Intro to Business CHAPTER TWO The New Ethical Environment

Intro to Business CHAPTER TWO The New Ethical Environment 1.Business ethics are continually in the news.

Intro to Business CHAPTER TWO The New Ethical Environment 1.Business ethics are continually in the news. Investigations, lawsuits, arrests, convictions, etc…

Intro to Business CHAPTER TWO The New Ethical Environment 1.Business ethics are continually in the news. Investigations, lawsuits, arrests, convictions, etc… 2.Theses stories obscure the fact that many firms are ethical

Intro to Business CHAPTER TWO The New Ethical Environment 1.Business ethics are continually in the news. Investigations, lawsuits, arrests, convictions, etc… 2.Theses stories obscure the fact that many firms are ethical Most Americans feel that their employers keep promises and respect and honesty is on the rise Most business owners and managers lead companies without breaking the rules

Intro to Business CHAPTER TWO The New Ethical Environment 1.Business ethics are continually in the news. Investigations, lawsuits, arrests, convictions, etc… 2.Theses stories obscure the fact that many firms are ethical Most Americans feel that their employers keep promises and respect and honesty is on the rise Most business owners and managers lead companies without breaking the rules GE’s CEO says that a firm stays on the most admired list due to virtue, execution, growth and great people.

Intro to Business CHAPTER TWO The New Ethical Environment 3. Not all firms meet ethical standards

Intro to Business CHAPTER TWO The New Ethical Environment 3.Not all firms meet ethical standards Americans feel that greed, poor values, and disinterest in preserving jobs affected too many companies Also feel that executives felt that preserving was a business issue, not an ethical issue

Intro to Business CHAPTER TWO New Government Regulations 1.Sarbanes-Oxley Act

Intro to Business CHAPTER TWO New Government Regulations 1.Sarbanes-Oxley Act Set new rules for business trading and financial reports Establishes new regulation for securities trading and accounting practices Requires companies to publish their code of ethics and inform public of changes in it Forces CEO’s to make sure that financial statements are accurate It may encourage companies to write codes and guidelines

Intro to Business CHAPTER TWO New Government Regulations 2.US Sentencing Commission Created by the federal government to create and enforce standards Institutionalizes ethics compliance programs and sets high ethical standards for corporate conduct

Intro to Business CHAPTER TWO New Ways for Companies to Regulate Themselves 1.Ethics Compliance Officers To deter wrongdoing and upholding standards To train employees to spot fraud and abuse To investigate sexual harassment and discrimination issues To monitor conflict of interest

Intro to Business CHAPTER TWO New Ways for Companies to Regulate Themselves 2.Audit departments and financial statements are linked to ethics reviews 3.Most important, CEO’s and top officers must now personally sign off on the accuracy of their firms financial statements.

Intro to Business CHAPTER TWO Individuals Make a Difference 1.Individuals can affect ethical expectations and behavior

Intro to Business CHAPTER TWO Individuals Make a Difference 1.Individuals can affect ethical expectations and behavior 2.Workers create current state of individual business ethics, and some act illegally or unethically on the job

Intro to Business CHAPTER TWO Individuals Make a Difference 1.Individuals can affect ethical expectations and behavior 2.Workers create current state of individual business ethics, and some act illegally or unethically on the job Survey shows that 1/3 of workers spend 30 minutes a day on the Internet and Personal Business Unethical behavior most often seen was lying, withholding information, abusing or intimidating employees, inaccurately reporting of time sheets and discrimination Consideration of co-workers is a less urgent but growing issue of personal ethics, particularly in tight quarters

Intro to Business CHAPTER TWO Individuals Make a Difference 3.Technology expands the range and impact of unethical behavior Computers allow anyone with access to steal, change data or shut down a system Hackers are often employees and inside attacks are expensive Intellectual Property can be more easily stolen. Ie patents and copyrights.

Intro to Business CHAPTER TWO Individuals Make a Difference 4.Nearly every employee wrestles with ethical questions Some rationalize behavior. “Everyone does it” Some act unethically when pressured or forced to meet performance quotas Others avoid actions that don’t mesh with their personal values and morals