Chap_20_Business_Ethics_Powerpoint

INSTITUTIONALISING
ETHICS
CHAPTER 20
Business Ethics
1Chapter 20

LEARNING OBJECTIVES
Business Ethics Chapter 20
2
 At the end of this chapter students will be able to discuss and
illustrate the:
1. Reasons for institutionalising ethics at the strategic, systems
and operational level
2. Four broad strategies for managing ethical performance
3. Systems for monitoring and evaluating ethical performance
4. Measurement and assessment of integrity in a quantitative
or qualitative manner using a number of selection methods
5. Key role players in ethics management and the linkage
between them

INTRODUCTION
Even if an organization is characterized by the
presence of i) leaders with integrity, ii) ethical
internal support, iii) code of ethics – but this
may not be sufficient to produce sustained
ethical behavior
An institutional effort built on an ethics
strategy and comprehensive ethics
management programs is required
3

INSTITUTIONALISATION
ON A STRATEGIC LEVEL
For ethics to be institutionalized:
Ethical values to be made part of the operating
consciousness of the organization
May not be easy to transform the culture in the
organization
Commitment of ethics to be reflected in vision, mission
and identity of the organization
Four broad strategies for managing ethical
performance:
i. Reactive
ii. Compliance
iii. Integrity
iv. Total aligned strategies
4

Four broad strategies for managing
ethical performance
i. THE REACTIVE STRATEGY
A defensive approach, a starting point for
many organizations
Committing the company to avoid litigation,
boycotts, strikes
Has certain dangers to be considered in
advance
Susceptible to scandal
5

ethical performance
ii. THE COMPLIANCE STRATEGY
Espouse a directional code of ethics
A moved away reactive strategy
Prevention of unethical behavior
Code becomes standard against which the company measures.
Rule based approach in managing ethics
 Limitations
Breed a mentality of what is not forbidden is allowed
Tends to disempower employees from using their own
discretion
Can lead to proliferation of ethical rule and guidelines for
conduct
6

ethical performance
iii. THE INTEGRITY STRATEGY
Based on limited number of broad and aspirational guidelines
that set the parameters of corporate ethical conduct.
To raise the level of ethical performance of the company
Characterized by internationalization of ethical values and
standards by employees.
 Limitations
The greater discretion granted in an integrity strategy can be
abused
Depends heavily on leadership of the company setting the same
tone and example.
It presupposes a clear sense of corporate identity and priorities
7

ethical performance
iv. THE TOTALLY ALIGNED STRATEGY
Organization wishing to integrate ethics
seamlessly into the purpose, mission and goals
of the organization
Reinforce ethics as part of the company’s
culture and purpose.
A TAO strategy is about congruence between
the purpose, vision and ethical values of the
organization.
8

ON A SYSTEMS LEVEL
The systems required to do this should make
provision for the introduction of an ethics
dimension in the following aspects:
1. Communication,
communicate clearly its ethics expectations to
all stakeholders.
standards for ethical conduct that have been
written into its code of ethics have to be
understood and applied by every employee.
9

ON A SYSTEMS LEVEL
2. Awareness programmes
Employees, in particular, need to know what
the organization expects in terms of ethical
awareness and ethical conduct
The code of ethics has to move beyond the
point of being words on paper – it has to
become a living document.
To accomplish this, an organization requires an
ethics awareness campaign
10

3. Ethics talk
 Is an extremely powerful tool with which
to entrench ethics in an organization
Not many employees verbalise their
thoughts in meetings and discussions.
Nor do people actually often debate ethical
issues.
11
ON A SYSTEMS LEVEL

4. An ethics helpline
Assist employees in code interpretation, or
when they are confronted with difficult
ethical issues
12
ON A SYSTEMS LEVEL

5. Confidential reporting system,
It may stand organizations in good stead to
have a separate, anonymous facility or
reporting line where unethical behaviour can
be specifically reported.
Such a reporting line satisfies the need for
confidential reporting.
13
ON A SYSTEMS LEVEL

6. Ethics newsletters
an internal mechanism to publish
accounts of good news ethics stories,
case studies of ethical dilemmas,
records of cases that indicate how
unethical behaviour was dealt with or
statistics relating to helpline queries or
confidential reporting incidents
14
ON A SYSTEMS LEVEL

7. Recruitment
If an organization wishes to build a
new ethics culture or maintain an
existing one, it has to ensure that it
attracts potential employees of integrity
15
ON A SYSTEMS LEVEL

8. Selection
Once an organization has embarked on an
ethics journey, it has no choice but to be an
ethically discerning employer. Selection
methods include:
 Using interviews to assess integrity, Reference checking,
The psychometric assessment of integrity, Integrity in
assessment centre technology, Orientation of new
employees, Performance management, Reward, Training,
Disciplinary procedures ,Monitoring and evaluation
16
ON A SYSTEMS LEVEL

INSTITUTIONALISATION ON AN
OPERATIONAL LEVEL
Ethical principles need to be applied in the daily activities
of each member of the organization
Ensure that ethical behaviour manifests itself in all jobs
and interpersonal interactions. “Ethics talk’ that can be used
to make it easier for employees regularly to consider ethics
in their decision-making
Organizations’ past and present ‘ethical heroes’ are used as
role models for ethical thought and actions.
The job of every manager in the organization to set the
climate for ethical behaviour based on mutual respect
17

ETHICS MANAGEMENT
ROLE PLAYERS
1. The CEO
the moral leader of the organization, determines the
extent to which ethical behaviour will be modelled.
 Ethical behaviour of the CEO is a more important
ethical guideline than any ethical code
2. The ethics sponsor
is that person that provides and guarantees the
resources, financial and other, that are required to
design and implement ethics management initiatives
18

ETHICS MANAGEMENT
ROLE PLAYERS
3. The ethics champion
Provide the initial impetus for an ethics management
drive, and to ensure that the ethics initiative retains
momentum for however long is required.
4. The ethics committee
Primary roles of the ethics committee comprise (a)
providing strategic direction to the organization’s long-
term ethics initiative, and (b) the overseeing of
strategy implementation
19

5. The ethics manager
is to be the executive head and manager of the
organization’s ethics function (or office).
This entails the planning, coordination,
implementation and control of the strategies,
structures and systems required to institutionalise,
monitor, and report ethics performance
6. The line manager
The role is to make ethical values and behaviour, as
defined by the code of ethics, real for all employees
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ETHICS MANAGEMENT
ROLE PLAYERS

21
THE LINK BETWEEN ROLE PLAYERS

CONCLUSION
No single strategy or process for the
institutionalization of business ethics will provide a
guaranteed or quick-fix remedy for ridding
organizations of unethical behavior
The quest for entrenching ethics in an organization is
a gradual process that will require not only
commitment to ethical behavior, but also sustained
institutionalization. The strategies and systems
described in this chapter can put organizations on that
path.
22

Chap_20_Business_Ethics_Powerpoint

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