Enron, Chevron, and Dow Chemical have all committed highly unethical acts in the history of their industries. They set examples for future companies to see how extreme decisions and punishments for them, made in a business can get. In order for a company to be able to defend itself in an ethical dilemma it has to have a solid policy on ethics. Policies and procedures included with added organizational values will promote an ethical culture. An ethical culture in the work place can prevent or hinder any "bad apples" from acting unethically. The reverse is true where an unethical environment can bring down good employees (Driscoll, 1999). Not only do these practices help to reduce risky situations they also reduce a company's punishment if they are found guilty of such actions. All businesses should adopt programs for this reason if nothing else, especially since the adoption of the 1991 of the Federal Sentencing Guidelines for Organizations consequences include hefty fines and in some cases jail time for those involved.
The first step to creating and maintaining an ethical company is to have and enforce policies and procedures. Every company should incorporate a code of ethics into their employee handbooks. In a study done on five major company’s codes, including the Society for Human Resource Management (SHRM), it was found that they were unorganized, unclear, and lacked specific guidelines for HR managers (Giancola, 2008). This is a main issue that needs to be tackled by HR professionals looking to promote ethics in a company.
Once the code has been created to the best of the company’s ability it is important for all employees to read and understand it. If employees understand and respect the code of ethics they are more likely to act ethically in the workplace. The best way to ensure this is by required training. Not only upon hiring but annually employees should be obligated to review the ethics policy. This will remind them how to handle situations and the possible repercussions of their actions. Other forms are training along with this can also benefit the company. For example, at Boeing they have an ethical situation test that creates a fun environment for a serious topic. Each supervisor is asked to question their employees on 54 situations and give four possible courses of actions, the employees then hold up cards with their choices (Kelley, 1998). This type of training stimulates collaboration and increases employee involvement in the issues. Personnel may be more likely to remember and use this training in the future based on the way it was presented.
Once these policies have been put in place the business needs to focus not only on itself as a whole but on individual employees as well. The most common forms of misconduct in United States business are on a personal level rather than companywide. These include conflict of interest, abusive and intimidating behavior, and lying. Not helping this situation is the fact that only 28 percent of businesses support criticism of their policies (Giancola, 2008). It is imperative that employees have a say in these guidelines because they are the ones affected by them. They should be allowed and expected to raise their opinions. This allows the company to create the most beneficial plan for their employees which will lead to a higher ethical following.
Another beneficial procedure for businesses to integrate is an ethics hotline. This is a confidential way for employees to report issues they believe to be or turn unethical. Employees can then feel safe to speak up without the fear of retaliation from co-workers or superiors. As people have become more aware of business ethics some companies have found that employees are more willing to even leave their name when reporting misconduct (Kelley, 1998). HR personnel can then act accordingly to the reported activity without making anyone feel vulnerable.
In addition, many companies have found it helpful to hire an ethics officer as well. This person would work with the hotline to provide advice on situations and help prevent them from escalating. This position is increasingly being introduced to companies around the world for its obvious benefits. With an ethics officer on board it is much easier for dilemmas to be handled before legal action is taken. This position is not an easy one and it takes a strong and loyal person to hold it. They must be able to clear the line between right and wrong and sometimes even stand up against executives (Kelley, 1998). Even still, this person is vital to many organizations and can sometimes even save a company.
Even with all of this put into place it is impossible to avoid unethical situations. However, if a company trains and prepares its employees to handle these dilemmas it has a better chance of extinguishing them before they get out of hand. This is not a cookie cutter practice either, each industry and business within said industry needs to create its own policy that best suits its needs. With these safeguards companies have a good chance at steering clear of serious issues and staying out of the unwanted spotlight.
Driscoll, D., Hoffman, W. M., (1999). Gaining the ethical edge: procedures for delivering values-driven management. Science direct, 32(2). Retrieved from http://www.sciencedirect.com.huaryu.kl.oakland.edu/science/article/pii/S0024630198001472
Giancola, F., (2008). A tool for developing ethical policies and procedures. ProQuest, 63(3). Retrieved from http://search.proquest.com.huaryu.kl.oakland.edu/docview/216888020
Kelley, T., (1998). Earning it; charting a course to ethical profits. Retrieved from http://www.nytimes.com/1998/02/08/business/earning-it-charting-a-course-to-ethical-profits.html?pagewanted=all&src=pm