100 Managers' Toolbox: Business Ethic

Specific guidance tools for Business managers on values, ethics, and unethical practices that guide a business to success

100 Managers' Toolbox: Business Ethic

When to use

Whenever you are doing business

What you get

A simple set of rules, which will advise all who work for you what in expected of them

when they do business.

Time

3 – 4 hours to get a group of people to understand the issues faced by the people in

your company when doing business.

Number of people

5 – 15 from across the organisation. It is fundamentally important that senior

management are represented

Equipment

The checklist shown on the page opposite and a flipchart or wipe board to capture the

output from session.

 

Method

1. Go through each of the items on the checklist, and consider for each one, what

   would be appropriate behaviour for the company, this will provide the backbone of

   the ‘ethics code’.

2. Develop an action plan to support the element that are highlighted in the step              above.

3. Develop an effective (appropriate for your company and your employer) method of

   disseminating the output (ethics code) across your organisation. Think also about

   how you ‘police’ it. What happens if the code is broken?

 

Example

Areas for consideration

Suggested guidelines

Purchasing

Gifts of an advertising nature of modest value can be accepted. Offers of entertainment can only be accepted if part of a group and can be reciprocated. Gifts of cash cannot be accepted. All acceptances to be declared to supervisor

Selling

Gifts on an advertising nature of modest can be offered, dinner meetings and modest group entertainment can be offered. Gifts of cash in any form cannot be offered. All must be formally recorded.

Purchasing internationally

Operate within the law of the selling and purchasing companies’ national laws. This bring UK buyers into line with purchasing in the UK, i.e. no financial incentive to be accepted.

Selling internationally

Operate within the law of both the purchasing and selling country, therefore, no direct incentive should be offered. However, if it is

normal in the purchasing country to trade through in-country agents, the agents themselves may wish to offer a sales incentive. This must never be priced into the contract, nor should any element of the discount or commission offered to the agent be earmarked for such purposes. Agents’ commission must be modest and commensurate with the work carried out.

Competition

Do not make adverse comments about competitor’s product or services. All comparisons need to be factual.

Bidding and negotiations

All bids should be made based on information provided and knowledge obtained by legal means. All negotiations are to be conducted with integrity; you should never try to outsmart the buyer and seller.

 

Exercise

Negotiate with a child how much pocket money he or she should have. Consider how you would do this without resorting to some form of bribery, dishonestly, or ettempting to outsmart your child.

You must get the group to discuss each item fully and agree what Is expected of people.

    A code of ethics is important as without one, people make their own assessment of what is expected of them, which may be very different to what the company expects.

    The checklist prepared is not complete as many businesses, whether manufacturing or service face a whole host of areas where business ethics can have a profound impact on the success of the company such as:

  • Environment
  • Recruitment and motivation of people
  • Financial incentives to employees
  • Share ownership
  • Relationship with stock market and bankers
  • Relationship with regulators

 

Additional comments

People can occasionally see the development and integration of business ethics as

being over constraining to individuals, or just common sense. Business ethics must not be seen as a behavioural conformity procedure. It is about being open and clear about expectations.

Other information

Further information can be found: G. Ghryssides and J. Kaler, An introduction to Business Ethics, Thomson Business Press, 1993.

 

Areas for consideration

Issues to consider

Suggested guidelines

Purchasing

Gifts or offers of entertainment to buyers from selling companies.

 

Selling

Gifts or offers of entertainment to customers.

 

Purchasing internationally

Is the law of selling country different to?

UK, i.e. interest legal, does the law of

the selling country allow financial sales

incentives?

 

Selling internationally

Is the law of the purchasing country

different to UK, i.e. is a financial

incentive for a contract legal?

 

Competition

Do not make adverse comments about

competitor’s product or services. All

comparisons need to be factual.

 

Bidding and negotiations

Soliciting information about competitors

or bids that is not generally available.

Lack of integrity during negotiation.

 

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