1. MGMT 452 Corporate Social Responsibility
Zeynep Gürhan-Canlı
Strategic Approaches to Improving Ethical Behavior
Chapter 6
March 10, 2010

2. The Need for Organizational Ethics Programs
Organizations are held accountable for the conduct of their employees.
Without such programs, employees may not understand acceptable behavior.
Organizations can create unethical corporate cultures.
Pressure to succeed
Rewarding the wrong behavior
Stakeholders demand greater ethical and social responsibility.

3. Root Causes of Misconduct

4. Codes of Conduct
Formal statements that describe what an organization expects of its employees. Reflect the board of directors and senior management’s desire for organizational compliance.
Policies and procedures.
Government law and regulation.
Relationships with customers, suppliers,and competitors.
Acceptance of gifts, travel, and entertainment.
Political contributions.
Expense reporting.
Conflicts of interest.
Business payments.

5. Texas Instruments: Ethics Quick Test
Is the action legal?
Does it comply with our values?
If you do it, will you feel bad?
How will it look in the newspaper?
If you know it’s wrong, don’t do it!
If you’re not sure, ask.
Keep asking until you get an answer.

6. Ethics Officers Assesses organizational needs and risks
Develops and distributes the code of ethics
Conducts ethics training programs
Establishes and maintains a confidential system to respond to ethics questions
Makes certain the company is in compliance with government regulation
Monitors and audits ethics conduct
Takes action when there is a code violation
Reviews and updates the code

7. Ethics Training and Communication
Educates employees about the firm’s policies, expectations, relevant laws and regulations, and general social standards.
Makes employees aware of available resources, support systems, and personnel who can assist with ethics and legal advice.
Can empower employees.

8. Factors Crucial to Ethics Training
Identify the key ethical risk areas
Relate ethical decisions to the organizations values and culture
Communicate company codes, policies, and procedures regarding ethical business conduct
Provide leadership training to model desired behavior
Engage in regular training events using a variety of educational tools
Establish manuals, websites, and other communication to reinforce ethics training
Evaluate and use feedback to improve training

9. Establishing Systems to Monitor and Enforce Ethical Standards
Help or assistance lines
Report and request assistance with ethical concerns
Observation and feedback
Determine level of adequacy in handling ethical issues
Whistle-blowing
Exposing an employer’s wrongdoing to outsiders, such as the media or government agencies
Protection for accurate exposures

10. Questions to Ask Before Engaging in External Whistle-blowing
Have I exhausted internal anonymous reporting opportunities within the organization?
Have I examined company policies and codes that outline acceptable behavior and violations of standards?
Is this a personal issue that should be resolved through other means?
Can I manage the stress that may evolve from exposing potential wrongdoing in the organization?
Can I deal with the consequences of resolving an ethical or legal conflict within the organization?

11. Implementing Organizational Ethics Programs
Role of leadership
Transformational leaders
Communicate a sense of mission, stimulate new ways of thinking, and enhance as well as generate new learning experiences.
Consider employee and organizational needs.
Transactional leaders
Make certain that the required conduct and procedures are implemented.
Employees achieve a negotiated level of required ethical performance.

12. Leaders influence Corporate Culture
Organizational leaders use their power and influence to shape corporate culture. Power refers to the influence that leaders have over the behavior and decisions of subordinates.
Exerting power is one way to influence the ethical decision-making framework.

13. Five Power Bases
There are five power bases from which one person may influence another:
Reward power
Coercive power
Legitimate power
Expert power
Referent power

14. The Role of an Ethical Corporate Culture
Top management provides a plan for the corporate culture
If executives and CEOs do not explicitly address issues, a culture may emerge where unethical behavior is sanctioned and rewarded.
To be successful, ethical standards and expected behaviors should be integrated throughout every organizational process from hiring, training, compensating, and rewarding to firing.

15. Variation in Employee Conduct
Because people are culturally diverse and have different values, they interpret situations differently and will vary in the ethical decisions they make on the same ethical issue.

16. Variation in Employee Conduct