Please refer to Chapter 2 to describe (in 1-2 pages) how your “No Limits” business is going to operate ethically (with integrity, honesty, and humility). I have copied and pasted text from chapter 2 for you to reference to write my two page essay. It is mandatory that you reference parts of these texts from chapter 2 in my paper. I have the text from chapter 2 in bold and black below.
There are many companies out there today, big and small, that contribute to the community around them and abroad. How will your company be socially responsible.
Remember to make Direct reference to the text book (by page number) as you detail your vision for running your company ethically and with social responsibility. You are also encouraged to look up other articles in addition to your textbook as other references and resources.
2-2aFairness and Honesty
Fairness and honesty in business are two important ethical concerns. Besides obeying all laws and regulations, businesspeople are expected to refrain from knowingly deceiving, misrepresenting, or intimidating others. The consequences of failing to do so can be expensive. Recently, for example, Juan Alejandro Rodriguez Cuya faces decades in prison after being convicted of deceiving and intimidating Spanish-speaking customers of a call center into fraudulent settlements. In court, prosecutors explained that Cuya extorted victims into believing that they had to pay for deliveries of nonexistent products or else be subject to huge fines and lawsuits and even deportation. Gerber came under fire for promoting that its Good Start Gentle baby formula can prevent or reduce allergies in children. The Federal Trade Commission ruled that Gerber’s claim lacked scientific evidence and asked the company to remove the statement from its advertising and product labels.
If consumers feel they have been deceived or that companies have been unfair, they will take their business elsewhere and may even ask regulators to intervene. The Federal Trade Commission filed suit against AT&T for “throttling” or reducing Internet speeds for heavy smartphone users who signed up for unlimited plans. Some consumers saw their speeds reduced by as much as 90 percent. The head of the FTC contends that AT&T’s actions are unfair to consumers who paid for “unlimited” plans with the expectation of limitless usage and speed.
2-4cIndividual Companies’ Role in Encouraging Ethics
Codes of ethics are perhaps the most effective way to encourage ethical behavior. A code of ethics is a written guide to acceptable and ethical behavior as defined by an organization; it outlines uniform policies, standards, and punishments for violations. Because a code of ethics informs employees what is expected of them and what will happen if they violate the rules, it can go a long way toward encouraging ethical behavior. However, codes cannot possibly cover every situation. Companies also must create an environment in which employees recognize the importance of complying with the written code. Managers must provide direction by fostering communication, actively modeling and encouraging ethical decision making, and training employees to make ethical decisions. Figure 2-2 offers snippets of some of the guiding principles behind well-known companies’ codes of ethics.
Beginning in the 1980s, an increasing number of organizations created and implemented ethics codes. Today, about 95 percent of Fortune 1000 firms have a formal code of ethics or conduct. For example, the ethics code of Starbucks defines the firm’s mission and values and includes provisions relating to policies and procedures; laws and regulations; relationships with customers, suppliers, competitors, and the community; conflicts of interest; handling of proprietary information; and more. Starbucks’ code also details how employees can express concerns or find guidance in ambiguous situations and even provides a graphical decision-making framework that employees can apply to difficult decisions.
In the wake of a number of corporate scandals and the Sarbanes-Oxley Act, many large companies now have created a new executive position, the chief ethics (or compliance) officer. Assigning an ethics officer who guides ethical conduct provides employees someone to consult if they are not sure of the right thing to do. An ethics officer meets with employees and top management to provide ethical advice, establishes and maintains an anonymous confidential service to answer questions about ethical issues, and takes action on ethics code violations.
Sometimes even employees who want to act ethically may find it difficult to do so. Unethical practices can become ingrained in an organization. Employees with high personal ethics may then take a controversial step called whistle-blowing. Whistle-blowing is informing the press or government officials about unethical practices within an organization. Consider Josh Harmon, who brought a lawsuit against Trinity Industries under the False Claims Act, which permits whistle-blowers to sue companies they believe have defrauded the government. Harmon, who installed roadway guardrails that are supposed to cushion vehicles in the event of an accident, believed that Trinity failed to notify regulators and others that it had redesigned its guardrail end caps in such a way that they became unsafe and caused injuries and fatalities during vehicle accidents instead of reducing them. A federal jury ultimately decided that Trinity had indeed made false claims to regulators about the product’s redesign and owed $663 million in damages. Harmon, the whistle-blower, was awarded 30 percent of the award, or about $199 million.
Whistle-blowing, however, can have serious repercussions for employees: Those who “blow whistles” may face retaliation and sometimes even lose their jobs. The Sarbanes-Oxley Act of 2002 protects whistle-blowers who report corporate misconduct. Any executive who retaliates against a whistle-blower can be held criminally liable and imprisoned for up to ten years. Federal employees who report misconduct are likewise protected by the Whistleblower Protection Act of 1989.
When companies set up anonymous hotlines to handle ethically questionable situations, employees actually may be more likely to engage in whistle-blowing. When firms instead create an environment that educates employees and nurtures ethical behavior, fewer ethical problems arise. Ultimately, the need for whistle-blowing is greatly reduced.
It is difficult for an organization to develop ethics codes, programs, and procedures to deal with all relationships and every situation. Michael Josephson, an expert on workplace ethics, says, “The objective of such programs is to establish a business culture in which it’s easier to do the right thing than the wrong thing, and where concerned co-workers and vigilant supervisors repress illegal or improper conduct that can potentially endanger or embarrass the company.” When no company policies or procedures exist or apply, a quick test to determine if a behavior is ethical is to see if others—co-workers, customers, and suppliers—approve of it. Ethical decisions will always withstand scrutiny. Openness and communication about choices will often build trust and strengthen business relationships. Table 2-1 provides some general guidelines for making ethical decisions.
2-9Implementing a Program of Social Responsibility
A firm’s decision to be socially responsible is a step in the right direction—but only the first step. The firm then must develop and implement a program to reach this goal. The program will be affected by the firm’s size, financial resources, past record in the area of social responsibility, and competition. Above all, however, the program must have the firm’s total commitment or it will fail.
An effective program for social responsibility takes time, money, and organization. In most cases, developing and implementing such a program will require four steps: securing the commitment of top executives, planning, appointing a director, and preparing a social audit.
2-9aCommitment of Top Executives
Without the support of top executives, any program will soon falter and become ineffective. For example, the Boeing Company’s Ethics and Business Conduct Committee is responsible for the ethics program. The committee is appointed by the Boeing board of directors, and its members include the company chairman and CEO, the president and chief operating officer, the presidents of the operating groups, and senior vice presidents. As evidence of their commitment to social responsibility, top managers should develop a policy statement that outlines key areas of concern. This statement sets a tone of positive support and later will serve as a guide for other employees as they become involved in the program.
2-9bPlanning
Next, a committee of managers should be appointed to plan the program. Whatever form their plan takes, it should deal with each of the issues described in the top managers’ policy statement. If necessary, outside consultants can be hired to help develop the plan.
2-9dThe Social Audit
At specified intervals, the program director should prepare a social audit for the firm. A social audit is a comprehensive report of what an organization has done and is doing with regard to social issues that affect it. This document provides the information the firm needs to evaluate and revise its social responsibility program. Typical subject areas include human resources, community involvement, the quality and safety of products, business practices, and efforts to reduce pollution and improve the environment. The information included in a social audit should be as accurate and as quantitative as possible, and the audit should reveal both positive and negative aspects of the program. Caesars Entertainment, which operates casinos, evaluates its corporate citizenship efforts annually and then issues a report describing its performance for a variety of stakeholders including employees, investors, and the media. Caesars’ Corporate Citizenship Report details its performance in meeting goals in the areas of responsible gaming, employee development, environmental stewardship, and community investment.
Today, many companies listen to concerned individuals within and outside the company. For example, the Boeing Ethics Line listens to and acts on concerns expressed by employees and others about possible violations of company policies, laws, or regulations, such as improper or unethical business practices, as well as health, safety, and environmental issues. Employees are encouraged to communicate their concerns, as well as ask questions about ethical issues. The Ethics Line is available to all Boeing employees, including Boeing subsidiaries. It is also available to concerned individuals outside the company.
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