Leader’s Ethical Guide Component Two 1

Leader’s Ethical Guide Component Two

Charlie K Pregler

Fort Hays State University

Leader’s Ethical Guide Component Two 2

Leader’s Ethical Guide Component Two

The value of all that is contained in this document is the basic blueprint for business

success. Without an ethical compass provided by the COE. A company is hap hazardously

making ethical choices. Its only when the COE and individuals in the company use a strong

DML that ethical decisions can be screened in a manner that reflects the company’s intentional

direction. It is the purpose of this document to provide the reader with a sense of direction and

ability to make the right ethical choices.

Code of Ethics

Every employee at Charlie Inc is responsible for up keeping the “Charlie” way.

C hoices~ Making choices that are moral, ethical and strive to be better than just
legal. Strive to make choices that are right for everyone.
H onesty~ In the way we conduct every transaction large or small. Remain
honest, truthful, trustworthy, and genuine.
A dvance~ Good ethical practices in the company. Sharing constructive feedback
about how every action reflects and creates a good ethical climate.
R espect~ We respect the customers, teammates, and guests at all times by
keeping your promises, being on time, being fair and being
considerate.
L oyalty~ Remaining loyal to the company and its affiliates. Not exploiting
connections for self-gain.
I tegrity~ We shall act in a manner which will uphold a high integrity. Bringing
strong moral principles into every decision we make.
E ducate~ Leading by example and showing others the correct way to conduct
oneself at all times.

We all are a piece of Charlie Inc. We need to remember what makes Charlie stand
out from other Companies.

The code of ethics is the blueprint on which the company operates. It must reflect the

values and behaviors that the company wants to live by. It should be seen as important as writing

the constitution. “In a COE, values should represent one or two-word descriptors or short

phrases of what are priorities for your company” (Dunn, 2016, p. 34). The ability to recall the
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COE is as important as the words on it. Making sure that it can be remember readily, can be done

through a variety of ways. One of which is my example above. “Mnemonic can be used to

transform abstract words into high-imagery substitutes so that they can be stored more easily in

memory” (MacDaniel, 1987, p. 35). This is what makes the device so useful. The COE can

easily be remembered as with my example it is an acronym of the company name, Charlie. With

each world standing for a core company value.

Creation of the COE should be done in a collaborative session. If Charlie Inc was a true

company it would mean bringing people into a brainstorming session. “Allow employees to state

their opinion in the brainstorming session as the diversity only makes the COE stronger and

more applicable to all personnel” (Dunn, 2016, p. 49). This is the way in which you get everyone

on board with the COE. Making a COE that is distasteful or one that doesn’t apply to the

company is just a waste. It must seek to include every member of the company to make it

effectively followed by every member of the company.

The length of the COE is critical to making the Mnemonic device work. If it can’t be

easily recalled it will not be used and practiced. “Choose an acronym or alliteration that has a

connection to your organization (three to five and no more than seven letters)” (Dunn, 2016, p.

52). The acronym Charlie is seven letters and right at the edge of the values you want.

Remembering the values stated becomes more critical than having a large number that can’t be

remembered. It’s a simple case of quality over quantity.

Decision Making Ladder

My Decision-making ladder is a designed to help guide leaders through ethical decisions.

It’s based on a step-up format but we should know that there are many types of decision making
Leader’s Ethical Guide Component Two 4

ladders not always following a step-up design. The design above is meant to take a leader

through ethical theories on the journey to a decision.

Cultural
Relativism:
Justice Theory: What does my
Fair cultural
Kantian distribution of background
Ethics: benefits and dell me about
Situational Would I want this decision
Utilitarianism : Ethics: burdens
my proposed
Greatest Behavior is action to
Benefit for the relative to the become law
greatest situation and
number after my morals
harm/benefit may adapt to
analysis do the loving
action

The first step of the ladder is set in Utilitarianism. “Utilitarianism or utility theory

proposes a harm/benefit analysis of any decision, ultimately choosing the best utility in the form

of the greatest benefit or good for the greatest number of people” (Dunn, 2016, p. 67). For

example, if my company was to suddenly lose customers and need to reduce headcount. I have a

few options available to me. I could make cuts based off of seniority or performance. Or I could

employee Utilitarianism and see what way I could benefit the most amount of people. Having a

job means having benefits and in most cases thirty hours gives employees benefits. I could

instead poll people or have meetings discussing reducing everyone’s hours down to thirty hours

to save everyone’s job. This is an example of how we can do the greatest good for the most

amount of people. Without this step in the DML one could simply choose the option best for the

company and move on without the stress of getting feedback from anyone. However, at what

cost to the company is losing trained, dedicated employees. Using the utility theory helps both

the employees and the company, thus doing the greatest good for the greatest number of people.
Leader’s Ethical Guide Component Two 5

Step two is situational ethics. “Situational ethics is a form of relativism in its belief that

morals (standards of right and wrong) are relative to any situation” (Dunn, 2016, p. 68). An

example of this would be if Charlie Inc had one department failing to meet orders week after

week. This department was filled with aging employees that simply had trouble keeping up with

the younger departments in company. Situational ethics would look at how this situation fits into

the COE. Then assess what the loving action would be. A form of loving action might be to

lower the standards for that group so they can meet the order demand. It’s a balance of what is

right in the situation at hand. Its downfall is that the loving action can begin to become a gray

area of decision making. “Although cheating is generally seen as wrong, students identify many

situations in which they feel cheating is acceptable” (Mccabe,1992 p. 365). We can quickly see

that this step takes a good amount of thought to not slide into grey areas of ethics.

The third step is Kantian ethics. “In Kant’s mind, an action was moral or ethical if that

action could become a universal law” (Dunn, 2016, p. 66). In this step, we look at our action and

see if the decision we made will be good for all both now and in the future. An example would

be with Charlie Inc. If an employee came to one of Charlie Inc’s supervisors and asked to be

allowed off because his dog died. The employee is out of time and if they take off they will be

dismissed. If I were to make an exception according to Kantian ethics, I would have to do this for

everyone. What fallout could occur from this? What if another employee has ten dogs. It

becomes an issue of overriding the employee handbook for time off. In this case we would have

no choice but to not let the individual off.

The fourth step is Justice theory. “Justice theory is an umbrella for several nuanced

theories that always consider the fair distribution of benefits and burdens in any culture, society,

family, or workplace” (Dunn, 2016, p. 71). We must make sure that decisions are fair to
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everyone. In Charlie Inc, if the plant was to take on a contract rebuilding used equipment. The

used equipment would be a dirty job, much harder than the new equipment we build. Would it be

fair to place all the rebuilding onto the second shift team? Is it fair to the workers of that shift?

The answer would be no. The workload should if possible be distributed and the burden carried

by all.

The fifth and final step of my DML is Cultural relativism. “Cultural relativism is

associated with a general tolerance and respect for difference, which refers to the idea that

cultural context is critical to an understanding of people’s values, beliefs and practices”

(Howson, 2009). In Charlie Inc, an example would be if we decided to build a new plant in a

country where it is normal to take prayer breaks throughout the day. It becomes a matter of

respecting the countries cultural beliefs and adapting the company policies to match the beliefs.

“If people are going to be successful in today's multicultural, information, world society, they

will need to develop a culturally sensitive frame of reference and mode of operation” (Rosado,

2006, p. 1).

Communication and Management Process

Hiring process-is critical in establishing the ethical climate for the organization. “The

message of the company ethics begins in the beginning or in the employee attraction or hiring

process of the company” (Dunn, 2016, p. 80). We must use the best tools at our disposal to

attract and screen potential employees. If we are seeking employees who work well in teams. We

must set up tests to check for teaming tendency’s or abilities. The job postings and recruitment

must be forward and upfront about the company culture and COE well known.
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Verbal and visual communication of ethical policies- We should seek to incorporate

visual communication of the COE and company policy throughout everything we do. That means

having posters on walls outlining ethics and practices. “Tools included a daily e newsletter,

signage located on the walk way entering the facility, signage in many parts of the facilities, note

cards printed with company values, and work computer screen savers that scrolled company

values” (Dunn, 2016, p. 90). The overall idea is to market the COE so that it becomes easily for

anyone in or around the company to know.

Role Modeling-“Role modelling is a process that allows students to learn new behaviors

without the trial and error of doing things for themselves” (Murray, 2005). The same holds true

in the company. Effective role modeling from leaders is where the employees learn what’s

acceptable and how to conduct oneself within the company. Without effective role models,

individual will test the boundaries and find the gray areas in the COE. Implementation of the

process is done by demonstrating to others through formal in informal conversations. It becomes

a trickle-down method in which the upper management leads by example.

Ethical training- “The first and most obvious ethics training must happen at orientation or

during the on boarding of new employees” (Dunn, 2016, p. 85). Its critical to establish training

on day one and keep refreshing ethical training from that point forward. Learning should and

always will be a lifelong pursuit. It should never simply end as things are always changing and

people can succumb to getting off course with what they think is right and what is right. Ethical

training seeks to be a compass for people, showing them the way back on course.

Ethical audit- Ethical audits are a piece of the CEMS, the way in which we evaluate how

well the company is doing ethically. “The ethical audit is a strong component for an effective
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CEMS. The for-profit companies in my research utilized some form of an ethical audit; all

companies felt that this was an area of organizational ethics that could be improved by using a

formal ethical audit” (Dunn, 2016, p. 98). Perhaps having better ethical audits could have

stopped the Enron, Tyco, HealthSouth, Arthur Anderson, Volkswagen, Bear Stearns and many

more from failing to match up to their COE. This is done through questionnaires, focus groups,

round table events and many other information gathering techniques.

Rewards and discipline- The Corporate ethical management system is what must be used

for discipline and reward. Rewards can be in the form of recognition, parking spots, money etc.

The goal is to have people following the COE and rewarding for it or discipling for not. Without

a system of discipline, the COE would mean nothing. “If boundaries are drawn, but the

consequences are not enforced when the boundaries are broken, the parents may be seen as

pushovers” (Dunn, 2016, p. 95). This principle applies to company discipline as well. It’s the

same thing all over in life. If you speed you get a ticket, if nobody is policing speeders would

speed without regard to limits. The same applies for rewards, people who don’t break the speed

limits are rewarded with lower insurance rates.

Conclusion

Having a solid understanding of what a COE is and how to design and live by it, is

important. It becomes the very way the company conducts itself and the image it displays to the

world. The DML is a tool to insure you have the tools to make hard decisions. It’s a process in

which we can follow to arrive at a decision we can feel good about. CEMS are what keep the

company from becoming the next Enron, Bre-X, Tyco, WorldCom, Barclays, Arthur Anderson,

Bernie Madoff, AIG.

Leader’s Ethical Guide Component Two 9

References

Dunn, D. D. (2016). Designing ethical workplaces: The Moldable Model©. New York, NY:

Business Expert Press.

MacDaniel, M. A. (1987). Imagery and related mnemonic processes: theories, individual

differences and applications. New York u.a.: Springer.

Mccabe, D. L. (1992). The Influence of Situational Ethics on Cheating Among College

Students. Sociological Inquiry, 62(3), 365-374.

Rosado, C. (2006). Cultural Relativism. Retrieved October 22, 2017, from

https://www.andrew.cmu.edu/course/80-241/guided_inquiries/articles/cultural_rel.html

Howson, A. (2009). Cultural Relativism [Scholarly project]. In Ebscohost. Retrieved October 22,

2017, from https://www.ebscohost.com/uploads/imported/thisTopic-dbTopic-1247.pdf

Murray, C. J. (2005, June 28). Role modelling as a teaching method for student mentors.

Retrieved October 22, 2017, from https://www.nursingtimes.net/roles/nurse-

educators/role-modelling-as-a-teaching-method-for-student-mentors/203794.article