Mgt 609 – Project Management Fundamentals Ethics and Professional Responsibility Dr. Alan C. Maltz Howe School of Technology Management Stevens Institute of Technology Alan.Maltz@stevens.edu © Alan C. Maltz, Ph.D, 2014

Business Ethics Rules or standards governing the conduct of a business Moral code – what is ‘right’ and what is ‘wrong’? Highly subjective nature Tension between different stakeholders © Alan C. Maltz, Ph.D, 2014

Today’s Headlines Are they ‘moral’ or ‘ethical’ issues? Corporate corruption Corporate criminal behavior Individual profiteering Stock manipulation Others? Despite all the media and popular sentiment that these examples show a lack of ethics, in reality all of the examples cited above are moral issues, not ethical ones; many of the companies involved, in fact, had Codes of Ethics in place, and ethical enforcement procedures. But all the ethical guidelines in the world will have no effect on a person who has lost his or her moral compass. Calling these “ethical issues” is, in fact, giving them more status than they deserve, with the added negative affect of further lowering the value of the study of ethics in the minds of the public. © Alan C. Maltz, Ph.D, 2014

Ethical Issues Project Managers face many opportunities for unethical behavior. Common ethical missteps include: “Wired” bids and contracts (winner has been predetermined) “Buy-in” (bidding with low intention of cutting corners or forcing subsequent contract changes) “Kickbacks” “Covering” for team members (group cohesiveness) Taking “shortcuts” (to meet deadlines or budgets) Using marginal (substandard) materials Compromising on safety Violating standards Purpose: Provide examples for discussion related to ethical issues faced by a project manager. Key Points: Point out that there is a distinction between morality and legality. This distinction is especially important in dealing with multicultural projects. What may be morally acceptable in one culture may sometimes be prohibited under the law of a different culture. Ask members of the class if they have encountered any of the ethical issues listed on the slide. What type of business career do YOU want to lead? © Alan C. Maltz, Ph.D, 2014

Business Ethics Tensions: Profits versus higher wages Expansion versus development Production versus pollution Supplier benefits versus consumer prices/lower costs Survival of the business versus needs of stakeholders © Alan C. Maltz, Ph.D, 2014

Ethical Issues are Seldom Black and White Conflicting Demands: Loyalty to company and colleagues Concern for public welfare Personal gain, ambition Ethical standards are usually relative and personal, there is seldom an absolute standard © Alan C. Maltz, Ph.D, 2014

Ethical Issues in the Real World What ethical issues have you faced as project managers? What did you do about them? How did you feel about the choices you made? What was the impact on the project and the team? Purpose: Provide examples for discussion related to ethical issues faced by a project manager. Key Points: Point out that there is a distinction between morality and legality. This distinction is especially important in dealing with multicultural projects. What may be morally acceptable in one culture may sometimes be prohibited under the law of a different culture. Ask members of the class if they have encountered any of the ethical issues listed on the slide. © Alan C. Maltz, Ph.D, 2014

A Simple Test… If you are facing an ethical dilemma, then you simply ask yourself, “What would you do if you knew your actions would make the front page of tomorrow’s Washington Post?” © Alan C. Maltz, Ph.D, 2014

Sarbanes-Oxley Act Created by Sen. Paul Sarbanes (D-Maryland) and Congressman Michael Oxley (R-Ohio) Signed into law July 30, 2002 In response to the Arthur Anderson, Enron and WorldCom/MCI debacle, the Sarbanes-Oxley act seeks to: Restore the public confidence in both public accounting and publicly traded securities Assure ethical business practices through heightened levels of executive awareness and accountability © Alan C. Maltz, Ph.D, 2014

Sarbanes-Oxley Overview Creates the Public Corporation Accounting Oversight Board (the “Board”, PCAOB) Adds new criminal penalties for obstruction of justice by destroying or altering records Requires corporate executives to certify the accuracy of reported financial information Requires registration with Board of public accounting firms © Alan C. Maltz, Ph.D, 2014

Sarbanes-Oxley Affects Any publicly-traded company Any public accounting firm that provides auditing services for publicly-traded companies Independent contractors to public accounting firms Any company or agency subject to the obstruction of justice sections Any individual © Alan C. Maltz, Ph.D, 2014

Thank You - Questions? Alan C. Maltz, Ph.D. Howe School of Technology Management Stevens Institute of Technology Castle Point on the Hudson Hoboken, NJ 07030 Phone: +1 (561) 632-4848 E-mail: alan.maltz@stevens.edu Web: http://www.stevens.edu/ © Alan C. Maltz, Ph.D, 2014