{"id":47,"date":"2018-09-24T14:22:59","date_gmt":"2018-09-24T14:22:59","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/suny-osintrobus\/chapter\/how-organizations-influence-ethical-conduct\/"},"modified":"2018-09-27T20:57:08","modified_gmt":"2018-09-27T20:57:08","slug":"how-organizations-influence-ethical-conduct","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/chapter\/how-organizations-influence-ethical-conduct\/","title":{"raw":"How Organizations Influence Ethical Conduct","rendered":"How Organizations Influence Ethical Conduct"},"content":{"raw":"<ol id=\"fs-idm350291920\" start=\"2\">\r\n \t<li>How can organizations encourage ethical business behavior?<\/li>\r\n<\/ol>\r\n<p id=\"fs-idm340436272\">People choose between right and wrong based on their personal code of ethics. They are also influenced by the ethical environment created by their employers. Consider the following headlines:<\/p>\r\n\r\n<ul id=\"fs-idm336075360\">\r\n \t<li>Investment advisor Bernard <span class=\"no-emphasis\">Madoff<\/span> sentenced to 150 years in prison for swindling clients out of more than $65 billion.<\/li>\r\n \t<li>Former <span class=\"no-emphasis\">United Airlines<\/span> CEO Jeff Smisek leaves the company after a federal investigation into whether United tried to influence officials at the <span class=\"no-emphasis\">Port Authority of New York<\/span>.<\/li>\r\n \t<li>Renaud Laplanche, the founder of <span class=\"no-emphasis\">Lending Club<\/span>, loses his job because of faulty practices and conflicts of interest at the online peer-to-peer lender.<\/li>\r\n \t<li><span class=\"no-emphasis\">Wells Fargo<\/span> CEO John Stumpf fired after company employees opened more than 2 million fake accounts to meet aggressive sales targets.<a href=\"#rfin-ch02_3\">\r\n<\/a>\r\n<div id=\"rfin-ch02_3\" class=\"reference\">\u201cTop 10 Crooked CEOs,\u201d <em>TIME,<\/em> http:\/\/content.time.com, accessed June 23, 2017; Jena McGregor, \u201cMore CEOs Are Getting Forced Out for Ethics Violations,\u201d <em>Washington Post,<\/em> https:\/\/www.washingtonpost.com, May 15, 2017; Adam Hartung, \u201cWells Fargo CEO Stumpf Is Gone: Is This the Beginning of Wholesale Leadership Change?\u201d <em>Forbes,<\/em> http:\/\/www.forbes.com, October 13, 2016.<\/div><\/li>\r\n<\/ul>\r\n<p id=\"fs-idm341089920\">As these actual stories illustrate, poor business ethics can create a very negative image for a company, can be expensive for the firm and\/or the executives involved, and can result in bankruptcy and jail time for the offenders. Organizations can reduce the potential for these types of liability claims by educating their employees about ethical standards, by leading through example, and through various informal and formal programs.<\/p>\r\n\r\n<div id=\"fs-idm340334560\" class=\"bc-section section\">\r\n<h3>Leading by Example<\/h3>\r\n<p id=\"fs-idm339602608\">Employees often follow the examples set by their managers. That is, leaders and managers establish patterns of behavior that determine what\u2019s acceptable and what\u2019s not within the organization. While Ben Cohen was president of <span class=\"no-emphasis\">Ben &amp; Jerry\u2019s<\/span> ice cream, he followed a policy that no one could earn a salary more than seven times that of the lowest-paid worker. He wanted all employees to feel that they were equal. At the time he resigned, company sales were $140 million, and the lowest-paid worker earned $19,000 per year. Ben Cohen\u2019s salary was $133,000, based on the \u201cseven times\u201d rule. A typical top executive of a $140 million company might have earned 10 times Cohen\u2019s salary. Ben Cohen\u2019s actions helped shape the ethical values of <span class=\"no-emphasis\">Ben &amp; Jerry\u2019s<\/span>.<\/p>\r\n\r\n<\/div>\r\n<div id=\"fs-idm352646416\" class=\"bc-section section\">\r\n<h3>Offering Ethics Training Programs<\/h3>\r\n<p id=\"fs-idm336301296\">In addition to providing a system to resolve ethical dilemmas, organizations also provide formal training to develop an awareness of questionable business activities and practice appropriate responses. Many companies have some type of ethics training program. The ones that are most effective, like those created by <span class=\"no-emphasis\">Levi Strauss<\/span>, <span class=\"no-emphasis\">American Express<\/span>, and <span class=\"no-emphasis\">Campbell Soup Company<\/span>, begin with techniques for solving ethical dilemmas such as those discussed earlier. Next, employees are presented with a series of situations and asked to come up with the \u201cbest\u201d ethical solution. One of these ethical dilemmas is shown in <strong><a class=\"autogenerated-content\" href=\"#fs-idm333556192\">(Figure)<\/a><\/strong>. According to a recent survey by the <span class=\"no-emphasis\">Ethics Resource Center<\/span>, more than 80 percent of U.S. companies provide some sort of ethics training for employees, which may include online activities, videos, and even games. [footnote]Dori Meinert, \u201cCreating an Ethical Workplace,\u201d Society for Human Resource Management, https:\/\/www.shrm.org, accessed June 23, 2017; Jeff Kauflin, \u201cThe World\u2019s Most Ethical Companies 2017,\u201d <em>Forbes,<\/em> http:\/\/www.forbes.com, March 14, 2017.[\/footnote]<\/p>\r\n\r\n<table id=\"fs-idm333556192\" summary=\"\"><caption>\u00a0<\/caption>\r\n<thead>\r\n<tr>\r\n<th>An Ethical Dilemma Used for Employee Training<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>Bill Gannon was a middle manager of a large manufacturer of lighting fixtures in Newark, New Jersey. Bill had moved up the company ladder rather quickly and seemed destined for upper management in a few years. Bill\u2019s boss, Dana Johnson, had been pressuring him about the semiannual reviews concerning Robert Talbot, one of Bill\u2019s employees. Dana, it seemed, would not accept any negative comments on Robert\u2019s evaluation forms. Bill had found out that a previous manager who had given Robert a bad evaluation was no longer with the company. As Bill reviewed Robert\u2019s performance for the forthcoming evaluation period, he found many areas of subpar performance. Moreover, a major client had called recently complaining that Robert had filled a large order improperly and then had been rude to the client when she called to complain.<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Discussion Questions\r\n<ol id=\"fs-idm340671376\">\r\n \t<li>What ethical issues does the situation raise?<\/li>\r\n \t<li>What courses of action could Bill take? Describe the ethics of each course.<\/li>\r\n \t<li>Should Bill confront Dana? Dana's boss?<\/li>\r\n \t<li>What would you do in this situation? What are the ethical implications?<\/li>\r\n<\/ol>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n<div id=\"fs-idm354325584\" class=\"bc-section section\">\r\n<h3>Establishing a Formal Code of Ethics<\/h3>\r\n<p id=\"fs-idm350460688\">Most large companies and thousands of smaller ones have created, printed, and distributed codes of ethics. In general, a code of ethics provides employees with the knowledge of what their firm expects in terms of their responsibilities and behavior toward fellow employees, customers, and suppliers. Some ethical codes offer a lengthy and detailed set of guidelines for employees. Others are not really codes at all but rather summary statements of goals, policies, and priorities. Some companies have their codes framed and hung on office walls, included as a key component of employee handbooks, and\/or posted on their corporate websites.<\/p>\r\n\r\n<div>\r\n<div>Examples of company codes of ethics:<\/div>\r\n<ul class=\"no-style\">\r\n \t<li><span class=\"no-emphasis\">Costco<\/span> http:\/\/phx.corporate-ir.net\/phoenix.zhtml?c=83830&amp;p=irol-govhighlights<\/li>\r\n \t<li><span class=\"no-emphasis\">Starbucks<\/span> https:\/\/www.starbucks.com\/about-us\/company-information\/business-ethics-and-compliance<\/li>\r\n \t<li><span class=\"no-emphasis\">AT&amp;T<\/span> https:\/\/www.att.com\/gen\/investor-relations?pid=5595<\/li>\r\n<\/ul>\r\n<\/div>\r\n<p id=\"fs-idm335329456\">Do codes of ethics make employees behave in a more ethical manner? Some people believe that they do. Others think that they are little more than public relations gimmicks. If senior management abides by the code of ethics and regularly emphasizes the code to employees, then it will likely have a positive influence on behavior.<\/p>\r\n<p id=\"fs-idm337220304\">The \u201c100 Best Corporate Citizens\u201d as ranked by <em>Corporate Responsibility<\/em> magazine are selected based on seven categories, including employee relations, human rights, corporate governance (including code of ethics), philanthropy and community support, financial performance, environment, and climate change.[footnote]\u201cThe 2017 100 Best Corporate Citizens,\u201d <em>Corporate Responsibility,<\/em> http:\/\/www.thecro.com, accessed June 23, 2017; Karsten Strauss, \u201cAmerica\u2019s 100 Best Corporate Citizens in 2017,\u201d <em>Forbes,<\/em> http:\/\/www.forbes.com, May 11, 2017.[\/footnote]<\/p>\r\nThe top corporate citizens in 2017 were:\r\n<ol id=\"fs-idm333586240\">\r\n \t<li><span class=\"no-emphasis\">Hasbro<\/span>, Inc.<\/li>\r\n \t<li><span class=\"no-emphasis\">Intel<\/span> Corp.<\/li>\r\n \t<li><span class=\"no-emphasis\">Microsoft<\/span> Corp.<\/li>\r\n \t<li><span class=\"no-emphasis\">Altria Group, Inc.<\/span><\/li>\r\n \t<li><span class=\"no-emphasis\">Campbell Soup Company<\/span><\/li>\r\n \t<li><span class=\"no-emphasis\">Cisco Systems<\/span>, Inc.<\/li>\r\n \t<li><span class=\"no-emphasis\">Accenture<\/span><\/li>\r\n \t<li><span class=\"no-emphasis\">Hormel Foods<\/span> Corp.<\/li>\r\n \t<li><span class=\"no-emphasis\">Lockheed Martin<\/span> Corp.<\/li>\r\n \t<li><span class=\"no-emphasis\">Ecolab<\/span>, Inc.<\/li>\r\n<\/ol>\r\n<div id=\"fs-idm339339040\" class=\"customer-satisfaction\">\r\n<div class=\"textbox shaded\">\r\n<h3>Campbell\u2019s Adds CSR to Its Recipe<\/h3>\r\n<p id=\"fs-idm340683296\">The <span class=\"no-emphasis\">Campbell Soup Company<\/span> is no longer just about traditional cans of processed soup. Under the guidance of its management team, particularly its former CEO Denise Morrison (Morrison retired from Campbell\u2019s in July of 2018), Campbell\u2019s has undergone a transformation that includes a strong emphasis on organics and fresh food\u2014and a large serving of corporate citizenship.<\/p>\r\n<p id=\"fs-idm354347440\">Named one of the Best Corporate Citizens by <em>Corporate Responsibility<\/em> magazine in 2017, Campbell\u2019s is working to make sustainability and transparency part of its business DNA, and this culture shift has had an important influence on the company\u2019s business strategies.<\/p>\r\n<p id=\"fs-idm345763424\">Morrison, who took over as CEO in 2011, is a firm believer in the company\u2019s central vision: real food that matters for life\u2019s moments. \u201cWe can make a profit and make a difference, and we are doing both through our business . . . in a way that\u2019s authentic, that\u2019s transparent, and that truly matters,\u201d she explains.<\/p>\r\n<p id=\"fs-idm336596864\">Under Morrison\u2019s watch, the company recently acquired several fresh food and organic companies, including <span class=\"no-emphasis\">Bolthouse Farms<\/span>, one of the largest suppliers of fresh carrots in the United States, and <span class=\"no-emphasis\">Garden Fresh Gourmet<\/span>, which produces a top line of fresh salsa and hummus. Tracking the strong change in consumer preference for healthier food, Campbell\u2019s also recently acquired <span class=\"no-emphasis\">Plum Organics<\/span>, a line of organic baby food products, which should help solidify the company\u2019s reputation for fresh ingredients with millennials and their families.<\/p>\r\n<p id=\"fs-idm339905952\">The company\u2019s transformation from a processed food giant to a major competitor in the fresh food business has also had a positive influence on the company\u2019s bottom line. Campbell\u2019s shareholders have to be pleased with the 20 percent increase in the company\u2019s stock price over the past two years, as the markets, competitors, and consumers take notice of the company\u2019s strong commitment to sustainability.<\/p>\r\n<p id=\"fs-idm333579536\">Inherent in the company\u2019s reinvention is the strong emphasis on corporate citizenship\u2014doing good and giving back seem to be top priorities for Campbell\u2019s. In addition to acquiring sustainable and fresh food companies, Campbell\u2019s has also made a conscious decision to support the communities where their employees live and work. For example, the company launched a healthy communities initiative in Camden, New Jersey, where Campbell\u2019s is headquartered\u2014an urban city that has seen its share of economic and social challenges in the past. In partnership with several local organizations, this initiative has helped fund community gardens, food pantries, nutrition education, and cooking classes that help build healthy communities. The Camden experience has been so successful that the company has expanded the program to other cities where it operates, including Detroit, Michigan, and Norwalk, Connecticut.<\/p>\r\n<p id=\"fs-idm340089792\">The company\u2019s ongoing commitment to fresh food, community involvement, and corporate social responsibility has helped change the narrative when it comes to being a sustainable and ethical organization.<\/p>\r\n\r\n<div id=\"fs-idm350565760\">\r\n<div><strong>Questions for Discussion<\/strong><\/div>\r\n<ol>\r\n \t<li>How does Campbell Soup Company\u2019s recent business acquisitions help support its CSR strategies?<\/li>\r\n \t<li>Provide examples of how the company\u2019s transformation from a processed food giant to a purveyor of fresh ingredients can help attract a new group of customers.<\/li>\r\n<\/ol>\r\n<\/div>\r\n<p id=\"fs-idm353728800\">Sources: \u201cCorporate Responsibility and Sustainability Are Good for Business,\u201d https:\/\/www.campbellsoupcompany.com, accessed June 27, 2017; \u201cCampbell Soup Wants to Make You a Personal Eating Plan (video),\u201d <em>Fortune,<\/em> http:\/\/fortune.com, May 2, 2017; Don Seiffert, \u201cCampbell Soup CEO Makes 3 Predictions about the Future of Food,\u201d <em>Boston Business Journal,<\/em> http:\/\/www.bizjournals.com, April 13, 2017; Aaron Hurst, \u201cHow Denise Morrison Took Processed Food Icon Campbell\u2019s on a Fresh Food Buying Spree,\u201d <em>Fast Company,<\/em> https:\/\/www.fastcompany.com, March 2, 2017; Abigail Stevenson, \u201cCampbell Soup CEO: Stunning Disruption in the Ecosystem of Food,\u201d <em>CNBC,<\/em> http:\/\/www.cnbc.com, July 21, 2016.<\/p>\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<div id=\"fs-idm349660960\" class=\"bc-section section\">\r\n<h3>Making the Right Decision<\/h3>\r\n<p id=\"fs-idm350797344\">In many situations, there may be no simple right or wrong answers. Yet there are several questions you can ask yourself, and a couple of self-tests you can do, to help you make the right ethical decision. First, ask yourself, \u201cAre there any legal restrictions or violations that will result from the action?\u201d If so, take a different course of action. If not, ask yourself, \u201cDoes it violate my company\u2019s code of ethics?\u201d If so, again find a different path to follow. Third, ask, \u201cDoes this meet the guidelines of my own ethical philosophy?\u201d If the answer is \u201cyes,\u201d then your decision must still pass two important tests.<\/p>\r\n\r\n<div id=\"fs-idm351530416\" class=\"bc-section section\">\r\n<h4>The Feelings Test<\/h4>\r\n<p id=\"fs-idm351533680\">You must now ask, \u201cHow does it make me feel?\u201d This enables you to examine your comfort level with a particular decision. Many people find that, after reaching a decision on an issue, they still experience discomfort that may manifest itself in a loss of sleep or appetite. Those feelings of conscience can serve as a future guide in resolving ethical dilemmas.<\/p>\r\n\r\n<\/div>\r\n<div id=\"fs-idm335285872\" class=\"bc-section section\">\r\n<h4>The Newspaper or Social Media Test<\/h4>\r\nThe final test involves the front page of the newspaper or social media posts. The question to be asked is how an objective reporter would describe your decision in a front-page newspaper story, an online media site, or a social media platform such as <span class=\"no-emphasis\">Twitter<\/span> or <span class=\"no-emphasis\">Facebook<\/span>. Some managers rephrase the test for their employees: How will the headline read if I make this decision, or what will be the reaction of my social media followers? This test is helpful in spotting and resolving potential conflicts of interest.\r\n<div id=\"fs-idm335915904\" class=\"scaled-down\">\r\n\r\n[caption id=\"\" align=\"aligncenter\" width=\"1300\"]<img src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/3654\/2018\/09\/24142258\/Mod_02_Photo_2_Alt.jpg\" alt=\"A photograph shows a cell phone screen, with many apps, including Facebook, Skype, Twitter, LinkedIn, and Instagram.\" width=\"1300\" height=\"1040\" \/> Making an ethical decision might come down to how you feel about the decision or to the newspaper or social media post test. The question to ask yourself is how the decision would make you feel if an objective reporter described the decision on the front page of a newspaper or via a social media post on Twitter or Facebook\u2014all of which would be viewed by many, many people. Speaking of social media, it plays a pivotal role in ethical decision-making today, when people use the medium to share critical comments about friends as well as employers, business colleagues, and competitors. Should companies view employees\u2019 social media pages on a regular basis, or is that information off-limits to employers? (Credit: Mike MacKenzie\/ Flickr\/ Attribution 2.0 Generic (CC BY 2.0))[\/caption]\r\n\r\n<\/div>\r\n<div id=\"fs-idm354014160\" class=\"concept-check\">\r\n<div class=\"textbox key-takeaways\">\r\n<h3>concept check<\/h3>\r\n<ol>\r\n \t<li>What is the role of top management in organizational ethics?<\/li>\r\n \t<li>What is a code of ethics?<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<div id=\"fs-idm353470384\" class=\"section-summary\">\r\n<h3>Summary of Learning Outcomes<\/h3>\r\n<ol>\r\n \t<li>How can organizations encourage ethical business behavior?<\/li>\r\n<\/ol>\r\n<p id=\"fs-idm340344912\">Top management must shape the ethical culture of the organization. They should lead by example, offer ethics-training programs, and establish a formal code of ethics.<\/p>\r\n\r\n<\/div>\r\n<div class=\"textbox shaded\">\r\n<h3>Glossary<\/h3>\r\n<dl id=\"fs-idm336888640\">\r\n \t<dt>code of ethics<\/dt>\r\n \t<dd id=\"fs-idm354564960\">A set of guidelines prepared by a firm to provide its employees with the knowledge of what the firm expects in terms of their responsibilities and behavior toward fellow employees, customers, and suppliers.<\/dd>\r\n<\/dl>\r\n<\/div>","rendered":"<ol id=\"fs-idm350291920\" start=\"2\">\n<li>How can organizations encourage ethical business behavior?<\/li>\n<\/ol>\n<p id=\"fs-idm340436272\">People choose between right and wrong based on their personal code of ethics. They are also influenced by the ethical environment created by their employers. Consider the following headlines:<\/p>\n<ul id=\"fs-idm336075360\">\n<li>Investment advisor Bernard <span class=\"no-emphasis\">Madoff<\/span> sentenced to 150 years in prison for swindling clients out of more than $65 billion.<\/li>\n<li>Former <span class=\"no-emphasis\">United Airlines<\/span> CEO Jeff Smisek leaves the company after a federal investigation into whether United tried to influence officials at the <span class=\"no-emphasis\">Port Authority of New York<\/span>.<\/li>\n<li>Renaud Laplanche, the founder of <span class=\"no-emphasis\">Lending Club<\/span>, loses his job because of faulty practices and conflicts of interest at the online peer-to-peer lender.<\/li>\n<li><span class=\"no-emphasis\">Wells Fargo<\/span> CEO John Stumpf fired after company employees opened more than 2 million fake accounts to meet aggressive sales targets.<a href=\"#rfin-ch02_3\"><br \/>\n<\/a><\/p>\n<div id=\"rfin-ch02_3\" class=\"reference\">\u201cTop 10 Crooked CEOs,\u201d <em>TIME,<\/em> http:\/\/content.time.com, accessed June 23, 2017; Jena McGregor, \u201cMore CEOs Are Getting Forced Out for Ethics Violations,\u201d <em>Washington Post,<\/em> https:\/\/www.washingtonpost.com, May 15, 2017; Adam Hartung, \u201cWells Fargo CEO Stumpf Is Gone: Is This the Beginning of Wholesale Leadership Change?\u201d <em>Forbes,<\/em> http:\/\/www.forbes.com, October 13, 2016.<\/div>\n<\/li>\n<\/ul>\n<p id=\"fs-idm341089920\">As these actual stories illustrate, poor business ethics can create a very negative image for a company, can be expensive for the firm and\/or the executives involved, and can result in bankruptcy and jail time for the offenders. Organizations can reduce the potential for these types of liability claims by educating their employees about ethical standards, by leading through example, and through various informal and formal programs.<\/p>\n<div id=\"fs-idm340334560\" class=\"bc-section section\">\n<h3>Leading by Example<\/h3>\n<p id=\"fs-idm339602608\">Employees often follow the examples set by their managers. That is, leaders and managers establish patterns of behavior that determine what\u2019s acceptable and what\u2019s not within the organization. While Ben Cohen was president of <span class=\"no-emphasis\">Ben &amp; Jerry\u2019s<\/span> ice cream, he followed a policy that no one could earn a salary more than seven times that of the lowest-paid worker. He wanted all employees to feel that they were equal. At the time he resigned, company sales were $140 million, and the lowest-paid worker earned $19,000 per year. Ben Cohen\u2019s salary was $133,000, based on the \u201cseven times\u201d rule. A typical top executive of a $140 million company might have earned 10 times Cohen\u2019s salary. Ben Cohen\u2019s actions helped shape the ethical values of <span class=\"no-emphasis\">Ben &amp; Jerry\u2019s<\/span>.<\/p>\n<\/div>\n<div id=\"fs-idm352646416\" class=\"bc-section section\">\n<h3>Offering Ethics Training Programs<\/h3>\n<p id=\"fs-idm336301296\">In addition to providing a system to resolve ethical dilemmas, organizations also provide formal training to develop an awareness of questionable business activities and practice appropriate responses. Many companies have some type of ethics training program. The ones that are most effective, like those created by <span class=\"no-emphasis\">Levi Strauss<\/span>, <span class=\"no-emphasis\">American Express<\/span>, and <span class=\"no-emphasis\">Campbell Soup Company<\/span>, begin with techniques for solving ethical dilemmas such as those discussed earlier. Next, employees are presented with a series of situations and asked to come up with the \u201cbest\u201d ethical solution. One of these ethical dilemmas is shown in <strong><a class=\"autogenerated-content\" href=\"#fs-idm333556192\">(Figure)<\/a><\/strong>. According to a recent survey by the <span class=\"no-emphasis\">Ethics Resource Center<\/span>, more than 80 percent of U.S. companies provide some sort of ethics training for employees, which may include online activities, videos, and even games. <a class=\"footnote\" title=\"Dori Meinert, \u201cCreating an Ethical Workplace,\u201d Society for Human Resource Management, https:\/\/www.shrm.org, accessed June 23, 2017; Jeff Kauflin, \u201cThe World\u2019s Most Ethical Companies 2017,\u201d Forbes, http:\/\/www.forbes.com, March 14, 2017.\" id=\"return-footnote-47-1\" href=\"#footnote-47-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p>\n<table id=\"fs-idm333556192\" summary=\"\">\n<caption>\u00a0<\/caption>\n<thead>\n<tr>\n<th>An Ethical Dilemma Used for Employee Training<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Bill Gannon was a middle manager of a large manufacturer of lighting fixtures in Newark, New Jersey. Bill had moved up the company ladder rather quickly and seemed destined for upper management in a few years. Bill\u2019s boss, Dana Johnson, had been pressuring him about the semiannual reviews concerning Robert Talbot, one of Bill\u2019s employees. Dana, it seemed, would not accept any negative comments on Robert\u2019s evaluation forms. Bill had found out that a previous manager who had given Robert a bad evaluation was no longer with the company. As Bill reviewed Robert\u2019s performance for the forthcoming evaluation period, he found many areas of subpar performance. Moreover, a major client had called recently complaining that Robert had filled a large order improperly and then had been rude to the client when she called to complain.<\/td>\n<\/tr>\n<tr>\n<td>Discussion Questions<\/p>\n<ol id=\"fs-idm340671376\">\n<li>What ethical issues does the situation raise?<\/li>\n<li>What courses of action could Bill take? Describe the ethics of each course.<\/li>\n<li>Should Bill confront Dana? Dana&#8217;s boss?<\/li>\n<li>What would you do in this situation? What are the ethical implications?<\/li>\n<\/ol>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<div id=\"fs-idm354325584\" class=\"bc-section section\">\n<h3>Establishing a Formal Code of Ethics<\/h3>\n<p id=\"fs-idm350460688\">Most large companies and thousands of smaller ones have created, printed, and distributed codes of ethics. In general, a code of ethics provides employees with the knowledge of what their firm expects in terms of their responsibilities and behavior toward fellow employees, customers, and suppliers. Some ethical codes offer a lengthy and detailed set of guidelines for employees. Others are not really codes at all but rather summary statements of goals, policies, and priorities. Some companies have their codes framed and hung on office walls, included as a key component of employee handbooks, and\/or posted on their corporate websites.<\/p>\n<div>\n<div>Examples of company codes of ethics:<\/div>\n<ul class=\"no-style\">\n<li><span class=\"no-emphasis\">Costco<\/span> http:\/\/phx.corporate-ir.net\/phoenix.zhtml?c=83830&amp;p=irol-govhighlights<\/li>\n<li><span class=\"no-emphasis\">Starbucks<\/span> https:\/\/www.starbucks.com\/about-us\/company-information\/business-ethics-and-compliance<\/li>\n<li><span class=\"no-emphasis\">AT&amp;T<\/span> https:\/\/www.att.com\/gen\/investor-relations?pid=5595<\/li>\n<\/ul>\n<\/div>\n<p id=\"fs-idm335329456\">Do codes of ethics make employees behave in a more ethical manner? Some people believe that they do. Others think that they are little more than public relations gimmicks. If senior management abides by the code of ethics and regularly emphasizes the code to employees, then it will likely have a positive influence on behavior.<\/p>\n<p id=\"fs-idm337220304\">The \u201c100 Best Corporate Citizens\u201d as ranked by <em>Corporate Responsibility<\/em> magazine are selected based on seven categories, including employee relations, human rights, corporate governance (including code of ethics), philanthropy and community support, financial performance, environment, and climate change.<a class=\"footnote\" title=\"\u201cThe 2017 100 Best Corporate Citizens,\u201d Corporate Responsibility, http:\/\/www.thecro.com, accessed June 23, 2017; Karsten Strauss, \u201cAmerica\u2019s 100 Best Corporate Citizens in 2017,\u201d Forbes, http:\/\/www.forbes.com, May 11, 2017.\" id=\"return-footnote-47-2\" href=\"#footnote-47-2\" aria-label=\"Footnote 2\"><sup class=\"footnote\">[2]<\/sup><\/a><\/p>\n<p>The top corporate citizens in 2017 were:<\/p>\n<ol id=\"fs-idm333586240\">\n<li><span class=\"no-emphasis\">Hasbro<\/span>, Inc.<\/li>\n<li><span class=\"no-emphasis\">Intel<\/span> Corp.<\/li>\n<li><span class=\"no-emphasis\">Microsoft<\/span> Corp.<\/li>\n<li><span class=\"no-emphasis\">Altria Group, Inc.<\/span><\/li>\n<li><span class=\"no-emphasis\">Campbell Soup Company<\/span><\/li>\n<li><span class=\"no-emphasis\">Cisco Systems<\/span>, Inc.<\/li>\n<li><span class=\"no-emphasis\">Accenture<\/span><\/li>\n<li><span class=\"no-emphasis\">Hormel Foods<\/span> Corp.<\/li>\n<li><span class=\"no-emphasis\">Lockheed Martin<\/span> Corp.<\/li>\n<li><span class=\"no-emphasis\">Ecolab<\/span>, Inc.<\/li>\n<\/ol>\n<div id=\"fs-idm339339040\" class=\"customer-satisfaction\">\n<div class=\"textbox shaded\">\n<h3>Campbell\u2019s Adds CSR to Its Recipe<\/h3>\n<p id=\"fs-idm340683296\">The <span class=\"no-emphasis\">Campbell Soup Company<\/span> is no longer just about traditional cans of processed soup. Under the guidance of its management team, particularly its former CEO Denise Morrison (Morrison retired from Campbell\u2019s in July of 2018), Campbell\u2019s has undergone a transformation that includes a strong emphasis on organics and fresh food\u2014and a large serving of corporate citizenship.<\/p>\n<p id=\"fs-idm354347440\">Named one of the Best Corporate Citizens by <em>Corporate Responsibility<\/em> magazine in 2017, Campbell\u2019s is working to make sustainability and transparency part of its business DNA, and this culture shift has had an important influence on the company\u2019s business strategies.<\/p>\n<p id=\"fs-idm345763424\">Morrison, who took over as CEO in 2011, is a firm believer in the company\u2019s central vision: real food that matters for life\u2019s moments. \u201cWe can make a profit and make a difference, and we are doing both through our business . . . in a way that\u2019s authentic, that\u2019s transparent, and that truly matters,\u201d she explains.<\/p>\n<p id=\"fs-idm336596864\">Under Morrison\u2019s watch, the company recently acquired several fresh food and organic companies, including <span class=\"no-emphasis\">Bolthouse Farms<\/span>, one of the largest suppliers of fresh carrots in the United States, and <span class=\"no-emphasis\">Garden Fresh Gourmet<\/span>, which produces a top line of fresh salsa and hummus. Tracking the strong change in consumer preference for healthier food, Campbell\u2019s also recently acquired <span class=\"no-emphasis\">Plum Organics<\/span>, a line of organic baby food products, which should help solidify the company\u2019s reputation for fresh ingredients with millennials and their families.<\/p>\n<p id=\"fs-idm339905952\">The company\u2019s transformation from a processed food giant to a major competitor in the fresh food business has also had a positive influence on the company\u2019s bottom line. Campbell\u2019s shareholders have to be pleased with the 20 percent increase in the company\u2019s stock price over the past two years, as the markets, competitors, and consumers take notice of the company\u2019s strong commitment to sustainability.<\/p>\n<p id=\"fs-idm333579536\">Inherent in the company\u2019s reinvention is the strong emphasis on corporate citizenship\u2014doing good and giving back seem to be top priorities for Campbell\u2019s. In addition to acquiring sustainable and fresh food companies, Campbell\u2019s has also made a conscious decision to support the communities where their employees live and work. For example, the company launched a healthy communities initiative in Camden, New Jersey, where Campbell\u2019s is headquartered\u2014an urban city that has seen its share of economic and social challenges in the past. In partnership with several local organizations, this initiative has helped fund community gardens, food pantries, nutrition education, and cooking classes that help build healthy communities. The Camden experience has been so successful that the company has expanded the program to other cities where it operates, including Detroit, Michigan, and Norwalk, Connecticut.<\/p>\n<p id=\"fs-idm340089792\">The company\u2019s ongoing commitment to fresh food, community involvement, and corporate social responsibility has helped change the narrative when it comes to being a sustainable and ethical organization.<\/p>\n<div id=\"fs-idm350565760\">\n<div><strong>Questions for Discussion<\/strong><\/div>\n<ol>\n<li>How does Campbell Soup Company\u2019s recent business acquisitions help support its CSR strategies?<\/li>\n<li>Provide examples of how the company\u2019s transformation from a processed food giant to a purveyor of fresh ingredients can help attract a new group of customers.<\/li>\n<\/ol>\n<\/div>\n<p id=\"fs-idm353728800\">Sources: \u201cCorporate Responsibility and Sustainability Are Good for Business,\u201d https:\/\/www.campbellsoupcompany.com, accessed June 27, 2017; \u201cCampbell Soup Wants to Make You a Personal Eating Plan (video),\u201d <em>Fortune,<\/em> http:\/\/fortune.com, May 2, 2017; Don Seiffert, \u201cCampbell Soup CEO Makes 3 Predictions about the Future of Food,\u201d <em>Boston Business Journal,<\/em> http:\/\/www.bizjournals.com, April 13, 2017; Aaron Hurst, \u201cHow Denise Morrison Took Processed Food Icon Campbell\u2019s on a Fresh Food Buying Spree,\u201d <em>Fast Company,<\/em> https:\/\/www.fastcompany.com, March 2, 2017; Abigail Stevenson, \u201cCampbell Soup CEO: Stunning Disruption in the Ecosystem of Food,\u201d <em>CNBC,<\/em> http:\/\/www.cnbc.com, July 21, 2016.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div id=\"fs-idm349660960\" class=\"bc-section section\">\n<h3>Making the Right Decision<\/h3>\n<p id=\"fs-idm350797344\">In many situations, there may be no simple right or wrong answers. Yet there are several questions you can ask yourself, and a couple of self-tests you can do, to help you make the right ethical decision. First, ask yourself, \u201cAre there any legal restrictions or violations that will result from the action?\u201d If so, take a different course of action. If not, ask yourself, \u201cDoes it violate my company\u2019s code of ethics?\u201d If so, again find a different path to follow. Third, ask, \u201cDoes this meet the guidelines of my own ethical philosophy?\u201d If the answer is \u201cyes,\u201d then your decision must still pass two important tests.<\/p>\n<div id=\"fs-idm351530416\" class=\"bc-section section\">\n<h4>The Feelings Test<\/h4>\n<p id=\"fs-idm351533680\">You must now ask, \u201cHow does it make me feel?\u201d This enables you to examine your comfort level with a particular decision. Many people find that, after reaching a decision on an issue, they still experience discomfort that may manifest itself in a loss of sleep or appetite. Those feelings of conscience can serve as a future guide in resolving ethical dilemmas.<\/p>\n<\/div>\n<div id=\"fs-idm335285872\" class=\"bc-section section\">\n<h4>The Newspaper or Social Media Test<\/h4>\n<p>The final test involves the front page of the newspaper or social media posts. The question to be asked is how an objective reporter would describe your decision in a front-page newspaper story, an online media site, or a social media platform such as <span class=\"no-emphasis\">Twitter<\/span> or <span class=\"no-emphasis\">Facebook<\/span>. Some managers rephrase the test for their employees: How will the headline read if I make this decision, or what will be the reaction of my social media followers? This test is helpful in spotting and resolving potential conflicts of interest.<\/p>\n<div id=\"fs-idm335915904\" class=\"scaled-down\">\n<div style=\"width: 1310px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/3654\/2018\/09\/24142258\/Mod_02_Photo_2_Alt.jpg\" alt=\"A photograph shows a cell phone screen, with many apps, including Facebook, Skype, Twitter, LinkedIn, and Instagram.\" width=\"1300\" height=\"1040\" \/><\/p>\n<p class=\"wp-caption-text\">Making an ethical decision might come down to how you feel about the decision or to the newspaper or social media post test. The question to ask yourself is how the decision would make you feel if an objective reporter described the decision on the front page of a newspaper or via a social media post on Twitter or Facebook\u2014all of which would be viewed by many, many people. Speaking of social media, it plays a pivotal role in ethical decision-making today, when people use the medium to share critical comments about friends as well as employers, business colleagues, and competitors. Should companies view employees\u2019 social media pages on a regular basis, or is that information off-limits to employers? (Credit: Mike MacKenzie\/ Flickr\/ Attribution 2.0 Generic (CC BY 2.0))<\/p>\n<\/div>\n<\/div>\n<div id=\"fs-idm354014160\" class=\"concept-check\">\n<div class=\"textbox key-takeaways\">\n<h3>concept check<\/h3>\n<ol>\n<li>What is the role of top management in organizational ethics?<\/li>\n<li>What is a code of ethics?<\/li>\n<\/ol>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div id=\"fs-idm353470384\" class=\"section-summary\">\n<h3>Summary of Learning Outcomes<\/h3>\n<ol>\n<li>How can organizations encourage ethical business behavior?<\/li>\n<\/ol>\n<p id=\"fs-idm340344912\">Top management must shape the ethical culture of the organization. They should lead by example, offer ethics-training programs, and establish a formal code of ethics.<\/p>\n<\/div>\n<div class=\"textbox shaded\">\n<h3>Glossary<\/h3>\n<dl id=\"fs-idm336888640\">\n<dt>code of ethics<\/dt>\n<dd id=\"fs-idm354564960\">A set of guidelines prepared by a firm to provide its employees with the knowledge of what the firm expects in terms of their responsibilities and behavior toward fellow employees, customers, and suppliers.<\/dd>\n<\/dl>\n<\/div>\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-47\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Intro to Business. <strong>Authored by<\/strong>: Gitman, et. al. <strong>Provided by<\/strong>: OpenStax. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.2\">http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.2<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em>. <strong>License Terms<\/strong>: Download for free at http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.2<\/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-47-1\">Dori Meinert, \u201cCreating an Ethical Workplace,\u201d Society for Human Resource Management, https:\/\/www.shrm.org, accessed June 23, 2017; Jeff Kauflin, \u201cThe World\u2019s Most Ethical Companies 2017,\u201d <em>Forbes,<\/em> http:\/\/www.forbes.com, March 14, 2017. <a href=\"#return-footnote-47-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><li id=\"footnote-47-2\">\u201cThe 2017 100 Best Corporate Citizens,\u201d <em>Corporate Responsibility,<\/em> http:\/\/www.thecro.com, accessed June 23, 2017; Karsten Strauss, \u201cAmerica\u2019s 100 Best Corporate Citizens in 2017,\u201d <em>Forbes,<\/em> http:\/\/www.forbes.com, May 11, 2017. <a href=\"#return-footnote-47-2\" class=\"return-footnote\" aria-label=\"Return to footnote 2\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":5759,"menu_order":3,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Intro to Business\",\"author\":\"Gitman, et. al\",\"organization\":\"OpenStax\",\"url\":\"http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.2\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"Download for free at http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.2\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-47","chapter","type-chapter","status-publish","hentry"],"part":41,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/pressbooks\/v2\/chapters\/47","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/wp\/v2\/users\/5759"}],"version-history":[{"count":2,"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/pressbooks\/v2\/chapters\/47\/revisions"}],"predecessor-version":[{"id":334,"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/pressbooks\/v2\/chapters\/47\/revisions\/334"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/pressbooks\/v2\/parts\/41"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/pressbooks\/v2\/chapters\/47\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/wp\/v2\/media?parent=47"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/pressbooks\/v2\/chapter-type?post=47"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/wp\/v2\/contributor?post=47"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/wp-json\/wp\/v2\/license?post=47"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}