Business Ethics Chapters 4,7, 8

Code of Conduct

More like a regulatory set of rules. Tends to elicit less debate about specific actions.

An Effective Ethics Program : Organizational Probation

Use of on-site consultants to observe and monitor legal compliance efforts as well as to report the firm's progress toward avoiding misconduct to the U.S. Sentencing Commission.

Mandated boundary

an externally imposed boundary of conduct (laws, rules, regulations, and other requirements)

Civil law

defines the rights and duties of individuals and organizations (including businesses)

Antitrust Improvements Act, 1976

Strengthens earlier antitrust laws; gives Justice Department more investigative authority

Criminal law

prohibits specific actions (fraud, theft, or securities trading violations) and imposes fines or imprisonment as punishment for breaking the law

DF - Whistle Blower Bounty Program

whistle-blowers are eligible to receive 10 to 30 percent of fines and settlements if their reports result in convictions of more than $1 million in penalties

Formal Group

An assembly of individuals with an organized structure that is explicitly accepted by the group.

Variation in Employee Conduct

- 10% : Follow their own values and beliefs; believe that their values are superior to those of others in the company - 40% : Always try to follow company policies - 40% : Go along with the work group - 10% : Take advantage of situations if the penalty is less than the benefit and the risk of being caught is low

An Effective Ethics Program

- Cannot be assumed people know how to behave appropriately in a job/firm/business context.

Ethics Programs

- Designed to encourage ethical decision making in business. - Must be well-designed to prevent major misconduct.

The Sarbanes Oxley Act (SOX)

- oversight of corporate accounting practices - makes fraudulent financial reporting a crime - strengthens fraud penalties - requires corporations to establish codes of ethics for financial reporting - must demonstrate greater transparency in financial reporting to investors and other stakeholders

Laws that encourage ethical conduct

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The Dodd Frank Act

Additional incentives for whistle-blowers (> $1 million = 10-30%).

Federal Trade Commission Act, 1914

Created the Federal Trade Commission (FTC) to help enforce antitrust laws

Whistle-Blowing

Exposing an employer's wrongdoing 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.

FTC Improvement Act, 1975

Gives the FTC more power to prohibit unfair industry practices

Committee

Group assigned to a specific task, represent different constituencies, meet regularly to review performance, develop plans, or make decisions. - Weaknesses—lack of individual responsibility and Groupthink mentality.

Core practice

Helps ensure compliance with legal requirements, industry self-regulation, and societal expectations

An Effective Ethics Program : Updated Foreign Corrupt Practices Act guidelines

Recommend incorporating incentives into the firm's corporate culture to encourage ethical behavior.

Values Program

Values Orientation -Strive to develop shared values. Penalties are attached but the focus is on an abstract core of ideals (accountability and commitment). The foundation of an organizational ethical culture. - Gives employees a clearly defined basis on which to make decisions. Fairness, compassion, respect, and transparency are paramount. Employee Diversity - Requires explicit communication and training (financial reporting, use of company resources, and intellectual property). - Increase employees' work ethics awareness, integrity, willingness to deliver information to supervisors, use of reporting mechanisms, and perception that ethical decisions are being made. - Research: When personal and organizational values are compatible with one another, it tends to positively influence workplace ethics.

Elements of an Ethical Culture

Values, norms, artifacts, behavior. Voluntary actions, governance, core practices, legal compliance

Voluntary boundary

a management-initiated boundary of conduct (beliefs, values, voluntary policies, and voluntary contractual obligations)

Dodd-Frank Wall Street Reform and Consumer Protection Act

charged with improving the quality of financial data available to government officials and creating a better system of analysis for the financial industry

SOX Whistleblower Protection

granted special damages and attorneys' fees

Voluntary Practices

include the beliefs, values, and voluntary contractual obligations of a business. All business engage in some level of commitment to voluntary practices to benefit internal and external stakeholders.

An Effective Ethics Program : FSGO

- A "carrot-and-stick" philosophy. Carrot = Avoid penalties should a violation occur. Stick = Possibility of being fined or put on probation if convicted of a crime. Encourages federal judges to increase fines for organizations that continually tolerate misconduct. - To reduce or eliminate fines for firms with extensive compliance programs that make due diligence attempts to abide by legal and ethical standards.• - A program developed in the absence of misconduct will be more effective than one imposed as a reaction to scandal or prosecution.

Motivation

- A force within that focuses behavior toward achieving a goal. - Job performance is considered to be a function of ability and motivation [job performance = ability × motivation]. - An increase in promotion touches higher-order needs (social connections, esteem, and recognition) rather than lower-order (salary, safety, and job security). - Research shows an individual's career stage, age, organization size, and geographic location affect the relative priority given to satisfying respect, self-esteem, and basic physiological needs. - An individual's hierarchy of needs may influence his or her motivation and ethical behavior. - Relatedness needs are satisfied by social and interpersonal relationships. - Growth needs are satisfied by creative or productive activities.

Ethics and Corporate Culture

- A significant factor in ethical decision making. - Culture dictates hiring people with specific, similar values. If those values are perceived as unethical by society, society will view the organization and its members as unethical. - If a company's primary objective is to make as much profit as possible through whatever means, its culture may foster behavior that conflicts with stakeholders' ethical values. - If an organization values ethical behavior, it rewards them thru recognition and awards in a consistent and balanced manner. - All performance at the threshold level should be acknowledged, and praise or rewards given as close to the performance as possible.

Variation in Employee Conduct : Top 40% (2)

- Always try to follow company policies and rules. - Have a strong grasp of acceptable behavior and attempt to comply with codes of ethics, ethics training, and other communications about appropriate conduct. - If a policy prohibiting taking office supplies from work, these employees probably will observe it. - Not likely to speak out about the 40 percent who choose to go along with the work group. - Prefer to focus on their jobs and steer clear of any organizational misconduct. - If the company fails to communicate standards of appropriate behavior, members of this group will devise their own.

Cultural Audit

- Assessment of an organization's values. - Usually conducted by outside consultants but may be performed internally as well. - Communication about ethical expectations and support from top management help to identify a corporate culture that encourages ethical conduct or leads to ethical conflict.

Informal Groups - The Grapevine

- Can act as an early warning system for employees. - Can be an important source of information for individuals to assess ethical behavior within their organization. - Corporate culture may provide a general understanding of rules, but informal groups make this come alive and provide direction for employees' daily choices. - Information passed along the grapevine is not always accurate, but managers who understand how the grapevine works can use it to reinforce acceptable values and beliefs.

Statement of Values

- Conceived by management, fully developed with input from all stakeholders. - The terms "code of ethics" and "statement of values" are often used interchangeably.

Corporate Culture

- Corporate culture and organizational culture can be used interchangeably. - Shared values, norms, and artifacts that influence employees and determine behavior, including ways of solving problems that members (employees) of an organization share. - Shared beliefs top managers in a company have about how they should manage themselves and other employees, and how they should conduct their business(es).

Responsibility of the Corporation to Stakeholders

- Corporations are viewed as moral agents that are accountable to stakeholders. - A corporation is created in society to perform specific social functions; accountable to the society for its actions.

Informal Groups

- May generate disagreement and conflict, or enhance morale and job satisfaction. - Can help develop informal channels of communication, sometimes called the grapevine. - The grapevine: Information passed along the grapevine may relate to the job, the organization, an ethical issue, or it may simply be gossip and rumors.

Organizational Structure

- Decision making authority is concentrated in the hands of top-level managers, and little authority is delegated to lower levels. - Responsibility, both internal and external, rests with top-level managers. - Structure especially suited to organizations that make high-risk decisions and have lower-level managers are not highly skilled in decision making. - Suitable for organizations when production processes are routine and efficiency is of primary importance. - Division of labor is typically well defined and a clear understanding of how to carry out assigned tasks. - Stress formal rules, policies, and procedures backed up with elaborate control systems. - Codes of ethics may specify the techniques used for decision making.

Decentralized Organization

- Decision making authority is delegated as far down the chain of command as possible. - Relatively few formal rules, and coordination and control are usually informal and personal. - Focus on increasing the flow of information. - Strength: Adaptability and early recognition of external change. With greater flexibility, managers can react quickly to changes in their ethical environment. - Weakness: Difficult to respond quickly to changes in policy and procedures established by top management. - Independent profit centers may deviate from organizational objectives. - May have fewer internal controls and use shared values for their ethical standards. - May have more variation in behavior. - May be harder to control rogue employees engaging in misconduct.

Variation in Employee Conduct : Middle 40%

- Go along on most matters. - Most concerned about the social implications of their actions and want to fit into the organization. - Easily influenced by what the people around them are doing. - May know using office supplies for personal use is improper, yet they view it as acceptable because their coworkers do so. - Rationalize their actions by saying the use of office supplies is a benefit of working at their particular company and it must be acceptable because the company does not enforce a policy prohibiting the behavior. - Rationalize that no one will get into trouble for doing what everybody else is doing.

Group Norms

- Help define acceptable and unacceptable behavior within a group. - Define the limit allowed on deviations from group expectations. - Provide explicit ethical directions. - Can relate directly to managerial decisions. - Have the power to enforce a strong degree of conformity among group members. - Can define the different roles for various positions within the organization.

Systems to Monitor and Enforce Ethical Standards

- How employees handle ethically charged situations. - Role-playing exercises. - Discussion regarding ethical issues and dilemmas. - Questionnaires. - Internal systems that allow employees to report misconduct. - Consultants. - Case-management services and software.

The Sarbanes-Oxley Act and the Federal Sentencing Guidelines for Organizations (FSGO):

- If an employee provides information to the government about a company's wrongdoing under the Federal False Claims Act, the whistle-blower is known as a qui tam relator. - Can receive between 15 and 25 percent of the recovered funds. - Must have adequate knowledge of wrongdoing that could damage society. - Illegal to "discharge, demote, suspend, threaten, harass, or in any manner discriminate against" a whistle-blower and set penalties of up to 10 years in jail for executives who retaliate against whistle-blowers. - Specific protections including the right to seek investigation and review by federal Inspectors General for "adverse actions" such as termination or demotions.

The Need for Organizational Ethics Programs

- Impossible to know and understand all laws. - To sensitize employees to potential legal/ethical issues in work environments. - Increase employees' ethical awareness, participation in ethical decision making, and ethical behavior. - Fostering ethical decision making requires terminating unethical employees and improving the firm's ethical standards. - Bad Apples (Employees) - Bad Barrel (Organization) - The more misconduct, the less trust employees feel toward the organization—and the greater the turnover. - Companies are vulnerable to ethical problems and legal violations if their employees do not know how to make the right decisions. - Develop a program by establishing, communicating, and monitoring the ethical value/legal requirements for corporate culture, industry, and country.

The Importance of Institutionalization in Business Ethics

- Institutionalization helps implant values, norms, and artifacts in organizations, industries, and society. - Failure to understand core practices provides the opportunity for unethical conduct. - Institutionalization of business ethics has advanced rapidly in recent years as stakeholders recognized the need to improve business ethics.

Variation in Employee Conduct : Top 10%

- Maintain formal ethical standards that focus on rights, duties, and rules. - Embrace values that assert certain inalienable rights and actions, which they perceive to be always ethically correct. - Believe their values are right and superior to the values of others or even to the company's value system. - Have a tendency to report or speak out about employee or firm misconduct even if the company defines it as ethical. - Members of this group will probably report colleagues who take office supplies.

Steps in Measuring an Ethical Corporate Culture

- Management and the board demonstrate their commitment to integrity, core values, and ethics codes through their communications and actions. - Employees are encouraged/required to have hands-on involvement in compliance, especially internal control systems and reporting systems. - Ethical leadership. - Employees must receive communication through resolutions and corrective actions related to ethical issues. - Employees must have the ability to report policy exceptions anonymously to any member of the organization, including the CEO, other members of management, and the board of directors.

Code of Ethics

- Most comprehensive; consists of general statements, sometimes altruistic or inspirational, that serve as principles and as the basis for rules of conduct. - Generally specifies methods for reporting violations, disciplinary action for violations, and a structure of due process. - Six values that are desirable for codes of ethics: (1) trustworthiness, (2) respect, (3) responsibility, (4) fairness, (5) caring, and (6) citizenship.

Differential Association

- People learn ethical or unethical behavior while interacting with others. - The learning process is more likely to result in unethical behavior if the individual associates primarily with persons who behave unethically. - Associating with others who are unethical, combined with the opportunity to act unethically, is a major influence on ethical decision making. - Differential association influences ethical decision making, and superiors in particular have a strong influence on the ethics of their subordinates. - Employees, especially young managers, tend to go along with their superiors' moral judgments to demonstrate loyalty.

Values based ethical cultures

- Relies on an explicit mission statement that defines the core values of the firm and how customers and employees should be treated. - Board of directors/upper management should add to value statements by formulating specific value statements for its strategic business units (SBU). - Certain areas may have rules associated with stated values, enabling employees to understand the relationship between the two. - The focus is on values such as trust, transparency, and respect to help employees identify and deal with ethical issues. - When using this approach, explain why rules exist, what the penalties are if rules are violated, and how employees can help improve the ethics of the company.

Whistle Blowing Legal Protections

- Sarbanes-Oxley Act - The Federal Sentencing Guidelines for Organizations (FSGO) - The U.S. Department of Labor (DOL) - The Corporate and Criminal Fraud Accountability Act (CCFA) - Securities and Exchange Commission - The Dodd-Frank Act

The Role of Corporate Culture in Ethical Decision Making

- Some cultures are so strong, they come to represent the character of the entire organization. - Explicit statements of values, beliefs, customs, and expected behavior usually come from upper management. (Memos, written codes of conduct, handbooks, manuals, forms, and ceremonies are formal expressions of an organization's culture.) - Corporate culture can be expressed through gestures, looks, labels, promotions, programs, and legends (or the lack thereof). - When leaders are perceived as trustworthy, employee trust increases; leaders are seen as ethical and as honoring a higher level of duties.

Core or best practices - strategic philanthropy

- Synergistic and mutually beneficial use of an organization's core competencies and resources to deal with key stakeholders so as to bring about organizational and societal benefits. - Argues that philanthropy must have a long-term positive impact. - Should pertain to the mission and operations of the company. Must also have strong support from top managers.

Variation in Employee Conduct : Bottom 10%

- Take advantage of situations to further their own personal interests. - More likely to manipulate, cheat, or act in a self-serving manner. - May choose to take office supplies from work for personal use if the only penalty they suffer is paying for the supplies - The lower the risk of being caught, the higher the likelihood that the 10 percent most likely to take advantage of the company will be involved in unethical activities

Core or best practices - Social Entrepreneurship

- When an entrepreneur founds an organization with the purpose of creating social value. - Can be for-profit, nonprofit, government-based, or hybrids. - Many social entrepreneurs choose to organize their enterprises as nonprofits. - The major difference between a social enterprise and a nonprofit is the use of entrepreneurial principles and business-led strategies to create social change. - Companies engaged in strategic philanthropy will often outsource their philanthropic programs and/or partner with other organizations. - Directly implement their programs and are organized around achieving social objectives.

DF - Consumer financial protection bureau (CFPB)

- independent agency within the Federal Reserve System that "regulates the offering and provision of consumer financial products or services under the Federal consumer financial laws" - power over credit markets as well as authority to monitor lenders and ensure they are in compliance with the law - curtail unfair lending and credit card practices, enforce consumer financial laws, and check the safety of financial products before their launch into the market

SOX Public Company Accounting Oversight Board

- monitors/establishes standards and rules for auditors - has investigatory and disciplinary power over auditors and securities analysts - attempts to eliminate conflicts of interest by prohibiting accounting firms from providing both auditing and consulting services to the same client companies without special permission from the client firm's audit committee - limits the length of time lead auditors can serve a particular client

DF - The financial stability oversight council (FSOC)

- responsible for maintaining the stability of the financial system in the US through monitoring the market, identifying threats, promoting market discipline among the public, and responding to major risks that threaten stability - has the authority to limit or closely supervise financial risks, create stricter standards for banking and nonbanking financial institutions, and disband financial institutions that present a serious risk to market stability

SOX Auditor and Analyst Independence

- section 201 prohibits registered public accounting firms from providing both non-audit and audit services to a public company - all material off balance sheet transactions and other relationships with unconsolidated entities that affect current or future financial conditions of a public company must be disclosed in each annual and quarterly financial report. - public companies must report "on a rapid and current basis" material changes in their financial condition or operations

SOX Cost of compliance

- section 404 requires companies to document both the results of financial transactions and the processes they used to generate them - compliance costs were high shortly after SOX was passed; they have declined over the years

Federal Sentencing Guidelines for Organizations (FSGO)

- seeks to improve financial regulation, increase oversight of the industry, and prevent they types of risk taking, deceptive practices, and lack of oversight that led to the 2008-2009 financial crisis - contains 16 provisions that include increasing the accountability and transparency of financial institutions, creating a bureau to educate consumers in financial literacy and protect them from deceptive financial practices, implementing additional incentives for whistleblowers, increasing oversight of the financial industry, and regulating the use of complex derivatives

Compliance based ethical cultures Problems

1) Its lack of long-term focus on values and integrity. 2) Does not teach employees to navigate ethical gray areas.

Power shapes corporate culture: five power bases

1) Reward: Ability to influence the behavior of others by offering them something desirable (money, status, or promotion). 2) Coercive: Penalizes actions or behavior and relies on fear to change behavior. More effective in changing behavior in short versus long run. Often employed where there is an extreme imbalance of power. People continually subjected to coercion may seek a counterbalance and align themselves with other, more powerful persons or leave the organization. 3) Legitimate: Stems from the belief that a certain person has the right to exert influence and certain others have an obligation to accept it (titles and positions of authority). 4) Expert: Derived from a person's knowledge (or a perception that a person possesses knowledge). Usually stems from a superior's credibility with subordinates. Credibility (expert power), is positively correlated to the number of years a person worked in a firm or industry, education, and honors he/she has received for performance. 5) Referent: Exists when one person perceives that his/her goals or objectives are similar to another's with an attempt to influence the first to take actions that allows both to achieve their objectives. Identification with others helps boost the decision maker's confidence, thus increasing the referent power

Ethics Officers Responsibilities

1. Assess needs/risks an organization-wide ethics program must address. 2. Develop/distribute the code of conduct or ethics. 3. Conduct training programs. 4. Establish/maintain confidential services to answer employees' ethical questions. 5. Make sure company is in compliance. 6. Monitor/audit ethical conduct. 7. Take action on code violations. 8. Review/update code.

Two basic dimensions in an organization's culture

1. Concern for people—the organization's efforts to care for its employees' well-being. 2. Concern for performance—the organization's efforts to focus on output and employee productivity.

Developing and implementing a code of ethics

1. Consider areas of risk and state the values as well as conduct necessary to comply with laws and regulations. Values are an important buffer in preventing serious misconduct. 2. Identify values that specifically address current ethical issues. 3. Consider values that link the organization to a stakeholder orientation. Attempt to find overlaps in organizational and stakeholder values. 4. Make the code understandable by providing examples that reflect values. 5. Communicate the code frequently and in language that employees can understand. 6. Revise the code every year with input from organizational members and stakeholders.

Minimum Requirements for Ethics and Compliance Programs

1. Establish standards and procedures to prevent and detect criminal conduct.\ 2. Ensure the firm's board, top management, and high-level personnel exercise reasonable oversight of those standards and procedures. 3. Make reasonable efforts to keep individuals whom organizations knew or should have known to have engaged in illegal activities out of key positions. 4. Communicate standards and procedures by training directors, employees, and appropriate agents. 5. Monitor and audit the program to detect criminal conduct, evaluate the program periodically, and have a system for reporting suspected violations. 6. Promote and consistently enforce the program through appropriate incentives and appropriate discipline. 7. After criminal conduct is detected, take reasonable steps to respond appropriately and prevent further similar criminal conduct, including necessary modifications to the ethics and compliance program.

Common mistakes in designing and implementing an ethics program

1. Failure to understand and appreciate goals. 2. Setting unrealistic and unmeasurable program objectives. 3. Senior management's failure to take ownership of the ethics program. 4. Developing program materials that do not address the needs of the average employee. 5. Transferring an "American" program to a firm's international operations. 6. Designing an ethics program that is little more than a series of lectures.

Benefits of having an ethics code

1. Guide employees in situations where the ethical course of action is not immediately obvious. 2. Help the company reinforce—and acquaint new employees with—its culture and values. A code can help create a climate of integrity and excellence. 3. Help the company communicate its expectations for its staff to suppliers, vendors, and customers. 4. Minimize subjective and inconsistent management standards. 5. Help a company remain in compliance with complex government regulations. 6. Build public trust and enhance business reputations. 7. Offer protection in preempting or defending against lawsuits. 8. Enhance morale, employee pride, loyalty, and the recruitment of outstanding employees. 9. Promote constructive social change by raising awareness of the community's needs and encouraging employees and other stakeholders to help. 10. Promote market efficiency, especially in areas where laws are weak or inefficient, by rewarding the best and most ethical producers of goods and services.

Key goals of successful ethics training

1. Identify key risk areas employees will face. 2. Provide experience in dealing with hypothetical or disguised ethical issues within the industry through mini-cases, online challenges, DVDs, or other experiential learning opportunities. 3. Let employees know wrongdoing will never be supported in the organization and employee evaluations will take their conduct in this area into consideration 4. Let employees know they are individually accountable for their behavior. 5. Align employee conduct with organizational reputation and branding. 6. Provide ongoing feedback to employees about how they are handling ethical issues. 7. Allow a mechanism for employees to voice their concern that is anonymous, but provides answers to key questions (24-hour hotlines). 8. Provide a hierarchy of leadership for employees to contact when they are faced with an ethical dilemma they do not know how to resolve.

Characteristics of an Ethical Corporate Culture: Sarbanes 404 Compliance Section

1. Requirement that management assess the effectiveness of the organization's internal controls and commission audits of these controls by an external auditor in conjunction with the audit of its financial statements. 2. Requires firms to adopt a set of values that forms a portion of the company's culture. 3. Mandates an evaluation of corporate culture to provide insight into the character of an organization, its ethics, and transparency. 4. The intent is to expose mismanagement, fraud, theft, abuse, and to sustain a corporate culture that does not allow these conditions and actions to exist.

FSGO Steps

1. a firm must develop and disseminate a code of conduct that communicates required standards and identifies key risk areas for the organizations 2. high ranking personnel in the organization who are known to abide by the legal and ethical standards of the industry (ethics officer, VP of human resources, general counsel, etc) must have oversight over the program 3. no one with a known propensity to engage in misconduct should be put in a position of authority 4. a communications system for disseminating standards and procedures (ethics training) must also be put in place 5. organizational communications should include a way for employees to report misconduct without fearing retaliation, such as an anonymous toll free hotline or an ombudsman. monitoring and auditing systems designed to detect misconduct are also required 6. if misconduct is detected, the firm must take appropriate and fair disciplinary action. individuals both directly and indirectly responsible for the offense should be disciplined. In addition, the sanctions should be appropriate for the offense 7. after misconduct has been discovered, the organization must take steps to prevent similar offenses in the future. This usually involves making modifications to the ethical compliance program, conducting additional employee training, and issuing communications about specific types of conduct

Core or Best Practices: Voluntary Responsibilities

1. improve quality of life and make communities the places where people want to do business, raise families, and enjoy life. Makes it easier to attract and retain employees and customers. 2. reduce government involvement by providing assistance to stakeholders 3. develop employee leadership skills 4. create and ethical culture and values that acts as a buffer to organizational misconduct 5. ties an organizations product(s) directly to a social concern through a marketing program 6. affects buying patterns 7. often of short duration, so consumers may not adequately associate the business with a particular cause

Caring culture, integrative culture, apathetic culture, exacting culture

A: Minimal concern for either people or performance. Individuals focus on their own self-interest. C: High concern for people but minimal concern for performance issues. It is difficult to find nationally recognizable companies that maintain little or no concern for performance E: Little concern for people but a high concern for performance. Focuses on the interests of the organization. I: Combines a high concern for people and performance. An organization becomes integrative when superiors recognize employees are more than interchangeable parts—employees have an ineffable quality that helps the firm meet its performance criteria.

Robinson-Patman Act, 1936

Bans price discrimination between retailers and wholesalers

Compliance Program

Compliance Orientation - Requires employees to identify with and commit to specific required conduct. Uses legal terms, statutes, and contracts to teach employees the rules and penalties for noncompliance. - Helps employees understand rules of conduct when there are identified risks. - Linked to employees' awareness of ethical risks at work and a clear understanding of rules and expectations that facilitates decision making. - Research : Both approaches can interact or work toward the same end.

Reasons Codes Fail

Not promoted so employees don't read it. Not easily accessible. Written too legalistically. Written vaguely, providing no accurate direction. Top management never refers to the code in body or spirit.

Sherman Antitrust Act, 1890

Prohibits monopolies

Celler-Kefauver Act, 1950

Prohibits one corporation from controlling another where the effect is to lessen competition

Clayton Act, 1914

Prohibits price discrimination, exclusive dealing, and other efforts to restrict competition

Consumer Goods Pricing Act, 1975

Prohibits price maintenance agreements among manufacturers and resellers in interstate commerce

Wheeler-Lea Act, 1938

Prohibits unfair and deceptive acts regardless of whether competition is injured

Lanham Act, 1946

Protects and regulates brand names, brand marks, trade names, and trademarks

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. Requires attorneys to become internal whistle-blowers

Compliance based ethical cultures

The accounting professional model - Rules create a compliance culture organized around risk - Compliance-based cultures use a legalistic approach to ethics - Codes of conduct are established with compliance as their focus, with rules and policies enforced by management. - Instead of revolving around an ethical culture, the company revolves around risk management. - The approach is good in the short term because it helps management, stakeholders, and legal agencies ensure laws, rules, and the intent of compliance are fulfilled.

Work Groups

Used to subdivide duties within specific functional areas of a company. - Enables specialization. - Ethical conflicts may arise because team members come from different functional areas. - Conflicts when members of different organizational groups interact.

strategic philanthropy

giving back to communities and causes