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Page 6-1
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
PREVIEW CASES
Pfizer
Wells Fargo
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
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. Supply Chain Ethics
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’ course, 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’
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 or professional associations’ websites will provide a rich
research source. Challenge students – possibly matching students
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.
what the organization might be next to improve their ethics program.
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Top Management Commitment and Involvement
Ethics Policies or Codes
Ethics and compliance officers
Ethics reporting mechanisms
Ethics training programs
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
Teaching Tip: Ethics Training
Construct an exercise where the students use their own experiences in
the classroom to identify what educational or training techniques were
Page 6-4
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
Not all ethical issues in business are the same, but ethical challenges occur in all
major functional areas of business. Professional associations for each functional area
often attempt to provide a standard of conduct to guide practice.
LO 6-3: Creating effective ethics polices and identifying responsible individuals to
become the organization’s ethics and compliance officer.
LO 6-4: Constructing successful ethics reporting mechanisms, ethics training
programs, and similar safeguards.
Companies need to create a complex series of ethical safeguards to enable
employees to behave ethically. Ethics codes or policies provide guidance to
LO 6-5: Understanding how to conduct business ethically in the global marketplace.
Ethical issues, such as bribery, are evident throughout the world, and many
international codes.
KEY TERMS
bribery
corporate culture
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
INTERNET RESOURCES
www.thecro.com CR: Corporate Responsibility Magazine
www.dii.org Defense Industry Initiative on Business Ethics
and Conduct
ecoaconnects.theecoa.org Ethics & Compliance Initiative
Connects (Ethics and Compliance Officer Association)
DISCUSSION CASE
EQUIFAX’S DATA BREACH
Discussion Questions
1. Do you think the company reacted appropriately upon learning about the
breach?
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
2. What could Equifax have done differently to prevent the cyberattack?
3. What type(s) of ethical climate existed at Equifax, and did this contribute to
the hacking issues there?
4. What changes should managers and the board of directors make now to
reduce the likelihood of an incident like this from occurring in the future?
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
5. What types of ethics training would you recommend for Equifax employees
in the future to prevent such correct behavior?
