Ethics in the Workplace

Supplemental Self-Study Presentation

Ethics in the Workplace

Overview
Ethics in the Workplace

Introduction
The most common understanding of ethics is that it has to do with standards of right and wrong,
and how people should behave. People most often think about:
• Behaviors to engage in
• Behaviors to refrain from
• Specific values such as:
– Honesty
– Fairness
– Integrity
Ethics in the Workplace

Module 1:
What Is Business Ethics?
Ethics in the Workplace

The Development of Ethical Standards

Ethical standards are developed using different approaches:
• Utilitarian approach. The goal is to produce the greatest good and the least amount of harm.
You can do this by focusing on the consequences of behaviors.
• Fairness or justice approach. All people should be
treated equally—or fairly based on a defensible standard. For example, paying people more
based on harder work or greater contributions to the organization. Likewise, all people should
be treated with dignity.
Ethics in the Workplace

The Development of Ethical Standards Part 2

• Common good approach. Decisions are made based on improving the welfare of everyone.
Police and fire departments, public education, recreation, and health care are often created
based on the common good approach (or trying to achieve the common good approach).
• Virtue approach. This approach answers the question, “What kind of person will I become if I
do this?” It looks at what behaviors bring out the highest potential in people. These would
include virtues such as, truth, honesty, courage, compassion, generosity, tolerance, integrity,
fairness, self-control, prudence, etc.
Ethics in the Workplace

Myths about Business Ethics

• Myth: Ethics has to do with my feelings about what is right or wrong.
Truth: Your feelings can misdirect you.
• Myth: Ethics has to do with my religious beliefs.
Truth: Being ethical can be related to religious
beliefs and can motivate people to
act ethically; however, every person can
behave ethically, even if they don’t have any
specific religious beliefs.
• Myth: Being ethical is not breaking the law.
Truth: Being ethical is not the same as
following the law. In most cases, the law is
derived from ethical standards. However,
behaving ethically may require doing MORE
than the law demands. And in rare cases,
such as when slavery was legal, following the
law was unethical.
Ethics in the Workplace

Myths about Business Ethics

• Myth: Being ethical is behaving in a way that society/the organization believes is acceptable.
Truth: Sometimes societal or organizational norms get out of whack, such as in Nazi Germany
or Enron or the financial meltdown of late 2008. Often, there isn’t consensus on what society
accepts, such as abortion or gay marriage.
• Myth: Ethics is simply doing what’s right.
Truth: What’s right is in the eye of the
beholder. Two people can be faced with the
same situation and make two different
decisions about how to behave and both
claim
they are doing what’s right.
• Myth: Ethics can’t be managed or trained—
people are either ethical or they’re not.
Truth: Ethics can be managed and trained;
however, a business needs to specifically
communicate its expectations and standards of behavior.
Ethics in the Workplace

Benefits of an Ethical Workplace

Benefits of fostering an ethical workplace go beyond simply doing the right thing (although that is
important). Here are more reasons:
• Gives employees a foundation during times of change. In today’s business environment
where change is constant and senior management can be a revolving door, attention to
business ethics makes people consciously decide how they want to/should behave.
• Cultivates teamwork and productivity. Ongoing discussions about business ethics builds
trust, openness and, community—important ingredients of effective teams in the workplace.
• Creates greater consistency in standards and quality of products and services offered by the
organization. There will likely be more satisfied customers when they know they can have
confidence in the quality of the product/service and how it is offered/delivered. And
employee satisfaction will be higher, thus reducing turnover, lawsuits, etc.
Ethics in the Workplace

Benefits of an Ethical Workplace Part 2

• Helps ensure corporate policies are legal and proactively enforced. Attention to business
ethics can close the gap between stated policies and actual behavior. In bottom line terms,
this can save the company money by minimizing lawsuits related to hiring, firing, harassment,
etc.
• Supports employer and societal growth. Attention to business ethics has prompted changes
over time, such as appropriate length of work days, hiring, and firing based on reasonable
standards, etc.
Ethics in the Workplace

The Ideal Ethical Workplace

• Equality is essential.
• Fairness is fanatical.
• Integrity is integral.
• Vision is vital.
• Individual accountability is authentic.
• Collective responsibility is common.
Ethics in the Workplace

Test Your Knowledge

Read the question, then click on the answer.

The “Utilitarian” approach to developing ethical standards is based on which premise?

A. Do the least harm.

B. Treat all people equally.

C. Increase the welfare of everyone.

D. Develop individuals to their highest potential.

Ethics in the Workplace

Module 2:
How to Create an Ethical Workplace
Ethics in the Workplace

Guidelines for Achieving an Ethical Workplace

Creating an ethical workplace takes thought and planning; it doesn’t just happen automatically.
Follow these tips for implementing a thorough and thoughtful plan.

Communications
• Develop a written code of ethics.
• Distribute a copy of the code to every employee and include it with new employee
orientations.
• Make copies available to business partners and customers.
• Emphasize the code’s importance by having senior management leading communications.
• Explain how senior management/board of directors, etc. uses the code when formulating
business practices and strategies.
Ethics in the Workplace

Guidelines for Achieving an Ethical Workplace Part 2

• Use various communication channels to reinforce the content of the code. For example,
include a letter from the CEO along with a copy of the code, send an email regarding the code
and ethics policy or post it on the organization’s intranet along with examples that illustrate
acceptable and unacceptable behavior, blogs, video clips, etc.
• Make sure employees and others know the consequences of violating the code.
• Make sure employees know how to report violations of the code.
Ethics in the Workplace

Guidelines for Achieving an Ethical Workplace Part 3

Training
• Include ethical issues in employee orientation and ongoing
training.
• Use real-world scenarios/case studies so that employees are
clear about what constitutes acceptable business practices
(and what doesn’t).
• Ensure every employee knows how to react if he or she is
faced with a potential violation of the code or a decision
involving an ethical dilemma.
• If employees can’t be certain of confidentiality when
reporting a violation or potential violation, they will be less
likely to bring attention to any violations the company
culture will remain unchanged.
Ethics in the Workplace

Guidelines for Achieving an Ethical Workplace Part 4

Contracts and Performance Appraisals
• Make compliance with the code mandatory.
• Include references to code of ethics in employment
contracts and contracts with vendors and suppliers.
• Link violations to code with disciplinary procedures.
• Include review of compliance to code as part of annual
performance appraisals and bonus and salary evaluations.
Linking compliance with the code to performance
appraisals builds it into the culture of the organization.
Ethical behavior becomes a norm and expectation.
Ethics in the Workplace

Guidelines for Achieving an Ethical Workplace Part 5

Monitoring and Reporting
• Establish an independent committee to deal with oversight
of the code.
– Make them responsible for establishing, reinforcing, and
monitoring the code, ethics policies, and identifying
potential ethical risks and opportunities.
– Use surveys, assessments, and other reporting tools to
determine level of compliance from the organization as a
whole.
• The code of ethics and its accompanying policies and
procedures should be reviewed at least every three years to
ensure that new issues are covered and its relevance is
maintained.
• Analysis of ethics performance should be reported regularly
to employees and other stakeholders.
Ethics in the Workplace

Guidelines for Achieving an Ethical Workplace Part 6

The Bottom Line
The best way to handle an ethical dilemma is to avoid its development in the first place. Your
ethics policy is working if your employees demonstrate ethical behaviors and refrain from
unethical behaviors (as defined by your Code of Ethics). You should value attempts to behave
ethically and recognize that a few mistakes are better than not trying at all. Sweeping infractions
under the rug and pretending everything is OK only enables unethical behavior to persist.
Ethics in the Workplace

Decision-Making Tools
Many employees will have their own ideas about what is ethical and what isn’t. In many cases,
common sense serves as the basis for making decisions. However, it is also helpful to have some
tools for employees to use when faced with an ethical dilemma. We start by offering a series of
questions to cover to guide the employee in making an ethical decision.
• What are the facts?
• Who is involved? Who will be affected by the
outcome?
• What are the underlying causes of the situation?
• What principles, values or standards should be
upheld in this situation?
• What is the best case scenario? The worst case scenario?
• What are possible options/alternatives/solutions, and the pros and cons of each? (minimizes
negative consequences and upholds values/standards)
• What is your decision and how will you explain it?
Ethics in the Workplace

Decision-Making Analysis
Once you have made your decision, it can be helpful to analyze it to make certain you are
comfortable with your decision.
• Have you defined the issue/situation/problem accurately?
• Have you considered the other side of the issue/problem?
• How did this situation occur in the first place, and how does this affect your potential
decision/action?
• What is your intention in making this decision?
• Whom could your decision/action affect or injure?
• Can you discuss the situation/problem with those
affected before you make your decision?
• Can you explain your decision/action to your boss,
family, society with no misgivings/reservations?
• Will you be as confident about your decision in a
year as you are now?
• How will your decision be perceived by others?
Ethics in the Workplace

Decision Confidence Assessment

If you like a very structured approach, this chart

may be more useful when analyzing a decision
you have made. It can be used in conjunction
with the questions on the previous slide,
or in place of them. Click to the next slide to
view the assessment.
Ethics in the Workplace

Decision Confidence Assessment Part 2

Scale: 1=not at all; 2=sort of; 3=about average; 4=better than most; 5=absolutely!

Did I obtain all relevant information about the situation to make an

Relevant information 1 2 3 4 5
informed decision?

Affected people Is everyone who is affected or has a right to be informed/involved in the 1 2 3 4 5

decision in fact informed and/or involved?

Consequences Have I identified all potential negative consequences of my decision? 1 2 3 4 5

Fairness If I were any one of the people affected by this decision, would I think it was 1 2 3 4 5
fair?

Universality How well could this decision be applicable to all similar situations? 1 2 3 4 5

Does this decision uphold the values and standards that are important to
Upholding values 1 2 3 4 5
me and my organization?

Enduring worth Will I feel as confident about this decision in a year as I do today? 1 2 3 4 5

Grandmother test Is there anything about this decision I would hesitate to tell my 1 2 3 4 5
grandmother/mother/child, etc.?
Ethics in the Workplace

Common Excuses and What to Do about Them

If participants haven’t used these excuses for unethical behavior themselves, they have probably
heard other people use them.

• “My boss told me to.”

• “I’ll lose my job if I don’t.”
• “Everyone does it.”
• “It’s expected.”
• “I have to do it to get ahead.”
• “The organization won’t notice.”
• “My customers expect it.”
Ethics in the Workplace

Common Excuses and What to Do about Them

What is the antidote to these excuses? Don’t be a victim! Ask

yourself if you really want to work at a place that condones or
even supports unethical behavior. If you’re not in a position to
change jobs at the moment, think about the positive way you
may be perceived if you stand up for yourself and what you
know is responsible behavior. Think of the 4 C’s:
• Character—who you are when no one is looking
• Conscience—doing what you know is right in this situation
• Courage—feel the fear and do it anyway
• Confidence—acting “as if”
Ethics in the Workplace

Dealing with Unethical People

Dealing with unethical people can be an extremely difficult situation, especially if that person is
your boss.

Before you report a violation:

• Make sure you have your facts in order.
• Include documentation if possible.
• Have first-hand knowledge; don’t base
your claims or accusations on hearsay.
Even if the source is someone you trust
wholeheartedly, see if you can
substantiate that person’s claim.
• Diplomatically see if others know what
you know.
• If the unethical person is your boss, see if others know what you know—a “safety in numbers”
approach can help protect you if you decide to report on your boss.
Ethics in the Workplace

What You Can Do

• Behave ethically yourself.
• Lead by example. For instance, if you make a mistake, admit it and use it as a learning
opportunity.
• Get to know coworkers, customers, and vendors as individuals and don’t base your opinions
of them on what others say.
•Find common ground even with people who behave unethically.
• If others’ unethical behavior is affecting you, and you see it is not going to change (through
your intervention or anyone else’s), then find a way to deal with it without getting sucked in
yourself.
– Limit your interactions with the person.
– Remind yourself that their behavior isn’t personally
directed at you.
– Don’t respond in kind.
– As you develop rapport, you may be able to influence
their decisions and choices to be more ethical.
Ethics in the Workplace

Test Your Knowledge

Read the question, then click on the answer.

Which of the following is true of creating effective guidelines for achieving an ethical workplace?

A. Keep ethics separate from annual performance appraisals so employees think about it more
than once a year.

B. Don’t involve senior management because employees are cynical about what they say.

C. Measure success based on the ability of employees to refrain from engaging in unethical
behaviors.

D. Use the standard chain of command to report potential ethical violations.

Ethics in the Workplace

Module 3:
Tools to Support an Ethical Workplace
Ethics in the Workplace

An Ethics Policy
An effective ethics policy:
• Sets out an organization’s ethical values, standards, and commitments that form the
foundation for the way that it does business.
• Confirms senior management commitment to the above.
• Describes how to report a potential violation.
• Describes how this will be achieved and
monitored.
• Identifies the main ethical issues faced by the
organization and employee.
• Identifies other policies and documents that
support and detail aspects of the ethics policy -
such as a code of ethics, a bullying and
harassment policy, a gifts and hospitality policy,
an environment policy etc.
Ethics in the Workplace

An Ethics Policy Part 2

Supportive Activities Unsupportive Activities

• Tie the code in with the organization’s core values.
• Give a copy to all staff.
• Provide the means to report a violation of the code •
in a confidential manner.
• Make the code available to customers and
business partners.
• Make adherence to the code a part of the
employment contract.
• Senior staff model the desired behaviors.
• Set up an independent board to monitor the code’s •
effectiveness.
• Write the code separately without incorporating
core values (or not having core values).
• Pin the code on the HR bulletin board.
Failure to follow up on reported violations.
• Treat the code as confidential or a strictly
internal document.
• Make exceptions to the employment contract.
• Senior staff behave contrary to the code
Depend on hearsay to judge whether or not the
code is working.
Ethics in the Workplace

Issues Addressed in an Ethics Policy

Ethics policies expressly state traits and
behaviors that foster ethical behavior. They
often deal with the following issues:
• Professional dress and behavior
• Business expenses
• Personal use of business property
• Gifts and entertainment
• Conflicts of interest
• Confidentiality
• Harassment and discrimination
• Work/home balance
• Security and data protection
• Drug and alcohol use
• Whistle blowing
Your goal when developing ethics guidelines is
to focus on the top values needed to avoid the
potential ethical dilemmas that are most likely
to occur in your organization.
If you are implementing an ethics policy for the
first time, it may increase the number of issues
and potential violations in your organization, as
people become sensitive to the standards and
expectations.
Ethics in the Workplace

Traits to Promote
• Honesty, integrity, and trustworthiness
• Responsibility and accountability
• Respect, courtesy, tolerance, and acceptance
• Justice and fairness
• Compassion, caring, kindness
• Citizenship—at work and in your community
Ethics in the Workplace

Code of Ethics Example

This example is typical for a major corporation in the United States.

Ethical Business Practices

Company policy requires Directors, employees, and agents to observe high standards of business
and personal ethics in the conduct of their duties and responsibilities. Directors and employees
must practice fair dealing, honesty, and integrity in every aspect of dealing with other Company
employees, the public, the business community, shareholders, customers, suppliers, competitors,
and government authorities.
When acting on behalf of the Company, Directors and employees shall not take unfair advantage
through manipulation, concealment, abuse of privileged information, misrepresentation of
material facts, or other unfair-dealing practices. Company policy prohibits unlawful discrimination
against employees, shareholders, Directors, officers, customers or suppliers on account of race,
color, age, sex, religion or national origin. All persons shall be treated with dignity and respect and
they shall not be unreasonably interfered with in the conduct of their duties and responsibilities.
Ethics in the Workplace

Code of Ethics Example Part 2

Ethical Business Practices (continued)
No Director or employee should be misguided by any sense of loyalty to the Company or a desire
for profitability that might cause him or her to disobey any applicable law or Company policy.
Violation of Company policy will constitute grounds for disciplinary action, including, when
appropriate, termination of employment.
Sensitive Transactions
Company policy prohibits its Directors, employees, and agents from entering into sensitive
transactions. If such a transaction occurs, the Company and its officers, Directors, and employees
directly involved may be subject to fines, imprisonment, and civil litigation.
Commercial Bribery
Company policy prohibits commercial bribes, kickbacks, and other similar payoffs and benefits
paid to any suppliers or customers.
Accounting Controls, Procedures & Records
Applicable laws and Company policy require the Company to keep books and records that
accurately and fairly reflect its transactions and the dispositions of its assets.
Ethics in the Workplace

Code of Ethics Example Part 3

Use & Disclosure of Inside Information
Company policy prohibits disclosure of material inside information to anyone other than persons
within the Company whose positions require them to know such information.
Confidential or Proprietary Information
Company policy prohibits employees from disclosing confidential or proprietary information
outside the Company, either during or after employment, without Company authorization to do
so.
Conflicts of Interest
Company policy prohibits conflicts between the interests of its employees and the Company.
Fraud & Similar Irregularities
Company policy prohibits fraud and establishes procedures to be followed concerning the
recognition, reporting, and investigation of suspected fraud.
Ethics in the Workplace

Supplier Ethics Example

This is an example of a corporation’s code of ethics regarding working with vendors.
Corporation is confident that its suppliers desire to operate in an environment that is free from
influence due to unethical business practices. Therefore, Corporation’s suppliers are requested to
conduct business in a manner that would not, in any way, compromise the ethical principles
required of Corporation’s personnel.
Corporation personnel are to abide by the following guiding ethical principles:
• Avoid the intent and appearance of unethical or compromising practice in relationships,
actions, and communications.
• Refrain from accepting money, gifts of other than nominal value, excessive hospitality, loans
or other special treatment from present or potential suppliers that might influence, or appear
to influence, purchasing decisions.
• Refrain from reciprocal agreements that restrain competition.
• Not to agree to restraints on resale or pricing on resale.
Suppliers who attempt to compromise these ethical principles will be subject to cessation of
business with Corporation.
Ethics in the Workplace

Test Your Knowledge

Read the question, then click on the answer.

Which of the following is the most useful activity to support the full adoption and integration of a
code of ethics in your organization?

A. Pin the code on the HR bulletin board.

B. Treat the code as confidential or as a strictly internal document.

C. Avoid following up on reported violations.

D. Make the code available to customers and business partners.

Ethics in the Workplace

Review
 Ethics in the Workplace

CASE STUDY—Apply What You’ve Learned

Read the case study and answer the questions that follow in order to put your skills into practice.

Organization: A large, metropolitan radio station.

People: Nick, Justin, Shannon: coworkers. Amy: Nick’s mentor.
Judith: a VP at the station.
Situation: Nick just joined the company and completed his new
employee training. He noticed a document labeled “Code of
Conduct” posted on the bulletin board in the break room and
remembered a brief mention of professional behavior and
expectations during his orientation training. He asked his mentor,
Amy, about it and she said, “I have never read it. I just do what
my conscience tells me. Do the same and you’ll be fine.”
 Ethics in the Workplace

CASE STUDY—Apply What You’ve Learned Part 2

A few days later Nick was meeting with his team including his coworkers Justin and Shannon.
Justin: “Are you ready for the process improvement review? I hear the consultant will be here
tomorrow.”
Shannon: “Who’s that?”
Justin: “His name is Jim Clark. Apparently, Judith highly recommended him.”
Shannon: “I hope he doesn’t mess things up. I
don’t know why we need a process
improvement review. I feel like things are
running just fine.”
Justin: “I know we can always get better, but
sometimes it’s just a cover for getting rid of
“deadwood”—you know, eliminating positions
just to get rid of certain employees more easily
than going through an official performance
improvement and dismissal process.”
 Ethics in the Workplace

CASE STUDY—Apply What You’ve Learned Part 3

A few days later Nick was making copies and found a piece of paper left in the copy machine. It
was a bill from a therapy session. The psychiatrist’s name: Jim Clark, and the patient’s name:
Judith Overton. Nick isn’t sure what to do with this information. He goes to Amy for advice.
Nick: “Am I acting unprofessionally to bring this
up when it’s clearly private? She left it in the copy
machine so it’s not like I intentionally invaded her
privacy. Or is she acting unprofessionally for using
her personal therapist for work that may result in
people losing their jobs?”
Amy: “Leave it alone. That’s what I say. What good
could come of saying something? Who would you
tell?”
Nick: “Well, according to our code of ethics, we
have an independent committee to look into
things like this. Isn’t that where I would go?”
 Ethics in the Workplace

CASE STUDY—Apply What You’ve Learned Part 4

Amy: “I would hardly call it independent. All of those people know Judith and while they’re not
directly under her supervision, she has a lot of influence with their boss. I wouldn’t risk it.”
Nick: “Risk it? You mean retaliation for reporting it?”
Amy: “Now you’re catching on!”
Nick goes back to his office to think about what Amy said. He
remembers that Amy told him simply to follow his conscience and
he would be fine. So what was his conscience telling him? That the
situation sounded fishy. In his mind, the situation had the
potential to do a lot of harm; some people might lose their jobs
due to a senior manager’s bias and working around the official
dismissal system. That didn’t seem fair. But what if this consultant
was actually unbiased himself and very good at what he did? Nick
wrestled with his choice about whether to report what he knew or
not. In the end, Nick decided he didn’t have enough information
to make an official report.
 Ethics in the Workplace

CASE STUDY—Questions to Consider

1. What myths, if any, were evident?
2. What activities did the organization do that supported their code of ethics? That weakened
their code of ethics?
3. What ethical issue(s) was/were present in the scenario and what excuses, if any, were used to
explain them?
4. Which approach to ethical standards (Utilitarian, Fairness, Common Good, Virtue) does Nick
appear to be using to asses the situation?
5. Why did Nick make the decision he did and what might
have been the alternative?
 Ethics in the Workplace

CASE STUDY—Suggested Answers

1. What myths, if any, were evident?

Amy told Nick, “I just do what my conscience tells me.” That statement reflects a mistaken
belief that business ethics is simply doing what’s right and that is has to do with your feelings
about what is right or wrong, both of which are myths.

2. What activities did the organization do that supported their code of ethics? That weakened
their code of ethics?

The organization posted a copy of the code in the break room and briefly mentioned it during
new employee orientation. Those two activities are not bad, but they are not enough to fully
integrate the code into the organization’s culture. Employees were not given their own copy
and appear to ignore the code or not take it seriously. In addition, it doesn’t appear to be
modeled by senior staff or used in annual performance appraisals, all of which undermine its
usefulness.
 Ethics in the Workplace

CASE STUDY—Suggested Answers Part 2

3. What ethical issue(s) was/were present in the scenario and what excuses, if any, were used
to explain them?

There are two issues. The first is Judith’s choice to use her personal therapist as a consultant
whose recommendations may result in employees losing their jobs. This is potentially a
conflict of interest and/or questionable behavior. The second is Nick’s decision whether or
not to report finding Judith’s bill in the copy machine. This reflects an issue of confidentiality.
We don’t know Judith’s rationale or excuse for her choice. When Nick takes Amy’s advice to
do nothing, he accepts the excuse that “Judith may retaliate and I may get fired if I report it,”
and “Maybe it’s not really a problem.”

4. Which approach to ethical standards (Utilitarian, Fairness, Common Good, Virtue) does
Nick appear to be using to asses the situation?

Nick’s thinking was that the situation had the potential do a lot of harm; that is evidence of a
Utilitarian approach. Then he thought to himself that the situation seemed unfair; that is
evidence of a Fairness approach.
 Ethics in the Workplace

CASE STUDY—Suggested Answers Part 3

5. Why did Nick make the decision he did and what might have been the alternative?

Nick justified his decision by saying to himself that he didn’t have enough information. And that
may be true. However, he seems to be influenced by Amy’s advice to leave it alone for fear of
retaliation.
The alternative would have been for Nick to report what he found. If the independent committee
had walked Judith through the ethical decision making analysis questions, she might have
changed her mind about using her personal therapist and avoided the appearance (or reality) of a
conflict of interest.
Ethics in the Workplace

Congratulations!
By now you should be able to:
• Dispel common myths about business ethics.
• Describe the ideal ethical workplace.
• Implement ethics guidelines and policies in your organization.
• Identify and resolve typical ethical dilemmas.
• Recognize common excuses for unethical behavior, and what to do about them.
• Deal with unethical coworkers, customers, and vendors.
Ethics in the Workplace

Appendix
Ethics in the Workplace

References
The following resources are suggested for further information on the topics covered in this course.

Ferrell, O.C. and John Fraedrich. Business Ethics: Ethical Decision Making and Cases. South-Western College Publishing, 2006.
Fishman, Wendy, Becca Solomon, Deborah Greenspan, Howard Gardner. Making Good: How Young People Cope with Moral Dilemmas at
Work. Harvard University Press, 2004.
Shaw, William H. Business Ethics. Wadsworth Publishing, 2007.
Trevino, Linda K. and Katherine A. Nelson. Managing Business Ethics: Straight Talk About How To Do It Right. Wiley, 2006.
Ethics in the Workplace

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