2. Ethics, Morality and Values
Ethics is the study of morality
Morals are the standards used to
judge right and wrong
Values are the degree of conviction
about the way to conduct life
3. Conviction
The degree of conviction to your
values can be described as primary,
secondary, or peripheral
• Primary – core values, unchanging
• Secondary – Important, but changeable
occasionally
• Peripheral – Values that are known but
not lived by
4. How Do We Get Values?
Parents, family and friends
Experiences
The environment (media, education)
5. Conflict of Values
Dramatic outcomes can occur when
individuals and groups hold
conflicting core values:
• Religious wars
• Business scandals
• Crime
6. Environmental Factors
Over the last decade, ethical
scandals in business have been on
the rise:
• Enron
• WorldCom
• Tyco
• Health South
7. How To Stop Unethical Behavior
A combination of external regulations
and compliance programs and
voluntary corporate ethics programs
is the most effective way to combat
inappropriate corporate behavior
(Trevino, Weaver, Gibson, & Toffler,
1999).
8. External Regulations
Sarbanes-Oxley Act (SOX)
• Requires CEOs and CFOs to sign
statements making them personally
responsible for the accuracy of the
quarterly financial statements
• Knowingly misrepresenting the
financials opens them up to
punishments including fines and jail
time
• Protection for whistleblowers
9. Other External Regulations
Other external regulations include
regulations related to:
• Minimum wage
• Overtime compensation
• Discrimination
• Health and Safety
• Privacy
10. Organizational Responses
Codes of ethics including:
• Explicit standards of rules to be followed
• Corporate values statements
11. Explicit Standards
Explicit standards define precisely
acceptable and unacceptable conduct
such as accepting gifts and the
amount allowable
12. Corporate Values Statements
Describes the core values the
company wants its employees to
exhibit including:
• How employees are to treat one another
• How employees are to treat customers
and stockholders
13. Effective Values Statements
Must come from the top with the
CEO being directly involved in its
development
Top management must actively
disseminate the values statement
and then live by it
The values statement must be
focused
14. HR Responses
Conduct surveys to determine:
• What behaviors are routinely being
rewarded and reinforced
• What values and attitudes are prevalent
• How strong the pressure to engage in
misconduct is
15. HR Responses Continued
Take steps to eliminate and
discourage reasons for misbehavior
and introduce and encourage
reasons to behave ethically
16. HR Responses Continued
Develop an appraisal system that
rewards individuals for ethical
behaviors and punishes those who
act unethically
17. HR Responses Continued
HR can use its expertise to
communicate with the workforce to
get out the ethical message
18. Costs of Corporate Ethics
Violations
$7 trillion in stock market losses
Loss of jobs and retirement savings
by employees
19. Costs of Corporate Ethics
Programs
Costs of implementing and
maintaining compliance to create an
ethical business environment
20. Human Costs
Unethical business environments
can:
• Demotivate individuals
• Make good employees leave the
company
• Attract unethical employees
• Lead to the lack of trust by the
employees for the company
21. Ethics Effectiveness Quick-Test
Ethics Effectiveness Quick-Test asks
eight questions about twelve
different areas that can help to
increase the ethical effectiveness in
an organization
22. Guidelines for Fostering an Ethical
Culture
Have a well developed policy and
procedures manual
Enforce policies
Reward compliance
Recruit ethical employees
Create a division to oversee ethics
23. Conclusion
Whenever you are required to make
a difficult decision, especially one
that is ethically challenging, select an
option that you would be comfortable
describing to the nation on the
evening news
