Why CSR Week 6Strategic Approaches to improving ethical behavior1. The need for organizational ethics programs

a. Organizations are held accountable for the conduct of their employeesi. Without such programs, employees may not understand acceptable behavior

b. Organizations can crate unethical corporate culturesi. Pressures to succeed

ii. Rewarding the wrong behaviorc. Stakeholders demand greater ethical and social responsibility

i. Recent corporate ethics crises have destroyed the public’s trustii. Consumers want CEOs that demonstrate trust as a priority

iii. Companies must meet the public’s demands for ethical decision making2. Code of conduct

a. Most companies begin the process of establishing organizational compliance programs by developing codes of conduct (also called codes of ethics)

b. Formal statements that describe what an organization expects of its employeesi. Reflect the board of directors and senior management’s desire for

organizational compliance with the values, mission, rules, and policies that support an ethical climate

c. Codes of conduct do not have to be so detailed that they take into account every situation

d. Codes of conduct should provide employee guidelines that provide a means of achieving organizational ethical objectives in an accepted manner

e. May address issues related toi. Policies and procedures

ii. Government law and regulationiii. Relationships with customers, suppliers, and competitorsiv. Acceptance of gifts, travel, and entertainmentv. Political contributions

vi. Expense reportingvii. Conflicts of interest

viii. Business payments3. Core values of corporate codes of conduct

a. Corporate codes of ethics often have five to seven core values that are suggested as desirable, which include trustworthiness, respect, responsibility, fairness, caring, and citizenship

b. Doesn’t resolve every ethical issue but helps deal with ethical dilemmas by limiting specific actions

4. Developing and implementing a code of ethicsa. Consider areas of risk and state values as well as necessary conductb. Identify values that specifically address current ethical issuesc. Consider values that link the organization to a stakeholder orientationd. Make the code understandable by providing examples that reflect valuese. Communicate the code frequently in language employees can understandf. Revise the code each year

5. Ethics officersa. Organizational ethics programs must also have oversight by a high-ranking

person in the organization (typically called an ethics officer) known to respect legal and ethical standards

i. Assess organizational needs and risksii. Develop and distribute the code of ethics

iii. Conduct ethics training programsiv. Establish and maintain a confidential system to respond to ethics questionsv. Make certain the company is in compliance with government regulation

vi. Monitor and audit ethics conductvii. Take action when there is a code violation

viii. Review and update the codeb. Ethics officers are often recruited from other positions within the organizationc. In most firms, they do not report directly to the board of directorsd. They are responsible not only for understanding pertinent regulations, but also

for understanding how to communicate and reinforce values6. Ethics training and communication

a. Educates employees about the firm’s policies, expectations, relevant laws and regulations, and general social standards

b. Makes employees aware of available resources, support systems, and personnel who can assist with ethics and legal advice

c. Can empower employees – ask tough questions and make ethical decisions7. Training and communication initiatives

a. Should reflect the unique characteristics of an organizationi. Size, culture, values, management style, and employee base

b. Must operate with a strong foundationi. Code, ethical concerns procedures, line and staff involvement, and executive

supportc. Are more effective if employees engage in exercises that involve solving ethical

dilemmas that relate to their jobi. Should be related to actual situations that employees may experience

8. Establishing systems to monitor and enforce ethical standardsa. An effective ethics program uses a variety of resources to monitor ethical conduct

i. Help or assistance lines1. Report and request assistance with ethical concerns2. Assists with the interpretation of company policy and specific

work-related issues3. Should be easily accessible and serve as a safety net

b. Observation and feedbacki. Determine the level of adequacy in handling ethical issues

ii. Many businesses use role-playing in the training of salespeople and managersiii. Questionnaires can reveal employees’ ethical perceptions of their company

c. Whistle blowingi. Exposing an employer’s wrongdoing to outsiders, such as the media or

government agencies9. Goal of ethics training

a. The goal of ethics training is to ensure that an employee:i. Recognizes when a situation requires ethical decision making

ii. Understands the values and culture of the organizationiii. Is able to evaluate the impact of ethical decisions on the company

10. Questions to ask before engaging in external whistle-blowing

a. Historically, whistle-blowers often lose their jobs or are forced to retire; sometimes whistle-blowers receive more personal consequences, such as threats to their safety

b. Have I exhausted internal anonymous reporting opportunities within the organization?

c. Have I examined company policies and codes that outline acceptable behavior and violations of standards?

d. Is this a personal issue that should be resolved through other means?e. Can I manage the stress that may evolve from exposing potential wrongdoing in

the organization?f. Can I deal with the consequences of resolving an ethical or legal conflict within

the organization?11. Variation in employee conduct

a. Because people are culturally diverse and have different values, they interpret situations differently and will vary in ethical decisions they make on the same ethical issues

CSR Week 7Employee relations1. Corporate social responsibility and employee engagement

a. CSR and employee engagement are two of the most discussed issues in the business world today

b. An Aon consulting survey indicates that less than one-third of employees are engaged, and that two of five employees would not recommend their employer as a place to work

c. 44% - discount bad reputationd. 50% - says organizations should have CSR policiese. 80% - would work with environmental responsible company

2. CSR can provide employees with (Maslow’s Hierarchy of Needs)a. A sense of security and safety that their material needs will be metb. Self-esteem that stems from a positive social identityc. Feelings of belongingness and social validation of important valuesd. Existential meaning and a deeper sense of purpose at work

3. Economic responsibilities to employeesa. Employee-employer contract

i. Contract includes beliefs, perceptions, expectations, and obligations that constitute an agreement between individuals and their organizations

ii. Usually informal contract but has significant impact on an employee’s actionsiii. When promises or expectations are not met, there is an enormous breach of

trust resulting in less loyalty4. Psychological contract

a. Psychological contract is the beliefs, perceptions, expectations, and obligations that make up the agreement between individuals and the organizations that employ themi. Largely unwritten

ii. Details of the contract develop through interactions with managers and coworkers and through perceptions of the corporate culture

b. When employers present information in a credible, competent, and trustworthy manner, employees are more likely to be supportive of and committed to the organization

5. Workforce reductiona. Process of eliminating employment positionsb. Also known as down sizing or right sizingc. Can involve reducing the number of employees (layoffs, terminations, incentives

for early retirement, and hiring freeze), simplifying products and processes, and decreasing quality and service

d. Makes the private relationship between employee and employer a public issue that creates concern, criticism, and economic effects on multiple stakeholders

e. This may have profound implications for the welfare of employees, their families, and the economic prospects of a geographic region and other constituents, as well as for the corporation itself

6. 3 downsizing tacticsa. Workforce reduction: aimed at headcount reduction, short term implementation,

foster transition and transformationb. Organization redesign: aimed at organization change, moderate-term

implementation, fosters transition and transformationc. Systematic redesign: aimed at culture change, long term implementation, fosters

transformation7. Workforce reduction

a. Key considerationsi. A comprehensive plan must be developed that takes into account the financial

implications and qualitative and emotional toll of the reduction strategyii. The organization should commit to assisting employees who must make a

career transitioniii. Companies must accept the consequences of terminating employees

8. How individuals can mitigate the effects of downsizinga. Employees should understand how their skills and competencies affect business

performanceb. Employees should strive for cost-cutting and conservation strategies regardless

of the employer’s current financial conditionc. Today’s work environment requires that most employees fulfill diverse and

varying rolesi. More cross training

ii. Flexible workplace9. Whistle-blowing

a. A whistle-blower is one who reports individual or corporate wrong doing to either internal or external sourcesi. The focus is usually on issues or behaviors that need corrective action

b. Managers and other employees may not appreciate reports that expose company weaknesses, raise embarrassing questions, or otherwise detract from organizational tasksi. Historically, whistle-blowers have been retaliated against, demoted, fired, and

even worse as a result of their action