Unit 1 — Ethics in Business

The first unit of the programme: what business ethics means, the forms corruption takes, the duties a company owes its stakeholders, and the vocabulary the exam text draws on.

يتكوّن الدرس من 9 أجزاء: What Business Ethics Means، Corruption, Fraud and Counterfeiting، Stakeholders and Social Responsibility، Counterfeiting and the Conscious Consumer، Ethics in Other Professions and Social Auditing، Writing a Public Statement and an Opinion Article، Policy Statement, Speech and Charter of Ethics، Key Vocabulary and Useful Expressions، Reading: Bribery.

What Business Ethics Means

1. The key words

2. Why a company needs ethics

A company that behaves ethically is not only being generous. It is protecting itself.

It builds **trust** with customers, partners and banks.
It protects its **image** and its **reputation**, which take years to build and one scandal to destroy.
It avoids **legal problems**: fines, court cases, and in serious cases the closure of the firm.
It creates a **safe and fair workplace**, so good employees stay instead of leaving.
It respects **human rights** and protects the **environment**.

3. What ethical behaviour looks like in practice

Selling products that are safe and of good quality.
Paying workers a fair wage and respecting working hours.
Telling the truth in advertising instead of exaggerating.
Paying suppliers on time and honouring contracts.
Paying taxes instead of hiding profits.

4. The short-term trap

Unethical behaviour often looks profitable at first. A company that pays no taxes, uses cheap unsafe materials and lies in its adverts may earn more this year.

But the cost arrives later:

customers leave and do not come back;
the media and consumer associations publish the story;
courts impose fines, and managers may go to prison.

> Remember this sentence for the written part: *Unethical practices may increase profit in the short term, but they destroy reputation in the long term.*

5. Check yourself

Give a definition of "business ethics" in one sentence.
Name three reasons why a company should behave ethically.
Explain why unethical behaviour is dangerous even when it brings profit.

Corruption, Fraud and Counterfeiting

These three words come back in almost every exam text of this unit. Learn to tell them apart.

1. Corruption

Corruption is the abuse of a position of power for private gain. It takes several forms.

2. Fraud

Fraud is cheating in order to obtain money or a benefit: falsifying accounts, inventing documents, declaring a loss that does not exist.

The difference is useful to remember:

corruption normally needs **two** people, one who gives and one who receives;
fraud can be committed by **one** person alone, by lying in a document.

3. Counterfeiting

Counterfeiting is the imitation of something with the intention to deceive. A counterfeit product is a fake copy sold as if it were genuine.

Currency counterfeiting: producing false banknotes.
Product counterfeiting: fake medicines, fake spare parts, fake designer goods.
Document counterfeiting: false diplomas, false certificates.

Why it is treated as a serious crime:

fake medicines and fake spare parts **kill people**;
counterfeit money **devalues the national currency** and threatens economic stability;
the genuine producer loses sales, and the state loses taxes.

4. The whistleblower

A whistleblower is an employee who reports illegal or unethical acts committed inside their own company. Modern laws protect whistleblowers, because without them most internal fraud would never be discovered.

5. Check yourself

What is the difference between bribery and extortion?
Why does counterfeiting threaten a country's economy and not only one company?
Who is a whistleblower, and why do laws protect them?

Stakeholders and Social Responsibility

1. Who are the stakeholders?

Stakeholders are all the people and groups affected by what a company does. A company that thinks only of its owners forgets most of them.

2. Corporate Social Responsibility

Corporate Social Responsibility (CSR) is the idea that a company is responsible for its effect on society and on the environment, and not only for its profit.

A firm that practises CSR will, for example:

reduce its emissions instead of waiting for a law to force it;
finance a school, a clinic or a sports club in the town where it operates;
refuse suppliers who use child labour;
publish a yearly report on what it has done.

3. Social auditing

A social audit is an examination of how well a company respects its social and environmental commitments, in the same way that a financial audit examines its accounts. It is carried out by an independent body so that the result can be believed.

4. Ethical investment

Ethical investment means choosing where to put your money according to moral criteria and not only according to the expected profit. An ethical fund will refuse to invest in firms that pollute heavily, that sell weapons, or that exploit their workers.

5. How a company promotes ethics

A clear **code of conduct** given to every employee.
**Training** on ethics and professional behaviour.
**Leadership by example**: managers must respect the rules they impose.
**Control systems** able to discover fraud early.
**Protection for whistleblowers** who report problems.

6. Check yourself

Name five stakeholders of a factory built near a village.
What is the difference between a financial audit and a social audit?
Give two decisions an ethical investor would refuse to take.

Counterfeiting and the Conscious Consumer

Interpreting a picture

The exam and the classroom often start this unit with a picture: a man selling "designer" watches on a pavement, a box of medicines without a label, an envelope passed under a table. Interpreting it takes four steps.

A description alone is not enough: the marks go to the interpretation and the judgement.

Reading: "Half the Price, Twice the Risk" (a story written for this lesson)

Karim drives a taxi in a busy city. Last month, a man at a weekly market offered him a set of brake pads in a box that carried the logo of a famous brand. The price was half of what Karim usually paid at the garage, so he bought two sets without asking for a receipt.

When he brought them to his mechanic, the man looked at the box for a few seconds and shook his head. The logo was slightly blurred, the instructions were full of spelling mistakes and there was no serial number on the pads. "These are fakes," he said. "They look the same, but they are made of a cheaper material. They wear out quickly and, when they get hot, they can stop working."

Karim felt angry, then ashamed. He had wanted to save money, but he had nearly put his passengers' lives in danger. The mechanic fitted genuine pads and advised him to report the seller to the police.

Karim later learned that counterfeiters do not only copy luxury bags and watches. They copy what people use every day: medicines, chargers, cosmetics, toys and spare parts. Because these goods escape quality controls, nobody checks whether they are safe. The buyer pays less at the moment of purchase, but the real cost may come later, in an accident or a hospital bed.

Today Karim tells his customers his story. "If the price is too good to be true," he says, "the product probably isn't true either."

How to spot a counterfeit product

The conscious consumer: active citizenship

A conscious consumer knows that every purchase is a choice with consequences. Being an active citizen means using that choice responsibly:

buying from **authorised sellers** and keeping the **receipt**;
reading **labels**, expiry dates and safety marks;
**refusing** fakes even when they are cheap, because buying them finances fraud;
**reporting** counterfeit goods to the authorities or a consumer association;
**raising awareness** around you: telling family and friends what you know.

A word map on fraud

**People**: a fraudster, a counterfeiter, a forger, an accomplice, a victim.
**Actions**: to cheat, to deceive, to forge, to falsify, to smuggle, to swindle.
**Objects**: a forged signature, a fake label, a false invoice, a counterfeit banknote.
**Consequences**: a fine, a prison sentence, a loss of trust, a health risk.

Check yourself

Give three signs that showed the mechanic the brake pads were fake.
Why are everyday counterfeit goods more dangerous than fake luxury bags?
Name two things a conscious consumer does before buying.

Ethics in Other Professions and Social Auditing

The same values, different jobs

Ethics is not only a question for businessmen. Every profession has its own code of ethics (also called a code of practice): the written duties that its members must respect. The values are the same everywhere (honesty, fairness, respect, responsibility), but each job applies them in its own way.

Key words

**Confidentiality**: the duty to keep private information secret.
**Impartiality**: treating everyone equally, without favouring anybody.
**Conflict of interest**: a situation in which a person's private interest could influence a professional decision, for example a judge asked to decide a case involving his brother's company.
**Misconduct**: bad or dishonest behaviour by a professional.
**Accountability**: the obligation to answer for one's decisions.

Social auditing in more detail

A social audit checks whether a company really respects its social and environmental commitments. A financial audit looks at the money; a social audit looks at people and the planet.

What it examines

**Employees**: wages, safety, working hours, training, equal treatment of men and women.
**Customers**: product safety, honest information, how complaints are handled.
**Suppliers**: fair payment, no child labour in the supply chain.
**The community**: local jobs, support for local projects, noise.
**The environment**: waste, energy, water, pollution.

How it is carried out

The company states its **values and objectives**.
It chooses **indicators** that can be measured: the number of work accidents in a year, the share of waste recycled, the hours of training per employee.
Data is collected and **stakeholders are consulted** through questionnaires and interviews.
An **independent auditor** checks the data.
The results are published in a **social report** with an **action plan** for improvement.
The audit is **repeated** regularly, so that progress can be compared.

Why it matters: it brings transparency, makes managers accountable, shows where the firm must improve, and gives ethical investors reliable information before they put their money in the company.

Responding to a text on social auditing

When the task asks you to respond to a text, follow this plan:

**Restate** the main idea of the text in one sentence.
**Give your position**: *I fully agree… / I partly agree…*
**Support it** with two reasons and an example.
**Conclude** with a recommendation: *Every large company should…*

> *Model: The text explains that a social audit measures how a company treats its workers, its customers and the environment. I fully agree that such audits are necessary. First, figures such as the number of work accidents cannot be hidden behind fine words. Second, an independent check gives consumers and investors a reason to trust the firm. Every large company should therefore publish a social report each year.*

Writing a Public Statement and an Opinion Article

A. The public statement

A public statement is an official text in which a person or an organisation speaks to the public in order to take a position on an issue and call people to act. In this unit the classic topic is: *how to fight corruption*.

Its features

It is addressed to a wide audience: *Dear citizens, / Dear fellow students,*
It speaks in the name of a group: **we**, **our**.
Its tone is **formal and serious**, without slang or abbreviations.
It states the problem, proposes measures and ends with a **call to action**.

Planning with a spider map

Write the topic in the centre and draw one branch for each idea. Then add details to every branch.

**Centre**: fighting corruption
**Education**: lessons on integrity at school; awareness campaigns.
**Law**: heavier penalties; independent courts.
**Transparency**: public contracts published online; officials declare their wealth.
**Technology**: online administration means fewer face-to-face contacts with officials, so fewer chances to ask for bribes.
**Citizens**: refuse to pay; report every request for a bribe.
**Protection**: laws that protect whistleblowers.

Each branch becomes one or two sentences of the statement. Choose three or four branches; do not try to use them all.

A model public statement (written for this lesson)

> Dear fellow citizens, > > We, the members of our school's Integrity Club, wish to express our deep concern about corruption, which slows down the development of our country and destroys trust between citizens and institutions. > > We believe that corruption can be defeated if everyone plays a part. First, schools should teach integrity as seriously as they teach mathematics. Second, all public contracts ought to be published online, so that every citizen can see who received them and why. Moreover, more administrative procedures should be carried out online, because the fewer contacts there are between citizens and officials, the fewer chances there are to ask for a bribe. Finally, people who report bribery must be protected by the law. > > Corruption survives only when honest people stay silent. Let us refuse to pay or accept a bribe, and let us report every attempt. It is high time we built a fairer society together. > > The Integrity Club

B. The opinion article

An opinion article defends a clear point of view on a question of public interest. Follow this diagram:

A model opinion article (written for this lesson)

> Honesty Pays in the Long Run > > Many people think that a company cannot be honest and successful at the same time. In my view, ethics is not an obstacle to profit; it is its best protection. > > First of all, customers come back to firms they trust. A shop that sells safe products at fair prices does not need to spend a fortune on advertising, because satisfied customers advertise it for free. Moreover, an ethical company keeps its best employees, since people prefer to work where they are respected. > > Some people claim that cheating brings quicker profit. This may be true for a few months. However, one scandal is enough to destroy a reputation that took years to build, and fines and court cases cost far more than the money saved. > > To sum up, ethics is a long-term investment. Companies should see honesty not as a cost but as the foundation of lasting success.

Checklist before handing in

Is my opinion clear from the introduction?
Does each argument have an example?
Did I answer the opposite view?
Did I use connectors (*first, moreover, however, to sum up*)?
Is the tone formal, with no abbreviations?

Policy Statement, Speech and Charter of Ethics

A. Expanding notes

In this unit you will often receive notes and be asked to turn them into a text. Notes leave out articles, auxiliaries and connectors, and they use symbols.

| Symbol | Meaning | | :--- | :--- | | → | leads to, results in | | + | and, in addition | | = | means, is the same as | | e.g. | for example | | ≠ | is different from |

Method

Keep the **order** and the **meaning** of the notes; do not add new ideas.
Add a **subject and a verb** to every idea, in the right tense.
Add **articles**, **prepositions** and **connectors**.
Read the result aloud: every sentence must be complete.

*Notes*: corruption → loss of investors' trust + fewer jobs *Expanded*: Corruption leads to a loss of investors' trust and, as a result, fewer jobs are created.

B. A speech in favour of ethics in business

*Notes*: ethics = honesty + fairness · ethical firm → trust of customers · cheating → short-term profit ≠ long-term success · young people = future managers → must choose honesty

> Ladies and gentlemen, dear classmates, > > What is ethics in business? It is simply honesty and fairness applied to work. An ethical firm wins the trust of its customers, and trust is worth more than any advert. Of course, cheating may bring a quick profit, but quick profit is not long-term success. We, the young people in this room, are the managers of tomorrow. The choice we make today will decide the kind of economy we leave to our children. Let us choose honesty. > > Thank you for your attention.

A speech greets the audience, asks a rhetorical question, speaks to the listeners directly (we, let us) and thanks them at the end.

C. A policy statement for an ethical investment fund

A policy statement is a document in which an organisation states its principles and the rules it will follow. An ethical fund writes one to inform potential contributors (the people who might put their savings in it) about where their money will go.

Guidelines (the diagram)

**Who we are and what we aim at.**
**Positive criteria**: what we invest in.
**Negative criteria**: what we refuse to invest in.
**Control**: how we check the firms (social audits, visits, reports).
**Commitment to contributors**: transparency and regular information.

Checklist of language: present simple for principles (*we invest, we refuse*); will / will not for commitments; *we are committed to + -ing*; formal tone; short paragraphs.

> Policy Statement of an imaginary ethical fund (written for this lesson) > > Our fund was created to offer savers a way to earn a reasonable return without betraying their values. > > We invest in companies that respect their workers, protect the environment and pay their taxes in full. We give priority to firms working in renewable energy, health and education. > > We will not invest in companies that produce weapons, employ children, pollute heavily or have been found guilty of corruption. > > Before investing, we study each company's social audit, and we visit its sites whenever possible. If a company stops respecting our criteria, we will sell our shares. > > We are committed to informing our contributors: every year we will publish the full list of our investments and the results of our controls.

D. The project: a charter of ethics in business

A charter of ethics is a short document that a company, a club or a school adopts to state the rules of behaviour of its members. It contains:

a **title** and a short **preamble** (why the charter exists);
**numbered articles**, each with one rule, using *must*, *must not* or *shall*;
the **date** and the **signatures**.

*Examples of articles*

**Article 1**: Every employee must treat customers with honesty and respect.
**Article 2**: Employees must not accept gifts or money from suppliers.
**Article 3**: The company shall pay its suppliers on time.
**Article 4**: The company shall reduce its waste and recycle whenever possible.
**Article 5**: Any employee who reports a violation of this charter shall be protected.

Key Vocabulary and Useful Expressions

1. Core vocabulary

2. Word families

Being able to move from one form to another is tested in the text-exploration part.

3. Opposites by prefix

legal → **il**legal
honest → **dis**honest
moral → **im**moral
responsible → **ir**responsible
fair → **un**fair
to use → to **mis**use

4. Expressions for the written part

Use them to open, to argue and to close.

Giving an opinion

In my opinion, a good company should…
I strongly believe that…
From my point of view,…

Arguing

First of all, … Secondly, … Finally,…
Moreover, / Furthermore, / In addition,…
This is mainly due to…

Contrasting

However, / Nevertheless,…
Although some people claim that…, the truth is that…

Concluding

To conclude, / All in all,…
Governments and consumers should encourage ethical companies and punish dishonest ones.

5. Check yourself

Give the noun and the adjective formed from *to corrupt*.
Form the opposite of *legal*, *honest* and *responsible*.
Write one sentence of opinion about bribery using an expression from part 4.

Reading: Bribery

1. The text

A bribe is a form of corruption which involves the promise of money or a favour to someone in a position of power, with the hope of influencing that person's behaviour. Bribery is viewed as a crime in many regions of the world, and people who are caught offering or receiving bribes may face heavy penalties.

There are several reasons why bribery is treated as a crime. In the first place, accepting a bribe and acting on it is a clear misuse of power and a failure of duty. In societies that value equality, the idea of buying a decision is especially unacceptable, because it shows the gap between those who can pay for a favour and those who cannot.

A bribe also damages the quality of the decision itself. When a construction firm bribes an official in order to obtain a contract, the official may overlook a company which offers better or cheaper work, and the state is the first to lose.

Bribes take many forms. Payments to public officials have been common throughout history, and in some regions they still are. Bribery also exists in finance, and even in medicine, where doctors may be offered gifts by drug companies so that they prescribe a particular product.

Drawing the line is not always easy. Politicians receive contributions from companies and industries; critics see these payments as bribes when the politicians then vote in the interest of their biggest contributors. In some countries the practice is so widespread that a bribe is treated almost as a normal fee, and an honest citizen may find that their file is never approved until they pay.

2. Comprehension

Give a suitable title to the text other than "Bribery".
Are these statements **true** or **false**? Justify from the text.

a. A bribe is always a sum of money. b. Bribery harms only the person who pays it. c. In some countries bribery has become an ordinary practice.

Answer according to the text.

a. Why is accepting a bribe described as a misuse of power? b. How does a bribe damage the quality of a decision? c. Why is the line between a bribe and a political contribution difficult to draw?

3. Text exploration

Find in the text words closest in meaning to: *punishments* (§1), *intolerable* (§2), *ignore* (§3).
Find in the text words opposite in meaning to: *light*, *dishonest*, *rare*.
Rewrite the following sentence in the passive voice.

> *A construction firm bribed the official.*

Combine the two sentences with the connector in brackets.

> *Bribery is widespread. It is difficult to prosecute.* (so … that)

Classify these words according to the pronunciation of their final *-ed*: *viewed*, *offered*, *treated*, *approved*.

4. Written expression

Write a composition of about 150 words on the following topic.

> Corruption slows down the development of a country. Say how it harms the economy and suggest two measures that could reduce it.

الجزء الأول من الدرس مفتوح للجميع، وبقيته مع الاشتراك.

Unit 1 — Ethics in Business

What Business Ethics Means

What Business Ethics Means

1. The key words

2. Why a company needs ethics

3. What ethical behaviour looks like in practice

4. The short-term trap

5. Check yourself

Corruption, Fraud and Counterfeiting

Corruption, Fraud and Counterfeiting

1. Corruption

2. Fraud

3. Counterfeiting

4. The whistleblower

5. Check yourself

Stakeholders and Social Responsibility

Stakeholders and Social Responsibility

1. Who are the stakeholders?

2. Corporate Social Responsibility

3. Social auditing

4. Ethical investment

5. How a company promotes ethics

6. Check yourself

Counterfeiting and the Conscious Consumer

Interpreting a picture

Reading: "Half the Price, Twice the Risk" (a story written for this lesson)

How to spot a counterfeit product

The conscious consumer: active citizenship

A word map on fraud

Check yourself

Ethics in Other Professions and Social Auditing

The same values, different jobs

Key words

Social auditing in more detail

Responding to a text on social auditing

Writing a Public Statement and an Opinion Article

A. The public statement

Planning with a spider map

A model public statement (written for this lesson)

B. The opinion article

A model opinion article (written for this lesson)

Checklist before handing in

Policy Statement, Speech and Charter of Ethics

A. Expanding notes

B. A speech in favour of ethics in business

C. A policy statement for an ethical investment fund

D. The project: a charter of ethics in business

Key Vocabulary and Useful Expressions

Key Vocabulary and Useful Expressions

1. Core vocabulary

2. Word families

3. Opposites by prefix

4. Expressions for the written part

5. Check yourself

Reading: Bribery

Reading: Bribery

1. The text

2. Comprehension

3. Text exploration

4. Written expression

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