Managing Business Ethics: Straight Talk About How To Do It Right, 4th Edition

by Linda K. Trevio (Pennsylvania State University, USA); Katherine A. Nelson (University of Pennsylvania, USA)

• ISBN13: 9780471755258
• ISBN10: 0471755257
• Edition: 4th
• Format: Paperback
• Copyright: 2006-08-01
• Publisher: WILEY JOHN & SONS LTD

Summary

Practical strategies for promoting ethical behavior Offering a highly realistic, down-to-earth look at ethics in the workplace, Linda Treviño and Kate Nelson's Managing Business Ethics will help you identify and solve ethical dilemmas, understand why people behave the way they do, and help you design a culture that will promote ethical behavior in your organization. Throughout, the emphasis is on common, real-life work situations, including hiring, managing, assessing performance, disciplining, firing, and providing incentives for staff, as well as producing quality products and services, and dealing effectively and fairly with customers, vendors, and other stakeholders. Highlights of the Fourth Edition * Updated information relates content to current events such as the U.S. Sentencing Guidelines for Corporations. * Describes the link between ethical culture and employee engagement. * Covers new research, including the role of emotions in ethical decision making. * Presents new profiles of organizations such as McWane, Enron, Citigroup, and Marsh & McLennan. * International references reflect the realities of the increasingly global business environment.

Author Biography

Linda K. Treviño is Professor of Organizational Behavior, Cook Fellow in Busness Ethics, and Director of the Shoemaker Program in Business Ethics in the Smeal College of Business Administration at The Pennsylvania State University where she has been on faculty since 1987. She served as Chair of the Department of Management and Organization from 1999 - 2003. She holds a Ph.D. in management  from Tesas A&M University. Her research and writing on the management of ethical conduct in organizations is widely published and is internationally known.She has published about fifty journal articles and has co-authored an academic book entitled, Managing Ethics in Business Organizations: Social Scientific Perspectives, with Gary Weaver, in 2003.

Katherine A. Nelson is a founding principal of Talent Strategy Partners in Media, Pennsylvania, and a senior fellow in business ethics at the Wharton School, University of Pennsylvania. Her expertise includes ethics program design and strategic organizational communication. Kate and her partners at Talent Starategy Partners help organizations attain superior business results by focusing on the threee key levers that influence how employees deliver value—effective leadership, employee commitment, and a deliberate culture. By developing creative approaches to build a "value-mentality" among employees, they influence the cultural elements that underpin employee commitment—the engine that drives value delivery. They focus on the entire employee experience—from how well an organization lives its values and develops its leaders to how well it communicates its vision and rewards its people for outstanding performance.

Table of Contents

Preface	xv
PART I INTRODUCTION TO BUSINESS ETHICS
Introducing Straight Talk About Managing Business Ethics: Where We're Going and Why	2	(21)
Introduction	2	(1)
Taking Away the Mystery	3	(1)
Moving beyond Cynicism	3	(4)
Tools to Manage Unethical Behavior	6	(1)
Focus on the Positive, the Ethical, and the Socially Responsible	6	(1)
Is Business Ethics Just a Fad?	7	(2)
Can Business Ethics Be Taught?	9	(6)
Aren't Bad Apples the Cause of Ethical Problems in Organizations?	9	(2)
Shouldn't Employees Already Know the Difference between Right and Wrong?	11	(1)
Aren't Adults' Ethics Fully Formed and Unchangeable?	12	(3)
This Book Is About Managing Ethics	15	(2)
Bringing Ethics Down to Size	17	(1)
Ethics and the Law	17	(1)
How the Book Is Structured	18	(1)
Conclusion	19	(1)
Discussion Questions	19	(1)
Exercise: Your Cynicism Quotient	20	(1)
Notes	21	(2)
Why Be Ethical? (Why Bother? Who Cares?)	23	(43)
Introduction	23	(1)
Why Be Ethical? Why Bother? Who Cares?	23	(1)
The Motivation to Be Ethical	24	(1)
The Media Focus on Ethics and Corporate Reputation	25	(2)
Industries Care About Ethics	27	(1)
Executive Leaders Care About Ethics	28	(1)
Managers Care About Ethics	29	(2)
Employees Care About Ethics: Employee Attraction and Commitment	31	(1)
Individuals Care About Ethics: Reputation Counts	32	(1)
Does Society Care? Business and Social Responsibility	32	(6)
Economic Responsibilities	33	(1)
Legal Responsibilities	34	(1)
Ethical Responsibilities	34	(2)
Philanthropic Responsibilities	36	(2)
Government Regulation of Business	38	(2)
Is Socially Responsible Business Good Business?	40	(11)
Socially Responsible Investors	45	(1)
Avoiding the Costs of Criminal Liability	45	(4)
The Importance of Trust	49	(2)
The Best and the Worst In Us	51	(5)
Conclusion	56	(1)
Discussion Questions	56	(1)
Case: Merck and River Blindness	57	(2)
Appendix: How Fines Are Determined under the U.S. Sentencing Guidelines	59	(2)
Notes	61	(5)
PART II ETHICS AND THE INDIVIDUAL
Common Ethical Problems	66	(29)
Introduction	66	(1)
Human Resources Issues	67	(6)
Discrimination	68	(3)
Harassment, Sexual and Otherwise	71	(2)
Conflicts of Interest	73	(4)
What Is It?	74	(2)
Why Is It an Ethical Problem?	76	(1)
Costs	76	(1)
Customer Confidence Issues	77	(4)
What Is It?	77	(4)
Why Is It an Ethical Problem?	81	(1)
Costs	81	(1)
Use of Corporate Resources	81	(4)
What Is It?	82	(3)
Why Is It an Ethical Problem?	85	(1)
Costs	85	(1)
When All Else Fails: Blowing the Whistle	85	(6)
When Do You Blow the Whistle?	86	(1)
How to Blow the Whistle	87	(4)
Conclusion	91	(1)
Discussion Questions	91	(2)
Notes	93	(2)
Deciding What's Right: A Prescriptive Approach	95	(26)
Introduction	95	(1)
The Layoff	95	(1)
Prescriptive Approaches to Ethical Decision Making in Business	96	(7)
Focus on Consequences (Consequentialist Theories)	96	(2)
Focus on Duties, Obligations, and Principles (Deontological Theories)	98	(3)
Focus on Integrity (Virtue Ethics)	101	(2)
Eight Steps to Sound Ethical Decision Making in Business	103	(6)
Step One: Gather the Facts	103	(1)
Step Two: Define the Ethical Issues	104	(1)
Step Three: Identify the Affected Parties (the Stakeholders)	105	(1)
Step Four: Identify the Consequences	106	(1)
Step Five: Identify the Obligations	107	(1)
Step Six: Consider Your Character and Integrity	108	(1)
Step Seven: Think Creatively about Potential Actions	108	(1)
Step Eight: Check Your Gut	109	(1)
Practical Preventive Medicine	109	(3)
Doing Your Homework	109	(1)
When You're Asked to Make a Snap Decision	110	(2)
Conclusion	112	(1)
Discussion Questions	112	(2)
Exercise: Clarifying Your Values	114	(1)
Case: Pinto Fires	115	(5)
Notes	120	(1)
Deciding What's Right: A Psychological Approach	121	(31)
Introduction	121	(1)
Moral Awareness and Moral Judgment	121	(3)
Individual Differences, Moral Judgment, and Ethical Behavior	124	(8)
Cognitive Moral Development	125	(6)
Locus of Control	131	(1)
Cognitive Barriers to Good Ethical Judgment	132	(5)
Thinking About Fact Gathering	132	(1)
Thinking About Consequences	133	(2)
Thinking About Integrity	135	(1)
Thinking About Your Gut	136	(1)
Emotions in Ethical Decision Making	137	(1)
Reflections on the Pinto Fires Case	138	(8)
Revisiting the Pinto Fires Case	142	(4)
Conclusion	146	(1)
Discussion Questions	146	(1)
Notes	147	(5)
PART III ETHICS AND THE MANAGER
Ethical Problems of Managers	152	(27)
Introduction	152	(3)
Managers and Employee Engagement	152	(3)
Managing the ``Basics''	155	(8)
Hiring and Work Assignments	155	(2)
Performance Evaluation	157	(2)
Discipline	159	(2)
Terminations	161	(2)
Managing a Diverse Workforce	163	(6)
Diversity	164	(1)
Harassment	165	(2)
Family and Personal Issues	167	(2)
The Manager as a Lens	169	(4)
The Buck Stops with Managers	170	(2)
Managers Are Role Models	172	(1)
Managing Up and Across	173	(2)
Honesty Is Rule One	174	(1)
Standards Go Both Ways	175	(1)
Conclusion	175	(1)
Discussion Questions	176	(1)
Notes	177	(2)
Managing for Ethical Conduct	179	(35)
Introduction	179	(1)
In Business, Ethics Is About Behavior	179	(1)
Practical Advice for Managers about Ethical Behavior	180	(1)
Our Multiple Ethical Selves	180	(4)
The Kenneth Lay Example	181	(2)
The Dennis Levine Example	183	(1)
Practical Advice for Managers About Multiple Ethical Selves	183	(1)
Reward Systems	184	(9)
People Do What's Rewarded and Avoid Doing What's Punished	184	(1)
People Will Go the Extra Mile to Achieve Goals Set by Managers	184	(1)
How Reward Systems Can Encourage Unethical Behavior	185	(1)
Practical Advice for Managers About Reward Systems	186	(1)
Recognize the Power of Indirect Rewards and Punishments	187	(2)
Can You Really Reward Ethical Behavior?	189	(1)
What About Punishment?	190	(2)
Practical Advice for Managers About Punishment	192	(1)
``Everyone's Doing It''	193	(2)
People Follow Group Norms	193	(1)
Rationalizing Unethical Behavior	193	(1)
Pressure to Go Along	194	(1)
Practical Advice for Managers About Group Norms	194	(1)
People Fulfill Assigned Roles	195	(4)
The Zimbardo Prison Experiment	196	(1)
Roles at Work	197	(1)
Conflicting Roles Can Lead to Unethical Behavior	198	(1)
Roles Can Support Ethical Behavior	198	(1)
Practical Advice for Managers About Roles	199	(1)
People Do What They're Told	199	(2)
The Milgram Experiments	200	(1)
Obedience to Authority at Work	200	(1)
Practical Advice for Managers About Obedience to Authority	201	(1)
Responsibility Is Diffused in Organizations	201	(5)
``Don't Worry---We're Taking Care of Everything''	201	(1)
Diffusing Responsibility in Groups	202	(1)
Diffusing Responsibility by Dividing Responsibility	203	(1)
Diffusing Responsibility by Creating Psychological Distance	204	(1)
Practical Advice for Managers About Personal Responsibility	205	(1)
Conclusion	206	(1)
Discussion Questions	206	(1)
Case: Sears, Roebuck and Co.: The Auto Center Scandal	207	(3)
Notes	210	(4)
PART IV ETHICS AND THE ORGANIZATION
Ethical Problems of Organizations	214	(42)
Introduction	214	(1)
Managing Stakeholders	215	(2)
Ethics and Consumers	217	(16)
Conflicts of Interest	218	(6)
Product Safety	224	(4)
Advertising	228	(5)
Ethics and Employees	233	(8)
Employee Safety	234	(4)
Employee Downsizings	238	(3)
Ethics and Shareholders	241	(3)
Ethics and the Community	244	(3)
Why Are These Ethical Issues?	247	(1)
Costs	247	(2)
Conclusion	249	(1)
Discussion Questions	250	(3)
Notes	253	(3)
Ethics as Organizational Culture	256	(58)
Introduction	256	(1)
A ``Cookie Cutter'' Approach Won't Work	256	(3)
Organizations Don't Have Cookie-Cutter Ethical Problems	257	(1)
Cookie-Cutter Programs Are Superficial	257	(1)
``Ethics for a Day'' Breeds Cynicism	257	(1)
Proactively Develop an Ethical Organizational Culture	258	(1)
Organizational Ethics as a Cultural Phenomenon	259	(2)
What Is Culture?	259	(1)
Strong versus Weak Cultures	259	(1)
How Culture Influences Behavior: Socialization and Internalization	260	(1)
Ethical Leadership	261	(10)
Ethical Leaders Create Culture	261	(2)
Leaders Maintain or Change Organizational Culture	263	(8)
Formal Cultural Systems	271	(14)
Selection Systems	271	(1)
Values and Mission Statements, Policies and Codes	272	(4)
Orientation and Training Programs	276	(1)
Performance Management Systems	277	(4)
Organizational Structure	281	(2)
Decision-Making Processes	283	(2)
Informal Cultural Systems	285	(6)
Heroes and Role Models	285	(1)
Norms: ``The Way We Do Things Around Here''	286	(1)
Rituals	287	(1)
Myths and Stories	287	(2)
Language	289	(2)
Developing and Changing the Ethical Culture	291	(4)
How an Ethical Culture Can Become an Unethical Culture	292	(1)
Becoming a More Ethical Culture	293	(2)
A Cultural Approach to Changing Organizational Ethics	295	(5)
A Cultural Systems View	295	(1)
A Long-Term View	296	(1)
Assumptions About People	296	(1)
Diagnosis: The Ethical Culture Audit	296	(2)
Ethical Culture Change Intervention	298	(2)
The Ethics of Managing Organizational Ethics	300	(1)
Conclusion	300	(1)
Discussion Questions	301	(1)
Case: Videotek Corporation	301	(5)
Case: Culture Change at Texaco	306	(2)
Case: An Unethical Culture in Need of Change: TAP Pharmaceuticals	308	(2)
Notes	310	(4)
Managing Ethics and Legal Compliance	314	(42)
Introduction	314	(1)
Structuring Ethics Management	315	(3)
Managing Ethics: The Corporate Ethics Office	315	(1)
Ethics Officers	316	(1)
The Ethics Infrastructure	317	(1)
The Corporate Ethics Committee	318	(1)
Communicating Ethics	318	(26)
Basic Communications Principles	319	(3)
Evaluating the Current State of Ethics Communications	322	(1)
Multiple Communications Channels for Formal Ethics Communication	323	(2)
A Novel Approach to Ethics Communication at USAA	325	(4)
Mission or Values Statements	329	(2)
Policy Manuals	331	(1)
Codes of Conduct	332	(1)
Communicating Senior Management Commitment to Ethics	333	(9)
Formal and Informal Systems to Resolve Questions and Report Ethical Concerns	342	(2)
Using the Reward System to Reinforce the Ethics Message	344	(2)
Evaluating the Ethics Program	346	(1)
Surveys	346	(1)
Values or Compliance Approaches	347	(2)
Globalizing an Ethics Program	349	(1)
Conclusion	350	(1)
Discussion Questions	351	(1)
Notes	352	(4)
PART V ETHICS AND THE WORLD
Managing for Ethical Conduct in a Global Business Environment	356	(42)
Introduction	356	(1)
Focus on the Individual Expatriate Manager	357	(17)
The Difficulties of Foreign Business Assignments	357	(1)
The Need for Structure, Training, and Guidance	357	(1)
Foreign Language Proficiency	358	(1)
Learning About the Culture	359	(1)
Recognizing the Power of Selective Perception	360	(1)
Assumption of Behavioral Consistency	361	(1)
Assumption of Cultural Homogeneity	362	(1)
Assumption of Similarity	362	(1)
Ethics-Related Training and Guidance	363	(5)
How Different Are Ethical Standards in Different Cultures?	368	(2)
Development of Corporate Guidelines and Policies for Global Business Ethics	370	(4)
The Organization in a Global Business Environment	374	(14)
Deciding to Do Business in a Foreign Country	374	(8)
Development of a Transcultural Corporate Ethic	382	(4)
Putting It All Together: Royal Dutch Shell	386	(2)
Conclusion	388	(1)
Discussion Questions	389	(1)
Appendix: Caux Round Table Principles for Business	390	(4)
Notes	394	(4)
Index	398