Ethical Behavior

Fairness

Fairness is the quality of treating others equally. It involves being impartial and exercising the same standards of judgment regardless of the parties involved. People who are fair examine the facts and evaluate the information. They consider the impact their decisions will have on others before making them.

Civil charges can bring bad publicity and the likelihood of large payouts.

Implementing and enforcing an ethics program can help identify and reduce misconduct before it can cause major problems. An ethical maxim established today may prevent tomorrow's dilemma.

Which of the following is NOT a benefit for employees who work for an ethically-focused organization?

Reduced willingness to report misconduct

The steps of ethical decision making include the following:

1. Take time to think things through. 2. Identify short-term and long-term goals. 3. Gather reliable information and facts. 4. Determine available options and discuss them with a trusted authority. 5. Consider how the decision will impact yourself and others. 6. Make the decision. 7. Observe the outcome and make adjustments if necessary.

Unethical behavior increases misconduct

Approximately three-fourths of employees reported incidents of misconduct when others did not model values, such as honesty, respect, and trust, on the job. Unethical behavior also increases conflict and reduces efficiency.

Organizations employing ethics programs experienced up to three times greater market share than organizations without them. Organizations that do not promote ethical relationships experience 15 percent lower profit ratios and higher turnover ratios than those that are dedicated. Research indicated that employee dissatisfaction also resulted in lower profits.

Highly skilled employees experience the biggest decrease in productivity, up to 25 percent, caused by unethical behavior of others on the job. These individuals comprise the central cohesive element of the organization, but they are also able to change jobs easily if dissatisfied with working conditions.

Which of the following is characteristic of a responsible person?

Is accountable for decisions made

Many reasons exist for managers to focus on ethics in the workplace, namely:

Recruiting and retaining top-quality employees Maintaining productivity in the work environment Upholding the organization's reputation in the community While it would be foolish to think that stressing ethical behavior will immediately solve an organization's problems, it does communicate to employees that the organization is taking the necessary steps to improve the work environment.

Unethical behavior can result in the following negative consequences:

Reduced sales Reduced efficiency Increased sabotage Reduced productivity Reduced stock prices Reduced communication Increased employee fraud Increased the risk of scandal Reduced retention and recruiting Increased employee absenteeism

Active support of employees is crucial to the long-term success of any program. Rather than just doing what is cost-effective, leaders and supervisors in ethically focused organizations are expected to display ethical behavior and to consistently apply honesty, respect, and trust in the workplace.

Studies have shown that upper-level managers view workplace ethics more positively than employees do. Because of this, managers may underestimate the need to concentrate on ethical issues. Management should consult with employees at all levels to ensure that they adequately address ethical issues at all levels.

Research has indicated that unethical behavior causes reduced sales and reduced stock prices.

The majority of people reported that they make a decision to buy goods or services from a particular company based somewhat on their opinion of the company's ethics. Ethical reputation also plays a large part in the decision to buy a company's stock. Organizations that embrace unethical practices experience unusually negative returns for extended periods, which affect stock prices.

Ethics refers to standards of conduct or principles that influence how an individual behaves and makes decisions. Personal values, such as trustworthiness, respect, responsibility, fairness, caring, and citizenship, comprise the foundation of character and influence ethical decision making. The steps of ethical decision making include:

The steps of ethical decision making include: Thinking it through Identifying goals Discovering facts Determining options Determining possible effects on others Making the decision Observing the outcome and making adjustments

Which of the following best describes integrity when referring to ethical behavior?

Unwavering adherence to a strict moral code

What can employees do that will influence and sustain ethical behavior in the work environment?

a. Avoid responsibility *b. Be patient with others' mistakes c. Be satisfied with mediocrity d. Blame someone else for their mistakes *e. Praise others' achievements f. Take credit for others' accomplishments

In order to diminish the probability of criminal conduct, which of the following are organizations required to implement? Select all that apply.

a. Checks and balances *b. Internal control procedures c. A complex personal hierarchy *d. Standards of conduct

Which of the following result from using discernment and consideration of stakeholders when making decisions? Select all that apply.

a. Financial gain b. Faster promotions *c. Better decisions *d. Sense of fulfillment *e. Lack of harm to others f. Increased stock price

Trustworthy:

A trustworthy person is one who makes ethical choices even when no one is watching. Trustworthiness is a combination of honesty, integrity, reliability, and loyalty. One lie or act of deception can destroy a lifetime of trust because it creates doubt. Where doubt exists, there is no trust.

Which of the following negative consequences is a common result of civil charges filed because of an organization's unethical behavior?

Bad publicity

Ethical decision makers consider the consequences of their decisions, as well as the effect their decisions will have on others

Because of this, ethical decision making generally involves several steps.

Citizenship

Citizenship is the quality of possessing a sense of duty that regulates behavior in relation to the community. A good citizen understands and submits to laws, and voluntarily participates in activities that contribute to the welfare of others, such as conservation, recycling, using public transportation, and cleaning up litter.

Organizations that do not implement an ethics program, or do not enforce it if they have one, are inviting the following negative consequences:

Civil charges Criminal charges Moral and financial bankruptcy

Moral values, such as respect, honesty, fairness, and responsibility, guide how we ought to behave.

Ethical principles explain how to apply moral values to behavior. Ethical people are willing to accept responsibility for the consequences of their actions. In theory, it should be relatively easy to discern right from wrong; however, conflicting choices cloud real situations.

The main reasons for having an ethics program are to direct employees away from ethical risk-taking and enable employees to make many decisions themselves, leaving supervisors more time and energy for other work.

Even the best ethics program cannot prevent employees from making poor decisions, but an effectively managed ethics program allows organizations to provide employees who want to make good decisions with the proper tools.

Employees who work in ethically focused organizations have a more positive experience and relate the following benefits:

Fewer incidents of misconduct at work Increased willingness to report misconduct Reduced pressure to compromise ethical ideals Improved overall satisfaction with the organization Increased feeling of being valued as an employee Increased satisfaction with response to reported misconduct

Integrity

Integrity is an unwavering adherence to a strict ethical or moral code. It is the quality of being steadfast and possessing soundness of character. It involves not being easily swayed by circumstances. In other words, a person with integrity does not make decisions based on convenience.

Which of the following is the last step in the ethical decision-making process?

Observing the outcome and making adjustments

The connection between lack of ethics education or unethical standards and low productivity is clear. Lack of trust creates low morale and increased stress, which results in diminished productivity. Those who were less willing to help others were not as productive, received help less often, and had a lower social standing.

Organizations that do not have a code of ethics demonstrate reduced average return on capital (AROC), market value added (MVA), and economic value added (EVA) and demonstrate more price to earnings (P/E) volatility, while organizations that implement and promote a code of ethics exhibit a significant increase.

Which employee action can help encourage and sustain ethical behavior in the workplace?

Providing a good example through exhibiting ethical behavior

Honesty is critical to trustworthiness.

The most fundamental ethical value, it involves truthfulness in both behavior and statement. Honest behavior involves complying with the rules and not attempting to steal from, cheat, defraud, or trick another person. Honest communication includes truthfulness, sincerity, and candor.

Organizations are required to enforce compliance with the program on an organizational level and establish uniform disciplinary measures to ensure that all employees receive equal treatment for violations of standards.

They should also ensure that every disciplinary measure is adequate for the violation.

Wait several hours, if possible, before making a decision.

This will prevent impulsive decisions, prepare the mind for thoughtful discrimination, and allow self-discipline to function.

Which of the following are employee benefits of working in an ethical organization?

a. Increased pressure to compromise ethical ideals *b. Increased overall satisfaction with the organization *c. Increased willingness to report misconduct d. Increased incidence of misconduct at work *e. Increased feeling of being valued as an employee *f. Increased satisfaction with response to reported misconduct

Organizations that do not implement an ethics program, or do not enforce it if they have one, are inviting what types of consequences?

a. Principled reputation *b. Financial bankruptcy *c. Civil charges *d. Criminal charges e. Higher employee retention *f. Moral collapse

Reliability is an important facet of trustworthiness

A reliable person is one who will keep his/her commitments. When a person makes a promise or commits to do something, this creates an expectation on the part of the recipient and an obligation on the part of the person making the promise. When a person fails to make a reasonable effort to fulfill the commitment, it destroys reliability. Reliable employees also exhibit PERSEVERANCE Perseverance involves making a determined effort to complete assigned tasks and refusal to succumb to obstacles or make excuses.

Unethical behavior also causes increased incidence of employee sabotage. Employee sabotage includes:

Being satisfied with mediocrity Spending budget surplus wastefully Making promises with no intention of delivery Failing to meet deadlines or deliver on commitments Reporting false information to gain pay or a promotion Exaggerating requirements in anticipation of budget reductions Wasting time and energy to maintain control or avoid making a decision

What is ethical behavior?

Ethics refers to standards of conduct or principles that influence how an individual behaves and makes decisions. An individual's core values become ethical principles when the core values pertain to beliefs about what is right and wrong. These principles provide guidelines for evaluating competing options and choosing appropriately. When people's ethical principles match their actions, they are displaying ethical behavior.

Employee fraud costs organizations billions of dollars each year. In fact, employee fraud is more common than consumer fraud. The cost per worker is about twenty cents on every dollar earned.

The occurrence of employee fraud has increased by fifty percent over a ten year period. However, most workers believe that if managers and supervisors would model ethical behavior, there would be fewer incidents of employee fraud.

A person practicing ethical behavior normally exhibits the following traits:

Trustworthiness—making ethical choices, even when no one is watching Respect—treating others with kindness, politeness, and consideration Responsibility—delivering on promises Fairness—consistently applying rules, logic, or ethics Caring—feeling concern and empathy for others Citizenship—submitting to the duties and responsibilities of membership in a society or group

Unethical behavior causes higher rates of employee absenteeism. Unethical organizations budget nearly twice as much to cover the cost of absent employees as organizations that practice and promote ethics.

Unethical behavior causes some employees to come to work when ill. These employees pass on sickness to others, perform their work inefficiently, and reduce overall productivity. Over half of unethical organizations reported a problem with employees who frequently come to work when ill.

Having a written Code of Ethics will not ensure that employees will act appropriately

however, it provides a guide for those who want to do what is right, but may find themselves in situations where the right action is not clear.

Respect

Respect is being civil to other people and treating them with courtesy. It is not being subservient, but involves giving honor due to position, ability, or knowledge. Respect shown to others is a reflection of respect for self. If a person does not have self-respect, it is unlikely that he/she will be respectful to others. Respect prevents employees from engaging in hostility, humiliation, exploitation, or abuse of others.

Responsibility

Responsibility is recognizing that choices generate consequences. Decision makers must evaluate choices in light of the consequences generated from making those decisions. Responsible employees exercise self-control when making decisions. A responsible person is not only accountable for the decisions he/she makes and accepts blame for any wrongdoing, but also does not take undeserved credit for the accomplishments of others.

The Board of Directors should be responsible for implementing a system to oversee and encourage employee compliance with the Code of Ethics. The system should include training and education, conformance assessments, adequate financial and staff support for the ethics program, and adequate protection for employees who report misconduct.

Review the Code of Ethics and the training annually to ensure that it is up to date.ANNUALLY!!!!

Ethical organizations attract and retain highly skilled employees. The majority of employees reported the main reason for remaining on the job was the organization's ethical environment. Ethical organizations tend to have lower employee turnover, which enables them to retain vital skills and reduce time and money spent on retraining.

Not only do ethical organizations have high employee retention, but they also have high customer retention as well. Greater customer retention means higher profits.

Which of the following statements are true concerning ethics? Select all that apply.

*a. Provide guidelines for making choices *b. Influence decisions and behavior *c. Refer to standards of conduct d. Ensure that employees act appropriately

Both large and small nonprofit, government, and commercial organizations are realizing the value of incorporating an ethics program and ethics training into their organizations. Potential benefits associated with an effective ethics program include:

Attracting and retaining highly skilled employees Encouraging open discussion of ethical issues Building and sustaining rapport with community members Fostering favorable and constructive working conditions Maintaining employee trust to encourage ongoing self-regulation Focusing efforts of employees on the organization's mission and vision Providing ethical guidance and resources for staff before conflicts arise

Identifying short- and long-term goals helps to clarify the decision process.

Before making a decision, determine what you are trying to accomplish. A particular decision may satisfy a short-term goal and seem desirable, but after careful analysis, the same decision may make a long-term goal impossible, or cause the long-term goal to be more difficult to achieve.

The functions of an ethics program include influencing the way employees think and feel about job-related ethical issues and assisting employees in solving such situations.

By establishing an ethics program and providing staff with standards, training, and resources to guide employees in making decisions concerning ethical issues, organizations establish a work environment where employees do not fear acknowledging that they are struggling with an ethical situation.

Caring

Caring is concern for the welfare of others and responsiveness to perceived needs. It entails compassion and unselfishness. Caring people feel an obligation to be truthful, trustworthy, just, and courteous to others. They are willing to give their time and talents for the benefit of others, without expecting something in return.

Which of the following is a benefit of establishing an ethical program in the workplace?

Employees are not afraid to admit to struggling with an ethical situation.

Organizations that either do not implement an ethics program or do not enforce it are inviting civil and criminal charges, as well as moral and financial bankruptcy. Employee fraud costs organizations billions of dollars each year. Encouraging ethical behavior reduces the probability of incurring the consequences of unethical behavior and also provides the following benefits:

Encouraging ethical behavior reduces the probability of incurring the consequences of unethical behavior and also provides the following benefits: Increased market share Reduced employee turnover Increased customer retention Reduced employee absenteeism Reduced misconduct in the workplace Increased retention of highly skilled employees

Before making any decision, it is wise to consider how the decision will affect you and what impact it will have on others. Ask questions to determine whether making this decision will require violating ethical principles, such as:

Is this decision irresponsible? Will this decision involve breaking laws or rules? Will the decision involve lying or breaking a promise? Will making this decision be disrespectful, unfair, or uncaring to another person?

Loyalty

Loyalty is an expectation of faithfulness, commitment, and dedication that is prevalent in close relationships. It is an expectation of undivided concern, support, and encouragement of select individuals, groups, or associations. At times, a conflict of loyalties may arise when individuals ask others to withhold information that is harmful to others or illegal. Each person must determine the priority of his/her loyalties and weigh the consequences of withholding confidential information. Employees of government and public services should recognize a greater obligation to the public.

Criminal charges can carry a penalty of jail time and fines;

however, the United States Sentencing Commission's Federal Sentencing Guidelines allows judges to reduce fines for executives if the organization has endorsed an ethics program.

A major asset that senior management strives to guard is the company's reputation in the community.

An organization's reputation results directly from its level of commitment to its ethics program. Although managers may realize that company reputation can be affected by employee decisions, they may fail to see how an ethics program itself can equip employees to boost company status.

Which of the following are personal values that influence decision making? Select all that apply.

*a. Fairness b. Admiration c. Curiosity *d. Responsibility *e. Caring f. Trustworthiness

Lack of an ethics program reduces communication because it results in employees not reporting misconduct.

Research indicates that twice as many employees reported incidents of misconduct when they observed them, if they worked at an organization where an ethics program was in force.

By establishing an ethics program and providing staff with standards, training, and resources to guide employees in making decisions concerning ethical issues, organizations establish a work environment where employees do not feel threatened to acknowledge that they are struggling with an ethical situation. One main reason for having an ethics program is to provide employees who want to make good decisions with the proper tools. Employees who work in ethically focused organizations have a more positive experience and relate the following benefits:

Employees who work in ethically focused organizations have a more positive experience and relate the following benefits: Fewer incidents of misconduct at work Increased willingness to report misconduct Reduced pressure to compromise ethical ideals Improved overall satisfaction with the organization Increased feeling of being valued as an employee Increased satisfaction with response to reported misconduct

To ensure consistency, organizations should:

Examine the effectiveness and reliability of internal controls used to determine if employees are complying with established standards Examine existing standards and procedures regularly to determine if the guidelines are complete and easily understood by those who will apply them Rewrite any unclear regulations Communicate any updated information to employees Check frequently to ensure that employees understand and accept the guidelines

Additional examples of employee sabotage include:

Failing to pay attention to details Failing to advise supervisors of risks Being unwilling to admit inadequacies Refusing to praise others for contributions Withholding required information from supervisors Accepting credit for work that was not personally completed Transferring blame to others for bad decisions or poor results

There are things that you should avoid doing in order to foster ethical behavior in others.

Refrain from being satisfied with mediocrity. Contribute your best effort and accept the results. Pay attention to details; sometimes the little things make a big difference in the outcome. Avoid taking credit for the accomplishments of others. Do not engage in stalling tactics to avoid responsibility or making a decision. Refrain from blaming others for your mistakes.

Organizations should establish communication, training, and education for all employees in order to familiarize them with the organizations ethical standards and procedures. They should:

Select a method of training Establish a training schedule that will accommodate the needs of both the organization and the individual Define the method used to select individuals responsible for providing the training and enforcing the ethics program

The United States Sentencing Commission established the Federal Sentencing Guidelines to help organizations ensure compliance with ethics program standards. According to the guidelines, required core elements for an effective Corporate Compliance and Ethics Program include:

Standards and procedures to prevent and detect criminal conduct Overall responsibility to oversee compliance Due care in delegation of authority Reasonable efforts not to include within authority personnel any individual who has engaged in illegal activities or inappropriate conduct Communication, employee training, and education Monitoring and auditing to detect criminal conduct, and periodically evaluating the effectiveness of the compliance and ethics program Systems that allow for anonymity/confidentiality of employees reporting criminal conduct Enforcement and discipline Appropriate, consistent response

Organizations are required to implement standards of conduct and internal control procedures that effectively diminish the probability of criminal conduct.

When implementing an ethics program, organizations should establish an ethics committee whose focus is to monitor and audit compliance with the standards and procedures of the ethics program.

What benefits do organizations that encourage ethical behavior experience?

a. Reduced morale *b. Increased customer retention *c. Reduced misconduct in the workplace *d. Increased market share *e. Reduced employee turnover f. Diminished productivity