Introduction to Corporate Ethics

Corporate Ethics Subject Synopsis

This course looks at theories, principles and moral reasoning of corporations practices. Business Ethics is a normative endeavour that deals with how managers and other employees ought to act to certain situations whether within the organization itself or with external public.

It impacts a better understanding and acknowledgement of what is morally right and wrong.

Time-table for Corporate Ethics Lectures, May Semester, 2011

Group 1: Mondays - 10 - 11 a.m. Tuesdays - 3 - 5 p.m. Group 2: Mondays - 3 - 4 p.m. Wednesdays 12-2 p.m.

(Block 21 Level 2 Room 12 (Block 14, Level 2, Room 9)

(Pocket D Lecture Theatre D4) (Pocket D Lecture Theatre D2)

Course Outcomes of Corporate Ethics

1. Explain basic ethical concepts and principles that is relevant to resolving moral issues in business. 2. Identify moral issues involved in the managing of business in local and global context. 3. Discuss what constitutes ethical and unethical practices in business organization and changing workplace. 4. Describe their reasoning and analytical skills to apply ethical concepts to business decisions.

ETHICS AND ITS IMPORTANCE

Learning Outcomes
At the end of this lecture, students will be able to: 1) outline the importance of ethics in life. 2) identify the universally accepted good and bad values. 3) elaborate on PETRONAS shared values and brand essence.

ETHICS
We often ask ourselves some questions:
How should I live my life? What sort of person should I strive to be? What values are important for me in life? What standards or principles should I live by?

Exploring these issues immerses one in the study of right and wrong or moral reasoning. It leads one to the study of ethics.

What is ethics?
The standards of moral behaviour, i.e. behaviour that is accepted by society as right versus wrong (Nickels,2006). Ethics begins with each of us. It is related to our upbringing which is influenced by culture and religion.

 Ethics deals with individual character and the moral values that govern and limit our conduct. It investigates questions of right and wrong, duty and obligation, and moral responsibility.
(William H. Shaw)

What is the difference between Morality and Ethics?

More often, morality is used interchangeably with the term ethics. However, many scholars proposed clear differences between the two terms. Morality is concerned with the norms, values and beliefs embedded in social processes which define right or wrong for an individual or a community ( Shaw, 2008) Ethics ,on the other hand are concerned with the study of morality and the application of reason to elucidate specific rules and principles that determine right or wrong for a given situation ( Crane and Matten, 2007). These rules are called ethical theories (Crane and Matten, 2007).

Where do moral standards come from?

According to Shaw (2008), rationally, we learn and adapt to the ethics and moral principles through our : - upbringing - socialization (i.e. the behaviour around those around us) - experiences and our critical reflections on those experiences (self reflection) - the explicit and implicit standards of our culture We also learn ethics from religious teachings. All religion provides its believers with a strong composition of conduct, part of which involves moral instructions, values and commitments.

 For example, the Islamic term corresponding to the concept of ethics, though different scope and nature is ilm al-akhlaq. Al-Akhlaq is derived from the root word khuluq, which means to create, to shape and to give form. Accordingly, ilm al- Akhlaq, as a branch of knowledge is a science which deals with the ways to maintain virtues at their optimum level, i.e. to avoid wrongdoing and to do what is right and desirable ( McDonough, 1984)

Universally Accepted Basic Moral Values

 Good values
Integrity Respect for human life Self control Honesty Courage

 Bad values
Cheating Cowardice Cruelty

Virtue Standards and definitions.

Ability Being dependable and competent Acceptance - Making the best of a bad situation AmiabilityAmiability- Fostering agreeable social contexts Articulateness Ability to make and defend ones case AttentivenessAttentiveness- Listening and understanding Autonomy Having a personal identity Caring Worrying about the well-being of others wellCharismaCharisma- Inspiring others CompassionCompassion- Sympathetic Cool headedness - Retaining control and reasonableness in heated situations  Courage- Doing the right thing despite the cost Courage Determination Seeing a task through to completion  Fairness- Giving others their due, creating harmony Fairness-

         

Virtue Standards and definitions.. cont.

                     
GenerosityGenerosity- Sharing, enhancing others well-being wellGraciousness- Establishing a congenial environment raciousnessGratitude Giving proper credit HeroismHeroism- Doing the right thing despite the consequences HonestyHonesty- Telling the truth, not lying Humility Giving proper credit HumourHumour- Bringing relief, making the world better IndependenceIndependence- getting things done despite bureaucracy IntegrityIntegrity- Being a model of trustworthiness Justice treating others fairly Loyalty Working for the well being of an organization PridePride- Being admired by others PrudencePrudence- Minimizing company and personal losses ResponsibilityResponsibility- Doing what it takes to do the right thing Shame (capable of) Regaining acceptance after wrong behaviour Trust Dependable Spirit Appreciating a larger picture in situations SaintlinessSaintliness- Approaching the ideal in behaviour ToughnessToughness- Maintaining ones position TrustworthinessTrustworthiness- Fulfilling ones responsibilities WittinessWittiness- Lightening the conversation when warranted Zeal Getting the job done right; enthusiasm
Reference : Jennings, Marianne M, page 8)

What is Integrity?
 Being upright and honest.  Integrity relates to honesty and goodness, wholeness and unity
(Oxford Dictionary)  A person of integrity upholds ethical principles.

 Dr. Danial Zainal Abidin, in his public lecture to UTP students in

July,2008 said Integrity in Islam is Taqwa. Taqwa.

 Taqwa is a comprehensive word found in the Quran that carries the 

meaning of fear (God consciousness), respect, and reverence for God. Liguistically, Liguistically, Taqwa means protection or shield from what is harmful. grateful to Him.

 An individual with Taqwa will sincerely obey the rules of Allah and be

Integrity (continue.)




A person of integrity will consistently consider his dignity, image and reputation before undertaking an action and always strives to do good deeds. Donald Zauderer listed thirteen (13) specific behaviours that can help identify the level of integrity in individual actions (Stanwick and Stanwick, 2009). (Stanwick Stanwick, - possess humility - maintain the ability to be concerned about the greater good - be truthful - fulfill commitments - strive for fairness - take responsibility - have respect for individual - celebrate the good fortune of others - develop others - reproach unjust acts - be forgiving - extend self to others

What is Self Control?

 The ability to control human behaviour or
desires through the exertion of will.

 Ones ability to remain calm and not show his

emotions by being impulsive, angry or overoverreactive when faced with a conflict, crisis or unfavourable situation.  A self controlled person is normally emotionally stable and patient when handling a problem.

What is Courage?
 It is doing the right thing despite the cost. It is the ability to face
danger, pain etc without showing fear.

 According to Aristotle, it is the virtue of responding to fear with a

reasonable amount of daring. ( Boatright, 2007)

 A courageous person is usually someone with good drive, confident

and possesses a high sense of achievement and motivation.

 A courageous person will also not hesitate to respond to

unfavourable situations when he sees injustice happening around him. life.

 He is forward looking and accepts change as part and parcel of his

Code of Ethics
 A code is a statement of principles,
policies or rules that guides behaviour.

 Code of Ethics is defined as a social,

religious or civil code of behaviour and principles of conduct that are considered correct, especially those of a particular group, profession or individual.
Hanks (1979:502)

PETRONAS Shared Values

Loyalty
Loyalty to Nation and Corporation

Professionalism
Committed, Innovative and Proactive and Always striving for Excellence

Integrity Honest and Upright Cohesiveness

United in Purpose and Fellowship

Petronas Brand Essence

Energy Receive, Energy Return, Aspiring People Everywhere trusted enriching passionate progressive

As students of UTP and PETRONAS scholars who are potential employees of PETRONAS Group of Companies, how do demonstrate the PETRONAS Shared Values and brand essence?

Shared Values

loyalty , professionalism, integrity, cohesiveness

Brand Essence -

Energy Receive, Energy Return, Aspiring People Everywhere

trusted, enriching, passionate, progressive

Applying ethics in the business world

Is ethics important in the business world? Yes, it is important for business people to be ethical as being ethical in business is actually no different than being ethical in private life. Today, business managers have many reasons to be concerned with ethical standards of their organizations. The lessons learned from the collapse of Enron, Arthur Anderson, etc. The consequences of unethical behaviour and unethical business (Desjardins, page 3) institutions are too serious to be ignored.

The only reservation would be that business issues are not easily addressed by ordinary ethical reasoning. (Boatright, page 5) How can ethics be integrated within business? Which ethics should guide business decisions?
(Desjardins, page 3)

Business and Organizational Ethics

Business Ethics is the study of what constitutes right or wrong, or good and bad, human conduct in a business context. The word business in our context means an organization whose objective is to provide goods and services for profit. Businesspeople are those who participate in planning, organizing or directing the work of business. One distinguishing feature of business is its ECONOMIC character. In the world of business, we interact with each other not as family members of friends but as buyers and sellers, employers and employees, etc. In the study of Corporate/Business Ethics, however, we will take a broader view of dwelling on issues that arise anywhere that employees and employers come together. For e.g. discrimination, whistle-blowing, unjust dismissal, health and safety hazards, etc.