For our final lesson, we'll probe the PMI® “Code of Ethics and Professional Conduct” and consider the realm of
ethics. Every PMI member and everyone who seeks or has obtained a PMI® certification are required to abide
by it. You’ll find questions on the exam that will challenge your understanding of applied ethics and duty of
loyalty. Duty of loyalty is defined as a person’s moral and legal responsibilities to promote the best interest of a
person or organization with whom they are affiliated.
The first chapter of the PMI Code of Ethics and Professional Conduct paints the big picture of what the code
is intended for. The vision of the code is, no doubt, that the project management community will adopt the code
in their day-to-day operations and lives as representatives of the PMI. The code is needed because project
managers are often in situations where their ethics could be jeopardized. When you consider issues with project
labor, unscrupulous vendors, and the temptation of personal gain for project managers, it’s a great idea to have a
Code of Ethics and Professional Conduct.
The project management community should do what’s “right and honorable.” I’m sure we all want to reflect
those values in our conduct and see them in the conduct of other project managers. The PMI Code of Ethics and
Professional Conduct go beyond our role as project manager. The code wants adherence in all areas of our lives:
“at work, at home, and in service to our profession.” Don’t most of us live, eat, and sleep project management,
anyway?
The real purpose of the code is reputation. From the PMI’s point of view, the code and our agreement to adhere
to the code will raise the perception of the ethical values project managers agree to—and are expected to abide
by—as members and participants in PMI programs. The code is also a motivation to become a better project
management practitioner. In theory, establishing a globally accepted code for our ethics and behavior should raise
our credibility, reputation, and collective behavior to new standards.
Example of the question:
The PMI has contacted you regarding an ethics violation of a PMP candidate. The question is in regard to a friend
who said he worked as a project manager under your guidance. You know this is not true, but to save a friendship,
you avoid talking with the PMI. This is a violation of what?
A. The Code of Ethics and Professional Conduct to cooperate on ethics violations investigations.
B. The Code of Ethics and Professional Conduct to report accurate information.
C. The Code of Ethics and Professional Conduct to report any PMP violations.
D. The law concerning ethical practices.
Answer:
The right answer is A. By avoiding the conversation with PMI in regard to your friend’s ethics violation, you
are, yourself, violating the Code of Ethics and Professional Conduct to cooperate with the PMI. B, C, and D are
incorrect answers because they do not fully answer the question.
The code includes four values that are core to the ethics and standards for project managers:
Responsibility;
Respect;
Fairness;
Honesty.
These four values are the focus of the final four chapters of the Code of Ethics and Professional Conduct. Within
each of these values are aspirational standards and mandatory standards. Basically, as project managers, we should
aspire to some characteristics of these standards, and we must adhere to other facets of these standards.
The code also contains some comments for examples and clarification. You’ll also find a glossary of terms in the
code—something our pals at the PMI haven’t provided before. I’ll list those terms at the end of this lesson.
Ethics and Ethical Dilemmas
Let’s start with some definitions. What are ethics? There are a couple of definitions that would apply for project
managers:
“A set of moral principles or values”, “The principles, norms, and standards of conduct governing an
individual or group”.
The first definition focuses inward on the individual and his or her own beliefs. The second focuses outward on
the observable characteristics of a person or group. PMI’s code of ethics provides the standard governing all
project managers. Since employee conduct can and should be defined, every organization should have ethical
behavior guidelines. These may take the form of policies and procedures and may be included with training and
indoctrination programs. Examples include:
ü Define work-related conduct.
ü Define conflicts of interest.
ü Define appropriate and inappropriate behaviors.
ü Set expectations regarding how customers will be treated.
It sounds simple enough. So why is it difficult? It is because ethical dilemmas will occur, especially in projects.
What is an ethical dilemma?
“Situations concerning right and wrong where values are in conflict”
Situation: A project team member (and good friend) has not been meeting their performance expectations. As
a friend, you understand what’s going on. But as project manager, you need each team member to meet their
obligations. Should you:
Ø Remain loyal to your friend?
Ø Remain loyal to your company?
Ethical dilemmas often occur when you have multiple relationships with someone—in this case, personal and
business relationships. You have a duty of loyalty to both your friend and your company, and because of that,
values are in conflict.
Example of the question:
Your manager is presenting a status report of all projects being run in his division. He reports that all projects are
showing a positive CV. However, you know that your status reports for the last several weeks have been reporting
a negative CV. What do you do?
A. Do nothing.
B. Offer to review your entire manager’s combined status reports before he presents them.
C. Notify the appropriate management immediately.
D. Ask your manager if that information was simply a typographical error.
Answer: C
Legal versus Ethical
We often think of ethics regarding how we achieve something. For example, giving bribes to government
officials is an unethical way to win contracts. But ethics also take the end results into consideration. When a
company uses legal business practices to open a facility they know produces gases damaging the ozone layer,
they've been unethical. Wait—isn't legal the same as ethical? Not at all! Laws reflect society’s minimally
acceptable norms and standards of business conduct. Although there is a high degree of overlap, not all ethical
standards are legally codified. Ethics raise the bar, because it’s more than society’s minimally acceptable norms.
It is generally accepted that law abiding behaviors are also ethical. However, not everything that’s legal is ethical.
Think about it. Racial discrimination was legal in our country until 1964. It’s always been unethical.
The second chapter of the PMI Code of Ethics and Professional Conduct centers on responsibility. We project
managers already have a level of responsibility based on the organizational structure in which we operate (from
functional to projected).
Defining Responsibility
According to the Code of Ethics and Professional Conduct, it is our responsibility, or duty, to take ownership for
the decisions we make—or fail to make. It’s also our duty to take ownership of our actions—or lack of actions.
And finally, it’s our duty to take ownership of the results of those decisions and actions.
Exam Tip: To be a great project manager, you must take responsibility.
Responsibility comes with our understanding of what’s legal and ethical. Responsibility is defined as our duty
to take ownership of our actions and decisions. This includes the good and the bad. It’s easy to take responsibility
for the good decisions and actions. It’s more difficult to take ownership when things go bad.
Code of Ethics
Project managers need to aspire to responsibility. Here are the details of the responsibility aspirations for this
section of the Code of Ethics and Professional Conduct:
ü Make decisions/ take actions based on best interests of society, public safety, and the environment.
ü Only accept assignments that match our background, experience, and qualifications.
ü Fulfill our commitments.
ü Own up to our mistakes and correct them as soon as possible. Protect proprietary or confidential
information.
ü Protect proprietary or confidential information.
ü Uphold this code and hold each other accountable to it.
ü Be familiar with and uphold policies, regulations, and laws.
ü Report unethical or illegal conduct.
ü Report violations of this Code that are substantiated by facts.
ü Practice zero tolerance when someone retaliates against the person who made the report.
Proprietary and Confidential information
Confidential information is literally information shared with you in confidence. If the information was shared
with the wrong people, it could be damaging to the company, reputation, or individual. The most common
protection instrument is called a nondisclosure agreement (NDA). The protections are defined in the agreement
and usually time-limited. There are two categories:
Personal information: (name, Social Security number, birthdate, etc.)
Competitive advantage information: (“trade secrets”)
Your project may require or create proprietary information. Some industries such as healthcare have a legal
obligation to protect personal information, so if your projects touch these areas, protections must be put in place.
If you are unsure if something qualifies, ask for legal guidance.
Adhering to the Mandatory Standards of Responsibility
Project managers have to deal with regulations, laws, contracts, and other mandatory requirements in their
projects. This section acknowledges those requirements. Let’s have a look at what the Code of Ethics and
Professional Conduct calls for:
Project managers have a mandatory responsibility to adhere to regulatory requirements and laws.
Project managers adhering to this code have a mandatory responsibility to report unethical or illegal
conduct to management and those affected by the conduct.
Project managers are required to bring valid, fact-driven violations of the Code of Ethics and Professional
Conduct to the PMI for resolution.
Disciplinary action should commence for project managers who seek to retaliate against a person raising
ethics violations concerns.
Project managers must adhere to these points and agree to participate in them in their roles in the project
management community.
Check for Understanding
There will be scenario-style questions on the exam covering this information. How should you respond? The
recommended approach is to use the Code as the guidepost. Here are some examples to think about:
ü Uphold this code and hold each other accountable to it.
ü Be familiar with and uphold policies, regulations, and laws.
ü Report unethical or illegal conduct.
ü Report violations of this Code that are substantiated by facts.
ü Practice zero tolerance when someone retaliates against the person who made the report.
Example of the question:
You are about to begin negotiations on a new project that is to take place in another country. Which of the
following should be your guide on what business practices are allowed and discouraged?
A.
The project charter
B.
The project plan
C.
Company policies and procedures
D.
The Code of Ethics and Professional Conduct
Answer:
The right answer is C. The company policies and procedures should guide the project manager and the decision
he makes in the foreign country. A and B are incorrect because these documents are essential, but they usually
do not reference allowed business practices. D is incorrect because, although the PMI Code of Ethics and
Professional Conduct does possess crucial information, the company’s policies and procedures are most specific
to the project work and requirements.
Defining Respect:
Respect is defined as our duty to show a high regard for ourselves and others. Respect extends to the resources
we are responsible for and must protect. These include people, materials, equipment, money, and even the
reputation of our company.
Code of Ethics
Here is a list of standards within the PMI® Code of Ethics and Professional Conduct:
ü Be knowledgeable of norms and customs of others, and behave consistently within that framework.
ü Listen carefully and seek understanding.
ü Always conduct yourself in a professional manner.
ü Deal directly with the person with whom you have a conflict or disagreement.
ü Always negotiate in good faith.
ü Never act in an abusive manner toward others.
ü Respect the property rights of others.
ü Never exert power over others to influence decisions that may benefit you personally at their expense.
Culture, Customs, and Norms
We are a global society. You may work on international projects or have different nationalities represented
on your project team. That means you need to understand the norms and customs of different cultures and be
respectful.
Culture: the beliefs, customs, and traditional practices of a particular society that influences their way of
thinking and behaving.
Example of the question:
You are the project manager for the ABC Project. This project takes place in a different country than where
you are from. The project leader from this country presents a team of workers who are all from his family.
What should you do?
A. Reject the team leader’s recommendations, and assemble your own project team.
B. Review the résumés and qualifications of the proposed project team before approving the team.
C. Determine whether the country’s traditions include hiring from the immediate family before hiring from
outside the family.
D. Replace the project leader with an impartial project leader.
Answer: C
You should first confirm what the local practices and customs call for in regard to hiring family members
before others. A and D are incorrect, since they do not consider the qualifications of the project team leader
and the project team. In addition, they do not take into account local customs. B is incorrect as well. Although
it does ponder the qualifications of the project team, it does not consider the local customs.
Customs: traditional and widely accepted way of behaving that is specific to a particular society or place.
Example includes how someone greets another person (shake their hand, bow, or kiss their cheek?)
Norms: unofficial guideline about what is considered normal social behavior of a social unit. It forms the
basis of collective expectations.
According to the iceberg theory of culture, what you see (music, food, dress) is superficial.
Ø
Ø
Ø
Ø
It’s what you don’t see that truly represents a culture. A culture is defined by what they value. Examples
include how a particular society perceives time, their environment, power, space. It influences how they
communicate, think, and how they structure their social units.
Culture is transferred from one generation to the next and will change over time. There will be cultural
differences in how people perceive.
Conflicts and poor relationships can occur when you are insensitive to someone’s culture and customs.
Demonstrate respect by learning more about other cultures and sharing yours. Listen carefully when others
speak and always do your best to understand. Be respectful in your encounters with others and always behave
in a professional manner.
Intellectual Property
You must respect the property of other, and that includes intellectual property. Intellectual property represents
the property of the mind. Examples include literary and artistic works, symbols, names, and images used in
commerce. There are two categories:
Industrial property: includes patents for inventions, trademarks, industrial designs, and geographical
indications:
Patent: exclusive right granted for an invention (product or process) that’s unique, useful, and not obvious
(creative invention); is time-limited (example 20 years);
Trademark: distinctive sign that identifies specific goods or services produced by an individual or company;
may be renewed indefinitely;
Industrial design: refers to the ornamental or aesthetic aspects of an article (examples include medical
instruments or jewelry) such as pattern or color; time-limited (example 15 years);
Geographical indication: the place of origin where the name is used in the name of goods to express
uniqueness and quality (example Idaho potatoes or Swiss watches).
Copyrights: includes literary works, films, music, paintings, architectural designs; time-limited but usually
not less than 50 years.
The heart of intellectual property law is balancing the financial rewards for creation with the business need to
promote the generation of even more innovative ideas. You must be aware of all intellectual property
associated with your project and protect it.
Defining Fairness:
Fairness is defined as our duty to make decisions and act impartially and objectively free from competing
self-interest or prejudice.
Code of Ethics
Here is a list of standards within the PMI® Code of Ethics and Professional Conduct:
Demonstrate transparency in decision-making.
Proactively disclose real or potential conflicts of interests.
Recuse yourself from decision-making if there is a real or potential conflict of interest.
No favoritism or discrimination is used when awarding contracts.
Do not discriminate against others based on gender, race, religion, or disability.
Apply the rules of the organization without favoritism or prejudice.
Being fair to everyone you work with is difficult. Fairness can be subjective, and although your perception was
fair, someone else’s perception could be unfair. In a recent British survey, 70% of those surveyed felt they have
been treated unfairly at work within the last two years. When asked to describe the unfair treatment, the most
common response was “type of work given.” Think about how you delegate project tasks to your team. Is it fair?
The legal definition of fairness requires three conditions are met: It must be equitable, reciprocal, and impartial.
Equitable means everyone is treated fairly and in the same way. Reciprocal means there is an equal or balanced
exchange between people. I do something for you and you do something for me. Impartial means without bias.
It’s your responsibility to treat everyone fairly. Unfair treatment can take different forms including:
Prejudice: preconceived and unfavorable opinion not based on reason or actual experience. Assuming
someone with a physical disability is not intelligent, or in a divorce, giving child custody to the mom
because it’s assumed mothers are better parents.
Stereotypes: an oversimplified and often offensive generalization used to describe or distinguish a group.
Examples include believing all women are bad drivers and all older people don’t know how to use
technology.
Discrimination: the practice of treating someone unfairly (either in favor of or against) based on the group
they belong to.
Favoritism: the practice of giving unfair preferential treatment to one person or group at the expense of
someone else.
Nepotism: the practice by those with power and influence favoring friends and relatives without regard
of their merit.
Conflict of Interest
Example of the question:
You are the project manager of the SUN Project. Your organization is a functional environment, and you do not
get along well with the functional manager leading the project. You disagree with the manager on how the project
should proceed, the timings of the activities, the suggested schedule, and the expected quality of the work. The
manager has requested that you get to work on several of the activities on the critical path even though you and
she have not solved the issues concerning the project. What should you do?
A.
Go to senior management and voice your concerns.
B.
Complete the activities as requested.
C.
Ask to be taken off of the project.
D.
Refuse to begin activities on the project until the issues are resolved.
Answer: B
The project manager must respect the delegation of the functional manager. A, C, and D are all inappropriate
actions because they do not complete the assigned work the functional manager has delegated to the project
manager.
Conflicts of interest can occur when you have competing interests or loyalties. You’ll be torn between our
loyalties, and it can be a very difficult situation. Conflicts of interest can be perceived or action. The perception
of a conflict of interest is much more common than actual conflicts of interest. You may feel that there isn’t one
because of your understanding of the situation. But when someone from the outside is looking at the situation,
what do they see? Often, conflicts of interest occur in gray areas, where right and wrong aren't clear. Even though
a conflict may not actually exist, you need to avoid even the impression of a conflict. Although conflicts can take
many forms, they all generally fall into one of two categories:
ü Personal influence: You are in a position to influence a decision based on your personal knowledge of
the situation or an individual. For example, you personally know one of the candidates under consideration
for hiring or promoting. Your relationship and the perception of the benefit to you create potential conflict
of interest.
ü Financial gain: You are in a position to benefit financially directly or indirectly in a given situation. This
could include bribes, kickbacks, stock, or other gifts of monetary value. As a project manager, you have
a responsibility to disclose to clients, customers, owners, or contractors significant circumstances that
could be construed as a conflict of interest or an appearance of impropriety. You also have the
responsibility to ensure that a conflict of interest does not compromise the legitimate interests of a client
or customer or influence or interfere with professional judgments.
EXAM TIP: To answer project management ethics questions, you should first abide by the laws of the country
in which you’re doing business. Second, follow your company’s policies. Third, follow the cultural standards of
the location where the project is being managed. Fourth, follow your own ethics. And fifth, as a last resort, if you
don’t know what to do, imagine what an angel would do and answer the question accordingly.
Defining Honesty
Honesty is defined as our duty to understand the truth and act in a truthful manner.
Example of the question:
One of your project team members reports that he sold pieces of equipment because he needed to pay for his
daughter’s school tuition. He says that he has paid back the money by working overtime without reporting the
hours worked so that his theft remains private. What should you do?
A.
Fire the project team member.
B.
Report the team member to his manager.
C.
Suggest that the team member report his action to human resources.
D.
Tell the team member you’re disappointed in what he did, and advise him not to do something like this
again.
Answer: B
This situation calls for the project team member to be reported to his manager for disciplinary action. A is
inappropriate because the project manager may not have the authority to fire the project team member. C is
inappropriate because the project manager must take action to bring the situation to management’s attention. D is
also inappropriate because no formal disciplinary actions are taken to address the problem.
Code of Ethics
Here is a list of standards within the PMI® Code of Ethics and Professional Conduct:
Seek to understand the truth.
Be truthful in communications and conduct.
Provide accurate information in a timely manner.
Make commitments and promises in good faith.
Create a safe environment for others to tell the truth.
Don’t engage in or condone behavior intended to deceive others.
No dishonest behavior intended for personal gain at the expense of someone else.
Why would PMI select honesty as one of only four core values? Think about it for a minute. Honesty is a
foundation for everything else. Let’s start with honesty as an individual’s characteristic. Honest people build up
their credibility with others. Credibility is your currency with a new project team. If you are honest with them,
you can work to establish an environment where they can be honest with you and each other. Trust will grow,
and the project will reap the benefits. Trust and honesty must be in place to support open and frank
communications. So, if there’s no honesty, communications suffer. If communications break down, how can you
be confident of the information you’re sharing with your stakeholders?
Corporate Culture and Honesty
Honesty is important for company cultures as well. Employees want management to be transparent and truthful
even when the news isn’t good. Companies that embrace honesty create an environment where employees feel
supported when taking risks. When honesty isn’t there, the support is missing and it creates an environment where
employees fear taking risks. They feel they will be punished when things go wrong. Changing the environment
requires trust from both sides—management and employees. Without trust, employees won’t feel safe being
honest. If they aren’t honest, micromanaging flourishes. Employees interpret micromanaging to mean they aren’t
trusted. If you don’t trust me, then I can’t trust you, and the whole cycle starts all over again.
Exam TIP: Being honest is not the same as being truthful.
Honesty versus Truth
When we look at the standards for honesty, it also mentions being truthful. Don’t these terms mean the same
thing? Actually, it is no. Honesty is a state of being. When you tell the truth, you are being honest. Truthful means
consistently telling the truth. I can choose my words carefully and tell you the truth without being fully honest
with you.
Basically, as project managers, we don’t lie. We are required, according to the code, to tell the truth regardless of
the impact it may have on us, our project team, or our projects. How many project managers do you know who
are living by this requirement?
Example of the question:
You are a consulting project manager with over 15 years’ experience running software development projects.
You have been engaged to manage a finance application project for a new customer. However on the first day
onsite at the customer’s headquarters you are told the project has been cancelled, but there is a need for a project
manager to manage a major infrastructure project to deploy a large number of servers and storage devices. The
customer asks if you would be interested in leading this project. You have never managed this type of project
before but would be interested in the challenge. Which of the follow is the best response?
A. Do not mention your lack of experience, but ask for more information about the project. After reviewing
the information and see that you could probably wing the project, accept the project.
B. Accept the job with the caveat you can bring in any needed resources to work on the project, then hire a
project manager you know that works in this area to handle the implementation details.
C. Decline the opportunity, citing your lack of experience and knowledge in this area.
D. Do not mention your lack of experience and accept the job.
Answer: C
Key Terms
Abusive manner: Treating others with conduct that may result in harm, fear, humiliation, manipulation, or
exploitation. For example, berating a project team member in front of the team because she has taken longer than
expected to complete a project assignment may be considered humiliation.
Conflict of interest: A situation in which a project manager may have two competing duties of loyalty. For
example, purchasing software from a relative may benefit the relative, but it may do harm to the performing
organization.
Duty of loyalty: A project manager’s responsibility to be loyal to another person, organization, or vendor. For
example, a project manager has a duty of loyalty to promote the best interests of an employer rather than the best
interests of a vendor.
PMI member: Anyone, whether certified as a project manager or not, who has joined the Project Management
Institute.
Practitioner: A person who is serving in the capacity of a project manager or contributing to the management of
a project, portfolio of projects, or program. For example, a program manager is considered to be a project
practitioner under this definition.