Business Ethics. The Managerial Approach to Business Ethics. Roadmap. What is the role of managers in corporate ethics? Leadership and example. Corporate culture: raising the ethical performance of a corporation by an inch. Control systems: steering corporations away from ethical failure.
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The Managerial Approach to Business Ethics
1. Identify (and state) your rules of operation clearly. Make commitments and values explicit.
2. Avoid organisational hypocrisy. Don’t subvert formal requirements with informal laxity (see Stonecipher case below).
Codes Leadership & mentoring
Ethics training Incentives and disincentives
Newsletters Performance standards
understatement of liabilities in financial reports.
1. There is a "kill the messenger" ethos in the organisation - justifies distortion and concealment of information.
2. There is a low degree of confidence in the accuracy of internal reports.
3. Despite claims to doing the right thing, in the last analysis, top management does the most expedient thing.
4. Employees do not know of or refer to written ethics policies .
5. The operative value of the organisation is: if it's legal it's ethical.
6. Top management's stated concern for ethics is for public relations.
7. Managers while basically truthful are willing to deceive in order to accomplish organizational or personal goals.
8. Managers do not believe there is an obligation to be candid where could harm personal or organizational goals.
9. People who ignore ethics but produce bottom line results get promoted.
Dear Mr. Lay,
Has Enron become a risky place to work? For those of us who didn't get rich over the last few years, can we afford to stay?
… I am incredibly nervous that we will implode in a wave of accounting scandals. My eight years of Enron work history will be worth nothing on my resume, the business world will consider the past successes as nothing but an elaborate accounting hoax. Skilling is resigning now for "personal reasons" but I would think he wasn't having fun, looked down the road and knew this stuff was unfixable and would rather abandon ship now than resign in shame in two years. … I firmly believe that the probability of discovery significantly increased with Skilling's shocking departure. Too many people are looking for a smoking gun.
Do you think that post-Enron America is a more ethical place?
“Not really. We are building more Enrons, but we don't want to admit it. I fall into Warren Buffett's camp when he says that C.E.O. pay is the acid test. When C.E.O. pay has been reduced, then I'll believe that our business leaders have adopted a spirit of corporate reform.”