Introduction To Business Ethics 1207907958988578 9

INTRODUCTION TO BUSINESS ETHICS ITETHIC 3rd Term 2007-2008 IM DLS-CSB Paul A.B. Pajo Jr. II

Why Be Ethical?  What is ethics, and why is it important to act     

according to the a code of principles Why is business ethics becoming increasingly important? What are corporations doing to improve business ethics? Why are corporations interested in fostering good business ethics? What approach can you take to ensure ethical decision making? What trends have increased the risk of using information technology

Definition of Ethics  Ethics is the set of beliefs about right

and wrong

The importance of integrity  Your moral principles are statements of

what you believe to be rules of right conduct  A person who acts with integrity acts in accordance with a personal code of principles – integrity is one of the cornerstones of ethical behavior

Why are you doing it?  “The changes in our life must come from

the impossibility to live otherwise than according to the demands of our conscience [...] not from our mental resolution to try a new form of life”  -Leo

Tolstoy (1828-1910)

Self-Governance  “A man cannot govern a nation if he

cannot govern a city; he cannot govern a city if he cannot govern a family; he cannot govern a family unless he can govern himself; and he cannot govern himself unless his passions are subject to reason”  Hugo

Grotius

Why fostering Good Business Ethics is important  To gain the goodwill of the community  To create an organization that operates

consistently  To produce good business  To protect the organization and its employees from legal action  To avoid unfavorable publicity

Creating an Organization that Operates Consistently  Operate with honesty and integrity, staying to      

corporate principles Operate according to standards of ethical conduct, in word and in action Treat colleagues, customers, consumers with respect Strive to be the best at what matters most to the company Accept personal responsibility for actions Value diversity Make decisions based on facts and principles

Key Features to implement an effective program of compliance and Ethics 1. Identify its core beliefs, which need to

include a commitment to complying with the letter and spirit of the law and ethical conduct 2. Understand the strengths and weaknesses of its culture and organization structures

Key Features to implement an effective program of compliance and Ethics 3. Scan its business environment, presumably on an enterprise-wide basis to determine what pressures the organization faces, especially the risk of criminal conduct and violating other applicable laws, and more broadly, to gather benchmarking data to compare to industry standards and best practices

Key Features to implement an effective program of compliance and Ethics 4. Determine relative to its goals and objectives and baseline data its prior performance, what outcomes should be expected of the program

Key Features to implement an effective program of compliance and Ethics 5. Identify targets and measurable indicators of expected program outcomes

Key Features to implement an effective program of compliance and Ethics 6. Design, implement, and enforce a program that will “exercise due diligence to prevent, detect, and report criminal conduct ad otherwise promote an organizational structure that encourages ethical conduct and a commitment to compliance with all applicable law

Key Features to implement an effective program of compliance and Ethics 7. Regularly evaluate its program to determine if it is effective, and capture what the organization learns along the way

Appointing a Corporate Ethics Officer  What is a Corporate Ethics Officer? 

A senior-level manager who provides vision and direction in the area of business conduct

Members of the Ethic Officer Association (EOA)                  

Adelphia Communications Group AOL Time Warner AT&T BAE Systems British Telecom Cingular Wireless Computer Associates International Dell Computer Hewlett-Packard Intel MCI Microsoft Oracle QUALCOMM Qwest Sprint Sun Microsystems Texas Intruments

How Management can affect Employees’ Ethical Behavior #1  Manager: 

Set and hold people accountable for meeting “stretch” goals, quotas, and budgets

 Possible Employee Reaction: 

“My boss wants results not excuses, so I have to cut corners to meet the goals has set.”

How Management can affect Employees’ Ethical Behavior #2  Manager: 

Fail to provide a corporate code of ethics and operating principles to guide decision making

 Possible Employee Reaction: 

“Because there are no guidelines, I don’t think my conduct is really wrong or illegal.”

How Management can affect Employees’ Ethical Behavior #3  Manager: 

Fail to hold people accountable for unethical actions

 Possible Employee Reaction: 

“No one will ever know the difference, and if they do, so what?”

How Management can affect Employees’ Ethical Behavior #4  Manager: 

When employees are hired, put a 3-inch binder titled “Corporate Business Ethics, Policies, and Procedures” on other desks. Tell them to “read it when you have the time and sign the attached form that say you read and understand corporate policy”.

 Possible Employee Reaction: 

“This is overwhelming. Can’t they just give me the essentials? I can never absorb all this”.

Manager’s checklist for establishing an ethical work environment #1  Does your company have corporate

code of ethics?

Manager’s checklist for establishing an ethical work environment #2  Was the corporate code of ethics

developed with broad input from employees at all levels within the organization, and does it have their support?

Manager’s checklist for establishing an ethical work environment #3  Is the corporate code of ethics concise

and easy to understand, and does it identify the values you need to operate consistently and meet the needs of your stakeholders?

Manager’s checklist for establishing an ethical work environment #3  Is the corporate code of ethics concise

and easy to understand, and does it identify the values you need to operate consistently and meet the needs of your stakeholders?

Manager’s checklist for establishing an ethical work environment #4  Do all employees have easy access to a

copy of the corporate code of conduct, and have they all signed a document stating that they have read and understood it?

Manager’s checklist for establishing an ethical work environment #5  Do employees participate in annual

training to reinforce the values and principles that make up the corporate code of ethics?

Manager’s checklist for establishing an ethical work environment #6  Do you set an example by

communicating the corporate code of ethics and actively using it in your decision making?

Manager’s checklist for establishing an ethical work environment #7  Do you evaluate and provide feedback to

employees on how to operate with respect to the values and principles in your corporate code of ethics?

Manager’s checklist for establishing an ethical work environment #8  Do you seek feedback from your

employees to ensure that their working environment does not create conflicts with the corporate code of ethics?

Manager’s checklist for establishing an ethical work environment #9  Do you seek feedback from your

employees to ensure that their work environment does not create conflicts with corporate code of ethics?

Manager’s checklist for establishing an ethical work environment #10  Do employees have an avenue, such as

an anonymous hotline, for reporting infractions of the code of ethics?

Manager’s checklist for establishing an ethical work environment #11  Are employees aware of sanctions for

breaching the code of ethics?

Seven Steps for Ethical Decision Making 1. Get the facts 2. Identify stakeholders and their positions 3. Consider the consequences of their 4. 5. 6. 7.

decision Weigh various guidelines and principles Develop and evaluate your decision Review your decision Evaluate the results of your decision