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ISBN: 978-1904388883
Acknowledgements
This research report has been produced independently by the authors, and the
views expressed are those of the authors.
The research team would like to thank the following for their help and support:
RICS for its sponsorship of the research, for assisting in distributing the
questionnaire, and for hosting the focus group;
Dr Ian Selby, Director of Research and Innovation at CEM, for his expert
guidance, direction and support;
those survey respondents and focus group participants who, for reasons of
confidentiality, must remain anonymous;
Professor Frances Plimmer for her support during the early stages of the
research;
colleagues and RICS for their helpful comments on a draft version of this
report.
FOREWORD
The perception and reputation of Britains professional classes, and the
nature of professional engagement with clients, is in a state of flux.
Events in the public and private sectors: the series of professional scandals,
have questioned the efficacy of the past, creating a new forceful movement
of enquiry, admonishment and reform within most of the United Kingdoms
professional bodies.
The currency of the surveying profession: the assets of land and property,
are a fundamental component of Modern Britain, an aspirational commodity
which is a core component of the economy, whose operation and trading
demands the highest possible standards and practices. The surveying
profession has weathered this storm with relatively few wounds, but its
introspection has been led by an evidenced-based approach, analysing its
practices and behaviours with a questioning of its ethical practices, and how
these impact the outcomes of its clients and partners.
This new research report investigates this question, exploring the extent
to which differences in approach to ethical issues exist between small
and large firms. Engaging with the profession, this research will enable
discussion and widen the debate about ethical practices and behaviour right
across the surveying profession.
Ann Heywood
Principal, The College of Estate Management
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Ethics issues in surveying firms - does size matter?
Table of Contents
1. Introduction 1
1.1 Why ethics are important now 2
1.2 Ethics for surveyors 2
1.3 Focus and scope of the research 4
1.4 Methodology 4
1.5 Report format 4
2. Ethics in surveying 5
2.1 Introduction 6
2.2 Individual ethics and education 6
2.3 Ethics in business 9
2.3.1 The benefits of ethical behaviour 9
2.3.2 Evidence of unethical behaviour 11
2.4 The influence of firms culture 13
2.5 The case for and against codes of ethics 15
2.5.1 What are codes of ethics? 15
2.5.2 The benefits of codes of ethics 16
2.5.3 Difficulties with codes of ethics 16
2.6 The RICS codes of conduct 20
2.7 Ethics in small and large firms 21
2.7.1 Culture and communication 22
2.7.2 Pressures to act unethically 23
2.7.3 Attitudes towards acting ethically 25
2.7.4 The relevance and application of ethical codes 26
2.8 Summary 27
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Ethics issues in surveying firms - does size matter?
3. Ethics in practice 29
3.1 Introduction 30
3.2 The questionnaire response 31
3.3 Pressures on ethical standards 34
3.4 Managing ethical issues 37
3.5 Ethical standards set by RICS 44
3.6 Ethics and personal characteristics 46
3.7 Expectations of professional surveyors 48
3.8 Summary 51
5. References 63
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Ethics issues in surveying firms - does size matter?
Executive summary
The College of Estate Management (CEM) report Ethics for Surveyors
(Plimmer et al. 2009) revealed variation in standards between firms and
areas of business. It identified a perception among individuals working in
large UK surveying firms that there exist major differences in the ways in
which large and small firms reflect on, promote and manage professional
ethical standards and encourage staff to deal with ethical dilemmas within
their organisations.
The firms ethical culture is defined by the attitudes, norms and values
of those at management level, and is not dependent on size of firm.
Surveyors ethics relate to age and experience and are affected by the
culture of the employing firm, but not size of firm.
Working for a firm with a poor reputation can adversely affect the
career prospects of young surveyors, and this group is most concerned
about the enforcement of good ethics.
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Ethics issues in surveying firms - does size matter?
Working for
a firm with a
poor reputation
can adversely
affect the career
prospects of
young surveyors
v
INTRODUCTION
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Ethics issues in surveying firms - does size matter?
The present global economic crisis brings into sharp focus the very
professionalism, excellence and ethics of professionals the average
population depends on and trusted, not only in the commercial and
financial realm, but at all levels of the economy and society. (2010: 6)
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Ethics issues in surveying firms - does size matter?
The analysis of the interviews with individuals in large real estate practices
identified a perception that ethics are managed differently in small firms.
Indeed, when recruiting qualified surveyors, large firms tended to prefer
candidates from large employers which, from their viewpoint, adopted
similar ethical standards to their own and speak the same language.
This viewpoint suggests that the culture of firms which surveyors work
for early in their careers influences the ethical standards they acquire and
subsequently affects their future career prospects.
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Ethics issues in surveying firms - does size matter?
1.4 Methodology
The research involved:
4
ETHICS in
2 SURVEYING
Ethics issues in surveying firms - does size matter?
2.1 Introduction
This section reviews the available literature on ethics for professionals,
including what little literature is available specifically for surveyors. It
argues that the development of ethical standards starts with the individual
and traces the way in which values and characteristics associated with
good ethics contribute to business success and have been incorporated
into codes of conduct introduced by RICS in 2007. The importance of the
culture of the employer is discussed, and this leads into a debate on the
differences between how small and large firms ensure ethical behaviour
and handle ethical dilemmas.
Ethics in business
Summary
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Ethics issues in surveying firms - does size matter?
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Ethics issues in surveying firms - does size matter?
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Ethics issues in surveying firms - does size matter?
maintaining reputation
a climate of trust.
It is widely recognised that, in the long term, ethical companies are more
successful than unethical ones. Harris (1998: 6), drawing on the work of
Bowie and Vaaler (1996), also asserts that:
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Ethics issues in surveying firms - does size matter?
Within a business context, there are therefore clear arguments for being
entirely and openly ethical. As Nicholson (2005) reports, investing in an
ethics policy costs much less than what unethical behaviour might cost a
firm.
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Ethics issues in surveying firms - does size matter?
It is also clear that treating clients ethically is one of the best ways of
retaining them (Zweig 2000), and that a firms reputation with its clients and
suppliers, and its culture, also represent a valuable and intangible asset
within its portfolio (Greenway 2002).
A study across the USA, tracking integrity in the workplace (Marr 2007),
revealed that less than half (49%) of working adults believed that their
senior executives are people of high integrity (an increase of only two
percentage points on 1999), only 56% felt that integrity policies had been
well communicated in their organisation, and 55% felt that there is little
pressure to cut corners on ethical or compliance issues. The percentage
which reported their firms as highly ethical was unaltered from 1999,
at 59%.
Of some concern is that 54% cited at least one act of misconduct which
they were personally aware of. Such acts included lying to supervisors
(26%), fair (presumably unfair) treatment of employees (26%), improper/
personal use of company resources (21%), conflicts of interest (20%),
stealing (19%), lying on reports (18%), and sexual harassment (18%).
About three quarters of those who acknowledged such incidences in the
research had not reported them because of lack of evidence; cynicism of
management responding to such a complaint; fear of repercussions; or
because they did not perceive it to be their responsibility to do so.
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Ethics issues in surveying firms - does size matter?
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Ethics issues in surveying firms - does size matter?
However, such a culture, and therefore ethical behaviour, does not simply
materialise out of thin air, but instead has to be managed (Dillman 2000). To
both Greenway (2002) and Richards (2003), it is business leaders/managers
who set the firms culture and who need to ensure that it is communicated
to staff. As Richards argues:
Its important for business managers to create a culture that guides
and reinforces employees as they make decisions and choices each
day. ... Importantly, this is true regardless of the size of your firm.
... The responsibility to investors is the same, but the methods that
firms employ to assure compliance may differ. (2003: 3)
Clearly, management systems can encourage appropriate behaviour by
communicating what is expected of employees both within an organisation
and externally to other stakeholders. However, it is leadership from the top
which directs and articulates what that acceptable behaviour is (Greenway
2002; Nicholson 2005). As Liu et al. (2004: 446) argue,
... it can be seen that the organisational/industrial culture and
norms have major influences on surveyors behaviours. ... Especially
when there are no ethical codes in the organisation, an ethical
management culture is regarded as a means of protecting interests
for fellow organisation members.
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Ethics issues in surveying firms - does size matter?
Sims (1992: 510) similarly states that [w]hat top managers do, and the
culture they establish and reinforce, makes a big difference in the way
lower-level employees act and in the way the organization as a whole acts
when ethical dilemmas are faced. Wolfe (1988, cited in Sims 1992) argues
that managers can develop ways of thinking (often unconsciously) that
foster unethical behaviour, and Jansen and Von Glinow (1985, cited in Sims
1992) state that organisations have a tendency to develop counternorms,
practices that are contrary to prevailing ethical standards but that are
accepted within an organisation. Indeed, Sims (1992) is of the opinion that
some firms recruit and promote employees who have values consistent with
those of the firm.
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Ethics issues in surveying firms - does size matter?
Implicit in rule ethics is concern with procedures, and the fairness (or
otherwise) of the outcome is judged entirely by the fairness (or otherwise)
of the process (Wolverton and Wolverton 1999). Such regulations are
relatively easy to apply because adherence is a clear matter of fact and
there is no room for judgement (Brown 1990).
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Ethics issues in surveying firms - does size matter?
Dienhart (1995) suggests that one of the most important things that a code
can do is to show professionals that ethical values constitute the core or
foundation of their profession; in other words, they define the profession,
which allows those considering entering it to think about what they are
getting into. Both Teo (2010) and Dienhart (1995) also argue that codes
assist those who are pressured to act unethically.
Not all the literature supports the view that codes of conduct are necessary
to improve ethical behaviour within a firm. Indeed, Longenecker et al.
(1994: 8), based on responses to a questionnaire in the United States of
ethical perceptions in firms, reported ... no connection between ethical
perceptions and the use of written codes.
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Ethics issues in surveying firms - does size matter?
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Ethics issues in surveying firms - does size matter?
She argued that this approach often obstructs rather than supports
proper professional aims, producing perverse ... incentives for arbitrary
and unprofessional choices and leading to a culture of suspicion and low
morale that may ultimately lead to professional cynicisSimilar concerns are
discussed by Dienhart (1995: 427), who identifies a number of criticisms of
codes of conduct, one of which is that ... they promote unethical behavior,
because the true aim of such codes is to serve the interests of those who
write them, not to promote the welfare or protect the rights of vulnerable
parties. Given that codes are inevitably written by those who are then
subject to them, it is easy to see how scepticism as to their effectiveness
can develop outside and within professions.
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Ethics issues in surveying firms - does size matter?
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Ethics issues in surveying firms - does size matter?
RICS provides both Rules of Conduct for Firms (RICS 2007b) and Rules
of Conduct for Members (RICS 2007c). Both codes are based on the five
principles of:
proportionality
accountability
consistency
targeting
transparency.
integrity
competency
service
lifelong learning
solvency
information to RICS
co-operation.
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Ethics issues in surveying firms - does size matter?
RICS (2010) states that the Rules of Conduct for Firms is [a] proportionate
and flexible approach that allows firms to comply with the rules in a way
that suits their business size, the sphere in which they operate and the
needs and demands of their clients; and that the Rules of Conduct for
Members ... are short, simple and principles-based, designed so that all
members can follow them regardless of where in the world they practise
and whatever their sphere of activity.
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Ethics issues in surveying firms - does size matter?
The previous CEM research found that employees in large firms relied on
the support of colleagues in helping staff deal with ethical issues. In some
cases, managers or a designated officer within the firm were available
for guidance, and there was a clear reliance placed on the culture within
the employer company to encourage and develop both ethical standards
and ways of dealing with ethical dilemmas. Openness and reliance on
individuals disclosing issues of concern were identified as important
in resolving ethical issues in most firms, and ethical standards were
communicated to new staff through awareness raising and setting a good
example. As Atkin (2003: 50) asserts:
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Ethics issues in surveying firms - does size matter?
In part, it was implied that smaller firms will not be able to adopt this
approach to resolving dilemmas because there are fewer professionals
employed and therefore limited opportunities either to develop or inculcate
such a culture or to explicitly demonstrate appropriate ethical standards.
This perception may be considered as an inevitable consequence of having
fewer colleagues to turn to for advice and support. There was also a
perception that surveyors in smaller firms do not have the same ethical
standards because they have to live by their wits to a greater extent than
those in larger firms, in order to make a living. The study also revealed the
suggestion that smaller firms are likely to be more vulnerable to pressure
from large clients, regardless of the economic climate, because of the local
nature of their business as well as its size and potential specialisation.
Medlin and Green (2003) investigated the ethical attitudes of small business
owners and managers in US firms with fewer than 100 employees. The
survey examined the impact of gender, experience, education (degree
level or not), religious beliefs and age on ethical attitudes, and achieved 98
responses. Among the respondents, 83% were business owners and 17%
business managers. Most worked in professional services (28%), retail
(22%), manufacturing (10%) and personal services (10%). The research
found that most small business owners/managers did not feel compelled
to act unethically, but a significant proportion felt pressure to act in a less
than ethical manner. Practitioners in small businesses felt particularly
vulnerable because they faced different pressures which affected how
they managed ethical issues for a number of reasons, including intense
competitive pressures and limited resources.
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Ethics issues in surveying firms - does size matter?
Among audit firms, Lewis (2007) reports on the views of Eric Kench,
Chairman of the Practice Society, who argues that it is the auditors in
small firms, and particularly sole practitioners, who are most vulnerable to
unethical pressures. He highlights the fact that small firms lack the budget
available in larger firms to run helplines, hire ethics officers, and design
and implement ethics policies.
Their study found that the most common ethical dilemmas faced by
respondents in small firms relate to:
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Ethics issues in surveying firms - does size matter?
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Ethics issues in surveying firms - does size matter?
The discussion in Section 2.5 implies that because large firms can afford
codes of ethics and written systems for dealing with ethical issues, they
must be more ethical than small firms. However, Nicholson (2005) reports
on the views of Les Hunkele, an ethics expert asked by the Construction
Management Association of America in 2005 to deliver ethics presentations
to members, who argues that the absence of a formal ethics policy does not
necessarily signify a lack of concern for ethics.
Wider evidence for the application of ethics codes and their relevance
is quite varied. On the whole, large firms have more formalised ethics
and compliance programmes, whereas small firms may take business
risks by not always observing regulatory requirements in the form of
documentation. While Richards (2003) argues that good documentation
is a requisite for good compliance, the counterview is also expressed that
increased regulation creates more work and rarely solves the underlying
problem (Ware 2000).
Nicholson (2005) also reports that, among construction firms, while large
firms tend to have established codes of ethics, guidelines and mission
statements, others have adopted less formal policies and manage ethics
through personal contact within the firm. The problem arises, he argues,
when companies grow and personal contact is lost, at which point firms
adapt by creating in-house training, often hiring experts to establish a
programme or write and disseminate a code of ethics.
Widespread recognition of the informality of management policies and
practices among small firms is also reported by Longenecker et al. (1994).
However, their research found that [e]ven though there is a substantial
difference in the usage of written codes at different size levels, there was
very little evidence of significant differences in their ethical perceptions
(ibid.: 8).
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Ethics issues in surveying firms - does size matter?
2.8 Summary
This section has reviewed a wide range of literature on ethics for
professionals, discussing the ways in which standards are influenced by
individual (personal/family), educational and environmental (for example,
firm, profession) factors. It has provided evidence to suggest that such
standards are not affected by size of firm, despite there being arguably
more, or at least different, pressures on employees of small firms to
act unethically. The literature indicates that small firms lack the budget
available in larger firms to run helplines, hire ethics officers, and design
and implement ethics policies, and that the method of communicating
ethical conduct across the firm does vary according to the size of firm.
The section has highlighted the widespread view that firms demonstrating
high ethical standards benefit financially from an enhanced reputation and
a competitive advantage, as well as from greater client and staff retention.
However, at the same time, there is the pressure to cut corners and take
risks for extra gain, and the literature provides evidence of poor ethical
behaviour. This is particularly an issue confronting managers, who are
charged with acting professionally while at the same time ensuring the
financial stability of the firm.
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Ethics issues in surveying firms - does size matter?
it is leadership
from the top that
directs and
articulates what
acceptable
behaviour is ...
regardless
of size
of firm
28
ETHICS in
3 PRAcTICE
Ethics issues in surveying firms - does size matter?
3.1 Introduction
Drawing on the responses received to a questionnaire sent to all members
of the RICS Commercial Property Professional Group in July 2009 and
on a focus group attended by nine participants drawn from small and
large firms in November 2009, this section discusses the way in which
ethics are managed by commercial real estate firms in the UK, with a
particular focus on whether the approach differs according to size of firm.
The main conclusion from the section is that it is the firms culture set at
management level, rather than size, that determines ethical standards,
whereas size is only an influencing factor in relation to the way ethical
issues are communicated internally.
Most respondents had worked in the UK (91%), and these responses formed
the basis of the statistical analysis. Also, most respondents were a partner,
director or senior surveyor (66%) who had qualified 11 or more years ago
(65%). Figure 3.1 shows the size of firm in which respondents worked,
currently and previously. Table 3.2 shows that, whereas membership of the
Commercial Property Professional Group is dominated by sole practitioners
(44%) and surveyors in small firms of up to five chartered surveyors (38%),
rather than large firms with over 10 chartered surveyors (8%), more
questionnaire respondents worked in large firms (40%).
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Ethics issues in surveying firms - does size matter?
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Ethics issues in surveying firms - does size matter?
there is a greater
tendency for career
moves from large
to small firms than
in the opposite
direction
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Ethics issues in surveying firms - does size matter?
34
Ethics issues in surveying firms - does size matter?
35
Ethics issues in surveying firms - does size matter?
However, other participants had a different view. As one commented, ... the
whole world is a great deal less ethical than it was twelve months ago.
The focus group also discussed client pressure. One participant observed
that often the most difficult thing is to actually try and persuade people
that what theyre asking you to do isnt the right course of action ... there is
always somebody that wants you to do something slightly different and the
question is how far do you go down that line. Another participant therefore
argued that you have to be asking the question, is it ethical what I do, as
a professional you should really be going down that road every time you
are taking a job. ... You do need to have that question in your mind as you
go through is what Im doing the right thing? A further participant
agreed: ... there has to be an independent moral standard that you have as
a basis whatever work youre doing in relation to that. If you dont have that
absolute to go by then you will be lost. Certainly, all the participants agreed
that being honest with all parties is paramount.
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Ethics issues in surveying firms - does size matter?
The risks associated with large firms expansion outside the UK were also
commented on:
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Ethics issues in surveying firms - does size matter?
38
Ethics issues in surveying firms - does size matter?
39
Ethics issues in surveying firms - does size matter?
40
Ethics issues in surveying firms - does size matter?
41
Ethics issues in surveying firms - does size matter?
The focus group discussion explored whether size of firm has a bearing on
ethical standards. The main conclusion was that it is the company culture
and the example set at management level, rather than size of firm, that
determines ethical standards. As one participant commented: I think it
depends on the people that are running the firm ... I wouldnt necessarily
say that it is related to the size of the firm, I would say it is related to the
direction given to everybody by the people that run the firm. Another
participant agreed, arguing that: ... it comes down to the nature of the
organisation and the individuals running it rather than the size of the
operation. A further participant contended that it:
... you take it, in the first instance, from the person who manages
you or your mentor as a young surveyor. Certainly thats your first
example of the profession and thats the one you are going to hold up
and even as a young surveyor if you can work with someone who is
unethical you should be able to see it you hope, but then you still are
to some extent influenced very strongly by the person that you work
for and as you say it is a cultural thing isnt it, so it almost comes
back to that. If you are exposed to it for long enough its going to have
some effect.
This view was echoed by a second participant: ... you need to have a good
relationship between whoever is the immediate boss. So Im taking on
somebody and Im training them, then whatever I say and the way in which I
go about things should be passed down to them ....
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Ethics issues in surveying firms - does size matter?
This view was repeated several times, with two respondents, again with
experience of working in both small and large firms, arguing: Company
culture is the critical factor, and it depends on the culture of the individual
firm, large or small. A third suggested: It is dependent on the characters of
the management team in each case, and a fourth stated: Its rather more a
case of how senior staff view ethics and the approach they take.
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Ethics issues in surveying firms - does size matter?
In light of the indication that small and large firms differ according to the
way ethics is communicated, the focus group participants were asked
whether they felt that having RICS ethics guidelines in place is more
important for small or large firms. An argument put forward for a protocol
being more important in larger firms was that: It does no harm to have
that set of protocols, that principle available, but I think that sort of thing
becomes again more perhaps important if youve got a larger practice
because it really comes down in the end to the individual, how you know
individuals behave in that case. On the other hand, another participant
argued that RICS guidelines are more important for small firms, as they
are less likely to have written guidance of their own.
However, there was also a view that the guidance was equally important to
both small and large firms in defending actions when dealing with clients:
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Ethics issues in surveying firms - does size matter?
the firm should be taken from RICS standards: ... I would have thought
most of the big surveying practices would probably just sign up to the
principles that are contained within the RICS guidelines and in one sense as
a regulated company of the RICS you are required to stand up for it.
However, others argued that firms have an equally, if not more, important
role to play. For example:
... RICS must lead by setting the general standard but cannot
prescribe for all eventualities but it is for individual firms to drive/set
those standards at ever higher levels. Standards are a moving target
and need to be driven at the coal face if there is not to be general
slippage and loss of market share as a result.
Similarly: RICS should set the standard required but the main
responsibility should rest with the employer to inform their staff of the high
ethical standards in place at the business concerned and what this means
in practice.
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Ethics issues in surveying firms - does size matter?
Alternatively:
There was a general consensus among the focus group participants that
the principle-based method approach currently adopted by RICS is more
appropriate than a more prescriptive approach. As one explained:
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Ethics issues in surveying firms - does size matter?
... in order for the RICS to try and make sure over a period of time
that its ethical standards are maintained at a higher level, it needs
to to use a nasty word for it indoctrinate if you like at a young age
those people who are coming through the system and it needs to
make a big point of it.
... an equal emphasis at all stages and for all parties ... [A]s youre
working through your profession effectively the greater danger is
actually seeing it not happening at the older level that become more
cynical and then realise well actually if that is the way to get on, if
thats how I become a partner or an associate or someone like that
actually I have to ditch some of that ethics because thats the only
way that I can get on.
In both the questionnaire responses and the focus group, comments
were made as to the difficulty faced by young/inexperienced surveyors in
challenging the ethical position of an employer and senior colleagues. As
one questionnaire respondent remarked:
Many surveyors are unhappy with their employer but the market
and need to find employment severely limits choice. It is a lucky (or
foolish) person who feels able to robustly challenge an employers
ethical position. There is a limit to the number of times you can
challenge an employer without career limitation.
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Ethics issues in surveying firms - does size matter?
The focus group was particularly concerned about young surveyors ability
to leave an unethical firm, especially in the current economic climate,
because [i]n a market like this theyre not going to do that, theyre going to
stay. So are they then going to be forced to swallow their honesty and their
integrity? Sadly in some cases that is what will happen to these poor kids
and I really do feel for them. For another participant:
It was further argued in the focus group that the large majority of firms
would be reluctant to employ anyone who had worked for a considerable
length of time for a firm that is perceived to have questionable ethical
standards. As one participant explained:
... if they are working for one of those firms then probably other
firms wouldnt touch them anyhow, so if theyve been there for a
certain length of time and you as a competitor know thats the way
they work you actually wouldnt want to employ that person, and
I know theres firms I would be happy to employ people from and
other firms I probably wouldnt even interview.
In other words, firms look to recruit to their own image and the right type
of people, which means the choice of employer surveyors make early in
their career, in terms of that employers ethical reputation, can dictate
their future.
48
Ethics issues in surveying firms - does size matter?
49
Ethics issues in surveying firms - does size matter?
50
Ethics issues in surveying firms - does size matter?
However, some argued that one should put the client first only if what the
client wants is in line with what is consistent with the individuals and the
professions standards. For example: It is important to work to the best
ability of your clients but at the same time you need to feel that your own
standards are upheld; right for the Client unless not consistent with the
precepts of the profession and the good governance of the firm; and What
is right for the client is the priority when the client is also ethical, if not
you refer to the base standard for the profession and your own initiative.
Indeed, one senior surveyor reported an occasion where his firm stopped
working for a client because they wished the firm to disregard some ethical
practices that the firm adhered to.
Alternatively, others felt that the profession should come first. For example:
The best way to help clients, firms and stakeholders is to maintain the
professionalism of Surveying, long term standards should outweigh
short term pressures.; and Once you do what is right for the surveying
profession, all other interests will be taken care of client, employer,
stakeholders and yourself. It is the standards of the profession that bind us
all together. On the other hand: Surveyors should do what they believe to
be (ethically) correct, in the long run this benefits everyone.
3.8 Summary
The main conclusion from this section is that it is the company culture
and, in particular, the example set at management level, rather than size
of firm, that determines ethical standards. The survey results revealed
no association between size of firm and how well ethics are managed and
communicated. However, the evidence indicates that size of firm does
influence the ways in which firms ethical standards and ways of dealing
with ethical issues are communicated, with large firms more likely to have a
formal protocol in place and small firms using less formal methods.
The findings also indicate that on the whole surveyors believe that their
firms approach to managing ethics is best. So, for example, respondents in
large firms believe ethics are managed better that way, while respondents
from small firms are equally supportive of their firms approach. Further,
the general perception among individuals of firms where there is an ethics
protocol (across all sizes of firm) is that communication is better where one
exists, while the general perception among those in a firm without an ethics
protocol believe communication is better without one.
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Ethics issues in surveying firms - does size matter?
The section has also highlighted a perception (among the focus group
participants in particular) that age and experience have a strong influence
on ethical values and standards, and that the example set by senior
colleagues influences the ethical behaviour of less experienced employees.
Indeed, it has discussed the contention that working for a firm perceived
to have questionable ethical standards can have a detrimental effect on
a young surveyors career, as focus group members strongly argued that
many firms recruit to their own image and are reluctant to employ any
surveyors who have worked for any significant amount of time in a firm with
a poor reputation.
Finally, doing what is right for the client was ranked by the questionnaire
respondents above doing what is right for the surveying profession; what
they think is right; what is right for the firm (employer); and what is right
for the firms stakeholders. A statistical analysis of the responses did not
reveal a strong association between either size of firm or experience as
a surveyor and the order in which the five options were ranked, although
those who worked in large firms did place more importance on doing what
is right for the employer than those in small firms.
52
CONCLUSIONS AND
4 RECOMENDATIONS
Ethics issues in surveying firms - does size matter?
4.1 Introduction
Building on previous CEM research investigating ethics inUK real estate
firms, the aim of this research was to examinethe extent to whichethical
standards, and themethods of communicatingsuch standards,vary
according tosize of firm. Specifically, the research objective was to
investigate whether there are differences of approach between small
surveying practices (fewer than six chartered surveyors) and large firms
(more than 10 chartered surveyors) as to how they:
54
Ethics issues in surveying firms - does size matter?
Key role for education: education and training for new recruits to the
profession should be accompanied by a strong emphasis on ethics in
CPD, in order to ensure a consistent standard is applied among all
surveyors.
Key role for RICS: surveyors view ethical standards set by RICS as
more important than those set by individual firms and believe the
Institution needs to do more to enforce professional standards.
Both the literature review and the empirical analysis indicate that size of
firm does influence the types of ethical issue that firms face. Practitioners
in small businesses tend to feel more vulnerable to intense competitive
pressure and limited resources, whereas large firms face issues of
communicating standards to a larger and more diverse workforce.
55
Ethics issues in surveying firms - does size matter?
They are also less likely to have in-house support or ready access to
consultants in terms of HR, finance and legal expertise compared with
larger firms. At the same time, large firms that employ people from a
wider range of backgrounds from inside and outside the property industry
face more complex issues in terms of communicating the firms ethical
culture in order to establish a common approach and standard. The issue is
therefore one of scale and diversity.
The research evidence shows that firms which demonstrate high ethical
standards benefit financially through enhanced reputation and a competitive
advantage, as well from greater client satisfaction and staff retention.
Conversely, allowing poor performance to go unchecked risks not only an
adverse affect on clients and other stakeholders, but also on the reputation
of the firm concerned and the wider profession.
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Ethics issues in surveying firms - does size matter?
The absence of a written ethics policy does not necessarily signify a lack of
concern for ethics. Indeed, the literature reviewed in Section 2 highlights
a number of issues, as well as benefits, associated with formal codes of
conduct and limited evidence of a real connection between such codes and
ethical perceptions. Further, the empirical evidence presented in Section 3
indicates that, on the whole, surveyors believe that their firms approach to
managing ethics is the best. Regardless of size of firm, surveyors working
for a firm that has an ethics protocol believe ethics are managed better that
way, while those in firms without a formal protocol are equally supportive of
that approach.
In contrast to the views expressed by some of the individuals from large firms
interviewed as part of the previous CEM research (Plimmer et al. 2009), the
main conclusion of this report is that it is the firms culture, and not size,
that matters when it comes to determining the standards or quality of ethics
practised by the organisation. While the way in which ethical requirements
are communicated tends to vary according to the size of firm, with greater
formality and documentation in large firms than small ones, this difference in
communication style does not mean that ethical standards vary.
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Ethics issues in surveying firms - does size matter?
It is clear that surveyors ethical values and standards vary by age and
experience. For example, the evidence indicates an association between
length of experience and attitudes towards RICS standards in that younger
members regard RICS rules as more important than company rules and
call for stronger enforcement.
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Ethics issues in surveying firms - does size matter?
However, as the students in the CEM ethics online debate discussed, this
raises the question of how one gathers the necessary information in order
to assess the reputation of a firm. There are a number of answers, including
through word of mouth and by looking for and reviewing the firms code of
conduct and/or corporate social responsibility policy.
Of concern is the fact that the current economic climate means that
surveyors choices are rather more restricted, and they face the prospect
of having to accept any offer of employment they receive, at whichever
firm it might be. Surveyors who are currently uncomfortable about their
employers ethical standards are also in a difficult position, with reduced
prospects of finding work elsewhere.
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Ethics issues in surveying firms - does size matter?
There is constant pressure to cut corners and take risks for extra gain, and
the literature provides evidence of poor ethical behaviour. Education and
training should emphasise the danger of taking such risks because they
can rebound on individuals or firms by destroying their reputation.
However, this report goes further in arguing for education and training in
ethics for all surveyors, whatever their level of experience, through lifelong
learning. CPD should reinforce the standards required and why they exist.
This is important not only to ensure a consistent standard is applied by all
surveyors, but also because any bad habits that experienced surveyors may
have picked up during their career might lead less experienced surveyors
to think that acting in that way is the best way to progress. As discussed,
the example set by senior colleagues helps shape the ethical behaviour and
values of less experienced employees.
Finally, RICS has a key role to play in enabling professional networks that
can be particularly important for surveyors in smaller firms who have fewer
in-house colleagues to turn to for support and advice compared with those
in larger firms. Such networks also provide newly or recently qualified
surveyors with opportunities to gather information about the reputation of
firms and help them access potential future employers.
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Ethics issues in surveying firms - does size matter?
RICS needs to raise awareness about ethical issues and promote the
incorporation of ethics training into accredited courses leading to the
APC and into CPD courses.
RICS needs to continue its efforts to police the industry and enforce the
standards set by its codes of conduct.
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Ethics issues in surveying firms - does size matter?
being highly
educated does not
automatically
equate with
acquiring higher
ethical standards
62
REFERENCES
5
Ethics issues in surveying firms - does size matter?
64
Ethics issues in surveying firms - does size matter?
Homann K (1999) Ethics in real estate. Does the German real estate industry
need a code of conduct to support the implementation of ethics?, in S E
Roulac (ed.) Ethics in Real Estate, London: Kluwer Academic Publishers.
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Ethics issues in surveying firms - does size matter?
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Ethics issues in surveying firms - does size matter?
Richards L (2003) Keeping pace with the speed of change for small firms:
perspectives from the SEC, Securities Industry Association, Small Firms
Conference, Florida, 9 October. Available at: www.sec.gov/news/speech/
spchlar100903.htm [Accessed 5 May 2009].
Ware J (2000) Drawing the line in a gray area, in Ethical Issues for Todays
Firm, proceedings of the AIMR Seminar, In the Best Interests of Our Clients,
78 December 1999, Philadelphia, PA: AIMR.
Zweig J (2000) You get the clients you deserve, in Ethical Issues for Todays
Firms, proceedings of the AIMR Seminar, In the Best Interests of Our Clients,
78 December 1999, Philadelphia, PA: AIMR.
67
College of Estate Management 2010
CEM warrants that reasonable skill and care has been used in preparing this
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ISBN: 978-1904388883
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