Organizational Behavior

Module 3: Ethics in Business

Module Learning Outcomes

Describe the methods of encouraging ethical behavior and the laws encouraging good corporate
practices

3.1: Describe the history of business ethics as a topic in organizational behavior

3.2: Describe the methods to encourage ethical behavior in contemporary organizations
Business Ethics
Learning Outcomes: Business Ethics

3.1: Describe the history of business ethics as a topic in organizational behavior

3.1.1: Discuss the history of business ethics
3.1.2: Describe business ethics and why they play an important role in the workplace
3.1.3: Examine recent ethical investigation cases in the workplace
History of Business Ethics

• Early code of ethics include The Ten Commandments, Aristotle economic relations
philosophies
• Social responsibility becomes a focus in the 1960s
• Business ethics becomes a topic in business in the early 1970s
Business Ethics in the Workplace

• Personal ethics
• Professional ethics
• Organizational ethics
Types of Ethical Issues

• Fraud
• Sustainability
• Diversity
• Exploitation
Ethical Investigations

• Enron
• Bernie Madoff
• Yahoo!/Scott Thompson
• Bill O’Reilly/20th Century Fox
• Equifax
• Elon Musk
Class Discussion: Ethical Investigations

• Have you heard any stories in the news about ethical dilemmas or investigations in the
workplace?
• How were these incidents resolved? Or are they still ongoing?
Practice Question 1

Which of the following is the best description of business ethics?

A. Legal matters concerning business decisions and transactions

B. The morals of each employee within a company
C. Religious teachings and beliefs of right versus wrong
D. Identifying right and wrong and consciously choosing right
Practice Question 2

The Equifax data breach in 2017 was a huge ethical scandal. There were multiple components
to the scandal, all of which have big implications. Which of the following was not a part of the
scandal?

A. Equifax was oblivious to the breach, finding out at the same time as the public.
B. Approximately 145 million people’s information was compromised.
C. Equifax knew about the breach months before it was public knowledge.
D. Executives sold $1.8 billion in shares right before the breach went public.
Behaving Ethically
Learning Outcomes: Behaving Ethically

3.2: Describe the methods to encourage ethical behavior in contemporary

organizations
3.2.1: Examine smart hiring methods
3.2.2: Discuss the importance of a company's code of ethics
3.2.3: Examine how training can impact ethical behavior
3.2.4: Describe how upper management impacts ethical culture
Hiring

Employers can hire ethically by conducting

• Behavioral interviews
• Personality tests
• Background checks
• Reference checks
Class Activity: What’s a behavioral interview?

• Pair up into groups of two

• You’re interviewing for a position as a caretaker for the elderly.
• Using the verbiage in the module as your guide, what kind of questions would you ask?
• What kind of responses are good? Which are bad? (Take 5 minutes each)

Examples in the module:

• Describe a stressful work situation and how
you handled it.
• Tell me about a time you used logic to solve a problem.
• Tell me about a time you did not meet your goal.
How did you handle that?
Present: What’s a behavioral interview?
An Organization’s Code of Ethics

What should it include? How should it be implemented?

• Company values • Delivered to all employees

• Company mission • Training on ethics and values
• Company principles • Signed documentation indicating receipt
and understanding
Training for Ethical Behavior

• Group sessions or one-on-one training

• Offer refresher courses every six months

Without training, ethics and behaviors will be

left up to employee interpretation
Creating an Ethical Culture

• Upper management sets the example

• Middle management reinforces
• All employees at every level responsible for
representing company’s ethical code and
upholding the organization’s reputation
Practice Question 3

What is the first step in implementing smart hiring practices?

A. Conduct a behavioral-based interview

B. Create a list of qualifications and behavioral needs for the position
C. Run a candidate background check and check references
D. Request all applicants complete a personality test prior to scheduling interviews
Practice Question 4

Which of the following lists the most important components needed in every organization’s
code of ethics?

A. A company’s mission, values and principles

B. A company’s beliefs, preferences and mission
C. A company’s vision, past successes and future goals
D. A company’s beliefs, mission, and vision
Practice Question 5

Without proper training, ethical behavior is _______________________.

A. forgotten
B. only demonstrated by management
C. overwhelming
D. left open to interpretation
Quick Review

• Historical codes of ethics, like the Ten Commandments, were early guides for ethical
behavior
• Business ethics became a topic of importance in the early 1970s
• Ethics operate on a personal, professional and organizational level
• Types of ethical issues include
• Fraud
• Sustainability
• Diversity
• Exploitation
• A company’s values, mission and vision are a part of its code of ethics
• Hiring and training are among the means by which organizations develop and maintain
strong ethical cultures