BUSINESS ETHICS

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Business Ethics: What is it?
Ethics is the branch of philosophy that is used to
evaluate the attitude and behavior of a person and
analyze human actions.
Refers to a code of standards by which one can
determine what is wrong and what is right for the
business enterprise.
Moral principles, policies, and values that govern
the way companies and individuals engage in
business activities.
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Goes beyond legal requirements to establish a code of
conduct that drives employee behavior at all levels and helps
build trust between a business and its customers.
For example,
Fairness,
integrity,
commitment to agreement,
broad mindedness considerateness,
Are of importance given the human esteem and self-
respect.
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Ethical Behaviour Vs Ethical Action
Ethical Behaviour
Actions that are against social norms or acts that are
considered unacceptable to the public
Evidenced by certain values and principles maintained
within the relationships, such as integrity, transparency,
honesty or fairness, e.g. plagiarism by students (unacceptable)

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Ethical Action
An expression of our core commitments to honor
the worth of all people, cultivate relationships, and
build justice.
We work together to bring out the best in others and
ourselves, enhancing everyone’s unique capacity and
responsibility to contribute to a more humane world

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Ethical actions in an ethical society are used to represent
the initiatives taken by the people to show their commitment
to their work.
Ethical actions can be of two types;
Constructive outcomes produce more benefits (joint
or separate) than damages, and leave the parties in a
more engaged relationship,
Destructive outcomes produce more damages and
separation.

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Constructive actions
Are desire prompted duties
Are always done by people who consider it their
responsibility or duty to perform the actions.
These actions can be performed daily or on special
times.
These actions always provide a result that is purposeful
and self determined.

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Destructive Actions
Perceived of as acts that are universally seen as
negative, such as lying and stealing
Examples include;
Taking something from others
Lying
Taking and speaking insensitively
Using bad language
Jealous thoughts, e.t.c

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Creating an ethical culture is critical to running a
successful and sustainable organization.
In today’s increasingly competitive and complex
business environment, ethical behavior and decision-
making can make or break a company’s reputation.

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By prioritizing ethical culture, organizations can
foster an environment where employees feel valued,
respected and empowered to do the right thing, even
in challenging situations.
Moreover, ethical culture can help attract and retain
top talent, build stakeholder trust, and enhance brand
reputation.

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Unethical Problems in a business
Conflicts of interest,
Illegal use of resources.
False product claims
Hidden terms in user agreements
Unethical accounting
Bribery
Selling customer data, e.t.c.

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Corporate Code of Ethics
Sets out an organization's ethical guidelines and best
practices to follow for honesty, integrity, and
professionalism.
For members of an organization, violating the code
of ethics can result in sanctions including termination.

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Organizations adopting the Code of Ethics will need
to commit to the following;
1. Understanding and commitment
ensure consistent understanding of business ethics across the
organization at all levels
continually enhance knowledge of all relevant laws and
regulations in the countries in which the organization operates,
either directly or indirectly
commit to eradicating unethical business practices including
bribery, fraud, corruption and human rights abuses, such as
modern slavery and child labour.

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2. Ethical practice
conduct all business relationships with respect, honesty and
integrity, and avoid causing harm to others as a result of
business decisions.
treat all stakeholders fairly and impartially, without
discrimination or favour.
actively support and promote corporate social responsibility
(CSR)
avoid any business practices which might bring the
procurement profession into disrepute.

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3. Professionalism
use procurement strategies to drive unethical practices from the
supply chain.
ensure procurement decisions minimize any negative impact on
human rights and the environment whilst endeavouring to
maximize value and service levels.
put ethical policies and procedures in place, regularly monitored
and updated, and ensure compliance.
mandate the education and training of all staff involved in
sourcing, supplier selection and supplier management to
professional standards
practice due diligence in all business undertakings.
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4. Accountability
take ownership of business ethics
foster a culture of leadership by example
take steps to prevent, report and remedy unethical
practices
provide a safe environment for the reporting of
unethical practices.

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Implementing the Corporate Ethical Codes
Best practices for making an ethics code effective
Root the code in core values such as trust and integrity.
Give a copy to all staff.
Provide a way to report breaches in a confidential
manner.
Include ethical issues in corporate training programs.
Set up a board committee to monitor the effectiveness
of the code.
Report on the code’s use in the annual report.

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Make conformity to the code part of a contract of
employment.
Make copies of the code available to business
partners, including suppliers.
Make a named individual responsible for code
implementation.
Review the code in light of changing business
challenges.
Make sure senior staff walk the talk.

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Whistleblowing
The attempt of an employee to disclose that he or she
believes to be illegal behavior in or by the organization.
An activity of a person, often an employee, revealing
information about activity within an organization that is
deemed;
illegal,
immoral,
Illicit
unsafe or,
fraudulent.
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Whistle blowing has to do with ethics because it
represents;
a person’s understanding,
that an action his or her organization is taking is
harmful,
that it interferes with people’s rights or is unfair
or detracts from the common good.

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Failure on the part of the management of the
organization to fulfill its social obligation calls for
whistle blowing.
It is the responsibility of the whistle blower to be
careful about revealing the organizations secrets and
to consider the harm it may come to - colleagues and
shareholders.

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Consideration before Whistleblowing;
1.Make sure you have a valid case
meant for reporting criminal offences, regulatory breaches, health and
safety (including environmental) breaches, or cover-ups
2. Only report the right kind of concerns and not to air grievances
company's whistleblowing channels shouldn't be used as an outlet to
air grievances or make false reports
3. Check the approved channels
Your company handbook should explain how to make a report and to
whom.
Going straight to the media or putting it online may undermine the
message and damage your reputation

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4. Remember you're a witness, not an investigator
not there to gather conclusive evidence of
wrongdoing, don't delay because you want to gather
that additional evidence.
5. Escalate your concerns to others if needed
If no one believes you, if no action is taken, if there's
a cover-up, or if lives are at risk, then it's fine to
escalate your concerns to others, i.e. CEO, the Police,
or even sometimes the press.

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6. Remember that the law is designed to protect you
Anyone can blow the whistle if they suspect
wrongdoing or unethical behaviour.
And though it isn't easy, the law protects you
from reprisal or unfair treatment.
Authorities must handle all reports with
confidentiality and sensitivity.

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7. Consider the moral & financial implications
Often the moral imperative outweighs any financial
reward and encourages whistleblowers to act
altruistically and not selfishly
There's a strong case for rewarding whistleblowers, i.e.
in industries like health, nuclear, etc., where the
consequences of non-compliance are greatest
With nowhere to hide, this would bring about a new
era of greater accountability.

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Ethical Dilemma: What is it?
Described as the state in which a business must
choose between behavior that is most advantageous to
them or behavior that is just, fair, and morally right for
stakeholders.
In a free-market economy, ethical dilemmas are
extremely common.
This is because the economic forces that drive prices
down through competition are the forces from which
ethical dilemmas arise.
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Can also be referred to as ethical paradox or moral
dilemma
It is a problem in the decision making
process between two possible options, neither of
which, is absolutely acceptable from an ethical
perspective.
Although, most people face many ethical and moral
problems in their lives, most of them come with
relatively straightforward solutions.

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Capitalism rewards innovation, hard work, and value
by allowing businesses to engage in reasonable
practices that make the most money.
Ethical problems in a business environment arise
when doing the right thing is mutually exclusive
(events that can not occur simultaneously) with the
actions most advantageous to the business or person.

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Ethical dilemmas are extremely complicated
challenges that cannot be easily solved.
Therefore, the ability to find the optimal solution in
such situations is critical to everyone.
Every person may encounter an ethical dilemma in
almost every aspect of their life, including personal,
social, and professional.

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The biggest challenge of an ethical dilemma is that it does not offer
an obvious solution that would comply with ethics or norms.
The following approaches to solve an ethical dilemma were
deduced:
Refute the paradox (dilemma): The situation must be
carefully analyzed. In some cases, the existence of the dilemma
can be logically refuted.
Value theory approach: Choose the alternative that offers the
greater good or the lesser evil.
Find alternative solutions: In some cases, the problem can be
reconsidered, and new alternative solutions may arise.

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Examples of ethical dilemma include:
Taking credit for others’ work
Offering a client a worse product for your own
profit
Utilizing inside knowledge for your own profit

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Ethical Dilemmas in Business
A business demonstrates ethical behavior when its decisions and
its actions embody justice, truthfulness, and fair dealing with its
stakeholders.
Ethical issues in corporate organizations are of exceptional
importance because of the trust consumers place in the products
and services they use on a daily basis.
There is an inverse relationship between ethical problems and
government regulation.
As a business chooses to behave ethically, the need for statutory
or regulatory government intervention is lessened.

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Ethical dilemmas in business include
Lack of integrity,
Problematic organizational relationships,
Conflicts of interest, and
Deceptive advertising.
These are not mutually exclusive, and more than one
of the four dilemmas can be present in the same
situation.

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Integrity
Ethics - principles that guide behaviur.
Integrity - should carry out ethical principles in our daily lives
and activities, rather than espousing an ideal and then doing
something contradictory.
Integrity can be defined as the unwavering adherence to a
set of moral and ethical principles.
It involves being honest, accountable, reliable, transparent,
and ethical in all aspects of life.

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Integrity, “is doing the right thing, even when no
one is looking.” (C.S. Lewis)
A foundational moral virtue, and the bedrock upon
which good character is built.
Acting with integrity means understanding,
accepting, and choosing to live in accordance with
one’s principles, which will include honesty, fairness,
and decency.

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A person of integrity will consistently demonstrate
good character by being free of corruption and
hypocrisy.
Integrity is revealed when people act virtuously
regardless of circumstance or consequences.
This often requires moral courage.
Indeed, integrity is the critical connection between
ethics and moral action.

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It is a factor that plays a role in business ethics.
It refers to a workplace culture that is fair, equitable, honest and
just.
Integrity is especially important in business because unethical
behavior is not necessarily illegal.
For example:
A friend confides to you that he has committed a particular
crime and you promise never to tell.
Discovering that an innocent person has been accused of the
crime, you plead with your friend to give himself up.
He refuses and reminds you of your promise. What should you
do?
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Characteristics of ethical actions that inculcates an
ethical culture, i.e.
Transparency
Accountability
Fairness
Integrity
Respect for the law
Values/Focuses on long-term success
Commitment to social responsibility
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Benefits of Business Ethics
Helps an organization maintain ethical values
during times of crisis
Helps employees behave according to the ethical
values that are preferred by the top management of
an organization.
Supports employee’s growth
Helps to avoid criminal acts of ‘o mission’ and it
also helps in lowering fines.

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Helps to identify and manage the value associated
with quality management, strategic management
and diversity management.
Helps in building a strong and positive public
image of an organization
Strengthens organizational culture
Ensures the right activities are performed in an
organization***

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