Measures To Improve Ethical Conduct 201 2

INTRODUCTION Ethical Conduct - A Call for Natural Duty

Ethics is defined as the science of the morality of human acts. And because actions reflect the motives of the doer, ethics is said to be the study of human motivation, and ultimately, of human rational behavior. Derived from the Greek word "ethos," which means "characteristic way of acting," ethics sets the norms and standard of corporate organizations to define how and why employees are expected to act the way they should be. This is because "ethos" or ethics includes cultural mannerisms, religion, politics, laws, and social aspirations of a group of people. It is an all-encompassing subject that seeks to promote harmony and professionalism within the working environment.

Central to the belief that companies should be operated in a socially responsive way for the benefit of all stakeholders is the belief that the managers will behave in an ethical manner. The
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term ethics refers to the moral principles that reflect societys beliefs about the actions of an individual or a group that are right or wrong. Of course, the values of one individual, group or society may be odds with the values of another individual, group or society. Ethical standard, therefore, reflect not a universally accepted code, but rather the end product of a process of defining and clarifying the nature and content of human interaction. Ethical Conduct in Corporations Every profession is learned and extremely significant. The professionals, and for everybody who is in the labor force, are familiar with the fact that their work has a straight and very important influence on the value of life for everybody. In the corporate world, it has been a well-known fact that work is directed to the promotion of life. It is a personal duty since each one has the moral obligation to take care of themselves and others, and not be a burden to them. This obligation take up greater proportion as an employee assumes a higher position. For that reason, it is highly expected that the services given by the labor force need fairness, truthfulness, integrity, lack of prejudice, and fair play. In the practice of their profession and obligations, employees must perform carry out under a norm professional conduct, which has a need of devotion to the highest codes of ethical conduct. Basic Duties of Workers Ethical Conduct dictates the duties of a worker. It is ethical conduct because it is impossible for anyone to have an inkling of these duties, namely: Work honestly and comply with all agreements Never injure capital, nor steal from the employer Never outrage the person of the employer Never employ deceit nor violence in presenting a cause Never consort with agitator or men of evil principles
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Basic Duties of Employers It is also important to set some ethical conduct for the employers. Employers have the sacred task of caring for their workers. Theirs is the golden opportunity to become the ethical man for others. They must be fair minded and generous in their dispositions. The following are their basic duties towards their workers: Appreciate their work Respect the human dignity of the workers Never treat them as slaves for making money Never assign them task beyond their strength, do not employ them in work not suited to their age or gender Give them commensurate wages Provide for their health and social recreation Provide them time for the practice of their religion Instruct them on how to use their money wisely Instruct them to love their family Provide them with the opportunities for promotion. All of these things that should be stipulated in every corporate ethical conduct as supposed to promote the goodwill of every individual who are members in the labor force. In this way, they can promote the goodwill to the whole community as they continue to practice their profession according to the highest standards set by the ethical conduct.

Unethical Behaviors
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The media feeds us with information of unethical behaviors in our environment revealing the unethical social issues that demand our attention. The newspaper accounts of unethical behaviors in business have raised concerns about business ethics which have led to studies on their causes in organizations. These unethical behaviors are from unsavory individuals that have no moral character. In 1961, the survey conducted by Reverend Raymond C. Baumhard S. J., showed that there was a very high concern about ethical behaviors. That concern is higher today.

What is an Unethical Behavior?

The Civil Service Commission of Philippines defined an unethical behavior as any behavior prohibited by law. In a dynamic business environment, a large gray area exists that makes it difficult and unclear to distinguish what is ethical. An unethical behavior would therefore be defined as one that is not morally honorable or one that is prohibited by the law. Many behaviors will fall in the classification including corruption, mail and wire fraud, discrimination and harassment, insider trading, conflicts of interest, improper use of company assets, bribery and kickbacks, compliance procedures, ethical relations with others, disciplinary action, fraud, illegal business donations, patent infringement and product liability.

Unethical Behavior - It's Impact on Today's Workplace

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It is a sad truth that the employees of just about every business, in every business, will occasionally encounter team members who are taking part in unethical behaviors. Such unethical behaviors include a wide variety of different activities. Among the most common unethical business behaviors of employees are making long-distance calls on business lines, duplicating software for use at home, falsifying the number of hours worked, or much more serious and illegal practices, such as embezzling money from the business, or falsifying business records. Though there is sometimes a difference between behaviors that are unethical and activities that are actually illegal, it is up to the business itself to decide how it deals with unethical behavior legal or not. Many employees find that discovering unethical behavior among co-workers actually tests their own values and ethical behaviors. After all, unethical behavior that is not illegal frequently falls in a grey area between right and wrong that make it difficult to decide what to do when it is encountered. Furthermore, different people have different views regarding what is ethical and what is unethical. For example, some people feel that it is alright to tell a little "white lie", or to make one long distance call on the company's nickel, as long as they can justify it in their mind. When employees discover other employees doing something that they know is wrong by the company's standards, their own sense of what is right and what is wrong instantly comes into question. That employee needs to consider how s/he feels about that particular activity, as well as informing about that activity, or turning a blind eye. Even by deciding to do something about it, the employee who has discovered the unethical behavior is presented with a number of difficult choices. Should the employee speak to the individual directly, or should the employee head directly to a company supervisor? To make this decision a bit easier, many companies have adopted several techniques that allow for the management of unethical activities. The first step is to create a company policy, in writing, that is read and signed by each employee. This erases most feelings of ambiguity when it comes to deciding what to do after witnessing an unethical behavior.

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The second is to give a clear outline of what is expected of the person who has discovered the unethical behavior. It should include the person who should be contacted, and how to go about doing it. With clear instructions, there will be less hesitation in reporting unethical activities, and then they can be dealt with quickly and relatively easily, before they develop into overwhelming issues. Furthermore, the repercussions of unethical behaviors should be clearly stated. This way, both the person doing the activity, and the witness to the activity will be well aware of the way that things will be dealt with, and there won't be any risk of someone not reporting unethical behavior because they're afraid that the culprit will be unfairly treated. Communication is key in the proper management of unethical behavior in today 's workplace. Unethical behaviors that stimulated interest in ethics include Watergate events, Lockheed Scandal, the 1972 United States presidential election, illegal business donations and bribery of foreign officials in order to induce business abroad. Today, the most common ones are false communication, collusion, conflicts of interest, gifts and kickbacks, health services providers unfair practices, insider trading, discrimination and harassment, and embezzlement. False Communications False communications fall into various categories. They include falsification of auditors or controllers report or any form of manipulation that does not tell the whole truth. These include cheating on tax returns or inappropriate depreciation schedule and wrong expenses. Feeding the public with wrong report of the organizations business performance to make the organization look good is another common practice. In 2001, Enron gave wrong information about their loss because Ken Lay, the CEO of Enron, was advised by some trusted Enron executives to report only $1.2 billion of the $7 billion in losses because it was felt that the amount could be explained reasonably without doing more
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damage to the falling stock price of the company. Similar to this was the case of Manville Corporation. The top management of the Corporation suppressed, for decades, evidence which proved that asbestos inhalation was killing their employees. Collusion Collusion, especially with competitors, to fix prices, is an unfair business practice today. This could be considered stealing from customers. However, there are differences of opinion on whether or not price fixing is stealing from customers . Gifts and Kickbacks Some organizations do not allow their employees to receive gifts from clients during normal course of business. Those who do, generally provide guide lines on limitations as to the amount an employee can receive as gift. Sometimes a buyer may request for kickbacks or entertainment which, if not provided, may lead to the loss of the customer. An employee frequently receives pressure from the management to behave unethically or to obtain profitable business at any cost, which may include the use of any possible dirty tricks. The employees who desire to be retained or promoted have no choice but to dance to the tune of the management. This is because there were cases of those who refused to behave unethically the way management instructed and were fired or nearly fired. Conflict of Interest Conflict of interest occurs when ones private interest interferes or appears to interfere in any way with the interest of the organization. According to Sliglitz, it can be argued that there is no conflict of interest because, based on Adam Smiths view, the individuals, when pursuing their own self-interest are actually pursuing the general interest of society. Some examples of conflicts of interest are:
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- diverting from the organization for personal benefit, a business opportunity, - using the organizations assets for personal benefit, - accepting any valuable thing from the organizations customers or suppliers, and - having a financial interest in an organizations competitor. Unethical practices in the Health Care Sector There are three common unethical practices in the Health Care Sector. The first is refusing to provide health care services to the patients who have no medical insurance. Some Health Centers do not admit patients who have no insurance unless they can provide evidence that they have the ability to pay for the health service. The second unethical practice in the health care sector is over treating patients to boost income. The third is doing surgery at surgical centers instead of the hospital so that the doctors do not have to pull call at any hospital.

Insider Trading Insider trading is an unethical behavior which occurs when a person who has access to confidential information uses or shares the information for securities trading purposes or any other purpose except the conduct of regular company business. The confidential information of the company are not to be used for achieving personal gain neither are they to be disseminated directly or indirectly, to friends, family members and other outsiders who may in turn trade on or misuse the information. Discrimination and Harassment Discrimination involves not providing equal opportunity in employment on merit but on other basis such as race, sex, national origin, age, religion, or any other basis not related to the job.
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Harassment is a derogatory comment or unwelcome sexual advances.

Wrong Doing A large number of people, including top management, are involved in wrong doing both in the public and in the private sectors. The managers of E.E. Hutton, for example, were found guilty of 2000 mail and wire fraud. were accused of falsifying time cards. Similarly, the supervisors of a defense contractor

Why People Behave Unethically??

Dedicated employees, who are usually honest, sometimes behave unethically because of four rationalizations: that no one will ever find out, that the behavior is not really illegal, that it is in the best interest of the organization, and that the organization will protect them. Although the costs of unethical behavior are hard to measure, they can add, according to research, more than 20% to the cost of doing business. The costs will include low wages, unemployment, and poverty. If top management wants to improve organizational performance, they must stand firm that ethical methods are the only ways business should be done.

Causes of Unethical Behaviors

The study that was commissioned by American Management Association (AMA) and which was conducted by the Human Resource Institute (HRI) using 1121 managers and Human Resource experts as participants, revealed that the leading cause of unethical corporate behavior is pressure to meet unrealistic business objectives and deadlines. The study also showed that the second leading factor that causes unethical behavior is the desire to further ones career while the third leading factor is the desire to protect ones livelihood.
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Job pressure, according to the study, causes employees to engage in unethical behaviors

that include cutting corners on quality control, covering up incidents and lying to customers.

Ignorance is another major cause of unethical behaviors.

The study of (AMA)

and (HRI), revealed that the ignorance that the acts are unethical and not knowing the seriousness of the consequences when caught, are causes of unethical behaviors.

Competition for scarce resources, power or position can cause individuals to engage in

unethical behaviors. Hosmer emphasized that an attempt to improve their corporate competitive positions made managers to take immoral actions. Bazerman and Banaji felt that the cause of the unethical behaviors in organizations is the presence of a few bad apples among organizational actors. The primary cause of unethical behaviors can be traced to lack of maintaining the type of consistent leadership that is necessary for running an ethical organization. This exposes the employees to opportunities that make them engage in unethical behaviors.

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Five Barriers to an Ethical Organization

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How to Improve Ethics in a Global Economy??

Ethical issues are a major concern for organizations because of the far-reaching impacts they can have on customers, shareholders, employees, and the overall company. Many influences impact the ethical behavior of employees and thus impact the overall company; however, managers can take proactive steps to positively influence ethical behavior. There are many ways a company can be negatively impacted by ethical issues. Customers and other employees may be impacted by the unethical behavior of company employees such as when greed overtook concerns about human welfare when the Manville Corporation suppressed evidence that asbestos inhalation was killing its employees, or when Ford failed to correct a known defect that made its Pinto vulnerable to gas tank explosions following low speed rear-end collisions. Over the last several years, the public watched when the Martha Stewart insider trading ethics issue played out on television and saw the negative impact it had on her company, her reputation, her personal finances, and even her personal life; culminating in jail time. People were also engrossed watching the Enron scandals unfold, which ultimately resulted in the downfall of that company. According to the findings of Ernst & Youngs 10th global fraud survey, 13% of US respondents admitted that their organization had been asked to pay a bribe to retain or win business in the last two years. Poor ethical behavior of employees can result in not only fines, jail time, and lawsuits, but loss of customers, loss of brand equity, lost productivity, and even lost revenue. US industries lose
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about $600 billion a year from unethical and criminal behavior. While news media mainly communicate ethics stories of the largest magnitude, ethics violations can include such things as doing personal work during office hours, cheating on expense reports or even calling in sick when not ill. What influences impact ethical behavior? There are many influences, both internal and external to organizations. Internal influences include the ethical codes of conduct companies have established (or the lack thereof), the culture within the company, the size of the organization, the companys structure, and even the companys strategy and the type of pressure that exists to achieve financial results. Even the behavior of management influences the behavior of employees beneath that layer. What top managers do, and the culture they establish and reinforce, makes a big difference in the way lower-level employees act and in the way the organization as a whole acts when ethical dilemmas are faced. Coca-Cola in India is an example of how one company is trying to proactively address ethical issues. During the recruitment and hiring process, Coca-Cola India measures each applicants stand on personal ethics. States Nalin Garg, VP of HR, No matter how much pressure we have on us to recruit, hiring an employee whose ethics are suspect is a no-go. Coca-Cola India has implemented a set of workplace ethics and protocols that are helping drive the desired corporate culture. Every employee needs to abide by it regardless of the designation of role. It includes punctuality, keeping personal work to the minimal, controlling expenses, maintaining office decorum and contributing towards creating a positive culture that results in enhanced performance and workplace relationships. The company also works with an external agency, Human Dynamic Asia Pacific, for its employee assistance program and includes a hotline service to encourage whistleblowers in the organization. While ethical issues are a major concern for organizations, there are ways for managers to positively impact the ethical behavior of employees. As Ben Heineman, the former General
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Electric General Counsel states, Performance does not have to come at the expense of integrity. A company can meet or exceed its numbers and, at the same time, adhere to formal rules, establish global ethical standards and motivate employees throughout the company to exemplify values of honesty, candor, fairness, reliability and trustworthiness. Ways to positively impact ethical behavior include: Act as a role model for the ethical behavior you wish to see in your employees Ensure your company has established and regularly trains employees in business codes of conduct and business ethics Work with your HR department to ensure potential candidates are screened for highly ethical conduct Train all new employees on their expected ethical behavior such as arriving to work on time, treating company expenses as if it were their own personal checkbook, keeping personal time to a minimum (such as surfing the web), always acting professional and respectful to other employees, etc. Provide an employee ethics hotline Hold open discussions with your employees on how your company or department can improve their ethical behavior Improving Ethics in Your Business Corporate scandals in recent years have lead to a flurry of changes in how we conduct business at many levels. The federal government has increased regulations for companies producing financial reports through the Sarbanes- Oxley Act (SOX), and internally many companies have increased the responsibility of the Board of Directors in overseeing the managing executives. Still, many stock holders, business owners, managers, and even employees express concern over whether their organization are ethical and whether members at all levels hold themselves to a high standard of conduct.
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Strategies to Improve the Ethical Climate of a Business Organization

The ethical climate of a business organization can make the difference between a successful venture and an unsuccessful one. In a 2007 article published in Financial Executive, contributing writer Cynthia Waller Vallario suggests that there may be a connection between how a business is perceived and its internal ethical climate. Improving the ethical climate of your own business "enhances and preserves its reputation, inspires loyalty and advertises that it has its ethics message right. It also fosters an ethical culture within the organization." Evaluating Ethical Behavior In an article published in 2004, Curtis C. Verschoor suggests that companies should undergo internal ethics audits on a regular basis. He contends that "the regular internal audit of the organization's ethics and compliance program adds great value to the organization." Verschoor argues that business organizations must take a "top-down" approach to ethics. By communicating and modeling behavioral standards from the highest levels of your business down to the entrylevel positions, you can ensure that there is no "gap" between ethical standards and the actual behavior of employees. By regularly evaluating these standards and the behavior of your company's leadership, you can effectively promote compliance to ethical behavioral norms for your organization. Educating Employees

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Increased focus in the business community regarding ethics-based issues has led to increased funding and research to increase ethical awareness. One strategy to improve the ethical climate of your business organization is to offer or even require classes in business ethics. Business ethics classes at the local community college or even classes offered directly through the human resources department can be a practical and cost-effective way to offer ongoing ethics training and motivation. Protecting Employees One problem that might arise in the promotion of ethical guidelines to your workforce is the fear employees may have regarding their role in reporting unethical or questionable behavior by another employee or even a supervisor. Employees must be assured that they will be safe from retaliation from other employees or supervisors who might be turned in for engaging in questionable activities. The best way to make this assurance is to offer employees a confidential channel through which they can report bad behavior. A company ethics hot line is one way to increase employee willingness to speak out. Another might be a suggestion box kept in a secure location where other employees are not likely to see one of their fellow employees turning them in. Employees must be confidently assured that reporting bad behavior is expected and safe.

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CONCLUSION
Today, there is a tremendous loss of confidence in corporate conduct and there is an urgent need to work towards restoring it. Although ethics education seem to produce limited evidence of changing behaviors, the commitment of management to monitor annual ethics education for all employees will produce the desired favorable results. There should be clear communication to the employees of what are honorable and expected behaviors in the organization. They must maintain and stand firm on a clear cut policy that ethical methods are the only way of doing business.

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BIBLIOGRAPHY

Basu Kaushik (2011). Why, for a Class of Bribes, the Act of Giving a Bribe should be Treated as Legal. New Delhi, India

Omolewu Gabriel, Associate Professor of Management, Wilberforce University. Strategies for Improving Ethical Behaviors in Organizations.

Lewis Jared. Ethics. Retrieved from http://www.ehow.com/way_5891381_strategies-ethical-climate-businessorganization.html http://www.careerwomaninc.com/blog/?p=175 http://hbr.org/hb/article_assets/hbr/1104/R1104C_A_lg.gif

Pearce II john A, Robinson, Jr. Richard B, Mital Amita. Strategic Management.

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