ARC MGMT 374 Week 11 Presentation

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ARC MGMT 374 Week 11 Presentation

  1. 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. 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. 3. Root Causes of Misconduct© 2013 Cengage Learning. All Rights Reserved. 3
  4. 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. 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. 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. 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. 8. Minimum Requirements for Ethics and Compliance Programs© 2013 Cengage Learning. All Rights Reserved. 8
  9. 9. Percentage of Boards Concerned About Personal Liability for Fraud, Bribery, and Corruption© 2013 Cengage Learning. All Rights Reserved. 9
  10. 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. 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. 12. Benefits of Having an Ethics Code© 2013 Cengage Learning. All Rights Reserved. 12
  13. 13. Developing and Implementing a Code of Ethics/Conduct© 2013 Cengage Learning. All Rights Reserved. 13
  14. 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. 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. 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. 17. Goals of Successful Ethics Training Programs© 2013 Cengage Learning. All Rights Reserved. 17
  18. 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. 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. 20. Employees Reporting That Their Company Has a Comprehensive Ethics Program (According to Organizational Size)© 2013 Cengage Learning. All Rights Reserved. 20
  21. 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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