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 PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET AN AMAZING DISCOUNT :)