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Unethical Behavior
Unethical
Unethical Behavior
The Old Testament also talks about false balances (Amos 8:5; Hosea 12:7; Micah 6:11) despite Gods command against such (Lev. 19:36; Ezek. 45:10)
Business Ethics
Business
Ethics is about:
Decision-Making
Conflicting
Decision-Making
Ethical
decision-making involves the ability to discern right from wrong along with the commitment to do what is right.
Decision-Making
Some
factors affecting decision-making (from Integrity Management, by D. T. LeClair et al, Univ. of Tampa Press, 1998): Issue Intensity (i.e. how important does the decision-maker perceive the issue to be? Can be influenced by company/management emphasis) Decision-Makers Personal Moral Philosophy Decision-Makers Stage of Moral Development Organizational Culture
Decision-Making
8 Steps to Sound, Ethical Decision-Making 1. Gather as many relevant & material facts as circumstances permit. 2. Identify the relevant ethical issues (consider alt. viewpoints) 3. Identify, weigh & prioritize all the affected parties (i.e. stakeholders) (see Johnson & Johnson Credo, Taking Sides, p.25) 4. Identify your existing commitments/obligations. 5. Identify various courses of action (dare to think creatively) 6. Identify the possible/probable consequences of same (both short & long-term) 7. Consider the practicality of same. 8. Consider the dictates and impacts upon your character & integrity.
Decision-Making
Disclosure
Test: How comfortable would I feel if others, whose opinion of me I value, knew I was making this decision?
Decision-Making
The
By People In Business
The
By People in Business
Ultimately,
one's own motivation for ethical behavior must be internal to be effective. External motivation has a limited value -- punishment and fear is only effective in the short-run. If people believe that they are above the law, they will continue to act unethically. Organizations that have a clear vision, and support individual integrity are attractive places of employment. - Teri D. Egan, Ph.d, Associate Professor, The Graziadio School of Business at Pepperdine University, Corporate Ethics, Washington Post Live Online, Friday, Aug. 2, 2002;
Ethics
Values: guiding constructs or ideas, representing deeply held generalized behaviors, which are considered by the holder, to be of great significance. Morals: a system or set of beliefs or principles, based on values, which constitute an individual or groups perception of human duty, and therefore which act as an influence or control over their behavior. Morals are typically concerned with behaviors that have potentially serious consequences or profound impacts. The word morals is derived from the Latin mores (character, custom or habit) Ethics: the study and assessment of morals. The word "ethics" is derived from the Greek word, ethos (character or custom).
Morality
The
most important human endeavor is the striving for morality in our actions. Our inner balance and even our very existence depend on it. Only morality in our actions can give beauty and dignity to life. - Albert Einstein (in a letter 11/20/50)
Morality
The
historian Arnold Toynbee observed: "Out of 21 notable civilizations, 19 perished not by conquest from without but by moral decay from within."
What is right or wrong is consistent in all places or circumstances. There are universally valid moral principles. ( only by obedience to universal moral norms does man find full confirmation of his personal uniqueness and the possibility of authentic moral growth. - Pope John Paul II, see also Rom. 12:2; Heb. 13:8) Ethical Relativism (also called Situational Ethics): What is right or wrong varies according to the individual/society/culture or set of circumstances. There are no universally valid moral principles. (Related Biblical reference "everyone did what was right in his own eyes" (Deut. 12:8, Judges 17:6; 21:25) (see also Isa. 5:20 & 24, Jer. 2:13, Rom. 1:18-32, 1 Cor. 5:6-7, 2 Cor. 6:14-15, 1 John 1:8)
Relativism
As
R.H. Popkin describes relativism in his article on the subject in The Encyclopedia of Religion, views are to be evaluated relative to the societies or cultures in which they appear and are not to be judged true or false, or good or bad, based on some overall criterion but are to be assessed within the context in which they occur. Thus, what is right or good or true to one person or group, may not be considered so by others there are no absolute standards Man is the measure of all things (quoting the Greek philosopher Protagoras (481420, B.C.), and each man could be his own measure [Relativism] urges suspension of judgment about right and wrong. (Ellis Washington, Reply to Judge Richard A. Posner on the Inseparability of Law and Morality, Rutgers Journal of Law and Religion, Vol. 3)
Relativism
As
Cardinal Joseph Ratzinger said, Relativism is presented as a position defined positively by the concepts of tolerance and knowledge through dialogue and freedom, concepts which would be limited if the existence of one valid truth for all were affirmed affirming that there is a binding and valid truth in history in the figure of Jesus Christ and the faith of the church is described as fundamentalism. Such fundamentalism, is presented in different ways as the fundamental threat emerging against the supreme good of modernity: i.e., tolerance and freedom. - Address to Congregation for the Doctrine of Faith, Guadalajara, Mexico, May 1996
Absolutism v. Relativism
The
demise of Americas legal foundations occur when society rejects laws that are based on solid, irrevocable, moral, universal, absolute values, to a society that bases its laws on an arbitrary system of relativism, situational ethics, materialism, individualism, hedonism, paganism, or in any secularist ideology. This secularization of law has influenced all branches of knowledge law, philosophy, business, religion, medicine, education, science, the arts, and mass media. Harold Berman, The Interaction of Law and Religion 21 (1974).
on the idea that legal reforms can compel corporate morality, Michael Prowse, in the Financial Times, stated that "The underlying problem is that we are living in times that might aptly be called 'postethical.'" People are now "emotivists," who relativize moral judgments and "obey the law, help others and respect customs and mores only if they calculate that this will benefit them personally in some way. ... The root problem is a loss of belief in objective ethical standards.
said in John 8:31-32, If you continue in my word, then are you my disciples indeed; And you shall know the truth, and the truth shall make you free. It would seem follow then that, people cannot experience ultimate and true freedom unless and until they come to terms with the absolute truth revealed by God.
Values
To ensure that employees can and will act with integrity organizations need a strong and consistent set of values that dictate appropriate individual actions. - Conclusion of study conducted by
Professor Pratima Bansal, cited in Rebuilding trust, The integral role of leadership in fostering values, honesty and vision,by Carol Stephenson in the Ivey Business Journal, Jan/Feb. 2004, Vol. 68, Issue 3.
Values
Navigating
the complexities of a situation ... requires a reliable compass. We can plot that "north" by determining clearly our own core values. We have to identify - and articulate - what we believe is important to us and to our companies. Our core values drive our behaviors, and our behaviors tell the world who we are and what we stand for. ...Identifying and adhering to a core-values compass point provides a standard that will make decisions easier, consistent and justified. - Parkinson, J. Robert, Thinking clearly,
remembering values key to making the call, Milwaukee Journal
Sentinel, March 22, 2004.
Values
Without commonly shared and widely entrenched moral values and obligations, neither the law, nor democratic government, nor even the market economy will function properly.(Vaclav Havel Politics, morality, and Civility, Summer Meditations)
Values
What are the core values that are fundamental to the success of any individual or organization?
Values
Honesty
Respect
Responsibility Fairness Compassion Perseverance
Courage
Values - Honesty
Honesty
Transparency
Values - Honesty
Honesty
Builds/Maintains Trust Fosters Community Makes Communication more Efficient & Effective Demonstrates Respect for the Dignity of Others
Values - Honesty
Moral
Leaders welcome transparency and truth as opposed to secrecy and deception. Respondents to a recent Victor James ethical leadership survey, by a wide margin, cited honesty as the quality most admired in a leader.
Values - Honesty
Richard
Sears founder of Sears Roebuck and Companystarted the modern mail order industry, supplying a burgeoning nation with innovative products and building a business that gave employment to
Values - Honesty
Honesty
and transparency make you vulnerable. Be honest and transparent anyway. - Mother Teresa
"Speech was given to man to disguise his thoughts." - Charles-Maurice de Talleyrand
Contra:
Values - Honesty
Some
Values - Respect
Respect:
To give particular attention to, show consideration for, or hold in high or special regard (Merriam-Webster's Online
Dictionary, 10th Edition)
Should
Values - Respect
Every
man is to be respected as an absolute end in himself; and it is a crime against the dignity that belongs to him as a human being, to use him as a mere means for some external purpose. - Immanuel Kant,
Prussian geographer and philosopher (17241804)
Values - Respect
Human Dignity is the intrinsic worth that inheres in every human being. From the Catholic perspective (among other Christian perspectives), the source of human dignity is rooted in the concept of Imago Dei, in Christs redemption and in our ultimate destiny of union with God. Human dignity therefore transcends any social order as the basis for rights and is neither granted by society nor can it be legitimately violated by society. In this way, human dignity is the conceptual basis for human rights. While providing the foundation for many normative claims, one direct normative implication of human dignity is that every human being should be acknowledged as an inherently valuable member of the human community and as a unique expression of life, with an integrated bodily and spiritual nature. In Catholic moral thought, because there is a social or communal dimension to human dignity itself, persons must be conceived of, not in overly-individualistic terms, but as being inherently connected to the rest of society. - from
Values - Respect
Civilizations
should be measured by "the degree of diversity attained and the degree of unity retained. - W.H. Auden, English poet (1907-1973)
look down on anybody unless you're helping him up. - Jesse Jackson, American political activist and preacher
Never
about tolerance?
culture has fallen into a kind of moral vertigo we value tolerance so much that we don't know how to talk to each other about what is right and good, - Rev. Kevin Phillips, director of
the Business Leadership and Spirituality Network (BLSN) quoted in Competing Values, by Jane Lampman, Christian Science Monitor, August 1, 2002.
you know that the term tolerance (or in some translations sufferance Gk. eao) is rarely used in the New Testament, and that where it is used it is generally used in a negative sense? For example:
Notwithstanding I have a few things against thee, because you tolerate that woman Jezebel, who calls herself a prophetess, to teach and to seduce my servants to commit fornication, and to eat things sacrificed unto idols. Rev. 2:20
By
contrast, the New Testament uses the term love Gk. agapeo nearly 150 times in a positive sense.
So whats the difference between love and tolerance?
Values - Compassion
Compassion:
feeling, the emotion of caring concern; the opposite of cruelty, in Hebrew rahamanut, from the word rehem, 'womb', based on the idea of sibling love (coming from from the same womb).
Values - Compassion
"The word 'care' finds its roots in the Gothic 'Kara' which means lament. The basic meaning of care is: to grieve, to experience sorrow, to cry out with.. . . A friend who cares makes it clear that whatever happens in the external world, being present to each other [now] is what really matters." [Henri Nouwen, Here and Now,
p. 105]
Values - Compassion
Southwest Airlines CEO Herb Kelleher has openly demonstrated a willingness to go the extra mile for Southwest employees. He has made it a priority to learn their names and to chip in and work alongside them when the situation has demanded his help. He has been observed lugging baggage and greeting customers in an Easter Bunny costume. He has repeatedly demonstrated a truly exceptional level of caring and compassion for his employees, and his employees have responded in kind. Perhaps the most dramatic example of their commitment to their beloved leader occurred when they pooled their own money and ran a $60,000 ad in USA Today recognizing him on Bosses Day. In the ad they thanked
Values - Compassion
I
expect to pass through the world but once. Any good therefore that I can do, or any kindness I can show to any creature, let me do it now. Let me not defer it, for I shall not pass this way again. - Stephen Grellet, French/American religious leader (1773-1855) "Men are only great as they are kind. - Elbert Hubbard, American entrepreneur and philosopher (founder of Roycroft) (1856-1915)
Values - Compassion
"No
act of kindness, no matter how small, is ever wasted." - Aesop, 6th Century B.C. Writer of Greek fables the world seems cold to you, kindle fires to warm it. - Lucy Larcom, American poet (18261893) individual is capable of both great compassion and great indifference. He has it within his means to nourish the former and outgrow the latter.- Norman Cousins, American essayist & editor (1912-1990)
"If
"The
Values - Compassion
"There
are two ways of spreading light: to be the candle or the mirror that reflects it. - Edith Wharton, American novelist (1862-1937) is the basis of morality.'' - Arthur Schopenhauer, German philosopher (1788-1860) we need in order to be moral human beings is compassion. - Nina Rosenstand summarizing the view of David Taylor in Good and Evil, from The Moral of the Story: An Introduction to Ethics, McGraw-Hill, 2004.
Compassion
All
Values - Compassion
Some scriptural references regarding compassion: (Matthew 18:27, Luke 10:30-37, (Parable of the Good Samaritan), 1 John 3:17, Jude 1:22)
Values - Responsibility
Responsibility/Accountability/Reliability:
Moral Leaders take responsibility for their own actions/failures and those of their companies and they demand accountability from their subordinates. (e.g. at Dell theres no The dog ate my homework. Dell ruthlessly exposes weak spots during grueling quarterly reviews and execs know they had better fix the problem before the next meeting. What You Dont Know About Dell, Business Week, Nov. 30, 2003, p.79) Involves a commitment to competent quality performance. Implies fidelity to promises and other commitments and not making promises that cannot be kept, such as committing to unrealistic delivery dates. Also calls for acknowledgment of implicit commitments, such as the protection of confidences.
Values - Responsibility
I
am only one, but still, I am one. I cannot do everything but I can do something. And, because I cannot do everything, I will not refuse to do what I can. - Edward
Everett Hale, American clergyman and writer (1822-1909)
The
question for each man to settle is not what he would do if he had the means, time, influence and educational advantages, but what he will do with the things he has. - Hamilton Wright Mabee
Values - Responsibility
Any
mans life will be filled with constant and unexpected encouragement if he makes up his mind to do his level best each day. - Booker T. Washington, American
educator (1856-1915)
I long to accomplish some great and noble task, but it is my chief duty to accomplish small tasks as if they were great and noble. - Helen Keller, American
social activist, public speaker and author (18801968)
Values - Fairness
Fair:
just, equitable, impartial, unbiased, objective. Involves a elimination (or at least a minimalization) of one's own feelings, prejudices and desires, so as to achieve a proper balance of conflicting interests. Implies an equitable distribution of burdens and benefits. John Rawls argues in A Theory of Justice that rules are fair if they are rules that the people operating under them would have agreed to, had they been given an opportunity to accept or reject them beforehand.
Values - Fairness
Justice: demonstrating fairness, equity, impartiality, righteous action, To some, justice is about conformity to truth. To others, its about conformity to law But law and justice are 2 different concepts.
The law is something we must live with. Justice is somewhat harder to come by. - Sherlock Holmes, in The Case of the Red Circle.
This is a court of law, young man, not a court of justice. ~Oliver Wendell Holmes, Jr. justice occurs on earth when power and authority between people are exercised in conformity with Gods standards of moral excellence. - Gary Haugen, in The Good News About Injustice,
InterVarsity Press, 1999.
Values - Perseverance
Perseverance/Fortitude
steadfast determination to continue on despite adversity usually over a long period of time.
Values - Perseverance
Nothing in the world can take the place of perseverance. Talent will not; nothing is more common than unsuccessful men with talent. Education will not; the world is full of educated derelicts. Genius will not; unrewarded genius is almost a proverb. Persistence and determination alone are omnipotent. - Calvin Coolidge
Values - Perseverance
Some Biblical References: Job 17:9a, the righteous one holds fast to his way; Hos. 12:6b, endure to the end, John 8:31-32, 2 Cor. 13:5, keep proving yourself; Gal. 5:14, stand fast; Gal. 6:9, do not give up in doing what is fine; Phil. 1:27, stand firm, striving side by side; Phil. 4:1, stand firm; 1 Thes. 5:21, hold fast to what is fine; 2 Thes. 2:1517, stand firm, maintain your hold; 1 Tim. 6:1112, pursue endurance; 2 Tim. 2:12, go on enduring; 2 Tim. 3:14, continue in the things you have learned; 2 Tim. 4:78, fight the fine fight, finish the course; Heb. 2:1, pay attention to what you have heard that you not drift away; Heb. 3:14, make fast your hold to the end; Heb. 10:23, 3536, hold fast to the declaration of our hope, you have need of endurance; James 1:2-4, perseverance must finish its work, 2 Pet. 3:17, do not fall from steadfastness. God helps those who persevere. - The Koran
Values
Which
Values - Courage
The
first place to start is for every individual to become aware of their core values and to have the courage and discipline to live out of them in all aspects of their lives. (The rising tide
won't lift this economy: Unless we're willing to confront the trust problem we've helped to create, Bill Grace, Founder & Executive Director, Seattle's Center for Ethical Leadership, Guest Columnist, Seattle Post-Intelligencer, June 16, 2003.)
Values - Courage
Courage is the greatest of all virtues; because, unless a man has that virtue, he has no security for preserving any other. - Samuel Johnson Courage is the ladder on which all the other virtues mount. - Clare Booth Luce (1903 - 1987), in Reader's Digest, 1979 Courage is the footstool of the virtues, upon which they stand. - Robert Louis Stevenson Courage is not simply one of the virtues, but the form of every virtue at the testing point. - C.S. Lewis Courage is strength of mind, capable of conquering whatever threatens the attainment of the highest good. St. Thomas Aquinas
Values - Courage
Courage
is a perfect sensibility of the measure of danger and a mental willingness to endure it. - General William T. Sherman (for whom the Sherman tank was named). Courage is being scared to death . . . and saddling up anyway. - John Wayne
Values - Courage
Whenever
you see a successful business, someone once made a courageous decision. - Peter Drucker We must constantly build dykes of courage to hold back the flood of fear. Martin Luther King, Jr. One isn't necessarily born with courage, but one is born with potential. Without courage, we cannot practice any other virtue with consistency. We can't be kind, true, merciful, generous, or honest. Maya Angelou (1928 - )
Values - Courage
The
credit belongs to the man who is actually in the arena... who strives valiantly... who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat. - Theodore Roosevelt
Values - Courage
Courage:
the ability to disregard fear; bravery. The Latin root of this word is cur, which means heart. Courage literally means to take heart. Fear exists along a continuum. Courage involves recognizing a reasonable amount of fear or nervousness, facing it and then taking an intelligent risk. Moral courage involves standing up for ones principles, in spite of possible adverse consequences to such things as reputation or emotional well-being.
Golden Rule , i.e. to do unto others as you would have them do unto you is an example of a value common to many cultures/religions (Mahabharata 5:1517,
Hinduism, Talmud, Shabbat 31a & Levitcus 19:18, Judaism, Matthew 7:12, Christianity, Udana-Varga 5:18, Buddhism, Analects 15:23, Confucianism, Number 13 of Imam "Al-Nawawi's Forty Hadiths.", Islam)
Note:
Several Corporations have directly incorporated some form of this rule in their codes of ethics including Coachman, Mary Kay, Progressive, Merrill Lynch and USAA
Corporate Culture
Both
A corporation is said to manifest its values in its corporate culture Corporate culture is loosely defined as the attitudes, behaviors and personalities that make up a company and that shape its behavior and reputation, or as Elizabeth Kiss of the Kenan Institute for Ethics puts it, corporate culture is how we perceive, think, feel and do things around here. Most employees take their cues from the company culture and behave accordingly.
business derives its character from the character of the people who conduct the business. - Ricky W. Griffin, Management, Boston: Houghton Mifflin
Company (2002)
Corporate Culture
Corporate Culture
"Moral
behavior is concerned primarily with the interpersonal dimension of our behavior: how we treat one another individually and in groups and, increasingly, other species and the environment." The key here is that morality brings us into contact with others and asks us to consider the quality of that contact. -
Quote
from The Leadership Compass, John Wilcox and Susan Ebbs, as quoted in Everyday Ethics, by Thomas Shanks, S.J., Markkula
Corporate Culture
"The
first step in the evolution of ethics is a sense of solidarity with other human beings." Albert
Schweitzer, early 20thcentury German Nobel Peace Prize-winning mission doctor and theologian
Corporate Culture
The
Pressure to Conform
We are all a kind of Chameleon, taking our hue - the hue of our moral character, from those who are about us. - John Locke (1632 - 1704)
Corporate Culture
The Pressure to Conform Some years ago, a social scientist named Solomon Asch wanted to see how people dealt with social pressure so he designed an experiment to measure the results. He came up with a simple test that showed a series of lines on a board in front of the room, with one of the lines matching another in being the same length. The others were either much shorter or much longer. A person was brought into the room, along with others in a group, which unbeknown to the subject, were helpers to the professor. The whole group was asked to match the two lines that were the same length together. The helpers intentionally gave the wrong answer and it was found that in almost 75% of the time, the subjects would go along with the wrong answer, knowing full well it was wrong, but not wanting to stand out. - Opinion and Social Pressure, Scientific American, Nov.
1955, 31-35.
Corporate Culture
The
Pressure to Conform
Culture shapes behavior. There are plenty of perfectly decent people who go astray because they're in a culture that creates an environment in which they can't get their jobs done unless they engage in unethical activities. Harvard Business School professor and business ethicist Barbara Toffler, former partner at Arthur Andersen. Toffler left Andersen in 1999, well before the Enron and Global Crossing scandals destroyed the company. Her book, Final Accounting: Ambition, Greed, and the Fall of Arthur Andersen (Random House/Broadway Books, 2003), describes the process of ethical erosion in grim detail. Postcards from an Ethical Wasteland, CIO, June 1, 2003
Corporate Culture
In
Moral Man and Immoral Society, Reinhold Niebuhr proposed that individual persons are always more moral functioning alone than when they function in a social group. - Institutional Ethics: An Oxymoron, By Joe E. Trull, Editor, Christian Ethics Today, Journal of Christian Ethics, Issue 035 Volume 7 No 4 August 2001 . you agree with this?
Do
Corporate Culture
Rarely
do the character flaws of a lone actor fully explain corporate misconduct. More typically, unethical business practice involves the tacit, if not explicit, cooperation of others and reflects the values, attitudes, beliefs, language, and behavioral patterns that define an organizations operating culture. - Lynn Sharp Paine, Harvard Business School
Corporate Culture
A
strong corporate culture founded on ethical principles and sound values is a vital driving force behind strategic success. - Thompson & Strickland One company stressed its commitment to RICE : respect, integrity, communication, and excellence. The words have been on T-shirts, paperweights, and on signs. The firm printed a 61-page booklet with its code of ethics and every employee had to sign a certificate of compliance. That company was Enron!
Values?
Where?
According to Ethical or Moral, Values, Principles or Standards The average American, by the age of 65, will have spent
By contrast, over the same time period, the average weekly church-going American will have spent only 8 months of their life receiving spiritual instruction. American children will take in 63,000 hours of media (television, radio, internet, i-pods, etc.) input between the ages of 5 and 17. By contrast, if they go to church once a week for an hour, over the same number of years, that's 600 hours.
In the middle of an interview for acceptance to a prestigious Ivy League school back east, the interviewer asked his sure of himself candidate, If no one would ever find out, and no one got hurt, would you lie for $1M? The young man thought for a moment and said, If no one found out, and no one was hurt? Sure, I think I would! The interviewer then asked, Would you lie for a dime? The young man shot back, No way, what kind of man do you think I am? The interviewer responded, I have already determined that, I am just trying to determine your price.
So fearful were the ancient Chinese of their enemies on the north that they built the Great Wall of China, one of the 7 wonders of the ancient world. It was so high they knew no one could climb over it, & so thick that nothing could break it down. Then they settled back to enjoy their security. But during the first 100 years of the walls existence,
the 1950s a psychologist, Stanton Samenow, and a psychiatrist, Samuel Yochelson, sharing the conventional wisdom that crime is caused by environment, set out to prove their point. They began a 17year study involving thousands of hours of clinical testing of 250 inmates here in the District of
According to Ethical or Moral, Values, Principles or Standards 33% of teens would act unethically to get ahead
or to make more money if there was no chance of getting caught, according to a new Junior Achievement/Harris Interactive Poll of 624 teens between the ages of 13 and 18. 25% said they were not sure and only 42% said they would not. These results confirm our belief that ethics education must begin in elementary school. said Barry Salzberg, U.S. Managing Partner of Deloitte & Touche.
Men qualify for freedom in exact proportion to their disposition to put moral chains on their own appetites. Society cannot exist unless a controlling power is put somewhere on will and appetite, and the less of it there is within, the more of it there must be without. Edmund Burke (1774)
We have grasped the mystery of the atom and rejected the Sermon on the Mount. The world has achieved brilliance without wisdom, power without conscience. Ours is a world of nuclear giants and ethical infants. -General of the Army, Omar Bradley
There are seven sins in the world: Wealth without work, Pleasure without conscience, Knowledge without character, Commerce without morality, Science without humanity, Worship without sacrifice and politics without principle. Mahatma Gandhi (1869 1948)
Ethics
R. H. Tawney, the British historian, once wrote: ''To argue, in the manner of Machiavelli, that there is one rule for business and another for private life, is to open the door to an orgy of unscrupulousness before which the mind recoils.''
Ethics
Truett
Cathy, founder of Chick-fil-A, argues there is no such thing as business ethics - only ethics.
Ethics
Duty-Based v. Outcome-Based Ethics
Duty (Deontology)
Duty is an act done simply for the sake of what is right. Duty is determined by revealed truths and involves universal principles Often religion-based e.g. Kants Categorical Imperative "Everyone is obligated to act only in ways that respect the intrinsic value, human dignity and moral rights of all persons." Places High Value on Individual Rights
Outcome (Consequentialism)
Ethical if best outcome for the majority Involves cost-benefit analysis e.g. Bentham & Mills Utilitarianism "Of any two actions, the most ethical one is that which will produce the greatest balance of benefits over harms." De-emphasizes individual rights
Ethics
Strategic v. Real Ethics
What is the motivation/purpose for acting ethically?
Integrity
Integrity:
from the Latin integritas, meaning wholeness, completeness, or purity. To courageously hold to what one believes is right and true, without compromise. To stand undivided, immovable, consistent in both heart and action, word and deed. Involves the maintenance of virtue and the pursuit of moral excellence. Integrity is demonstrated by not only espousing your values, but by living according to them. Integrity describes both who you are and what you do. People of integrity are conscientious, trustworthy, accountable, committed and consistent. A key to maintaining integrity is counting the cost before committing yourself.
Integrity
Psychologists
have found integrity to be essential to an individual's sense of identity and self-worth, enabling the successful navigation of change and challenge. Links between integrity and the ability to gain and maintain the trust of others have often been noted. Many purveyors of practical advice, including Cicero and Benjamin Franklin, have counseled that integrity is the cornerstone of worldly success. According to Franklin, "no Qualities [are] so likely to make a poor Man's Fortune as those of Probity & Integrity" (quoted in Beebe, 1992, p. 8) - from
Blackwells Encyclopedic Dictionary of Business Ethics.
Integrity
In Living a Life That Matters Rabbi Harold Kushner describes the kind of people who are able to overcome the negativity in their lives as shalem, people who are whole, united within themselves, their internal conflicts ended. Because of this, he says, they are persons of integrity. Integrity, says Kushner, is a quality just as essential to human well-being as is the pursuit of peace and justice.
Integrity
The
The man of integrity walks securely, but he who takes crooked paths will be found out. (Prov. 10:9) The integrity of the upright guides them, but the unfaithful are destroyed by their duplicity. (Prov. 11:3) Integrity brings peace (i.e. a clear conscience) and marks the perfect man (Hebrew Word: Tam = Man of Integrity) (Ps. 37:37, 1 Kings 9:4) The just [man] walketh in his integrity: his children [are] blessed after him. (Prov. 20:7) A good name is better than precious ointment. (Ecc. 7:1)
Integrity
Some Biblical Examples of Integrity: Joseph, Gen. 39:1-12 Jacob/Israel (Gen 32:29) known as a simple man (tam, Gen 25:27) that is to say, that his mouth was like his heart. Job (Book of Job, see in particular description of Job at 2:3, 27:5) Daniel, Shadrach, Meshach & Abednego (Daniel Chapters 3 & 6) David (Ps. 7:8) Solomon (1 Kgs. 9:4) Contrast: Ananias & Sapphira, Acts 5:1-11 and Acts 20:1636
Integrity
According
to Michael Useem, Director of the Center for Leadership and Change Management, Warren Buffett's influence derives from his moral stature
Character
Character:
The notable/conspicuous/ distinguishing moral/ethical traits or characteristics of a person that give evidence of their essential nature and which ultimately shape their reputation.
Character
President
Harry Truman used to say: "Fame is a vapor, popularity an accident, riches take wings, those who cheer today may curse tomorrow, only one thing endures -- character.
Character
"What you are stands over you... and thunders so that I cannot hear what you say to the contrary. Ralph Waldo Emerson
Character
In his book The Death of Character, James Hunter, a noted sociologist from the University of Virginia, concludes that while Americans are innately as capable of developing character as they ever were in the past, there are now few cultural or institutional guidelines in our society that call for its cultivation or maintenance. The reason, he suggests, is because there is no consensus of moral authority. Do you agree with this?
Character
Compartmentalization: Many people believe that what individuals do in their private lives is their own business as long as it does not adversely impact the performance of their duties to the organization and they are able to deliver the goods professionally. Under this way of thinking even serious moral failures may be excused. Some refer to this kind of thinking as compartmentalization. (e.g. President Clinton/Monica Lewinsky situation, where, despite the scandal, President Clinton maintained between a 60 and 70% approval rating with the American public.) Do you agree with this? Contrast: Find God in all things, St. Ignatius Loyola.
Character
Character vs. Reputation: It has been said that an individuals character can be illustrated by a barrel of apples. The apples seen on top by all represent ones reputation, and the apples that lie hidden underneath are his character.
Reputation
Eli Lily introduced a drug, fialuridine, intended to treat hepatitis B. However, 15 patients who submitted to trials of the drug suffered liver toxicity and 6 died. Rather than follow the companys long-standing no comment policy, the new Chairman and CEO, Randall Tobias openly acknowledged the failure. His view was that communication stands at the top of the list in the elements of good leadership. In addition, he believed that if a company leaves a communications void, others will fill it with misinformation. (Put the Moose on the Table:Lessons in Leadership from a CEOs Journey Through Business and Life, Randall and Todd Tobias, Indiana University Press)
A railroad executive burst into Arthur Andersens office one day in 1914, demanding that the firms founder approve the railroads books. Accountants had discovered that the railroad was inflating its profits by failing to properly record expenses. Andersen refused, saying that there wasnt enough money in the city of Chicago to make him approve the fraudulent accounting. Andersens independence cost him the client, but it gained him something far more valuable, a reputation for integrity that gave investors confidence in Arthur Andersen audits, a reputation that helped the firm become one of the top 5 accounting firms in the U.S. After nearly 90 years in business, Andersen imploded in 2002 after acknowledging that its auditors had shredded documents relating to its audits of Enron.
Reputation
Reputation
Warren Buffett, CEO of Berkshire Hathaway, warns his executives once a year not to do anything that year they would be ashamed to read about in their local newspaper. You can lose a reputation that took 37 years to build in 37 seconds. And it might take more than 37 years to build it
Virtue
According to Marshall Schminke, who teaches business ethics at the University of Central Florida, A persons individual moral framework is only the third-most important factor in deciding what theyll do. The most important is what does their boss do. Workers look to their boss first for cues on what constitutes moral behavior. Second, they look at their peers, and finally at their own moral code. -
Experts: Ethics not Just Codes, Marshall Schminke, Raleigh News & Observer, June 8, 2003, p.12E, based on an article by Harry Wessel in the
The Role of Leadership in Developing a Culture of Integrity Edgar Schein argues that leaders shape
culture through what they notice, measure, reward and dislike.
e.g. At Enron and Worldcom, executives and Board members elevated growth and short-term profits above all other considerations and nurtured a culture of cut-throat competition within the company.
President George W. Bush observed recently, "Ultimately the ethics of American business depend on the conscience of America's business leaders."
The Role of Leadership in Developing a Culture of Integrity A report by former U.S. Attorney General Richard
Thornburg explained how the corporate culture created by CEO Bernie Ebbers and CFO Scott Sullivan fostered an environment that led to the largest ever bankruptcy in U.S. history. Ebbers resisted efforts to establish a company code of conduct calling it a colossal waste of time. He also made numerous, often highly emotional demands for results. (Reports:Ebbers
The closer the enterprise the greater the correlation between the corporate culture and the personal ethics of its leaders (e.g. small, family business (note: Malden Mills was a family business), contrast: a multinational corporation)
In a recent study by the Southern Institute for Business and Professional Ethics, 97% of respondents said that the leader of an enterprise must also be the moral leader, but many executives dont see or appreciate their power as role models in this regard. Employees take their cue from superiors on how to conduct themselves, and written codes of conduct rarely carry as much weight as the actual actions of those in command.
Perhaps Skilling and Lay couldn't know all the goings-on at Enron, as they claim. However, "people at the top tend to set the target, the climate, the ethos, the expectations that fuel behavior," says Thomas Donaldson, a business ethics professor at the Wharton School at the University of Pennsylvania. (Corporate Ethics: Right Makes Might, Business Week, 4/11/02)
Role of Leadership in Developing a Culture of In his new book, "Authentic Leadership" Integrity
(2003), Bill George, CEO of Medtronic, discusses how to develop 5 essential dimensions of the authentic leader:
1) Purpose 2) Values 3) Heart 4) Relationships 5) Self-discipline.
Feuerstein was thrust into the national spotlight in December 1995 when fire nearly completely destroyed his 130-year-old textile company. Demonstrating an all-toouncommon loyalty to his 2,400 workers, he continued paying them
Compassion: Feuerstein arranged Heart-bypass operations for several workers that could not afford them and he provided free soft drinks and extra breaks for employees when the summer heat drove temperatures to more than 90 degrees on the manufacturing lines.
While many other American mill owners moved their operations to foreign countries, where employees earn as little as $1 or $2 an hour, Feuerstein said he was committed to keeping his business in Lawrence, MA where he paid his workers $12.50 an hour. In fact, Malden Mills' new $70 million plant was situated in the heart of a ghetto in Lawrence, one of the state's poorest cities. "I think it's the duty of government and industry to [remain committed to urban America]," he said. "Because if we don't, we won't have our cities in another 20 to 30 years. And if we don't have our major cities, we won't be the leader the financial world."
Employer/Employee Loyalty That Goes Both Ways How many corporate CEOs in the downsizecrazed companies today could ask their employees to double production in a few weeks given no changes in the current plant, much less given temporary plants set up in old warehouses? How many of your employees would work 25 hours a day because the company needed it to fill outstanding
More than a year after the fire, Feuerstein said he was as moved by his workers' gratitude as they were by his generosity. He told of one employee who
goes both ways: Feuerstein gave some young companies credit early on to help them grow and Feuerstein made sure the company kept its customers supplied even in difficult times. These customers returned the favor by remaining loyal customers even when Malden Mills was nearly destroyed.
Integrity: The real test of leadership is maintaining convictions during hard times. The most important communication is not what you say but what you do. Actions Speak Louder Than Words
Spiritual Foundation
Spiritual Foundation:
Feuerstein recently concluded a speech quoting from Jeremiah 9:22-23, in flawless Hebrew, then giving the English
Spiritual Foundation
Feuerstein also quoted the famous first century Talmudic scholar Hillel - twice: "In a situation where there is no righteous person, try to be a righteous person and "Not all who increase their
Spiritual Foundation
Feuerstein's father, Samuel, was one of the early pioneers of the Jewish Day School movement and a leader with the Union of Orthodox Jewish Congregations. In fact, Feuerstein related, it was, in part, his grandfather's devotion to Judaism that led him to found Malden Mills at the turn of the century when he emigrated from Hungary. "My grandfather felt that by owning a textile mill it would not only enable him to bring his children into the business, but would provide the opportunity to observe the Sabbath." Since the family worked together, it allowed them to schedule work hours around religious observances.
Spiritual Foundation
Feuerstein grew up in a family where Talmudic discussions around the dinner table helped formulate his beliefs about how to act in the world. "Judaism gives you a complete and thorough ethical framework within which you and your family can live," he explained.
Spiritual Foundation
Feuerstein and his wife, Louise, are ardent supporters of their temple, Young Israel of Brookline, Mass. Coincidentally, their synagogue suffered a fire a
Spiritual Foundation
Spiritual study remains an important part of Aaron Feuerstein's life, and he refers to it as "exercise for my mind." Also, each day he alternates between doing an hour of running and an hour of calisthenics. During that time, he goes over memorized passages from either Jewish literature (his favorites are the Prophets, the Psalms and Pirke Avot) and English literature (specializing in Shakespeare's tragedies).
Spiritual Foundation
Spiritual Foundation
In a recent poll, 58% of Americans said yes. This is not the view in most developed countries. For example, in France, only 13% said yes. (Nicholas D. Kristof, N.Y. Times} However, only 4 % of U.S. adults have a biblical worldview as the basis of their decision-making, according to a new study by Barna Research Group. "Although most people own a Bible and know some of its content, our research found that most Americans have little idea how to integrate core biblical principles to form a unified and meaningful response to the challenges and opportunities of life," said researcher George Barna. Among the most prevalent alternative worldviews was postmodernism, dominant in the two youngest generations.
Spiritual Foundation
the happiness of a people, and the good order and preservation of civil government, essentially depend upon piety, religion, and morality." - The
Massachusetts Constitution of 1780, Ch. V, Sec. 2
Spiritual Foundation
"Religion, morality, and knowledge, being necessary to good government and the happiness of mankind, schools and the means of education shall forever be encouraged. - Northwest Ordinance, enacted
by the Continental Congress in 1787, Art. 3, 1 Stat. 51, 53 n. a (July 13, 1787, re-enacted Aug. 7, 1789)
Spiritual Foundation
"Where there is no religion, there will be no morals. Benjamin Rush, Speech in Pennsylvania Ratifying Convention (Dec. 12, 1787)
Spiritual Foundation
[T]he most important of all lessons [from the Scriptures] is the denunciation of ruin to every State that rejects the precepts of religion. . . . I believe that religion is the only solid base of morals
Spiritual Foundation
I have read your manuscript with some attention. By the argument it contains against a particular Providence [Christianity], though you allow a general Providence, you strike at the foundation of all religion. For without the belief of a Providence that takes cognizance of, guards, and guides, and may favor particular persons, there is no motive to worship a Deity, to fear his displeasure, or to pray for his protection. I will not enter into any discussion of your principles, though you seem to desire it. At present I shall only give you my opinion that . . . the consequence of printing this piece will be a great deal of odium [hate] drawn upon yourself, mischief to you, and no benefit to others. He that spits into the wind, spits in his own face. But were you to succeed, do you imagine any good would be done by it? . . . [T]hink how great a portion of mankind consists of weak and ignorant men and women and of inexperienced, inconsiderate youth of both sexes who have need of the motives of religion to restrain them from vice, to support their virtue. . . . I would advise you, therefore, not to attempt unchaining the tiger, but to burn this piece before it is seen by any other person. . . . If men are so wicked with religion, what would they be if without it. - Benjamin Franklins 1790 reply to Thomas Paine regarding Paines request of Franklin to review his new book, The Age of Reason:
Spiritual Foundation
" our ancestors established their system of government on morality and religious sentiment. [T]he cultivation of the religious sentiment represses licentiousness . . . inspires respect for law
Of all the dispositions and habits which lead to political prosperity, religion and morality are indispensable supports Reason and experience both forbid us to expect that national morality can prevail in the exclusion of religious principle.
Spiritual Foundation
"We have no government capable of contending with human passions unbridled by morality and religion. Our constitution was made only for a moral and religious people. It is wholly inadequate to the governing of any other. - John Adams
Spiritual Foundation
If we are to go forward, we must go back and rediscover those precious values - that all reality hinges on the moral foundations and that all reality has spiritual control. - Martin Luther King, Jr.
Spiritual Foundation
Business and religion are not separate worlds. Business is people they take their religion to work with them True religion is is the life we lead, not the creed we profess A character standard is more important to a stable world than an international gold standard. - The Spiritual
Responsibility of American Business and Industry. By: Johnson, Clement D.. Vital Speeches of the Day, 12/15/55, Vol. 22 Issue 5, p151, 3p; (AN 9867986)
Spiritual Foundation
[T]he
loss of God leaves man at the naked mercy of his fellows, where might makes right. John Montgomery, The
Law Above the Law, 55 (1975)
Spiritual Foundation
What if, under your particular understanding of the universe, other human beings were not created in God's image, had no inherent dignity, and were yours to do with as you pleased? And what if your particular response to the mystery of life happened to be the same as that of Eric Harris, one of the two young killers in Littleton, Colorado, who said, "My belief is that if I say something, it goes. I am the law"? or, as Fyodor Dostoevsky wrote, "Without God, everything is permitted"? - The Necessity of Truth
Spiritual Foundation
In Business and Religion: Odd Couple or Bosom Buddies? Evan Gahr reports that:
Among leaders of the nation's top 100 businesses, 65 % attend church or synagogue regularly--compared to 40 % of the general population. IBM chairman Louis Gerstner, Jr., a graduate of an all-boys Catholic high school, attends mass daily. Dallas-based Interstate Battery company, the top replacement-battery manufacturer in North America, boasts a full-time corporate chaplain who leads voluntary prayer sessions and Bible study groups.
Spiritual Foundation
In Business and Religion: Odd Couple or Bosom Buddies? Evan Gahr reports that:
Illinois-based ServiceMaster was founded by 2 evangelicals. Originally just a rug-cleaning operation, it has since blossomed into the nation's top provider of cleaning workers. The company's motto is, "To honor God in all we do." Thomas Monaghan, the founder of Domino's Pizza, also founded Legatus, an international organization for Catholic business leaders that holds seminars on business ethics and sponsors conferences featuring prominent Catholics from the pope on down. Monaghan calls Legatus his "number-one priority.
Spiritual Foundation
In Business and Religion: Odd Couple or Bosom Buddies? Evan Gahr reports that:
Allou Health and Beauty Care, Inc., which boasts one of the highest profit margins in the industry, bases its business operations principles enunciated in the Jewish Talmud.
Spiritual Foundation
Spiritual Foundation
And according to one study, a majority of Americans see religion as central to recovering the country's moral compass.
Spiritual Foundation
Christian philanthropist Sir John Templeton, regarded by Wall Street as one of the world's wisest investors, contends in his book, The Templeton Plan21 Steps to Personal Success and Real Happiness, that "the most successful people are often the most religiously motivated. They are likely to have the keenest understanding of the importance of ethics in business. They can be trusted to give full measure and not cheat their customers. In his extensive research, Templeton found that "the common denominator connecting successful people and successful enterprises is a devotion to ethical and spiritual principles." Templeton believes that "the person who lives by God's principles is the same person who will succeed in life, making lasting friendships and, most likely, reaping significant financial rewards.- Christian
Spiritual Foundation
Does a leaders strong spiritual foundation guarantee that he will lead his company in developing a culture of integrity?
Spiritual Foundation
Unfortunately, subsequent years of mounting debt forced Malden Mills into bankruptcy. Questions inevitably arose about whether Feuerstein's benevolence may have helped bring his company to bankruptcy. To Feuerstein, though, the point is moot. In March, he was asked by the CBS program "60 Minutes" if, knowing how things played out, he would do the same thing he had done, he responded "Yes, it was the right thing to do. Maybe on paper my company is now worth less to Wall Street. But I
Barbara Lee Toffler an adjunct professor at Columbia University's Graduate School of Business and an expert on corporate responsibility,
It seems appropriate that Feuerstein, translated from the Yiddish, means firestone, or a stone which can endure intense heat, because it is clear that his integrity survived a literal trial by fire.
Postscript: Aaron Feuerstein filed a reorganization plan to emerge from Chapter11 bankruptcy on March 7, 2003. Creditors have already arranged to strip Feuerstein of his chief executive's title, though they haven't kicked him out of his office. Feuerstein retains the titles of president and chairman but owns just a minority stake. Malden Mills Board now includes Feuerstein, two independents and four members appointed by creditors. The company has laid off about 70 people and has set aside Feuerstein's pledge that fabric made in Asia with cheaper labor wouldn't be sold to US consumers, a policy he felt would protect local jobs. A mill in China recently began producing the company's signature Polartec for garments sold in the United States. Some members of the board would like to move "substantial" parts of the mill overseas, whereas Feuerstein "believes that it is not only feasible, but desirable, to maintain manufacturing operations in the United States."The board is also looking into developing housing or commercial assets on parts of the mill's 25-acre site. Feuerstein has to raise $125 million to pay off creditors and retain control of Malden Mills. Feuerstein's connections won Malden Mills valuable military contracts to supply troops in Afghanistan with Polartec garments and won some leverage with creditors. His social capital (with the
Role of Leadership in Developing a Culture of Vision - Moral leaders tend to maintain a clear, Integrity strong and positive vision and purpose for
themselves and their organizations that takes into account their organizations impact on society, and they must inspire others to become invested in the pursuit of that vision. (Related Scriptures, Prov. 29:18, Hab. 2:2-3) According to Wess Roberts, author of Leadership Secrets of Attila the Hun, vision is the Northstar for any organization.
Role of Leadership in Developing a Culture of Servant Leadership - Moral leaders benefit Integrity
their organizations by empowering as opposed to controlling others. They do this by first recognizing, and then helping actuate, the latent potentialities of others. (see Matt. 20:25-27) The key concept behind servant leadership is the belief that true leadership emerges from those whose primary motivation is a deep desire to help others.
1) Active Listener
Leaders must be good listeners and invite discussion, debate and feedback. - Carol Stephenson
Role of Leadership in Developing a Culture of An increasing number of companies have adopted Integrity servant-leadership as part of their corporate
philosophy or as a foundation for their mission statement. Among these are the Toro Company (Minneapolis, Minnesota), Synovus Financial Corporation (Columbus, Georgia), ServiceMaster Company (Downers Grove, Illinois), the Men's Wearhouse (Fremont, California), Southwest Airlines (Dallas, Texas), and TDIndustries (Dallas, Texas).
Front-line Actors - Moral leaders really lead. They become consciously and actively involved in the promotion of ethical behavior in their organizations, both by word and deed.
Classical Theory
Definition: The role of business is to maximize profits within the law (see Milton Friedman, "The Social Responsibility of Business Is to Increase Its Profits.", New York Times Magazine,
Classical Theory
Put another way, by Harvard Professor Theodore Levitt, In the end business has only two responsibilities - to obey the elementary canons of face-to-face civility (honesty, good faith, and so on) and to seek material gain. - The Dangers of Social Responsibility, Harvard Business Review 36 (Sept.-Oct., 1958)
Classical Theory
Serve the interests of the shareholders Social obligations limited to ordinary moral expectations. Views obligations to non-shareholders as a constraint Trusts in Adam Smiths Invisible Hand (The Wealth of Nations) - The assumption that society benefits most when individuals are allowed to define and pursue their own self-interests, with minimal interference from governments or other authorities.
Problems with: Market Failures (e.g. pollution & resource depletion, see Pacific Lumber Case, Desjardins, Introduction to Business Ethics, p.39, a successful, balanced enterprise ruined)
When the 1990s Tech Stock Bubble burst it sent layoffs soaring, 401(k) assets tanking. According to the Center on Budget and Policy Priorities, between 1997 and 1999 the bottom 20% of earners saw their income decline, while the richest 1% saw their income more than double. The invisible hand is a bit partial in the way it dispenses favors. (Marjorie Kelly, The Divine Right of Capital)
In fact, the purpose of a business firm is not simply to make a profit, but is to be found in its very existence as a community of persons who in various ways are
Stakeholder Theory
Definition: The primary consideration in business decision-making is preserving/promoting the rights of stakeholders Takes into consideration the moral principle of mutual respect.
Theory Goal:Stakeholder to maintain the benefits of the free market while minimizing the potential ethical problems created by capitalism (Phillips, Wharton School) Primary difference from Classical Theory: elevation of nonshareholding interests to the level of shareholder interests in formulating business strategy and policy.
Stakeholder Theory Stakeholder : an individual or group, inside or outside the organization, who has a meaningful stake in its performance. Who are the stakeholders of a business? Narrow view vs. Wide View
Stakeholder Theory
Stakeholder Theory
Corporate citizenship: the extent to which a business meets its responsibilities, to its various stakeholders, or to society at large.
Stakeholder Theory
Definition: A voluntary assumption of responsibilities, beyond the legal and economic, that take into account moral/ethical/socially desirable goals and outcomes. Concept originated in the 1950s and began to gain a significant following in the 1960s.
Possible Examples Merck: moved to develop Mectizan, a drug that would treat river blindness, a disease that primarily affected the poor. Merck knew that it would cost millions to develop and that they would most likely not realize a direct profit from the effort. But this resulted in a public relations windfall!
Intel: provides education in science & math in countries where it has plants.
Man ought to regard himself, not as something separated and detached, but as a citizen of the world, a member of the vast commonwealth of nature to the interest of this great community, he ought at all times to be willing that his own little interest should be sacrificed. - Adam Smith
Dilutes the Business Purpose Viewed as fundamentally antagonistic to the Capitalist Enterprise Often influenced by simplistic political and social agendas
The search for guilt-free affluence has helped to transform "green" business into a mass-market phenomenon. Patagonia, a designer and distributor of outdoor clothing and gear, has long prided itself on being green. For nearly two decades, it has given 10% of pre-tax profits or 1% of sales, whichever is larger, to environmental causes.
Rain Forest Chic - Socially responsible image as a marketing tool, source of free, positive publicity (e.g. The Body Shop, both customers and franchisees attracted by progressive reputation)
Ben & Jerrys Fight global warming with Ice Cream Annual one world one heart festival Pint for a pint with International Red Cross Rainforest Crunch Fiasco/Mistreatment of Employees/Sale to Unilever (4/12/2000)
If you were trying to decide which type of company to invest in, which would you choose and why? (Classical, Stakeholder, CSR)
Environment
Areas of Concern?
Waste & Pollution Use of Natural Resources Preservation of Environmentally Sensitive Areas Preservation of Biodiversity
Consider Endangered Species Act, Noah/Ark, Note: Under Jewish Law: The medieval Jewish commentator Nahmanides explained the biblical injunction against slaughtering a cow and her calf on the same day (Leviticus 22:28) and the taking of a bird with her young (Deuteronomy 22:6). "Scripture will not permit a destructive act that will cause the extinction of a species, even though it has permitted the ritual slaughtering of that species (for food). And he who kills mother and sons in one day, or takes them while they are free to fly away, is considered as if he destroyed that species." The Sefer Ha-hinukh offers a similar explanation, stating that there is divine providence for each species and that God desires them to be perpetuated.
Environment
Sustainability - the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs. (see Phil. 2:4) The responsibility for ensuring a sustainable world falls largely on the shoulders of the worlds enterprises. Stuart Hart (1997) See Interface Corporation Case, Desjardins, p.174-176. Polluters Dilemma (Supplement)
Environment
Caretaker
Environment
See Gen. 2:15 (Dress & Keep) Dress(abad, Heb.) = Work, Serve, Labor for Keep (shamar, Heb.) = Keep, Guard, Treasure, Preserve, Protect, Retain, Save, Watch Over, Celebrate Jewish prohibition known as bal tashhit, 'do not destroy' is based by the Rabbis on the biblical injunction not to destroy fruit-bearing trees (Deut. 20: 19), but it is extended by them to include wasting anything that can be used for the benefit of mankind. See also Ezek. 34:18, Anti-pollution scripture? Takes into account the moral principle of stewardship/trusteeship (see Lev. 25:23-24).
Sweatshops
Sweatshops: Huge mass production facilities in which large numbers of people work under barbaric conditions for subsistence wages.
Sweatshops
Sweatshops
Sweatshops
Illegal immigrants especially vulnerable. Often involve organized crime. 90% of sweatshop workers are female. Sometimes involve child labor.
Note: According to International Labor Organization (ILO) reports, some 1/5 of all children in the world ages 5-14, or about 250 million children, are engaged in child labor.
Sweatshops
Globalization
Yes - Black et al
Violate Intl Human Rights & Labor Laws Right to a living wage? Companies can afford to treat better/pay more
A mens dress shirt, made in Mexico, and selling for $32.00 in the United States, costs only $4.74 to produce
Customers will not tolerate sweatshops and are willing to pay more to prevent them. (Is this true?)
Ad by Behind the Label and organization dedicated to exposing sweatshops shows a young American girl shopping and saying, I helped push African women into slums, I was just shopping.
Globalization
Globalization
Globalization
Globalization
"The successful entrepreneur must know how to glide over every moral restraint with almost childlike regard...[and have], besides other positive qualities, no scruples whatsoever, and [be] ready to kill off thousands of victims -- without a murmur. - John D. Rockefeller.
Ethical Behavior Enhances profitability Most academic studies support the conclusion that ethical behavior and profitability go hand in hand
A 1999 DePaul University study of 300 large firms found that companies that make an explicit commitment to follow an ethics code provided more than twice the value to shareholders than companies that didn't. And it gets better: According to Management Review, published by the American Management Association, "For the 47 companies expressing a more extensive or more explicit commitment to ethics, the market value added difference was larger--an average of $10.6 billion, or almost three times the MVA of companies" without similar commitments.
Two professors at the Harvard Business School did a study of 207 major companies over an 11-year period. They used all sorts of measuring devices and came up with a ranking by corporate cultures. What they measured were things that are sometimes called the soft side of business-morale, rewards for creativity, emphasis on ethics, how well managers listen to their employees, and so on. In my business we call them more or less spirited
Is Ethical Behavior Good for Business? An investment of $1,000 ten years ago in
each of ten companies highly regarded for ethical behavior (G.E., Coca-Cola, HewlettPackard, Microsoft, Intel, Southwest Airlines, Berkshire Hathaway, Disney, Johnson & Johnson, and Merck) would have resulted in a return nearly three times as much as an investment of $10,000 in the Standard & Poors 500 stock index. (Fortune)
An exception: In response to numerous lawsuits, gun manufacturer, Smith & Wesson's former CEO Ed Shultz decided to start including locks on
Reputation Management A reputation for integrity enhances customer loyalty (e.g. Johnson & Johnson Tylenol Case) Conversely, damage to a company's reputation can mean a sharp and often irreversible loss of market share.
Social Capital Experts say most people forgive mistakes made by leaders who have both conviction and a good heart. - Del Jones, Leadership lessons from the Reagan years, USA Today, June 11, 2004, p.6B.
Decreases Costs - Though initiating and ethics program sometimes involves significant upfront costs, it generally helps to avoid other larger costs later.
Encourages Investment - A Conference Board of Canada poll revealed that 77% of Canadians are most likely to invest in, 81% to purchase from, and 79% to work for companies they view as socially responsible.
Rote Behavior
Moral Gamesmanship, the excusing of unethical practices by viewing business as "a game" and oneself as "a player Scientism, the elevation of science-including management science-to a position of unquestioned authority.
(see Corporate moral blindness not solved by typical ethics, by John Knapp, Emory Report, April 26, 1999, Volume 51, No. 29, http://www.emory.edu/EMORY_REPORT/erarchive/1999/April/erapril.26/4_26_99morals.html)
Emotions
Arrogance "When men are most sure and arrogant they are commonly most mistaken, giving views to passion without that proper deliberation which alone can secure them from the grossest absurdities"
- David Hume quotes (Scottish philosopher, historian, economist and essayist. 1711-1776)
Emotions
Blind Ambition Desperation Feeling of Invulnerability Flirting with the Edge Greed
Capitalism
Capitalism: An economic system in which the major part of production and distribution lies in private hands, operating under a primarily free market system, for the primary purpose of earning a profit on capital invested.
Capitalism
Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of the things for the greatest good of everyone. John Maynard Keyes
Capitalism
(Source: Ethics and Economic Affairs,by Lewis, Alan; Wrneryd, Karl Erik, Publication: London ; New York Routledge, 2002)
Capitalism
As it presently functions, capitalism encourages human pathologies -embodying irresponsibility as a central requirement in its operating routines. -William Greider is national affairs
correspondent for The Nation
Corporations
Today more than 25% of the worlds economic activity comes from the 200 largest corporations. - Top 200 The Rise
of Corporate Global Power, by Anderson & Cavanaugh, Institute for Policy Studies, 2000)
The largest 500 U.S. companies constitute at least 75% of the U.S. economy.
Corporations
Many now believe that it is not the church or state, but the corporation that is:
the most important organization in the world - The Company: A Short History of a
Revolutionary Idea, by Micklethwait & Woolridge, 2003 or the central institution of contemporary society - Corporate Society: Class, Property, and Contemporary Capitalism, by McDermott, 1991.
Corporations
These beliefs echo the prediction made by French Sociologist Emile Durkheim (18581917), in his work Suicide, that following the collapse of the family and the church, the corporation would be the association in the future that would supply the social support that every individual needs to maintain a moral life . - Cited in An Essay on the Background of
Business Ethics: Ethics, Economics, Law and the Corporation, by Lisa N. Newton & Maureen M. Ford, in Taking Sides.
Corporations
Corporations
King George III's Lord Chancellor Baron Thurlow remarked at the end of the 18th Century: "How can you expect a corporation to have a conscience, when it has no soul to be damned and no body to be kicked?"
Corporations
As artificial persons corporations cannot have real responsibilities. Nobel Prize Winning Economist Milton Friedman Philosophy Professor Manuel Velasquez argues that only corporate members and not corporations themselves, can be held morally
Corporations
However, Although a corporation is not something that can be seen or touched, it does have prescribed rights and legal obligations within the community. William H. Shaw, Business Ethics.
Corporations
The exclusively economic definition of the corporation is a deadly oversimplification , allowing overemphasis on self-interest at the expense of the consideration of others. - Kenneth Andrews, Professor, Harvard Business School
Corporations
Limited liability is the key feature of the corporate form, encouraging investment.
Doesnt that run directly counter to the value of Responsibility/Accountability?
Types of Codes
Forbes 500 Companies (237 respondents):
Date Introduced Revised in 90s < 5 yrs. >20 yrs. Code of Ethics Values Statement 91% 53% 18.5% 51.0% 15.5% 8.0% 82% 83%
Corporate Credo
All Three Documents
34%
49 cos.
41.0%
22.0%
81%
Source: Patrick E. Murphy, Corporate Ethics Statements: Current Status and Future Prospects, Journal of Business Ethics 14: 727-740 (1995).
to define accepted/acceptable behaviors; to promote high standards of practice; to provide a benchmark for members to use for self evaluation; to establish a framework for professional behavior and responsibilities;
as a vehicle for occupational identity & maturity; to increase ethical sensitivity & judgement; to enhance the sense of community among members, of belonging to a group with common values and a common mission;
to discourage corruption, fraud and other malfeasance to enhance credibility with stakeholders to provide a guidepost for addressing potential problems such as potential conflicts of interest
But as Joshua Joseph, research manager at the Ethics Resource Center in Washington, D.C. says, corporate ethics codes alone have little effect on employee behavior. Organizations must communicate whats in the code, provide training on what it means and put systems into place that allow workers to ask questions and report possible misconduct without fear of reprisals.
Integration Endorsement Breach Response Plan (Gaps between values and practices must be addressed) Personal Feedback Affirmation Regular Review Contracts
Some Implementation Methods Translation (e.g. Merck & Co.s code has been translated into 22 languages) Distribution (Pamphlets, On-Line, etc.) Annual Report Ethics Officer/Department
Required annual acknowledgement/review Periodic surveys Anonymous 24-hour contact point with real and immediate investigation/follow-up
Are Codes of Ethics/Conduct just for show? (Taking Sides, p.22) Yes?
Created in response to coercion Often Ambiguous language Enron had a Code of Ethics!
Set your expectations high; find men and women whose integrity and values you respect; get their agreement on a course of action; and give them your ultimate trust. - John Fellows Akers, Chairman of IBM
I am sure that in estimating every mans value either in private or public life, a pure integrity is the quality we take first into calculation, and that learning and talents are only the second.- Thomas
In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don't have the first, the other two will kill you.-- Warren Buffet
Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws. - Plato
Dick Grasso, Former Chairman and CEO of the New York Stock Exchange, You cannot legislate honesty. (Who was forced to resign due to outrage over his $39.5 million salary)
Leon Panetta, Former White House Chief of Staff in the Clinton Administration, "Restoring trust in corporate America is crucial to our economy. Passing laws alone will not guarantee honesty. CEOs and Boards of Directors have that responsibility," he said.
Senator Joe Lieberman, We cannot put the business ethics police on every corner that might be cutnor would we want to. Government will never be able to legislate or regulate morals into every part of our markets. Business people and businesses must do that
Senator Joe Lieberman, Those who idealize the government's role and suggest heaping so many new regulations on businesses may stifle the American spirit of enterprise. Those who idealize the market's self-corrective powers don't see the size of the scar or the powerful temptation to return to business as it was before.
Senator Joe Lieberman, The Enron scandal cries out for governmental action, but we must acknowledge before we act that there are twin dangersof doing too little and doing too much.
Milton Friedman, suggests that the market and not new regulations is a more effective deterrent and punisher. New regulations will only hinder the growth of American's economy, and the "bad eggs" have already have been punished by the market.
Government Regulation of Business Ethics Has regulation been good for business in any way?
Statutes like the Sherman & Clayton Antitrust Acts helped to dissolve giant trusts (Though recent trends seem to be reversing this) Statutes like the Wagner Act enabled labor unions to emerge as responsible entities OSHA regulations have improved workplace safety Recent acts have forced disclosure of financial information leading to a more honest and effective stock market.
But have recent new regulations actually helped improve business ethics? Only 17% of respondents to a recent SHRM online poll report seeing a decrease in ethics violations at their companies. 35% report an increase!
Levels
Branches
includes rigorous standards for audit committees requires more frequent & transparent financial disclosures requires securities analysts to maintain greater independence from investment banks. provides a series of new civil and criminal penalties for violations of securities laws, and enhances penalties for such violations under existing statutes.
The Sarbanes-Oxley Companies must disclose whether or Act not they have a code of ethics, and if
not why not. They must also disclose any change in or waiver of ethics codes. Whistleblowing employees are protected for providing information to federal officials, congressional members, and company supervisors.
The Sarbanes-Oxley Created a public company accounting Act oversight board to register public
accounting firms, to establish or adopt auditing, quality control, ethics and independence and accounting standards, to conduct inspections of registered CPA firms and to enforce compliance with the Act.
The Sarbanes-Oxley Attorneys must report material Act evidence of a securities law violation,
or breach of fiduciary duty, to the chief legal counsel or CEO. If those parties fail to respond, attorneys must report to the board. Some attorneys believe this duty may conflict with their fields existing ethical codes of conduct. (Though the ABA has recently sanctioned this)
The Sarbanes-Oxley CEOs and CFOs must certify their Act financial reports are accurate, or suffer
penalties of $1 million and up to 10 years in prison for "knowing" violations, and up to $5 million and 20 years for "willful" violations. All personal loans to executives and directors by public companies are banned.
The Sarbanes-Oxley Executives are required to pay back Act bonuses or equity-based
compensation, if companies later restate their financials. The penalty for certifying bad financials: fines up to $5 million, and up to 20 years in prison.
The Sarbanes-Oxley There are no objective standards for Act exactly what CEO's or CFO's are
actually certifying. Under Section 906, they must certify "that information contained in the periodic report fairly represents, in all material respects, the financial condition and results of operations of the issuer." But what does "fairly" mean? What is "material"?
U.S. Federal Sentencing Guidelines Created in 1984 in order to give greater uniformity
and effectiveness in sentencing for federal crimes. Took effect in 1991. Emphasis is on prevention and detection. Intent to wipe out illegal gains and compensate victims. Base fine from a table of ranked crimes, $5K to 72.5 K + or - culpability score, factors e.g. level of personnel involved & existence of an effective ethics program.
U.S. Federal Sentencing Guidelines Codes of conduct must be developed that are
capable of reducing misconduct, Specific high level personnel must be responsible for the compliance program (i.e., compliance officers) and support the ethics/compliance program (i.e., top management). Substantial discretionary authority in the organization must not be given to persons with a propensity to engage in illegal conduct.
Standards and procedures must be communicated to employees, other agents (such as advertising agencies), and independent contractors (or consultants) through training programs and formal communication systems. (All relevant stakeholders should be exposed to the company code of conduct).
The organization must take reasonable steps to achieve compliance with its standards, by using monitoring and internal auditing systems to detect misconduct. A reporting system must allow employees and agents to report misconduct without fear (i.e., anonymous ethics hotlines).
Standards and punishment must be enforced consistently and the organization must create a process to prevent further offenses. A plan to review and modify the compliance program is necessary to demonstrate a continuous improvement process in selfmonitoring.
The Corporate Ethics movement has been spurred by the Federal Sentencing Guidelines which offer leniency where an effective ethics program is in place.
Limitations:
Of the 208 sentenced organizations, only four asked for mitigation based on the presence of an effective ethics compliance program.
Punitive Nature: Laws & regulations are usually punitive rather than motivational Difficult to Enforce: Regulations sometimes difficult to enforce as the costs of conducting litigation are high Incompetence: Political appointees are sometimes not competent Failure to act in the Public Interest: Regulatory agency made earlier decisions allowing Enron to engage in certain accounting practices and
Agency Capture: Regulated industries set out to "capture" their regulatory bodies.
e.g. J. Steven Griles, a former mining and oil industry lobbyist is now Deputy Secretary of the Interior, John Graham, the director of a White House office overseeing environmental regulation founded a Harvard think tank that produced studies questioning
Other regulators: The market, industry associations (peer pressure), the media/public opinion (boycotts), Public Interest Groups /class action suits) Weakness: Approach based on confrontation. Pressure usually irregular & ad hoc in nature
Corruption/Bribery
Corruption/Bribery
Corruption exists in every country and is endemic to some, especially developing countries.
Africa: Corruption is perceived to be rampant in Cameroon, Kenya, Angola, Uganda, Madagascar and Nigeria. In Kenya, bribery costs the average citizen 20% of their income. In 2004, Kenyan President Kibaki launched a zero corruption initiative. (Unfortunately, his government was recently forced to resign due to, you guessed it, corruption). No African country was listed among the 25 least corrupt countries in the most recent Transparency International Survey (Botswana, which was rated as Africas least corrupt nation, tied
Corruption/Bribery
Asia: Corruption is perceived to be rampant in Bangladesh and Indonesia. In Indonesia, it is estimated that 20% of business costs are bribes to bureaucrats. The Financial Times recently reported that deep corruption [in China] is corroding the exercise of state power. Falsified accounts used to cover up this corruption have the effect of rendering Chinas official statistics virtually meaningless.
Corruption/Bribery
Latin America: Corruption is perceived to be rampant in Paraguay. In Ecuador, it is estimated the government could pay off its foreign debt in five years if corruption was brought under control. In Argentina, corruption in the customs department defrauded the government out of $3 billion in revenues. Officials estimated that 30% of all imports were being underbilled and approximately $ 2.5 billion of goods were brought into the country labeled in transit to another country, thus illegally avoiding import taxes altogether.
Corruption/Bribery
In Albania, approximately one-third of potential profits are lost to bribe payments that amount to 8% of inventory turnover. German companies are estimated to pay an aggregate of over $ 3 billion a year in bribes to obtain business contracts abroad. In industrial countries 15 % of businesses were found to pay bribes, but in the former Soviet Union this figure jumped to over 60 %. In Kazakhstan typical bribe to win approval of a large construction contract is 15 to 20% of contract price.
Political Corruption/Bribery
In Mexico, suspicions surround the ability of Raul Salinas, the brother of former President Carlos Salinas, to amass a fortune of over $ 120 million while a public official. Two former presidents of South Korea were convicted of developing a fund of over $900 million while they were in office in the 1980s and 1990s. According to Transparency International, in 6 out of 10 countries, political parties were determined to be their nations most corrupt institutions.
Corruption/Bribery 1997 estimate by the World Bank placed the total about of bribery involved in international trade at $ 80 billion per year. A recent World Bank survey of 3,600 firms in 69 countries found that 40 % of businesses pay bribes.
According to a recent Transparency International Report, Finland was rated the world's cleanest business environment, followed by New Zealand, Denmark, Iceland, Singapore, Sweden and Switzerland. (Note Norway is somewhat farther back on the list)
Corruption/Bribery
Where do we stand?
In the same study , the U.S. tied for 17th with Belgium and Ireland. It was perceived as more corrupt than Norway, Australia, the Netherlands, the U.K., Canada, Austria, Luxembourg, Germany and Honk Kong, but less corrupt than nations such as France, Spain, Japan, Israel, Italy, & Mexico.
Bribe Corruption/Bribery - a payment of money, or something of value, to a party, with the intent to influence, or in exchange for special consideration, that is incompatible with the partys duties of office, position or role (Coarse Bribery that which affects a significant community interest)
Corruption/Bribery Civil servants in regulatory agencies, usually badly paid relative to the economic power they possess, may find it hard to refuse payment in exchange for waiving the regulations or to tailor specifications and contracts, to suit special groups or firms. (Note: In India most government officials & their families could probably not survive on their salaries alone.)
Corruption/Bribery
Corruption/Bribery Motivations: Firms, pressure groups and citizens try to maximize their gains by paying bribes, while public officials try to maximize their illegal earnings and politicians their power and wealth.
Corruption/Bribery Facilitating Payment - customary, local, incentive/grease payments or sweeteners intended to expedite performance. Usually made to low-level public officials to speed things along. Typically involves issuing licenses or permits, clearing goods through customs, etc. (In Italy, called bustarella. In Mexico, la mordida, the bite. In South Africa, dash. In the Middle/Near East, baaksheesh. In Germany, schimengeld. In France, douceur. (Ukraine adoption example)
Corruption/Bribery
The CEO of Unilever, the food and hygiene giant, insists Unilever does not pay bribes but it does pay "facilitating payments". "There are customary local things," he said. But they are only used where local custom and practice dictate in the 90+ countries in which Unilever operates. The idea is akin to tipping a waiter to get a better table, he said. He insisted that an overall code of conduct governs these matters, and bans the use of payments for unfair advantage although trusted local managers have leeway to interpret the rules according to local habits.
Corruption/Bribery
How do you distinguish between a bribe and a mere gift? Consider the social situation and context Consider perceptions of donor and recipient important Consider whether or not a quid pro quo is understood to be expected
Ashbourn Corp., is soliciting bids for a 5 year contract for the cleaning of their U.S. facilities, worth $22 million per yr. Pete Stevens, the Sales Manager of Perfect Cleaning Co. is, by coincidence, a former employee of Ashbourn Corp.& an old college buddy of John Joyce, Ashbourn Corp.s Purchasing Director. Pete was confident he could win this contract, after all his company already had a good relationship with Ashbourn Corp. James Parkin, the CEO of Perfect Cleaning Co. & Edgar White, the CEO of Ashbourn Corp. were both Masons and Parkin had sponsored White for membership to an exclusive country club a couple of years earlier.
Gift or Bribe?
Pete phoned John Joyce to find out more about the bidding process. They also talked about old times and how they used to enjoy skiing holidays together "Isn't it about time we went back to Reno" asked Pete, "How about booking a long weekend? I've got plenty of spare Air Miles that you can use? John Joyce was cautious about this suggestion. After all, they are in the middle of a bidding process. But he mentions it to his wife who is really keen about the idea of getting back onto the slopes. "We will have a rule, no mention of work" She says. They book to go on holiday with Peter and his wife in February.
Gift or Bribe?
Christmas is fast approaching. John Joyce, sends Pete Stephens a Christmas card. His company has a policy of not sending gifts. Johns wife receives a package by courier on the 23rd of December from Pete and his wife addressed to the Joyce family. It is an elegant mantel clock. In February, the two couples enjoy a relaxing skiing holiday together. Not a word is spoken about business. Pete even wins $10,000 at the casino after taking some tips from John on winning at Black Jack. Pete buys John a champagne dinner to celebrate.
Gift or Bribe?
Gift of Bribe?
In March the bids are considered, with John Joyce as Chairman of the Selection Committee. The bids are almost identical. None of the companies really stand out on price, quality of service, etc. John tells his CEO that he hesitates to recommend Perfect Cleaning Co. because of his rejuvenated friendship with Pete. However, his CEO tells him, Dont worry about that. I trust you to look after our shareholders' interests - you tell me who you think is best for the job". Perfect Cleaning Co. is awarded the contract. A week later a letter arrives marked "Private & Confidential". John Joyce opens it and a check for $5,000 falls out. A simple note is attached "Thanks for your tip at the Casino you deserve a share of my winnings! Pete.
Corruption/Bribery . Governments are starting recognize and respond to the damage caused by bribery/corruption Why?
Corruption/Bribery .
Globalization: The borderless global marketplace is bringing national economies and corporations throughout the world into increasingly greater interdependence. High profile cases (e.g. Lockheed/Japan, involved major companies as well as political figures and staggering sums of money. Paid $12.5 million in bribes for $430 million sales contract.)
Corruption/Bribery .
Implies intent Only liable for actions of 3rd party agents when have reason to know of Does not prohibit facilitating payments (Note that the Justice Dept. only brings on average 1.5 cases per year- Special Report: Bribery and Business, Economist, March 2, 2002, p.64)
Corruption/Bribery . at At first, the rest of the world looked it as a sad case of an American moralism or moralistic imperialism
If other nations not follow suit does this = a competitive disadvantage for U.S.?
. 1996 Corruption/Bribery Interamerican Treaty Against Corruption 1997 OECD treaty committing 34 countries to similar restrictions, in effect beginning in 1999.
. OtherCorruption/Bribery important anti-bribery initiatives have recently been launched by the World Bank, the International Monetary Fund, the European Union, the Council of Europe, the Organization of American States, the Pacific Basin Economic Council, the Global Coalition for Africa and the United Nations.
Corruption/Bribery .
Ghana, Mozambique, Zambia & South Africa have also launched anticorruption drives..
Corruption/Bribery . In addition, recent steps by President Vladimir Putin to introduce tax reforms and new laws fighting moneylaundering in Russia But still high levels of bribery by firms from Russia, China, Taiwan and South Korea, Italy, Hong Kong, Malaysia, Japan, USA and France.
Corruption/Bribery . the Not much being done to address demand side of bribery (i.e. extortion) RICO (Anti-Racketeering) Statutes in U.S.
Corruption/Bribery The reality is that to maximize . opportunities in the growing markets of developing countries, corporations must strive to be seen as honest, long-term, committed guests. Corporations must impress upon host governments, customers, suppliers, and the general public that they seek fair, open, long-term relationships.
Corruption/Bribery . Coca-Cola trains its staff to learn about the traditions, politics, and values of the people in all of the countries in which it operates. It gives key responsibilities to nationals of these countries and ensures that its image is never that of a ruthless multinational colonialist corporation.
Corruption/Bribery Coca-Cola plays an active role . in most of the countries in which it works, supporting education and the arts and social services in a long-term and genuine way. GE & Texaco also have developed a reputation of refusing to pay bribes.
Corruption/Bribery
Caux Roundtable Anti-Corruption Principles
1. Disclose publicly and make widely known its endorsement of the Anti-Corruption Measures. 2. Establish a clearly articulated written policy prohibiting any of the firms employees from paying or receiving bribes and kickbacks. 3. Implement the policy with due care and take appropriate disciplinary action against any employee discovered to have made payments in violation of the policy. 4. Provide training for employees to carry out the policy, and provide continuing support, such as help lines, to assist employees to act in compliance with the firms policy.
Corruption/Bribery
Caux Roundtable Anti-Corruption Principles
5. Record all transactions fully and fairly, in accordance with clearly stated record-keeping procedures and accounting controls, and conduct internal audits to assure that all payments made are proper. 6. Report annually on the firms bribery and corruption policy, along with a description of the firms experiences implementing and enforcing the policy. 7. Have the annual report in step six above audited either by an independent financial auditor or an independent social auditor, or both. 8. Require all agents of the firm to affirm that they have neither made nor will make any improper payments in any business venture or contract to which the firm is a party.
Corruption/Bribery
Caux Roundtable Anti-Corruption Principles
9. Require all suppliers of the firm to affirm that they have neither made nor will make any improper payments in any business venture or contract to which the firm is a party. 10. Establish a monitoring and auditing system to detect any improper payments made by the firms employees and agents. 11. Report publicly any solicitations for payments whenever such reporting will not lead to harsh reprisals of material consequences to the company or its employees (or report privately to a monitoring organization, such as Transparency International or a social auditor). 12. Establish a system to allow any employee or agent of the firm to report any improper payment without fear of retribution for their disclosures.