1. Business Ethics: The Role of culture and values for an ethical workplace
David Swartout – MGMT 6600

2. Author’s Background Nancy Lockwood
HR expert for the Society for Human Resource Management
Certified Senior Professional in Human Resource Management and Global Professional in Human Resource Management
Published several books
Work/Life Balance: Challenges and Solutions
Corporate India and HR Management
Society for Human Resource Management
Founded in 1948 by 28 individuals who wanted a national organization to represent the HR profession
Goal is to continue professional development, promote networking, and advance the interests of the HR profession
Headquartered in Alexandria, VA today and has 350 staff members, and over 250,000 global student and professional members in 140 countries
SHRM is the global HR professional organization that exists to:
Build and sustain partnerships with human resource professionals, media, governments, non-governmental organizations, businesses and academic institutions to address people management challenges that influence the effectiveness and sustainability of their organizations and communities.
Provide a community for human resource professionals, media, governments, non-governmental organizations, businesses and academic institutions to share expertise and create innovative solutions on people management issues.
Proactively provide thought leadership, education and research to human resource professionals, media, governments, non-governmental organizations, businesses and academic institutions.
Serve as an advocate to ensure that policy makers, law makers and regulators are aware of key people concerns facing organizations and the human resource profession.

3. Key Points/Major Findings
Leadership and organizational culture determine the message of business ethics in an organization
Establishing the value for ethical behavior boosts trust and transparency
Training and codes of conduct
New global movements increase the need for understanding of different cultures and values
This article discusses the importance of leadership and how it can affect the corporate message of ethics
Trust and transparency are important to make sure all employees feel they are treated fairly
Proper training and codes of conduct are necessary to establish an ethical corporate culture
The need for managers to think of other cultures in the global market and how they act ethically

4. What is business ethics?
Includes:
Organizational values
Guidelines and codes
Legal compliance
Risk Management
Behavior
Organization leadership is responsible for establishing the foundation of ethics in a workplace. Effective management can use these factors to influence employee satisfaction, performance, and productivity
This article mainly focuses on organizational culture and values, mostly targeting HR professionals and managers.

5. Where did business ethics come from?
Codes established in the 1920’s
JC Penny introduced code of conduct in 1913
Grew in 1980’s in response to government and legal pressures
National scandals have increased demand for stricter organizational code of ethics and values
2) 1980s response was to government regulations for defense contractors at the time. Codes of ethics were developed so defense contractors would comply with a high standard of conduct.
3) In 1999 a survey of Fortune 1000 companies was taken and found only 20% had adopted their ethics policies before 1976 and 60% since the mid-eighties
4) Scandals such as Enron and Worldcom resulted in the Sarbanes-Oxley Act which is intended to foster honest communication between company officers and the shareholders of publicly traded companies
Personal Story – I had to sign a statement regarding honesty and integrity when I was hired at my company Comdata
We have to pass regular training and online quizzes from our HR department regarding Sarbanes Oxley, business ethics, integrity, and honesty. More and more companies are implementing training like this from their HR departments and hold business ethics in a higher regard than ever before.
Has anyone else had to sign an agreement or pass a test in business ethics for their job? How does your company or manager discuss ethics with you?

6. Ethical Leadership and Culture
Developed through communication, rules, leadership, rewards, rituals, and stories
Includes views of employees, organizational values, and constant compliance
3 key questions:
How does the company portray values?
Do company policies reflect corporate values?
Are employees treated fairly?
Corporate integrity is reflected in leadership
Leaders should model the ethical behavior they require from their employees
2009 National Business ethics survey indicated 80% approval that top management sets a good example for ethical behavior and 86% for direct supervisors. Good but room for improvement. Poor leadership and not setting examples for ethical behavior destroys the culture of an organization
Problem with Ethical Leadership in today’s marketplace

7. Standards and Practices
Managers within an organization are expected to:
Support employees in following standards
Talk about importance of ethics and doing the right thing
Set a good example
Held accountable if found in violation of policies
Code of Conduct = platform of ethical workplace
Encouraging ethical behavior
Reward and recognition/performance evaluation
If a manager within an organization isn’t following company standards of ethics, how can they expect their employees to?
Code of conduct describes a value system based on ethical principles and rules
Conflicts of interest
Accepting gifts
Use of company assets – company credit card
Personal story – I had to sign a code of conduct and letter showing the use of company credit cards when I was granted one for travel
Did anyone else have to sign one? Have you read the MTSU code of conduct? Shows rules for cheating, student behavior, etc?
These tools reinforce ethical behavior
Awards for ethical behavior help reward and boost ethical behavior
Performance reviews may include a section on how the employee demonstrates the values of the organization

8. Generational Differences
Work ethic and conflict
Baby Boomers, Generation X, Millennials (Gen Y)
Volunteerism
Showcase ethical and moral behavior through community service
Burk, B., Olsen, H., Messerli, E. (2011). Navigating the Generation Gap in the Workplace from the Perspective of Generation Y. Parks & Recreation, Vol. 46, Issue 5, p35-36.
Varied ethical perspectives exists across different generations
Baby Boomers: They enjoy being part of a group and want to be recognized for their hard work and dedication.
Generation X: They don't want to be micro-managed, but give them opportunities to have flexibility in their jobs. They are a determined group and will do a good job if they are given opportunities to multi-task.
Often, our value systems and goals are the same as our supervisor or co-worker, but the way we communicate these can be quite different. We, as Generation Y, get a bad reputation for our communication styles and desire to be heard, but this may be because we have been told we must speak up and speak often if we want to advance in the workplace. We may not have the best idea for a solution, but much of our education or training has taught us that any idea is better than no idea. We are not suggesting you stop and bite your tongue, but a slight pause to collect your thoughts before speaking might help you better communicate your idea to Baby Boomers and Generation Xers.
Baby boomers may see a lack of work ethic in younger generations because they value more time spent at work and less vacation
Generation X and Y show work ethic through teamwork, collaboration, and meetings. Also value their time away from work more importantly than baby boomers.
No matter the age, people want credible trustworthy leadership and value achievement and responsibility
Millenials, or Generation Y tend to value volunteerism in their communities.

9. Ethical Decision Making
Personal values vs. corporate message
Potential conflict
Moral Motivation
Why should I do the right thing?
Key ethical leadership skills
A person’s values drive their decision making and sometimes feel conflicted between their own values and the corporate message
In today’s business world, managers are forced to make quick decisions which can be pressured and fail to focus on ethical principles
Guidelines for ethical decision making are important and provide framework for learning.
Personal Story – My company focuses on new hire training and a large portion of which is based on ethical decision making
Key leadership skills in ethics that are important for today’s workplace:
Personal integrity and good character
Moral reasoning and compliance with corporate ethics
Moral feelings – cost/benefit analysis
Has anyone ever faced a decision in which they were forced to decide between their own personal values and those of the company they work for?

10. Challenges of Leadership
“The ever-present incentive for leaders to show profitability, coupled with the inability of governments or private industry to support continuous controls or monitoring, condemns these new rules, restrictions, and enforcement mechanisms to relative ineffectiveness.”
Lager, James M. (2010). Governments demand compliance, ethics demands leadership. Journal of Public Affairs, Vol. 10, Issue 3, P
This article indicates the struggle of leaders within an organization to make the right ethical decisions, yet still show the profitability that is expected of them from their shareholders.
Discusses how the government expects the compliance of corporations in ethical performance, but solid leadership is necessary within an organization first.

11. Corporate Ethics Programs
Training
Web-based
Webcast
In-person
Six elements necessary for proper ethics and compliance program
Training assists employees and managers to make sure they aren’t conflicted between their own values and “doing the right thing”
Different sources available for training. As I said, my company offers web-based training and quizzes. Has anyone taken training in business ethics for their company?
Six elements for a solid program:
Written standards – code of conduct
Training on ethics
Ability to seek ethics related advice for employee – HR department
Process to report misconduct anonomysly – important for people to feel comfortable in reporting their managers
Disciplinary action for those who violate policies
Inclusion of ethical behavior in every employees regular performance appraisal
- Part of my mid year and end of year review includes a section on how we follow through on Comdata’s values and goals as a company.

12. Perceptions of Fairness
Organizational justice
Fairness of outcomes/allocation of resources
Fairness of decision making process
Fairness of personal treatment by supervisor
Transparency is key to fairness
If ethics policy is applied inconsistently or not transparently, it can negatively impact employee moral
Questions of fairness may arise if poor management and communication of policies exist
Has anyone experience what you saw as an unfair policy or something that was inconsistent for different employees?
Maybe someone was punished for something and someone else wasn’t? Did this cause you to question the fairness of the organization? Did this affect your moral?
Transparency reduces the perception of favorable treatment, liking one employee over the other, and can increase productivity and commitement.

13. Global Ethics Global mindset Manager’s responsibilities
Only in individual development
Lack of norms within organizations
Manager’s responsibilities
Communication style
Culturally neutral
Lack of understanding leads to several troubling factors
There is a need now more than ever for organizations to establish an organizational mindset for a global approach to business ethics
It has often been left up to the employee to familiarize themselves with other cultures and how they operate ethically
It is important for a manager to remain culturally neutral and communicate effectively with employees of different cultures
Failure to do so can lead to
Poor team performance – some employees can establish relationships while some can’t
Inconsistent productivity – some employees may isolate themselves
Employee dissatisfaction – this isolation can create a sense of inequality and unfair treatment, affecting productivity
Employee retention problems – employees who don’t feel appreciated lose their faith in the organization and may leave

14. International Ethical Conduct
“If MNCs are to develop ethical business practices contingent and sensitive to cultural differences, a better understanding of the factors contributing to ethical standards and the impact that ethical behaviors have on subsequent standards and conduct becomes critical.”
Luthans, F., & Stajkovic A. (1997). Business Ethics across Cultures: A Social Cognitive Model. Journal of World Business. Vol. 32, Issue 1, p17-34.
Although there is general agreement that ethical business conduct enhances chances of organizational success, MNCs still face the challenge of how to determine what constitutes ethical conduct in different countries simply because what is ethically "right" and "wrong" is culturally determined
To date, little effort has been given to the development of a conceptual framework for the identification and analysis of such factors and their relationships.
MNCs = multi-national corporations

15. In Conclusion
Leadership determines tone of business ethics in the workplace
How it is perceived and communicated
Foundation of solid values creates the right decisions
Boosts trust, fairness, transparency, compliance
Global organizations must understand different cultures

16. Future Implications
What do you see as a potential challenge for businesses in their ability to operate in an ethical manner in the future?
“Critics are increasingly complaining that business schools focus too much teaching effort on maximizing shareholder value, with only a limited understanding of ethical and social aspects of business leadership.”
Cavaliere, F., Mulvaney, T., & Swerdlow, M. (2010). Teaching business ethics after the financial meltdown: is it time for ethics with a sermon?. Education, Vol. 131, Issue 1, p3-7.
Our country is faced with a financial crisis of mammoth proportions: a crisis rooted in ethics, or rather, the lack of ethics. Critics are increasingly complaining that business schools focus too much teaching effort on maximizing shareholder value, with only a limited understanding of ethical and social aspects of business leadership. Business teachers and their accrediting agencies, such as the American Assembly of Collegiate Schools of Business (AACSB), need to step up and question the effectiveness of current ethics curricula and accept responsibility for seeing that teaching ethics equates to learning ethics. Society should, sooner than later, demand that ethics education translate into ethical behavior in the workplace.
Do you think schools (MTSU) is doing an effective job of teaching ethics to students to prepare them for how they will be tested in the workplace?

17. References
Burk, B., Olsen, H., Messerli, E. (2011). Navigating the Generation Gap in the Workplace from the Perspective of Generation Y. Parks & Recreation, Vol. 46, Issue 5, p35-36.
Cavaliere, F., Mulvaney, T., & Swerdlow, M. (2010). Teaching business ethics after the financial meltdown: is it time for ethics with a sermon?. Education, Vol. 131, Issue 1, p3-7.
Luthans, F., & Stajkovic A. (1997). Business Ethics across Cultures: A Social Cognitive Model. Journal of World Business. Vol. 32, Issue 1, p17-34.
Lager, James M. (2010). Governments demand compliance, ethics demands leadership. Journal of Public Affairs, Vol. 10, Issue 3, P