Tag Archives: business ethics

Business Ethics - Infographic

State of Business Ethics in the U.S. – Infographic

Did you know that 34% of employees think their managers are unethical?

More Americans are finding work right now, which is good news. The bad news? We may not be behaving ourselves while we’re there. Reports of workplace-ethics lapses are dropping slightly as backlash against those who speak out is rising – and there are more ominous signs on the horizon.

We invite you to view this infographic that highlights the current state of business ethics in the U.S. and offers tips for business owners to clean up their organization. Here are a few facts:

  • 1 in 2: Employees that have seen misconduct in the office
  • 1 in 5: Whistleblowers say they have faced some form of retaliation, up from just 12% five years ago (see the top five forms of retaliation in the graphic)
  • 42%: Employees who say their company’s ethics cultures are weak

business ethics infographic

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Infographic Credits, courtesy of Bolt Insurance:

Source: BoltInsurance.com

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Merl Waschler

Merl Waschler’s First Job

Merle Waschler
President and CEO, Valley of the Sun United Way

Describe your very first job and what lessons you learned from it.
As a young adult in high school and my early college years, I worked at Greystone Park Psychiatric Hospital in my hometown state of New Jersey. I consider my time at Greystone to be one of those pivotal life-shaping experiences. As an orderly and camp counselor, I worked serving the needs of mentally ill adults and children from all walks of life. Here I learned the power of empathy, patience and the true meaning of human potential. These virtues continue to shape my life and career daily.

Describe your first job in your industry and what you learned from it?
Upon graduating from Penn State University, I began my finance and accounting career at Arthur Andersen. Throughout my tenure at the firm, I sharpened my skills in business management and developed a business approach to accounting. I continue to utilize the financial management, operations and strong business ethics I learned early in my career at Arthur Andersen. I am genuinely grateful that my first industry job led me to a strong relationship with United Way. During my career at the firm, I served as a United Way loaned executive. As such, I worked alongside United Way staff helping to increase the understanding human service needs, and encouraged donations to the annual fundraising campaign. This journey has come full circle for me, as loaned executives are tremendous support to Valley of the Sun United Way.

What were your salaries at both of these jobs?
I made minimum wage at Greystone Park (around $3.25 an hour) and earned about $10,300 a year at Arthur Andersen.

Who is your biggest mentor and what role did they play?
My career and professional mentorship hit its pinnacle as Valley of the Sun United Way’s president. I am fortunate to have the counsel of leaders that span diverse industries, leadership levels and areas of expertise. As a leadership group, I look to corporate CEOs, nonprofit leaders, community philanthropists and many others for advice on pressing issues in the areas of education, income and health to guide Valley of the Sun United Way’s work. Equally important is the community’s voice to ensure pressing human care needs continue to be met. This wide-range community perspective is powerful and reflects a desire from all to create opportunities for a better tomorrow.

I continue to be inspired by my professional and community mentors and will work vigorously to improve the quality of life in our community for individuals, families and children.

What advice would you give to a person just entering your industry?
The nonprofit sector continues to innovate and transform to meet community needs. I would encourage individuals entering the field to consider that changing community conditions takes time, tenacity, innovation and a degree of risk. I’ve seen an increasing number of nonprofits moving toward the integration of business models and social change theories. All of this represents a great opportunity for individuals, organizations and the communities served by nonprofits.

With this in mind, find an organization that fits your passion and has bold community goals. Surround yourself with innovative thinkers and agents of change. Reach for the opportunity that maximizes results for you and the organization. Remember that long-term change will not be achieved overnight — look for an opportunity with longevity.

If you weren’t doing this, what would you be doing instead?
I can honestly say that I cannot imagine doing something else. We often seek to find that job we can be so passionate about that it does not seem like “work” or a “job.” I am very lucky to be living that today. It’s so rewarding to work with business, nonprofit, faith-based, government, academia and so many other sectors to strengthen the quality of life in our community each and every day. I’ve met so many inspiring individuals whose lives have been touched by Valley of the Sun United Way and our many partners. I am humbled to be serving our community and will continue to do so proudly.

Students involved in cheating are more likely to engage in unethical practices such as insider trading.

University Of Arizona Program Teaches Undergrads The Importance Of Good Ethics

In the 21st century, incidents of corporate malfeasance have become commonplace. America witnessed the implosion of the onetime energy wonder Enron, the fall of telecommunications giant WorldCom, and the collapse of mortgage miracle Countrywide, just to name a few.

Not surprisingly, questions were quickly raised about the role business schools played in such scandals, the implication being that B-schools encouraged the blind pursuit of profit maximization and a “winner-take-all” mentality. While such fiery rhetoric is provocative, it’s important to point out that such pursuits run counter to the basic tenets of long-term, sustainable business practices taught in business classes.

While B-schools certainly have a role to play in promoting ethical practices, such a tremendous responsibility can’t fall squarely on the shoulders of B-schools. It is our families and institutions in society that must also demonstrate and reinforce personal and professional ethics.

Even though a host of ethics initiatives, centers, and/or institutes bubbled up across the nation in response to highly publicized cases of corporate corruption, nearly all are situated at the graduate level among MBA students and centered on matters related to corporate governance. The Eller College of Management at the University of Arizona launched its ethics program in 2003, and it was met with interest and enthusiasm for being markedly different.

The Eller ethics program, E-tegrity (Eller Integrity), is aimed at undergraduate business students and is focused on connecting academic integrity in the classroom with future behavior in the workplace. As research suggests, student behaviors demonstrated in the classroom can carry over into careers. Put differently, students involved in cheating are more likely and at-risk to engage in unethical practices such as insider trading.

From the onset, E-tegrity was supported by Eller College Dean Paul Portney. Leadership from the top is always imperative to begin and maintain any program. Equally important is the buy-in from faculty and students. Faculty affirmed that the college had a responsibility to promote ethics and were invigorated with the prospect of establishing a culture of strong ethics. Students also proved deeply interested. With this broad base of support, E-tegrity began.

Prior to the start of the fall 2003 semester, faculty were asked to take three simple, but important measures in their classes: (1) include a college-adopted student oath statement on syllabi that addressed both academic dishonesty and academic misconduct, (2) formally handle all academic integrity cases, and (3) use the anti-plagiarism software (Turnitin.com) purchased by the college.

The code of conduct statements on syllabi would help ensure that faculty sent a consistent message to students. Formally handling cases would encourage that due process would be followed and cases would be officially reported. The anti-plagiarism software would help deter and detect plagiarism, which accounted for 70 percent of university academic integrity violations in 2002-2003. By adopting these measures, the faculty would take on the primary responsibility for the enforcement component of the program.

Because E-tegrity called for a cultural change in the college that centered on student involvement, in the same fall 2003 semester, students were invited to apply for membership to a new student organization known as the Eller Board of Honor and Integrity (EBHI). EBHI would ultimately be charged with the educational component of the program, working with students on a variety of innovative programs to help raise awareness. Members of EBHI would: (1) Develop a student oath that would be administered to students upon entry to the college; (2) offer presentations to students on the importance of ethics, whereby they not only promoted, but were expected to exemplify personal integrity and ethics among their peers; and (3) assist with the organization and delivery of a series of new and innovative programs that have come to define E-tegrity on a national scale.

Ultimately, the programs of E-tegrity are aimed at three levels: K-12, collegiate and executive. At the K-12 level, there is the High School Ethics Forum. EBHI members facilitate discussions among the city’s top high school students on matters related to personal and professional ethics. At the university level, there is the Eller Ethics Case Competition, in which top B-schools from around the country send their very best students to compete in a three-day event that challenges the ethical reasoning of students. At the executive level, there is the partnership with the Tucson Chapter of the Better Business Bureau (BBB) where students from EBHI comprise a single vote in the BBB’s Annual Business Ethics Awards process. In the near future, EBHI members will also serve as teaching assistants in the college’s first ethics course. In this capacity, EBHI members will assist with the course objective of promoting ethical decision-making.

Over the past five years, E-tegrity has gained traction and matured as an ethics program. By connecting academic integrity in the classroom with future behavior in the workplace, the college motivates students to examine their personal values and consider all stakeholders in their decision-making.E-tegrity has been the recipient of various awards for excellence, and innovation has provided meaningful guidance to B-schools around the country looking to address and support ethical behavior on the part of undergraduate students and future business leaders. The real payoff will come in several years, when we begin to graduate students whose entire college career will have taken place in an atmosphere of high standards that are clearly articulated, widely honored, and vigorously enforced.

Paul Melendez is the founder and director of the ethics program at the Eller College of Management at the University of Arizona. For more information on E-tegrity, visitugrad.eller.arizona.edu/etegrity

ethics scale

Making Ethics An Essential Part Of Doing Business

The challenge of building an ethical climate in businesses is not new. However, in the last decade, the importance of such a climate, and the heavy costs of ethical transgressions, have been prominent in the daily headlines. They reveal the impact of decades of ethical mismanagement that goes beyond explicitly breaking laws. Rather, the issue is the systematic failures of businesses in developing, executing and maintaining an infrastructure that fosters ethical decision-making.

By ethical decision-making, we mean the ability of employees to recognize and detect decision situations that risk damaging operations or investments, negatively impacting shareholders and other stakeholders, or harming the business’ reputation.

Business ethics are complex; we cannot trivialize the work of developing a culture of integrity. Nevertheless, here is a list of key guidelines that managers in companies of any size can use to build an ethical system of “doing what is right.”

The prerequisites
Start at the top — You are the ethical leaders of the business. Chief executive officers must formally commit to incorporating ethical behaviors as a guiding principle within their business’ mission statement and goals. Ethical core values should be consistently communicated, embraced and reinforced to stakeholders.

Know key laws and regulatory issues — Employees must know relevant laws such as Sarbanes-Oxley, Occupational Health and Safety, intellectual property, etc., that impact their responsibility areas. Many employees should know labor laws to avoid discriminatory behaviors. And, they should know that violating laws or trying to “get around them” will not be tolerated.

Standardize policies and procedures — This is where ethical lapses frequently occur, especially in small businesses. There is a tendency to ignore or resist putting in place formal codes of behavior because they can make the members of an entrepreneurial enterprise feel constrained, or worst of all, bureaucratic. But without written common rules and procedures for such areas as itemizing expenses, accepting gifts, incentive programs, days off, or handling customer communications, businesses lend themselves to problems of cheating, fairness and misrepresentations. This is not to suggest developing detailed manuals, but rather identifying key areas of inconsistencies that can cause financial, reputation or stakeholder harm, and then developing proactive communication to avoid potential ethical misconduct.

Implement a formal system to handle potential ethical problems — Employees should know where they can go within the company if they have or notice an ethical dilemma, particularly if they believe they cannot go directly to their manager. If a business has a human resources department, that is a logical place to go if employees are concerned about the risks of “whistle blowing.” Some businesses have designated an ethics officer, a hot line, or a suggestion box to foster an environment of integrity. Whatever approach is taken, employees must be assured that they will not suffer negative consequences for consulting with appropriate parties to discuss their concerns.

Conduct behavioral interviewing with potential employees — How do you hire employees who are ethical? Unfortunately, there are no valid and reliable “ethical behavioral” tests. Some businesses have job prospects take written exams that include questions addressing fictional ethical dilemmas; others ask those questions in interviews. These approaches may provide insights into a potential hire’s ethical reasoning and decision-making. While no one can guarantee a recruit’s future ethical behavior, the processes described above will help integrate him or her into the ethical climate of the business.

Building a foundation
Incorporate ethical behavior into performance expectations — This is a very new area. To ensure that the values of the organization are aligned with an employee’s conduct, ethics could be included as part of the performance appraisal process. Employees then become accountable not just for achieving business results, but also for how they went about accomplishing them.

Provide employees with mentors — One way to help employees in ethical decision-making is to provide them with colleagues who can offer advice and support. This can be done by establishing a formal system of mentors, or by actively encouraging employees to seek out others within the organization.

Hold periodic employee training sessions — Learning about ethics within a business context is an ongoing process. Holding periodic employee meetings where they can learn from one another about ethical dilemmas they faced and how they were resolved, situations where they should not push boundaries, and how to talk about ethical issues with others, can be invaluable in developing a collective ethical identity.

Identify and develop ethical leaders — As your business identifies employees who “do the right things,” the company should highlight their performance, reward them and promote them as role models to others.

Commitment to an ethical climate
Respond quickly to reports of unethical behavior — Investigate, and if confirmed, work to resolve them. You will want to do this, not only to reinforce a climate of ethics, but to prevent any possible escalation of an unaddressed ethical problem.

Establish and follow through with consequences for both positive ethical behaviors and misconduct — Reward employees who demonstrate sound ethical behavior, and be clear on the consequences if employees violate a law or policy, are deceptive in their dealings with others, do creative but dangerous manipulation of data or information, etc. Rewards and punishments can be tangible or intangible, but they must be consistent and appropriate to the potential or actual harm that results from the situation at hand.

Monitor ethical activity — If possible, do ethical audits. Like any business-result area, measurement is fundamental. One can accomplish this through looking at the number of ethical instances reported, doing a survey, compliance reports, etc.

Keep up to date on laws and compliance issues — Ensure that managers are current on any revisions.

CEOs have to be the ethical leaders. They need to stand for and drive the values they want their business to be known for as it succeeds in its performance. To do this, they must be clear on what their values are, communicate them regularly, establish checks and balances to ensure value commitment, and reinforce a culture of integrity. This is not an easy process, but it is a necessary condition toward building an ethical climate. And this is the ultimate leadership challenge.

Dale Kalika is a lecturer and Barbara Keats is an associate professor in the department of management in the W. P. Carey School of Business at Arizona State University. They are conducting research on Generation Y, their entrance into the work force, and ethical decision-making.