CHAPTER 6

1. CHAPTER 6 Strategic Approaches to Improving Ethical Behavior

2. Chapter Objectives • To provide an overview of the need for an organizational ethics program • To consider crucial keys to development of an effective ethics program • To examine effective implementation of an ethics program

3. The Need forOrganizational Ethics Programs • Organizations are held accountable for the conduct of their employees. • Organizations can create unethical corporate cultures. • Stakeholders demand greater ethical andsocial responsibility.

4. Codes of Conduct Formal statements that describe what an organization expects of its employees

5. Developing andImplementing a Code of Ethics • Consider areas of risk and state values as well as necessary conduct. • Identify values that specifically address currentethical issues. • Consider values that link the organization to a stakeholder orientation. • Make the code understandable by providingexamples that reflect values. • Communicate the code frequently in language employees can understand. • Revise the code each year.

6. Ethics Officers • Assess organizational needs and risks • Develop and distribute the code of ethics • Conduct ethics training programs • Establish and maintain a confidential system to respond to ethics questions • Make certain the company is in compliance with government regulation • Monitor and audit ethics conduct • Take action when there is a code violation • Review and update the code

7. Ethics Training and Communication • Educates employees about the firm’s policies, expectations, relevant laws and regulations, and general social standards • Makes employees aware of available resources, support systems, and personnel who can assist with ethics and legal advice • Can empower employees

8. Training andCommunication Initiatives • Should reflect the unique characteristics of an organization • Must operate with a strong foundation • Are more effective if employees engagein exercises that involve solving ethical dilemmas that relate to their job

9. Establishing Systems to Monitorand Enforce Ethical Standards • Help or assistance lines • Observation and feedback • Whistle-blowing

10. Questions to Ask BeforeEngaging in External Whistle-blowing • Have I exhausted internal anonymous reporting opportunities within the organization? • Have I examined company policies and codes that outline acceptable behavior and violations of standards? • Is this a personal issue that should be resolved through other means? • Can I manage the stress that may evolve from exposing potential wrongdoing in the organization? • Can I deal with the consequences of resolving an ethical or legal conflict within the organization?

11. Continuous Improvementof the Ethics Program • Putting strategies into action • Translating a plan of action into operational terms and monitoring, controlling, and improving organizational performance

12. ImplementingOrganizational Ethics Programs • Role of leadership • Transformational leaders • Transactional leaders

13. Leaders influence Corporate Culture • Organizational leaders use their power and influence to shape corporate culture. Power refers to the influence that leaders have over the behavior and decisions of subordinates.

14. Five Power Bases • Reward power • Coercive power • Legitimate power • Expert power • Referent power

15. Variation in Employee Conduct • Because people are culturally diverse and have different values, they interpret situations differently and will vary in the ethical decisions they make on the same ethical issue.