Business 185 Business Ethics

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Business 185Business Ethics

• Warren Sargent
• 625-4598

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Course Information on Internet

• http//www.cos.edu
• Click on
• Academic Divisions
• Divisions
• Business
• Faculty/Staff
• Warren Sargent

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In this class we will learn about ethical
decision making

• Business
• Family
• Community Service

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Introduce a new friend

• Name
• Residence city
• Vocation (occupation)/employer
• Avocation (hobbies/interests)
• Why are you taking this class?

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Topics

• A. Managing business ethics
• B. Why be ethical?
• C. Common ethical problems
• D. Deciding what's right
• E. Ethical problems of managers
• F. Managing for ethical conflict
• G. Ethical problems of organizations
• H. Ethics as organizational culture
• I. Creating an ethical organizational culture
• J. Managing for ethical conduct in a global
  business environment
• K. Advice for executives

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Text

• Managing Business Ethics
• 2nd Edition
• Linda Trevino
• Katherine Nelson

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Evaluation and Grading

• Attendance 200
• Class participation 300
• Homework 300
• Final 200
• Total 1000

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Attendance

• Unexcused absence costs 30 points
• Excused absence cost 10 points
• Arriving late or leaving early cost 5 points
• Accumulated total of 90 points F

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Participation

• Individual, in class discussions
• Group presentations to class

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Evaluation and Grading

• 900- A
• 800-899 B
• 700-799 C
• 600-699 D
• 599- F

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Chapter 1
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Introduction to Business Ethics

• Definition
• Can it be taught?
• Process
• Law

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Definition 1 of Business Ethics

• The principles, norms and standards of conduct
  governing an individual or group

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Definition 2 of Business Ethics

• The study and evaluation of decision making by
  businesses according to moral concepts and
  judgments.

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Can Business Ethics Be Taught?
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Can Business Ethics Be Taught?

• Each individual has their own principles, norms
  and standards of conduct
• Pressure may be exerted by the group to use the
  principles, norms and standards of conduct of the
  group (which may be different from an
  individuals)
• Cultural differences need to be evaluated

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Can Business Ethics Be Taught?

• Framework of decision making needs to be
  developed where all of the effected parties are
  identified and their interests evaluated
• Individual
• Company
• Customer
• Supplier
• Owner
• Environment
• Culture/Society
• Competitors/Market

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Ethical Principles are Simple

• Most of us have a sense of right and wrong
• We need to learn how to apply that sense in
  business settings where there are many parties
  and perspectives
• Case studies will help us learn from example

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Standards of Business Practice

• Where is there agreement?
• Where is there disagreement?

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Example page 10
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• Youre the VP of a medium-sized organization that
  uses chemicals in its production processes. In
  good faith, youve hired a highly competent
  person to ensure that your company complies with
  all environmental laws and safety regulations.
  This individual informs you that a chemical the
  company now uses in some quantity is not yet on
  the approved EPA list, although its undergoing
  review and is scheduled to be placed on the
  approved list in about three months because its
  been found to be safe. You cant produce your
  product without this chemical, yet youre not
  supposed to use the chemical until its approved.
  Waiting for approval would require shutting down
  the plant for three months, putting hundreds of
  people out of work, and threatening the companys
  very survival. What should you do?

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Example

• What are the major issues?
• Where are the major conflicts?
• Who are the affected parties?
• How do you evaluate the different perspectives?
• How do you reconcile the differences?

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Process

• Characteristics of Individuals
• Individual Ethical Decision Making Behavior
• Characteristics of Organizations

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Characteristics of Individuals

• Individual differences
• Cognitive (thinking) differences

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Characteristics of Organizations

• Group and organizational pressures
• Organizational culture

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Individual Ethical Decision Making and Behavior

• Moral Moral Ethical
• Awareness Judgment Behavior

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Ethics and the Law Some Overlap
Ethics
Law
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Chapter 2
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Why be Ethical?

• Organizational perspective
• Members need to know boundaries
• Lapses can shatter customer confidence
• Members may abandon unethical group
• Potential governmental regulation
• Media may expose unethical behavior
• Management must justify unethical behavior to
  employees
• Fines from unethical behavior

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Why be Ethical?

• Individual perspective
• Desire to do right
• Possible loss of income or reputation if
  unethical behavior becomes publicized
• Peer pressure
• Long term view (short term view may suggest that
  unethical behavior will be rewarded)

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Why be Ethical?

• Management should be held accountable for lapses
• Organizations want to retain the best employees,
  who generally want to work in an ethical
  environment
• A good reputation is important
• Integrity is an essential ingredient for success
  and personal satisfaction

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Why be Ethical?

• Customer perspective
• Supplier perspective
• Owner perspective
• Environmental perspective
• Cultural/Societal perspective
• Competitive/Market perspective
• There are many perspectives to consider!

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Corporate Responsibilities

• Economic (to make a profit)
• Legal (to obey all laws)
• Ethical (to consider all stakeholders, to do
  right and avoid harm)
• Philanthropic (to promote human welfare and
  goodwill)

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Corporate Responsibilities

• Economic
• Legal Ethical
• Philanthropic

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Corporate Responsibilities

• Federal Government issued sentencing guidelines
  for federal offenses (1984, 1987, 1991)
• Apply to organizations and individuals
• Penalties stiffer than before as well as more
  consistent
• Tools include fines and other sanctions (e.g.
  divestiture)
• Provides a deterrent against unethical behavior

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Corporate Responsibilities

• Social irresponsibility and illegal corporate
  behavior are associated with lower stock market
  returns
• These behaviors cost money as well as tarnish a
  reputation

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Corporate Responsibilities

• Managers and workers value good reputations
• Workers are guided by an ethical compass to
  consider both costs and benefits of a decision
• Growing use of teamwork requires more trust and
  cooperation (ethical behavior)

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Case 2.1, Page 43
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Chapter 3
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Overview of United States Law

• Criminal law
• Civil law
• Administrative
• Torts
• Contract

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Civil Law

• Administrative
• Congress (Federal and State) passes laws and
  affected governmental agencies make rules to
  enforce laws

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Civil Law

• Torts
• Assault and battery
• Bad faith
• Conversion (taking possession illegally)
• Defamation
• Trespass
• False imprisonment
• Negligence
• Liability

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Civil Law

• Contract
• Competent parties
• Mutual agreement
• Genuine assent
• Reciprocal consideration
• Legality (cant be criminal, tortious or against
  public policy)

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Ethical Issue Identification

• We need to learn how to identify ethical issues
• Lapses often occur because of a lack of
  understanding of the ethical issues involved

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Ethical Issues to Consider

• Human relations
• Conflict of interest
• Customer confidence
• Use of corporate resources
• Whistle blowing

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Human Resource Issues

• Potential problems
• Sexual or other types of harassment
• Performance evaluation
• Interviewing
• Hiring
• Discipline
• Firing

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Human Resource Issues

• Goal interview, hire, appraise, promote, layoff,
  fire strictly on the basis of qualifications
• Assumption people are able to be fair without
  considering extraneous factors such as sex, race,
  age, or religion

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Human Resource Issues

• Discrimination
• Sexual and other types of harassment

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Discrimination

• Occurs whenever something other than
  qualifications affects how an employee is treated
• Is an ethical issue because of the unfairness
  that is at its core
• Victims can file lawsuits under the Civil Rights
  Act of 1964 or under tort or contract law

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Sexual or other types of Harassment

• Quid Pro Quo
• You give me this and I will gave you that.
• I will only give you this, if you give me that.
• Hostile work environment
• Worker is made to feel uncomfortable
• Focus is from the perspective of the person that
  feels harassed

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Sexual or other types of Harassment

• Requirement to prove harassment would a
  reasonable person feel harassed in this
  situation?
• Harassers intentions are not considerd
• Employers can be liable for monetary damages if
  they do not investigate or stop the harassment

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Conflict of Interest

• When judgment or objectivity is compromised

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Conflict of Interest

• Bribes and kickbacks (overt and subtle)
• Money
• Gifts
• Influence (using relationships)
• Privileged information

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Conflict of Interest

• Erode trust

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Short Discussion Case page 60
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• Your daughter is applying to a prestigious Ivy
  League university. Since admission to the school
  is difficult, your daughter has planned the
  process carefully. She has consistently achieved
  high marks, taken preparatory courses for
  entrance exams, and has participated in various
  extracurricular activities. When you tell one of
  your best customers about her activities, he
  offers to write her a letter of recommendation.
  He's an alumnus of the school and is one of its
  most active fund raisers. Although he's a
  customer, you also regularly play golf together
  and your families have socialized together on
  occasion.

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Customer Confidence Issues

• Confidentiality
• Product safety
• Truth in advertising
• Special fiduciary responsibilities

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Confidentiality

• Privacy is a basic customer right
• Information about customers must not be disclosed

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Product Safety

• Customers have a right to a safe product or
  service

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Short Discussion Case page 64
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• You're the head of marketing for a small
  pharmaceutical company that has just discovered a
  very promising drug for the treatment of
  Alzheimer's disease. You have spent months
  designing a marketing campaign which contains
  printed materials and medication sample kits for
  distribution to almost every family physician and
  gerontologist in the country. As the materials
  are being loaded into cartons for delivery to
  your company's representatives, your assistant
  tells you that she has noticed a typographical
  error in the literature that could mislead
  physicians and their patients. I n the section
  that discusses side effects, diarrhea and
  gastrointestinal problems are listed as having a
  probability of 2 percent. It should have read 20
  percent. This error appears on virtually every
  piece of the literature and kits, and ads
  containing the mistake are already on press in
  several consumer magazines.

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Truth in Advertising

• Customers and prospective customers have the
  right to truthful product/service information

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Special Fiduciary Responsibilities

• Professionals in medicine, law, religion, and
  banking/finance/accounting, have a special
  relationship with their customers (clients,
  parishioners, etc.)
• These professionals have an obligation to protect
  their customers
• Obligations spelled out in industry codes of
  ethics

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Short Discussion Case page 67
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• A young woman who works for you is moving with
  her husband to another city, where she'll be
  looking for a new job. She's an excellent worker
  and when she asks you for a reference, you're
  glad to do it for her. She specifically asks for
  a written recommendation on your corporate
  letterhead.

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Use of Corporate Resources

• Use of corporate reputation
• Corporate financial resources
• Providing honest information

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Use of Corporate Reputation

• Make sure that you have permission to use the
  company name

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Corporate Financial Resources

• Company resources are for company business only

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Providing Honest Information

• You must report the facts honestly

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Whistle Blowing

• Telling the truth to top management when middle
  management will not listen

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How to Blow the Whistle

• 1. Approach your manager first (two times, if
  necessary)
• 2. Discuss the situation with your family
• 3. Contact the person in your company that has
  the authority to act
• 4. If nothing happens, go outside the company
• 5. Consider leaving your company

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Conflict of Interest Issue page 76
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Customer Confidence Issue page 77
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Chapter 4
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Deciding What is Right
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Example page 79-80
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• Youre the plant manager in one of ABC
  Companys five plants. Youve worked for the
  company for 15 years, working your way up from
  the factory floor after the company sent you to
  college. Your boss just told you in complete
  confidence that the company will have to lay off
  200 workers. Luckily, your job wont be affected.
  But a rumor is now circulating in the plant, and
  one of your workers (an old friend who now works
  for you) asks the question, Well, Pat, whats
  the word? Is the plant closing? Am I going to
  lose my job? The closing on our new house is
  scheduled for next week. I need to know. What
  will you say?

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Ethical Decision Making Approaches

• Focus on consequences
• Focus on duties, obligations and principles
• Focus on integrity

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Focus on Consequences

• What will be the results or consequences of a
  decision or action?
• Utilitarianism an ethical decision should
  maximize benefits to society and minimize harms
• How can you evaluate all of the consequences for
  all of the individuals involved?

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Focus on Consequences

• Can you see how minority rights may be sacrificed
  with this approach?

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Focus on Duties, Obligations and Principles

• What is your duty?
• Based on honesty, fairness, promise keeping,
  rights (to safety, privacy, etc.), justice, and
  respect for persons and property

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Focus on Duties, Obligations and Principles

• Can you see a conflict between doing what is
  right versus doing what will maximize societal
  welfare?

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Focus on Duties, Obligations and Principles

• Whose definition of right principles should be
  used?
• Can you see some potential for conflict?

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Virtue Ethics

• Focus is on the decision maker(s)s character,
  motivation and intentions
• The assumption is that the community has already
  decided what is right in each situation (via
  community standards) and appointed decision
  makers to represent the community

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Virtue Ethics

• What if the community is not in agreement on
  standards?
• What if the community is wrong?

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Sound Ethical Decision Making

• 1. Gather facts
• 2. Define the ethical issues
• 3. Identify the affected parties
• 4. Identify the consequences
• 5. Identify the obligations
• 6. Consider your character and integrity
• 7. Think creatively about potential actions
• 8. Check your gut

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Implementing Ethical Decision Making at Work

• Ask your manager how to raise ethical issues
  within your organization
• With them
• Without them

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Implementing Ethical Decision Making at Work

• 1. Do not underestimate the value of a hunch to
  alert you about an ethical dilemma
• 2. Ask for time to think it over
• 3. Find out quickly if your organization has a
  policy covering this situation
• 4. Ask your manager or peers for advice
• 5. Ask yourself whether your decision will be
  embarrassing when others evaluate it

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Pinto Fires Case page 95
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Chapter 5
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Deciding What is Right

• Issues in psychology
• Awareness of ethical dilemma
• Cognitive moral development
• Males versus female perspectives
• Locus of control
• Cognitive barriers to good ethical judgment

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Awareness of Ethical Dilemma

• Language affects our view of ethical situations
• Our attitude to our coworkers can affect our
  assessment of an ethical situation
• We cannot assume that everyone will see every
  ethical dilemma

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Cognitive Moral Development

• We go through stages of moral development
• The development process is influenced by peers
  and life situations
• Strongly influenced by what the supervisor says,
  does and rewards
• Moral reasoning can increased through training

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Moral Development Stages

• 1. Obedience and punishment orientation
• 2. Instrumental purpose and exchange
• 3. Interpersonal accord, conformity, mutual
  expectations
• 4. Social accord and system maintenance
• 5. Social contract and individual rights
• 6. Universal ethical principles

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Differences Between Men and Women

• Men focus mostly on justice considerations
• Women focus on morality of care
• Relationships
• Caring for others
• Responsibility to others
• Interdependent relationships

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Locus of Control

• How much control do you believe that you have or
  can exert over the events of life?

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Locus of Control

• High internal locus of control
• Outcomes are primarily the result of your own
  efforts
• High external locus of control
• Life events are determined primarily by fate,
  luck or powerful others

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Locus of Control

• High internal locus of control viewpoint
• Take responsibility for their actions
• Less willing to be pressured by others
• High external locus of control viewpoint
• Not able to take responsibility for their actions
  unless they are coached to accept the
  responsibility
• Need to be taught accountability

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Cognitive Barriers to Good Ethical Judgment

• Routine or problem solving method
• Cost/benefit analysis
• Overconfidence of the facts
• Ignoring consequences thought to affect few
  people
• Potential risks underestimated
• People have an illusion of superiority

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Good Ethical Judgment

• Consider the barriers to good ethical judgment
  carefully make sure that you are not falling
  into any of the traps
• Use your gut, conscience and informed brain

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Another Short Case for Discussion page 122
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Discussion Questions page 122
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Chapter 6
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Ethical Problems of Managers

• The basics
• Diverse workforce
• Managing up and across

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Managing the Basics

• Hiring and work assignments
• Performance evaluation
• Discipline
• Terminations

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Hiring and Work Assignments

• Discrimination is illegal, but prejudice is
  difficult to overcome
• Only relevant consideration is ability
• Some companies hire to meet a profile (e.g.
  healthy, young people with regular features,
  moderate height, medium build, and no discernable
  accent)

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Performance Evaluation

• Sometimes viewed as an annual event, but should
  be considered as a continuous requirement
• Workers want to know where they stand
• Measurable standards, established in advance, are
  generally viewed positively

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Performance Evaluation Case page 129
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• You were recently promoted to manager of a
  department with five professionals and two
  clerical staff. One of the professionals, Joe, is
  a nice guy, but he simply hasn't been able to
  match the performance of the others in the
  department. When he tells you he's been
  interviewing for another job in a different part
  of your company, you pull his personnel file and
  see that the person who previously managed the
  department had rated Joe's performance as "good
  to excellent." You frankly disagree. Joe has
  asked you for a recommendation. Based on the
  written appraisals, you could give him a good
  one--but your personal observation is at odds
  with the written evaluations. Joe's prospective
  manager--your peer in another department--asks
  for your opinion. What do you say?

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Discipline

• Most managers postpone it
• Needs to be done in a constructive way
• Identify problem behavior and consequences of
  continuing with that behavior
• Should be done in private
• Employees should have their say
• Must be consistent and fair across the
  organization

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Terminations

• For cause something done that results in instant
  firing (assault, theft, forgery, gross
  insubordination, fraud, etc.)
• For poor performance generally done in a
  sequential way (verbal warning, written
  reprimand, termination)
• Substantiated with written documentation

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Terminations

• 1. Brief explanation of the reason
• 2. Severance package of pay and benefits
• 3. Outplacement counselor
• 4. Conduct on neutral ground
• 5. Conduct in person and individually
• 6. Keep all information private

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Managing a Diverse Workforce

• Future management success based on how well teams
  function
• Team members will come from diverse groups
  (different sexes, ages, races, religions,
  ethnicities)

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Managing a Diverse Workforce

• Manager must create an environment where people
  from diverse backgrounds can function well
  together
• Manager must coach and teach that individual
  differences can be viewed as a major strength and
  asset of a group

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Managing a Diverse Workforce

• No room for harassment
• By team members
• By manager (and manager must balance needs of
  individuals with that of the group)
• Family and personal issues need to be considered
  flexibility is key (by team members and
  management)

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Managing Up and Across

• 360 degree feedback
• Managers appraise workers
• Workers appraise co-workers and managers
• Honesty is number one
• Must be a role model to employees in following
  standards

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Managing Up and Across

• Good reputation is a prerequisite for success
• Be cooperative
• Do a good job
• Treat people with respect
• Keep your promises
• Meet deadlines
• Be accurate and fair in your appraisal of events
  and activities

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Managing a Diverse Workforce page 145
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Managing Up and Across page 146
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Chapter 7
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Managing for Ethical Conduct

• Behavior
• Our multiple ethical selves
• Reward systems
• Everyones doing it
• People fulfill assigned roles
• People do what they are told
• Responsibility is diffused in organizations

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Managing for Ethical Behavior

• Ethical concepts must be concrete
• E.g. sales representatives must be honest with
  our customers about product characteristics and
  delivery dates
• Unethical behavior must be discouraged and
  punished
• Ethical conduct must be modeled

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Our Multiple Ethical Selves

• People socialized to accept different behavior
  depending on the context
• People can have multiple ethical systems
• Managers must be clear about the ethical behavior
  expected of new employees

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Reward Systems

• People do what is rewarded
• People avoid doing what is punished
• People learn from observing rewards and
  punishments of others

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Rewards

• Exclusive focus on goals obscures the means to
  achieve the goal
• If means of achievement are important, then they
  must be rewarded too
• If individuals rewarded for meeting goals, no
  matter what methods are used, then only those
  methods that result in meeting goals will be used
  (regardless of ethics)

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Punishment

• A deterrent to misconduct is punishment
• Punishment must be fair and consistent
• Employee should present their side of the story
  before punishment is determined
• Punish in private
• Unethical behavior must be punished it has a
  positive effect on other employees

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Everyones Doing It

• People follow group norms
• Rationalization for unethical behavior
• Peer pressure
• Group norms must be conformed with written rules

128
People Fulfill Assigned Roles

• Roles are strong forces for guiding behavior
• Workers are assigned roles
• Conflicting roles can lead to unethical behavior

129
People Do What They Are Told

• Organizations are authority structures
• Members must give up some of their independence
  and autonomy
• Members expect to be told what to do
• Members owe loyalty to the organization and
  manager
• Leads to pressure to comply

130
Responsibility is Diffused in Organizations

• Individuals often encouraged to turn
  responsibility over to those at higher levels
• Important decisions are often made in groups
• Responsibility is often so divided that
  individuals see themselves as a cog in a large
  machine
• Great psychological distance between the decision
  maker and potential victims

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Sears, Roebuck and Company Case page 170
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Another Short Case for Discussion page 173
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Chapter 8
134
Ethical Problems in Organizations

• Stakeholders
• Consumers
• Employees
• Shareholders
• Community

135
Stakeholder

• Any individual or group having a stake
• Employee
• Organization
• Customer
• Supplier
• Owner
• Environment
• Culture/society
• Competitors/market

136
Stakeholder

• Individual or group that can affect or be
  affected by business decisions or undertakings

137
Consumers

• Consumers have a right to a product or service
  that will not hurt them
• Due Care Theory

138
Due Care Theory

• Products and services should meet all
  governmental regulations, and be safe under all
  foreseeable conditions
• Materials should meet governmental regulations
  and durable enough to withstand reasonable use
• Products should be made without defects

139
Due Care Theory

• Products should be inspected regularly for
  quality
• Products should be safely packaged, with clear
  directions for use, and a clear description of
  any hazards
• Manufacturers should have a system to recall
  products that prove to be dangerous

140
Johnson Johnson pages 184-5
141
A.H. Robins pages 185-6
142
Product Safety Case page 186
143
G. Heileman Brewing page 188
144
Discussion Case page 189
145
Employees

• Employees have a right to work without being
  maimed or killed
• Organizations have an obligation to hire and fire
  responsibility

146
Johns Manville pages 190-2
147
Scott Paper pages 193-4
148
Lincoln Electric pages 194-5
149
Shareholders

• Organizations have a clear ethical obligation to
  shareholders (owners)
• To serve interests of owners
• Trying to perform well (short and long term)
• Not to engage in activities that could put the
  organization out of business
• Not to make short-term decisions that might
  jeopardize the companys future health

150
Salomon Brothers pages 196-7
151
Ethics and Shareholders Case page 197
152
Community

• Organization has an obligation to protect the
  environment of the community
• Organization should be a good neighbor, doing
  what is right for the community

153
Union Carbide pages 198-9
154
Exxon pages 199-200
155
Discussion Case page 200
156
Chapter 9
157
Ethics as Organizational Culture

• Cookie cutter approach wont work
• Organizational ethics
• Formal cultural systems
• Informal cultural systems
• Developing and changing the ethical culture
• Cultural approach to change
• Ethics of managing organizational ethics

158
Cookie Cutter Approach Wont Work

• All organizations have ethical dilemmas, but each
  organization is unique, which requires unique
  approaches and solutions to the dilemmas

159
Cookie Cutter Approach Wont Work

• Cookie Cutter efforts are likely to be short
  lived or superficial
• Ethics for a day breeds cynicism
• Must proactively develop an ethical
  organizational culture

160
Organizational Ethics

• Every organization has a unique view of the role
  of ethics
• Organizational ethics is a part of organizational
  culture

161
Organizational Culture

• Expresses shared assumptions, values and beliefs
• Manifested in
• Norms
• Physical settings
• Modes of dress
• Special language
• Myths
• Rituals
• Heroes
• Stories

162
Organizational Culture Created and Maintained by
Formal Informal Systems

• Formal systems
• Leadership
• Structure
• Selection systems
• Orientation
• Training programs
• Rules
• Policies
• Reward systems
• Decision making processes

163
Organizational Culture Created and Maintained by
Formal Informal Systems

• Informal systems
• Norms
• Heroes
• Rituals
• Stories
• Language

164
Formal Cultural Systems

• Leaders can create, maintain or change culture
  (ethics flow from the top down)
• Most managers are neutral ethical leaders
• They dont set ethical goals
• They dont talk about the importance of ethical
  business practices
• Employees hear that ethics are not important and
  will do whatever is needed to meet goals

165
Formal Cultural Systems

• Selection systems
• Select the right people
• Organizational structure
• Removing bureaucratic layers and pushing
  responsibility down in the organization can have
  a positive effect of business ethics
• Written code of ethics reduces likelihood of
  trouble

166
Formal Cultural Systems

• Reward systems
• Is there an alignment between rewards and ethical
  behavior?
• Are whistle blowers vilified?
• Orientation and training programs
• Ethics training must be consistent with ethical
  culture
• Decision making processes
• Is there an over reliance on quantitative
  analysis?

167
Informal Cultural Systems

• Are informal norms consistent with formal norms?
• Other issues heroes role models, rituals,
  myths stories, language

168
Developing and Changing the Ethical Culture

• Change is tough!
• Status quo is easy to maintain
• Cultural change must come from the top and from
  the environment
• Human tendency is abhor change
• Culture is addictive
• Unethical behavior feeds on itself (if I am
  successful, why should I change?)
• Organization must insist on change

169
Cultural Approach to Change

• Code of ethics must be followed to the letter
• Reward systems and decision making processes must
  reflect ethical behavior
• A new code of ethics or a new focus on ethical
  behavior is difficult to implement
• Rules must be followed consistently and closely
• Failure to follow through will be interpreted as
  hypocrisy

170
Cultural Approach to Change

• Audit can be conducted to ascertain the
  effectiveness of the ethical system (formal as
  well as informal)

171
Ethics of Managing Organizational Ethics

• Whose values or ethics shall we follow?
• Employees should have input

172
VideoTek Case page 235
173
Another Case page 240
174
Chapter 10
175
Model Ethics Programs

• Ethics infrastructure
• Communicating ethics
• Evaluating ethics programs
• Values or compliance approaches

176
Ethics Infrastructure

• Who manages the formal ethics programs?
• Do ethics programs have the highest priority?

177
Communicating Ethics

• Formal and informal systems must be consistent
• Recognize that multiple channels of communication
  are available
• Written statements and policies are important

178
Evaluating Ethics Programs

• Assessment of ethical training and compliance
  must be conducted

179
Values or Compliance Approaches

• Values approach stresses expected behavior and
  organizational behavior
• Compliance approach focuses on letter of the law
  (rather than he intent of the law)

180
Whats Wrong with this Picture Case page 284
181
Chapter 11
182
Ethical Conduct in a Global Environment

• Expatriate manager
• Organization in a global business environment

183
Expatriate Manager

• Difficulties of foreign business assignments
• Importance of training and guidance
• Foreign language proficiency
• Learning about the culture

184
Learning About the Culture

• Individualism versus collectivism
• Training can help us be on the lookout
• Women may experience difficulties
• Be open to the cultural differences
• Recognize ethical issue differences
• Differentiate between bribes, gifts and tips

185
Organization in a Global Business Environment

• Things are different!
• Sexual and racial harassment
• Human rights
• Price discrimination/differences
• Pollution, including waste disposal
• Gifts

186
Gifts Japan

• Consult store staff
• Always wrap gifts, but never in white
• Give and receive gifts with both hands along with
  a slight bow

187
Gifts China

• Reasonably priced gift when negotiations complete
• Give gifts to everyone, based on rank
• No gifts in amounts of four
• Colors be careful
• If your gift declined, decline theirs, if offered

188
Gifts Singapore

• Gift giving not common
• Corruption not tolerated
• If gifts given, only token items used

189
Gifts India

• Graft is widespread
• Bribes often solicited, although illegal
• Rely on advice of local experts

190
The Gift Case page 311