This publication is the first attempt to analyze and summarize the situation of business ethics among
for staff of Azerbaijan companies. The manual can also be used in the preparation of university business
The manual consists of 10 chapters, discussing various aspects of business ethics and self-assessment
studies presented at the end of each chapter are based on real examples of Azerbaijan companies. At
the end of the book readers will find notes to cases, which discuss various approaches to the ethical
dilemmas presented. The appendices contain sample business ethics documents used by multi-national
companies, as well as a suggested example which could be used by Azerbaijan companies.
The manual was pilot tested during a series of seminars organized by Transparency International from
team of authors and the Baku office of the Citizens Democracy Corps organized a second round of
training in May 2003.
This project would have been impossible without the financial support provided by the Royal Norwegian
success of the project. This project was co-funded by the Transparency International Secretariat as the
follow-up to the Regional Business Ethics Conference, which was organized by Transparency Azerbaijan
in Baku in November 2002 to develop business ethics standards in Azerbaijan.
The team of authors owes special thanks to the Good Governance Program, U.S. Department of
in the summer of 2002, in which two co-authors of this book (Sanar Mammadov and Vagif Gaziev)
participated. This Program funded the organization in the winter of 2004 of three additional rounds of
training based upon this publication.
Preparation of this book has posed a challenge which could not have been successfully met without the
the book in all three languages (Azerbaijan, English and Russian). For this, we are grateful to the staff
members of BP Azerbaijan Business Unit, Business Alliance Development, Exxon/Mobil Operating
Company LLC, AZEL, SS – Production, Center of Economic Reforms under Azerbaijan Ministry of
Economic Development, Good Governance Program of the U.S. Department of Commerce, British
Embassy in Baku, Caspian Business News newspaper, and Transparency International Secretariat and
chapters of CIS countries and TI Secretariat. We are especially grateful to Mr. Namik Azizov, President
of the Union of Managers of Azerbaijan and Mr. Charles Davidson, Visiting Faculty Fellow, Khazar
University who have read the manuscript and whose valuable comments served to improve the quality
of this publication.
Your comments on this publication will be very much appreciated in order to help us undertake further
by telephone (99412) 92 04 22) or post (Ahmad Javad Street 5, Flat 6, Baku, Azerbaijan, 370004).
Dr. Rena Safaralieva,
Azerbaijan Marketing Society
Business ethics is an important attribute, which testifies to the quality of governance culture of any
decisions made at different management and executive levels are accompanied by a risk of emergence
of internal or external conflicts, damage to reputation of decision makers or reduction of efficiency of the
management system, (whether a state organ, a private or public enterprise, an NGO or political party),
can benefit from the incorporation of business ethics as an important component of corporate culture.. As
is well-known, violation of ethics has led to bankruptcies of several of the largest companies and
discredited many well known political leaders and top managers. It suffices to recall recent corruption
related scandals in the Italian and Korean governments and such big companies, as Enron and Elf.
What makes it so important to follow ethical norms in the workplace?
We believe that the main reasons of the growing importance of ethical compliance in the work
environment are: on one hand, the increasingly high cost of poor decisions, which has to be paid not only
by decision makers, but more often than not by society at large; on the other hand, because legislation
simply cannot envision and regulate every aspect of social interaction. Some undesirable conduct is
always left outside of the legal framework and must therefore be regulated by norms of ethics, i.e., a code
of certain rules of behavior, perceived by the majority as right, just, and fair. It is even more difficult for
legal instruments to regulate behavior of people within an isolated structure, for example, an
individual company or organization.
Factors such as democratization and free access to information in the modern society also contribute
which may have global consequences and thus to avoid negative financial and societal repercussions. It
is better still to avoid actions which will result in detrimental negative consequences for others which
only preventive measures can assure. Establishing codes of conduct can serve a valuable preventive role,
and therefore benefit not only business but all society.
Rules of business ethics are summarized in the so called codes – sets of rules to regulate behavior of
majority of companies based in democratic countries, to say nothing of transnational corporations. A code
of ethics is a compulsory document, which regulates behavior of employees of governmental and non-
governmental organizations in developed Western democracies.
It shall be mentioned that codes are tailored to individual structures. Codes may have many things in
which is specific to each particular organization.
How timely is creation and introduction of business ethics codes in Azerbaijan? By all means, it should
fully comply with all ethical norms in a country like Azerbaijan. The reason for this lies in the
widespread manifestations of corruption: bribery, protectionism, nepotism, unfair competition, etc. These
forms of corruption thrive under conditions such as the absence of democratic traditions, imperfect
legislation, dependence of the judicial on the executive power, low level of transparency in the public
sector in general, scarcity of independent media, undeveloped civil society, etc.
However, Azerbaijan companies especially those which are gradually gaining access to international
modern Azerbaijan consumers became more and more sophisticated regarding company reputations.
Can this task be successfully fulfilled by Azerbaijan companies? By all means. The term, business ethics,
itself is rather new, however, many components of business ethics have been applied before in the form
of all kinds of internal regulations and job descriptions of enterprises. This is why many employees of
companies will not find it difficult to adhere to the principles of business ethics and the need to follow
them. The codes will not repeat old internal regulations and job descriptions and will have many new