MPU3222 LU11 C9 Ethics PDF

 1 Ethics, Professionalism and Social Responsibility 9  Synopsis This chapter discusses the importance of ethics, professionalism and social responsibility in entrepreneurial and business activities. Ethics involve personal beliefs, values and...

 1 Ethics, Professionalism and Social Responsibility 9  Synopsis This chapter discusses the importance of ethics, professionalism and social responsibility in entrepreneurial and business activities. Ethics involve personal beliefs, values and good practices, such as being disciplined, honest, responsible and trustworthy. Professionalism means a person is competent and qualified to do a specific task, and he undertakes the task in the manner that is to be expected from a professionally competent person, such as acting with due care, skill, diligence and complying with the rule of law, regulations and code of practice. Being socially responsible means a person will ensure that his action will contribute to and benefit the society, environment and country, and it will not harm or negatively impact the society, environment and country. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 3  Objectives The objectives of this chapter are: To understand and appreciate the importance of good morals, ethics and professional values at work. To understand the meaning of being professional at work. To appreciate the importance of social responsibility to a business organization. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 4  Learning Outcomes At the end of this chapter, students should be able to: Appreciate the importance of good character for long-term success. Appreciate and relate to corporate social responsibility. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 5  List of Topics  Introduction to Ethics and Standards of Professional Conduct  The Importance of Ethics and Code of Good Professional Conduct  Islamic Ethical Values  Social Responsibility and Sustainable Development Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 6  Introduction  An entrepreneur who conducts business ethically, professionally and in a socially responsible manner is an asset to the society and nation.  Through the business activities, the entrepreneur creates ‘win-win’ deals, providing benefits to society by offering products and services that are needed, and make profit for themselves. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 7  Introduction to Ethics and Standards of Professional Conduct  Ethics involve personal beliefs, values and good practices, such as being disciplined, honest, responsible and trustworthy.  Human ethical values were derived from many sources, such as religion, culture and law (legal acts, enactment, by-laws, rules and regulations). Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 8  Definition of Ethics  Ethics – A set of principles prescribing a behavioural code that explains what is good and right or bad or wrong; – May outline moral duty and obligations – Provide basic rules or parameters for conducting any activity in an ‘acceptable’ manner Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 9  Ethical Problems  Categories of ethical conflicts fraud, finance, confidentiality and honesty  Major factors that can cause ethical problems in an organization: – lack of integrity, – organizational relationship problems, – conflicts of interest, and – unclear policies Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 10  Introduction to Ethics and Standards of Professional Conduct (cont.)  It is universally accepted that a person has to be honest, responsible, fair and reasonable in all his dealings.  There are laws, code of professional practices and good conduct, religious and cultural values that can guide a person on what is ethically, morally and legally acceptable. – For instance, criminal cases such as cheating, stealing, robbing, rape, etc. are universally accepted as evil and wrong. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 11  Introduction to Ethics and Standards of Professional Conduct (cont.)  An adult would have developed his personal ethics through his upbringing, religious lessons, exposure to the world, education, social norms, observations, experiences, understanding of local laws, etc. – This is the moral compass that guides a person’s conscience. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 12  Introduction to Ethics and Standards of Professional Conduct (cont.)  Professionalism means a person is competent and qualified to do a specific task, and he undertakes to do the task in the manner that is to be expected from a competent person, e.g. – acting with due care, – skill, – diligence, – complying with laws, regulations and codes of practice. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 13  Introduction to Ethics and Standards of Professional Conduct (cont.)  All professionals have their own codes of practice, ethics and professional conduct. – E.g. accountants, engineers, lawyers, doctors, nurses, dentists, architect etc.—  Under law, these professional bodies have a board to oversee, manage and take disciplinary action on members who fail to comply or conform to the legal, technical or ethical requirements stipulated. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 14  Introduction to Ethics and Standards of Professional Conduct (cont.)  The nature of business is that entrepreneurs offer products and services to customers, and in the process, make profit.  The business process should be ethically and legally right, contribute to and benefit the society and does not pose any harmful impact to the country, society or environment.  An entrepreneur can only be happy and proud of his or her success if the achievement is done in a professional and ethical way. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 15  Introduction to Ethics and Standards of Professional Conduct (cont.)  Worldly achievement neglecting ethical principle and good conduct is a superficial achievement. – In reality, it causes worry, anxiety, sleepless nights, depression and self-doubt that may trigger self- destruction.  Personal character and integrity are the foundation of success and they are the final test of a person’s true quality. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 16  Introduction to Ethics and Standards of Professional Conduct (cont.)  Success that is based on good ethical and moral conduct is holistic, meaningful, satisfying and very often an exemplary long-term success that others may want to emulate. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 17  Common Unethical practices among sellers / entrepreneurs  Selling counterfeiting/ fake/ imitation products – http://www.theedgemarkets.com/article/ sale-fake-goods-hits-alarming-level  Selling fake products – E.g. cosmetics https://www.bharian.com.my/berita/wilayah /2017/09/321547/trend-penggunaan- kosmetik-murah-membimbangkan Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 18 Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 19 Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 20 Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 21 Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 22  Islamic Ethical Values  For a Muslim entrepreneur, all business dealings will be considered as good deeds (ibadah) if one is sincere (ikhlas) and does it in the best manner (itqan) following Islamic principles.  The following are key Islamic principles in doing business: (a) The entrepreneur shows and displays good behaviour and etiquette (akhlak and adab) towards other fellow Muslims, non- Muslims, animals and environment. (b) The entrepreneur should be mindful not to commit prohibited acts as outlined in Islamic laws (syariat). Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 23  Islamic Ethical Values (cont.) (c) The entrepreneur’s earnings should be permissible by Islam, i.e. halal. (d) The entrepreneur must pay obligatory alms (zakat) and offer donations (sadaqah). (e) The concept of blessing (barakah) means that smaller earnings can be superior than bigger earnings if it is earned through ethical and legal means. (f) Possession of wealth is permissible but Allah s.w.t is the absolute owner of wealth, and wealth is only entrusted to mankind temporarily. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 24  Islamic Ethical Values (cont.)  A Muslim believes that wealth must be obtained in halal ways and it must be used in a halal manner as prescribed by Islamic law.  A Muslim must use, manage and invest resources endowed to him to generate wealth, benefit, goodness to himself, the society and nation as a whole.  All of these good deeds will form part of his act of worship (ibadah) as a Muslim. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 25  Social ResponsibiIity and Sustainable Development  Social responsibility often means organizations or individuals practising good ethical principles and act as exemplar citizens.  In the long term, these acts enhance the corporate image of an organization and as such enhance its market positioning and competitiveness.  Corporate social responsibility (CSR) is an act of assuming a certain responsible act by corporate organizations towards the environment, consumers, employees, communities and other possible external stakeholders. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 26  Corporate Social Responsibility Examples  Eco-Biz Dream Project by Alliance Bank Berhad – https://www.thestar.com.my/news/education/ 2018/10/07/platform-for-social-entrepreneurs/  Community Programme by Shell – http://www.theborneopost.com/2016/08/25/shell- gives-back-to-society-through-csr-programme/ Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 27  Sustainable Development  Sustainable development is defined as meeting “the needs of the present without compromising the ability of future generations to meet their own needs” (United Nations, 1987).  This means inculcating the process of maintaining human needs while preserving the environment for future generations. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 28  Sustainable Development  Entrepreneurs must strive to contribute to a sustainable environment through – less pollution, – energy-efficient production, – energy- and water-efficient machinery, – reduce wastage, – eliminate output of harmful material to environment (i.e. carbon dioxide emissions and toxic waste), etc. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 29  Sustainability Example  Shell :delivering energy in a responsible way to meet the world's growing needs. – https://www.shell.com.my/sustainability.html  Maxis – https://www.maxis.com.my/en/about-maxis/ corporate-responsibility/sustainability- reports.html Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 30  Summary  Ethics, professionalism and social responsibility are integral parts of a business.  Entrepreneurs have to embrace ethics, professionalism and social responsibility in order to achieve profit objectives, as well as social obligations.  A holistic approach will make good business sense in the long run. The challenge is how to work out a practical concept, strategy and approach, so that the business model creates a ‘win-win’ situation to all stakeholders. Introduction to Entrepreneurship All Rights Reserved © Oxford Fajar Sdn. Bhd. (008974-T), 2017 9– 31