Compliance based ethics programs are typically designed by

Discuss The Current Status And The Ethical Issues Surrounding Social Media And Employee Obligations

Discuss the social media topic Exhibit 5.3 (pg. 138) in our text and discuss the current status and the ethical issues surrounding social media and employee obligations. Be sure to include at least two recent events that have happened either locally or nationally.

who were otherwise successful are disciplined. This sends a powerful message that ethical behavior truly is valued at GE.37

Danger Signs Maintaining consistent ethical behavior by all employees is an ongo- ing challenge. What are some danger signs that an organization may be allowing or even encouraging unethical behavior? Exhibit 5.4 lists many factors that could create a climate conducive to unethical behavior.38

Regardless of your employer’s ethical climate, you are responsible for the decisions you make. It’s been said that your reputation is your most precious asset. Here’s a suggestion: when making decisions, explicitly consider their impact on your personal reputation.

You can have strong personal character, but if you “manage” ethics only by benign neglect, you won’t develop a reputation as an ethical leader. Here’s another suggestion, if you want to take ethics to the next level: Set a goal for yourself to be seen by others as both a moral person and as a moral manager—someone who influences others to behave ethically. When you are both personally moral and a moral manager, you will truly be an ethical leader.39

Corporate Ethical Standards To create a culture that encourages ethical behavior, managers must be more than ethical people. They also should lead others to behave ethi- cally.40 At General Electric, longtime (now former) chief executive Jeffrey Immelt demon- strated his concern for ethical leadership by beginning and ending each annual meeting with a statement of the company’s integrity principles, emphasizing that “GE’s business success is built on our reputation with all stakeholders for lawful and ethical behavior.”41

OshKosh provides questions for employees to ask themselves when facing ethical deci- sions: “Are my actions legal?” “Am I being fair, honest and ethical?” “Will I sleep soundly tonight?” and “What would I tell my child to do?” The implication: if you wouldn’t want a decision highlighted in the media, then don’t do it.42 This “light of day” or “sunshine” ethi- cal framework can be a powerful influence.

Such fear of exposure compels people more strongly in some cultures than in others. In some Asian countries, anxiety about losing face often makes executives resign immediately if they are caught in ethical transgressions or if their companies are embarrassed by revelations in the media. By contrast, in the United States, exposed executives might respond with indignation, intransi- gence, pleading the Fifth Amendment, stonewalling, and mounting an everyone-else-does-it self- defense, or by not admitting wrongdoing and giving no sign that resignation ever crossed their minds. Partly because of legal tradition, the attitude often is never explain, never apologize, don’t admit the mistake, and do not resign, even if the entire world knows exactly what happened.43

Ethics Codes The Sarbanes-Oxley Act required public companies periodically to dis- close whether they have adopted a code of ethics for senior financial officers—and if not, why not. Often such statements are just for show, but when implemented well, they can change a company’s ethical climate for the better and truly encourage ethical behavior. Executives say they pay most attention to their company’s code of ethics when they feel that

ethical leader

One who is both a moral person and a moral manager influencing others to behave ethically.

1. Excessive emphasis on short-term revenues over longer-term considerations.

2. Failure to establish a written code of ethics.

3. A desire for simple, quick-fix solutions to ethical problems.

4. An unwillingness to take an ethical stand that imposes financial costs.

5. Consideration of ethics solely as a legal issue or a public relations tool.

6. Lack of clear procedures for handling ethical problems.

7. Responding to the demands of shareholders at the expense of other constituencies.

EXHIBIT 5.4 Seven Danger Signs of Unethical Behavior at Your Organization

Fear of exposure compels people more

strongly in some cultures than in others.

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140 Part Two  Planning: Delivering Strategic Value

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The Digital World While corporate ethics programs work hard to ensure that employees are behaving ethically, some companies use technology to enforce compliance and limit their lia- bility if a violation occurs. Most companies have a policy that computers, cell phones, and Internet access provided by the company come with the company’s legal right to access any content.

Goldman Sachs’ compliance department monitors all e-mails and social media with an algorithm that looks for key words, which, when flagged, receive additional scrutiny to determine if there is an issue. Employees sign a document stating that they are aware e-mails are reviewed.

Examples of words and phrases monitored are “worst investment,” “I trusted you,” and many types of profan- ity. While the original list of words and phrases was pro- duced in 2008, in 2016 news agencies started publishing words and phrases used by the algorithm that had been obtained from an anonymous inside source.

Digital monitoring tools can affect employee online behavior by their power to catch transgressors, and also by the ease with which stakeholders can post proof online of behavior they think the public should know about. These provide a level of transparency not previously pos- sible, while creating additional ethics challenges. What are your reactions to this?

stakeholders (customers, investors, lenders, and suppliers) try to influence them to do so, to promote a positive image.44

Most ethics codes address subjects such as employee conduct, community and environ- ment, shareholders, customers, suppliers and contractors, political activity, and technology. The nonprofit Ethics Resource Center conducts research and assists companies interested in establishing a corporate code of ethics.45

Ethics codes must be carefully written and tailored to individual companies’ philoso- phies. Exhibit 5.5 reprints the Commitments section of The Hershey Company’s code of ethics.

To make an ethics code effective, do the following: (1) involve those who have to live with it in writing the statement; (2) focus on real-life situations that employees can relate to; (3) keep it short and simple, so it is easy to understand and remember; (4) write about values and shared beliefs that are important and that people can really believe in; and (5) set the tone at the top, having executives talk about and live up to the statement.46

When reality differs from the statement—as when a motto says people are our most pre- cious asset or a product is the finest in the world, but in fact people are treated poorly or product quality is weak—the statement becomes a joke to employees rather than a guiding light.

Ethics Programs Corporate ethics programs commonly include formal ethics codes that articulate the company’s expectations: ethics committees that develop policies, evalu- ate actions, and investigate violations; ethics communication systems that give employees a means of reporting problems or getting guidance; ethics officers or ombudspersons who investigate allegations and provide education; ethics training programs; and disciplinary processes for addressing unethical behavior.47

Ethics programs can range from compliance-based to integrity-based.48 Compliance- based ethics programs are designed by corporate counsel to prevent, detect, and punish legal violations. Program elements include establishing and communicating legal standards and procedures, assigning high-level managers to oversee compliance, auditing and monitoring compliance, reporting criminal misconduct, punishing wrongdoers, and taking steps to pre- vent offenses in the future.

Such programs can reduce illegal behavior and help a company stay out of court. But as a former chair of the Securities and Exchange Commission said, “It is not an adequate ethical standard to aspire to get through the day without being indicted.”

Integrity-based ethics programs go beyond the mere avoidance of illegality; they are con- cerned with the law but also with instilling in people a personal responsibility for ethical

compliance-based ethics programs

Company mechanisms typically designed by corporate counsel to prevent, detect, and punish legal violations.

integrity-based ethics programs

Company mechanisms designed to instill in people a personal responsibility for ethical behavior.