Looking at the information available to us in resolving an ethical dilemma, and drawing conclusions based on that information in relation to our own ethical standards

when we are attempting to resolve an ethical dilemma, we follow this process

Framework developed by Lawrence Kohleberg that presents the argument that we develop a reasoning process over time, moving through 6 distinct stages

The 6 Stages are:

Level 1: Preconventional

Level 2: Conventional

Level 3: Postconventional

-Lowest level of moral development

-A person's response to a perception of right and wrong is initially directly linked to the expectation of punishment or reward

Stage 1) Obedience and punishment orientation: person is focused on avoidance of punishment and defers to power and authority

Stage 2) Individualism, instrumentalism, and exchange: person is focused on satisfying his or her own needs

at this level, person continues to become aware of broader influences outside the family

Stage 3) "Good boy/nice girl" orientation: person is focused on meting expectations of family members

Stage 4) Law-and-order orientation: person is increasingly aware of his or her membership in a society and the existence f codes of behavior

-highest level of ethical reasoning

-person make a clear effort to define principles and oral values that reflect an individual value system rather than simply reflecting the group position

Stage 5) Social contract legalistic orientation: person is focused on individual rights and the development of standards based on critical examination-that is, something is right or wrong bcs it has withstood scrutiny by the society in which the principle is accepted

Stage 6) Universal ethical principle orientation: person is focused on self-chosen ethical principles that are found to be comprehensive and consistent

Friends

Family

Ethnic background

Religion

The media

personal role models and mentors

1. What are the facts?
2. What can you guess about the facts you don't know?
3. What do the facts mean?
4. What does the problem look like through the eyes of the people involved?
5. What will happen if you choose one thing rather than another?
6. What do your feelings tell you?
7. what will you think of yourself if you decide one thing or another?
8. Can you explain and justify your decision to others?

• Truth versus loyalty
• short term versus long term
• Justice versus mercy
• Individual versus community

• Ends-based: which decision would provide the greatest good for the greatest number of people
• Rules-based: what would happen if everyone made the same decision as you
• The Golden Rule: do unto others as your would have then do unto you

4 commonly held rationalizations that can lead to misconduct/justify unethical behavior

identified by Saul Gellerman

1. A belief that the activity is within reasonable ethical and legal limits-that is, that it is not "really" illegal or immoral
2. A belief that the activity is in the individual's or the corporation's best interests- that the individual would somehow be expected to undertake the activity
3. A belief that the activity is safe because it will never be found out or publicized
4. A belief that because the activity helps the company, the company will condone it and even protect the person who engages in it

Stockholders or shareholders

employees

customers

suppliers/vendor partners

retailers/wholesalers

federal government

creditors

community

R&D

Manufacturing

Marketing & Advertising

Sales

Customer Service

the perspective that the only obligation of a corporation is to maximize profits for its shareholders in providing goods and services that met the needs of its customers

the perspective that a corporation has an obligation to society over and above the expectations of its shareholders

• Transparancy
• Knowledge
• Sustainability
• Globalization
• The failure of the Public Sector

the system by which business corporations are directed and controlled

Concerned with how wel organizations meet their obligations to their stakeholders

the way in which boards oversee the running of a company by itsmanagers, and how board members are in turn accountable to shareholders and the company

a group of individuals who oversee governance of an organization

Elected by vote of the shareholders at the annual general meeting, the true power of the board can vary from institution to institution from a powerful unit that closely monitors the management of the organization to a body that merely rubber-stamps the decisions of the chief executive officer and executive team

An operating committee staffed by members of the board of directors plus independent or outside directors

this committee is responsible for monitoring the financial policies and procedures of the organization, specifically the accounting policies, internal controls, and the hiring of external auditors

an operating committee staffed by members of the board of directors plus independent or outside directors

the committee is responsible for setting the compensation for the CEO and other senior executives.  Typically, this compensation will consist of a base salary, performance bonus, stock options, and other perks

1. Create a climate of trust and candor
2. Foster a culture of open dissent
3. Mix up roles
4. Ensure individual accountability
5. Let the board assess leadership talent
6. Evaluate the board's performance

Legislation introduced to control bribery and other less obbious forms of payment to foreign officials and politicians by American publicly traded companies

Requires corporations to fully disclose any and all transactions conducted with foreign officials and politicians, in line with the SEC providions

Includes wording from the Bank Secrecy Act and Mail Fraud Act to prevent the movement of funds overseas for the express purpose of conducting a fraudulent scheme

payments that are acceptable (legal) provided they expedite or secure the performance of a routine governmental action

Any regular administrative process or procedure, excluding any action taken by a foreign official in the decision to award new or continuing business

Examples of routing governmental action:

• providing permits, licenses, or other official documents to qualify a person to do business in a foreign country
• processing governmental papers, such as visas and work orders
• providing police protection, mail pickup and elivery, or scheduling inspections associated with contract performance or inspections related to transit of goods across a country
• providing phone service, power, and water supply; loading and unloading cardo; or protecting perishable products or commodities from deterioration

the calculation of a degree of blame or guilt that is used as a multiplier of up to 4 times the base fine.  

Score can be adjusted according to aggrevating or mitigating factors

A fine that is set high enough to match all the organization's assets-and basically put the organization out of business.  

This is warranted where the organization was operating primarily for a criminal purpose

a legislative response to the corporate accounting scandals of the early 2000s that covers the financial management of businesses.

Contains 11 sections, or titles, and almost 70 subsections covering every aspect of the financial management of businesses

each of the sections can be seen to relate directly to prominent examples of corporate wrongdoing that preceded the establishment of the legislation-the Enron scandal in particular

corporate governance is about managers fulfilling a ____________ ___________ to the owners of their companies.  

Based on trust

incorporated a code of corporate practices and conduct that looked beyond the corporation itself, taking into account its impact on the larger community

went beyond the financial and regulatory accountability 

took on a more integrated approach to corporate governance, recognizing the involvement of all corporation's stakeholders and the community in which the corporatio operates

recognized as advocating the highest standards for corporate governance

second report released 8 years after King I

fromally recognized the need to move the stakeholder model forward and consider a triple bottom line as opposed to the traditional single bottom line of profitability

Step 1) Determination of the "base fine"

Step 2) The culpability Score

Step 3) Determining the Total find Amount

in addition to monetary fines, organizations also can be sentenced to _________ for up to 5 years.  The status can include the following requirements:

• Reporting the business's financial condition to the court on a periodic basis
• remaining subject to unannounced examinations of all financial records by a designated probation officer and/or court-appointed experts
• reporting progress in the implementation of a compliance program
• being subject to unannounced examinations to confirm that the compliance program is in place and is working

Grease payments

Marketing expenses

Payments lawful under foreign laws

Political contributions

Donations to foreign charities

1. Management oversight
2. Corporate policies
3. Communication of standards and procedures
4. Compliance with standards and procedures
5. Delegation of substantial discretionary authority
6. Consistent discipline
7. Response and corrective action

Required companies to periodically evaluate the effectiveness of their compliance programs on the assumption of a substantial risk that any program is capable of failing

Required evidence of actively promoting ethical conduct rather than just complying with legal obligations

Defined accountability more clearly

• when the company, through a product or decision, wil cause serious and considerable harm to the public or break existing laws
• when the employee identified a serious threat of harm
• when the employee's immediate supervisor does not act, the employee should exhaust the internal procedures and chain of command to the board of directors
• employee must have documented evidence that is convincing to a reasonable, impartial observer that his or her view of the situation is accurate, and evidence that the firm's prctice, product, or policy seriously threatens and puts in danger the public or product user
• the employee must have valid reasons to believe that revealing the wrongdoing to the public will result in the changes necessary to remedy the situation

Under this Act, whisle blowers (referred to as "relators") who expose fraudulent behavior against the government are entitled to between 10-30% of the amount recovered

Act addressed the issue of retaliation against federal employees who bring accusations of unethical behavior

Act imposed specific performance deadlines to processing whislte blower complaints and guaranteed the annonymity of the whislte blower

Act required prompt payment of any portion of the settlement to which the whistle blower would be entitled, even if the case were still working its way through the appeals process

Act applied to federal employees

Congress took an integrated approach to the matter of whistle blowing by prohibiting retaliation against whisle blowers and encouraging the act of whistle blowing itself

Requires public companies not only to adopt a code of ethics, but also to set up an internal apparatus to receive, review, and solicit employee reports concerning fraud and/or ethical violations

• Reinstatement to the same seniority status that the employee would have had but for the adverse employment action
• Back pay
• Interest
• All compensatory damages to make the employee whole
• "special damages" including litigation costs, reasonable attorney fees and costs, expert witness fees, and "all relief necessary to make the employees whole"

SOX does not provide for punitive damages

1. a well-defined process to document how complaints are handled
2. An employee hotline to file such complaints
3. A prompt andthourough invesigation of all complaints
4. a detailed report of all investigations, documenting all corporate officers involved and all actions taken

1. Customers must be aware that companies now have the technical capability to send their personal data to any part of the world to take advantage of lower labor costs
2. As an employee, you must be aware that employers now have the cpability of monitoring every email you send and Web site you visit in order to make sure that you really are delivering on that promise of increased worker productivity

Consent in which the employee has little choice.  

for ex) when an employee receives formal notification that the company will be monitoring all email and web activity and is made clear of that notification that his or her continued employment with the company will be dependent on the employee's agreement to abide by that monitoring

Conset in which the employee has an alternative to unacceptable monitoring

for example, if jobs are plentiful and the employee would have no difficulty in finding another position, then the employee has a realistic alternative for avoiding an unacceptable policy

legal concept that means a party may be held responsible for injury or damage even when he or she was not actively involved in an incident

parties that may be charged with this are generally in a supervisory role over the person or parties personally responsible for the injury or damage

implications are that the party charged is responsible for the actions of his or her subordinates

aka transnational corporations

company that provides and sells products and serices across multiple national borders.  

compay that pursues revenue on the basis of operating strategies that ignore national boundaries as merely bureaucratic obstacles

1. do no intentional harm
2. produce more good than harm for the host country
3. Contribute to the host country's development
4. Respec the human rights of their employees
5. respect the local culture
6. Pay their fair share of taxes
7. Cooperate with te local government to develop and enforce just background insitutions
8. majority control of a firm includes the ethical responsibility of attending to the actions and failures of the firm
9. MNCs that build hazardous plants are obligated to ensure that the plants are safe and operated safely
10. MNCs are responsible for redesigning the transfer of hazardous technologies so that such technologies can be safely administered in host countries

A voluntary corporate citizenship initiative endorsing 10 key principles that focus on four key areas of concern: the environment, anticorruption, the welfare of workers around eht world, and global human rights

Relies on public accountability, transparency, and the enlightened self-interest of companies, labor, and civil society to initiative and share substantive action in pursuing the principles on which this initiative is based

Human Rights

Labor Standards

1. uphold the freedom of association and the effective recognition of the right to collective bargaining
2. uphold the elimination of all forms of forced and compulsory labor
3. uphold the effective abolition of child labor
4. uphold the elimination of discrimination in employment and occupation

Environment

1. support a precautinary approach to environmental challenges
2. undertake initiatives to promote greater environmental responsibility
3. encourage the development and diffusion of environmentally friendly technologies

Anticorruption

1. work against all forms of corruption, including extorion and bribery

guidelines that promote principles and standards of behavior in the following areas: human rights, information disclosure, anticorruption, taxation, labor relations, environment, competition, and consumer protection

represents a more governmental approach to the same issues featured in the UN's nongovernmental Global compact

a governmental initiative endorsed by 30 members of the Organization for Economic Cooperation and Develpment and 9 nonmembers (Argentina, Brazil, Chile, Estonia, Israel, Latvia, Lithuania, romania, and Slovania)

OECD Guidelines fo Multinational Enterprises principles and standards of behavior that draw on the same core values as the UN Global Compact

10 "chapters"

1. Concepts and Principles
2. General Policies
3. Disclosure
4. Employment and Industrial Relations
5. Environment
6. Combating Bribery
7. Consumer Interests
8. Science and Technology
9. Competition
10. Taxation