1. BUSINESS
ETHICS

2. BUSINESS ETHICS
"Let me appeal to your sense of doing things my way" Cartoon by P.C. Vey Copyright 2004, Harvard Business Review

3. BUSINESS ETHICS Is this a “Good” Code of Ethics?
Would it help your Employees do the “Right Thing?”
What Company published this Code of Conduct and got an Award for it?

4. “Relativity applies to Physics, not Ethics”
To be “Successful,” does a Business have to “Act Ethically?”
How does a Business “Act Ethically?”
Who decides whether a Business is “Acting Ethically?”

5. A new Product has not yet been formally approved nor have funds been allocated, but everything looks fine. Meeting the delivery schedule won’t be easy. Wanting to get started, you start negotiating with a supplier. What do you tell that supplier?
This is a 'hot' program for both of us. Approval is imminent. Let's get the preliminary work underway now…
The program is a 'go'. I want you under contract as soon as possible…
Start work now and we’ll cover your costs when Administration finishes the paperwork…
If you want to be part of the team important great new product, you’ll have to shoulder some of the start-up costs…

6. BUSINESS ETHICS
Is this the Right Answer? Maximize Shareholder Value and Everything will be Fine!
Doesn’t Solving Ethical Dilemmas use Time that is better spent making Sales?
If We tell our Shareholders that We’ll Maximize their Value, What do We tell our “Stakeholders?”

7. WHERE DO ETHICS MATTER? In a Court Room: Legal Implications
Financial Markets: Reliability of Information
Human Resources Markets: How to Attract and Retain the Best and Brightest

8. After 3 months on the job, you learn an employee
falsified her employment application: she doesn’t have a college degree. As her boss, what do you do?
Fire Her Immediately
Overlook it, She’s doing a Great Job
Balance the Omission's Severity with the Great Job she’s doing plus her Age and Ethnicity
Contact HR and Determine Company Policy

9. UNETHICAL BUSINESS PRACTICES
Abusive or Intimidating Behavior
Accurate but Incomplete Disclosures
Discrimination against Protected Class
Receiving/Offering Bribes, Kickbacks or Incentives
Theft/Fraud: Expense Accounts/Personal Use of Company Property
Sexual Harassment
Termination without Fair Notice or Cause

10. ETHICAL ISSUES Three Steps for Analyzing Ethical Issues
Strictly Legal Perspective
Strictly Personal Perspective
Is It Legal?
If “No,” Stop and Take Action
Is It Balanced?
Compare Risks and Benefits
How Does It Make Me Feel?
What is your Conscience telling You? Are You doing the “Right Thing?”

11. No, since no one has complained
When one of your male supervisors talks to any female employee, he always calls her, "Babe.” You have overheard him use this term several times. As his manager, should you do anything?
No, since no one has complained
Yes. Explain to the supervisor that, while he may have no sexual intention, use of “Babe” may cause resentment
Yes. Order the supervisor to call an all-hands meeting and apologize for the unintended slights
No, because there is nothing wrong with calling a female employee “Babe" or other endearment

12. BUSINESS ETHICS: APPROACHES
COMPLIANCE-BASED
Prevent, Detect and Punish Legal Violations
INTEGRITY OR VALUES-BASED
Define Organizational Values and Encourage Employee Commitment to Ethical Aspirations

13. CONFLICTS OF INTEREST
DEFINITION: Employee’s Personal or Financial Interests Interfere with Employee’s Obligations to Employer
THREE TYPES:
Financial: Self-dealing or Insider Trading
Professional: Outside Commitments infringe on Employer Resources
Personal: Family/Employee Conflicts, Nepotism, Fraternization

14. CONFLICTS OF INTEREST
BEST RESPONSE? Preventative Measures: Employees free to have unrelated job activities, but…
EMPLOYER CAN EXPECT LAWFUL AND CONFLICT-FREE BEHAVIOR
Strategically Identify and Manage Potential Conflicts with Written Policies, Standards, Expectations, Training, Monitoring and Constant Communication

15. Your “Least Effective” Employee has Applied to Transfer to another Department. And the Manager is Calling you for a Reference…
Say the employee is the best one you’ve ever had and you’re heartbroken they’re leaving
Be Candid - Tell Everything - Leave out Nothing
Tell the manager the employee might be a better “fit” in their department instead of yours
Duck it: Suggest the Request be handled by HR

16. STRUCTURES AND SYSTEMS
Have a Code of Ethics (Standards), but More Important, have a Code of Conduct (Actions)
Communications Network: Formal and Informal (Use the ‘Grapevine’) Processes for Reinforcing and Refreshing
Formal Reporting System: Ethics Ombudsperson - Unbiased and Neutral but with Authority

17. THE BOTTOM LINE
Decision-making includes Personal, Organizational and Societal Values (“Layers”)
Ethical Values always open to Discussion and Criticism but …
Build a Fire Wall between “Immutable Standards” and Case-by-Case Exceptions
Accept Responsibility for sound Moral Judgments: It’s in Everyone’s Job Description

18. Communities and their Businesses
Organizational Responsibility. Discuss possible roles and activities the venture might take or promote that contribute to the community’s “greater good.” Will these roles or activities make a significant, positive contribution? How will the venture sustain its commitment to these contributions?

19. Personal Ethics have Broader Context and Application
ETHICS AND THE LAW
Legal Requirements often represent an Ethical Minimum
Personal Ethical Standards Generally Exceed Legal Standards
Laws are Ethical Issues with Societal Implications as interpreted by a Legislature;
Personal Ethics have Broader Context and Application
ETHICS
LAW

20. BUSINESS ETHICS
A Relative wants to work in your Department. It could be a promotion and a big pay raise. He’s asking for your advice…
Give him the benefit of your inside knowledge
Tell him not to apply
Tell him that if he gets the job, he’ll have to move out of your house where he’s been for 9 months
Ask him how to deal with possible perceptions of favoritism or nepotism

21. PERSPECTIVES ON ETHICS
Ethical Issues require Persons or Organizations to choose an Action that may get judged as Right or Wrong
Business Ethical Issues: Classifications
Conflicts of Interest
Fairness and Honesty
Communications
Organizational Relationships

22. WHY DO ETHICS MATTER? Does “Doing the Right Thing” Matter?
To Whom Does it Matter?
What are the Costs to Business of Unethical Behavior?

23. ETHICAL CLIMATE/CULTURE
More Important than Ethics Program
Begins with leadership (all levels) that includes Ethical Considerations in every Decision: Are We Doing the Right Thing?
Focus on What’s best for BOTH Employees and Affected Community (stakeholders)
Actions louder than Words/Codes: Consistency and Follow-up Actions

24. CRITERIA GUIDING ETHICAL ACTIONS
Employees won’t be Punished for Questioning Authority
Employees will be held Accountable (Punished) for Rule Violations
Focus on larger organizational/societal Outcomes; Not Personal/self-Interest
Would You wish Others to behave in the same Way if Action affected You?

25. FORCES THAT SHAPE BUSINESS ETHICS
Organizational Culture
Personal Ethics
Founder
History
Defining Moments
Stories of Development
Beliefs and Values
Moral Development
Ethical Framework Is
Decision
or Behavior
Ethically and
Socially
Responsible?
Organizational Systems
External Stakeholders
Structure
Policies and Rules
Code of Ethics
Reward System
Selection and Training
Government Regulations
Customers
Special Interest Groups
Market Forces