JANE DIAZ

MR. PAJO

BS-IM

ITETHICS

 

 

BOOKREVIEW #3

BUSINESS ETHICS: ETHICAL DECISION MAKING AND CASE

4TH Edition by: Ferrell and Fraedrich

HF5387

 

 

Chapter VIII – DEVELOPMENT OF AN EFFECTIVE ETHICS PROGRAM

“A company must have an effective ethics program to ensure that all employees

understand the values of the business and comply with policies and codes of conduct

that create the ethical climate of the organization.”

 

 

The objective of this chapter are to know and understand the seen minimum

requirements of an ethical compliance program, to identify the keys of succession

including the types of training and also the goal of training, to be aware of the purpose

and implementation of an ethical compliance programs, to examine the monitoring,

auditing, and enforcement of ethical standards and to understand top management’s

role in supporting ethics programs. The goal of this is to encourage the reader to think

about the impact of once ethical decisions on business and society. There are those who

feel that ethics should arise inherently from the company’s culture and the hiring good

employees will limit unethical behavior with the organization. In this chapter an overview

of how managers can develop an organizational ethics program, it is not intended to

imply the objectives of controlling the personal ethics and moral beliefs of individuals in

the business organization.

 

Ethical behavior can be encouraged through the establishment of organizational

standards of conduct. These standards make take the form of codes of ethics or policy

statements of a certain questionable practices. The company must give enough

instruction or direction for employees to avoid risks associated with the particular

business. A code of ethics is the formal statements of what an organization expects in

the way of ethical behavior, let employees know what behaviors are accepted or

improper. Many organizations have established codes of ethics as well as strategies for

enforcing them.

 

Regardless of how the oversight of the ethics program is managed, it is important

that the managers in charge of the program are within the scope, size and history or

environment of the organization. Companies can implement ethical principles in their

organizations through training programs. Discussion conducted in ethical training

programs sometimes break down into personal opinions about what should or should not

be done particular situation.

Training and communication should reflect the unique characteristics of

organizations. If ethics training is to be effective, it should start with a foundation, a code

of ethics, an ethical concerns, staff involvements and executive priorities on ethics that

are communicated to employees.

 

Among the goals of the ethic programs might be to improve employee

understanding of ethical issues and the ability to identify them; to inform employees of

related procedures and rules. Reducing unethical behavior is important to company’s

long term relationships with their customer and community. If corrective action is not

taken against behavior that is organizationally or socially defined as unethical, and the

code of ethics is aggressively enforced and becomes part of the corporate culture, it can

be effective in improving ethical behavior within organization.

Successful ethics training is important in helping employees identify ethical

issues and providing the means to address such issues and resolve them. Employees

should seek help in the resolution of ethical problems from managers or other

designated personnel. Although personal values are involved in ethical decision making,

they are only one of the components that guide the decisions, actions and policies of

organizations. The burden of ethical behavior relates to the organization’s values and

tradition, not just the individuals who make decisions and carry them out.

 

 

Chapter IX – BUSINESS ETHICS IN A GLOBAL ECONOMY

“Cultural differences that create ethical issues in international business include

differences in language, body language, time perception and religion.”

 

 

The objectives of this chapter are to gain an appreciation of culture as a factor in

business ethics, to assess the role of multinational corporations in business, to gain also

the awareness of ethical issues globally, to examine attempts to establish a universal set

of ethics for global business, and to explore cultural relativism as a framework for global

business ethics. Global business brings together people and countries that have

different cultures, values, laws and ethical standards, The international business person

must not only understand the values, cultures and ethical standards of his or her own

country but also sensitive to those of other countries.

 

When business people travel, they sometimes perceive different modes of

operation abroad. To examine the complexities of ethics decision making in the global

arena, it must focus on the causes of conflict among people and organizations. One of

the most difficult concepts to understand and apply to the business environment is

culture. Culture is defined as everything in our surroundings made by people, both

tangible items and intangible concepts and values, language, religion, law, politics,

technology, education, social organization, general values and ethical standards are all

included in this definition. Cultural differences include differences in speech and body

language. Problems of translation into another language often make it difficult for

business people to express exactly what they mean.

According to cultural relativism, morality varies from one culture to another, and

business practices are defined as right or wrong by the particular culture. Ethical

relativism, on the other hand, assumes that only one culture defines ethical behavior for

the world.

 

Advances in telecommunications have intensified such ethical issues as

copyright unauthorized duplication of fashion designs. They have also made it easier to

carry our questionable financial activities. Companies are facing concerns about

treatment of minorities’ women, as well as the issues of child labor and employees

rights.

 

When companies market their products outside their own countries, the costs of

transportation, taxes, tariffs and other expenses can raise the prices of the products,

however, when the price increase exceeds the costs of these additional expenses, an

ethical issue emerges. Price discrimination creates an ethical issue and may be illegal

when the practice violates either country’s laws; when the market cannot be segmented

or the cost of segmenting exceeds the extra revenue from legal price discrimination or

when the practice results in customer dissatisfaction.

 

Chapter X – BUSINESS ETHICS AND ORGANIZATIONAL PERFORMANCE

“Trust is a key element in holding organizational relationship s and stakeholders

together.”

 

 

The chapter objective are to provide evidence that corporate ethical value

systems support business performance, to relate corporate citizenship to financial

performance, to show the relationship between business ethics, customer satisfaction,

corporate quality an employees commitment, to discuss the relationship and social

institutions that-building ethical systems and nation’s economic well being. Trust as a

part of business ethics, the importance of business ethics to an organization has been

debated from a variety of perspectives. Many business managers view ethics programs

in their organization as an expensive activity that provides rewards only to society so the

role ethical concerns in business relationship continuous to be misunderstood.

Many investors are concerned about business ethics, social responsibility, and

reputation of companies in which they invest, and various socially responsible mutual

funds and asset management firms can help investors purchase stock in ethical

companies. Investors recognized that an ethical climate is the foundation for efficiency,

productivity and profit.

 

This chapter provides evidence that resources spent on corporate ethics

programs is in an investment that has the potential to improve business performance.

The concept of business ethics are desirable and significant contribution to business

activities is still controversial. Because of the expense and commitment required, many

companies refuse to establish an effective ethics program as in other chapter, for they

do not believe that the benefits of an ethics programs exceeds the costs.

Trust in the organization is a two way street. Employees give and the company

also give in return. Trust employee and employer help ensure a company’s survival and

success over time. Trust is the glue that holds organizations together and allows them to

focus on efficiency, productivity and profits. Compelling trust is the highest form of

human motivation. It brings out every or very best in people, but it takes time and

patience, and it does not preclude the necessity to train and develop people so their

competency can rise that level of trust.

 

Employee commitment comes from employees who believe their future is tied to

that of the organization and their willingness to make personal sacrifices for the

organization. The more company is decided to taking care of its employees, the more

likely it is that the employees will take care of the organization.