Business Ethics


Course Description

E16. Business Ethics, 3 CE Hours, $21

Description: This course deals with Conflict of Interest, Harassment, and Whistle-Blowing. In most businesses, ethics is promulgated as a policy.

Objectives: At the end of this course, you will be equipped to make basic ethical decisions on business matters involving 1. conflicts of interest, 2. work requirements, 3. work conditions and 4. dealing with work problems.

Course Exam

Test: Study this website for 3 hours for an approved 3 hours Continuing Education Certificate (0.3 CEUs).  Click here for the self-correcting test & online payment, and 2) receive your certificate immediately online. All are online, nothing by post-mail.

Course Introduction

What we’ll be covering in this course

Most businesses ethics is promulgated as a policy. You need to find the answers to these questions:

  1. When are interests in conflict?
    1.1 law
    1.2 types
  2. What is work ethics?
    2.1 management
    2.2 investing
  3. Are you being harassed?
    3.1 sexual
    3.2 racial
  4. Who are whistle-blowers?
    4.1 trust
    4.2 effectiveness

Warmup Exercise

Survey of Ethical Theoretic Aptitudes

First, take this survey at

This survey is designed to ascertain your inclination to approach ethical issues from either a deontological or a utilitarian perspective. There are no wrong answers and no unethical scores.

Reprinted From F. Neil Brady’s Ethical Managing: Rules and Results.


1. When are interests in conflict?

Conflict of Interest Definition

A conflict of interest involves the abuse — actual, apparent, or potential — of the trust that people have in professionals. The simplest working definition states: A conflict of interest is a situation in which financial or other personal considerations have the potential to compromise or bias professional judgment and objectivity. An apparent conflict of interest is one in which a reasonable person would think that the professional’s judgment is likely to be compromised. A potential conflict of interest involves a situation that may develop into an actual conflict of interest. It is important to note that a conflict of interest exists whether or not decisions are affected by a personal interest; a conflict of interest implies only the potential for bias, not a likelihood. It is also important to note that a conflict of interest is not considered misconduct in research, since the definition for misconduct is currently limited to fabrication, falsification, and plagiarism.

There are many varieties of conflicts of interest, and they appear in different settings and across all disciplines. While conflicts of interest apply to a “wide range of behaviors and circumstances,” they all involve the use of a person’s authority for personal and/or financial gain.


Additional background on conflicts of interest, if needed, can be found in our Conflict of Interest course.

What does the law say?

In a conflict of interest, the conflict is between the interests of the organization and that of the employee (or sometimes board or other members).

What are examples of conflicts of interest?

Here are four statements. Some are better than others.

“I would never harass anyone”………………………..”I have my fingers in a lot of things”

“In some cases, it may be OK to take a pen home.”…………………………………….. “I stop this waste”

Board Member Conflict of Interest

ERIC_NO: ED427622,  Guide to Conflict of Interest and Disclosure. The Fundamentals. Board Basics. By Ingram, Richard T., 1997

ABSTRACT: This booklet offers guidelines for conflict of interest issues and disclosure for members of governing boards of institutions of higher education. It urges institutions to develop conflict-of-interest policy documents to guide decisions concerning such topics as defining what constitutes “conflict of interest”; the board’s role in cases of an “appearance” of conflict of interest; when a perceived conflict of interest should be addressed; who is responsible for requesting board attention and action; maintaining balance in light of the need to seek members who are influential people with diverse affiliations; and whether board policy should specify most possible conflicts of interest.

A general guideline offered suggests that any time a trustee or institutional officer (or family member or business associate) stands to gain financially (either directly or indirectly) from a specific transaction, there is a potential conflict of interest. Examples of relatively easy and more difficult situations are offered.

The booklet warns that policy guidelines and annual disclosure requirements should strike a balance between being overly prescriptive or so vague that they are easily ignored or ineffective. Also provided are some criteria for defining conflict of interest, as well as a sample conflict of interest policy statement.

Drug Research Conflict of Interest

ERIC_NO: ED404907, State University of New York at Buffalo: Potential Conflict of Interest in the School Pharmacy. Report 95-D-50. 1997

ABSTRACT: This audit examined a case of potential conflict of interest in the School of Pharmacy at the State University of New York (SUNY) at Buffalo. In 1992 a professor in the Department of Pharmacy Practice, which conducts grant-funded drug research, created Pharmaceutical Outcomes Research, Incorporated (PhOR), a private, for-profit corporation that also conducted drug research. In February 1994 this professor became chairman of the department. It was alleged that a computer network had been removed from the department to PhOR offices where it was used to obtain research monies that may have otherwise gone to the university, and that department faculty and staff time had been inappropriately diverted to benefit PhOR. An investigation found that the professor in question admitted to removing the computer network to PhOR offices and using the equipment to work on both university and PhOR grants. It was also found that drug research grant funding for the department declined from $428,000 to virtually nothing during the period while grant funding for PhOR increased substantially. The professor subsequently resigned, and the matter was referred to the state attorney general’s office. Two appendixes contain a list of contributors and SUNY Buffalo’s response to the report.


2. What is work ethics?

What are some of the myths about business and work ethics? Complete Guide to Ethics Management

Consider a simple Code of Ethics: Employees will conduct themselves at all times as follows: Treat every customer as if she/he were our last. Speak and act professionally at all times. Be completely honest in every communication. Ensure that your ethics are above reproach and fair.

What is ethical in business, financing, and investment?

Mark Pastin, in The Hard Problems of Management: Gaining the Ethics Edge (Jossey-Bass, 1986), provides the following four principles for highly ethical organizations:

  1. They are at ease interacting with diverse internal and external stakeholder groups. The ground-rules of these firms make the good of these stakeholder groups part of the organizations’ own good.
  2. They are obsessed with fairness. Their ground-rules emphasize that the other persons’ interests count as much as their own.
  3. Responsibility is individual rather than collective, with individuals assuming personal responsibility for actions of the organization. These organizations’ ground-rules mandate that individuals are responsible for themselves.
  4. They see their activities in terms of purpose. This purpose is a way of operating that members of the organization highly value. And purpose ties the organization to its environment.

ERIC_NO: ED288062, Vocational Ethics. Toward the Development of an Enabling Work Ethic.
Miller, Pamela F.; Coady, William T. 1986

ABSTRACT: This manual is intended to provide vocational educators with a rational for teaching vocational ethics, a framework for understanding the development of an enabling work ethic, and practical suggestions for teaching vocational ethics in the classroom. The first section discusses the importance of vocational ethics as an area of inquiry focusing on questions of ethical conduct in the workplace. The three stages involved in the development of an enabling work ethic are then examined. The next section reviews principles of indirect and overt instruction, appropriate instructional content, teaching strategies (the teacher’s role and the format and sequence of instruction), and procedures for creating and adapting curricula. Covered in the section on instructional content are value assessment criteria (reciprocity, consistency, coherence, comprehensiveness, adequacy, and duration) and mediation skills (assertiveness, empathic listening, principled negotiation, and risk taking). Appendixes include a list of materials dealing with assertiveness, empathic listening, and negotiating and risk-taking skills, as well as 13 sample lesson plans, all of which involve problem solving by using the value assessment criteria and mediation skills discussed in the manual.


3. Are you being harassed?

What is sexual harassment?  Take the following Quiz on What is Sexual Harassment reprinted from Jerry Kendrick, Attorney with the Texas Workforce Commission to review your sexual harassment knowledge.

Sexual harassment deals with behavior that is not only inappropriate but also illegal. Unwelcome acts in themselves may not constitute sexual harassment. That behavior arises from inappropriate motives and emotions. While it is often difficult to document, it can be documented.

ERIC_NO: ED197242, Sexual Harassment. A Report on the Sexual Harassment of Students. By Till, Frank J., 1980

ABSTRACT: To convince federal policy-makers that the sexual harassment of students is both illegal and serious, the National Advisory Council on Women’s Educational Programs issued and circulated a “Call for Information on the Sexual Harassment of Students,” a request for descriptive anecdotes from victims and others who knew of harassment incidents.

Anecdotes from 116 victims identified 5 types of sexual harassment:

(1) sexist remarks or behavior;
(2) inappropriate and offensive, but sanction-free sexual advances;
(2) solicitation of sexual activity by promise of rewards;
(4) coercion of sexual activity by threat of punishment; and
(5) sexual crimes and misdemeanors.

Information from students in post-secondary institutions who have been harassed by faculty, staff, or other employees reveals that few colleges and universities are dealing with the problem and that students are coping privately with harassment. The Council recommends that schools publicly state their policy on the prohibition of sexual harassment, avenues of complaint, and sanctions for incidents, and suggests that the federal government make sexual harassment an act of discrimination under Title IX.


4. Who are whistle-blowers?

How does whistle-blowing affect trust and work?

Whistle-blowers need to careful logs of all relevant activities to document their concerns. Consider some cases of whistle-blowing.

ERIC_NO: ED199773, Constitutional Protection for Whistle Blowers: Has the First Amendment Called in Sick? By Sanders, Wayne, 1981

ABSTRACT: Free speech for the public employee is much more limited than free speech in the society at large. The courts have been unwilling to extend free speech protection carte blanche and have instead cautiously attempted to define what speech would be allowed or prohibited in public organizations.

This approach is illustrated in four areas of court concern:

(1) the controversy between internal versus external communication,
(2) the establishment of criteria to distinguish protected from unprotected speech,
(3) the scrutiny of organizational regulations, and
(4) the case of organizational members refusing to participate in certain activities.

Regardless of what free speech protections are available to an employee, they are only as good as the employee’s ability to press a free speech claim. Two practical problems are involved in this: lack of due process hearings and the complexity of organizational punishments.

It is clear, then, that while the First and Fourteenth Amendments of the Constitution may offer some protection for the outspoken employee, that employee must fight hard for the protection. If protecting whistle blowers is an important goal of society, then alternative legal strategies should be considered. One such strategy might be a specific contract with free speech provisions clearly stated. Another, and more promising strategy, is statutory protection.

Studies of Interest

ERIC_NO: ED434218, Business Ethics. Digest Number 98-1. By Akhavan, Kambiz, 1998

ABSTRACT: Discussion of business ethics rests on rather ambiguous grounds. What one person considers highly unethical can be legitimate in another person’s eye. Many businesses operate under tenets that, although not illegal, most people would consider unethical. Having the ability to distinguish between ethical and unethical practices does not guarantee that a business owner will consistently choose the ethical decision. Business owners need to realize the tremendous benefits of operating an ethical company and severe disadvantages of using unethical operations. Guidelines that can help them create or improve the ethical standards within their companies include the following: (1) if the company has committed a serious error, do not attempt to cover it up; (2) create a believable public commitment to ethical operations; (3) establish a strategy to communicate the ethics guidelines to the staff; (4) build trust with employees and constantly monitor the ethics program; (5) hire people who can uphold the company’s high ethical standards; and (5) realize that company executives are role models. Trust is one of the company’s most vital assets. Maintaining the highest ethical standards adds to a company’s value and success. Consequences of success in an unethical business are short lived. If customers or clients learn a company cheats, they may never return. A business cannot operate successfully if employees abuse sick days, cut corners on quality, lie to colleagues, cover up incidents, deceive customers, and take credit for co-workers’ ideas.

ERIC_NO: ED323143, A Liberal Education for Business Ethics. By O’Brien, William A. 1989

ABSTRACT: The crisis in business ethics does not stem so much from the inability to distinguish between right and wrong as it does from the habits people develop over time. Choice in today’s world seems to conflict with ethical beliefs. Ethics involves more than making choices; it also involves learning to live with results and accepting responsibility for decision making. The choices one makes have a meaningful impact and corporate United States misses the point in the current approach to the ethics crisis. By marketing ethics as good business, corporate United States does more to exacerbate the problem than to cure it. How can higher education teach ethics in ways that force students beyond exercises in problem-solving and decision-making? One method is by reversing thinking about ethics; i.e., to prescribe desired behaviors instead of proscribing unwanted behaviors. This means concentrating on what is moral and not on what is merely legal. Another method is by bringing liberal education into the business curriculum, by adapting traditional material to non-traditional situations, and by reducing the emphasis on careerism in education.

(All ERIC abstracts are  )


Ethics Library

Explore your concerns in ethics at three of the following sites:


Study this website for 3 hours for an approved 3 hours Continuing Education Certificate (0.3 CEUs).  Click here for the self-correcting test & online payment, and 2) receive your certificate immediately online. All are online, nothing by post-mail.

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