Transcript Business and Society

Outline






Statement of Values
Codes of Conduct and Ethics
Ethics Training
Ethics Audits and Consultants
Ethics Officers and Ethics Committees
Ethics Reporting Systems and
Whistleblowing
Chapter 6
Copyright © 2008 McGraw-Hill Ryerson Ltd.
1
Statement of Values


A description of the beliefs, principles, and basic
assumptions about what is desirable or worth
striving for in an organization.
Key components:





Chapter 6
Key stakeholder interests to be satisfied and balanced
Emphasis on quality and/or excellence
Efficiency
Work climate
Observance of codes
Copyright © 2008 McGraw-Hill Ryerson Ltd.
2
Codes of Conduct and Ethics


Code of conduct: explicitly states what
appropriate behaviour is by identifying what is
acceptable and unacceptable
Code of ethics: a statement of principles or
values that guide behaviour by describing the
general value system within which a
corporation attempts to operate in a given
environment.
Chapter 6
Copyright © 2008 McGraw-Hill Ryerson Ltd.
3
Types of Codes







Corporate or business enterprise
Professional organizations
Industry and sector
Single issue
Codes from national and international bodies
Example #1: UofL Student Citizenship
Example #2: Academy of Management Code
Chapter 6
Copyright © 2008 McGraw-Hill Ryerson Ltd.
4
Criticisms of Codes







Unenforceable
If enforced, penalties are insignificant
Unnecessary, as most corporations already
operate ethically 
Often idealistic
Written in meaningless generalities
Merely to prevent government legislation
Mere response to public criticism
Chapter 6
Copyright © 2008 McGraw-Hill Ryerson Ltd.
5
Ethics Training



Managers or outside consultants
Online exercises
Practical checklists and tests






Is it legal - baseline
Benefit/cost test - utilitarian
Categorical imperative - universalist
Light of day test – on TV
Do unto others – Golden rule
Ventilation test – second opinion
Source: Pagano, 1987
Chapter 6
Copyright © 2008 McGraw-Hill Ryerson Ltd.
6
Conflicts of Interest


Three types of conflict: (1) real; (2) apparent;
(3) potential
Examples:


Chapter 6
self-dealing; accepting gifts or benefits; influence
peddling; using employer’s property; using
confidential information; outside employment or
moonlighting; post-employment; personal conduct
Conflicts for university faculty members as
teachers, researchers, committee members and
consultants
Copyright © 2008 McGraw-Hill Ryerson Ltd.
7
Ethics Audits and Consultants




Systematic effort to discover actual or
potential unethical behaviour in an
organization.
Preventive and remedial purpose
Useful in conjunction with a code of ethics
Conducted by consultants
Chapter 6
Copyright © 2008 McGraw-Hill Ryerson Ltd.
8
Ethics Officers and Ethics Committees

Ethics officers:






Independent manager
Reports to the board of directors or CEO
Reviews complaints or information from anyone in the
organization or any stakeholder
Studies situation and recommends action
Responsible for the ethics program
Ethics committees:

Chapter 6
Comprising management, employees, and outside
stakeholders
Copyright © 2008 McGraw-Hill Ryerson Ltd.
9
Ethics Reporting Systems and
Whistleblowing



Whistleblowing: an act of voluntary disclosure
of inappropriate behaviour or decisions to
persons in positions of authority in an
organization.
Reporting systems (e.g., hotlines)
Example: Recall Air Canada / West Jet
Chapter 6
Copyright © 2008 McGraw-Hill Ryerson Ltd.
10
Whistleblowing: Issues






Remain silent, quit, or disclose wrongdoing?
Does obligation to employer supersede
obligation to self, profession, or industry?
Will whistleblower be believed?
Is whistleblower a hero or a snitch?
Who should the whistleblower contact?
What will the consequences be?
Chapter 6
Copyright © 2008 McGraw-Hill Ryerson Ltd.
11
Whistleblowing and Movies





Boiler Room (2000) - stock brokerage
A Civil Action (1998) - bad water
Erin Brockovich (2000) - bad water II
The Insider (1999) – tobacco industry
The Rainmaker (1997) - insurance denial
Chapter 6
Copyright © 2008 McGraw-Hill Ryerson Ltd.
12
Ethics: Who is Responsible?



Boards of directors?
Management?
Three models of moral management:




Immoral (devoid of ethical principles)
Amoral (without ethics, but not actively immoral)
Moral (conform to high standards of ethical
behaviour)
Recall discussion from last week
Source: Carroll, 2002
Chapter 6
Copyright © 2008 McGraw-Hill Ryerson Ltd.
13
Ethics Programs:
Evaluation and Benefits
Compliance-based
 Rules, laws
 Prevent criminal
conduct
 Lawyer-driven
 Employee discretion
limited
 Code of conduct
Chapter 6
Integrity-based
 Values/ethics/principles
 Enable responsible
conduct
 Management-driven
 Employee discretion
increased
 Code of ethics
Copyright © 2008 McGraw-Hill Ryerson Ltd.
14