Posted: November 9th, 2014

Critical Thinking summary

Critical Thinking summary

Order Description

Submit a “critical thinking” summary of assigned readings (articles and chapters), indicating your understanding and perceptions of key content points. For this assignment, choose a topic or article from the University of Illinois’ Business Ethic’s website for summarizing along with the Is your ethics working article. Consider the following content for your journals:
• Identify key ethical concepts, theories, and models (how can you apply this information to yourself and/or your organization – be sure to provide examples).
• Summarize the results of your self-assessments (what did you learn about your strengths/limitations and how can you improve) OR Identify key concepts in assigned videos (how do they apply to you as a leader, and to your organization).
Journals must follow the APA 6th edition’s guidelines for spelling, grammar, quoting, citing, referencing, and formatting. Journal entries must contain 2 to 3 pages of content (title/cover/reference pages do NOT count in page length). The journal must use a narrative format; however, some bulleted items are acceptable.

Isbur
Proeram
1 V
A BUSINESS WITH
STRONG ETHICAL
BEHAVIOR ENHANCES
AND PRESERVES ITS
REPUTATION, INSPIRES
LOYALTY AND ADVERTISES
THAT IT HAS ITS ETHICS
MESSAGE RIGHT.
IT ALSO FOSTERS AN
ETHICAL CULTURE WITHIN
THE ORGANIZATION.
U
X
H
W
BY CYNTHIA WALLER VALLARIO
Ethical behavior, honesty and integri-ty are issues that senior executives
routinely identify as top priorities on
their companies’ agendas. But the
mere presence of codes of conduct,
compliance training and publicized
reporting systems does not ensure a
company has eliminated an environ-ment that allows or encourages uneth-ical misconduct. This is particularly
true when constant pressure to per-form and meet targets for short-term
objectives drive employee behavior.
Culture is the leading risk factor
comprising integrity and compliance
in companies today, says David
Gebler, president of Working Values
Ltd., a business ethics and training
agency in Sharon, Mass. Yet, he adds,
“Companies do not fully understand
how their culture creates risks and
how to mitigate them to stay out of
trouble.”
Indeed, he says, “Unethical con-duct doesn’t happen in a vacuum.
Good people may crack when their
breaking point is reached. Or they feel
entitled to slip because standards are
not applied consistently throughout
the organization.”
Gebler, a former corporate attorney
and a fellow at the Center for Business
Ethics at Bentley College, founded
Working Values in 1993 (it’s now a
wholly-owned subsidiary of Smart-Pros, a professional education firm).
One of his firm’s missions is to assist
companies in designing compliance
programs that recognize the links
between an organization’s values and
employee behaviors necessary to
implement those values. Formal pro-grams are guides to shape culture, not
vice versa, he says.
“Corporate culture has a great
influence on outcomes,” says Gebler.
For example, he explains, if employ-ees are not surprised when miscon-duct occurs, or there’s a discrepancy
between how employees view top
executives’ adherence to ethical
behavior and how managers perceive
themselves, then the company is not
moving towards a positive outcome.
“What is key for a successful ethics
program is the reduction of observed
misconduct in the workplace.”
Ethics Scandals Fuel Training
Employees are weary of managers
who measure success by tallying how
many individuals certify they’ve read
the ethics code and have completed
mandatory training courses. Such a
“one-and-done,” checklist mentality
for ethics training simply doesn’t
26 financial executive I may 2007 www.fei.org
work, argues Rick Keller, an organi-zational psychologist and president
of The Healthy Business Doctor, in
Summerfield, Fla.
“Despite what many people
believe, very few companies are
doing enough education to foster
and maintain an ethical culture. Yet,
education can be easy when effective
leaders communicate a consistent
ethical message,” says Keller
The great majority of leading cor-porations take their ethical and legal
responsibilities very seriously, as evi-denced by a comprehensive study in
2006 of millions of employee compli-ance training records, conducted by
Integrity Interactive Corp., a
Waltham, Mass., provider of Web-based ethics training.
Depending on a company’s size, it
faces different compliance risks. The
study revealed that in any given
year, it is possible to identify which
compliance risks are of greatest con-cern by reviewing the training cours-es employees are most frequently
required to complete. Certain staple
topics are applicable to the broadest
cross-section of employees at all job
levels, among those: mutual respect,
financial integrity and proper use of
computers.
Integrity Interactive’s findings
demonstrate the most popular com-pliance training topics last year cor-responded closely to problems domi-nating business headlines. New top
courses, appearing for the first time,
were on subjects such as Sarbanes-Oxley internal controls, data safe-guarding, privacy and human rights.
Ethics Officer Oversight Needed
Generally, good ethical decision-making requires the ability to explore
all the aspects of a decision and then
to weigh the options surrounding a
course of action. Consider these tests
once a decision is reached and imple-mented: If you had to explain your
decision on television, would you be
comfortable doing so? If you had to
do the same thing over again, would
you do anything differently?
This is the world of the chief
ethics officer, who acts as the point
person to steer all levels of employ-ees toward integrating ethics into
decision-making processes and codes
of conduct. The ethics officer needs
to be a strong communicator, politi-cally savvy, able to assimilate infor-mation quickly and maintain credi-bility by displaying objectivity and
discretion.
“Culture is not a six-month rollout
or the fad du jour,” comments Keith
Darcy, executive director of the
Ethiqs and Compliance Officer Asso-ciation (ECOA). The 1,400-member
ECOA is an international, multi-industry association for ethics and
compliance practitioners that was
started 15 years ago. There’s no place
to hide today, says Darcy, warning,
“The scandals haven’t stopped, and
companies that treat ethics officers as
window-dressing are destined for
unfortunate consequences.”
Ideally, the chief ethics officer
should report directly to the CEO or
the board’s audit committee. What is
typical, though, is to have the ethics
officer report to the general counsel,
although there is an emerging recog-nition that this is not the optimal
reporting relationship. If the position
is established in response to a regula-tory problem, the ethics officer will
first report to the general counsel, but
that will change over time. What does
not, and should not, happen is for the
ethics officer to report to the CFO.
“The ethics officer must be strate-gically relevant and independent in
order to be effective,” says Darcy. It
can be wise to appoint someone to
the role from within the company,
who has varied line experience and
the ability to foster strong relation-ships with other senior executives. A
critical protection for the ethics offi-cer, notes Darcy, is to insist that he or
she cannot be terminated without a
review by the audit committee.
Darcy held the first ethics officer
position on Wall Street — a role he
created when working for Prudential
Securities. He’s currently a faculty
member in the executive education
program at the Wharton School of
the University of Pennsylvania.
So, what, from Darcy’s perspec-tive, is different in the way compa-nies embrace ethics training and
compliance now as opposed to 10
years ago? He acknowledges the
tremendous impact on the ethics
industry generated by the passage of
Sarbanes-Oxley in 2002 and an
amendment made to the Federal Sen-tencing Guidelines in 2004, requiring
all organizations to not only have
ethical standards, but a culture that
promotes ethical conduct — lan-guage embraced by all the federal
regulators.
David Gebler, President
Working Values Ltd.
is There Too iVIuch Emphasis?
It’s apparent that over the past five
years, businesses have become more
proactive in seeking to protect them-selves from future scandals. This has
led some employees to believe that
many companies are obsessed with
ethics programs and compliance.
Certainly the increased awareness of
and need for ethical behavior, the
establishment of hotlines to report
misconduct and greater use of ethics
officers and written codes of conduct
are making a difference.
But besides the costs, there is
another downside to implementing
all these specific controls. Gebler
finds some companies are exhausted
from integrating all the requirements
and are unable to follow through on
measuring the effectiveness of their
programs. “If companies are uncer-tain about their integrity goals and
how to define success, they will ulti-mately fail in achieving changes in
behavior,” he opines.
The American Management Asso-U
X
H
W
www.fei.org may 2007 I financial executive 27
Select Ethics Resources
There are any number of resources available to help businesses navigate through governance and regulatory require-ments. A few are offered here:
• Financial Executives International (FEI) requires all of its members to sign a code of ethics and recommends that sen-ior finance executives sign such a code annually and deliver it to their company’s board of directors. FEI’s code of ethics
became a model for companies to comply with Sarbanes-Oxley and New York Stock Exchange requirements. It’s available
on the website at www.fei.org.
• OCEG Foundation Red Book, published by the Open Compliance and Ethics Group, It’s a best practices guide that
integrates governance, compliance, ethics and risk management frameworks through all organizational levels, (The
book can be downloaded at oceg.org.)
• The Institute of Business Ethics in London says a code of ethics should begin with a preface, signed by the CEO, identi-fying which values are important to top management in conducting the business. It should then cover such critical areas as:
• the purpose of the business and its values;
• customer relations guidelines; ”
• employee relations, including working conditions, training, recruitment, discrimination and
use of company assets; , • the importance of protecting the shareholders’ investment; and
• an outline for implementing the code.
ciation concluded in a study, The Eth-ical Enterprise: A Global Study of Busi-ness Ethics 2005, that any approach to
improving business ethics must
incorporate the ethical framework as
a strategy and system. As one of the
study’s co-authors, Keller, who has
been involved in ethics training for
10 years, also stresses accountability,
“Business leaders who support and
model ethical behaviors and communi-cate values are critical to a company’s
ethics,” notes Keller. “If a company’s
underlying values do not reward ethi-cal behaviors, then an opportunity has
been missed which sets the company
up for future problems,” he adds.
Conversely, he says, employees
should understand they will be
accountable for their performance,
and not just as it impacts their career
advancement. Indeed, he says man-agers should understand they can be
held responsible for their subordi-nates’ actions, A way to drive home
this message “is to let people know if
their unethical behavior sabotages
the business, they will be fired,”
How frequently do employees cite
“communication” as a significant
source of trouble in the workplace?
Sometimes a culture issue has a sim-ple solution. Gebler says managers
with poor communication skills
become bad listeners who don’t
always respect and value employee
opinions. Eventually, they may turn
smart subordinates into bureaucrats
without enthusiasm. Where good
communication is lacking, manage-ment training that is geared to the
ethical framework can sensitize indi-viduals to recognize risk areas and
learn how to make people comfort-able in reporting problems.
Ultimate Good Business Strategy
It’s clear that companies that empha-size ethics throughout the cultural
framework aren’t just “doing the
right thing” but ultimately find they
are protecting the company’s reputa-tion and brand.
When scandals erupt, the damage
to reputation can create a ripple
effect, starting with an employee exo-dus, notes Keller. “The inability to
attract and retain talented employees
is very expensive, and can affect loy-alty, quality control and deadlines for
completing initiatives. Add to the
mix customer dissatisfaction, impact
on stock price and loss of market
share, and you have all four wheels
falling off,” warns Keller.
“Reputational risk is much more
serious than financial risk, and all
boards of directors should know
that,” Darcy says. And Gebler adds
that while boards are still coming to
terms with their increased oversight
responsibilities, this does not allow
them to ignore ethical issues.
How does a company build its
culture to show its actions speak
louder than words? Ethical culture
cannot be separate from the rest of
the organization, and top manage-ment must recognize and insist that
all stakeholders adopt the same
vision. “Starting with the board of
directors, everyone needs training to
learn how to identify risks and devel-op strategies that promote ethical
conduct and trust,” says Gebler. “If
employees believe reporting bad
news equates to failure, that organi-zation is building a toxic culture,”
CYNTHIA WALLER VALLARIO, J.D., (civ
[email protected]) is a freelance business
writer based in Livingston, N.}., who spe-cializes in corporate governance. She’s a fre-quent contributor to Financial Executive.
TAKE A WAYS
» Senior executives routinely identify
ethical behavior, honesty and integrity as
top issues on their companies’ agendas.
» Employees grow tired of managers
who measure success by tallying how
many individuals certify they’ve read the
ethics code and have completed manda-tory training courses. A checklist mentali-ty for ethics training doesn’t work.
» Both Sarbanes-Oxley and an amend-ment to Federal Sentencing Guidelines in
2004, requiring all organizations to not
only have ethical standards but a culture
that promotes ethical conduct, have had
tremendous impact on corporate ethics.
28 financial executive I may 2007 www.fei.org

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