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Business Ethics among US Companies

According to research, in the United States the word ethics is likely the most common descriptor associated with business ethics programs. In fact, U.S. corporate titles and functions ethics officer, ethics offices have done much to institutionalize the term. This is not, however to say that using the term ethics in U.S. locations cannot engender problems during a training session, e.g., confusion among ethics, business ethics, and morality. U.S. multinational companies are increasingly shying away from the term ethics in favor of such terms as integrity or business practices, which are more appropriate for cross-cultural use. (Martens, vol. 6)

Another appreciable difference between ethics training in the United States resides in the deployment of scenario questions. U.S. scenarios questions are typically designed to anticipate a right or wrong answer. (vol. 6, issue 1) The US case model more frequently calls upon open-end questions, for which no final determination as to the correctness of participant responses is anticipated. Biefnot notes, In the United States, one cannot leave a question unanswered. There is always a good answer and a bad answer.

Studies have mention that in the United States most companies provide resources to assist employees in resolving ethical and compliance dilemmas. Bonime-Blanc notes that every issue requires a case-by-case analysis and most problems are in the gray area. Under the U.S. compliance system, it is extremely important to provide employees with the appropriate resources to help them think through their issues. In fact, the goal of discussing ethics questions in the United States is often to allow employees to identify appropriate corporate resources, where guidance can be obtained or to which the issue can be escalated. The U.S. legal system has long encouraged the use of internal resources to provide for whistle blowing outlets internally and externally. The recently enacted Sarbanes-Oxley Act of 2002 only underscores this legal imperative. (Martens, vol.6) It is for this reason that most ethics training programs in the United States, unlike their European equivalents, spend much time describing and helping employees to understand corporate resources. Web-based training is becoming increasingly popular in the United States. The benefits of e-training for U.S. companies could include cost-effectiveness, consistency of content, an ability to focus on company policies and law, the identification of right versus wrong answers, and the ability to quantify and document employee levels of participation. Differing business environments, needs, cultural attitudes, and histories have helped shape the training approaches of companies in each region. Despite these differences, there is much to learn by examining the approaches to ethics on both sides of the Atlantic. (vol.6) Today, corporate leaders no matter where they are located should keep an open mind when reviewing and evaluating their companies’ approaches to business ethics and those of their counterparts overseas. Once a company has identified the goals and objectives of an ethics program and ethics training, it must determine which methodologies and tools will best support them. It is, perhaps, now in the best interest of companies whether in the United States, or elsewhere to look beyond what lay in their own backyards when considering what methods and tools to adopt to construct an effective ethics program. (International Business Ethics Review) Business ethics defines how a company integrates core values such as honesty, trust, respect, and fairness into its policies, practices, and decision making. Business ethics also involves a company’s compliance with legal standards and adherence to internal rules and regulations. As recently as a decade ago, business ethics consisted primarily of compliance-based, legally-driven codes and training that outlined in detail what employees could or could not do with regard to areas such as conflict of interest or improper use of company assets. (Business for Social Responsibility, 2005) Today, a growing number of companies are designing values-based, globally consistent programs that give employees a level of ethical understanding that allows them to make appropriate decisions, even when faced with new challenges.

A series of ethics, governance, and accounting scandals in 2002 rocked the corporate world, damaged stock markets, and caused investors, regulators and others to question the assumption fairly or unfairly that most companies do the right thing most of the time. (2005) These scandals destroyed major companies and led to fines and prison terms for executives, providing a stark reminder of the importance of ethical business practices. In response, many orporations, especially in the U.S., took a serious look at strengthening their ethics programs. Leadership companies have found that ethics policies and programs with some or all of the following elements go a long way toward building an ethical culture, reducing risk, and demonstrating a commitment to integrity: (2005) Strong, visible support from top management Ensuring that ethical values such as honesty and not only performance values such as innovation, figure prominently in mission statement and codes of conduct Appointing ethics officers, creating innovative ethics training formats, and setting up ethics help lines Carrying out ongoing evaluations/audits of ethical performance, with rewards and sanctions Creating board ethics and/or corporate responsibility committees

ERC’s report is the result of one of the largest, most in-depth and rigorous recent studies on the attitudes of American workers towards workplace ethics, similar to a study by ERC in 1994. The study was conducted by telephone interviews with 1,500 randomly selected employees in the for-profit, non-profit, and governmental sectors, located across the contiguous 48 states of the U.S. (August 2000) The findings of the new survey indicate that a greater number of U.S. corporations, agencies, and organizations are promoting ethics in the workplace and supporting training programs. More than 80 percent of the interviewees said their organization has some form of ethics program in place, and that statistic goes up to 90 percent for organizations with more than 500 employees.

Employees with more than five years tenure in their organizations feel greater pressure to compromise these standards than do newer employees. Our new findings suggest that many organizations may not be meeting the ethical expectations of their employees, said Joshua Joseph, Research Analyst at ERC who developed the study. He pointed out that one in every three employees says they have observed some form of ethical misconduct within the past year, most notably lying to employees, customers, vendors and the public, withholding needed information, or abusive and intimidating behavior toward employees. (2000) Other ethical concerns of employees included sexual harassment, mis-reporting of hours worked, breaking environmental and safety regulations, and outright stealing, among others. (2000) As many as 17 percent of interviewees reported race, gender, or related forms of discrimination, while 5 percent had concerns about accepting bribes. More than two in five employees who witnessed some form of misconduct did not report it, due to fear of being seen as troublemakers by management or fear of pressure from co-workers. Moreover, more than 40 percent of workers who file complaints about misconduct say they are disappointed by management responses. (Workers Report on Ethics in U.S. Companies) ERC’s findings show that across the country, and in every employment sector, ethics matter a great deal to employees. In fact, many interviewees stated that their organization’s concern for ethics is a key reason why they remain in their jobs. The study shows a clear link between business ethics and business success. Organizations that do not pay enough attention to ethics programs and practices at work may be putting their organizations at risk for more ethical misconduct, said ERC’s Daigneault. “This will only lead to greater problems detecting misconduct when it occurs and more difficulty attracting and keeping good people.’’ (2000)

One of the most difficult questions is: How do we resolve the conflicts between our home nation’s civil laws and ethical principles and those of the country in which we are doing business? What can we expect other countries’ views of business ethics to be? Attention to ethical business conduct is growing in parts of the world previously unconcerned about it; especially as some governments pass anticorruption laws and more multinational corporations (MNCs) formalize ethics codes and pro- grams to strengthen their internal ethical climate. More companies’ managers are becoming aware of the risk of expensive legal entanglements caused by doing business with firms having lower ethical standards than their own. (Robert, 1994) Worldwide watchdog groups, such as Greenpeace, and global news coverage networks, such as the BBC and CNN, also increase the risk of global public relations disasters. More and more businesses around the globe, small as well as large, are becoming multinational. Worldwide, local businesses are beginning to grapple with their own ethical dilemmas. (Petry, 1994) For these reasons, it is important to expand the scope of the international business ethics field beyond a critique of large First-World MNCs. The Ninth Bentley College Conference on Business Ethics, therefore, was titled, International Perspectives on Business Ethics.”

The call for papers sought submissions on a variety of issues of which the impact of multinational corporate operations on the environment and culture of host countries was but one. Other suggested topics were cross-cultural comparisons of ethical attitudes and/or business codes of conduct; the possibility of transnational codes of business ethics; unique ethical problems and specific ethical viewpoints of developing countries; and business/government relations conducive to sustainable economic growth. (Robert, 1994)

Bibliography:

Martens, Lori Tansey. ‘Transatlantic Perspectives on Business Ethics Training’, International Business Ethics Review, (Volume 6, Issue 1)

‘Business for Social Responsibility’ (2005)

‘Workers Report on Ethics in U.S. Companies’ (August 08, 2000)

Robert, Frederick et al. ‘Emerging Global Business Ethics’, Quorum Books, Westport, CT (1994) p.14