Ethics in Functional Areas

Module IV

ETHICS BASED ORGANISATIONAL CULTURE

Saucer & Sims Model

REASONS OF UNETHICAL BEHAVIOR

1.​ Work-family balance

2.​ Poor leadership
3.​ Poor internal communication
4.​ Lack of management support
5.​ Need to meet goals
Ethics Officers Association,1997 Survey

ETHICS MANAGEMENT
▪​ Managerial tool to enforce integrity of employees
​ through a set of codified rules and regulations
​ on reasonable ethical standards
​ considered as a distinct managerial function which embraces all other functions
 STRUCTURE OF ETHICS MANAGEMENT

Ethics Programmes
i.​ Formal codes of conduct
ii.​ committees for developing and maintaining ethical policies
iii.​ ethics communication system
iv.​ ethics office
v.​ training
vi.​ disciplinary system

Code of Conduct
▪​ Statements of organisational values
​ Code of ethics-entire scheme of organisational ethics
​ Code of conduct-written document on what is acceptable and not
​ Statement of values-conceived by management to serve the general public

Ethics Committee
▪​ Appointed committee of chosen members exclusively for workplace ethics
​ Formulate ethical policies,
​ Raise concerns of ethical nature,
​ prepare or update codes of conduct
​ resolve ethical dilemma

Ethics Communication System

▪​ Maintaining Principle of Veracity
▪​ Communicate the company’s values and standards of ethical conduct to employees
▪​ Provide information to employees on ethics policies and procedures
▪​ Put in place processes to help employees obtain guidance on ethical conduct
▪​ Establish means of enquiry like hotlines,suggestion box etc.

Guidelines for Ethical Communication

▪​ Convey the desired message in a significant manner
▪​ Maintain a relationship with the audience
▪​ Avoid withholding crucial information
▪​ Well organized value system
▪​ Accuracy of information is necessary

Ethics Officers

Responsible for
​ Assessing the needs and risks that an organisation wide ethics programme must
address
​ Developing and distributing a code of conduct
​ Conducting ethics training for employees
​ Establishing confidential service on employees’ ethical issues
​ Making sure the company is in compliance with
 ​ Govt.’s regulation
​ Taking action on possible violation
​ Reviewing and updating code

Ethical Leadership
▪​ believe in the ethical principles in core
▪​ represent the highest moral authority
▪​ lead by example
▪​ respect self and others
▪​ Intervene in ethical problems, when needed
▪​ should have mentors to confer with

ETHICS TRAINING
▪​ The main purpose of ethics training is awareness raising around the code ,in all levels.
▪​ Ethics training aim to raise the ethical sensitivity of staff so that they know what is
acceptable business practice
▪​ It might provide them with the skills for working through a situation for which the right
thing to do is unclear.
▪​ Some companies provide training on specific ethics challenges viewed as a risk to the
business such as Human Rights ,Bribery and Corruption.

Guidelines
▪​ Help employees identify the ethical dimensions of business decision.
▪​ Give employees a means to address ethical issues
▪​ Help employees understand the ambiguity inherent in ethical situations.
▪​ Make employees aware that their actions define the company’s ethical posture both
internally and externally.
▪​ Provide direction for employees to find managers or others who can help them resolve
ethical conflicts.
▪​ Eliminate the belief that unethical behavior is ever justifiable

Training Evaluation Principles

▪​ Cultural Competency: ensuring the influence of culture on human behaviour is taken
into consideration during the evaluation.
▪​ Ethical guidelines: Institutional or organizational rules or norms that guide evaluation
practice, especially regarding vulnerable populations.
▪​ Evaluation standards: Core national or internationally agreed best practice for
conducting evaluation.
▪​ Institutional review board: A committee set up by an organization or institution to
monitor the ethical and technical research and evaluation conducted by its members.
▪​ Systematic Inquiry: Evaluators conduct systematic, data-based inquiries about whatever
is being evaluated.
▪​ Competence: Evaluators provide competent performance to stakeholders.
▪​ Integrity/Honesty: Evaluators ensure the honesty and integrity of the entire evaluation
process.
 ▪​ Respect for People: Evaluators respect the security, dignity and self-worth of the
respondents, program participants, clients, and other stakeholders with whom they
interact.
▪​ Responsibilities for General and Public Welfare: Evaluators articulate and take into
account the diversity of interests and values that may be related to the general and public
welfare.

▪​ CORPORATE GOVERNANCE
▪​ A formal system to facilitate ethical decision making in business
​ Accountability:
Strategic decision​ ​ ​ ​ Legal and ethical

​ Oversight:
Checks to reduce deviations from policies and strategies

​ Control:
Process of auditing and improving organisational decisions and actions

▪​ CG-Definition
Corporate Governance is defined as holding the balance between economic and social goals and
between individual and communal goals.
​ ​ ​ ​ ​ -Adrian Cadbury

Procedures and processes according to which an organisation is directed and controlled.

​ CG structure specifies the distribution of rights and responsibilities among the
different participants in the organisations and lays down the rules and procedures for
decision-making
​ -Organisation of Economic Co-operaton and Devlopment(OECD

Theories of CG
•​ Agency theory defines the relationship between the principals (such as shareholders of
company) and agents (such as directors of company).
•​ Steward theory states that a steward protects and maximises shareholders wealth through
firm Performance.
•​ Stakeholder theory incorporated the accountability of management to a broad range of
stakeholders.
•​ Resource Dependency Theory focuses on the role of board directors in providing access
to resources needed by the firm.
•​ Transaction cost theory describes governance frameworks as being based on the net
effects of internal and external transactions.
 •​ Political theory brings the approach of developing voting support from shareholders

ETHICS AUDIT
▪​ A systematic evaluation of an organisation’s ethics programme to determine its
effectiveness.
▪​ Provides an opportunity to measure conformity to the firm’s desired ethical standards.
▪​ A tool to identify and measure the ethical commitment to stakeholders.
▪​ Objective method for demonstrating the company’s ​commitment to improve strategic
planning,
​ compliance with legal and ethical standards ,
​ social responsibility.
▪​ Improves relationship with stakeholders who desire greater transparency.

Framework
•​ Secure commitment of top managers and Board of Directors
•​ Establish a committee to oversee ethics audit
•​ Define scope of audit
•​ Review organisation’s mission,policies [Link] define their ethical priorities
•​ Collect and analyse relevant information information in each designated subject matter
area.
•​ Have the results verified by an independent agent.
•​ Report the findings to the audit committee and,if approved,to managers and stakeholders.

▪​ CORPORATE SOCIAL RESPONSIBILITY

▪​ Definition:Integrating the responsibility of corporate actions and its impact on ecological
and social aspects of environment in the business model of organisations.

▪​ Concept:Reflected as company’s sense of responsibility towards community and

environment.

▪​ Purpose:CSR serves as a self-controlling process which enables a business to ensure its

​ compliance with the legal system, the ethical standards and the international
prevailing norms.
​ encouraging a positive engagement towards the stakeholders.

▪​ Theory:
Supported by Kantian ethics theory or deontological approach.

▪​ Common CSR
reduction in pollution,community improvement programmes,environmental sustainability
activities,social-business projects,contribution to national relief funds,employment enhancing.
▪​ CG and CSR:
CSR improved by way of social accounting and incorporating ethics management in CG

▪​ Contemporary :
More recent approaches are Corporate philanthropy , strategic philanthropy Environmental &
Social Governance(ESG)

▪​ STRATEGIC PHILANTHROPY
▪​ Linking core business competencies to societal and community needs.
▪​ companies use philanthropy as a means to benefit their business interests and those of a
beneficiary organization.
▪​ affiliated with corporations, not individuals, and usually involves participation from the
board of directors and multiple departments.
▪​ Has an expectation of increased company profit, recognition, or other direct/indirect
benefits.
▪​ The act of giving in any form is based on research, planning, careful execution, analysis of
the results, and strategy revisions if company is not seeing their desired results.

▪​ Standards:
Recognized international standards for CSR is ISO 26000.
▪​ Regulation-
Clause 135 of Companies Act,2012 is CSR clause requires targeted companies to spend a
specified formula based amount to CSR in that year.
▪​ merits-
facilitates the long term profitability for companies,supporting sustainability
▪​ demerits-
distracts from the economic role of businesses.
▪​ Positive Impacts-
societal upliftment,ethical consumerism, socially responsible investing,strategic philanthropy
▪​ Negative impacts
▪​ green washing,window dressing or covering up unethical practices