Developing an Effective Ethics Program
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The responsibility of the corporation as a
moral agent
The need for organizational ethics programs
An effective ethics program
An ethics program can help avoid legal
problems
Codes of conduct
Ethics officers
Ethics training and communication
Systems to monitor and enforce ethical
standards
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Enron had a code of ethics and was a member
of the Better Business Bureau. Discuss this
statement?
Business ethics programs have the potential
to help top managers establish an ethical
culture and eliminate the opportunity for
unethical conduct.
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Do you view orgs only as a profit making
entities? Or as a moral agents?
As moral agents, companies need to obey the
laws and regulations that define acceptable
business conduct.
Companies are not human. That is why laws
and regulations are necessary to provide
formal structural restraints and guidance on
ethical issues. See figure 8-1 and read.
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Doctor’s excuse
And read the list on page 355.
Ethics programs are required? Why?
Yes they are to help sensitize employees to
the potential legal and ethical issues within
their work environments. Some time you
might not know that speaking to a friend
about how you make the product is unethical.
That is why creating ethics program is
important to know and recognize ethical
issues from non ethical.
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Would you terminate unethical person?
Consider the bad apple analogy.
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A company must have an effective program to
ensure that all employees understand its
values and comply with the policies and code
of conduct that create its ethical culture.
People are coming to work from different
cultures and different backgrounds, that is
why they need to have a program of
consistent ethical standards of what is right
and what is not.
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Using “carrot and stick” approach internally
before used on the company externally.
Governments and governmental agencies may
use the above approach on companies. Like
the Sarbanes –Oxley Act in the US.
Again the value orientation vs the compliance
orientation.
Code of conduct: formal statements that
describe what an org expects of its
employees
 Forms of such statements are:
1- code of ethics: most comprehensive and
consists of general statements, some times
inspirational statements but usually specifies
acceptable or unacceptable types of behavior.
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2-code of conduct: regulatory in nature and
entails less debate.
Problems with code of ethics
a. Not promoted and employees don’t read.
b. Not easily accessible
c. Not understandable by average employees
(legal terminologies).
d. Vague and does not provide clear direction.
e. Top management never refer to the code in
spirit.
3- statement of values: it serves the general
public and stakeholders.
These terms are used interchangeably.
Code of ethics reflect what???
It reflects top management’s desire for
compliance with the values, rules, and
policies that support an ethical culture.
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Code of ethics care about 6 values:
1. Trustworthiness
2. Respect
3. Responsibility
4. Fairness
5. Caring
6. Citizenship
Such values require distribution, training, and
support by top mgt.
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Codes of conduct will not resolve every
ethical issue encountered in daily operations.
But they help employees and managers deal
with ethical dilemmas by prescribing specific
activities.
How would you promote your code of
conduct or code of ethics?
Code of ethics specifies that employees must
act with zero tolerance toward bribery, fraud,
and corruption in all areas and functions.
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Codes of conduct do not have to be so
detailed that they take into account every
situation but they should provide guidelines
that are capable of helping employees
achieve organizational ethical objectives and
addressing risks in an accepted way.
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Recognition by national awards like Business
Ethics “100 Best Corporate Citizens” as a list.
Do you want to be in the list so you need to
create and nurture programs in such
direction
Fortune list of America’s most admired
companies. Texas Instruments ranked
number one for 3 years.
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High ranking persons to enforce business
ethics and code of ethics programs, those
known to respect ethics, values and
principles.
What are their responsibilities?
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Training objectives
Training methods
To inform
To educate
And to get feedback and understanding of
the purpose or purposes behind the ethical
program and training
Employee participation and involvement
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Observing employees
Internal audits
Surveys
Reporting systems-hotline
Investigations
External auditing
Disciplinary actions
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Misunderstanding the goals and objectives of
the program.
Leadership is not a role model
Unrealistic goals
No leadership support and ownership of the
program
Unable to address employees’ needs and
problems
Unable to recognize cross cultural differences
Impractical programs
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The existence and enforcement of company rules
and procedures limit unethical practices in the
organization.
What is communication means here?
Change must start from the top and by the top.
Systems to monitor and enforce ethical standards
Continuous improvement
Common mistakes in designing and implementing
an ethics program.
Review the chapter and say in a paragraph; what
would you do as a manager to create an effective
ethics program.