Chapter 8 Discussion Questions

what is organizational control system?

ethics programs are developed as organizational control systems, with the aim of creating predictability in employee behavior.

what is a code of conduct?

formal statements that describe what an organization expects of its employees

what is a compliance orientation?

creates order by requiring employees to identify with and commit to specific required conduct

what is behavioral stimulation?

gives participants a short, hypothetical ethical issue situation to review.

were the key reasons that codes of ethics fail?

1. code is not promoted and employees do not read it 2. code is not easily accessible 3. code is written too legalistically and therefore is not understandable by average employees 4. code is written too vaguely, providing no accurate direction 5. top management never refers to the code in body or spirit

why is communication important when it comes to code of ethics and the effectiveness of ethics programs?

by communicating to employees both what is expected of them and what punishments they face if they violate the rules, codes of conduct curtail opportunities for unethical behavior and thereby improve ethical decision making

would it comes to code of ethics, what does research demonstrate?

demonstrates that employees at organizations with effective ethical codes of conduct tend to be less tolerant of unethical behavior towards stakeholders than those at companies without ethical codes.

under what conditions will ethics training be ineffective?

if conducted solely because it is required or because it is something competing firms are doing

what are two major reasons why employees do not report observed misconduct?

include fear of retaliation and making personal value judgments about whether it would be worthwhile to report the misconduct

what is organizational probation?

involves using on-site consultants to observe and monitor a company's legal compliance efforts as well as to report the company's progress toward avoiding misconduct to the U.S Sentencing Commission

what is the second mistake? what does research suggest?

is not setting realistic and measurable program objectives. Research suggests employees and senior managers often know they are doing something unethical but rationalize their behavior as being "for the good of the company"

why is corrective action in important component in creating and maintaining an ethical culture?

maintaining ethical culture, it needs to determine why and take corrective action, either by enforcing current standards more strictly or setting higher standards.

how is a risk assessment used to develop an effective ethics program?

monitors and weighs the risks of third-party suppliers and/or business partners since a company can be damaged by misconduct that occurs in the supply chain

how we describe the legal test of a company's ethics program?

of a company's ethics program may occur when an individual employee is charged with misconduct.

what is role-playing? how is role-playing used to assess how ethically employees are performing his or her job?

role playing exercises when they train salespeople and managers. Ethical issues can be introduced into the discussion and the results can be videotaped so participants and their superiors can evaluate the outcome of the ethics dilemma

what reasons to the authors provide as to why behavioral simulation is effective?

these exercises help participants gain awareness of the ethical, legal, and social dimensions of business decision making; develop analytical skills for resolving ethical issues; and gain exposure to the complexity of ethical decision making in organizations

what are the advantages and disadvantages of a values orientation?

Advantages: is it gives employees a clearly defined basis on which to make decisions, one in which fairness, compassion, respect, and transparency are paramount Disadvantages: diversity in employees' experience and personal values requires explicit communication and training on subject matter areas.

if a company determines is ethical performance has been less than satisfactory, why would they want to change how certain kinds of decisions are made? why would a company centralize decision-making? why would a company decentralize decision-making?

Executives may want to change how certain kinds of decisions are made. Centralize key decisions so upper managers can ensure these decisions are made in an ethical manners. Centralization may reduce the opportunities lower-level managers and employees have to make unethical decisions. Decentralizing important decisions may be better way to attack ethical problems so lower-level managers who are familiar with the local business environment and local culture and values can make more decisions.

under what conditions does the federal sentencing guidelines for organizations encourage federal judges to increase fines? when are they encouraged to eliminate fines?

FSGO encourages federal judges to increase fines for organizations that continually tolerate misconduct and to reduce or eliminate fines for firms with extensive compliance programs that make due diligence attempts to abide by legal and ethical standards

what is implementation? when it comes to an organization's ethics program, why is implementation important?

Implementation requires designing activities to achieve organizational objectives using available resources and given existing constraints. Implementation translates a plan for action into operational terms and establishes a means by which an organization's ethical performance will be monitored, controlled, and improved. A firm's ability to plan and implement ethical business standards depends in part on how it structures resources and activities to achieve its ethical objectives.

what are the various reasons described in this section as to why a company must have an effective ethics program?

a company must have an effective ethics program to ensure all employees understand its values and comply with the policies and codes of conduct

how would you characterize a strong ethics program? why are strong ethics programs needed?

a strong ethics program includes a written code of conduct; an ethics officer to oversee the program; careful delegation of authority; formal ethics training; and rigorous auditing, monitoring, enforcement, and revision of program standards. Without a strong program, problems are likely to occur.

what are the advantages and disadvantages of a compliance orientation?

advantage: helps employees understand rules of conduct when there are identified risks. Rules on the recruiting and hiring of new employees will help enforce company policy and prevent legal violations Disadvantage: with no compliance requirements, values may help the employee navigate through the ethical issues at hand

what role do questioners play in a company's ability to monitor and enforce ethical standards?

can serve as benchmarks in an ongoing assessment of ethical performance by measuring employees' ethical perceptions of their company, their superiors, their coworkers, and themselves, as well as serving as a means of developing ratings of ethical or unethical practices within their firm and industry

what is the difference between a code of ethics and a code of conduct?

code of ethics: generally specifies methods for reporting violations, disciplinary action for violations, and a structure of due process. code of conduct: is a written document that may contain some inspirational statements but mainly specifies acceptable and unacceptable types of behavior

what are some of the most common program learning objectives? what is the first mistake many firms make when designing ethics programs ?

common program objectives are to deter and detect unethical behavior as well as violations of the law; to gain competitive advantages through improved relationships with customers, suppliers, and employees; and, especially for multinational corporations, to link employees through a unifying and shared corporate culture.

what is it mean that the federal sentencing guidelines for organizations uses a carrot and stick philosophy?

companies that act to prevent misconduct by establishing and enforcing ethical and legal compliance programs may receive a "carrot" and avoid penalties should a violation occur. The ultimate "stick" is the possibility of being fined or put on probation if convicted of a crime

when it comes to assessing risk, where the key areas that need to be addressed?

companies to assess their key risk areas and customize a compliance program to address these risks and satisfy key effectiveness criteria

what is a code of ethics?

comprehensive and consists of general statements, sometimes altruistic or inspirational, that serve as principles and as the basis for rules of conduct

how does ethics training impact all three types of influence?

full awareness of a company's philosophy of management, rules, and procedures can strengthen both the corporate culture and the ethical stance of peers and supervisors.

what role does software play in monitoring and enforcing ethical standards?

provides reports of employee concerns, complaints, or observations of misconduct that can be tracked and managed. The company can track investigations, analysis, resolutions, and documentation of misconduct reports.

when it comes to ethics programs, what does research show?

research provides evidence hat unethical behavior occurs less frequently in organizations that have a well-implemented ethics program.

what is an ethics officer?

responsible for managing their organizations' ethics and legal compliance programs

when it comes to compliance and values-based approaches, what does research reveal?

reveals both types of programs can interact or work toward the same end, but a values orientation has the added benefit of sparking ethical reasoning among employees

what is a statement of values?

serves the general public and also addresses distinct groups such as stakeholders

what are the federal sentencing guidelines for organization ?

some corporate cultures provide opportunities for or reward unethical conduct because management is not sufficiently concerned about ethics or the company failed to comply with the minimum requirements

what is the "bad apple - bad barrel" analogy?

some people are simple "bad apples" who will always do things in their own self-interest regardless of their organization's goals or accepted standards of conduct. organizations can become "bad barrels" not because individuals are bad, but the pressures to succeed create opportunities that reward unethical decisions

what are an ethics officer's responsibilities?

1. assessing the needs and risks an organization-wide ethics program must address 2. developing and distributing a code of conduct or ethics 3. conducting training programs for employees 4. establishing and maintaining a confidential service to answer employees' questions about ethical issues 5. making sure the company is in compliance with government regulation 6. monitoring and auditing ethical conduct 7. taking action on possible violations of the company's code 8 reviewing and updating the code

what are the benefits of having a comprehensive code of ethics?

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 production in preempting or defending against lawsuits.

what are the goals for 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

what roles do (1) the CEO, boards of directors and top managers; (2) legal staff and (3) employees play in developing an organizations code of ethics?

1. implement code 2. called on to ensure the code has correctly assessed key areas of risk and provides buffers for potential legal problems 3. enables the empowerment of all members of the organization to create shared values; has a systematic and far-reaching impact in advancing ethical decisions

what are the six values that have been suggested as desirable for codes of ethics?

1. trustworthiness 2. respect 3. responsibility 4. fairness 5. caring 6. citizenship

ethical decision-making is influenced by what three things?

corporate culture, coworkers and supervisors, and the opportunities available to engage in unethical behavior

who should an ethics officer report to ? why is this an important issue?

directly to the chief executive officer and may have some access to the board. they must be prepared to address emerging risk areas.

what are the various reasons why a training program is a major step in developing an effective ethics program?

employees find the training useful. Educates employees about the firm's policies and expectations, relevant laws and regulations, and general social standards.

what must organizations do in order to ensure that ethics training makes a difference?

employees must understand why it is conducted, how it fits into the organization and what their own role in implementing it is

what do corrective actions involve? what should organizations do when employees abide by an organization's ethical standards? what they do when employees violate ethical standards?

involve rewarding employees who comply with company policies and standards and punishing those who do not.

what are the characteristics of an effective risk assessment program?

involves not only examining legal issues but also environmental, health and safety, and other risk areas. Then use these risk assessments to change or update internal control mechanisms

what is the final common mistake? what should organizations do not avoid making this mistake?

is designing an ethics program that is little more than a series of lectures. In such cases, participants typically recall less than 15% the day after the training. A more practical solution is to allow employees to practice the skills they learn through case studies or small group exercises

what is the fourth mistake? why is it a problem when ethical compliance programs are designed by lawyers? what should organizations do to avoid this problem?

is developing program materials that do not address the needs of the average employee. many compliance programs are designed by lawyers to ensure the company is legally protected.

what is the third mistake ?

is senior management's failure to take ownership of the ethics program. maintaining an ethical culture may be impossible if CEO's and other top officers do not support an ethical culture.

what is the fifth mistake what should organizations do to avoid making this mistake?

is transferring an "American" program to a firm's international operations. In multinational firms, executives should involve overseas personnel as early as possible in the process in order to foster an understanding of company's values and to minimize the potential for misconduct stemming from understandings.

what are the various needs for organization ethics programs?

it is crucial to ensure proper controls are in place to detect conflict of interest, especially in areas where a decision could have a significant impact on consumer well-being

how should organizations measure the effectiveness of its ethics program ?

it is important to get input from employees. Employee surveys and the incorporation of ethics measurements in performance appraisal systems are two ways to help determine the effectiveness of a firm's ethical training

is it possible to know every detail of every law and how laws apply to various situations? why?

it is impossible to know every detail of the highly complex laws relevant to these situations because it is difficult to know every law associated with your job.

when designing ethics training, what must organizations do in order for the training to be effective ?

it must start with a theoretical foundation based on values, a code of ethics, procedures for airing ethical concerns, line and staff involvements, and clear executive priorities on ethics, all of which must be communicated to employees.

what does it mean if ethics is viewed as an individual matter?

many believe the best way to develop an ethical corporate culture is to provide character education to existing employees or hire individuals with good character and sensitize them to ethical issues

what are the characteristics of an effective ethics hotline?

operate on an anonymous basis and are supported 24 hours a day, 365 days a year.

what is a values orientation?

strives to develop shared values

what does it mean to sensitize employees to potential legal and ethical issues within the work environments?

studies show ethics programs can increase employees' ethical awareness, participation in ethical decision making, and ethical behavior

when or under what circumstances are a company's ethics program legally tested?

the court system or the U.S. Sentencing Commission evaluates the organization's responsibility for the individual's behavior during the process of an investigation. If the courts find the company contributed to the misconduct or failed to show due diligence in preventing misconduct, then the firm may be convicted and sentenced.

what are the various reasons formal ethics codes and programs fail?

the problem is top managers have not integrated these codes, values, and standards into their firms' corporate cultures where they can provide effective guidance for daily decision making.

is having an ethics officer important? why?

they often move into their position from other jobs in their companies, such as law, finance, and human resource management

how detailed should a code of ethics be?

they should have oversight by high-ranking persons known to respect legal and ethical standards

what are the variety of resources companies use to monitor ethical conduct and measure the program's effectiveness? what are the ways a company can assess compliance with its ethical codes and standards?

to monitor ethical conduct and measure the program's effectiveness. observing employees, conducting internal audits and investigations, circulating surveys, and instituting reporting systems are ways a company can assess compliance with its ethical code and standards.

what are accountability policies? what role do they play in ethics programs?

within the ethics program the most important component to deter misconduct