Manual for Azerbaijan companies Rena Safaralieva

credibility – the International Bank organizes campaigns to assert their credibility and Azerigasbank 

builds its reputation by supporting social programs and cultural events.  

 

Fourthly, violation of ethical norms sooner or later leads to an accident, usually resulting in a toughening 

of the state regulation. It suffices to recall the tragedy in the Baku circus of January 2003, when death of 

two children forced authorities to toughen control over technical safety of entertainment industry.  

 

Fifthly,  professionals seek to avoid companies with a bad reputation. For example, the Minaret group, 

which a few years ago was engaged in various machinations with privatization vouchers in Azerbaijan, 

was forced to pay salaries significantly exceeding the average salary rates paid by international 

companies in Baku in order to attract professionals willing to work for them. 

 

Sixthly,  ethics helps to increase profits. According to estimates, it is five times cheaper to keep old 

customers than to make new ones

6

. For example, Azeurotel takes reasonable efforts to maintain its 

existing client base. This company notifies its customers in advance of all technical problems or 

preventive measures and indicates a concrete time when access to Internet will be unavailable. Another 

provider – Azeronline—sends no such notifications, despite the fact that many of their customers have 

problems with Internet access at least once a week.  

 

At last but not least, in a country like ours, where the state, for a variety of reasons, is not able to provide 

the majority of population with a decent standard of living, the task of instilling and implementing ethical 

values must be largely borne by business in their own interests. Acting as socially responsible 

corporations, i.e., by creating competitive and well- paid jobs, supporting social programs, giving up 

super-profits by setting reasonable prices, refraining from polluting the environment, business can, to a 

certain degree, help ease social tension.  

 

The myth of amorality of business 

 

This myth is mainly based on the perception that the main function of business is to “make money”. A 

financial statement clearly shows profit, but how can we evaluate the moral foundations of a business? 

We will not argue about the importance of efficiency and profitability of business. However, a question 

arises: is it possible to make money today, while neglecting the interests of other market players and 

business stakeholders? In the West, the times of “wild capitalism” sank into oblivion long time ago. The 

post-Soviet countries are also witnessing tendencies towards a more civilized market.  

 

Today people do not believe in financial pyramids like “Vlastelina” in Russia or “Vahid Bank” in 

Azerbaijan. In St. Petersburg, numerous shady deals in the construction business resulted in loss of 

credibility of this industry. People are afraid to prepay for housing, which makes construction business 

almost impossible. To remedy the situation construction firms from St. Petersburg established the Club 

of Honest Constructors. The Club members demonstrate their desire to work honestly and gain customer 

loyalty. The Club publishes “a white list” of honest, trustworthy firms 

7

. Such an approach somewhat 

resembles the practices of medieval guilds with their statutes. 

 

In the past BP and Shell came under considerable pressure from the general public in Britain for their 

operations in Angola and Nigeria. Producing oil and being opaque about their payments to the 

governments of these extremely corrupt countries, oil companies, in fact, supported dictatorial regimes 

and embezzlement of these countries’ resources. As a result, both companies toughened their ethical 

principles and assumed an obligation to be more transparent about their revenues in the countries in 

which they operate, including Azerbaijan.  

 

                                                 

7

 E.A.Utkin, Business Ethics, Zertsalo Publishing House, Moscow, 2000.  

8

 A. Ossipova, Consultant, Honest Constructors’ Club, St. Petersburg, Presentation at  Regional Business Ethics Conference, 

Baku, November 22-23, 2002.  

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Basic moral values of a civilized market 

 

Today businesses operating in a civilized market, which our country shall strive to build, are guided by 

the following moral values:  

 

•

 

pragmatism and efficiency;  

•

 

balance of profit and social justice;  

•

 

freedom within the law and equal opportunities for all market players;  

•

 

respect of freedom of other people and tolerance to their errors.  

 

Morality and mentality 

 

It is quite a widely held opinion that businesses operating in the East, and  in Azerbaijan in particular, are 

very little concerned with ethics. Some believe that nepotism and corruption are so deeply rooted in our 

culture and mentality, that it is useless to combat these phenomena. We will try to discuss whether 

corruption is an intrinsic component of Azerbaijan  mentality. Firstly, no morality justifies corruption and 

a society whose members “believe that its leaders should prefer to promote their own private interests at 

the expense of the group” is yet to be found.

8

 Within a comprehensive corrupt system, people get 

involved in corrupt practices in order to survive and develop a certain degree of tolerance towards this 

negative social phenomenon. For example, in Italy public administrators are vested with more power 

when compared to their Northern European counterparts, in a manner very similar to Azerbaijan. 

Consequently, Italians display much more flexibility in their ethical judgements, and often strive to 

bypass laws. 

9

 Secondly, this thesis is refuted by a rather big contingent of Azeris who work in different 

economic and legal environments in foreign companies within the country and abroad.  

 

As for nepotism, we shall acknowledge that our culture is based on close family ties. However, firstly, 

observations show that today in Azerbaijan many businesses prefer to employ people on the basis of their 

of professional competence, rather than on “insider-outsider” principle. Secondly, we should seek reasons 

for such an approach in the business environment, rather than in mentality. Inconsistent legal frameworks 

and corruption force many businesses to turn into “semi-Mafia” structures that cannot afford to trust 

outsiders.

10

 Such a situation is typical not only of Azerbaijan but can be observed in other countries as 

well.  

 

According to an opinion survey in Russia, personal contacts are perceived to be the most reliable factor 

for career growth (88%) and only about one third of respondents (39%) believe in success of intensive 

efforts. 

11

  

 

However, a certain degree of tolerance towards individual manifestations of unethical behavior and 

corruption does not mean that combatting against this negative phenomenon is hopeless. It suffices to 

recall that at the stage of formation of monopolies at the turn of the last century, predatory extraction of 

national resources, ruthless exploitation of employees and absence of ethical standards in business were 

the norm in the United States, to such a high degree that British investors refused to invest into the rapidly 

growing economy of their former colony. However, over time a combination of factors discussed above, 

resulted in introduction of commonly accepted norms and standards of business ethics in America.  

                                                 

9

 J.Pope, Confronting Corruption. The Elements of a National Integrity System, TI Source Book, 2000, p. xix 

10

 R.D. Lewis, Business Cultures in International Business: From Confrontation to Understanding, Moscow, Delo Publishing 

House, 2002, p. 33 

11 

R.Safaralieva, Chapter 2,  The Society, Law and Ethics, In: Corruption, ed. by S.Bagirov, Publication of Transparency 

Azerbaijan, 2002  

12

 E.A. Utkin, Business Ethics, Zertsalo Publishing House, Moscow, 2000, p.133  

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