MKTG Ethics Final

Ethical Issue Intensity is:

the relevance or importance of an event or a decision in the eyes of the individual, work group and/or organizations.

Code of Conduct definition:

-Begin the process of establishing organizational ethics programs by developing this; formal statements that describe what an organization expects of its employees o is a written document that may contain some inspirational statements but mainly specifies acceptable and unacceptable types of behavior. o Is more akin to a regulatory set of rules, and as such, tends to elicit less debate about specific actions.

Values definition:

-Enduring beliefs and ideals that are socially enforces [Trust and Integrity] -Several desirable or ethical values for business today are: o Teamwork o Trust o Integrity -Based on organizational or industry best practices

How does an ethics audit assist in managing organizational ethics?

-An audit can be a precursor to setting up an ethics program, as it identifies the firm's ethical standards as well as its existing policies and risk areas. Recent legislation and FSGO amendments encourage greater ethics auditing as companies attempt to demonstrate to various stakeholders that they are abiding by the law and have established programs to improve ethical decision making. -Assessment of an organization's ethical culture is necessary to improve ethical performance and to document in legal proceedings that a firm has an effective ethics program. Companies can use ethics audits to detect misconduct before it becomes a major problem, and audits provide evidence of a firm's attempts to identify and deal with major ethical risks.

Why is there a need for an organizational ethics program?

-An ethics program can help avoid legal problems: The FSGO encourages companies to assess their key risk areas and customize a compliance program to address these risks and satisfy key effectiveness criteria. An effective risk assessment involves not only examining legal issues but also environmental, health and safety, and other risk areas. Companies should prioritize and weigh these risks based on their potential impact on the organization. Firms can then use these risk assessments to change or update internal control mechanisms. It is also important to monitor and weigh the risks of third-party suppliers and/or business partners since a company can be damaged by misconduct that occurs in the supply chain.

What are the challenges that whistle blowers face and how can companies help to support a reporting culture when perceived misconduct is observed

-Challenges include the possibility of losing their jobs or being forced to retire. A study of 300 whistle-blowers by researchers at the University of Pennsylvania found that 69 percent lost their jobs or were forced to retire after exposing their companies' misdeeds. About 21 percent of respondents to the National Business Ethics Survey indicated they experienced some form of retaliation after reporting misconduct. -Legal protection for whistle-blowers exists to encourage reporting of misconduct. Whistle-blower laws have provisions against retaliation and are enforced by a number of government agencies. •Under the Sarbanes-Oxley Act, the U.S. Department of Labor (DOL) directly protects whistle-blowers who report violations of the law and refuse to engage in any action made unlawful. •The Corporate and Criminal Fraud Accountability Act (CCFA) protects employees of publicly traded firms from retaliation if they report violations of any rule or regulation to the Securities and Exchange Commission, or any provision of federal law relating to fraud against shareholders. It also requires attorneys to become internal whistle-blowers as well. •The 2010 passage of the Dodd-Frank Act proposed additional incentives for whistle-blowers. Under the new rules, whistle-blowers who provide information that aids in the recovery of over $1 million could receive 10 to 30 percent of that amount. The belief is that monetary incentives will prompt observers of corporate misconduct to come forward and report their observations.

What is the role of corporate culture in ethical decision making?

-Comparing the firms activities with its mission statement, goals and objectives help the firm to see if they are staying true to their values. There are also trade associations have come up with guidelines over the years from others in the industry and have dispersed these guidelines within their industries. -these rules help guide the decision-making process. The interaction between the company internal rules and regulations and industry guidelines form the basis of whether a business is making ethical or unethical decisions.

Principles definition:

-General boundaries for behavior that often become the basis for rules [Human rights, freedom of speech] -Specific and persuasive boundaries for behavior that should not be violated

How does cultural relativism relate to international ethical decision making?

-Many people resort to cultural relativism when they defend the payment of bribes/other questionable practices when they are conducting business where it is the norm -When conducting international business, they question of whose values/ethical standards take precedence is a big issue people face.

Why is there a need for an organizational ethics program? continued

-One reason ethics programs are required in one form or another is to sensitize employees to the potential legal and ethical issues within their work environments. -Studies show ethics programs can increase employees' ethical awareness, participation in ethical decision making, and ethical behavior. -To promote legal and ethical conduct, an organization should develop a program by establishing, communicating, and monitoring the ethical values and legal requirements that characterize its history, culture, industry, and operating environment. -Without such programs, uniform standards, and policies of conduct, it is difficult for employees to determine what behaviors are acceptable within a company.

What can ethical leaders do to manage variation in employee conduct (ethical diversity among employees)?

-Organizations should focus particular attention on managers who oversee the day-to-day operations of employees within the company. -They should also provide training and communication to ensure the business operates ethically, it does not become the victim of fraud or theft, and employees, customers, and other stakeholders are not abused through the misconduct of people who have a pattern of unethical behavior. -Companies that fail to monitor activities and enforce ethics policies provide a low-risk environment for those employees inclined to take advantage of situations to accomplish their personal, and sometimes unethical, objectives.

How does an ethics audit assist in managing organizational ethics? continued

-Other firms might conduct audits in an attempt to comply with the FSGO's requirement that the board of directors oversee the discovery of ethical risk, design and implement an ethics program, and evaluate performance. Some companies view the auditing process as tied to continuous improvement that is closely related to improved financial performance. -The auditing process can highlight trends, improve organizational learning, and facilitate communication and working relationships.18 Auditing can also help companies assess the effectiveness of their programs and policies, which often improves their operating efficiencies and reduces costs. Information from audits and reports can allow a company to ensure it achieves the greatest possible impact with available resources.

How does differential association relate to ethical decision making?

-Studies support that differential association supports ethical decision making -if an individual primarily associates with someone who is unethical, combines with the opportunity to act unethically, is major influence on their ethical decision making.

What is ethical crisis management and recovery?

-The process of ethical disaster-recovery planning involves assessing an organization's values, developing an ethics program, performing an ethics audit, and developing contingency plans for potential ethical disasters. The ethics audit itself provides the key to preventing ethical disasters. -prepare for ethical disasters that can result in substantial legal and financial costs and disrupt routine operations, paralyze employees, reduce productivity, destroy organizational reputation, and erode stakeholder confidence. -Such contingency planning assesses risks, plans for eventualities, and provides ready tools for responding to ethical crises. -

What is the U.K. Bribery Act?

-Tougher stance against bribery -Overlaps with FCPA, but goes further -Will make companies doing business in UK to change their compliance reports -Any company can be held liable for bribery, no matter where offense is committed/who commits it (even if there's no connection to UK) -Companies do not have explicit knowledge to be charged -Bribes btw private businesspeople is also illegal

What are normative approaches to ethical decision making?

-a normative approach in business ethics revolves around the standards and rules of behavior within the firm, these rules and standards are based on individual morals values as well as the collective values of the organization. -Concepts like fairness and justice are highly importuned in a normative structure

Six Sigma defintion:

-focuses on improving existing processes that do not meet quality specifications or that need to be improved, as well as developing new processes that meet Six Sigma standards. The goal of Six Sigma is to reduce defects in products and strive for continual improvement. -is a methodology designed to manage process variations that cause defects, defined as unacceptable deviations from the mean or target, and to systematically work toward managing variation to eliminate those defects. The objective of Six Sigma is to deliver world-class performance, reliability, and value to the end customer.

Ethics Audit definition:

-is a systematic evaluation of an organization's ethics program and performance to determine effectiveness. -A major component of the ethics program described in Chapter 8, the ethics audit includes "regular, complete, and documented measurements of compliance with the company's published policies and procedures." As such, the audit provides an opportunity to measure conformity to the firm's desired ethical standards

Triple Bottom Line definition:

-provides a perspective that takes into account the social, environmental, and financial impacts of decisions made within an organization. o This approach to measuring social, financial, and environmental factors (or people, places, and planet) recognizes that business has a responsibility to positively influence a variety of stakeholders, including customers, employees, shareholders, community, and the natural environment. The challenge is how to evaluate a business's social and environmental impacts, since there are no universally standard forms of measuring these criteria. o When making an increased commitment to social responsibility, sustainability, or ethics, companies consider implementing triple bottom line reporting as a way to confirm their investments and initiatives support their organization's values and overall success.

Code of Ethics definition:

-the most comprehensive and consists of general statements, sometimes altruistic or inspirational, that serve as principles and as the basis for rules of conduct. A code of ethics generally specifies methods for reporting violations, disciplinary action for violations, and a structure of due process. -Codes of ethics may address a variety of situations, from internal operations to sales presentations and financial disclosure practices.

How would you characterize the impact of the Wells Fargo ethical lapses over the past several years?

-widespread o fired thousands of employees and discontinued the sales quota o bank paid over $100 m to consumers- fraudulent fees and paid damages to those affected o gov action- senate hearing

What are the minimum requirements for ethics and compliance programs (think about and explain the 7 requirements of the Federal Sentencing Guidelines for Organizations)?

1. Standards and procedures, such as codes of ethics, that are reasonably capable of detecting and preventing misconduct. 2. High-level personnel who are responsible for an ethics and compliance program. 3. No substantial discretionary authority given to individuals with a propensity for misconduct. 4. Standards and procedures communicated effectively via ethics training programs. 5. Systems to monitor, audit, and report misconduct 6. Consistent enforcement of standards, codes, and punishment 7. Continuous improvement of the ethics and compliance program

Differential Association definition:

Differential association is the idea that people learn ethical or unethical behavior while interacting with others who are part of their role-sets or belong to other intimate personal groups.

How does ethical issue intensity affect ethical decision making?

It affects decision making because the intensity is personal and temporal in character to accommodate values, beliefs, needs, perceptions, the special characteristics of the situation and personal pressures that may be there at the time. Depending on who is making the decision will affect if it is ethical or unethical

Compliance based ethical culture:

Organized around risk -Takes a legalistic approach to ethics -Use laws and regulator rules to create codes and requirements -Codes of Conduct are established with compliance as the focus, with rules and policies enforced by management -Effective in short term because it helps management, stakeholders, and legal agencies ensure laws, rules, and the intent of compliance are fulfilled -Lacks long term focus on values and integrity -Does not teach employees to navigate in gray areas

Values based ethical culture:

Relies on an explicit mission statement that defines the core values of the firm and how customers and employees should be treated. -These values are organized by product, geography, or function within the firms management structure -The focus of this structure is on values such as trust, transparency, and how employees can help -A defining aspect of this structure is top-down integrity with shared values, norms that provide a guide for behavior, and visible artifacts such as a code of ethics that provide a standard of conduct

cultural Relativism definition:

The concept that morality varies from one culture to another and that right/wrong are defined differently

Ethical decision making process includes:

ethical issue intensity, individual factors, and organizational factors such as the corporate culture and opportunity. All of these factors are related and influence the intentions and evaluations behind the decision that either product ethical or unethical behavior.

Normative Ethics definition:

examines how organizational decision makers should approach an issue rather than using a descriptive approach that looks at how decision makings approach an issue. Normative means, "an ideal standard

Corporate culture's relationship to ethical culture:

if a firms culture encourages/rewards/does not monitor unethical behavior, employees may act unethically

Corporate culture definition:

is the set of values, norms, and artifacts, including ways of solving problems that members (employees) of an organization share

Corporate culture definition:

is the set of values, norms, and artifacts, including ways of solving problems that members (employees) of an organization share. Gives organizational members meaning and sets the internal rules of behavior

Whistle Blowing definition:

means exposing an employer's wrong-doing to outsiders such as the media or government regulatory agencies. Sometimes used to refer to internal reporting of misconduct to management, especially through anonymous reporting mechanisms often called hotlines

What is Walmart doing from a social responsibility perspective to enhance its CSR objectives?

o Charitable giving o Sustainability o Increase wages

What are some of the ethical issues faced by Wells Fargo Bank in the sales area?

o Opening accounts without people's permission in order to meet quota??

How can Wells Fargo prevent future ethical misconduct lapses?

o Overhaul o Change quota o Training

What are some of the ethical challenges faced by Walmart?

o Poor employment practices -Low wages, minimal benefits, poor workplace conditions, bad scheduling, etc. -Accusation of discrimination o Bribery Accusation at Walmex (Mexico)** -accused of paying for expedited zoning licenses o Leadership Misconduct o Unsafe working conditions

What is the FCPA?

o Prohibits American companies from making payments to foreign officials for the purpose of obtaining or retaining business o Company has to have explicit knowledge of bribe to be held criminally liable

What are some of the activities that Zappos strives to implement to create a corporate culture that attracts quality people?

o Training -They will pay people not to continue if they will not be a good fit bc they want quality ppl who are dedicated to the company

Ethical Culture definition:

reflects the integrity of decisions made and is a function of many factors, including corporate policies, top managements leadership on ethical issues, the influence of coworkers, and the opportunity for unethical behavior.

Should clearance pricing be regulated? Whichever stance you take, please thoroughly defend your position. If YES:

• Clearance: -An end-of-season sale to make room for more goods/ pushing the sale of slow-moving, shop-worn, and demonstration model goods -For many ppl it signals substantial discounts, but it is not really regulated, so retailers have more freedom in how to use it -Yes, 'clearance' is potentially misleading and should be regulated and used only when there is a substantial price discount: (more from consumer perspective) -Deceptive to consumers (puffery) -Consumers may believe they are getting better deals than they really are -Can mislead consumers bc when they see clearance, they think they need to buy it bc it implies to them that: -Product may be discounted -Others will get to it first Perceived value of product/belief they are saving money

Should clearance pricing be regulated? Whichever stance you take, please thoroughly defend your position. If NO:

• Clearance: -An end-of-season sale to make room for more goods/ pushing the sale of slow-moving, shop-worn, and demonstration model goods -For many ppl it signals substantial discounts, but it is not really regulated, so retailers have more freedom in how to use it• -No, retailers should be able to use the term without having to qualify/justify the amount of discount: (more from the retailer perspective) -Negative implications if it was regulated -Limit businesses -For some businesses, it is important part of their strategy when selling products -Businesses are able to get rid of excess inventory/goods when demand is low

Example of how ethical crisis management and recovery plan can assist in dealing with ethical misconduct within an organization

• Ernst & Young conducted an investigation into some of the ways Chief Risk Officers of global companies manage risks and used their insights to help develop a list of recommendations for managing business risk. For instance, asset managers are investing in more resources for data generation and management. Cybersecurity in particular is being recognized as not simply an IT issue but as a risk area with companywide implications.30 By understanding new and potential legislation in different areas of the world, businesses can determine how to best meet these regulations and minimize their risks of violating the laws of a specific country.

What are the global ethical issues faced by Google and does it adhere to the "Don't be evil" policy?

• Global Ethical Issues: -Chinese Censorship -Investigated/Sued by different governments ♣ Concerns that widespread reach/market power violate antitrust laws -Violating Privacy and User info Collection ♣ Inability to opt out of some forms of tracking ♣ Fear that private info will be compromised • Adherence to the Don't be evil policy: -Called into question after it allowed Chinese gov to censor some parts of its sites in order to enter the market

What is a halocracy and how does it impact Zappos employees?

• Holacracy: -A form of decentralized management in which authority/decision making are distributed throughout an organization; instead of having a management hierarchy, the focus is more on self-management/discipline. -At Zappos, instead of having teams with a manager, there are circles with someone as a lead link to help lead discussions, etc. • Impact on Zappos Employees: -When it was first announced, about 20% of employees left the company

What are some of the ethical challenges faced by multinational corporations?

• Multinational Corporations (MNCs): -Public companies that operate globally without significant ties to any 1 nations or region. Highest level of international business commitment. • Ethical Challenges: -Transferring jobs overseas/questionable labor practices -Exploitation of natural/human resources due to the size/power of MNCs

What are some of the key ideas or concepts that you learned from the NASBA Center for the Public Trust, Ethical Leadership Certification program?

● identify ethical issues ● learn how to respond to ethical dilemmas ● enhance ethical decision-making abilities ● Ethical Decision Making ● Organizational Support of Ethical Leadership ● Role of Leadership in Managing and Preventing Conflicts and Ethical Risks ● Role of Communication in Ethical Leadership ● Implementing Ethical Leadership