1. Wages: 2.

Working conditions:
Fair wages depend on: Health and safety
‡ Local wages
Studying and
‡ Firm¶s ability to pay
‡ Burdens of the job
eliminating job risks
‡ Minimum wage laws Compensating for risks
‡ Fair relation to other Informing workers of
salaries in the firm
known risks
‡ Wage negotiations
‡ Local living costs Insuring workers
against unknown risks.
Sweatshops: A workplace that has numerous health
and safety hazards and poor working conditions, as
well as low wages

Job satisfaction
Experienced meaningfulness
Experienced responsibility
Knowledge of results
Job specialization
eveloping an Effective
Ethics Program

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 he Need for Organizational
Ethics Programs
Scandals in corporate world have lowered
the public¶s trust of business.
Understanding the factors that influence
ethical decision making can help companies
encourage ethical behavior.
Employees are not legal experts and
therefore need guidance with legal
issues impacting their jobs.

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 An Effective Ethics
Program...
helps ensure that all employees understand the
organization¶s values and comply with the
policies and codes of conduct that create its
ethical climate
± iverse employee backgrounds
(education, experience, family)
make organizational socialization
more critical.

Copyright © Houghton Mifflin Company. All rights reserved. ï

 Ethics Programs Can Help
Avoid Legal Problems
he program must be communicated to all
employees²providing a common understanding
of organizational values, policies, and
procedures.
± Companies that act to prevent organizational
misconduct may receive a ³carrot´ and avoid
organizational penalties.
± hose that do not may receive a ³stick´²
fines and penalties.

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 Effective Ethical Compliance
Programs...
must deal effectively with the risk associated
with a particular business and has to become
part of the corporate culture
can help avoid civil litigation
must exhibit due diligence to prevent
misconduct

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 alues ersus Compliance
Programs
compliance orientation
± creates order by requiring that employees
identify with and commit to specified conduct
± uses legal terms, statutes and contracts that teach
employees the rules and penalties for noncompliance
values orientation
± attempts to develop shared values
± focuses more on an abstract core of ideals such as
respect and responsibility, although there are penalties
for misconduct
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 Codes of Conduct...
are formal statements of what an organization
expects in the way of ethical behavior
± will not solve every dilemma
± provide rules and guidelines
± reflect senior management¶s desire for compliance
with values, rules and policies in support of an
ethical climate
should be specific enough to be reasonably
capable of preventing misconduct
ï 10
 Codes of Conduct...
codes of conduct
± formal statements that describe what an organization
expects of its employees
codes of ethics
± most comprehensive document consisting of general
statements that serve as principles and the basis for the
rules of conduct
statement of values
± serves the general public and addresses
stakeholder interests
ï 11
 Manley¶s Six Steps to
Implementing a Code of Ethics
distribute the code comprehensively: employees,
subsidiaries, and associated companies
assist in interpretation and understanding
specify management¶s role in implementation
make employees responsible for understanding
establish grievance procedures
provide a conclusion or
closing statement
ï 12
 Ethics Officers
Ethics officers or committees are responsible for
oversight of the ethics/compliance program:
± coordinate program with top management
± develop, revise and disseminate the code
± develop effective communication
± establish audits and control systems
± provide consistent enforcement of standards
± review and modify the program to improve
effectiveness
ï 13
 Ethics raining and
Communication
provides guidance for ethical standards and
activities that integrate the functional areas of
business
helps employees identify ethical issues and
provides a means to address and resolve them
can help reduce criminal, civil, and
administrative consequences
including:
± fines, penalties, judgments, etc.
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 Ethics raining Programs
Should...
reflect organizational size, culture, values, management
style and employee base
improve employee understanding of ethical issues
influence the organizational culture, significant others,
and opportunity in the ethical decision making process
overall, provide for recognition of
ethical issues, understanding of
culture and values, as well as
influence ethical decision making

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 Systems to Monitor and
Enforce Ethical Standards
An internal system for employees to report
misconduct is an opportunity to register
ethical concerns:
± ethics hot lines
± questionnaires used to serve as benchmarks
Enforcement is also important:
± corrective actions to provide standards
and punishment
± consistent enforcement critical
ï 1
 Continuous Improvement of
the Ethics Program
If a company has determined that its ethical
performance has not been satisfactory,
management may want to recognize the way
ethical decisions are made:
± A decentralized organization may be centralized
(perhaps temporarily) so that top level managers can
ensure that ethical decisions are made.
± A centralized organization may be decentralized
(perhaps temporarily) so that lower level managers
can make more decisions.
ï 1
 Common Mistakes in esigning/
Implementing an Ethics Program
not having a clear understanding of the goals of the
program from the beginning
not setting realistic and measurable
program objectives
senior management¶s failure to take
ownership of the ethics program
developing program materials that do
not address the needs of the average employee
transferring a domestic program internationally
designing a program as a series of lectures
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