*

*
Crapler Four
0erard|rg
Elr|ca| ard
3oc|a||y
Respors|o|e
8erav|or
Copyright 21 by the McCraw-Hill Companies, Inc. All rights reserved.
McCraw-Hill/Irwin
Learnlng CuLcomes
Lxplaln why obeylng Lhe law ls only Lhe flrsL sLep ln
behavlng eLhlcally
Ask Lhe Lhree quesLlons Lo answer when faced wlLh
a poLenLlally uneLhlcal acLlon
uescrlbe managemenL's role ln seLLlng eLhlcal
sLandards
ulsLlngulsh beLween compllancebased and
lnLegrlLybased eLhlcs codes and llsL Lhe slx sLeps ln
seLLlng up a corporaLe eLhlcs code
ueflne corporaLe soclal responslblllLy and compare
corporaLlons' responslblllLles Lo varlous
sLakeholders
*
*
Ern|oa| $ranoaros are
Funoamenra|
Eth|cs -- %ne sranoaros ol mora| oenav|or. 3enav|ors rnar are
aooepreo oy soo|ery as r|nr versus uron.
whAT are ETh|68?
LC1
4-3
LLhlcs
a person can obey Lhe law and sLlll be
behavlng uneLhlcally (follow law eLhlcal
behavlor/acLlon)
lollowlng Lhe law ls only Lhe flrsL sLep ln belng
eLhlcal
Lxample Ahmad ls a franchlsee aL Ampang
buL franchlsor also helps hlm promoLe hls
shop aL ConnaughL lL wlll affecL Lhe franchlsee
aL ConnaughL (lranchlse promoLlon)
*
*
Ern|oa| $ranoaros are
Funoamenra|
#|ght:
rlegr|ly (roresl)
Respecl lor rurar ||le
(lre|r oerav|our or re||g|or)
3e|l corlro|
loresly
Courage(oravery)
3e|l-sacr|l|ce
Wrong:
Cheating
Cowardice(fear)
Cruelty
A8|6 H0#AL VALUE8
LC1
4-5
*
*
Enron 0re execul|ve |s serv|rg a 21 year serlerce(pur|srrerl) lor accourl|rg
lraud (crarges |r oa|arce sreel)Wr||e arolrer W||| oe re|eased |r 0clooer 2011.
Arthur Andersen Corv|cled ol larper|rg W|lr W|lresses,(la|| lo W|lress ard
crarge lre slalererl) lre corpary Was d|sso|ved ard aooul 28,000 peop|e
|osl lre|r joos.
Tyco |nternat|ona| TWo execul|ves slo|e S00 r||||or lror lre corpary ard
are scredu|ed lo oe re|eased lror pr|sor |r 2030.
Ade|ph|a 6ommun|cat|on TWo execul|ves Were corv|cled ol corsp|racy, oar|
ard secur|l|es lraud ard g|ver serlerces ol 15 ard 20 years. (ra||rg a la|se
erlry l|rarc|a| record)
wor|d6om Forrer CE0 Was corv|cled ol lraud, corsp|racy ard la|se l|||rgs
ard serlerced lo 25 years.
PAY|NC the P#|6E
(Lega| 8r|elcase) pg 91
4-6
*
*
Ern|os 3e|ns u|rn
Eaon ol us
!|ag|ar|z|rg lror rlerrel raler|a|s |s lre rosl corror
lorr ol creal|rg |r scroo|s loday.
ETh|68 and Y0U
LC2
Studies found a strong
relationship between
academic dishonesty
and dishonesty at work.
4-7
ulshonesLyuneLhlcal?
Ah Mlng faLher has hearL aLLack Ah Mlng
falled ln exam Powever Ah Mlng cheaL hls
faLher say he pass ln exam
ls LhaL eLhlcal or uneLhlcal?
*
*
Ern|os 3e|ns u|rn
Eaon ol us
Ask yourse|f these quest|ons:
- s |l |ega|?
- s |l oa|arced?
- loW W||| |l ra|e re lee| aooul ryse|l?
A6|NC ETh|6AL 0|LEHHA8
LC2
4-9
Jhy ask Lhese 3 quesLlons?
Asklng and answerlng Lhese Lhree quesLlons
wlll prevenL many people from maklng
uneLhlcal declslons
*
*
Every r|rule, peop|e up|oad 10 rours ol v|deo lo YouTuoe -
rol a|| |s user-gereraled corlerl.
v|acor sued YouTuoe lor S1 o||||or lor a||oW|rg ep|sodes ol |ls
popu|ar sroWs or lre s|le.
Viacom holds YouTube responsible for carrying the
illegal content, rather than the individuals who
uploaded it.
wro do you lr|r| srou|d oe accourlao|e lor lre copyr|grl
v|o|al|ors -- lre Weos|le or lrose Wro up|oaded lre v|deos?
To TUE or N0T to TUE
(Va||rg Elr|ca| 0ec|s|ors)
4-11
*
*
ana|n 3us|nesses
Ern|oa||y ano
Respons|o|y
Trusl oelWeer Wor|ers ard
raragers rusl oe oased or
la|rress, roresly, operress ard
rora| |rlegr|ly.
Leadersr|p car re|p |rsl||| corporale
va|ues |r erp|oyees.
ETh|68 8TA#T at the T0P
LC3
4-12

ana|n 3us|nesses
Ern|oa||y ano
Respons|o|y
A6T0#8 |NLUEN6|NC HANACE#|AL
ETh|68
Ind|v|dua| Crgan|zat|ona| Lnv|ronmenta|
Ialues
Jork 8ackground
lamlly SLaLus
ersonallLy
1op Level
ManagemenL
hllosophy
llrm's 8eward
SysLem
!ob ulmenslons
CompeLlLlon
Lconomlc
CondlLlons
Soclal/CulLural
lnsLlLuLlons
LC3
4-13
A6T0#8 |NLUEN6|NC
HANACE#|AL ETh|68(cont.}
LLhlcs beglns wlLh Lhe lndlvldual buL ls
lnfluenced by Lhe organlzaLlon and Lhe
envlronmenL ln whlch Lhe buslness operaLes
*
*
$err|n 0orporare
Ern|oa| $ranoaros
r |rcreas|rg ruroer ol corpar|es rave adopled Wr|ller
codes ol elr|cs.
6omp||ance-ased Eth|cs 6ode -- Empnas|ze prevenr|n
un|aulu| oenav|or oy |noreas|n oonrro| ano oy pena||z|n
uronooers.
|ntegr|ty-ased Eth|cs 6ode -- el|ne rne oran|zar|ons
u|o|n va|ues, oreare an env|ronmenr rnar supporrs ern|oa||y
souno oenav|or ano srress a snareo aooounrao|||ry amon
emp|oyees.
ETh|68 600E8
LC4
4-15
*
*
$err|n 0orporare
Ern|oa| $ranoaros
1. Top raragererl rusl adopl ard urcord|l|ora||y supporl
ar exp||c|l corporale code ol corducl.
2. Erp|oyees rusl urderslard lral ser|or raragererl
expecls a|| erp|oyees lo acl elr|ca||y.
3. Varagers ard olrers rusl oe lra|red lo cors|der lre
elr|ca| |rp||cal|ors ol a|| ous|ress dec|s|ors.
(corl|rued)
h0w to |HP#0VE
U8|NE88 ETh|68
LC4
4-16
*
*
$err|n 0orporare
Ern|oa| $ranoaros
1. r elr|cs oll|ce rusl oe sel up W|lr Wr|cr erp|oyees car
corrur|cale aroryrous|y. wh|st|eb|owers -- !eop|e uno
reporr |||ea| or unern|oa| oenav|or.
h0w to |HP#0VE
U8|NE88 ETh|68
LC4
5. nvolve outsiders such as
suppliers, subcontractors,
distributors and
customers.(drink tea, dinner?
HK can't because have CAC)
6. The ethics code must be
enforced.
4-17

Source !ames Cehrke Magnlfy Leadershlp uevelopmenL november 2008

1. Varagers rusl corrur|cale lre orgar|zal|or's v|s|or or
elr|ca| oerav|or.
2. 0rgar|zal|ors rusl rave a code ol elr|cs.
3. !o||c|es rave lo oe erlorced regard|rg elr|ca| ollerces.
(pur|srrerl)
1. Elr|ca| respors|o|||ly rusl oe laugrl lo a|| erp|oyees.
(corl|rued)
h0w to P#EVENT UNETh|6AL EhAV|0#8
LC4
$err|n 0orporare
Ern|oa| $ranoaros
4-18

Source !ames Cehrke Magnlfy Leadershlp uevelopmenL november 2008

5. 0|scuss|ors ol elr|cs rusl oe |rc|uded |r lre dec|s|or-
ra||rg process. (r|grl or Wrorg?)
. ccourlao|||ly rusl oe la|er ser|ous|y al a|| |eve|s |r lre
orgar|zal|or.
Z. 0rgar|zal|ors rusl acl lasl Wrer a cr|s|s occurs.
8. Erp|oyees rusl |roW lrey rave lo delerd ard ra|rla|r
lre corpary's repulal|or.
h0w to P#EVENT UNETh|6AL EhAV|0#8
LC4
$err|n 0orporare
Ern|oa| $ranoaros
4-19
;uesLlon
Company faclng flnanclal problem Powever
you are one of Lhe sales execuLlve LhaL can
help company earn money for produclng bad
quallLy producL
uo you produce lL for make your organlsaLlon
survlve or noL?
*
*
0orporare
$oo|a| Respons|o|||ry
6orporate 8oc|a| #espons|b|||ty (68#} -- %ne oonoern
ous|nesses nave lor rne ue|lare ol soo|ery.
C3R |s oased or a corr|lrerl lo
|rlegr|ly, la|rress, ard respecl.
C3R proporerls argue lral
ous|resses oWe lre|r ex|slerce lo lre
soc|el|es lrey serve ard carrol ex|sl
|r soc|el|es lral la||.
60#P0#ATE 806|AL #E8P0N8||L|TY
LC5
4-21
CS8
Vary lor-prol|l corpar|es rave pr||arlrrop|c (||rd
ard re|plu|) erdeavors (allerpl) as a parl ol lre|r
r|ss|or.
Corrur|l|es oller deperd or corpar|es lo re|p
W|lr soc|a| progrars lral ra|e lre ||ves ol peop|e
|r lre corrur|ly oeller.
l slards lo reasor lral ous|resses lral slrerglrer
lre|r corrur|l|es, as proporerls ol C3R argue, W|||
groW slrorger as lre|r corrur|l|es |rprove.
*
*
0orporare
$oo|a| Respons|o|||ry
6orporate Ph||anthropy -- no|uoes onar|rao|e oonar|ons.
6orporate 8oc|a| |n|t|at|ves -- no|uoes ennanoeo lorms ol
oorporare pn||anrnropy. {ennanoeo lorms ol oorporare
pn||anrnropy o|reor|y re|areo ro rne oompanys oompereno|es.j
examp|e ol 0$|o|sr|o |anr %% keeps a 50person
emerenoyresponse ream on sranooy ro o anyunere |n rne
uor|o ar 48 nours nor|oe. %ne ream nas ne|peo |n more rnan ruo
oozen emereno|es, |no|uo|n rne 2004 /s|an rsunam|.
60#P0#ATE Ph|LANTh#0PY
and 806|AL |N|T|AT|VE8
LC5
4-23
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*
0orporare
$oo|a| Respons|o|||ry
6orporate #espons|b|||ty -- no|uoes everyrn|n lrom n|r|n
m|nor|ry uorkers ro mak|n sale proouors, m|n|m|z|n po||ur|on,
us|n enery u|se|y, ano prov|o|n a sale uork env|ronmenr.
6orporate Po||cy -- %ne pos|r|on a l|rm rakes on soo|a| ano
po||r|oa| |ssues.
60#P0#ATE #E8P0N8||L|TY
and P0L|6Y
LC5
4-24
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0orporare
$oo|a| Respons|o|||ry
erox ollers a $oo|a| $erv|oe leave prograr.
An ultimate example of a company helping the
community is Xerox's program, Social Service Leave,
which allows employees to leave for up to a year and
work for a nonprofit while still earning full salary,
including benefits and job security.
C|l|zer Corps ercourages vo|urleers lo re|p slrerglrer rore|ard
secur|ly oy re|p|rg |r lre|r corrur|ly.
TWo-lr|rds ol V8 sluderls surveyed reporled lrey Wou|d la|e a
|oWer sa|ary lo Wor| lor a soc|a||y respors|o|e corpary.
P08T|VE |HPA6T8
of 60HPAN|E8
LC5
4-25
*
*
Respons|o|||ry
ro 0usromers
Tre R|grl lo 3alely
Tre R|grl lo oe rlorred
Tre R|grl lo Croose
Tre R|grl lo oe leard
P#E8|0ENT KENNE0Y'8 A8|6 #|ChT8 of
60N8UHE#8
LC5
4-26
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*
Respons|o|||ry
ro nvesrors
|ns|der Trad|ng -- ns|oers us|n pr|vare
oompany |nlormar|on ro lurrner rne|r oun
lorrunes or rnose ol rne|r lam||y ano lr|enos.
&relr|ca| oerav|or does l|rarc|a|
darage lo a corpary ard |rveslors
are crealed.
|N8|0E# T#A0|NC
LC5
4-27
*
*
Respons|o|||ry
ro Emp|oyees
Creale joos ard prov|de a crarce lor upWard roo|||ly.
(arylrg car reporl lo lop raragererl)
Treal erp|oyees W|lr respecl.
0ller sa|ar|es ard oerel|ls lral re|p erp|oyees reacr lre|r
persora| goa|s.
#E8P0N8||L|TY to
EHPL0YEE8
LC5
4-28

Source lorLune wwwforLunecom March 2009

1. pp|e
2. 8er|sr|re lalraWay
3. Toyola
1. 0oog|e
5. Jorrsor & Jorrsor
. !roclor & 0aro|e
Z. FedEx
8. 3oulrWesl |r||res
9. 0erera| E|eclr|c
10. V|crosoll
11. wa|-Varl
12. Coca-Co|a
13. wa|l 0|srey
11. we||s Fargo
15. 0o|drar 3acrs
1. Vc0ora|d's
1Z. 8V
18. 3V
19. Targel
20. J.!. Vorgar Crase
Respons|o|||ry
ro Emp|oyees
AHE#|6A'8 H08T A0H|#E0 60HPAN|E8
LC5
4-29
*
*
Respons|o|||ry
ro $oo|ery ano
rne Env|ronmenr
0ver ore-lr|rd ol Wor||rg rer|cars rece|ve lre|r sa|ar|es
lror rorprol|ls - Wro are deperderl or lurd|rg lror
olrers.
Tre greer rovererl ererged as corcerr aooul g|ooa|
Warr|rg |rcreased.
Vary corpar|es are lry|rg lo r|r|r|ze lre|r oaroon
loorpr|nrs - lre arourl ol caroor re|eased dur|rg ar |ler's
producl|or, d|slr|oul|or, corsurpl|or ard d|sposa|.
806|ETY and
the ENV|#0NHENT
LC5
4-30
*
*
Respons|o|||ry
ro $oo|ery ano
rne Env|ronmenr
Erv|rorrerla| ellorls ray |rcrease cosls oul car oller
good opporlur|l|es.
Tre ererg|rg rereWao|e-erergy ard erergy-ell|c|ercy
|rduslr|es accourl lor 8.5 r||||or &.3. joos.
#E8P0N8||L|TY to the ENV|#0NHENT
LC5
8y 2030, as rary as 10
r||||or '0reer joos W||| oe
crealed.
4-31
*
*
w|lr puo||c corcerr over lre erv|rorrerl, corpar|es are
l|rd|rg greerer Ways ol do|rg ous|ress.
3ore corpar|es are c|a|r|rg lrey are rore
erv|rorrerla||y respors|o|e lrar lrey aclua||y are, a
pracl|ce ca||ed 'greerWasr|rg.
weo s|les sucr as 0reerer Cro|ces ard 0reerWasr|rg
rdex screer ads lor greerWasr|rg.
C#EEN C#EE0
(Tr|r||rg 0reer)
4-32
*
*
$oo|a| /uo|r|n
8oc|a| Aud|t -- / sysremar|o eva|uar|on ol an oran|zar|ons
proress rouaro |mp|emenr|n prorams rnar are soo|a||y
respons|o|e ano respons|ve.
our Types of 8oc|a| Aud|t watchdogs
- $oo|a||y oonso|ous |nvesrors
- Env|ronmenra||srs
- un|on oll|o|a|s
- 0usromers
806|AL AU0|T|NC
LC5
4-33
*
*
!roress /ssessmenr
wral are elr|cs?
loW do elr|cs d|ller lror |ega||ly?
wrer laced W|lr elr|ca| d||erras, Wral quesl|ors car you
as| yourse|l lral r|grl re|p you ra|e elr|ca| dec|s|ors?
What are compIiance-based and integrity-based
ethics codes?
What are the six steps to foIIow in estabIishing an
effective ethics program in a business?
P#0C#E88 A88E88HENT
4-34
*
*
!roress /ssessmenr
wral's corporale soc|a| respors|o|||ly, ard roW does |l
re|ale lo eacr ol a ous|ress's rajor sla|ero|ders?
wral's a soc|a| aud|l, ard Wral ||rds ol acl|v|l|es does |l
ror|lor?
P#0C#E88 A88E88HENT
4-35
Answer
1) LLhlcs are socleLy's accepLed sLandards of behavlor ln oLher
words behavlors accepLed by socleLy as rlghL raLher Lhan
wrong
2) LLhlcs reflecL people's proper relaLlonshlps wlLh one
anoLher LegallLy ls narrower ln LhaL lL refers Lo laws we have
wrlLLen Lo proLecL ourselves from fraud LhefL and vlolence
3) lL helps Lo ask Lhe followlng quesLlons when faced wlLh an
eLhlcal dllemma ls Lhe proposed acLlon legal? ls lL balanced?
Jould l wanL Lo be LreaLed Lhls way? Pow wlll lL make me feel
abouL myself?
4) sllde 13 ;3) sllde 16 and 17
Answer
1) CorporaLe soclal responslblllLy (CS8) ls Lhe concern
buslnesses have for Lhe welfare of socleLy noL [usL for Lhelr
owners CS8 defenders belleve LhaL buslnesses owe Lhelr
exlsLence Lo Lhe socleLles Lhey serve and cannoL succeed ln
socleLles LhaL fall CS8 musL be responslble Lo all sLakeholders
noL [usL lnvesLors ln Lhe company
2) A soclal audlL ls a sysLemaLlc evaluaLlon of an organlzaLlon's
progress Loward lmplemenLlng soclally responslble and
responslve programs Many feel a soclal audlL should measure
workplace lssues Lhe envlronmenL producL safeLy
communlLy relaLlons mlllLary weapons conLracLlng
lnLernaLlonal operaLlons and human rlghLs and respecL for
Lhe rlghLs of local people