Ethical Issues and Challenges

Ethical Issues and Challenges Dr. Elijah EzenduFIMC, FCCM, FIIAN, FBDI, FAAFM, FSSM, MIMIS, MIAP, MITD, ACIArb, ACIPM, PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC, CMgr

Stakeholders of Corporate Environment• Shareholders• Employees• Customers• Suppliers• Creditors• Governmental Agencies• Community• Special interest Groups

Ethical Issues 1• Developing ethical culture• Eliminating conflict of interest• Enhancing cross-cultural ethics• Boosting fraud prevention• Aligning risk management to Corporate Governance• Equitable action to every shareholder• Fostering acceptable values in inter- organisational relationships

Ethical Issues 2• Unbiased relationship with employees• Appropriate disposition to acquisition and use of intellectual property• Observance of acceptable standards in finance• Adherence to genuineness of proposition in sales, marketing and representation• Application of technology for improving human race• Effective use of acceptable production and assurance technique

Ethical Issues 3• Promoting gender equality at work• Participating in community development• Accepting full responsibilities for its action• Prohibition of bribery

Causes of Unethical Practices• Greed• No Time• No Experience• Breakdown of control• Deficient Education• Circle of Influence• Poor organisational culture• Absence of Requisite Risk Management• Gamble• Lack of Integrity

Ethical issues in a society recline on the levers of values, beliefs and idiosyncrasies of people who act or stand perceived as role influencers or action models therein.

Rest’s Model of Ethical Action

Approaches for Handling Ethical Predicament• Utilitarianism• Communal Acceptation• Religiosity• Religiophilosophy• Personal Virtue• Deontology• Integrated Corporate Ethical Framework

UtilitarianismThis is an ethical doctrine based on value of usefulness to all concerned thereby yielding the highest level of happiness. Thus its not focused on the desire of few people in a society.

Communal AcceptationThis approach hinges on the finality of action by a community for a particular purpose, albeit the fundamental goal could be the happiness of a person or few people who used positions as great power influencers to induce followers or protégé in the direction of self aggrandizement or minority satisfaction.

ReligiosityThe application of doctrines enshrined in a particular religion as the only permissible framework for ascertainment of right & wrong.

ReligiophilosophyThis highlights admixture of doctrines of an imbibed religion and the basic beliefs in addition to principles of a group of people with the aim of obtaining a framework that conciliates both sides of the coin.

Personal VirtueThe practice of evolving individual character to a point of effectiveness by reinforcing one’s values with the culture of a community, firm, group or association.

DeontologyThe generic method of assessing the level of morality which a particular action or activity represents in order to categorise it as right, wrong, permissible or mandatory.

Integrated Corporate Ethical FrameworkThis involves the development of an inclusive framework that serves as a hallmark of value excellence for an organisation or association by mixing well-assessed values and principles of immediate operating communities, professional bodies and global institutional benchmarks.

Common Rationalizations Used to Justify Unethical Conductso If it’s necessary, it’s ethicalo If it’s legal and permissible, it’s proper.o I was just doing it for youo I’m just fighting fire with fireo It doesn’t hurt anyoneo It can’t be wrongo It is not for myselfo It is a fair compensation for I losto It does not affect my judgment Source: Shirley Egan

Types of White Collar Crime 1• Bank Fraud• Blackmail• Bribery• Cellular Phone Fraud• Computer Fraud• Counterfeiting• Credit Card Fraud• Embezzlement• Environmental Schemes• Extortion• Forgery• Weights and Measures

Types of White Collar Crime 2• Health Care Fraud• Insider Trading• Insurance Fraud• Investment Schemes• Kickback• Larceny/Theft• Money Laundering• Racketeering• Securities Fraud• Tax Evasion• Telemarketing Fraud• Welfare Fraud Source: National Check Fraud Center

“Computer fraud can be defined as the use of a computer to gain unauthorized access to information or perform activities with the explicit goal of gaining material goods at the expense of others through criminal means.” - ComputerFraud.com

“An act involving misuse of computer or data therein, so as to illegitimately take over fund, material or property or valuable thing, or to bring about loss." - Elijah Ezendu, Computer Fraud

“Computer crime involves the use of a computer resource for the purpose of illicitly gaining goods or resources, or causing harm to another entity. For example fraud, theft, child pornography, virus, and unauthorized access. Whereas computer fraud is a subset of computer crime involving the use of electronic resources to present fraudulent or misrepresented information as a means of deception. For example online auction fraud, identity theft, and phishing.” - Kunz & Wilson, Computer Crime & Computer Fraud

Types of Computer Fraud1. Computer Manipulation2. Computer Forgery3. Desktop Counterfeiting

Computer Manipulation1. Input Manipulation2. Programme Manipulation3. Output Manipulation

Computer ForgeryThis is illegal alteration of documents in a computer in order to cause misrepresentation thereby defrauding an entity.

Desktop CounterfeitingThis deals with designing and developing counterfeits or modified forms of documents, cheques and certificates by means of desktop publishing skills.

“Internet fraud is a form of fraud which uses any component of the Internet to accomplish the intended fraudulent activity.” - National White Collar Crime Center, USA

“The term ‘Internet fraud’ refers generally to any type of fraud scheme that uses one or more components of the Internet - such as chat rooms, e-mail, message boards, or Web sites - to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of fraud to financial institutions or to other connected with the scheme.” Source: US Department of Justice

“Internet auction fraud was by far the most reported offense, comprising 44.9% of referred complaints. Non-delivered merchandise and/or payment accounted for 19.0% of complaints. Check fraud made up 4.9% of complaints. Credit/debit card fraud, computer fraud, confidence fraud, and financial institutions fraud round out the top seven categories of complaints referred to law enforcement during the year.” Source: Internet Crime Complaints Center

Tools Used for Internet Fraud• Email• Chat rooms• Websites• Message Boards• Portals• Web Application

Types of Internet Fraud 1• Credit/Debit Card Fraud• Business Deceit• Recruitment Deceit• Freight Forwarding Scam• Counterfeit Cheque Scam• Advance Fee Fraud• Non-Delivery of Goods/Service Fraud

The successful integration of fitting ethical framework into organisations and the society at large shall provide the right platform for building effective action against challenges of unethical practices.

ExerciseAn organisation intends to boost its corporate governance through effective ethical practices. State appropriate recommendations.

Dr Elijah Ezendu is award-winning business expert and certified management consultantwith expertise in HR, OD, Competitive Intelligence, Strategy, Restructuring, BusinessDevelopment, Sales & Marketing, Business Turnaround & Interim Management, Leadership,ADR, Project & Programmes Management, Cost Management, Outsourcing, Franchising,Internal Control, Intellectual Capital, Online Business, Social Media, Software Architecture,Cloud Computing, eLearning, Business & Tech Integration, Social Impact Analysis, andInternational Business. He holds proprietary rights of schematic methods in HR, Strategy,Competitive Intelligence, Business Model, Business Development, Negotiation, CSR, SocialHR, and Social Media. He is currently Chief Executive Officer, Rubiini, UAE. He functioned asSenior Partner, Shevach Consulting, Nigeria; Lead Assessor and Member of GoverningCouncil, Institute of Management Consultants, Nigeria; Lead Resource, Center forCompetitive Intelligence Development; Lead Consultant, JK Michaels; Technical Director,Gestalt; Chief Operating Officer, Rohan Group; Director, Fortuna, Gambia; Director ofProgrammes, Institute of Business Development, Nigeria; Member of TDD Committee,International Association of Software Architects, USA; Member of Strategic Planning andImplementation Committee, Chartered Institute of Personnel Management of Nigeria;Adjunct Faculty, Regent Business School, South Africa; Adjunct Faculty, Ladoke AkintolaUniversity of Technology, Nigeria. He holds Doctoral Degree in Management, Master ofBusiness Administration and stands as Fellow of several professional institutes in NorthAmerica, UK & Nigeria. He is an author and world-class speaker who has featured in manyworkshops & conferences. His ancillary services included council member of professionalinstitutes, editor-in-chief of journals, and Board Member of some Foundations. He serves asAdjunct Faculty of Business Schools in addition to Director of Firms.

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Ethical Issues and Challenges

by Elijah Ezendu on May 02, 2010

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