Business Ethics free essay sample

Disclosure the fcpa requires corporations to fully disclose any and all transactions conducted with foreign officials and politicians Prohibition the fcpa incorporated the wording of the bank secrecy act and the mail fraud act to prohibit the movement of funds overseas for the express purpose of conducting a fraudulent scheme -facilitation payments-payments that are acceptable (legal) provided they expedite or secure the performance of a routine governmental action -routine governmental action- any regular administrative process or procedure, excluding any action taken by a foreign official in the decision to award new or continuing business What is a routine governmental action? see above definition but examples are: providing permits, licenses, or other official documents to qualify a person to do business in a foreign country -processing governmental papers such as visas and work orders -providing police protection, mail pickup and delivery, or scheduling inspections associated w ith contract performance or inspections related to transit of goods across a country Providing phone service, power, and water supply; loading and unloading cargo; or protecting perishable products or commodities from deterioration -performing actions of a similar nature The key distinction in identifying bribes was the exclusion of any action taken by a foreign official in the decision to award new or continuing business. We will write a custom essay sample on Business Ethics or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Such decisions being the primary target of most questionable payments were not deemed to be routine governmental action How many principles are in the Defense Industry Initiative, what are they? 6 * Each company will have and adhere to a written code of business ethics and conduct * The company’s code will establish the high values expected of its employees and the standards by which they must judge their own conduct nd that of their organization; each company will train its employees concerning their personal responsibilities under the code * Each company will create a free and open atmosphere that allows and encourages employees to report violations of its code to the company without fear of retribution for such reporting * Each company will have the obligation to self-govern by monitoring compliance with federal procurement laws and adopting procedures for voluntary disclosure of violations of federal procurement laws and corrective actions taken * Each company will have the responsibility to each of the other companies in the industry to live by standards of conduct that preserve the integrity of the defense industry * Each company must have public accountability for its commitment to these principles What are the most important regulations covered under the Federal Sentencing Guidelines for Organizations? Federal sentencing guidelines for organizations hold business liable for the criminal acts of their employees and agents, important regs are the culpability score meaning the calculation of a degree of blame or guilt that is used as a multiplier of up to four times the base fine. The culpability score can be adjusted according to aggravating or mitigating factors Aggravating factors- -high-level personnel were involved in or tolerated the criminal activity -the organization willfully obstructed justice -the organization had a prior history of similar misconduct the current offense violated a judicial order, injunction or con dition of probation Mitigating factors; -the organization had an effective program to prevent and detect violations of law -the organization self-reported the offense to appropriate governmental authorities, fully cooperated in the investigation, and accepted responsibility for the criminal conduct , second reg- death penalty-where the fine is set high enough to match all the organization’s assets-and basically put the organization out of business. This warranted where the organization was operating primarily for a criminal purpose What are the most important regulations covered under the Sarbanes-Oxley Act of 2002, what is title IX? arbanes-oxley act is a legislative response to the corporate accounting scandals of the early 2000s that covers the financial management of business. I still need to put the most important regulations, Creates more penalties for White collar crimes. It makes each member of the Management Team sign the financial statement and they are now responsible for anything on those statements. -It creates an oversight board for Accounting Firms. title IX is white-collar crime penalty enhancements -provides that any person who attempts to commit white-collar crimes will be treated under the law as if the person had committed the crime -requires CEOs and CFOs to certify their periodic reports and imposes penalties for certifying a misleading or fraudulent report. What is an internal whistle blower what is an external whistle blower? -Internal is when an employee discovers corporate misconduct and brings it to the attention of their supervisor who then follows established procedures to address the misconduct within the organization -external is when an employee discovers corporate misconduct and chooses to bring it to the attention of law-enforcement agencies and/or the media When is it unethical to blow the whistle? * That the employee is motivated by the opportunity for financial gain or media attention * -employee is carrying out an individual vendetta against the company What are the most important regulations addressed by the whistleblower act of 1989? imposed specific performance deadlines in processing whistleblower complaints -guaranteed the anonymity of the whistle-blower -required prompt payment of any portion of the settlement to which the whistle-blower would be entitled -employees who prevail were entitled to damages which may inc lude: -reinstatement to the same seniority status that the employee would have had but for the adverse employment action -back pay -interest -all compensatory damages to make the employee whole -special damages including litigation costs, reasonable attorney fees and costs, experts witness fess, and all relief necessary to make the employee whole Ch. 8 What is an intranet and what is an extranet? Intranet – a company’s internal web site containing information for employees only -Extranet- a private piece of a company’s internet network that is made available to customers and/or vendor partners on the basis of secured access by unique password What is telecommuting? -the ability to work outside of your office (from your home or anywhere else) and log in to your company network (usually via a secure gateway such as a VPN, virtual private network) What is Packet-sniffing? -a software that can intercept, analyze, and archive all communications on a network, including employee email, chat sessions, file sharing, and internet browsing. Employees who use the workplace network to access personal email accounts are not provided by the company are not protected. Their private accounts, as long as they are accessed on workplace network or phone lines can be monitored What is a smart ID card? -Can track an employee’s location while they are on the move through the workplace Ch 9 What are developed nations, what are less developed nations? -Developed nations is a country that enjoys a high standard of living as measured by economic, social, and technological criteria -Less-developed is a country that lacks the economic, social, and technological infrastructure of a developed nation What is a conglomerate versus a multinational corporation (MNC) -Conglomerate- -multinational corporation is a company that provides and sells products and services across multiple national borders What is the Global Code of ethics? a general standard of business practice that can be applied equally to all countries over and above their local customs and social norms What is addressed by the Foreign Corrupt Practices Act? What is the Global Compact? -a volunta ry corporate citizenship initiative endorsing 10 key principles that focus on four key areas of concern: the environment, anticorruption, the welfare of workers around the world, and global human rights Who are the OECD and what are some of the guidelines? Guidelines that promote principles and standards of behavior in the following areas: human rights, information disclosure, anticorruption, taxation, labor relations, environment, competition, and consumer protection; a governmental initiative endorsed by 30 members Back to Chapter 1 What is the Golden Rule? Do unto others as you would have them do unto you What is Utilitarianism? Ethical choices that offer the greatest good for the greatest number of people to help people (Scottish philosopher David Hume) What is Universal Ethics? Actions that are taken out of duty and obligation you a purely moral idea rather than based on the needs of the situation since the universal principles are seen to apply to everyone everywhere all the time (German philosopher Immanuel Kant) no idea needed What is Ethical Relativism? Gray area in which your ethical principles are defined by the traditions of your society, your personal opinions, and the circumstances of the present moment Business Ethics free essay sample Versions of the first principle, sometimes called eco- efficiency, have long been a part of the environmental movement. Doing more with less has been an environmental guideline for decades. | Question 2| | 0. 5 / 0. 5 points| According to model of the economy (or Economic System) as a subset of the biosphere (or Ecosystem), we recognize that neither matter nor energy can truly be created, it can only be transferred from one form to another. We will write a custom essay sample on Business Ethics or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page This conservation of matter/energy is consistent with the: Question options: | first law of thermodynamics. | | second law of thermodynamics. | third law of thermodynamics. | | fourth law of thermodynamics. | Hide Feedback| | | The model of the economy (or Economic System) as a subset of the biosphere (or Ecosystem) differs from the circular flow model is several ways. From the first law of thermodynamics (the conservation of matter/energy), we recognize that neither matter nor energy can truly be created, it can only be transferred from one form to another. | Question 3| | 0. 5 / 0. 5 points| Identify the responsibility which holds that a business should be responsible for incorporating the end results of its products back into the productive cycle. Question options: | Backcasting| | Cradle-to-cradle| | Take-make-waste| | Cradle-to-grave| Hide Feedback| | | Cradle-to-cradle responsibility holds that a business should be responsible for incorporating the end results of its products back into the productive cycle. | Question 4| | 0. 5 / 0. 5 points| Identify the correct statement about the Brundtland Commission. Question options: | The United Nations World Commission on Trading and Development (WCTD) is commonly known as the Brundtland Commission, named after the place in Norway where the summit was held. | It was charged with developing recommendations for paths towards economic and social development that would not achieve economic growth at the expense of underdeveloped and developing countries. | | It offered what has become the standard definition of sustainable development. Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs . | | It led to trading agreements like NAFTA, CAFTA, and the EU. | Hide Feedback| | | The Brundtland Commission offered what has become the standard definition of sustainable development. Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. | Question 5| | 0. 5 / 0. 5 points| The evolution of business strategy towards biomimicry can be understood along a continuum. The earliest phase has been described as _____, where business takes resources, makes products out of them, and discards whatever is left over. Question options: | cradle-to-grave| | take-make-waste| | cradle-to-cradle| | eco-efficiency| Hide Feedback| | | The evolution of business strategy towards biomimicry can be understood along a continuum. The earliest phase has been described as take-make-waste. Business takes resources, makes products out of them, and discards whatever is left over. | Question 6| | 0. 5 / 0. 5 points| According to economist Herman Daly, the emphasis of economic growth as the goal of economic policy will inevitably fail unless it is realized that: Question options: | the population of the world needs to be controlled. | | the economy is a subsystem within earths biosphere. | | resources are infinite. | | efficient markets need to be stabilized to ensure higher economic returns. | Hide Feedback| | Daly argues that neoclassical economics, with its emphasis on economic growth as the goal of economic policy, will inevitably fail to meet these challenges unless it recognizes that the economy is but a subsystem within earths biosphere. | Question 7| | 0. 5 / 0. 5 points| Which of the following statements is not a problem faced by the regulatory approach to environmental challenges? Question options: | It u nderestimates the influence that business can have in establishing the law. | | This approach underestimates the ability of business to influence consumer choice. | It established standards that effectively shifted the burden from those threatened with harm to those who would cause the harm. | | If we rely on the law to protect the environment, environmental protection will extend only as far as the law extends. | Hide Feedback| | | The environmental regulation enacted during the 1970s established standards that effectively shifted the burden from those threatened with harm to those who would cause the harm. This is not a problem associated with the regulatory approach but one of the changes that occurred after it was enacted. | Question 8| | 0. 5 / 0. 5 points| According to model of the economy (or Economic System) as a subset of the biosphere (or Ecosystem), entropy increased within a closed space (the second law of thermodynamics) implies that: Question options: | the amount of re-usable products decreases with increase in production. | | the economy exists within a finite biosphere. | | wastes are not produced at each stage of economic activity. | | the amount of usable energy decreases over time. | Hide Feedback| | | The model of the economy (or Economic System) as a subset of the biosphere (or Ecosystem) differs from the circular flow model is several ways. Energy is lost at every stage of economic activity. Consistent with the second law of thermodynamics (entropy increased within a closed system), the amount of usable energy decreases over time. | Question 9| | 0 / 0. 5 points| The approach that at least some animals have the cognitive capacity to possess a conscious life of their own is akin to the _____ ethical framework, which asserts that we have a duty not to treat these animals as mere objects and means to our own ends. Question options: | Kantian| | virtue ethic| | utilitarian| | social web| Hide Feedback| | | The first approach emphasizes the fact that many animals, presumably all animals with a central nervous system, have the capacity to feel pain. Reminiscent of the utilitarian tradition, this view asserts an ethical responsibility to minimize pain. | Question 10| | 0. 5 / 0. 5 points| Internalizing external costs and assigning property rights to unowned goods such as wild species are two responses to market failures by defenders of a narrow economic view of corporate social responsibility. These ad hoc attempts to repair market failures are environmentally inadequate because of the: Question options: | bastcasting problem. | fungibility problem. | | biomimicry problem. | | first-generation problem. | Hide Feedback| | | Internalizing external costs and assigning property rights to unowned goods such as wild species are two responses to market failures. But there are good reasons for thinking that such ad hoc attempts to repair market failures are environmentally inadequate. One importa nt reason is what has been called the first-generation problem. | Ch9| Question 1| | 0 / 1 point| The approach that animals with a central nervous system feel pain is akin to the _____ ethical framework, which asserts an ethical responsibility to minimize pain. Question options: | Kantian| | virtue ethic| | utilitarian| | deontological| Hide Feedback| | | The first approach emphasizes the fact that many animals, presumably all animals with a central nervous system, have the capacity to feel pain. Reminiscent of the utilitarian tradition, this view asserts an ethical responsibility to minimize pain. | Question 2| | 1 / 1 point| In economic terms, all resources are infinite because: Question options: | they are ‘fungible. | | governmental regulations ensure that resources are distributed fairly. | | the advent of technology ensures that all resources are recyclable. | efficient markets will distribute resources efficiently. | Hide Feedback| | | From a strict market economic perspective, resources are infinite. As the supply of any resources decreases, the price increases, thereby providing a strong incentive to supply more or provide a less costly substitute. In economic terms, all resources are fungible. They can be replaced by subst itutes, and in this sense resources are infinite. | Question 3| | 1 / 1 point| Identify the correct statement about the circular flow model. Question options: | It differentiates natural resources from the other factors of production. | It explains the origin of resources. | | It treats economic growth as both the solution to all social ills and also as boundless. | | It holds that resources are finite. | Hide Feedback| | | An observation of the circular flow model is that it treats economic growth as both the solution to all social ills and also as boundless. | Question 4| | 1 / 1 point| The _____ explains the nature of economic transactions in the terms of a flow of resources from businesses to households and back again. Question options: | circular flow model| | three pillars of sustainability| triple bottom line approach| | bilinear model| Hide Feedback| | | What is sometimes called the circular flow model explains the nature of economic transactions in terms of a flow of resou rces from businesses to households and back again. | Question 5| | 0 / 1 point| According to economist Herman Daly, over the long term, resources and energy cannot be used, nor waste produced, at rates which the biosphere cannot replace or absorb them without harming its ability to sustain life. These are what Daly calls the: Question options: | economic limitations. | | the backcasting effect. | | biophysical limits to growth. | | un-expendable boundaries. | Hide Feedback| | | Over the long term, resources and energy cannot be used, nor waste produced, at rates at which the biosphere cannot replace or absorb them without jeopardizing its ability to sustain (human) life. These are what Daly calls the biophysical limits to growth. | Question 6| | 1 / 1 point| What do you understand by the statement all resources are fungible? Question options: | They can be regulated and controlled by the government. | | They can be replaced by substitutes. | They cannot be duplicated. | | They can be recycled. | Hide Feedback| | | In economic terms, all resources are fungible. They can be replaced by substitutes, and in this sense resources are infinite. | Question 7| | 1 / 1 point| The Triple Bottom Line approach involves the measurement of business success of sustainable businesses and sustainable economic development in terms of three factors. Identify them. Question options: | Economic, legal, and environmental sustainability| | Economic, ethical, and environmental sustainability| | Economic, legal, and competitive sustainability| Legal, competitive, and environmental sustainability| Hide Feedback| | | Sustainable business and sustainable economic development seek to create new ways of doing business in which business success is measured in terms of economic, ethical, and environmental sustainability, often called the Triple Bottom Line approach. | Question 8| | 1 / 1 point| Which of the following statements is true about the circular flow model? Question options: | The economy need not grow to keep up with population growth. | | The possibility that the economy cannot grow indefinitely is not part of this model. | The economy need not grow to provide for a higher standard of living. | | The economy cannot grow indefinitely. | Hide Feedback| | | An observation about the circular flow model is that it treats economic growth as both the solution to all social ills and also as boundless. To keep up with population growth, the economy must grow. To provide for a higher standard of living, the economy must grow. To alleviate poverty, hunger, and disease, the economy must grow. The possibility that the economy cannot grow indefinitely is simply not part of this model. | Question 9| | 1 / 1 point| A market-based approach to resolving environmental challenges is reminiscent of the _____ view of CSR. Question options: | philanthropic| | economic| | social web| | integrative| Hide Feedback| | | A market-based approach to resolving environmental challenges is reminiscent of the narrow, economic view of CSR. | Question 10| | 1 / 1 point| The three goals of sustainable development that include economic, environmental, and ethical sustainability are referred to as the: Question options: | Tripartite Goals. | | three pillars of sustainability. | | Three Pronged charter. | | shoulders of sustainability. | Hide Feedback| Business Ethics free essay sample Consider the functional departments reviewed in chapter 3. Which department do you think faces the greatest number of ethical challenges? Why? I think human resource department faces the maximum number of ethical challenges. The human resources function within an organization should ideally be directly involved in the relationship between the company and the employee throughout that employee’s contract with the company. Each of these activities demands transparency and very challenging from an ethical perspective. The creation of the job description for the position. The recruitment and selection of the right candidate for the position. The orientation of the newly hired employee. The efficient management of payroll and benefits for the (hopefully) happy and Productive employee. The documentation of periodic performance reviews. The documentation of disciplinary behavior and remedial training, if needed. The creation of a career development program for the employee. HR department should coordinate final paperwork and should host an exit interview to ensure that anything the organization can learn from the departure is fed back into the company’s strategic plan. We will write a custom essay sample on Business ethics or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page If the right people are hired in the first place, it is believed, many other problems are avoided down the road. Many advocates of ethical business conduct argue that HR should be at the center of any corporate code of ethics – not as the sole creator of the code, since it is a document that should represent the entire organization HR professionals must help ensure that ethics is a top organizational priority. HR must ensure that the leadership selection and development processes include an ethics component. HR is responsible for ensuring that the right programs and policies are in place. HR must stay abreast of ethics issues The finance function of an organization can be divided into three distinct areas: financial transactions, the accounting function, and the auditing function. Financial transactions – the process by which the flow of money through an organization is handled. Accounting function – keeps track of all the company’s financial transactions by documenting the money coming in and money going out and balancing the accounts at the end of the period. Auditing function – the certification of an organization’s financial statements, or â€Å"books† as being accurate by an impartial third-party professional. Existing and potential investors will make the decision to invest in the shares of an organization. 2. Provide three examples of unethical behavior that you have observed at the company you work or (or worked for in the past). What were the outcomes of this behavior? Deliberate Deception: I have seen following types: taking credit for work done by someone else, calling in sick in order to go to the beach, sabotaging the work of another person. This can be very damaging by using a persons trust to undermine his rights and security. In a workplace environment, this results in conflict and retaliation and less productivity. Conscience violation: My sales manager threatened to fire you unless I could sell 50 inferior quality but pricey products within the next mo. To keep your job, I had to violate my conscience and recommend that your customers buy the pricey inferior quality product. My boss was engaging in unethical behavior by forcing me to do something wrong, and also was risking the ire and potential loss of valuable customers to meet a product sales goal. Failed to Honor Commitments: My boss promised me an extra day off if I could rush out an important project by a certain date. But when the project was successful by that deadline and I wanted to realize the day off, my boss did not agree to give me that day off citing a lot of work still pending. 3. Philip Kotler argues that professional marketers â€Å"should have the same ambivalence as nuclear scientists who help build nuclear bombs. † Is that a valid argument? Why or why not? While I suppose this statement has some validity, it seems somehow exaggerated. I would say that they probably should feel some ambivalence, but not â€Å"the same ambivalence† as the people who make nuclear weapons. The validity of this statement rests on the idea that marketing is harmful to those who are exposed to it. This is true to some degree. First of all, marketing can cause people to waste money. It can cause them to buy things that they would not have wanted to buy if they had not been exposed to the marketing. It might cause them to buy things that they will not even actually use. Second, it can harm people by encouraging them to buy things that are actually bad for them. The classic example of this would be marketing for cigarettes. Of course, it is a major exaggeration to compare marketing and nuclear weapons. Marketing is not lethal in the same way that nuclear weapons are. It can also, at times, be beneficial and does not necessarily hurt anyone. Nuclear weapons cannot be used without killing people. Marketing can be used without doing people any harm at all even if it can at times do some degree of harm. 4. What are â€Å"Creative bookkeeping techniques†? Provide three examples. Creative accounting, also known as competitive book keeping, is the adjustment of economical statistics, usually within the law and bookkeeping requirements, but very much against their soul and certainly not offering the â€Å"true and fair† perspective of a company that records are expected to. A common aim of creative bookkeeping will be to fill revenue outcomes. Some organizations may also decrease revealed income in excellent years to sleek outcomes. Obligations and resources may also be controlled, either to stay within boundaries such as debt covenants, or to cover up problems. Typical creative bookkeeping techniques consist of off balance sheet funding, over-optimistic income recognition and the use of overstated non-recurring products. The phrase â€Å"window dressing† has identical significance when used to records, but is a wider phrase that can be used to other places. In the US it is often used to explain the adjustment of financial commitment collection efficiency statistics. In the perspective of records, â€Å"window dressing† is more likely than â€Å"creative accounting† to suggest unlawful or bogus methods, but it need to do so. The methods of creative bookkeeping modify eventually. As bookkeeping requirements modify, the methods that will work modify. Many changes in bookkeeping requirements are used to prevent particular methods of adjusting records, which indicates those purpose on creative bookkeeping need to find new methods of doing things. Simultaneously, other, well intentioned, changes in bookkeeping requirements start up new possibilities for creative bookkeeping (the use of reasonable value is an excellent example of this). Many (but not all) creative bookkeeping methods modify the main statistics proven in the fiscal reports, but make themselves obvious elsewhere, most often in the notices to the records. The market has been amazed before by bad information invisible in the notices, so a persistent strategy can give you a side. One of the most important aspects of creative accounting is Earnings management. It occurs when professionals use verdict in economical confirming and in constructing dealings to alter economical statements to either deceive some stakeholders about the actual economic performance of an organization or impact contract results that rely on revealed bookkeeping statistics. Earnings control usually includes the synthetic increase (or decrease) of earnings, profits, or income per share results through competitive bookkeeping techniques. Aggressive income control is a form of scams and varies from confirming mistake. Management wanting to show income at a certain level or following a certain design seek problems in economical confirming requirements that allow them to modify the statistics as far as is possible to achieve their preferred aim or to fulfill forecasts by economical experts. These improvements amount to bogus economical confirming when they fall outside the range of suitable bookkeeping practice. Individuals for such behavior include industry objectives, individual realization of an extra, and maintenance of position within a industry. In most cases conformance to suitable bookkeeping methods is a matter of individual reliability. Aggressive income control becomes more potential when an organization is affected by a recession in company. Earnings control is seen as a pushing issue in current bookkeeping exercise. Part of the difficulty can be found in the approved acknowledgement that there is no such thing as a single right income figure and that it is possible for genuine company methods to develop into undesirable economical confirming. It is relatively easy for an auditor to identify mistake, but income control can include innovative scams that is concealed. The requirement for control to claim that the accounts have been prepared properly offers no protection where those professionals have already joined into conscious deception and scams. Auditors need to tell apart scams from mistake by determining the use of objective. Would you leave your position within a company if you saw evidence of unethical business practices? Why or why not? What factors would you consider in making that decision? Yes I will leave my position within a company if I see evidence of unethical business practices being followed. I will follow the steps below while making that decision: 1. Determine whether the matter truly involves ethics. 2. Strive to discover all the available facts before proceeding. 3. Consult existing guidelines that might apply as a possible mechanism for resolution. 4. Pause to consider, as best as possible, all factors that might influence the decision you will make. 5. Consult with a trusted colleague. Because ethical decision-making involves a complicated process influenced by our own perceptions and values, we can usually benefit by seeking input from others. 6. Evaluate the rights, responsibilities, and vulnerability of all affected parties. These evaluations should include, if relevant, any involved institution and perhaps even the general public. 7. Generate alternative decisions. 8. Enumerate the consequences of making each decision 9. Make the decision. Implement the decision. 6. Explain the potential ethical challenges presented by generally accepted accounting principles (GAAP). Accountants always make judgments about how to record business transactions. They often base their decisions on the financial objectives of the companies for which they work while using accepted accounting principles (GAAP) to steer their decisions. GAAP are not a fixed set of rules. They are guidelines or, more precisely, a group of objectives and conventions that have evolved over time to govern how financial statements are prepared and presented. And it’s this lack of a clearly laid out rule that presents the ethical challenged around GAPP. The most difficult ethical problems (frequency reported) are: Client requests to alter tax returns and commit tax fraud, conflict of interest and independence Client requests to alter financial statements, personal-professional problems, and fee problems. CPAs perceive that opportunities exist in the accounting profession to engage in unethical behavior When top management (partners) reprimands unethical behavior, the ethical problems perceived by CPAs seem to be reduced. Exercises: Complete the â€Å"Internet Exercise† on page 58 of Business Ethics Now. 1. Visit the U. S. government recall Web site www. recalls. gov, select a product recall event from the past three years, and answer the following questions: a. What information would you consider to be evidence of an ethical transgression in this product recall? b. Other than recalling the product, what other actions did the company take to address the situation? c. What steps would you suggest that the company should have taken to restore that reputation? d. Locate the Web sites for the American Marketing Association (AMA) and the American Institute of Certified Public Accountants (AICPA). One has a â€Å"Professional Code of Conduct,† and the other has a â€Å"Statement of Ethics. † Does the terminology make a difference? Why or why not? e. Compare and contrast the components of each approach. f. Since the AMA offers certification as a â€Å"Professional Certified Marketer,† would the organization benefit from promoting a professional code of conduct like the AICPA? Why or why not? Child Safety Seat Recalls: On February 7, 2014, Graco Childrens Products, Inc. (Graco) informed NHTSA that it would be recalling model year 2009 through 2013 toddler and booster child restraints, models Cozy Cline, Comfort Sport, Classic Ride 50, My Ride 65, My Ride w/Safety Surround, My Ride 70, Size 4 Me 70, Smart Seat, Nautilus, Nautilus Elite, and Argos 70. On March 7, 2014, Graco informed NHTSA it would be including an additional 403,222 seats in this recall, including certain model year 2006 through 2014 Argos 70 Elite, Ready Ride, Step 2, My Ride 65 with Safety Surround, My Size 70, Head Wise 70 with Safety Surround, Nautilus 3-in-1, Nautilus Plus, and Smart Seat with Safety Surround. The defect involves difficulty in unlatching the harness buckle. In some cases, the buckle becomes stuck in a latched condition so that it cannot be opened by depressing the buckles release button. CONSEQUENCE: It may be difficult to remove the child from the restraint, increasing the risk of injury in the event of a vehicle crash, fire, or other emergency, in which a prompt exit from the vehicle is required. REMEDY: Graco is offering to replace the buckle with a new design, free of charge. Registered owners will be notified Beginning around early April 2014, and offered the free replacement buckle. All other owners may contact Graco at 1-800-345-4109 (toll-free) or 1-330-869-7225, or online at www. [emailprotected] com. a. A Child safety seat is intended to provide safety to the child. But the consequence of this recall says : : It may be difficult to remove the child from the restraint, increasing the risk of injury in the event of a vehicle crash, fire, or other emergency, in which a prompt exit from the vehicle is required. That is an ethical transgression. b. Graco is offering to replace the buckle with a new design, free of charge. Registered owners will be notified beginning around early April 2014, and offered the free replacement buckle. c. Other than recalling and replacing the existing faulty products, Graco should publicly demonstrate that they have put better process and controls in place to avoid similar defects in their products in the future. That would have helped them to restore their reputation. d. They do not have much of practical difference. The purpose of both of them is to enforce ethical professional practices form their members e. Code of conduct depicts the standard procedures to be followed to do a work within professional boundaries. Statement of ethics outlines the ethical behaviors related to a particular organization or profession. f. No. In marketing profession, ethical challenges are much more evident than a lack of standards. So statement of ethics makes more sense. Case Study: Review Issue 5 from Taking Sides: Clashing Views in Business Ethics and Society. Whi ch viewpoint do you side with? Why? Explain. Reference at least two outside resources that further support the viewpoint you side with. Issue 5: Can Ethics Codes Build â€Å"True† Corporate Ethics? I side with Yes, When it comes to corporate ethics, bad news is good news. According to the Ethics Resource Center’s 2009 National Business Ethics Survey, on-the-job misconduct is down, whistle-blowing is up, and ethical organizational cultures are stronger. Despite these trends, there may be no better time for human resource managers to conduct or participate in ethics-related audits. Setting the Tone: Legal developments in recent like Sarbanes-Oxley Act, with its emphasis on tone at the top and its requirement that publicly traded companies disclose whether they have a code of ethics to deter wrongdoing. The Federal Acquisition Regulation and the Federal Sentencing Guidelines also have a significant impact on organizations’ ethics policies and practices by requiring or providing incentives to encourage businesses of all kinds and sizes to adopt codes of conduct, train their employees on these codes, and create effective audit and reporting mechanisms. HR plays a crucial role in shaping corporate ethical codes, policies and procedures and then communicating and teaching that information to the workforce. In many companies, the top HR manager either serves as the de facto chief ethics and compliance officer or works with the person in that role to manage ethics and compliance programs. Apart from the chief executive officer, there may be no more important ethical role model in the organization than an HR manager. Employees watch HR and they should. HR managers, we essentially need to serve as the poster children for ethical behavior. HR managers who thrive as ethical role models almost always play central roles in conducting ethics-related audits, notes Marjorie Doyle, principal of ethics consulting firm Marjorie Doyle Associates in Landenberg, Pa. , and a member of the Advisory Board of Directors for the Society of Corporate Compliance and Ethics. As a former chief corporate ethics and compliance officer, I spent a lot of time with HR, she says. HR managers are trying to get people to do the right thing. They also tend to manage the annual performance review process and operate the communications network within the company, both of which are crucial to ethics audits, Doyle says. They have a feel for whether certain behaviors are as ethical as they need to be. Laying the Groundwork Ethics audits ensure that behaviors an organization espouses in its code of conduct and policies and procedures exist in practice and that behavior forbidden in these documents does not occur. The risk of neglecting ethics audits can be severe. After its ethics-related implosion, Enron became well-known for the fact that the framed values statements in conference rooms were at odds with employees’ behavior on trading floors. And, more-immediate problems potentially exist for companies that do not conduct ethics audits. The danger can spread to other stakeholders, including customers, suppliers and community members. If word gets out that you are not an ethical organization, you run the risk of losing business, Crane notes. Conducting an ethics audit requires a team effort as well as a clear definition of ethical behavior. While many larger companies staff a chief ethics and compliance officer position, that individual is not solely responsible for each employee’s behavior. For this reason, Conway, Ark. -based Nabholz Construction Co. has an ethics committee consisting of top legal, finance, HR and operational executives. We want to have diverse skills on the committee and to make sure all of our geographies are represented, says Andrea Woods, SPHR, vice president and corporate counsel for the private company with about 850? Employees. Nabholz Construction’s ethics committee takes responsibility for monitoring and investigating ethics hotline calls and e-mails. The hotline system is managed by a third-party provider, an arrangement that Woods says strengthens objectivity and independence. The committee conducts ethics audits as part of an annual internal audit process. In addition, a divisional controller, an HR employee and Woods conduct spot ethics audits on the recommendation of the committee. The frequency Woods describes—annual audits on all ethics-related areas and spot ethics audits on an as-needed basis in response to risk assessments—jibes with what ethics consultants recommend. Depending on company size and auditing resources, Crane notes, some companies may audit their entire ethics programs only once every two years. However, the occurrence of a major organizational realignment may necessitate more frequent ethics audits in its wake. Whether or not corporate leaders seek outside help on ethics audits depends on the nature and magnitude of the issues. If the issue involves something very important to the company, it helps to get an outside perspective and the impartial judgment that a third party provides, Crane says. If the company conducts the audit internally and outside stakeholders are paying close attention to the issue, it can be more difficult to say, ‘Yes, we audited our ethics internally and everything is just fine. That may be received as a matter of the fox guarding the henhouse. Making It Tangible Regardless of whether ethics audits are woven into internal audit processes, performed internally in response to changing risk profiles or conducted by an external auditor, the question is What are you auditing against? says Mark Snyderman, senior knowledge leader at LRN, a company that helps businesses develop ethical corporate cultures. The answer requires a distinction between two disciplines frequently lumped together in corporate America: ethics and compliance. Ethics refers to the amorphous area of behavior. Compliance refers to adherence to legal regulations. A company may be fully compliant yet still engage in unethical practices. While that may seem like a clear distinction on paper, it becomes muddled in a global business environment. Compliance audits compare internal behaviors to external regulations. Ethics audits compare internal behaviors to internal guidelines on behavior—guidelines that exist in corporate codes of conduct and ethics-related policies and procedures. Of course, some compliance problems may stem from ethical lapses; others may arise from process or operational bugs. That’s why many business leaders conduct ethical audits in tandem with financial or operational audits. The code should be translated into specific guidance within policies and procedures. You don’t need to start out with the 10 commandments and 500 related rules, but you do need to have something specific to audit against, Doyle says. For example, what does an ethical violation related to bribery or conflict of interest look like? Be very descriptive in your policies and procedures about what these things mean, she recommends. Also, have managers and employees establish performance goals related to ethics and compliance so employees can be evaluated against those objectives. Doyle says greater specificity in ethics-related policies and procedures paves the way for ethics-related performance objectives and metrics. These metrics help enable more-tangible ethics audits.