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    Business Ethics

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    Rohan Bhuvad
    The document discusses the relationship between ethics and corporate excellence. It describes the components of corporate ethics programs, including codes of ethics, ethics training, reporting mechanisms, and investigations. Effective ethics programs can prevent costly scandals and help companies adapt to changes. They reassure stakeholders and maintain a company's reputation for integrity. While codes of ethics vary, they generally state core values and rules for situations involving conflicts of interest, resources, gifts, and workplace conduct. Guidelines for writing an effective code include getting support from all levels, communicating the code clearly, and enforcing it consistently.

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    Business Ethics

    Uploaded by

    Rohan Bhuvad
    911 views9 pages
    The document discusses the relationship between ethics and corporate excellence. It describes the components of corporate ethics programs, including codes of ethics, ethics training, reporting mechanisms, and investigations. Effective ethics programs can prevent costly scandals and help companies adapt to changes. They reassure stakeholders and maintain a company's reputation for integrity. While codes of ethics vary, they generally state core values and rules for situations involving conflicts of interest, resources, gifts, and workplace conduct. Guidelines for writing an effective code include getting support from all levels, communicating the code clearly, and enforcing it consistently.

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    The document discusses the relationship between ethics and corporate excellence. It describes the components of corporate ethics programs, including codes of ethics, ethics training, reporting mechanisms, and investigations. Effective ethics programs can prevent costly scandals and help companies adapt to changes. They reassure stakeholders and maintain a company's reputation for integrity. While codes of ethics vary, they generally state core values and rules for situations involving conflicts of interest, resources, gifts, and workplace conduct. Guidelines for writing an effective code include getting support from all levels, communicating the code clearly, and enforcing it consistently.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    911 views9 pages

    Business Ethics

    Uploaded by

    Rohan Bhuvad
    The document discusses the relationship between ethics and corporate excellence. It describes the components of corporate ethics programs, including codes of ethics, ethics training, reporting mechanisms, and investigations. Effective ethics programs can prevent costly scandals and help companies adapt to changes. They reassure stakeholders and maintain a company's reputation for integrity. While codes of ethics vary, they generally state core values and rules for situations involving conflicts of interest, resources, gifts, and workplace conduct. Guidelines for writing an effective code include getting support from all levels, communicating the code clearly, and enforcing it consistently.

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    The key takeaways are that corporate ethics programs aim to foster ethical conduct within an organization and prevent scandals, while also providing legal and strategic advantages to companies.

    The components of a corporate ethics program generally include a code of ethics, ethics training for employees, means of communicating ethics issues to employees, and mechanisms for reporting ethical concerns.

    Some guidelines for developing an effective code of ethics include involving employees, being clear about objectives, writing simply, providing reasons for policies, and ensuring top-level support.

    5-BUSINESS ETHICS & CORPORATE GOVERNANCE.

    Relationship Between Ethics & Corporate Excellence.

    Relationship Between Ethics And Corporate Excellence.


    Corporations are increasingly paying attention to Ethics in the Conduct of Employees at all levels of the Organization. Unlike the emphasis on Corporate Social Responsibility, which focuses on the impact of Business Activity on Society at large, the Corporate Ethics Movement addresses the Need to Guide Individual Decision Making and to develop an Ethical Work Place Environment. Much of the Impetus has come from a Recognition of dangers posed by Individual Misconduct. However, Unethical Business Practices are seldom due to a lone Rogue Employee, but usually result from factors in the Organization. Corporate Ethics Programs: Corporate Ethics Programs are designed to create an Organization that Fosters Ethical Conduct. Specifically, what are the components of an Ethics Program? What leads Corporations to adopt an Ethics Program and what do they expect to achieve? Some companies have adopted Ethics Programs in response to serious Scandals, whereas others seek to prevent Scandals before they occur.

    Corporate Ethics Programs (Contd).


    In U.S.A. the Corporate Ethics Movement has been spurred by the Federal Sentencing Guidelines (Government), which offer lenient treatment for convicted organizations with an Effective Ethics Program. These are Defensive Strategies aimed at Legal Compliance. However, many Corporations strive for a higher level of conduct in the belief that a Reputation for Integrity provides a Strategic Advantage. Like all other Corporate Initiatives, though, Ethics Programs represent an Investment that must be justified, and so we need to tale a critical look at their Benefits and possible Objections to them. Every Organization has an Ethics Program of some kind, although it may not be recognized as such. In the Broadest Sense, an Ethics Program consists of the Rules and Policies of an Organization and the Procedures and Systems for Motivating and Monitoring Ethical Performance. Rules and Policies include the Culture and Value of an Organization and Formal Documents such as Mission Statements, Codes of Ethics, Personnel Manuals, Training Materials and Management Directives.

    The Components Of Corporate Ethics Program:


    The Components Of Corporate Ethics Programs (Contd).


    Compliance with Rules and Policies is secured by various Procedure and Systems for Orientation, Training, Compensation, Promotion, Auditing and Investigation. These Systems and Procedures are essential functions in any Business Organization. Companies with an Identifiable Ethics Program are distinguished by the emphasis that they place on these functions and the manner in which they address them. The Components of a Corporate Ethics Program generally include a Code Of Ethics, Ethics Training for Employees, means of Communicating with Employees about matter of Ethics, a Reporting Mechanism for enabling Employees to Report alleged Wrong Doing, An Audit System for detecting Wrong Doing, and a System for conducting investigations and taking Corrective Action. In addition, more than 500 US Corporations have established the Position Of Ethics Officer to oversee all aspects of an Ethics Program. Many Companies without an Ethics Officer, still assign the main Responsibilities to one or more high level Executives. This List of Components does not reveal the Range Of

    The Components Of Corporate Ethics Program (Contd).

    At one end of the Spectrum are Programs designed to merely to secure compliance with the Law and with the Companys Own Rules and Polices. The Goals are to prevent Criminal Conduct and Violation of Government Regulations on the One Hand and to Protect the Company from Self Interested Action by Employees on the Other Hand Compliance of this kind is essential for any Organization, but some Organizations take a Broader View of Ethics. At the Other End of the Spectrum are Ethics Programs that Communicate the Values and Vision of the Organization, seek to build Relations of Trust with all Stakeholder Groups and Emphasize the Responsibility of each Employee for Ethical Conduct. Lynn Sharp Paine describes the latter kind of Program as an Integrity Strategy in contrast to the Compliance Strategy, that is represented by the former kind. Whereas, a Compliance Strategy imposes Standards of Conduct on Employees and attempts to Compel Acceptable Behavior, a Program Guided by Integrity aligns the Standards of Employees with those of 5 the Organization, and enables them to act Ethically.

    The Components Of Corporate Ethics Program (Contd).


    An Integrity Strategy seeks to create conditions that Foster Right Action instead of relying on Deterrence and Detection. These conditions are created by the whole Management Team, rather than being relegated to Lawyers or others in Compliance, and by Employing the Whole Resources of the Organization. In particular, the full range of Procedures and Policies, the Accounting and Control Systems and Decision Making Structures of the Corporation are Utilized for the end of Fostering Right Conduct. An Integrity Strategy also attempts to Motivate Employees by Appealing to their Values and Ideals, rather than relying solely on Material Incentives.

    The Benefits Of Corporate Ethics Program: The main


    Benefits of a Corporate Ethics Program is to prevent Ethical Misconduct by Employees, which is costly to Companies, not only in Direct Losses, but also in those Sustained from a Tarnished Reputation. The Total Cost to Sears Roebuck And Company for settling Suits Nationwide over allegations that its Sear Auto Center made Unnecessary repairs is estimated at $60 Million.

    The Benefits Of Corporate Ethics Program (Contd).


    The Second Benefit of Ethics Programs is to provide a Managerial Tool for Adapting the Organization to Rapid Change. Among the Factors that have lead Corporations to Adopt Ethics Programs are Increased Competition, the Development of New Technologies, Increased Regulation, Recent Mergers and Acquisitions, and Globalization of Business. A Third Benefit of Ethics Program is Managing Relationship with External Constituencies. An Ethics Program serves to Reassure Customers, Suppliers, Investors, and the General Public of the serious intent of a Corporation to adhere to High Ethical Standards. Problems often develop, when a Company and its Suppliers or Vendors operate by different Standards, and so a Companys Ethics Program helps make its Standards known. The Existence of an Ethics Program is an assurance not only to Socially Responsible Investors, who look for such Indicators, but also Shareholders generally, who want to avoid the cost of Major Scandals. The Directors of a Company have Fiduciary Duties to the Shareholders to ensure that Companys Reporting Systems are reasonably well designed to help the Management to Detect Violations of Law.
    7

    Code Of Ethics.
    The First Step in developing an Ethics Program, and the only step some Companies take, is a Code Of Ethics. Codes of Ethics vary widely, falling into Three Main Types: The Most Common is a Statement of Specific Rules or Standards for a Variety of Situations. These are most often called Codes Of Conduct or Statements of Business Standards or Practices. A Second Type is a Statement of Core Values or Vision of an Organization, sometimes called a Credo or Mission Statement. These Statements frequently include Affirmations of the Commitments of a Company to Key Stakeholders, such as Customers, Employees, and the Community. The Third are Corporate Philosophies that describe the Beliefs Guiding a Particular Company. Most Code Ethics combine Elements of the First Two Types, but at least One US Firm, namely, Levi Strauss & Company, has adopted all Three Kinds of Statements. An Aspiration Statement describes what kind of Company its members want to be. A Code Of Ethics Explains the Values and Ethical Principles that Guide Action. Levi Strauss has adopted a Document called Global Sourcing and Operating Guidelines which contains very specific Rules on Working with Business Partners and choosing Countries for Operations. Recently Levi Strauss cancelled a Contract with a Supplier in Spain, 8 after Reports on Human Rights Violation.

    1) 2) 3) 4) 5) 6) 7) 8) 9) 10)

    There is no Blue Print for Writing a Code Of Ethics. Both Procedure and Context must Arise from specific Feature of the Company in Question. However, some Values, such as Respect of the Individual, Fair Treatment, Honesty, Integrity, Responsibility, Trust, Team Work, and Quality are included in typical Codes, as are such Topics as Conflict of Interest, Use of Company Resources, Gifts and Entertainment, Confidentiality of Information and Work Place Behavior. A Few Guidelines for developing a Code Of Ethics are given below: Be clear about the Objectives the Code is intended to Accomplish. Try to get Support and Ideas for the Code from all levels of Firm. Be aware of the Latest Developments in the Laws &Regulations. Write as simply and clearly as possible. Be sure the Code is Legally defensible, but avoid Legal Jargon. Try to give reasons for the various Provisions of the Code. Devise a Concrete Program for Communicating the Code and for educating Employees about the Code and all Programs Designed to Support it. Devise a Concrete and Responsible Program for Enforcing the Code. Select Competent Persons to Administer the Code and Give them Time and Resources to get the Job done. Make sure to provide for changing the Code to meet New Situations and Challenges. The Code should not only have the full support of the Top Management, but also from all Employees at All Levels. All should have Ownership Of Code.
    9

    Writing A Code Of Ethics.

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