394 Business Ethics

Figure 6.6 summarizes an alignment contingency model for understand-

ing the “big picture” of leaders’ tasks in defining and implementing effective
and ethical strategies, cultures, and structures. Strategies, cultures, struc-
tures, and systems are aligned along a vision, mission, and core values. This
approach is compatible with the “fi rms of endearment,” “built-to-last,” and
“good to great” studies of successful organizations. Customers as key stake-
holders are central to an organization’s alignment since they are essential to a
fi rm’s success.
Strategy must be aligned with markets, values, culture, leadership style,
and structure to be effective. Strategy serves both a revolutionary role (to be
innovatively competitive) and a more classical role at four levels: enterprise,
corporate, business, and function. Strategies influence ethics by the expecta-
tions, pressures, motivation, and rewards they create. Overly aggressive strate-
gies, which may also be unrealistic, can create implementation pressures that
lead to unethical activities.
Culture, structure, and other systems are internal dimensions that
enable leaders and professionals to implement strategy. “High- ethics” com-
pany cultures can serve as a benchmark for other organizations’ cultures.
Such cultures are grounded in well- defi ned purposes that drive operations.
These cultures are also modeled by leaders who are devoted to fairness,
interaction with all stakeholders, concern for stakeholder interests, and indi-
vidual responsibility.
Organizational structures that are overly centralized or decentralized
may foster ethical problems. Although there is not “one best way” to structure
a company, there are advantages and disadvantages to each type of structure.
For example, centralized functional structures discourage open communica-
tion and sharing and must be integrated. Decentralized structures, such as net-
works and project teams with little or no coordination, may create a climate for
unethical activities, such as fraud, theft, and unfair pressure of customers and
alliance partners. Having leaders who rely on mission-driven ethical values that
are communicated, reflected in the culture, and enforced throughout a firm is
a necessary part of structural alignment.
Figure 6.8 illustrates the challenge of balancing internal organizational
and professional stakeholders’ values. Professional stakeholders in marketing,
R&D, sales, finance, and production often function within four boundaries:
rewards, time horizons, training backgrounds, and resource constraints. A
critical task of organizational leaders is to guide internal professionals and
focus them on the mission and values of the company.
An overview of self-regulated ethics programs was presented. Ethics pro-
grams, codes, ombudspersons, peer reviews, and ethics officers programs are
ways in which corporations can attempt to regulate themselves. Johnson &
Johnson’s “Credo” (Figure 6.3) is an example of an outstanding ethics code.
A “Readiness Checklist” for assessing a values-based, stakeholder readi-
ness perspective was offered that enables firms to address the extent to which
they use a values-based stakeholder approach in their business practices.