Title Details

PREFACE XIII

ACKNOWLEDGMENTS XVII

SECTION I

INTRODUCTION 1

CHAPTER 1 INTRODUCING STRAIGHT TALK ABOUT MANAGING BUSINESS ETHICS: WHERE WE’RE GOING AND WHY 2

Introduction 2

The Financial Disaster of 2008 4

Borrowing Was Cheap 4

Real Estate Became the Investment of Choice 5

Mortgage Originators Peddled “Liar Loans” 5

Banks Securitized the Poison and Spread it Around 6

Those Who Were Supposed to Protect Us Didn’t 7

Moving Beyond Cynicism 9

Can Business Ethics Be Taught? 14

Aren’t Bad Apples the Cause of Ethical Problems in Organizations? 14

Shouldn’t Employees Already Know the Difference between Right and Wrong? 15

Aren’t Adults’ Ethics Fully Formed and Unchangeable? 16

This Book is about Managing Ethics in Business 19

Ethics and the Law 21

Why Be Ethical? Why Bother? Who Cares? 21

Individuals Care about Ethics: The Motivation To Be Ethical 22

Employees Care about Ethics: Employee Attraction and Commitment 23

Managers Care about Ethics 24

Executive Leaders Care about Ethics 25

Industries Care about Ethics 26

Society Cares about Ethics: Business and Social Responsibility 26

The Importance of Trust 27

The Importance of Values 29

How This Book Is Structured 30

Conclusion 31

Discussion Questions 32

Exercise 33

Your Cynicism Quotient 33

Notes 34

SECTION II ETHICS AND THE INDIVIDUAL 37

CHAPTER 2 DECIDING WHAT’S RIGHT: A PRESCRIPTIVE APPROACH 38

Ethics and the Individual 38

Ethical Dilemmas 38

Prescriptive Approaches to Ethical Decision Making in Business 39

Eight Steps to Sound Ethical Decision Making in Business 51

Practical Preventive Medicine 58

Conclusion 61

Discussion Questions 61

Exercise 62

Clarifying Your Values 62

Introducing the Pinto Fires Case 63

Case: Pinto Fires 63

Short Cases 68

Notes 68

CHAPTER 3 DECIDING WHAT’S RIGHT: A PSYCHOLOGICAL APPROACH 70

Ethical Awareness and Ethical Judgment 70

Individual Differences, Ethical Judgment, and Ethical Behavior 74

Ethical Decision-Making Style 75

Cognitive Moral Development 76

Locus of Control 83

Machiavellianism 84

Moral Disengagement 85

Facilitators of and Barriers to Good Ethical Judgment 87

Thinking about Fact Gathering 87

Thinking about Consequences 88

Consequences as Risk 89

Thinking about Integrity 90

Thinking about Your Gut 92

Unconscious Biases 93

Emotions In Ethical Decision Making 94

Toward Ethical Action 96

Revisiting the Pinto Fires Case: Script Processing and Cost-Benefit Analysis 100

Cost-Benefit Analysis 102

Conclusion 104

Exercise 104

Understanding Cognitive Moral Development 104

Discussion Questions 105

Short Case 106

Notes 106

CHAPTER 4 ADDRESSING INDIVIDUALS’ COMMON ETHICAL PROBLEMS 110

Identifying Your Values—and Voicing Them 111

People Issues 113

Discrimination 114

Harassment, Sexual and Otherwise 118

Conflicts of Interest 122

What Is It? 122

How We Can Think about This Issue 124

Why Is It an Ethical Problem? 125

Costs 125

Customer Confidence Issues 126

What Is It? 126

How We Can Think about This Issue 130

Why Is It an Ethical Problem? 130

Costs 130

Use of Corporate Resources 131

What Is It? 131

How We Can Think about This Issue 135

Why Is It an Ethical Problem? 136

Costs 136

When all Else Fails: Blowing the Whistle 136

When Do You Blow the Whistle? 139

How to Blow the Whistle 140

Conclusion 144

Discussion Questions 145

Short Cases 145

Notes 147

SECTION III MANAGING ETHICS IN THE ORGANIZATION 149

CHAPTER 5 ETHICS AS ORGANIZATIONAL CULTURE 150

Introduction 150

Organizational Ethics as Culture 151

What Is Culture? 151

Strong versus Weak Cultures 151

How Culture Influences Behavior: Socialization and Internalization 152

Ethical Culture: A Multisystem Framework 153

Alignment of Ethical Culture Systems 154

Ethical Leadership 156

Executive Leaders Create Culture 156

Leaders Maintain or Change Organizational Culture 157

Other Formal Cultural Systems 165

Selection Systems 165

Values and Mission Statements 167

Policies and Codes 168

Orientation and Training Programs 170

Performance Management Systems 171

Organizational Authority Structure 174

Decision-Making Processes 177

Informal Cultural Systems 178

Role Models and Heroes 179

Norms: “The Way We Do Things around Here” 180

Rituals 181

Myths and Stories 181

Language 182

Organizational Climates: Fairness, Benevolence, Self-Interest, Principles 184

Developing and Changing the Ethical Culture 185

How an Ethical Culture Can Become an Unethical Culture 186

Becoming a More Ethical Culture 187

A Cultural Approach to Changing Organizational Ethics 189

Audit of the Ethical Culture 190

A Cultural Systems View 190

A Long-Term View 191

Assumptions about People 191

Diagnosis: the Ethical Culture Audit 191

Ethical Culture Change Intervention 193

The Ethics of Managing Organizational Ethics 195

Conclusion 195

Discussion Questions 195

Case: Culture Change at Texaco 196

Case: An Unethical Culture In Need of Change: Tap Pharmaceuticals 198

Case: “Bad to the Bone” 200

Notes 202

CHAPTER 6 MANAGING ETHICS AND LEGAL COMPLIANCE 207

Introduction 207

Structuring Ethics Management 208

Making Ethics Comprehensive and Holistic 211

Managing Ethics: The Corporate Ethics Office 211

Ethics and Compliance Officers 211

The Ethics Infrastructure 213

The Corporate Ethics Committee 214

Communicating Ethics 215

Basic Communications Principles 215

Evaluating the Current State of Ethics Communications 218

Multiple Communication Channels for Formal Ethics Communication 220

Interactive Approaches to Ethics Communication 222

Mission or Values Statements 225

Organizational Policy 226

Codes of Conduct 227

Communicating Senior Management Commitment to Ethics 229

Formal and Informal Systems to Resolve Questions and Report Ethical Concerns 235

Using the Reward System to Reinforce the Ethics Message 238

Evaluating the Ethics Program 239

Surveys 240

Values or Compliance Approaches 241

Globalizing an Ethics Program 242

Conclusion 245

Discussion Questions 245

Short Case 246

Appendix: How Fines Are Determined under the U.S. Sentencing Guidelines 247

Notes 249

CHAPTER 7 MANAGING FOR ETHICAL CONDUCT 251

Introduction 251

In Business, Ethics is about Behavior 251

Practical Advice for Managers: Ethical Behavior 252

Our Multiple Ethical Selves 252

The Kenneth Lay Example 253

The Dennis Levine Example 255

Practical Advice for Managers: Multiple Ethical Selves 255

Rewards and Discipline 256

People Do What Is Rewarded and Avoid Doing What Is Punished 256

People Will Go the Extra Mile to Achieve Goals Set by Managers 257

How Goals Combined with Rewards Can Encourage Unethical Behavior 258

Practical Advice for Managers: Goals, Rewards, and Discipline 259

Recognize the Power of Indirect Rewards and Punishments 260

Can Managers Really Reward Ethical Behavior? 262

What About the Role of Discipline? 263

Practical Advice for Managers: Discipline 265

People Follow Group Norms 266

“Everyone’s Doing It” 266

Rationalizing Unethical Behavior 266

Pressure to Go Along 267

Practical Advice for Managers: Group Norms 267

People Fulfill Assigned Roles 268

The Zimbardo Prison Experiment 269

Roles at Work 270

Conflicting Roles Can Lead to Unethical Behavior 271

Roles Can Also Support Ethical Behavior 271

Practical Advice for Managers: Roles 272

Obedience to Authority: People Do What They’re Told 272

The Milgram Experiments 273

Obedience to Authority at Work 275

Practical Advice for Managers: Obedience to Authority 275

Responsibility is Diffused in Organizations 275

“Don’t Worry—We’re Taking Care of Everything” 276

Diffusing Responsibility in Groups 276

Diffusing Responsibility by Dividing Responsibility 277

Diffusing Responsibility by Creating Psychological Distance 278

Practical Advice for Managers: Personal Responsibility 279

Conclusion 280

Am I Walking My Ethical Talk? 280

Discussion Questions 281

Case: Sears, Roebuck, and Co.: The Auto Center Scandal 281

Short Case 284

Notes 285

CHAPTER 8 ETHICAL PROBLEMS OF MANAGERS 288

Introduction 288

Managers and Employee Engagement 288

Managing the “Basics” 291

Hiring and Work Assignments 291

Performance Evaluation 292

Discipline 295

Terminations 297

Why Are These Ethical Problems? 299

Costs 299

Managing a DiverseWorkforce 300

Diversity 301

Harassment 302

Family and Personal Issues 304

Why Are These Ethical Problems? 306

Costs 306

The Manager as a Lens 306

The Buck Stops with Managers 307

Managers Are Role Models 309

Managing Up and Across 310

Honesty Is Rule One 311

Standards Go Both Ways 312

Conclusion 313

Discussion Questions 313

Short Cases 314

Notes 315

SECTION IV ORGANIZATIONAL ETHICS AND SOCIAL RESPONSIBILITY 317

CHAPTER 9 CORPORATE SOCIAL RESPONSIBILITY 318

Introduction 318

Why Corporate Social Responsibility? 318

Types of Corporate Social Responsibility 325

Economic Responsibilities 325

Legal Responsibilities 326

Ethical Responsibilities 326

Philanthropic Responsibilities 327

Triple Bottom Line and Environmental Sustainability 330

Is Socially Responsible Business Good Business? 334

The Benefit of a Good Reputation 334

Socially Responsible Investors Reward Social Responsibility 335

The Cost of Illegal Conduct 335

The Cost of Government Regulation 337

What the Research Says about Social Responsibility and Firm Performance 339

Being Socially Responsible Because It’s the Right Thing to Do 342

Conclusion 344

Discussion Questions 344

Case: Merck and River Blindness 345

Short Case 346

Notes 347

CHAPTER 10 ETHICAL PROBLEMS OF ORGANIZATIONS 351

Introduction 351

Managing Stakeholders 352

Ethics and Consumers 353

Conflicts of Interest 354

Product Safety 362

Advertising 367

Ethics and Employees 372

Employee Safety 372

Employee Downsizings 377

Ethics and Shareholders 380

Ethics and the Community 385

Why Are These Ethical Issues? 388

Costs 388

Conclusion 389

Short Cases 390

Discussion Questions 395

Notes 395

CHAPTER 11 MANAGING FOR ETHICS AND SOCIAL RESPONSIBILITY IN A GLOBAL ENVIRONMENT 400

Introduction 400

Focus on the Individual Expatriate Manager 401

The Difficulties of Foreign Business Assignments 401

The Need for Structure, Training, and Guidance 401

Foreign Language Proficiency 402

Learning about the Culture 402

Recognizing the Power of Selective Perception 404

Assumption of Behavioral Consistency 405

Assumption of Cultural Homogeneity 405

Assumption of Similarity 406

How Different Are Ethical Standards in Different Cultures—Really? 413

Development of Corporate Guidelines and Policies for Global Business Ethics 414

The Organization in a Global Business Environment 418

Deciding to Do Business in a Foreign Country 419

Development of a Transcultural Corporate Ethic 426

Conclusion 431

Discussion Questions 431

Short Case 432

Case: Selling Medical Ultrasound Technology in Asia 432

Case: Google Goes to China 436

Notes 441

INDEX 447