Manual for Azerbaijan companies Rena Safaralieva

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Manual for Azerbaijan companies  


Rena Safaralieva  

Sanar Mammadov   

Vagif Gaziev   









Publication of Transparency Azerbaijan with financial support of  

Royal Norwegian Embassy and Transparency  International







Baku  - 2004 




This publication is the first attempt to analyze and summarize the situation of business ethics among 

Azerbaijan businesses. This manual is designed to facilitate the organization of business ethics training 

for staff of Azerbaijan companies.  The manual can also be used in the preparation of university business 

ethics courses.  


The manual consists of 10 chapters, discussing various aspects of business ethics and self-assessment 

questions, which can  help  readers to easily self-check how well  the  material has been learned. Case 

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 

January to April 2003 as well as at the Western University in Baku  from 2001 to 2003. In addition, the 

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 

Embassy in Baku. We would like to express our sincere gratitude to the Embassy for its confidence in the 

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 

Commerce, which organized training in business ethics for  specialists from Central and Eastern Europe 

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 

invaluable assistance of our editors who donated their time and effort to enhance the content and style of 

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 

work in this area. Please send them to Transparency Azerbaijan  by e-mail  (,  

by telephone (99412) 92 04 22) or post (Ahmad Javad Street 5, Flat 6, Baku, Azerbaijan, 370004). 






Dr.  Rena Safaralieva, 








Transparency Azerbaijan  






Sanar Mammadov,  








Azerbaijan Marketing Society  










Business ethics is an important attribute, which testifies to the quality of governance culture  of any 

company, whether state  or private, governmental or non-governmental. Any organization, where 

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 

enormously to the need for business ethics. These factors make it impossible to  hide a bad decision  

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 

employees. A  code of business ethics is the most important internal document  for the overwhelming 

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 

common, yet there  is always a certain aspect of activity  of a  company or  organization or public agency 

which is specific to each particular organization.  


How timely is creation and introduction of business ethics codes in Azerbaijan?  By all means, it should 

be done. Still, we have to recognize that  this is rather difficult  and in some cases simply impossible to 

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 

markets, need to develop  a business ethics culture.  This will add one more guarantee of their success, as 

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 

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