Ethics Moral Business

A) I chose readings “Ethics: A basic framework” to analyze first point. From this reading I have formed the view that, although, the markets are impersonal, but particular real persons act directly or through companies, as its managers, in these marketplaces. The mobility of employment, capital, produce and technology is making business increasing global in its transactions and its effects. Laws and market forces are necessary, but insufficient guides for ethical conduct. Moral values in business decision making is very necessary, without them stable business relationship is impossible. All people are very different, but still there are existing instinctive understanding about what is good – bad and what is right – wrong. Human actions are the primary subject – matter of our ethical judgments. By human action we mean behavior or activity that is deliberate.

An ethical person always is more agreeable and he looks more reliable than unethical ones. Talking about business, an ethical human doesn’t look only agreeable or good manner person, he also looks honorable, trusted, conscientious and sincere. Ethical person is good partner; he is able to conduct successful negotiations and so on. So a good business human should always be ethical and observe some special rules, principles of conduct and moral values. The deliberate actions we designate as “ethic” or “unethical” are usually actions that benefit or harm other people or ourselves positively or negatively in some serious way. However, it’s need acknowledge, people can have different understanding about moral values and ethics.

As I understood from readings “Ethics: A basic framework”, there are many definitions of ethics in society, but in my opinion, the ethic is a system of moral values and principles of market participants.

Every person has an ethical set of beliefs or ethical principles. Most people think that cheating or stealing are wrong, promises ought to be kept and so on. Ethic in all its forms is concerned with intention “right” or “wrong”, “good” or “bad”. The word “ethic” has a number of meanings. According this framework, there four fundamental questions to which market participant must answer before acting ethically:

• Is the action consistent with the persons’ basic duties?

• Does it respect the rights and legitimate claims of the affected parties?

• Does it reflect best practice?

• Is it compatible with the persons’ own deeply held commitments?

Explaining meaning of “duty” it should be note, that duty is a human action which is exactly conformable to the laws which require us to obey them. In one cases, basic moral duties involve specific obligations to particular parties (for example, to pay for good), in other cases – more general and open – ended (for example, banks’ duty to be cautions and careful before granting the loans).

In common meaning, the natural rights are those which have no relation to the establishment, support, or management of the government. These consist, for example, in the power of acquiring and enjoying property and the like. However, the basic, essential rights like duties are determined in the codes or statutes. Ethical activity is such as it doesn’t violate other person’s rights and liberties (natural or fixed in the codes or statutes).

Every person must have a responsibility to respect human rights and democratic institutions. Also recognize government’s legitimate obligation and support public policies and practices that promote human development through harmonious relations between business and other segments of society.

Best practice – It are the certain posit principles and standards of excellence, which are desirable, but not necessarily obligatory. Ethical activity isn’t activity, which mere doesn’t violate others persons rights and liberties, however, it must correspond to best practice.

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Moral commitments are often involve in behavioral rules, such as "keep promises" or "respect property rights.", however, in general case, moral commitments are wider person’s obligations than law establishes and it depends on person’s outlook, moral values and etc. For example, the companies have a responsibility to provide theirs customers the highest quality products consistent with their requirements and to ensure its maintenance thought guarantee was over. Or, the company should listen to their employees and act on theirs suggestions, ideas, requests and complains, avoid “silence” discrimination and guarantee equal treatment and opportunity in areas such as gender, age, race and religions.

Presented framework in the article “Ethics: A basic framework” consist of three main stages:

• Understanding the facts;

• Identifying relevant standards;

• Maintaining objectivity.

At first stage, the company has to traverse what it has to do and to forecast possible result of its activity. The analysis, according this framework, consists of three basic components:

• Identifying the parties likely to be affected by the action;

• Mapping for each party the positive and negative consequences;

• Evaluating proposed action against ethical standards (duties, rights, best practice and commitments).

At second stage, the company must decide what ethical standards (company’s own code, industry standards or other) will be applied.

The last stage – maintaining objectivity. Company must evaluate its ethical judgment reference to various tests. It this case it were given three questions to which company must answer before acting:

• Would company be comfortable if target action were described on the front page of a respected newspaper (evaluating how company’s actions may be viewed by society);

• Would company be comfortable if everyone in a similar situation did this (evaluating what would happen if company’s action became the general practice);

• Is this how I’d (to have in mind manager of company) like my leadership to be remembered (manager’s self – evaluation)?

Generally speaking, ethic is very necessary and compulsory for every person (both natural and legal). Business person should be ethical especially. Human actions are not the only subject matter for ethic. Besides action, ethic examines and evaluates social practices, organizations, institutions, and even social, political and economic systems. Good manner and compliance business principles always help to communicate with others, to negotiate, find reliable partner and expand successful business. If a business person agrees with employees, the customers trusted him, if owners and suppliers do not doubt him; every activity will be fortunate and profitable.

B) I chose “IKEA’s Global Sourcing Challenge” Indian Rugs and Child Labor” case to analyze second point. Because the problem of child labor is very tender subject currently, now children have received more attention than before (the word “child” is understandable as any person below fifteen years of age, unless local minimum age law stipulates a higher age for work or mandatory schooling, in which case the higher age would apply; if, however, the local minimum working age is set at fourteen (14) years of age in accordance with exceptions for developing countries, the lower age will apply). Child labor is understandable as the employment of children under an age determined by law or custom. Human Rights Watch, the largest human rights organization, in their homepage announces, sustaining International Labor Organization (ILO) data, that 250 million children between the ages of five and fourteen work in developing countries – at least 120 million on a full time basis. Sixty-one percent of these were in Asia, 32 percent in Africa, and 7 percent in Latin America. Most working children in rural areas were found in agriculture; urban children worked in trade and services, with fewer in manufacturing, construction and domestic service.

The reason of this view to the children – in the early twentieth century it was acknowledged that children's rights are distinct from those of adults and it must be protected much more. The United Nations in 1989 adopted the Child Rights Convention, which established that children have special rights to protection and special rights to development. But it’s necessary that these rights would be realized in practice. The both individual person and companies must understand clearly meaning and important of Child rights and Child Rights Convention.

The IKEA is very proper example of company, which tries to ensure rights of children and promotes negative view of society to illegal child labor in all world, especially, in third world countries (India, Pakistan and etc.). As I understood from readings, IKEA follows by the Child Rights Convention, collaborates with International Labor Organization (ILO), International Organizations Save the Children and UNICEF. Below I will present the main importance points of IKEA activity related with the children rights.

In my opinion, the one of most important matters is to acknowledge that problem exists. In this case, IKEA understands and knows that child labor exist in various countries (India, Paskistan and etc.) where IKEA products are manufactured, but IKEA refuse child labor at its suppliers (it must be mentioned that IKEA supports the legal employment of young workers). Possibly, child labor was and is normal traditional phenomenon in some South – East Asian countries and IKEA allows to different cultures and values in countries where IKEA operates and sources its products. However, it does not compromise on the basic requirements regarding the Child Rights Convention.

To ensure rights of children IKEA works actively to prevent and detect child labor. At first, IKEA established Children's Ombudsman (first in 1998, Barner), who is responsible for ensuring that IKEA would operate in such way that wouldn’t violate the best interests of the child. Its work complies with the UN Convention on Child Rights Convention. Also, IKEA has a special code of conduct called The IKEA Way on Preventing Child Labor, which is a part of The IKEA Way on Purchasing Home Furnishing Products (IWAY). The IKEA Way on Purchasing Home Furnishing Products code is invoked to all suppliers and their sub-contractors.

Next – monitoring of compliance to The IKEA Way on Preventing Child Labour is done by IKEA trading service offices and with unexpected visits by internation audit company’s KPMG auditors at suppliers and sub-contractors in South - East Asia. If child labor is found, IKEA requires the supplier to act in the best interests of the child. The supplier must implement a corrective and preventive action plan, including education and training. If corrective action is not made within an agreed time frame, or if further violations occur, IKEA terminates all business relationship with the supplier and their sub-contractors.

The complexity of the child labor issue requires contribution and influence of many parties (countries’ governments, international organisation defending human rights and etc.), not only IKEA. IKEA understands that problem of child labor can’t solve by economic blockade. By co-operating closely with International Organizations such as UNICEF and Save the Children, the IKEA Social Initiative tries to create the general support structure necessary to tackle the root causes of child labour and achieve a sustainable solution. The IKEA Social Initiative supports a project, run by UNICEF, promoting children's rights in the northern Indian state of Uttar Pradesh, from where IKEA sources many of its carpets. The aim is to prevent and eliminate child labor in the carpet belt by addressing root causes such as debt, poverty, lack of access to education disability and ill health.

Despite to putting forth, IKEA confronts with child labor yet. It should be note that this goal (to eliminate child labor) can’t be achieved straight away. Only complex strategies that involves access to education opportunities, open avenues for gainful employment and eradicate parental illiteracy can eventually eliminate child labor.

C) I’m working in AB DnB NORD bank – I’m the Head of Special assets department. The Bank is part of the DnB NORD banking group registered in Denmark. This holding was established by Norway’s largest bank DnB NOR and North Germany’s largest bank NORD/LB. As I understood from readings and discusses it’s very important that each employee of AB DnB NORD bank exercises due care and refrains from acts that could weaken confidence in and is loyal to AB DnB NORD bank. To achieve this goals each employee must know AB DnB NORD bank’s vision, values, policies and procedures. If in doubt as to whether certain action is allowed, the employee of AB DnB NORD bank must abstain from it.

A bank is a very specific company, the high requirements of ethics is applied to it and its employee. According my understanding about ethics no employee may participate in or seek to influence a decision where special circumstances exist which might bring the issue of his or her impartiality into question. Such a circumstance could be any connection with the matter under consideration, e.g. through relatives, close associates or financial interests, etc. An employee is also not authorised to take decisions if circumstances exist that may lead others to believe that he or she promotes interests other than those of AB DnB NORD bank. This also applies to actions undertaken by the employee as a private individual.

I think, that employees of my organization must exercise due care in situations where their integrity could be questioned. No employee or close associate shall require, receive or accept any offer of “undue benefits” from bank’s business connections. Nor must any employee give or offer others undue benefits.

AB DnB bank employees can see various personal data of customers. By my opinion, employees in AB DnB NORD bank following by perception of ethics can’t, via the computer systems or in other non-public sources, to actively seek information about colleagues, customers or third parties when they do not need to be privy to such information in order to carry out their work.

As a part of ethics, especially in the banking system, is observance of confidentiality. It’s essential to ensure that confidential information is not misused or passed on to unauthorised persons.

Employees of AB DnB NORD bank group would be recommended to refrain from other activity if it that may lead to believe that it could have negative impact of the employee’s performance in AB DnB NORD bank group or weaken confidence in AB DnB NORD bank group.

However, in my opinion, it wouldn’t be violation of ethics if employee would participate in clubs or associations.

To avoid conflicts of interests, parents/children or spouses/partners should not work in the same structural unit if one of them is a immediate superior to the other. Nor should such persons hold positions where they have the opportunity to prevent, evaluate, approve, audit, control or in any other way affect the work of the other.

For this perception of ethics to be effective, it is especially important for each employee to continuously value his or her activity in relation to ethics rules.

All employees in a managerial position have a particular responsibility for ensuring that their conduct as well as that of their subordinates complies with the Code of ethics at all times.

It would useful that companies, especially banks, insurance companies and other companies, which activity is related to upper trust of society, would have the policy of ethics, which would be is an integral part of the employment agreement and rules of internal work procedure of the companies and the employees will be familiarised with the policy of ethics.

The employees non - fulfilling, non-complying or ignoring the regulations of the Code of Ethics shall be subject to disciplinary punishment. Depending on the degree of breach of the Code of Ethics, employee‘s guilt and resulting outcome, the employee may imposed to disciplinary punishment, including dismissal from the position without notice.