CBA

2020-2021

GLOBAL RECIPROCAL COLLEGE

BGERMIC

Prepared by:

Ms. Shiela S. San Juan, MBA

 GLOBAL RECIPROCAL COLLEGES

WEEK 4
(Introduction to Ethics)

I. LEARNING OUTCOMES

1. Define ethics
2. Enumerate and describe the basic characteristics and values associated with ethical behavior
3. Understand why people act unethically
4. Give and explain the categories of ethical principles
5. Explain why professional ethics is important and why a code of conduct should be adopted

II. DISCUSSION

ETHICS DEFINED

Ethics can be defines broadly as a set of moral

principles or values that govern the actions and
decision of an individual or group. While personal
ethics vary from individual to individual at any
point in time, the most people within a society are
able to agree about what is considered ethical and
unethical behavior. In fact, a society passes laws
that define what its citizens consider to be more
extreme forms of unethical behavior.
Ethics is a topic that is receiving a great deal of attention throughout our society today. This
attention is an indication of both the importance of ethical behavior to maintaining a civil
society, and a significant number of notable instances of unethical behavior. Much of what is
considered unethical in a particular society is not specifically prohibited. So how do we know
whether we are acting ethically? Who decides what standards of conduct are appropriate? Is any
type of behavior “ethical” as long as it does not violate a low or a rule of one’s profession?
It is common for people to differ in their moral principles or values. Even if two people agree on
the ethical principles that determine ethical behavior, it is unlikely that they will agree on the
relative importance of each principle. These differences result from all of our life experience.
Parents, teachers, friends and employers are known to influence our values, but so do television,
team sports, life successes and failures, and thousands of other experiences.

Business Governance, Risk Management & Internal Control

CBAE
2020-2021
 GLOBAL RECIPROCAL COLLEGES

CHARACTERISCIS AND VALUES ASSOCAIATED WITH ETHICAL BEHAVIOR

The following list of ethical principles incorporates the characteristics and values that most
people associate with ethical behavior.

Integrity
Ethical executives demonstrate personal integrity and the courage of their convictions by
doing what they think is right even when there is great pressure to do otherwise; they are
principled, honorable and upright; they will fight for their beliefs. They will not sacrifice
principle for expediency, be hypocritical, or unscrupulous. They are principled,
honorable, upright, courageous and act on convictions; does not be twofaced or
unscrupulous or adopt an end-justifies-the means philosophy that ignores principle.
Honesty
Ethical executives are honest and truthful in all their dealings and they do not deliberately
mislead or deceive others by misrepresentations, overstatements, partial truths, selective
omissions, or any other means. It goes without saying that anyone who is ethical will also
be honest and loyal. Honesty is particularly important to be an effective ethical leader,
because followers trust honest and dependable leaders. Ethical leaders convey facts
transparently, no matter how unpopular they may be.

Trustworthiness and Promise Keeping

Ethical executives are worthy of trust. They are candid and forthcoming in supplying
relevant information and correcting misapprehensions of fact, and they make every
reasonable effort to fulfill the letter and spirit of their promises and commitments. They
do not interpret agreements in an unreasonably technical or legalistic manner in order to
rationalize non-compliance or create justifications for escaping their commitments.

Loyalty (Fidelity) and Confidentiality

Ethical executives are worthy of trust, demonstrate fidelity and loyalty to persons and
institutions by friendship in adversity, support and devotion to duty; they do not use or
disclose information learned in confidence for personal advantage. They safeguard the
ability to make independent professional judgments by scrupulously avoiding undue
influences and conflicts of interest. They are loyal to their companies and colleagues and
if they decide to accept other employment, they provide reasonable notice, respect the
proprietary information of their former employer, and refuse to engage in any activities
that take undue advantage of their previous positions

Business Governance, Risk Management & Internal Control

CBAE
2020-2021
 GLOBAL RECIPROCAL COLLEGES

Fairness and Openness

Ethical executives and fair and just in all dealings; they do not exercise power arbitrarily,
and do not use overreaching nor indecent means to gain or maintain any advantage nor
take undue advantage of another’s mistakes or difficulties. Fair persons manifest a
commitment to justice, the equal treatment of individuals, tolerance for and acceptance of
diversity, they are open-minded; they are willing to admit they are wrong and, where
appropriate, change their positions and beliefs

Caring for Others

Ethical executives are caring, compassionate, benevolent and kind; they like the Golden
Rule, help those in need, and seek to accomplish their business objectives in a manner
that causes the least harm and the greatest positive good.

Respect for Others

Ethical executives demonstrate respect for the human dignity, autonomy, privacy, rights,
and interests of all those who have a stake in their decisions; they are courteous and treat
all people with equal respect and dignity regardless of sex, race or national origin.

Responsible Citizenship

They obey just laws; if all law is unjust, openly protest it; exercise all democratic rights
and privileged responsibly by participation (voting and expressing informed views),
social consciousness, and public service; when in a position of leadership or authority,
openly respect and honor democratic processes of decision making, avoid unnecessary
secrecy or concealment on information, and assure that others have all the information
they need to make intelligent choices and exercise their rights.

Pursuit of Excellence

Pursue excellence in all matters; in meeting your personal and professional

responsibilities, de diligent, reliable, industrious and committed, perform all tasks to the
best of your ability, develop and maintain a high degree of competence, be well informed
and well prepared; do not be content with mediocrity; do not win at any cost””. Ethical
executives pursue excellence in performing their duties, are well informed and prepared,
and constantly endeavor to increase their proficiency in all areas of responsibility.

Business Governance, Risk Management & Internal Control

CBAE
2020-2021
 GLOBAL RECIPROCAL COLLEGES

Accountability

Be accountable, accept responsibility for decision, for the foreseeable consequences of

actions and inactions, and for setting an example of others. Ethical executives
acknowledge and accept personal accountability for the ethical quality of their decisions
and omissions to themselves, their colleagues, their companies, and their communities.

WHY ETHICAL BEHAVIOR NECESSARY?

It is important to understand that ethical behavior in the workplace can stimulate positive
employee behaviors that lead to organizational growth, just as unethical behavior in the
workplace can inspire damaging headlines that lead to organizational demise.

Simply put, organizational stakeholders that include individuals, groups and

organizations of various types enter into a relationship with a business organization for
that business to protect their interests in a specific way. Therefore, there is a mutual
expectation that stakeholders and business organizations act in an ethical manner and in
each other’s best interest.

A decision to act unethically, by the organization or a stakeholder, can strain the

relationship and damage the reputation of the organization. The increased risk of
reputational damage and harm from negative headlines is often the catalyst for
organizations to promote and encourage ethical behavior and prevent and report unethical
behavior. Furthermore, where many individuals are connected to social media with
mobile technology, the risk that unethical behavior will cause reputational damage to an
organization is arguably much greater that in decades past, as behavior is more easily
recorded on video, captured in photos, shared online and propelled into headlines.

However, there are benefits of ethical behavior in the workplace beyond the avoidance of
reputational harm. An organization that is perceived to act ethically by employees can
realize positive benefits and improved business outcomes. The perception of ethical
behavior can increase employee performance, job satisfaction, organizational
commitment, trust and organizational citizenship behaviors. Organizational citizenship
behaviors include altruism, conscientiousness, civic virtue, sportsmanship and courtesy.

Business Governance, Risk Management & Internal Control

CBAE
2020-2021
 GLOBAL RECIPROCAL COLLEGES

WHY DO PEOPLE ACT UNETHICALLY?

Most people define unethical behavior as conduct that differs from the way they believe
would have been appropriate given the circumstances. Each of us decides for ourselves
what we consider unethical behavior, both for ourselves and other. It is important to
understand what cause people to act in a manner that we decide is unethical.

There are two primary reasons why people act unethically.

1. The first reason is the person’s ethical standards are different from those
of society as a whole. Most people who commit such acts feel no
remorse when they are apprehended because their ethical standards
differ from those of society as a whole. When people cheat on their tax
return, treat other people with hostility, lie on employment applications, or
perform below their competence level as employees, most of us regard
that as unethical behavior.

2. T h e o t h e r r e a s o n i s t h e p e r s o n c h o o s e s t o a c t s e l f i s h l y . W h e n
i t c o m e s t o individual employee characteristics, the greatest predictor
of unethical behavior is an employee’s emphasis on self-gain. That is,
tendency to use interpersonal relationships opportunistically and have
less concern about consequences for others. Unethical behavior also
increases when employees feel that their actions will not harm a potential
victim and that their peers will not condemn their actions. They will
engage in more unethical behavior when the company promotes an
“everyone for him or herself” atmosphere instead of an environment
that focuses employee attention on the company’s stakeholders. Although
some studies suggested employees’ age, gender, and educational levels
matter, there was little systematic support for these relationships. The
existence of a code of conduct does not curb unethical actions, however
enforcement of such a code does. Codes of conduct have become so
common that they have lost their potency; thus, only properly enforced
codes influence ethical conduct.

Another additional reasons for people to act unethically are pressure

that drive them to do things that they wouldn’t normally do. Some
people also make unethical choices because they are not sure about
what really is the right thing to do. Then, self-interest, personal gain,
ambition and downright greed are the bottom of a lot of unethical activity
in business. There are those who simply never learned or do not
care about ethical values.

Business Governance, Risk Management & Internal Control

CBAE
2020-2021
 GLOBAL RECIPROCAL COLLEGES

CATEGORIES OF ETHICAL PRINCIPLES

Principles of Personal Ethics include among others

 Basic justice, fairness
 Respect for the right of others
 Concern for the right of others
 Concern for the well-being on welfare of others
 Benevolence, trustworthiness, honesty
 Compliance with the law

Professional Ethics include among others

 Integrity, impartiality, objectivity
 Professional competence
 Confidentiality
 Professional behavior
 Avoidance of potential or apparent conflict of interest

Business Ethics include among others

 Fair competition
 Global as well as domestic justice
 Social responsibility
 Concern for environment

The Need for Professional Ethics

To understand the importance of a Code of Ethics to professionals, one must understand

the nature of a profession as opposed to other vacation. Professional ethics are as
important as personal ethics. Many big well known companies have suffered many
destructive effects because the management of the company may have lacked
professional ethics.

In order to have a successful business, it is important to run a business ethically.

However, the term "business ethics”, when correctly interpreted, means standards of
behavior of every individual in a business, and not necessarily only standards of the

Business Governance, Risk Management & Internal Control

CBAE
2020-2021
 GLOBAL RECIPROCAL COLLEGES

business, as a whole. Thus, a business or a society that lacks ethical principles is bound to
fail sooner or later.

There is no universally accepted definition of what constitutes a profession; yet for

generations, certain types of activities have been recognized as profession while others
have not.

All recognized professions have several common characteristics. The most important of
these characteristics are:
1. A responsibility to serve public
2. A complex body of knowledge
3. Standards of admission to the profession
4. A need for public confidence

Code of Good Governance for the Professionals in the Philippines (EO. No. 220, June 23, 2003)

Business Governance, Risk Management & Internal Control

CBAE
2020-2021
GLOBAL RECIPROCAL COLLEGES

Business Governance, Risk Management & Internal Control

CBAE
2020-2021