Readings High Points Key Points From Each Article Day I

Can a Corporation Have a Conscience? It can and it should. No more or less morally responsible than individuals Not solely economic (individuals as means) nor legal-political (any action that is not punished by government) Three uses of “Responsible” –Causal (blame – after the fact) –Rule-following (follow social and legal norms) –Decision-making (independent judgment)

Corporate Social Responsibility and Employee Engagement CSR can and will attract employees and retain them –Generation Y workers set social responsibility above compensation –Even stronger in China, India and Germany –Communicate and engage CSR works when employees are engaged in specifics Belief in the values and socially responsible goals of the organization retains employees

Corporate Social Responsibility: Doing Well by Doing Good CSR can be an efficient management strategy –Improved economic performance –Improved competitive position, including first mover advantage Stakeholder approach –Stakeholders valued by cash flow influence –Net present value –“Treat society well… It will return the favor

Corporate Social Responsibility: Doing Well by Doing Good Structural action vs. strategic action –Meet claim without creating opportunity for competitors –Structural action when opportunity would be created –Strategic action to create advantage (first mover) Agent – Owner –Different time horizon/discount rates –CSR best effected by flat compensation structure (salary only)

What Matters Most: Corporate Values and Social Responsibility Companies are adopting social responsibility programs, world-wide Workers and managers are seeking opportunity to do good Most frequent obstacle is lack of enlightened leadership Public less tolerant Change in role of NGO’s – collaborative relationships Starts with values – living in the hearts and minds of employees Transparency forms the foundation of trust.

“Good” Bad Ethical Managers Choices Rationalizations –Not “really” illegal or immoral –In individual’s or company’s best interest –It will never be found out –Company will condone and protect Know which risks are worth taking Prevent misconduct, not catch it

Managing for Organizational Integrity Company responsible for individual’s misdeeds –Everything to do with management –Provide leadership and institute systems to facilitate ethical conduct Shape individuals’ behavior –Incentive and performance systems –Management behavior

Managing for Organizational Integrity Compliance versus integrity –Compliance = legal –Integrity = ethical Compliance –Insurance for executives –Factors in sentencing Integrity –Leads organization –Engages employees

Readings High Points Day II

Building Organizational Integrity Improve ethical awareness Limit risks from employees’ unethical behavior (often in spite of a code of ethical behavior) Create a culture that encourages doing the right thing rather than just compliance. Employee development is valued.

Building Organizational Integrity Barriers –Unrealistic performance objectives –Workforce demographics –State of organization –Cynicism

Integrity and Management Avoid decisions that we later regret Tests of judgment –Publicity, trusted friend, reciprocity, universality, obituary One of the greatest risks of professional life is that day-to-day pressures will lead to a gradual erosion of integrity

Discipline of Building Character Challenges – choice between right and right. –Forces focus on core values –Creates basis for future Defining moments –Individual – Who am I? –Work Groups – Who are we? –Executives – Who is the Company?

Defining Moments Individual –Conflicting feelings –Deeply rooted values Work Group –Points of view (other ethical viewpoints) –Influence behavior – Truth as a process Executive –Personal and organizational strength –Role of organization in society –Vision to reality