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Strategic core
A company's: philosophy and mission, vision, what it believes drives value added, and how it treats its stakeholders.
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Ethics Program Orientation Types
Compliance-based, integrity/value-based, satisfaction of external stakeholders, protect top management from blame, or a combination.
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Compliance-based orientation focus
Preventing, detecting, and punishing violations of the law.
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Integrity or values-based orientation focus
Defines organizational values and encourages employee commitment.
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Satisfaction of external stakeholders orientation focus
Improvement of image with and relationships with external stakeholders.
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Protect top management from blame orientation focus
Cover your ass (CYA)
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Important aspects of ethical culture
Ethical leadership by executives/supervisors, reward systems, perceived fairness, open discussion, authority structure that emphasizes an employee's accountability, organizational focus that communicates care for employees, official policies and procedures, supporting offices, supporting structures.
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Ethical programs' usual dimensions
- Formal ethics code
- Ethics committees developing policies, evaluating, investigating
- Ethics communications systems
- Ethics officers providing coordinating policies, education, or investigating
- Ethics training
- Disciplinary processes
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Seven impact dimensions
- Unethical behavior
- Employee awareness
- Looking for ethics advice within the company
- Delivering bad news to management
- Ethics violation are reported
- Better decision making due to the ethics program
- Employee commitment to the organization
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Ethical renewal
The process of building trust within an organization
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Omissions from ethical cultures of most concern:
- lack of strong CEO involvement
- lack of training
- failure to renew employee commitment to the code
- lack of communications
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Development of an ethical corporate culture
- Assign responsibility
- Ethics audit
- Ethics risk assessment
- Top management support
- Develop consensus on key ethical values
- Develop code of conduct
- Develop ethics program
- Establish a review mechanism
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Rational for developing ethics codes
- Instrumental
- Compliance
- Stakeholder commitment
- Value/Mission
- None/composite
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Depths of ethics code coverage
- Credo - inspirational short statements
- Code of ethics - deals with ethics principles, short
- Code of conduct - deals with principles plus examples
- Code of practice - detailed rules
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Kohlber's six stages of maturity
- 1: ethical due to fear of being punished
- 2: ethical because they realize it is in their best interest
- 3: Ethical due to peer pressure
- 4: Accept obedience to moral and ethical laws
- 5: Develop a concern for social welfare of society
- 6: Principled conscience
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Code guidance alternatives
- Obey these rules
- Seek advice before acting
- Act on your best judgement, but disclose
- Guiding principles that indicate this is what we are and stand for
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Four organizations leading the development of standards and codes of conduct
- Social Accountability International (SAI)
- Fair Labor Association (FLA)
- Maquila Solidarity
- International Labor Office (ILO)
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A properly function code is essential to:
- The development and maintenance of an ethical corporate culture
- An effective internal control system
- Due diligence defense for directors and officers
- Effective empowerment for employees to make ethical decisions
- Sending proper signals to external stakeholders
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