Chapter 2 Business Ethics and Social Responsibility 24 The Organizational

Chapter 2 business ethics and social responsibility

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Chapter 2 Business Ethics and Social Responsibility 2.4 The Organizational Approach to Ethics 81
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It’s always possible to send the wrong message. In August 2004, newspapers around the country carried a wire-service story titled “Convicted CEO Getting $2.5 Million Salary While He Serves Time.” Interested readers found that the board of directors of Fog Cutter Capital Group had agreed to pay CEO Andrew Wiederhorn (and give him a bonus) while he served an eighteen-month federal-prison term for bribery, filing false tax returns, and financially ruining his previous employer (from which he’d also borrowed $160 million). According to the board, they couldn’t afford to lose a man of Wiederhorn’s ability. The entire episode ended up on TheStreet.com’s list of “The Five Dumbest Things on Wall Street This Week.”William McCall, “CEO Will Get Salary, Bonus in Prison,” CorpWatch , print_article.php?&id=11476 (accessed April 24, 2006). Tightening the Rules In response to the recent barrage of corporate scandals, more large companies have taken additional steps to encourage employees to behave according to specific standards and to report wrongdoing. Even companies with excellent reputations for integrity have stepped up their efforts. Codes of Conduct Like many firms, Hershey Foods now has a formal code of conduct 11 : a document describing the principles and guidelines that all employees must follow in the course of all job-related activities. It’s available on the company intranet and in printed form and, to be sure that everyone understands it, the company offers a training program. The Hershey code covers such topics as the use of corporate funds and resources, conflict of interest, and the protection of proprietary information. It explains how the code will be enforced, emphasizing that violations won’t be tolerated. It encourages employees to report wrongdoing and provides instructions on reporting violations (which are displayed on posters and printed on wallet-size cards). Reports can be made though a Concern Line, by e-mail, or by regular mail; they can be anonymous; and retaliation is also a serious violation of company policy.Hershey Foods, “Code of Ethical Business Conduct,” (accessed January 22, 2012). 11. Statement that defines the principles and guidelines that employees must follow in the course of all job-related activities. Chapter 2 Business Ethics and Social Responsibility 2.4 The Organizational Approach to Ethics 82
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KEY TAKEAWAYS Ethics is more than a matter of individual behavior; it’s also about organizational behavior. Employees’ actions aren’t based solely on personal values; they’re also influenced by other members of the organization.
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