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Professional Ethics & Code of
Ethics
Lesson 06

1
Lesson's Objectives
◦
◦
◦
◦
◦

Define Professional Ethics
Organizational standards and codes of ethics,
Evaluation of code...
Professional Ethics
◦ A profession is a job that requires specific
training and is regulated by certain standards
◦ Profes...
Professional Ethics


Professional ethics are often established
by professional organizations to help
guide members in pe...
Characteristics of a Profession
◦
◦
◦
◦
◦
◦
◦
◦
◦

Common body of knowledge
Formal educational process
Standards of entry
...
Teens View of Business Leaders
non
39%

Ethical
12%

Unethical
49%

6
To Be Ethical Leader
To be perceived as an ethical leader, must be a
visibly ethical person and an ethical manager
with a...
To Be Ethical Leader
 Being a moral manager is insufficient
Moral management gain legitimacy only if
employees believe th...
Weak

Strong

Moral
Person

Strong

Hypocritical
Leader

Ethical Leader

Unethical Leader

?
Ethically
neutral (silent)
le...
Ethical Leadership Example
◦ Known to be a person of the highest integrity.
Strength and revised corporate
credo/philosoph...
James Burke.

11
Unethical Leadership Example
◦ Lied to employee & financial analysts, was
condescending / not respecting, belligerent/
agg...
Al Dunlap, Sunbeam.

13
Hypocritical Leadership Example
◦ Talked about ethics, religion (doing "God's
work"). Yet, employees became aware of
misle...
Jim Bakker of PTL Ministries.

15
Ethical Neutral Leadership Example
Intense/strongly focus on bottom line.
Decentralized management style means that
ethics...
Need for Corporate Ethics Programs
◦ Almost companies in Sri Lanka have reduced
trust in businesses
 Beverage, Milk powde...
Values Vs. Compliance Orientation
◦ Compliance orientation
 Requires that employees identify with and commit
to specified...
Ethical Programs
◦ It is a programe that create firm's ethical climate
and helps ensure that all employees understand
the ...
A strong ethics program includes
◦
◦
◦
◦
◦

Written code of conduct
Ethics officer to oversee the program
Care in the dele...
Concepts of Code of Ethics
◦ Codes of conduct - represents employee
ethics
 Formal statements that describe what an
organ...
Code of Ethics
◦ Code of ethics are formal statements of what
an organization expects in the way of ethical
behavior
 It ...
Corporate Code of Ethics
◦ Often contain six core values







Trustworthiness
Respect
Responsibility
Fairness
Cari...
E.g. Uniliever
◦ General Code of Ethics focuses on:
 Standard of Conduct : Honesty, Integrity &
Openness
 Obeying the La...
E.g. Wal-Mart
◦ Wal-Mart's Ethics Beliefs
 "respect for the individual,"
 "service to the customer" and
 "Striving for ...
Implementing Code of Ethics
◦ Distribute the code comprehensively:
employees, subsidiaries, & associated
companies
◦ Assis...
Consideration of Code of Ethics
◦ Ethics officers or committees are responsible
for oversight of the ethics/compliance
pro...
Communication of Ethical Standards
◦ Must start with a foundation, a code of ethics,
a procedure for airing ethical concer...
Communication of Ethical Standards
◦ Provides guidance for ethical standards &
activities that integrate the functional ar...
Oversight of Ethical standards
◦ Reflect organizational size, culture, values,
management style & employee base
◦ Improve ...
Enforcing Ethical Standards
◦ Consistent enforcement is critical
◦ But an internal system for employees to
report miscondu...
Enforcing Ethical Standards
◦ If a company has determined that its ethical
performance has not been
satisfactory, manageme...
Enforcing Ethical Standards
◦ An effective ethics program employs many
resources to monitor ethical conduct and
measure th...
Ethical Compliance Audit
◦ A systematic evaluation of an organization's
ethics program and/or performance to
determine its...
Mistakes in Ethical Program
◦ Not having a clear understanding of the goals
of the program from the beginning.
◦ Not setti...
Thank You

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06 professional ethics & code of ethics Slide 1 06 professional ethics & code of ethics Slide 2 06 professional ethics & code of ethics Slide 3 06 professional ethics & code of ethics Slide 4 06 professional ethics & code of ethics Slide 5 06 professional ethics & code of ethics Slide 6 06 professional ethics & code of ethics Slide 7 06 professional ethics & code of ethics Slide 8 06 professional ethics & code of ethics Slide 9 06 professional ethics & code of ethics Slide 10 06 professional ethics & code of ethics Slide 11 06 professional ethics & code of ethics Slide 12 06 professional ethics & code of ethics Slide 13 06 professional ethics & code of ethics Slide 14 06 professional ethics & code of ethics Slide 15 06 professional ethics & code of ethics Slide 16 06 professional ethics & code of ethics Slide 17 06 professional ethics & code of ethics Slide 18 06 professional ethics & code of ethics Slide 19 06 professional ethics & code of ethics Slide 20 06 professional ethics & code of ethics Slide 21 06 professional ethics & code of ethics Slide 22 06 professional ethics & code of ethics Slide 23 06 professional ethics & code of ethics Slide 24 06 professional ethics & code of ethics Slide 25 06 professional ethics & code of ethics Slide 26 06 professional ethics & code of ethics Slide 27 06 professional ethics & code of ethics Slide 28 06 professional ethics & code of ethics Slide 29 06 professional ethics & code of ethics Slide 30 06 professional ethics & code of ethics Slide 31 06 professional ethics & code of ethics Slide 32 06 professional ethics & code of ethics Slide 33 06 professional ethics & code of ethics Slide 34 06 professional ethics & code of ethics Slide 35 06 professional ethics & code of ethics Slide 36
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06 professional ethics & code of ethics

  1. 1. Professional Ethics & Code of Ethics Lesson 06 1
  2. 2. Lesson's Objectives ◦ ◦ ◦ ◦ ◦ Define Professional Ethics Organizational standards and codes of ethics, Evaluation of code of ethics, Implementing business ethics, The ethics audit. 2
  3. 3. Professional Ethics ◦ A profession is a job that requires specific training and is regulated by certain standards ◦ Professional ethics the ethical norms, values, and principles that guide a profession and the ethics of decisions made within the profession. ◦ Lecturer ◦ Doctor ◦ Accountant 3
  4. 4. Professional Ethics  Professional ethics are often established by professional organizations to help guide members in performing their job functions according to sound and consistent ethical principles. 4
  5. 5. Characteristics of a Profession ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ Common body of knowledge Formal educational process Standards of entry Recognition of public responsibility The Public Interest Integrity Objectivity and independence Due Care Scope and Nature of Services 5
  6. 6. Teens View of Business Leaders non 39% Ethical 12% Unethical 49% 6
  7. 7. To Be Ethical Leader To be perceived as an ethical leader, must be a visibly ethical person and an ethical manager with a consistent message Therefore to be a ethical leader; Being a moral person alone is insufficient Executives are distant from most employees and, without "moral management," bottom line messages can overwhelm all others. 7
  8. 8. To Be Ethical Leader  Being a moral manager is insufficient Moral management gain legitimacy only if employees believe the given principled, caring person who means what s/he says ◦ Then ethical leadership is  Much more than traits (e.g. integrity)  Requires great care to create and sustain an ethical culture that sends a consistent message that is at least as powerful as the "bottom line" drumbeat (via real attention to ethics in multiple cultural systems). 8
  9. 9. Weak Strong Moral Person Strong Hypocritical Leader Ethical Leader Unethical Leader ? Ethically neutral (silent) leader Moral Manager Weak 9
  10. 10. Ethical Leadership Example ◦ Known to be a person of the highest integrity. Strength and revised corporate credo/philosophy, launched annual credo survey after Tylenol crisis, required action plans to address problems, handled ethical violations swiftly James Burke, Johnson & Johnson. 10
  11. 11. James Burke. 11
  12. 12. Unethical Leadership Example ◦ Lied to employee & financial analysts, was condescending / not respecting, belligerent/ aggressive and disrespectful of employees, made decisions and rewarded employees based upon bottom line only, left company crippled, accused of filing false financial reports - settled with SEC for half million dollars. Al Dunlap, Sunbeam 12
  13. 13. Al Dunlap, Sunbeam. 13
  14. 14. Hypocritical Leadership Example ◦ Talked about ethics, religion (doing "God's work"). Yet, employees became aware of misleading financial practices, conflicts of interest, lying to donors, theft of donor contributions, sexual liaisons, etc! Jim Bakker of PTL Ministries (PTL stands for "Praise the Lord" or "People That Love"), later called The Jim and Tammy Show) 14
  15. 15. Jim Bakker of PTL Ministries. 15
  16. 16. Ethical Neutral Leadership Example Intense/strongly focus on bottom line. Decentralized management style means that ethics management is left to business unit managers. Describe by Fortune magazine as “tone deaf" on ethics issues. Citigroup has dealt with a variety of conflicts of interest scandals. Sandy Weill, Citigroup 16
  17. 17. Need for Corporate Ethics Programs ◦ Almost companies in Sri Lanka have reduced trust in businesses  Beverage, Milk powder, Meat products, services... ◦ Employees are not legal experts and need guidance as their orientation is deferent  Compliance orientation  Values orientation ◦ Therefore an ethical program is required. 17
  18. 18. Values Vs. Compliance Orientation ◦ Compliance orientation  Requires that employees identify with and commit to specified conduct  Uses legal terms, statutes and contracts that teach employees the rules and penalties for noncompliance ◦ Values orientation  Focuses more on an abstract core of ideals such as respect and responsibility  Research shows is most effective at creating ethical reasoning 18
  19. 19. Ethical Programs ◦ It is a programe that create firm's ethical climate and helps ensure that all employees understand the organization's values and comply with the policies and codes of conduct. ◦ Organizations should develop an organizational ethics program by establishing, communicating, and monitoring uniform ethical values and legal requirements. 19
  20. 20. A strong ethics program includes ◦ ◦ ◦ ◦ ◦ Written code of conduct Ethics officer to oversee the program Care in the delegation of authority Formal ethics training Auditing, monitoring, enforcement, and revision of program standards 20
  21. 21. Concepts of Code of Ethics ◦ Codes of conduct - represents employee ethics  Formal statements that describe what an organization expects of its employees ◦ Codes of ethics - corporate or business ethics  Most comprehensive document and it consists of general statements that serve as principles and the basis for the rules of conduct ◦ Statement of values  Serves the general public and addresses stakeholder interests 21
  22. 22. Code of Ethics ◦ Code of ethics are formal statements of what an organization expects in the way of ethical behavior  It will not solve every dilemma  Provide rules & guidelines  It reflects senior management's desire for compliance with values, rule & policies in support of an ethical climate  And it should be specific enough to be reasonably capable of preventing misconduct 22
  23. 23. Corporate Code of Ethics ◦ Often contain six core values       Trustworthiness Respect Responsibility Fairness Caring Citizenship 23
  24. 24. E.g. Uniliever ◦ General Code of Ethics focuses on:  Standard of Conduct : Honesty, Integrity & Openness  Obeying the Law : Laws of host country  Employees : No forced or child labor  Consumers : Consistent value offering  Public Activities : No political affiliation  Competition : strong & Fair  Compliance & Monitoring : Board, Senior Mgt 24
  25. 25. E.g. Wal-Mart ◦ Wal-Mart's Ethics Beliefs  "respect for the individual,"  "service to the customer" and  "Striving for excellence.“ E.g. LG  Responsibilities and Obligations to Customers Fair Transaction with stakeholders Fair Competition 25
  26. 26. Implementing Code of Ethics ◦ Distribute the code comprehensively: employees, subsidiaries, & associated companies ◦ Assist in interpretation & understanding ◦ Specify management's role in implementation ◦ Make employees responsible for understanding ◦ Establish grievance procedures ◦ Provide a conclusion or closing statement 26
  27. 27. Consideration of Code of Ethics ◦ Ethics officers or committees are responsible for oversight of the ethics/compliance program ◦ Coordinates program with top management ◦ Develops, revises & disseminates the code ◦ Develops effective communication ◦ Establish audits & control systems ◦ Provides consistent enforcement of standards ◦ Reviews & modifies the program to improve effectiveness. 27
  28. 28. Communication of Ethical Standards ◦ Must start with a foundation, a code of ethics, a procedure for airing ethical concerns, and executive priorities on ethics ◦ Can educate employees about firm's policies and expectations, laws and regulations, and general social standards ◦ Can make employees aware of resources, support systems, and personnel who can assist them with ethical advice ◦ Can empower employees. 28
  29. 29. Communication of Ethical Standards ◦ Provides guidance for ethical standards & activities that integrate the functional areas of business ◦ helps employees identify ethical issues & provides a mean to address & resolve ◦ Can help reduce criminal, civil & administrative consequences including:  Fines, penalties, judgments, etc. 29
  30. 30. Oversight of Ethical standards ◦ Reflect organizational size, culture, values, management style & employee base ◦ Improve employee understanding of ethical issues ◦ Influence the organizational culture, significant others, & opportunity in the ethical decision making process ◦ Overall, provide for recognition of ethical issues, understanding of culture & values, and influence ethical decision making 30
  31. 31. Enforcing Ethical Standards ◦ Consistent enforcement is critical ◦ But an internal system for employees to report misconduct is an opportunity to register ethical concerns ◦ Ethics hot lines ◦ Questionnaires may be used to serve as benchmarks ◦ Corrective actions provide standards & punishment 31
  32. 32. Enforcing Ethical Standards ◦ If a company has determined that its ethical performance has not been satisfactory, management may want to recognize the way ethical decisions are made: ◦ A decentralized organization may be centralized (perhaps temporarily) so that top level managers can ensure that ethical decisions are made. ◦ A centralized organization may be decentralized (perhaps temporarily) so that lower level managers can make more decisions. 32
  33. 33. Enforcing Ethical Standards ◦ An effective ethics program employs many resources to monitor ethical conduct and measure the program’s effectiveness       Observing employees Internal audits Surveys Reporting systems Investigations Independent audits 33
  34. 34. Ethical Compliance Audit ◦ A systematic evaluation of an organization's ethics program and/or performance to determine its effectiveness ◦ Can help in establishing codes & program ◦ Should provide a systematic & objective approach to surveying the ethical condition of the organization ◦ May be more effective if performed by an external entity (organizations should participate in ethics audit instrument development) 34
  35. 35. Mistakes in Ethical Program ◦ Not having a clear understanding of the goals of the program from the beginning. ◦ Not setting realistic and measurable program objectives. ◦ Senior management's failure to take ownership of the ethics program. ◦ Developing program materials that do not address the needs of the average employee. ◦ Transferring a domestic program internationally. ◦ Designing a program as a series of lectures. 35
  36. 36. Thank You 36
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