Ethical Reasoning and Corporate Programs

2. Chapter 6 Ethical Reasoning and Corporate Programs The Core Elements of Ethical Character Analyzing Ethical Problems in Business Whistle-blowing Making Ethics Work in Corporations

3. Managers’ values in contrast Exhibit 6.Aa • American managers were found to be more protective of organizational resources and more interested in compliance with rules than Russian managers. • German managers were found to be more ethical, although more difficult to work with, than other managers within the European Union. • Chinese were more concerned with profits and more willing to accept bribes than Americans, although Americans were less ethical in their reasoning than subjects from the developing country of Belize.

4. Exhibit 6.Ab Managers’ values in contrast • Spanish executives were found to be more ethical than American managers and they were more concerned with global harmful impacts than Americans. • Chilean managers scored higher than Australian managers on issues of bribery, and American and Australian mangers were more concerned with who was being harmed in their ethical reasoning than Chilean or Ecuadorian managers. • Iranian managers were found to be conformists and were sociocentric. These traits were found in other predominantly Arab countries and differed significantly from traits exhibited by American managers.

5. Figure 6.1 Stages of moral development and ethical reasoning

6. Corporate culture and ethical climates Corporate culture A blend of ideas, customs, traditional practices, company values, and shared meanings that help define normal behavior for everyone who works in a company. Ethical climate The unspoken understanding among employees of what is and is not acceptable behavior.

7. The components of ethical climates Figure 6.2 Source: Adapted from Bart Victor and John B. Cullen, “The Organizational Bases of Ethical Work Climates,” Administrative Sciences Quarterly 33(1988), p. 104.

8. Three methods of ethical reasoning Figure 6.3

9. Figure 6.5a An analytical approach to ethical problems Step 1 Ask Utility Do benefits exceed costs? Rights Are human rights respected? Justice Are benefits and costs fairly distributed? Yes No Yes No Yes No

10. Figure 6.5b An analytical approach to ethical problems Step 2 Compare results If yes is the answer to all three questions, it is probably ethical If no is the answer to all three questions, it is probably unethical If the answers are mixed, it could be either ethical or unethical

11. Whistle-blowing protection around the world Exhibit 6.Ba • United Kingdom—The U.K. Public Interest Disclosure Act protects most workers from retaliation by their employers, including dismissal, disciplinary action, or transfer. • European Union—The EU published a charter for whistle-blower protection, identifying terms under which commission staff may blow the whistle, imposing a duty upon officials to report suspected wrongdoing, and outlining the channels for reporting malpractice. • South Africa—The Protected Disclosures Act 2 prohibits employers from subjecting an employee to an occupational detriment for raising concerns about unlawful or irregular conduct. Source: Lori Tansy Martens and Amber Crowell, “Whistle-blowing: A Global Perspective (Part 1),” Ethikos, May-June 2002, pp.6-8.

12. Exhibit 6.Bb Whistle-blowing protection around the world • Israel—This country adopted whistle-blowing protection legislation that protects corporate and government workers. • Ghana—A whistle-blower protection act has been proposed to offer rewards and protection to people who volunteer information leading to the prosecution of white-collar criminals. • South Korea—The Anti-Corruption Act established the Korea Independent Commission Against Corruption, whose mission includes the encouragement, protection, and compensation of whistle-blowers. Source: Lori Tansy Martens and Amber Crowell, “Whistle-blowing: A Global Perspective (Part 1),” Ethikos, May-June 2002, pp.6-8.

13. Stigmas against whistle-blowing • Divided loyalties—In some Asian countries, members of the company are treated as family members and it is considered wrong to report on family members. • History—The country may have a tragic history of reporting on others. • Logistics—Employees of global companies may be faced with numerous time zones and language differences that could prevent whistle-blowing or make it more difficult. • Fear of retribution—Despite government laws to protect whistle-blowers, many employees of global businesses fear retaliation.

14. Organizations’ ethics safeguards at work Figure 6.5

15. Corporate ethics awards Business Ethics Awards criteria: • Be a leader in the field, showing the way ethically. • Have programs or initiatives that demonstrate sincerity and ongoing vibrancy that reaches deep into the company. • Have a significant national presence whose ethical behavior sends a loud signal. • Be a standout in at least one area of ethical performance. • Have recently faced a challenging situation and overcome it with integrity.