Business Finance and Applied Economics, Study notes of Business Economics

Download Business Finance and Applied Economics and more Study notes Business Economics in PDF only on Docsity! Hand-out no.1 Lesson 1.3 BASIC ETHICS AND SOCIAL RESPONSIBILITY CODES OF RIGHT CONDUCT Learning Objectives: The learners shall be able to; • Distinguish between good policies/practices and morally unacceptable policies/practices. COMMON GOOD vs. GREATEST GOOD COMMON GOOD GREATEST GOOD Is that principle that whatever serves Is the principle that there is a standard that the most number of members in a people must cooperatively strive for to the community is considered good. harmony in the community. Is usually whatever rules or actions The higher order of good. It can be used for good are required to reduce the disharmony purposes to address areas where the common in the community. good is not inclusive of groups of people. The common good, being about peaceful individually, people can also contribute to co-existence, is normally good under greatest good. every system of objective or subjective measure. Serving the greatest good is to think of other groups of people to whom the individual is not a Individually, people can also contribute member and creating a balance, a harmony, on a daily basis to the common good. between and within. Serving the common good requires individual people as well as oneself. CODES OF RIGHT CONDUCT CODE • A well-written code of conduct spells out an organization’s mission, values and principles, connecting them with standards of professional conduct. • Expresses the values the organization desires to promote in leaders and employees. • Simply speaking, the code defines preferred behavior. • A fundamental guide and reference for employees to support everyday decision making. • It can provide as a helpful reference, assisting employees trace pertinent documents, services and other resources connected to ethics in the organization. Company’s Code of Right Conduct • Company’s code of right conduct talks about the company. • It tells a story about what the company believes and cares about, what it is truly committed to and the way it can be expected to act. • The best codes serves as strategic communication that effectively conveys a company’s commitment to act responsibly and accept accountability for doing so. • A code is a statement of shared values that prescribed for right action. Therefore it necessitates that a code must share characteristics with moral theory Two types of Moral theory 1. Consequentialist theory  Focuses on the outcomes of actions, settling on whether or not an action is good by knowing the results.  Utilitarianism is a common theory under this kind.  “The greatest good for the greatest number”, is a familiar phrase that shows this attitude. 2. Non-consequentialist theory  Centers on the principle that an action is good based on the principle people follow and regardless of the results of the action.  Deontological approach is an example of this theory.  Deontological , means for duty or obligation from the Greek word “deontos”.  A phrase that shows the attitude using this approach is “People have an obligation to respect the rights of the individual”. Four approaches to defining right action 1. Utilitarianism • Utility is any net benefits produced by an action. • The principle of utility affirms the actions or behaviors are right if they encourage happiness or pleasure, wrong if they generate unhappiness or pain.  Attempts to answer the question about what a man ought to do.  The answer to this is that he ought to act to create the best consequences. Utilitarianism reflects on three things: 1. What is good • Hedonism means the only thing that is good in itself is pleasure or happiness. • Pleasure and happiness are categorized as “intrinsic” goods. • Intrinsic goods are good in themselves and not because they make some further valuable thing. 2. Whose well-being • Utilitarian logic can be used both for moral reasoning and rational decision-making. • In addition, it can also be used for discussions on the interests of different persons and groups. a. Individual self-interest b. Groups c. Everyone affected 3. Actual consequences or forseeable consequences 2. Deontology  Is an approach that focuses on the rightness or wrongness of actions themselves.  To a deontologist, whether a situation is good or bad depends on whether the action that brought it about was right or wrong.  What makes a choice “right” is its conformity with a moral norm. Other types of Deontology 1. Divine command theory  This is a form of deontological theory which means an action is right if God has declared that it is right, and that an act is obligatory if and only if it is commanded by God. 2. Natural rights theory  This theory holds that human have absolute natural rights. 5. standard of practice 6. disciplinary actions Provisions of the Code Code provisions are the exact standards behavior and performance expectations that an organization selects to emphasize and tackle in the code. The preference of topics to be part of the code will be influenced by three factors namely: 1. The code’s purpose and objectives; 2. The organization’s overall purpose and objectives; and 3. The questions or concerns expressed by the intended users who are employees and stakeholders. In settling on which topics to concentrate on, the following issues could be raised which are: 1. the primary laws and regulations relevant to the organization 2. mistakes in the past 3. other mistakes done in the past 4. guidance needed to offer to employees and 5. the gray areas that requires clarification or confirmation. Below are some common provisions found in organizational codes which not comprehensive, nor are the category heading definitive: 1. Compliance, Integrity and Anti-corruption a. accuracy of corporate finances and financial reporting b. employee records and expense reports c. bribes d. political contributions 2. Conflicts of Interest a. gift and gratuities b. political activity c. outside employment d. family members e. disclosure of financial interest 3. Employee, Client and Vendor Information a. maintaining records and information b. privacy and confidentiality c. disclosure of information 4. Employment Practices a. workplace harassment b. equal opportunity c. diversity d. fair treatment of staff e. work-family balance f. discrimination g. fair labor practices h. illegal drugs and alcohol i. use of organization property and resources j. proper exercise of authority k. employee volunteer activities l. romantic relationships with coworkers m. incentives and recognition systems 5. Environmental Issues a. commitment to the sustainability b. employee healthy and safety 6. Ethics and Compliance Resources a. ethics advice helpline b. reporting procedures c. anonymous/confidential reporting hotline d. summary of investigations process e. anti-retaliation policy and protections for reporters f. accountability and discipline for violators g. ombuds program 7. Internet, Social Networking and Social Media a. internet and social network use at work b. prohibited sites and content c. policies regarding posts about company, work products or coworkers d. online relationships between managers and their reports 8. Relationships with Third Parties a. procurement b. negotiating contracts