Ethical and Professional Practices

Chapter 1

An Overview of Ethics

Moral code ‫ وثيقة األخالق‬A set of rules that establishes the boundaries of generally
accepted behavior within a society.
Morality ‫ أخالقي‬Social conventions about right and wrong that are widely shared
throughout a society.
Morality may vary by: Age, Cultural group, Ethnic background, Religion, Life
experiences, Education, and Gender.
Ethics ‫ أخالقيات المهنة‬A set of beliefs about right and wrong behavior within a
society.
Software piracy ‫ قرصنة البرمجيات‬The act of illegally making copies of software
or enabling others to access software to which they are not entitled.
Virtue ‫ الفضيلة‬A moral habit that inclines people to do what is generally
acceptable to society.
Vice ‫ الرذيلة‬A moral habit that inclines people to do what is generally
unacceptable to society.
Integrity ‫ النزاهة‬Adherence to a personal code of principles.
Morals ‫ األخالق‬One’s personal beliefs about right and wrong.
Law ‫ القانون‬A system of rules that tells us what we can and cannot do. Laws are
enforced by a set of institutions.
Bathsheba syndrome ‫ متالزمة باثشيبا‬The moral corruption of people in power
often facilitated by a tendency for people to look the other way when their
leaders act inappropriately.
Corporate Social Responsibility-CSR ‫ المسؤولية االجتماعي للشركة‬The concept
that an organization should act ethically by taking responsibility for the
impact of its actions on the environment, the community, and the welfare of
its employees.
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Supply chain sustainability ‫ سلسلة التوريد المستدام‬Is a component of CSR that
focuses on developing and maintaining a supply chain that meets the needs
of the present without compromising the ability of future generations to
meet their needs.
Stakeholder ‫ أطراف (أصحاب) المصلحة‬Someone who stands to gain or lose
depending on how a situation is resolved.
Why Fostering CSR and Good Business Ethics Is Important?
1. Gaining the goodwill of the community.
2. Creating an organization that operates consistently.
3. Fostering good business practices.
4. Protecting the organization and its employees from legal action.
5. Avoiding unfavorable publicity.
Although each company’s value system is different, many share the
following values:
1. Operate with honesty and integrity, staying true to organizational
principles.
2. Operate according to standards of ethical conduct, in words and action.
3. Treat colleagues, customers, and consumers with respect.
4. Strive to be the best at what matters most to the organization.
5. Value diversity.
6. Make decisions based on facts and principles.
The Ethics Resource Centre - ERC has defined the following characteristics
of a successful ethics program:
1. Employees are willing to seek advice about ethics issues.
2. Employees feel prepared to handle situations that could lead to misconduct.
3. Employees are rewarded for ethical behavior.
4. The organization does not reward success obtained through questionable
means.
5. Employees feel positively about their company.

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How we can improve corporate ethics?
1. Appointing a Corporate Ethics Officer.
2. Ethical Standards Set by Board of Directors.
3. Establishing a Corporate Code of Ethics.
4. Conducting Social Audits.
5. Requiring Employees to Take Ethics Training.
6. Including Ethical Criteria in Employee Appraisals.
Corporate ethics officer ‫ ضابط أخالقيات المهنة في الشركة‬- Corporate compliance
officer ‫ ضابط االمتثال في الشركة‬A senior-level manager who provides an
organization with vision and leadership in the area of business conduct.
The ethics officer responsibilities include the following:
1. Responsibility for compliance—that is, ensuring that ethical procedures
are put into place and consistently adhered to throughout the organization.
2. Responsibility for creating and maintaining the ethics culture that the
highest level of corporate authority wishes to have.
3. Responsibility for being a key knowledge and contact person on issues
relating to corporate ethics and principles.
Code of ethics )‫ وثيقة أخالق المهنة (وثيقة أخالقيات المهنة‬A statement that highlights
an organization’s key ethical issues and identifies the overarching values
and principles that are important to the organization and its decision making.
Codes of ethics frequently include a set of formal, written statements about:
1. the purpose of an organization,
2. its values, and
3. the principles that should guide its employees’ actions.
An organization’s code of ethics should:
1. focus employees on areas of ethical risk relating to their role in the
organization,
2. offer guidance to help them recognize and deal with ethical issues,
3. provide mechanisms for reporting unethical conduct, and
4. fostering a culture of honesty and accountability within the organization.

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An effective code of ethics helps ensure that:
1. employees abide by the law,
2. follow necessary regulations, and
3. behave in an ethical manner.
A code of ethics cannot gain company-wide acceptance unless:
1. it is developed with employee participation, and
2. fully endorsed by the organization’s leadership.
It must also be easily accessible by employees, shareholders, business partners,
and the public.
Sarbanes-Oxley Act ‫ قانون ساربينز أوكسلي‬A bill whose goal was to renew
investors’ trust in corporate executives and their firms’ financial reports; the
act led to significant reforms in the content and preparation of disclosure
documents by public companies.
Section 404 of the Sarbanes-Oxley Act states that annual reports must contain
a statement signed by the Chief Executive Officer - CEO and Chief
Financial Officer - CFO attesting that the information contained in all of the
firm’s Securities and Exchange Commission - SEC filings is accurate.
Section 406 of the Sarbanes-Oxley Act requires public companies to disclose
whether they have codes of ethics and disclose any waiver to their code of
ethics for certain members of senior management.
Social audit ‫ المراجعة (التدقيق) االجتماعي‬A process whereby an organization reviews
how well it is meeting its ethical and social responsibility goals, and
communicates its new goals for the upcoming year.
Some companies base a portion of employee performance evaluations on:
1. Treating others fairly and with respect
2. Operating effectively in a multicultural environment
3. Accepting personal accountability
4. Continually developing themselves and others
5. Operating openly and honestly with suppliers, customers, and other
employees

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Decision-making process:

Problem statement ‫ جملة وصف المشكلة‬A clear, concise description of the issue
that needs to be addressed in a decision-making process.
A good problem statement answers the following questions:
1. What do people observe that causes them to think there is a problem?
2. Who is directly affected by the problem?
3. Is anyone else affected?
4. How often does the problem occur?
5. What is the impact of the problem?
6. How serious is the problem?

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What approach can you take to ensure ethical decision making?
1. Virtue ethics approach
2. Utilitarian approach
3. Fairness approach
4. Common good approach
Virtue ethics approach ‫ نهج أخالق المهنة القائم على الفضيلة‬An approach to ethical
decision making that focuses on how you should behave and think about
relationships if you are concerned with your daily life in a community.
Utilitarian approach ‫ نهج المنفعة‬An approach to ethical decision making that
states that you should choose the action or policy that has the best overall
consequences for all people who are directly or indirectly affected.
Fairness approach ‫ نهج العدالة‬An approach to ethical decision making that
focuses on how fairly actions and policies distribute benefits and burdens
among people affected by the decision.
Common good approach ‫ نهج المشترك الجيد‬An approach to ethical decision
making based on a vision of society as a community whose members work
together to achieve a common set of values and goals.

Skills

Upon the successful completion of this chapter, you should be able to write:
1. Corporate Social Responsibility
2. Companies Statement Values
3. Code of Ethics for virtual corporate.

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 Checklists

Manager’s checklist for establishing an ethical work environment:

Question Yes No

Does your organization have a code of ethics?

Do employees know how and to whom to report any infractions of
the code of ethics?
Do employees feel that they can report violations of the code of
ethics safely and without fear of retaliation?
Do employees feel that action will be taken against those who
violate the code of ethics?
Do senior managers set an example by communicating the code of
ethics and using it in their own decision making?
Do managers evaluate and provide feedback to employees on how
they operate with respect to the values and principles in the code
of ethics?
Are employees aware of sanctions for breaching the code of
ethics?
Do employees use the code of ethics in their decision making?

Good Luck