By doing so, managers risk and get the organization into trouble because they believe that their behavior (unethical) is in the interests of the organization or the individual. The reason

However, business ethics is not only about socially responsible behavior. It focuses on a wide range of managerial and managerial behaviors. Moreover, the focus of her attention is both the goals and the means used to achieve them by both. For example, almost all Americans are likely to feel that it is unethical to bribe a foreign official to get a contract. In this case, the means are unethical. Imagine, however, that we are talking about a contract for the purchase of fur seals used to make clothing. Some people who value wildlife protection may find it unethical to use fur, even if it can be obtained without bribes. The goal is considered unethical here, since such actions are considered as improper behavior. From this point of view, behavior is wrong, not because it is illegal, but because it is contrary to personal values ​​and is an action that cannot be supported. In another illustration, many people consider it unethical for companies to do business with South Africa because of the country's apartheid policies. The opinion of these people is the result of the actions of the South African government, which violate the values ​​\ u200b \ u200bof people about the attitude towards individuals in society.

In addition to senior leaders who often exhibit unethical corporate behavior, anyone in the organization can also act unethical. Consider the following situations. You are a purchasing agent, and one of the suppliers you do business with offers you a box of good wine. Do you accept it

According to research data from the mid-70s. about two-thirds of the 500 largest American companies have behaved illegal in one form or another. Opinion polls have shown that, in the general public, adherence to ethical behavior is declining in the United States. According to one poll, 65% of Americans believe that the overall ethical standard in the country has declined over the past decade °. Only 7% of Americans believe it has gone up. When asked about the most common unethical business practices, the head of one of the financial institutions said Bribes, forgery, inaccurate financial statements, artificially inflated prices, collusion about prices. Another study spanning a 15-year period showed that business leaders are more cynical than 15 years ago about the ethics of leadership in general.

TRAINING IN ETHICAL BEHAVIOR. Another approach that organizations use to improve ethical behavior is to educate managers and employees on ethical behavior. In doing so, workers are introduced to business ethics and are made more susceptible to ethical issues they may face. Embedding ethics as a subject in university-level business curricula is another form of teaching ethical behavior to help learners better understand these issues. According to a study by the Center for Business Ethics, corporations are much more concerned with ethics today than in the past, and they have taken concrete steps to introduce ethics into their practice. That said, daily newspapers are replete with examples of unethical and illegal behavior by employees of organizations of all types, however, we believe that organizations themselves do not lack opposing examples of ethical behavior by their employees. Continuing to implement the various programs and practices described above, and ensuring that high-level leaders serve as role models for appropriate ethical conduct, organizations must be able to raise their ethical standards.

What do you think about the reasons for the recent trend of unethical behavior?

Unethical behavior of individual auditors deserves censure and punishment, up to exclusion from the auditor community, deprivation of qualification certificate and license to conduct auditing activities.

An increasing concern in society is caused by unethical marketing, price fixing, bribery, inaccurate advertising, unsafe goods. Most likely, this concern stems from the fact that marketing activities are in plain sight. The impact and opportunities provided by the field of marketing management are such that marketing can still be the source of the most business disruption. Unethical marketing does not use any arguments about business ethics. Such marketing is an unethical activity that ultimately leads to the bankruptcy of a company or individual entrepreneur. In addition, unethical marketing creates a negative image for the firm. It is the basis for deviant behavior and, as a result, leads to organizational dysfunction. Bribery, for example, harms unrelated consumers and competitors. A similar situation arises when a dishonest seller can increase their commissions by deceiving buyers. If these activities are not identified and punished, then they benefit the individuals who conduct them, and possibly their companies, at the expense of others and economies.

It is important to take into account the results that ethical disregard or unethical behavior can lead to. In the long term, the shareholders of a company are likely to punish the firm for unethical marketing by their actions, and consumers, for example, can turn to other companies. In the short term, it is also possible for a company to ignore ethical standards. And the more such ignorance spreads, the sooner legitimate opposition can be found. It is likely that companies that conduct business in accordance with the cannibalistic principle of eating their own kind are instilling in their employees the same attitude towards the company itself and towards each other. Therefore, adherence to ethical standards is the foundation of a successful business.

Human rights. The principle of human rights is based on the premise that a person or group of people has a right to something or has the right to be treated appropriately. A decision is considered unethical when it violates human rights. This principle puts mutual respect at the forefront, even if we disagree with someone or do not love someone. This ethical concept makes the person appreciate. It is a violation of human rights and therefore unethical behavior by a union that does not recognize the right of a group of women employees to apply for any job in accordance with their qualifications. Another example - a company is engaged in thoughtless disposal of hazardous waste. A company may be guilty of ignoring the rights of others by using the environment for selfish ends.

Organizational relationships. Market participants should be aware of how their behavior can influence the behavior of others organizationally. They should not use pressure or coercion that could lead to unethical behavior towards others, such as company employees, suppliers or consumers. However, they must

What are your successes in this exercise You may be asking yourself for the first time a question about the motives and goals of your actions. At this point, I intend to give you a basic understanding of how you can develop flexibility in behavior. As a developmentist, I find it unethical to forcefully change or manipulate people. Change only happens when people themselves want change.

Nevertheless, unethical behavior has its own benefits, and its danger is that the spread of unethical behavior leads to a decrease in the so-called ultimate morality, which is understood as the lowest level, the border of ethically acceptable and practiced behavior. When this ultimate morality falls as a result of the increasing proliferation of unethical patterns of behavior, pressure arises on the individual entrepreneur (subject), forcing him to adapt to the falling limiting morality in order to avoid deteriorating his competitive position.

In the third case, the individual understands that everyone will benefit if the rules are universally observed, but for himself he will consider best model unethical behavior. The third case just serves as an illustration of the problem, which with the development of the market economy system becomes more and more acute - with the above-mentioned problem of the free rider. The problem with the moral free-rider is that individuals want to take advantage of the moral state and not participate in the cost of it, which consists of limiting unethical impulses. In other words, each individually has an interest in ensuring that everyone follows the rules and that the common good for the whole group is realized, but each individually is tempted to make an exception for himself from these rules.

Groupthink occurs in organizations when groups prioritize their own, contrary to generally accepted norms, if this leads to benefits for their organization, which in turn encourages people in the organization to commit or support unethical actions. Groupthink appears in organizations and groups that deliberately commit unethical behavior when the group is cohesive, when its leader advocates unethical decisions or ideas, and when the group does not have internal control to ensure ethical behavior. The desire of group members to gain approval from other members and the leader greatly contributes to unethical decision-making. In such situations, the group takes unethical actions and rejects any opinion that does not coincide with the goals of the group and its leader. Another primary symptom of groupthink is the avoidance of having to defend one's position. This happens when the group leader receives social support from his advisors who agree with his opinion and participate in finding arguments to justify the most dubious decisions.

Ethics not only touches upon the problem of social responsibility, but should also be considered in a wide range of options - the behavior of managers and subordinates. Moreover, from an ethical standpoint, both the goals and the means used in management must be evaluated. So, if a trading company, in pursuit of high profits, builds its strategy on selling expensive imported goods of dubious quality to the population, then it not only violates legal norms, but also relieves itself of social responsibility, demonstrating unethical corporate behavior. Within such a firm, among managers and

However, in the relationship between the seller and the buyer, moral and ethical standards are not always observed. Sometimes there is a possibility that a product is misrepresented. This is a fairly common case, especially in the retail industry, where a product is advertised as having a number of specific properties, and because of this, as well as its relative cheapness, it sells quickly. When his stock runs out, the salesperson tries to convince the customer to buy a more expensive product. This type of unethical behavior has its own name - bait and hook. Once the customer has taken the bait, the seller goes to great lengths to convince the customer to purchase another product, which tends to be more expensive.

However, not every example of commonly held unethical marketing behavior is illegal. Marketers often have to make legitimate decisions that may not be ethical. There are issues that the law has not yet reached or for which, due to their complexity or due to the lack of clarity about what is correct in each particular case, the law cannot or will not prescribe anything. For example, overpricing is generally not illegal, but is often considered unethical in many countries, the law does not prohibit television advertising for children, and yet it is also often criticized for immorality. Such gray areas, where behavior can be legal but unethical, or where legislation and ethics are not clear-cut, often pose significant challenges to academics and practitioners alike.

Contact a manager at any level on any issue, including issues such as violation of the law or unethical behavior.

We will respect the professional reputation and practice of other management consultants. This does not remove the moral obligation to make public the unethical behavior of our colleagues and bring it to the attention of the authorities.

The auditing community as a whole and each auditor individually condemn the unethical behavior of individual auditors and demand their punishment, up to exclusion from their environment, deprivation of qualification certificate and license to conduct auditing activities.

The actions of managers or ordinary employees that violate the law should also be regarded as unethical. For example, E.F. Hatton was found guilty of forging 2,000 postal and telegraphic items, i.e. in an act that is clearly breaking the law. It's right. However, actions that do not violate the law may or may not be considered unethical depending on a different value system. Imagine a situation with the withdrawal of Thileno-la capsules from the Johnson & Johnson company. For the most part, people should consider this action to be ethical. Some must view the behavior of Ford Motor as unethical because it objected to the withdrawal of the Pinto or redesign of the fuel system to eliminate potential gas tank hazards.

As the reasons for the expansion of unethical business practices, business leaders attribute 1) competition, which marginalizes ethical considerations 2) an increasing desire to indicate the level of profitability every 3 months, i.e. in quarterly reports 3) failures in ensuring that managers are adequately rewarded for ethical behavior 4) a general decline in the importance of ethics in American society, which subtly excuses unethical behavior in the workplace 5) pressure from the organization on ordinary workers in order to find them a compromise between their own personal values and the values ​​of the managers. This latter reason is supported by the results of more than 20 years ago research, which found that the behavior of their leaders was the main influence on unethical decision-making by employees. In a broad sense, what the owner does and how the owner behaves is the main factor influencing the behavior of the subordinate. Thus, by behaving ethically, you, as a leader, can significantly influence the ethics of your subordinates.

The idea of ​​ethical business conduct is also to protect the firm from encroachment on the part of unethical employees and competitors. High ethical standards also protect employees. If people work in a highly ethical firm, the firm's attitude towards them from the standpoint of honesty and dignity will be compensated for by a high ethical level of the employees themselves and an increase in labor productivity.

One might get the impression that Mandeville's paradox of private vices - social benefits makes ethics superfluous, since, as already noted, unethical behavior leads to a socially useful result, leads to an increase in social wealth and welfare. In addition, it is believed that ethical behavior is not required from market participants also because it is assumed that the very pressure of competition will force them to economically correct actions that are identical to ethically correct actions. In other words, outside competition sufficiently compels entrepreneurs to behave efficiently and honestly inside and outside the enterprise, otherwise there would be an outflow of workers to other employers and buyers to other sellers.

Third, there is also such a type of ethical behavior as refusal to obtain a competitive advantage and economic profit by exploiting a morally questionable opportunity, unethical behavior, or breaking rules. In this case, the costs for the entrepreneur represent a wasted opportunity, since he is missing out on additional income, refusing to unethical, i.e. contrary to duty and rules, behavior 2. Ethical behavior here consists in the rejection of public evil (for example, bribery) at the expense of the rejection of private enrichment. There is also an economic incentive not to produce social evil; the enterprise is interested in the fact that bribery does not become common practice and that it does not itself become its victim3. "

Unfortunately, each of us can rationally justify immoral behavior. We can convince ourselves that such actions are acceptable. The best way to prevent immoral acts is to recognize that this excuse is based on vicious and self-serving logic. It helps to be fully armed against four general rational ways of justifying unethical behavior

The length of time a law is enforced in practice may depend to some extent on the nature of the material and the interpretation of the law in different countries. However, if plagiarism is not subject to the law, it can be regarded as unethical, and any serious precedent can be regarded as unprofessional behavior.

An organization can affect and distort an individual's good intentions. O. Ferrell and others (Ferrellet al, 1989), following research predicting unethical behavior, suggest that decisions about which behavior is appropriate in a particular situation are influenced by the organization's existing opportunities for an individual to behave ethically or unethically. ... These opportunities are a function of the culture of the organization, the professional

Unethicalness, and to put it more harshly - the immorality of their behavior is found in communication with subordinates, colleagues, counterparties, administrative bodies, foreign partners, in the dominance of bribery and corruption.

V business sphere the concept of image is widely used. The word itself means image, reflection, likeness, image. One of the definitions of the image is a halo created by the opinion of a social group or by a person's own efforts. Image is closest to the concepts of reputation and good name. A person and a firm can have a positive, positive, approving, and negative image. Image is associated with perception, or we perceive the bearer of the image as our own, trustworthy, whose behavior we approve, or not. The image of a company is a factor of customer confidence, an increase in the number of sales, loans, and hence the prosperity or decline of the company, its owners and employees. At the same time, the image is a dynamic phenomenon, and, like the impression about a person, it can change under the influence of circumstances, new information, as a result of long-term communication. The image of a company depends not only on its products, but also on its social responsibility, those forms of activity that society regards as positive, corresponding to pressing public interests and concerns. The image is created by long-term and purposeful efforts in the field of Publi Relations (systematically planned activities aimed at forming the desired public opinion), in the field of advertising, in the field of customer relations, ethics of behavior, formation and maintenance of reputation. Image is a fragile phenomenon, it is enough for a client to buy a low-quality product once or to come across unethical behavior of an employee of the company, as its reputation in the eyes of the client drops sharply, and he himself, and sometimes his friends, are lost for the company (Once they lied - who will believe you). Therefore, the image of the company depends on each of its employees. If the employees of the firm regard the attitude towards them as bad, then this dissatisfaction in one way or another affects their attitude towards customers, which undermines the firm's efforts to create a positive image.

Can - and should - shareholders, acting with the help of their agents, try to expropriate part of the proceeds from the firm's creditors? unethical behavior there is no place in the business world Second, in the event of such attempts, lenders will defend themselves by introducing restrictive provisions in future loan agreements.Finally, if lenders determine that managers are trying to increase the wealth of shareholders at their expense, they will either refuse to continue doing business with this firm, or they will charge it higher than usual interest - as compensation for the risk of possible exploitation.Thus, a firm that plays unfair play with its creditors either loses access to the hired capital market or faces high interest rates on loans and other constraints, both of these prospects are fraught with harm to shareholders.

For an organization's actions to be ethical, it must first be adhered to openly and unconditionally by its senior officials.35 consequences of unethical behavior, their own actions and ethical practices. Senior executives continually remind employees that it is their duty not only to comply with codes of ethics, but also to report violations. Although such companies provide

At all times, immoral behavior has been condemned in society. Therefore, it is necessary to clearly recognize the difference and understand what it is. Morality is a collection of behavioral rules in society. Moreover, it should be noted that its norms differ in different cultures and nationalities. So, what is the norm for your family and culture, in another country it becomes an indicator of immorality and, accordingly, vice versa.

Deviant behavior

Immoral behavior is a subgroup in the classification of the deviant. Often these two concepts are confused and replaced with one another, which is naturally a mistake. To understand the meaning of "immoral", one should understand the concept and classification of deviant behavior.

Deviant behavior is a person's actions that do not correspond to the norm, that is, they are non-standard.

Deviant behavior can be conditionally divided into two groups:

• Human actions deviating from the norm due to mental disorders... This group includes people with psychopathic illnesses. The so-called category of mentally abnormal. This group also includes people with mental abnormalities, but within the normal range.
• Human actions that deviate from the accepted norms of morality and ethics, that is, immoral behavior. This view deviant behavior finds expression in crimes and misconduct. In most cases, individuals who are characterized by immoral acts, after their commission, are subjected to administrative, criminal liability. In case of minor violations of moral and ethical standards, social and medical workers are forced to work with a person.

Concept

Immoral behavior is a violation of moral principles by a person through actions. Morality is a kind of requirements for the people around and for oneself, which are considered correct during interaction. However, it should be noted that the concept of morality is rather vague. Since, for example, for one foul language is considered the norm, but for others it is outrageous and immoral.

An example of differences in different cultures- the concept of adultery in our country and in Japan. Married man who regularly cheats on his spouse with different women, causes us only negative emotions and indignation. In Japan, the opposite is true. The spouse has the right to come home in a state of alcoholic intoxication, in the company of geisha, and the wife will not only not make a scandal, but also thank the priestesses of love for accompanying, delivering the faithful to the family hearth. In Japan, the status of the head and earner of the family is extremely high.

In Japan, they have a favorable attitude towards same-sex marriage, which cannot be seen in European countries. The reason for this is the cult of the samurai, who on duty are obliged to abandon family ties. Therefore, it is believed that it was they who favored the development of homosexuality.

Forms of behavior contrary to morality

Immoral human behavior has the following basic forms:

• Addiction.
• Substance abuse.
• Prostitution.
• Law violation.
• Alcoholism.
• Suicide.
• Use of obscene expressions.
• Insults.

Immoral behavior: reasons

There are three main reasons for immoral behavior:

• Inequality on the social ladder. Mainly income affects the upbringing and behavior of a person. The less a person earns money, the greater the likelihood of his degradation. Due to frustration with the level of his life, he tries to escape from reality with the help of alcohol or drugs. Poverty is a psychologically challenging ordeal.
• Education level. A person due to ignorance may simply not know about the rules of morality and ethics. Traditions, norms and rules must be passed on in society from generation to generation. Parents need to make the child understand from childhood what can be done and what is abhorrent to universal human values ​​and statutes.
• Environment. Undoubtedly, this reason is one of the fundamental ones. In many ways, a person's actions and thoughts depend on what and who surrounds him every day. The closest people have the greatest influence: family, friends, classmates, colleagues. If a person is often surrounded by persons with immoral behavior, and apart from them he sees nothing, then for him it becomes the norm. In such cases, in order to eradicate immoral acts, sociologists work with groups of people, and not with one specifically guilty person.

Behavior and law

As mentioned earlier, it is not uncommon for immoral behavior to be prosecuted. The punishment that threatens a person for acts contrary to morality ranges from the imposition of a fine to a prison term.

There is a concept of "immoral behavior of the victim". That is, when the person against whom the crime was committed behaved in an inappropriate manner and provoked another individual to commit an offense. In this case, the unmoral actions of the victim become a mitigating circumstance for the offender.

Moral behavior is a set of actions, actions of people that meet the norms of morality, consciousness, order, formed in society, or towards which it is directed.

In the process of entrepreneurial and managerial activity, there are cases of deviation from social norms, that is, unethical behavior, it can be caused by various factors:

1.competitive struggle;

2. the pursuit of large profits;

3. inept incentives for leaders for ethical behavior;

4. underestimation of ethical norms in society;

5. an attempt to achieve the goal and realize the mission of the organization at any cost;

6. unethical behavior of partners;

7. conflict, stressful situations in the organization;

8. unsuccessful selection and inept application of leadership styles;

9. complex system development and decision making in the organization.

To ensure ethical behavior, modern management offers the following measures:

Introduction of ethical norms that reflect the system of common values, social preferences, rules of conduct for employees of the organization;

Creation of ethics committees;

Application of incentive mechanisms that counteract unethical behavior and behavior;

Implementation of social audits to determine the impact social factors on the organization;

Organization of training on ethical behavior for managers and all personnel:

Continuously informing employees about cases of highly ethical behavior;

Conducting meetings, conferences, symposia, etc. on issues of ethical behavior.

The established norms of morality are the result of a long-term process of establishing relationships between people. Without observance of these norms, political, economic, cultural relations are impossible, because one cannot exist without respecting each other, without imposing certain restrictions on oneself.

When faced with the problem of ethical choice, managers tend to rely on a normative point of view, that is, certain norms and values, in accordance with which decisions are made.

In normative ethics, there are several approaches to describing value systems and, accordingly, adopting ethically difficult decisions that can be applied in management practice: utilitarian approach, individualistic approach, moral and legal approach, the concept of justice.

Utilitarian approach. The basic principles of the utilitarian approach are based on the fact that moral behavior is most beneficial the largest number of people. The decision-maker must consider the impact of each of his options on all stakeholders and choose the option that brings pleasure to the largest number of people.

Individualistic approach. Assumes that a person's actions are morally acceptable that are beneficial to her in the long term. Self-control is considered the main driving force, and all external forces, which limit it, must be suppressed. Each person chooses for himself the most profitable solution in the long term, on the basis of which he judges the quality of his decisions. Individualism is reduced to behavior that is beneficial to other people, that is, a person's actions begin to correspond to the norms desirable for society. One of the features of this approach is that it presupposes (if necessary) the actions of the individual aimed at acquiring personal short-term benefits that are incompatible with social norms.

Moral and legal approach. The moral-legal approach asserts that a person is initially endowed with fundamental rights and freedoms that cannot be violated or limited by the decisions of other people. In the decision-making process, the following moral rights can be taken into account:

1. The right to freedom of consent.

2. Right to privacy.

3. The right to freedom of conscience.

4. Right to Proper Treatment.

5. The right to life and safety.

Justice concept. There is distributive justice (equal - equal), procedural justice (compliance with the rules), compensatory justice (compensation for damage).

In the global economy, there are seven main mechanisms by which norms can be put into practice. These include:

1) codes of ethics;

2) ethics committees;

3) training;

4) social audits;

5) legal committees;

6) services, consider claims of citizens on ethical issues;

7) changes in the corporate structure.

The most commonly used mechanism is a code of ethics. It is developed by a specially created body - a committee, a commission, and the like. About 90% of foreign companies have implemented ethical principles with the help of such codes. They can be developed for the company as a whole and contain ethical rules common to all.

In the global economy, many companies are now creating divisions or hiring individual employees to develop codes of ethics: Steps are being taken to educate managers on the provisions of these codes; a system of incentives for managers is also being created, provided that they take ethical issues into account when making decisions and that their official conduct complies with the ethical standards set forth in the codes.

When monitoring official actions of employees, companies use lie detector tests, drug tests, etc.

More productive, in the opinion of managers of many firms and their owners, is the way of hiring graduates educational institutions, where there was a large and extensive program of teaching the basics of ethics. In this case, ethical standards are laid in the consciousness (and subconsciousness) of the future employee as part of the ideological complex and, one might even say, as unshakable axioms, are not subject to appeal. Then the cumbersome and expensive system for developing company codes, training employees in ethical standards of monitoring compliance with ethical requirements is largely unnecessary.

Ethical behavior of employees

1. Lean attitude to company property.

2. Consensus of different interests.

3. Ethics of external business relations, including work with government agencies.

4. Ethics in relations with consumers, partners and competitors.

5. Ethics of choice in sensitive situations. For example, keep it a secret out of patriotism for the company or disclose the facts of violations.

International Business Etiquette Rules

1. Rules of greeting, address, presentation.

2. Rules of business contacts: meetings, receptions, negotiations, business correspondence, etc.

5. Ethical standards of material relations: rules for the exchange of gifts and souvenirs; problems of tips and other rewards, etc.

Compliance with the rules of international business etiquette is one of the most important conditions for a company's success. Any deviations or liberties can damage the reputation of the company, which will certainly negatively affect its economic activities.

American business and management researcher Peter Kostenbaum published a book under the eloquent title: "The Heart of Business: Ethics, Power, Philosophy." He convincingly showed how non-economic factors can affect the economy of a firm. Kostenbaum brought components of the company's long-term success:

1. Profit should be not only legal, but also honest, earned by labor and talent.

2. Employees must be moral, patriotic towards the firm and respectful to each other.

3. Goods and services must be of high quality and offered at a reasonable price.

4. The prestige of the company must be well-deserved, the reputation is adequate, the image of top managers is consistent with their business and personal qualities.

Thus, the ethics of international business is not a tribute to fashion. It is not only a socially significant phenomenon, but also an indispensable condition for economic success.

Internationally Social responsibility(CO) of a company is interpreted as a voluntary contribution of business to the development of society in the social, economic and environmental spheres, directly related to the main activities of the company and going beyond the minimum specified by law.

Thus, the scope of the company's SO includes the management of the company's activities in the field of:

Ecology,

· industrial safety and labor protection,

· staff development,

External social activities,

· The relationship of the company with all groups of stakeholders (persons interested in the financial and other results of the company).

The social responsibility of a company is the level of an organization's voluntary response to the social problems of society.

Contrary to the common misconception in Central and Eastern Europe (especially in developing countries) that corporate CO is sponsorship, charity, or social branding, leading international organizations define company CO as a strategic approach to business. That is, a CO company is not an advertising, marketing or PR activity, it covers the entire company and determines how it does business, invests and builds relationships with partners.

What is social responsibility expressed:

1. In relation to consumers. Consumers want reliable products and services, reasonable prices, and good service from the corporation. Meeting the expectations of consumers - this is the social responsibility of corporations to consumers.

2. In relation to suppliers. All suppliers expect fair relations and, of course, timely payments from cooperation with their counterparties. This is many times more important for small suppliers, whose financial situation is such that they do not tolerate delays in payments due to the lack of reserve funds for these enterprises.

3. In relation to shareholders. Shareholders enter into a special relationship with the corporation as "suppliers" of risk capital. They provide the capital needed for a corporation to emerge, develop, and grow. The social responsibility of the corporation in relation to its shareholders is to ensure its profitability in order to enable them to receive such income that would make it attractive for further investment in its activities.

4. In relation to employees (personnel). Wage earners expect more than just pay for their work. They are also concerned with factors such as equality of opportunity, health protection in the workplace, financial security, privacy, freedom of expression and ensuring an adequate quality of life. Indeed, practice shows that those employees who receive fair remuneration, are involved in the decision-making process, and feel comfortable (both physically and psychologically) at work work better.

5. In relation to the local population. The corporation does not exist in an "airless" space. It is surrounded by people for whom the location of the corporation is a haven of life, where they breathe the air, live, raise children, etc. Corporations use the infrastructure created by these people and thereby ensure themselves high profits. That is why the local population expects corporations to be directly involved in solving their problems. This applies to education, organization of transport, conditions for recreation, health care system, problem solving the environment and etc.

6. In relation to society as a whole. The activities of corporations are the object of close scrutiny from various government agencies, political parties, mass media. Timely and full payment of taxes by them enables state structures to solve the social issues assigned to them. At the same time, the main responsibility of corporations is their concern as employers and job creators about their own economic viability and the quality of the goods and services produced.

In other words, social responsibility implies the ethical conduct of business with all groups of the corporate audience.

In many multinational corporations such as Toyota, Siemens, General Mills and Johnson & Johnson, special guidelines have been drawn up, which describe in detail how company employees should deal with suppliers, customers, competitors and other participants in the business process. In other companies such as Philips, Nissan, Daewoo, Whirlpool and Hewlett-Packard, developed ethical codes(codes of ethics) - a written declaration of values ​​and ethical standards by which the company is guided in its actions.

In multinational corporations, a decision must be made as to whether a single code should be drawn up for all divisions of the corporation dispersed throughout the world, or whether it would be more appropriate to develop a specific code for each division, taking into account local conditions. If a company is acquired abroad, a corporation must also decide whether to impose a corporate code of ethics on the company or whether it is better to maintain the ethical standards of conduct that the company followed in the past. For a code of ethics to be effective, it must be clearly articulated and free from ambiguous definitions. In addition, this code should regulate the basic principles of ethical conduct that are relevant to the company's business environment and its business activities. The company must have a rule according to which decision-makers on emerging problems must strictly adhere to the norms of behavior enshrined in the code of ethics.

Summarizing the definitions of business social responsibility (SBS) of more than 50 international organizations, social responsibility as an approach to business has the following set of characteristics:

· SOB is a voluntary choice of the company, in the face of increasing competition and decreasing confidence in business;

· SOB goes beyond the obligations prescribed by the law for businesses to pay taxes, create jobs and generate profits;

· GSS includes all members of the local community: business, media, government, non-governmental organizations, population, investors, etc .;

· SSS is not a way to solve the problems of society at the expense of business, but a way to participate in the development of the environment in which business operates;

· COB is an approach to sustainable development with a direct (usually long-term) impact on the company's financial performance.

With a competent approach, the company's SO contributes to its commercial success, favorably distinguishing it in a competitive environment.

Emerging markets are characterized by the following areas of practical use CO:

Improving environmental processes - increased productivity and income, cost savings with the use of environmentally friendly and cleaning equipment.

Formation of the company's reputation - it's no secret that the business image is not the last factor that allows the company to maintain its competitiveness today. Among the abundance of homogeneous goods, when the consumer satisfies not only physiological needs through the product, but also emotional, aesthetic, spiritual needs, he (the consumer), among many factors in the process of making a purchase decision, pays attention to the social policy of the enterprise. Those. it is about increasing customer loyalty and trust.

Reduced litigation costs.

Human resources - decrease in staff turnover, increase in the interest of employees. People do not want to work in companies that do not prioritize social responsibility as a corporate policy priority.

Access to new markets - standardization according to international criteria (ISO, etc.).

Reducing pressure from inspection bodies... The publication of the principles and policies regarding employees, the environment, in relations with suppliers provides an answer to the government authorities, what is the company's approach to these issues. In fact, today, improving relations with the authorities remains the main benefit that a company gains through social responsibility programs.

Above are not all business opportunities of a CO company - there are many more.

A period of time

Why are high ethical standards important to the investment industry and investment professionals? As shown by the 2008 global financial crisis, seemingly unimportant individual decisions, such as approving loans to individuals unable to provide proof of stable income, can collectively accelerate market crisis which can lead to economic hardship and job losses for millions of people. In an interconnected global economy and market, each participant must strive to understand how his or her decisions and unethical behavior, as well as the products and services he or she provides, can affect not only the short term, but also the long term.

The investment industry serves society by matching those who provide capital or money with those who are looking for it to finance their activities. Consider those who provide capital - investors and those who are looking for it - borrowers. Borrowers may seek funds to meet long-term goals, such as building or upgrading factories, schools, bridges, highways, airports, railways, or other facilities. They can also seek short-term capital to fund short-term goals and / or support their day-to-day operations. Borrowers can be businesses, schools, hospitals, companies and other legal entities and individuals. Some borrowers will turn to banks or other lending institutions to finance their activities; others will turn to stock exchanges to gain access to the funds they need to achieve their goals.

In exchange for providing capital to finance borrowers, investors expect their investments to generate returns, offsetting their use and associated risks. Before providing capital, diligent and disciplined investors will assess the risks and rewards of providing capital. Certain risks, such as a downturn in the economy or a new competitor, can negatively impact the expected return on investment. To help assess the potential risks and rewards of an investment, investors conduct research, assess borrower capabilities, conduct competitive analysis, read official statements, research management's business plan, research reports, and industry reports. Responsible investors will not invest their capital if they do not trust that their capital will be used to their advantage. Investors and society benefit from capital flows for borrowers who can benefit the most from capital through products and services.

Cash flows are more efficiently allocated to investors and borrowers when financial participants are confident that all parties will behave. Ethical behavior builds and reinforces trust, which has benefits for individuals, firms, and society as opposed to unethical behavior. When people believe that a person or institution is reliable and acts according to their expectations, they are more likely to accept the risks associated with those people and institutions. For example, when people trust their own, they are more likely to invest their money and accept the risk of short-term price fluctuations, since they can reasonably believe that their investments will provide them with long-term benefits. Entrepreneurs are more likely to accept the risk of expanding their business if they believe they can attract investors with the necessary funds to expand at a reasonable cost. The higher the level of trust in the financial system, the more people are willing to participate in the financial markets. Wide participation in financial markets allows capital flow to finance the growth of production of goods, provision of services, infrastructure. All of this benefits society with new and often better built hospitals, bridges, manufactured products, services rendered and jobs created. Wide participation in financial markets also means that the need and demand for investment professionals is increasing, resulting in increased employment opportunities for those seeking to use their specialized skills and knowledge of financial markets.

Ethics always matters, but ethics has a special meaning in investment because the investment industry and financial markets are built on trust. Unethical behavior repels, ethical behavior attracts. Trust is important for the entire business, but it is especially important in the investment industry, for several reasons. Reasons may include: the nature of customer relationships, differences in knowledge and access to information, and the nature of investment products and services.

In relations with clients, investors entrust their assets to financial intermediary firms to provide intermediary functions, helping to preserve their capital. Failure to protect clients' assets by the firm and its employees can have serious consequences for everyone involved. Without trust and ethical behavior, intermediary firms would have no business.

Those in the investment industry have specialized knowledge and sometimes better access to information. Having specialized knowledge and better access to information is an advantage in any endeavor, giving one side more power. Investors believe that those they hire will not use their knowledge to harm it. They rely on an investment specialist who uses specialized knowledge to serve the interests of the client.

Another reason why trust is so important in the investment industry has to do with the nature of the products and services. Other industries, such as transportation, manufacturing, technology, retail or food processing, manufacture products and / or provide services that are tangible and / or clearly visible. We can hold a tablet in our hands and test it. We can use software, dine at restaurant chains and watch movies in cinemas. We can judge the quality of a product or service based on many factors: How well will it perform its intended function? How effective is it? How durable is it? How attractive is that? Is the price reasonable or appropriate for the product or service?

In the investment industry, many investments are intangible and only appear as numbers on a page or screen. With no tangible products to test and no guarantees of any kind to protect the product or service to perform as expected, investors must rely on the information provided about the investment - both before and after purchase. When they contact their financial advisor and ask for an investment report, they receive either an electronic or a printed statement listing the transactions. They believe the information is accurate and complete, and they trust the investment professionals with whom they advocate. The globalization of finance means investment professionals are likely to have business opportunities in new or unfamiliar places. Without trust and ethical behavior, financial transactions, including global transactions, are less likely. Unethical behavior can scare off the interaction of counterparties from different parts of the world.

Because of these factors. This trust is created, supported by the ethical actions of all individuals who work and / or precinct in the markets, including those who work for companies, banks, investment firms, sovereign companies, rating agencies, accounting firms, financial advisors and planners, and institutional and retail investors. When market participants act ethically, investors and others can trust that the numbers on the screen or report pages are accurate representations of information and be confident that investing and participating in the financial markets will be profitable. The ethical behavior of all market participants can lead to greater participation, customer protection and greater investment opportunities. The ethical behavior of firms can lead to more high levels success and profitability for both firms and their employees. Clients are attracted to firms with a solid track record, resulting in business growth, higher revenues, and greater profits.

There is another - unethical behavior. Unethical behavior is an action that goes beyond what is considered morally right or right for a person, profession, or industry. Individuals can behave unethically. Entrepreneurs, professionals and politicians can also behave unethically. Unethical behavior in the investment industry poses more threats than in any other professional field. And a number of factors contribute to this.

At the level of microeconomics. Firms with ethical behavior may also have lower relative costs than those with unethical behavior, because regulators are less likely to initiate costly investigations or impose significant fines on firms where high ethical standards are the norm.

At the level of macroeconomics. Unethical behavior dilutes and can even destroy trust. When clients and investors suspect that they are not getting accurate information or that the market is not a playing field, they lose confidence. Investors with low confidence are less willing to take risks. They may demand higher returns on the use of their capital, prefer to invest elsewhere, or choose not to invest at all. Any of these actions will increase costs for borrowers seeking capital to finance their operations. Without access for capital, borrowers may not be able to meet their targets of building new factories, bridges, or hospitals. Reduced investment can harm societies through job losses, growth and innovation. Unethical behavior ultimately harms not only clients, but also the firm, its employee and others who are in one way or another connected with the investment process. You can read an example of unethical company behavior in the article.

Declining confidence in the markets can dampen the growth of the investment industry and tarnish the reputation of firms and individuals in the industry, even if they did not engage in unethical behavior. Unethical behavior hinders the ability of markets to channel capital to borrowers who can create the most value from growth capital. Both markets and society are affected when unethical behavior erodes trust in financial markets. For you personally, unethical behavior can cost you your job, reputation and professional growth, and can lead to fines and possibly jail time. The unethical behavior of the company poses a threat both to the person / company who has undertaken such behavior and to the subjects who did not directly participate in the process.

Questions to consolidate knowledge after reading the article "Unethical behavior in the investment industry"

Question 1

Which of the following statements is the most accurate. Investment professionals have a particular responsibility for ethical behavior because:

A) The industry is highly regulated.

B) They are tasked with protecting clients' assets.

C) the profession requires compliance with its code of ethics.

Solution 1:

B is the correct answer. Investment professionals have a particular responsibility because clients instruct them to protect clients' assets.

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