Chapter 9 Flashcards
(49 cards)
5 Items that have a significant impact on whether an ethics program is successful
1) the content of the company’s code of ethics
2) the frequency of communication regarding the ethical code and program
3) the quality of communication
4) senior management’s ability to successfully incorporate ethics into the organization
5) local management’s ability to do the same
If an organization has a culture more focused on planning than on implementation…
Employees may come to view unethical conduct as acceptable behavior
Some companies still do not understand that ethics is a critical aspect of business strategy in action
This misunderstanding stems from a belief that the ethics of employees is primarily an individual matter, and not the responsibility of managers
The nature of ethics programs in corporate America
1) Is to determine risks
2) Develop policies and codes of conduct
3) Require specific standards of conduct.
Shared Values among Employees
The glue of successful management as well as of business ethics programs
Johnson Controls’ Four Spheres of Ethical Behavior
1) Employees and other team members
2) Company and shareholders
3) Customers, competitors, and suppliers
4) Public and communities.
The Center of John Controls’ 4 Sphere Model
Integrity
Symbolizing that the company must operate with integrity in each of these “spheres”
Formal Controls
Include the following input controls:
1) proper selection of employees
2) effective ethics training
3) strong structural systems (including communication systems)
Ethics Help Desk
Is a point of contact within an organization where employees and managers can bring their concerns and receive assistance from the most appropriate person in the firm to handle the situation
How Ethics Help Desk can be successful
1) Must be supportive of employees
2) Be easily accessible
3) Have simple procedures for employees to follow
Process Controls
Include management’s commitment to the ethics program and the methods or system for ethics evaluation.
Output Controls
Involve comparing standards with actual behavior
The primary purpose of an ethics audit is to:
- Identify the risks and problems in outgoing activities
- Plan the necessary steps to adjust, correct, or eliminate these ethical concerns
____ and ___ provided a guide that stressed the necessity for an ethical culture within the organization and the creation of an ethics and compliance program
U.S. Dep. of Justice and the SEC
Ethics Audit
A systematic evaluation of an organizations ethics program and performance to determine effectiveness
The recent addition of ISO 19600 lists global standards for compliance management systems (CMSs)
Companies that adopt this standard are expected to conduct periodic audits on their CMSs to identify weaknesses and ensure the ethics program is being implemented effectively
Social Audit
The process of assessing and reporting on a business’s performance in fulfilling the economic, legal, ethical, and philanthropic responsibilities expected of it by its stakeholders
Deferred Prosecution Agreements (DPAs)
When companies admit wrongdoing (but not guilt), pay a fine, cooperate with the Justice Department, and agree to meet certain terms within a certain time frame
Measures of Ethical Climate Include
- Collective ethical sensitivity
- Collective character
- Collective judgment
- Collective moral motivation
One of the greatest benefits of the auditing process
Improved relationships with stakeholders who desire greater transparency
Top Challenges for CEO’s
- Political uncertainty
- Increased regulation
- Technological change
- Cybersecurity
- Management diversity
Ethical Disasters
Are the discovery of large-scale unethical activity and follow recognizable phases of escalation
The process of Ethical Disaster-Recovery Planning
- Assessing an organization’s values
- Developing an ethics program
- Performing an ethics audit
- Developing contingency plans for potential ethical disasters
1st Recommendation for Improving Risk Management
Review the nature and scope of the risk management function.
