Business Ethics: The Role of culture and values for an ethical workplace

1. Business Ethics: The Role of culture and values for an ethical workplace David Swartout – MGMT 6600

2. Author’s Background Nancy Lockwood • HR expert for the Society for Human Resource Management • Certified Senior Professional in Human Resource Management and Global Professional in Human Resource Management • Published several books • Work/Life Balance: Challenges and Solutions • Corporate India and HR Management

3. Key Points/Major Findings • Leadership and organizational culture determine the message of business ethics in an organization • Establishing the value for ethical behavior boosts trust and transparency • Training and codes of conduct • New global movements increase the need for understanding of different cultures and values

4. What is business ethics? • Includes: Organizational values Guidelines and codes Legal compliance Risk Management Behavior

5. Where did business ethics come from? • Codes established in the 1920’s • JC Penny introduced code of conduct in 1913 • Grew in 1980’s in response to government and legal pressures • National scandals have increased demand for stricter organizational code of ethics and values

6. Ethical Leadership and Culture • Developed through communication, rules, leadership, rewards, rituals, and stories • Includes views of employees, organizational values, and constant compliance • 3 key questions: • How does the company portray values? • Do company policies reflect corporate values? • Are employees treated fairly?

7. Standards and Practices • Managers within an organization are expected to: • Support employees in following standards • Talk about importance of ethics and doing the right thing • Set a good example • Held accountable if found in violation of policies • Code of Conduct = platform of ethical workplace • Encouraging ethical behavior • Reward and recognition/performance evaluation

8. Generational Differences • Work ethic and conflict • Baby Boomers, Generation X, Millennials (Gen Y) • Volunteerism • Showcase ethical and moral behavior through community service Burk, B., Olsen, H., Messerli, E. (2011). Navigating the Generation Gap in the Workplace from the Perspective of Generation Y. Parks & Recreation,Vol. 46, Issue 5, p35-36.

9. Ethical Decision Making • Personal values vs. corporate message • Potential conflict • Moral Motivation • Why should I do the right thing? • Key ethical leadership skills

10. Challenges of Leadership “The ever-present incentive for leaders to show profitability, coupled with the inability of governments or private industry to support continuous controls or monitoring, condemns these new rules, restrictions, and enforcement mechanisms to relative ineffectiveness.” Lager, James M. (2010). Governments demand compliance, ethics demands leadership. Journal of Public Affairs, Vol. 10, Issue 3, P216-224.

11. Corporate Ethics Programs • Training • Web-based • Webcast • In-person • Six elements necessary for proper ethics and compliance program

12. Perceptions of Fairness • Organizational justice • Fairness of outcomes/allocation of resources • Fairness of decision making process • Fairness of personal treatment by supervisor • Transparency is key to fairness

13. Global Ethics • Global mindset • Only in individual development • Lack of norms within organizations • Manager’s responsibilities • Communication style • Culturally neutral • Lack of understanding leads to several troubling factors

14. International Ethical Conduct • “If MNCs are to develop ethical business practices contingent and sensitive to cultural differences, a better understanding of the factors contributing to ethical standards and the impact that ethical behaviors have on subsequent standards and conduct becomes critical.” Luthans, F., & Stajkovic A. (1997). Business Ethics across Cultures: A Social Cognitive Model. Journal of World Business. Vol. 32, Issue 1, p17-34.

15. In Conclusion • Leadership determines tone of business ethics in the workplace • How it is perceived and communicated • Foundation of solid values creates the right decisions • Boosts trust, fairness, transparency, compliance • Global organizations must understand different cultures

16. Future Implications • What do you see as a potential challenge for businesses in their ability to operate in an ethical manner in the future? • “Critics are increasingly complaining that business schools focus too much teaching effort on maximizing shareholder value, with only a limited understanding of ethical and social aspects of business leadership.” Cavaliere, F., Mulvaney, T., & Swerdlow, M. (2010). Teaching business ethics after the financial meltdown: is it time for ethics with a sermon?. Education, Vol. 131, Issue 1, p3-7.

17. References Burk, B., Olsen, H., Messerli, E. (2011). Navigating the Generation Gap in the Workplace from the Perspective of Generation Y. Parks & Recreation,Vol. 46, Issue 5, p35-36. Cavaliere, F., Mulvaney, T., & Swerdlow, M. (2010). Teaching business ethics after the financial meltdown: is it time for ethics with a sermon?. Education, Vol. 131, Issue 1, p3-7. Luthans, F., & Stajkovic A. (1997). Business Ethics across Cultures: A Social Cognitive Model. Journal of World Business. Vol. 32, Issue 1, p17-34. Lager, James M. (2010). Governments demand compliance, ethics demands leadership. Journal of Public Affairs, Vol. 10, Issue 3, P216-224.