1
Running head: CONDUCT ANALYSIS
Business Conduct Analysis
Anthony Johnson
STL 435- Strategic Leadership
March 23, 2014
Dr. Whitney Stevens
Southwestern College Professional Studies
2
CONDUCT
Abstract
How a company approaches ethical behavior in business dealings is important for the long-term
health of the company. Examining what are ethical norms for two large companies will provide
contrasting information that will provide a better picture of what quality ethical behavior consists
of. This paper will examine the stated standards of conduct for both the Walt Disney Company
and CBS Broadcasting. Analyzing the strengths and weaknesses of both will provide a better
understanding of ethical business behavior.
3
CONDUCT
Business Conduct Analysis
How a company is presented to the world, and conducts itself is important for its overall
success. A company gains a reputation as it grows, and a positive reputation can be hard to
achieve, and even easier to loose. It is important that a company conducts itself in an ethical
manner at all times, not only because it is the right ethical choice to make, but because this is in
its overall long term interest. A company that has a positive ethical impression on the general
populace is more likely to be trusted with the business and investment of consumers (David,
2013). Companies that engage in unethical behavior can be doomed to eventual failure, as this
behavior will eventually comes to the light of day. How ethical business practices are instituted
in any company is important for its overall long-term well being.
The larger a company is, the more likely that it will face ethical issues. This is due to
several factors, but two of the most common are: more personalities lead to a greater risk of
unethical behavior, and expanding stakeholders require even more effort to keep all parties
satisfied. Trying to keep these demands met may lead to questionable choices being made. These
responsibilities are why companies need to hone in on ethical behavior from the start. The
Business Conduct Statement the companies provide will allow all stakeholders to picture what
the ethical norms are for any large company. This paper will examine and contrast the Business
conduct statements from both the Walt Disney Corporation and CBS, Broadcasting. Both
corporations are competitors with one another, so an accurate contrast of how similar entities
approach ethical behavior in a business setting can be drawn.
The Ethics of Walt Disney
The Walt Disney Company has been a powerhouse in the entertainment industry since its
founding in the 1920’s. The company has an expansive reach across several different industries,
CONDUCT
4
with a large employee base and worldwide recognizable brand. These factors lead the company
to be protective about how it serves its stakeholders and protects its reputations. In their 2012
business conduct statement, the company lists out their approach to ethical considerations, as
they relate to their customers, employees, vendors and shareholders (The Walt Disney Company,
2012). The company must be conscious of their responsibilities for each of these sectors in order
to encourage ethical consideration from the top down. If a company is invested in their ethical
behavior from the CEO level down, it is more likely that that behavior will be emulated across
the workforce.
The company’s business conduct statement is very aggressive on how it approaches gifts,
customer safety, and vendor consideration (The Walt Disney Company, 2012). All three
elements are essential for a company to be both ethical and successful. Gifts from outside
individuals can influence the decisions of managers and leaders at all levels of the company, and
it can be hard to tell the difference between legitimate gifts and bribes. It is important to have a
hard stance to prevent behavior that may be unseemly, and Disney is firm about their policy (The
Walt Disney Company, 2012). The company is stand fast on their commitment to the safety of
their customers (The Walt Disney Company, 2012). This is important, as some companies have
taken shortcuts in their safety practices in order to increase revenue. This may work out for the
short term, but if a safety related incident occurs, it can ruin the brand. It is important to practice
ethical behavior not only for morality reasons, but because the long-term survival of the
company can often be at stake (David, 2013). This ties into the fact that outside vendors the
company may hire need not be given preference in their treatment; this allows Disney to treat all
companies fairly. Honest operators are needed in any field. Disney encourages this type of
behavior from the top down in their ethical statement.
5
CONDUCT
While the company has many positive factors in their ethical approach, they are lax in
their approach to considerations for third country workers, fair pay standards, and encouraging
diversity. The company employs many third country workers in their resort and cruise line
divisions, often at far lower salaries than their American counterparts (Yahoo Finance). At the
same time, the company does not seriously address how they plan to ensure both diversity in the
workforce, and equal pay for all same-talented individuals (The Walt Disney Company, 2012).
Not addressing these issues could put Disney at risk for lawsuits and losing the best talent to
rivals.
Conduct at CBS
CBS, as a major competitor of Disney, has as much at stake as Disney in pursuing ethical
behavior in order to protect the brand. Their approach to business ethics has much of the same
approaches as Disney, but with their own strengths and failings. The company is good at
promoting an equal opportunity workplace, protecting intellectual privacy, and cracking down on
insider trading. However, they are weak in promoting advocacy of the customer, addressing
possible bribery form outside sources, and establishing a safe reporting mechanism for all
players to report grievances (CBS, 2012). Employees need to be able to feel that they can report
issues without fear of reprisal (David, 2013), as a company that communicates is more likely to
avoid potential business and ethical hazards. Self-policing is one of the best methods a company
has to avoid any negative effects of unethical behavior on the company as a whole.
CBS has their own ethical challenges, but addressing them in a forceful way will allow
the company to avoid as many negative repercussions of unethical behavior. Unfortunately for
CBS, several of their employees are world-renowned entertainment figures who will be firmly in
the light of day at the first sign of unethical behavior (CBS, 2012). This forces the company to
6
CONDUCT
try to mitigate and prevent as many public lapses of unethical behavior as possible. Ethical
statements are often not enough, companies need to be constantly on the lookout for possible
ethical breakdowns and address them in ways that will prevent the same type of behavior from
happening in the future.
Conclusion
Writing down ethical conduct is great, as it gives a common frame of reference for all
stakeholders to follow. However, it is often not enough and more action is needed to ensure that
ethical behavior is being followed. Companies need to periodically review their statements on
conduct and determine if they are still relevant. Guarding against unethical behavior is a constant
struggle that requires vigilance. Both CBS and Disney are proactive in their approach to ensuring
ethical approaches in business. Harming their brands with a lapse in ethical conduct could doom
either company, or at least damage their bottom line. Avoiding this fate, while behaving in an
ethical manner is a vital consideration for all involved.
7
CONDUCT
References
CBS. (2012). CBS 2012 Buisness Conduct Statement. Retrieved 03 19, 2014, from CBS
Corporation: http://www.cbscorporation.com/ourcompany.php?id=213
David, F. R. (2013). Strategic management: A competitive advantage approach (14th ed.).
Upper Saddle River, NJ: Prentice Hall.
Ferell, L., Ferrell, O., & Fraedrich, J. (2013). Buisness ethics: Ethical decision making and
cases. Mason, OH: South-Western.
The Walt Disney Company. (2012). 2012 Standards of Buisness COnduct. Retrieved 03 19,
2014, from The Walt Disney Company:
http://cdn.media.ir.thewaltdisneycompany.com/forms/DIS-SBC-CM.pdf
Yahoo Finance. (n.d.). The Walt Disney company (DIS). Retrieved 02 23, 2014, from Yahoo
Finance: http://finance.yahoo.com/q/co?s=DIS+Competitors
CONDUCT
8