether a one man operation or a full blown brick-and-
mortar corporate enterprise, the owners must adopt a code of ethics for the business. For

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small businesses, the code is usually unwritten and sometimes not even discussed and
decided upon, but still a code exists. Larger businesses often have written codes of ethics and
employees are trained in them and required to adhere to the code Business owners who toss
ethics aside by promising one thing and delivering another thing entirely usually do not last
long in the marketplace. Generally, Management of ethics in an organization deals with the
morality and conduct of the individuals and the responsibilities of the management.
Therefore, ethical management or ethical leadership deals with issues relating to managerial
misbehavior and the moral conduct of the management.

Statement of value
What is Statement of value?

Values statements, or statements of values are the core, guiding principles of an

organization; they define what a company believes in and how people in the organization
are expected to behave with each other, customers, vendors and other stakeholders.

A statement of values contains a description of the beliefs, principles, and basic

assumptions about what is desirable or worth striving for in an organization. Many
corporations have articulated their values in such statements, also referred to as creeds
and statements of philosophy. A statement of values also becomes the basis for a code of
ethics. Most business enterprises are concerned to some extent about ethical behavior,
integrity, employee health and safety, the environment, quality, and service. Such
concerns are a part of corporate life today. Different multinational corporations adopt the
top ten corporate values to be integrity, honesty, justice, equality, objectivity
(impartiality), loyalty, devotion, respect, prudence, and tolerance. There is no uniformity in
content or format in these statements. Kooten found that a value statement may contain any
combination of components, such as:

 The key interests to be satisfied and balanced; for example, the public or
community interest, owners, employers, and suppliers;

 An emphasis on quality and/or excellence in relation to product and service,

employees, and technology;

 Efficiency as indicated by low cost, high productivity and value for money
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or investment;

 The atmosphere or climate of enterprise; for example, a good place to work,

an emphasis on teamwork, managers' support of staff, and development of employees;

 The observance of codes of conduct to enhance integrity and to ensure fairness in

all dealings

Who Needs a Values Statement?

It does not matter the size of your organization; all businesses big and small can benefit
from a values statement.

For large companies, it helps establish a personality and enables employees to unite
around common themes by establishing a baseline for a company’s culture. Smaller
companies’ values may center on the founders and their reasons for starting the business.
Their statements might be more direct and targeted toward a smaller customer base.

No matter what the sizes of your organization, a values statement helps give people a
sense of who you are and what’s important to you.

What are the Difference between a Mission, Vision and Values Statement?

It is easy to confuse a values statement with a mission statement and vision statement, but
they reflect three very different aspects of who you are as a business.

Mission statements explain why your organization exists – why it was created in the
first place. Was it to help the community? Provide a service? Fulfill an unmet need? The
mission statement supports the vision and values statement and serves to communicate
purpose and direction to employee team members, customers and stakeholders.
Vision statements are forward-looking statements that state what an organization is
striving to achieve. This statement can include a problem the business is trying to solve
or a synopsis of a company’s strategic plan. The vision statement should inspire current and
prospective employees and customers by showing its aspirations as an organization.
Values statements explain what is important to your organization, how you conduct
business and how you conduct yourselves. They are a guideline that helps demonstrate the
type of company culture you have and helps establish your brand reputation.

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What are the Benefits of a Values Statement?

A values statement is more than just information to fill the “About Us” page on
company’s website. It’s a key component of the company and its culture it builds. Some
of the benefits of a values statement include:

Shapes Company Culture: While a mission and vision statement explain purpose and
goals, a values statement explains a company’s moral compass. A values statement reflects
what your business stands for and gives team members and prospective employees a
baseline of expectations for how to conduct themselves.
Shows Transparency: A survey by Glassdoor showed that 90 percent of job seekers
find transparency an important quality in an organization. Being honest and open in
your values statement shows that your company is more an “open door policy” than
“behind closed doors” kind of business and encourages team members to follow suit.
Helps with Recruitment: A clear and honest values statement will catch the eye of
those interested in working for your company, especially if it encapsulates the principles that
are important to you and gives prospective employees an understanding of the type of
environment in which they would work.
Can Increase Business: A values statement shows what your business stands for, and a
good values statement can set you apart from the competition. A company that
embodies its values statement is more likely to have longer-lasting relationships with its
employees and customers.

Codes of conduct and ethics

Code of Ethics and Code of Conduct are the standards that a group must adhere to, so as to
remain the member of the organization. The primary difference between code of ethics and
code of conduct is that code of ethics is a set of principles which influence the judgment
while the code of conduct is a set of guidelines that influence employee’s actions.

These statements are formally addressed and need to be accepted by the members when they
join the organization for the first time. These help the business enterprise in regulating the
business efficiently. While code of conduct is something that states organized values, code of
ethics is used to observe ethical norms and gives a foundation to rules of conduct.
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Definition of Code of Ethics

Code of Ethics is a document issued by the top-level management, which consist of a set of
principles, designed to guide the members of the organization to carry out business honestly
and with integrity. It describes the core values of the organization that guides the decision-
making. It provides ethical standards which are to be followed by the members. It sets out
general guidelines to assist individuals to apply their judgment, concerning a suitable
behavior in a given situation.

Code of ethics helps members in understanding what is right or wrong. The codes are
disclosed publicly and hence addressed to the interested parties to know the way the company
does business. Violation of the code of ethics by any member may result in termination or
dismissal from the organization.

Principles of code of ethics

Code of ethics is made up of five fundamental principles: integrity, objectivity, professional

competence and due care, confidentiality and professional behavior:

A. Integrity: being straightforward, honest and truthful in all professional and business
relationships. You should not be associated with any information that you believe contains a
materially false or misleading statement, or which is misleading by omission.
B. Objectivity: not allowing bias, conflict of interest or the influence of other people to
override your professional judgment.
C. Professional competence and due care: an ongoing commitment to your level of
professional knowledge and skill. Base this on current developments in practice, legislation
and techniques. Those working under your authority must also have the appropriate training
and supervision.
D. Confidentiality: You should not disclose professional information unless you have specific
permission or a legal or professional duty to do so.
E. Professional behavior: comply with relevant laws and regulations. You must also avoid
any action that could negatively affect the reputation of the profession.

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Definition of Code of Conduct

Code of Conduct is a document that expresses the practices and behavior of a person,
required or restricted as a condition for becoming a member of the organization or profession.
The code sets out the actual rules, so it lays down the do’s and doesn’t s of an employee. The
members are responsible for its adherence and held accountable for its violation.

Every organization has its code of conduct issued by the Board of Directors (BOD) that
determines the social norms, regulations and responsibilities. It is in the form of written
statement; that contains rules for behavior, which are supposed to be followed by the
employees of the company. The document directs and guides the employees in various
matters.

Key Differences between Code of Ethics and Code of Conduct

The major differences between code of ethics and code of conduct are described in the
given below points:
 Code of Ethics is an aspiration document, issued by the board of directors containing core
ethical values, principles and ideals of the organization. Code of Conduct is a directional
document containing specific practices and behavior that are followed or restricted under the
organization.
 Code of Ethics is general is general in nature, whereas code of conduct is specific.
 Code of Conduct is originated from the code of ethics, and it converts the rules into specific
guidelines, that must be followed by the members of the organization.
 Lengthwise, code of ethics is a shorter document than a code of conduct.
 Code of Ethics regulates the judgment of the organization while a code of conduct
regulates the actions.
 Code of Ethics is publicly available, i.e. anyone can access it. Conversely, Code of
Conduct is addressed to employees only.
 Code of Ethics focuses on values or principles. On the other hand, Code of Conduct is
focused on compliance and rules.

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Table 4.1 Comparison between code of Ethics and Code of conduct

Basis for
Code of ethics Code of conduct
comparison
Meaning An inspirational document, A directional document
issued by the board of containing specific
directors containing core practices and behavior
ethical values, principles that are followed or
and ideals of the restricted under the
organization is Code of organization is Code of
Ethics. Conduct.
Nature General Specific
Scope Wide Narrow
Governs Decision making Actions
Length Short Comparatively longer
Disclosure Publicly disclosed. Employees only.

Focused on Values or principles Rules and regulations

To sum up, Code of Conduct is actually extracted from the Code of Ethics. Therefore, the
latter concept is wider than the former. Moreover, these codes are beneficial for businesses of
any size and nature as the codes lays down direction which is helpful for employees, to
behave in a particular manner and also making a public image of ethical behavior. The
following discussion refers to codes generally.

Levels of codes in business system

Codes have been developed at different levels in the business system, and they all contribute
to the managing of ethics:
] Corporate or business enterprise- Individual corporations prepare codes for their own use.
] Professional organizations-Professions such as lawyers, accountants, and architects have
been early users of codes and are influenced by them when employed by business enterprises.

] Industry and sector-Industry associations formulate codes that enterprises in the industry or
sector may voluntarily follow. Also referred to as voluntary codes, sometimes these codes are
developed in conjunction with government
] Single issue-Non-governmental organizations (NGOs) or business associations develop
codes applicable to a particular issue, for example sweatshop labor in developing countries.
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] Codes for national and international bodies-International NGOs or agencies such as the
United Nations or the Organization for Economic Co-operation and Development (OECD)
prepare codes.
Content of Codes of Conduct and Codes of Ethics
 A general statement of ethics, values, or philosophies
 Criteria for decision making and compliance with laws
 Responsibility toward employees, including items such as health and safety, non-
discrimination, and privacy
 Conflicts of interest, their identification, and how to handle them
 Protection of corporate assets, including accurate accounting, security or property, and
insider information
 Appropriate business practices, including honesty, fairness, obeying the law, and
information disclosure
 Appropriate conduct on behalf of the corporation; for example, relationships with customers,
suppliers, competitors, creditors, and government
 Responsibilities to society at large, including contribution to political parties, responses to
media, treatment of communities, and concern for environmental protection
 Implementation procedures, including familiarity with the code, reporting of violations,
refusing unethical requests, and seeking help on ethical matters
 Specification of enforcement/compliance procedures and the penalties for inappropriate or
illegal behavior.

Ethics training, audits and consultants

Ethics training
Ethics training involves teaching employees about the values and policies on ethics they
should follow in their decision making. The teaching sessions involve an orientation on
values or ethics and related policies and deal with reputation and legal risks. A code of ethics

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or statement of values may be used in this teaching process, in addition to handbooks

or policy statements. Such teaching can be done by managers or outside consultants
and addressed to all levels of employees, but more emphasis has been placed on
management levels.
Ethics training programs also help employees deal with ethical questions and translate
the values stated in a code of ethics into everyday behavior. Training programs are
important supplement to a written code of ethics.
Larger corporations have developed online exercises to increase awareness of ethical
implications. Employees complete such exercises at their computers, with appropriate
responses presented or a scoring of the employee's ethical awareness given. Such
training programs are established not only to develop employee awareness of ethics in
business but also to draw attention to the ethical issues to which an employee may be
exposed.
Training involves giving participants practical checklists and tests to evaluate their
actions. Training usually also includes a description of cont1ict of interest, something
that inevitably arises in a discussion of ethics.

Ethics Audit

An ethics audit is a systematic effort to discover actual or potential unethical behavior

in an organization. It is designed not only to uncover unethical behavior, but also to
identify existing opportunities for unethical behavior.
An ethics audit is a process that is qualitative and quantitative. It provides an
opportunity to assess ethics programs and ethics training for employees, new hires, or
the general workforce. The ethics audit process involves assessing ethics-related
information such as compliance with an ethics program’s code of conduct or code of
ethics policies and procedures.
There is a preventive as well as a remedial purpose. Audits are particularly useful
when used in conjunction with a code of ethics, as the code can be the basis for
comparison to establish how well or poorly the organization is doing. Regular audits
foster ethical practice. In recent years, several ethics audits or ethics accountability

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measures have been developed.

An ethics audit can include reviewing the code of ethics, reviewing past incidents and
the response by the individual and the organization, and interviewing employees to
understand their perspective on the organization’s ethics. Some choose to utilize
different ethics audit types. The ethics audit types vary from assessing
individual employee awareness to understanding the overall ethical culture. In the
end, ethics auditing is similar to any other audit.
This process can be an effective way to raise awareness of unethical behavior within
an organization and prevent it from happening again. This process can be applied to
volunteer programs, board meetings, and employee training programs. You must carry
out an ethics assessment regularly to ensure the integrity of your company.
An ethics audit should be conducted regularly as a means of improving both ethics-
based decision-making and employee morale. An ethics audit should be conducted
regularly to detect ethical issues within your organization. It can identify practices that
are not ethical, ensuring that they do not occur and that written policies and procedures
are followed. An audit can also determine whether your company’s values and beliefs
are aligned with how employees are acting. Letting a few ethical violations slide can
set a dangerous precedent. Therefore, it is crucial to conduct an ethics review
regularly.

What Is Ethics Audit Used For?

In short, ethics audits are a systematic evaluation of an organization’s ethics program
to determine if the ethics program is robust and working as it should. The audit
process serves to identify ways in which an ethics program can be improved, reassess
ethical assumptions made in the planning stages, and examine whether ethics policies
have been adequately implemented. Ethics audits can also be used to provide direction
for future ethics programs. The results of an ethics audit may help:

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 Formulate educational or special policies and answer questions about your

organization’s mission and ethical goals.
 Help your organization identify any gaps in its ethical culture.
 Help your company determine the best ways to improve its standards and
increase its reputation.
 Determine the health of your organization. Companies that are more ethical
than others will be less likely to experience fraud, and that means fewer
financial losses for the company. This type of audit can be carried out as part
of internal management or externally as well.

What is being assessed during the audit?

The audit will reveal any issues that might be unethical and illegal and identify the
consequences of these acts. It can also identify the need for improvements and make
changes to existing procedures. The ethics audit is a crucial part of any internal control
system. Your organization needs to monitor and assess its ethical standards to avoid
problems. Once it is in place, it is important to implement it to ensure a positive
culture for your workers.

Should an Ethics Audit Be Conducted Regularly?

An ethics audit is usually based on a written ethics code, and it can follow different
structures. The audits are often performed by the top management or the ethics
committee of an organization (Internal), but they could also include external
participants such as auditors (Supreme Audit Institutions) and consultants (External).
Everyone has their ideas about ethics and moral behavior, and these will influence
decisions and behaviors in daily activities. One should consider conducting ethics
audits at least once a year, if not more often. A regular ethics audit can help an
organization to:

 better understand its ethics

 identify potential risks and weaknesses in ethics systems

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 identify areas of improvement or opportunities for further development

 Measure the overall ethics level within the organization.

So, Ethics audits are most often done every year, although more frequent performance
is possible when needed. The results of such audits are usually presented to the ethics
committee and then to the organization’s ethics council. The ethics council can use the
outcomes of the ethics audit to improve procedures and systems within the
organization and to demonstrate that the ethics program is effective, efficient, and
operating as it should be.
Ethics audits are also an opportunity for building awareness among employees about
what responsible business conduct means at their organization, what standards apply
in different situations, how people can prevent problems from arising, and so on. An
ethics audit might sometimes be perceived as a threat, something which has negative
connotations or questions someone’s honesty or integrity. That is why it could be
helpful if top management includes ethics audits as part of the regular performance
review process. This way they can present ethics audits as something positive instead
of a hazard.

Reporting the audit report communicates the results of the audit work and for that
reason it is one of the most important parts of the audit process. If written and
communicated well, it can be a powerful tool for prompting management to corrective
action. It is therefore a common challenge for all Supreme Audit Institutions how to
present the results of the audit in the most effective and impactful manner.

Ethics consultants
An ethical consultant is a professional who helps businesses develop and adhere to a
set of ethical principles, which are beliefs the company and its shareholders agree to
uphold. They may also be lawyers who ensure their clients' ethical code and behaviors
follow the laws in the state or country where their clients operate. These professionals
usually either work independently or for a business consulting firm.

Ethics consultants are trained to identify, analyze, and help resolve difficult ethical

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issues. Ideally, ethics consultants have to obtained formal education in ethical theory,
practical ethics, and professional ethics to supplement their substantive expertise in
their profession.

Business ethics consultants evaluate the ethical practices of individuals or

organizations. Business ethics consultants may also help a company create a formal
code of conduct for its employees.
What does an ethical consultant do?
Ethical consultants' duties may vary by the type of consulting firm they work for or by
the needs of their specific clients. However, here are some common tasks they may
perform:

Confer with ethics board or other governing bodies within the organization in order
to gain an understanding or current company policies and procedures as they relate
to ethics
Develop plans for training employees in compliance with the law as well as their
ethical obligations to the company, its clients and the public
Help create or modify company code of conduct or code of ethics

Protect organization from lawsuit by ensuring the company’s culture and conduct
won’t lead to criminal or civil legislation
Assess the strengths and weaknesses of the company’s policies and procedures
May be involved in investigating why unethical conduct is present within the
organization, such as employee stress levels, large workloads or improper training
May conduct research related to ethics and prepare reports for publication based on
those findings
Meet with clients to discuss their ethical goals for their company and draft a set of
ethical practices
Verify that the client's ethical practices follow local laws and regulations
Perform ethical audits to ensure everyone is adhering to the agreed-upon set of
practices
Investigate barriers to workers adopting the practices

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Educate business leaders about the legal and ethical effects of their work
Advise business leaders on the ethical and legal course of action during disputes.

Key Ethical Principles (Additional reading)

Ethical principles are standards of conduct defining the kind of behavior an ethical
person should and should not engage in. The following list of principles incorporates
the characteristics and values that most people associate with good character and
ethical behavior.

These principles not only provide a guide to making decisions they also establish the
criteria by which your decisions will be judged by others.

Abraham Lincoln described character as the tree and reputation as the shadow. Your
character is what you really are; your reputation is what people think of you. Thus,
your character is determined and defined by your intentions and the extent to which
you guide all your actions by these ethical principles while your reputation is purely a
function of perceptions. In business, both are important.

There are 12 Ethical Principles for Business Executives by Michael Josephson (2010).
Trust, one of the most important assets a successful executive needs, can be
strengthened or destroyed by both your actions and the way your actions are perceived
in relation to these twelve principles:

1. Honesty. Ethical executives are, above all, worthy of trust. They are honest in all
their actions and communications. They are not only truthful they are candid
and forthright.

Ethical executives do not deliberately mislead or deceive others by misrepresentations,

overstatements, partial truths, selective omissions, or any other means and when trust
requires it they supply relevant information and correct misapprehensions of fact.

2. Integrity: Ethical executives earn the trust of others through personal integrity.

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They demonstrate moral courage, doing what they think is right even when there is
great pressure to do otherwise. Ethical executives are principled, honorable, upright
and scrupulous. They fight for their beliefs and do not sacrifice principle for
expediency.

3. Promise-keeping: Ethical executives can be trusted because they make every

reasonable effort to fulfill the letter and spirit of their promises and commitments.
They do not interpret agreements in an unreasonably technical or legalistic manner in
order to rationalize non-compliance or create justifications for escaping their
commitments.

4. Loyalty: Ethical executives justify trust by being loyal to their organization and the
people they work with. They do not put their loyalty above other ethical principles but
they place a high value on protecting and advancing the lawful and legitimate interests
of their companies and their colleagues. They faithfully safeguard their ability to make
independent professional judgments by avoiding undue influences and conflicts of
interest and they do not use or disclose information learned in confidence for personal
advantage. If they decide to accept other employment, ethical executives provide
reasonable notice, respect the proprietary information of their former employer, and
refuse to engage in any activities that take undue advantage of their previous positions.

5. Fairness: Ethical executives strive to be fair and just in all dealings. They do not
exercise power arbitrarily nor do they use overreaching or indecent means to gain or
maintain any advantage or take undue advantage of another’s mistakes or difficulties.
Ethical executives manifest a commitment to justice, the equal treatment of
individuals, tolerance for and acceptance of diversity. They are open-minded; willing
to admit they are wrong and, where appropriate, change their positions and beliefs.

6. Caring – concern for others: Ethical executives are caring, compassionate,

benevolent and kind. They always consider the business, financial and emotional
consequences of their actions on others and seek to accomplish their business

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Complied by: Genet A. (MBA) WU, CBE, Dep’t of Management
 Business Ethics and Corporate Social Responsibility(MGMT4231) Chapter Four 2016
E.C.

objectives in a manner that causes the least harm and the greatest positive good.

7. Respect for others: Ethical executives demonstrate respect for the human dignity,
autonomy, privacy, rights, and interests of all those who have a stake in their
decisions; they are courteous and treat all people with equal respect and dignity
regardless of sex, race or national origin. Ethical executives adhere to the Golden
Rule, striving to treat others the way they would like to be treated.

8. Law abiding. Ethical: executives abide by laws, rules and regulations relating to
their business activities.

9. Commitment to excellence: Ethical executives pursue excellence in performing

their duties, are well-informed and prepared, and constantly endeavor to increase their
proficiency in all areas of responsibility.

10. Leadership: Ethical executives are conscious of the responsibilities and

opportunities of their position of leadership and seek to be positive ethical role models
by their own conduct and by helping to create an environment in which principled
reasoning and ethical decision making are highly prized.

11. Reputation and morale: Ethical executives seek to protect and build the
company’s good reputation and the morale of its employees by engaging in no conduct
that might undermine respect and by taking whatever actions are necessary to correct
or prevent inappropriate conduct of others.

12. Accountability: Ethical executives acknowledge and accept personal

accountability for the ethical quality of their decisions and omissions to themselves,
their colleagues, their companies and their communities.

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Complied by: Genet A. (MBA) WU, CBE, Dep’t of Management