4. Fines & Reasons
Company Fine Reason
Arthur Andersen $500,000
Obstruction of Justice
Shredding Enron
Documents
Citigroup $5,000,000
Analyst Issued
Misleading
Information
Merrill Lynch $100,000,000
Conflict of Interest
Between Investment
Bank & Research
Dept.
Credit Suisse
First Boston $100,000,000
IPO Shares Unfairly
Distributed
Source: Business Week, Nov. 4, 2002
5. Crisis of Trust
All Corporations
Fair Amount 41%
Only A Little 35%
Not At All 13%
A Great Deal 10%
No Opinion 1%
Your Employer
A Lot 50%
Only Somewhat 39%
Not At All 8%
No Opinion 3%
Source: USA Today/CNN/Gallup Poll, Jan. 25-27, 2002
7. Codes of Ethics
Compliance-Based
Increasing control and
penalizing wrongdoers
Integrity-Based
Define guiding values
Support ethical
behaviour
Shared accountability
8. Six Steps to Improve Ethics
1. Top management support
2. Expectations begin at the top
3. Ethics imbedded in training
4. Ethics office set up
5. External stakeholders informed
6. There must be enforcement
9. Responsibility Defined
Corporate Social Responsibility
-the concern businesses have for
the welfare of society
Corporate Philanthropy –
charitable donations
Corporate Responsibility – acting
responsibly within society
Corporate Policy –position on
social and political issues
10. Reaction to the New Social
Responsibility
Many companies have undertaken a
Social Audit - a systematic evaluation
of the company’s position and progress
on social issues
Shareholders and other stakeholders
have actively encouraged companies to
become proactive on social issues
11. Conundrums of Doing Business
Globally
What do you do when:
You are forbidden to trade – Cuba
Ethical norms of the host country
violate the laws of the home country
Social responsibility has whole new
meaning
Environmental practices differ from the
home company
Notas del editor
1. Factors that influence business ethics are analyzed from three different perspectives: individual factors, organizational factors, and environmental factors.If you work through the acetate factor-by-factor, this should allow for maximum participation and full coverage. 2. Ask students which of these factors tends to predominate in terms of overall managerial behavior. Also students can be queried if these factors change noticeably over time. 3. An interesting question to pose to students is what factors most dominate their attitudes concerning ethical behavior. We’ve tried this in our classes and have received some very interesting responses. Let us know by e-mail what your students have to say.