Business Ethics: A Case Study Approach - Hardcover

Henn, Stephen K.

Hardcover

ISBN 10: 0470450673 ISBN 13: 9780470450673

Verlag: Wiley, 2009

Inhaltsangabe

An important guide for senior management on structuring an organization to promote ethical behavior and enhance performance

Designed for senior leaders of organizations–boards of directors; C-level executives; trustees; managing partners; government officials; and anyone tasked with a duty–Business Ethics: A Case Study Approach provides readers with an understanding of the human elements that drive ethical and unethical behavior and how to recognize indicators–both bad and good–of an organization's ethical make-up. Topics featured include: what drives individual decision making; how groups and environments influence decision making; the role of leadership; and much more.

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Über die Autorin bzw. den Autor

STEPHEN K. HENN is President of SmartPros Legal & Ethics, Ltd. He is an experienced consultant, executive, and attorney with over fifteen years as a pioneer and leader in legal and ethics training for lawyers and executives. He has been an instructor for several live and Web-based legal and ethics programs. Prior to SmartPros Legal & Ethics, Henn was president and CEO of Cognistar Interactive Corporation, a leader in Web-based continuing legal education and executive ethics and compliance training.

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THERE'S A "NEW NORMAL" IN BUSINESS ETHICS

Despite all the words and regulations aimed at building ethical and responsible organizations, observed misbehavior has increased think of the Siemens scandal and Bernie Madoff. Business Ethics: A Case Study Approach confronts the brutal fact about business ethics as it exists today it's not working.

This stirring casebook powerfully draws a direct line between ethics and business performance that is, the sounder your company's ethical foundation, the stronger it will perform in brand recognition, sales, customer satisfaction and loyalty, employee productivity, and even in reduced regulatory burdens.

So, how can you develop leadership that sets the right tone at the top?

Author and ethics professional Stephen Henn answers that question with candidly insightful case studies that look at every angle of ethical lapses, including:

• A CFO's Dilemma
• The Duke University Lacrosse Scandal
• Arthur Andersen
• The Stanford Prison Experiment
• The Smithsonian Institution
• Firestone/Ford Tire Recalls
• Jordan's Furniture
• Whirlpool and Leadership Development
• Ponzi Schemes
• And many more

Examining the old mind-sets and dogmas on business ethics and holding them up to the light of day, Business Ethics: A Case Study Approach reveals how the ethical health of your organization will forecast whether or not it outperforms the competition. This is your twenty-first-century rule book for understanding the "new normal" in business ethics.

Aus dem Klappentext

In the seven years since Enron exploded, it seems little has changed. The financial crisis, the seemingly intractable problems facing Detroit, and the bribery scandal that resulted in an $800 million fine for Siemens, to name a few have altered the business landscape for the foreseeable future. Ethics seems to be discussed frequently when people talk about these matters. So, have we learned our lesson? If the past few years are any guide, the answer is "no."

Linking theory to practice, "Business Ethics: A Case Study Approach"--written by ethics professional Stephen Henn-provides de-tailed case studies showing how organizations built on strong ethical foundations outperform those where ethics is not a principal business driver. Revealing the relationship between behavior in the workplace and the conditions that foster it, this timely book: Discusses the key elements involved in ethical and unethical behavior Looks at the role of trust in an organization and its internal and external dealings Examines the psychology behind individual decision-making Explores the role that group behavior plays in affecting individual decision-making Reveals how to strengthen an individual's affinity for your organization

When the facts are all out, Bernie Madoff probably did not get up one morning and say, "I think I will reconstruct the original Ponzi scheme and defraud investors." For the vast majority of companies ruined by ethics scandals, there was something small that eventually snowballed into an out-of-control situation. "Business Ethics: A Case Study Approach" is, now more than ever, essential reading for senior leaders of organizations, trustees, managing partners, government officials, and anyone tasked with a duty-fiduciary or otherwise--to prevent that "something small" from happening in the first place.

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Business Ethics

A Case Study ApproachBy Stephen K. Henn

John Wiley & Sons

Copyright © 2009 John Wiley & Sons, Ltd
All right reserved.
ISBN: 978-0-470-45067-3

Chapter One

Introduction

To see what is in front of one's nose needs a constant struggle. -George Orwell

Themes

So, with some niceties dispensed with, let's spend time on the over-arching themes that you should keep in mind as we go through this discussion. The first is that your organization is not perfect, nor will it ever be. There will always be some risk involved. With employee turnover in the range of 10 to 20 percent per year, you will always be adding new dynamics to the mix of your personnel structure. This obvious fact goes to the point that you need to be looking at the ethical makeup of your organization constantly in the same manner and rigor you review financial performance.

So it is important to understand what you can control and what you cannot control. To keep it simple, there are three basic types of unethical behaviors. The first is the "lone wolf," that is, someone acting alone in a position of trust and in an area of their expertise. Embezzlement is typical of this problem. It is hard to stop the determined lone wolf. The good news is that the damage is usually minimal. The slightly better news is that this unethical behavior is not "structural." It is the ethics equivalent of getting struck by lightning. Bad luck, but you move on. We will talk about ways-in the context of preventing more substantial problems-to minimize risk. A determined person, however, will be difficult to spot. That is, until they drive the $80,000 sports car to work.

The next type of unethical behavior is the "oops," which is far more common. This is where an employee-loyal, hardworking, and honest-makes a mistake. A big one. A mistake that could get him or her fired. The decision then, on that person's part, is to fess-up or cover-up. The overwhelming temptation is to cover-up and hope for the best. The "oops," like the lone wolf, is usually not fatal or structural. Yet how the scenario plays out will heavily influence future behavior.

The last type is the "conspiracy." As the term implies, it is the effort by more than one individual to perpetuate a fraud. These latter two situations are the primary focus of this book. These situations are the company killers. Conversely, they should be the easiest to prevent to a diligent organization: The bigger the conspiracy, the greater the risk to the conspirators that they involve someone who exposes the conspiracy.

Second, while a qualitative concept, ethics can be measured. Ethical and unethical behavior show up in costs, growth, employee turnover, employee satisfaction, and, of course, return on equity. Attitudes can be surveyed and the results compared over time and across your organization. While there is a temptation to dismiss qualitative results as too soft, there are a number of methodologies and tools that can analyze behavior and produce actionable data.

Finally, since this is not fiction, I don't mind revealing a key plot point early. As you read this, keep in mind the notion of "trust." Trust is so important to an organization at the macro- and microlevel that it is essential to discuss upfront. The reason we focus on personal ethical behavior and the aggregate ethical behavior of an organization is because it is the basis of building trust between individuals and between organizations. At the core, trust is the most essential way to reduce cost and build value.

As mentioned in the preface, throughout the book there are case studies and examinations of ethical lapses that focus on the role of the senior executives. I urge you to examine these situations with an eye toward identifying the breakdown of trust in the relationships. This is important because, while trust is a "touchy feely" concept, as senior executives you often do not have enough raw data to understand the facts well enough. In point of fact, where issues of fraud and malfeasance are involved, real facts are even harder to come by as they are often covered up or obfuscated by those perpetuating the unethical behavior.

What you are left with is a gut feeling for the situation: Do you trust the facts? Do you trust the statements? Do you trust the individuals? If not, it is time to act.

CASE STUDY A CFO'S DILEMMA

Years ago, there was a chief financial officer (CFO) of a manufacturing company about to be taken public. Times were good: The company had successfully come out of the development stage and started to ship product, had negotiated relationships with the top resellers in our industry and, in so doing, secured upward of 85 percent of the distribution chain, and the initial reception from the investment banking community was very good. The company was buzzing with excitement-especially as employees and management started to believe their stock options would be worth a fair amount of money.

The accounting group and outside auditors had recently completed the audit of the second-quarter numbers that would be used as the basis for the offering. Summer was upon them and there was a lull in the activity as the company was in the final stages of deciding on an investment banker. Returning from lunch one day, the CFO saw a tractor-trailer at the loading dock. This was good news because it meant the company was shipping product. Taking a quick detour, the CFO asked the manufacturing manager where the product, a specialized machine, was headed. "Here," he said. "It is coming back for a software upgrade. It will be going back out in the next day or so." Oh, well, the CFO thought, and headed to his office.

But something nagged at him. The company's processes included a fairly detailed forecast of revenue, and the CFO did not recall anyone forecasting upgrade revenue for the foreseeable future. Later in the day, curiosity getting the better of him, the CFO went back down to the manufacturing manager and asked if he knew if the software upgrade had been forecasted and for when-the CFO's assumption being that this machine was being upgraded early. "No, we are not charging for this. It's included in the sales price. But it is no big deal; it costs us nothing. Plug in a computer and press a button; maybe 20 minutes of work," he said.

The CFO had negotiated the contracts when he was an outside advisor to the company, and he was damn certain that there were no "free" software upgrades. The CFO stated, "I am fairly certain upgrades were not included in the price."

"Beats me, but I know this machine is getting an upgrade."

This could be a very big problem. The company recognized the revenue based on acceptance of the device. If there was an expectation of an upgrade, there could not be acceptance. No acceptance, no revenue. Having just completed the audit, the CFO knew the company had booked the revenue for all machines shipped to date.

The CFO pored over his files, but there was nothing in the files to indicate the upgrade was due. The CFO then tried to contact the head of engineering, but he was away on vacation. The nagging...

Details zur Ausgabe

• Verlag: Wiley
• Erscheinungsdatum: 2009
• Sprache: Englisch
• ISBN 10: 0470450673
• ISBN 13: 9780470450673
• Einband: Gebundene Ausgabe
• Auflage: 1
• Anzahl der Seiten: 208
• Kontakt zum Hersteller: Wiley-VCH GmbH; product_safety@wiley.com; ; Boschstrasse 12; Weinheim; 69469; Deutschland