Making it Stick: Doing What’s Right in a Competitive Market Chapter 10 Making it Stick: Doing What’s Right in a Competitive Market Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Key Components of an Ethics Policy Characteristics of a market Demanding customers Impatient stockholders Aggressive vendors Demanding federal, state, and local officials demanding creditors Aggressive competitors

Sustainable Ethics Ethical behavior that persists long after the latest public scandal or the latest management buzzword Stages in making ethical behavior sustainable Establish a code of ethics Support the code of ethics with extensive training for every member of the organization

Sustainable Ethics Hire an ethics officer Celebrate and reward the ethical behavior demonstrated by your employees Promote your organization’s commitment to ethical behavior Continue to monitor the behavior as you grow

Establish a Code of Ethics Well-written code of ethics can: Capture what the organization understands ethical behavior to mean Establish a detailed guide to acceptable behavior State policies for behavior in specific situations Document punishments for violations of those policies

Establish a Code of Ethics Recommendations of the Institute of Business Ethics to create an ethics code Find a champion Get endorsement from the chairman and the board Find out what bothers people Pick a well-tested model

Establish a Code of Ethics Produce a company code of conduct Try it out first Issue the code and make it known Make it work

Support the Code With Extensive Training Each department of the organization should apply the code to examples that could arise in their area where employees can work on: Recognizing the ethical issue Discussing options for an appropriate response Selecting the best option for the organization

Hiring an Ethics Officer Ethics officer: Senior executive responsible for monitoring the ethical performance of the organization both internally and externally Enforce the code of ethics and provide support to any employees who witness unethical behavior Sends a clear message to your stakeholders Provides an appropriate person for employees and their managers to turn to when they need additional guidance and support

Encouraging Ethical Behavior Celebrate examples of good ethical behavior in the company newsletter Award prizes for ethical behavior Award prizes for new and creative ideas Recognize employees who represent the standard of behavior to which you are committing Declare an Ethics Day and allow every department to share their successes stories

Promote the Organizations’ Commitment to Ethical Behavior Offer a no-questions-asked refund Offer a 110% price-match guarantee If the client is overcharged accidently, give them a refund plus interest before their accounting department figures out the error and asks for the money

Promote the Organizations’ Commitment to Ethical Behavior Get clients involved in the development of the ethics policies Let employees visit client sites to talk about the code of ethics in person Share success stories with all stakeholders Invite stakeholders to the Ethics Day celebration

Continuous Monitoring Any organization’s commitment to ethical performance must be watched constantly Continued growth of technology will present new situations for ethical dilemmas so the code may need to be re-written on a regular basis

Becoming a Transparent Organization Result when organizations are driven by events and/or a fear of future events Reactive ethical policies Result when the company develops a clear sense of what they stand for as an ethical organization Proactive ethical policies Organization maintains open and honest communications with all stakeholders Leads to the conclusion of the loss of market advantage through corporate surveillance Transparency

Organizational Integrity Characteristic of publicly committing to the highest professional standards and sticking to that commitment It is vital to earn the trust and confidence of the stakeholders for the long-term survival of the organization