1. Framingham State University
Human Resource Management & Business Ethics: An Organizational Imperative
Robert J. Awkward, Ph.D.
Visiting Associate Professor of HR Management & MHR Program Coordinator
Framingham State University
October 12, 2017

2. Business Ethics Defined
“Business ethics comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in organizational life” (Ferrell, Fraedrich, & Ferrell, 2017).

3. Business Ethics Defined
Principles – specific and pervasive boundaries that should not be violated
Values – Enduring beliefs and ideals that are socially enforced
Ferrell, Fraederich, & Ferrell, 2017

4. Why is Business Ethics Important?
Individual ethical values are not adequate to guide organizational decision making
The impact of organizational decisions, e.g., product development, pricing, advertising, sales techniques, service delivery, hiring practices, and environmental impact
An awareness of business ethics helps to identify ethical issues when they arise
Helps to reconcile conflicts between your own personal values and those of the organization

5. Driving Forces for Change
Timeframe
Major Legal Initiatives
1960s
Consumer Bill of Rights
1970s
- Foreign Corrupt Practices Act
- Business ethics as a field of study began
1980s
Defense Industry Initiative on Business Ethics and Conduct
1990s
Federal Sentencing Guidelines for Organizations
2000s
- Sarbanes-Oxley Act
- Dodd-Frank Wall Street Reform and Consumer Protection Act

6. Driving Forces for Change

7. A Stakeholder Orientation
“A stakeholder orientation involves activities and processes within a system of social institutions that facilitate and maintain value through exchange relationships with multiple stakeholders” (Hult, Mena, Ferrell, & Ferrell, 2011).

8. An Evolving Perspective
Adam Smith’s view - Values that a firm should adopt to produce in a more socially responsible way correlates with the needs and concerns of the stakeholders
Friedman’s view - Stakeholders do not have any role in requiring businesses to demonstrate responsible and ethical behavior
Stakeholder support for companies that are socially responsible enhances a firm’s profitability

9. A Stakeholder Orientation

10. Steps of Social Responsibility

11. Steps to Implementing a Stakeholder Perspective
Assessing the corporate culture
Identifying stakeholder groups and issues
Assessing organizational commitment to social responsibility
Identifying resources and determining urgency
Gaining stakeholder feedback

12. The Role of Organizational Leadership

13. Benefits of Business Ethics
Employee commitment
Development of an ethical culture leads to employee retention and loyalty, which increases employee performance
Investor loyalty
Investors are aware of the contributions of ethical conduct in providing a foundation for efficiency, productivity, and profits in a firm

14. Benefits of Business Ethics
Customer satisfaction
Companies viewed as socially responsible gain a high amount of customer trust and satisfaction
Profits
Ethical culture helps a company stay ahead of its competitors, thereby gaining more profits

15. HRM’s Role in Creating an Ethical Culture/Climate
HRM is an important participant in the senior leadership of the organization
HRM leads efforts to hire, orient, train, reward & recognize performance, and the disciplinary processes
HRM may be specifically assigned responsibility for organizational ethics
Policy and practices
Orientation and training

16. HR Competency Model Ulrich, Younger, Brockbank, & Ulrich (1992)
Business Mastery
HR Mastery
Personal Credibility
Change Mastery

17. Issues of Organizational Misconduct
Issues to be addressed
Misuse of company resources
Abusive behavior
Harassment
Accounting fraud
Conflicts of interest
Defective products
Bribery
Product knockoffs
Employee theft

18. Closing & Final Comments