Abstract
Despite appeals from public opinion all over the world for the development of ethics in business and thewidespread adoption of a Code of ethics by many firms, the integration of ethical values into the corporateplanning process has received little attention either in real life or in research literature. In order to overcome thegap between ethical principles and practice, this study underlines some key points which could help theintegration of values into Activity-Based Budgeting: identifying ethical values, creating an Ethical framework,examining the distinctive parts of actions, choosing a preference order for values, incorporating the values intoeach single element of every activity. The approach based on activities allows managers to give visibility tothose objectives with an ethical dimension and incorporates them analytically into the budgeting system.
Highlights
The subject of business ethics has received a great deal of interest from public opinion, consumers, politicians, managers and economists all over the world
The research literature, provides conflicting results; it is not clear what effect a Code of ethics has on decision making and what factors influence the effectiveness of a Code (Helin & Sandström, 2007; Kaptein & Schwartz, 2008; Singh, 2011)
In order to integrate values into the planning process, this paper proposes each activity in budgeting be structured on the basis of a set of key elements as listed below: 1) The input of the activity; 2) The resources that are needed in the activity; 3) The number and names of employees; 4) The tasks assigned to employees, reward systems, hours of work and the deadlines to be observed; 5) The type of organizational structure; 6) The information required by employees to do their job; 7) The output of the activity
Summary
The subject of business ethics has received a great deal of interest from public opinion, consumers, politicians, managers and economists all over the world. Even today we are witnessing varied and numerous episodes of misconduct, such as the violation of workplace health and safety rules, the infringement of environmental standards, the mismanagement and misuse of an organization’s resources and company time, false or deceptive sales practices and lying to employees (KPMG Forensic, 2008; Ethics Resource Center, 2012). Ethical compliance programs, such as ethical codes, policy statements, speeches, systems for reporting malpractice, do not seem to reduce legal violations (McKendall, DeMarr & Jones-Rikkers, 2002)
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