Business Ethics for Real Estate: A. Glean

No matter the business or industry, ETHICS is an issue!

In business, it is easy to rely on simple knowledge of right and wrong to make decisions. However, this is not good enough when the goal is to be ethical!!!

INTRODUCTION Ethics is a general term for what is often described as the "science (study) of morality". In other words, ethical behaviour is that which is "good" or "right.“ Ethics is about behaviour. Behaviour is determined by accountability.

Business ethics inquires into and justifies the decision-making process concerning what is right and wrong in all areas of business practice. It is the application of general ethical principles to the actions and decisions of businesses and the conduct of their personnel

WHAT ARE THE DRIVERS OF UNETHICAL STRATEGIES AND BUSINESS BEHAVIOR? Drivers of Unethical Business Behavior: Faulty internal oversight allows self-dealing in the pursuit of personal gain, wealth, and self-interest. Short-termism pressure to meet or beat short-term performance targets. A culture that puts profitability and business performance ahead of ethical behavior.

PERSONAL VERSUS BUSINESS ETHICS… Firstly, the economic nature of business distinguishes it from normal day to day activity. Employment also has its own standards of right and wrong Secondly, another distinguishing factor is that business takes place essentially in organisations

DECISION MAKING IN BUSINESS Decision making takes place on three (3) levels: 1) Individual 2) Organisational 3) Sector/business practice IDENTIFICATION OF THE REQUIRED LEVEL FOR A DECISION IS KEY

At the individual level, a person decides what he or she will do. At the organizational level, decisions involve an individual acting within his or her organizational role and are often expressed in procedures and policies, Whereas the business system level involves systemic problems that concern industry practices and the economic system.

Ethics is just one aspect of decision making Ethics is just one aspect of decision making. Generally, there are three points of view to be considered: Moral, Economic and Legal Morality is a key issue. Three issues must be considered when faced with decision making.

What are the moral issues to consider when making decisions/telling the truth: Potential harm to the customer Misrepresentation/Manipulation Fairness- Golden Rule

How should we be guided when taking the moral point of view How should we be guided when taking the moral point of view? Seek out and act on reasons/rationale: One should try to justify rules set by good reasons. Impartiality: One should think about the interests of others as worthy of consideration and ascribe all interests equal weight in deciding what to do. The moral point of view uses reason or logic, not just feeling or conventional views, to justify decisions. And it requires impartiality, Morality by its nature is public in the sense that it is a shared set of rules that are intended to be followed by everyone. A test of the moral point of view is, would you feel comfortable if colleagues, friends, and family knew about your decision, or if it were reported on TV or in the newspapers?

People discount the moral aspect of business, arguing that the key consideration in business is profit generation and efficiency. The legal perspective must also be considered, but this approach is seen as a constraint on the economic position.

THERE SHOULD BE AN INTEGRATED APPROACH TO DECISION MAKING Ethics is in part an attempt to think clearly and deeply about ethical issues in business and to arrive at a conclusion supported by the strongest possible arguments ie a moral point of view. However, one should consider economic factors as well as the law.

However, there is a relationship between economics and ethics THERE SHOULD BE AN INTEGRATED APPROACH TO DECISION MAKING Ethics and Economics Economics teaches that businesses should operate with only profit in mind. However, there is a relationship between economics and ethics According to economic theory, firms in a free market utilize scarce resources or factors of production in order to produce an output of goods and services, the demand for which is determined by the preferences of individual consumers who are trying to maximize their own satisfaction (Utility). Seek Utility Free market issues Use of non economic values

THERE SHOULD BE AN INTEGRATED APPROACH TO DECISION MAKING Ethics and Law Business decisions must also include the legal point of view because the law is a significant influence on business activity. Some argue that law is the only moral standard necessary to follow. (If it’s legal, then it’s morally okay.)

Ethics and Law The previous position is supported by two schools of thought: (1) that ethics is a matter of personal conduct, whereas law applies to public matters like business, and (2) that all unethical conduct in business has already been addressed by the law.

However, the Law is not enough: 1) The law is not equipped to regulate certain aspects of business 2) Slow to develop in new areas 3) The law embodies certain moral concepts that are not properly defined

The Law is not enough… 4) In many cases, the law is unsettled 5) With the inefficiency of the law, additional legislation is required and there is increased litigation

AREA Code of Ethics A code of corporate conduct is an important management tool. It is the primary documentation for moving business ethics from the area of ideas to that of action at the various levels of an organized enterprise. A code of corporate conduct is an important management tool. It is the primary documentation for moving business ethics from the area of ideas to that of action at the various levels of an organized enterprise. Much of the content has had its origin not in theory but in experience, and in the need to co-ordinate diverse interests and activities, to accommodate the individual and the firm to environmental expectations, or to avoid conflicts. It improves the quality and efficiency of relationships by providing common understandings. However, the conduct patterns of business ethics are not limited to those that are assembled in the statements of a formal code. There is a whole complex of traditions or trade practices, quasi-legal constraints, of tacitly acceptable and unacceptable competitive practices, all of which provide guidelines for ethical conduct in business situations. Most of these represent practical solutions to problems of relationships, involving the interests of more than one party. A degree of consensus is almost always required in order to make an applied ethic successful. The items in the formal code of ethical conduct tend to be those where more explicit controls and individual commitments are considered to be desirable.

AREA Code of Ethics However, the conduct patterns of business ethics are not limited to those that are assembled in the statements of a formal code. As stated previously, there are principles, practices etc, all of which provide guidelines for ethical conduct in business situations. A code of corporate conduct is an important management tool. It is the primary documentation for moving business ethics from the area of ideas to that of action at the various levels of an organized enterprise. Much of the content has had its origin not in theory but in experience, and in the need to co-ordinate diverse interests and activities, to accommodate the individual and the firm to environmental expectations, or to avoid conflicts. It improves the quality and efficiency of relationships by providing common understandings. However, the conduct patterns of business ethics are not limited to those that are assembled in the statements of a formal code. There is a whole complex of traditions or trade practices, quasi-legal constraints, of tacitly acceptable and unacceptable competitive practices, all of which provide guidelines for ethical conduct in business situations. Most of these represent practical solutions to problems of relationships, involving the interests of more than one party. A degree of consensus is almost always required in order to make an applied ethic successful. The items in the formal code of ethical conduct tend to be those where more explicit controls and individual commitments are considered to be desirable.

Roles and the Agent A role is a structured set of relationships with accompanying rights and obligations Obligations of a particular role are sometimes added to those of ordinary morality ie someone who occupies a role assumes obligations above those of everyday life.

Roles and Managers Role Morality is specific to a particular role for professionals. In this case, the Real Estate Agent has responsibilities to different groups and should consider various interests. Also, roles are created to serve society better. A proper system ensures advancement of society and benefits all.

Ethical Theory and Business Ethics Ethics as a philosophical endeavour is the study of morality It can be either Normative or Descriptive Normative refers to the possibility of justification Descriptive involves an empirical research the actual rules or standards of a particular group or simply an appreciation of the ethical reasoning process

Theories include: Teleological theories Deontological theories Concept of Virtue

Teleological: The rightness of actions is determined primarily by the amount of good consequences produced

Deontological Theories: These issues are non-teological: Consequences are not relevant to determining decision making. Obligation or duty is the main moral category in these theories

Virtue Moral character is more critical than right action Virtue Moral character is more critical than right action. Virtue is a character trait that manifests itself in habitual action. What type of person should I be?

Current Issues Whistle blowing Conflict of Interest Discrimination Marketing and Advertising Product Quality Employment Issues Corporate Governance Occupational Safety and Health

In Conclusion…. This should be our goal: Ethical Management Acting ethically as a manager Management of Ethics Acting effectively in situations that have an ethical aspect

THANK YOU FOR YOUR ATTENTION