Is Formal Ethics Training Merely Cosmetic?
A study of Ethics Training and Ethical
Organizational Culture
Companies are provided incentives by the U.S. Organizational Sentencing Guidelines if they are to develop formal ethics programs to promote ethical organizational cultures, to decrease corporate offenses. Are companies truly developing ethic programs to ensure that they are performing ethically, or are they merely doing this for the incentives that they will receive. In my research, a study of bank employees before and after the formal ethics training was done to see the effects of the training.
“The United States Sentencing Guidelines for Organizations was introduced in 1991 to provide guidance to federal judges in crafting sanctions for a wide range of corporate crime cases”
(United States Sentencing Commission, 1991). During the 1990s and 2000s, the height of all the corporate scandals, it raises questions about a corporation’s an ability to change its culture through a formal ethics program. Are these programs used to reduce doubt, or are they really sincerely used to help improve the culture of an organization.
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This conceptual background of the Sentencing Guidelines is itself supported by the well-accepted theory of responsive regulation (Ayres & Braithwaite, 1992; Baldwin & Black, 2010).
According to this theory, self-regulation is seen as optimal and only should be replaced or supplemented by additional layers of formal controls when there is evidence of firm failures. The response regulation approach taken by the commission is that they feel that the corporation self-regulation would be accomplished through ethical programs. The ideal result that the commission is looking for a corporation to encourage ethical and discourage unethical behavior.
Hypothesis 1: Levels of observed unethical behavior will be initially lower after comprehensive ethics training than before comprehensive ethics
training. The test was conducted by comparing three different visits at a back that participated in a formal ethical program. Time one is before the training. Time two is nine months after the training, and time three is two and a half years after the training. The training sessions focused on the bank’s values and principles, cases analyses of ethical dilemmas, then end on the bank’s rules, policies, and procedures. A survey was used on 2,204 employees, with approximately 58% response rate over the three time lines. The statistical data that was collected used regression analysis to analyze the data. Ethical and unethical behavior was captured to show a willingness to report unethical behavior (adapted from Treviño et al., 1998, and Weaver & Treviño, 1999). The result of the test showed shifts in response over the time lines, which also varied across the age spectrum as well as gender. It shows that individuals see leadership differently by age, and that male and female sees results differently as well. I would be very interested in the results from this test if it was to be performed on my work center. The age range, culture, male female, veteran, civilian would all ad a great dynamic to the test. Who are more likely to report unethical practices, what others may see as unethical, some may see as opportunities. The results would shine light on the climate of the office, and would help leadership see areas that needs improvement in their leadership style as well as overall organizational objetives. Ayres, I., & Braithwaite, J. 1992. Responsive regulation: Transcending the deregulation debate. New York: Oxford University Press. Weaver, G. R., Treviño, L. K., & Cochran, P. L. 1999a. Corporate ethics practices in the niid-1990's: An empirical study of the Fortune 1000. Journal of Business Ethics, 18: 283-94. http://dx.doi.Org/10.1023/A:1005726901050 United States Sentencing Commission. 1991. United States sentencing commission: Guidelines manual. http://www.ussc.gov/Guidelines/1991_guidelines/Manual_PDF/1991 _Guidelines_Manual_Full.pdf.
The ethical code of an organization illustrates the importance of being honest, acting with integrity, and showing fairness in decision making (Bethel, 2015). Ultimately, “laws regulating business conduct are passed because some stakeholders believe they cannot be trusted to do what is right” (Ferrell, Fraedrich, & Ferrell, 2015, p. 95). In the last couple of years, culture has become the initiator for compliance, which means from the top down there has to be a commitment to act in a way that represents the company’s core values (Verschoor, 2015).
Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the
More and more people are holding businesses to a higher ethical accountability. A companies decisions effect its employees, costumers the environment, and even the community, so decisions should not be taken lightly. It also becoming more obvious that managers feel that trustworthy employees with good worth ethics are an intangible asset to their company. Managers will not receive such employees if they do not have high ethical and moral standards themselves. I think that people ultimately want ethics that will produce a productive and honest workforce that also increases profits.
After news of the scandal of Enron, one of the hottest items on e-Bay was a 64-page copy of Enron’s corporate code of ethics. One seller/former employee proclaimed it had “never been opened.” In the forward Kenneth L. Lay, CEO of Enron stated, “We want to be proud of Enron and to know that it enjoys a reputation for fairness and honesty and that it is respected (Enron 2).” For a company with such an extensive code of ethics and a CEO who seemed to want the company to be respected for that, there are still so many unanswered questions of what exactly went wrong. I believe that simply having a solid and thorough code of ethics alone does not prevent a company from acting unethically when given the right opportunity.
Effective organizations are able to clearly define their ethical expectations by setting high moral standards, writing codes of conduct, and utilizing mentoring programs. “Masters provide your servants with what is right and fair, because you know that you also have a Master in heaven” (Col. 4:1). When organizations clearly define their ethical expectations to their subordinates, they are much more likely to treat their customers fairly. Customers who are treated fairly are much more likely to be loyal consumers of the products or services that the company provides. This helps to establish a loyal customer base that a business can depend upon, thus providing a predictable source of annual revenue. If an employer treats their employees with respect, honesty, and with candor they’ll give the customer 110% (Rion, 2001).
Over the years, a number of companies have been implicated in business scandals involving issues such as stealing, cheating, violating company policy, or breaking the law. These scandals can ruin the reputation of an organization and cause the business to fail. The study of organizational behavior tells us that an organization’s culture and climate have a direct impact on the organization’s ethics. Currently, Lockheed Martin’s culture and climate contribute to a healthy and ethical environment. However, given current events the organization must continue to monitor key performance indicators and revise its ethics program as necessary.
An integrative model for understanding and managing ethical behavior in business organizations. Journal of Business Ethics, 9(3), 233-242. Doi: 10.1007/BF00382649
An organization that lacks a true culture of ethical compliance can create problems with integrity issues with stakeholders and customers. When a major company such as Enron, was structured their approach to ethics on the surface appeared to oppose progressive innovation. The policies and ethics programs were set up to protect the company and its shareholders. According to author Berenbeim, The Enron company had a detailed code of ethics it was not enough the organization needed to incorporate ethics and integrity throughout their corporate culture. Enron had to focus on business ethics issues raised by the conduct of the company’s directors, officers, accounts and lawyers (Berenbeim, 2002).
Enron was the model for rapid growth in the 1990’s but part of the culture and ethics of Enron was disturbing. Falsified documents, cutthroat competitiveness among employees and accounting schemes that hid the truth of the company’s indebtedness were just a few examples of the lack of business ethics within the organization. Perhaps a more virtuous management team could have saved Enron from collapse.
From reading this case, we realize the company did not apply the managing ethics competency in building its goals and structure. Managing ethics competency involves the o...
According to Ferrell (2004), “Organizations create ethical or unethical corporate cultures based on leadership and the commitment to values that stress the importance of stakeholder relationships. Establishing and implementing a strategic approach to improving organizational ethics is based on establishing, communicating, and monitoring ethical values and legal requirements that characterize the firm's history, culture, and operating environment” (p. 129). Ethics programs ensure satisfactory relationships with all stakeholders by aligning with all of their demands and needs, and determine conduct with customers and relationships with regulators, shareholders, suppliers, and employees (Ferrell, 2004).
Corporate governances actually illustrate that no entity or agent is immune from fraudulent practices (Arjoon, 2005 p 342-344). Therefore, it is crucial for an organization to have a stable ethically healthy corporate culture, Patagonia is "doing things right" by influencing the actions of the workforce. Through the integration of ethical conduct in an organization, employees see the complexity of making ethical choices; also, it helps the staff understand what an ethical decision entails and how to talk about hard ethical choices and taking responsibility for making moral choices carefully and
I believe that personal ethics should and will change over the span of a lifetime. In the beginning of your life, you must be selfish in order to survive and thrive. As you begin to grow as a person and develop a sense of yourself detached and apart from others you need also to begin to grow a sense of respect for the thoughts, mindsets and beliefs of those you have encountered. I do not think anyone is born knowing how to be a good person or how to live ethically yet. Most start developing a set of values from whomever raised them parents, grandparents, or guardians. Weather those set of values set us up to live an ethical way of life or not, being young we view our parents as knowledgeable and genuine believing what they say is correct no
I discovered how sticking to one’s morals should be the topmost priority for everyone involved in business, whether personal or professional. Regardless of what the consequences may be, the intensity of the problem, and the complexities it may bring, sacrificing one’s integrity should never be an option, as integrity goes hand-in-hand with the morals of an individual (Duggan & Woodhouse, 2011). They further go on to say that having individuals take part in building a code of ethics that supports employee integrity, they will act ethically. Also, I believe that companies should place more emphasis on the moral behavior of their employees, and clear-cut policies should be set regarding such ethical situations. Furthermore, I realized how serving justice while making decisions really helps in the long run, and that opting to go for the ideal rather than they deserved is not always the best option, and could hurt a company in more than one
Ethics are the values and principles one uses to guide their behaviors and decisions. In an organization, such as the field of applied behavior analysis, a code of ethics is a set of guidelines that help the practitioners within the field make uniform decisions, which protect the client, practitioner, and field’s reputation by answering such questions as: what’s the right thing to do, what’s worth doing, and what it means to be a good behavior analyst (Cooper, Heron, & Heward, 2007). It is important for behavior analysts to be familiar with the code of ethics as presented by the Behavior Analyst’s Certification Board, as well as the laws of their respective states, not only to ensure the welfare of their clients, and to avoid sanctions,