Work Ethics Handout 2024-25 Sem 1 PDF

7 TERMINOLOGY USED IN ETHICS Introduction Each subject uses terms that are specific to that subject or topic. The same term may have different meanings in another context or situation. Compiled below are some common terms used in Business Ethics. These terms have been defined by different authors l...

7 TERMINOLOGY USED IN ETHICS Introduction Each subject uses terms that are specific to that subject or topic. The same term may have different meanings in another context or situation. Compiled below are some common terms used in Business Ethics. These terms have been defined by different authors like Ethics Research Center and others (listed in references). Term Meaning Agency Belief that one has the power to enact change. Agency is a critical component in reporting decisions because most people will only report if they believe their action has the potential to make a difference. Aspirational A strong desire to achieve something high or great. An aspirational code would be intended to reach a higher standard of “doing what is right,” superseding mere compliance with what the law mandates. Benchmarking The process of comparing to established “best practices,” peer organizations or even past results in order to better understand strengths, challenges and progress made. Business Ethics The conduct by which companies and their agents abide by the law and respect the rights of their stakeholders, particularly their customers, clients, employees, and the surrounding community and environment Capacity Building The development of an organization’s core skills and capabilities, such as leadership, management, finance and fundraising, programs and evaluation, in order to build the organization’s effectiveness and sustainability. It is the process of assisting an individual or group to identify and address issues and gain the insights, knowledge and 132  experience needed to solve problems and implement change. Capacity building is facilitated through the provision of technical support activities, including coaching, training, specific technical assistance and resource networking (from the California Wellness Foundation’s “Reflections on Capacity Building”). Code of Conduct Can refer to a listing of required behaviors, the violation of which would result in disciplinary action. In practice, used interchangeably with Code of Ethics. Code of Conduct or A central guide and reference to assist day-to-day decision Code of Ethics making. It is meant to clarify an organization’s mission, values and principles, linking them with standards of professional conduct. As a reference, it can be used to clarify standards, organizational values and policies; promote effective decision-making; and direct users to identify relevant ethics- related resources within the organization. Code of Ethics Often conveys organizational values, a commitment to standards and communicates a set of ideals. In practice, used interchangeably with Code of Conduct. In Section 406(c), the Sarbanes-Oxley Act defines “code of ethics” as such standards as are reasonably necessary to promote– (1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (2) full, fair, accurate, timely, and understandable disclosure in the periodic reports required to be filed by the issuer; and (3) in compliance with applicable governmental rules and regulations. Code Provisions The specific standards of behavior and performance expectations that your organization chooses to highlight and address in your code. 133 Compliance The extent to which a company conducts its business operations in accordance with applicable regulation and statutes Comprehensive An ethics and compliance program should include six key Ethics and elements : 1) written standards of ethical workplace conduct; Compliance Program 2) training on the standards; 3) company resources that (as defined by ECI) provide advice about ethics issues; 4) a means to report potential violations confidentially or anonymously; 5) performance evaluations of ethical conduct; and 6) systems to discipline violators. A seventh element is a stated set of guiding values or principles. Conflict of Interest A person has a conflict of interest when the person is in a position of trust which requires her to exercise judgment on behalf of others (people, institutions, etc.) and also has interests or obligations of the sort that might interfere with the exercise of her judgment, and which the person is required to either avoid or openly acknowledge. Corporate Culture the shared beliefs, values, and behaviors that create the organizational context within which employees and managers interact Corporate Social The practice in which a business views itself within a broader Responsibility (CSR) context, as a member of society with certain implicit social obligations and responsibility for its own effects on environmental and social well-being Corruption The abuse of public power for private benefit. Perversion or destruction of integrity in the discharge of public duties by bribery or favor or the use or existence of corrupt practices, especially in a state or public corporation. Courage Choosing to do what one believes is right even if the result will not be to everyone’s liking or may lead to personal loss. 134 Credo Fundamental beliefs (or a set of beliefs) or guiding principles. Deontology A normative ethical theory suggesting that an ethical decision requires us to observe only the rights and duties we owe to others, and, in the context of business, act on the basis of a primary motive to do what is right by all stakeholders Effective (or Well- A vital, living parts of a company’s ethos and way of doing Implemented) Ethics business that ensures ethical conduct is rewarded and that and Compliance employees know how to and feel supported in their efforts to Program (as defined uphold ethics standards in their work. ECI measures six by ECI) hallmarks of a company with an effective ethics and compliance program: 1) freedom to question management without fear; 2) rewards for following ethics standards; 3) not rewarding questionable practices, even if they produce good results for the company; 4) positive feedback for ethical conduct; 5) employee preparedness to address misconduct; and 6) employees’ willingness to seek ethics advice. Empathy Caring about the consequences of one’s choices as they affect others. Being concerned with the affect one’s decisions have on those who have no say in the decision itself. Ethical Congruence A situation where one’s decision is consistent with, aligns with, the applicable set(s) of values. Under these circumstances, a choice to take some action will harmonize with the decision-maker’s values. The organizational state where values, behaviors and perceptions are aligned. Ethical Decision- Decisions that involve ethical considerations. Factors to be Making considered include:  Impact of the action or decision on others or relationships with them (altruistic considerations)  Determination of the “right thing to do” – as defined by the values and principles which apply to this situation (idealistic considerations) 135   Potential consequences of the action or decision (individualistic considerations)  Business consequences of this action or decision (pragmatic considerations) Ethical Differences Situations in which two people agree on a particular value and disagree as to the action to be taken or decision to be made. Ethical Dilemmas Challenging situations that require involve competing sets of values. Ethical Relativism a view that ethics depends entirely upon context Ethics The standards of behavior to which we hold ourselves in our personal and professional lives Ethics Culture The extent to which employees at all levels are committed to doing what is right and successfully upholding values and standards. Ethics culture includes ethical leadership (tone at the top); supervisor reinforcement of ethical behavior; and peer commitment to support one another in doing right. Ethics Risk Potential for harm to an organization caused by misconduct that goes undetected and persists due to lack of management awareness and action. Focus Group A small group of people gathered to share their opinions and experiences, thus serving as a representative sample of a larger population. Information obtained from focus groups is not analyzed statistically, but instead used for informational purposes (i.e., to assess the culture of an organization). Good Faith Based on the belief in the accuracy of the information or concern being reported. Goodwill The value of a business beyond its tangible assets, usually including its reputation, the value of its brand, the attitude of its workforce, and customer relations 136 Governance The act, process or power of exercising authority or control in an organizational setting. Independence In the most general usage, freedom to act without control or influence from others, to be free to make decisions and act without external constraint. In the business world, independence has come to have a specialized meaning. It is most commonly understood to mean freedom from conflicting interests – the specialized case of having the ability to make a decision or act in ways which are free from conflict between one’s personal interests and the interests of the party on whose behalf we are making the decision (from “No Virginia, There Is No Such Thing as Independence,” Frank Navran). Integrity The adherence to a code of moral values implying trustworthiness and incorruptibility because there is unity between what we say and what we do Long-term A broad view of profit maximization that recognizes the fact perspective that the impact of a business decision may not manifest for a long time Maxims Short, pithy statements that are used to instruct and guide behavior. Morals Values that we attribute to a system of beliefs that help the individual define right versus wrong, good versus bad. These typically get their authority from something outside the individual – a higher being or higher authority (i.e., government, society). Moral concepts, judgments and practices may vary from one society to another (from “What is the Difference Between Ethics, Morals and Values?”, Frank Navran). 137 Normative Ethical A group of philosophical theories that describe how people Theories ought to behave on the basis of reason Ombudsman A designated neutral or impartial dispute resolution practitioner whose major function is to provide confidential and informal assistance to managers and employees and/or clients of the employer: patients, students, suppliers or customers. Outcomes Results of actions taken. The expected outcomes of an ethics and compliance programs are reduced pressure to compromise standards; fewer observations of misconduct; increased rate of reporting observations that occur; and a decline in retaliation against whistleblowers. Qualitative Data Data that is descriptive rather than numeric. It can be collected in several ways: focus groups, interviews and open- ended survey questions. Qualitative data is generally more subjective than quantitative data. Quantitative Data Data that is numeric and, as such, lends itself more easily to comparisons. Quantitative data is often gathered via survey research. Reporter Any employee who observes workplace misconduct and informs an appropriate authority (either external or internal to the organization). Reporting System Any mechanism (i.e., helpline, hotline or website) established by an organization in order to provide employees and other agents with a means to report misconduct to the organization without fear of retribution. An essential component of an ethics and compliance program, reporting systems may be confidential and/or anonymous and enable the organization to “exercise due diligence to prevent and detect criminal 138  conduct” per Chapter Eight of the Federal Sentencing Guidelines Manual. Reputational Risk Potential for harm resulting from the loss of stakeholder trust. Rules-Centered Code Frequently takes the form of a list of behavioral of Conduct requirements, the violation of which could result in disciplinary action. Sample A small selection intended to be representative of the whole. For example, survey research is frequently conducted on a randomly-selected portion of population rather than a census of the entire group. Sample selection can be stratified to enable result to be representative of identified subgroups as well as the population as a whole. Security Belief in the safety of one’s person and position. Security is a driving factor in employee reporting. Shareholder an individual or institution that owns stock or shares in a corporation, by definition a type of stakeholder; also called stockholder Short-term A focus on the goal of maximizing periodic (i.e., quarterly and perspective annual) profits Social Contract An implicit agreement among societal members to cooperate for social benefit; when applied specifically to a business, it suggests a company that responsibly gives back to the society that permits it to incorporate, benefiting the community at the same time that it enriches itself Stakeholders Individuals and entities affected by a business’s decisions, including customers, suppliers, investors, employees, the community, and the environment, among others 139 Stockholder An individual or institution that owns stock or shares in a corporation, by definition a type of stakeholder; also called shareholder Survey A set of questions used to examine a condition, situation or value. Sustainability Generally, referring to a state or condition that can be maintained over an indefinite period of time. Commonly used with development as in: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (from the landmark 1987 publication “Our Common Future” by the World Commission on Environment and Development). Transparency 1. Sharing information and acting in an open manner. 2. A principle that allows those affected by administrative decisions, business transactions or charitable work to know not only the basic facts and figures but also the mechanisms and processes. It is the duty of civil servants, managers and trustees to act visibly, predictably and understandably (based on 2006 publications by Transparency International, https://www.transparency.org/) Utilitarianism A normative theory of ethics suggesting that an ethical act is the one whose consequences create the greatest good for the greatest number of people Values The core beliefs we hold regarding what is right and fair in terms of our actions and our interactions with others. Another way to characterize values is that they are what an individual believes to be of worth and importance to their life (valuable) (from “What is the Difference Between Ethics, Morals and Values?”, Frank Navran) Values-Centered A set of principles for an organization and its employees Code of Ethics grounded in ideals (such as integrity, trust-worthiness and 140  responsibility) which guide workplace decision-making and conduct Virtue theory A normative theory that focuses on proper conduct guided by the training we received growing up Whistleblower(ECI Any employee who reports misconduct when observed in the definition) workplace. Although some believe whistleblowers are distinct from internal reporters, ECI research indicates that nearly all employees who report to someone outside their organization report internally as well. Furthermore, internal reporting always precedes reporting externally. External reporting is usually a function of the organization’s (perceived) lack of adequate response to the report (for more information, see “Inside the Mind of a Whistleblower, 2010, Ethics Resource Center). References: https://www.ethics.org/resources/free-toolkit/toolkit-glossary/ https://openstax.org/books/business-ethics/pages/1-key-terms 141