Willis 1

Submitted by Steve Willis to Professor Mir Blazevic University of Wisconsin Ethics in the Workplace: The Implications of Ethics Decisions

Ethics, Values, and Social Responsibility in Business

Due to recent blunders across many economic forefronts, ethical responsibility in corporations has come under the spotlight. As downfalls in the financial and mortgage sectors have determined that, there lays a lapse of ethics across the board through the decisions that people have made. The downfall of companies like with Enron (Kadlec, Weisskopf and Zagorin, 2002), scandals such as the Bernie Madoff affair (Lenzner, 2008), other fraudulent activities including insider trading (La Roche, 2012) proves that ethics is missing in corporate culture, if not absent in many leaders decisions, thus affecting a greater whole. The result of these unethical decisions in various corporations is a loss of the worst kind which is the loss of trust and integrity of those individuals and organizations directly affected and in the marketplace. The other problem is that once a violation of ethics is reported will it be appropriately and thoroughly handled as opposed to just summarily dismissed which can lead to further ethical dilemmas in the work place. As evidenced by corruption and misconduct occurring at even the highest levels and persisting because of complacence and fear. If employees cannot trust managers to do the right thing, then this implicit lack of trust and integrity diminishes the capacity to maintain and establish an ethical culture in the workplace. The recent Occupy Wall Street Movement is further evidence resulting in the far-reaching consequences that such ethics decisions have had on society. As a result of unethical misconduct in the financial sector, the SEC has recently imposed charges on the former executive of Bank of America, Ken Lewis (Ellis, 2010). Other recent charges have been imposed by the SEC which alleged that executives schemed to fraudulently over state the companys income by more than $400 million and falsely record a profit rather than an actual loss illegally violating ethical and legal standards (Newsroom Americal Feeds, 2012). Corporations however are nothing more than the individuals who participate in them, and their decisions have very clear-cut implications as they unfold. Taking urgent action is imperative when unethical situations arise. When an organizations ethical culture is clearly defined by codes of conduct and ethical expectations, therein lays in part a solution to avert and avoid ethical dilemmas, and possible missteps that may lead to a further snowball effects. Doing what is right, holding people accountable, and addressing any problems with immediate urgency are the basic ethical premises. It takes courage to stand up for what is ethical, as proven by responsible leaders who enforce and exemplify such ethical standards. When ethics prevails, all stakeholders have a definitive relationship of trust with whom they are involved. The other detail is that by organizations establishing trust, the consumers can know with certainty, that the businesses they patronize do not have any violation of ethical implications. This may not be concerning to all, it does however set the tone for consumer security, and faith in the fact, that by patronizing such businesses, consumers are in fact contributing and engaging in an equal and ethical relationship.

Willis 2

Ethical Issues and Dilemmas in the Workplace

The basics of ethics come down to taking responsibility and it takes the leaders and heads of organizations to ensure that ethics in the workplace is a paramount priority over all others. Without the leadership direct involvement from at the top levels of organizations, an ethical infrastructure is unlikely to develop. Executives and middle managers must also exhibit the culture of ethics through their decisions as well as actions by modeling ethical behaviors which are also expected by the rest of the organization and its employees. The words integrity and honesty may easily become blurred, as most corporations operate in a results and profit driven mode. As a companys directions are disseminated within an organization, it is important for a clear establishment of effective and ethical communication from the top-down in order for the middle and base managers to carry out their specific duties without creating mixed or vague messages. By communicating ethically this provides a way for the achievement of results by all personnel without causing or implying that they cross any ethical boundaries. Essentially, people can do their jobs and perform effectively without having to worry about negative repercussions or losing their jobs because of just having to get their job done or turning a blind eye to ethics. Company budget cuts and layoffs come to focus as the recent slow down and economic depression in the economy has had a cataclysmic response in the marketplace. Major retailers like Lowes, Best Buy and others have been forced to shut down numerous stores in an efforts to stop from financial hemorrhaging and alleviate the strain on its bottom line (Burritt, 2011)(USA Today). By closing out at least 50 stores, Best Buy is scheduled to save at least $800 million in salaries and operating costs in its cost reduction strategy (USA Today, 2012)(Richardson, 2012). At times, taking a tough line or a decisive stand in a muddle of ambiguity is the only ethical thing to do. If a manager is indecisive about a problem and spends time trying to figure out the good thing to do, the enterprise might be lost (McCoy, 1997, p. 70). The ethics in firing its loyal employees is all part of the business, protecting the business itself and its stakeholders and shareholders. In some cases, employee loss can be avoided by reassigning jobs. However, with big box retailers as Best Buy and Lowes the ethical action of keeping its employees is not the case (Burritt, 2011)(USA Today, 2012). When other ethical dilemmas present such as with teachers altering test scores, ethical misconduct in government, and privacy of personal information in the work place, the questions turns to: 1. how to do what is right, 2. who will take responsibility by taking ethical corrective action (Richardson, 2012). In order to ensure ethical responsibility, the morals of the article The Parable of Sadhu suggest, it takes only one individual to affect the entirety of an organization and its stakeholders: Business ethics, then, has to do with the authenticity and integrity of the enterprise. To be ethical is to follow the business as well as the cultural goals of the corporations, its owners, its employees, and its customers. Those who cannot serve the corporate vision are not authentic business people and, therefore, not ethical in the business sense. (McCoy, 1997, p. 70)

Willis 3

Thus, it takes only one individual to do what is right and when the hard choice is imminent that said individual must stand for what is ethical regardless of the opposition, or complacency of others, or backlash. Therein lays the solution as to how one persons fervor can affect the entirety in a group dynamic. Standing up for what is right, as opposed to allowing unethical decisions to take place is the quintessential trait, and tantamount to establishing ethics and an ethical culture.

Business and Society: Environmental Issues

Contemporary

Ethical,

Social,

and

In Article 11 Are You Too Family Friendly?, one issue is that single employees felt resentment towards parents who reap the rewards of the family-friendly benefits their organization provides (Wells, 2007). As the article reports, these tensions are rooted in the misalignment between the traditional workplace and the largely nontraditional workforce (Wells, 2007, p. 36). People do not always realize the additional responsibilities involved with family and active parenting. Most family members contribute and perform non-paid work outside of the work place which contributes to their families. This work is sometimes equal to or more than the amount of paid hours of the work place. Single persons have an ability to use their time for leisurely activities. They should truly not feel any resentment towards employees with family based on not having the additional responsibilities of non-paid work involved in family and parenting. The reason companies may grant such flexibility to their employees is in order to avert and alleviate the pressures involved in work-family balance issues. By granting employees options to leave early, or take a flex day, permits employees to have the balance they need, considering they also need to provide equal attention to both their work and family lives In addition, employers have numerous effects on peoples lives. As a majority of employees tend to put work first, they make and base life decisions around work and their corresponding schedules. The impact of employers decisions on behalf of benefits and employment culture can significantly contribute to individuals actions. Work place misconduct can occur because of employees striking back at their work place organization. Ultimately, companies such as Recreational Equipment Incorporated (REI) supply their employees with a vast amount of employment benefits as well as other work place perks (REI, 2012). REI provides its employees with sufficient support in order to enable the possibility of a work-family balance. REI offers a Work/Life employee [assistance] programoffers access to services, referrals, three inperson visits and support to help us all in our quest to live and work well (REI, 2012). REI also states, the degree to which our employees lead balanced lives impacts our bottom line (REI, 2012). REI supplies its employees with training and developmental tools in order for them to educate and lead fulfilling, prosperous, and opportunistic careers of mobility. In contrast to benefits, the corporate social responsibility extends beyond the inner working of the company to its consumers or stakeholders. When things go wrong, corporate executives should be held accountable. For example, to foster community relations Wal-Mart recently announced that it is going green across all of its companys manufacturing sites. This however is a smoke screen which covers up the fact that egregious ethical violations in both human living and labor conditions have been problematic for Wal-Mart overseas, predominately in China (Greenwald, 2005). Workers face unacceptable conditions hard-working, poor and virtually

Willis 4

unprotected on the job. [for a] wage of less than $3 dollars per day (Holland, 2007). The exploitation of human capital and taking advantage of the lack of work place standards and laws is an abhorrent and abominable act. However, executives at Wal-Mart do not face prosecution or major scrutiny as their consumers continue to patronize their business; the public is also not truly aware of the real problems, created by this multi-national corporation operating unethically across transnational borders. The additional piece is that in a lapse of ethical decision making and by taking advantage of people serves to create a backlash of problems concerning quality. When an unsafe product hits the market, the results can be devastating as seen by the deaths of babies due to a 2008 case of tainted baby formula that contained melamine, an industrial chemical (Bradsher, 2008). Other products have made it to market but it is the response of companies to correct the problem. As seen with a Tylenol recall, costing an estimated $50 million in order to ensure and maintain its integrity with the publics opinion of the company and its consumers (Richardson and McCord, Trust in the Marketplace, 2000).

Ethics and Social Responsibility in the Marketplace

The article Honest Innovation states, Ethics in the market place comes down to honest innovation (Hodock, 2009, p. 98). Companies have an ethical responsibility to tell the truth to its consumers; even more so, companies also have a social responsibility in the market place. The problem in ethical social responsibility starts within organization as an innovation team can manipulate the numbers in order to push products to the market, despite any quality issues they may have (Hodock, 2009, p. 99). Because of the rampant push to get products to the market place serious ethical issues can become overlooked as group thinking presses the issue of conformity. The issue being unethical dishonesty within an organization, and its marketing platforms require effective oversight. When companies drive harmful products to the market, the ethical implications go beyond just that. The detrimental effects of dishonesty and complacency may result in harm to human health as well as death. When companies cover up mistakes, they should be held directly responsible. Companies have an ethical obligation to disclose such mistakes as well as correct issues of harmful products. Press release statements and spreading the news when things go wrong with their products is the ethical responsibility of every corporation and organization. When try to pull the wool over the public eye the response can be devastating as consumers lose faith and brand loyalty. Another factor in corporate social responsibility is when companies use harmful chemicals in their manufacturing process. Harmful chemicals such as vinyl chloride (VC) are known to cause harm to human health (Sass, Castleman and Wallinga, 2005). A National Institute of Health article stated how this information was also suppressed, VC and PVC manufacturers also delayed public release of findings of liver angiosarcoma in VC (Sass, Castleman and Wallinga, 2005). Other companies like DuPont purport to provide people with the products they need when in fact the chemicals leeching from their products do harm to human health. (Eilperin, 2006).

Willis 5

A 2006 Washington post article, titled Harmful Teflon Chemical To Be Eliminated by 2015, states: Eight U.S. companies, including giant DuPont Co., agreed yesterday to virtually eliminate a harmful chemical used to make Teflon from all consumer products coated with the ubiquitous nonstick material. Although the chemical would still be used to manufacture Teflon and similar products, processes will be developed to ensure that perfluorooctanoic acid (PFOA) would not be released into the environment from finished products or manufacturing plants. (Eilperin, 2006) Even after a supposed removal of harmful chemicals in consumer products, how will the consumers know whether or not there are trace amounts of chemicals left? Regulatory organizations seem complascent as well considering they work closely with the corporations. It is difficult to know what goes on behind closed door meetings when there is no transparency. Companies such as Monsanto have created an empire of genetically modified (GM or GMO) products and seeds. GMO products are supposed to be safe for human consumption, yet there are negative implications calling it the global genocide (Huff, 2011). The debate over regulatory channels and science and technology should not be yielded to public consumers. Rather, corporate social responsibility is the ethical duty of corporations and individuals who make singular decisions about whether to proceed with questionable, faulty, or harmful products. The harshest penalties for corporations and executives in charge must be administered when deception and products pushed to market have occurred. There are clear and ethical implications indicate the ethical responsibility of doing business, as well as when complacent manufacturing practices continually occur. Retribution for such egregious violations of unethical activity in corporations and organizations must come to public attention and be given transparency and full disclosure. This will ensure safety to all stakeholders and prevent ethical issues from arising.

Developing the Future Ethos and Social responsibility of Business

Cisco stands out as a leader in corporate ethics as they have established a clear code of ethics by reinforcing them with training and certification. By Cisco training its employees in the corporate code of ethics, Cisco is reinforcing its ethical expectations so that employees will exhibit ethical behaviors. Such ethics culture also enables employees to make ethical decisions and know that their work place culture encourages it. Training is a necessary component in building and establishing a culture of ethics and guidelines so that the communication of these standards are implicit with both executives of corporations and its work force in order to prevent any mishaps and avoid any unethical decisions. The resulting improvements will affect any operational inefficiencies, customer service issues and logistical problems. As a secondary premise for the development of ethics in a corporate stratosphere, human resource practices ultimately shape and define a companys work force. By hiring people of character and integrity and by making these practices a priority, companies will benefit from having a trustworthy reputation, but also trust the people that drive the business (Telford and

Willis 6

Gostick, 2005). As ethics becomes a more important focus to organizations, it is imperative to ensure that filling jobs is not performed unconsciously. The act of hiring persons of virtuous character and integrity will significantly establish an ethical baseline. It seems that a main problem with ethics is complacency because of the pressures of societal conformity. However, the systemic influence of conformity has had a powerful impact on how ethics is portrayed through channels such as with media, distorting and corrupting the foundations of ethics in peoples minds. This is one possible reason for such complacency in individuals actions; since media is fictitious however, there are no real consequences, yet unethical decisions have caused very real outcomes affecting very real lives. The effects of media are contrasted by the ethical dilemmas created when someone does the right thing or blow the whistle. In such cases, correcting unethical situations may result in causing harm, damage, or negative retribution in individuals work and personal lives. Thus, the conflict of dealing with ethical dilemmas causes people to act in a complacent manner, as well as lack the courage to step up and say anything. Hence, control and fear diminish peoples ability to take the necessary actions when unethical situations are presented and when it comes time to report or correct such ethical violations that they may in fact know of. Blowing the whistle or reporting ethics violations is sometimes seen as a lack of naysayers loyalty to ones company. Some employees condemn and frown upon those who do report ethical violations, and these employees remain work-loyal and ethically complacent. Unethical corporations, companies, or people want others to think that it is bad to tell the truth. In creating coercive and also passive employees, companies may continue to act unethically. There are however many protections to whistle blowers in the event of reporting to ensure their anonymity and legal protection.

Final Thoughts
A final thought on ethics, is that whether a person knows what is ethical or not, does not mean that they will always do what is right, or make a necessary call-out so that proper actions can take place to address ethical issues. This was apparent through the class, in some cases, as many of my peers did not want to answer the hard questions about what they would do in hypothetical ethics situations. People may be informed of, and apprised of ethics, and ethical behavior within their organizations; as well know commonly established ethical standards and laws of our society, but this does not always inform the decision process of individuals and their corresponding actions. Doing what is ethically right takes courage, but ultimately ethical decisions lay in the hands of the individuals choosing, to make the right choices.

Works Cited
Bradsher, Keith. China Begins Inquiry Into Tainted Baby Formula . 12 September 2008. Website. 26 March 2012. <http://www.nytimes.com/2008/09/13/world/asia/13milk.html>.

Willis 7

Burritt, Chris. Lowes to Close 20 U.S. Stores, Slow North American Openings. 17 October 2011. Website. 26 March 2012. <http://www.businessweek.com/news/2011-10-17/lowe-s-to-close-20-u-s-storesslow-north-american-openings.html>. Eilperin, Juliet. Harmful Teflon Chemical To Be Eliminated by 2015. 26 January 2006. Website. 26 March 2012. <http://www.washingtonpost.com/wpdyn/content/article/2006/01/25/AR2006012502041.html>. Ellis, David. Ex-BofA chief Lewis charged with fraud. 4 February 2010. Website. 26 March 2012. <http://money.cnn.com/2010/02/04/news/companies/bank_of_america/index.htm>. Hodock, Calvin. "Honest Innovation." Business Ethics. New york: McGraw-Hill Companies, Inc., 2012. 98-101. Book. Holland, Joshua. Wal-Mart's 'China Price'. 7 November 2007. Website. 26 March 2012. <http://www.alternet.org/module/printversion/27829>. Huff, Ethan A. Monsanto, GMOs, and the global genocide of science and humanity. 11 October 2011. Website. 26 March 20122. <http://www.naturalnews.com/033936_Monsanto_genocide.html>. Kadlec, Daniel, et al. Enron: Who's Accountable? 13 Janurary 2002. Website. 26 March 2012. <http://www.time.com/time/magazine/article/0,9171,1001636,00.html>. La Roche, Julie. Martha Stewart Back Finally On The Board After Five-Year SEC Ban. 11 September 2011. Website. 26 March 2012. <http://articles.businessinsider.com/2011-0928/wall_street/30211763_1_sam-waksal-stock-sale-imclone>. Lenzner, Robert. Bernie Madoff's $50 Billion Ponzi Scheme. 12 December 2008. Website. 26 March 2012. McCoy, Bowen H. "The Parable of the Sadhu." Business Ethics. Ed. John E Richardson. 11/12. Vol. 23. New York: McGraw-Hill Companies, Inc., 2012. 23 vols. 66-71. Book.

Willis 8

Newsroom Americal Feeds. SEC Charges Three Mortgage Executives With Fraudulent Accounting Maneuvers in Midst of Financial Crisis. 13 March 2012. Website. 26 March 2012. <http://www.newsroomamerica.com/story/224607/sec_charges_three_mortgage_executives_with _fraudulent_accounting_maneuvers_in_midst_of_financial_crisis.html>. REI. Pay & Benefits Total Rewards at REI. 2012. Website. 26 March 2012. <http://www.rei.com/jobs/pay.html>. . REI's Culture & Values. 2012. Website. 26 March 2012. <http://www.rei.com/jobs/culture.html>. Richardson, John E and Linnea Bernard McCord. "Trust in the Marketplace." Business Ethics. Vol. 23. New York: McGraw-Hill Companies, Inc., 2012. 23 vols. 78-80. Book. Richardson, John E, ed. Business Ethics. 11/12. Vol. 23. New York: McGraw-Hill Companies, Inc., 2012. 23 vols. Book. Sass, Jennifer Beth, Barry Castleman and David Wallinga. Vinyl Chloride: A Case Study of Data Suppression and Misrepresentation. 24 March 2005. Website. 26 March 2012. <http://ehp03.niehs.nih.gov/article/fetchArticle.action?articleURI=info%3Adoi %2F10.1289%2Fehp.7716>. Telford, Dana and Adrian Gostick. "Hiring Character." Business Ethics. New York: McGraw-Hill Companies, Inc., 2012. 122-125. Book. USA Today. Best Buy is closing 50 stores after losing money. 2012. Website. 26 March 2012. <http://www.usatoday.com/money/companies/earnings/story/2012-03-29/best-buy/53852802/1>. Verschoor, Curtis C. "High Rates of Misconduct at All Levels of Government." Business Ethics. Ed. John E Richardson. Vol. 23. New York: McGraw-Hill Companies, Inc., 2012. 23 vols. 38-40. Book. WAL-MART: The High Cost of Low Price. Dir. Robert Greenwald. 2005. Film. Wells, Susan J. "Are You Too Family Friendly?" Business Ethics. Ed. John E Richardson. Vol. 23. New York: McGraw-Hill Companies, Inc., 2012. 23 vols. 33-37. Book.