Business Ethics: Ethical Decision Making & Cases 11th Edition Instructor manual

4.     President Obama has led the passage of legislation to stimulate an economic recovery from the greatest recession the world has experienced since the 1930s. The legislation focused on social concerns.
5.     To address lingering issues related to the financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act represents the most sweeping financial legislation since Sarbanes-Oxley Act and possibly since the Great Depression.
6.     Around the world, the basic assumptions of capitalism are under debate in the wake of the most recent financial industry meltdown and global recession. Widespread government intervention is worrisome to free-market capitalists.
 
IV. Developing an Organizational and Global Ethical Culture
A.    Compliance and ethics initiatives in organizations are designed to help establish appropriate conduct and core values.
1.     The ethical component of a corporate culture relates to the values, beliefs, and established and enforced patterns of conduct that employees use to identify and respond to ethical issues.
B.    The term ethical culture is acceptable behavior as defined by the company and industry. The goal of an ethical culture is to minimize the need for enforced compliance of rules and maximize the use of principles that contribute to ethical reasoning in difficult or new situations.
C.    Globally, businesses are working more closely together to establish standards of acceptable behavior. Many companies demonstrate their commitment to acceptable conduct by adopting globally recognized principles, such as the United Nations’ Global Compact.
1.    Companies that choose to abide by ISO 19600—a global compliance management standard—can use it to improve their approaches to compliance management, which can reassure stakeholders of their commitment toward ethics and compliance.
2.    The UN Global Compact—a set of ten principles concerning human rights, labor, the environment, and anti-corruption—is meant to create openness and alignment among business, government, society, labor, and the United Nations.
 
V.  The Benefits of Business Ethics
A.    The field of business ethics is rapidly changing as more firms recognize the benefits of improving ethical conduct and the link between business ethics and financial performance.
B.    Among the rewards for being more ethical and socially responsible in business are increased efficiency in daily operations, greater employee commitment, increased investor willingness to entrust funds, improved customer trust and satisfaction, and better financial performance.
C.    Ethics Contributes to Employee Commitment
1.     Employee commitment comes from employees who believe their future is tied to that of the organization and their willingness to make personal sacrifices for that organization.
a.     The more a company is dedicated to taking care of its employees, the more likely it is that the employees will take care of the organization.
b.     Issues that may foster the development of an ethical climate for employees include the absence of abusive behavior, a safe work environment, competitive salaries, and the fulfillment of all contractual obligations toward employees, as well as social programs such as stock ownership plans and community service.
2.     Employees’ perception of their firm as having an ethical environment leads to performance-enhancing outcomes within the organization.
a.     An organization with a strong, ethical corporate culture helps to increase group creativity, decrease turnover, and increase job satisfaction.
b.     Trusting relationships within an organization between both managers and their subordinates and upper management contribute to greater decision-making efficiencies.
c.     When companies are viewed as highly ethical by their employees, they were six times more likely to keep their workers.
3.     Research indicates that the ethical climate of a company matters to employees.
D.    Ethics Contributes to Investor Loyalty
1.     Investors today are increasingly concerned about the ethics, social responsibility, and the reputation of companies in which they invest.
a.     Investors recognize that an ethical climate provides a foundation for efficiency, productivity, and profits, while negative publicity, lawsuits, and fines can lower stock prices, diminish customer loyalty, and threaten a company’s long-term viability.