ch4_ppt

Chapter 4Learning ObjectivesUnderstand the difference between a Code of Ethics and a Code of ConductExplain the importance of code awareness and expectationsDescribe the content found in most Codes of Ethics and Codes of ConductCreate and implement an effective Code of Ethics communication strategyConduct an annual employee assessment of the Code of Ethics

Chapter 4: Collins, Business Ethics


Difference Between a Code of Ethics and a Code of ConductCode of Ethics:A Code of Ethics briefly describes broad ethical aspirationsIt is sometimes referred to as a Values StatementIt has a few general principles to guide behavior that could fit on a business cardThese principles describe the kind of people we want to be


Chapter 4: Collins, Business EthicsThe general principles embodied in a Code of Ethics represent aspirations

When faced with an ethical dilemma or ambiguous situation, principles articulated in the Code of Ethics can help guide the decision maker

*

Difference Between a Code of Ethics and a Code of ConductCode of Conduct:A Code of Conduct more extensively describes acceptable behaviors for specific situations that are likely to arise

It is often developed by an employee with legal expertise, provides substance to the Code of Ethics and is usually several pages long


Chapter 4: Collins, Business EthicsA Code of Conduct applies the Code of Ethics to a host of relevant situations

*

Purpose and Importance of CodesThe extent of an organizations ethics program is

often related to its sizeIn the 1960s, only 15 percent of surveyed companies had a Code of EthicsNow, nearly all Fortune 1000 companies have a Code of Ethics


Chapter 4: Collins, Business EthicsBegin drafting a Code of ethics when the number of employees reaches about 10

Assign responsibility for managing organizational ethics to a specific individual at the 50-employee level and begin developing some ethics training*

Exhibit 4.1 Ethics Program Growth and Organizational SizeInsert Exhibit 4.1Chapter 4: Collins, Business Ethics


Purpose and Importance of CodesDemonstrate Managerial Concern for EthicsDiscuss the organizations Codes of Ethics and Conduct with new employees to establish ethical expectations

New employees play a pivotal role in helping an organization achieve the highest standards for honesty and ethical behaviors


Chapter 4: Collins, Business EthicsBy discussing the organizations Code of Ethics and Conduct, managers demonstrate concern that ethical issues will be appropriately addressed*

Purpose and Importance of CodesConvey a Particular Set of Values and ObligationsCodes of Ethics clarifies appropriate behaviors and provides employees with clear and consistent moral guidanceIt articulates and reinforce a moral consensusIt legitimizes dialogue about ethical issues when challenging situations arise


Chapter 4: Collins, Business EthicsEmployees need a reliable source of information to guide them when ethical issues arise

*

Purpose and Importance of CodesMeet Legal Requirements and Industry TrendsThe Sarbanes-Oxley Act: required all publicly traded companies to disclose whether they had a Code of Ethics for senior financial officersMany industry associations and professional organizations develop codes as a self-regulating strategy that deflects government regulation


Chapter 4: Collins, Business EthicsBanks, health care firms, and organizations doing business with municipal, state, and federal governments are required to have an ethics code

Lawyers, accountants, teachers, and social workers who violate their professional code can lose their license

*

Purpose and Importance of CodesPositive impact on employee behaviors:Researchers report that organizations with Codes of Ethics have higher levels of employee commitment and greater tolerance for diversity


Chapter 4: Collins, Business EthicsWithin an organization culture of trust, employees are more likely to trust managerial decisions, and managers are more likely to trust employee decisions

*

Code of Ethics ContentProviding employees with a list of prohibitionsthings they should not docan feel oppressive

Make the Code of Ethics an affirmative statement of how employees should act


Chapter 4: Collins, Business EthicsIts similar to the difference between a coach telling an athlete not to play badly versus a coach telling an athlete she is playing well and can do even better*

Code of Ethics ContentAn extensive scholarly review of corporate Codes of Ethics, global Codes of Ethics, and business ethics literature found the following six values continually expressed:

TrustworthinessRespectResponsibilityFairnessCaringCitizenship Chapter 4: Collins, Business Ethics

Chapter 4: Collins, Business Ethicsmdarnell (m) - delete "the"

International CodesThe Foreign Corrupt Practices Act (FCPA) makes it illegal for U.S. businesses to directly pay bribes in other nations The FCPA differentiates bribery from facilitating paymentsA bribe is typically defined as providing someone with a monetary incentive to do something contrary to his or her job descriptionFacilitating payments, which are legal, expedite performance of routine governmental action


Chapter 4: Collins, Business EthicsSome businesses headquartered in the U.S. argued that the FCPA puts them at competitive disadvantage because businesses headquartered in other nations continue to pay bribes as a cost of doing business

*

Code of Ethics ContentAmerican businesses are obligated to obey both U.S. laws and host nation laws, with the higher ethical standards taking precedence

The Caux Round Table spearheaded a collaborative effort to develop the Caux Principles for Responsible Business



Exhibit 4.4a Caux Principles for Responsible BusinessInsert Exhibit 4.4Chapter 4: Collins, Business Ethics


*

Exhibit 4.4b Caux Principles for Responsible BusinessInsert Exhibit 4.4Chapter 4: Collins, Business Ethics


*

Creating a Code of EthicsFollowing are 13 steps for creating a Code of Ethics as a team-building exercise:Step 1-Obtain approvalStep 2-Create a code-writing teamStep 3-Gather list of ethical issues from relevant stakeholdersStep 4-Define a Code of EthicsStep 5-Gather a list of ethical behaviors from participants


Chapter 4: Collins, Business EthicsAn ethics code serves as a constant reminder, particularly when the owner is not present

*

Code of Ethics ContentStep 6-Determine common themesStep 7-Draft a Code of EthicsStep 8-Compare to other codes and modifyStep 9-Compare to other groupsStep 10-Code alignmentStep 11-Code reviewStep 12-Code communication strategyStep 13-Code revision



Connecting Code of Ethics to Strategic PlanningStrategic planning integrates an organizations mission with its vision and provides clear direction on how the organization will progress from its current situation to a highly desired future situation


Chapter 4: Collins, Business EthicsConnecting the code to an organizations mission and vision, rather than keeping it separate, establishes credibility and visibility for the Code of Ethics

Mission statements describe what an organization does and for whom

Vision statements describe what an organization aspires to become in the future

Strategic plans are communication devices*

Exhibit 4.5: Crafting a Cause-Based Strategic MessageInsert Exhibit 4.4Chapter 4: Collins, Business EthicsJim Armstrongs 10-step process for developing a cause-based communication strategy


*

Code of Conduct ContentA Code of Conduct addresses the wide range of legal expectations and ethical risks unique to an organization or job title


Chapter 4: Collins, Business EthicsCreating a Code of Conduct requires input from top-level executives, corporate lawyers, and human resource personnel*

Code of Ethics ContentThe New York Stock Exchange recommends that a Code of Conduct address the following seven topics:Conflicts of InterestCorporate OpportunitiesConfidentiality Fair DealingProtection and Proper Use of AssetsCompliance with Laws, Rules, and RegulationsEncouraging the Reporting of Any Illegal or Unethical BehaviorChapter 4: Collins, Business Ethics

Chapter 4: Collins, Business EthicsDevelop different Codes of Conduct for different business units, work functions, or stakeholders as an organization grows in complexity

Revise the Code of Conduct when new issues arise*

Code of Ethics ContentCodes of Conduct are based on shifting moral expectations and legal obligationsNew technologies create new ethical dilemmas requiring new ethical guidelines

Insert Exhibit 4.7Chapter 4: Collins, Business Ethics


Code of Conduct RelevancyBusiness GratuityA business gratuity is a present, gift, hospitality, or favor for which fair market value is not paid by the recipientA fine line exists between a business gratuity and a bribeThe general guideline for when a gratuity evolves into a bribe is when the object of value unduly influences buying decisions


Chapter 4: Collins, Business EthicsInstructing buyers not to accept gratuities from suppliers, and then encouraging salespeople to offer gratuities to customers, sends mixed messages that damage managerial credibility

Organizations need consistent policies to avoid the negative impacts of employees claiming hypocrisy*

Code of Conduct RelevancyEmailA 2009 survey reported that approximately half of all organizations monitor email use

Clearly note in the Code of Conduct that the employers right to monitor email communications on company-owned computers and network systems supersedes employee privacy rights


Chapter 4: Collins, Business EthicsA 2007 survey conducted by the American Management Association found that 28 percent of the organizations had terminated an employee for inappropriate email use

*

Code of Conduct RelevancyAssociation of Consulting Engineers Australia Code of Conduct PolicyInsert Exhibit 4.8Chapter 4: Collins, Business Ethics


Implementing an Effective Code Communication StrategyEthical hypocrisy, the gap between an organizations formal ethical proclamations and its actual behavior, damages employee moraleResearchers report that people working for a supervisor who encouraged employees to lie about delivery information to clients had less job and organizational satisfaction



Implementing an Effective Code Communication StrategyElements of an Effective Code Communication Strategy:Connect the code to the organizations strategyMention the Code of Ethics in job announcementsIntroduce the code during employee orientationAnnually distribute the Code of Ethics with a letter signed by a high-level executive emphasizing the importance of applying the code on a daily basis



Implementing an Effective Code Communication StrategyElements (cont.)Display the Code of Ethics in newsletters, highly traveled areas, and on stationary and websitesDiscuss the code during ethics training workshopsMention the Code of Ethics in correspondences with suppliers and customersEvaluate employees on code adherence in performance appraisalsLink code adherence to promotions and merit raisesAnnually assess how well the organization embodies the code


Chapter 4: Collins, Business EthicsEmployees are more likely to report a code violation if others in the organization disapprove of the violation, they do not fear retribution for reporting, or the person committing the violation has been given a previous warning

Codes are particularly essential during periods of market and organizational turbulence

Turbulence creates uncertainty and employees can shift into a survival of the fittest mindset*

Annual Code of Ethics AssessmentInsert Exhibit 4.9Chapter 4: Collins, Business Ethics


The general principles embodied in a Code of Ethics represent aspirations

When faced with an ethical dilemma or ambiguous situation, principles articulated in the Code of Ethics can help guide the decision maker

*A Code of Conduct applies the Code of Ethics to a host of relevant situations

*Begin drafting a Code of ethics when the number of employees reaches about 10

Assign responsibility for managing organizational ethics to a specific individual at the 50-employee level and begin developing some ethics training*By discussing the organizations Code of Ethics and Conduct, managers demonstrate concern that ethical issues will be appropriately addressed*Employees need a reliable source of information to guide them when ethical issues arise

*Banks, health care firms, and organizations doing business with municipal, state, and federal governments are required to have an ethics code

Lawyers, accountants, teachers, and social workers who violate their professional code can lose their license

*Within an organization culture of trust, employees are more likely to trust managerial decisions, and managers are more likely to trust employee decisions

*Its similar to the difference between a coach telling an athlete not to play badly versus a coach telling an athlete she is playing well and can do even better*Some businesses headquartered in the U.S. argued that the FCPA puts them at competitive disadvantage because businesses headquartered in other nations continue to pay bribes as a cost of doing business

*

*

*An ethics code serves as a constant reminder, particularly when the owner is not present

*Connecting the code to an organizations mission and vision, rather than keeping it separate, establishes credibility and visibility for the Code of Ethics

Mission statements describe what an organization does and for whom

Vision statements describe what an organization aspires to become in the future

Strategic plans are communication devices*

*Creating a Code of Conduct requires input from top-level executives, corporate lawyers, and human resource personnel*Develop different Codes of Conduct for different business units, work functions, or stakeholders as an organization grows in complexity

Revise the Code of Conduct when new issues arise*Instructing buyers not to accept gratuities from suppliers, and then encouraging salespeople to offer gratuities to customers, sends mixed messages that damage managerial credibility

Organizations need consistent policies to avoid the negative impacts of employees claiming hypocrisy*A 2007 survey conducted by the American Management Association found that 28 percent of the organizations had terminated an employee for inappropriate email use

*Employees are more likely to report a code violation if others in the organization disapprove of the violation, they do not fear retribution for reporting, or the person committing the violation has been given a previous warning

Codes are particularly essential during periods of market and organizational turbulence

Turbulence creates uncertainty and employees can shift into a survival of the fittest mindset*

ch4_ppt

Documents