1. Ethics and You A Guide to Ethical Decision Making

2. General Rule
Government business shall be conducted in a manner that is above reproach, with complete impartiality, and with preferential treatment for none
(FAR )

3. Apply the General Rule
It’s the end of the FY and you are swamped with contract actions. You receive a requirements package and several companies have been identified in the market research—none are small businesses. You suspect that there are several small businesses that can do the work, but you don’t have enough time to redo the market research and if it does not get awarded on time the money will expire. Do release the RFP under full and open competition?

4. We Face Two Fundamental Problems…
On what do we base our ethical standards for making our business decisions?
We will explore the ethical standards for business prescribed by society, our organizations, our occupation and us as individuals
How do those standards get applied to specific situations or decisions we face?
We will look at ways to use the:
Principled Decision Making Model
Rational Problem Solving Tool

5. What is Ethics?
“Ethics is with what my feelings tell me is right or wrong.”
Ethics is not the same as feelings
“Ethics has to do with my religious beliefs.”
Ethics is not religion
“Being ethical is doing what the law requires.”
Ethics is about not following the law
“Ethics are the standards of behavior our society accepts.”
Ethics is not following culturally accepted norms
“I don’t know what the word means.”
Ethics is not science

6. Core Ethical Principles
Honesty––truthful, straight–forward, sincere, candid; doesn't mislead or deceive
Integrity/Principled–– courage of convictions; stands up for beliefs; puts principle over expediency
Promise-Keeping––always strives to keep commitments; reliable, dependable
Fidelity/Loyalty––doesn't talk behind your back; faithful to friends, employer, country, and duties
Source: Section Primary Ethical Values , DoD R, The Joint Ethics Regulation

7. Core Ethical Principles
Fairness—strives to be equitable, open, just; not prejudiced; doesn't discriminate on improper basis
Caring/Compassion—considerate, kind sharing, charitable, unselfish
Respect for Others—respects freedoms, dignity and rights of others
Civic Duty—abides by laws and rules; participates, does his/her share

8. Core Ethical Principles
Pursuit of Excellence—does best; pride in work; responsible to those who depend on him/her
Personal Responsibility/Accountability—considers consequences and accepts responsibility for actions and inaction's; doesn't shift blame or make excuses

9. Non-Ethical Values
"Non-ethical Values" however personally important, do not deal intrinsically with notions of right and wrong, good or bad
Ego
Power
Greed (Money)
Ambition
Self-Interest

10. The Roots of Unethical Behavior
The climate in some organizations does not encourage people to think through the ethical consequences of business decisions
Leaders help to establish the culture of an organization and set the example that others follow
Employees sometimes do not realize they are behaving unethically because they fail to ask if the decision is ethical
Pressure to meet unrealistic performance goals that can be attained only by cutting corners or acting in an unethical manner

11. The Relationship Between Law and Ethics
The question, “Is an act legal?” is different from the question, “Is an act ethical?”
Sometimes whether an action is legal or ethical depends on how a court or admin. agency interprets a statute.
The law cannot codify all ethical requirements so, an action might be unethical, yet not necessarily illegal
It might be unethical to lie to your family, but it is not necessary illegal. What about to a contractor?
If KOs, in good faith, believe they are complying with a statute and later are ruled against, was their action unethical?

12. Determinants of Business Ethics
Societal Ethics
Individual Ethics
Occupational Ethics
Organizational Ethics
Decision Making Processes

13. Societal Ethics
Societal Ethics
Standards that govern how members of a society should deal with one another in matters involving issues such as fairness, justice, poverty, and the rights of the individual
People behave ethically because they have internalized certain values, beliefs, and norms
People feel very uncomfortable in a society that has defined a different ethical norms than their own society
This has significant business implications in a global market place
Child labor laws
Environmental protections
Attitudes towards women, minorities, the elderly
Common practices associated with gifts and gratuities
Buy American

14. Societal Ethics & the FAR
Gratuities
Covenant Against Contingent Fees
Child Labor—Cooperation with Authorities and Remedies
Affirmative Action Compliance
Equal Opportunity
Buy American and Balance of Payments Program

15. Organizational Ethics
Guiding practices and beliefs through which a particular organization or company and their managers and leader’s view their responsibility toward their stakeholders
Top managers play a crucial role in determining an organization or company’s ethics

16. Organizational Ethics

17. Organizational Ethics

18. Organizational Ethics
DoD 101
We Instill Values
Even with top notch recruits we would not be successful if we didn’t provide leadership, professional development, and technical training throughout their careers; we constantly build and reinforce core values that everyone wearing a uniform must live by: duty, integrity, ethics, honor, courage, and loyalty.  Our core values are leadership, professionalism, and technical know-how.
Source:

19. Occupational Ethics
Occupational Ethics
Standards that govern how members of a profession, trade, or craft should conduct themselves when performing work-related activities

20. Occupational Ethics & the FAR
FAR (c) Conduct business with integrity, fairness, and openness. (1) …Accordingly, each member of the Team is responsible and accountable for the wise use of public resources as well as acting in a manner which maintains the public’s trust. Fairness and openness require open communication among team members, internal and external customers, and the public. (2) To achieve efficient operations, the System must shift its focus from “risk avoidance” to one of “risk management.” The cost to the taxpayer of attempting to eliminate all risk is prohibitive. (3) The Government shall exercise discretion, use sound business judgment, and comply with applicable laws and regulations in dealing with contractors and prospective contractors. All contractors and prospective contractors shall be treated fairly and impartially but need not be treated the same.

21. NCMA The Contract Management Code of Ethics
Occupational Ethics
Each member of the contract management profession (“the profession”) accepts the obligation to continuously improve one’s professional knowledge and job performance in the field of contract management…
Each member of the profession shall:
Strive to attain the highest professional standard of job performance, to exercise diligence in carrying out one's professional duties, and to serve the profession to the best of one’s ability.
Conduct oneself in such a manner as to bring credit upon the profession, as well as to maintain trust and confidence in the integrity of the contract management process.
Avoid engagement in any transaction that might conflict or appear to conflict with the proper discharge of one's professional duties…

22. NCMA The Contract Management Code of Ethics
Occupational Ethics
Comply with all laws and regulations that govern the contract management...
Keep informed of developments in the contract management field, utilizing both formal training and ad hoc means, to continuously increase knowledge, skill, and professional competence.
Share one’s knowledge and experience openly to contribute to the development of other professionals, improve performance quality, and enhance public perception of the profession.
Not knowingly influence others to commit any act that would constitute a violation of this code.
Source:

23. Individual Ethics
Individual Ethics
Personal standards and values that determine how people view their responsibilities to others
How they should act in situations when their own self-interests are at stake
"Personal Operational Value System" relates to the way individuals rank competing values in deciding how to act

24. Individual Ethics -- Your Role?
As the business advisor you will face ethical dilemmas and your role may be to help the team identify values and clarify them…
Like What??? But How???

25. Decision Making Processes
Are decisions made based on economic logic or expediency, without consideration for ethics?
Using an appropriate decision making process has a significant influence on business ethics
Conducting a consideration of alternatives
Evaluation of impact on stakeholders
Studies show that business people may behave unethically because they fail to ask the relevant question… Is this decision or action ethical?

26. Decision Making Processes
Shelving hard decisions is the least ethical course. — Adrian Cadbury, British business executive (b. 1929)

27. Two Types of Ethical Choices
Decision Making Processes
Right vs. wrong
Choosing right from wrong is the easiest
Right vs. right
Situation contains shades of gray i.e. all alternative have desirable and undesirable results
Choosing “the lesser of two evils”
“Satisficing”

28. Making Defensible Decisions
Decision Making Processes
Use a tool to make a judgment based on well-reasoned, defensible ethical principles
This requires discipline and practice
If not, the risk is poor judgment i.e. a low-quality decision
Ethical decision making is not a science.
It is however a skill—a survival skill

29. Decision Making Processes
Defensible Decisions
Decision Making Processes
“Defensible Decision”
Recognize that two well-meaning individuals can examine the same situation and arrive at different courses of action
Decision based on reason and can be defended according to ethical concepts

30. Why is Ethical Decision Making So Difficult ?
Decision making involves a great degree of value clarity, ethical decision making involves more!
They require critical thinking and evaluation
Practically, anticipating the exact outcome of a course of action is impossible
This uncertainty is at the root of all difficulties in ethical decision making

31. 12 Ethics Questions for Business Decision-Makers
Have you defined the problem accurately?
How would you define the problem if you stood on the other side of the fence?
How did this situation occur in the first place?
To whom and what do you give your loyalties as a person and as a member of the organization or corporation?
What is your intention in making this decision?
How does this intention compare with the likely results?
Whom could your decision or action injure?
(continued)
Nash, Laura L. "Ethics Without Sermons." Howard Business Review 59 (1981): 79-90

32. 12 Ethics Questions for Business Decision-Makers
Can you engage the affected parties in a discussion of the problem before you make your decision?
Are you confident that your position will be as valid over a long period of time as it seems now?
Could you disclose without qualm your decision or action to your boss, your CEO, the board of directors, your family, or society as a whole?
What is the symbolic potential of your action if understood? If misunderstood?
Under what circumstances would you allow exceptions to your stand?
Nash, Laura L. "Ethics Without Sermons." Howard Business Review 59 (1981): 79-90

33. Rationalizations Obstacles to Ethical Decision Making
If it's necessary, it's ethical
If it's legal and permissible, it's proper
It's just part of the job
It's all for a good cause
I was just doing it for you
I'm just fighting fire with fire
It doesn't hurt anyone
Everyone's doing it
It's OK if I don't gain personally
I've got it coming
I can still be objective

34. Make an Ethical Decision
Develop a method/process for exploring the ethical aspects of a decision
Principled Decision Making Model - context for ethical decisions
Rational Problem Solving Tool –process tool for making decisions
3. Develop
alternatives
2. Problem
clarification
4. Choose
best solution
5. Implement
solution
Awareness
6. Evaluate
decision
1. Identify
problem

35. Principled Decision Making Model
The Josephson Institute of Ethics Principled Decision-Making Model combines aspects of three classical ethics models:
The Golden Rule—do unto others as you would have them do unto you—is simple and timeless advice
Immanuel Kant’s belief in the existence of absolute “higher truths” provides a starting point for identifying one’s moral obligations
Consequentialism recognizes the complexity of ethics issues and advocates basing decisions upon consequences that yield the greatest good

36. “Principled Decision Making”
Consider the welfare of all stakeholders
Don’t inadvertently cause harm by not considering the welfare of others
Give precedence to ethical values over non-ethical values
Responsibility to serve taxpayers ahead of personal self-interest
Prioritize based on what will bring the most good and least harm to others
Accept that there isn’t always a perfect decision, but you must consider your choices and be able to explain your thinking

37. Using the Rational Problem Solving Tool
Identify the problem
Determine precisely what must be decided
Determine which ethical principles and values are involved
Consider whether ethically questionable conduct can be avoided by changing goals or methods, or by getting consent
What individuals and groups have an important stake in the outcome?
Do some have a greater stake because they have a special need or because we have special obligations to them?
1. Identify
problem

38. Using the Rational Problem Solving Tool
2. Clarify the problem
Evaluate the facts and assumptions carefully, especially if the problem or alternatives require the sacrifice of any ethical principle
Distinguish solid facts from beliefs, desires, theories, suppositions, unsupported conclusions, opinions, and rationalizations
Consider the credibility of sources, especially when they are self-interested, ideological or biased
Make a judgment about what is not true and what consequences are most likely to occur
2. Problem
clarification

39. Using the Rational Problem Solving Tool
3. Develop alternatives
Formulate and devise the full range of alternatives
Force yourself to develop at least three ethically justifiable options
With regard to each alternative, carefully consider the benefits, burdens and risks to each stakeholder
Determine who will be helped the most and harmed the least
Eliminate patently impractical, illegal and improper alternatives
3. Develop
alternatives

40. Using the Rational Problem Solving Tool
4. Choose the best solution
Prioritize the values so that you can choose which values to advance and which to subordinate
Apply "ethics guides" like the Principled Decision Making Model:
Consider the welfare of all stakeholders
Don’t inadvertently cause harm by not considering the welfare of others
Give precedence to ethical values over non-ethical values
Responsibility to serve taxpayers ahead of personal self-interest
Prioritize based on what will bring the most good and least harm to others
Accept that there isn’t always a perfect decision, but you must consider your choices and be able to explain your thinking
Consider the worst case scenario
Evaluate the viable alternatives according to personal conscience
4. Choose
best solution

41. Using the Rational Problem Solving Tool
5. Implement solution
Develop a plan of how to implement the decision
Maximize the benefits and minimize the costs and risks
How will you break the news to certain stakeholders?
6. Evaluate and modify decision
Monitor the effects of decisions
Be prepared and willing to revise a plan, or take a different course of action
Adjust to new information
5. Implement
solution
6. Evaluate
decision

42. Make a Decision and Test It
No matter how you make the decision… test it
If you wrote your decision up in a memorandum for a 3rd party to read later, would they support your analysis and decision?
If you told someone you respect why you chose this option, what would that person say?
If you had to explain your decision on television, would you be comfortable doing so?
How will it make me feel about myself?

43. In the End…
Most businesspeople will at some point an make ethical mistake
Can you learn from it and recover from it?

44. Ethics Resources U.S. Office of Government Ethics http://www.oge.gov/
U.S. Department of Defense Standards of Conduct Office
DoD R The Joint Ethics Regulation (JER) November 17, 2011
Josephson Institute
Encyclopedia of Ethical Failure, Updated July 2012

45. Its not always as easy as just obeying the law or following the FAR
Let’s Look at a Case
Its not always as easy as just obeying the law or following the FAR