MHR Chapter 4
the code states,
"If management, our auditors or government investigators request information or documentation from us, we must cooperate. This means we may not conceal, alter or destroy such information".
Property deviance
"Sweethearting" is another example of in which employees discount or don't ring up merchandise their family or friends bring to the cash register. Sweethearting is responsible for 35% of losses in supermarkets.
The ethics training would make employees realize that the following rationalizations for unethical behavior should be avoided, such as:
"This is not really illegal, so it is OK to do it," "This is really in everyone's best interests," "No one will ever find out", or "I am doing this for my company, so my company will stand behind me." These rationalizations are just excuses for unethical behavior and should not be used to justify unethical behavior.
3. Principle of religious injunctions
. If a firm suddenly announces that it would severely cut health care benefits for employees due to high costs, the proposed change in health care benefits could become very contentious. This may result in low employee morale and more employees leaving the company. the firm may be better off if it just absorbs the increase in costs and maintain current levels of health benefits.
Personality-based integrity tests
. Prison inmates serving time for white-collar crimes (counterfeiting, embezzlement, and fraud) scored much lower than a comparison group of middle-level managers on scales measuring reliability, dependability, honesty, and being conscientious and rule-abiding. These results show that companies can selectively hire and promote people who will be more ethical.
Principles of utilitarian benefits
A company decides to lay off 15% of its workforce in order to be able to remain competitive and return to profitability. Then 85% of its employees would stay at the job. The company may use the utilitarian principles to justify its layoff decision as being an ethical choice.
Overt integrity tests
A company's CEO is going to retire and will select a new CEO from internal candidates. He gave all candidates seeds to grow plants. He told candidates that a CEO will be selected one year later based on the plants they grew from the seeds. After one year, the candidates brought their beautiful plants to the company but one candidate who nothing grown in his pot. Other candidates laughed at him. Then the CEO announced that this candidate who had nothing in his pot was selected as new CEO. Why? Because the seeds were dead and cannot grow into any plants. He is the only person who is honest and so he is selected.
Because different stakeholders may disagree about what is right or wrong, meeting ethical responsibilities is more difficult than meeting economic or legal responsibilities.
A doctor accepted significant annual payments from a medical device company and heavily promoted its products to his patients. This is considered an unethical behavior. The discretionary responsibility often refers to philanthropic actions to promote human welfare or goodwill.
inconsistence between individual ethics and occupational ethics
A doctor may not personally believe that the course of medical treatment (such as abortion) chosen by a patient is the right choice. However, under the Code of Ethics for the Medical Association, the doctor must respect the rights, autonomy and freedom of choice of the patient.
2. Principle of personal virtue
A former CEO of Radio Shack lied about his education. He said he received two bachelor degrees but he did not. Soon after he became CEO, the truth was discovered and the CEO then had to resign. The CEO violates the and eventually lost his CEO job.
domain of ethics
A manager took credit for a product design for himself while this design was a result of the entire group work. This behavior falls into the These domains indicate different amount of explicit control. In the domain of codified law, obedience is to laws prescribed by the legal system. You must act in certain ways as required by laws. So the legal domain shows the high amount of explicit control. In the domain of ethical behavior, obedience is to unenforceable norms and standards, and this domain has the medium amount of explicit control. In the domain of free choice, obedience is strictly to oneself, so it has the low amount of explicit control.
Principles of utilitarian benefits
A pharmaceutical company released a drug that has been governmentally approved with known side effects. The drug is able to help more people than are bothered by the minor side effects. The release is regarded as an ethical choice since it does more benefits than harms. The utilitarian approach often shows "the end justifies the means" mentality.
Principle of government requirements
According to the Affordable Care Act, healthcare coverage is mandatory for companies with more than 50 employees. Companies that do not do so would be considered unethical.
In codified law
Agreements among competitors can raise antitrust suspicious. Fixing prices, restricting output, and dividing sales markets among competitors are illegal. These issues are in the domain of law. So antitrust authorities must investigate the effect and purpose of such an agreement to determine its legality.
Overt integrity tests
An employer might ask an applicant, "Do you think you would ever consider buying something from somebody if you knew the person had stolen the item?" or "Don't most people steal from their companies?" Surprisingly, unethical people will usually answer yes to such questions because they believe that the world is basically dishonest and that dishonest behavior is normal.
Secondary stakeholders
An environmental group, As You Sow, along with company shareholders, asked Exxon Mobile to provide detailed information about the impact of fracking, a technique that uses water to extract oil and natural gas from oil shale. Exxon declined the request in the first place. But one year later, in the face of increased concerns about fracking, Exxon provided a report on fracking's impact on air quality, water, and chemical usage at Exxon sites. Since primary stakeholders have a direct interest in a firm while secondary stakeholders have an indirect interest (influence) on a firm, companies pay more attention to
Case on national flag
An incident at UC-Irvine and people's responses to that incident showed people's feeling and attitudes toward national flag.
The distinguishing feature between discretionary and ethical responsibilities is that the discretionary responsibilities are not expected in an ethical or moral sense.
At Campbell Soup Company, employees are given time in the workday to help schools design more nutritious menus and to expand the availability of fresh produce in local grocery stores. The company also allows a food bank to take from its assembly lines product that would otherwise be discarded and use it to feed the needy.
Whistleblowing
At Paychex company, a multibillion dollar payroll services firm in Rochester, New York, the information obtained from the hotline is reported directly to the company's board of directors and audit committee, which can then trigger an investigation independent of company management
make ethics training more effective,
CA Technologies company created a series of comical training videos with a fictional manager, Griffin Peabody, who faces a series of ethics issues, such as conflicts of interest, competitive intelligence, and workplace harassment. These issues are real for their employees and the video series teach compliance lessons in a funny way. It works well. (You can find these videos on Griffin Peabody at YouTube.com as you wish.)
domain of ethics
Certain accounting practices are unethical such as unjustifiably shifting expenses to inappropriate periods to influence current financial results. These behaviors are in the
Production deviance
E.g. During the NCAA (National Collegiate Athletic Association) basketball tournament season in every spring, employees fill out their tournament brackets for March Madness in hopes of winning office betting pools. It is estimated that 50 million American office workers participate in March Madness office pools, which are technically illegal. About 56% of those 50 million workers spend at least one hour filling out their tournament selections, the cost of that lost hour nationwide to employers is $1.9 billion. These are unproductive behaviors.
domain of free choice
For a firm, it is the firm's free choice to decide how many products it wants to produce. However, a firm must produce products that meet legal requirements such as safety standards.
The difference between Property Deviance and Personal aggression
For example, if a worker damaged the company's phone, it is property deviance. If a worker damaged another worker's cell phone,
Property deviance
For example, you are assigned to work at the client's site and you claimed 8 working hours instead of actual 5 hours. You pocketed money for the false 3 hours and you "pad" your time sheet and your company's asset.
Defensive strategy
Foxconn from Taiwan has factories in China that make iPhones and iPads. 18 employees attempted suicide over four years. An extensive New York Times investigation found that employees often worked 7 days a week, were exposed to dangerous chemicals, and lived in crowded dorm rooms. Apple had been conducting audits of its suppliers' manufacturing facilities for many years but was slow to respond. After the New York Times story, Apple began working with the Fair Labor Association, a nonprofit organization that promotes and monitors safe working conditions.
no guarantee that socially responsible companies will be profitable
GM's Chevy Volt features a plug-in hybrid engine, producing outstanding fuel efficiency of 60 miles per gallon and the ability to drive 800 miles between fill-ups. This is a highly environmentally friendly car but it has been a disaster for GM financial performance. The Volt is difficult and expensive to assemble, so much so that Reuters estimates that GM loses $50,000 per Volt!
Organizations often use code of ethics to establish principles for acceptable ethical behavior.
Hershey's, the leading producer of chocolate and confectionary goods in North America, has its Code of Ethical Business Conduct in 8 languages and the code sets specific ethical standards on topics ranging from treatment of coworkers to protecting the environment to maintenance of financial records
Ethical responsibility
Hong Kong is a business hub in Asia but also one of the most polluted cities in the world. To help Hong Kong become greener, Maersk Line, the world's largest container-shipping company, has used a special type of fuel on its ships to Hong Kong. This fuel has just 0.5% sulphur, a level one-seventh lower than what the Hong Kong government requires. The low-sulphur fuel costs the company an extra $2 million per year. In this case, Maersk Line goes beyond what law requires and contributes to what society urges for a greener environment. Thus, the company fulfills its
Discretionary responsibilities
Hurricane Sandy, the largest Atlantic hurricane ever recorded, caused approximately $75 billion in damage in New York and New Jerseys states. J.P. Morgan pledged $2 million to the Red Cross, $1 million to local agencies, and $5 billion in special loans to small and mid-sized businesses. The bank also allowed storm-affected customers to skip mortgage payments for 90 days and suspended all of its foreclosure activity in storm-damaged areas.
Principles of Ethical Decision Making
If a company decides to implement mandatory alcohol and drug testing for employees, it might benefit the organization as a whole but reduce the individual freedom of employees. Should the firm do it?
Principles of Ethical Decision Making
If a company is the leading employer in a town and creates many jobs but its waste effluents may potentially cause local health problems in the community. Which issue is more important?
Reactive strategy
In Spring 2014, General Motors (GM) publicly acknowledged that since 2001 it had knowingly produced 1.6 million GM cars with faulty ignition switchers, which is linked to 12 auto-related deaths. The problem was first documented at GM in 2001 but the defective switches were not redesigned until 2007 and the first vehicle recall was not issued until 2013. Ironically, the problem is easily fixed with a $5 replacement part that takes minutes to install.
Principle of distributive justice
Managers give their favorite employees big raises and give other employees smaller raises because managers do not like them. This decision violates the principle of distributive justice and is regarded as an unethical choice.
Ethical behavior
Martin is Laura's boss and they are also friends. Martin is going to report a project progress at a corporate meeting. Laura asks Martin to report her part of the project as finished even though she still has a few days left to go. If Martin reports Laura's performance accurately, this would exemplify an ethical behavior. If Martin decided to report falsely, this would be
Professional ethics
Medical ethics govern the way doctors and nurses should treat their patients. Doctors are expected to perform only necessary medical procedures and to act in the patient's interest and not in their own self-interest.
Time, place, and manner (TPM) restrictions
No one is allowed to hold a street meeting in the middle of Time Square at the rush hour.
Accommodation strategy
Novartis, a Swiss drug maker, discovered some misconducts in its Japanese clinical research trials. There were "ethically inappropriate" links between sales and research because sales staff had made attempts to influence research results. The company announced the immediate resignation of top 3 executives at the Japanese division and began training programs to make clear what was and was not acceptable in the context of sales and clinical research.
Professional ethics
Occupational Therapy Code of Ethics and Ethical Standards are developed by American Occupational Therapy Association and applied to its members in this profession.
When there are enough people who endorse a norm, it may become a formal rule.
On Nov. 17, 2009, Los Angeles City Council approved a city ordinance and put a ban on declawing for cats. In this case, declawing for cats was an ethical issue in the past and now it is a legal issue in Los Angeles.
no trade-off between being socially responsible and economic performance.
Patagonia sells expensive outdoor gear and clothing to customers who are willing to pay a higher price because of the company's environmental focus. The company switched to organic cotton two decades ago, which costs 3 times as much as traditional cotton because it is grown without chemicals and irrigation.
management should fairly and consistently punish ethical violators.
Paychex's CEO Martin Mucci says, the key is to deal with it quickly, severely, and publicize it. Our employees know that if they are caught cheating in any way, even if only to make a few dollars, they will most likely be terminated. Then we review that with the entire management team. The company does not treat anyone differently even top salespersons or managers of locations can be fired if they violate the company's code of ethics.
Individual ethics
Some pet owners have plastic surgery for their dog or cat for cosmetic purpose only, such as getting their dogs' ears pierced or tattooed. Many vets won't perform cosmetic procedures. The American Veterinary Medical Association and the Humane Society of the United State is also against surgery purely for cosmetic reasons.
Other examples of exceptions to free speech:
Speech that promotes an unlawful end, such as a speech urging people to riot, is not protected.
Property deviance
Still another example of is "dumpster diving," in which employees unload trucks, stash merchandise in a dumpster, and then retrieve it after work.
ethics
Susan often schedules personal appointments and run personal errands during work hours. Her co-worker complained to the HR manager about Susan's absenteeism. The HR manager said that it was not a problem because it didn't affect her overall performance. Both Susan's and the HR manager's behavior are not morally right, which raises an ethical issue. Ethics are not only a guide to making decisions, but also the criteria the public judge you on. How people see you and your company is the basis of building trust. If you're taking unethical actions, you lose credibility, and your business will suffer. These values form the basis of business ethics, such as honesty, integrity, keeping your promises, loyalty, fair, caring, respect, obeying the law, and accountable, etc. They what you need to hold yourself accountable to:
Societal ethics vary from country to country and may change over time.
Sweatshops were ethical in some countries in the past, and now becomes unethical.
Economic responsibility
Symmantec, the software virus company, fired its second CEO in less than two years because "We weren't making enough progress in product innovation. We were not seeing revenue growth."
Case on national flag
The US Supreme Court in the Texas v. Johnson case (1989) ruled that due to the First Amendment to the US Constitution, it is unconstitutional for a government (whether federal, state, or municipality) to prohibit the desecration of a flag, due to its status as "symbolic speech." Therefore laws banning the desecration of flag is not enforceable. However, many people believe that the desecration of national flag is not right and this act often falls into the domain of ethics.
the code states,
The code at Hershey's company clearly indicates what employees should do under these situations.
According to a study by the Association of Certified Fraud Examiners (ACFE), 5% of all revenues are lost annually as a result of fraud.
The former chief information officer of Foundry Networks, a California-based technology company, was sentenced to 6½ years in prison for an insider trading scheme that produced $27 million in illegal profits. The former CIO supplied sales information about his employer to a San Francisco-based hedge fund analyst who spread the information to others.
Political deviance
The game of "company politics" can be considered a form of workplace deviance. An employee may spread false rumors or gossip about another in an effort to gain a promotion or more favorable work assignment.
Legal responsibility
Tie-in sale is the sale of one product (the tying product) to a customer on the condition that a second product must be purchased. The customer may not want the second product, or may be able to purchase it elsewhere at a lower price. Tie-in sale or tying is often illegal if they restrict competition.
Case on telephone conversations
Two girls talked over the phone. The first girl instructed another girl where to put explosives in a building in order to achieve a maximum effect. As soon as they hung up the phone, police showed up at the door and wanted to arrest the first girl for a terrorist attempt. The first girl said it was a computer game. Police did not believe it. So the girl had to bring the police to another girl's home to show the computer game and proved her innocence. You should realize that your telephones may be bugged for potential terrorist acts and threats. The violence-related words and attempts will be tracked down to the source.
Proactive strategy
Unilever announced that it would no longer use micro-plastic beads in its soap products from 2015. No conclusive evidence indicates that micro-beads are harmful, but there is potential to be harmful because micro-beads absorb chemicals. Unilever decided to completely eliminate micro-beads from its products.
"Employees First, Customers Second"
Unilever's CEO Paul Polman said to the Financial Times, "I do not work for the shareholder, to be honest; I work for the consumer, the customer...I'm not driven and I don't drive this business model by driving shareholder value."
Societal ethics
Using animals to test cosmetics products is losing support from more and more of the general public. The Humane Society of the United States and Humane Society International are committed to ending animal testing forever. Beautyfille.com lists over 100 beauty brands that do not test on animals such as The Body Shop, Victoria's Secret, and LA Girls. The Vegetarian Site.com exposes the names of manufactures of personal care and household items that still test their products on animals, such as Revlon, Clinique, Estee Lauder, Ralph Lauren Fragrances, and Neutrogena.
Societal ethics vary from country to country and may change over time.
Using child labor was ethical in some developing countries but unethical in other countries.
Professional ethics vary from group to group.
When I submitted papers to management journals and legal journals respectively, For management journals, I am allowed to submit a paper to one journal only at a time. If the paper is rejected for publication, I can try another journal. However, legal profession has different rules. I am allowed to submit the same paper to as many journals as you wish at the same time. If the article is accepted by more than one journal, I can choose the best journal to publish. I was able to choose to publish my papers in Yale Journal of International Law and Pennsylvania Journal of International Economic Law.
As the late Nobel Prize-winning economist Milton Friedman wrote, There is one and only one social responsibility of business -
When Jack Welch run GE, he was regarded as the incarnation of the idea that a firm's sole aim should be maximizing returns to its shareholders. This idea has dominated American business for the past 25 years until the financial crisis hit. Even Mr. Welch has expressed doubts: "On the face of it, shareholder value is the dumbest idea in the world," he said in 2009 (The Economist, A New Idolatry, 4/22/2010).
Property deviance
When employees steal company merchandise, this is called employee shrinkage, which costs US retailers $15.2 billion a year.
domain of free choice
Whether you want to complete your higher education or not, it is your free choice. However, it is mandatory for children to go to primary and secondary schools, which is not your
Personal aggression
Workplace violence is one kind of personal aggression. Fortunately, workplace violence has dropped significantly from 16 of every 1,000 employees who experienced nonfatal workplace violence in 1993 to 4 of every 1,000 employees today.
Principle of individual rights
You know a product of your company has flaws that might harm the safety or health of customers. As a manager, your decision to release this product without revealing the true information would clearly be unethical.
domain of free choice
You want to drive a car or not, this is your free choice. However, you must have a drive license in order to drive, or it is illegal; and this is in the
Primary stakeholders
shareholders, employees customers suppliers, creditors, governments, local communities. Without the support of those primary stakeholders, firms cannot survive, not to mention for profitability.
Both Overt Integrity Tests and Personality-Based Integrity Tests are written tests to assess a person's honesty, and the difference is that the former is direct while the latter is indirect. for example
when you take a personality test in your company, you are not asked about what you think on a particular unethical behavior. However, your personality traits shown in the test may become an indicator of your ethical tendency (honesty or not).
