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Chapter 10

Making It Stick:
Doing What’s
Right in a
Competitive
Market
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Learning Outcomes
• Develop the key components of an ethics policy
• Analyze the ramifications of becoming a
transparent organization
• Understand the difference between reactive
and proactive ethical policies
• Discuss the challenges of a commitment to
organizational integrity

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Key Components of an Ethics Policy

• Characteristics of a market
• Demanding customers
• Impatient stockholders
• Aggressive vendors
• Demanding federal, state, and local officials
• Demanding creditors
• Aggressive competitors

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Sustainable Ethics
• Ethical behavior that persists long after the
latest public scandal or the latest management
buzzword
• Requires involvement of every member of the
organization

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Stages in Making Ethical Behavior
Sustainable
• Establish a code of ethics
• Support the code of ethics with extensive
training for every member of the organization
• Hire an ethics officer
• Celebrate and reward the ethical behavior
demonstrated by employees
• Promote the organization’s commitment to
ethical behavior
• Continue to monitor the behavior
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Establish a Code of Ethics
• Well-written code of ethics can:
• Capture what the organization understands by
ethical behavior
• Establish a detailed guide to acceptable
behavior
• State policies for behavior in specific situations
• Document punishments for violations of policies

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Establish a Code of Ethics (continued 1)
• Recommendations from the Institute of
Business Ethics to create an ethics code
• Find a champion
• Get endorsement from the chairperson and the
board
• Find out what bothers people
• Pick a well-tested model

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Establish a Code of Ethics (continued 2)
• Produce a company code of conduct
• Try it out first
• Issue the code and make it known
• Make it work

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Support Code of Ethics with Extensive
Training
• Each department of the organization should
apply the code to examples that could arise in
its area where employees can work on:
• Recognizing the ethical issue
• Discussing options for an appropriate response
• Selecting the best option for the organization

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Ethics Officer
• Senior executive responsible for monitoring the
ethical performance of the organization both
internally and externally
• Role usually developed as a separate
department with the responsibility of:
• Enforcing the code of ethics
• Providing support to any employee who witnesses
unethical behavior

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Encouraging Ethical Behavior
• Celebrate examples of good ethical behavior
• Award prizes for:
• Ethical behavior
• New and creative ideas
• Recognize employees who represent the
standard of behavior
• Declare an Ethics Day, and allow every
department to share its success stories

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Promote the Organization's
Commitment to Ethical Behavior
• Ethics policy commits a person to doing the
right thing for all stakeholders
• Make clear and firm promises to the
stakeholders
• Deliver on those promises
• Offer concrete examples that the organization is
committed to winning the trust of its customers

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Continuous Monitoring
• Any organization’s commitment to ethical
performance must be watched constantly
• Continued growth of technology will present
new situations for ethical dilemmas
• Code may need to be rewritten on a regular
basis

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Becoming a Transparent
Organization
• Reactive ethical policies: Result when
organizations are driven by events and/or a fear
of future events
• Proactive ethical policies: Result when the
company develops a clear sense of what it
stands for as an ethical organization
• Transparency: Organization maintains open and
honest communications with all stakeholders

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Organizational Integrity
• Characteristic of publicly committing to the
highest professional standards and sticking to
that commitment
• Vital to earn the trust and confidence of the
stakeholders for the long-term survival of the
organization

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