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Isma Business Ethics Sweat The Small Stuff

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Isma Business Ethics Sweat The Small Stuff

  1. 1. Business Ethics “Sweat the Small Stuff” 2003 Winter Meeting Kevin C. Swailes Chairman & CEO Swailes & Co.
  2. 2. Business Ethics The World’s Perception
  3. 3. Corporate Ethics “A New Era”
  4. 4. Corporate Ethics “A New Era”
  5. 6. 20 03 Business Ethics
  6. 7. <ul><li>Barnes & Noble (Houston-wide) </li></ul>20 03 Business Ethics
  7. 8. <ul><li>Barnes & Noble (Houston-wide) </li></ul><ul><li>125 Titles In The Computer </li></ul><ul><li>None in Stock Throughout City </li></ul>20 03 Business Ethics
  8. 9. <ul><li>Barnes & Noble (Houston-wide) </li></ul><ul><li>125 Titles In The Computer </li></ul><ul><li>None in Stock Throughout City </li></ul><ul><li>“ Not Sold Out, Just Don’t Carry” </li></ul>20 03 Business Ethics
  9. 11. 20 03 Business Ethics
  10. 12. 20 03 Business Ethics <ul><li>Publishing Capital of the World </li></ul><ul><ul><li>New York City, Rockefeller Center </li></ul></ul>
  11. 13. <ul><li>“Plenty of Selection” </li></ul>20 03 Business Ethics
  12. 14. <ul><li>“ Plenty of Selection” </li></ul><ul><li>No Business Ethics Books Found </li></ul>20 03 Business Ethics
  13. 15. <ul><li>“ Plenty of Selection” </li></ul><ul><li>No Business Ethics Books Found </li></ul><ul><li>Business Etiquette ?? </li></ul>20 03 Business Ethics
  14. 16. <ul><li>“ Plenty of Selection” </li></ul><ul><li>No Business Ethics Books Found </li></ul><ul><li>Business Etiquette ?? </li></ul><ul><li>“ You Mean Like Enron?” </li></ul>20 03 Business Ethics
  15. 17. A Study in Ethics? Books About Enron
  16. 19. Index Reveals. . . Ethics
  17. 20. Index Reveals. . . Mark to Market Accounting Obstruction of Justice Anti-Emission Treaties Auditing Conflicts of Interest Core Values Ethics
  18. 21. Index Reveals. . . Mark to Market Accounting Obstruction of Justice Anti-Emission Treaties Auditing Conflicts of Interest Core Values No Reference to Ethics Ethics
  19. 22. Academia and Ethics Trip to the University Library
  20. 24. <ul><li>Multiple Titles </li></ul>
  21. 25. <ul><li>Multiple Titles </li></ul><ul><li>Very Detailed Works </li></ul>
  22. 26. <ul><li>Multiple Titles </li></ul><ul><li>Very Detailed Works </li></ul><ul><li>First Use of the Word “Ethics” as a Branch of Philosophy - by Aristotle . </li></ul>
  23. 27. <ul><li>Multiple Titles </li></ul><ul><li>Very Detailed Works </li></ul><ul><li>First Use of the Word “Ethics” as a Branch of Philosophy - by Aristotle . </li></ul><ul><li>It’s Meaning In Greek was literally “What pertains to a man’s character.” </li></ul>Source: David Bostock, Oxford University Press, 2000
  24. 28. A lot of Great Information. . .
  25. 29. A lot of Great Information. . . But Nowhere to Go!
  26. 30. Business Ethics A Different Approach?
  27. 31. NY Times Best Seller
  28. 32. Malcolm Gladwell
  29. 33. Malcolm Gladwell <ul><li>Former business and science writer at the Washington Post and currently a staff writer for The New Yorker. </li></ul>
  30. 34. Malcolm Gladwell <ul><li>Former business and science writer at the Washington Post and currently a staff writer for The New Yorker. </li></ul><ul><li>His book draws from psychology, sociology and epidemiology. </li></ul>
  31. 35. Malcolm Gladwell <ul><li>Former business and science writer at the Washington Post and currently a staff writer for The New Yorker. </li></ul><ul><li>His book draws from psychology, sociology and epidemiology. </li></ul><ul><li>Small Factors influence Large Epidemics (Counterintuitive to Cause & Effect.) </li></ul>
  32. 36. Theory in Criminology Presented in The Tipping Point
  33. 37. Broken-Windows
  34. 38. Dr. Philip Zimbardo
  35. 39. Dr. Philip Zimbardo <ul><li>Professor of Psychology at Stanford University </li></ul>
  36. 40. Dr. Philip Zimbardo <ul><li>Professor of Psychology at Stanford University </li></ul><ul><li>1969 Experiment </li></ul>
  37. 41. Dr. Philip Zimbardo <ul><li>Professor of Psychology at Stanford University </li></ul><ul><li>1969 Experiment </li></ul><ul><li>2 - 1959 Oldsmobile Vehicles </li></ul><ul><ul><li>No License Plates, Hoods Raised </li></ul></ul>
  38. 42. Dr. Philip Zimbardo <ul><li>Professor of Psychology at Stanford University </li></ul><ul><li>1969 Experiment </li></ul><ul><li>2 - 1959 Oldsmobile Vehicles </li></ul><ul><ul><li>No License Plates, Hoods Raised </li></ul></ul><ul><li>One in the Bronx One Near Stanford’s Campus </li></ul>
  39. 43. How Long Did the Olds sit in the Bronx before it was targeted?
  40. 44. 10 Minutes How Long Did the Olds sit in the Bronx before it was targeted?
  41. 45. 10 Minutes A Family - A Father, Mother, & Son Took the Radiator and Battery How Long Did the Olds sit in the Bronx before it was targeted?
  42. 46. How Long Did the Olds sit by Stanford University?
  43. 47. How Long Did the Olds sit by Stanford University? 1 Week Untouched
  44. 48. Dr. Philip Zimbardo Source: Wilson, James. George Kelling, The Atlantic Monthly, March 1982.
  45. 49. Dr. Philip Zimbardo <ul><li>Used an additional “releaser signal” for the Stanford Vehicle. </li></ul><ul><ul><li>Took a sledgehammer and smashed part of the vehicle. </li></ul></ul>Source: Wilson, James. George Kelling, The Atlantic Monthly, March 1982.
  46. 50. Dr. Philip Zimbardo <ul><li>Used an additional “releaser signal” for the Stanford Vehicle. </li></ul><ul><ul><li>Took a sledgehammer and smashed part of the vehicle. </li></ul></ul><ul><li>Soon, passersby were joining in. </li></ul>Source: Wilson, James. George Kelling, The Atlantic Monthly, March 1982.
  47. 51. Dr. Philip Zimbardo <ul><li>Used an additional “releaser signal” for the Stanford Vehicle. </li></ul><ul><ul><li>Took a sledgehammer and smashed part of the vehicle. </li></ul></ul><ul><li>Soon, passersby were joining in. </li></ul><ul><li>“Within a few hours, the car had been turned upside down and utterly destroyed.” </li></ul>Source: Wilson, James. George Kelling, The Atlantic Monthly, March 1982.
  48. 52. The Atlantic Monthly James Q. Wilson Political Scientist & George L. Kelling Criminologist
  49. 53. March 1982
  50. 54. March 1982 <ul><li>Broken Windows is Title of an Article by Wilson & Kelling that references Zimbardo study. </li></ul>
  51. 55. March 1982 <ul><li>Broken Windows is Title of an Article by Wilson & Kelling that references Zimbardo study. </li></ul><ul><li>About Community Policing. </li></ul>
  52. 56. March 1982 <ul><li>Broken Windows is Title of an Article by Wilson & Kelling that references Zimbardo study. </li></ul><ul><li>About Community Policing. </li></ul><ul><li>States that Broken Windows that remain unrepaired will result in more Broken Windows. </li></ul>
  53. 57. When People Sense No Apparent Authority. . . Crime Escalates
  54. 58. New York City “A Case Study of Transformation”
  55. 59. A Case Study in NYC
  56. 60. A Case Study in NYC <ul><li>New York City had Big Problems – Rampant Crime (8,000 people shot in 1990) and Subway was “close to collapse” </li></ul>
  57. 61. A Case Study in NYC <ul><li>New York City had Big Problems – Rampant Crime (8,000 people shot in 1990) and Subway was “close to collapse” </li></ul><ul><li>David Gunn, Director of Transit Authority Proposes a Broken-Windows Approach to the Problem. </li></ul>
  58. 62. A Case Study in NYC <ul><li>New York City had Big Problems – Rampant Crime (8,000 people shot in 1990) and Subway was “close to collapse” </li></ul><ul><li>David Gunn, Director of Transit Authority Proposes a Broken-Windows Approach to the Problem. </li></ul><ul><li>Not a Very Popular Viewpoint. </li></ul>
  59. 63. Deal with the Graffiti What about the Major Crime?
  60. 64. NYC Subway Car Source: Prof Chris Leo urban development gallery Circa 1982
  61. 65. NYC Subway Car Source: Prof Chris Leo urban development gallery Circa 1982 Every Car - Every Day - No Graffiti
  62. 66. NYC - A Case Study
  63. 67. <ul><li>Hired William Bratton to head the Transit Police Department </li></ul>NYC - A Case Study
  64. 68. <ul><li>Hired William Bratton to head the Transit Police Department </li></ul><ul><li>Bratton Initiates Broken-Windows and announces he will go after the fare-beaters. </li></ul>NYC - A Case Study
  65. 69. <ul><li>Hired William Bratton to head the Transit Police Department </li></ul><ul><li>Bratton Initiates Broken-Windows and announces he will go after the fare-beaters. </li></ul><ul><li>Again, opposition is vocal. </li></ul><ul><ul><li>What about Major Crime? </li></ul></ul>NYC - A Case Study
  66. 70. <ul><li>Fare-Beaters are checked for weapons and outstanding warrants. </li></ul>NYC - A Case Study
  67. 71. <ul><li>Fare-Beaters are checked for weapons and outstanding warrants. </li></ul><ul><li>Correlation is apparent. </li></ul>NYC - A Case Study
  68. 72. <ul><li>Fare-Beaters are checked for weapons and outstanding warrants. </li></ul><ul><li>Correlation is apparent. </li></ul><ul><li>Crime starts to Reduce </li></ul>NYC - A Case Study
  69. 73. NYC Takes Notice
  70. 74. <ul><li>Bratton is recruited as Commissioner of Police. </li></ul>NYC Takes Notice
  71. 75. <ul><li>Bratton is recruited as Commissioner of Police. </li></ul><ul><li>Takes on Squeegee Men & Vagrants </li></ul>NYC Takes Notice
  72. 76. <ul><li>Bratton is recruited as Commissioner of Police. </li></ul><ul><li>Takes on Squeegee Men & Vagrants </li></ul><ul><li>Again, Vocal Opponents </li></ul>NYC Takes Notice
  73. 77. RESULTS?
  74. 78. RESULTS? YES Look at NYC Today
  75. 79. Who Do You Think Got The Credit?
  76. 80. Our Favorite Mayor Who Do You Think Got The Credit?
  77. 81. 2003 Mexico City “Broken-Windows”
  78. 82. New York City Broken Windows Graffiti Giuliani Dr. Zimbardo
  79. 83. What’s Your Point? New York City Broken Windows Graffiti Giuliani Dr. Zimbardo
  80. 84. Corporate Ethics Program Volume 1-49 Lofty Goals In Search of Business Ethics
  81. 85. Corporate Ethics Program Volume 1-49 Too Many Controls Complicated Program
  82. 86. Corporate Ethics Program Volume 1-49 Too Many Controls Complicated Program Getting a Drink from a Fire Hose
  83. 87. Corporate Ethics Program Volume 1-49 Ms. Becky Johnson, Ethics Compliance Officer “ Do This, Or Else!”
  84. 88. Corporate Ethics Program Volume 1-49 Some Ideas Are Good
  85. 89. Corporate Ethics Program Volume 1-49 Some Ideas Are Good But They May Have APPLICATION PROBLEMS
  86. 90. What Are Your Broken Windows?
  87. 91. Saying One Thing . . . But Doing Another?
  88. 92. Saying One Thing . . . But Doing Another?
  89. 93. How Important is Leading By Example?
  90. 94. Keith C. Swailes
  91. 95. Keith C. Swailes <ul><li>Handwritten Notes </li></ul>
  92. 96. Keith C. Swailes <ul><li>Handwritten Notes </li></ul><ul><li>Entrepreneur’s Class </li></ul>
  93. 97. Keith C. Swailes <ul><li>Handwritten Notes </li></ul><ul><li>Entrepreneur’s Class </li></ul><ul><li>30 Years Ago </li></ul>
  94. 98. Keith C. Swailes <ul><li>Handwritten Notes </li></ul><ul><li>Entrepreneur’s Class </li></ul><ul><li>30 Years Ago </li></ul><ul><li>The Importance of “Situational Ethics” </li></ul>
  95. 99. Keith C. Swailes <ul><li>Handwritten Notes </li></ul><ul><li>Entrepreneur’s Class </li></ul><ul><li>30 Years Ago </li></ul><ul><li>The Importance of “Situational Ethics” </li></ul><ul><li>Teaching by Example </li></ul>
  96. 100. Can Behavior Change Organizational Ethics?
  97. 101. “ Don’t Ask, Don’t Tell” In the Oil Patch
  98. 102. A Case Study of “Front Running”
  99. 103. <ul><li>A Client had Lost Valuable Information to Competition </li></ul>A Case Study of “Front Running”
  100. 104. <ul><li>A Client had Lost Valuable Information to Competition </li></ul><ul><li>“ There’s A Mole!” </li></ul>A Case Study of “Front Running”
  101. 105. <ul><li>A Client had Lost Valuable Information to Competition </li></ul><ul><li>“ There’s A Mole!” </li></ul><ul><li>Interview of Contract Landman </li></ul>A Case Study of “Front Running”
  102. 106. <ul><li>A Client had Lost Valuable Information to Competition </li></ul><ul><li>“ There’s A Mole!” </li></ul><ul><li>Interview of Contract Landman </li></ul><ul><li>Asked about Two Companies in AMI </li></ul>A Case Study of “Front Running”
  103. 107. <ul><li>A Client had Lost Valuable Information to Competition </li></ul><ul><li>“ There’s A Mole!” </li></ul><ul><li>Interview of Contract Landman </li></ul><ul><li>Asked about Two Companies in AMI </li></ul><ul><li>Company 1 - “People always talk.” </li></ul>A Case Study of “Front Running”
  104. 108. <ul><li>A Client had Lost Valuable Information to Competition </li></ul><ul><li>“ There’s A Mole!” </li></ul><ul><li>Interview of Contract Landman </li></ul><ul><li>Asked about Two Companies in AMI </li></ul><ul><li>Company 1 - “People always talk.” </li></ul><ul><li>Company 2 - “We NEVER TALK” </li></ul>A Case Study of “Front Running”
  105. 109. <ul><li>A Client had Lost Valuable Information to Competition </li></ul><ul><li>“ There’s A Mole!” </li></ul><ul><li>Interview of Contract Landman </li></ul><ul><li>Asked about Two Companies in AMI </li></ul><ul><li>Company 1 - “People always talk.” </li></ul><ul><li>Company 2 - “We NEVER TALK” </li></ul><ul><li>There’s No Mole, There’s A Hole </li></ul>A Case Study of “Front Running”
  106. 110. Broken Windows Today
  107. 111. Lack of Consistency Policies with No Action Broken Windows Today
  108. 112. Lack of Consistency Policies with No Action Broken Windows Today Breakdown of Ethics. . . Malfeasance Increases
  109. 113. Light at the End of the Tunnel
  110. 114. Business Practices & Ethics Programs Left Unattended, will (over time) Create Larger and More Complex Problems. A perception of “Lacking Authority” or “Nobody Really Cares” Creates a Climate Conducive to Breakdown. Empirical Data
  111. 115. Reversing the Trend In Today’s Business Climate
  112. 116. Reversing the Trend In Today’s Business Climate Small Things Make the Difference
  113. 117. Small Things Make the Difference <ul><li>Management Example </li></ul><ul><ul><li>Situational Ethics </li></ul></ul><ul><ul><ul><li>Decide What Side of the Counter </li></ul></ul></ul><ul><ul><li>Standards must be Reasonable </li></ul></ul>
  114. 118. Small Things Make the Difference <ul><li>Management Example </li></ul><ul><ul><li>Situational Ethics </li></ul></ul><ul><ul><ul><li>Decide What Side of the Counter </li></ul></ul></ul><ul><ul><li>Standards must be Reasonable </li></ul></ul><ul><li>Ethics Briefing at Time of Hire </li></ul>
  115. 119. Small Things Make the Difference <ul><li>Management Example </li></ul><ul><ul><li>Situational Ethics </li></ul></ul><ul><ul><ul><li>Decide What Side of the Counter </li></ul></ul></ul><ul><ul><li>Standards must be Reasonable </li></ul></ul><ul><li>Ethics Briefing at Time of Hire </li></ul><ul><li>Senior Management Support </li></ul>
  116. 120. Small Things Make the Difference <ul><li>Management Example </li></ul><ul><ul><li>Situational Ethics </li></ul></ul><ul><ul><ul><li>Decide What Side of the Counter </li></ul></ul></ul><ul><ul><li>Standards must be Reasonable </li></ul></ul><ul><li>Ethics Briefing at Time of Hire </li></ul><ul><li>Senior Management Support </li></ul><ul><li>Auditing & Monitoring Behavior against Standards </li></ul>
  117. 121. Small Things Make the Difference <ul><li>Management Example </li></ul><ul><ul><li>Situational Ethics </li></ul></ul><ul><ul><ul><li>Decide What Side of the Counter </li></ul></ul></ul><ul><ul><li>Standards must be Reasonable </li></ul></ul><ul><li>Ethics Briefing at Time of Hire </li></ul><ul><li>Senior Management Support </li></ul><ul><li>Auditing & Monitoring Behavior against Standards </li></ul><ul><li>Speed of Follow-up & Investigation is Critical </li></ul><ul><ul><li>Indicator of Importance </li></ul></ul>
  118. 122. Small Things Make the Difference <ul><li>Management Example </li></ul><ul><ul><li>Situational Ethics </li></ul></ul><ul><ul><ul><li>Decide What Side of the Counter </li></ul></ul></ul><ul><ul><li>Standards must be Reasonable </li></ul></ul><ul><li>Ethics Briefing at Time of Hire </li></ul><ul><li>Senior Management Support </li></ul><ul><li>Auditing & Monitoring Behavior against Standards </li></ul><ul><li>Speed of Follow-up & Investigation is Critical </li></ul><ul><ul><li>Indicator of Importance </li></ul></ul><ul><li>Confidential Reporting via Hot Line </li></ul>
  119. 123. Small Things Make the Difference <ul><li>Companies are Shy to Publish Prosecution </li></ul><ul><ul><li>Press Releases can be Valuable </li></ul></ul>
  120. 124. Small Things Make the Difference <ul><li>Companies are Shy to Publish Prosecution </li></ul><ul><ul><li>Press Releases can be Valuable </li></ul></ul><ul><li>Internal Advisories </li></ul>
  121. 125. Small Things Make the Difference <ul><li>Companies are Shy to Publish Prosecution </li></ul><ul><ul><li>Press Releases can be Valuable </li></ul></ul><ul><li>Internal Advisories </li></ul><ul><li>Educate - Ethics Are not Free </li></ul><ul><ul><li>Sometimes There Are Costs </li></ul></ul>
  122. 126. Small Things Make the Difference <ul><li>Companies are Shy to Publish Prosecution </li></ul><ul><ul><li>Press Releases can be Valuable </li></ul></ul><ul><li>Internal Advisories </li></ul><ul><li>Educate - Ethics Are not Free </li></ul><ul><ul><li>Sometimes There Are Costs </li></ul></ul><ul><li>Annualize Employee Acknowledgement </li></ul>
  123. 127. Small Things Make the Difference <ul><li>Companies are Shy to Publish Prosecution </li></ul><ul><ul><li>Press Releases can be Valuable </li></ul></ul><ul><li>Internal Advisories </li></ul><ul><li>Educate - Ethics Are not Free </li></ul><ul><ul><li>Sometimes There Are Costs </li></ul></ul><ul><li>Annualize Employee Acknowledgement </li></ul><ul><li>Ongoing Ethics Briefings using Sanitized Examples (Very Powerful to Deter & Detect ) </li></ul>
  124. 128. Simplicity of Message Ethics in Action &
  125. 129. Simplicity at West Point
  126. 130. Honor Code
  127. 131. General Douglas MacArthur
  128. 132. General Douglas MacArthur <ul><li>Formalized the Cadet Honor Code </li></ul>
  129. 133. General Douglas MacArthur <ul><li>Formalized the Cadet Honor Code </li></ul><ul><li>Cadet at West Point 1899-1903 </li></ul>
  130. 134. General Douglas MacArthur <ul><li>Formalized the Cadet Honor Code </li></ul><ul><li>Cadet at West Point 1899-1903 </li></ul><ul><li>Superintendent 1919-1922 </li></ul>
  131. 135. General Douglas MacArthur <ul><li>Formalized the Cadet Honor Code </li></ul><ul><li>Cadet at West Point 1899-1903 </li></ul><ul><li>Superintendent 1919-1922 </li></ul><ul><li>2nd Father of West Point </li></ul>
  132. 136. General Douglas MacArthur <ul><li>Retired in 1937, But Returned to Service in 1941 per President Roosevelt’s Request </li></ul>
  133. 137. General Douglas MacArthur <ul><li>Retired in 1937, But Returned to Service in 1941 per President Roosevelt’s Request </li></ul><ul><li>Supreme Allied Commander </li></ul>
  134. 138. General Douglas MacArthur <ul><li>Retired in 1937, But Returned to Service in 1941 per President Roosevelt’s Request </li></ul><ul><li>Supreme Allied Commander </li></ul><ul><li>He accepted the Surrender of Japan on Sept. 2, 1945 </li></ul>
  135. 139. General Douglas MacArthur <ul><li>Final Visit to West Point - 1962 </li></ul>
  136. 140. General Douglas MacArthur <ul><li>Final Visit to West Point - 1962 </li></ul><ul><li>To Be Honored with the Thayer Award </li></ul>
  137. 141. General Douglas MacArthur <ul><li>Final Visit to West Point - 1962 </li></ul><ul><li>To Be Honored with the Thayer Award </li></ul><ul><li>Famous Speech </li></ul>
  138. 142. General Douglas MacArthur <ul><li>Final Visit to West Point - 1962 </li></ul><ul><li>To Be Honored with the Thayer Award </li></ul><ul><li>Famous Speech </li></ul><ul><li>Did not Bask in the Glory of the Moment </li></ul>
  139. 143. General Douglas MacArthur <ul><li>Final Visit to West Point - 1962 </li></ul><ul><li>To Be Honored with the Thayer Award </li></ul><ul><li>Famous Speech </li></ul><ul><li>Did not Bask in the Glory of the Moment </li></ul><ul><li>Used his time for a Simple Message </li></ul>
  140. 144. Ethics of the American Soldier Duty Honor Country
  141. 145. Ethics of the American Soldier Duty Honor Country

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