978-1259315411 Chapter 6 Solution Manual

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CHAPTER 6

ORGANIZATIONAL ETHICS

INTRODUCTION

Faced with increasing pressure to create an ethical environment at work,

businesses can take tangible steps to improve their ethical performance. The

organization’s culture and ethical work climate play a central role in promoting

ethics at work. Ethical situations arise in all areas and functions of business, and

often professional associations seek to guide managers in addressing these

challenges. Corporations can also implement ethical safeguards to create a

comprehensive ethics program. This can become a complex challenge when

facing different customs and regulations around the world.

PREVIEW CASES

Takata Corporation

Boeing Company

Why are business executives, managers, and employees repeatedly being caught

conducting illegal and unethical activities? What can firms do to minimize or prevent the

unethical activities perpetrated by their executives and employees? Could companies set

in place systems or programs to monitor workplace activities to detect illegal or unethical

behavior?

The preview cases should provide the students with a good starting point to discuss other,

possibly more current, examples of corporate wrongdoing. There are multiple reasons

why employees act unethically and illegally, as discussed in Chapter 5, as well as

examples – although not often portrayed in the media – of employees doing the right

thing. The discussion may focus on [1] the individual decision-maker and her/his

motivations to act ethically or not, [2] pressures faced by the decision-maker from her/his

employer, boss or peers, and [3] organizational systems that help or impede ethical

decision making at work. The emphasis may be on what businesses can do to help

employees act ethically, avoiding the examples depicted in the preview case, or must

efforts to ensure ethical behavior come from government, regulators or the courts?

CHAPTER OUTLINE

I. CORPORATE ETHICAL CLIMATES

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II. BUSINESS ETHICS ACROSS ORGANIZATIONAL FUNCTIONS

A. Accounting Ethics

B. Financial Ethics

C. Marketing Ethics

D. Information Technology Ethics

E. Other Functional Areas

III. MAKING ETHICS WORK IN CORPORATIONS

A. Building Ethical Safeguards into the Company

Teaching Tip: Corporate Ethical Climates

An assessment of the ethical climates of the students’ college or

university may provide the basis for a lively discussion. Students easily

can observe their immediate surroundings and the impact of the

schools’ culture and climates on ethical issues relevant to the students’

lives and use the language in Figure 6.1 to assess the ethical climate

observed.

Teaching Tip: Types of Business Ethics Issues

Have your students prepare a class report that identifies an example of

a business ethics issue for each functional area. If the students have

work or internship experiences, have them draw upon their own

experiences. If not, a review of recent newspapers or business

periodicals will provide a rich research source. Challenge students –

possibly matching students majoring in a discipline to the

corresponding professional code of conduct (e.g. Accounting majors

matched to the AICPA code, etc.), to identify ethical issues in the

current press. Then, locate passages in the professional code as a guide

for those professionals encountering these ethical issues, answering the

question: What should these professionals do when faced with the

ethical issue?

Teaching Tip: Organizational Ethics Programs

This section of the chapter provides an excellent opportunity to bring to

class a number of different local organizations’ ethics programs.

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 Top Management Commitment and Involvement

 Ethics Policies or Codes

 Ethics and compliance officers

 Ethics reporting mechanisms

 Ethics training programs

B. Corporate Ethics Awards and Certifications

IV. ETHICS IN A GLOBAL ECONOMY

A. Efforts to Curtail Unethical Practices

GETTING STARTED

KEY LEARNING OBJECTIVES

LO 6-1: Classifying an organization’s culture and ethical climate.

LO 6-2: Recognizing ethics challenges across the multiple functions of business.

Teaching Tip: Ethics Codes

Examples of corporate codes of ethics are easily found using the

Internet, especially for firms heavily involved in U.S. government

contracting. Students could survey local firms to see if they have

codes. Some colleges or universities have codes of ethics to analyze.

Some faculty members have found great success in having students

craft their own code of ethics, governing their behavior in the class.

Teaching Tip: Ethics Awards

Students could be given the assignment of identifying businesses in the

region that have demonstrated exemplary ethical behavior. This

project might conclude by inviting a company spokesperson from the

award-winning company to speak to the class.

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LO 6-3: Creating effective ethics polices, ethics reporting mechanisms, ethics

training programs, and similar safeguards.

LO 6-4: Assessing the strengths and weaknesses of a comprehensive ethics program.

LO 6-5: Understanding how to conduct business ethically in the global marketplace.

KEY TERMS

bribery

corporate culture

INTERNET RESOURCES

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DISCUSSION CASE

ALCOA’s CORE VALUES IN PRACTICE

Discussion Questions

1. How would you classify Alcoa’s ethical work climate? Which ethical

criterion, as shown in Figure 6.1, was used by the company: egoism (self-

centered), benevolence (concern for others), or principles (integrity

approach)? Or, using Professor Paine’s two distinct ethics approaches, as

discussed in this chapter, was Alcoa’s approach more compliance or

integrity?

Alcoa’s ethics program, as indicated by the title of the discussion case, is based

there appears to be a mix of “personal morality” (principled and individual focus)

2. What role did top management commitment play in developing the ethical

work climate and organizational performance seen at Alcoa? What other

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ethical safeguards are mentioned in the case to support the company’s

efforts at developing a strong ethical culture?

organization’s integrity, even when this meant making a tough decision to

terminate a long-time manager. Other ethical safeguards in place at Alcoa

Network.

3. Was Alcoa justified in changing management at the facility for failure to

report workplace accidents, even though no serious harm resulted from the

workplace incident?

adhere to the company’s reporting systems. Compliance with the reporting of a

workplace hazard was consistent with the values that senior management wanted

principled approach discussed in Chapter 5.

4. Can the focus on safety seen at Alcoa be duplicated into other ethics and

compliance areas and how would this be accomplished?

students to explore through Internet research.

In addition, at the core of Alcoa’s focus on safety is the reliance on integrity – doing the

discussed elsewhere in the book.

5. Why do you think Alcoa’s strong values-based culture failed to prevent corrupt

acts by a subsidiary, as described earlier in the chapter? Do you think Alcoa’s

creation of a new code of conduct in 2014 will help prevent incidents like this in the

future?

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will happen, as they did at Alcoa.

ethical behavior worldwide at Alcoa but will not be perfect.

reporting safety incidents, Alcoa management communicated to employees that this sort

of behavior was unacceptable and that there are consequences for this sort of behavior.