Running head: ETHICS OF ORGANIZATIONAL GIFT GIVING

The Ethics of Organizational Gift Giving Kyle R. Snyder Walden University

ETHICS OF ORGANIZATIONAL GIFT GIVING

Colorado, a vast state covering over 100,000 square miles, is home to an ample amount of groups and organizations including Native Americans, military, farmers, oil entrepreneurs, and countless other support groups. These organizations are crucial to the economic, political, and social advancement of Colorado and its critical infrastructure. The numerous agencies all maintain their own organizational culture which operates within the confines and social norms of their field of expertise. The culture within these groups is derived from decades of development in the public and private sector which allow for fair practice, competitive maturation, and most importantly, public trust. Obtaining, and maintaining, public trust requires that these organizations develop values that go beyond individual behavior and address issues of the ethical culture within organizations (Gilman, 2005, p. 12). Often this is regulated by legal codes developed by each organization to eliminate the perception of unethical behavior. One of the most troublesome areas that can destroy public trust, through perceived or actual corrupt and unethical practices, is through the act of gift giving. The act of gift giving between friends, relatives, and professional executives pre-dates history. Even in modern times most societies view gifts as individual acts of kindness or virtue (Schultz, 2010, p. 163). Within professional organizations, where the public interest is of the utmost importance, the act of gift giving, especially among high ranking officials, can have a significant impact on the future of the organization. David Schultz (2010) explains that The root problem with gifting in professional settings is how it affects either the appearance or reality of ones job performance (p.162). To counter this perception organizations adopt legal codes that dictate what is acceptable in gift giving and acceptance of gifts from other organizations. To explore the variances in the different cultural environments, the legal codes of the United States Department of the Interior (DOI), a government agency, and the Boeing Company, a private

ETHICS OF ORGANIZATIONAL GIFT GIVING

government contractor, were analyzed to determine how the cultural climate impacted the legal obligations of each entity. The DOI is a government agency which protects Americas natural resources and heritage, honors our cultures and tribal communities, and supplies the energy to power our future (n.d.). Inside of the DOI are the Bureau of Indian Affairs (including the Office of Indian Education Programs), Bureau of Land Management, Bureau of Reclamation, Bureau of Ocean Energy Management, Bureau of Safety and Environmental Enforcement, National Indian Gaming Commission, National Park Service, Office of Surface Mining Reclamation and Enforcement, Office of the Special Trustee for American Indians, U.S. Fish and Wildlife Service, U.S. Geological Survey, and the remainder of the Department (including the Office of the Secretary, Office of the Solicitor, Office of the Inspector General, and the immediate office of each Assistant Secretary). Each of these subsections is referred to as a separate agency within the department. The DOI prohibits its employees from soliciting or receiving gifts from any person, company, or organization that has business with [an individuals] agency, is seeking to do business with [an individuals] agency, conducts operations that are regulated by [an individuals] agency, or has any interests that might be affected by the performance or non-performance of [an individuals] official duties. (Department of the Interior [DOI], 2011, p.8) Outside of these rules the legal code does not restrict an individual from one agency to receive a gift from a member who falls under another agency. The restrictions are also less intrusive in the areas of professional performance, presentations, meals, and value of awards than most other governmental agencies. The legal code spells out the standards between employees and limits the gifting of a subordinate to a supervisor. Specific instances are caveated within the legal code

ETHICS OF ORGANIZATIONAL GIFT GIVING

which would allow for special one-time occasions to be celebrated between supervisor and subordinate without the perception of favoritism. One item of note is that an employee may accept a gift given under circumstances which make it clear that the gift is motivated solely by a family relationship or personal friendship rather than [their] position (DOI, 2011, p. 11). The Boeing Company is the second largest government contractor in the world. Headquartered in Chicago, Illinois, Boeing focuses their industry on commercial airplanes, national defense, engineering operations, capital investments, and several other ventures. Similar to the DOI, Boeing prohibits employees from accepting gifts when there is an actual or perceived expectation that the donor may want something in return, may be attempting to gain an unfair advantage, or may be trying to influence an employee to do things that might violate laws (Boeing, 2012, p. 18). Unlike the DOI policy, Boeing takes a harder stance on gifts and does not leave the interpretation of a gifts perception to the employee. All business courtesies offered to and accepted by Boeing employees are gifts belonging to Boeing an employee may keep a business courtesy only when acceptance of the courtesy promotes successful working relationships and goodwill for Boeing interests, conforms to the reasonable and ethical practices of the marketplace, does not create actual conflict of interest or divided loyalty, and does not create the appearance of an improper attempt to influence business decisions. (Boeing, 2012, p. 18) This method is more restrictive than most cultures and demonstrates a hardline approach to ensuring legal and ethical compliance is maintained by all employees. The DOI and Boeing have different organizational cultures which dictate their ethics on gift-giving practices. The DOI must contend with numerous groups all served by the public agency. By restricting the agency to a blanket legal code, like Boeing, the DOI may alienate

ETHICS OF ORGANIZATIONAL GIFT GIVING

thousands of individuals it is designed to help. It also must monitor the practices of its employees further to ensure that interdepartmental corruption does not begin to circumvent the gift giving practices through gift-laundering. Similar to the DOI, Boeing also has numerous customers around the world. Their stronger position is due to the monetary implications that could arise within a private company. The organizational culture is driven by profit not public service and provides less of a moral obligation to withhold the laws and perception of the company. The two cultures are very similar in design yet fundamentally different in the rational for their performance. Culture plays a significant part in the ethics of an organization. When the opportunity arises, human nature drives us to want to return the kindness of another individual. Schultz (2010) reminds us that gift giving often invites or demands reciprocity (p.165). That is why the legal and ethical codes of an organization will have a great impact upon any group. To develop these, each group must have the fortitude to identify, deny, and correct any improprieties by its employees to ensure that the culture of the organization and the trust of those the organization serves are maintained. Inevitably, conflicts will occur within an organization which enters the grey area of legal ethical codes. Employees become friends, friends become customers, and customers become employers. In the modern world, these blurred lines can both be beneficial to an organizations growth through filling critical positions with key personnel while giving off the image of favoritism and improprieties. The same can occur when gifts, food, or other rewards are made. The ethical and legal code of an organization will never be able to address, or predict, every situation that may occur. Stuart Gilman (2005) explains that ethical and moral codes can be

ETHICS OF ORGANIZATIONAL GIFT GIVING

used as an organizational road map so that changes in the institutions address risk and vulnerability to corruption (p. 33). When a situation occurs that has crossed into the ethical grey area, or potentially into a violation, the quick action by the individual and organization can mitigate the negative backlash which may follow. Being forward about a situation will allow for the organization to proactively document, investigate, report, and remedy the potential violation and present a proactive image that their standards are being upheld. If the violation is found to be true, then the organization as a whole must reassess their ethics to understand how to prevent situations of similar nature in the future. If a blatant disregard for protocol was performed, and the act was for personal gain, the organization must immediately remedy the situation through removal of the employee and those who may have been involved.

ETHICS OF ORGANIZATIONAL GIFT GIVING Reference Boeing Company. (2012). Ethical business conduct guideline [PDF document]. Retrieved from http://www.boeing.com/assets/pdf/companyoffices/aboutus/ethics/ethics_booklet.pdf Gilman, S. C. (2005). Ethics codes and codes of conduct as tools for promoting an ethical and professional public service: Comparative successes and lessons. Retrieved from http://www.oecd.org/mena/governance/35521418.pdf Schultz, D. (2010). Ethics regulation across professions: The problem of gifting. Public Integrity, 12(2), 161172. United States Department of the Interior. (n.d.). Retrieved April 14, 2014, from http://www.doi.gov/index.cfm

United States Department of the Interior. (2011). Ethics guide for DOI employees [Word document]. Retrieved from http://www.doi.gov/archive/ethics/docs/Ethics_Guide_for_DOI_Employees_November_ 2011.doc