"Surname 102. LITERATURE REVIEW2.1.0 IntroductionThe aim of this section is to carry out a critical analysis of pertinent literature on the subject ofthe study and survey the works of different authors on the topic of ethics it applies to thefinancial industry in Kenya. Therefore, the chapter will explore the meaning of ethics and thedevelopment of a professional code of conduct as a vital concept in organizational management.The section outlines analyzes the banking crisis incidents from several moral viewpoints. Itcommences with utilitarianism, the fundamental ethical theory in neoclassical economics, whichhas partially motivated the disasters. Subsequent is deontology, which is the study of ethicsbased on rules. Deontological ethics could not apply because of the overriding effect ofutilitarianism which challenges the banking professionals? faith in collective rules. The thirdtheory will be the teleological principles. Subsequently, will be the ethics of care, theinterpersonalprinciples grounded in ethicalobligations between people in their individualsettings,which arose from the studyof, family units, and healthcare. Afterwards, the section will analyzethe need for banks to adhere to ethical values in their dealings and the importance of creatingawareness within financial institutions through training and sanitization programs amongbanking stakeholders, especially employees and the management. What is more, theories ofethics related to banking will also be discussed. 2.2.0 Definition of Ethics The term, ethics is multifaceted, and three meanings can be derived from it. Firstly, it signifiesthe moral view of an object or person, whether inferred by the entity?s behavior or explicitlyspecified. Secondly, ethics may denote the range of normative doctrines and motives thatgovern behavior, either at an individual or collective level. Thirdly, it could mean the aspect ofphilosophical analysis dedicated to understanding the ideologies that constituting the term in itssecond sense as described above. According to Barsky, ethics refers to the application of a setof values to human interactions (3). Contrary to popular believe, the ethical system is notsystematic but rather adheres to a set of guidelines depending on an individual?s situation,which helps that person make decisions. Ethics have evolved as anatural reaction to the desire by humankind to achieve agreaterexistence by establishing order in social dealings, bringing about the welfare of peopleand society by fostering good and avoiding harm. Oftentimes, individuals are faced withconflicts of sense of duty, a necessity to choose whose interests to support and at whosedetriment. The manifestation of a tough choice and the lack of a clear solution is amoraldilemma.One variance between an ordinary and a moral decision is clear where the establishedguidelines no longer function, and the decision- maker is confronted with the duty of evaluatingvalues and making a resolution in circumstances which different from any past experiences.The above statement proves the dynamic nature of ethical codes and the significance ofexperience in influencing virtuous decision making. Furthermore, the descriptions of ethicsoutlined above give emphasis to the universality of ethical duty and the compliance ofegocentricity to the greater good of people in general. What is more, it stresses the developmentof distinct characteristics that promote the society?s best interest. However, the discipline ofethics is shrouded incontroversy as regards what constitute right or wrong mannerisms, and inany case, ifthe focus shouldshift to the actions or aims of the ethical agent, or theSurname 11significanceof such actions.The Basic Ethical tenets in Banking are:i. The code of reciprocal trust: Trust is of distinctive significance for the successfulrunning of the banking system. In most cases, vital and prized deals are regularlycontracted online or by phone, in a situation where there are no witnesses. Such anassociation between the participants is controlled by the sacred standard ofmutualtrust.ii. Principle of reciprocity: this means that the participants of the banking relationshipshould act in the best interest of one another in such a way that none of them feelsantagonized.iii. The standard of noble intentions is imperative for business ethics and honorablebehaviour. This standard means that there is no justification on the part of the bankor client, for treating the other partner in a corrupt manner, be it to dishonesty,embezzlement or some other detrimental way of handling a professionalpartner.iv. The principle of finding the middle ground and professional tolerance: This coderecommends the bringing together of the contradictory interests of the members in abusinessprocess.v. The standard of moral enhancement of corporate behaviour embodies the bankingindustry?s business associates? willingness to accept the blame for any wrongful actthat may have been made as a result of their actions. What is more, they shouldacknowledge the slip-ups and respond appropriately.2.3.0Ethical Values, Training and AwarenessEach business has a culture and consequently some ethical ideals, beliefs and expectations.According to McDowell, the basic tenets for ethical conduct in business are proficiency,trustworthiness and honesty (3). There is no moral professional position that promotes thedefrauding of clients, fellow workers, or any other person trusting that professional. On theother hand, Guy classifies ten ethical values that have withstood the test of time as follows:Consideration, trustworthiness, responsibility, honoring promises, the quest for excellence,dependability, impartiality, integrity, respect and responsible citizenship (17). The virtuesserve the measures for ethical decision-making.The author further asserts that a principledculture is one in which essential values are recognized and voluntarily discussed in the contextof the company?s actions (100).Managers ought to understand that in the midst of thesevalues lays the flexibility and pragmatism to understand that, at any one time, some standardsmust be reduced in order to get the best out of others. McDowell further asserts there are three levels of business activities that necessitatedifferent levels of the commitment to not only sustain high levels of moral conduct, but alsoits appearance. These levels are a reviewer, the caregiver of an incompetent person and thefiduciary. The individuals serving in those categories are expected to be altruistic in theperformance of their duties and capable of safeguarding the welfare of the others for whomand to whom they are responsible (31). Moreover, they must be selfless. Banks fall within thefiduciary category because in addition to their fiduciary roles, they also serve as institutionsof financial intermediation. As the guardians for private and public funds, banks must, as aSurname 12matter of inevitability and expectation, adopt ethical values in their operations and conduct.In so doing, they can offer a safe and sound investment environment attractive to clients,account holders and investors, both domestically and globally. While the profit motive isessential it is not adequate to warrant a bank to engage in unscrupulous deals.Some literature also weighs in on ethical training and awareness.Training on ethicsand ethical awareness are the essential tools needed in professional banking to effectivelycarry out the fiduciary obligation expected from bankers. Banking employees must thereforego through proper ethics teaching in order to enable them manage complex problems. It isalso essential for staff to fully aware of what constitutes just and unethical practices so thatthey can distinguish unethical dilemmas and complications when they occur in the regularcourse of business dealings with clients (Francis 175). According to Francis, the purpose ofteaching ethics is, to sensitize scholars and business practitioners on the scope of moralvalues, and the way in which they pervade all professional activity. West et al. concur withFrancis on the issue of training as a strategy for promoting ethical behavior amongemployees and managers (1).The authors argue that training on ethics increases theresponsiveness to ethical concerns and offers a forum for the distribution and deliberation ofnew regulations and criterions of conduct. Other tactics for promoting ethical behavior arearchetypal moral leadership by managers and rigorous implementation of ethical laws andstandards of conduct. Furthermore, Francis postulates that moral responsiveness trainingprograms may differ from one organization to another (182).Nevertheless, it is vital that thefollowing goals are borne in mind:i. Training on ethics should promote and support the firms? values and standardsii. The training should make leaders more aware of the moral dimensions of theircorporate decisions and conduct,iii. The training should re-educate employees on the firm?s ethical policiesiv. The training should reinforce the ability of the employees to apply theestablishment?s ethicsv.Training should provide a forum for managers to detect ethical problems and areasofvulnerability (Francis 182).Moral codes, according to Francis (178):i. Spell out management?s views on what constitutes disreputable behaviourii. Help employees to reflect about moral issues before they are faced with the realities ofthe situationiii. Offer employees an opportunity to refuse to comply with corrupt actionsiv. Define the parameters of what makes up acceptable behaviourv.Offer a mechanism for communicating decision-making policy. 2.4.0 Theories of ethicsSeveral theories related to banking include utilitarianism; deontological ethics, teleologicalethics.2.4.1 Utilitarianism The utilitarian theory posits that the determination of the morality of an action depends on it?sthe consequences of that action. According to the school of thought, the basis of morals is "