{"id":3044,"date":"2015-12-28T02:05:39","date_gmt":"2015-12-28T02:05:39","guid":{"rendered":"https:\/\/courses.candelalearning.com\/waymakerintromarketing1xmaster\/?post_type=chapter&#038;p=3044"},"modified":"2016-02-18T17:40:21","modified_gmt":"2016-02-18T17:40:21","slug":"reading-a-culture-of-accountability","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-marketing\/chapter\/reading-a-culture-of-accountability\/","title":{"raw":"Reading: A Culture of Accountability","rendered":"Reading: A Culture of Accountability"},"content":{"raw":"<h2>Introduction<\/h2>\r\nAt the beginning of this module we discussed the 2015 revelation that Volkswagen installed emissions-altering software in eleven million diesel vehicles\u00a0worldwide, which caused the cars to pass emissions tests they should have failed. Consider, for a moment, how many employees would have to be involved\u00a0in order to achieve\u00a0this level of fraud? \u00a0This was not the handiwork of a single employee but the result of a pattern of unethical behavior in the company. When the Ethics &amp; Compliance Initiative (ECI) released the results of its\u00a02013 National Business Ethics Survey, it noted that these types of broad, organizational breaches are fairly common.\r\n<blockquote>The survey shows that a significant amount of misconduct involves continuous, ongoing behavior rather than one-time incidents: Employees say that more than a quarter (26 percent) of observed misconduct represents an ongoing pattern of behavior. Another 41 percent said the behavior has been repeated at least a second time. Only one-third (33 percent) of rule breaking represents a one-time incident.[footnote]http:\/\/www.ethics.org\/newsite\/research\/eci-research\/nbes\/nbes-reports\/nbes-2013[\/footnote]<\/blockquote>\r\nIn the case of Volkswagen, an early internal investigation pointed to a \"culture of tolerance\" for ethical compromises. Employees were pushed to do what was needed to meet corporate objectives at any\u00a0cost.\r\n\r\nThe organizational culture is comprised of the values and beliefs that an organization shares, which create its social environment. The culture of a large organization can be difficult to understand since it is influenced by many different factors. Still, many research studies point to leadership and policies as being instrumental in building an ethical organizational culture.\r\n<h2>Policies That Encourage Ethical Behavior<\/h2>\r\nMany companies have a specific policy that defines appropriate behavior. The policy is often called the Standards for Business Conduct. As the name suggests, the policy is intended to set the standards for acceptable behavior; it's not meant to be an exhaustive list of every type of ethical behavior.\r\n\r\nMany of these policies do\u00a0the following:\r\n<ul>\r\n\t<li>Define the threshold for behavior: While it should go without saying that employees are expected to be law abiding, companies choose to be quite explicit about\u00a0stating that they require their employees to follow the law.<\/li>\r\n\t<li>Create expectations for behavior: The policies identify common issues that employees may encounter\u2014such as accepting gifts from suppliers\u2014and explain\u00a0how they should be handled.<\/li>\r\n\t<li>Set policy: establish company protocols\u00a0for handling confidential information, including customer data, etc.<\/li>\r\n\t<li>Give guidance on making judgment calls: Companies often define how they\u00a0would like employees to make decisions when guidelines do not adequately cover them.<\/li>\r\n\t<li>Describe\u00a0reporting and enforcement procedures: There is generally a process for reporting and addressing issues, as well as information about how the company will protect those reporting concerns.<\/li>\r\n<\/ul>\r\nLet's examine some examples from company policies to see how some of these components\u00a0are addressed.\r\n<h3>The Legal Threshold<\/h3>\r\nThe ethics policy generally begins by reminding employees that they are required to act in accordance with the law. For companies that engage in business across the globe this can be complex. Starwood Hotels and Resorts addresses this issue in their Code of Business Conduct and Ethics:\r\n<blockquote>You must, at all times, obey the laws of the jurisdictions where we conduct business. Starwood conducts business all around the world. Our associates are citizens of many countries. As a result, our operations are subject to the laws of many jurisdictions. It is often challenging for us to understand how those various laws apply to our businesses. However, whether you are a Starwood associate or member of the Board of Directors, you are expected to conduct yourself in accordance with applicable law.\r\n\r\nStarwood is a company organized under the laws of the United States and is generally subject to U.S. federal law. From time to time, the laws of the United States conflict with laws of a city, town, country or other jurisdiction where we conduct business. If there is a conflict between the applicable laws, seek guidance from the Office of the General Counsel (Legal). \u00a0[footnote]https:\/\/secure.ethicspoint.com\/domain\/media\/en\/gui\/711\/code_en.pdf[\/footnote]<\/blockquote>\r\nStarwood has established\u00a0a clear expectation to follow the law, acknowledged the complexity of\u00a0their business environment, and provided direction when employees need help.\r\n<h3>Creating Expectations for Behavior<\/h3>\r\nIn the course of a normal business day, many service employees receive tips. Where is the line between an appropriate tip and a gift? Starbucks has defined this for employees in its Standards of Business Conduct:\r\n<blockquote>A gift or favor should not be accepted or given if it might create a sense of obligation, compromise your professional judgment or create the appearance of doing so. In deciding whether a gift is appropriate, you should consider its value and whether public disclosure of the gift would embarrass you or Starbucks.\r\n\r\nA gift of money should never be given or accepted. (Some retail partners, however, may accept customary tips for service well done.) As a general rule, partners should limit gifts to or from any one vendor or business associate to US $75 per year. A gift of nominal value may be given or accepted if it is a common business courtesy, such as coffee samples, a coffee cup, pens or a similar token. However, during traditional gift-giving seasons in areas where it is customary to exchange gifts of money, such as China, Japan, Malaysia, Singapore and Thailand, partners should not solicit but may exchange cash with nongovernmental business associates in nominal amounts up to the equivalent of US $20.[footnote]https:\/\/globalassets.starbucks.com\/assets\/eecd184d6d2141d58966319744393d1f.pdf[\/footnote]<\/blockquote>\r\nIt is very common for company's to set a threshold for giving and receiving gifts. These specific guidelines help\u00a0employees navigate what would otherwise be a judgment call and make it easier to identify an ethical breach and initiate corrective action.\r\n<h3>Setting Policy<\/h3>\r\nUnited Parcel Service (UPS) groups the sections of its Code of Business Conduct\u00a0into stakeholder groups: our company, our people, our customers, our shareholders, and our communities. This enables\u00a0the company to address a range of workforce expectations, such as workplace safety:\r\n<blockquote>UPS is committed to a safe work environment that is free of threats, intimidation, and physical harm. Everyone has a right to work in a safe environment and everyone shares the responsibility for ensuring the safety of others. We have zero tolerance for workplace violence, and we will investigate and take appropriate action up to and including dismissal regarding any threats to a safe workplace.\r\n\r\nUPS prohibits violent behavior in the workplace including, but not limited to, physical assaults, fighting, threatening comments, intimidation, threats through electronic communications including social media, and the intentional or reckless destruction of property of the company, employee, UPS representative, or customer. Comments or behavior that reasonably could be interpreted as intent to do harm to people or property will be considered a threat. We also prohibit the unauthorized possession and\/or use of weapons by any employee or UPS representative while at work, on company property, or while on company business.[footnote]https:\/\/www.ups.com\/media\/en\/code_bus_conduct.pdf[\/footnote]<\/blockquote>\r\nThe UPS policy is very specific about its expectations of employees in\u00a0ensuring a safe work environment.\r\n<h3>Judgment Calls<\/h3>\r\nNo policy will address every issue, nor should it try. Most policies try to guide employees in the way\u00a0they should make judgment calls. In its Standards of Business Conduct, American Airlines addresses this issue specifically:\r\n<blockquote>Remember, your best resource about what\u2019s right or wrong is your own conscience. So if you find yourself in a difficult situation, think before you act. And ask yourself the following questions:\r\n<ul>\r\n\t<li>Is it legal?\u00a0If it\u2019s not legal, don\u2019t do it.<\/li>\r\n\t<li>Is it ethical?\u00a0If it feels wrong, it probably is wrong.<\/li>\r\n\t<li>How would it look in the newspaper?\u00a0If you wouldn\u2019t feel comfortable if your friends and family knew about your actions, you probably shouldn\u2019t do it.[footnote]https:\/\/www.aa.com\/i18n\/amrcorp\/corporateInformation\/facts\/ethics.jsp[\/footnote]<\/li>\r\n<\/ul>\r\n<\/blockquote>\r\nThese policies are\u00a0an important tool in\u00a0building a culture of accountability and\u00a0ethical behavior in a company, but the policies must be upheld by all the employees, and senior leaders play a significant role in reinforcing their importance.","rendered":"<h2>Introduction<\/h2>\n<p>At the beginning of this module we discussed the 2015 revelation that Volkswagen installed emissions-altering software in eleven million diesel vehicles\u00a0worldwide, which caused the cars to pass emissions tests they should have failed. Consider, for a moment, how many employees would have to be involved\u00a0in order to achieve\u00a0this level of fraud? \u00a0This was not the handiwork of a single employee but the result of a pattern of unethical behavior in the company. When the Ethics &amp; Compliance Initiative (ECI) released the results of its\u00a02013 National Business Ethics Survey, it noted that these types of broad, organizational breaches are fairly common.<\/p>\n<blockquote><p>The survey shows that a significant amount of misconduct involves continuous, ongoing behavior rather than one-time incidents: Employees say that more than a quarter (26 percent) of observed misconduct represents an ongoing pattern of behavior. Another 41 percent said the behavior has been repeated at least a second time. Only one-third (33 percent) of rule breaking represents a one-time incident.<a class=\"footnote\" title=\"http:\/\/www.ethics.org\/newsite\/research\/eci-research\/nbes\/nbes-reports\/nbes-2013\" id=\"return-footnote-3044-1\" href=\"#footnote-3044-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p><\/blockquote>\n<p>In the case of Volkswagen, an early internal investigation pointed to a &#8220;culture of tolerance&#8221; for ethical compromises. Employees were pushed to do what was needed to meet corporate objectives at any\u00a0cost.<\/p>\n<p>The organizational culture is comprised of the values and beliefs that an organization shares, which create its social environment. The culture of a large organization can be difficult to understand since it is influenced by many different factors. Still, many research studies point to leadership and policies as being instrumental in building an ethical organizational culture.<\/p>\n<h2>Policies That Encourage Ethical Behavior<\/h2>\n<p>Many companies have a specific policy that defines appropriate behavior. The policy is often called the Standards for Business Conduct. As the name suggests, the policy is intended to set the standards for acceptable behavior; it&#8217;s not meant to be an exhaustive list of every type of ethical behavior.<\/p>\n<p>Many of these policies do\u00a0the following:<\/p>\n<ul>\n<li>Define the threshold for behavior: While it should go without saying that employees are expected to be law abiding, companies choose to be quite explicit about\u00a0stating that they require their employees to follow the law.<\/li>\n<li>Create expectations for behavior: The policies identify common issues that employees may encounter\u2014such as accepting gifts from suppliers\u2014and explain\u00a0how they should be handled.<\/li>\n<li>Set policy: establish company protocols\u00a0for handling confidential information, including customer data, etc.<\/li>\n<li>Give guidance on making judgment calls: Companies often define how they\u00a0would like employees to make decisions when guidelines do not adequately cover them.<\/li>\n<li>Describe\u00a0reporting and enforcement procedures: There is generally a process for reporting and addressing issues, as well as information about how the company will protect those reporting concerns.<\/li>\n<\/ul>\n<p>Let&#8217;s examine some examples from company policies to see how some of these components\u00a0are addressed.<\/p>\n<h3>The Legal Threshold<\/h3>\n<p>The ethics policy generally begins by reminding employees that they are required to act in accordance with the law. For companies that engage in business across the globe this can be complex. Starwood Hotels and Resorts addresses this issue in their Code of Business Conduct and Ethics:<\/p>\n<blockquote><p>You must, at all times, obey the laws of the jurisdictions where we conduct business. Starwood conducts business all around the world. Our associates are citizens of many countries. As a result, our operations are subject to the laws of many jurisdictions. It is often challenging for us to understand how those various laws apply to our businesses. However, whether you are a Starwood associate or member of the Board of Directors, you are expected to conduct yourself in accordance with applicable law.<\/p>\n<p>Starwood is a company organized under the laws of the United States and is generally subject to U.S. federal law. From time to time, the laws of the United States conflict with laws of a city, town, country or other jurisdiction where we conduct business. If there is a conflict between the applicable laws, seek guidance from the Office of the General Counsel (Legal). \u00a0<a class=\"footnote\" title=\"https:\/\/secure.ethicspoint.com\/domain\/media\/en\/gui\/711\/code_en.pdf\" id=\"return-footnote-3044-2\" href=\"#footnote-3044-2\" aria-label=\"Footnote 2\"><sup class=\"footnote\">[2]<\/sup><\/a><\/p><\/blockquote>\n<p>Starwood has established\u00a0a clear expectation to follow the law, acknowledged the complexity of\u00a0their business environment, and provided direction when employees need help.<\/p>\n<h3>Creating Expectations for Behavior<\/h3>\n<p>In the course of a normal business day, many service employees receive tips. Where is the line between an appropriate tip and a gift? Starbucks has defined this for employees in its Standards of Business Conduct:<\/p>\n<blockquote><p>A gift or favor should not be accepted or given if it might create a sense of obligation, compromise your professional judgment or create the appearance of doing so. In deciding whether a gift is appropriate, you should consider its value and whether public disclosure of the gift would embarrass you or Starbucks.<\/p>\n<p>A gift of money should never be given or accepted. (Some retail partners, however, may accept customary tips for service well done.) As a general rule, partners should limit gifts to or from any one vendor or business associate to US $75 per year. A gift of nominal value may be given or accepted if it is a common business courtesy, such as coffee samples, a coffee cup, pens or a similar token. However, during traditional gift-giving seasons in areas where it is customary to exchange gifts of money, such as China, Japan, Malaysia, Singapore and Thailand, partners should not solicit but may exchange cash with nongovernmental business associates in nominal amounts up to the equivalent of US $20.<a class=\"footnote\" title=\"https:\/\/globalassets.starbucks.com\/assets\/eecd184d6d2141d58966319744393d1f.pdf\" id=\"return-footnote-3044-3\" href=\"#footnote-3044-3\" aria-label=\"Footnote 3\"><sup class=\"footnote\">[3]<\/sup><\/a><\/p><\/blockquote>\n<p>It is very common for company&#8217;s to set a threshold for giving and receiving gifts. These specific guidelines help\u00a0employees navigate what would otherwise be a judgment call and make it easier to identify an ethical breach and initiate corrective action.<\/p>\n<h3>Setting Policy<\/h3>\n<p>United Parcel Service (UPS) groups the sections of its Code of Business Conduct\u00a0into stakeholder groups: our company, our people, our customers, our shareholders, and our communities. This enables\u00a0the company to address a range of workforce expectations, such as workplace safety:<\/p>\n<blockquote><p>UPS is committed to a safe work environment that is free of threats, intimidation, and physical harm. Everyone has a right to work in a safe environment and everyone shares the responsibility for ensuring the safety of others. We have zero tolerance for workplace violence, and we will investigate and take appropriate action up to and including dismissal regarding any threats to a safe workplace.<\/p>\n<p>UPS prohibits violent behavior in the workplace including, but not limited to, physical assaults, fighting, threatening comments, intimidation, threats through electronic communications including social media, and the intentional or reckless destruction of property of the company, employee, UPS representative, or customer. Comments or behavior that reasonably could be interpreted as intent to do harm to people or property will be considered a threat. We also prohibit the unauthorized possession and\/or use of weapons by any employee or UPS representative while at work, on company property, or while on company business.<a class=\"footnote\" title=\"https:\/\/www.ups.com\/media\/en\/code_bus_conduct.pdf\" id=\"return-footnote-3044-4\" href=\"#footnote-3044-4\" aria-label=\"Footnote 4\"><sup class=\"footnote\">[4]<\/sup><\/a><\/p><\/blockquote>\n<p>The UPS policy is very specific about its expectations of employees in\u00a0ensuring a safe work environment.<\/p>\n<h3>Judgment Calls<\/h3>\n<p>No policy will address every issue, nor should it try. Most policies try to guide employees in the way\u00a0they should make judgment calls. In its Standards of Business Conduct, American Airlines addresses this issue specifically:<\/p>\n<blockquote><p>Remember, your best resource about what\u2019s right or wrong is your own conscience. So if you find yourself in a difficult situation, think before you act. And ask yourself the following questions:<\/p>\n<ul>\n<li>Is it legal?\u00a0If it\u2019s not legal, don\u2019t do it.<\/li>\n<li>Is it ethical?\u00a0If it feels wrong, it probably is wrong.<\/li>\n<li>How would it look in the newspaper?\u00a0If you wouldn\u2019t feel comfortable if your friends and family knew about your actions, you probably shouldn\u2019t do it.<a class=\"footnote\" title=\"https:\/\/www.aa.com\/i18n\/amrcorp\/corporateInformation\/facts\/ethics.jsp\" id=\"return-footnote-3044-5\" href=\"#footnote-3044-5\" aria-label=\"Footnote 5\"><sup class=\"footnote\">[5]<\/sup><\/a><\/li>\n<\/ul>\n<\/blockquote>\n<p>These policies are\u00a0an important tool in\u00a0building a culture of accountability and\u00a0ethical behavior in a company, but the policies must be upheld by all the employees, and senior leaders play a significant role in reinforcing their importance.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-3044\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>A Culture of Accountability. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-3044-1\">http:\/\/www.ethics.org\/newsite\/research\/eci-research\/nbes\/nbes-reports\/nbes-2013 <a href=\"#return-footnote-3044-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><li id=\"footnote-3044-2\">https:\/\/secure.ethicspoint.com\/domain\/media\/en\/gui\/711\/code_en.pdf <a href=\"#return-footnote-3044-2\" class=\"return-footnote\" aria-label=\"Return to footnote 2\">&crarr;<\/a><\/li><li id=\"footnote-3044-3\">https:\/\/globalassets.starbucks.com\/assets\/eecd184d6d2141d58966319744393d1f.pdf <a href=\"#return-footnote-3044-3\" class=\"return-footnote\" aria-label=\"Return to footnote 3\">&crarr;<\/a><\/li><li id=\"footnote-3044-4\">https:\/\/www.ups.com\/media\/en\/code_bus_conduct.pdf <a href=\"#return-footnote-3044-4\" class=\"return-footnote\" aria-label=\"Return to footnote 4\">&crarr;<\/a><\/li><li id=\"footnote-3044-5\">https:\/\/www.aa.com\/i18n\/amrcorp\/corporateInformation\/facts\/ethics.jsp <a href=\"#return-footnote-3044-5\" class=\"return-footnote\" aria-label=\"Return to footnote 5\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":7,"menu_order":15,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"A Culture of Accountability\",\"author\":\"\",\"organization\":\"Lumen 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