Submitted to : Dr. Ambika Bhatia Assist.

Professor

Submitted By Bhupinder singh MBA-2 (sem-4) Roll no 2906

Punjabi University Regional Centre for IT& Management Mohali

1. Inroduction 2. Salient Features Of Ethical Dilemmas 3. The Need For Ethics 4. The Nature Of Ethics 5. Ethics And The Law 6. Stakeholders And Business Ethics 7. Societal Ethics 8. Government Policies On Ethics 9. A Framework For Ethical Decision Making Recognize An Ethical Issue 10.Factors, In Helping You Deal With An Ethical Dilemma 11.Resolving Ethical Dilemmas 12.Case Study 13.Steps To Resolving An Ethical Dilemma.

INTRODUCTION

What is Ethics?
Ethics (also known as moral philosophy) is a branch of philosophy which seeks to address questionsabout morality; that is, about concepts like good and bad, right and wrong, justice, virtue, etc. Ethics refers to the moral values that govern the appropriate conduct of an individual or group. Ethicsspeaks to how we ought to live, that is, how we ought to treat others and how we ought to run or manageour own lives.

Simply stated, ethics refers to standards of behavior that tell us how human beings ought to act in the many situations in which they find themselves-as friends, parents, children, citizens, businesspeople, teachers, professionals, and so on. Ethics refers to a system of moral principles a sense of right and wrong, and goodness and badness of actions and the motives and consequences of these actions. As applied to business firms, ethics is the study of good and evils, right and wrong and just and unjust actions of businessmen. Ethics is a body of principles or standards of human conduct that govern the behavior of individuals and groups. Ethics arise not simply from man's creation but from human nature itself making it a natural body of laws from which man's laws follow. Ethics is a branch of philosophy and is considered a normative science because it is concerned with the norms of human conduct, as distinguished from formal sciences such as mathematics and logic, physical sciences such as chemistry and physics, and empirical sciences such as economics and psychology. Ethics is seen as an individuals own personal attitude and a believe concerning what is right or wrong, good or bad. It is important to note that ethics reside within individuals and that organization doesnt have ethics. People have ethics. Consequently, its definition and understanding varies from person to person. These are not absolute, but are relative. Ethical behaviors are in the eye of beholder. What is right or wrong is a personal individual matter, but is still influenced by socially accepted norms. Right, and proper and fair are the ethical terms. It expresses a judgment about behavior towards people they felt to be just. Ethics are useful tools for sorting out the good and bad components within complex human interactions. Business ethics does not differ from generally accepted norms of good or bad practices. If dishonesty is considers to be unethical and immoral in the society, then any business man who is dishonest his or her employees, customers shareholders, or competitors is unethical and immoral person. Businessmen should not try to evolve their own principles to justify what is right and what is wrong. Ethics refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization. Business Ethics are the accepted principles of right or wrong governing the conduct of business people. Ethical decisions are those that are in accordance with those accepted principles of right and wrong, whereas and unethical decision in one that violates accepted principles. This is not as straightforward as it sounds Managers may face ethical dilemmas, which are situations where there is no agreement

over exactly what the accepted principles of right and wrong are, or where none of the available alternatives seems ethically acceptable

It is helpful to identify what ethics is NOT

Ethics is not the same as feelings. Feelings provide important information for our ethical choices. Some people have highly developed habits that make them feel bad when they do something wrong, but many people feel good even though they are doing something wrong. And often our feelings will tell us it is uncomfortable to do the right thing if it is hard.

Ethics is not religion. Many people are not religious, but ethics applies to everyone. Most religions do advocate high ethical standards but sometimes do not address all the types of problems we face. Ethics is not following the law. A good system of law does incorporate many ethical standards, but law can deviate from what is ethical. Law can become ethically corrupt, as some totalitarian regimes have made it. Law can be a function of power alone and designed to serve the interests of narrow groups. Law may have a difficult time designing or enforcing standards in some important areas, and may be slow to address new problems. Ethics is not following culturally accepted norms. Some cultures are quite ethical, but others become corrupt -or blind to certain ethical concerns (as the United States was to slavery before the Civil War). "When in Rome, do as the Romans do" is not a satisfactory ethical standard. Ethics is not science. Social and natural science can provide important data to help us make better ethical choices. But science alone does not tell us what we ought to do. Science may provide an explanation for what humans are like. But ethics provides reasons for how humans ought to act. And just because something is scientifically or technologically possible, it may not be ethical to do it.

IS ETHICS JUST ABOUT HAVING THE RIGHT PRINCIPLES?

When people respond intuitively to the question What is ethics? they tend to identify ethics with principles which distinguish right and wrong. And this is correct as far as it goes. However, the kinds of situations which demand ethical action motivated by sound ethical principles also require a specific kind of thinking, namely ethical reflection.
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An Ethical dilemma is a complex situation that often involves an apparent mental conflict between moral imperatives, in which to obey one would result in transgressing another. This is also called an ethical paradox since in moral philosophy, paradox often plays a central role in ethics debates. "Love your neighbour" is sometimes in contradiction to an armed rapist: if he succeeds, you will not be able to love him. But to pre-emptively restrain them is not usually understood as loving. This is one of the classic examples of an ethical decision clashing or conflicting with an organismic decision, one that would be made only from the perspective of animal survival: an animal is thought to act only in its immediate perceived bodily self-interests when faced with bodily harm, and to have limited ability to perceive alternatives - see fight-orflight response.

Ethics in business has to do with making the right choices - often there is no apparent one right way and one must choose the best in the circumstances. Managers are sometimes faced with business choices that create tensions between ethics and profits, or between their private gain and the public good. Any decision where moral considerations are relevant can potentially give rise to an ethical dilemma, for example: A decision that requires a choice between rules A decision where there is no rule, precedent or example to follow A decision that morally requires two or more courses of action, which are in practice incompatible with each other. A decision that should be taken in ones self-interest, but which appears to violate a moral principle that you support. It is the imperative to act, combined with the uncertainty of which action to take, that causes a dilemma.

Salient Features of ethical dilemmas

Uncertain outcomes Multiple choice and alternatives Mixed consequences Direct/Indirect involvement

THE NEED FOR ETHICS

If your workplace lacks ethical standards, your employer risks losing valuable employees and customers and possibly even more. Federal laws impose heavier penalties on employers convicted of criminal wrongdoing if they cannot prove that theyve made efforts to implement ethical measures to prevent and deter illegal conduct. Some of the primary forms of employee misconduct or unethical behavior include the following:

 Misrepresenting time or hours worked; Lying to supervisors; Lying to co-workers, customers, vendors, or the public; Misuse of your employers assets; and Lying on reports or falsifying records. As you can see, there is a widespread need for ethics in your workplace. A code of ethics can provide guidelines for your conduct and help improve the overall atmosphere of your workplace. Your employers workplace ethics policy deters employee misconduct, avoids conflicts of interest, helps keep you and your co-workers honest, provides you with guidelines for resolving sensitive issues, and helps make clear that all employees are responsible for their unethical behavior.

The Nature of Ethics

Suppose you see a person being mugged in the street. How will you behave? Will you act in some way to help even though you risk being hurt? Will you walk away? Perhaps you might adopt a middle-of-the-road approach and not intervene but call the police instead? Does the way you act depend on whether the person being mugged is a fit male, an elderly person, or even a street person? Does it depend on whether there are other people around, so you can tell yourself, Oh well, someone else will help or call the police. I dont need to? Ethical Dilemmas The situation described above is an example of an ethical dilemma, the quandary people find themselves in when they have to decide if they should act in a way that might help another person or group, and is the right thing to do, even though doing so might not be in their own self-interest. A dilemma may also arise when a person has to decide between two different courses of action, knowing that whichever course he or she chooses will result in harm to one person or group even though it may benefit another. The ethical dilemma here is to decide which course of action is the lesser of two evils.

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People often know they are confronting an ethical dilemma when their moral scruples come into play and cause them to hesitate, debate, and reflect upon the rightness or goodness of a course of action. Moral scruples are thoughts and feelings that tell a person what is right or wrong; they are a part of a persons ethics. Ethics are the inner-guiding moral principles, values, and beliefs people use to analyze a situation and decide what is right. At the same time, ethics also indicate what inappropriate behavior is and how a person should behave to avoid doing harm to another person. The essential problem in dealing with ethical issues, and thus solving moral dilemmas, is that there are no absolute or indisputable rules or principles that can be developed to decide if an action is ethical or unethical. Put simply, different people or groups may dispute which actions are ethical or unethical Depending on their own personal self-interest and specific attitudes, beliefs, and values. How, therefore, are we and companies and their managers to decide what is ethical and act accordingly?

Ethics and the Law

The first answer to this question is that society as a whole, using the political and legal process, can lobby for and pass laws that specify what people can and cannot do. In the last chapter, for example, we examined the many different kinds of laws that exist to govern business. Laws also specify what sanctions or punishments will follow if those laws are broken. Different groups in society lobby for laws to be passed based on what they believe is right or wrong. Once a law is

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passed, the decision about how to behave in a certain situation moves from the personally determined ethical realm to the socially determined legal realm. If you do not conform to the law, you can be prosecuted and punished. Changes in Ethics over Time Neither laws nor ethics are fixed principles cast in stone, however. Both change over time. As a societys ethical beliefs change, its laws change to reflect them. it was considered both ethical and legal to own slaves in ancient Rome and Greece and in the United States until the nineteenth century. Ethical views regarding whether slavery was morally right subsequently changed, however, and slavery was later outlawed. In most societies today behaviors like murder, theft, slavery, and rape are considered unacceptable and prohibited. But many other kinds of behaviors are open to dispute when it comes to whether they are ethical or should be made illegal or not .

Some people might believe that a particular behavior such as smoking tobacco or possessing guns is unethical and should be made illegal. Others might argue that it is up to individual people if they want to own guns or smoke. In the United States it is, of course, illegal to possess or use marijuana even though it has been shown to have many medical uses. Some cancer sufferers and AIDS patients find that marijuana relieves many of the side effects of medical treatment, like nausea and lack of appetite. Yet, in the United States, the Supreme Court has held that the federal government can prohibit doctors from prescribing marijuana to these patients, so their suffering goes on. By contrast in Canada there has been a widespread movement to decriminalize marijuana, and in other countries, marijuana is perfectly legal. The point is laws can and do change as peoples ethical beliefs change. For example, in Britain in 1830, there were over 350 different crimes for which a person could be executed, including sheep stealing. Today there are none. Capital punishment has been abolished. As you can see, both ethical and legal rules are relative: No absolute standards exist to determine how we should behave. Consequently, we frequently get caught in moral dilemmas and are continually faced with ethical choices. It is a part of life. Companies and their managers are no different. Some make the right choices, while others do not. In the early 2000s, a rash of scandals occurred at major U.S. companies, including Enron, WorldCom, Tyco, Merrill Lynch, and others. Managers in some of these companies clearly broke the law and defrauded investors.

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In other cases, managers used legal loopholes to divert hundreds of millions of dollars in corporate money for their own use. At WorldCom, for example, former CEO Bernie Ebbers used his position to place six of his friends on WorldComs 13-member board of directors. Obviously these six people voted in favor of Ebberss recommendations to the board. As a result, Ebbers received huge stock options and a personal loan of over $150 million from WorldCom. In return, his supporters were well rewarded for being directors. Among other perks, Ebbers allowed them to use WorldComs corporate jets for a minimal feesomething that saved them hundreds of thousands of dollars each year. Although not all of the activities Ebbers and other corporate wrongdoers engaged in were illegal, this does not make these behaviors ethical. In many cases societies later pass laws to close the loopholes used by unethical people, such as Ebbers and Rockefeller,who gain at the expense of others. But ordinary people, not just corporate executives make everyday decisions in the course of business about what is ethical and what is not. A case in point is the pirating of digital products using the Internet, as Business in Action discusses.

Stakeholders and Business Ethics

Just as people have to work out the right and wrong ways to act, so do companies. When the law does not specify how companies should behave, their managers must make these decisions. Who are the people or groups affected by a companys business decisions? If a company behaves in an ethical way, how does this benefit people and society? Conversely, how are people harmed by a companys unethical actions? The people and groups affected by the way a company does business are called its stakeholders. Stakeholders supply a company with its productive resources. As a result, they have a claim on and stake in the company. Because stakeholders can directly benefit or be harmed by its actions, the business ethics of a company and its managers are important to them. Who are a companys major stakeholders? What do they contribute to a company, and what do they claim in return? Next we examine the claims of these stakeholders stockholders, managers, employees, suppliers and distributors, customers, the community, and the nation-state.

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Stockholders
Stockholders have a claim on a company because when they buy its stock, or shares, they become its owners. This stock grants them the right to receive some of the companys profits in the form of dividends. And they expect to get these dividends. In 2003, for example, Microsoft had over $46 billion in cash on hand to fund its future operations. Under pressure from its shareholders, Microsoft declared a dividend of 31 cents per share be paid to the owners of its 5 billion shares. (Bill Gates received $100 million in dividends based on his own personal stockholdings.) Stockholders are interested in the way a company operates because they want to maximize their return on their investment. Thus, they watch the company and its managers closely to ensure they are working diligently to increase the companys profitability. Stockholders also want to ensure that managers are behaving ethically and not risking investors capital by engaging in actions that could hurt the companys reputation and quickly bankrupt it. Once mighty Enron took less than one year to fall after the covert Stakeholders and Business Ethics Customers Managers Company Stockholders Employees Suppliers and Distributors Community, Society, and Nation-State

Types of Company Stakeholders stakeholders People or groups of people who supply a company with its productive resources and thereby have an interest in how the company behaves. actions of its top managers came to light. The Enron tragedy was brought about by a handful of greedy top managers who abused the trust of stakeholders. A number of pension funds that had invested heavily in Enron stock were especially hard hit, adversely affecting thousands of retirees. The

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collapse of Enron is also said to have precipitated the crash of the entire stock market in 2001, wiping out the savings of millions of Americans.

Managers
Managers are a vital stakeholder group because they are responsible for using a companys financial capital and human resources to increase its profitability and stock price. Managers have a claim on an organization because they bring to it their skills, expertise, and experience. They have the right to expect a good return or reward by investing their human capital to improve a companys performance. Such rewards include good salaries and benefits, the prospect of promotion and a career, and stock options and bonuses tied to the companys performance. As we discussed in Chapter 3, managers must be motivated and given incentives to work hard in the interests of stockholders. Their behavior must also be scrutinized to ensure they do not behave illegally or unethically and pursue goals that threaten stockholders (and employees) interests. Unfortunately, we have seen in the 2000s how easy it is for top managers to find ways to ruthlessly pursue their self-interest at the expense of stockholders and employees because laws and regulations were not strong enough to force them to behave ethically.

Employees
A companys employees are the hundreds of thousands of people who work in its various functions, like research, sales, and manufacturing. Employees expect that they will receive rewards consistent with their performance. One principal way a company acts ethically toward employees and meets their expectations is by creating an occupational structure that fairly and equitably rewards them for their contributions. Companies, for example, need to develop recruitment, training, performance appraisal, and reward systems that do not discriminate between employees and that employees believe are fair.

Suppliers and Distributors

No company operates alone. Every company relies on a network of other companies that supply it with the inputs it needs to operate. Companies also depend on intermediaries such as wholesalers and retailers to distribute its products to the final customer. Suppliers expect to be paid fairly and promptly for their inputs; distributors expect to receive quality products at agreedupon prices. Once again, many ethical issues arise in the way companies contract and interact

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with their suppliers and distributors. Important issues concerning how and when payments are to be made or product quality specifications are governed by the terms of the legal contracts a company signs with its suppliers and distributors. Many other Customers are often regarded as the most critical stakeholders: If a company cannot persuade them to buy its products, it cannot stay in business. Thus, managers and employees must work to increase efficiency and effectiveness in order to create loyal customers and attract new ones. They do so by selling customers quality products at a fair price and providing good after-sales service. They can also strive to improve their products over time. Many laws exist that protect customers from companies that attempt to provide dangerous or shoddy products. Laws exist that allow customers to sue a company that produces a bad product, such as a defective tire or vehicle, causing them harm. Other laws force companies to clearly disclose the interest rates they charge on purchasesa cost that customers frequently do not factor into their purchase decisions. Every year thousands of companies are prosecuted for breaking these laws, so buyer beware is an important business rule customers must follow.

Community, Society, and Nation

As we have seen in previous chapters, the effects of business activity permeate all aspects of the community, society, and nation in which it takes place. Community refers to the physical location in which a company is located, like a city, town, or neighborhood. A community provides a company with the physical and social infrastructure that allows it to do business; its utilities and labor force; the homes in which its managers and employees live; the schools, colleges, and hospitals that service their needs, and so on. Through the salaries, wages, and taxes it pays, a company contributes to the economy of the town or region in which it operates and often determines whether the community prospers or suffers. Similarly, a company affects the prosperity of a society and a nation and, to the degree that a company is involved in global trade, all of the countries in which it operates.

Although the way an individual McDonalds restaurant operates might be of small consequence, the combined effects of the way all McDonalds (and other fast-food companies) do business are enormous. In the United States alone, over 500,000 people work in the fast-food industry, and

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many thousands of suppliers like farmers, paper cup manufacturers, builders, and so on, depend on it for their livelihood. Small wonder then, that the ethics of the fast-food business are scrutinized closely. The industry is the major lobbyer against attempts to raise the minimum wage, for example, because a higher minimum wage would substantially increase its operating costs However, responding to protests about chickens raised in cages in which they cannot Move their wings, McDonaldsthe largest egg buyer in the United Statesissued new ethical guidelines concerning cage sizes and related matters. Its egg suppliers must abide by these guidelines if they are to retain its business. Business ethics are also important because the failure of companies can have catastrophic effects on the communities in which they operate, and, if the businesses are large enough, entire regions and evens nations. The decision of a large company to pull out of a community can seriously threaten its future. Some companies attempt to improve their profits by engaging in actions that, although not illegal, can hurt communities and nations. One of these actions is pollution. As we discussed in the last chapter, many U.S. companies reduce costs by trucking their waste to Mexico where it is legal to dump it in the Rio Grande. The dumping pollutes the river from the Mexican side, and the effects are increasingly being felt on the U.S. side, too. Business Ethics Some companies, like Merck, Johnson & Johnson, Prudential Insurance, Fannie Mae, and Blue Cross-Blue Shield, are well known for their ethical business practices. Other companies, like Arthur Andersen, Enron, and WorldCom, are either out of business or struggling to survive. What explains such differences between the business ethics of these companies and their managers? There are four main determinants of differences in business ethics between companies and countries: societal ethics, occupational ethics, individual ethics, and organization al Ethics

Societal Ethics
Societal ethics are standards that govern how members of a society should deal with one another in matters involving fairness, justice, poverty, and the rights of individuals. Societal ethics emanate from a societys laws, customs, and practices, and from the unwritten values and norms that influence how people interact with each other. Most people have internalized (made a part of their moral fabric) certain values, beliefs, and norms that specify how they should behave when

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confronted with an ethical dilemma. In other words, an internal compass of sorts guides their behavior. Societal ethics vary among societies. Countries like Germany, Japan, Sweden, and Switzerland are well known as being some of the most ethical countries in the world, with strong values about social order and the need to create a society that protects the welfare of all people. In other countries the situation is very different. In many economically poor countries bribery is standard practice to get things donesuch as getting a telephone installed or a contract awarded. in the United States and other economically advanced countries, bribery is considered unethical and is illegal. IBM came under fire after managers in its Argentina division paid a $6 million bribe to land a $250 million contract servicing the computers of a large, state-owned bank. IBM won the contract, but the managers who arranged the bribe were fired. Although bribes such as these are not necessarily illegal under Argentine law, IBMs organizational rules forbid the practice. Moreover, the payment of bribes violates the U.S. Foreign Corrupt Practices Act, which prohibits U.S. companies from paying bribes in order to win contracts abroad. It also makes companies liable for the actions of their foreign managers, and allows companies found in violation to be prosecuted in the United States. By firing the managers, IBM signaled that it would not tolerate unethical behavior by any of its employees, and it continues today to take a rigorous stance toward ethical issues. Countries also differ widely in their beliefs about appropriate treatment for their employees. In general, the poorer a country is, the more likely employees are to be treated with little regard. One issue of particular ethical concern that has set off protests around the world is the use of child labor, discussed in Business in Action. Business Ethics and Social Responsibility Ethics is the study and practice of decisions about what is good, or right. Ethics guides us when we are wondering what we should be doing in a particular situation. Business ethics is the application of ethics to the special problems and opportunities experienced by businesspeople. For example, as a business manager, you might someday decide what is best for Nike and the various people affected by decisions at Nike. Is the company doing the right thing when it attempts to reduce costs of production by having its shoes assembled in countries where the working conditions are very substandard compared to those in the United States? Such questions present businesses with ethical choices, each of which has advantages and disadvantages. An

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ethical dilemma is a problem about what a firm should do for which no clear, right decision is available. Reasonable people can expect to disagree about optimal solutions to ethical dilemmas. For example, imagine yourself in the position of a business manager at Wells Fargo Bank. You know that providing bank accounts for customers has costs attached to it. You want to cover those costs by charging the customers the cost of their checking accounts. By doing so, you can preserve the banks revenue for shareholders and employees of Wells Fargo. So far, the decision seems simple. But an ethical dilemma soon appears. You learn from recent government reports that 12 million families cannot afford to have bank accounts when they are charged a fee to maintain one. You want to do the right thing in this situation. But what would that be? The study of business ethics can help you resolve this dilemma by suggesting approaches you can use that will show respect for others while maintaining a healthy business enterprise. Making these decisions would be much easier if managers could focus only on the impact of decisions on the firm. If, for example, a firm had as its only objective the maximization of profits, the right thing to do would be the option that had the largest positive impact on the firms profits But businesses operate in a community. Communities have expectations for behavior of individuals, groups, and businesses. Different communities have different expectations of businesses. Trying to identify what those expectations are and deciding whether to fulfill them complicate business ethics. The community often expects firms to do much more for it than just provide a useful good or service at a reasonable price. For example, a community may expect firms to resist paying bribes, even when the payment of such fees is an ordinary cost of doing business in certain global settings . The social responsibility of business consists of the expectations that the community imposes on firms doing business inside its borders. These expectations must be honored to a certain extent, even when a firm wishes to ignore them, because firms are always subject to the implicit threat that legislation will impose social obligations on them. So, if the community expects businesses to obey certain standards of fairness even when the standards Business Law and Business Ethics Before business managers consider the social responsibilities of firms in their communities, they need to gather all the relevant facts. Nikes decision about where and how to manufacture their shoes depends on a huge array of facts: alternative costs, the legal framework in each relevant country, the social responsibilities of firms in the various jurisdictions unemployment rates, and levels of literacy among potential workers, just to name a few. But experienced managers know

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that assembling the facts is just the beginning of a thoughtful business decision. Next, it makes sense to ask, Is it legal to go forward with this decision? The legality of the decision is the minimal standard that must be met. But the existence of that minimum standard is essential for the development of business ethics. To make this point, lets take a look at the growing practice of bribery in the absence of such legal standards. In some countries businesses must pay bribes to receive legitimate supplies. Though the businessperson may be morally opposed to paying the bribes, the supplies are necessary to stay in business and there may be no other means of obtaining them. Thus, foreign companies face an ethical dilemma: They must decide whether to pay bribes or find alternative sources of supplies. For instance, when McDonalds opened its doors in Moscow, it made arrangements to receive its supplies from foreign providers. These arrangements ensured that the franchise did not have to engage in questionable business practices.

ETHICS AND LAW

Laws and ethics have common aim- defining proper and improper behavior. But the two are not quite same. Laws are the societys attempt to formalize that is to reduce to written rules- idea about what is right and what is wrong in various walks of like. However, it is rarely possible for written rules to capture all the sublet variations that people give to ethics. Ethical concepts are more complex than writing rules. Ethics deals with human dilemmas that frequently go beyond the formal language of laws and the meanings given to legal rules. Similarities and differences apart, legal rules help promote ethical behavior in organization. Some of the acts which seek to ensure fair business practices in our country are the followings:

The Foreign Exchange Regulation Act, 1973, now replaced by FEMA. The Companies Act, 1956. The Monopolies and Restrictive Trade Practices Act, 1969. The consumer Protection Act, 1986. The Environment Protection Act, 1986. The Essential Commodities Act, 1955.

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Government policies on ethics

Cultural Expression as a Human Right :- Although there is no specific mention of culture or ethnicity, the UN Universal Declaration of Human Rights provides for the equality of individuals, prohibits discrimination based on race/religion/language, and freedom of religion. These protections are generally accepted to cover the right to collective protection of culture. Cultural Expression as reflected in Social Work Ethics:- The IFSWs Declaration of Ethical Principles recognizes in its introduction that IFSW guidelines should be adapted to differing cultural contexts. These principles prohibit discrimination on any basis (race, religion, language, etc) and adhere to the UN declaration of human rights. It can be assumed that these ethics encourage social workers to support their governments adopting policies that fit these principles. Government policy on cultural diversity can have a major impact on the practice of Social Work Of course, while social workers may refer to such broad principles as the UN Declaration of Human Rights and the IFSW Declaration of Ethical Principles when dealing with cultural diversity, these laudable standards do not always translate into reality on the ground level of day-to-day practice. Both individual and structural barriers may exist. Being human themselves, social workers bring any number of biases to their work and they also practice within the context of government policy on cultural diversity. Governments world-wide have taken a variety of approaches to addressing cultural diversity in policy. And since social workers often work in government regulated settings, have their profession regulated by legislation and deal with the effects of other government policy on their clients, government policy without a doubt is a key shaping factor of practice. If cultural rights are not being respected, government policy will shape the recourses available to social workers and the people with whom they work. How government policies affect the ethics Sometimes it's easy to see when things go wrong in government: Elected officials take bribes; candidates lie about their opponents; city officials make important public decisions in secret meetings. Other times, the right thing is not so obvious: Should a councilmember represent the wishes of the majority, even when he or she thinks the majority is wrong? Is it acceptable for a governor to appoint a family member to his or her cabinet if the appointee is the best person for the job? Whether the ethical issues are obvious or complicated, they are easier to address if public

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servants have given some thought to the kinds of dilemmas they will confront before a crisis occurs. The materials in this "primer" on government ethics are intended to provide elected officials, government workers, and ordinary citizens with an introduction to the basic questions that are likely to come up in the conduct of public business.

A Framework for Thinking Ethically We all have an image of our better selves-of how we are when we act ethically or are "at our best." We probably also have an image of what an ethical community, an ethical business, an ethical government, or an ethical society should be. Ethics really has to do with all these levelsacting ethically as individuals, creating ethical organizations and governments, and making our society as a whole ethical in the way it treats everyone. Why Identifying Ethical Standards is Hard There are two fundamental problems in identifying the ethical standards we are to follow: On what do we base our ethical standards? How do those standards get applied to specific situations we face?

If our ethics are not based on feelings, religion, law, accepted social practice, or science, what are they based on? Many philosophers and ethicists have helped us answer this critical question. They have suggested at least five different sources of ethical standards we should use. Five Sources of Ethical Standards The Utilitarian Approach Some ethicists emphasize that the ethical action is the one that provides the most good or does the least harm, or, to put it another way, produces the greatest balance of good over harm. The ethical corporate action, then, is the one that produces the greatest good and does the least harm for all who are affected-customers, employees, shareholders, the community, and the environment. Ethical warfare balances the good achieved in ending terrorism with the harm done to all parties through death, injuries, and destruction. The utilitarian approach deals with consequences; it tries both to increase the good done and to reduce the harm done. The Rights Approach Other philosophers and ethicists suggest that the ethical action is the one that best protects and respects the moral rights of those affected. This approach starts from the belief that humans have a dignity based on their human nature per se or on their ability to choose freely what they do with their lives. On the basis of such dignity, they have a right to be treated as ends and not

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merely as means to other ends. The list of moral rights -including the rights to make one's own choices about what kind of life to lead, to be told the truth, not to be injured, to a degree of privacy, and so on-is widely debated; some now argue that non-humans have rights, too. Also, it is often said that rights imply duties-in particular, the duty to respect others' rights. The Fairness or Justice Approach Aristotle and other Greek philosophers have contributed the idea that all equals should be treated equally. Today we use this idea to say that ethical actions treat all human beings equally-or if unequally, then fairly based on some standard that is defensible. We pay people more based on their harder work or the greater amount that they contribute to an organization, and say that is fair. But there is a debate over CEO salaries that are hundreds of times larger than the pay of others; many ask whether the huge disparity is based on a defensible standard or whether it is the result of an imbalance of power and hence is unfair. The Common Good Approach The Greek philosophers have also contributed the notion that life in community is a good in itself and our actions should contribute to that life. This approach suggests that the interlocking relationships of society are the basis of ethical reasoning and that respect and compassion for all others-especially the vulnerable-are requirements of such reasoning. This approach also calls attention to the common conditions that are important to the welfare of everyone. This may be a system of laws, effective police and fire departments, health care, a public educational system, or even public recreational areas. The Virtue Approach A very ancient approach to ethics is that ethical actions ought to be consistent with certain ideal virtues that provide for the full development of our humanity. These virtues are dispositions and habits that enable us to act according to the highest potential of our character and on behalf of values like truth and beauty. Honesty, courage, compassion, generosity, tolerance, love, fidelity, integrity, fairness, self-control, and prudence are all examples of virtues. Virtue ethics asks of any action, "What kind of person will I become if I do this?" or "Is this action consistent with my acting at my best?" Putting the Approaches Together Each of the approaches helps us determine what standards of behavior can be considered ethical.

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There are still problems to be solved, however. The first problem is that we may not agree on the content of some of these specific approaches. We may not all agree to the same set of human and civil rights. We may not agree on what constitutes the common good. We may not even agree on what is a good and what is a harm . The second problem is that the different approaches may not all answer the question "What is ethical?" in the same way. Nonetheless, each approach gives us important information with which to determine what is ethical in a particular circumstance. And much more often than not, the different approaches do lead to similar answers.

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Making Decisions Making good ethical decisions requires a trained sensitivity to ethical issues and a practiced method for exploring the ethical aspects of a decision and weighing the considerations that should impact our choice of a course of action. Having a method for ethical decision making is absolutely essential. When practiced regularly, the method becomes so familiar that we work through it automatically without consulting the specific steps. The more novel and difficult the ethical choice we face, the more we need to rely on discussion and dialogue with others about the dilemma. Only by careful exploration of the problem, aided by the insights and different perspectives of others, can we make good ethical choices in such situations. We have found the following framework for ethical decision making a useful method for exploring ethical dilemmas and identifying ethical courses of action.

A Framework for Ethical Decision Making Recognize an Ethical Issue

situation be damaging to someone or to some group? Does this decision involve a choice between a good and bad alternative, or perhaps between two "goods" or between two "bads"? o, how? Evaluate Alternative Actions

Approach) e Rights Approach)

Common Good Approach) want to be? (The Virtue Approach) Make a Decision and Test It

-or told a television audience-which option I have chosen, what would they say? Act and Reflect on the Outcome

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of all stakeholders?

There are 7 It is helpful to identify what ethics is NOT

choices. Some people have highly developed habits that make them feel bad when they do something wrong, but many people feel good even though they are doing something wrong. And often our feelings will tell us it is uncomfortable to do the right thing if it is hard.

religions do advocate high ethical standards but sometimes do not address all the types of problems we face.

standards, but law can deviate from what is ethical. Law can become ethically corrupt, as some totalitarian regimes have made it. Law can be a function of power alone and designed to serve the interests of narrow groups. Law may have a difficult time designing or enforcing standards in some important areas, and may be slow to address new problems. others become corrupt -or blind to certain ethical concerns (as the United States was to slavery before the Civil War). "When in Rome, do as the Romans do" is not a satisfactory ethical standard. make better ethical choices. But science alone does not tell us what we ought to do. Science may provide an explanation for what humans are like. But ethics provides reasons for how humans ought to act. And just because something is scientifically or technologically possible, it may not be ethical to do it.

Factors, In Helping You Deal With An Ethical Dilemma.

1. Recognize

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2. Facts 3. Options 4. Test 5. Decide 6. Check 7. Action Step 1: Recognizing the DilemmaA friend of mine whom I was fairly close to was
stealing office supplies from work. I noticed Karen taking computer paper, pencils, pens, etc. I knew she was using them for personal use, not for work-related use. This is where my dilemma came in: Do I say something to her and risk her becoming angry? Do I go to my boss and Karen be fired? Do I ignore the stealing and let it continue? I didnt want to ruin my friendship, but I knew this was wrong.

Step 2: Get the Facts

Is she truly taking it home or what is she really doing with it after work? Does she truly think this is immoral? What is going on in her life to make her want to steal and not go buy her own? Is she struggling financially?

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I started to watch her; I watched her leave from work and study what she did with the merchandise. I started to take notes on what day and what time she took stuff.

Step 3: Identify Your Options I could confront her about it and risk losing a friendship. I could tell my boss about it and my friend not know I was the one who told. I could tell my co-workers and ask them what to do, have one of them confront her. I could ignore it. I could put a spreadsheet by the supplies and have my co-workers record what supplies they are taking (when and why). If the amount taken matches and each person does not take more than necessary then I will let it go. If not, then I will report to the boss.

Step 4: Test each option: Is it legal? Is it beneficial?

Confronting her: It is legal. Will it be beneficial? I am not sure, she could decide to steal the products when nobody else is there, end our friendship, and create a poor work environment for both of us. Telling my boss: It is legal. I think this would be beneficial because my boss could end it without an argument between Karen and I. Telling my co-workers: Legal, but I dont think it would be beneficial. This would cause more office drama, rumors, and bad feelings at work. Ignoring it: Legal in a way, but ignoring it is just as bad as doing in my opinion. This would definitely not be beneficial. Karen is doing something illegal and wrong. I saw it, which makes me responsible to do the right thing. Putting up an inventory sheet: Legal and beneficial, but would have to get bosss permission. Also, this could cause office rumors regarding the sheet (why is it up, whos stealing, etc

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 Step 5: Decide Which Option to Follow I chose to talk to Karen; ask her what is going on and why she is doing that. She is a very kind and honest person, why would she behave so erroneously? I will keep a close eye and keep an eye on the supplies; make sure she quit. Make sure she isnt fooling herself into thinking this is okay and not a big deal. There is a TED Talk that discusses our society and why we think cheating and stealing is okay sometimes.

Step 6: Double-check with Spotlight Questions:

How will I feel if my family finds out about my decision? They already know what is going on and I have talked to them about it. They said I should go to my boss. How will I feel if this is reported in the newspaper? I will feel fine. I am not ignoring it and I am trying to tell my friend and my boss without ruining my friendship or work atmosphere. I should tell my boss first, but I believe people are moral and honest. I think if I confront her about it, she will burst out crying, tell me how ashamed she is, and stop stealing. How will I feel if my boss finds out (if Karen gets her act together and I dont tell my boss)? I will probably be afraid Karen will be fired and afraid I will receive disciplinary action since I did not tell my employer first

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Step 7: Take Action

Now for the good part! I talked to Karen about her actions after work in the parking lot. We sat down in the back of my truck and discussed why she did it. She explained she is having financial trouble and her kids needed supplies for school and homework. I explained I would help her out with money; I am not rich or anything, but she cant be saving that much with stealing computer paper. I explained that this is wrong and she cant be doing this. I said, You cant be stealing from work; they will make you pay for all the stuff you stole and fire you. You have two kids and a husband to support. He is out of work right now and you are the bread-winner. You cant risk losing your job! She agreed and agreed not to steal again. She knew it was wrong but felt there were no other options. She told me she would tell our boss what she did and will work extra hours undocumented to make up for the items she stole As you can see, this worked out fairly well for me; I was able to talk to her and she told our boss herself. Karen was not fired, but she did have to pay for the supplies she stole. Our employer trusted Karen to tell them how much she stole because she was up front and honest with them about her stealing. It worked out better for all of us. There are not a lot of ethical dilemma stories like this one, which is why I chose it!

Resolving ethical dilemmas

These case studies are compatible with the ethical codes of the CCAB member bodies, which are derived from the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants (IESBA).4 The case studies illustrate the application of the conceptual framework approach to resolving ethical dilemmas. This approach focuses on safeguarding the fundamental principles of: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.

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In order to do so, it is important to be alert to situations that may threaten these fundamental principles. Identified threats need to be evaluated and managed, to ensure that they are either eliminated or reduced to an acceptable level. Threats may arise as a result of any of the following: self-interest: the threat that a financial or other interest will inappropriately influence your judgement or behavior self-review: the threat that you will not properly evaluate the results of a previous judgement made or service performed by you (or someone else within your practice) when forming a judgement as part of providing a current service advocacy: the threat that you will promote a position (usually your clients) to the point that your objectivity is compromised familiarity: the threat that, due to a long or close relationship with someone, you will be too sympathetic to that persons interests, or too accepting of their work intimidation: the threat that you will be deterred from acting objectively because of actual or perceived pressures, including attempts to exercise undue influence over you.

When resolving an ethical conflict, consider carefully whether other parties could or should be involved in discussions and, if appropriate, how those parties should be approached. You should keep in mind confidentiality obligations. As a professional accountant in public practice, you may find yourself under significant time pressure as you try to satisfy the competing demands of your clients. You could be expected to spend less time discharging your duties than you feel is actually required, and this could, in turn, give rise to a risk that any ethical issues that arise will not be adequately considered. If you are facing, or think you might be facing, an ethical dilemma, you may wish to seek advice from a trusted colleague within your firm, your professional body or an independent lawyer. Consider whether your actions in response to the situation and the advice obtained are sufficiently well documented, either by way of minutes or your own records. In many

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situations, the perception of a reasonable and informed third party will be relevant to the resolution of the dilemma, and you might be required to evidence the steps you took to resolve the issue.

Case Study
Case Study 1 Dealing with staff performance issues Outline of the case A junior member of staff has just returned to work after taking special leave to care for her elderly mother. For financial reasons she needs to work full-time. She has been having difficulties with her mothers home care arrangements, causing her to miss a number of team meetings (which usually take place at the beginning of each day) and to leave work early. She is very competent in her work but her absences are putting pressure on her and her overworked colleagues. You are her manager, and you are aware that the flow of work through the practice is coming under pressure. One of her male colleagues is beginning to make comments such as a womans place is in the home, and is undermining her at every opportunity, putting her under even greater stress. Key fundamental principles Integrity: You need to be fair to all those involved and act in a straightforward manner. Confidentiality: You owe a duty of confidentiality to the staff involved.Professional behaviour: How should you proceed so as not to discredit yourself, your profession or the practice for which you work? Considerations Identify relevant facts: Consider the firms policies, procedures and guidelines, best practice and, with legal assistance if required, applicable laws and regulations. Is there a staff handbook or similar internal publication? Consider whether it is your proper role to manage this sort of staff issue. Does the practice have a department responsible for personnel issues?

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Identify affected parties: Key affected parties are you, the junior member of staff and her colleagues. Other affected members of staff may be in the personnel department.Who should be involved in the resolution: Consider not just whom you should involve but also why and when. Can your professional body provide advice and guidance? Do you have access to appropriate staff in the personnel department, or are you able to consult an external organisation for confidential advice? Possible course of action Check the relevant facts. If necessary, clarify staff procedures with the personne department. Take legal advice if required .Discuss the matter with the junior member of staff. Possible solutions may include suggesting a more flexible approach to team meetings. Do these always have to be in the morning? At times, working from home may be an option for the junior member of staff .You also need to deal with the other member of staff, who needs to be reminded about proper conduct and how such behaviour may amount to harassment and be in breach of 7the practices code of conduct.

Considering the issues and trying to identify a solution enables you to demonstrate that you are behaving professionally and attempting to resolve the difficulties faced by the junior member of staff. Throughout, you must be seen to be acting fairly both towards the junior member of staff, who is responsible for her mothers care, and towards other members of staff. Having considered all reasonable compromises, if the conclusion is reached that the junior employee is unable to carry out the work for which she was employed, you must turn your attention to her on-going employment within the practice. This will probably be out of your hands, and you should deliver the relevant facts to the personnel department or the owners of the practice. Appropriate confidentiality must be maintained at all times. You should document, in detail, the steps that you take in resolving your dilemma, in case your ethical judgement is challenged in the future.8

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Case Study 2 Improper accounting for sales Outline of the case You are one of three partners in a firm of accountants. Five years ago the firm was appointed as external accountants to a young, successful and fast-growing company, engaged to prepare year end accounts and tax returns. The business had started trading with a handful of employees but now has a workforce of 200, while still remaining below the size of company requiring a statutory audit. Due to your close relationship with the directors of the company (who are its owners) and several of its staff, you become aware that staff purchases of goods manufactured by the company are authorised by production managers, and then processed outside the accounting system. The proceeds from these sales are used to fund the firms Christmas party. Key fundamental principles Integrity: Would omitting income from staff sales result in the financial statements and returns to the tax authority being misleading? Is the practice dishonest, and what should be involvement? Objectivity: In view of the trust that has built up between you and your client, and thethreat brought about by the familiarity you have with the directors and staff of the company, how will you maintain your objectivity when deciding on a course of action? your

Professional competence and due care: You must ensure that the financial information that you produce on behalf of your client is in accordance with technical and professional standards. Professional behaviour: How should you act in order to protect your reputation and that of your firm and your profession? Considerations Identify relevant facts: Consider relevant accounting standards and any applicable laws and regulations. Determine the system currently employed for controlling staff sales and funding the staff Christmas party.

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Identify affected parties: Key affected parties are you and your firm, your client company, its directors and staff, and users of the companys accounts, including the tax authority.Who should be involved in the resolution: The reputation of your firm may be vulnerable, and you should disclose this ethical dilemma to your partners. Throughout the resolution process, you should keep your partners informed and be alert to any possible requirement to notify your professional indemnity insurers. It is not appropriate to discuss the matter with any of the staff of the client company, although the directors should be informed of the issue as soon as possible, and be involved in the resolution.9 Possible course of action Having brought the issue to the attention of your partners, and obtained the relevant details of the clients system for accounting for staff sales, you should raise your concerns with the directors of the client company. You will also have to determine whether the financial statements of previous years are likely to be misleading and, if so, consider your responsibility (or that of your client) to inform the relevant authorities (including the tax authority). You should strongly advise the directors that a staff sales policy should be introduced to ensure that these sales are fully recorded in the companys accounting system in the future. You should explain to the directors the implications of their actions, and that you are safeguarding the interests of the company and its staff in advising how the situation may be rectified. If the directors are co-operative, you should advise them of the recommended changes to the accounting system and how they might disclose the past undisclosed income to the tax authority. If the directors appear unwilling to change the system in respect of staff sales, you are obliged to disassociate yourself from any involvement with the companys financial statements, and this will require your firm to resign as the companys accountant. At any time, you may seek advice from your professional body.In view of your clients conduct, you are obliged to consider your whistleblowing obligations, and may have to report the matter to one or more authorities. You should document, in detail, the steps that you take in resolving your dilemma, in case your ethical judgement is challenged in the future.10

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Case Study 3 Conflicting clients interests Outline of the case You are a sole practitioner who used to provide a range of accountancy services for a small company (Company A) that owns a hardware shop in the town where you practise. Following a brief retendering process, the client chose to engage an alternative firm of accountants. Both you and the other firm had been asked to tender for a range of services, including the preparation of year end accounts, tax compliance work, and a due diligence exercise in respect of the intended purchase of a small hardware business in the neighbouring town. You believe that you were unsuccessful in the tendering process on the basis of cost alone, as Company A is not very profitable, and suffers from the competition of the other hardware business that it intends to acquire.You are the continuity provider for another local sole practitioner. Two months ago he suffered a heart attack, and so you are currently acting for a number of his clients. He is not expected to resume practising for another two months.One of the clients of the incapacitated practitioner (Company B) operates a shop selling electrical goods. The director and majority shareholder has called you to arrange a meeting to discuss a business venture that he is considering. At the meeting, the client explains that he intends to make an offer for the same small hardware business that Company A is seeking to acquire. He is aware that there is another bidder for the business, but is unaware that it is Company A, or that Company A used to be your client. When the meeting is over, you start to feel uneasy. You want to help Company B and provide a valued service on behalf of the practitioner for whom you are the continuity provider. But you realise that you are also in possession of confidential information concerning the plans of your previous client. You are aware of Company As problems and its motivation for wishing to acquire the business. Key fundamental principles Integrity: You must be straightforward and honest. Confidentiality: How will you ensure that you do not use confidential information relating

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to your previous client to the advantage of Company B? Professional behaviour: How will you safeguard your reputation and that of your profession? Considerations Identify relevant facts: You have responsibilities to the practitioner for whom you are the continuity provider, and to his clients. You may assume that the target business has a premium value to Company A, because Company A already owns a similar business. However, this is confidential information (which would give Company B a competitive advantage in the bidding process). You must not breach the fundamental principle of confidentiality. In addition to your 11 professional bodys code of ethics, you should consider any applicable laws and regulations. Identify affected parties: Key affected parties are you, Company B (and its director), Company A (and its directors) and the target business (and its owners). You should also consider the practitioner for whom you are acting as continuity provider. Who should be involved in the resolution: The issue of confidentiality is a sensitive one, and you should not involve any parties in the resolution process without good reason. Any discussion of this ethical dilemma, in itself, risks breaching confidentiality. The involvement of your professional body may be particularly useful in such a situation. If the other sole practitioner is well enough, he should be informed of the dilemma and the actions that you decide to take. Possible course of action You must not disclose to the director of Company B any confidential information gained

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from your former relationship with Company A. Nor may you use the information for the advantage of Company B or for your own personal benefit. Your problem is complicated by the fact that you are obliged to act for certain clients under the continuity agreement. However, you must remove (or reduce to an acceptable level) the threat to the fundamental principle of confidentiality. This may be achieved by openly declaring the conflict to the director of

Company B. Even so, you must exercise very careful judgement when determining how much information can or cannot be shared. In the first instance, you should evaluate the threat to the principle of confidentiality brought about by the conflicting interests of your current client and your previous client. In this case, you are likely to conclude that it is significant. Even if you believe that the threat can be managed while you assist Company B in its bid for the target business, this may not be the perception of a reasonable and informed third party. Therefore, you should consider declaring the conflict of interest between Company A and Company B, and explaining that you cannot act on behalf of Company B in respect of the proposed bid for the target business. You still have a responsibility to your previous client, but if you need to disclose this fact to the director of Company B, you should not mention the name of that client. Such disclosure should be documented. If pressure is put upon you to disclose the name of the other bidder, you should resist. Under such circumstances, it may be advisable to disengage from the client completely in order to effectively safeguard the threat to confidentiality. This will be a measure of last resort, as you are expected to provide continuity of service to Company B, and also act in the interests of the practitioner who is incapacitated. You should keep the incapacitated practitioner informed, if possible.

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In any event, you should document, in detail, the steps that you take in resolving your dilemma, in case your ethical judgement is challenged in the future.12

Case Study 4 How much to disclose to the finance director Outline of the case You are a qualified accountant in practice, and you lead a team providing management consultancy services. In recent years your practice has undertaken several assignments on manufacturing efficiency improvements for a medium-sized, quoted group of companies. It operates through a number of divisions, but line responsibility appears complicated, and so significant control rests with four semi-autonomous regional directors. The authority of these directors is enhanced by their seats on the groups main board. You have cultivated a good working relationship with the regional director with whom you are in contact most frequently. Three weeks ago that regional director asked you to investigate, as a matter of urgency, a particular project, Project A. He had been irritated to be told, informally, of the likely deferral of the agreed delivery date for the components on this sophisticated design-and-build contract. Project A comes within the regional directors responsibility primarily because of the location of the factory that makes the key components. Once on site, your team had discovered a range of difficulties with the project, starting with fundamental design faults and extending deep into the manufacturing processes. It is clear that various contracts will be breached, and litigation is likely to follow. Your team has

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produced a prioritised list of actions and begun working to establish a revised schedule to take the project to completion. At a recent meeting, you gave the regional director and the factory manager your estimate that the delay to Project A will be a minimum of three months. You indicated that extra direct costs are likely to be 7 million to 10 million. This is before any potential claims for compensation. On the instructions of the regional director, your team has been working on a formal report specifying detailed recommendations. While still incomplete, the report appears certain to support your previous estimates. You are aware, from the financial press, that the group is rumoured to have difficulties with its bankers. You assume that the situation with Project A is likely to be seriously detrimental to the groups financial position. One week before the final version of the report is due, you receive a surprise telephone call from the groups finance director. He explains that he is about to enter a main board meeting, but needs to know a date for delivery of the report on Project A. Late the previous evening, the regional director had informed the finance director that your firm had been asked to provide the report. He says: I appreciate that you have only just started, so there are no reliable estimates yet. But the regional director mentioned that Project A could incur around 4 million to 5 million in extra costs, with income delayed by perhaps six to eight weeks. The regional director has sent his apologies to the board meeting, as he has to attend a family funeral. He adds: Hopefully, the regional director is being cautious, but if something does turn out to be as

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wrong with Project A as those numbers suggest, the extra costs and deferred income have serious implications for the groups cash flow. The full board will need to start planning 13 remedial action now. When will your report be ready? Key fundamental principles Integrity: How do you maintain your professional integrity: by responding only to the question asked or by immediately alerting the finance director and the main board to the seriousness of the situation? Objectivity: Does loyalty to the regional director, from whom your firm usually takes instructions, outweigh your responsibility to the main board? If not, can you resist any feeling of intimidation from the regional director that you may be experiencing? Confidentiality: Confidentiality is fundamental to the assignment as a whole. But to whom is the duty of confidentiality owed? Professional behaviour: The information you have could assist the main board significantly with the discharge of its duties. Whether you disclose the information now or restrict the information you provide pending a discussion with the regional director, how can you protect your reputation and that of your firm? Considerations Identify relevant facts: You should establish why the finance director appears to have incorrect information. Is there a mistake or misunderstanding, or some other explanation for the discrepancies in the extra costs and the time frame? You must establish from your engagement letter to

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whom you owe a duty of confidentiality, in order to resolve your potential conflict of loyalty. Identify affected parties: Key affected parties are you, the regional director, the finance director and the board. Indirectly, investors and other stakeholders in the group are affected, due to the groups recent cash flow problems. Who should be involved in the resolution: You should involve the regional manager as early as possible, and the finance director and the main board if necessary. Possible course of action You should take care not to make a hasty decision while on the telephone to the finance director. If necessary, you should state when your report will be ready, and end the telephone conversation, so that you may establish the facts. It should be possible to call the finance director back later, even if that means interrupting the board meeting. As soon as you are able, you should review the firms letter of engagement, which will establish who the client is for the purpose of your duty of confidentiality. Your firm is engaged as consultants, rather than as auditors, and if your engagement is with the division overseen by the regional director, it could be argued that communication to the main board is an internal matter for which you have no direct responsibility. In the meantime, you should attempt to contact the regional director to inform him of the 14 finance directors misunderstanding, and reconcile the conflicting estimates. You should not take part in any deliberate attempt to mislead the main board.

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It is possible that the future of the group as a going concern could be under threat. If a review of the engagement letter reveals that your engagement is with the main board, in the absence of an explanation from the regional director, you should call the finance director and explain that the report is likely to reveal estimates that are very different from those mentioned earlier. If the engagement is with the regional directors group company, a duty of confidentiality is owed to that client and, if the finance director seeks further information from you, you should make your position clear. Nevertheless, when you are able to contact the regional director, you should discuss with him the call you received from the finance director. If you are then of the opinion that the regional director has deliberately misled the main board, you should ask him to rectify the position. If he does not, you might have a conflict of interest. You could seek advice from your professional body. In addition, in order to determine your responsibilities (and those of the regional director towards the main board), you may seek independent legal advice. You should document, in detail, the steps that you take in resolving your dilemma, in case your ethical judgement is challenged in the future

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STEPS TO RESOLVING AN ETHICAL DILEMMA.

How do you decide what to do if you are presented with an ethical dilemma? There are two major approaches that you might draw from. One focuses on the practical consequences of your actions (consequentalist approach) and might be summed up rather brutally by the phrase no harm, no foul. In contrast, the deontological approach would lead you to ask whether an action is, in itself, right. For example, does an action uphold a promise or demonstrate loyalty. The essence of deontological approaches is captured by the phrase Let justice be done though the heavens fall. Whilst there is an extensive record of philosophical debate about the relative merits of these two positions, they can serve as useful starting points for complementary strategies of coping with ethical dilemmas. 1. WHAT ARE THE OPTIONS? List the full range of alternative courses of action available to you. 2. CONSIDER THE CONSEQUENCES

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Think carefully about the range of positive and negative consequences associated with each of the different paths of action before you. Who/what will be helped by what you do? Who/what will be hurt? What kinds of benefits and harms are involved and what are their relative values? Some things (e.g. healthy bodies and beaches) are more valuable than others (e.g. new cars). Some harms (e.g. a violation of trust) are more significant than others (e.g. lying in a public meeting to protect a seal colony). What are the short-term and long-term implications? Now, on the basis of your answers to these questions, which of your options produces the best combination of benefits-maximization and harm-minimization? 3. ANALYSE THE ACTIONS You now have to consider each of your options from a completely different perspective. Disregard the consequences, concentrating instead on the actions and looking for that option which seems problematic. How do the options measure up against moral principles like honesty, fairness, equality, and recognition of social and environmental vulnerability? In the case you are considering, is there a way to see one principle as more important than the others? 4 MAKE YOUR DECISION AND ACT WITH COMMITMENT Now, bring together both parts of your analysis and make your informed, decision. Act on your decision and assume responsibility for it. Be prepared to justify your choice of action. No one else is responsible for this action but you. 5. EVALUATE THE SYSTEM Think about the circumstances which led to the dilemma with the intention of identifying and removing the conditions that allowed it to arise.

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Bibliography Web sites

http://en.wikipedia.org/wiki/Ethical_dilemma http://examples.yourdictionary.com/ethical-dilemma-examples.html http://www.lmu.edu/Page27945.aspx http://www.ehow.com/about_5481837_ethical-dilemma_.html http://www.differencemakers.com/swapshop/pdf/dilemma_example http://blog.nationmultimedia.com/print.php?id=962 http://smallbusiness.chron.com/causes-ethical-dilemma-conducting-business-23439.html http://www.ehow.com/how_7385408_steps-follow-addressing-ethical-dilemmas.html

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