Strategic Approaches to Improving Ethical Behavior

1
CHAPTER 6

• Strategic Approaches to Improving Ethical Behavior

2
Chapter Objectives

• To provide an overview of the need for an
  organizational ethics program
• To consider crucial keys to development of an
  effective ethics program
• To examine effective implementation of an ethics
  program

3
The Need forOrganizational Ethics Programs

• Organizations are held accountable for the
  conduct of their employees.
• Organizations can create unethical corporate
  cultures.
• Stakeholders demand greater ethical andsocial
  responsibility.

4
Codes of Conduct

• Formal statements that describe what an
  organization expects of its employees

5
Developing andImplementing a Code of Ethics

• Consider areas of risk and state values as well
  as necessary conduct.
• Identify values that specifically address
  currentethical issues.
• Consider values that link the organization to a
  stakeholder orientation.
• Make the code understandable by
  providingexamples that reflect values.
• Communicate the code frequently in language
  employees can understand.
• Revise the code each year.

6
Ethics Officers

• Assess organizational needs and risks
• Develop and distribute the code of ethics
• Conduct ethics training programs
• Establish and maintain a confidential system to
  respond to ethics questions
• Make certain the company is in compliance with
  government regulation
• Monitor and audit ethics conduct
• Take action when there is a code violation
• Review and update the code

7
Ethics Training and Communication

• Educates employees about the firms policies,
  expectations, relevant laws and regulations, and
  general social standards
• Makes employees aware of available resources,
  support systems, and personnel who can assist
  with ethics and legal advice
• Can empower employees

8
Training andCommunication Initiatives

• Should reflect the unique characteristics of an
  organization
• Must operate with a strong foundation
• Are more effective if employees engagein
  exercises that involve solving ethical dilemmas
  that relate to their job

9
Establishing Systems to Monitorand Enforce
Ethical Standards

• Help or assistance lines
• Observation and feedback
• Whistle-blowing

10
Questions to Ask BeforeEngaging in External
Whistle-blowing

• Have I exhausted internal anonymous reporting
  opportunities within the organization?
• Have I examined company policies and codes that
  outline acceptable behavior and violations of
  standards?
• Is this a personal issue that should be resolved
  through other means?
• Can I manage the stress that may evolve from
  exposing potential wrongdoing in the
  organization?
• Can I deal with the consequences of resolving an
  ethical or legal conflict within the organization?

11
Continuous Improvementof the Ethics Program

• Putting strategies into action
• Translating a plan of action into operational
  terms and monitoring, controlling, and improving
  organizational performance

12
ImplementingOrganizational Ethics Programs

• Role of leadership
• Transformational leaders
• Transactional leaders

13
Leaders influence Corporate Culture

• Organizational leaders use their power and
  influence to shape corporate culture. Power
  refers to the influence that leaders have over
  the behavior and decisions of subordinates.

14
Five Power Bases

• Reward power
• Coercive power
• Legitimate power
• Expert power
• Referent power

15
Variation in Employee Conduct

• Because people are culturally diverse and have
  different values, they interpret situations
  differently and will vary in the ethical
  decisions they make on the same ethical issue.