Management Chapter 6 Homework Page Organizational Ethics Introduction Faced With Increasing Pressure Create Ethical Environment

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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

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

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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

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?

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?

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?