Nickels McHugh McHugh

1. 4-1 Nickels McHugh McHugh

2. 4-2 Ethics More Than Legality Standards are Fundamental See Learning Goal 1: Explain why legality is only the first step in behaving ethically. See text pages: 90-91See Learning Goal 1: Explain why legality is only the first step in behaving ethically. See text pages: 90-91

3. 4-3 Top U.S. Ethical Issues Also available on a Transparency Acetate See Learning Goal 1: Explain why legality is only the first step in behaving ethically. Top U.S. Ethical Issues Improper accounting practices and deceptive sales/marketing practices were among the top concerns of the marketing executives in a poll conducted by the CMO Magazine in August 2004. Ask the students: What companies come to mind when we talk about improper accounting practices? (A quick Google search brings up following well known companies for improper accounting practices: AIG, Health South, and Qwest Communications. And, of course, the famous scandals at Enron and WorldCom comes to mind as well.) Ask the students: Which of these issues have they encountered themselves and how do they feel about them? A good example of deceptive sales/marketing practices is the advertising by many credit card companies of 5% cash back. When you read the fine print or start using the card, you find out that you will usually get only 1% cash back.Also available on a Transparency Acetate See Learning Goal 1: Explain why legality is only the first step in behaving ethically. Top U.S. Ethical Issues Improper accounting practices and deceptive sales/marketing practices were among the top concerns of the marketing executives in a poll conducted by the CMO Magazine in August 2004. Ask the students: What companies come to mind when we talk about improper accounting practices? (A quick Google search brings up following well known companies for improper accounting practices: AIG, Health South, and Qwest Communications. And, of course, the famous scandals at Enron and WorldCom comes to mind as well.) Ask the students: Which of these issues have they encountered themselves and how do they feel about them? A good example of deceptive sales/marketing practices is the advertising by many credit card companies of 5% cash back. When you read the fine print or start using the card, you find out that you will usually get only 1% cash back.

4. 4-4 Ways to Prevent Unethical Behavior Also available on a Transparency Acetate See Learning Goal 1: Explain why legality is only the first step in behaving ethically. Ways to Prevent Unethical Behavior This slide complements the previous Top US Ethical Issues slide. Before you put this slide up, you may want to ask the students: How can the top ethics issues be addressed? What can be done to deter the unethical behaviors? Increasing the penalty and educating the employees are among the top methods for deterring unethical behaviors, according to the CMO Ethics Poll. (Source: CMO Magazine, October 2004) Thirty percent of the respondents in the poll suggested adding new laws to deter unethical behaviors. Ask the students: If ethics is more than legality, would new laws help? (Students should be able to argue this point. Although ethics is more than legality, if something is against the law, people may deter from such behavior. However, it should be pointed out that ethics should be the way of life, i.e., it needs to be ingrained in the employees through culture and role modeling.)Also available on a Transparency Acetate See Learning Goal 1: Explain why legality is only the first step in behaving ethically. Ways to Prevent Unethical Behavior This slide complements the previous Top US Ethical Issues slide. Before you put this slide up, you may want to ask the students: How can the top ethics issues be addressed? What can be done to deter the unethical behaviors? Increasing the penalty and educating the employees are among the top methods for deterring unethical behaviors, according to the CMO Ethics Poll. (Source: CMO Magazine, October 2004) Thirty percent of the respondents in the poll suggested adding new laws to deter unethical behaviors. Ask the students: If ethics is more than legality, would new laws help? (Students should be able to argue this point. Although ethics is more than legality, if something is against the law, people may deter from such behavior. However, it should be pointed out that ethics should be the way of life, i.e., it needs to be ingrained in the employees through culture and role modeling.)

5. 4-5 Privacy Protectors Based on a Privacy Trust Score (PTS): Health care providers scored the highest Grocery Stores and Department of Homeland Security (DHS) scored the lowest Democrats have higher PTS than all other political affiliations 81% of the respondents feel privacy is important or very important Also available on a Transparency Acetate See Learning Goal 1: Explain why legality is only the first step in behaving ethically. Privacy Protectors Darwin Magazine asked 5,500 people throughout the country if they trusted various businesses and government organizations known to collect personal information. This resulted in a Privacy Trust Score (PTS) for each organization. Health care providers (physicians, hospitals, and clinics) received the highest PTS score. Banks and Pharmacies also received a high rating. Interestingly, government along with the grocery stores received the lowest PTS ratings. (Source: www.darwinmag.com, November 2003) Also available on a Transparency Acetate See Learning Goal 1: Explain why legality is only the first step in behaving ethically. Privacy Protectors Darwin Magazine asked 5,500 people throughout the country if they trusted various businesses and government organizations known to collect personal information. This resulted in a Privacy Trust Score (PTS) for each organization. Health care providers (physicians, hospitals, and clinics) received the highest PTS score. Banks and Pharmacies also received a high rating. Interestingly, government along with the grocery stores received the lowest PTS ratings. (Source: www.darwinmag.com, November 2003)

6. 4-6 Ethics of MBA Students Percent of MBA Students Who Would: Buy Stock on Inside Information 52% Reveal Corp. Secrets to Spouse/Family 50% Let a Gift Sway Purchasing Decision 26% Pay Someone Off to Close a 13% Business Deal Also available on a Transparency Acetate See Learning Goal 1: Explain why legality is only the first step in behaving ethically. Ethics of MBA Students A disturbing slide that examines the potential actions of MBA students as it relates to Business Ethics. This slide further identifies the need for ethical teaching at the highest level of our academic institutions. Some University Programs are attempting to solve this negative social trend. University of Maryland requires MBA students to take a 1-day trip to prison to illustrate how smart, successful, business savvy overachievers can land in jail. Companies are showing greater awareness of this problem with 75% of the USA�s 1,000 largest companies having Corporate Ethics Officers. Also available on a Transparency Acetate See Learning Goal 1: Explain why legality is only the first step in behaving ethically. Ethics of MBA Students A disturbing slide that examines the potential actions of MBA students as it relates to Business Ethics. This slide further identifies the need for ethical teaching at the highest level of our academic institutions. Some University Programs are attempting to solve this negative social trend. University of Maryland requires MBA students to take a 1-day trip to prison to illustrate how smart, successful, business savvy overachievers can land in jail. Companies are showing greater awareness of this problem with 75% of the USA�s 1,000 largest companies having Corporate Ethics Officers.

7. 4-7 Most Popular Ways to Monitor Employees Internet (74%) Background Exams (62%) Store and Review Email (43%) Store and Review Computer Files (31%) Videotape Employees (18%) Also available on a Transparency Acetate See Learning Goal 2: Ask the three questions one should answer when faced with a potentially unethical action. Most Popular Ways for Monitoring Employees Employee monitoring is an area getting a lot of attention due to privacy debate. Ask students: Do organizations have the right to monitor the activities of their employees? (This can be a debate issue: Employee privacy vs. organizational performance and its right to protect its intellectual property.) Ask students: Have they played computer games when working at a company or done personal stuff, such as school research papers, etc.? How should the organization react and respond to such behaviors?Also available on a Transparency Acetate See Learning Goal 2: Ask the three questions one should answer when faced with a potentially unethical action. Most Popular Ways for Monitoring Employees Employee monitoring is an area getting a lot of attention due to privacy debate. Ask students: Do organizations have the right to monitor the activities of their employees? (This can be a debate issue: Employee privacy vs. organizational performance and its right to protect its intellectual property.) Ask students: Have they played computer games when working at a company or done personal stuff, such as school research papers, etc.? How should the organization react and respond to such behaviors?

8. 4-8 Ethics Check Questions: Is It Legal? Is It Balanced? Also available on a Transparency Acetate See Learning Goal 2: Ask the three questions one should answer when faced with a potentially unethical action. See text pages: 91-94 Ethics Check Questions A simple scenario can be presented to the students to take them through these three questions checklist. For example: If they are making copies of personal work on company copier or they are using official company time to do personal work or billing the company for meals when traveling on a company business but the meals were covered by the suppliers/vendors. Starting with a simple scenario and gradually making it more complex can bring different issues to the table help students understand the gray areas.Also available on a Transparency Acetate See Learning Goal 2: Ask the three questions one should answer when faced with a potentially unethical action. See text pages: 91-94 Ethics Check Questions A simple scenario can be presented to the students to take them through these three questions checklist. For example: If they are making copies of personal work on company copier or they are using official company time to do personal work or billing the company for meals when traveling on a company business but the meals were covered by the suppliers/vendors. Starting with a simple scenario and gradually making it more complex can bring different issues to the table help students understand the gray areas.

9. 4-9 Why Don�t We Trust Corporations? Also available on a Transparency Acetate See Learning Goal 3: Describe management�s role in setting ethical standards. Why Don�t We Trust Corporations? This is another slide that identifies major reasons why people do not trust corporations. Respondents were college-educated with household income of over $75,000. This slide points to a serious need on the part of management to act in an ethical manner and present an ethical image of the corporation through its actions rather than words only. Also available on a Transparency Acetate See Learning Goal 3: Describe management�s role in setting ethical standards. Why Don�t We Trust Corporations? This is another slide that identifies major reasons why people do not trust corporations. Respondents were college-educated with household income of over $75,000. This slide points to a serious need on the part of management to act in an ethical manner and present an ethical image of the corporation through its actions rather than words only.

10. 4-10 Factors Influencing Managerial Ethics Also available on a Transparency Acetate See Learning Goal 3: Describe management�s role in setting ethical standards. Factors Influencing Managerial Ethics Factors that influence business ethics are analyzed from three different perspectives: individual factors, organizational factors, and environmental factors. If you work through the acetate factor-by-factor, this should allow for maximum participation and full coverage. Ask the students: Which of these factors tends to predominate in terms of overall managerial behavior? Do these factors change noticeably over time? Ask the students: What factors most dominate their attitudes concerning ethical behavior? (We�ve tried this in our classes and have received some very interesting responses. Let us know by e-mail what your students have to say.)Also available on a Transparency Acetate See Learning Goal 3: Describe management�s role in setting ethical standards. Factors Influencing Managerial Ethics Factors that influence business ethics are analyzed from three different perspectives: individual factors, organizational factors, and environmental factors. If you work through the acetate factor-by-factor, this should allow for maximum participation and full coverage. Ask the students: Which of these factors tends to predominate in terms of overall managerial behavior? Do these factors change noticeably over time? Ask the students: What factors most dominate their attitudes concerning ethical behavior? (We�ve tried this in our classes and have received some very interesting responses. Let us know by e-mail what your students have to say.)

11. 4-11 Codes of Ethics Compliance-Based Integrity-Based See Learning Goal 4: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. See text pages: 96-97See Learning Goal 4: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. See text pages: 96-97

12. 4-12 Steps to Improve U.S. Business Ethics Top management support Employees� understanding Managers� training Ethics Office Outsiders must be informed Enforcement of ethics code See Learning Goal 4: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. See text pages: 96-97 See Learning Goal 4: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code. See text pages: 96-97

13. 4-13 Also available on a Transparency Acetate See Learning Goal 5: Define corporate social responsibility and examine corporate responsibility to various stakeholders. Three Levels of Social Responsibility This slide investigates differing concepts of the social responsibility of organizations. Social Responsibility can be defined as: Companies� voluntary commitment to improving society by developing long-term policies that honor high ethical standards and meet responsibilities. In class, you may want to visit a corporate website to investigate a company�s social practice. (Target Stores, Anheuser-Busch, McDonald�s Corp.) Listed below are some examples you can share with the students of companies who practice social responsibility: Target Corp. � Contributes over $2 million each week to the communities it serves. Anheuser-Busch � Over the past 10 years has contributed over $320 million to charitable organizations. McDonald�s � Ronald McDonald House CharitiesAlso available on a Transparency Acetate See Learning Goal 5: Define corporate social responsibility and examine corporate responsibility to various stakeholders. Three Levels of Social Responsibility This slide investigates differing concepts of the social responsibility of organizations. Social Responsibility can be defined as: Companies� voluntary commitment to improving society by developing long-term policies that honor high ethical standards and meet responsibilities. In class, you may want to visit a corporate website to investigate a company�s social practice. (Target Stores, Anheuser-Busch, McDonald�s Corp.) Listed below are some examples you can share with the students of companies who practice social responsibility: Target Corp. � Contributes over $2 million each week to the communities it serves. Anheuser-Busch � Over the past 10 years has contributed over $320 million to charitable organizations. McDonald�s � Ronald McDonald House Charities

14. 4-14 Also available on a Transparency Acetate See Learning Goal 5: Define corporate social responsibility and examine corporate responsibility to various stakeholders. Percentage of Corporate Social Responsibility KPMG conducts the survey of world�s biggest companies every three years. The current survey was conducted in 2005. Japan and the UK lead the country list with 80 and little over 70 percent respectively. Fifty-two percent of the top 250 companies in the Fortune 500 list published separate reports on corporate social responsibility (CSR). Ask the students: Why would businesses publish a separate CSR report? (Most cited reason by businesses was economic consideration. Other reasons were ethical considerations, desire to motivate employees and attract new recruits.) (Source: Financial Times, June 15, 2005)Also available on a Transparency Acetate See Learning Goal 5: Define corporate social responsibility and examine corporate responsibility to various stakeholders. Percentage of Corporate Social Responsibility KPMG conducts the survey of world�s biggest companies every three years. The current survey was conducted in 2005. Japan and the UK lead the country list with 80 and little over 70 percent respectively. Fifty-two percent of the top 250 companies in the Fortune 500 list published separate reports on corporate social responsibility (CSR). Ask the students: Why would businesses publish a separate CSR report? (Most cited reason by businesses was economic consideration. Other reasons were ethical considerations, desire to motivate employees and attract new recruits.) (Source: Financial Times, June 15, 2005)

15. 4-15 Social Audit Company Outside Groups that serve as watchdogs: Socially-Conscious Investors Environmentalists Union Officials Customers See Learning Goal 5: Define corporate social responsibility and examine corporate responsibility to various stakeholders. See text pages: 99-108See Learning Goal 5: Define corporate social responsibility and examine corporate responsibility to various stakeholders. See text pages: 99-108

16. 4-16 International Ethics and Social Responsibility Ethical problems are Not Unique to the U.S. managers Demand for Socially Responsible Behavior from Global Suppliers Joint Initiative on Corporate Accountability and Workers� Rights Inter-American Convention Against Corruption See Learning Goal 6: Analyze the role of American businesses in influencing ethical behavior and social responsibility in global markets. See text pages: 108-109See Learning Goal 6: Analyze the role of American businesses in influencing ethical behavior and social responsibility in global markets. See text pages: 108-109

17. 4-17 Best Company Reputation Johnson & Johnson (80.6) Coca-Cola (79.7) Google (79.5) UPS (79.4) 3M (78.8) See Learning Goal 6: Analyze the role of American businesses in influencing ethical behavior and social responsibility in global markets. Best Company Reputations Reputation quotient was based on the respondent� rating of each company on 20 attributes. Harris Interactive Annual RQ survey was conducted in 2005. Ask the students: Which of these companies they would rate highest and why? (Many of them may pick up Google simply because of their familiarity. If they ask for criteria, etc., they are thinking in the right direction.) An interesting assignment for students may be to research how this list compares with Fortune Magazine�s Most Admired Corporations. (Fortune�s Top 10 companies for 2006: GE, FedEx, Southwest Airlines, Procter & Gamble, Starbucks, Johnson & Johnson, Berkshire Hathaway, Dell, Toyota Motors, and Microsoft.)See Learning Goal 6: Analyze the role of American businesses in influencing ethical behavior and social responsibility in global markets. Best Company Reputations Reputation quotient was based on the respondent� rating of each company on 20 attributes. Harris Interactive Annual RQ survey was conducted in 2005. Ask the students: Which of these companies they would rate highest and why? (Many of them may pick up Google simply because of their familiarity. If they ask for criteria, etc., they are thinking in the right direction.) An interesting assignment for students may be to research how this list compares with Fortune Magazine�s Most Admired Corporations. (Fortune�s Top 10 companies for 2006: GE, FedEx, Southwest Airlines, Procter & Gamble, Starbucks, Johnson & Johnson, Berkshire Hathaway, Dell, Toyota Motors, and Microsoft.)

18. 4-18 Most Admired Global Companies General Electric Toyota Procter & Gamble FedEx Johnson & Johnson Microsoft Dell Berkshire Hathaway Apple Computer Wal-Mart See Learning Goal 6: Analyze the role of American businesses in influencing ethical behavior and social responsibility in global markets. Most Admired Global Companies This slide complements the previous slide Best Company Reputations. Ask the students: Why do both the lists of most admired global companies and most admired US companies have so many common companies? (Most of these U.S. companies are global giants as well.) An interesting assignment for students could be to read and research Fortune�s criteria to determine how the companies were selected for these lists. Were they on the list because of profitability or great CSR or happy employees or fantastic service? How can other companies improve their standing on this list? (The researched criteria for the previous question should provide the necessary answer for this question as well.)See Learning Goal 6: Analyze the role of American businesses in influencing ethical behavior and social responsibility in global markets. Most Admired Global Companies This slide complements the previous slide Best Company Reputations. Ask the students: Why do both the lists of most admired global companies and most admired US companies have so many common companies? (Most of these U.S. companies are global giants as well.) An interesting assignment for students could be to read and research Fortune�s criteria to determine how the companies were selected for these lists. Were they on the list because of profitability or great CSR or happy employees or fantastic service? How can other companies improve their standing on this list? (The researched criteria for the previous question should provide the necessary answer for this question as well.)