Transcript What Are Unethical Business Practices?

BUSINESS
ETHICS
Dutch Bros. “adopted” the Optimists’ Creed as the
“Dutch Creed.” Every meeting ends with reciting it
to help keep a positive outlook
THE CREED
To be so strong that nothing can disturb your
peace of mind.
To talk health, happiness and prosperity to every
person you meet.
To make all your friends feel that there is
something in them.
To look at the sunny side of everything and
make your optimism come true.
To think only of the best, to work only for the
best, and to expect only the best.
THE CREED
To be just as enthusiastic about the success of
others as you are about your own.
To forget the mistakes of the past and press on to
the greater achievements of the future.
To wear a cheerful countenance at all times and
give every living creature you meet a smile.
To give so much time to the improvement of
yourself that you have no time to criticize
others.
To be too large for worry, too noble for anger, too
strong for fear, and too happy to permit the
presence of trouble.
BUSINESS ETHICS
"Let me appeal to your sense of doing things my way"
Cartoon by P.C. Vey
Copyright 2004, Harvard Business Review
BUSINESS ETHICS
Can Business (and Businesses) be
“Ethical?” What does that mean?
Do “Ethics” matter More Now than Before?
Whose “Ethics” are They?
Isn’t the “Best Ethic” maximizing Shareholder
Value? What do you say to your
“Stakeholders?”
WHY DO ETHICS MATTER?
Does “Doing the Right Thing” Matter?
To Whom Does it Matter?
What are the Costs to Business of
Unethical Behavior?
WHERE DO ETHICS MATTER?
In a Court Room: Legal Implications
Financial Markets: Reliability of
Information
Human Resources Markets: How to
Attract and Retain the Best and
Brightest
ETHICAL ISSUES
Three Steps for Analyzing Ethical Issues
Strictly Legal
Perspective
Is It Legal?
If “No,” Stop and Take Action
Is It Balanced?
Compare Risks and Benefits
How Does It Make Me Feel?
Strictly Personal
Perspective
What is your Conscience telling You?
Are You doing the “Right Thing?”
BUSINESS ETHICS
After 3 months on the job, you learn an
employee falsified her employment
application: she doesn’t have a college
degree. As her boss, what do you do?
Fire Her Immediately
Overlook it, She’s doing a Great Job
Balance the Omission's Severity with the Great Job
she’s doing plus her Age and Ethnicity
Contact HR and Determine Company Policy
BUSINESS ETHICS
Your least effective employee has applied to
transfer to another department. And the
manager is calling you for a reference…
Say the employee is the best one you’ve ever
had and you’re heartbroken they’re leaving
Be Candid - Tell Everything - Leave out Nothing
Tell the manager the employee might be a better
“fit” in their department instead of yours
Duck it: Suggest the Request be handled by HR
BUSINESS ETHICS
A Relative wants to work in your Department. It
could be a promotion and a big pay raise. He’s
asking for your advice…
Give him the benefit of your inside knowledge
Tell him not to apply
Tell him that if he gets the job, he’ll have to move
out of your house where he’s been for 9 months
Ask him how to deal with possible perceptions of
favoritism or nepotism
BUSINESS ETHICS
You discover your Boss lets his Children (who
attend an expensive out-of-state college) charge
calls to the Firm’s Telephone Account and then
falsifies his Expense Record…
Tell Accounts Payable about what you know
Write a Memo reminding everyone about the policy
regarding personal use of company resources
Report it to your Boss’s Boss
Notify the Legal Department immediately
UNETHICAL BUSINESS PRACTICES
1.
2.
3.
4.
Abusive or Intimidating Behavior
Accurate but Incomplete Disclosures
Discrimination against Protected Class
Receiving/Offering Bribes, Kickbacks or
Incentives
5. Theft/Fraud: Expense Accounts/Personal
Use of Company Property
6. Sexual Harassment
7. Termination without Fair Notice or Cause
BUSINESS ETHICS: APPROACHES
COMPLIANCE-BASED
Prevent, Detect and Punish Legal
Violations
INTEGRITY OR VALUES-BASED
Define Organizational Values and
Encourage Employee Commitment
to Ethical Aspirations
ETHICS AND THE LAW
Legal Requirements often represent an
Ethical Minimum
Personal Ethical Standards Generally
Exceed Legal Standards
ETHICS
LAW
Laws are Ethical Issues with
Societal Implications as
interpreted by a Legislature;
Personal Ethics have
Broader Context and
Application
FORCES THAT SHAPE BUSINESS ETHICS
Organizational Culture
Personal Ethics
Beliefs and Values
Moral Development
Ethical Framework
Organizational Systems
Structure
Policies and Rules
Code of Ethics
Reward System
Selection and Training
Is
Decision
or Behavior
Ethically and
Socially
Responsible?
Founder
History
Defining Moments
Stories of Development
External Stakeholders
Government Regulations
Customers
Special Interest Groups
Market Forces
PERSPECTIVES ON ETHICS
Ethical Issues require Persons or Organizations
to choose an Action that may get judged as
Right or Wrong
Business Ethical Issues: Classifications
Conflicts of Interest
Fairness and Honesty
Communications
Organizational Relationships
CONFLICTS OF INTEREST
DEFINITION: Employee’s Personal or
Financial Interests Interfere with Employee’s
Obligations to Employer
THREE TYPES:
Financial: Self-dealing or Insider Trading
Professional: Outside Commitments
infringe on Employer Resources
Personal: Family/Employee Conflicts,
Nepotism, Fraternization
CONFLICTS OF INTEREST
BEST RESPONSE? Preventative
Measures: Employees free to have
unrelated job activities, but…
EMPLOYER CAN EXPECT LAWFUL AND
CONFLICT-FREE BEHAVIOR
Strategically Identify and Manage Potential
Conflicts with Written Policies, Standards,
Expectations, Training, Monitoring and
Constant Communication
STRUCTURES AND SYSTEMS
Have a Code of Ethics (standards), but
more important, have a Code of
Conduct (Actions)
Communications Network: Formal and
Informal Processes for Reinforcing and
Refreshing
Formal Reporting system: Ethics
Ombudsperson - Unbiased and Neutral
but with Authority
ETHICAL CLIMATE/CULTURE
More Important than Ethics Program
Begins with leadership (all levels) that includes
Ethical Considerations in every Decision:
Are We Doing the Right Thing?
Focus on What’s best for BOTH Employees
and Affected Community (stakeholders)
Actions louder than Words/Codes:
Consistency and Follow-up Actions
Communities and their Businesses
Organizational Responsibility. Discuss
possible roles and activities the venture
might take or promote that contribute to
the community’s “greater good.” Will
these roles or activities make a
significant, positive contribution? How will
the venture sustain its commitment to
these contributions?
CRITERIA GUIDING ETHICAL ACTIONS
Employees won’t be Punished for
Questioning Authority
Employees will be held Accountable
(Punished) for Rule Violations
Focus on larger organizational/societal
Outcomes; Not Personal/self-Interest
Would You wish Others to behave in the
same Way if Action affected You?
BOTTOM LINE OF
ETHICAL LEADERSHIP
Decision-making includes Personal,
Organizational and societal Values
Ethical Values always open to Discussion and
Criticism but …
Must have Fire Wall between Immutable
standards and Case-by-Case Exceptions
Accept Responsibility for sound Moral
Judgments: It’s in Everyone’s Job Description