TABLE OF CONTENT
ABSTRACT
INTRODUCTION
1. Theoretical framework of be
1.1 THE DEFINITIONS AND PRINCIPLES OF BUSINESS ETHICS
1.2 OVERVIEW OF THEORIES OF EMPLOYEE MOTIVATION
2. Data analysis of business ethics in kz and its influence
2.1THE BUSINESS ETHICS IN KAZAKHSTAN AND MOTIVATIONS OF EMPLOYEES
2.2 ANALYZE OF MIDDLE AND TOP MANAGERS ACCORDING TO THEIR BUSINESS SECTORS
3. Findings and recommendations
3.1 FINDINGS
3.2 RECOMMENDATIONS
3.3 SUMMARY OF THE STUDY
CONCLUSION
REFERENCES
APPENDIX
Limitations of Study. The limitations of the study are determined by the following factors. Firstly, the issue explored by this research is very sensitive, therefore I encountered with great difficulties in obtaining the necessary information. Secondly, the inability to conduct a survey or a direct observation or another types of research methods have prevented us from collecting primary data. Therefore, I have used only secondary data, and as a result, the data provided in the research may have marginal inaccuracies.
The definition and principles of Business Ethics
The term Business Ethics is one of the most misunderstood either most different interpreted term in business, because there is still great deal of uncertainty in what does it means. “Ethics is difficult to define in a precise way, it is code of moral principles and a value that governs the behavior of people with respect to what is right or wrong.”1Also, in today is world great deal of ambiguity involving what is business ethics is? I found that, clear definition is hard to find, we have 300 available explaining’s of it in various books.
It mainly expressed as: “It is the application of our understanding of what is good and right to that assortment of institutions, technologies, transactions, activities, and pursuits which we call ‘business”2
For modern ethics of business questions of ethics are aprioristic. The opinion that financial wellbeing of the company less all induces it to observance of ethical standards, quite misleading; life and practice of business postulated the following statement: "Good ethics mean good business". Otherwise negative reaction from customers and partners will inevitably lead to considerable decrease in profitability of the company, and the doubtful reputation which is spread around by mass media will result in absence of any trust to it. The Nobel Prize laureate Milton Friedman states that role of business is using its energy and resources in the activity directed to increase profits, but strictly follow the rules of the game, by participating in open competitive fight, without resorting to fraud and deception.
Ethics impose the system of restrictions representing the sum of the moral rules and traditions which developed in this society on business.
Simply put, ethics involves learning what is right or wrong, and then doing the right thing but "the right thing" is not nearly as straightforward as conveyed in a great deal of business ethics literature. Most ethical dilemmas in the workplace are not simply a matter of "Should Bob steal from Jack?" or "Should Jack lie to his boss3?".
According to the National Business Ethics Survey, most of the huge firms and companies can easily make better their integrity via realizing effective ethics programs, in order to decrease employee misconduct.
Experience of the international business confirms the importance of business ethics in formation of success of firm.
“JPMorgan Chase paid the federal government $13 billion last fall—the largest corporate settlement in U.S. history—to settle charges involving conduct that prosecutors say contributed to the mortgage meltdown. The bank acknowledged that it made serious misrepresentations to the public about numerous residential mortgage-backed securities”.4
The direct connection of ethics with vital practice is well traced in the sphere, so-called professional ethics which represents system of moral requirements to professional activity of the person. One of types of professional ethics is ethics of business relations. It evolved from rather late general labor morals. In turn, the main place in ethics of business relations is taken by ethics of business. It includes ethics of management, ethics of business communication, ethics of behavior, etc.
The system of norms and rules accepted now in world business didn't arise in finished form. It developed throughout the long historical period, in process of development of a civilization, on the basis of inadvertent following of people to certain traditions and customs.5
Primary foundation of professional ethics was laid during blossoming of antique civilizations. From there rules and norms of trade, including - (that is especially important for a situation in domestic business) idea of importance of observance of contracts originate, for example, a professional Hippocratic Oath. However in an inner world of the person of the antique and medieval cultures based on violent compulsion of the person to productive work there was no place to ideas of communication between work and property, wealth. Moreover, they were thought as separate, even opposite elements of human life
Ethics of business as applied field of knowledge were created in the United States and in Western Europe in the 1970th years of the XX century. However moral aspects of business involved researchers in the 60th years. The scientific community and the business world came to a conclusion about need of increase of "ethical consciousness" of professional businessmen when carrying out business operations by them, and also "responsibility of corporations before society". Special attention was paid on the become frequent cases of corruption both among government bureaucracy, and among responsible persons of various corporations.
Relationship between corporate and universal ethics, a problem of social responsibility of business, questions of the annex of the general ethical principles to concrete situations of decision-making, influence of religious and cultural values on economic behavior, etc. falls within the scope of ethics of business. There are specialized periodicals (for example, Journal of Business Ethics) and a large number of monographs.
Sweden is called usually the country of Lutheran culture and morals. These morals are built on 10 precepts of the Bible and quite strongly developed individual consciousness and responsibility of each separately taken citizen. Any resident of the country knows that he ответствен for himself, for the family and for the environment, for the country where he lives.
In 1986 leaders of the Japanese, European and American companies gathered in Switzerland for discussion of questions of business ethics and development of the general ethical principles of business in the modern world. These principles can be used by any separately taken company as a basis for development of the intra corporate rules or the program of business.6
We all live in rapid changing business environment, and to survive in this terms organizations have to be agile and smart, but one of the important element in today is business is reputation of that business. World is oversaturated with information and to gain trust of the stakeholders companies have to create good reputation at first, then reputation will work for company.
The reputation of firm is formed of the simple sum of examples of worthy behavior of her employees which is shown:
in the relation to property of firm;
in situations when various interests face;
at establishment of external business connections;
during the work with public institutions;
in relationship with clients and competitors;
in very delicate situations when the staff of firm is faced by a choice problem: to make public or keep in secret an example of violation by colleagues of intra firm rules and norms.7
The manager of any level requires understanding of bases of ethics as he is compelled to make these or those decisions constantly. How they will be estimated by colleagues? What consequences of these decisions will be? To receive answers to these questions, it is necessary to represent accurately what morally - the moral climate developed in this society and in this firm.
The manager needs to maintain long and mutually relations with owners of the companies, consumers, creditors, suppliers, employers. Very often these relations develop in situations when interests of the parties don't coincide. The main thing governed here - adhering to ethical principles, to avoid intention to pay in the evil for the evil. In the resolution of the manager his advantage is shown.
The American researchers formulated the following principles of business ethics:
principle of justice;
principle of the right;
principle of a utilitarizm (practicalness).8
These principles offer managing directors a way of direct consideration of quality of the chosen decision before it is accepted.
The first principle is based on concepts of decency and honesty and can be used in the analysis of the made decisions. The main controversial issue in this case consists in the following: whether to base realization of opportunities on requirements, ability or a contribution?
The principle of the right is based on postulation of inviolability of the rights of each personality. When the rights are ignored, there is an ethical violation. Legal approach proves also that for each right there are corresponding debt, a duty or responsibility or to a contribution?
In the field of the right there are controversial problems. One of them consists in a contradiction between the rights of the personality, especially at distribution of insufficient resources. Besides, the problem arises and from disagreement in certain cases of society with the rights of an individual.
As for the third principle - a utilitarizm - decision-making in this case depends on a ratio of expenses and profits. People who prove need of certain decisions, proceeding from this prospect, speak so: "Yes it is more than biggest good". They define expenses, as well as profit, on each step in business. Benthamites will prove that the most desirable course of action what leads to the greatest profits.
To prove the made decision in business, proceeding from all three above-mentioned principles, not always perhaps. So, dismissing workers, the manager builds the decision on the basis of the principle of a utilitarizm, is sometimes right, but not justice. On the contrary, leaving at the enterprise of the worker, it arrives so, realizing the idea of justice and observance of the rights of the last, but renounces the principle of a utilitarizm.
In the World there is a huge need for the sensible heads capable to bring firm to the leading competitive positions and to keep thus decency and moral shape. The constructive system of training in ethical standards is necessary. The western models of moral improvement of the person and the organization could become a basis of such system. So, for example, in the USA regularly there are releases "The review of the organization of the behavior training" in which discussions about questions of training of moral at the American business schools are conducted. One of the development devoted to this subject carries the name "Model of Moral Improvement of an Individual and Organization".9
Three Levels of Personal Moral Development
Over a period of thirty years of empirical research, Kohlberg has developed a theory of moral development which postulates a culturally universal, invariant sequence of stages of moral judgement.10 As a result of cross-cultural studies Kohlberg has identified six definite and universal stages of development in moral thought. On the basis of the reasoning used by subjects in putting forward solutions to hypothetical moral dilemmas it was noted by Kohlberg and his associates that each subject’s stage or moral thought could be classified into one of six definite and universal stages of development
Various factors influence managers is capacity to settle moral decisions. Each individual bring specific personality and behavioral traits to the job. Individual and family needs, religious foundation all shape a managers value system. Personal qualities such as ego strength, self-confidence, feeling of independence may empower managers to make ethical choices and moral decisions despite of individual risks.
One important personal trait is the stage of moral development. A simplified version of one model of personal development is shown in Figure 1, Managers can make decisions at three levels: preconventianal,conventional,and postconventional.
At the preconventional level, individuals are concerned with external rewards and punishments and obey authority to avoid detrimental personal consequences. In an organizational context, this level may be associated with managers who use an autocratic or coercive leadership style, with employees oriented toward dependable accomplishment of specific tasks
http://darkbrownhairs.co/kohlbergs/kohlbergs-stages-of-moral-development-chart.html
At level two, called the conventional level, people learn to conform to the expectations of good behavior as defined by colleagues, family, friends, and society. Meeting social and interpersonal obligations is important. Work group collaboration is the preferred manner for accomplishment of organizational goals, and managers use a leadership style that encourages interpersonal relationships and cooperation.
At the post conventional, or principled level, individuals are guided by an internal set of values based on universal principles of justice and right and will even disobey rules or laws that violate these principles. Internal values become more important than the expectations of significant others.11
Ethical Compass of the company, Role of HR managers.
In conditions when in modern economy actually main resource for successful development of the company is the human capital, questions of ethics and morals, reputation of the company and its top management ephemeral at first sight have serious impact not only on investment appeal, but also on desire of employees, both regular, and potential, to work in the company. In fact words that "People are major assets", became common truth for a long time, however the few companies follow it. Thus it is very remarkable that the recent researches conducted by the recruiting www .totaljobs.com Internet portal showed that for 78% of the people who are looking for work one of the major factors influencing decision-making to join the company, the reputation of top management and directly the CEO Company is. 75% of respondents answered that the "stained" reputation of CEO will force them to refuse the offer on work. 12
Unfortunately, all aforesaid factors to a lesser extent influence decision-making process in many companies, than desire to raise profits at any cost. In this regard the western theorists of business emphasize that already now in the company the HR manager has to play an extremely important role.
According to Mike Peggy, the director of the European the Mentoring Centre, the author of the book "The Magic of Work", corporate ethics more depend on people who are engaged in recruitment in the companies, and ethical climate in the organization the HR manager best of all can and has to operate. 13In principle, these words aren't new at all, however in them rational grain is covered. For a long time also questions of a role of the HR manager in creation of corporate culture are actively discussed, however not always the HR manager understands sense of the concept "corporate culture". Hanging out on office of posters, stickers and joint celebration of birthdays of employees is only external manifestations, surroundings while the corporate culture is under construction on the developed behavior stereotypes in the company, on moral ethical standards. And, in particular, depends on it both the desire with Clear and open for all levels ethical policy in the company radically can affect not only on internal, but also to work for external communication processes of the companies, and desire of investors and clients to cooperate with it.
The clear and open for all levels ethical policy in the company radically can influence not only on internal, but also external communication processes
It is obvious that the role of the HR manager in formation of ethical climate in the organization is paramount. Nick Kelly offers the following scheme which can help the HR specialist to create this climate at all levels of the company.
1. Find the leader: "Until the central figure in the company (it is desirable, the CEO) isn't ready to support and form the principles of business ethics in the company, activity of the HR manager won't be effective".
2. Get support of the CEO and board of directors: "The board of directors has to share an ethical position of the HR manager, support it and receive regular reports on activity of the HR specialist".
3. In the actions, be based on already existing systems of concepts: "Take as a basis already taken place models - especially what concern the aspects mentioning different communication situations."
4. Create the code of behavior: "Include in it all behavior models which settled in the company – beginning from ethics of business communication, finishing with practice of a congratulation of employees on holidays".
5. Promote promotion of the code: "Print and distribute the code in the form of the booklet among all staff of the company, her clients and suppliers. Place it on the website of the company. Publicly declare that the company is guided in the actions by the code and has the program of implementation of the principles stated in it in practice".
6. Make so that the code worked: "Include practical examples of work of the code in all intra corporate trainings. Build system of performance appraisal at all levels of the company on the basis of the principles of the code."14
The Japanese companies are considered as ancestors of corporate codes. They brought a behavior regulation in the company to the absolute. About 10-15 years ago corporate codes appeared in the American companies. Top management of the United States actively studied at Japanese colleagues to collective approach to management. It is obvious that blind copying of the western standards will hardly be suitable for the Kazakhstan companies already that the level of development of the Kazakhstan business isn't comparable to level, for example, American. However the most progressive Kazakhstan companies already attended to a problem of ethical policy.