The Institutionalization of Business EthicsCHAPTER 4
•Institutionalization in business ethics relates to established laws, customs, and the expectations of organizational ethics programs considered a requirement in establishing reputation.
•Organizations need to maintain an ethical culture and manage stakeholder expectations for appropriate conduct. They achieve these ends through corporate governance, compliance, risk management, and voluntary activities. Corporate governance is structured by a governing authority that provides oversight as well as checks and balances to make sure that the organization meets its goals and objectives for ethical performance.
Risk management analyzes the probability or chance that misconduct could occur based on the nature of the business and its exposure to risky events. Voluntary activities often represent the values and responsibilities that firms accept in contributing to stakeholder needs and expectations.