What are the 4 Lenses of the ELI?

1. Facts
2. Stakeholder Assessment
1. Duties, rights, best practice, etc.
3. Identifying & Applying Standards
1. Principles, Mission, Law, Codes
2. CODEX principles
3. Creative ethical solutions (Quiet Leaders)
4. Objectivity & Transparency
1. Awareness to self-interest and hurdles

1. Passion
1. "fire in the belly"
2. Intellect
1. "think creatively"
3. Mentor
1. "a pattern of developing other people in the company"
4. Communicate
1. "inspire others in an easy, informal way"
5. Integrity
1. your "values" and ability to do what's right

"I am responsible"

• Acts are done with care and concern for others

"I am fair"

• Create a fair system, and include EVERYONE 

"I make choices that are good for everyone"

• Creates the greatest good for the greatest number of people.

"I make virtuous choices"

• Acts are consistent with a "good" character.

Being entitlted, or self-righteous.

(they have unrealistic goal expectations as well)

ELI "Guardians" - Rights/responsibilities lens

(also include their duty)

Duty: assure that the company knows the rules and their consequences if not followed

• Legal department/lawyers
• Finance team/CPA's
• Board of Directors

ELI "Guardians" - Relationship Lens

(also include their duty)

Duty: ensure that everyone is treated fairly and EQUALLY.

• Human resource department
• Quality-assurance teams
• Training & development
• Leadership teams

ELI "Guardians" - Results Lens

(also include their duty)

Duty: focus on forwarding the goals of the organization

• Sales
• Manufacturing/ R&D
• Project management
• Investors/owners

ELI "Guardians" - Reputation Lens

(also include their duty)

Duty: ensure that the external community has a favorable, but ACCURATE view of the company

• CEO's
• Marketing & Consultative sales
• Investor relations
• Public relations

We often use emotion to resolve ethical issues (rather than reason)

If we DO use reason, it is usually to justify our actions after they have been taken.

1. Is the action consistent with the actor's basic duties?
2. Does it respect the rights and other legitimate claims of the affected parties?
3. Does it reflect best practice?
4. Is it compatible with the actor's own deeply held core values?

Principles or standards of excellence for a company

(ideals, values, aspirations, etc.)

Self-chosen (or subjective) moral convictions for a company

Example: Google, "You can make money without doing evil"

Stop and think! avoid jumping to conclusions based on emotion ("what are the FACTS?")

Ask the right questions to get the right answer

(not just what you want to hear)

Explore your duties, rights, best practices, and commitments

CODEX principles

Key: "would you want your actions to be published on the front page of the newspaper?"

Be TRANSPARENT!

What is Paine's CODEX?

(just the definition here)

What are Paine's 8 CODEX principles?

(HINT: "F.P.R.T.D.F.C.R.")

1. Fiduciary: act in the company's best interest
2. Property: respect property and others' property
3. Reliability: keep your commitments
4. Transparency: conduct business openly & truthfully
5. Dignity: respect everyone's dignity
6. Fairness: treat everyone fairly
7. Citzenship: act as responsible community members
8. Responsiveness: be responsive to real claims of others.

• There was a huge fire that critically disabled the factory.
• The workers were out of a job.
• The factory was in a "bad economy" location.
• The owner (Aaron Feuerstein) had to choose whether to rebuild there, or in a new location.
• Eventually, he decided to rebuild there AND to pay the workers their salary while they were not working (aka while the factory was being built)

1. Ethics is about making the "best" right choice.
2. Doing the right thing isn't always easy.
3. Reacting emotionally ("instinctively") may not always provide the best ethical choice.

1. "Slippery slope"
2. Victim mentality
3. "Everybody does it!"
4. Cultural context (traditions)
5. Don't challenge authority (obedience)
6. "Moral muteness" (threats we see for NOT speaking up)
7. "Moral disengagement" (don't care)
8. Conflicting interests - self-interest

1. Are any options likely to be attractive or unnatractive, for the SHORT-TERM interests of the decision makers?
2. Are these interests likely to conflict with the interests of MAIN stakeholders?
3. Are any conflicting interests likely to be strong enough to significantly DISTORT the decision?

1. Quiet leaders seek to gain leadership and excellence by involving others in "big decisions", rather than doing it themselves.
2. Blindly following the rules can be just as unethical as breaking them (in a bad way)

• Don't BREAK the rules - they BEND them.

(they look for creative ways to get around the rules)

1. Risk Management (avoid unethical activities)
2. Organizational Functioning & Stability (increases the quality and commitment of employees & customers)
3. Market Positioning (ethics = good business)
4. Just the "right thing to do"

States that the purpose of a corporation is to maximize the Shareholder's wealth.

("sharing profits internally is IMMORAL")

States that businesses must:

1. Behave ethically and contribute to economic development, while improving the quality of life in their community.
2. Take responsibility for the impact of their actions on stakeholders, AND the environment.

A report that shows how a company monitors its compliance with the law, ethical standards, and international norms.

** required by law in Europe!

1. Environment: concerns over pollution, waste, natural resources, and climate change
2. Globalization: increases in Globalization has led to questions of cultural differences & best practices
3. Flow of Information: increased transparency as a result of more readily-accessible technology
4. Power of the Brand: public perception of the corporation has a HUGE impact on revenue generation

What is Carroll's Pyramid of Social Responsibility?

(levels in ASCENDING order)

(1) Economic Responsibilities

(2) Legal Responsibilities

- obey the law

- law is society's codification of what is right 

(3) Ethical Responsibilities

- Be ethical.

- Obligation to do what is right

- avoid harm

(4) Philanthropic Responsibilities

- be a good corporate citizen

- contribute resources to the community

- improve the quality of life

1. By reconcieving products and markets (?)
2. By redefining productivity in the Value Chain
3. By enabling local Cluster Development

• Helps charities raise money and public awareness
• Makes consumers feel good
• Helps corporations increase sales
• Increase brand reputation of the COMPANY and the CHARITY
• Shows that the business is responding to consumer-demands for better CSR

• Distracts attention from charities that provide a greater service to society
• May cannibalize other forms of cash and volunteer donations
• Fulfills self-interest, but discourages thoughtful considerations of real problems and personal decisions
• Increased competition creates a blur between promotions
• Masks the real ethical, legal, and environmental problems.
• Manipulates core human emotions

• Governed by a Board of Directors
• They ARE allowed to make a profit
• Required to file annual IRS tax returns

How are Nonprofits and For-Profits DIFFERENT?

(Explain how nonprofits are unique)

• No equity or shareholders to the corporation (they are owned by the community)
• Profits CANNOT be distributed to any person
• Can provide a tax deduction to anyone who donates money
• Tax exempt on income and corporate property

What are the 4 types of Sector-Bending Behaviors?

(just list them; there are notecards that ask for each one individually)

1. Imitation
2. Interaction
3. Intermingling
4. Industry Creation

When a nonprofit adopts a more structured, business-like company strategy

Example: Credit Unions

When a non-profit interacts with for-profit organizations (usually) for mutual benefit.

Competition: for-profits can push-out nonprofits from an industry area

Contractors: government, nonprofit, and for-profits utilize each other to become more effecient (example, outsourcing)

Collaborators: where nonprofits and for-profits exclusively join forces for mutual benefit.

A Hybrid Model where nonprofits actually OWN for-profit businesses

When an entirely new Industry is created, and everyone plays a role.

Example: charter schools where gov't funding & private donations are fueling both for-profit and nonprofit service providers

• Competition: challenges everyone to be more efficient
• Sustainability: giving nonprofits the ability to earn revenue reduces their dependence on donations
• Accountability: providing direct services to paying customers increases the need to deliver quality service on time.
• Financial Strength: provides the ability to be opportunistic, expand business, and compete in new industries

• Natural Resistance: traditional nonprofit leaders believe that "they are NOT a business."  Thus, by adopting traditional business strategies, they risk adverse reaction from the public.
• Social Performance - Mission Drift: adopting these strategies may distract from the original mission.
• Undermines Social Benefits: reduced engagement by volunteers and donars who want to make a contribution

1. Social enterprises use the methods of business to advance their social, environmenta, and human-justice agendas.
2. There are 2 characteristics that distinguish a Social Enterprise from other types of organizations:
1. S.E. directly address intractable social needs
2. S.E. commercial activity is a strong revenue-driver.