20134 Intro.pptMGMT20134An introduction to Bus.docx

20134 Intro.ppt
MGMT20134
An introduction to Business Ethics and Sustainability.
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Welcome to Business Ethics
This is a 6 credit postgraduate unit available as an elective,
offered by the School of Business and Law, to students
undertaking postgraduate courses at CQU.
This unit is designed to introduce you to concepts related to
ethics, morality, corporate accountability and sustainability.
It requires you to reflect on your own practice, believes and
values and understand how they have developed, how they have
informed your practice and whether they are defendable.
This unit has the following learning objectives:

This unit examines the interrelated topics of personal and
business ethics and business sustainability.
It critically reviews the socio-cultural environment in which
business operates and how this can change dramatically between
countries and cities.
Ethical frameworks for managerial decision-making are
critiqued with reference to various stakeholder groups and you
will examine the debates surrounding sustainable development
as they impact on organisations in their local and global
contexts.
The interactions between personal ethics and how ethics is
managed within an organisation are also considered.
Technological, societal and cultural sources of ethical
challenges are reviewed and cases will be discussed outlining
how various organisations might respond to these challenges.
Unit Learning Outcomes
On successful completion of this course, you will be able
to:investigate the interconnections between business ethics,
sustainability and globalisation; and evaluate the differences
between ethics, legal requirements and cultural factors in a
business setting;
explain the various aspects of business sustainability and how
these impact upon business strategy;
critique the major ethical theories and frameworks and be able
to compare these in a contemporary business setting;
discuss the management of business ethics within an
organisation and explore the role of tools such as Codes of
Conduct, Risk Management frameworks and gift policies in
assisting such management; and

demonstrate commonly accepted professional ethical standards
in the work place and in your behaviour toward others.
Texts and Journals
Ferrell,O.C., Fraedrich, J., and Ferrell, L. (2015), Business
ethics: Ethical decision making and cases, Cengage, Stamford. (
A newer edition is now available)
Other texts which can be sourced at most libraries include:
MacDonald, G. (2015). Business ethics: A contemporary
approach, Cambridge University Press, Port Melbourne.
Donaldson, T., Werhane, P. and Van Zant, J.D. (2008). Ethical
issues in business: A philosophical approach, Pearson, Upper
Saddle River.
De George, R.T.(2010). Business ethics, 7th edn, Prentice Hall,
New York.
Trevino, L.K., and Nelson, K. (2013). Managing business
ethics: Straight talk about how to do it right, 6th edn, Wiley and
Sons, New York.
Velasquez, M. (2013). Business ethics: Concepts and cases,
Pearson, Upper Saddle River.
Academic Journals
The Journal of Business Ethics
The Asian Journal of Business Ethics
Business Ethics Quarterly
The Journal of CSR and Sustainability
Academic Staff
Course Coordinator & Facilitator Melbourne: Associate
Professor Michael Segon
Facilitator Melbourne: Dr Adriana KoulourisCourse Facilitator

Sydney: Dr Grace Phan-AthirojCourse Facilitator Brisbane:
Sandra Figueira
2018 Schedule Term 2Topic 1 An Introduction to Business
Ethics, Professional Duty and Key Issues in Business
EthicsTopic 2: Morality and Moral ReasoningTopic 3 Values,
Culture and RelativismTopic 4 International Perspectives in
EthicsTopic 5 Ethical Theories and Perspectives I
Vacation week begining 13th AugustTopic 6 Ethical
Theories and Perspectives IITopic 7 Ethical LeadershipTopic 8
The Corporation, Law and Moral AccountabilityTopic 9
Sustainable Organisations: Developing Ethical CulturesTopic
10 Sustainable Organisations: Corporate Social
ResponsibilityTopic 11SustainabilityWeek 12 Presentations
Assessment Tasks
There are three (3) Assessment tasks
Individual Essay:
40%
Due: Week 6 Friday (24 Aug 2018) 11:59 pm AEST
Individual reflection:
30%
Week 12 Friday (5 Oct 2018) 11:59 pm AEST
Group Presentation & Executive Summary: 30%
Week 12 Friday (5 Oct 2018) 11:59 pm AEST
This assessment task is designed to assist students to examine a
range of ethical issues and to apply ethical theories as means of
arriving at a justifiable decision.
Students will have the opportunity to examine international

business ethics issues, specifically related to corruption, bribery
and practice using ethical concepts and theories.
A detailed rubric and an audio file are available on the Moodle
site that provides further details regarding this assessment
Due Date: Week 6 Friday (Week 6 Friday (24-Aug-2018)
(Submit assignments through Moodle site).The assignment must
also be submitted through Turnitin and must have less than a
10% similarity scoreLate assignments are penalised at 5% per
day after the cut off timeThis Marks awarded for referencing,
research and presentation standardA minimum of 16 quality
references is expected.
Assessment Tasks- Individual
Assessment Criteria
Defining key terms and concepts related to ethics, morality,
personhood and moral accountabilityAdvancing a resolution to
the ethical dilemmas using ethical theories and concepts with
examples to illustrateDemonstrating a breadth and quality of
research by using a minimum of 12-16 academic
sourcesCorrectly using of the APA in text referencing system to
correctly citing academic sources.
These are the minimum requirements. Students should note that
satisfactorily meeting the minimum requirements will typically
result in the minimum pass grade being awarded.
Assessment Tasks- Individual
Assessment: Reflection and Self Analysis
The key aspect of reflection is a critical evaluation of the self.
Students will undertake a number of in-class cases during the
semester and must use two (2) of the nominated cases as the

basis for their self analysis, signed by the unit facilitator to
verify they have been completed in class. The unit coordinator
and or facilitator will then nominate which ones are to be used
as part of the assessment.
Students will also complete at least 3 ethical diagnostic tools in
class and must attach the results sheet as an appendix, signed by
the unit facilitator to verify they have been completed.Students
are to use the findings of these tools to analyse how and why
they made their decision(s) the assumptions made and
approaches used, and whether their positions changed over time
and why.Students should also include a brief statement about
how the content of the unit has given them greater insights into
ethical practice as a future manager and leader.A detailed rubric
and audio file are available on the Moodle site that provides
further details for this assessment task.Refer to the unit Moodle
site for further details.
Assessment: Reflection and Self Analysis
Assessment Criteria
Students are required to:Two cases nominated by the unit
coordinator or class facilitator, completed in class (signed and
or verified by the lecturer)
A minimum of 3 diagnostic tools (results page signed by
facilitator attached as appendices)
Discuss the decisions and analyse these referring to the
diagnostic results and ethical theories and concepts.
Utilisation key ethical, csr and sustainability concepts and
terms to describe and analyse their own positions or belief

All students will be allocated to a group by the facilitator and or
unit co-ordinator.
These groups will be non-negotiable.
Students will undertake analysis of an organisation examining
either its internal approach to the development of ethical culture
or its external engagement through corporate social
responsibility or specific ethical practices of executive
leadership.
The specific task will be determined by the facilitator and unit
coordinator in consultation with each group.
Each group will present as a group of consultants, such as
KPMG, Ernst and Young etc., and assume that they have been
hired by the organisation to conduct the analysis and present to
the CEO and or Board of Directors.
Each group will be afforded 15-20 minutes to present and must
provide a copy of the Powerpoint slides to the facilitator
PRIOR to the Presentation. Each group is also required to
submit an Executive Report of approximately 1000 words with
a detailed reference list.
This presentation will occur in week 12 of term during the
class.
Assessment: Group Presentation & Exec Summary
Assessment Criteria
Students are to demonstrate knowledge of the subject matter,
and effective presentation skills by:Providing a concise and

structured presentation with introduction, main presentation and
conclusion.Effectively using audio visuals and verbal
communication delivered within the time allocation (15 mins
per group)Using of key ethical, csr and or sustainability models,
concepts and theories as an analytical frame.Identifying of
company strengths and weaknesses against the analytical
frame.Providing a clear set of recommendations supported by
literature (if and when appropriate)Demonstrating a
commitment to professional business presentation
standard.Ensuring all group members to make a balanced
contribution in the presentation.Providing copy of the
presentation (powerpoints) MUST be provided to the unit
facilitator prior to the presentation.
Assessment: Group Presentation and Exec Summary
Assessment Criteria:
Students are to demonstrate knowledge of the subject matter,
and effective written skills by:
Providing a concise overview of the content of the presentation
of approximately 1000 wordsUsing of key ethical, csr and or
sustainability models, concepts and theories as an analytical
frameIdentifying of company strengths and weaknesses against
the analytical frameProviding a clear set of recommendations
supported by literature (if and when appropriate)Using
a minimum of 12-16 quality references made up of
recommended texts and academic journal articles so as to
demonstrate breadth and quality of researchThe use of the APA
in text referencing system to correctly cite academic
sourcesEnsuring a list of references used in the presentation is
attached to the executive report.
Assessment: Group Presentation and Exec Summary
The teaching approach used for this unit will be based on adult

learning techniques.Some facilitator presentation of theory will
occur in each session however the primary method will be the
use of “Socratic dialogue”Students are expected to read the unit
notes and the chapter references prior to coming to
classStudents are expected to actively engage in class
discussions, case studies and presentations.It is an Australian
Government requirement that International students must attend
a minimum of 80% of scheduled classesPlease not hat
attendance registers will be taken and records keptAnti-
discrimination legislation prohibits discrimination based on
race, culture etc., thus ALL students are expected to attend a
minimum of 80% of classes
Teaching Method & Participation
As Masters students you are required to engage in research as
per the Australia Quality Framework (AQF) guidelines. Two
specific requirements need to be considered.1. Students need to
demonstrate “a body of knowledge that includes the
understanding of recent developments in a discipline and/or
area of professional practice, and2. Students must demonstrate
"knowledge of research principles and methods applicable to a
field of work and/or learning”.
Each Masters unit has a number of required weekly readings in
terms of academic texts, journals and business publications that
represent the appropriate body of knowledge and recent
developments referred to by the AQF. In order to demonstrate
the ability to engage in appropriate research, students should
read and utilise these texts and journals and publications. As
Masters students you are expected to research beyond this
minimum standard through additional texts, journals and studies

to demonstrate an ability to engage in independent research.
Your attention is drawn to the University’s stated position on
plagiarism. THE WORK OF OTHERS, WHICH IS INCLUDED
IN THE ASSIGNMENT MUST BE ATTRIBUTED TO ITS
SOURCE using the APA in text referencing system (a full list
of references must be submitted as part of the assessment).
Research and Presentation
20134 Topic 1.ppt
MGMT20134
Business Ethics and Sustainability
Topic 1: Introduction, Professionalism and Key Issues
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Learning objectives:
To define the concepts of ethics and morality
To be able to distinguish the three dimensions of ethics so as to
describe, analyse and understand individual and collective
(cross cultural) behaviour
Understand the relationship between ethics, morality and values

To recognise the conditions under which individuals and
organisations would be held morally accountable for their
actions
To understand the concept of a profession, the characteristics of
professionalism and whether management and leadership can be
considered as a profession.
To recognise the key ethical issues that affect the professions
and business.
IntroductionThis course provides important knowledge and
skills that assist managers and leaders in almost every facet of
their work.
Orme and Ashton (2003) argue that ethics is a foundation
competency and that individuals cannot be expected to follow
ethical rules unless they actually understand them.
The objective of studying ethics in a business context is to
enhance the quality of business decision-making.
By including ethical concepts as “filters” managers and leaders
can identify the degree of risk associated with a particular
strategy for both the organisation and themselves
Why should we be concerned about ethics, CSR and
sustainability?Every decision make or action we undertake has
ethical implications. We have the potential to generate good
outcomes through our decisions, but we can also cause harm to
our company, colleagues to stakeholders and to ourselves. We
can also make decisions in an unethical way. We should not
assume that if its legal, its ethical.
Without an examination of morality and various dimensions of
ethics we cannot have an informed discussion regarding when
an individual should be held accountable for their actions,
whether they have duties as professionals, whether an

organisation can be held accountable for its actions and why we
should be concerned with doing good as well as being profitable
or delivering high quality services.
Key terms definedAccording to Preston (1996, p 16) ethics is
concerned with what is right, fair, just or good; about what we
ought to do, not just what is the case or what is most acceptable
or expedient.
Ferrell Fraedrich and Ferrell (2015) describe it as the study of
the general nature of morals and of specific moral choices;
moral philosophy; the study of rules or standards governing
conduct of the members of a profession.
DeGeorge (2010) suggests that ethics is concerned with the
goods worth seeking in life, and with the rules that ought to
govern human behaviour and social interaction.
MacDonald (2015) describes business ethics as consisting of
rules, standards, codes or principles that provide guidelines for
morally right behaviour in specific business situations.
Business Ethics
Ferrell, Fraedrich and Ferrell (2015, p 5) define Business Ethics
as “organisational principles, values and norms that may
originate from individuals, organisational statement or from the
legal system that primarily guide individual and group
behaviour in business
Ethics has everything to do with management. Managers who
fail to provide proper leadership and to institute systems that
facilitate ethical conduct share responsibility with those who
conceive, execute, and knowingly benefit from corporate
misdeeds (Paine 2000).

Allison (1998) has argued that ethics is fundamental to business
conduct. He contends that a moral relationship lies at the basis
of agreements and contracts between two people or two
organisations, and that unless there is a basis of trust, business
cannot proceed.
Solomon (2005) suggests that the values of business life and the
values of the rest of life and society are rarely far apart; after
all, people in business are people with private lives and a sense
of community.
Organisations clearly exist in society and must abide by the
minimum moral code of that society with law defined as the
minimum moral standard of society (Buchholz, 1989).
Ethics and the concept of “Ought”
The concept of “ought” is critical in an understanding of ethics
because the study of ethics is multifaceted including the study
of morality, the legitimacy of moral claims and basis of
justification of decisions.
(Buchholz, 1989, Donaldson, 1989, Solomon, 2005, DeGeorge,
2010)
Approaches to Ethics
We can approach the study of ethics from three different
perspectives- what is important to recognise is that we need to

be objective and seek to describe and understand an ethical
position before making a judgement about it.
Descriptive Ethics- studying and describing the morality of
people in a culture
Normative Ethics- explaining and justifying a coherent moral
system- typically the set of principles or rules that or basic
moral values found in a society.
Metaethics (Analytical ethics)- the study of normative ethics
and is often referred to as analytical ethics because it seeks to
analyse the meaning of morality
(Buchholz, 1989, Donaldson, 1989, Preston, 1996,Solomon,
2005, DeGeorge, 2010)
Morality Defined
It is important to understand what we mean by morality and the
fact that other individuals, groups and cultures may have
different interpretations of morality.
Velasquez (2006) defines morality, as the standards that an
individual or a group has about what is right and wrong or good
and evil.
Buchholz (1989) defines morality simply as the difference
between right and wrong.
Ferrell, Fraedrich and Ferrell (2015) describe morals as a
person’s personal philosophy about what is right and wrong.
Moral standards can be described as the norms about the kind of
actions believed to be right and wrong and the values placed on
the objects that are considered to be morally good or morally
bad.

Morality and the Law.Buchholz (1989) suggests that law is the
minimum moral standard of a society. In other words it is the
formal (written) basic standard of behaviour expected of
individuals in a society.
De George highlights that morality and law share concerns over
issues of societal importance and have certain principles,
obligations and criteria of evidence in common.
“Law is the public’s agency for translating morality into
explicit social guidelines and practices an stipulating
punishment for offences (2010 p.4).
Subjective and Objective Morality?
We need to acknowledge that our view of what is right and
wrong differs from the views of others and potentially what is
actually wright and wrong. These potential differences raise the
issue of subjective and objective morality- the distinction
between what one believes to be right and wrong, and what is
actually right and wrong.
An action is subjectively right if the person believes the action
to is moral.
The action is objectively right if the action is in conformity
with the moral law
(Buchholz, 1989)
Ethics Morality and Values.
The concepts of ethics and morality are inextricably linked.
Similarly we cannot conduct a discussion about ethics and
morality without addressing the concept of values.
Ferrell, Fraedrich and Ferrell (2015) state that values are
enduring beliefs and ideals that are socially enforced.

McDonald (2015) describes them as deeply held beliefs as to
what is important and highly valuedThey might refer to a set of
principles by which we make judgements or a set of beliefs such
as Confucianism and Buddhism, or religions such as Judaism,
Christianity, Islam and Hinduism.
We should also note that most societies have some form of basic
values that underpin their ethics
Moral Responsibility.
Holding an individual accountable for their actions is the basic
concept of moral responsibility.
French (in White 1998) suggests that people are considered to
be rational entities that can be held responsible and accountable
for their actions.
Actions committed knowingly and freely are considered moral
in nature and can therefore attract either praise or blame
(Buchholz, 1989).
Corporate Social ResponsibilityCan or should a business or
organisation be held morality responsible for it’s actions?Do
organisations as separate legal entities have duties to society
beyond economic ones?These questions essentially summarize
the debate about Corporate Social Responsibility or CSR.
One of the most noted scholars in the business ethics field,
Prakash Sethi (1975) describes it as raising the behaviour of
organisations to a level that is consistent with the prevailing
social norms, values, and expectations of its performance.
Ferrell, Fraedrich and Ferrell (2015) describe CSR as an
organisation’s obligation to maximize its positive impact and
minimize its negative impact on society.McAlister et al. (2005,

p 4) define social responsibility as “the adoption by a business
of a strategic focus for fulfilling the economic, legal, ethical
and philanthropic responsibilities expected of it by its
stakeholders”.
Corporate Social ResponsibilityThe terms CSR and business
ethics are often used interchangeably, although as we will see
they are different but related concepts.
Whilst we have defined CSR, it nevertheless has many different
interpretations and variations.
Ferns, Emelianova and Prakash Sethi (2008) as well as Jones,
Bowd, and Tench, (2009) note that CSR terms include:
corporate philanthropy, corporate citizenship, business ethics,
stakeholder theory, community involvement, corporate
responsibility, socially responsible investment, sustainability,
triple-bottom line, corporate accountability and corporate social
performance.
Sustainability
Sustainability, like CSR, is a term that has come to mean
different things to different people.
For many it’s a concept that is related to the natural
environment and it conjures up issues such as climate change,
recycling, and biodiversity. However as McDonald (2015)
states, whilst initially referring to environmental issues, the
idea of sustainability has broadened and now incorporates
activities that:Extend the longevity of organisations, i.e.
business or economic sustainabilitySustain and renew the
biosphere and protect all living speciesEnhance society’s ability
to maintain itself and solve its major problemsMaintain
appropriate levels of welfare for present and future generations.

Leadership, Management and Professions
Most managers and leaders refer to themselves as professionals
and claim to act professionally. But what do we mean by the
terms “Profession” and “Professional” and what do we lay claim
to when we tell others that we are a professional?
DeGeorge (1999), May (1989) and Koehn (1994) all note the
confusion that exists regarding the terms of profession and
professional and how these are its differentiated from a trade,
skilled occupation, craft or a career.
Most people who have an occupation and earn a salary typically
refer to themselves as professionals. However, the concept is far
more substantive than simply being paid for a task.
We need to distinguish between a true profession, acting
professionally, an occupation and a career.
Professions, Occupation and Careers
An occupation any job or function that is performed
by individuals that constitute a
set of skills or abilities. It maybe paid or
voluntary.
A (true) profession an occupation that requires substantial
knowledge and skills, a controlling body,
a licence to operate/practice and specific
codes or standards
Acting professionally behaving in a manner consistent with
the expectations of a profession
A career a series of jobs which that allows the
use of skills and abilities, over a long

period of time
Origins of Professions
The origin of the word profession comes from the verb “to
profess” and was linked to religious orders where one professed
a faith or belief.
In medieval times, Guilds were associations that represented the
skilled crafts such as the arts, music, alchemists and “stone
masons and those that built safe civil constructions- “the
ingenious ones” i.e. engineers.
A feature of these people were that their skills and abilities
required a long apprenticeship- not everyone could do what they
did- play an instrument, paint a portrait or build bridges and
civil constructions that were sturdy and safe.
The guilds were the associations that established the standards
and the means by which people became masters and controlled
entry to the practice.
These guilds were the forerunners of today’s modern concept of
a profession.
Characteristics of Professions
Watkins (1999) puts forward a view that the professions can be
differentiated from other groups (occupations) in society
because of specific characteristics of its members.
These characteristics include:
the possession of specialized skills,the attainment of expert

knowledge, usually based on mastery acquired through
intellectual and practical training, and the existence of
professional body or association that is charged with the
maintenance of the profession including ensuring that members
abide by appropriate standards.
Characteristics of Professions
Khurana, Nohria and Penrice (2005) suggest four criteria for
calling an occupation a bona fide profession including:
a common body of knowledge resting on a well-developed,
widely accepted theoretical base; a system for certifying that
individuals possess such knowledge before being licensed or
otherwise allowed to practice; a commitment to use specialized
knowledge for the public good, and a renunciation of the goal of
profit-maximization, in return for professional autonomy and
monopoly power; and a code of ethics, with provisions for
monitoring individual compliance with the code and a system of
sanctions for enforcing it.
Examples of true professions are typically medicine and law.
Is Management a Profession?Management has many of the
characteristics of a true profession including university
qualifications, a variety of associations such as the Australian
Institute of Management, The Indian Institute of Management,
The Singapore Institute of Management and many others
worldwide. These associations typically have codes of ethics
and practice that members are requested to follow.
However, one does not need a degree to occupy a management
or leadership position. Nor is there an accrediting body that
licences individuals to practice management.
Like many other occupations, management is really a quasi-
profession which seeks to “professonalise” itself by focusing on

increasing expert knowledge, sharing that knowledge and asking
those to claim to be professional managers and leaders to abide
by a code of conduct.
What is an Ethical Issue?An ethical issue can be seen as a
problem, situation, or opportunity, which has several possible
options, and where each must be evaluated as right or wrong,
ethical or unethical. Aguilar states, “Managers who are
sensitive to the ethical content of business decisions and
operational activities, who agree to behave ethically, and who
hold compatible views on how to analyse ethical situations still
must confront the inherently perplexing nature of many ethical
problems” (1994, p33).
Three Key Values
Ferrell, Fraedrich and Ferrell (2015) provide a simple approach
of identifying three key values that enable decision makers to
evaluate activities that might have significant ethical
dimensions:
IntegrityHonestyFairness
Four Levels of Business Ethics
MacDonald (2015) provides a different approach to
understanding ethical issue. Rather than using concepts of
principles and values as suggested by Farrell, Fraedrich and
Farrell above, she used a contextual approach:
Personal Level- each person must engage in ethical decision
making as we wrestle with various options and possible
outcomes that are associated with business decisions- ultimately
we still must make the decision.

Organisational level- as agents of a firm, we make decisions on
behalf of or in the interests of the organisation rather than self-
interest. -If a manager makes the decision for organisation- who
is held responsible- the organisation as a legal person or the
manager or both?
National Level- at this level ethics relates to the expectations a
society collectively holds about the behaviour of its citizens,
organisation and the practices deemed acceptable. MacDonald
suggests that bribery and corruption can be considered as
national level issues
International Level- in many ways this level seeks to address
how the national level issues interact on a global stage-
concepts such as globalisation, ecological and sustainability and
economic aspects such as fair trade, tax inconsistencies, free
trade agreements can be seen as ethical because they all have
the potential to generate benefits and harms for few, some or
all.
Industries, Sectors and ProfessionsThere are many different
ways of categorising and describing ethical issues.
MacDonald (2015) notes some issues can be specific to
industries such as the banking and finance, retail or hospitality
industries.
Some may be specific to the private sector more so than the
public and not for profits. Another way is to look at issues as
they pertain to the “professions” such as Doctors and Nurses,
Lawyers, Accountants and Marketers etc.,
Industries, Sectors & Professions
Farrell Fraedrich and Farrell (2015) simply describe a range of
ethical issues that could apply to sectors, industries and
professionals:

Misuse of company time and resourcesAbusive or intimidating
behaviourLyingConflicts of interestBribery (and
Corruption)Corporate intelligenceDiscrimination sexual
harassmentFraudInsider trading Intellectual property rights
Privacy Issues
Conflict of Interest
Differentiating private versus organizational interests is
problematic due to the fact that establishing ethical
relationships is in part linked to reciprocity- the concept of
doing something for another person with the expectation that
the favour will be returned.
Reciprocity is the basis of developing a trusting relationship
with another person.
Different cultures have slightly different ways of facilitating
reciprocity-
A conflict of interest is a situation where an individual
advances their own personal interest at the expense of the
organization. It can also be were a person’s existing
relationships with stakeholders result in decision making being
potentially compromised.
Conflict of Interest
Conflict and AgencyAgency describes the relationship between
owners of a business and those who are delegated the tasks of
running the business, making the product or service and
bringing it to the market. The expectation is that the “agent”
will act in the interests of the organization and thus the owners

and will not their personal interest.
Real v Perceived Conflict of Interest
A real conflict of interest is when a manager or leader’s ability
to act in the interests of the organisation is compromised and
they make a decision which clearly is to their own benefit at the
expense of the organization.
A perceived conflict of interest occurs when stakeholders and
others believe that a manager or leader’s ability to act in the
interests of the organisation is compromised.
It does not necessarily mean that it is, but people believe it to
be the case.
Inappropriate behaviour in the workplaceFarrell, Fraedrich and
Farrell (2015) identify a range of interpersonal behaviours that
related to how people interact and related to each other that are
clearly ethical issues and in some cases illegal behaviour.
In recent years discrimination, sexual harassment and bullying
in the workplace have been gaining greater attention,
particularly in the Australian context.
Ethical Issues in HR
McDonald (2015) identifies a number of ethical issues which
occur within the HR discipline including:Issues relating to the
rights and duties of employees with those of
managersDiscrimination Ethical issues during recruitment and

selection, compensation, engaging in the work environment,
safety and health and separation from an organisationThe
characteristics of a ‘just’ work environment
Rights of employees – the right to:a safe working
environmentfair compensationinformationconsultation and to
express one’s viewfair treatmentconfidentiality and
privacyequity and fairness.
Respect – ensure that:all employees in an organisation
demonstrate consideration, esteem and deferencestaff are not
subject to inequitable treatment or discrimination.
Duties – of both the employees and the managers: occupational
health and wellbeingexpectation of honesty and integrity by all
parties.Due process – ensuring adherence to appropriate
procedures and processes. Justice – ensuring equity and fairness
in the workplace.Environmental awareness – the pursuit of
sustainability in human resource practices. Confidentiality –
upholding the confidence of information and processes to
protect privacy.
Ethical Issues in recruitment, selection and promotion
Deceptive applicant information –
providing false or deceptive information.
Soliciting unwarranted information –
information sought from an applicant must be related to valid

criteria that clearly relate to the job in question.
Discrimination occurs when preferential treatment is bestowed
on employees on grounds other than their qualifications or job
performance (Crane & Matten 2010).
Glass ceiling
When an otherwise qualified person reaches an invisible barrier
that prevents promotion or salary increases, they are said to
have reached a glass ceiling.
(McDonald, 2015)
Ethical Issues in the workplace
Sexual harassment is where unwelcome sexual advances are
made (either verbally or physically).
Workplace bullying has been defined by Victoria Legal Aid as
persistent, unwelcome behaviour, mostly using unwarranted or
invalid criticism, finding fault, exclusion or isolation. Bullying
is a significant health and safety issue, for which employers
are being held responsible.
Violence in the workplace
(McDonald, 2015)
Organisations that engage in ethical marketing behaviour, such
as The Body Shop, engender trust and loyalty, where as
organisations that exhibit unethical behaviour erode the
confidence of consumers and key stakeholders and can

ultimately threaten their own viability through the imposition of
greater control or through loss of profitability.
Key Ethical Issues in MarketingHonesty – ensuring accurate
representation of the product or service.Accepting responsibility
– actions as: serving the needs of customers, avoiding coercion,
acknowledging obligations to stakeholders.Confidentiality –
protect the private information of customers, employees and
partners.Transparency – promoting a spirit of openness in
marketing operations.Equity and fairness – justly balancing the
needs of the buyer with the interests of the seller.
(McDonald, 2015)
Ethical Issues in Marketing
Promotional activity has the tricky task of encouraging
consumers to buy but without deceiving or manipulating them.
The main criticisms of promotion and the many forms of
marketing communication are that it is inherently untruthful,
deceptive, unfair, manipulative and offensive (Eagle 2009).
Misrepresentation
Misleading, fraudulent or untrue advertising. Offensive
advertising
Can relate to both the content of the advertisement, that is,
overtly sexual, demeaning to women, promoting stereotypes,
being disrespectful etc., and also to the products themselves, for
example, alcohol, tobacco,
pharmaceuticals and adult products.Stereotyping

Gender and racial stereotyping:Deceptive advertising using
social media
False testimonials and fake tweets refer to content generated by
the company itself or by someone paid by the company
Public relations
The role and reputation of the public relations profession is to
ensure that a favourable image between the organisation and its
‘public’/stakeholders is maintained, while balancing the
company’s integrity and gaining the public’s trust.
Sponsorship
Is a powerful promotional tool, but organisations can come
unstuck if the personality to whom they attach their brand acts
unethically and is perceived unfavourably by the general public.
For example companies that used Lance Armstrong to promote
their sporting products
(McDonald, 2015)
Other ethical issues in marketing:
Distribution of products and serviceData collection and
researchPrivacy of customer informationTargeting
disadvantages groupsCause related marketing

McDonald (2015) notes that there are many ethical issues in the
accounting and finance industry.
She highlights misrepresentation and inaccurate financial
reporting, accounting fraud, insider trading, conflict of interest,
tax avoidance and tax evasion, money laundering and
investment scams as amongst the most significant.
Misrepresentation and inaccurate financial reporting includes
false expenses, over/under valuation of assets and liabilities,
inflated profits or hiding losses etc.
Accounting fraud occurs when an employee steals cash, assets
or other resources from a firm. According to KPMG (2015) the
average fraud in Australia and New Zealand is valued at over
$3million and only 30% of frauds are reported.
Insider Trading occurs when individuals take advantage of
access to information before it enters the marketplace, e.g.
buying or selling shares due to information not available t the
public
Ethical Issues in Finance & Accounting
Tax minimisation – when corporate structures, processes and
practices are legitimately organised to reduce the amount of tax
paid.
Tax avoidance – is an arrangement which complies with the
letter of the law but is possibly not within the spirit of the law.
Accounting techniques for tax avoidance include:Transfer
pricing – allows companies to shift money between certain tax
jurisdictions to avoid paying tax twice on the same
amount.Offshore billing – the parent company charges

Australian consumers for services from its offshore tax haven
subsidiary and the money goes directly to the tax haven.Thin
capitalisation – the parent company lends money to its
Australian subsidiary via an offshore finance arm based in a low
tax jurisdiction. Intangible assets – the parent company in the
tax haven owns intangible assets such as Intellectual Property
and licenses the use of that property to the Australian operation
which pays significant sums to the tax haven based subsidiary,
thereby stripping out taxable revenue from the Australian
company and placing that revenue in the low tax location.
Tax evasion – where unlawful actions are taken to avoid tax.
(McDonald, 2015)
Transparency International (2009) describes money laundering
as the process of concealing the origin, ownership, or
destination of illegally or dishonestly claimed money by hiding
it within legitimate economic activities.
Investment scams are also referred to as Ponzi schemes and in
effect use the monies of new investors to pay “returns” to those
who joined earlier. The most well know recent scheme was
perpetrated by Bernie Madoff in the US whose victims lost an
aggregate of US$20 billion.
MGMT20134 Week 1.docxMGMT20134
Business Ethics and Sustainability
Table of Contents
Introduction 2

Learning objectives 2
Overview 3
What is Ethics? 3
Descriptive Ethics 4
Normative Ethics 4
Metaethics (Analytical ethics) 4
Morality 5
Moral Responsibility 6
Morality and Law 6
Ethics, Morality and Values 7
Leadership and Management as a Profession 8
Guided Readings 9
Journal Readings 10
Introduction
Following the Global Financial Crisis at the end of the 2000s,
many people openly questioned the lack of ethical standards
within the business community, particularly the financial sector.
Some went so far as to blame leaders and managers with MBA
qualifications, highlighting that ethical practice is considered a
duty of professionals and that many had failed their obligations
to society.
Unfortunately, research has clearly shown that the majority of
business schools, in Australia and worldwide, do not
specifically address the ethical aspects of being a manager,
leader or an employee in sufficient depth. Consequentially many
managers and leaders do not understand or simply ignore the
ethical implications of decisions exposing both themselves and
their organisations to significant financial and reputational risk.
There is an even more worrying view that the activity of
business is amoral in nature as it only deals with economic
transactions resulting from the exchange of goods and services.
This perspective view can be dismissed based one important
aspect of assigning moral responsibility-causality. We hold that
a person and an organisation should be held morally responsible
when they undertake actions freely and knowingly, and when we

can establish a relationship between their actions and the
resulting consequences. Clearly when we make decisions as
leaders and managers we take into account matters of cost,
benefit, implications to market share and to company
reputation. So too should we be taking our ethical duties and
responsibilities seriously as virtually all decision contexts have
direct ethical dimension which in turn affects cost, profitability
and reputation.
This introductory unit seeks to establish the foundations by
which concepts of ethical decision-making social responsibility
and sustainability can be explored. Without an examination of
morality and various dimensions of ethics we cannot have an
informed discussion regarding when an individual should be
held accountable for their actions, whether they have duties as
professionals, whether an organisation can be held accountable
for its actions and why we should be concerned with doing good
as well as being profitable or delivering high quality
services.Learning objectives
This unit has the following learning objectives:
1. To define the concepts of ethics morality, Corporate social
responsibility and sustainability
2. To be able to distinguish the three dimensions of ethics so as
to describe, analyse and understand individual and collective
(cross cultural) behaviour
3. Understand the characteristics of a moral standard
4. Understand the relationship between ethics, morality and
values
5. To recognise the conditions under which individuals and
organisations would be held morally accountable for their
actions
6. To understand the concept of a profession, the characteristics
of professionalism and whether management and leadership can
be considered as a profession.Overview
Noted scholar and Professor of management at McGill
University, Henry Mintzberg conducted landmark studies of
managers and leaders in the 1970s and replicated these studies

again in the 2000s. He found that managerial work was, and still
is, characterised by brevity, variety and fragmentation. This
means that managers and leaders tend to break up their tasks
spend short periods of time on each and not necessarily attend
to them in a cohesive and structured manner. He also found that
despite decision making being a critical component of a
manager’s role they are not reflective thinkers but tend to be
reactive and make decisions with insufficient information.
Child (1988; 2005) found another characteristic of managerial
decision making that generates cause for concern when
discussing “good” quality decision making. He found that when
confronted with the need to reach a decision, managers tend to
look to the first solution that appears that satisfy the minimum
decision criteria, rather than take a considered approach and
consider a variety of options thus increasing the likelihood of
an optimal solution. Child termed this phenomenon “saticifing”.
The financial crisis of the late 2000s, the collapse of Lehman
Bros, the toxic loans of American banks, the collapse of Enron,
World Com and as a result Arthur Anderson, HIH and One-Tel
in Australia, can in part be explained by poor decision making.
But are there other issues that also need to be considered? Did
managers in these organisations also act unethically? In order to
answer these questions we need to understand what ethics is and
when people should be held accountable for their actions.
Business Ethics, Sustainability and the MBA
MGMT 20134 Business Ethics and Sustainability is one of four
“foundation” courses in the CQU MBA program. This course
provides important knowledge and skills that assist managers
and leaders in almost every facet of their work. Orme and
Ashton (2003) argue that ethics is a foundation competency and
that individuals cannot be expected to follow ethical rules
unless they actually understand them. They cite Foy (2002) who
states that ethics is not a methodology or a strategy one can
apply without grounding in basic theory, principles and
concepts. Orme and Ashton (2003) state that ethics needs to be
explained and that practical and experiential exercises need to

be included in order for people to understand the moral
dimensions of issues. Research undertaken by the European
Foundation for Management Development with recruiters of
graduate MBAs, found that employers throughout the world are
seeking managers and leaders with high degrees of integrity and
professionalism. In a survey of Australian, Malaysian and
Singaporean employers, Segon and Booth (2013) found that
skills such as ethical decision making were ranked as just as
important as interpersonal skills, emotional intelligence and
leadership.
The objective of studying ethics in a business context is to
enhance the quality of business decision-making. By including
ethical concepts as “filters” managers and leaders can identify
the degree of risk associated with a particular strategy for both
the organisation and themselves.
Having a sound ethical foundation will assist your development
as a manager and a leader. Kouzes and Posner (2010) found that
employees admire and will follow managers and leaders who act
with integrity and behavioural consistency. Thus ethical
perspectives are also considered in MGMT 20131
Organisational Governance and Leadership and MGMT 20129
People and Organisations. Similarly ethical approaches to
managing change and the communication with stakeholders are
also vital. As noted in the introduction to this course, the
absence or the inability of managers to consider ethics in the
financial, economic and operational decision making was cited
as a major factor in the GFC. Thus key courses in the CQU
MBA such as ECON 20039 Economics for Managers,
ACCT20077 Accounting for Management Decision Making and
MGMT 20130 Operations Management are informed by this
course in terms of improving decision making by identifying the
ethical dimensions and impact on a range of stakeholders.
Lastly the strategic objective of any business is to achieve
economic sustainability. Corporate reputation plays a major
factor in assisting businesses and organisations in achieving this
key objective.

By including this course and other foundation courses such as
Business Communications and Critical Thinking & Managerial
Decision Making, the MBA at CQU directly addresses
Mintzberg's criticism of the lack of reflective thinking and
Child’s “satisficing” phenomena by assisting managers to
develop understand the basis for and thus establish defendable
positions for their decisions and actions. In some cases this may
result in us reappraising our own values, beliefs and perception
of what is right, wrong, fair and just in the business and in
society.What is Ethics?
According to Preston (1996, p 16) ethics is concerned with what
is right, fair, just or good; about what we ought to do, not just
what is the case or what is most acceptable or expedient.
Ferrell Fraedrich and Ferrell (2015) suggest that it is the study
of the general nature of morals and of specific moral choices;
moral philosophy; the study of rules or standards governing
conduct of the members of a profession. DeGeorge (2010)
suggests that ethics is concerned with the goods worth seeking
in life, and with the rules that ought to govern human behaviour
and social interaction. Similar themes emerge in other
definitions including Velasquez, (1998) the study of what is
good or right for human beings, what goals people ought to
pursue and what actions they ought to perform, and Buchholz
(1989) who describes it as the actions and practices directed
towards improving the welfare of people and attaining a good
life.
The concept of “ought” is critical in an understanding of ethics
because the study of ethics is multifaceted including the study
of morality, the legitimacy of moral claims and basis of
justification of decisions.
We can approach the study of ethics from three different
perspectives- what is important to recognise is that we need to
be objective and seek to describe and understand an ethical
position before making a judgement about it. Descriptive Ethics
This consists of studying and describing the morality of people
in a culture. It compares and contrasts the different beliefs,

values or practices of people. This is a necessary aspect of the
study of ethics because it provides the information that can then
be analysed further as part of the next two forms of ethics:
normative and metaethics.Normative Ethics
In normative ethics we attempt to explain and justify a coherent
moral system- typically the set of principles or rules that or
basic moral values found in a society.
According to DeGeorge (2010) the purpose of normative ethics
is threefold:
a. It attempts to form into a related whole the various norms,
rules and values of a society’s morality. It attempts to present
these as consistently and as coherently as possible- including a
hierarchy of the importance of the principles or moral rules.
b. It seeks to establish the basic principles from which a
society’s particular norms can be determined
c. It seeks so justify the basic principle of morality.Metaethics
(Analytical ethics)
Metaethics is the study of normative ethics and also referred to
as analytical ethics because it seeks to analyse the meaning of
morality. As DeGeorge (2010) puts it, metaethics is the study of
moral reasoning. It is related to linguistics because it seeks to
determine the meaning of words and concepts such as good,
bad, etc. To consider what good actually means is different
from whether things or actions are actually good.
In business we are expected to analyse decision from an
economic, marketing and strategic perspectives etc. We
incorporate decision-making models to assess the likely impacts
of our decision on a firm’s profitability or an organisation’s
ability to deliver its services in an economic and effective
manner. The importance of the three dimensions of ethics
should be apparent as these analytical approaches parallel the
business ones. Consider the decisions to establish a presence on
a foreign country. Analysing a country’s culture, values and
business practices from descriptive, normative and meta-ethical
perspectives can greatly assist a business to understand the
differences between etiquette and ethics of a culture, where they

align and differ from our own, what is permissible and what is
not and importantly, why!
Moreover these concepts can be applied to all other courses in
the MBA. As Buchholz (1989); Matten and Moon (2005) and
Segon and Booth (2010) suggest a major problem with business
education is that it fails to consider the ethical aspects of its
content. Academics presenting courses in strategy, economic
and marketing rarely question whether the application of the
content has ethical or moral implications in addition to the
economic. The answer is obvious- of course they do!
As practising leaders and managers we follow organisational
policies and procedures as part of performance management,
financial management and corporate governance—these are
examples of normative ethics that seek to clarify the behaviours
that we ought to demonstrate in our organisations. Morality
Many people dislike discussing issues of morality within the
context business activity. Perhaps one of the most well know
articles criticising the idea of the moral dimension of business
was by Milton Friedman who advocated that the sole social
(moral) responsibility was to maximize profits. The problem
with this perspective is it fails to acknowledge that the activity
of business generates not only good consequences, but also bad
ones and that in some cases leaders and managers knowingly
commit to an action that will cause harm
It is important to understand what we mean by morality and the
fact that other individuals, groups and cultures may have
different interpretations of morality.
Velasquez (2006) defines morality, as the standards that an
individual or a group has about what is right and wrong or good
and evil, whilst Buchholz (1989) defines morality simply as the
difference between right and wrong.
Moral standards can be described as the norms about the kind of
actions believed to be right and wrong and the values placed on
the objects that are considered to be morally good or morally
bad.
These definitions should immediately demonstrate a link to

descriptive, normative and meta-ethical considerations.
However Buchholz (1989) highlights some problems with the
study and application of morality when it comes to how we as
individuals approach the issue. He suggests that we tend to
operate at two levels, on a personal level in which we wish to
judge and act in accordance to our conscience and the third
person level in which we wish to judge the actions of others
from an objective point of view, but do not wish to know or
cannot know the subjective state of the one performing the
action.
The other problem that should be apparent is the distinction
between what we believe or perceive to be morally right and
what actually is morally right. This is the distinction between
what one believes to be right and wrong, and what is actually
right and wrong. An action is subjectively right if the person
believes the action is moral where as an action is objectively
right if the action is in conformity with the moral law
(Buchholz, 1989).
Velasquez (2006, p6) states that “moral standards can be
described as the norms or principles about the kinds of actions
believed to be morally right and wrong, as well as the values
placed in the kinds of objects believed to be morally good and
morally bad”.
Velasquez (2006, p. 9) highlights five characteristics of moral
standards:
1. Involved with serious benefits or injuries
2. Not established by law or legislation
3. Should be preferred to other values including self interest
4. Based on impartial considerations
5. Associated with special emotion and vocabulary
We should be able to recognize that this distinction between
subjective and objective morality has many implications for
individuals and businesses, in particular when dealing with
overseas contexts where interpretations of values and ethics
may be different. Are these different interpretations examples of

subjective or objective morality?Principles
According to Ferrell, Fraedrich and Ferrell (2015) principles are
specific and pervasive boundaries for behaviour that must not
be violated. We can think of principles as statements that seek
to guide behaviour. In many cases principles inform the
development of rules and regulations. For example we would
consider concepts such as freedom, justice and fairness as
principles. In Australia and in many other countries, we have
developed anti-discrimination laws to insure that people are
treated fairly and justly.
Within the business world many organisations use principles as
part of their mission or vision statements. In a similar content
these can be used to develop internal rules and regulations
(policies and procedures) that then guide or prescribe actions
and permissible and non-permissible action.Moral
Responsibility
Holding an individual accountable for their actions is the basic
concept of moral responsibility. French (in White 1998)
suggests that people are considered to be rational entities that
can be held responsible and accountable for their actions.
Actions committed knowingly and freely are considered moral
in nature and can therefore attract either praise or blame
(Buchholz, 1989).
We accept that whilst a person has moral responsibility, there
might be mitigating factors that can affect the extent of this
responsibility and accountability. These could include a
physical or psychological impairment that affects their ability to
make informed choices, their ability to understand the context
and consequences of their decisions and the seriousness of the
action.
Exercise 1 Holding an Individual Accountable
Try to think of a situation where the consequences of a decision
made by an individual might be extremely serious, yet we would
not hold that individual accountable for their actions.

Now think of a situation where an individual would be held
responsible for their actions- try to identify the type of
consequences that the individual may be subjected to.
Lastly think of a decision that might be considered as unethical,
yet would not be considered as significant- perhaps even trivial
in nature
Prepare a brief summary of your views for discussion in class
and online student post your responses in the discussion board
Morality and Law
Buchholz (1989) suggests that law is the minimum moral
standard of a society. In other words it is the formal (written)
basic standard of behaviour expected of individuals in a society.
DeGeorge highlights hat morality and law share concerns over
issues of societal importance and have certain principles,
obligations and criteria of evidence in common. “Law is the
public’s agency for translating morality into explicit social
guidelines and practices and stipulating punishment for offences
(2010 p4).
But how do we determine whether a moral code has been
breached- is it possible to act morally but illegality or act
legally by immorally?Ethics, Morality and Values
As we have seen the concepts of ethics and morality are
inextricably linked. Similarly we cannot conduct a discussion
about ethics and morality without addressing the concept of
values.
The term “values” has different meanings in different contexts.
For example from an economic perspective the term refers to a
concept of measurement- we value something because it is
worth something to us. Organisations often use the term to refer
to characteristics that they wish employees to emulate- most
often found in mission statements. For our purposes we use the
term values to refer to basic beliefs that inform our concept of
right and wrong. They might refer to a set of principles by
which we make judgements or a set of beliefs such as
Confucianism and Buddhism, or religions such as Judaism,
Christianity, Islam and Hinduism. We should also note that

most societies have some form of basic values that underpin
their ethics. These may be very prominent and directly link
government, the legal system with the values such as in some
Islamic countries that identify Islam as the official religion with
both a civil and Sharia legal systems; whilst other countries
claim to be secular, yet have clear evidence of the influence of
religious beliefs- Australia is a case in point. Whilst it has no
official religion, it is predominantly based on Judeo- Christian
beliefs and many of its laws and practices can be traced to the
teaching of the old and new testaments.
Some argue that values or principles that inform our behaviours
are established by:
· religion
· an issue of ethical relativism
· a function of the society that we are examining
· our parents and upbringing
· schools and universities
· peers and friends.
It is likely that our values are in fact informed by all of these
influences to varying degrees.
Exercise 2 Where do my values come from?
Try to think about the values you believe are critical in your life
and those that inform what you hold to be right and wrong.
Now think about your upbringing, your parents, the schools you
attended, your key friends and significant life experience and
try to determine the extent to which your values have been
determined or influenced by your these key people and
experiences.
Have your values changed over time?
The MBA seeks to develop you as a manager and leader. One of
the most popular management development approaches is Daniel
Goleman’s Emotional Intelligence Model that identifies a range
of competencies that leads to superior performance. This is
known as the input based competency approach to management.

This school of thought originated in the United David
McClelland’s seminal 1973 article “Measuring for Competence”
and was further developed by Richard Boyatzis in the early
1980s who sought to establish what distinguishes competent
managers, i.e. superior performing managers from those that are
classified as good, but not outstanding.
The input approach emphasises that in order for managers and
leaders to cope with a diverse range of situations and people,
they must be able to adapt their behaviours through diagnosis of
problems and people. This requires conceptual understanding of
the subject matter, the context and the limitations of the
manager themselves. This later point emphasises the importance
of self-awareness in the competency movement and why we
have promoted refection in key MBA courses at CQU.
This model can equally be applied to the study and development
of ethical capability. In order to become a capable ethical
manager, we must understand ethics, morality CSR and
sustainability conceptually. We need to develop the skills that
enable us to act and make decisions in an ethical manner and we
need to be genuine in our endeavours. The later clearly links to
the concept of intent discussed earlier.
An analysis of the conceptual knowledge of ethics and morality
will enhance our understanding. By analysing our own values
and ethical positions and why we hold them we will be better
able to understand the ethical positions of others, even if we
may not agree with them we can at least understand why they
hold a particular position.
Exercise 3 What are my Values?
Visit the Yourmorals.org/explore.php which has a number of
online questionnaire dealing with morality and values.
Compare the results of the questionnaire to the list of values
that you complied for exercise 2. To what extent do they align
or differ?
Reflect on the results and note any values that are a surprise to
you.

Using normative and meta-ethical perspectives see if you can
explain or propose why you may have achieved the resulting
profile.
Be sure to keep a record of your results as you may wish to
retake the tests at the end of this course to see whether you have
developed different views.
Corporate Social Responsibility.
Earlier in this discussion we talked about holding an individual
morally responsible for their actions. In many ways not
dissimilar issues and challenges arise when we consider whether
we can hold an organisation morally responsible for their
actions. Whilst we will consider some of the philosophical and
economic arguments around this issue, one of the later topics
will directly address the concept of Corporate Social
Responsibility.
One of the most noted scholars in the business ethics field,
Prakash Sethi (1975) describes CSR as raising the behaviour of
organisations to a level that is consistent with the prevailing
social norms, values, and expectations of its performance. The
European Commission (2001, p 13) describe it as an integration
of social and environmental concerns in business operations and
an interaction with stakeholders on a voluntary basis.
McAlister et al. (2005, p 4) define social responsibility as “the
adoption by a business of a strategic focus for fulfilling the
economic, legal, ethical and philanthropic responsibilities
expected of it by its stakeholders”.
Corporate Social Responsibility (CSR) has been variously
described as an organisation’s obligation to maximize its
positive and minimize its negative effects, as a member or
citizen of a society, with concern for that society’s needs and
wants in the long term (Lantos (2001).

Essentially the debate about CSR is whether an organisation has
an obligation or duty to do more than just make a return to its
shareholders, within the confines of the law. So CSR issues
might include:
· Should an organisation donate part of its profits to charity?
· Should an organisation seek to keep employees on during
difficult times?
· Should organisations establish themselves or work in with
countries that violate human rights?
· Should organisations invest in other organisations who are
involved in the manufacture of dangerous goods, such as drug
companies, tobacco companies and military equipment
manufacturers?
Ferns, Emelianova and Prakash Sethi (2008) as well as Jones,
Bowd, and Tench, (2009) note that CSR terms include:
corporate philanthropy, corporate citizenship, business ethics,
stakeholder theory, community involvement, corporate
responsibility, socially responsible investment, sustainability,
triple-bottom line, corporate accountability and corporate social
performance.
What should be apparent even in this brief overview is that
these questions and the whole CSR debate seems to only apply
to private and or shareholder profit maximizing firms? As
former GE CEO Jack Welch said to an audience of business
students at Duke University in the early 2000s “Only a
profitable firm can be socially responsible!”
Clearly this view of CSR seems to exclude a major sector of all
economies- the public and not for profit sectors. In many cases
the not-for-profits are at the heart of CSR and Sustainability
activities. One could also advance that the whole public sector
ethos is one of service to the community-in some cases as a
result of market failure- which is the inability of the private
sector to provide goods and services at a profitable level, or in
some cases certain sectors in which is deemed undesirable to

have the profit motive as an organisations raison d’etre. In
many countries, including Australia, we refer to the government
sector as the “public or civil” service- emphasising its role to
meet the needs of the community and broader society.
Sustainability.
Sustainability, like CSR, is a term that has come to mean
different things to different people. For many it’s a concept that
is related to the natural environment and it conjures up issues
such as climate change, recycling, and biodiversity. However as
McDonald (2015) states, whilst initially referring to
environmental issues, the idea of sustainability has broadened
and now incorporates activities that:
· Extend the longevity of organisations, i.e. business or
economic sustainability
· Sustain and renew the biosphere and protect all living species
· Enhance society’s ability to maintain itself and solve its major
problems
· Maintain appropriate levels of welfare for present and future
generations.
In this course we embrace these broader perspectives of
sustainability and will examine the concept in greater detail in
later units. However we must recognize an important fact that
cannot be denied. The earth is finite and thus all the natural
resources that exist on the planet are also finite. The major
problem we have with the method by which we allocate goods
and services- the free market- is that it typically only takes into
account the supply that enters the market and not the actual
reserves. Noted Canadian commentator and environmentalist
David Suzuki gave an example of the north atlantic cod being
overfished to almost extinction, yet the market price stayed
relatively constant because supply to the market was maintained
at a constant level. As David Suzuki noted it is in the interests
of business that they manage resources in the most sustainable
way possible and to seek to develop renewable resources and
processes so as to enhance future development.Leadership and

Management as a Profession
Am I a professional?
Simply note your answer- Yes or No
Now list the 2 or 3 things that in your mind justifies your
contention that you are a professional leader or manager and
belong to a profession.
Most managers and leaders refer to themselves as professionals
and claim to act professionally. In fact most people use the
terms to describe their paid employment. Consider the following
examples:
· a professional footballer,
· a professional cleaner,
· a professional financial advisor, etc.
Most of you probably answered “Yes” to the question in
exercise 4- am I a professional. But what do we mean by the
terms “Profession” and “Professional” and what do we lay claim
to when we tell others that we are a professional?
DeGeorge (1999), May (1989) and Koehn (1994) all note the
confusion that exists regarding the terms of profession and
professional and how these are its differentiated from a trade,
skilled occupation, craft or a career. Today most people who
earn a salary typically refer to themselves as professionals;
however the concept is far more substantive than simply being
paid for a task.
Guilds, Masters, Apprentices and Professions.
The origin of the word profession comes from the verb “to
profess.” Originally this was linked to the taking of religious
vows- to profess a belief or a faith. Clearly the link of
professions to religious orders no longer applies. A stronger
link can be made to the medieval period when guilds or
associations represented the interests of highly skilled artisans
and craftsmen. These groups included artists, musicians and
“ingenious builders” (the origin of the engineering concept). A

feature of these people were that their skills and abilities
required a long apprenticeship- not everyone could do what they
did- play an instrument, paint a portrait or build bridges and
civil constructions that were sturdy and safe. The guilds were
the associations that established the standards and the means by
which people became masters and controlled entry to the
practice. These guilds were the forerunners of today’s modern
concept of a profession.
Watkins (1999) puts forward a view that the professions can be
differentiated from other groups in society because of specific
characteristics of its members.
These characteristics include:
· the possession of specialized skills,
· the attainment of expert knowledge, usually based on mastery
acquired through intellectual and practical training, and
· the existence of professional body or association that is
charged with the maintenance of the profession including
ensuring that members abide by appropriate standards.
·
A more recent perspective by Khurana, Nohria and Penrice
(2005) suggest four criteria for calling an occupation a bona
fide profession including:
· a common body of knowledge resting on a well-developed,
widely accepted theoretical base;
· a system for certifying that individuals possess such
knowledge before being licensed or otherwise allowed to
practice;
· a commitment to use specialized knowledge for the public
good, and a renunciation of the goal of profit-maximization, in
return for professional autonomy and monopoly power; and
· a code of ethics, with provisions for monitoring individual
compliance with the code and a system of sanctions for
enforcing it.
We can summarise these views to establish the basic
characteristics of a true profession and thus what a member of a

profession must demonstrate:
1. A high degree of expert knowledge acquired typically at a
University,
2. An association with a registration system that allows the
professional to practice, a code of ethics that commits the
individual to high standards of behaviour both in work and
personal life,
3. The professional is bound to act in the interest of the client
and only within the boundary of their expertise.
4. That the professional is committed to continually develop and
share the knowledge base.
So what we can identify is that most occupations may call
themselves professions, but they tend to have only some of the
characteristics of a true profession. For example if we consider
“professional footballers” we note that they must be registered
players before they can take to the field, they are represented by
a players association and they have high degrees of skill and
typically are very well remunerated. However, one does not
have to spend years learning the rules of Rugby, Football or
Australian rules. Whilst it can be considered as highly skilful, it
is not expert knowledge. The problems faced by footballers on
the pitch or ground are not overly complex or abstract as those
faced by true professionals. Thus we can conclude that
footballers do not belong to a true profession, although they
may be called upon by their clubs to act in a professional
manner.
So is management a true profession?
Management and leadership do have many of the characteristics
of a profession. Firstly most positions in organisations require a
university degree or postgraduate program such as an MBA.

One can argue that this represents a substantial body of expert
knowledge consistent with a profession. Associations clearly
exist such as the Australian Institute of Management, The Hong
Kong Management Association, The Singapore Institute of
Management and many others worldwide. These associations
typically have codes of ethics and practice that members are
requested to follow. However, one does not need a degree to
occupy a management or leadership position. Nor is there an
accrediting body that licences individuals to practice
management.
Clearly management and leadership are not true professions
however like many other occupations they seek to
professionalise by focusing on furthering education and
qualifications often focusing on specialist aspects and the use of
codes of ethics and codes of practice are designed to insure that
mangers and leaders behave in a way that advances the interests
of clients and organisations and the general community.
The Duty of Managers and Leaders
As noted in the introduction, following the Global Financial
Crisis many criticisms were made of the behaviour of managers
and in particular those with MBAs who were seen as partially
responsible for the crisis by subordinating the interests of
society to hose of profit maximization. In response a number of
US Business Schools have introduced MBA or Management
Oaths. Amongst the most well-known is the movement initiated
at Harvard in the US by a group of MBA Graduates.
Two versions of the oath exist. The one presented here is the
more concise version.
OATH – SHORT VERSIONAs a manager, my purpose is to
serve the greater good by bringing people and resources
together to create value that no single individual can build
alone. Therefore I will seek a course that enhances the value my

enterprise can create for society over the long term. I recognize
my decisions can have far-reaching consequences that affect the
well-being of individuals inside and outside my enterprise,
today and in the future. As I reconcile the interests of different
constituencies, I will face difficult choices.
Therefore, I promise:
· I will act with utmost integrity and pursue my work in an
ethical manner.
· I will safeguard the interests of my shareholders, co-workers,
customers, and the society in which we operate.
· I will manage my enterprise in good faith, guarding against
decisions and behavior that advance my own narrow ambitions
but harm the enterprise and the societies it serves.
· I will understand and uphold, both in letter and in spirit, the
laws and contracts governing my own conduct and that of my
enterprise.
· I will take responsibility for my actions, and I will represent
the performance and risks of my enterprise accurately and
honestly.
· I will develop both myself and other managers under my
supervision so that the profession continues to grow and
contribute to the well-being of society.
· I will strive to create sustainable economic, social, and
environmental prosperity worldwide.
· I will be accountable to my peers and they will be accountable
to me for living by this oath.
This oath I make freely, and upon my honor.
Source: http://mbaoath.org.
You will note that the oath refers to management as a profession
and it also addresses issues of responsibility in terms of
economic, social and sustainability.
Exercise 5 Are You ready to take the Oath?
Visit http://www.marketplace.org/topics/life/big-book/oath-

mbas-be-better-leaders, for an interview with MBA Oath
Founder Peter Escher, and then see if you are willing to take the
oath at http://mbaoath.org/take-the-oath/
As you undertake this course and work through your MBA
studies or other Masters programs, keep in mind the importance
of acting within the bounds of your expertise, treating others
with respect and behaving in a manner that befits a true
professional.
Required Reading
The following text readings are largely introductory chapters
that cover the definitions of ethics, morality and scope the
concepts of CSR, Sustainability and Professionalism.
Reading 1
Ferrell, O.C., Fraedrich, J., & Ferrell, L. (2015). Business
Ethics Ethical Decision making and Cases, Cengage Learning,
Stamford. Ch 1 & 2
The first two introductory chapters of the principal text provide
an overview of business ethics and its relationship to related
concepts of corporate governance and stakeholder relationships,
social responsibility that will be addressed later in the
course.Additional Reading
Reading 2
DeGeorge, R. (2010). Business ethics, 7th edn. Prentice Hall,
Upper Saddle River, N.J. Chapter 1 & 2
Richard DeGeorge is one of the pioneers of Business Ethics, not
only in the United States, but a major contributor worldwide.
His text is now in its 10th edition and previous editions are
easily accessed with similar content. These introductory
chapters provide an overview of ethics, morality and the
relationship to business activity. Note that in Chapter 2 on

morality, De George also discusses Relativism, an important
concept that is of great relevance to our subsequent unit on
culture and on Global ethics.
Journal Readings
Journal Reading 1
Segon, M.J. & Booth, C. (2010.) “Teaching Ethics: Embedding
Ethics or stand-alone subjects in MBA programs” The
Australian Journal of Professional and Applied Ethics, Vol. 10,
No. 2
This article will give you an understanding of why the CQU
School of Business and Law took the decision to include a
course in Business Ethics and Sustainability as a foundation
course of the MBA. It also highlights that educationally the
argument that ethics should be imbedded as themes throughout
others courses cannot be supported and there is no logical
reason why any other course should also be similarly embedded.
Journal Reading 2
Grassl, W. (2010). “Aquinas on management and its
development” Journal of Management Development, Vol. 29,
No. 7/8. pp. 706-715
This article presents the philosopher Thomas Aquinas'
psychological theory of action as guide for understanding
decision making in management. It provides a description of
Aquinas' views on the structure of the moral act it provides a
discussion on how this can be applied to business decision-
making.
Journal Reading 3Khurana, R., & S Nohria, N. (2008). “It's time
to make management a true profession”. Harvard business
review (11/2008; 86(10):70-7,
This important article by Harvard Scholars Khurana and Nohria

raises many of the issues outlined in the final sections of these
course notes. They argue that management should strive to
become a true profession. As you read this article consider the
challenges and problems that we canvassed regarding whether
management can ever be a true profession.
11
MGMT20134 | Week 1 | Page 8
School of Business and Law
CQUniversity Australia | CRICOS Provider Code: 00219C
Profession May.pdf

MGMT20134 Topic 4 (1).docx
MGMT20134
Business Ethics and Sustainability Topic 4 International
Business Ethics
Table of Contents
Introduction 2
Learning objectives 2
Overview 3
Transatonals MNCs 3
Ethical Issues in the International context
4
Bribery and corruption 5
Who is bribing and who is taking bribes 7
The cost of corruption 9
Corruption, culture, custom, bribery and relativism
10
Organisational approaches to global challenges
11
Major global initiatives: legislation
12
Guided Readings 16
Journal Readings 16
Introduction
The MBA is amongst the most recognised of all university
qualifications. Many refer to it as a type of managerial global
passport because its value, as a management qualification, is
recognised and understood by organisations all over the world.

We also need to recognise that business is not necessarily
practiced in the same way in different countries but is to a large
extent culture specific.
In Topic 3 we discussed the importance of managers having a
global mindset- a need to understand differences in cultures and
how that translates business to practice. We also distinguished
between business ethics and business etiquette and that the two
are not always the same. Donaldson and Dunfee (1999 p. 47)
identify that ‘the importance of cultural differences to business
are highlighted by Kluckhorn, Hofstede, Hamden-Turner and
Trompenaars, yet the ethical implications remain largely
unexplored”. Sanyal and Guvenli (2009) acknowledge that
national cultures may influence behaviour within organisations
which In turn influences the ethics of business executives
within that culture.
The purpose of this unit is explore the challenges of working in
a global context and to identify those ethical issues that
confront managers and employees when undertaking business
dealings in cultures whose practices may not align with their
own. Perhaps the one of the greatest challenges faced by
managers and leaders in an international context is the use of
bribery and corrupt practices which might facilitate business
dealings, but also has the potential to destroy company
reputations and individual careers.Learning objectives
This topic has the following learning objectives:
· To recognise the challenges of the international context and
the ethical issues that emerge
· To recognise the challenges of relativism when operating in an
international context
· To define and understand the concepts of bribery and
corruption
· To recognise the impacts of bribery and corruption on
economies and society.

· To consider organisational strategies that assist in the
minimisation of corrupt practices.
· To consider key international legislation that impacts on
managers and leaders.
Overview
7
As we highlighted in Topic 3 the concepts of relativism and
absolutism create challenges and problems in determining what
is the right thing to do in a particular context or time or culture.
Nowhere are these concepts more relevant and critical than in
the international business arena. The ethical challenges that
managers and leaders face when working in different cultures,
with different laws and standards are significant potentially
generating opportunities for both growth and risk.
What is striking is that many managers and leaders simply do
not understand these challenges and are unaware of some of the
legal frameworks that cover international business. They make
the mistake of either assuming that business is handled in the
same way as in their own country, or that the practices and
business cultures of other countries need to be followed- even if
it contradicts organisational policy or home country
laws.Transnationals and Country Options
Organisations operating in foreign countries are often presented
with the challenges of managing processes that are not
transparent and characterised by the use of facilitation
payments. Carroll and Buchholz (2015) suggest that a
multinational corporation (MNC) or multinational enterprise
(MNE) seeking to establish itself in a new country faces two
major challenges:
1. Achieving corporate legitimacy in an unfamiliar society.
2. Differing philosophies between MNCs and host countries
Home Country
Stakeholder Pressures
Host Country
Stakeholder Pressures

Standards
Practices
Ethics
Laws
Culture
Customs
System of
Government
Socioeconomic
System
Standards
Practices
Ethics
Laws
Culture
Customs
System of
Government
Socioeconomic
System
MNC

Ferrell, Fraedrich and Ferrell (2015) describe multi-nationals or
transnationals as public companies that operate on a global
scale, without significant ties to any one nation or region. They
are characterized by a global strategy of focusing on
opportunities throughout the world and are subject of much
ethical debate due to their size and financial power
Sanyal and Guvenli (2009) note that when organisations
establish a business presence in foreign countries, they may
adopt an ethnocentric approach whereby they utilise their
existing organisational values and practices based on their home
country’s practices or a polycentric approach which seeks to
adapt company approaches to the local practices of host
countries. Perlmutter (1969) originally identified three
international orientations that can be used to categorise an
organisation’s approach to their international operations- or key
international appointments, and in the later 1970s added a
fourth:
1. Ethnocentric: Few foreign subsidiaries have any
autonomy; strategic decisions are made at headquarters. Key
positions at the domestic and foreign operations are held by
headquarters’ management personnel. In other words,
subsidiaries are managed by expatriates from the home or parent
country (PCNs).
2. Polycentric: The MNE treats each subsidiary as a distinct
national entity with some decision-making autonomy.
Subsidiaries are usually managed by local or host country
nationals (HCNs) who are seldom promoted to positions at
headquarters. Likewise, PCNs are rarely transferred to foreign
subsidiary operations.

3. Geocentric: The MNE takes a worldwide approach to its
operations, recognizing that each part makes a unique
contribution with its unique competence. It is accompanied by a
worldwide integrated business, and nationality is ignored in
favour of ability. PCNs, HCNs and TCNs can be found in key
positions anywhere, including those at the senior management
level at headquarters and on the board of directors.
4. Regiocentric: This reflects the geographic strategy and
structure of the multinational. Personnel may move outside their
countries but only within a particular geographic region.
Regional managers may not be promoted to headquarter
positions but enjoy a degree of regional autonomy in decision-
making.
Ethical issues in the international context.
According to McDonald (2015) there are numerous ethical
issues and or principles that need to be considered in an
international context
· Rights –human rights and associated labour standards.
· Duty of care – associated with the protection of labour
standards.
· Respect – for culture and associated traditions, intellectual
property, as well as respect for the environment and the impact
that a company’s operations might have on ecological, social
and financial infrastructures in the countries within which they
operate.
· Transparency – openness in transactions and the avoidance of
bribery.
· Equity – address power inequities in international trade and
open access to markets on a more just and fair basis.
· Honesty – honesty is important for the building of trust when
dealing across cultures.
· Objectivity – not being swayed by factors that could create, or
be viewed as, conflicts of interest.
Carroll and Buchholz (2015) highlight several areas in the
international arena that raise ethical challenges including

Questionable Marketing and Plant Safety Practices. In many
countries, particularly developing nations, regulation on
advertising will allow many practices that would be
unacceptable in countries such as Australia, This includes
gender and stereotyping and targeting specific groups. Health
and safety laws also differ often with disastrous consequences
with companies meeting a host country standard that is well
below home country requirements. They cite the example of
Union Carbide plant safety practices in Bhopal India led to the
“worst industrial accident in history,” killing more than 8,000
people, and injuring 200,000 others. They also highlight
Sweatshops, Human Rights, Labour Abuses and Corruption,
Bribery,
and Questionable Payments as significant ethical challenges.
McDonald (2015) asserts that corruption and bribery is the
greatest impediment to conducting business in developing
countries.
Bribery and corruption
Bribery and Corruption are terms that are often used
interchangeably or typically are mentioned in the same context.
However, corruption is a general term that describes unethical
or immoral practices were as bribery is a specific form of
corruption. Ferrell Fraedrich and Ferrell (2015) identify that
bribery’s acceptance varies by country. They highlight that it
can be a challenge to determine what a bribe actually is or when
something is not a bribe. However, they also note that is and
that most developed countries recognize bribery is not
conducive to business.
Corruption comes in many forms:
· Bribes: payments to public officials to persuade them to do
something (quicker, smoother or more favourably).
· Collusion: secret agreement between contractors to increase
profit margin
· Fraud: falsification of records, invoices etc.
· Extortion: use of coercion or threats. E.g. a payment to
secure / protect ongoing service – (cf. collusive corruption

where both sides benefit)
· Favouritism/Nepotism in allocation of public office
· ‘Grand ‘corruption: high level, political corruption typically
involving individuals in high public office including politicians,
police, judges etc., and;
· ‘Petty’ corruption: corruption in public administration and/or
during implementation or continuing operation and maintenance
Is Corruption really that serious?
This short British news report from 2013 summarises some of
the key findings of Transparency International’s Global
Corruption report.
It is hard to dismiss the seriousness of the findings and the
impact on many developing economies.
https://www.youtube.com/watch?v=uJpZYQ7rHXQ
Dion (2010) notes that the process of corruption has not been
precisely described suggesting that most commentators focus on
an operational definition of corruption. He maintains that
actual forms of corruption are grounded in prior phenomena of
corruption, whether it is the corruption of principles, the
corruption of moral behaviour, the corruption of people, the
corruption of organizations, or the corruption of states.
Corruption as part of Culture?
If we hold the view that bribery and corruption are part of
culture, then we are saying that these are ethical norms.
Norms are informed by values or virtues.
If this is true then we are saying that at the core of these
cultures (and clearly not our own culture) are vices such as
lying, cheating, dishonesty etc.?
Can this really be true?

The moral dimension of corruption can also be explored from a
variety of ethical perspectives. As we identified in our first
unit, Ethics is concerned with the actions and practices that are
directed towards improving the welfare of people and the quest
for a good life and a concern for creating the conditions under
which a good life can be attained. Buchholz (1989) suggests
that a moral act is one that is judged as having intent and
consciousness, in other words moral praise or blame that can be
afforded to an individual for a decision or the consequences of
an act will be in part determined by the level of consciousness
of the act its consequences and the intent of the individual.
Apke (2001) defines bribery as gaining improper advantage for
business activities such as successful tenders, applications for
permits, customs permissions, taxation concessions and judicial
and legislative rulings. Ampratwum (2008, p.76) states that
corruption is ‘usually defined as the transgression of formal
rules governing the allocation of public resources by officials in
response to offers of financial gain or political support’.
McDonald (2015) describes bribery as a practice involving
payment or remuneration to a representative of a company with
the specific intent to influence them into doing things that
extend beyond the scope of their position or office (Adams &
Maine 1998). The UK’s Bribery act defines the action as giving
or receiving a financial or other advantage in connection with
the "improper performance" of a position of trust, or a function
that is expected to be performed impartially or in good faith.
Bribery does not have to involve cash or an actual payment
exchanging hands and can take many forms such as an
inappropriate or extremely valuable gift, lavish treatment during
a business trip or tickets to a major event.
Ferrell Fraedrich and Ferrell (2015) identify that many ethical
issues face managers every day, which includes marketing and
advertising issues, product liability and safety, privacy of
employee records, employee discipline and relations with
competitors, and intelligence gathering. They have classified

the ethical issues relevant to most organisations into four key
areas of conflicts of interest; honesty and fairness,
communications and relationships within the organization.
Ferrell Fraedrich and Ferrell (2015) suggest that a conflict of
interest exists when an individual chooses whether to advance
their own personal interest, those of the organization or some
other group. This is consistent with the definitions of bribery
and corruption offered earlier. Similarly, honesty and fairness
are described as the expectations that business people, at a
minimum, follow all applicable laws and regulations. In
addition, they should not knowingly harm customers, employee,
clients or competitors thought deception, misrepresentation or
coercion. The later points clearly are consistent with examples
of bribery and corruption. Whilst organizational relationships
considers areas such as confidential relations, meeting
obligations and responsibilities and not placing pressure of
others that may encourage them to take unethical actions.
Bribery and corruption clearly is based on taking advantage of
relationships.
Who is bribing and who is taking the bribes?
Perhaps the best authority on bribery and corruption is the non-
government agency Transparency International or TI as they are
commonly known.
TI’s strategy is to tackle corruption in both the political and
business arenas providing important information for identifying
and measuring corruption and the development of education and
strategies for combating it. They have over 100 chapters
worldwide which take action in support of their mission “to stop
corruption and promote transparency, accountability and
integrity at all levels and across all sectors of society”.
Whilst they publish many detailed reports and make a range of
resources available, two of their most important documents are
the Bribe Perception and Bribe Payers and Index which
highlight those countries where bribery is a problem and those
countries who contribute to the problem by offering bribes.
The 2014 Corruption Perception Index examined 127 countries

and surveyed managers about which countries has major and
least problems with bribery and corruption, and the 2011 bribe
payer’s index examined which countries bribe the most and
least.
Countries that Bribe Least
Netherlands
Switzerland
Belgium
Japan
Australia
Canada
Singapore
United Kingdom
United States
France
Countries that Bribe Most
Russia
China
Mexico
Indonesia
U Arab Emirates
Argentina
Saudi Arabia
Turkey
India
Taiwan
Least Corrupt or Non Accepting
Denmark
New Zealand
Finland
Sweden
Norway

Switzerland
Singapore
Netherlands
Luxembourg
Canada
Most Corrupt- Accepting Bribes
Somalia
Korea (North)
Afghanistan
Sudan
South Sudan
Iraq
Turkmenistan
Uzbekistan
Libya
Eritrea
Activity: Where is My Country?
Visit TI’s website and find your own country in terms of
corruption perception index and bribe payer’s index.
http://www.transparency.org/research
Examine the past 3 years for each and determine whether your
country has improved or worsened in term soft s level of
corrupt- both in terms of offering and accepting bribery

The cost of corruption
According to Transparency International’s 2008 Bribe Payers
Survey, one-quarter of the more than 2,700 business executives
surveyed blamed private sector corruption for impeding the
operations and growth of their businesses. Such findings
discredit the notion that corrupt acts give businesses a
competitive advantage and benefit the bottom-line.
In the most recent 2011 Bribe Payers Survey the likelihood of
firms in 19 specific sectors to engage in bribery and exert undue
influence on governments was identified:
· Public works and construction companies scored lowest in the
survey. This is a sector where bypassed regulations and poor
delivery can have disastrous effects on public safety.
· Oil and gas is also a sector seen as especially prone to bribery.
The extractives industry has long been prone to corruption risk
(www.transparency.org/bpi2011/press).
The World Bank Institute’s Global Governance Director Daniel
Kaufmann estimates that annual worldwide bribery to be about
US $1 trillion ( does not include the extent of embezzlement of
public funds (from central and local budgets), or from theft (or
misuse) of public assets) and does not account for the
significant losses in investment, private sector development,
and economic growth to a country, or to the increases in infant
mortality, poverty and inequality - all resulting from corruption
and misgovernance. Such findings discredit the notion that
corrupt acts give businesses a competitive advantage and
benefit the bottom- line.
The World Bank Institute of Global Governance highlights that
business growth is up to 3% higher in the absence of corruption,
national income figures tend to be higher by 2-3% and that
corrupt payments and bribes would equate to a 20% tax on
businesses.
In 2011, Dow Jones conducted a State of Anti-Corruption
Survey of 300 companies globally. It discovered major losses of
business as a result of corruption specifically when dealing in

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