What Employees Need to Know

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Presentation transcript:

What Employees Need to Know Business Ethics What Employees Need to Know Today, we’re going to talk about business ethics. With all the pressures and concerns you face on the job, you might think that ethical concerns would be low on your list of priorities. But that would be a mistake. Ethical conduct by all employees is essential for a business to succeed and prosper. In our organization we require all employees to act ethically at all times on the job. The purpose of today’s training session is to make sure you understand what’s required of you.

Session Objectives Recognize the importance of business ethics Understand the requirements of the law and our ethics policy Identify ethical problems on the job Make ethical decisions The main objective of this session is to create awareness of ethical issues in business and ensure that you always know the ethical course of action to take on the job. By the time this session is over, you should be able to: Recognize the importance of business ethics; Understand the requirements of the law and our ethics policy; Identify ethical problems on the job; and Make ethical decisions.

Prequiz: How Much Do You Already Know? Business ethics is only a management issue. It’s OK to cut ethical corners a little if it increases profits. There’s no reliable way to know if you have an ethical problem. No laws require businesses and employees to act ethically. Before we jump into our discussion of business ethics, lets take a few minutes to see how much you already know about this important topic. Read each of the statements on the screen and decide if it’s true or false. [PAUSE] Business ethics is only a management issue—false. It’s OK to cut ethical corners a little if it increases profits—false. There’s no reliable way to know if you have an ethical problem—false. No laws require businesses and employees to act ethically—false. How did you do? Did you get all the answers right? If not, don’t worry. You’ll hear more about these issues and about many other important points related to business ethics during the session. So let’s go on to the next slide and get started.

What Is Business Ethics? Business ethics— a standard of acceptable behavior on the job; a set of rules by which to judge decisions and conduct in the workplace Business ethics is a standard of acceptable behavior on the job. It is a set of rules by which to judge decisions and conduct in the workplace. Ethical conduct on the job involves knowing what is right and wrong according to the established standards and consistently doing what the organization’s ethics policy requires. Making ethical choices sounds simple. But the problem is that in today’s rapidly changing business climate, it is often difficult to tell what is right or wrong. Many ethical problems fall in a “gray area,” where what is right or wrong is not obvious. Doing what is ethically right is often confused with what is easiest, quickest, or cheapest. Many business people in recent years have crossed the line for personal profit or because of misguided notions of organizational loyalty. Ethics involves all employees. A firm understanding of ethical conduct on the job provides everyone in the organization with the same moral compass to follow in times of uncertainty, crisis, and competition. Think about scandals involving unethical conduct in corporate America in the past decade. What’s wrong with that kind of behavior? © BLR®—Business & Legal Resources 1408

Why Is Ethical Conduct Important? “Being good is good business.” —Anita Roddick, founder of The Body Shop Ethical conduct is important because it not only involves doing what is right and proper, but it’s also good for business. Ethical conduct is the basis for long-term success in any organization. Ethical conduct promotes a strong public image for the organization. People respect an organization that makes ethical choices. Customers like doing business with an organization they can trust. Ethical conduct makes the best use of resources. Money, time, and effort are put into productive activities rather than diverted for questionable purposes or personal gain. Ethical conduct on the part of all employees also helps maintain quality and productivity. When employees follow ethical standards, they don’t cut corners or short-change the company or its customers. Ethical conduct assists the organization to comply with laws and regulations. What is ethical is also legal. Ethical conduct ensures good and proper relationships with customers and vendors. And ethical conduct boosts morale and promotes teamwork. When employees can trust one another and management, they can work together more harmoniously and effectively. © BLR®—Business & Legal Resources 1408

Legal Requirements Sarbanes-Oxley Act Federal Sentencing Guidelines Federal law requires publicly traded companies to abide by ethical standards. The Sarbanes-Oxley Act was adopted by Congress in the wake of the Enron, WorldCom, and other corporate scandals, as well as reforms led by the New York Stock Exchange. Section 406 of the Act specifically addresses corporate codes of ethics and disclosure requirements in corporations. Under Section 406, public companies are required to disclose whether they have an ethics policy and whether they have granted any waivers for certain senior executives. They must also include their code of ethics in their annual report or on their website and provide a free copy on request. If a company does not have an ethics policy, it must explain why. A directive in the Sarbanes-Oxley Act required the U.S. Sentencing Commission to amend the Federal Sentencing Guidelines. Those amendments specify seven requirements for ethics policies that apply to all corporations. Whenever an employee commits a criminal act within the scope of his or her employment, the organization as a whole can be held liable under the law for the act of the individual employee.

Ethics Policy Conduct Decision making Interactions Our ethics policy and codes of conduct provide the guidelines for ethical decision making on the job. Codes of conduct guide ethical decision making and behavior on the job by outlining proper and improper conduct in detail for different groups of employees within the organization. For example, there may be a code of conduct for employees involved in financial functions such as accounting and billing, another for people engaged in sales and customer service, and yet others for employees in purchasing, human resources, and so on. Our ethics policy also lays down the principles for proper business interactions for all employees. It provides the rules for relationships with co-workers, management, customers, vendors, competitors, the government, the community, and any other individuals or organizations with whom you may interact as part of your job. Are you familiar with the organization’s ethics policy and codes of conduct? Everyone should be. © BLR®—Business & Legal Resources 1408

Ethical Values Integrity Loyalty Respect Accountability Fairness Responsibility Ethics policies and codes are built on basic ethical values that apply to any job. These values include the following: Integrity—being honest, keeping your promises; Loyalty—supporting the organization’s mission and policies, protecting privileged information, and cooperating with others in the organization to promote common goals; Respect—treating others professionally, with courtesy and tolerance; Accountability—taking responsibility for your actions and requiring the same of your co-workers; Fairness—acting consistently and impartially at all times; and Responsibility—obeying laws and regulations and acting appropriately toward the community in which you do business, and the public in general. Think about these values and how important they are to the way you conduct yourself on the job.

Common Reasons for Unethical Behavior Pressure Uncertainty Self-interest There may be many reasons that drive people to cross the line and act unethically. Pressure can drive people to do things they wouldn’t normally do. Pressure to succeed, pressure to get ahead, pressure to meet deadlines and expectations, pressure from co-workers, bosses, customers, or vendors to engage in unethical activities or at least look the other way. Some people make unethical choices because they are not sure about what really is the right thing to do. So often ethical problems are complicated, and the proper choice may be far from obvious. Of course, some people don’t just do something wrong in a weak moment or because they’re not sure about what is the right thing to do. Some people know exactly what they are doing and why. Self-interest, personal gain, ambition, and downright greed are at the bottom of a lot of unethical activity in business.

Common Reasons for Unethical Behavior (cont.) Misguided loyalty Lack of personal values Misguided loyalty is another reason for unethical conduct on the job. People sometimes lie because they think in doing so they are being loyal to the organization or to their bosses. Examples of this type of behavior are not hard to find. For example, managers at automobile companies who hide or falsify information about defects that later cause accidents and kill people; or managers at pharmaceutical companies who hide information about dangerous side effects of their drugs. No doubt these managers believed they were protecting their employers. They may well have seen themselves as good, loyal employees. And then there are those who simply never learned or don’t care about ethical values. Since they have no personal ethical values, they don’t have any basis for understanding or applying ethical standards in business. These people don’t think about right and wrong. They only think, “What’s in it for me?” and “Can I get away with it?” Think about other possible reasons for unethical conduct.

Ethical Problem Areas Conflicts of interest Relationships Making ethical choices on the job, even for the ethically minded, is not always easy. It’s especially difficult to deal with five common problem areas. Conflicts of interest are a familiar problem for many employees. You may have to choose between your self-interest and the interests of your co-workers, department, or the organization. Sometimes the choice is between the interests of a customer and the interests of the organization, or between the community and the organization. These conflicts of interest may not be clear cut. Knowing the right thing to do may not always be obvious. So this is a problem area for many people. Relationships are another difficult area where ethical dilemmas abound. It’s sometimes hard to draw a line between personal and business relationships. You work with people for years and get to know them as friends. And yet, sometimes you have to make professional choices that don’t seem very friendly. For example, if a co-worker you know well does something wrong, you may have to report the situation. If a customer with whom you have a good relationship tries to use your relationship in some unethical way, you’re in a difficult situation. You don’t want to lose a customer, but you can’t condone the conduct. Deciding the best course of action can be difficult.

Ethical Problem Areas (cont.) Communication Confidentiality Laws and regulation What you say and how you say it has a big ethical impact when you speak and when you write. Massaging the truth, telling “little white lies,” failing to tell the whole story, and so forth, can all have an effect on the outcome of a situation. Ethical conduct is not just about behavior; it’s also about thoughts and words. Confidential information is exactly that—confidential and privileged. Ethically, you and your co-workers cannot use any confidential business information for self-gain or pass along such information to benefit friends or family, whether that information is about the organization or its customers. Laws and regulations are another problem area. There are so many restrictions and demands on businesses today that it sometimes can be difficult to know the right thing to do. The rules are often hard to understand and confusing. Even if you understand the law, you may not agree with it. It can be tempting to cut corners or forget about the details. What’s the likelihood of getting caught? Often the risks appear minimal compared with the rewards.

Doing the Right Thing: Your Choice Which are ethical values? Integrity Expediency Accountability Responsibility Self-interest Let’s take a couple minutes now to review ethical values, which are at the core of business ethics. Without each employee embracing ethical values, we have a problem promoting ethical conduct in our workplace. Decide which of the words on the screen describe ethical values. How did you do? Did you get them all right? The correct choices were integrity, accountability, and responsibility. Other ethical values include respect, loyalty, and fairness.

Review Do you understand: What business ethics is and why it’s important? Legal requirements? Ethics policy? Ethical values? Common reasons for unethical conduct? Ethical problem areas? Now it’s time to ask yourself if you understand the information presented so far. Do you understand: What business ethics is and why it’s important? Legal requirements? Our ethics policy? Ethical values? Common reasons for unethical conduct? Ethical problem areas? To do your job properly and avoid ethical problems, you need to understand all this information. Let’s continue to the next slide now and talk about how you know if you have an ethical problem.

How Do You Know If You Have an Ethical Problem? Discomfort Guilt Stress Sometimes ethical problems are obvious. But other times you may not really be aware of a looming ethical dilemma. You may be preoccupied with other issues, or you may be in denial. But warning signs of an impending problem are usually there if you look for them. Key among these warning signs is discomfort. If something about a situation is making you feel uncomfortable, it’s time to start digging and try to figure out what’s bothering you and why. There may well be an ethical issue at the root of your discomfort. A clearer indication of an ethical problem is a feeling of guilt. If you’re feeling guilty, you probably did something wrong—or are thinking about doing something you know deep down is wrong. Don’t deny this feeling. Explore it and respond appropriately to it. Stress can be another indicator of an ethical dilemma. You’re feeling a lot of pressure; you’re losing sleep over something. These can be signs that you’re putting off making a difficult, but necessary, choice. Take a closer look.

How Do You Know If You Have a Problem? (cont.) Anger Embarrassment Fear Anger might also be a sign of an ethical problem. If you’re feeling pressured to make a decision with which you don’t feel comfortable, you may be angry at the person or people who are pressuring you. Embarrassment is also a sign of possible misconduct—or the contemplation of misconduct. Would you be embarrassed to tell your boss, co-workers, friends, or family about what you’re doing or thinking of doing? If so, there’s a very good chance that it is unethical. Don’t do it. Why risk the respect of all these important people in your life? Fear of getting caught is another clear warning sign. If you’re afraid of getting caught for what you’re doing or thinking about doing, it’s pretty clear that you’re doing something you should not be doing. Pay attention to this feeling and stop before it’s too late. Think about other possible signs that you might be facing an ethical problem. Are the signs between your personal and business life different, or are they basically the same?

Ethical Decision Making Issues Facts Individuals Assistance Making any kind of decision is a process. It requires a good deal of careful thought, weighing alternatives, and ultimately making a choice of some kind. The first step in the ethical decision-making process is to examine the issues and decide if there is indeed an ethical problem. For example, does the situation involve issues of law, right and wrong, fairness, conflict of interests, truth, trust, or integrity? Next, identify the facts as clearly and precisely as you can, on the basis of what you know and what you can find out about the problem. Determine who is involved in this problem. Who is affected? Who is responsible? Look for assistance. Can your boss, a co-worker, or a trusted friend help you solve this problem? Often, another point of view can help you clarify the issues and make a better decision. © BLR®—Business & Legal Resources 1408

Ethical Decision Making (cont.) Options Thoughts Feelings Decision The next step in ethical decision making is to consider your options. Weigh each option carefully. Would it involve any kind of unethical conduct now or in the future? Think objectively. Try to think of your problem as a friend’s problem. How would you advise your friend to act? Ethical decision making involves both objectivity and subjectivity. It’s about not only what you think but also how you feel. Respect your feelings and listen to them. If an option would make you feel uncomfortable or embarrassed, it’s probably not ethical. Finally, choose the best option and act on it. If you find you’ve made a mistake, own it right away, and revise your decision on the basis of what you know now. Not owning your mistakes is just another form of unethical conduct.

Questions to Ask Precedents? Policies? Approval? Laws? Approval? Precedents? As you work through the ethical decision-making process we’ve just discussed, there are many questions you should ask yourself. For example: Does what you propose to do comply with the organization’s policies, codes, and procedures? Would this course of action violate any laws or regulations? Do you need to discuss this problem with your boss and get his or her approval? What have others in the organization done in similar situations in the past, and how has that turned out? Will your decision be fair to everyone who might be affected by it, now and in the future? Fairness? © BLR®—Business & Legal Resources 1408

Questions to Ask (cont.) Pressure? Interests? Confirmation? Support? Pride? Here are some other important questions to ask yourself: Is this decision in your best interest and the best interests of the organization, employees, customers, vendors, stockholders, the community, and others who might be involved? Are you under any pressure to make a decision with which you’re not comfortable? Where is this pressure coming from? Would someone you particularly respect agree with your decision? Would your family support your decision? Can you take pride in your decision? By asking and answering these questions—and others like them—the ethical choice in most business situations will usually become clear. Think about other questions that might help you determine whether a decision is ethical or not. © BLR®—Business & Legal Resources 1408

Ethical Quick Check Unfortunately, you don’t always have time to go through the decision-making process in detail. What can you do when you need a quick way to check a decision to be sure you’re making an ethical choice? Ask yourself this simple question: Would you be comfortable seeing a report of what you’re thinking of doing in the newspaper for all to see, including your boss, your co-workers, and your family? If the answer is no, reconsider your decision—it probably isn’t ethical.

Ethics and Customers If customers feel they have been mistreated, cheated, or lied to, we will lose their business Ethical business practices are the core of every successful organization. If customers feel they have been treated unfairly, cheated, or lied to, they will take their business elsewhere. Ethical business practices involve a variety of issues. Everyone in the organization has an obligation to work cooperatively to meet or exceed customer expectations. We also must provide quality products and services to our customers at a fair price. Acting ethically means honoring agreements and keeping promises. When problems arise in our relations with customers, we must work with the customer to find a mutually agreeable solution. And we must respect and safeguard proprietary information we learn in the course of doing business with customers.

Ethics and Vendors Follow code of conduct Maintain proper relations Report unethical proposals If you deal with vendors, ethics is also an important issue. Remember these simple do’s and don’ts. Do follow the organization’s code of conduct for business with vendors. Do maintain proper professional relationships with vendors. Remember, you are representing the organization in all dealings with vendors. Do report any unethical proposals to your boss right away.

Ethics and Vendors Accept gifts or gratuities Request favors Agree to unusual deals Don’t accept any gifts or gratuities from vendors. A gift may seem perfectly innocent, but it could later put you in an awkward position. Report any such overtures to your boss. Don’t request favors or other inducements or incentives from vendors. Don’t agree to any unusual or questionable deals. If something doesn’t seem right to you, it probably isn’t. Consult your boss before making any unusual agreements with vendors. Think about our rules for dealing with vendors and the precautions you must take to avoid ethical problems.

Ethical Decision Making: True or False? If you’re embarrassed about a decision, it could be unethical. It’s best not to discuss ethical decisions with others. You should find out how similar situations have been handled in the past when making decisions involving ethical issues. It’s OK to accept gifts from vendors. Now let’s take a few minutes to test your knowledge of the information we’ve covered in the previous slides. You must decide whether each of the statements on the screen is true or false. How did you do? Did you get all the answers right? Let’s review briefly: The first statement is true. If you feel embarrassed about a decision it could be unethical. Other signs include guilt, stress, discomfort, anger, and fear. The second statement is false. Discussing ethical decisions with co-workers or your boss can help clarify issues and assist you in making the right choices. The third statement is true. Precedent can be a good way to make ethical decisions. Following ethical actions that have been taken in the past can guide you to make a good decision now. The last statement is false. Never take gifts, gratuities, or any other inducement from vendors. It’s not the proper thing to do and could lead to future ethical problems. Report any such overtures to your boss.

Review Do you understand: How to identify ethical problems? Ethical decision making? Questions to ask about possible ethical issues? Ethical concerns in regard to customers and vendors? Do you understand all the information presented in the previous slides? For example, do you understand what we’ve said about: How to identify ethical problems? Ethical decision making? Questions to ask about possible ethical issues? Ethical concerns in regard to customers and vendors? It’s very important that you understand all this information so that you can conduct yourself in an ethical manner at all times. Now let’s conclude the session with some key points to remember.

Key Points to Remember Ethical conduct is required Understand and follow the ethics policy Examine actions and decisions If it doesn’t feel right, it probably isn’t Consult your boss Here are the main points to remember from this session on business ethics: Ethical decision making and conduct is required of every employee. Make sure you understand and follow our ethics policy at all times. Examine your actions and decisions carefully and look for ethical issues. If something doesn’t feel like it’s the right thing to do, it probably isn’t. Consult with your boss any time you think you may have an ethical problem. This concludes the business ethics training session.