1 MSETM 5110 – Ethics for Technology Managers What Constitutes Ethical Behavior? Webster’s definition Dialectic approach

2 MSETM 5110 – Ethics for Technology Managers Recap of Session 4 Continued the Ethics Journey: Valuing Ethics “In the News” Principles/Reputation/Relationships Discipline and Commitment Some corporate/Organization Examples: Biogen, Form, GM, NAR, McDonald’s, Wal-Mart, Phillip Morris, Lockheed Martin Technology Innovation and Ethics Values-Based vs. Compliance-Based Ethics Core Values vs. Aspirational Values A Framework: Right, Legal, Compliance with Enterprise Policy Building/Enhancing Trust

3 MSETM Ethics for Technology Managers Personal “Mini Survey” 1.My company acts ethically and with integrity: a.consistently b.occasionally c.rarely or not evident 2.My company promotes acting with integrity: a.strongly b.somewhat c.not evident 3.I act with honesty and integrity: a.consistently b.most of the time c.occasionally

4 MSETM Ethics for Technology Managers Personal “Mini Survey” (cont’d.) 4.Place your company on the following continuum: Lowest IntegrityAverage IntegrityHighest Integrity _________________________________________________________ 5.Place yourself on the following continuum: Lowest IntegrityAverage IntegrityHighest Integrity _________________________________________________________ 6.Your comfort level with your company’s behavior and commitment to ethical behavior: a.very comfortable b.somewhat comfortable c.Uncomfortable

5 MSETM Ethics for Technology Managers Personal “Mini Survey” (cont’d.) 7.Your comfort level with your own behavior: a.very comfortable b.somewhat comfortable c.uncomfortable 8.I am familiar with my company’s values statement: a.yes b.no 9.I am familiar with my company’s strategic/business plan: a.yes b.no 10.There is clear linkage/integration of values and strategic/business plan: a.yes b.no

6 MSETM 5110 – Ethics for Technology Managers What Happened to Our Corporate Icons?

7 MSETM 5110 – Ethics for Technology Managers Fortune Top 10: Rev. $’s B 1.Wal-Mart Exxon Mobil General Motors Ford Motor Enron General Electric Citigroup Chevron Texaco IBM Phillip Morris 72.9

8 MSETM 5110 – Ethics for Technology Managers Most Admired U. S. Companies (Fortune Magazine): 1.General Electric 2.Southwest Airlines 3.Wal-Mart Stores 4.Microsoft 5.Berkshire Hathaway 6.Home Depot 7.Johnson & Johnson 8.FedEx 9.Citigroup 10.Intel

9 MSETM 5110 – Ethics for Technology Managers Most Admired Global Companies (Fortune Magazine): 1.General Electric14.Target 2.Wal-Mart Stores15.PepsiCo 3.Microsoft16.Proctor and Gamble 4.Berkshire Hathaway17.AOL Time Warner 5.Home Depot18.Anheuser-Busch 6.Johnson & Johnson19.Exxon Mobile 7.FedEx20.Coca-Cola Enterprises 8.Citigroup21.J. P. Morgan Chase 9.Intel22.American International Group 10.Cisco Systems23.Dell Computer 11.Merck24.Nokia (Finland) 12.Pfizer25.Toyota Motor (Japan) 13.United Parcel Services

10 MSETM 5110 – Ethics for Technology Managers Purpose Create Value/Improve Quality of Life Sustainment/Survivability Connectivity Responsibility Accountability Relevancy HBR Articles/Case Studies Newspaper Articles Application Capturing the Learnings Furthering Science and Technology Personal Growth and Development Science: “what is” Engineering: “creating what has never been”

11 MSETM Ethics for Technology Managers Why Ethics? Makes Good Business Sense Establishes a Governance Process for Desired Culture Enhances Employee Morale Protects the Public Health, Safety, and Welfare Meets Stakeholder Expectations Assures Long-Term Viability of the Organization Assures Compliance

12 MSETM 5110 – Ethics for Technology Managers Corporate Ethics* Problem: A Betrayal of Quality Principles 1.Results: Pumping Up Stock Price at Any Cost (vs. Fundamental Focus on Quality and Customer Satisfaction) Malfeasance Robs the Stakeholders of Better Product and Services, and Long-Term Value 2.Myths: Audited Financial Statements Accurately Reflect the Financial Condition of the Firm Stock Analysts Offer Unbiased Research Corporate Boards Exercise Independent Oversight of Management

13 MSETM 5110 – Ethics for Technology Managers Corporate Ethics* Problem: A Betrayal of Quality Principles 2.Myths (cont’d.): Regulatory Mechanisms Provide Adequate Protection to Investors American Business Is An International Haven of Fair Play, Healthy Competition, Ethical Behavior, and Trustworthiness Few U. S. Organizations Have Reached World-Class Excellence (Dr. Joe Juran) Even Fewer Organizations Have Sustained Excellence during Changes in Leadership (Juran) Most corporate Quality Failures Rest with Leadership (Juran)

14 MSETM 5110 – Ethics for Technology Managers Corporate Ethics* Problem: A Betrayal of Quality Principles 3.What Went Wrong? Ethical Lapses at Top Levels of Businesses Away From Principle-Centered Leadership Companies Chasing Paper Profits Sought to Grow Bigger/Faster Managing by the Numbers Resulted in “Cooking the Books” Corporate Leaders Pursued Easy Riches and Personal Gain Corporate Leaders Focused on Short-Term Bottom Line Lip Service to Corporate and Personal Ethics Penalizing the Most Flagrant Criminal Activity Does Not Address the Need to Raise the Overall Ethical Standards of Business Conduct

15 MSETM 5110 – Ethics for Technology Managers Corporate Ethics* Problem: A Betrayal of Quality Principles 4.The Solution: Applying Principles of Effective Leadership—Clear Vision, Doing the Right Thing and Doing Things Right The Discipline of Quality Management As a Systematic Approach Involving: –Problem-Solving Diagnostics –Training –Change Management –Policy Reform A Quality Culture and a Habit of Ethical Business Behavior Must Operate in Parallel to Restore The Foundation of Trust Upon Which Our Economic Systems Operate Smoothly * American Society for Quality September 9, 2002

16 MSETM Ethics for Technology Managers So, What’s at Stake? “By exhibiting and supporting ethically sound behavior, managers can strengthen the relationships and reputations their companies depend on.”* *Paine, Managing for Organizational Integrity.

17 MSETM Ethics for Technology Managers Doing the Right Things [Strategic What] and Doing Things Right [Tactical How]

18 MSETM 5110 – Ethics for Technology Managers The Journey Leadership (Mission/Values) Management (Operating Principles) Business Model (Structure) Culture for Excellence (Energy/Innovation) Right Metrics (Stakeholder Value) Sustained Success (Performance Measures)

19 MSETM 5110 – Ethics for Technology Managers The Final Voyage of the Challenger

20 MSETM Ethics for Technology Managers Challenger Disaster Challenger Disaster, accident that destroyed the United States space shuttle Challenger 73 seconds after takeoff from the Kennedy Space Center on January 28, The crew—mission commander Francis R. Scobee; pilot Michael J. Smith, mission specialists Ronald E. McNair, Ellison S. Onizuke, and Judith A. Resnik; and payload specialists Gregory B. Jarvis and Christa McAuliffe, a high school teacher from New Hampshire—died in the accident. Following the incident, President Ronald Reagan appointed a special commission to investigate the cause of the accident and to develop corrective measures based on the commission’s findings. The commission was headed by former secretary of state William Rogers and included former astronaut Neil Armstrong and former test pilot Chuck Yeager. It found fault with a failed sealant ring and with the officials at the National Aeronautics and Space Administration (NASA) who allowed the launch to take place despite concerns voiced by NASA engineers.

21 MSETM Ethics for Technology Managers Challenger Disaster (cont’d.) According to the commission’s report, the disaster was caused by the failure of an “O-ring” seal in the solid-fuel rocket on the shuttle’s right side. The seal’s faulty design and the unusually cold weather, which affected the seal’s functioning, allowed hot gases to leak through the joint. Flames from inside the booster rocket escaped through the failed seal and enlarged the small hole. The flames then burned through the shuttle’s external fuel tank and through one of the supports that attached the booster to the side of the tank. The booster broke loose and collided with the tank, piercing the tank’s side. Liquid hydrogen and liquid oxygen fuels from the tank and booster mixed and ignited, causing the shuttle to tear apart.

22 MSETM Ethics for Technology Managers Challenger Disaster (cont’d.) The shuttle launch program was halted during the commission’s investigation and was not resumed until shuttle designers made several technical modifications and NASA management implemented stricter regulations regarding quality control and safety. Shuttle missions resumed on September 28, 1988, with the flight of the shuttle Discovery. See Space Exploration: Current and Future Programs. “Challenger Disaster.” Microsoft® Encarta Online Encyclopedia (3 Sept. 2002) ©2002 Microsoft Corporation. All Rights Reserved.

23 MSETM 5110 – Ethics for Technology Managers Where Do We Go From Here?

24 MSETM 5110 – Ethics for Technology Managers Course Syllabus Scope Strategies that can help to keep yourself and your organization on the right track Techniques for finding practical, responsible approaches to handling the challenges and ethical dilemmas that confront people every day Guidance on how bet to build an organization that values doing the right thing rather than the expedient thing Explanations as to why Enron, WorldCom, Global Crossing, Adelphia, and others are in the news

25 MSETM 5110 – Ethics for Technology Managers Four Key Questions Before Making a Business Decision: Is It Right? Is It Legal? Is It Consistent With Company Policy? How Will It Look to the Outside World?

26 MSETM 5110 – Ethics for Technology Managers “Do the Right Thing”