BE Group 12

Does corporate code of ethics help to improve corporate Behaviour?

Analysis into WHY corporate code of ethics does not significantly improve corporate behavior-

The basic question in ethics is not: “How close to the edge of the cliff can I go without falling?” but rather “How can I stay away from the edge?” - Bogdan M. Negru

Globalization and business ethics are linked as they affect a company’s ability to commit to its shareholders, in particular to external investors, and preserve the trust needed for further investment and growth BUT then there is Slippery slope…

Let us analyze the following scenario assuming that corporate code of ethics is in place

Imagine that one day someone in your organization walks in with a copy of your chief competitor's bid on a big contract. He swears he got it legally, but you aren't sure. And whether he did or didn't, it's still proprietary information. Are you going to use it in developing your bid?

Or what if someone in sales is up against some very tough quarterly objectives, but she can make them by concealing from a customer that the product he's interested in will be made obsolete by a new line in six months. Should she do it?

Or what if you hear that another very productive manager fired a fairly decent worker and replaced him with the inexperienced son of a friend?

The question arises: Is this within these executives' "managerial prerogatives"?

If one is like 3 out of 4 of the nation's major corporations, you have a code of conduct that might give your employees help with some of these situations. If one is like 1 out of 3, he would also offer ethics training in his company which probably helps employees work through some difficult cases.

Codes of conduct and code education are slowly permeating many corporate cultures, both helping employee understanding of their organization’s values as well as improving employee attitudes toward management.

For example, in a recent LRN Ethics Study, eight out of ten employees say their organization has a written code of conduct or code of ethics, and of those, the vast majority (83%) believe that their management genuinely wants to promote ethics and integrity in the organization.

Key “ethics-related actions” (ERA s) observed in organizations with strong ethical cultures include -

(1) Management communicating ethics as a priority, (2) Management setting a good example of ethical conduct, (3) Co-workers considering ethics when making decisions, and (4) Co-workers talking about ethics in the work they do

Though the following grounds have been set-

The Sarbanes-Oxley law, passed during 2002, requires corporations to set an anonymous system for employees to report fraud and other unethical activities.

The Ethics Resource Center’s National Business Ethics Survey revealed that in organizations with all four programs in place viz: Written standards, ethical training, ethics advice lines and system for anonymous reporting had a greater likelihood (78%) of reporting unethical behavior

Ethics walk is not consistent with ethics talk

Rewards: How they frame the ethical culture

The matter of rewarding employees for ethical behaviour is the least well developed part of current ethics programs.

what employees are rewarded for is one of the main factors that determines how strong the temptation will be for them to bend or break the rules—or even the law.

However, the greatest ethical danger occurs when raises, bonuses and promotions depend on unrealistic objectives

Creating a formal program, by itself does not guarantee effective ethics management. Recall that ENRON had an ethics code, and the board voted to bypass its

conflict-of-interest policy

Could a formal ethics office have helped Arthur Andersen?

It is easy for formal ethics offices to be marginalized if they don’t have the complete support of the organization’s leadership and if they are inconsistent with the broader culture. In fact Andersen still had ethics policies in place and talked about ethics in formal documents but the approach to ethics management had not kept pace.

The moral dimension was not part of the equation in case of Ford Pinto. Such “ethical fading,” a phenomenon first described by Ann Tenbrunsel and her colleague David Messick, takes ethics out of consideration and even increases unconscious unethical behavior regardless of whether code of ethics is in place or not.

Managing Ethics and Legal Compliance: What Works and What Hurts?

Survey of employees at six large American companies found that –

what hurts effectiveness most are an ethics/compliance program that employees believe exists only to protect top management from blame and an

ethical culture that focuses on unquestioning obedience to authority and employee self-interest.

Research conducted for the Lockheed-Martin Corporation in the late 1990s 14 revealed three statistically significant predictors of unethical conduct:

1. pressure to perform – that is, to meet productivity goals;2. observed misconduct; and3. job dissatisfaction.

Ethical lapses among business students

In a shocking study published in 2006, Don McCabe of Rutgers University and fellow researchers found that MBAs cheat more than other graduate students in the U.S. and Canada. Professor McCabe agreed that the self-selecting personality that goes for an MBA already carries within itself the potential for iffy behaviour

Of course, this kind of stuff stings those who have lofty goals — especially in light of recent accusations that business schools are the problem for having matriculated too many unethical captains of industry. Several commenters took umbrage at McCabe’s conclusions

“”[Henry] Kissinger supposedly once said that the reason that academic arguments are so loud is because the stakes are so low. I argue that business people and students cut corners — legally, ethically, and morally — because the stakes are so high. As long as the personal stakes are so high, even those MBAs pre-tested and pre-certified as ethical will be prone to ethical lapses, even if they have ethics. Call me cynical.” –Peter

References

http:// hbr.org/product/managing-ethics-and-legal-compliance-what-works- and-what-hurts/an/CMR146-PDF-ENG

http:// hbr.org/product/managing-ethics-and-legal-compliance-what-works- and-what-hurts/an/CMR146-PDF-ENG

http://www.lmu.edu/Assets/Colleges%2BSchools/CBA/CEB/Essays/ Corporate%2BEthics.pdf

http://hbr.org/2011/04/ethical-breakdowns/ar/1

Abinash Part

In this Era, where Software became the backbone of almost every Industry.IT Industries itself should commit themselves in making the analysis, specification, design, development, testing and maintenance of software a beneficial and respected

profession. In addition to their commitment to the health, safety and welfare of the public or stakeholders.IT Industries adhere to the following Principles:1. PUBLIC – IT Industries should act consistently with the public interest. It means:

Software Engineers should acccept complete responsibility of their Own Work.

Encouraged to volunteer their professional skills to good causes. Moderate the behaviour of the software engineer, the employer, the client with

the public good. Software should only be approved if they are found to be safe and does not

diminish the quality of life.The Ultimate effect of the work should be in the Public good.

2. CLIENT AND EMPLOYER – As Clients are Important driving force in IT Industries.So It should act in a manner that is in the best interests of their client and employer consistent with the public interest. So It Should:

Provide services only in their areas of competence, being honest and forthright about any limitations of their experience or education.

Not knowingly use software that is obtained or retained either illegally or unethically.

Use the property of a client or employer only in the ways properly authorized, and with the client's or employer's knowledge and consent.

Any proffessional Information gained should be kept private.

3. PRODUCT - IT Industries should ensure that their products and related modifications meet the highest professional standards possible. Software Engineers should:

Strive for high quality, acceptable cost and a reasonable schedule, ensuring significant tradeoffs are clear and accepted by the employer and the client, and are available for consideration by the user and the public.

Identify, define and address ethical, economic, cultural, legal and environmental issues related to work projects.

Ensure that they are qualified for any project on which they work or propose to work by an appropriate combination of education and training, and experience.

Ensure an appropriate method is used for any project on which they work or propose to work.

4. JUDGMENT - IT Industries should maintain integrity and independence in their professional judgment. Software Engineers should:

Temper all technical judgments by the need to support and maintain human values

Maintain professional objectivity with respect to any software or related documents they are asked to evaluate.

Not engage in deceptive financial practices such as bribery, double billing, or other improper financial practices.

Disclose to all concerned parties those conflicts of interest that cannot reasonably be avoided or escaped.

5. MANAGEMENT – IT Industries managers and leaders shall subscribe to and promote an ethical approach to the management of software development and maintenance. Managers and Leaders should :

Ensure good management for any project on which they work, including effective procedures for promotion of quality and reduction of risk.

Ensure that software engineers are informed of standards before being held to them.

Assign work only after taking into account appropriate contributions of education and experience tempered with a desire to further that education and experience.

Ensure realistic quantitative estimates of cost, scheduling, personnel, quality and outcomes on any project on which they work or propose to work, and provide an uncertainty assessment of these estimates.

Attract potential software engineers only by full and accurate description of the conditions of employment.

For Personal benefit should not prevent someone from taking a position for which that person is suitably qualified.

Ensure that there is a fair agreement concerning ownership of any software, processes, research, writing, or other intellectual property to which a software engineer has contributed.

Provide for due process in hearing charges of violation of an employer's policy or of this Code.

Not ask a software engineer to do anything inconsistent with this Code. Not punish anyone for expressing ethical concerns about a project.

6. PROFESSION - IT Industries should advance the integrity and reputation of the profession consistent with the public interest. Software Engineer should:

Help in developing an organizational environment favorable to acting ethically.

Promote public knowledge of software engineering. Extend software engineering knowledge by appropriate participation in

professional organizations, meetings and publications. Support, as members of a profession, other software engineers striving to

follow this Code. Not promote their own interest at the expense of the profession, client or

employer. Obey all laws governing their work, unless, in exceptional circumstances, such

compliance is inconsistent with the public interest. Avoid associations with businesses and organizations which are in conflict

with this code.

7. SELF - IT Industries should participate in lifelong learning regarding the practice of their profession and shall promote an ethical approach to the practice of the profession. Software Engineers should:

Further their knowledge of developments in the analysis, specification, design, development, maintenance and testing of software and related documents, together with the management of the development process.

Improve their ability to create safe, reliable, and useful quality software at reasonable cost and within a reasonable time.

Improve their ability to produce accurate, informative, and well-written documentation.

Improve their understanding of the software and related documents on which they work and of the environment in which they will be used.

Improve their knowledge of relevant standards and the law governing the software and related documents on which they work.

Improve their knowledge of this Code, its interpretation, and its application to their work.

Not give unfair treatment to anyone because of any irrelevant prejudices. Not influence others to undertake any action that involves a breach of this

Code.

Taking an example of Tata consultancy services Ltd, the biggest IT MNC of India.We can say that Co-orporate Code of Ethics is very helpful in improving Company and that also where you you have to deal with lot of global clients and they are the main contributer of the Company revenue.That’s why TCS became the most succesful Indian IT company.

TCS follows the below Code of Ethics in day to day work. Such as1. It is committed in all actions to benefit the economics development of the

countries in which it operates and doesn’t engage in any activity that would adversely effect their objective in doing so.

2. It maintains and prepare its all account fairly and accurately in accordance with the accounting and financial reportng standards.

3. The internal accounting and audit procedure fairly and accurately reflect all the company’s business transaction and disposition of assets.

4. It purely strive for the establishment and support of a competitive open market economy in India and abroad and co-oprate in the effort to promote the progressive and judicious liberilisation of trade by a country.

5. It markets its product and services on its own merits and doesn’t make any unfair and misleading satatements about competitors product and services.

6. It provided equal oppurtunities to all its employee and all qualified apllicants for emplyment without regards to their race, caste religion, cplour, marital status, sex, age, nationality, disability and veteran status.

7. TCS and their employee never niether receive nor make, directly or indirectly any illegal payments, remuneration, gifts, donation or comparable benefits that are intendended to, or percieved to obtain business or uncompetitive favours of the cnduct of the business.

8. It doesn’t support directly or indirectly any Political parties which can cause a unfair means.

9. It provide a safe and healthy working environment, with following all regulations regarding the preservation of the environment of the territory it operates.

10. TCS is commited to supply the Services of highest Quality standards backed by the efficient and reliable support system.

11. It is commite to enhance the shareholders value and comply with all regulationa and laws which govern shareholders rights.

12. Every employee of TCS on behalf of the company deals with professionalism, honesty, integrity as well as high moral and ethical standards.

13. An employee of a Tata company shall not engage in any business, relationship or activity, which might detrimentally conflict with the interest of his company or the Group.

14. An employee of a Tata company and his immediate family shall not derive any benefit or assist others to derive any benefit from the access to and possession of information about the company or the group which is not in the public domain and thus constitutes insider information.

References:http://www.acm.org/about/se-code

http://www.tcs.com/about/heritage_values/codes_conduct/Pages/default.aspx