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Organizational Ethics Week 4



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  • It’s not only the organization as a whole but the subcultures within the various departments that make up the organization’s culture*When the subculture’s cultures are the same as the organization’s, this means you have a strong organizational cultureEach department faces ethical dilemmas of different kinds
  • What is value chain: the key functional inputs provided to transform raw materials into a delivered product or service*Research & Development: develops and creates new product designs*Manufacturing: sources the components & builds the product*Marketing: advertising – promotes the product/service*
  • Within the value chain’s functional areas there are line functions that support them*HRM: coordinates recruitment, training, & personnel development*Finance: internal/external accounting personnel & external auditors*IS/IT: maintains data transfer/security, email, web sites, individual hardware & software*Management: supervisory role (oversees all operational functions)Each of these functional lines represent personnel, dollars & technology – all the resources an organization commits to
  • R&D professionals are responsible for a company’s future growth -they create the products that recruit new customers and bring current customers back
  • Utilitarianism – offer the greatest good to the greatest number of peopleUniversal Ethics – actions taken out of duty and obligation rather than based on the needs of the situation
  • Code of Ethics: doing no harm, fostering trust, and improving customer confidence in the integrity of the marketing exchange system while establishing clear ethical values of honesty, responsibility, fairness, respect, openness, & citizenshipSo even if a company follows this ethical code, is it really ethical to convince people to buy something they don’t really need?
  • Standard operating procedures accountants use to govern themselves*In order to keep investors satisfied, some corporation legally defer receipts from one quarter to the next *This can get tricky of what becomes deferment versus falsifying accounts/books


  • 1. Business Ethics & SocialResponsibilityMGMT 447
  • 2. Business Ethics• Differ from general ethics ▫ Stakeholders vested in the ethical performance of the organization ▫ Your work environment may provide situations that clash with your personal value system
  • 3. Organizational Culture• The values, beliefs, norms shared by employees of the organization• Sums up the policies and procedures of the functional departments within the organization
  • 4. Value Chain • R&D • Manufacturing • Marketing • Sales • Customer Service
  • 5. Value Chain cont…• Human Resource Management• Finance• Information Systems• Management
  • 6. R&D• Create new products ▫ Incorporate customer feedback ▫ Competitive feedback ▫ Strategic input• Ethical Dilemma ▫ Creating products of the highest quality, safety, & reliability all within a predetermined manufacturing cost
  • 7. Manufacturing• Build the designs created by R&D• Ethical Dilemmas ▫ Build it fast or build it right?
  • 8. Marketing• Includes ▫ Advertising ▫ PR ▫ Sales• Ensures the product reaches satisfied customers• Ethical Dilemmas ▫ Do customers really “need” these products ▫ Is this manipulation or placing a product in the hands of customers to better the customers’ lives?
  • 9. Marketing cont…• So who does a company owe responsibility to? ▫ Stockholders ▫ Customers• AMA Code of Ethics ▫ http://www.marketingpower.com/AboutAMA/Pa ges/Statement%20of%20Ethics.aspx• DMA Code of Ethics ▫ http://www.dmaresponsibility.org/guidelines/
  • 10. Human Resources• Job description• Recruitment/Selection of “right” candidate• New employee orientation• Payroll and benefits management• Performance review documentation• Disciplinary/training documentation• Career Development Program Plan• Final Paperwork/Benefit Severance/Exit Interview
  • 11. HR Cont…• Ethical Dilemmas ▫ Arise when there’s a failure to plan ahead• Should HR be at center of corporate code of ethics as its voice of reason? ▫ Ensure ethics is a top priority ▫ Ensure leadership selection & development ▫ Ensure proper programs & policies are in place ▫ Aware of ethical issues (legislation, etc)
  • 12. Finance• Financial transactions• Accounting function• Auditing function ▫ Internal
  • 13. Finance cont…• Ethical Challenges ▫ Falsifying Documents ▫ Embezzlement ▫ Fraudulent activity• GAAP• Bookkeeping Techniques• Conflict of Interest
  • 14. • Ford and Firestone: What went wrong? http://www.youtube.com/watch?v=wdxiglfVpK Q