Lesson Objectives:
- Codes of conduct- Ethics officers
- Ethics training and communication
- Monitoring and enforcing ethical programs
- Common mistakes in ethics programs
A code of conduct is the first element of an effective ethics program. It is a formal statement of what an organization expects from its employees. Codes of conduct that organizations can use include a code of ethics and a statement of values.Although they may contain inspirational statements, codes of conduct are more like regulatory sets of rules. They leave little to debate about certain actions. An example of something that might be found in a code of conduct is: "the organization and its employees must, at all times, comply with all applicable laws and regulations."
A code of ethics is the most extensive type of code of conduct. It consists of general principles that form the basis for rules of conduct. These principles, or general statements, may be altruistic or inspirational. Codes of ethics also usually dictate procedures for employees to report code violations, a method of due process, and disciplinary actions.
A statement of values is different from other codes of conduct because it is not intended for an organization's employees. Rather, it is intended to serve the general public and stakeholders. When developing a statement of values, management often includes input from its stakeholders. An example of something found in a statement of values is "treat your customers like human beings," which is in L.L. Bean's statement of values.
In order to be effective, an ethics program must have oversight by someone in a position of authority within the organization. These people are often referred to as ethics officers, who serve as managers of organizations' ethics and legal compliance programs.Ethics officers are responsible for determining whether an organization's behavior is in alignment with its stated goals, values, and mission.
A company's ethics officer is responsible for many things including: [1] assessing the needs that an ethics program should address, [2] creating and communicating a code of conduct, [3] training all employees on the ethics code, [4] responding to employee questions about ethical issues, [5] evaluating company compliance with government laws and regulations, [6] monitoring ethical conduct, [7] taking action on ethics violations, and [8] updating the code when necessary.
The creation of a corporate code of ethics alone is not enough address ethical issues. In order for a corporate code of ethics to be effective, employees must be trained in policies, expectations, laws and regulations. In addition, training can also make employees aware of additional resources the company provides, like support systems and personnel who can help them with ethical issues they may be facing.Many employees are unsure of how to address ethical issues when they occur. By incorporating "hands on" training, employees can learn best practices to deal with problems that are in line with the company's policies. In this training, employees can confront hypothetical dilemmas to help them develop appropriate responses. Behavioral simulation is one way to do this. In behavioral simulation, employees are given a hypothetical situation. They must then work together to develop a course of action to address the situation.
If an organization implements an ethics program just because it is required or expected, it is unlikely to be effective. For ethics training to work, top management must embrace the program and model expectations. Management must also communicate with operations managers to ensure ethical standards are followed. Management can also determine how effective the organization's ethics program is by obtaining input from employees. Anonymous surveys can be used to obtain unbiased feedback.
To be effective, an organization's ethics program must be continually evaluated. A "set it and forget it" approach generally does not work. Monitoring of the program can be done by conducting internal audits, observing employees, conducting surveys, and by other means. If employees are observed, the focus can be on how employees handle ethical dilemmas. And employee questionnaires are useful tools for measuring how ethical employees consider the organization to be. If the questionnaires reveal any problems, management will have a better understanding of what the problem is and how to resolve it.
Many companies establish hotlines that employees can call to report ethical misconduct. These hotlines are usually anonymous so employees don't have to worry about retaliation. These internal systems help management evaluate and monitor ethical performance. Although some hotlines are abused by employees who are trying to retaliate against coworkers, overall they do have a good track record.
If a company realizes that its ethical program is not fostering an ethical culture, it must take correction action to make improvements. Any deficiencies in the current system must be identified and changed. In some cases, corrective action could be an increase in enforcement of current standards. It could also involve rewarding employees who comply with corporate ethical standards and punishing those who do not comply.
Without consistent enforcement and disciplinary action, an organization's ethics program is unlikely to be effective. This is why ethics officers are needed to make sure the company's ethics program is implemented, all employees are trained on the program, and corrective action is taken when needed. If an employee is found to have violated the company's ethics code, the compliance officer is responsible for making recommendations to management on how to deal with the situation. In some cases, management may be required to report the ethics violation to a government regulatory agency.
When creating a corporate ethics program, there are six common mistakes that managers tend to make. The first mistake involves managers not considering the goals in creating an ethics program. Although most managers do recognize the general benefits of creating an ethics program, few take the time to consider the outcomes they want to accomplish. When asked about goals, many managers will respond with such generalities as deterring unethical behavior and violations of the law or gaining a competitive advantage.
Another common mistake that is made when creating an ethics program is not setting realistic and measurable objectives. Objectives can be determined by obtaining input from surveys, focus groups, and by asking employees for their opinions. It's important that the objectives management chooses are measurable.
The third common mistake is senior management failing to take ownership of the ethics program. If a company's top leadership is not on board with an ethics program, maintaining an ethical culture may not be possible. Ultimately, the responsibility to create an ethical culture falls on a company's board of directors. And according to the FSGO, ethics officers should report directly to the board of directors.
The fourth common mistake is creating program materials that don't meet employees' needs. To make sure the company is legally protected, many corporate compliance programs are actually created by attorneys. Unfortunately, the program materials attorneys create are often written in such a way that makes them unintelligible by those who read them. Because of this, feedback from employees working in various parts of the organization should be obtained and considered to make sure the program materials are actually useful.
As we've previously studied, people living in different countries have different customs, norms, and values. Another common mistake when creating an ethics program is trying to make a program that was designed for employees working in the United States work in a company's international operations. In organizations with multinational operations, management should obtain input from employees working in other countries to make sure the ethics standards that are created are universally accepted.
The final common mistake that is made when designing and implementing ethics programs is creating a program that is made up mostly of lectures. In such training sessions, participants usually retain less than 15% of the material covered. A solution that works better is to give employees the opportunity to practice with hypothetical ethical situations.
What are some of the common mistakes when implementing an ethics program?
Common Mistakes in Designing and Implementing an Ethics Program.
Not recognizing the need for a program..
Not setting realistic and measurable program objectives..
Management's failure to take ownership of the ethics program..
What is a major problem organizations tend to have when implementing organizational ethics program?
What is a major problem organizations tend to have when implementing organizational ethics program? Top managers don't integrate codes, values, and standards into their firms' corporate cultures.
Which of the following is one of the key goals of successful ethics training programs?
The goal of different types of ethics training is to teach employees to make good decisions that are consistent with your company's culture.
Which of the following is not a key element of strong ethical program?
Thus significant financial expenditure is not the key element of business ethics.