Professional Ethics for the Construction Industry

Rebecca Mirsky, John Schaufelberger

• Publisher: Routledge
• Year: 2022
• Print ISBN: 9781032268118
• eBook ISBN: 9781000591293
• Edition: 2
• Topic: Business
• Subtopic: Construction & Architectural Engineering
• Index: Business

This second edition of Professional Ethics for the Construction Industry empowers a new generation of built environment professionals to navigate the ethical challenges confronting them at every stage of a project, from the initial bid to its completion and beyond. Authored by a pair of veteran educators and industry professionals, this textbook introduces ethical dilemmas aspiring construction professionals will face on the job—and the critical thinking skills to reason their way out of them.

Written to meet curriculum requirements for all levels of construction education, this book explores ethics specific to the construction industry, illustrated by detailed and realistic case studies. All-new chapters on privacy, cutting-edge technologies, and pandemic-era worker protections complement chapters on perennial ethical issues surrounding the environment, client relationships, and more. Features include:

• Completely revised and updated to reflect changes in construction technology, workforce composition, and working environments.
• Updated to include new chapters on social media, privacy and technology, and construction during a disease outbreak or natural disaster.
• Ideal reading for courses in professional ethics, leadership, construction law, workforce readiness, and continuing education.
• Downloadable instructor's manual with commentary on scenarios provided at the end of each chapter.

As vital on the jobsite as in the classroom, Professional Ethics for the Construction Industry guides aspiring design and construction professionals through the thorniest on-the-job conundrums.

1Introduction

DOI: 10.1201/9781003290025-1

Chapter Outline

• Learning Objectives
• Ethics Fundamentals
• Ethical Challenges in the Construction Industry
• Further Reading

Learning Objectives

After reading this chapter, you should be able to:

• Describe the five common ethical approaches that form the foundation of professional business ethics.
• Explain how an ethical issue differs from a legal issue.
• Identify common areas of ethical challenges specific to the construction industry.

Ethics Fundamentals

One of the distinguishing features of human society is the desire to establish rules and order, in the form of rules, covenants, codes, standards, and laws that define acceptable behavior and conduct in a civilized world. Throughout history, religious leaders, philosophers, and politicians have pondered and discussed the human condition, and argued over how to live, or inspire others to live a just and moral life, whether dealing with individuals or empires. The golden rule, which requires one to treat others as one would wish to be treated, is one of the most fundamental and simple tools for making ethical decisions.

Whether or not a set of beliefs is based on religious tenets, those beliefs constitute the moral values people use to distinguish between right and wrong in making personal and business decisions. Ethics is the practice of examining those moral values in the face of day-to-day situations and having the courage to do what is right. Each decision has consequences, both to ourselves and to others. Generally, there are three primary ethical directives: loyalty, honesty, and responsibility. Loyalty may be requested from many groups and institutions: friends, family, employer, profession, and society. Honesty is more than truth telling. It involves not lying, but, more importantly, the correct representation of ourselves, our actions, and our views. Responsibility means anticipating the potential consequences of our actions and taking responsible measures to prevent harmful occurrences.

Whereas laws and regulations define courses of action to which we must legally adhere or avoid, ethics include standards of conduct to help us make the right decisions. For example, an individual may hold a moral belief that stealing is wrong. Aside from legal interpretations, ethics provides a framework for that individual to evaluate why stealing is wrong, or unethical, in a certain context. Perhaps it is unethical because the individual has represented himself as an honest person. Or maybe it is unethical because by stealing, the individual gives herself an unfair advantage over someone else. Or perhaps it is unethical because it deprives another of his right to the stolen item. Ethical decisions are often referred to as dilemmas because they arise from situations that are rarely black or white. We can use the reasoning behind the various ethical theories to help us to navigate the gray areas we frequently encounter in our professional and personal lives.

There are many excellent books, journals, articles, and other references that explore deeply, and in great detail, the different theories and branches of ethical thought. For our focused look at business ethics, and specifically business ethics for construction, we will limit ourselves to five ethical approaches that we can apply to some of the most common ethical challenges in our industry:

• The Utilitarian Approach—The ethical choice is whichever produces the greatest good for the greatest number of people. The Utilitarian Approach is concerned with the consequences of the action or decision (as opposed to the motivation or the means), and the direct or indirect impacts on everyone involved. When applying the Utilitarian Approach, it is possible that individuals may be harmed, or suffer negative consequences, as long as the majority of those affected benefit from the decision. The Utilitarian Approach also allows for using potentially unethical means such as lying to achieve the end goal of maximum benefit to the greatest number.
• The Rights Approach—The ethical choice is the one that respects the fundamental rights of others to be treated as equals capable of making their own decisions. Some of the common fundamental rights are free speech, liberty, safety and security, and equal protection under the law. Rights are also related to duty; if we acknowledge that others have fundamental rights, then we have a duty to respect those rights. If we ignore that duty, then we have acted unethically.
• The Justice Approach—The ethical choice is the one that treats everyone involved fairly and in accordance with what they are due. This means that people in equal circumstances should be treated (and compensated) equally. This approach is commonly applied in situations involving discrimination in the workplace. In evaluating a situation using the Justice Approach, we ask, “Are the individuals in this situation being treated equally, and if not, is there a justifiable reason for the inequality?”
• The Common Good Approach—The ethical choice is the one that promotes or contributes to the common good of society or the community. This approach is based on the assumption that there are certain services and resources, either natural or human made, whose existence benefits our common good as a society, and that the ethical choice preserves and protects those resources. Examples of services and resources that we all benefit from might include a healthy environment, a robust healthcare system, high quality education, and modern infrastructure. For all of society to benefit from resources that support the common good, all of society must also contribute to and share in the protection of those resources. Problems and conflicts arise when people value resources differently, choose to use more than their fair share, or refuse to conserve so that others may also benefit.
• The Virtue Approach—The ethical choice is the one that arises from and demonstrates our moral virtues. Honesty, integrity, respect, trust, and fairness are all examples of virtues. Companies commonly include the virtues they value most highly within their stated core values. These are understood to form the foundation for the corporate culture and how the company conducts its business. When faced with an ethical dilemma, the Virtue Approach requires that the individual or the company act in such a way that personifies the virtues for which they want to be known.

Applying an ethical approach in a business setting means using our knowledge of ethical decision-making in the management and operations of that business. Because there can be pitfalls with any single ethical approach when used alone, a sound framework for ethical decision-making looks at a situation from the perspective of each approach. Chapter 2 has more information about using a framework to make ethical decisions.

Ethical Challenges in the Construction Industry

Human survival depends on the protection and services provided by our built environment. Laws, codes, and standards to ensure safety and quality have been an integral part of the construction industry for hundreds of years. The earliest known building code is found in the Code of Hammurabi, dating back to nearly 1800 BC. The Babylonian king Hammurabi believed in strict punishment for shoddy work, stating:

If a builder has built a house for a man, and has not made his work sound, and the house he built has fallen, and caused the death of its owner, that builder shall be put to death.

(Hammurabi’s Code of Laws, no. 229)

Today we address building safety and quality through building codes, safety regulations, and a wealth of specifications and standards. But many of the decisions about how a construction company conducts business are not so well defined. A company’s success is tied to its reputation, and that reputation is built on relationships with clients, partners, subcontractors, suppliers, employees, agencies, and the community.

In construction, we face many ethical dilemmas in contract procurement, cost estimating, project management, accounting/financial management, customer relations, subcontractor relations, and material vendor relations. A construction company’s ability to acquire and retain customers as well as to attract and retain talented employees is directly influenced by its reputation for ethical culture and the ethical behavior of its leaders and employees. Construction is basically a service industry, and purchasers of construction services have choices. Thus, a reputation for ethical behavior is essential for success. A company’s ethics needs to be one of its core values to guide its employees in making daily decisions. Mishandling ethical situations can damage the company’s reputation and destroy the morale of its employees.

The construction industry is also extremely competitive with ample temptation to look for advantages by cutting corners, making backroom deals, favoring friends or relatives, or withholding information. At times, it can seem that the ethical decision runs contrary to the financial success of the company, and it can be extremely difficult for companies and their employees to know how to proceed. This is particularly challenging in the management of construction projects which rely on successful collaboration of individuals representing diverse organizations with different ethical cultures. Treating everyone fairly should be emphasized in the execution of construction projects.

In the following chapters, we look at some of the most common ethical challenges encountered by construction professionals, and provide a framework for making tough decisions. The examples and scenarios are taken from our own real-life experiences as well as those of our colleagues in industry. We look into some of the dilemmas associated with obtaining and performing the actual work of construction, including issues arising from relationships with clients, subcontractors, and suppliers. We also discuss issues with discrimination and harassment in the office and on the jobsite, and examine current practices in creating and implementing company codes of ethical conduct. Finally, we address some emerging topics that are presenting unique ethical challenges, such as the increase in digital information, prevalence of social media, crisis communications, and the growing interest among corporations in social responsibility.

Further Reading

For more detailed information and an excellent discussion about the five ethical approaches presented in this introduction, please visit the material on ethical decision making available on website of the Markkula Center for Applied Ethics at Santa Clara University, at www.scu.edu/ethics.

2Codes of Conduct, Compliance, and Reporting

DOI: 10.1201/9781003290025-2

Chapter Outline

• Learning Objectives
• Introduction
• Introductory Case Study
• Components of a Business Ethics and Conduct Program
• The Role of Professional Associations
• Construction Participant Perspectives
• Questions and Scenarios for Discussion
• Note
• Further Reading

Learning Objectives

After reading this chapter, you should be able to:

• Identify the main components of an effective ethics and business conduct program.
• Explain the difference between ethics and compliance.
• Give examples of common core values.
• Give examples of common areas of primary ethical or legal risk.
• Give examples of questions you might ask yourself in an “ethics check.”
• Describe a strategy to prevent retaliation against a whistleblower.

Introduction

The construction industry has long struggled with an image of a cutthroat, competitive business environment where award of work to the lowest bidder and low profit margins encourage fraudulent and unethical practices. Forward-looking companies realize that while such practices may pay short-term rewards, they are devastating to long-term success and profitability. As a result, more companies are devoting time and resources to improving their image as responsible and trustworthy business partners. They are accomplishing this by developing codes of ethical conduct and establishing compliance programs to ensure legal operations. In particular, the U.S. government has taken a leadership role in setting standards and guidelines for legal and ethical practices by government contractors. Even in the private sector, studies by consulting firm FMI, in conjunction with the Construction Management Association of America (CMAA), have shown that the number one factor influencing an owners’ choice of construction manager or contractor is trust and integrity.

In 1986, some of the nation’s top defense companies, including General Electric, Boeing, and Raytheon, came together to establish the Defense Industry Initiative (DII). The Packard Commission, appointed by President Ronald Reagan, had just published recommendations to address widespread allegations of fraud and criminal misconduct in defense contracting. At the time, according to a report by the Ethics Resource Center, the general public had become incensed by reports of “the falsification of timecards and test results, poor quality controls, defective pricing, waste, fraud and overall mismanagement of defense contracts.”

Member firms of the DII pledged to support and promote the following six principles of business ethics and conduct:

• Have and adhere to a written code of business ethics and conduct.
• Train employees concerning their personal responsibilities und...

Table of contents

• Cover
• Half-Title Page
• Title Page
• Copyright Page
• Contents
• Preface
• 1 Introduction
• 2 Codes of Conduct, Compliance, and Reporting
• 3 Contract Procurement
• 4 Construction Contracts and Purchase Agreements
• 5 Documentation and Recordkeeping
• 6 Project Execution
• 7 Discrimination and Harassment
• 8 Client Relations
• 9 Ethics and the Environment
• 10 International Construction
• 11 Technology and Digital Information
• 12 Construction during Crisis
• Index