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Chapter 2 Business Ethics and Social Responsibility2.4 The Organizational Approach to Ethics81
It’s always possible to send the wrong message. In August 2004, newspapers aroundthe country carried a wire-service story titled “Convicted CEO Getting $2.5 MillionSalary While He Serves Time.” Interested readers found that the board of directorsof Fog Cutter Capital Group had agreed to pay CEO Andrew Wiederhorn (and givehim a bonus) while he served an eighteen-month federal-prison term for bribery,filing false tax returns, and financially ruining his previous employer (from whichhe’d also borrowed $160 million). According to the board, they couldn’t afford tolose a man of Wiederhorn’s ability. The entire episode ended up on TheStreet.com’slist of “The Five Dumbest Things on Wall Street This Week.”William McCall, “CEOWill Get Salary, Bonus in Prison,”CorpWatch,print_article.php?&id=11476(accessed April 24, 2006).Tightening the RulesIn response to the recent barrage of corporate scandals, more large companies havetaken additional steps to encourage employees to behave according to specificstandards and to report wrongdoing. Even companies with excellent reputations forintegrity have stepped up their efforts.Codes of ConductLike many firms, Hershey Foods now has a formalcode of conduct11: a documentdescribing the principles and guidelines that all employees must follow in thecourse of all job-related activities. It’s available on the company intranet and inprinted form and, to be sure that everyone understands it, the company offers atraining program. The Hershey code covers such topics as the use of corporatefunds and resources, conflict of interest, and the protection of proprietaryinformation. It explains how the code will be enforced, emphasizing that violationswon’t be tolerated. It encourages employees to report wrongdoing and providesinstructions on reporting violations (which are displayed on posters and printed onwallet-size cards). Reports can be made though a Concern Line, by e-mail, or byregular mail; they can be anonymous; and retaliation is also a serious violation ofcompany policy.Hershey Foods, “Code of Ethical Business Conduct,”(accessed January 22,2012).11. Statement that defines theprinciples and guidelines thatemployees must follow in thecourse of all job-relatedactivities.Chapter 2 Business Ethics and Social Responsibility2.4 The Organizational Approach to Ethics82
KEY TAKEAWAYS•Ethics is more than a matter of individual behavior; it’s also aboutorganizational behavior. Employees’ actions aren’t based solely onpersonal values; they’re also influenced by other members of theorganization.