Rule Based Versus Principle Based Ethics in the Health Care Organizations

IPA Research Paper Assignment

Rule Based versus Principle Based Ethics in the Health Care Organizations

Szeto Hon Yiu

Institute of Public Accountants Hong Kong

“Ethics is often seen as a universal panacea to ensure true accountability and effective & fair operations of an organization. To ensure compliance a rule based approach to ethics should be implemented for all organizations. From your viewpoint should ethics be more rule based or principle based?”

Do you agree with the statement? Discuss the above statement in depth, by reviewing, comparing and contrasting recent approaches to ethics in organizations, and the applicability of such in the organization you work for.

1. INTRODUCTION

From my point of view, ethics should not be more rule based as strict rules have significant limitations and inflexibility to different situations of business organizations. I do not agree with the statement that only a rule based approach to ethics should be implemented for all organizations. Instead, I consider that both rules and principles are essential elements in effective compliance which is crucial for the corporate governance and due diligence of an organization.

Ethics and morals have the same meaning of ‘custom’ or ‘character’. In simple term, ethics is sometimes known as ‘moral philosophy’. The field of ethics or moral philosophy involves developing, defending and recommending concepts of right and wrong behavior. Ethics can be defined as the values that an individual uses to interpret whether any particular action or behavior is considered acceptable and appropriate. It consists of moral values, personal integrity, professional accountability, business legitimacy, equity and fairness, all of which are viewed differently by various people as acceptable standards of behavior. Business ethics can be defined as the collective values of a business organization that can be used to evaluate whether the behaviors of the organization’s collective members are considered acceptable and appropriate. To understand what is acceptable and appropriate for individuals, their moral values must be identified and supported.

The watchword of rule based approach is legal compliance. Compliance means making sure that the law is followed and the moral requirements of business are fulfilled. The rationale suggests that business is out to make a profit, and it should do whatever it can to maximize returns. This may mean causing pollution or bribing officials along the way. However, the moral yardstick involved is the appropriate law, and the organization will not do anything illegal. Many organizations have tried to institutionalize ethics by generating a code of conduct that lays out acceptable and sanctionable behavior. An illustration of this rule based approach is accounting in America prior to the scandals of the late 1990s, where the profession was very much rule-governed, with a strict and comprehensive code of conduct. One of the chief difficulties with a rule based approach is that it does not deal well with new or difficult issues where it is unclear which standard should apply. Furthermore, in some cases, rules will clash and there needs to be a way to adjudicate between them.