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ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
ARC MGMT 374 Week 11 Presentation
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ARC MGMT 374 Week 11 Presentation

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  • 1. Chapter 8: Developing an Effective Ethics Program Part Four: Implementing Business Ethics in a Global Economy© 2013 Cengage Learning. All Rights Reserved. 1
  • 2. Corporations as Moral Agents Corporations increasingly are viewed as moral agents accountable to stakeholders  Companies cannot think through ethical issues like people do–laws and regulations are necessary to provide formal structural restraints and guidance on ethical issues  Individuals have a responsibility as moral agents© 2013 Cengage Learning. All Rights Reserved. 2
  • 3. Root Causes of Misconduct© 2013 Cengage Learning. All Rights Reserved. 3
  • 4. The Need for Organizational Ethics Programs It can be nearly impossible to know all laws related to ethics  Becoming sensitized to ethical issues can help  Organizations can become bad barrels  Opportunities for misconduct Understanding factors that influence ethical decision making can help companies encourage ethical behavior • Employees are not legal experts and need guidance© 2013 Cengage Learning. All Rights Reserved. 4
  • 5. The Need for Corporate Ethics Programs Organizations should develop an organizational ethics program by establishing, communicating, and monitoring uniform ethical values and legal requirements  A strong ethics program includes  Written code of conduct  Ethics officer to oversee the program  Care in the delegation of authority  Formal ethics training  Auditing, monitoring, enforcement, and revision of program standards© 2013 Cengage Learning. All Rights Reserved. 5
  • 6. An Effective Ethics Program Misconduct leads to low employee trust and high turnover  Ethics programs help employees to understand organizational values and comply with policies and codes of conduct  Cannot assume that employees will know how to behave in an organization© 2013 Cengage Learning. All Rights Reserved. 6
  • 7. An Ethics Program Can Help Avoid Legal Problems The FSGO encourages companies to assess key risks and create programs to address them  An ethics program can help a firm avoid civil liability  The company bears the burden of proving that it has an effective ethics program A program developed in the absence of misconduct will be more effective than one imposed as a reaction to scandal© 2013 Cengage Learning. All Rights Reserved. 7
  • 8. Minimum Requirements for Ethics and Compliance Programs© 2013 Cengage Learning. All Rights Reserved. 8
  • 9. Percentage of Boards Concerned About Personal Liability for Fraud, Bribery, and Corruption© 2013 Cengage Learning. All Rights Reserved. 9
  • 10. Compliance Versus Values Orientation  Compliance orientation  Requires that employees identify with and commit to specified conduct  Uses legal terms, statutes, and contracts to teach employees the rules and penalties for noncompliance  Values orientation  Focuses more on abstract ideals, such as respect and responsibility  Is most effective at creating ethical reasoning– employees learn to make values-based decisions© 2013 Cengage Learning. All Rights Reserved. 10
  • 11. Codes of Conduct Formal statements that describe what an organization expects of its employees  Codes of ethics  Most comprehensive  General statements that serve as principles and the basis for the rules of conduct  Statement of values  Serves the general public and addresses stakeholder interests© 2013 Cengage Learning. All Rights Reserved. 11
  • 12. Benefits of Having an Ethics Code© 2013 Cengage Learning. All Rights Reserved. 12
  • 13. Developing and Implementing a Code of Ethics/Conduct© 2013 Cengage Learning. All Rights Reserved. 13
  • 14. Corporate Codes of Ethics Often contain six core values 1. Trustworthiness 2. Respect 3. Responsibility 4. Fairness 5. Caring 6. Citizenship© 2013 Cengage Learning. All Rights Reserved. 14
  • 15. Ethics Officers Are responsible for oversight of the ethics/compliance program  Assess needs and risks  Develop and distribute the code  Conduct training programs for employees  Establish audits and control systems to ensure government compliance  Review and modify the program to improve effectiveness© 2013 Cengage Learning. All Rights Reserved. 15
  • 16. Ethics Training and Communication Must start with a theoretical foundation, code of ethics, procedure for airing ethical concerns, line and staff involvements, and executive priorities on ethics  Ethics training can  Educate employees about policies and expectations, laws and regulations, and general standards  Make employees aware of resources, support systems, and personnel  Empower employees© 2013 Cengage Learning. All Rights Reserved. 16
  • 17. Goals of Successful Ethics Training Programs© 2013 Cengage Learning. All Rights Reserved. 17
  • 18. Systems to Monitor and Enforce Ethical Standards Employee input helps to monitor training effectiveness  An effective ethics program uses many resources to monitor ethical conduct and measure program effectiveness  Observing employees  Internal audits  Surveys  Reporting systems  Investigations  Independent audits Employees do not report misconduct when they fear retaliation or think they will not make a difference© 2013 Cengage Learning. All Rights Reserved. 18
  • 19. Continuous Improvement Implementation requires designing activities to achieve organizational objectives using available resources and existing constraints  Translates a plan for action into operational terms  Establishes a means for monitoring, controlling, and improving the program Depends partly on how an organization structures resources and activities to achieve ethical objectives© 2013 Cengage Learning. All Rights Reserved. 19
  • 20. Employees Reporting That Their Company Has a Comprehensive Ethics Program (According to Organizational Size)© 2013 Cengage Learning. All Rights Reserved. 20
  • 21. Common Mistakes in Designing/Implementing an Ethics Program  Not understanding the goals of the program  Not setting realistic and measurable program objectives  Senior management’s failure to take ownership of the program  Developing program materials that do not address average employee needs  Designing a program without interactive components© 2013 Cengage Learning. All Rights Reserved. 21

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