Ethics and Social Responsibility

1
Ethics and Social Responsibility
2
The Organization

• Facilitating Ethical Behavior
• Leading by Example
• Codes of Ethics
• Ethical Structures

3
Principle-based Codes

• Designed to
• Enable the employee to make ethical decisions
  based on appropriate values
• (e.g., The Golden Rule)

4
Policy-based Codes

• Outline how to act in specific ethical situations
  (reducing the need for thinking or shared
  values)
• Conflicts of interest
• Proprietary information
• Political gifts
• Equal opportunities.
• ASA

5
Ethical Structures

• Ethical ombudsman is the corporate conscience
• Ethics committee group appointed to monitor
  company ethics
• Ethics training programs
• Hot lines - employees can report questionable
  behavior, possible fraud, waste, or abuse ( i.e.,
  Blow the Whistle).

6
Arthur Andersen

• A. Andersen once had a strong ethical culture,
• Began to emphasize financial consulting
• Dominant value changed from think straight, talk
  straight to keep clients happy
• Hired experienced consultants without requiring
  them to take the A.A. ethics training.
• Went from 85,000 employees to 200 due to Enron
  scandal

7
Mitsubishi

• When accused of pervasive sexual harassment,
  launched PR offensive to convince outsiders
  nothing was wrong.
• Got some employees to stage demonstrations and
  petitioned govt. to call of investigation
• Denial
• Hurt reputation
• Led to high court-assessed damages when settled
  in 1998
• Delayed necessary changes

8
Waste Management

• Massive accounting fraud 1998
• Accused of dressing up earnings
• And disbursing 30 mill. in illegal bonuses to
  top mgmt
• Maurice Myers hired in wake of scandal
• Acted quickly to rectify
• Openly discussed in in-house publication
• Created anonymous hotline
• Company seemed to recover quickly

9
Lockheed Martin

• Chairmans Award to employee who exhibited
  outstanding ethical conduct the previous year.
• Leaders of all business units make nominations
• 250 senior executives attend the ritual

10
Guidelines for Ethical Dilemmas

• Is it legal?
• Is it right?
• Is it beneficial? To whom? How much?
• Is it harmful? To whom? How much?
• Would you be willing to allow everyone to do what
  you are considering?
• Would you like your family to know?
• Would you like your decision printed in the
  newspaper?
• Have you consulted others who are objective and
  knowledgeable?

11
Whistle-Blowing Guidelines

• Be sure you are right (keep accurate records)
• Try to resolve the situation in-house first
• Consult an attorney before contacting the media,
  etc.
• Realize you could be fired
• Dont expect to profit financially