Amoral behavior- This special kind behavior of subjects, which is denied and punished in a certain way in society. What should be understood by immoral behavior? Let's try to figure this out...
What is immoral behavior?
Immoral behavior is the behavior of a subject in which all the formed moral principles of society are assessed as insignificant, the usual moral and ethical view of the world is ignored, and is often perceived disdainfully or even aggressively.
Immoral behavior is often identified with the concept of deviant behavior, but in fact these concepts have different meaning, although very close. Immoral behavior should be considered those actions of a person that are not accepted and condemned by society, but do not carry a pronounced antisocial meaning and do not pose a threat to public safety. Measures of influence on persons leading such a lifestyle are usually public condemnation and censure.
Deviant behavior is a deviation from the norm and established rules. This type of human behavior requires correction - otherwise it can create favorable conditions for the development of crime. Deviant behavior, for example, is typical for many teenagers who have not yet formed a stable positive model of behavior in society, or, due to the notorious youthful maximalism, are ready to defend their ideas radical methods. As measures of influence on such persons, punishments are used in the form of placement in special medical or educational institutions, up to isolation.
Examples of immoral behavior
To make it more clear, we will give examples that clearly demonstrate what distinguishes immoral behavior from deviant behavior.
There are many examples of immoral behavior in our everyday life. For example, when a person, getting off the bus, pushes the person in front in the back in order to leave the cabin faster.
Human behavior can also be called immoral:
- using profanity in conversation (of course, provided that he does this publicly and not in a narrow circle of his “confidants”);
- not observing the rules of basic politeness (for example, closing the door in the face of a neighbor following);
- violating the rules of the hostel (for example, putting garbage on landing neglecting the duties of keeping common property clean), etc.
The use of violence in the family or among others, excessive or uncontrolled alcohol consumption, suicidal tendencies, and drug addiction should be considered deviant. Some experts tend to include prostitution here as well. However, if we talk about prostitution as an illegal business (organizing brothels, etc.), then this is already a crime, in accordance with the Criminal Code of the Russian Federation. Besides, deviant behavior can be considered excessive cruelty, for example towards stray animals. Agree, all of the above does not have much in common with immoral behavior.
Ethical behavior of employees
1. Careful attitude towards company property.
2. Consensus of various interests.
3. Ethics of external business connections, including working with government agencies.
4. Ethics in relations with consumers, partners and competitors.
5. Ethics of choice in sensitive situations. For example, keep it secret out of patriotism for the company or reveal facts of violations.
Rules of international business etiquette
1. Rules of greeting, address, introduction.
2. Rules business contacts: meetings, receptions, negotiations, business correspondence and 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 company success. Any deviations or liberties can damage the reputation of the company, which will certainly negatively affect its economic activity.
American business and management researcher Peter Kostenbaum published a book with the eloquent title: “The Heart of Business: Ethics, Power, Philosophy.” He convincingly showed how non-economic factors can influence the economy of a company. Kostenbaum deduced components of the company's long-term success:
1. Profit must not only be legal, but also honest, obtained through labor and talent.
2. Employees must be moral, patriotic towards the company and respectful to each other.
3. Products and services must be of high quality and offered at a realistic price.
4. The prestige of the company must be well-deserved, the reputation adequate, the image of top managers consistent with their business and personal qualities.
So ethics international business– this is not a tribute to fashion. It is not only a socially significant phenomenon, but also an indispensable condition for economic success.
In the international understanding 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 required by law.
Thus, the scope of the company’s SO includes management of the company’s activities in the field of:
· ecology,
· industrial safety And labor protection,
· personnel development,
· external social activities,
· the company’s relationship with all groups of stakeholders (persons interested in the financial and other results of the company’s activities).
A company’s social responsibility is the level of an organization’s voluntary response to social problems society.
Unlike what is common in Central and Eastern Europe(especially in developing countries) misconceptions that company SR is sponsorship, charity or social branding, leading international organizations define company SR as a strategic approach to business. That is, a company's CO is not an advertising, marketing or PR activity; it covers the entire company and determines how it does business, invests funds and builds relationships with partners.
What is social responsibility expressed in:
1. In relation to consumers. Consumers want to receive reliable goods and services from the corporation, reasonable prices, good service. Meeting consumer expectations is the social responsibility of corporations to consumers.
2. In relation to suppliers. All suppliers expect fair dealings with their counterparties and, of course, timely payments. This is many times more important for small suppliers, whose financial situation is such that they cannot tolerate payment delays due to the lack of reserve funds at 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 necessary for a corporation to emerge, develop, and grow. The corporation's social responsibility to shareholders is to ensure its profitability in order to enable them to receive such income that would make further investment in its activities attractive.
4. Towards employees(to staff). Employees expect more than just fair 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 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 air, live, raise children, etc. Corporations use the infrastructure created by these people and thereby ensure high profits for themselves. This is why local communities expect corporations to be directly involved in solving their problems. This concerns education, organization of transport, recreational conditions, healthcare system, problem solving environment and etc.
6. In relation to society as a whole. The activities of corporations are the object of close attention from various government agencies, political parties, mass media. Their timely and full payment of taxes makes it possible government agencies solve the social issues assigned to them. In the same time main responsibility corporations is their concern as employers and job creators about their own economic viability and the quality of the goods and services they produce.
In other words, social responsibility involves conducting business ethically with all corporate audience groups.
In many multinational corporations such as Toyota, Siemens, General Mills And Johnson & Johnson Special guidelines have been drawn up that 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 are written declarations of the values and ethical standards that guide a company's actions.
In multinational corporations, a decision must be made as to whether a single code should be developed for all of the corporation's worldwide divisions, 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 overseas, the corporation must also make a decision about whether to impose a corporate code of ethics on the company or whether it is better to maintain the same ethical standards of behavior that the company followed previously. To be effective, a code of ethics must be clearly stated and free from ambiguity. In addition, this code should regulate the main components of ethical behavior relevant to the company's business environment and its commercial activities. The company should have a rule according to which those who make decisions on emerging problems must strictly follow the standards of conduct set forth in the code of ethics.
If we summarize the definitions of social responsibility of business (CSR) 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 a company in an environment of increasing competition and decreasing trust in business;
· GSS goes beyond the legal obligations of 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.;
· Social security is not a way to solve society's problems at the expense of business, but a way to participate in the development of the environment in which business operates;
· SOB is an approach to sustainable development with a direct (usually long-term) impact on financial indicators companies.
With the right approach, a company’s SS contributes to its commercial success, distinguishing it favorably in a competitive environment.
Emerging markets are characterized by the following: areas of practical benefit CO:
Improving environmental processes – increased productivity and income, cost savings when using environmentally friendly and cleaning equipment.
Building a company's reputation – it’s no secret that business image today is not the last factor that allows an enterprise to maintain its competitiveness. 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 social policy enterprises. Those. It's about increasing customer loyalty and trust.
Reduce litigation costs.
Human resources – reducing staff turnover, increasing employee engagement. People don't want to work for companies that don't make social responsibility a corporate policy priority.
Access to new markets – standardization according to international criteria (ISO, etc.).
Reducing pressure from inspection bodies. The publication of principles and policies regarding workers, the environment, and relations with suppliers provides an answer and government agencies, what is the company's approach to these issues. In fact, today, improved relations with authorities remain the main benefit acquired by the company as part of social responsibility programs.
Not all business opportunities of a joint venture company are listed above - there are many more.
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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 management activities There are cases of deviation from social norms, that is, unethical behavior, it can be caused by various factors:
1. competition;
2. the desire for large profits;
3. inept incentives for managers ethical behavior;
4. underestimation of ethical standards 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 proposes the following measures:
Introduction of ethical standards that reflect a system of common values, public preferences, and rules of conduct for employees of the organization;
Establishment of ethics committees;
The use of incentive mechanisms that counteracted unethical behavior and actions;
Conducting social audits to determine impact social factors to the organization;
Organization of ethical behavior training for managers and all personnel:
Constantly informing employees about cases of highly ethical behavior;
Conducting meetings, conferences, symposiums, etc. on problems of ethical behavior.
The established moral norms are the result of a long-term process of establishing relationships between people. Without observing these norms, political, economic, and 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, accepting ethically difficult decisions that can be applied in management practice: utilitarian approach, individualistic approach, moral and legal approach, concept of justice.
Utilitarian approach. The basic principles of the utilitarian approach are based on the fact that moral behavior brings the greatest benefit. the largest number of people. The decision maker must consider the impact of each option on all stakeholders and choose the option that brings pleasure to the greatest number of people.
Individualistic approach. Assumes that a person's actions are morally acceptable if they benefit her in the long run. Home driving force self-control is considered, and all external forces that limit it must be suppressed. Each person chooses the most profitable solution for himself in the long term, on the basis of which he judges the quality of his decisions. Individualism comes down to behavior that is beneficial to other people, that is, a person’s actions begin to correspond to the norms desired by society. One of the features of this approach is that it assumes (if they are necessary) the actions of the individual aimed at acquiring personal short-term benefits, which do not necessarily correspond to 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. The following moral rights may be taken into account in the decision-making process:
1. The right to freedom of consent.
2. Right to privacy.
3. The right to freedom of conscience.
4. Right to proper treatment.
5. Right to life and safety.
Justice concept. There is distributive justice (equal to equal), procedural justice (compliance with rules), compensatory justice (compensation for damage).
In the global economy, there are seven main mechanisms through 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 that consider citizens’ claims on ethical issues;
7) changes in corporate structure.
The most commonly used mechanism is the code of ethics. It is developed by a specially created body - a committee, commission, etc. About 90% of foreign companies implemented ethical principles through 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 departments or hiring individuals to develop ethical codes: efforts are being made to familiarize managers with the provisions of these codes; A system of incentives for managers is also being created, provided that they take into account ethical issues when making decisions and that their official behavior complies with the ethical standards recorded in the codes.
When monitoring the official actions of employees, companies use lie detector tests, drug tests, etc.
More productive, according to managers of many companies and their owners, is the way to hire graduates educational institutions, where there was a large and extensive program for teaching the basics of ethics. In this case, ethical standards are laid down in the consciousness (and subconscious) of the future employee as part of a worldview complex and, one might even say, as unshakable axioms, are not subject to appeal. Then the cumbersome and expensive system for developing company codes and training employees in ethical standards for monitoring compliance with ethical requirements turns out to be largely unnecessary.
Why are high ethical standards so important to the investment industry and investment professionals? As the 2008 global financial crisis demonstrated, seemingly unimportant individual decisions, such as approving loans to individuals unable to provide proof stable income, together could precipitate a market crisis that could lead to economic hardship and job losses for millions of people. In an interconnected global economy and marketplace, 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 seek it to finance their activities. Consider those who provide capital—investors—and those who seek it—borrowers. Borrowers may be seeking funds to achieve long-term goals such as building or upgrading factories, schools, bridges, highways, airports, railways or other objects. They may also seek short-term capital to finance short-term goals and/or support their daily 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 that compensate for their use and associated risks. Before providing capital, diligent and disciplined investors will evaluate the risks and rewards of providing capital. Some risks, such as a downturn in the economy or a new competitor, may adversely affect the return expected from an investment. To help evaluate the potential risks and rewards of an investment, investors conduct research, evaluate borrower capabilities, conduct competitive analysis, read official statements, examine management's business plan, research reports, and industry reports. Responsible investors will not invest their capital unless they trust that their capital will be used for their benefit. Investors and society benefit when capital flows to borrowers who can bring the most value from capital through products and services.
Cash flows are more efficiently distributed between investors and borrowers when financial participants have confidence that all parties will behave. Ethical behavior builds and strengthens 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 in accordance with their expectations, they are more likely to accept risks associated with these people and institutions. For example, when people trust their money, they are more likely to invest their money and accept the risk of short-term price fluctuations because 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 necessary means for expansion at a reasonable price. The higher the level of trust in the financial system, the more people are willing to participate in financial markets. Wide participation in financial markets allows the flow of capital to finance the growth of production of goods, provision of services, and infrastructure. All of this benefits society with new and often better hospitals built, bridges built, products produced, services provided and jobs created. Widespread participation in the financial markets also means that the need and demand for investment professionals is increasing, with the result that employment opportunities for those seeking to use their specialized skills and knowledge of the financial markets are also increasing.
Ethics always matter, but ethics are especially important in investing because the investment industry and financial markets are built on trust. Unethical behavior repels, ethical behavior attracts. Trust is important for all businesses, but it is especially important in the investment industry for several reasons. Reasons may include: the nature of client relationships, differences in knowledge, and access to information, as well as the nature of investment products and services.
In relationships with clients, investors entrust their assets to intermediary financial firms to provide intermediary functions and help in preserving their capital. If a firm and its employees fail to protect client assets, this can have serious consequences for everyone involved. Without trust and ethical behavior, intermediary firms would have no business.
Those who work 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 that gives one party more power. Investors believe that the people they hire will not use their knowledge to harm them. They rely on an investment professional who uses specialized knowledge to serve the client's interests.
Another reason why trust is so important in the investment industry has to do with the nature of the products and services. In other industries such as transportation, industry, technology, retail or enterprises Food Industry produce products and/or provide services that are tangible and/or clearly visible. We can hold the tablet in our hands and check it. We can use software, dine at chain restaurants and watch movies in theaters. 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 this? Is the price reasonable or appropriate for the product or service?
In the investment industry, many investments are intangible and appear only as numbers on a page or screen. Without tangible products to verify and without any guarantee to protect the product or service to perform as expected, investors must rely on the information presented about the investment - both before and after purchase. When they contact their financial advisor and ask for an investment statement, they receive either an electronic or printed statement listing the transactions. They trust that the information is accurate and complete, and they trust the investment professionals they work with to protect their interests. The globalization of finance means that 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 to occur. Unethical behavior can discourage counterparties from different parts of the world from interacting.
Due to these factors. This trust is created, maintained by the ethical actions of all individuals who work and/or work 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 pages of a report are accurate representations of information and have confidence that investing and participating in the financial markets will be profitable. Ethical behavior by all market participants can lead to greater participation, customer advocacy, and greater investment opportunities. Ethical behavior by firms can lead to more high levels success and profitability for both companies and their employees. Clients are attracted to companies with a reliable reputation, which leads to business growth, higher revenues, and greater profits.
There is another one - unethical behavior. Unethical behavior is an act that goes beyond what is considered morally correct or right for a person, profession, or industry. Individuals may behave unethically. Entrepreneurs, professionals and politicians can also behave unethically. Unethical behavior poses more threats in the investment industry than in any other professional field. And a number of factors contribute to this.
At the microeconomic level. 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 in which high ethical standards are the norm.
At the macroeconomic level. Unethical behavior erodes and can even destroy trust. When clients and investors suspect that they are not receiving accurate information or that the market is not a fair playing field, they lose confidence. Investors with low trust are less willing to take risks. They may demand a higher return on their capital, choose 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 to capital, borrowers may not be able to meet their goals of building new factories, bridges or hospitals. Disinvestment can harm society by reducing jobs, growth and innovation. Unethical behavior ultimately harms not only clients, but also the firm, its employee and others involved in the investment process. You can read an example of unethical behavior of a company in the article.
Reduced confidence in markets can reduce the growth of the investment industry and tarnish the reputation of firms and individuals in the industry, even if they have not engaged in unethical behavior. Unethical behavior impedes the ability of markets to channel capital to borrowers who can create the most value from capital that contributes to economic growth. Both markets and society suffer when unethical behavior destroys trust in financial markets. For you personally, unethical behavior can cost you your job, reputation and professional advancement and can result in monetary fines and possibly prison. The unethical behavior of a company poses a threat both to the person/company that undertook such behavior, and to subjects who were not directly involved 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 most accurate. Investment professionals have a special responsibility for ethical behavior because:
A) the industry is highly regulated.
B) they are tasked with protecting clients' assets.
C) the profession requires adherence to its code of ethics.
Solution 1:
B is the right option answer. Investment professionals have a special responsibility because clients entrust them with protecting client assets.
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Ethical or unethical? - this is a subject of controversy for the philosophical discipline of ethics. In everyday life, we usually talk about morality and moral criteria for human behavior, about good and evil, based on the traditions and rules that have developed in society. And when scandals break out in the business environment, sometimes turning into the subject of global discussion and condemnation, experts, and we ourselves, try to determine the degree of morality or immorality of the actions of the management of a particular company.
Most often, scandals break out in connection with corruption, financial fraud, tax evasion, falsification of information, classification of personal expenses as business items, and a number of others. All of them are in the nature of an economic offense, but the reason that gives rise to them is always associated with behavioral components.
Descending Road
"The most the right road to hell is the one along which one descends gradually, the road is gentle, soft, without sudden turns, without signposts,” noted the writer and theologian Clive S. Lewis. In business, everything also begins with petty thefts and fraud, the “innocent” use of office supplies brought from work in everyday life. Research conducted by Harvard Business School showed that about 75% of company employees surveyed said they had witnessed unethical and sometimes illegal behavior by their colleagues.
The problem of unethical behavior is aggravated by the fact that, noticing the unethicalness of an act, many employees tend to “not notice” the immorality of the actions, considering them a trifle. Role-playing game in the course of the study, reproducing the audit, clearly demonstrated that the “auditors” did not report a gradual and slight overestimation of reporting data, but the “accountants” immediately prescribed a larger number, must be reported.
Unethical Leadership
Experts note that leaders at all levels of the corporate hierarchy are characterized by inflated self-esteem, which sometimes leads to a separation from reality and pushes them toward permissiveness. This is at a time when their ethics, values and behavior have a direct impact on the attitudes and behavior of those they lead, i.e. on organizational culture. This impact can be positive or negative.
Ethical leadership behavior must be specific enough to remain within the boundaries of leadership behavior and decision making based on fairness and morality. The concept of “unethical leadership” is quite broad and includes many ways to “manifest oneself.”
The “moral” standards of an unethical leader can be defined as illegal behavior, actions and decisions that violate moral standards, incl. promoting unethical behavior of subordinates. A leader, to be ethical and effective, must confront.
