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Chapter 5

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Queen's University
COMM 103
Gary Bisonnette

Chapter 5: Ethics and Corporate Social Responsibility Ethics and the Individual - Reflects the moral principle beliefs about what an individual views as being right or wrong - Built around the norms or standards of conduct which society views as being acceptable behavioural practices - Can be thought of as an invisible hand which is inside each of us and guides us as we make decisions - Ethical behaviour of an individual can be influenced positively or negatively by: o Individual motivations o Cultural and environmental upbringing o Personal pressures o Lack of information and/or ignorance - Some believe that if it is legal, it is ethical - If society has demonstrated both reward and a blind eye to particular actions, then such actions will become, in the minds of some individuals as acceptable practises - Dilemma in ethics: we all have a different interpretation of what is acceptable and/or non- acceptable behaviours - In decision-making, the formation of our ethical interpretation is from 4 sources o Individual values and influences o Societal influences o Professional designation and Association influences o Business culture of the organization - In making decisions, we need to think in terms of what is in the best interest of stakeholders and the public at large rather than ourselves - To determine if the ethical issue are being effectively dealt with, utilize the “Triple Yes” Rule o Yes # 1: Does the decision which I am making fall within the accepted values or standards that typically apply to all organizational environments o Yes # 2: Would I be willing to have this decision communicated to all of my organization’s stakeholders, and have it reported on the front page of the newspaper or serve as the lead story on a news channel? o Yes # 3: Would the people in my life with whom I have a significant personal relationship (family, spouse, etc.), as well as managers of other organizations approve of and support my decision - Two key elements of the ethical decision-making process o Be sure that you have initiated the proper depth of assessment o Test interpretation with another individual to ensure all possibilities have been considered  This will bring forward potential issues which you may not have thought of - The most important skill which you can bring to the workplace is integrity Ethics and Culture - Responsibility for developing policies relating to values, ethics and financial integrity lies with the board of directors o Where they do not formally exist, advisory boards, equity partners and individuals ensure that the parameters are defined, in place and fully communicated to employees - Just as companies are vulnerable to shifts in market conditions, changes in the intensity of competitive rivalry, disruptive technologies, and changing customers, so too, are vulnerable to the serious consequences and brand equity erosion which accompanies unethical behaviour within their management and employee ranks - For Boards to effectively create a culture of ethical behaviour o Must clearly defines and establish boundaries of acceptable behaviour and create performance standards to evaluate adherence to parameters o Boundaries must be clearly understood and communicated to all employees as a policy or code of conduct o Board of Directors must appoint representative, whose responsibility is to audit managerial and employee performance in critical areas of the policy o Create and support a mechanism for the reporting of ethical concerns (whistle-blowing) , such a process ensure that employees who utilize process are not penalized - Steps to improving business ethics o Top management must adopt and unconditionally support a corporate code of conduct o Communicate code and expectations to employees o Communicate to suppliers and customers o Train management and staff in ethical implications of business decisions o Establish an ethics office (including protection for whistleblowers) o Enforce the code - To truly create a culture of ethical behaviou
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