FACULTY LECTURES - Denis Collinsdcollins.faculty.edgewood.edu/BuisnessEthics...Sensitize yourself to...

SOCIAL RESPONSIBILITY IN BUSINESS

BUS 465

FACULTY LECTURES

FALL 2009

2

F IRST C L ASS Class Outline

Welcome – Last Dilemma My Ethical Dilemmas Communication Bio Info Sheets Values of a Good Society

Welcome to class.

How many of you would like to make the world a better place? Two things to do:

Design ethical organizations (we will do this) Sensitize yourself to ethical issues (we will do this)

How long since your last Ethical Dilemma? [1 year/stand up, 6 months, 1 month, week, day]

My recent ones

Types of ethical dilemmas I faced at different points in my life:

Age 18: Supermarket Clerk o Co-worker stealing products o My mom wants discounted ice cream o Bread thrown away in dumpster

Age 21: Accounting Intern o Drunk at lunch time

Age 22: Supermarket Manager/Headquarters o Dating clerks o Blowing off the day

How many of you would like to become excellent managers, get promoted, earn a good

salary?

Quick Quiz #1: What is the #1 Desired Skill – Communication Importance of Community and Talking in Class

3

ACTIVITY #1: In Front of Class, one row at a time Name Hometown Highlight of Break

My Bio

Student Info Sheet

I want to see who is paying attention: How many of you would like to become excellent managers, get promoted, earn a good

salary?

Quick Quiz #2: What is the #1 Desired Skill – Communication HABITS REQUIRE PRACTICE! … SO LET’S DO IT AGAIN! ACTIVITY #2: In Front of Class, one row at a time

Father’s Occupation Mother’s Occupation

A C T I V I T Y – VALUES OF A “GOOD SOCIETY”: VALUES defined: Beliefs of a person or social group in which they have emotional investment. What are the values of a “Good Society?”

(1) Typical L ist: T rustworthiness, Respect, Responsibility, Justice, Fairness, Caring, L iberty/F reedom

(2) Edgewood Values: Truth, Justice, Partnership, Community, Compassion If they are to guide society, they must be respected within:

(1) Business Sector, (2) Organizations, (3) Class This class is about creating ethical organizations Review model Review syllabus Review Homework

4

I will challenge you on that throughout the semester. … speaking of challenges: MANY THINGS OCCUR IN THREES: 24 hours: Morning, Afternoon, Night Life: Fetus, Body, Spirit Development: Formation Stage, Growth Stage, Completion Stage ….. SO …

Quick Quiz #3: What is the #1 Desired Skill – Communication

ACTIVITY #3: In Front of Class, one row at a time

Child/Teenager: What was your ideal job? Now: What would your ideal job be?

5

STUDENT INFORMATION SHEET The purpose of this form is to help me get to know who you are. Formal Name: Name I Should Call You: U.S. Citizen? Yes or No If No, what nation are you a citizen? Major: Phone Number: e-mail (print clearly otherwise my message will not reach you): Number of credits you are taking this semester: Number of hours a week you will be working at a job during the semester: Current or Most Recent Employment (Company Name, type of work): Career Objective: Extracurricular Activities or Hobbies:

6

E T H I C A L DI L E M M AS PE RSO N A L L Y E XPE RI E N C E D Read the syllabus. H O M E W O R K DU E (A): Write one short paragraph describing an incident at work (a part-time job or student organization) that represented an ethical dilemma, something that troubled your conscience, or that was not in the firm’s interest, violated a law, or not good for society. Using fictitious names, who did what, when, where, and why? How did you feel about it? H O M E W O R K DU E (B): Create a computer journal file. On the first page, write the 5 values of a good society the class agreed on. Next, write down an inspiring quote that you find meaningful and explain why it is. Print a copy of the quote and explanation and submit it as your homework. Class Outline

Quiz Syllabus Good Samaritan Story Journaling Student Dilemmas

SURPRISE T RU E /F A LSE Q UI Z B ASE D O N SY L L A BUS – Do on back of E thical

Dilemma H W 1) If you miss 6 class meetings the highest grade you can earn is a “C.” TRUE 2) If you never participate in class you lose 100 points in the 1,020 point grading system. TRUE 3) Late assignments are penalized 20%. TRUE 4) You can submit assignments over email. FALSE 5) If you miss a quiz you can take it at a later date. FALSE 6) Our Human Issues project will be about ______________? 7) You can receive a lower grade for a group project based on peer evaluations. TRUE 8) Each quiz will consist of 6 questions from the textbook reading. You will first take the quiz by yourself to see how prepared you are for class and then you will redo the exam with a team of students where you will teach each other the answer. TRUE. 9) There will be surprise quizzes. FALSE. F R E E M E A L ASSI G N M E N T To some degree, being “ethical” is similar to being a Good Samaritan. Why are some people Good Samaritans and others are not? What is the Good Samaritan Story?

Good Samaritan Research Study

7

Princeton Psychology Study -- Helping Behavior a function of (1) Personality, (2) Sensitivity to Issue or (3) Time Concern

Princeton Theology seminarians invited to a preaching contest Personality: tests conducted on (a) did you become seminarian to convert people or (b)

to care for the poor [also Type A/B] Sensitivity to Issue: (a) Half to give talk on Ministerial Careers and (b) half on the story

of the Good Samaritan – Jesus story on who is your neighbor – injured person on road ignored by rabbi and Levite (cares for Temple), but not Samaritan (a New Yorker!)

Time Concern – Meeting is on other side of campus and (a) half told they are already a late and (b) other half told they have twenty minutes to get over there

On path to building is an obviously hurt, moaning person on the ground leaning against a wall

By far the biggest predictor of who did or didn’t help – TIME What Contextual/Organizational Factors lead Business People to behave unethically?

(1) Please My Boss (2) My colleagues do it (3) Time (4) Profit

M Y B E L I E F : 20% Go-getters, 60% Fence-sitters, 20% Adversarial As future World-Class Managers You Need to Develop: L IST O N B O A RD

(1) Listening Skills (2) Communication Skills (3) Safe Conversational Learning Environment

I also want to make you more aware and reflective of what is happening in the world around you from an “ethical” perspective A C T I V I T Y – JO URN A L IN G

(1) Purpose of Journaling – More aware, understanding [Review in Syllabus] (2) Write about experiences outside and inside the classroom, the types of ethical dilemmas

you experienced or observed [What did I observe/experience today] (3) Evaluate them according to the values of a “good society” and your “inspiring quote” (4) Begin now

a. Something praiseworthy you recently experienced or observed b. Something blameworthy you recently experienced or observed c. Why did they excite you one way or the other? d. What could be done to reinforce or prevent them from occurring?

* A C T I V I T Y – R E A L-L I F E E T H I C A L DI L E M M AS: In small groups: (1) Share both of your ethical dilemmas with partner (2) Partner can ask qualifying questions (3) Partner will introduce student and share the most interesting dilemma with the entire class

8

(4) Award someone for the most interesting dilemma (5) Share award winner with the entire class. N O T E : R E A D A L L T H E DI L E M M AS A ND T H E N C H O OSE T H E 1/3 T H A T I T H IN K PR O V ID E T H E M OST V A RI E T Y A ND F O R M G R O UPS A R O UND T H E M .

9

C H APT E R 1: H U M A N N A T UR E A ND UN E T H I C A L B E H A V I O R IN

O R G A NI Z A T I O NS Enron Situation

Activity: Have the students do the following: For “In the Real World – Merger Opportunity: 1985,” if you were the CEO of Houston Natural Gas (p. 7), would you reject the merger proposal (option 1) or merge with InterNorth (option 2)? Why?

Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Background Summary:

“Merger Opportunity—1985,” pp. 6-7: Irv “The Liquidator” Jacobs approaches InterNorth to buy it out InterNorth of Omaha, Nebraska ($7.5 billion, 3 times the size of HNG) approaches Ken

Lay to be a White Knight Will pay $70 a share for stock selling at $46, a $2.4 billion price tag to buy HNG Combined IN/HNG Natural Gas entity would have a $4.3 billion debt Plus a $357 million greenmail payment to Jacobs for stock he already owns This would deplete cash Jobs would be reduced, only need 1 CEO! And HQ to be in Omaha But Ken Lay would earn a lot, getting $70 a share for his $46 a share HNG stock, which

he has a lot of Review Ken Lay background.

If you were the CEO of Houston Natural Gas (p. 7), would you:

reject the merger proposal (option 1) or merge with InterNorth (option 2)?

Why? Vote and Debate – Real Life: Merge The Ethical Decision-Making Framework questions are:

1) Who are all the people affected by the action?

a. CEO of HNG (you/Ken Lay) b. Houston Natural Gas employees c. InterNorth employees d. Shareholders of Houston Natural Gas and InterNorth e. Irwin Jacobs

2) Is the action beneficial to me? – Can go either way.

10

a. Yes. If we merge I can cash out my stock holdings and make a fortune, so

merging might be in my best interests. b. No. If we merge I might lose my job due to redundancy, so rejecting the offer

might be in my best interests.

3) Is the action supported by my social group? – Can go either way.

a. Yes. Mergers take place all the time, so merging is supported by other CEOs. b. No. Some CEOs reject mergers in order to protect the executive team’s job

security.

4) Is the action supported by national laws? – Accept the merger proposal. The CEO has a legal obligation to always act in the best interest of shareholders.

5) Is the action for the greatest good of the greatest number of people affected by it? – Accept the merger proposal.

By merging, HNG shareholders will financially gain and HNG would now be part of the largest natural gas pipeline system in North America. This is a strategic advantage at a time of deregulation. Tremendous debt will be incurred and must be managed appropriately.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Can go both ways.

By merging, I might be respecting shareholders (financial gains for them) at the expense of employees who might lose their jobs and the city of Houston (assuming that headquarters will relocate to Omaha).

Therefore, accept the merger and build into the agreement safeguards to limit the harms likely to be incurred by employees losing their jobs and Houston. Real Life Decision: Lay accepts offer

11

C H APT E R 1: H U M A N N A T UR E A ND UN E T H I C A L B E H A V I O R IN O R G A NI Z A T I O NS

HUMAN NATURE AND UNETHICAL BEHAVIOR Read Collins, Chapter 1, pp. 3-17. H O M E W O R K DU E (A) [one paragraph in total]: Have you ever lied (includes misleading, exaggeration, white lies) to your boss, a work peer, or a customer? Why? Describe the situation. H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 6-7, if you were the CEO of HNG, would you do choice #1 or #2? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Class Outline

Quiz Enron Dilemma What is Ethics Why Be Ethical How Ethical Are We? Costs Lies Human Nature Purgatory

WH AT IS E T H ICS? Step 4: Define ethics – Ethics is the set of principles you use to determine whether an action is r ight or wrong. Introduce the “action sequence,” which is mentioned on page 3 of this chapter.

G O T O PA G E 5 A ND R E V I E W IN F O R M A T I O N , W H I C H APPE RS B E L O W

Action Sequence and E thics An action sequence consists of three factors:

12

(1) Motivation behind the Act

(2) The Act (3) Consequence of the Act

Consequence of the Act Good Bad Motives

Good Ideal (#1) Deontologist (Tell Truth on Confidential Info)

Bad

Consequentialist (Greedy Capitalism)

Worst (#2)

What all this means is that we need to slow down, pay attention, and focus on what we are doing, rather than unconsciously flow through life or just follow the crowd. So how often do you face a situation where your motives might not be pure, or the consequences of your action may have a negative impact on someone? Many times every day WHY B E E T H ICAL? So why be ethical? Convince me. Tell students that you are a hard-nosed bottom-line boss who does not believe in the importance of ethics. Ask the student to convince you to be ethical. Some will say that you should be ethical because it is good for society, or that it is the “right” thing to do, or that God wants you to be ethical. Argue against these by noting that your competitors are unethical and the only way you can make payroll this month is to fudge a little with your accounting numbers or ??? (provide your favorite reason why you think managers behave unethically). Push students more until someone claims that either:

It is in your self-interest to be ethical or Ethical organizations financially outperform unethical organizations in the long-term

13

I t is good for business!

G O T O PA G E 8 A ND R E V I E W E X IBI T 1.1 – “Exhibit 1.1: Competitive advantages of being ethical and trustworthy.”

Competitive advantages of being ethical and trustworthy.

Ethical organizations, compared to unethical organizations: 1. Attract and retain higher quality employees 2. Attract and retain higher quality customers 3. Attract and retain higher quality suppliers 4. Attract and retain higher quality investors 5. Earn goodwill with community members and government officials 6. Achieve greater efficiency and decision making, based on more reliable information from stakeholders 7. Achieve higher product quality 8. Need less employee supervision Given All those Competitive Advantages … How are we doing in Real L ife? WH AT IS T H E E XT E NT O F UN E T H ICAL B E H AVIORS AT WORK? MIXED RESULTS HERE’S THE NOT SO GOOD SIDE

14

G O T O PA G E 12 A ND R E V I E W IN F O R M A T I O N , W H I C H APPE A RS B E L O W

Extent of Unethical Behaviors at Work

67% of CFOs have been pressured to misrepresent corporate results.

25% of middle-managers have written a fraudulent internal report.

75% of employees have stolen at least once from their employer.

57% of administrative personnel have been asked to lie for their boss.

25% of public relations executives have lied on the job.

33% of employees calling in sick are not really sick (i.e., tending to personal needs).

52% of 3,000 survey respondents observed at least one type of misconduct in the

workplace during the past year.

48% of these misconducts violated the law.

Only 55% of these survey respondents reported the misconduct to management.

Most common types of misconduct employees observed were:

o abusive or intimidating behavior towards employees

o lying

o employees placing their own interests over organizational interests

o violations of safety regulations

o misreporting of actual time worked

o illegal discrimination

o stealing

15

56 percent of MBAs admit to cheating on a class assignment during the previous

academic year.

WH AT TYPES O F ORGANIZATIONS AND OPERATIONAL ARE AS H AVE E T H ICAL DIL E MMAS?

EVERY TYPE – Public, Private, Government, Nonprofits

EVERY OPERATIONAL AREA – Board, Executives, Accounting, Marketing, Finance, Support Staff, Janitors

WH AT ARE T H E COSTS ASSOCIAT E D WIT H T H ESE UN E T H ICAL B E H AVIORS? How does all this impact the Bottom L ine?

HIGH COSTS OF LITIGATION

Bad Media Exposure – Bad Public Relations

Turnover

G O T O PA G E 15 A ND R E V I E W E X H IBI T 1.2 – “Exhibit 1.2: E E O C charges and resolutions, 1997 and 2007.” So why is there unethical behavior in organizations when it is clear that being ethical is good for business? MANAG ERS N E E D TO MANAG E MORALLY IMPER F E CT PE OPL E Researchers have documented the following frequencies for telling lies:

16

1 to 2 lies half-truths a day

20% lie during a 10 minute conversation

10 million Americans cheat on Income Tax according to IRS

70% of doctors lie to insurance companies

25% of middle-level managers have submitted a fraudulent internal report When was your first lie – Seth on poopy diaper Activity: Have student reflect on why they have lied. H O M E W O R K DU E (A) [one paragraph in total]: Have you ever lied (includes misleading, exaggeration, white lies) to your boss, a work peer, or a customer? Why? Describe the situation. Step 1: Ask students “Have you ever lied to your boss, a work peer, or customer?” Lies include being misleading, exaggeration, and white lies. How did you justify the lie? Step 2: Put students in small groups (3 to 5) and have them discuss one of their lies – what was the lie and how did the student justify it as being the right thing to do at the time? Step 3: Have the group create a list of justifications which they then share with the entire class. Step 4: Compare this list to the top 5 reasons why employees compromise ethical standards


Top 5 Reasons Employees G ive For Compromising E thical Standards

1. Following the boss's directives (experienced by 49% of survey respondents)

2. Meeting overly aggressive business or financial objectives (48%)

3. Helping the organization to survive (40%)

17

4. Meeting schedule pressures (35%)

5. Wanting to be a team player (27%)

WHY E LSE DO GOOD PE OPL E B E H AV E UN E T H ICALLY? 2 Common Explanations are it’s a function of:

(1) Personality (we’re born this way) (2) Environment (context)

To some degree, being “ethical” is similar to being a Good Samaritan. Why are some people Good Samaritans and others are not? What is the Good Samaritan Story?

Good Samaritan Research Study Princeton Psychology Study -- Helping Behavior a function of (1) Personality, (2) Sensitivity to Issue or (3) Time Concern

Princeton Theology seminarians invited to a preaching contest

Personality: tests conducted on o (a) did you become seminarian to convert people or o (b) to care for the poor [also Type A/B]

Sensitivity to Issue:

o (a) Half to give talk on Ministerial Careers and o (b) half on the story of the Good Samaritan – Jesus story on who is your neighbor – injured person on road ignored by rabbi and Levite (cares for Temple), but not Samaritan (a New Yorker!)

T ime Concern: Meeting is on other side of campus and o (a) half told they are already a late and o (b) other half told they have twenty minutes to get over there

On path to building is an obviously hurt, moaning person on the ground leaning against a

wall

By far the biggest predictor of who did or didn’t help – TIME M Y B E L I E F : 20% Go-getters, 60% Fence-sitters, 20% Adversarial

18

SO WH AT IS H UMAN NATURE? AND ARE E T H ICS G E TTING B E TT ER OR WORSE? Activity: Have students reflect on whether ethics are getting better or worse. There is no right or wrong answer. The question can be the foundation for a lively discussion in small groups or as an entire class. Step 1: Ask students to write an answer to the following questions:

Do you believe that people are good or bad?

Are people more ethical now compared to 10 years ago, 20 years ago, or 100 years ago? Step 2: Put students in small groups (3 to 5) and have them discuss their answers. Step 3: Challenge the group to reach a consensus and list the reasons that justify the group’s answer. Sometimes no consensus is achieved, which they find interesting. In this case, the group should jot down the major reasons why members cannot reach a consensus. Step 4: Each group reports out to the entire class. Facilitate the discussion. Philosophers – W rong: People are born neither Good, nor Bad, instead –

(1) We are born “pleasure seekers” [self-interested] and then

(2) habituated by society (parents, friends, leaders), and then

(3) apply rationality as we age and make our own decisions Me: EARTH IS ONE BIG “PURGATORY” We need inspirations to filter into our guiding principles, to help us during periods of temptation.

19

H U M A N ISSU ES T E A M O R G A NI Z IN G C L ASS PR OJE C TS

D O N O T miss this class because we are forming teams. I f you miss it you will receive one full-grade lower for team project grade. H O M E W O R K DU E (A) [one sentence]: Based on the “Team Role Survey” in this syllabus, what role do you want on your team? H O M E W O R K DU E (B) [one paragraph]: What is your Myers-Briggs Type Indicator (I’m an INFJ)? In what way does this adequately, or inadequately, describe you? Class Outline

Announce Teams Review Assignment in Syllabus Team Building W rite of questions on board

Answer the following questions:

1) Where did you grow up? 2) How many children were in your family? 3) What were your father and mother’s occupations? 4) What was the most difficult or important challenge during your childhood or

teenage years? Sit with team

Team Ice-Breaking

Answer the following questions:

1) Where did you grow up? 2) How many children were in your family? 3) What were your father and mother’s occupations? 4) What was the most difficult or important challenge during your childhood or teenage

years? Review Assignment

1) Review HI Project Report assignment & Free Rider 2) Review Project Report Format 3) Review Grading Rubric 4) Review Team Meeting Assessment 5) Review Peer Evaluation Form

Also:

(a) Discuss Credit hours this semester and what classes you are taking

20

(b) Discuss Current job and number of work hours a week (c) Exchange phone numbers and emails (d) Reach consensus on team name (e) Reach consensus on Team Survey Roles

Myers-Briggs results Read profile to your teammate: I’m an INFJ, and you?

Discuss if this profile fits you.

One or two specific examples that support how it is or is not like you.

What are the work-related implications of having such a personality profile?

21

M Y E RS-BRI G GS PE RSO N A L I T Y ASSESSM E N T*

Your personality is what you are. You have similarities to and differences from other people. There are no “right” or “wrong” answers. The more honest you are the more helpful the information you will receive. Complete and score the inventory below to find out your personality type. Personality Inventory: For each of the 32-items, circle either “a” or “b.” If you feel both “a” and “b” are true, decide which one is more like you, even if it is only slightly more true. 1. I would rather

a. Solve a new and complicated problem. b. Work on something I have done before.

2. I like to a. Work alone in a quiet place. b. Be where “the action” is.

3. I want a boss who a. Establishes and applies consistent criteria in all decisions. b. Considers individual needs and makes exceptions.

4. When I work on a project, I a. Like to finish it and get some closure. b. Often leave it open for possible change.

5. When making a decision, the most important considerations are a. Rational thoughts, ideas, and data. b. People’s feelings and values.

6. On a project, I tend to a. Think it over and over before deciding how to proceed. b. Start working on it right away, thinking about it as I go along.

7. When working on a project, I prefer to a. Maintain as much control as possible. b. Explore various options.

8. In my work, I prefer to a. Work on several projects at a time, and learn as much as possible about each one. b. Have one project that is challenging and keeps me busy.

9. I often a. Make lists and plans whenever I start something and don’t like to seriously alter my plans. b. Avoid plans and just let things progress as I work on them.

10. When discussing a problem with colleagues, it is easy for me a. To see “the big picture.” b. To grasp the specifics of the situation.

11. When the phone rings in my office or at home, I usually a. Consider it an interruption. b. Don’t mind answering it.

12. Which word describes you better? a. Analytical. b. Empathetic.

13. When I am working on an assignment, I tend to a. Work steadily and consistently. b. Work in bursts of energy with “down time” in between.

14. When I listen to someone talk on a subject, I usually try to a. Relate it to my own experience and see if it fits. b. Assess and analyze the message.

15. When I come up with new ideas, I generally

22

a. “Go for it.” b. Like to contemplate the ideas some more.

16. When working on a project, I prefer to a. Narrow the scope so it is clearly defined. b. Broaden the scope to include related aspects.

17. When I read something, I usually a. Confine my thoughts to what is written there. b. Read between the lines and relate the words to other ideas.

18. When I have to make a decision in a hurry, I often a. Feel uncomfortable and wish I had more information. b. Am able to do so with available data.

19. In a meeting, I tend to a. Continue formulating my ideas as I talk about them. b. Only speak out after I have carefully thought the issue through.

20. In work, I prefer spending a great deal of time on issues of a. Ideas. b. People.

21. In meetings, I am most often annoyed with people who a. Come up with many sketchy ideas. b. Lengthen meetings with many practical details.

22. I am a a. Morning person. b. Night owl.

23. What is your style in preparing for a meeting? a. I am willing to go in and be responsive. b. I like to be fully prepared and usually sketch an outline of the meeting.

24. In a meeting, I would prefer for people to a. Display a fuller range of emotions. b. Be more task oriented.

25. I would rather work for an organization where a. My job was intellectually stimulating. b. I was committed to its goals and mission.

26. On weekends, I tend to a. Plan what I will do. b. Just see what happens and decide as I go along.

27. I am more a. Outgoing. b. Contemplative.

28. I would rather work for a boss who is a. Full of new ideas. b. Practical.

In the following, choose the word in each pair that appeals to you more: 29. a. Social b. Theoretical 30. a. Ingenuity b. Practicality 31. a. Organized b. Adaptable 32. a. Active b. Concentration * Adapted from Dorothy Marcic, Joe Seltzer & Peter Vaill, Organization Behavior: Experiences and Cases, 6th Edition, South-Western: Cincinnati, 2001, pp. 11-14, 321-7.

23

M Y E RS-BRI G GS PE RSO N A L I T Y ASSESSM E N T SC O RIN G K E Y Karl Jung described four psychological functions that exist along two continua: (1) Energy Source Dimension: Introvert (I) … Extrovert (E) (2) Information Reception Dimension: Sensing [External World] (S) … Intuition [Internal World] (N) (3) Information Processing Dimension: Thinking [Logic] (T) … Feeling [Emotions] (F) (1) Information Implementation Dimension: Judgment [Organized] (J) … Perception

[Improvise] (P) Count one point for each item listed below that you circled in the inventory. Score for I Score for E Score for S Score for N 2a 2b 1b 1a 6a 6b 10b 10a 11a 11b 13a 13b 15b 15a 16a 16b 19b 19a 17a 17b 22a 22b 21a 21b 27b 27a 28b 28a 32b 32a 30b 30a Total Circled Total Circled

Circle the one with more points: I or E

(If tied on I/E, don’t count #11)

Circle the one with more points: S or N

(If tied on S/N, don’t count #16) Score for T Score for F Score for J Score for P 3a 3b 4a 4b 5a 5b 7a 7b 12a 12b 8b 8a 14b 14a 9a 9b 20a 20b 18b 18a 24b 24a 23b 23a 25a 25b 26a 26b 29b 29a 31a 31b Total Circled Total Circled

Circle the one with more points: T or F

(If tied on T/F, don’t count #24)

Circle the one with more points: J or P

(If tied on J/P, don’t count #23) Write Your Letter Score

I or E: _____

S or N: _____

T or F: _____

J or P: _____

24

JUNG’S PERSONALITY TYPOLOGY – M Y E RS-BRI G GS T YPE INDI C A T O R

Sensing Types Thinking Feelings Introverts Judging ISTJ: Serious, quiet, earn success by

concentration and thoroughness. Practical, orderly, matter-of-fact, logical, realistic, and dependable. Take responsibility. Make up their own minds as to what should be accomplished and work toward it steadily, regardless of protests or distractions.

ISFJ: Quiet, friendly, responsible, and conscientious. Work devotedly to meet their obligations and serve their friends and school. Thorough, painstaking, accurate. May need time to master technical subjects. Patient with detail and routine. Loyal, considerate, concerned with others feelings

Perceptive ISTP: Cool onlookers, quiet reserved, observing and analyzing life with detached curiosity and unexpected flashes of original humor. Usually interested in impersonal principles or why and how mechanical things work. Exert themselves no more than they think necessary to be efficient.

ISFP: Retiring, quietly friendly, sensitive, modest. Shun disagreements, do not force their opinions or values on others. Loyal followers. Ma be rather relaxed about assignments because they enjoy the present moment and no not want to spoil it by undue haste or exertion.

Extraverts Judging ESTJ: Practical realists, matter-of-fact, with a natural head for business or mechanics. Not interested in subjects the see no use for, but can apply themselves when necessary. Like to organize and run activities. Tend to run things well if they remember to consider other people's feelings and points of views.

ESFJ: Warm-hearted, talkative, popular, conscientious, cooperative, active committee members. Always doing something nice for someone. Works best with plenty of praise. Little interest in abstract thinking or technical subjects. Main interest is in things that directly and visibly affect people’s lives.

Perceptive ESTP: Matter-of-fact, do not worry or hurry, enjoy whatever comes along. May be a bit blunt or insensitive. Can do math or science when they see the need. Dislike long explanations. Are best with real things that can be worked, handled, taken apart or put back together.

ESFP: Outgoing, easygoing, accepting, friendly, fond of a good time. Likes making things. Knows what’s going on and joins in eagerly. Are best in situations that need sound common sense and practical ability with people as well as with things.

Intuitives (N)

Thinking Feelings Introverts Judging IN TJ: Have original minds and great drive that

they use only for their own purposes. In fields that appeal to them, they have a fine power to organize a job and carry it through. Skeptical, critical, independent, determined, stubborn. Must learn to yield less important points to win most important points.

IN FJ: Succeed by perseverance, originality, and desire to do whatever is needed or wanted. Put their best efforts into their work. Quietly forceful, conscientious, concerned for others. Respected for their firm principles. Followed for their clear convictions as to how best to serve the common good.

Perceptive IN TP: Quiet, reserved, brilliant in exams, especially in theoretical or scientific subjects. Logical to the point of hair-splitting. Interested mainly in ideas, with little liking for parties or small talk. Very sharply defined interests. Need to choose careers where some strong interest of theirs can be used and be useful.

IN FP: Full of enthusiasm and loyalties, but seldom talk of these until they know you well. Care about learning, ideas, language, and independent projects of their own. Tend to undertake too much, then somehow get it done. Friendly, but often too absorbed in what they are doing to be sociable or notice much.

Extraverts Judging E N TJ: Hearty, frank, able in studies, leaders in activities. Usually good in anything that requires reasoning and intelligent talk, such as public speaking. Are well-informed and keep adding to their knowledge. May sometimes be more positive and confident than their experience in an area warrants.

E N FJ: Responsive and responsible. Feel real concern for what others think and want, and try to handle things with due regard for other people’s feelings. Can present a proposal or lead a group discussion with ease and tact. Sociable, popular, active in school affairs, but put time enough on their studies to do good work.

Perceptive E N TP: Quick, ingenious, good at many things. Stimulating company, alert and outspoken, argue for fun on either side of a question. Resourceful in solving new and challenging problems, but may neglect routine assignments. Turn to one new interest after another. Can always find logical reasons for whatever they want.

E N FP: Warmly enthusiastic, high-spirited, ingenious, imaginative. Able to do almost anything that interests them. Quick with a solution for any difficulty and ready to help anyone with a problem. Often rely on their ability to improvise instead of preparing in advance. Can always find compelling reasons for whatever they want.

25

M Y E RS-BRI G GS L E A D E RSH IP ST Y L ES

Myers-Briggs Type

L eadership Style When to Use When Not to Use

ESFJ/ENFJ “Coach”

People-oriented, motivator, likeable, builds personal relationships, caring

Commitment from others is critical or in sensitive situations

Decisions need to be forced through or conflict is being avoided

ISFP/INFP “Campaigner”

Values-driven, passionate, focused on themes, champion of cause

The team has lost its sense of identity or is doing too many unimportant things

There is a problem that needs to be solved with dispassionate objectivity

ENTP/ENFP “Explorer”

Tries things that are new, introduces change, experiments, creates new opportunities

The team is ‘stuck in a rut’ or the status quo needs to be challenged

There are already too many initiatives under way and some stability is needed

INTJ/INFJ “Innovator”

Develops long term vision, produces radical ideas, anticipates what is outside current knowledge

Radical change is needed or change is a long term activity

There are immediate dangers and the team may not survive in the short term

ESTP/ESFP “Sculptor”

Takes action, produces results, leads from the front, sets an example

There is some inertia or lack of achievement has destroyed motivation

The team is being too expedient and more reflection is needed

ISTJ/ISFJ “Curator”

Observes, listens, clarifies goals, establishes realistic expectations, clarifies aims

The direction is vague or expectations have not been articulated

There are too many goals or too much information

ESTJ/ENTJ “Conductor”

Organizes, makes plans, sets measurable goals, coordinates resources

There is chaos or there are no measures of achievement

There are so many processes that creativity is stifled

ISTP/INTP “Scientist”

Analyzes, uses models, explains, compares situations, engages in intellectual debates

The situation is complex or driven by technical solutions

People’s feelings are very important or too many explanations are already available

26

M Y E RS-BRI G GS C O N F L I C T ST Y L ES*

Extraverts Prefer to develop solutions by talking it

through Often change direction or topic during

course of discussions Experience Introverts as “withholding”

Introverts Prefer measured pacing and need talk-free

time for internal processing Need a more intense focus, and to come

back to ideas after consideration Experience Extraverts as “invasive”

Sensing Types Define the problem based on concrete

events and on what actually happened Seek explanations and solutions based on

experience Experience Intuitive types as “unrealistic”

Intuitive Types See specific behavior as part of an

underlying pattern that is the real problem Seek theoretical explanations as solutions Experience Sensing types as “shooting

down their ideas” or blocking progress Thinking Types Search for logical alternatives and apply

them to everyone Believe that if a problem can be defined

accurately and the relevant evidence gathered, there will be a “correct” solution

Experience Feeling types as “irrational, inconsistent, and illogical”

Feeling Types Search for individual solutions that work

for people Believe the solution will be found by

gathering many perspectives and finding the answer that fits everyone’s needs

Experience Thinking types as “cold and uncaring”

Judging Types Need structure, decisions, and closure Create plans, structures, and time frames to

achieve goals Experience Perceiving types as people they

cannot count on to follow through

Perceiving Types Need flexibility, and want decisions to

grow out of the process Have faith in their own internal sense of

timing; want to be trusted to meet goals in their own ways

Experience Judging types as “hemming them in”

* Adapted from Barbara D. Matthews and Catharine A. Larkin, 2002, Type In Action!, Consulting Psychologists Press, Inc.

27

M Y E RS-BRI G GS PR O B L E M-SO L V IN G ST Y L ES*

Information Reception Dimension: Sensing [External World] (S) … Intuition [Internal World] (N) Information Processing Dimension: Thinking [Logic] (T) … Feeling [Emotions] (F)

ST Types Are factual Often refer to the specifics of the solution,

i.e., time, numbers, distance Sometimes speak of solutions in such a way that you can “see” what is going on

Are practical, stick to the script, and are serious in completing the task

N F Types Usually approach the problem from the

relationship side, bringing in emotions about how people are feeling

Build relationships between people and like “living happily ever after” endings

Do not always bother with all the factual information available to them

SF Types Are factual Are usually very concerned about the

people – who will be affected and how Focus on precise step-by-step instructions

for solving the problem Come up with practical solutions

N T Types Stretch the imagination about what is really

possible Imagine relationships that go beyond

others expectations Are generally original and quirky Often employ “mission impossible”

solutions Adapted from Barbara D. Matthews and Catharine A. Larkin, 2002, Type In Action!,

Consulting Psychologists Press, Inc.

28

PR OJE C T M A N A G E M E N T

H O M E W O R K DU E : Provide a “to-do” list of all the things your team must do to achieve successful completion of your project. Class Outline

Sit with team Project Management Process Project Timeline Complete Project Management Chart W rite Project T ime L ine on Board

PR OJE C T M A N A G E M E N T - H A ND O U TS Emphasize importance of this SKILL when looking for job

Teach what is meant by Project Management – HANDOUT

29

PR OJE C T M A N A G E M E N T Project Management: The task of getting a project’s activities done on time, within budget, and according to specifications. Project Management Process:

Define Objectives

Identify activities

and resources

Establish Sequence and time length for

each activity

Determine project

completion date

Assign Specific Deadline Date for

Each Activity

Conduct Lewin

Force-Field Analysis

on Obstacles

Determine additional resource

requirements

Planning Steps 1) Clarify Objectives (i.e., “Do X and Y and write a paper about it by Z date”) 2) Brainstorm a list of activities that must be done to accomplish your objectives 3) Put the activity list in a logical time sequence, determine how long each activity will take,

and modify as necessary 4) Review the time you have available to work on the project (i.e., the cancelled class sessions

when you meet as a team) 5) Create a project management calendar: For each specific activity, assign a specific date for

when it will be worked on and when the task will be completed 6) Conduct a Lewin Force-Field Analysis that lists all of the obstacles that may arise and how

you will manage the obstacle (see below) 7) What other resources do you need to complete the project? Insert this into the time-line. L ewin Force-F ield Analysis: First, list the forces against change (given your initial plan, the things you think might go wrong). Then for each obstacle, describe how your group thought it might overcome the obstacle.

C URR E N T ST A T E : (Problem) Students insensitive to environmental issues

F U T UR E ST A T E : (Goal) Students become good environmental agents

(2) Forces For Change (1) Forces Against Change Overcome #1 by … Obstacle #1: Students are

apathetic Overcome obstacle #2 by … Obstacle #2: (etc.)

30

A C T I V I T Y Now, as a team:

Share your project management schedule and reach a consensus Share your list of obstacles and brainstorm solutions

Develop an agenda for next class session

R E V I E W H A ND O U T O N N E X T PA G E

31

PR OJE C T M A N A G E M E N T C A L E ND A R A ND M A N A G IN G O BST A C L ES

Fall 2009 9/3/09: Speaker – Latinos in Madison 9/3: Hand out project list and choose projects 9/10: Team assignments and team building 9/15: Villager Mall Project Speakers 9/17: Project Management, work on developing an action plan 9/22: Work on implementing your action plan 9/29: Work on implementing your action plan 10/6: Work on implementing your action plan 10/20: Work on implementing your action plan. Discuss with professor for feedback . 10/27: Work on implementing your action plan 11/3: Work on implementing your action plan 11/10: Work on your team paper 11/12/09: Papers due, present in class 5) Action Plan: Describe your initial plan to accomplish your goals that you created in class as a team. Who was going to do what, when, where, and why? Create a “Project Management” table as shown below, listing the tasks that need to be completed and dates the tasks will be completed, arranged in chronological order. Cut and paste the table below into your report, insert additional rows as needed, and fill in the information. Do not change these dates as the project evolves. This table documents your initial expectations for reflection later in this paper.

Initial Action Plan Schedule Deadline Date Task 9/17/09 Create first draft of Initial Action Plan Schedule 11/12/09 Submit paper and present in class. Then create a Lewin Force-Field Analysis organizational change chart as shown below. First, list the forces against change (given your initial plan, these are your obstacles you expected to have to deal with, the things you thought might go wrong). Then for each obstacle, describe how your group initially planned to overcome the obstacle. Cut and paste the table below into your report, insert additional rows as needed, and fill in the information. [1-2 pages]

C URR E N T ST A T E : (Problem) Community Unaware of Services Available to Latinos

F U T UR E ST A T E : (Goal) Develop and Implement a Marketing Outreach Plan

(2) Forces For Change (1) Forces Against Change Overcome #1 by … Obstacle #1: Executive Director

is very busy Overcome obstacle #2 by … Obstacle #2: Everyone on team is

very busy

32

C H APT E R 2: T H E E T H I C A L F O UND A T I O N O F C API T A L ISM A ND T H E

OPT I M A L E T H I CS SYST E MS M O D E L Enron Situation

Activity: Have the students do the following: For “In the Real World – Skilling’s Innovative Gas Bank Idea: 1990”, if you were the CEO of Enron (p. 23), would you stay focused on natural gas pipelines (option 1) or invest in a Gas Bank (option 2)? Why?

Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Background Summary

“Skilling’s Innovative Gas Bank Idea—1990,” pp. 22-23: Almost bankrupt 1989 due to debt Hires consultants for new revenue streams Jeff Skilling personality Andy Fastow personality 1989 communism collapsed, capitalism won, internet starting, we’re in a new economy Gas Bank created 1990, long-term contracts with suppliers (other Natural Gas firms) and

buyers (public utilities) Mid-1991, 35 supplier contracts and 50 customer contracts, largest Florida Power &

Light Revenue overwhelmed by start-up costs New York Power authority signed 23 year contract for$1.3 billion, first 10 years is fixed Assume fixed amount of $600 million for 10 years; traditional accounting only allows

you to claim revenue upon receipt, so claim $60 million a year Skilling says this misrepresents Gas Bank’s assets, why not claim all $600 million and

adjust annually by claiming profits and losses off of the entire deal, like traders do with their stock portfolios, which is marked to current market price, not the original price, even though not sold yet.

Enron proposed this new accounting method to SEC, but was rejected because stock portfolio’s evaluated by independent third party (outside investors) whereas Gas Bank would be evaluated internally by Enron employees with competing interests

Skilling argues Arthur Andersen would provide oversight If you were the CEO of Enron (p. 23), would you:

stay focused on natural gas pipelines (option 1) or invest in a Gas Bank (option 2)?

Why? Vote and Debate – Real Life: Invest in a Gas Bank

33

The Ethical Decision-Making Framework questions are:


a. CEO of Enron (you/Ken Lay) b. Enron employees c. Enron shareholders d. Jeff Skilling

2) Is the action beneficial to me? – Invest in the Gas Bank.

The energy market is being deregulated. This is an optimal time to innovate because Enron would have first-mover advantages. Otherwise, new competitors are likely to invade the traditional gas pipeline market.

3) Is the action supported by my social group? – Invest in the Gas Bank.

Industrial associations are looking for new methods for making the market more efficient and effective.

4) Is the action supported by national laws? – Invest in the Gas Bank.

CEOs have a legal obligation to act in the best interests of shareholders. The Gas Bank investment could help Enron overcome its financial problems.

5) Is the action for the greatest good of the greatest number of people affected by it? – Invest in Gas Bank.

The Gas Bank, if successful, will establish Enron as an innovative market leader, create new sources of revenue, and ensure employee job security.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Invest in Gas Bank.

Shareholders and employees are being treated fairly and management is fulfilling its obligations.

Therefore, invest in the Gas Bank. It is to the greatest good of both employees and customers, and respects all stakeholders.

34

C H APT E R 2: T H E E T H I C A L F O UND A T I O N O F C API T A L ISM A ND T H E

OPT I M A L E T H I CS SYST E MS M O D E L CAPITALISM AND THE OPTIMAL ETHICS SYSTEMS MODEL Read Collins, Chapter 2, pp. 19-32. H O M E W O R K DU E (A) [one paragraph in total]: Have you ever stolen from your employer or as a customer? Why? Describe the situation. H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 22-23, if you were the CEO of Enron, would you do choice #1 or #2? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Class Outline

Quiz Enron Capitalism Theft Freedom and Trust Ethics of Capitalism Federal Sentencing Guidelines Optimal Ethics Systems Model TQM of Ethics

ADAM SMIT H’S CAPITALISM AND BUSIN ESS E T H ICS Now let’s go big-picture and look at the ethics of capitalism – when did it start? The “Father of Capitalism” is … Adam Smith (1776, The W ealth of Nations)

Self-Interest is natural – Leads to Greatest Good GNP Adam Smith (1723-1790), a Scottish philosophy professor, formulated capitalism as an economic system ethically superior to mercantilism.

35

G O T O PA G ES 23-24 A ND R E V I E W

IN F O R M A T I O N , W H I C H APPE A RS B E L O W

Adam Smith’s Ethical Defense of Capitalism

Freedom and liberty are essential values.

A free people naturally pursue their own self-interests, they don’t have to be told to do so.

If provided freedom in the economic sector, people will choose to enter product and labor markets where there is the greatest need and opportunity.

People morally self-regulate their actions based on their conscience, belief in God, concern for the well-being of others, and reason.

A strong system of justice is essential to punish those who do not appropriately self-regulate themselves.

Adam Smith maintained that, if given the opportunity to steal, most of us will not steal, even if nobody is looking.

Activity: Have students reflect on if they have ever stolen. H O M E W O R K DU E (A) [one paragraph in total]: Have you ever stolen from your employer or as a customer? Why? Describe the situation. Step 1: As an employee, have you ever stolen from your employer? If yes, what was the situation? Step 2: As a customer, have you ever stolen from a company or organization? If yes, what was the situation? Step 3: Share these situations in small groups (3 to 5). Activity: Have students reflect on resisting the temptation to steal. Step 1: Think about a time when, as an employee, you could have stolen from your employer but didn’t. Why didn’t you? Describe the situation.

36

Step 2: Think about a time when, as a customer, you could have stolen from a company or organization but didn’t. Why didn’t you? Describe the situation. Step 3: Share these situations in small groups (3 to 5). Step 4: Develop a list of reasons why people do not steal even though they could have. Compare these reasons to Adam Smith’s reasons.


Why W e Can T rust People With F reedom

Adam Smith’s reasons why freedom does not result in everyone stealing from, or abusing, each other:

(1) Conscience: Everyone has a conscience and our conscience tells us not to steal or abuse others.

(2) Belief in God: People who believe in God – sense that God does not want them to steal, do not want to hurt God’s feelings, or do not want to be punished by God in an after-life.

(3) Reason: Human beings can be reasoned with. We can be convinced with reason to restrain ourselves from doing “bad” things, like stealing or abusing others.

(4) Fear of Prison: People do not want to go to jail. Debate: How E thical is Capitalism?

Activity: Have students discuss the following: Circle the number that represents the extent to which you believe the United States’ version of free market capitalism is ethical. Explain your answer.

#1: Very Ethical #2: Ethical #3: Slightly more ethical than unethical #4: Slightly more unethical than ethical #5: Unethical #6: Very Unethical.

Manage this debate using the Exhibit 6.6 “Facilitating an Ethics Dialogue Workshop” framework:

37

Write answer Take vote Develop position rationale in small groups Empower the minority position to speak first and challenge the majority viewpoint Reach a conclusion

AM E NDM E NTS TO UNRE GULAT E D CAPITALISM [Supplemental Information not in the Book] Several ethical shortcomings of unregulated capitalism have resulted in amendments to unregulated capitalism. Ethical Shortcomings of Unregulated Capitalism (Amendment in Parentheses)

Working Conditions (Labor Unions)

Funding nonprofit organizations (Andrew Carnegie philanthropy)

Monopolies (Sherman Anti-Trust Act)

Low Wages (Henry Ford and New Deal)

Lack of Social Security (New Deal)

Discrimination (Equal Employment Opportunity Commission)

Environmental Problems (Environmental Protection Agency)

Unsafe Workplaces (Occupational Safety and Health Administration)

Unsafe Products (Consumer Product Safety Commission) F E D ERAL SE NT E NCING GUID E LIN ES – response to encourage ethics In 1991, President George H.W. Bush issued new Federal Sentencing Guidelines with the intention of encouraging, though not requiring, managers to implement ethical business practices. The Federal Sentencing Guidelines are applicable to nonprofits, unions, partnerships, trusts, and universities, as well as businesses. The 16 best practices for an Ethics Compliance Program suggested by the Federal Sentencing Guidelines are divided into six categories in Exhibit 2.1.

38

G O T O PA G ES 25-26 A ND R E V I E W E X IBI T 2.1 – “Exhibit 2.1: Best practices for ethics compliance programs.” Activity: Assume someone in your current or previous place of employment commits a consumer fraud. In the last column in Exhibit 2.1, mark each best practice the organization has and total the amount. Discuss your organization’s best practices score. What are its strengths and weaknesses? How would you transform a weakness into a strength? Activity: Further assume that the corresponding fine for the consumer fraud is $1.2 million. If your organization has not implemented any of the best practices in Exhibit 2.1, the initial $1.2 million fine can be assessed a multiplier of 4.0, increasing the fine to $4.8 million. If, on the other hand, your organization exhibits a good faith effort to minimize unethical behaviors by implementing many of the best practices, the initial $1.2 million fine could be assessed a culpability multiplier of 0.05, reducing the fine to $60,000. If some, but not all, of the best practices have been implemented, the fine will be between these two amounts. If you were the judge, what culpability multiplier [between 4.0 ($1.2 million fine) and 0.05 ($60,000 fine)] would you use in this case? Why? T H E “OPTIMAL E T H ICS SYST E MS MOD E L” SOLUTION The “Optimal Ethics Systems Model” in Exhibit 2.2 provides a more detailed guide for developing ethical employees and ethical organizations, and achieving superior performance, based on best practices that appear in the business ethics literature. Implementing the Optimal Ethics Systems Model significantly reduces the likelihood of an employee engaging in unethical or illegal behaviors. Review the model from the perspective of a manager.

G O T O PA G E 28 A ND R E V I E W E X IBI T 2.2 – “Exhibit 2.2: Optimal E thics Systems Model .” Hiring

Hire Ethical People (Chapter 3)

39

Orientation Codes of Ethics and Codes of Conduct (Chapter 4) Ethical Decision-Making Framework (Chapter 5)

Training

Ethics Training (Chapter 6) Operations

Employee Diversity (Chapter 7) Ethics Reporting Systems (Chapter 8) Ethical Leadership, Work Goals, and Performance Appraisals (Chapter 9) Empowering Ethical Employees (Chapter 10) Environmental Management (Chapter 11) Community Outreach (Chapter 12)

T H E TOTAL QUALITY MANAG E M E NT O F E T H ICS Human beings will remain morally imperfect and ethical problems will still arise. Depending on the egregiousness of the unethical behavior, the employee should be either disciplined or fired. These short-term solutions, however, do not address the systematic root of the ethical problem. Why wasn’t the employee’s unethical proclivity detected earlier? Is there a problem with the hiring process, ethics training workshops, or performance evaluations? The Total Quality Management of Ethics framework provides a method for determining the original source of the ethics defect.

G O T O PA G ES 30-31 A ND R E V I E W T IPS A ND T E C H NI Q U ES “T ips and T echniques: The Total Quality Management of E thics.” Activity: Have students discuss the following: Think about a particular illegal or unethical act committed by an employee at a current or previous place of employment. In small groups, describe the situation. Locate the original systematic failure source in the “Tips and Techniques: The Total Quality Management of Ethics” system (i.e., was there a hiring process failure, Code of Ethics failure, etc.?). Then develop an action plan to correct for the system failure.

40

C H APT E R 3: H IRIN G E T H I C A L PE OPL E

Enron Situation

Activity: Have students discuss the following: For “In the Real World – Mark-to-Market Accounting: 1991”, if you were the CEO of Enron (p. 49), would you keep using the traditional oil-and-gas accounting system (option 1) or appeal the SEC rejection and resubmit mark-to-market accounting proposal (option 2)? Why?


“Mark-to-Market Accounting—1991,” pp. 48-49: Ken Lay approved Jeff Skilling’s innovative proposal and created a Gas Bank Division Hired Skilling to be its CEO Very successful, 40% revenue increase to $13.2 billion in 1990, first year of operation Gas Bank used traditional accounting method. Skilling wants to use financial industry’s mark-to-market accounting system Allows immediate claiming of anticipated long-term revenue when a contract was signed,

rather than waiting until it is received Selling to public utilities, so money seems guaranteed SEC rejects initial proposal to change due to potential pricing manipulations Arthur Andersen is public auditor, agrees to sign letter supporting this new method

If you were the CEO of Enron (p. 49), would you:

keep the traditional oil-and-gas accounting system for Skilling’s Gas Bank division (option 1) or

appeal the SEC rejection and resubmit a proposal for adopting a mark-to-market accounting system for the Gas Bank division (option 2)?

Why? Vote and Debate – Real Life: Lay appeals and wins The Ethical Decision-Making Framework questions are:


a. CEO of Enron (you/Ken Lay) b. Jeff Skilling c. Enron shareholders d. Gas Bank division

41

2) Is the action beneficial to me? – Appeal the SEC rejection

The valuation of the Gas Bank, and Enron, will increase. This makes me look good.

3) Is the action supported by my social group? – Keep traditional accounting.

Every business in the industrial uses traditional accounting methods.

4) Is the action supported by national laws? – Appeal the SEC rejection.

CEOs have a legal obligation to always act in the best interests of shareholders. Mark-to-market can enhance shareholder wealth if the SEC agrees that the accounting system is appropriate.

5) Is the action for the greatest good of the greatest number of people affected by it? – Appeal the SEC rejection

Mark-to-market will enhance shareholder wealth. It will cost employee time and effort to make the appeal, but if approved, the financial benefits outweigh these costs.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Appeal the SEC rejection.

Shareholders want to know the true economic value of Enron’s Gas Bank. If SEC experts and Arthur Andersen agree that mark-to-market provides a more honest valuation of the Gas Bank division, then shareholders will not be misled. If the SEC, based on the additional information, rejects the appeal, then keep the traditional accounting system.

Therefore, appeal the SEC rejection. You have the legal right to appeal and Arthur Andersen has documented its support and commitment that mark-to-market is an appropriate accounting method for the Gas Bank division.

42

C H APT E R 3: H IRIN G E T H I C A L PE OPL E HIRING ETHICAL PEOPLE Read Collins, Chapter 3, pp. 35-56. H O M E W O R K DU E (A) [one paragraph in total]: When applying or interviewing for a job, how did a potential employer examine your ethics? H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 48-49, if you were the CEO of Enron, would you do choice #1 or #2? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. M E E T IN C O MPU T E R L A B F O R T H E M YSPA C E /F A C E B O O K A C T I V I T Y Class Outline

Quiz Enron Title VII of Civil Rights Act Resumes, Reference Checks, Background Checks Integrity Tests Facebook, MySpace Personality Measure – Conscientiousness Interviews Drug, Alcohol, Lie Tests

T H E 5-ST EP E T H ICS JOB SCRE E N PROC ESS

G O T O PA G E 37 A ND R E V I E W E X H IBI T 3.1 -- “Exhibit 3.1: Five-step ethics job screen.” ST EP 1: L E GAL GROUND RUL ES

Don’t violate Title VII of the Civil Rights Act! Gather and use information in a way that does not discriminate against job candidates based on their race, color, religion, gender, national origin, age, or disability.

G O T O PA G E 39 A ND R E V I E W E X H IBI T 3.2 --

43

“Exhibit 3.2: Job Selection Rule Checklist.”

Exhibit 3.2 provides a checklist for determining the viability of a job selection rule. A “Yes” response to any of the three rules could result in a discrimination lawsuit.

Integrity and personality test vendors should be required to affirm in writing that, based on use by other clients, the instrument has been proven not to violate any of the three rules.

Does your organization’s employee profile proportionally reflect the local labor market’s gender, racial, ethnic, and religious diversity? If not, why not? What changes should the organization make to achieve this outcome?

The law does not apply to:

Religious organizations or

Organizations with less than 15 employees. A manager of a business with ten employees can refuse to hire men (or women), Christians (or any other religion), or disabled people and not be in violation of federal discrimination law.

There are two other major exemptions to Title VII:

If a direct relationship exists between a protected class and an inability to perform the job task

If the discrimination relates to the “essence” or “central mission” of the employer’s business, if it is a bona fide occupational qualification (i.e., a Chinese person applying for a job as a waiter in a Chinese restaurant)

ST EP 2: B E H AVIORAL IN F ORMATION H O M E W O R K DU E (A) [one paragraph in total]: When applying or interviewing for a job, how did a potential employer examine your ethics? Activity: Call on students to provide examples.

44

Four recruiting tools can provide useful behavioral information about a job candidate’s ethics: Resumes, Reference Checks, Background Checks, and Integrity Tests. Review chart below for strengths and concerns regarding each of these four methods.

R E V I E W H A ND O U T , W H I C H APPE A RS B E L O W “Behavioral Information Sources: Strengths and Concerns”

45

Behavioral Information Sources: Strengths and Concerns Type Strengths Concerns Resumes Documents pervious work experience

and accomplishments Documents educational experience and accomplishments

44% contain lies about work histories 41% contain lies about education 41% contain lie about licenses or other credentials

Reference Checks

References have personal experience working with the job applicant References are legally protected from a defamation lawsuit as long as the information being conveyed is truthful

Many references listed have a favorable bias toward job applicant Some references are unwilling to share negative information due to lawsuit concerns Previous supervisor or subordinate are not often listed

Background Checks

Wide-range of information is easily available on Internet Can verify that information on resumes is accurate

Internet information can be inaccurate Information obtained that is not related to job performance can create a negative bias

Integrity Tests Documents applicants previous illegal actions and opinions about ethics issues

Favorable self-report bias Liars can provide false information and score higher than conscientious applicants

46

For reference checks …

Best person to speak to – former supervisor … but …

Many now just give name, rank, years of employment … so …

Activity for C O MPU T E R L A B: Have students discuss the following: Assume that you are a job recruiter. Conduct an Internet search of your name and review your MySpace or Facebook pages. List the positive and negative information you would now have about this job candidate. What changes should this person make to his or her MySpace or Facebook entries that would honestly present a more positive image to job recruiters? ST EP 3: PERSONALITY TRAITS Obtain measures for personality traits such as

a. conscientiousness b. organizational citizenship behavior c. social dominance and d. bullying

Review Handout for survey items that measure “conscientiousness,” which correlates highly with ethical performance. Activity: Have students discuss the following: The “conscientious” survey items are the best predictor of a person’s ethics and job performance. Review the survey items in Handout. What percent of the 6 “positively stated items” describe you? What percent of the 7 “negatively stated items” describe you? Discuss these survey findings.

R E V I E W H A ND O U T , W H I C H APPE A RS B E L O W “SURVEY ITEMS MEASURING ‘CONSCIENTIOUSNESS’”

47

Survey Items Measuring “Conscientiousness”

Positively Stated Items Negatively Stated Items Accomplish my work on time Often forget to put things back in their proper place Do things according to a plan Neglect my duties Am careful to avoid making mistakes Take tasks too lightly Keep my checkbook balanced Leave my work undone Like to plan ahead Do not plan ahead Return borrowed items Put off unpleasant tasks Am often late for work

48

ST EP 4: INT ERVI EW QU ESTIONS Interview job finalists about their responses to ethical dilemmas experienced at previous workplaces, and how they would respond to ethical dilemmas experienced by current employees. The ethics questions about previous work experiences must be job-related, and a standardized format followed, to avoid protected class biases.


Sample E thics Questions for Job F inalists

Have you ever observed an employee or customer stealing product? How did you respond?

Have you ever observed an employee sexually harassing another employee or customer? How did you respond?

Have you ever observed anything at work, or done anything at work, that violated industry standards or the law? What was it? How did you respond?

Have you ever been asked by a boss, co-worker, customer, or supplier to do something unethical? How did you respond?

Have you ever observed anything at work, or done anything at work, that bothered your conscience? What was it? How did you respond?

Activity [IF WE DON’T DO ETHICAL NARRATIVES]: Have students discuss the following: Assume you are applying for a job and the interviewer asked you the following questions. How would you respond?

1. Have you ever observed an employee or customer stealing product? How did you respond?

2. Have you ever observed an employee sexually harassing another employee or customer? How did you respond?

3. Have you ever observed anything at work, or done anything at work, that violated industry standards or the law? What was it? How did you respond?

4. Have you ever been asked by a boss, co-worker, customer, or supplier to do something unethical? How did you respond?

5. Have you ever observed anything at work, or done anything at work, that bothered your conscience? What was it? How did you respond?

49

How do you know if person is lying? ST EP 5: OT H ER T ESTS – ALCO H OL , DRUG , AND POLYGRAPH T ESTS Where appropriate, conduct alcohol, drug, and polygraph tests as a final test of the job finalist’s integrity.

R E V I E W H A ND O U T , W H I C H APPE A RS B E L O W “Alcohol, Drug, and Polygraph Testing”

50

Alcohol, Drug, and Polygraph T esting

Testing For Information Detection Methods Alcohol 6.6% of full-time employees are heavy

drinkers 15% of the workforce is impaired by alcoholism during work at least once a year

Breathalyzer Urine tests Blood tests Biomarkers Alcohol Use Disorders Identification Test (AUDIT)

Drugs 9.4 million working Americans use illicit drugs Workplace substance abuse costs employers $120 billion a year

Urine tests Blood tests Hair tests Saliva tests

Lies Can be used by pharmaceutical and security companies Employee Polygraph Protection Act of 1988 prohibits pre-employment polygraph tests for most other public and private companies Accuracy rates range from 81% to 98%

Respiration Sweat gland activity Blood pressure

51

C H APT E R 4: C O D ES O F E T H I CS A ND C O D ES O F C O NDU C T

Enron Situation

Activity: Have students discuss the following: For “In the Real World – The SPE Revenue Solution: 1993”, if you were a Tier 1 investment banker (p. 69), would you accept the offer (option 1), reject the offer (option 2), and/or notify the external auditor (option 3)? Why?


“The SPE Revenue Solution—1993,” pp. 67-69: Ken Lay appealed SEC’s initial rejection and “Mark-to-Market was approved with strong

auditor oversight (Arthur Andersen) Created cash flow problem because reported revenue was mostly projected, not actual. Wall Street analysts developed new projection on previous reported revenue Andy Fastow developed SPE’s; by law, (1) at least 3% had to be funded by an external

partner, and (2) had to be managed by an independent management team SPEs funded mainly with Enron stock, to purchase assets from Enron, which also removed debt off Enron’s books.

Outside investors were “Tier 1” investment bankers doing business with Enron. If you were a Tier 1 investment banker (p. 69), would you:

accept the offer (option 1), reject the offer (option 2), and/or notify the external auditor (option 3)?

Why? Vote and Debate – Real Life: Accept the offer The Ethical Decision-Making Framework questions are:


a. Tier 1 investment banker (you) b. Andy Fastow c. Enron shareholders d. Investment Bank e. Arthur Andersen

2) Is the action beneficial to me? – Depends.

52

a. Yes. If the likelihood of getting caught is low, accepting the offer favorably impacts my bonus and status.

b. No. If the likelihood of getting caught is reasonable, then reject the offer because I could lose my license and end up in jail.

3) Is the action supported by my social group? – Reject the offer.

Most investment bankers oppose violating the law.

4) Is the action supported by national laws? – Reject the offer and notify Arthur Andersen.

Fastow has offered to sell a loan to the SPE with a guarantee that Enron will repurchase it at a profit. This transaction cannot count as a sale by Enron; it is illegal.

5) Is the action for the greatest good of the greatest number of people affected by it? – Reject the offer and notify Arthur Andersen.

Fastow is designing an illegal revenue transaction between Enron and the SPE. This transaction presents a false revenue picture to many stakeholders: Enron’s shareholders, Enron’s auditor, and the Investment Bank. If exposed to the public, major problems can ensue.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Reject the offer and notify Arthur Andersen.

The transaction is deceptive, as noted earlier. Therefore, the Tier 1 investment bankers should reject the offer and notify Arthur Andersen auditors about these side agreements. Document your concerns and present this evidence to your boss in case Enron eliminates your investment bank from future deals.

53

C H APT E R 4: C O D ES O F E T H I CS A ND C O D ES O F C O NDU C T

CODES OF ETHICS AND CODES OF CONDUCT. Read Collins Chapter 4, pp. 59-75. H O M E W O R K DU E (A) [one paragraph in total]: Does your employer have a code of ethics? Describe how your employer educated you about it. H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 67-69, if you were the Tier 1 investment bank, would you do choice #1, #2, or #3? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Class Outline

Quiz Enron Codes of Ethics Codes of Conduct Code of Ethics Assessment

T H E DI F F ERE NC E B E TWE E N A COD E O F E T H ICS AND A COD E O F CONDUCT A Code of Ethics and a Code of Conduct are two unique documents. What is a Code of E thics?

A Code of Ethics describes broad ethical aspirations, like the Ten Commandments. What is a Code of Conduct?

A Code of Conduct describes acceptable behaviors for specific situations that are likely to arise, like the Deuteronomic Code found in Chapters 12 through 26 in Deuteronomy (Old Testament book in the Bible).

G O T O PA G ES 64-65 A ND R E V I E W E X H IBI T 4.1 - “Exhibit 4.1: Code of Ethics.” The New York Stock Exchange recommends that a Code of Conduct address seven topics.

54



Code of Conduct Content The New York Stock Exchange recommends that a Code of Conduct address seven topics:

1. Conflicts of Interest. Avoid conflict or potential conflict between an individual’s personal interests and those of the organization.

2. Corporate Opportunities. No use of corporate information or assets for personal gain.

3. Confidentiality. No disclosure of nonpublic information that could benefit competitors or

harm the organization.

4. Fair Dealing. Abstain from any unfair treatment of customers, suppliers, competitor, and employees, such as manipulation, concealment, abuse of privileged information, and misrepresentation of material facts.

5. Protection and Proper Use of Assets. Use assets efficiently and avoid theft, carelessness,

and waste.

6. Compliance with Laws, Rules, and Regulations. Proactively promote compliance.

7. Encouraging the Reporting of Any Illegal or Unethical Behavior. Proactively promote ethical behavior and not allowing retaliation for reports made in good faith.

IMPORTANC E O F COD E E XPE CTATIONS AND AWARE N ESS The organization’s leadership team must communicate the importance of these codes to employees and make them readily available because:

1. Managers are simply too busy with their other job duties to respond to all the ethical issues experienced daily by nonmanagement employees.

2. Many managers are uncomfortable addressing ethical issues and unreceptive to negative information.

55

3. Some managers may be bad role models. E F F E CTIVE COD ES H O M E W O R K DU E (A) [one paragraph in total]: Does your employer have a code of ethics? Describe how your employer educated you about it. Activity: Ask students about code awareness and use. Creating a Code of Ethics and Conduct must be followed by effective implementation. There are six attributes of effective implementation.

G O T O PA G E 69 A ND R E V I E W IN F O R M A T I O N , W H I C H APPE A RS B E L O W [N O T E : A L L APPE A RS AS W O RDS IN A SE N T E N C E O R PA R A G R APH] Effective implementation of a Code of Ethics and Conduct requires:

Support from senior managers Employee training

Management enforcement

Wide distribution

Employee protection from retribution for reporting a violation

Annual assessment

ANNUAL COD E O F E T H ICS ASSESSM E NT The last phase of implementation is probably the most important – use the code as an organizational assessment tool. Use the employee feedback as the basis for continuous improvement changes.

56

That nice Code in Exhibit 4.1 belonged to … ENRON!

G O T O PA G E 71 A ND R E V I E W E X H IBI T 4.2 - “Exhibit 4.2: Code of Ethics employee assessment.” It is relatively easy to transform a Code of Ethics into a 5-point Likert scale survey for employee assessment purposes.

G O T O PA G E 72 A ND R E V I E W E X H IBI T 4.3 - “Exhibit 4.3: Code of Ethics.” Exhibit 4.3 is a Code of Ethics that describes an organization’s five core values.

G O T O PA G ES 73-74 A ND R E V I E W E X H IBI T 4.4 - “Exhibit 4.4: Code of Ethics survey.” Exhibit 4.4 transforms the Code of Ethics into a survey instrument. The survey differentiates the evaluation of managers from nonmanagement employees because of their different responsibilities and activities.

Activity: Using Survey Handout Below of 5 Dominican Values for Edgewood College, Evaluate how well our organization lives up to this Code of Ethics using a “1 to 5 Likert scale” where 5=Strong Agree (firm lives up to the Code), 3=Neutral, and 1=Strongly Disagree. How can the organization improve an ethical shortcoming? The 5 Dominican Values: Truth, Justice, Compassion, Partnership, Community

G O T O N E X T PA G E A ND R E V I E W SUR V E Y

57

L iving Up To The Values Statement

Instructions: Please use the 1-5 scale below to assess how well each of the following statements exemplifies students and faculty. The more honest you are the more helpful the information you will receive. First assess the behavior of students, and then faculty. 1=Strongly Disagree; 2=Disagree; 3=Neither Agree nor Disagree; 4=Agree; 5=Strongly Agree SD D N A SA Students Are honest and tell the truth [truth] 1 2 3 4 5 Are fair when dealing with others [justice] 1 2 3 4 5 Demonstrate concern others [compassion] 1 2 3 4 5 Provide help to others when needed [partnership] 1 2 3 4 5 Exhibit “school spirit,” a sense of belonging to the school [community] 1 2 3 4 5 Students Subtotal -- Add the five scores and divide by five: Faculty Are honest and tell the truth [truth] 1 2 3 4 5 Are fair when dealing with others [justice] 1 2 3 4 5 Demonstrate concern others [compassion] 1 2 3 4 5 Provide help to others when needed [partnership] 1 2 3 4 5 Exhibit “school spirit,” a sense of belonging to the school [community] 1 2 3 4 5 Faculty Subtotal – Add the five scores and divide by five:

Assessment of Students 1) How do students live up to the company’s Values Statement? (choose just one area) 2) How do students fall short of living up to the company’s Values Statement? (choose just one area) 3) How can the college improve the shortcoming noted in #2? (provide one or two strategies)

Assessment of Faculty 4) How does faculty live up to the company’s Values Statement? (choose just one area) 5) How does faculty fall short of living up to the company’s Values Statement? (choose just one area) 6) How can the college improve the shortcoming noted in #5? (provide one or two strategies)

58

C H APT E R 5: E T H I C A L D E C ISI O N-M A K IN G F R A M E W O R K

Enron Situation

Activity: Have students discuss the following: For “In the Real World – Transferring Managerial Power: 1996”, if you were the CEO of Enron (p. 89), would you promote the CEO of traditional natural gas pipeline division (option 1), Jeff Skilling (option 2), the CEO of the growing international division (option 3), or a highly qualified outsider (option 4)? Why?


“Transferring Managerial Power—1996, pp. 88-89: Enron becomes the world’s largest natural gas company, high stock price, wins awards Three internal candidates and one external candidate Skilling threatens to quit if not promoted, accused international division CEO of

incompetence, and traditional natural gas pipeline CEO of old school Skilling lacks hands-on cash management experience, risk-taker, impatient, arrogant

If you were the CEO of Enron (p. 89), who would you promote to COO:

CEO of the traditional gas pipeline division (option 1), Jeff Skilling, the CEO of the highly successful Gas Bank division (option 2), CEO of the growing international division (option 3), or a highly qualified outsider (option 4)?

Why? Vote and Debate – Real Life: Skilling is Chosen The Ethical Decision-Making Framework questions are:


a. CEO of Enron (you/Ken Lay) b. Enron shareholders c. Job candidates d. The internal job candidate’s division

2) Is the action beneficial to me? – Promote Skilling.

All four candidates have strengths and weaknesses. But if Skilling is not promoted, he could quit the company and take his creative ideas and highly

59

skilled loyalists with him. I would now have to replace Skilling and his loyalists, which would be very difficult.

3) Is the action supported by my social group? – Promote Skilling or one of the other two internal divisional CEOs.

Typically, if all else is equal, organizations prefer to promote highly qualified internal candidates.

4) Is the action supported by national laws? – Can promote any of them.

All candidates are legally acceptable.

5) Is the action for the greatest good of the greatest number of people affected by it? – Promote Jeff Skilling or the Outsider.

Skilling has tremendous abilities; he just needs to be coached better. If Skilling leaves, he may take his division with him. If Skilling is uncoachable, then an outsider is needed to minimize internal damage.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Promote Skilling or the Outsider.

Skilling has earned the promotion, but he has made enemies. If promoted, he needs to be trained how to manage people and given targets to improve his internal relationships. On the other hand, there is political bad blood between him and the internal candidates. An outsider would provide new direction. If an outsider is hired, each internal candidate should be counseled so that as to not leave or seek revenge.

Therefore, consider having a long conversation with Skilling and determine his willingness to improve his internal management skills. If he agrees, then promote Skilling. If he refuses, then offer the job to the highly qualified outsider.

60

C H APT E R 5: E T H I C A L D E C ISI O N-M A K IN G F R A M E W O R K

ETHICAL DECISION-MAKING FRAMEWORK Read Collins, Chapter 5, pp. 77-95. H O M E W O R K DU E (A) [one paragraph in total]: Assume an out of control trolley car is hurtling down a street. Five people working on the track are in its path and about to be killed. You can save five lives by pulling a lever that will divert the trolley to an alternative track. Unfortunately, one worker is on the alternative track, so pulling the lever would kill him. Would you pull the lever? Explain why. H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 88-89, if you were the CEO of Enron, would you do choice #1, #2, #3, or #4? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Class Outline

Quiz Enron Ethical Theories Trolley Car Dilemma Persuading Others Ethical Hazard Signs

T H E E T H ICS D E CISION-MAKING F RAM EWORK The Rotary’s Four-Way Test, Raytheon’s Ethics Quick Test, and the Josephson Institute’s Ethics Questions are very helpful lists of questions, but not philosophically systematic. Philosophers have been debating the ranking of ethical theories for more than two thousand years. Review Exhibit 5.1, which provides an ethics decision-making framework that parallels Lawrence Kohlberg’s stages of moral reasoning. This ranking of ethical principles can be found in all cultures. The six question framework can help managers reach a moral conclusion regarding the rightness or wrongness of any decision.

G O T O PA G E 80 A ND R E V I E W E X H IBI T 5.1 -

61

“Exhibit 5.1: An ethics decision-making framework.” The five ethical theories are ordered in Exhibit 5.2 from the most basic to the most important.

G O T O PA G E 82 A ND R E V I E W E X H IBI T 5.2 - “Exhibit 5.2: Five ethical theories.”

Egoism (Question #2) is the most basic ethical theory and

Deontology (Question #6) is considered the most important and demanding ethical theory.

Utilitarianism: Consequences, Outcomes, General Welfare Deontology: Do No Harm! Sainthood! Which way do you lean? H O M E W O R K DU E (A) [one paragraph in total]: Assume an out of control trolley car is hurtling down a street. Five people working on the track are in its path and about to be killed. You can save five lives by pulling a lever that will divert the trolley to an alternative track. Unfortunately, one worker is on the alternative track, so pulling the lever would kill him. Would you pull the lever? Explain why.

A deontologist would not pull the lever. All lives are of equal value and pulling the lever

would be participating in a moral wrong – killing an innocent person.

A utilitarian, on the other hand, would pull the lever because, although one innocent person would be killed, five other lives would be saved.

Researchers report that most people agree with the utilitarian moral assessment of this situation.

For the Utilitarians:

62

Activity: Have students discuss the following: Now assume that you are standing on a

bridge when the runaway trolley takes aim at the five people working on the track. Unfortunately, the only nearby heavy object that could stop the trolley is a very obese person standing next to you. You are thin, yet strong, and throwing the obese person over the bridge will stop the trolley. Is it ethical to throw the obese person in the path of the trolley? Explain why.

Researchers report that utilitarians now hesitate, not wanting to physically move an innocent person in harm’s way.

PERSUADING OT H ERS After applying the ethical decision-making framework, two employees may still sincerely disagree about what is the ethically correct action to take. When this happens in organizations, the person with higher status or power tends to get his or her way. A healthier approach is for people to listen carefully to each other and then try to persuade each other. After listening carefully, categorize the other person’s response in terms of one of the five ethical theories. Then reframe the analysis using the other person’s ethical theory. T E N “ET H ICAL H AZARD APPROAC H ING” SIGNS Michael Josephson describes ten common rationalizations for unethical acts.

G O T O PA G E 94 A ND R E V I E W E X H IBI T 5.3 - “Exhibit 5.3: Ten “ethical hazard approaching” signs.”

Activity: Have students do the following: Think of the last time you heard someone in your organization state one of the ten “Ethical Hazard Approaching” comments in Exhibit 5.3. Which of the ten justifications was it? Describe the situation. What alternative action could the person have taken to generate a more ethical outcome?

63

C H APT E R 6: E T H I CS T R A ININ G

Enron Situation

Activity: Have students discuss the following: For “In the Real World – SPE Investments: 1997”, if your boss, an Enron Vice President (p. 115), offered to loan your domestic partner money to create, and invest in, an SPE that would conduct business with Enron, would you support the plan (option 1), risk getting fired for refusing to participate in the plan (option 2), inform the CEO about the plan (option 3), notify the external auditors about the plan (option 4), and/or notify the SEC about the plan (option 5)? Why?

Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer.

Background Summary:

“SPE Investments—1997,” pp. 114-115: Ken Lay promoted Jeff Skilling to be CEO of Enron Skilling promoted Andy Fastow to Vice President of Treasury and Business Funding,”

with goal of raising $20 billion a year in capital. Fastow creates new SPE called RADR to buy Enron’s wind farms Fastow’s wife (Leah) loans Michael Kopper, Fastow’s protégé, $419,000 to give to his domestic partner to create “Friends of Enron” to invest in RADR

Fastow would receive RADR profits through multiple gift checks and donations to the Fastow Foundation

If your boss, an Enron Vice President (p. 115), offered to loan your domestic partner money to create, and invest in, an SPE that would conduct business with Enron, would you:

support the plan (option 1), risk getting fired for refusing to participate in the plan (option 2), inform the CEO about the plan (option 3), notify the external auditors about the plan (option 4), and/or notify the SEC about the plan (option 5)?

Why? Vote and Debate – Real Life: Support the Plan The Ethical Decision-Making Framework questions are:


a. Subordinate of Enron Vice President (you/Michael Kopper) b. Enron shareholders c. Andy Fastow

64

d. Andy Fastow’s wife e. Michael Kopper’s domestic partner

2) Is the action beneficial to me? – Could go either way.

a. Yes. It would make my boss happy and can benefit my performance appraisal and

career at Enron. b. No. It is very deceptive and, if caught, I could get fired.

3) Is the action supported by my social group? – Refuse to participate.

This action is being done secretively because other people would probably condemn it.

4) Is the action supported by national laws? – Refuse to participate and notify the CEO.

This plan violates the spirit of the law. If exposed, shareholders might litigate. I should notify the CEO who is accountable for all actions taken by employees. If the CEO fails to respond appropriately, then I have a legal obligation to inform the external auditors. If the external auditors fail to respond appropriately, I have a legal obligation to inform the SEC.

5) Is the action for the greatest good of the greatest number of people affected by it? – Refuse to participate and notify the CEO.

Fastow is not representing the best interests of shareholders. If the scheme is exposed, it can negatively impact stock price.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Refuse to participate and persuade Fastow to abort the scheme.

Fastow’s plan deceives the CEO, the external auditors, and Enron shareholders. Inform Fastow that he must abort this scheme and, if he fails to, then you will notify the CEO.

Therefore, inform Fastow that he must abort this scheme and, if he fails to, then you will notify the CEO, the external auditors (if the CEO fails to respond appropriately), and the SEC (if the external auditors fail to respond appropriately). Document these activities in case of a future lawsuit.

65

C H APT E R 6: E T H I CS T R A ININ G ETHICS TRAINING Read Collins, Chapter 6, pp. 97-124. H O M E W O R K DU E (A) [one paragraph in total]: Does your employer provide ethics training? Describe what your employer offers. Is it any good? H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 114-115, if your boss requested this, would you do choice #1, #2, #3, #4, or #5? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Class Outline

Quiz Enron Extent and Who to Train Workshop Options Machiavellian Survey Work as a Calling Workshop Assessment

Benefits of T raining

G O T O PA G E 98 A ND R E V I E W IN F O R M A T I O N , W H I C H APPE A RS B E L O W E XT E NT O F E T H ICS TRAINING Researchers report that people employed in organizations with formalized ethics training have more positive perceptions about their organization’s ethics and greater job satisfaction. How extensive?

In a 2004 survey of publicly traded companies, 68 percent provided ethics training. In a 2005 survey of Human Resource professions, those most likely responsible for

managing the training, only 32 percent reported that their organizations offered ethics training.

More than 80 percent of city governments provide ethics training for employees. A law passed in 2004 by the Illinois legislature requires that all state employees receive

annual, computer-based, ethics training.

66

Many states mandate that continuing education courses for accountants and lawyers include an ethics component.

All members of the National Association of Realtors must complete ethics training courses.

Professional organizations, such as the AICPA, provide ethics resources on their websites, including a list of disciplinary actions.

WH O TO TRAIN Ethics training should be conducted throughout the organization, ranging from the CEO and Board of Directors to the janitor.

Both new and long-term employees need ethics training. Long-term employees require unique attention because they significantly shape the organization’s ethical tone.

WE B-BASE D E T H ICS TRAINING According to one survey, companies conduct more than 90% of their ethics training through e-learning programs. Internet ethics training programs should supplement, not replace, the most effective ethics training method – facilitator guided face-to-face interactions and group activities. F ACILITATING AN E T H ICS DISCUSSION Create a safe learning environment by choosing someone the participants trust to facilitate the ethics training workshop. Some employees don’t trust:

Boss HR Vice President

Therefore:

Have unit elect a facilitator they trust Consultant

E T H ICS TRAINING OPTIONS Activity:

67

How many do ethics training? What do you do? Does it work?

Review Exhibit 6.1 which lists ten ethics training options.

G O T O PA G ES 101-102 A ND R E V I E W E X H IBI T 6.1 - “Exhibit 6.1: Ethics training workshop options.” H O M E W O R K DU E (A) [one paragraph in total]: Does your employer provide ethics training? Describe what your employer offers. Is it any good? Activity: Call on students for examples COD E O F E T H ICS ASSESSM E NT TRAINING Employees should annually assess the organization’s ethical performance based on its Code of Ethics. A 9-step process for conducting this workshop was previously discussed in Chapter 4 (Exhibit 4.2). COD E O F CONDUCT CONT E NT TRAINING Use a game format to engage the minds of employees when educating them about the Code of Conduct’s content:

Jeopardy Who Wants to Be a Millionaire

G O T O PA G E 104 A ND R E V I E W IN F O R M A T I O N , W H I C H APPE A RS B E L O W Who is the organization’s Ethics Officer? The next round could be about the law:

68

Which one of the following is an appropriate reason for rejecting a job applicant: A) age, B) religion, C) gender, D) physical disability, or E) inability to perform the required task?

COD E O F CONDUCT VIOLATIONS AND OUTCOM ES TRAINING Design a workshop educating employees about the types of unethical activities that have previously occurred within the organization or industry, and how the guilty person was ultimately punished.

G O T O PA G E 105 A ND R E V I E W IN F O R M A T I O N , W H I C H APPE A RS B E L O W The United States Department of Defense maintains an ongoing list of ethical violations and corresponding punishments for use in ethics training programs. The crimes, and corresponding punishments, include:

Authorized purchase of non-work related clothing: Reassigned Showed police government ID to avoid ticket: Demoted Romantic relationship with government contractor: Reassigned Obtained free auto repairs from supplier: Fired

G O T O PA G E 105 A ND R E V I E W E X H IB I T 6.2 - “Exhibit 6.2: ‘Match the bribe to the penalty’ exercise.” APPLYING T H E COD E O F CONDUCT TO SPE CI F IC SITUATIONS TRAINING Coca-Cola’s ethics training includes reviewing the company’s Code of Business Conduct and determining whether several real-life scenarios are in accordance with, or violate, the code. Coca-Cola’s Code of Business Conduct exercise appears in Exhibit 6.3.

G O T O PA G ES 106-107 A ND R E V I E W E X H IBI T 6.3 - “Exhibit 6.3: Coca-Cola’s Code of Business Conduct exercise.”

69

CRE ATING BUSIN ESS E T H ICS SC E NARIOS F OR DISCUSSION TRAINING The most meaningful ethical issues to explore are those employees observe, experience, or hear about while employed either at their current organization or a previous employer. This workshop can also serve as a team building exercise.

G O T O PA G ES 108-109 A ND R E V I E W E X H IBI T 6.4 - “Exhibit 6.4: Ethical dilemma narrative exercise.”

G O T O PA G E 110 A ND R E V I E W E X H IB I T 6.5 - “Exhibit 6.5: ‘Sick leave?’ ethical dilemma narrative.” APPLYING T H E E T H ICS D E CISION-MAKING F RAM EWORK TRAINING G O T O PA G E 111 A ND R E V I E W E X H IB I T 6.6 - “Exhibit 6.6: Facilitating an ethics dialogue workshop.” Activity: Use format in Exhibit 6.6 to facilitate the “Sick Leave” dilemma on page 110. E T H ICAL H AZARD APPROAC H ING TRAINING If you did not do this activity for Chapter 5, Michael Josephson describes ten common rationalizations for unethical acts.

70

Activity: Have students do the following: Think of the last time you heard someone in

your organization stated one of the ten “Ethical Hazard Approaching” comments in Exhibit 5.3. What was it? Describe the situation. What alternative action could the person have taken to generate a more ethical outcome? PERSONALITY ANALYSIS TRAINING A host of personality surveys provide useful information, including:

Conscientiousness Organizational Citizenship Behavior Social Dominance Orientation Locus of Control Machiavellianism

Conscientiousness, Organizational Citizenship Behavior, and Social Dominance Orientation If you did not do this activity for Chapter 3, obtain measures for personality traits such as conscientiousness, organizational citizenship behavior, and social dominance and bullying. Review survey items in Week 2 handouts that measure “conscientiousness,” which correlates highly with ethical performance. Activity: Have students discuss the following: The “conscientious” survey items are the best predictor of a person’s ethics and job performance. Review the survey items in W eek 2 Handout. What percent of the 10 “positively stated items” describe you? What percent of the 9 “negatively stated items” describe you? Discuss these survey findings. Locus of Control Locus of control refers to whether individuals believe:

(1) they are in control, or responsible for, the events in their lives (internal locus of control), or

(2) the events in their lives are the result of things in their environment that are beyond their control (external locus of control).

Note: Complete the “Locus of Control” survey available at

www.ballarat.edu.au/ard/bssh/psych/rot.htm (see Footnote #16). Do the results adequately describe you? What are the strengths and weaknesses of your locus of control personality?

http://www.ballarat.edu.au/ard/bssh/psych/rot.htm

71

R E V I E W H A ND O U T , W H I C H APPE A RS B E L O W

L O C US O F C O N T R O L SUR V E Y* Evaluate the following statements about your beliefs by circling “Yes” or “No.” If you want to answer both “Yes” and “No,” think about whether your answer is just a little more one way than the other. If you would assign a weighting of 51 percent to “Yes” and 49 percent to “No,” then circle “Yes.” There are no “right” or “wrong” answers. The more honest you are the more helpful the information you will receive. Then complete the scoring key on the next page. Yes No 1. Most problems will solve themselves if you just don’t fool with them. Yes No 2. You can stop yourself from catching a cold. Yes No 3. Some people are just born lucky. Yes No 4. Success on work projects or school means a great deal to me. Yes No 5. I am often blamed for things that just aren’t my fault. Yes No 6. If somebody works hard he or she will be successful. Yes No 7. Most of the time it doesn’t pay to try hard because things rarely turn out right anyway. Yes No 8. If things start out well in the morning it’s going to be a good day no matter what I do. Yes No 9. Wishing can make good things happen. Yes No 10. It’s hard to change a friend’s opinion. Yes No 11. When I do something wrong there is very little I can do afterwards to make it right. Yes No 12. Most people who are good in sports are born that way. Yes No 13. One of the best ways to handle most problems is not to think about them. Yes No 14. I have a lot of choice in deciding who my friends will be. Yes No 15. A four-leaf clover will bring me good luck. Yes No 16. When people are angry with me there is very little I can do to stop their anger. Yes No 17. I have a good luck charm. Yes No 18. People like me according to how I behave when situations arise. Yes No 19. People are often angry with me for no reason at all. Yes No 20. I can change what might happen tomorrow by what I do today. Yes No 21. When bad things happen, there’s nothing I could have done to stop them from happening. Yes No 22. People can get what they want if they just keep trying. Yes No 23. It is useless for me to try to get my own way at home. Yes No 24. Good things happen to people who work hard. Yes No 25. There is little I can do to stop someone from being my enemy. Yes No 26. It’s easy for me to get friends to do what I want them to do. Yes No 27. When someone doesn’t like me there is little I can do about it. Yes No 28. It is almost useless for me to try in school because most people are smarter than I am. Yes No 29. Planning ahead makes things turn out better. Yes No 30. It is better to be smart than lucky. * Adapted from Dorothy Marcic, Joe Seltzer & Peter Vaill, Organization Behavior: Experiences and Cases, 6th Edition, South-Western: Cincinnati, 2001, pp. 17-20.

L O C US O F C O N T R O L SC O RIN G K E Y

72

Using the key below, score your answer from the Locus of Control Survey. Give yourself one point each time your answer agrees with the answer key. Your total score is the total number of agreements between your answers and the answer key answers. Item

Answer Key

Your Answer

Agree-ment Point

Item

Answer Key

Your Answer

Agree-ment Point

Item

Answer Key

Your Answer

Agree-ment Point

1 No 11. No 21. No 2 Yes 12. No 22. Yes 3 No 13. No 23. No 4 Yes 14. Yes 24. Yes 5 No 15. No 25. No 6 Yes 16. No 26. Yes 7 No 17. No 27. No 8 No 18. Yes 28. No 9 No 19. No 29. Yes 10. No 20. Yes 30. Yes Total Agreement Points: Interpreting Your Score Does luck or chance or the actions of others that determines what happens to you or is the direction of your life determined by your own actions? These two views represent the extremes of a personality concept labeled “locus of control.” People with a high internal locus of control believe they control what happens to them. People with a high external locus of control believe what happens to them is caused by other people or events. 0-17 Points indicate External Locus of Control: As a low scorer you indicate that life is generally more a game of chance than where your skills make a difference. Things happen to you. About 25 percent of the people taking the survey score in this range. 18-23 Points indicate M ixed Locus of Control: Since you answered some of the questions in each direction, you indicate that your internal and external locus of control beliefs may be situation-specific. In some situations you believe there is nothing you can do to change a situation. In other situations you believe that your fate rests entirely in your own hands. About 50 percent of the people taking the survey score in this range. 24-30 Points indicate Internal Locus of Control: As a high scorer you indicate that you have a lot of control over what happens to you, both good and bad. You tend to take the initiative and are willing to spend energy working for specific goals. About 25 percent of the people taking the survey score in this range. Machiavellianism Machiavellianism is “the ends justify the means” moral thinking. Many Machiavellians have a “do whatever it takes” attitude toward goal accomplishment.

73

Although the term Machiavellian is often used in an ethically derogatory manner, there is a good side to Machiavellianism. Machiavellians are very determined goal-oriented people. Managers should allow Machiavellians the liberty to pursue their interests as long as they do not violate the organization’s Code of Ethics or Conduct of Conduct. Activity: Complete the “Machiavellianism” survey in the handouts. What was your score? Do the results adequately describe you? What are the strengths and weaknesses of your Machiavellian personality?

R E V I E W H A ND O U TS, W H I C H APPE A RS B E L O W

M A C H I A V E L L I O N PO W E R ASSUMPTIONS ABOUT HUMAN NATURE 1) Wicked 2) Desire for Power 3) Paradox between not wanting to be oppressed, and oppressing others HOW TO OBTAIN POWER [STAGE 1] 1) Heredity 2) Virtue 3) Military Force 4) Fortune (Luck, $) 5) Crime 6) Support of the Citizens of the Great HOW TO MAINTAIN TEMPORARY POWER AND SECURITY [STAGE 2] 1) Live Amongst the People 2) Establish Colonies of Loyal Citizens 3) Strong & Supportive Standing Army 4) Be Protector of Lesser Powers 5) Weaken the Existing Powerful 6) Attack Foreign Threats First 7) Alliances with Friends 8) Bring Disorder and Resolve It 9) Put in Cruel Person for Dirty Work, then Replace 10) Special Case for Democracies HOW TO MAINTAIN PERMANENT POWER AND SECURITY [STAGE 3] 1) Keeping People Inspired 2) Strong Army and Don't Be Hated

74

3) Managing the Paradox Between The Great and The People 4) Mean Between Art of War and Amenities 5) Mean Between Liberality and Parsimony 6) Mean Between Cruelty and Mercy 7) Be Held in High Esteem 8) Surround yourself with capable and faithful ministers 9) Listen to the wise men, not the flatters 10) Take counsel when you want to, not when others want it 11) Be a very broad questioner 12) Be a good listener 13) Become angry at people who are hesitant to talk with you 14) Be wise, don't just rely on the wisdom of others

75

M A C H I A V E L L I A N SUR V E Y Richard Christie and Florence I. Geis, 1970, Studies in Machiavellianism.

Circle the answer that most closely resembles your attitude for each of the following 10 statements using the following 1-5 Scale. The more honest you are the more helpful the information you will receive. 1 = Strongly Disagree; 2 = Disagree; 3 = Neutral; 4 = Agree; 5 = Strongly Agree S

D D N A S

A 1. The best way to handle people is to tell them what they want to hear. 1 2 3 4 5 2. When you ask someone to do something for you, it is best to give the real reason for wanting it rather than giving reasons that might carry more weight.

1 2 3 4 5

3. Anyone who completely trusts anyone else is asking for trouble. 1 2 3 4 5 4. It is hard to get ahead without cutting corners here and there. 1 2 3 4 5 5. Honesty is the best policy in all cases. 1 2 3 4 5 6. It is safest to assume that all people have a vicious streak, and it will come out when they are given a chance.

1 2 3 4 5

7. Never tell anyone the real reason you did something unless it is useful to do so. 1 2 3 4 5 8. One should take action only when it is morally right. 1 2 3 4 5 9. It is wise to flatter important people. 1 2 3 4 5 10. All in all it is better to be humble and honest than important and dishonest. 1 2 3 4 5 11. P.T. Barnum was very wrong when he said there’s a sucker born every minute. 1 2 3 4 5 12. People suffering from incurable diseases should have the choice of being put to death painlessly.

1 2 3 4 5

13. It is possible to be good in all respects. 1 2 3 4 5 14. Most people are basically good and kind. 1 2 3 4 5 15. There is no excuse for lying to someone else. 1 2 3 4 5 16. Most people more easily forget the death of their father than the loss of their property.

1 2 3 4 5

17. Most people who get ahead in the world lead clean, moral lives. 1 2 3 4 5 18. Generally speaking, people won’t work hard unless they’re forced to do so. 1 2 3 4 5 19. The biggest difference between most criminals and other people is that criminals are stupid enough to get caught.

1 2 3 4 5

20. Most people are brave. 1 2 3 4 5 To obtain your “Mach” score:

1) Score A: Add the number you have circled for questions 1, 3, 4, 6, 7, 9, 12, 16, 18, 19. 2) Score B: For statements 2, 5, 8, 10, 11, 13, 14, 15, 17, 20, reverse the numbers you have

checked: 5 becomes 1, 4 becomes 2, 3 remains a 3, 2 becomes 4, and 1 becomes 5. Then add the number of the reversed scores.

3) Add your “Score A” total and your “Score B” total. This is your “Mach” score.

4) The higher your score, the more Machiavellian attitudes you express. Among a random

sample of American adults, the national average is 50.

76

ID E AL E MPLOYE E E XPE CTATIONS TRAINING Employees need to know in advance what managers expect of them. Managers usually have an image in their minds about how an ideal subordinate behaves, and this might not match the image subordinates possess.

First Workshop: Managers list ideal attributes (keep promises, show up on time) and group them according to themes; becomes part of performance appraisal

Second Workshop: Employees conduct a self-assessment

Praise Good

Action plan to transform Low score

G O T O PA G ES 118-121 A ND R E V I E W E X H IBI T 6.7 - “Exhibit 6.7: Qualities of an ideal employee: self-assessment survey.” WORK AS A CALLING All jobs can be a calling or vocation, if the employee has the appropriate attitude and perspective. No matter what the job task, the end result can be meaningful interactions with co-workers and customers, and outcomes that make a positive difference in the lives of others.

G O T O PA G ES 122-123 A ND R E V I E W E X H IBI T 6.8 - “Exhibit 6.8: Work as a calling.” Activity [O N L Y I F T I M E PE R M I T T IN G]: Have students discuss the following: Answer the questions that appear in Exhibit 6.8. Is your current job a “calling?” If not, how can you transform it into a calling?

77

ASSESSING T H E E T H ICS TRAINING WORKSH OPS Workshop attendees and the facilitator should assess the training session at its conclusion.


Ethics T raining Workshop Assessment Checklist

Were specific real-life situations addressed?

Were questions raised by participants?

Were participants provided with real-life responses to problems?

Were participants shown how to correct ethical problems?

Were participants shown how to deal with the stress that can be associated with ethical behavior?

Were the situations raised linked back to the Code of Ethics, Code of Conduct, or organizational strategy?

Did the trainer serve as a coach and facilitator, rather than a lecturer?

78

C H APT E R 7: R ESPE C T IN G E MPL O Y E E DI V E RSI T Y

Enron Situation

Activity: Have students discuss the following: For “In the Real World – Checks and Balances: 1997”, if you were the lead external auditor engagement partner (p. 133), would you demand that Fastow and Causey follow more rigorous accounting methods (option 1) or allow Fastow and Causey to use aggressive accounting methods (option 2)? Why?


“Checks and Balances—1997,” pp. 131-133: David Duncan, 38 year old Arthur Andersen partner, becomes lead auditor on the Enron

account in 1997 Rick Causey, now Enron CAO, was Duncan’s former boss at Andersen; still friends Duncan known for being a strong client advocate Duncan’s annual bonus based on 20% increase in client fees Carl Bass, a senior Andersen accountant on Duncan’s audit team, concludes Enron’s

aggressive accounting methods results in inappropriately booking income Bass tells Duncan not to sign off on 1997 fourth quarter audited statements until Enron

applies more rigorous accounting methods, which Wall Street would interpret negatively Fastow threatens to change accounting firms if Duncan does not sign the statements

If you were the lead external auditor engagement partner on the Enron account (p. 132), would you:

risk losing the Enron account by requiring that Fastow and Causey follow more rigorous accounting methods (option 1) or

risk your professional license by allowing Fastow and Causey to use aggressive accounting methods (option 2)?

Why? Vote and Debate – Real Life: Duncan ignores Bass and signs The Ethical Decision-Making Framework questions are:


a. Lead external auditor engagement partner (you/David Duncan) b. Carl Bass c. Arthur Andersen partners d. Andy Fastow

79

e. Rick Causey f. Enron shareholders

2) Is the action beneficial to me? – Can go either way.

a. Be More Rigorous. If Enron’s methods violate the law I can lose my license. b. Accept Aggressive Methods. Enron is my only client and if I lose this account I

will not earn a bonus nor get promoted.

3) Is the action supported by my social group? – Be More Rigorous.

Bass has objected to Enron’s aggressive methods, and many other accountants would most likely object too.

4) Is the action supported by national laws? – Be More Rigorous.

External auditors have a legal obligation to convey truthful financial information to shareholders. Enron’s aggressive methods of accounting are deceptive.

5) Is the action for the greatest good of the greatest number of people affected by it? – Be More Rigorous.

Enron’s aggressive accounting methods can deceive shareholders. If Enron continues along this path costly litigation might be filed.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Be More Rigorous.

External auditors have an obligation to shareholders and the accounting profession to certify truthful financial statements. An oversight partner has questioned Enron’s accounting and his opinion needs to be respected.

Therefore, demand that Fastow and Causey follow more rigorous accounting methods. Explain to Fastow and Causey that other external auditing companies are likely to reach a similar conclusion in hopes that they will not change accounting firms. Carefully explain your concerns to Enron’s Board of Directors if Fastow and Causey decide to change accounting firms. Document all of your concerns and gain Carl Bass’s support to help explain to other Andersen partners why you may lose your only client, Enron.

80

C H APT E R 7: R ESPE C T IN G E MPL O Y E E DI V E RSI T Y RESPECTING EMPLOYEE DIVERSITY Read Collins, Chapter 7, pp. 127-151. H O M E W O R K DU E (A) [one paragraph in total]: Does your employer provide diversity training? Describe what your employer offers. Is it any good? H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 131-133, if you were the lead external auditor, would you do choice #1 or #2? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Class Outline

Quiz Enron Competitive Advantages of Diversity Layers of Diversity Diversity Initiatives Diversity Training Workshops Training Problems Sexual Harassment Communication Styles

COMPE TITIVE ADVANTAG ES O F DIV ERSITY MANAG E M E NT For more than two centuries the American workforce was dominated by European-American males.


IN F O R M A T I O N , W H I C H APPE A RS B E L O W In 2004:

European-American men: 36 percent of the entire workforce, European-American women: 33 percent Latino-Americans: 14% African-Americans: 12% Asian-Americans: 4%

In 2007:

81

Combined buying power of African-Americans, Asian-Americans and Native Americans was $1.4 trillion, triple that from two decades earlier.

Latino-American disposable income accounts for 10 percent of all spending. Every employee should feel comfortable at work, and every customer and supplier should feel comfortable doing business with any organization. But, that is not always the case. There are five positive bottom-line reasons why respecting diversity creates a competitive advantage for organizations.



Competitive Advantages of Diversity Management

(1) Attract and retain diverse customers

(2) Attract and retain diverse employees

(3) Cost reductions: Fewer employee grievances, absences, turnover, and litigation

(4) Enhanced decision making, problem-solving, and creativity

(5) Stakeholder goodwill F OUR LAYERS O F DIVERSITY Diversity can be conceptualized on four unique layers: internal personality dimension, unchanging external dimension, evolving external dimension, and organizational dimension.. Each layer of diversity adds complexity to who we are and how others perceive us.



Four Layers of Diversity

82

1. Internal Personality Dimensions: Introvert or Extrovert Optimistic or Negative

2. Unchanging External Dimensions: There are permanent and beyond a person’s control

Race Ethnicity Gender Sexual Orientation Birth Generation

3. Evolving External Dimensions: These evolve over time

Age Height Weight Religion Educational Level Physical Ability Marital Status Income Level Geographic Location

4. Organizational Dimensions: These can be either unchanging or evolving

Hierarchical Status Work Content Department Seniority

IMPL E M E NTING A DIVERSITY INITIATIVE Creating an organizational culture that respects diversity requires planning and effort. Review the ten-step process for implementing successful diversity initiatives based on a traditional organizational change model.



Implementing a Diversity Initiative

Step 1: Present a Business Case for the Diversity Initiative

83

Step 2: Create a Shared Vision Statement

Step 3: Respectfully Build Off the Past

Step 4: Create a Sense of Urgency

Step 5: Empower a Change Agent

Step 6: Gather Political Support

Step 7: Craft an Implementation Plan

Step 8: Develop Enabling Processes

Step 9: Evaluate the Progress

Step 10: Reinforce the Change

Activity: Have students discuss the following: Think about a diversity initiative your organization implemented. Was it successful? If not, which of the ten implementation process steps needed to be better managed? B EST OPERATIONAL PRACTIC ES F OR MANAGING DIV ERSITY In 1998, the Equal Employment Opportunity Commission Task Force published examples of the “best” diversity policies, programs, and practices in the private sector.



EEOC’s Best Operational Practices for Managing Diversity

Diversity Office/Committee/O fficer: A particular person is held accountable.

Recruiting and Hiring: Need a diverse job applicant pool.

Personnel Policies: Rather than a one-size fits all approach, create flexible personnel policies and accommodate an employee’s unique situation. Three major areas of

84

flexibility are the use of personal days, cafeteria-style benefits plans, and flexible work schedules.

Dispute Resolution Mechanisms: Three general principles for guiding an organization’s dispute resolution system are: (1) Be receptive to receiving a diversity-related grievance, (2) Presume everyone innocent until proven otherwise, and (3) Involve the minimum number of people necessary to reach acceptable resolution.

Retention and Promotions: Diversity retention techniques that pave the road to promotions include appropriate training, challenging assignments, job rotation, holistic performance appraisals, career counseling, mentoring, focus group feedback, and promotion from within.

Performance Appraisals: Link bonuses to achieving diversity goals. Include a performance appraisal scale that measures behaviors demonstrating respect for diverse co-workers and customers.

Termination and Downsizing: Conduct an adverse impact analysis to determine if the list of employees to be laid off adversely affects the percentage of women, racial and ethnic minorities employed by the organization. If it does, then some additional criteria might have to be considered to not undo years of concerted effort to diversify the workforce.

Diversity T raining Problems and Solutions H O M E W O R K DU E (A) [one paragraph in total]: Does your employer provide diversity training? Describe what your employer offers. Is it any good? Activity: Call on students for examples Review Exhibit 7.1, which summarizes seven diversity training problems and their recommended solutions.

G O T O PA G ES 138-139 A ND R E V I E W E X H IBI T 7.1 - “Exhibit 7.1: Diversity training problems and solutions.”

85

Activity: Have students discuss the following: Think about a recent diversity training session you attended. Did any of the problems that appear in Exhibit 7.1 occur? Were the training goals clarified, competitive advantages discussed, national or industry examples reviewed, and previous efforts praised? What changes should be made in this regard? DIVERSITY DISCUSSION GUID E LIN ES Initial employee tension and resistance can be diffused by developing discussion guidelines..

R E V I E W H A ND O U T , W H I C H APPE A RS B E L O W

Diversity Discussion Guidelines

Be open and honest.

Participate fully at your own comfort level.

Speak from personal experience.

Listen respectfully.

Encourage others to participate.

Be fully present.

Be open to new and different perspectives.

Respect and maintain confidentiality.

Notice and verbally acknowledge group dynamics in the moment.

Speak up if something said or done upsets you.

Practice forgiveness and letting go.

Trust that through dialogue a deeper level of understanding and acceptance can be achieved.

Have fun and laugh.

86

DIVERSITY TRAINING E X ERIC ES The first three diversity exercises in this section foster self-awareness:

Who Are You Dominant Group and Subordinated Group Awareness, and White Privilege

The next two diversity exercises explore:

what it was like being prejudged, and how everyone is unique, yet shares things in common with others.

The sixth diversity exercise focuses on generating discussion about:

sexual harassment. The last diversity exercise highlights a factor that is easily overlooked, yet can be the most damaging if not managed appropriately:

differences in communication styles. Who Are You? Exercise The “Who Are You?” exercise helps workshop participants understand their diverse uniqueness.

G O T O PA G E 141 A ND R E V I E W E X H IB I T 7.2 - “Exhibit 7.2: Who are you?” Dominant Group and Subordinated Group Awareness Exercise Members of the dominant group tend to possess more power and influence over decisions and the shaping of organizational culture than subordinated group members.

G O T O PA G ES 142-143 A ND R E V I E W E X H IBI T 7.3 - “Exhibit 7.3: Dominant/subordinated group dynamics.” White Privilege Exercise

87

Members of the dominant group are often unaware of the special status they have over subordinated groups. “White Privilege,” an experiential exercise designed by Peggy McIntosh, emphasizes different aspects of white privilege, many of them subtle, in American society. Activity: Have students discuss the following: Forty-seven “white privilege” statements are available at http://husky1.stmarys.ca/~evanderveen/wvdv/Race_relations/white_privilege.htm. Record “yes” or “no” for each statement. What percentage of the 47 statements did you answer “yes?” Discuss your thoughts and feelings about the results. Experiences Being Prejudged Exercise Every individual has been prejudged because of some notable characteristic – age, profession, geography, race, gender, religion, and so on.

G O T O PA G E 144 A ND R E V I E W E X H IB I T 7.4 - “Exhibit 7.4: Experiences being prejudged exercise.” Activity: Diversity Panel

3 things unique about your culture 3 things unique about people from your culture 3 things American managers should know about doing business in your culture 3 things American managers should know about managing people from your culture

Individual Uniqueness and Commonalities Exercise People want to be treated as an individual, rather than representing a social group. The exercise in Exhibit 7.5 helps employees understand how each of them is unique, and also that each of them shares some common traits with other members of the group.

G O T O PA G E 145 A ND R E V I E W E X H IB I T 7.5 - “Exhibit 7.5: Individual uniqueness and commonalities exercise.” Sexual Harassment Exercise

http://husky1.stmarys.ca/~evanderveen/wvdv/Race_relations/white_privilege.htm

88

Activity: Have students discuss the following: Do the four scenarios in the “Sexual Harassment” exercise constitute sexual harassment? Does each scenario create a “hostile environment” at work? Why?

DO A TALLY ON EACH ONE – YES OR NO?



Sexual Harassment Exercise The Equal Employment Opportunity Commission differentiates between two types of sexual harassment – quid pro quo and hostile environment.

Quid pro quo sexual harassment occurs when conditions of employment or employment decisions are dependent on: (1) unwelcome sexual advances, (2) requests for sexual favors, or (3) other verbal or physical conduct of a sexual nature.

A “hostile environment” occurs when any of these three conditions interferes with an individual’s work performance.

Scenario One: Jess is Kim’s administrative assistant. Every morning Kim makes flattering comments about Jess’ appearance. Scenario Two: Jess is Kim’s administrative assistant. Kim invites Jess out for drinks to a singles bar after work. Jess claims not to be available. One week later Kim invites Jess out for drinks after work again. Scenario Three: Jess is Kim’s administrative assistant. Kim is an affectionate person and gently touches the arms of both male and female workers while engaged in conversation. Kim gently touches Jess’ arms three or four times a day. Scenario Four : Jess is Kim’s administrative assistant. Kim receives several unsolicited junk emails a day, including those about improving sexual performance. One of these unsolicited sexual performance emails is quite humorous and Kim forwards the email to Jess. Communication Style Exercise People tend to express themselves in a way that feels natural to them, and assume that others like to communicate in the same manner.

89

Rhonda Hilyer has developed a very useful tool of four communication styles, each symbolized by a different color. Individuals can exhibit all four styles to some extent, but most likely one or two styles dominate.

G O T O PA G E 149 A ND R E V I E W E X H IB I T 7.6 - “Exhibit 7.6: Communication styles.” Activity: Have students discuss the following: Based on the four communication style color descriptions in Exhibit 7.7:

What is your communication style color?

What is your boss’s communication style color? What is your subordinate’s communication style color?

What is the communication style color of the person you struggle with the most at

work? How can you adjust your communication style to influence the person you struggle

with the most at work?

What color you are – Red, G reen, Blue or Brown? T A K E T A L L Y! Write: Think of an employee you struggle with. What color is that person – Red

Green, Blue or Brown? Read about that color’s communication style

o We need mutual understanding and help o G reens go to front of room o Who struggles with “Greens”? Go to back of room o Non-G reen: Tell the Green why you struggle with Green o G reen: explain why they may be misunderstanding you o Non-G reen: Tell Green how you plan on motivating them in the future o G reen: How would you respond to someone trying to motivate you like that?

Will that strategy work? What’s a better strategy?

90

C H APT E R 8: E T H I CS R EPO R T IN G SYST E M Enron Situation

Activity: Have students discuss the following: For “In the Real World – Code of Ethics Exemption Request: June 1999”, if you were on Enron’s Board of Directors (p. 161), would you exempt Fastow from Enron’s Code of Ethics, given the established accounting safeguards (option 1) or refuse to exempt Fastow and cause the financial failure of an entire set of SPEs heavily invested in by Enron (option 2)? Why?


“Code of Ethics Exemption Request—June 1999,” pp. 160-161: David Duncan ignored Bass’ concerns and supported Fastow and Causey’s aggressive

interpretation of accounting rules, enabling Enron to double profits in 1997 Enron expands into new trading markets – minerals, revenues more than double Fastow promoted to CFO and creates LJM1 to support troubled SPEs Outsiders (need 3%) will only invest if Fastow is managing partner, but conflict-of-

interest violated Code of Ethics KPMG will audit LJM1, so with Andersen as double check, Board approves exemption

request June 28, 1999. If you were on Enron’s Board of Directors (p. 161), would you:

exempt Fastow from Enron’s Code of Ethics, given the established accounting safeguards (option 1) or

refuse to exempt Fastow and cause the financial failure of an entire set of SPEs heavily invested in by Enron (option 2)?

Why? Vote and Debate – Real Life: Exempt Fastow



a. Enron’s Board of Directors (you) b. Andy Fastow c. Enron shareholders

2) Is the action beneficial to me? – Exempt Fastow.

91

Safeguards seem reasonable and it will financially benefit Enron and my Enron stocks.

3) Is the action supported by my social group? – Refuse to Exempt Fastow.

Most boards refuse to allow executives to invest in companies that do business with their organization.

4) Is the action supported by national laws? – Refuse to Exempt Fastow.

Board members have a legal obligation to act according to the best interests of shareholders. Exemptions to an organization’s Code of Ethics should be rarely granted. This particular request violates the spirit of the law.

5) Is the action for the greatest good of the greatest number of people affected by it? – Exempt Fastow.

Enron’s financial performance will benefit by granting the exemption, which benefits all of the shareholders. There are appropriate accounting safeguards established to prevent misuse of the exemption.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Refuse to Exempt Fastow.

Boards have a legal obligation to represent the best interests of shareholders. The current Code of Ethics policy, which is common in the industry, is in the best interests of shareholders. Changing the policy can lead to deception.

Therefore, refuse to exempt Fastow from the Code of Ethics. The Code of Ethics policy is very reasonable and there is no crisis occurring that would demand reconsideration. Granting an exemption, even if there are appropriate accounting safeguards, establishes a dangerous precedent.

92

C H APT E R 8: E T H I CS R EPO R T IN G SYST E M

ETHICS REPORTING SYSTEMS Read Collins, Chapter 8, pp. 155-173. H O M E W O R K DU E (A) [one paragraph in total]: Describe a situation when you observed someone at work behave unethically but you did not do anything about it. Would you have informed an “Ethics Assist Line” if available? Why? H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 160-161, if you were on Enron’s Board, would you do choice #1 or #2? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Class Outline

Quiz Enron Reactions to Ethical Issues Ethics & Compliance Officers Ombudsman Assist Lines Whistleblowing False Claims Act Whistleblower

UND ESIRABL E E MPLOYE E RE ACTIONS TO E T H ICAL ISSU ES Many employees are hesitant to reveal ethical problems to their supervisor or executives. As a result, employees see unethical conduct, but often don’t do anything about it.


Employee Reactions to E thical Issues Many employees are hesitant to reveal ethical problems to their supervisor or executives. According to the Ethics Resource Center’s 2005 National Business Ethics Survey, this is because:

o 59% believe no corrective action will be taken

o 46% fear retaliation

93

o 39% fear no anonymity

o 24% assumed someone else would report it

o 18% did not know who to contact

Activity: Have students discuss the following: Think about a time when you observed someone doing something unethical at work and you didn’t do anything about it. Describe the situation and explain why you failed to do anything about it. E T H ICS & COMPLIANC E O F F IC ER (E CO) The Federal Sentencing Guidelines presented in Chapter 2 provide a judicial incentive for assigning one high level employee the responsibility of managing ethical performance. A growing number of organizations assign this responsibility to an Ethics & Compliance Officer (ECO).

There are more than 4,000 ECOs nationwide. There are more than 1,200 members in the Ethics & Compliance Officer Association

(ECOA). Some organizations create a separate ECO management position focused solely on

enhancing ethical performance. Many organizations choose to add the title and job responsibilities to an existing

organizational position, such as legal counsel, ombudsmen, regulatory compliance manager, internal auditor, or human resource manager.

A majority of ECOs have law degrees or financial backgrounds. E CO DUTI ES AND SKILLS


E C O Duties and Skills

ECO duties and responsibilities include:

Manage internal reporting systems

Assess areas for ethical risks

94

Offer guidance

Monitor the organization’s adherence to its Code of Ethics and Code of Conduct

Oversee the ethics communication strategy

Develop and interpret ethics policies

Oversee the ethics training program

Receive information about potential wrongdoings

Collect and analyze relevant data

Ensure that decisions are made and enforced

Inform employees about outcomes MANAGING AN INT ERNAL REPORTING SYST E M The ECO’s primary duty is to manage the organization’s internal reporting system. The process model in Exhibit 8.1 provides guidance on how to accomplish this.

G O T O PA G ES 162-163 A ND R E V I E W E X H IBI T 8.1, “Exhibit 8.1: Internal reporting system process.” OMBUDSMAN Another channel for communicating information about potential ethical and legal violations is an organizational ombudsman. An ombudsman’s job scope is typically much narrower than that of an ECO:

Guarantees the employee anonymity Investigates the employee’s concern Mediates a fair settlement Protects the employee from retaliation

95

An ombudsman, similar to lawyers and accountants, is held legally accountable to a professional Code of Ethics.



The International Ombudsman Association’s Code of Ethics

(1) Independence: The Ombudsman is independent in structure, function, and appearance to the highest degree possible within the organization.

(2) Neutrality and Impartiality: The Ombudsman, as a designated neutral, remains unaligned and impartial. The Ombudsman does not engage in any situation which could create a conflict of interest.

(3) Confidentiality: The Ombudsman holds all communications with those seeking assistance in strict confidence, and does not disclose confidential communications unless given permission to do so. The only exception to this privilege of confidentiality is where there appears to be imminent risk of serious harm.

(4) Informality: The Ombudsman, as an informal resource, does not participate in any formal adjudicative or administrative procedure related to concerns brought to his/her attention.

T HRE E TYPES O F OMBUDSMAN

1. Classical-Ombudsman: The most practical model for organizations to adopt. After discussing the issue with the employee, the ombudsman asks permission to contact key people, develops a plan for gathering information without revealing the identity of the complainant, investigates the claim outside the regular chain-of-command, reaches a conclusion, and then advocates for implementing the appropriate change.

2. Mediator-Ombudsman: Maintains neutrality, proposes options to the disputing parties, and focuses on reaching an agreeable resolution.

o Implementing the solution becomes someone else’s responsibility, which detracts from the effectiveness of the mediator-ombudsman model.

3. Advocate-Ombudsman: More likely to be found in government than other types of

organizations. The advocate-ombudsman pursues justice on behalf of the person submitting the complaint.

96

o The primary problem with the advocate-ombudsman model is that an adversarial relationship is created between the ombudsman and managers involved in the situation.

O rganizational Issues Addressed Putnam Investments employs an ombudsman. Employees are encouraged to contact the ombudsman for a host of issues.


Issues to Contact Putnam Investments’ Ombudsman

A code of ethics violation

Trading issues or violations

Legal or compliance issues

A situation that threatens employee safety

Unfair treatment by a manager or co-worker

Unfair pay as defined in the fair labor standards act

Unfair treatment on the basis of sex, race, color, ethnic group, age, sexual orientation, or other affiliation

ASSIST LIN ES & TYPES O F INQUIRI ES Nearly all Fortune 500 companies provide toll-free Assist Lines for employees from all over the world to share their concerns. Many organizations now refer to this communication channel as an “Assist Line” rather than an “Ethics Hotline” for two reasons.

1. The phrase “Ethics Hotline” makes it seem as though the employee is snitching or squealing on someone, an impression that managers should avoid.

97

2. “Assist” more accurately describes most of the calls that are received. According to

Sears, whose Assist Line receives 16,000 to 18,000 calls a year from its 300,000 employees, only a very small percentage of the calls report potential law violations. Northrup Grunman, which receives 1,400 calls a year, estimates that only 25 percent allege an illegal misdeed.

o The largest group of Assist Line callers consists of employees asking for assistance to solve a human resource issue, such as how to respond to an unfavorable performance evaluation or lack of work breaks.

o The second largest group of Assist Line callers consists of employees asking for ethics policy clarifications.

E F F E CTIVE ASSIST LIN ES H O M E W O R K DU E (A) [one paragraph in total]: Describe a situation when you observed someone at work behave unethically but you did not do anything about it. Would you have informed an “Ethics Assist Line” if available? Why? Two major issues must be addressed to enhance the effectiveness of Assist Lines:

1. Confidentiality: Honor confidentiality at all times.

2. False Accusations: Clearly state that all Assist Line submissions must be offered in good faith and that someone purposely submitting a false accusation will be disciplined.

H OW AN ASSIST L IN E WORKS Visit the EthicsPoint Assist Line at www.ethicspoint.com. For colleges and universities, the EthicsPoint system highlights four categories of wrongdoing:

(1) Unethical F inancial Abuse: Fraud, theft, falsification of records, improper giving or receipt of gifts, improper business conduct with supplier or contractor, and waste of college resources.

(2) Unethical Personal Conduct: Harassment, discrimination, threat of bodily harm,

threat of retribution, benefit abuses, conflict of interest, and confidentiality abuse.

http://www.ethicspoint.com/

98

(3) Unethical Treatment of College Property: Unsafe working conditions, environment abuse, sabotage, and vandalism.

(4) Unethical Use of Information Technology: Data privacy abuse, inappropriate use of

technology hardware or software, software piracy, and misuse of resources. Review the process for how an Assist Line operates.



E thicsPoint Assist L ine Process Process consists of:

Information received by Internet or phone is assigned a confidential case identification number.

The information is categorized based on the type of issue and operations area.

The case is routed to appropriate manager at the employee’s organization, unless the manager is named as part of the problem.

The manager receiving the information responds to the Assist Line system using the case identification number.

The manager can submit additional questions for the employee to anonymously answer, or clarify any misunderstandings about the organization’s policy on the issue.

The anonymous employee can trace the case’s progress using the identification number. WH ISTL E BLOWING Contacting someone outside the organization about misconduct inside the organization is referred to as whistleblowing. Activity: Have students discuss the following: Has an employee of your organization ever blown the whistle to an external authority, such as a government official or the media? If so, what happened regarding the issue and employee as a result? Why do you think management did not address the issue prior to the employee blowing the whistle?

99

WH E N TO BLOW T H E WH ISTL E Review the four conditions that should be met prior to blowing the whistle on an employer.


When to Blow the Whistle Ideally, the following four conditions should be met before an employee informs an external authority:

1) Serious harm is involved.

2) The whistleblower has already expressed his or her concerns to his or her immediate superior.

3) The whistleblower has exhausted other communication channels within the organization.

4) The whistleblower has convincing, documented evidence. T H E F ALSE CLAIMS ACT The federal government encourages whistleblowing. The False Claims Act was initially passed in 1863 during the Civil War to stop defense contractors from fraudulently selling the Union Army rifles, ammunition, and horses. The False Claims Act was strengthened in 1986 following a series of defense industry frauds against the federal government. An employee who independently sues his or her employer for fraud:

can receive between 15 and 30 percent of the total recovery amount.

If the government joins the lawsuit, the employee can receive up to 25 percent of the total recovery.

The lawsuit must be filed within six years of the fraud being committed.

100

Between 1986 and 2006, False Claims Acts filings resulted in corporate fines totaling more than $20 billion. Review Exhibit 8.2, which lists the five highest settlements, all in the healthcare industry, as of January 2006.

G O T O PA G ES 170-171 A ND R E V I E W E X H IBI T 8.2, “Exhibit 8.2: Top five false claims acts cases (as of January 25, 2006).” SUBMISSION CONSID ERATIONS F OR F ALSE CLAIM ACTS F IL INGS Review the submission considerations.


Submission Considerations for False C laim Act F ilings According to the False Claims Act Legal Center, a potential whistleblower should consider the following prior to filing under the False Claims Act:

The whistleblower must have actual knowledge of the fraud, not just a suspicion.

The fraud cannot be a tax fraud; tax fraud is specifically exempt from prosecution under the False Claims Act.

The whistleblower's evidence of the fraud cannot come from a publicly disclosed source such as a newspaper, TV, magazine, radio, court record, administrative hearing, Congressional hearing, U.S. General Accounting Office report, or a Freedom of Information Act request.

Federal money must be involved, or, in a state with a state False Claims Act, state money must be involved.

101

The company or entity that submitted the false claim must have done so knowingly.

Lawyers litigating False Claims Act cases routinely work for a contingency fee based on the settlement amount. Therefore, most lawyers will only pursue a case if the financial amount of the fraud is sizable, and the entity to be sued is able to pay back the stolen money and associated fines.

WH ISTL E BLOWER PROT E CTION LAWS Fear of retaliation is one of the primary reasons why employees do not blow the whistle on illegal activities. According to the Sarbanes-Oxley Act of 2002, no publicly traded company, or subcontractor of that company, can discharge, demote, suspend, threaten, harass, or in any other manner discriminate against a whistleblower. It also establishes criminal penalties for retaliation against whistleblowers of fines and imprisonment up to 10 years. The number of whistleblower reports grew substantially after the legislation became laws. In 2001, prior to the passage of the Sarbanes-Oxley Act, the Securities and Exchange Commission averaged 6,400 whistleblowing reports a month. Two years later, the monthly average escalated to 40,000. N E GATIVE OUTCOM ES F OR WH ISTL E BLOWERS The decision to blow the whistle on an employer should not be taken lightly. Blowing the whistle can have many negative impacts on an employee’s life.


Negative Outcomes for Whistleblowers Researchers have found that soon after blowing the whistle, whistleblowers experience:

(1) Negative performance evaluations

(2) Undesired job transfers

(3) Demotions

102

(4) Criticism or avoidance by co-workers

(5) Physical, psychological, and family problems

(6) Loss of job or forced retirement

(7) Blacklisting impeding employment

(8) Protracted legal battles waged at personal expense Review Cynthia Cooper’s experience:

She was one of three whistleblowers awarded Time magazine’s 2002 “Persons of the Year” for her courageous role in telling external authorities about WorldCom’s massive accounting fraud.

Just prior to, and after, blowing the whistle she experienced trouble sleeping during her secret internal audit investigation knowing that the evidence meant some of her friends might go to jail.

She was ostracized by her peers who blamed her for job losses they experienced due to a massive corporate restructuring after the scandal became public.

The publicity ruined her family life. She suffered long bouts of depression, unable to do much beyond crying in bed all day.

My experience as a U W whistle-blower on my tenure case and other activities (Ralph Nader):

February 1996, 6TH month chemo, I will live, tenure vote next month First Star Bank, layoff 2,000 to increase stock price Wisconsin Public Radio – debate VP? Next day visit by Dean Tenure vote – 2 speak out against, no brainer 79.2% approval Committee formed to help with immediate appeal – Andy, Raghu Lose again by 1 vote Legal right, counted abstentions as NO Went to media – made it worse Ralph Nader talks – Go all the way!

Isolation – elevator, lunch Loss of power – removed from committees Motives questions – sour grapes Denial by colleagues – you’re exaggerating or everyone does it Job opportunities disappear Family stress

103

Public scrutiny – face in paper External hero Good credentials got good job – ethics chair, historically black school, UB int’l

[When I applied for EC job, Gary contacted UW faculty for inside story] Some good outcomes as result for other faculty and staff Integrity

104

C H APT E R 9: E T H I C A L L E A D E RSH IP, W O R K G O A LS, A ND PE R F O R M A N C E APPR A ISA LS

Enron Situation

Activity: Have students discuss the following: For “In the Real World – Auditor Oversight Problems: Spring 2001”, if you were a senior Arthur Andersen partner (p. 185), would you defend Carl Bass and risk losing the $50 million Enron account (option 1) or remove Carl Bass from the Enron account and replace him with another highly qualified employee (option 2)? Why?


“Auditor Oversight Problems—Spring 2001,” pp. 184-185: Fastow wins CFO awards, Enron wins innovation awards End of 2000, Enron’s revenue is $100 billion, #7 on Fortune 500 list Hot stock reaches $181 a share in August 2000 (adjusted value) Carl Bass promoted to Arthur Andersen’s Professional Standards Group (PSG), oversees

Enron on contentious issues Bass tells Duncan to inform Enron Board about SPE problems, Duncan disobeys Causey claims Bass is unfair, and be replaced by a different PSG member or Enron will

change auditors. If you were a senior Arthur Andersen partner (p. 185), would you:

defend Bass and risk losing the $50 million Enron account (option 1) or remove Bass from Enron account and replace him with another highly qualified PSG

member (option 2)? Why? Vote and Debate – Real Life: Bass is replaced



a. Senior Arthur Andersen partner (you) b. Carl Bass c. David Duncan (audit team leader) d. Rick Causey (Enron’s CAO) e. Enron shareholders

105

2) Is the action beneficial to me? – Replace Bass.

Enron’s a $50 million account is in jeopardy. Replacing Bass is similar to getting a second opinion on the Enron account.

3) Is the action supported by my social group? – Defend Bass.

Partners need to stand up for their employees against clients behaving like bullies.

4) Is the action supported by national laws? – Replace Bass.

Bass and Causey disagree about the application of accounting rules on Enron’s transactions. A second opinion by a highly qualified PSG member would provide greater legal clarity.

5) Is the action for the greatest good of the greatest number of people affected by it? – Replace Bass.

It is not worth losing a $50 million account due to a personality conflict. There are other highly qualified experts at Andersen who can rule on this matter.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Defend Bass.

Bass is an expert on the Enron account. Enron does not like his latest ruling and is attempting to use its financial power to have him replaced. Auditing firms must act in the best interests of corporate shareholders. Enron’s shareholders depend on financial statements and should be informed about questionable accounting transactions.

Therefore, defend Bass in a manner that will not result in losing the Enron account. Firing the external auditors over this matter will likely result in negative publicity for Enron and a potential stock sell-off. Bass also needs to learn how to more professionally deal with Enron. If Bass is unable or unwilling to do so, then Andersen should begin training his replacement for the Enron account. Lastly, Andersen’s partners need to meet with David Duncan to discuss his insubordination.

106

C H APT E R 9: E T H I C A L L E A D E RSH IP, W O R K G O A LS, A ND PE R F O R M A N C E APPR A ISA LS

ETHICAL LEADERSHIP, WORK GOALS, AND PERFORMANCE APPRAISALS Read Collins, Chapter 9, pp. 177-203. H O M E W O R K DU E (A) [one paragraph in total]: Tell a brief story about a boss or someone at work who behaved as a moral role model. H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 184-185, if you were the senior Arthur Andersen partner, would you do choice #1 or #2? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Class Outline

Quiz Enron Managers as Role Models Great Place to Work Leadership Skills Work Goals Meditation Performance Appraisals Leadership Skills Appraisal Work Discipline Forgiveness

MANAG ERS AS E T H ICAL ROL E MOD E LS Managers are role models and the ethics of their actions are constantly being evaluated by subordinates. Managers must set an example of ethical performance by embodying how they want their employees to behave. A significant percentage of managers are ethically challenged.


Ethically Challenged Managers

107

A significant percentage of their managers are ethically challenged. Among the survey respondents:

39 percent reported that his or her manager failed to keep promises

37 percent reported that his or her manager failed to give credit when due

24 percent reported that his or her manager violated employee privacy

23 percent reported that his or her manager blamed others to cover up mistakes or to minimize embarrassment

H O M E W O R K DU E (A) [one paragraph in total]: Tell a brief story about a boss or someone at work who behaved as a moral role model. Activity: Have students discuss the following: Who is the best moral role model in your organization? Tell a story about this person that supports your claim that s/he is a moral role model. Activity: Have students discuss the following: You can be a moral role model by making a real personal difference in the life of a co-worker, customer, or supplier through a heart-to-heart discussion or action. Provide an example of when you:

1. Made a difference in a work-related life (employee, customer, supplier) 2. Could have made a different but chose not to 3. Can make a difference in a work-related life in the near future

GRE AT PLAC E TO WORK® DIM E NSIONS The Great Place to Work® Institute provides a model of best management practices for creating a work culture that achieves superior performance. A great place to work is defined by the Institute as a place where people “trust the people they work for, have pride in what they do and enjoy the people they work with.” Exhibit 9.1 summarizes how the model’s five dimensions are exemplified.

G O T O PA G ES 180-181 A ND R E V I E W E X H IBI T 9.1, “Exhibit 9.1: Great Place to Work dimensions.”

108

Activity: Evaluate your organization based on each of the three items in the five Great Place to Work® Dimensions that appear in Exhibit 9.1 (i.e., “Communications are open and accessible”) on pages 180-181. Use a 5-point Likert scale [1=Strong Disagree, 2=Disagree, 3=Neutral, 4=Agree, and 5=Strongly Agree] to determine a score for whether the item describes your workplace. What was your organization’s score? Which of the five dimensions are strengths and weaknesses? How would you transform one weakness into a strength? Virtues and L eadership Practices Managers can possess an infinite number of virtues, and can expect the same of their subordinates. Seven virtues rise to the top of the desired virtue list.



Highly Desi red L eadership V irtues

Mission-Driven

Honest

Respectful

Fair

Quality-Focused

Supportive

Accountable Jack Welch, the former CEO of General Electric, notes that although successful leaders may have very different personalities – compare Microsoft’s introspective Bill Gates to Southwest Airlines’ exuberant Herb Kelleher – they tend to have eight management practices in common. Activity: Have students discuss the following: Evaluate the leader of your work unit based on Jack Welch’s eight best practices of a successful leader (i.e., “Relentlessly upgrade their team”). Use a 5-point Likert scale [1=Strong Disagree, 2=Disagree, 3=Neutral, 4=Agree, and 5=Strongly Agree] to determine a score for whether the leader of your work unit practices

109

this. What is the score? Which of the eight practices are strengths and weaknesses? How can your work unit leader transform one weakness into a strength?


Best Management Practices of Successful L eaders Successful leaders:

Relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach, and build self-confidence.

Make sure people not only see the vision, they live and breathe it.

Get into everyone’s skin, exuding positive energy and optimism.

Establish trust with candor, transparency, and credit.

Have the courage, after listening, to make unpopular decisions and gut calls.

Probe and push with a curiosity that borders on skepticism, making sure their questions are answered with action.

Take risks, learn from their mistakes, and inspire others to do likewise.

Celebrate organizational and employee accomplishments.

Activity: Anyone score 30-40 “Yes”? How about 20-30? 10-20? Less than 10? WORK GOALS Unreasonable work goals can generate unethical behaviors. Employees may accomplish an unreasonable performance goal by providing false performance information or engaging in risky or abusive behaviors. Activity: Do employees ever engage in unethical behavior in order to achieve a performance goal? If so, how can the performance goals be modified to generate more ethical, or less unethical, behaviors?

110

Activity: Do STUDENTS ever engage in unethical behavior in order to achieve a performance goal? Why?

Goal unreasonable? Personality problem of student?

If so, how can the performance goals be modified to generate more ethical, or less unethical, behaviors? GOAL SE TTING Discuss the five aspects of “SMART” goals.


SM A R T Goals

Specific – Outcome is clearly identifiable.

Measurable – Outcome can be measured.

Aligned – Accomplishing the outcome contributes to organizational strategy.

Reachable – Achieving the outcome is challenging, but realistically attainable.

Time-Bound – Outcome is to be achieved by a particular day or time. MANAG E M E NT-BY-OBJE CTIVES Management-By-Objectives (MBO) is a goal setting technique where managers and their subordinates jointly determine work unit and individual goals in alignment with organizational goals. STRESS MANAG E M E NT The United States Department of Health and Human Services estimates that job stress costs organizations $200 billion annually. High levels of stress, inappropriately managed, can lead to:

health problems accidents

111

absenteeism turnover diminished productivity high insurance costs unethical employee behavior

Causes of stress at work include:

deadlines conflicts at work rapid change unfavorable working conditions autocratic or incompetent supervisors personal problems at home

How to help employees manage stress?



Activity: How many organizations in class do these? – Raise hand. Is it effective?

Stress Management Options

Wellness Programs: Physical fitness and exercising, smoking cessation, and nutrition management.

Employee Assistance Programs (EAPs): Drug or alcohol abuse counseling, financial planning, depression, and family care issues.

Delegation Training: Help employees learn how to establish priorities and delegate to others.

Time Management Training: Conduct a time analysis of work activities during the course of a week, and then set priorities to be more in control of their daily work life.

Quiet Time: A designated time period where employees can perform job tasks without being interrupted by phone calls, urgent meetings, email communications, or other pressing matters.

Meditation: A form of relaxation that helps a person develop clarity of mind and patience.

112



Meditation T echnique

Step 1: Find a quiet place where you will not be disturbed.

Step 2: Set a timer with a soft bell for the desired length of the meditation session.

Step 3: Sit up straight on the floor with legs crossed in a lotus position, or on a chair with your feet firmly on the ground. Step 4: Slowly relax your muscles. Step 5: Close your eyes and breathe slowly in a regular rhythm. If a beginner, start by counting breaths. If more advanced, focus on blank space or chant.

Step 6: Repeat this process, breathing slowly and naturally. Breathe each breath slightly deeper, and hold each breath slightly longer. Step 7: When distracting thoughts enter your mind, don’t feel bad about it. Acknowledge the thought, and then let it go. Step 8: Continue the mediation process until the alarm gently sounds. Slowly become aware of where you are, open your eyes, and get up gradually.

Activity: Do the following with students: Lead the students in a 5 to 7 minute meditation exercise. PER F ORMANC E APPRAISALS Performance appraisals should document employee accomplishments and benchmark the distance an employee still needs to travel to become an ideal employee. To improve ethical performance managers must measure and reward ethical performance, and measure and change unethical performance.

113

G O T O PA G E 191 A ND R E V I E W IN F O R M A T I O N , W H I C H APPE A RS B E L O W Design performance appraisals, and gather relevant data, that address four ethical performance issues:

1) Does the employee behave unethically?

2) Does the employee live up to the code of ethics?

3) Does the employee embody the attitudes and behaviors of an ideal employee?

4) Does the employee achieve and support ethics-based initiatives?

Activity: Does your organization conduct performance appraisals? Describe how the criteria used for your work unit’s employee performance appraisals generate ethical or unethical behaviors. How can these criteria be modified to generate more ethical, or less unethical, behaviors? Activity: Describe how the performance evaluation criteria used for a CLASS generate ethical or unethical behaviors. How can these criteria be modified to generate more ethical, or less unethical, behaviors? Activity [Do confidentially as a self-assessment]: Have students discuss the following: How often do you engage in each of the four unethical behaviors that appear in “Tips and Techniques”? Describe one of those situations. Why did it happen? How can it be avoided? LIVING UP TO T H E COD E O F E T H ICS PER F ORMANC E APPRAISALS Annually appraise how well employees perform according to the organization’s Code of Ethics. Review Exhibit 9.2 to demonstrate how to transform a Code of Ethics into an ethics performance appraisal form. Compare this with Exhibit 4.3 (Code of Ethics) and Exhibit 4.4 (Code of Ethics Survey) in Chapter 4.

G O T O PA G E 193 A ND R E V I E W E X H IB I T 9.2, “Exhibit 9.2: Code of Ethics performance appraisal.”

114

ID E AL E MPLOYE E ATTITUD ES AND B E H AVIORS PER F ORMANC E APPRAISALS Annually appraise employee performance based on the qualities of an ideal employee. Review Exhibit 9.3, which provides a sample survey for leadership skills.

G O T O PA G ES 194-195 A ND R E V I E W E X H IBI T 9.3, “Exhibit 9.3: Leadership skills performance appraisal.” Activity: Complete the survey in Exhibit 9.3 (pages 194-195) to evaluate your leadership skills. What are your strengths and weaknesses? How can you transform one weakness into a strength? COLL E CTION AND E VALUATION ISSU ES

360-Degree Performance Evaluations -- holistic Activity: Have students discuss the following: Does your organization use 360-degree performance evaluations? If yes, do respondents provide honest information? How can this system be improved?

Rating versus Ranking – Absolute standard or relative standards

o Ranking creates unhealthy competition among employees and

o May not adequately describe an employee’s value to the work unit. Activity: Have students discuss the following: Does your organization use a rating or ranking system for their performance evaluations? Are employees satisfied with the rating or ranking evaluation system? If not, what changes would you recommend? PER F ORMANC E APPRAISAL F E E DBACK Performance appraisal feedback sessions can be very tense:

Employees may feel anxious about receiving critical information from the supervisor.

115

Supervisors may feel anxious about giving critical feedback to employees, not knowing in advance how well the information will be received.

Review best practices for performance appraisal feedback sessions.



Performance Appraisal Feedback Best Practices

Meet personally with each direct report to discuss the performance appraisal results.

Give informal feedback frequently.

Provide positive feedback immediately after a praiseworthy behavior.

Provide constructive feedback immediately after a blameworthy behavior.

Hold performance appraisal feedback sessions in a neutral setting, such as a conference room.

Prior to the meeting compare the employee’s self-assessment with the 360-degree performance appraisal results.

Begin the meeting by praising those areas that both the employee and the raters highlighted as strengths.

Discuss any areas raters highlighted as strengths but the employee did not.

Discuss any areas the employee highlighted as strengths but the raters did not.

Explore with the employee why this perceptual gap exists.

Discuss those areas that both the employee and raters highlighted as weaknesses.

Focus on solving the problem and how to improve the weakness.

Jointly establish goals and strategies that will likely lead to better results. DISCIPLINING WORK RUL E VIOLATIONS

116

Fairness is an extremely important ethical value in all organizations. How managers respond to allegations that a subordinate has behaved unethically significantly influences how employees evaluate a manager’s fairness. MAJOR IN F RACTIONS The Employee Polygraph Protection Act of 1988 prohibits pre-employment polygraph testing for many organizations. But polygraph tests can be used for employee theft if managers have a “good cause.” Review Exhibit 9.4, which summarizes some of key rules governing employee polygraph tests.

G O T O PA G E 199 A ND R E V I E W E X H IB I T 9.4, “Exhibit 9.4: Employee Polygraph Protection Act of 1988.” MINOR IN F RACTIONS Many workplace violations are relatively minor, such as being late for work or playing solitaire on the organization’s computer during work time. Review the continuum of potential punishments for infractions.


Continuum of Potential Punishments for Infractions

1. Talk to, and coach, the employee about the problem

2. Oral warning

3. Written warning

4. Provide special in-house services to help employee

117

5. Send employee to formal training to help

6. Explore transferring employee to a different department

7. Put the employee on probation

8. Fine the employee or withhold portion of merit pay

9. Suspend without pay

10. Termination F ORGIVE N ESS Managers must exemplify the value of forgiveness, and coach employees on how to forgive. This is particularly important if the work group is recovering from a dishonest or abusive manager. Robert Enright defines forgiveness as a gift freely given in the face of moral wrong, without denying the wrong itself. Enright offers a four phase model that managers can apply to guide employees through the forgiveness process. G O T O PA G ES 201-202 A ND R E V I E W


Four Phases of Forgiveness

Phase 1: Uncovering Phase. The violated person recognizes that the unjust situation has created unhealthy anger and emotional pain. Phase 2: Decision Phase. The violated person explores the personal pain or damage that would continue if he or she chooses not to forgive the wrongdoer, compared to the positive changes that could occur if forgiveness is given. Phase 3: Work Phase. The violated person grieves over the unfairness of the wrongdoing, reframes the wrongdoer as a person of inherent human worth deserving of forgiveness, and practices the virtues of goodness, service, mercy, and generosity by forgiving the wrongdoer. Phase 4: Outcome Phase. The forgiving person experiences the emotionally healing benefits of forgiveness and finds meaning in the previous suffering.

118

Activity: What was the greatest injustice (or harm) done to you by a boss, colleague, subordinate, customer, or supplier? Explain the situation. Have you forgiven the wrongdoer for harming you? If no, how does your inability or unwillingness to forgive the wrongdoer continue to damage you? What positive benefits would you receive if you did forgive the person?

119

A C RI T I C A L IN C ID E N T N O T E : I R E A D A L L T H E DI L E M M AS A ND T H E N C H O OSE T H E 1/3 T H A T I T H IN K PR O V ID E T H E M OST V A RI E T Y A ND F O R M G R O UPS A R O UND T H A T . Class Outline

Read Assignment from Syllabus Review Grading Rubric Review how to write a narrative Review “Sick Leave” example Review how to facilitate an ethics discussion

G O T O PA G ES 108-109 A ND R E V I E W E X H IBI T 6.4 - “Exhibit 6.4: Ethical dilemma narrative exercise.”

G O T O PA G E 110 A ND R E V I E W E X H IB I T 6.5 - “Exhibit 6.5: ‘Sick leave?’ ethical dilemma narrative.”

G O T O PA G E 111 A ND R E V I E W E X H IB I T 6.6 - “Exhibit 6.6: Facilitating an ethics dialogue workshop.” Highlight that we’ve been doing this all semester with the Enron cases: (1) CREATIVE AND DESCRIPTIVE TITLE (2) SHORT PARAGRAPHS

120

(3) YOU AS DECISION MAKER (4) CHANGE NAMES TO MAKE IT CONFIDENTIAL (5) MODIFY DILEMMA SO THAT YOU END UP WITH JUST TWO or THREE CHOICES (6) IDEAL IS A 50/50 SPLIT, JUST LIKE A LAS VEGAS BOOKIE (NY GIANTS FAVORED BY 14 OVER PACKERS IN THE SUPER BOWL) (7) DEVELOP WHAT IFS USING ETHICAL THEORIES (8) CREATE A ROLE PLAY SCENARIO, EVERYONE HAS A ROLE, TO DRAMATIZE THE DILEMMA (9) MOST DIFFICULT: SUPPORT MINORITY AND CHALLENGE THE MAJORITY

121

C H APT E R 10: E MPO W E RIN G E T H I C A L E MPL O Y E ES

Enron Situation

Activity: Have students discuss the following: For “In the Real World – Informing Ken Lay: August 2001”, if you were an Enron Vice President (p. 212) and instructed by in-house lawyers not to meet with the CEO until after Enron’s chief legal counsel investigated your accusations about Fastow, would you cancel your meeting with Lay and wait until hearing back from Enron’s in-house lawyers (option 1), continue your own investigation and meet with Lay at the already scheduled time (option 2), confidentially notify Arthur Andersen about your suspicions (option 3), confidentially notify the SEC about your suspicions (option 4), and/or confidentially notify Wall Street Journal reporters about your suspicions (option 5)? Why?


“Informing Ken Lay—August 2001,” pp. 210-212: Bass was replaced on the Enron PSG oversight committee In 2000, Internet economic bubble burst, nation enters recession, stock market declines Lay retires as CEO in January 2001, stays as Chairman, Skilling takes over as CEO Fastow SPE network, funded primarily with Enron stock, begins to collapse Michael Kopper resigns and takes over as LJM managing partner Skilling resigns August 12, 2001; massive stock sell-off Lay comes out of semi-retirement and holds all-employee open forum Sherron Watkins, a VP under Fastow, submits anonymous letter about SPE issue Lay does not address it, she claims ownership of it, sets up meeting with Lay In-house lawyer recommends she cancel meeting with Lay until they investigate In late August, Watkins meets with Lay, but he doesn’t seem to understand

If you were an Enron Vice President (p. 212) and instructed by in-house lawyers not to meet with the CEO until after Enron’s chief legal counsel investigated your accusations about Fastow, would you:

cancel your meeting with Lay and wait until hearing back from Enron’s in-house lawyers (option 1),

continue your own investigation and meet with Lay at the already scheduled time (option 2),

confidentially notify Arthur Andersen about your suspicions (option 3), confidentially notify the SEC about your suspicions (option 4), and/or confidentially notify Wall Street Journal reporters about your suspicions (option 5)?

Why?

122

Vote and Debate – Real Life: Lay announces $1.7 billion in losses ($618 million in operating losses and $1.01 billion in non-recurring write-offs. The Ethical Decision-Making Framework questions are:


a. Enron Vice President (you/Sherron Watkins) b. Ken Lay c. In-house lawyers d. Andy Fastow e. Enron shareholders

2) Is the action beneficial to me? – Cancel the meeting with Lay.

You’ve already informed Lay by letter and the in-house lawyers. To go outside this chain of command could risk your job.

3) Is the action supported by my social group? – Cancel the meeting with Lay.

Most people in organizations prefer to follow chain-of-command and are unlikely to risk their jobs over this matter.

4) Is the action supported by national laws? – Continue your own investigation and meet with Lay at the scheduled time.

As an executive, you have a legal obligation to act in the best interests of shareholders. This important unknown information must be dealt with.

5) Is the action for the greatest good of the greatest number of people affected by it? – Continue your own investigation and meet with Lay at the scheduled time, and confidentially notify Arthur Andersen.

The CEO of Enron needs to know these details. In addition, Arthur Andersen is responsible for certifying Enron’s financial statements. Confidentially notify the Arthur Andersen auditing team so that they know what transactions need closer review. If Arthur Andersen refuses to investigate, then you should confidentially notify the SEC.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Continue your own investigation and meet with Lay at the scheduled time, and confidentially notify Arthur Andersen.

123

It is essential to investigate these concerns. Continue your investigation and keep the scheduled time for meeting Lay. But first, you should notify your boss, Andy Fastow, about your concerns. There might be a reasonable explanation and he should be given an initial opportunity to respond. If his response is inadequate, then meet with Lay. If Lay’s response is inadequate, then inform Arthur Andersen. If Arthur Andersen’s response is inadequate, then inform the SEC. If the SEC’s response is inadequate, then inform the media.

Therefore, continue your investigation, discuss your concerns with Fastow, and, if his response is inadequate discuss your concerns with Lay. Document as much information as you can, including your own performance reviews in case Fastow retaliates. If Lay’s response is inadequate, then notify Arthur Andersen, etc.

124

C H APT E R 10: E MPO W E RIN G E T H I C A L E MPL O Y E ES EMPOWERING ETHICAL EMPLOYEES Read Collins, Chapter 10, pp. 205-229. SUB M I T : FR E E C O M M UNI T Y M E A L PR O G R A M ESSA Y H O M E W O R K DU E (A) [one paragraph in total]: Describe how your boss or employer involves nonmanagement employees in the decision-making process or provides group-based bonuses for improved performance. H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 210-212, if you were the Enron vice president, would you do choice #1, #2, #3, #4, or #5? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Class Outline

Quiz Enron Go-Getters, Fence-Sitters, and Adversarials Team Effectiveness and Dysfunctions Problem-Solving Process to Improve Class Appreciative Inquiry to Improve College Participation in decisions Participation in financial performance

GO-G E TT ERS, F E NC E-SITT ERS, AND ADVERSARIALS Some managers mistakenly design systems of control to monitor the worst employees and, in the name of fairness, impose the same control system on all employees. This is unwise. Managers should treat their best employees different than other employees— they have earned it. Attitudes influence behaviors, and behaviors, in turn, influence attitudes. Most organizations have three types of employees in terms of workplace attitudes and behaviors.

G O T O PA G E 207 A ND R E V I E W E X H IB I T 10.1, “Exhibit 10.1: Workplace attitudes and behaviors.” E F F E CTIVE T E AMS

125

Patrick Lencioni highlights five issues that contribute to ineffective team performance. Review and discuss Exhibit 10.2.

G O T O PA G ES 213-214 A ND R E V I E W E X H IBI T 10.2, “Exhibit 10.2: Team effectiveness model.”

Activity: Evaluate your project team based on the team effectiveness model assessment that appears in the handouts. What is your score? What is your weakest are (lowest score)? How can you transform one weakness into a strength?

G O T O H A ND O U TS A ND R E V I E W


126

T eam E ffectiveness Model Assessment Instructions: Think about a team you are on at work. It is important to evaluate the statements below honestly and without over-thinking your answers. Evaluate each statement using the 3 point scale. Rarely Sometimes Usually 1. Team members are passionate and unguarded in their discussion of issues.

1 2 3

2. Team members call out one another’s deficiencies or unproductive behaviors.

1 2 3

3. Team members know what their peers are working on and how they contribute to the collective good of the team.

1 2 3

4. Team members quickly and genuinely apologize to one another when they say or do something inappropriate or possibly damaging to the team.

1 2 3

5. Team members willingly make sacrifices (such as budget, turf, head count) in their departments or areas of expertise for the good of the team.

1 2 3

6. Team members openly admit their weaknesses and mistakes. 1 2 3 7. Team meetings are compelling, and not boring. 1 2 3 8. Team members leave meetings confident that their peers are completely committed to the decisions that were agreed on, even if there was initial disagreement.

1 2 3

9. Morale is significantly affected by the failure to achieve team goals. 1 2 3 10. During team meetings, the most important – and difficult – issues are put on the table to be resolved.

1 2 3

11. Team members are deeply concerned about the prospect of letting down their peers.

1 2 3

12. Team members know about one another’s personal lives and are comfortable discussing them.

1 2 3

13. Team members end discussions with clear and specific resolutions and calls to action.

1 2 3

14. Team members challenge one another about their plans and approaches.

1 2 3

15. Team members are slow to seek credit for their own contributions, but quick to point out those of others.

1 2 3

Scoring: Combine your scores for the preceding statements as indicated in the following chart. Dysfunction 1: T RUST

Dysfunction 2: C O N F L I C T

Dysfunction 3: C O M M I T M E N T

Dysfunction 4: A C C O UN T- A B I L I T Y

Dysfunction 5: C O L L E C T I V E R ESU L TS

Item #4: Item #1: Item #3: Item #2: Item #5: Item #6: Item #7: Item #8: Item #11: Item #9: Item #12: Item #10: Item #13: Item #14: Item #15: Total: Total: Total: Total: Total: A score of 8 or 9 is a probable indication that the dysfunction is not a problem for your team. A score of 6 or 7 indicates that the dysfunction could be a problem. A score of 3 to 5 is probably an indication that the dysfunction needs to be addressed. Regardless of your scores, it is important to keep in mind that every team needs constant work, because without it, even the best ones deviate toward dysfunction. Source: Patrick Lencioni, 2002, The F ive Dysfunctions of a Team, San Francisco: Jossey-Bass, pp. 191-194.

127

SYST E MATIC T E AM PROBL E M-SOLVING PROC ESS Team problem solving requires training in two areas:

(1) How to think through a problem

(2) How to obtain relevant ideas from all team members For the first issue, the scientific method of inquiry provides individuals and teams with a systematic process for thinking through problems.


F ive Stages of the Problem Solving Process Stage 1: Define the Problem Stage 2: Identify Alternative Solutions Stage 3: Evaluate and Choose an Alternative Stage 4: Implement the Decision Stage 5: Monitor and Control Decision Outcomes Managers must also systematically address the second issue – how to obtain relevant ideas from all team members. See below for a problem solving process that helps a team access each member’s unique knowledge, introverts as well as extroverts, and develops solutions with the highest likelihood of achieving superior performance.



128

T eam Problem Solving Process Step 1: Present the Problem. The problem is presented to all team members. Team members are encouraged to ask clarifying questions so that they fully understand the key issues. Step 2: Define the Individual Solutions. Each team member individually writes down possible solutions to the problem. Step 3: Present Individual Solutions. Each team member reads his or her solution to the entire team. Team members listen carefully without responding. One team member takes responsibility for keeping a list of potential solutions. Step 4: Clarify Individual Solutions. Each team member explains his or her solution in greater detail and responds to clarifying questions as needed. Step 5: Brainstorm. For three minutes, team members should spontaneously propose as many solutions as possible. Step 6: Group and Prioritize Solutions. As a team, organize the list of potential solutions according to common themes. Determine which solutions to pursue further and prioritize them according to the greatest likelihood of success. Consider ease of implementation and costs when prioritizing the solutions. Develop action plans for implementing the best solutions. Step 7: Play Devil’s Advocate. Assign one team member the role of devil’s advocate. This person should criticize the highest priority solution by stating all the reasons why it is likely to fail. Other team members should respond to these concerns and develop plans on how these obstacles and shortcomings could be managed. Do this for each high priority solution. Step 8: Implement and Monitor. Have teams implement high priority solutions that fall within the boundaries of their authority. Monitor the outcomes. Team members should present complex and costly solutions, or solutions that impact the operations of other work units, to the appropriate manager for further analysis. Activity: Have the students experience the problem solving process – improving class.

What do you like most about the class? What do you dislike most about the class? Provide two or three strategies to solve the problem. Then put students on teams of 3 to 5 members. Agree on a problem Continue with the problem solving model.

o Read Problem o Individual Solution o Brainstorm

129

o Affinity o Devil’s advocate o Hand in Solution

CONN E CTING E MPLOYE ES TO T H E MISSION – APPRE CIATIVE INQUIRTY Appreciative Inquiry is a team-based management technique that focuses on the strengths possessed by each employee and the organization. Employees:

Identify organizational processes that work well (“discover”)

Envision processes that would work well in the future (“dream”)

Plan and prioritize processes that would work well (“design”)

Implement the proposals (“destiny”) The heart of an organization’s mission is to serve customers. Discuss how an Appreciative Inquiry workshop can explore how to achieve superior customer service.



Appreciative Inquiry Workshop Format Step 1: Individually reflect on superior customer service Step 2: On a small team, determine the essential elements of superior customer service Step 3: Develop a collective vision of what is needed to achieve superior customer service Step 4: Create a draft of a new organizational mission statement that emphasizes superior customer service at every level of operations Step 5: Determine the organization’s current “positive core” Step 6: Personal Commitments Step 7: Organizational Action Recommendations Step 8: Management Follow-Up

130

Activity: Have the students experience an Appreciative Inquiry workshop based on improving customer service at the school. Begin by having the students answer the four questions below, and then continue with steps 2 through 8 (pp 218-220).

1. Describe a situation when you received superior customer service as a student.

2. Describe other ways the school has provided superior customer service.

3. Describe other ways the school can provide superior customer service.

4. What changes would have to be made for the school to achieve this? DAILY PER F ORMANC E RE F L E CTIONS Set aside ten to fifteen minutes at the end of every day for teams to process the events that occurred during the day and make preparations for managing any ongoing problems the following day.


Daily Performance Reflections Organize daily reflections where employees share the following information:

1) An accomplishment or performance satisfaction during the day

2) A problem that arose during the day 3) How the problem was solved 4) A lesson learned from the accomplishment or problem that might benefit other team

members 5) A problem that still needs to be addressed

SCANLON-TYPE GAINSH ARING PLAN

131

Scanlon-type gainsharing plans provide nonmanagement employees with greater institutional responsibility and accountability for improving organizational operations. Work unit teams elicit, evaluate, and implement continuous improvement suggestions, and receive financial rewards for surpassing historical performance standards).



Scanlon-Type Gainsharing Plans Suggestion System Employees submit written suggestions to the gainsharing

coordinator about how to improve efficiency, reduce costs, and increase revenue.

The suggestions are listed in a log book and sent to the appropriate work team.

Gainsharing T eam Team consists of either all nonmanagement employees in the work unit or, if a large work unit, nonmanagement representatives voted to the team.

Meets weekly or monthly to review suggestions and brainstorm solutions to other relevant problems.

Has a monthly budget to implement suggestions that fall within their domain.

Suggestions that exceed the team’s monthly budget, or that impact other work units, are forwarded to a Review Board.

Review Board Consists of one representative from each gainsharing team, the gainsharing coordinator, and relevant managers.

Team representatives report on the changes their teams implemented and respond to questions.

Reach consensus on whether to implement more costly or inter-work unit suggestions.

Gainsharing Coordinator

Responsible for managing the gainsharing system. Duties include managing the suggestion system process, training

team members, attending team meetings, and maintaining records. G roup-Based F inancial Bonus

Calculation devised that compares projected costs and actual costs for a given period of time, usually a month.

Projected costs are based on the organization’s historical performance, usually an average of the previous three years.

When actual costs are lower than the projected historical cost, the financial difference is shared between the employees and organization, typically on a 50/50 ratio.

132

H O M E W O R K DU E (A) [one paragraph in total]: Describe how your boss or employer involves nonmanagement employees in the decision-making process or provides group-based bonuses for improved performance. Activity: Have students discuss. OPE N BOOK MANAG E M E NT Open Book Management is a technique where managers share relevant financial and operational information with nonmanagement employees so they can make better informed decisions.

G O T O PA G ES 223-224 A ND R E V I E W T IPS A ND T E C H NI Q U ES Determine which data are critical for the employees to know. The information shared could include:

income statements balance sheets revenue profit cost of goods cash flow customer returns on-time shipments

F INANCIAL INC E NTIV ES

Profit Sharing (pp. 224-225)

Stock Options (pp. 225-226)

Employee Stock Option Plans (pp. 226-227)

Cooperatives (pp. 227-228) – producer, consumer, employee

133

Activity: Have students discuss the following: Does your organization offer employees profit sharing, stock options, ESOP, or Cooperatives? If so, describe the plan. What are the strengths and weaknesses of your organization’s system? How can you transform a weakness into a strength?

134

C H APT E R 11: E NV IR O N M E N T A L M A N A G E M E N T

Enron Situation

Activity: Have students discuss the following: For “In the Real World – Announcing Third-Quarter Results: October 2001”, if you were CEO of Enron (p. 247), would you announce $7 billion in losses and risk financial collapse (option 1), $2 billion in losses to match Wall Street expectations (option 2), or $1.2 billion in losses as recommended by some Enron executives (option 3)? Why?


“Announcing Third-Quarter Results—October 2001,” pp. 245-247: Watkins meets with Ken Lay in late August about Fastow’s SPE network, and informs

Andersen contact, who informs Duncan Late August, CAO Rick Causey informs Ken Lay of $7 billion in hidden losses September 11, 2001, World Trade Center tragedy, stock market closes, then collapses Must release third quarter results October 16, 2001 Fiduciary duty to tell the truth to stockholders, but firm would collapse, 20,000 could lose

jobs and pensions loaded with Enron stock If you were the CEO of Enron (p. 247), how much of the hidden losses would you report to public on October 16:

all $7 billion in losses and risk financial collapse (option 1), $2 billion in losses to match Wall Street expectations (option 2), or $1.2 billion in losses as recommended by some Enron executives (option 3)?

Why? Vote and Debate – Real Life: Lay announces $1.7 billion in losses ($618 million in operating losses and $1.01 billion in non-recurring write-offs. The Ethical Decision-Making Framework questions are:


a. CEO of Enron (you/Ken Lay) b. Enron employees c. Enron shareholders d. Houston e. Arthur Andersen

2) Is the action beneficial to me? – Announce $1.2 billion or $7 billion.

135

a. Announce $7 billion: I have a fiduciary duty to tell the truth to shareholders and

can go to jail if I lie about this. b. Announce $1.2 billion: That will forestall bankruptcy and provide me with more

time to develop a solution. Also, as a major shareholder, I can obtain more money for selling shares.

3) Is the action supported by my social group? – Announce $1.2 billion.

Several prominent Enron executives have made this recommendation.

4) Is the action supported by national laws? – Announce $7 billion.

I have a legal obligation to convey the truth to shareholders.

5) Is the action for the greatest good of the greatest number of people affected by it? – Announce $1.2 billion.

If I tell the truth, shareholders will sell the stock and probably incur large losses. More than 5,000 employees in Houston would lose their jobs and employees at recently acquired companies would have major changes to deal with. Announcing $1.2 billion avoids all this and provides us time to make necessary changes for the company’s financial well-being.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Announce $7 billion.

I must tell the truth, and need to trust shareholders and employees with the truth. Therefore, Enron must admit that it has $7 billion in losses. First meet with the SEC and other regulators prior to the quarterly announcement and explain the problem. Obtain their advice on ways to protect against Enron’s total financial collapse following the announcement. Maybe the government would be willing to provide a loan if I and my board of directors resign, and we cooperate with the ensuing federal investigation into Fastow’s SPE schemes.

136

C H APT E R 11: E NV IR O N M E N T A L M A N A G E M E N T ENVIRONMENTAL MANAGEMENT Read Collins, Chapter 11, pp. 233-257. H O M E W O R K DU E (A) [one paragraph in total]: Describe how your employer tries to reduce energy costs or minimize environmental harms. H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 245-247, if you were the CEO of Enron, would you do choice #1, #2, or #3? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Class Outline

Quiz Enron Personal Behaviors Edgewood College – Green Tier Competitive Advantages of being eco-friendly Managing Environmental Change EMS The Natural Step Energy and Cost Reductions Green Building Environmental Performance Indicators

Before you ask anyone to change, you much change yourself. Gandhi: Be the change you want to see in others! SO HOW ARE Y O U DOING? Complete the “Calculating Your Carbon Footprint” (in your packet) for your home. How many pounds and short tons of carbon do you emit per year? Is that amount average, above average, or less than average? What are you doing right and what improvements can you make? Complete the “Green Consumption Surveys.” Summarize your survey scores and discuss how you did in comparison to the “average” score listed. Were you surprised by the results? In small groups:

137

What was your carbon footprint? What are you doing right? (each person shares this before going to next question) What improvements can you make? What were your Green Consumption Survey results? Were you surprised by them?

G O T O H A ND O U TS A ND R E V I E W


C A L C U L A T IN G Y O UR C A RB O N F O O TPRIN T

A Individual and Family Carbon Footprint Calculator is available at www.safeclimate.net/calculator/ The information you need for this calculator include:

Number of people in your household Automobile Transportation

o Miles drive per month for each vehicle o Miles per gallon for each vehicle

Airplane Transportation o Miles you fly per month on an annual basis

Electricity use* o Kilowatt hours per month

Heat use* o Natural gas use (Therms per month) o Heating oil (Gallons per month) o Propane (Gallons per month)

*Obtain from last local utility bill, or use M G & E W ebsite (if M G & E customer): http://www.mge.com/home/rates/energyuse.htm

a) Click on “Log in Now” on bottom of page b) If already registered type in User ID and password; if not registered enter account

number from a recent bill and dollar amount of the last bill and then establish User ID and password

c) Click “View Energy Use Detail” d) Click “View Detail” under electric and gas accounts e) Copy down last full year or previous 12 months f) Can also click on hotlink “Calculate My Home Heating Rating” under gas detail by

inputting square footage heated and decade house constructed.

http://www.mge.com/home/rates/energyuse.htm

http://www.safeclimate.net/calculator/

138

SUB M I T IN F O R M A T I O N IN T O C A RB O N F O O TPRIN T C A L C U L A T O R A T www.safeclimate.net/calculator/ Yahoo provides excellent “green” advice for a wide range of personal and company activities at http://green.yahoo.com/ The “Take Action” link on the Yahoo website includes a method for you to create your own personal action plan at http://green.yahoo.com/pledge/create;_ylt=Amk1E1PQ M9qz_JXvh3L ry.i L V8c X Locally, Channel 3 (W ISC-TV)’s website has excellent “going green” information at: http://www.channel3000.com/goinggreen/index.html Local green events and activities are available at: www.sustaindane.org

Environmentally-F riendly Consumption Survey Circle your answer for each of the following statements. The more honest you are, the more helpful the information you will receive. Items adapted from www.eartheducation.com Food Consumption and Packaging Habits Rarely Sometimes Usually 1. I take my own paper sacks (or other containers) to the grocery store 1 2 3 2. I grow some of my own food 1 2 3 3. I compost food waste 1 2 3 4. I use Styrofoam products 1 2 3 5. I eat red meat at least twice a week 1 2 3 6. I avoid eating animals raised in modern factory-farm production 1 2 3 7. I am a vegetarian 1 2 3 8. I grow or buy organically produced foodstuffs 1 2 3 9. I belong to a food co-op 1 2 3 10. I do grocery shopping at Whole Foods or other health food stores 1 2 3 11. I shop at the farmer’s market 1 2 3 12. I eat at fast-food restaurants 1 2 3 Household Energy & Supplies Rarely Sometimes Usually 1. I turn off electric lights and appliances when no one is in the room 1 2 3 2. I heat a portion of my home using renewable resources (biogas, wood, solar)

1 2 3

3. I run a dishwasher only when it is full and then let the dishes drip dry 1 2 3

http://www.eartheducation.com/

http://www.safeclimate.net/calculator/

http://green.yahoo.com/

http://green.yahoo.com/pledge/create;_ylt=Amk1E1PQM9qz_JXvh3Lry.iLV8cX

http://www.channel3000.com/goinggreen/index.html

http://www.sustaindane.org/

139

4. I set the thermostat at no higher than 68 degrees during the day and 55 degrees at night

1 2 3

5. I use air conditioning during the summer 1 2 3 6. I use storm doors and windows 1 2 3 7. I use a non-motorized push lawnmower 1 2 3 8. I wash my clothes in cold water 1 2 3 9. I use low wattage and/or energy saving light bulbs 1 2 3 10. I use pesticides or other chemical fertilizers 1 2 3 Water & Waste Water Rarely Sometimes Usually 1. I bathe every day 1 2 3 2. I limit my showers to five minutes or less 1 2 3 3. I turn off the water heater when leaving the house for more than a day 1 2 3 4. I turn off the water when brushing my teeth or shaving 1 2 3 5. I install regulators on shower heads to reduce the water used 1 2 3 6. I use phosphate free detergents 1 2 3 7. I have low flow toilets in my home 1 2 3 8. I use naturalistic landscaping 1 2 3 T ransportation Habits Rarely Sometimes Usually 1. I drive a vehicle that achieves 30 miles or more per gallon 1 2 3 2. I recently purchased a hybrid 1 2 3 3. I recently purchased an SUV 1 2 3 4. I regularly walk or ride a bicycle somewhere rather than driving 1 2 3 5. I car pool or use mass transit 1 2 3 6. I keep my vehicle properly tuned and serviced 1 2 3 7. I purchase radial tires and keep them properly inflated 1 2 3 8. I purchase a new car every few years 1 2 3 Recycling & Reusing Rarely Sometimes Usually 1. I recycle aluminum 1 2 3 2. I recycle newspaper 1 2 3 3. I recycle glass bottles 1 2 3 4. I recycle metal cans 1 2 3 5. I recycle magazines or give them to other people 1 2 3 6. I use both sides of a sheet of paper 1 2 3 7. I throw items away rather than repairing them 1 2 3 8. I give unnecessary clothing and furnishings to charity 1 2 3 9. I reuse plastic and paper bags 1 2 3 10. I buy throw-away pens 1 2 3 11. I reuse envelopes 1 2 3

140

What other ways do you consumer products and services in an environmentally-friendly manner?

Scoring K eys Food Consumption & Packaging Habits (Average Score: 12; Excellent: 20) Score A: Add scores for items 1, 2, 3, 6, 7, 8, 9, 10, 11 = Score B: Add scores for items 4, 5, 12 = Food Consumption & Packaging Score: Score A minus Score B = Household Energy & Supplies (Average Score: 12; Excellent: 18) Score A: Add scores for items 1, 2, 3, 4, 6, 7, 8, 9 = Score B: Add scores for items 5, 10 = Household Energy & Supplies Score: Score A minus Score B = Water & Waste Water (Average Score: 10; Excellent: 17) Score A: Add scores for items 2, 3, 4, 5, 6, 7, 8 = Score B: Score for item 1 = Water & Waste Water Score: Score A minus Score B = Transportation (Average Score: 8; Excellent: 13) Score A: Add scores for items 1, 2, 4, 5, 6, 7 = Score B: Add scores for items 3, 8 = Transportation Score: Score A minus Score B = Recycling & Reuse (Average Score: 14; Excellent: 21) Score A: Add scores for items 1, 2, 3, 4, 5, 6, 8, 9, 11 = Score B: Add scores for items 7, 10 = Recycling & Reusing Score: Score A minus Score B =

141

AFTER YOU HAVE EMBODDIED ECO-FRIENDLY BEHAVIORS, YOU NOW HAVE LEGITIMACY WITH OTHERS! COMPE TITIVE ADVANTAG ES O F B E ING E CO-F RI E NDLY Exhibit 11.1 summarizes some of the many economic and organizational benefits of being eco-friendly.

G O T O PA G ES 235-236 A ND R E V I E W E X H IBI T 11.1, “Exhibit 11.1: Benefits of being eco-friendly.” MANAGING T H E E NVIRONM E NTAL C H ANG E PROC ESS Exhibit 11.3 summarizes ten aspects of the environmental change process, beginning with the importance of an environmental manager accountable for initiatives.

G O T O PA G ES 239-241 A ND R E V I E W E X H IBI T 11.3, “Exhibit 11.3: Managing environmental change.” My involvement on Green Campus Committee Step 1: Acknowledge previous successes

Survey employees on best practice efforts Distribute info, praising the accomplishment

Step 2: Gather relevant data

What are your indicators? What do you want to benchmark?

o Edgewood: Heating and electricity bill rose 73%, from $464,277 in 2002 to $803,499 in 2006

142

Step 3: Engage employees in incremental changes My involvement on Green Campus Committee Eco Olympics

Step 4: Inspire employees by tackling a large project with a high likelihood of success

1,100 sq. foot boardwalk construction on Lake Wingra Step 5: Enhance customer awareness

Green Tier Certification by Wisconsin Department of Natural Resources First LEED Silver Residence Hall Sustainability Tour

Step 6: Institutionalize changes

EMS Campus Sustainability Coordinating Team Co-Chair

Step 7: Continuous Improvement

Sustainability Tour Composting, Community Garden June 5 state-wide conference Solar Info Center!

EDGEWOOD COLLEGE CERTIFIED “GREEN TIER”

B Y W ISC O NSIN D EPA R T M E N T O F N A T UR A L R ESO UR C ES

http://dnr.wi.gov/org/caer/cea/environmental/participants/edgewood/

In O ctober 2006, Edgewood College became the first college or university in Wisconsin to be accepted into the Department of Natural Resources’ Green Tier program, a statewide program that encourages institutions and businesses to go beyond current rules and regulations to reduce their impact on the environment. Institutions and companies participating in Green Tier can benefit through specific flexibilities outlined in statute, individual contracts and charters. Statutory incentives include, for example, a single point-of-contact within DNR to facilitate effective communications, and use of the Green Tier logo for marketing. Most importantly, companies are recognized for environmental performance that goes beyond what the law requires them to do, and for systematically and continually improving on that performance. Recent environmental accomplishments at Edgewood include:

Environmental Management System

http://dnr.wi.gov/org/caer/cea/environmental/participants/edgewood/

143

Environmental Management Policy Annual Environmental Audit Annual Environmental Indicator Report New Residence Hall LEED (Leadership in Energy and Environmental Design) Certified

http://www.usgbc.org Mazzuchelli renovation awarded 2005 Environmental Excellence Award Rain gardens designed to capture large volumes of runoff from the campus Annual Eco-Olympics

Wisconsin Department of Natural Resources (DNR) G reen T ier Program http://dnr.wi.gov/org/caer/cea/environmental/

Wisconsin’s innovative Green Tier program provides responsible companies the

flexibility they need to exceed environmental requirements while boosting productivity and cutting costs.

Green Tier program initiated October 2005 Initial Participants: MEGTEC Systems, American Transmission Co., Holsum Dairies,

Times Printing, Kimberly Clark Benefits of G reen T ier Status:

Recognition for superior environmental performance Single point contact at DNR Use of Green Tier logo Opportunity to be a pioneer in regulatory reform Permit streamlining, modified monitoring requirements, potential facility caps Deferred civil enforcement Differentiate Edgewood College from its competitors in attracting the type of students, faculty and business contacts that fit our college’s mission.

Obligations:

1) Implement, within one year of the date of application, an Environmental Management System (EMS) plan for each covered facility or activity that is certified to the ISO 14001 standard, or is functionally equivalent to ISO 14001 as determined by DNR.

2) Conduct annual EMS audits, with every 3rd EMS audit performance by a DNR-approved ISO 14001 outside environmental auditor.

3) Submit to DNR an annual report on each EMS audit that is in compliance with state law [s. 299.83(6m)(a)]

4) Submit to DNR an annual report on progress towards meeting objectives related to improved environmental performance.

E NVIRONM E NTAL MANAG E M E NT SYST E M (E MS)

http://dnr.wi.gov/org/caer/cea/environmental/

http://www.usgbc.org/

144

The International Organization for Standardization (ISO), a non-governmental organization, has worked closely with industry, technical experts, and other stakeholders to develop an Environmental Management System (EMS) plan for achieving superior environmental performance. Exhibit 11.4 highlights procedures to document for each of the five sections of an EMS plan.

G O T O PA G ES 242-243 A ND R E V I E W E X H IBI T 11.4, “Exhibit 11.4: An environmental management system (E MS) outline.” E NVIRONM E NTAL RISK ASSESSM E NT A key aspect of an EMS is managing environmental risk. Each organization has a unique set of environmental input, throughput, and output risks. Exhibit 11.5 provides a list of questions to consider when performing an environmental risk assessment.

G O T O PA G ES 244-245 A ND R E V I E W E X H IBI T 11.5, “Exhibit 11.5: Identifying environmental risks.” T H E NATURAL ST EP (TNS) F RAM EWORK AND COST RE DUCTIONS An increasing number of communities and businesses are using “The Natural Step (TNS)” framework as a conceptual tool for environmental analysis and action plan development. Review the three Natural Step objectives aimed at reducing the use of resources that damage environmental well-being. These should be explored by work units, total quality management teams, or gainsharing teams.

145



Natural Step (T NS) F ramework Objectives Objective #1 – Reduce Wasteful Dependence on Fossil Fuels and Underground Metals and

Minerals: What scarce minerals and materials does the organization use? How can the scarce minerals and materials be substituted with minerals and

materials that are more abundant in nature? How can the organization use its mined materials more efficiently?

Objective #2 – Reduce Wasteful Dependence on Chemicals and Synthetic Compounds:

What chemicals and synthetic compounds does the organization use? How can the chemicals and synthetic compounds be substituted with natural

compounds or those that break down more easily in nature? How can the organization use its synthetic compounds more efficiently?

Objective #3 – Reduce Encroachment on Nature:

What land, water, and wildlife resources does the organization use? Are any of the organization’s uses of land, water, and wildlife resources

unnecessary? How can the organization use its land, water, and wildlife resources more

efficiently?


Common Cost Reductions Energy Reduction: Ask the local public utility to perform an energy audit and provide on-site consultation on how to save money by reducing energy use.

146

Waste Disposal Reduction: Document organizational waste within each work unit and determine how to eliminate it. If the waste cannot be eliminated, then locate organizations willing to purchase or use the waste. Paper Reduction: Conduct communications through email, rather than using paper, and develop an on-line document storage system. Product Shipment Reduction: Examine how suppliers transport products to the organization and how the organization transports products to its customers. Determine alternative methods to more effectively receive and disburse these deliveries, including less packaging material. Toxic Substances Reduction: Develop a list of toxic substances used at the workplace. The number of suppliers providing non-toxic alternatives is a growing market. These products can reduce product disposal costs and positively impact employee health. Business Travel Reduction: Document the amount of business travel conducted during a particular time period. Determine which off-site meetings could have been conducted through teleconferencing, video-conferencing, or interactive email communications.

G O T O PA G E 249 A ND R E V I E W T IPS A ND T E C H NI Q U ES H O M E W O R K DU E (A) [one paragraph in total]: Describe how your employer tries to reduce energy costs or minimize environmental harms. Activity: Have students discuss this. PRODUCT PACKAGING AND D ESIGN The European Union’s “Packaging and Packaging Waste Directive” passed in 1994.



European Union’s “Packaging and Packaging Waste Directive” passed in 1994

147

The law originated in Germany, where product packages had accounted for approximately 25-30 percent of scarce landfill space.

Businesses operating within the European Union are now responsible for directly recovering and recycling product packaging or paying a “Green Dot” licensing fee to a third party that collects and recycles the packaging.

Packaging refers to both the package immediately surrounding the product and the transportation container, everything except the product itself.

The law covers cardboard, plastic, metals, wood, paper, crates, drums, pallets, and Styrofoam containers.

The European Union program, which has also been adopted by Canada, licenses more than 130,000 companies and 460 billion packaging items.

GRE E N BUILDINGS The United States Green Building Council’s “Leadership in Energy and Environmental Design” (LEED) rating system provides eco-friendly measurement standards for certifying building construction and remodeling.

The four levels of LEED certification are: Basic (26 points), Silver (32 points), Gold (39 points) and Platinum (52 points). Exhibit 11.6 provides examples of eco-friendly practices, and the number of points available, for each of the six LEED innovation and design categories. Mandatory practices for certification are noted with an asterisk.

G O T O PA G ES 252-253 A ND R E V I E W E X H IBI T 11.6, “Exhibit 11.6: The LEED rating system.” E NVIRONM E NTAL PER F ORMANC E INDICATORS Climate Care provides a simple Internet-based carbon calculator for business use at https://www.climatecare.org/business/business-co2-calculator.

https://www.climatecare.org/business/business-co2-calculator/

148

Exhibit 11.7 offers a more extensive list of environmental measures relevant to most organizations.

G O T O PA G E 254 A ND R E V I E W E X H IB I T 11.7, “Exhibit 11.7: Key environmental indicators.” A carbon credit is a permit that allows the holder to emit one ton of carbon dioxide. Credits are awarded to countries or groups that have reduced their green house gases below their emission quota. Carbon credits can be traded in the international market at their current market prices. SUSTAINABILITY REPORTING Global Reporting Initiative (GRI), an international multi-stakeholder coalition, provides general guidelines for sustainability reporting that allows for some environmental performance comparisons between organizations. In 2006, after extensive public review and feedback, GRI released the “third generation” of reporting guidelines.

149

C H APT E R 12: C O M M UNI T Y O U T R E A C H A ND R ESPE C T Enron Situation

Activity: Have students discuss the following: For “In the Real World – Arthur Andersen’s Document Retention Policy: October 2001”, if you were the lead external auditor engagement partner (p. 283), would you implement Arthur Andersen’s document retention and destruction policy and destroy redundant documents (option 1) or preserve all Enron documents to assist any future SEC investigations (option 2)? Why?


“Arthur Andersen’s Documentation Retention Policy—October 2001,” pp. 282-283: October 16, 2001, Lay announces $1.7 billion in losses ($618 million in operating losses

and $1.01 billion in non-recurring write-offs, not all $7 billion. SEC begins an “informal” investigation, Wall Street Journal’s journalists publish articles about Fastow’s SPEs

Andersen already under SEC “cease-and-desist” order from previous fraud Nancy Temple, Andersen’s in-house lawyer, sent Duncan email October 12, four days prior to the announcement, reminding him of Andersen’s “documentation retention and destruction policy.”

All nonessential audit material could be destroyed prior to the initiation of a “formal” SEC investigation.

Engagement team had been lax, failed to remove redundant and nonessential documents, “formal’ investigation not yet declared

If you were the lead external auditor engagement partner (p. 283), would you:

implement Andersen’s document retention and destruction policy and destroy redundant and nonessential documents (option 1) or

preserve all Enron documents to assist any future SEC investigation (option 2)? Why? Vote and Debate – Real Life: Duncan implemented policy … legal, but looked bad, indicted, lose all customers, basis of jury trial, lose trial, is overturned by the Supreme Court … too late The Ethical Decision-Making Framework questions are:


a. Lead external auditor engagement partner (you/David Duncan)

150

b. Arthur Andersen partners c. SEC investigators d. Enron shareholders

2) Is the action beneficial to me? – Destroy redundant documents.

My engagement team has been lax the previous two audits, which makes me look like an incompetent manager.

3) Is the action supported by my social group? – Destroy redundant documents.

A good lead external auditor engagement partner would obey company policy.

4) Is the action supported by national laws? – Destroy redundant documents.

I have the legal right to destroy redundant documents prior to the initiation of a “formal” SEC investigation. I am not violating the spirit of the law because these are redundant documents.

5) Is the action for the greatest good of the greatest number of people affected by it? – Preserve all Enron documents.

If I were an SEC investigator or an Enron shareholder, I would want to see all available documents, even if they are redundant, just in case they provide evidence of fraud.

6) Are the motives behind the action based on truthfulness and respect/integrity toward each stakeholder? – Preserve all Enron documents.

Destroying the documents so close to the highly anticipated announcement of a “formal” investigation makes it seem as if I am hiding something from the SEC and Enron shareholders.

Therefore, preserve all Enron documents to assist any future SEC investigations. Otherwise, the SEC and Enron shareholders might assume that the sudden mass destruction of documents is part of a cover-up.

151

C H APT E R 12: C O M M UNI T Y O U T R E A C H A ND R ESPE C T

COMMUNITY OUTREACH AND RESPECT Read Collins, Chapter 12, pp. 259-284. H O M E W O R K DU E (A) [one paragraph in total]: Based on the questions in Exhibit 12.1 (p. 273) and Exhibit 12.2 (p. 274-275), which community organization would be an ideal strategic philanthropic partner for your employer. Why? H O M E W O R K DU E (B) [one chart]: For the Enron case on pp. 282-283, if you were the lead external auditor, would you do choice #1 or #2? Use the “Critical Thinking Decision Making Process” chart to derive and defend your answer. Class Outline

Quiz Enron Benefits of Community Involvement Giving Money, Product, Skills, Jobs Charities United Way GlobalGiving, Kiva Strategic Philanthropic Partners Social Performance Assessment and Measures

M E E T IN C O MPU T E R L A B F O R K I V A , G L O B A L G I V IN G , A ND UNI T E D W A Y SE A R C H ES. BUSIN ESS CASE F OR COMMUNITY INVOLVE M E NT A very strong business case supports being a model citizen.



Business Case for Community Involvement Benefits to Customer Relations

152

Increased brand awareness and recognition

Customer loyalty

New business opportunities from collaborating with other involved companies

First-mover advantages

Benefits to Employee Relations

Attracting and retaining employees

A more productive and healthier workforce

Employees develop a deeper sense of purpose and mission Benefits to Community Relations

Preferences with local banks

Recognition as a responsible neighbor of choice

Community goodwill and support Investors are paying greater attention to a company’s social performance. The Socially Responsible Investment (SRI) financial market is huge.

In 2007, the SRI market in the United States accounted for approximately $2.7 trillion, 11 percent of all investment assets under professional management, up from $639 billion in 1995.

The growth difference was particularly profound between 2005 and 2007, where SRI assets grew 18 percent while the broader market grew only 3 percent.

The Domini Index has consistently performed above, or equal to, the S&P 500 since 1990.

153

WH AT TO GIVE What do nonprofit organizations and the community need from businesses? Four things:

(1) Money

(2) Products or Services

(3) Skills

(4) Job Opportunities GIVING MON EY According to the Giving USA Foundation, corporations donated $12 billion in 2004. Some companies link the sales of particular products to their philanthropic contributions.

American Express Ben & Jerry’s “(PRODUCT RED)”

GIVING PRODUCTS OR SERVIC ES Many community organizations can benefit from receiving company products or supplies. Review Timberland’s extensive product donation program at www.timberland.com/corp/index.jsp?page=donationProgram Review American Girl’s product donation strategy in “Tips and Techniques: A Highly Integrated Win-Win Donation” (see pages 264-265).

American Girl broken product, keep out of landfill. Madison Children’s Museum team building fixes them Benefit sale raises money for nonprofit and gets new customers

GIVING SKILLS In 2005, 65.4 million Americans over the age of 16 volunteered, approximately 29 percent of the adult population.

Some companies set aside one day a year for all employees to serve the community.

http://www.timberland.com/corp/index.jsp?page=donationProgram

154

The United Way sponsors a “Day of Caring” in many communities and creates projects with nonprofit organizations that make it easy for employees to participate.

The United Way also recruits business leaders and middle level managers of high potential to sit on the boards of nonprofit organizations.

The United Way’s computerized system collects data about an employee’s skill set and then matches the potential volunteer to the needs of nonprofits.

A growing number of companies offer employees short or long-term sabbaticals, or leave programs, for community involvement activities.

Managers must address several key issues when defining the parameters of a sabbatical program.


Sabbatical Program Issues Who qualifies: Will the employee be chosen based on years of employment, performance achievements, future potential, or some other criterion? For how long: Will the sabbatical be for one week, three weeks, two months, or a year? Where: Will the activity be performed locally, nationally, or internationally? Type of Activity: Will the activity be community service, small businesses assistance, travel immersion, writing a book, or anything? Compensation: Will the employee receive full pay, reduced pay, or no pay? Post-Sabbatical Obligation: Does the employee have to remain with the company for a certain period of time after the sabbatical? GIVING JOB OPPORTUNITI ES Businesses can give back to the community by providing jobs to people in need.

For displaced workers following a community crisis

For people with disabilities, elderly, and returning war veterans

155

For ex-convicts

Activity: Describe how your company donates money, products or services, or employee skills to nonprofit organizations, or provides job opportunities for hard-to-employ segments of the population. What are the strengths and weaknesses of your company’s community outreach program? How can you transform one weakness into a strength? GIVING TO WH OM Managers can:

Reactively give on a first-come first-serve basis

Outsource giving to the United Way and other mediating organizations

Proactively give and develop a few key strategic partnerships with nonprofit organizations.

Companies should pursue an integrative approach that involves all three types of recipients. RE ACTIVE GIVING Companies should set aside some of their community giving resources to support local nonprofit organizations and causes that are meaningful to employees and community members.

Respond to a nonprofit’s unforeseen need

Respond to a national emergency The American Institute of Philanthropy (AIP) Charity Rating Guide & Watchdog Report grades more than 500 national charities based on how nonprofits spend their donations. Attributes of AIP’s the top-rated charities.


Attributes of Top-Rated Charities

156

Spends more than 75 percent of their budgets on programs

Spends no more than $25 to raise $100 in public support

Does not hold excessive assets in reserve

Discloses financial information and documents

Charity Navigator, an independent non-profit organization, rates the financial health of more than 5,000 charities in terms of daily operations and program sustainability. List of questions to ask a charity prior to donating money:


Questions to Ask a Charity

Can the charity clearly communicate who they are and what they do?

Can the charity define its short-term and long-term goals?

Does the charity report progress made toward its goals?

Are the charity’s programs rational and productive?

Can you trust the charity?

Are you willing to make a long-term commitment to the charity? OUTSOURCING GIVING Companies should set aside some of their community giving resources to support the local United Way or some other highly credible organization that monitors the disbursement of donations. The United Way:

157

Performs community needs assessments and ensures that nonprofit recipients appropriately manage donations

Is strongly supported by local government officials Is an important business networking opportunity

International outsourcing organizations provide donors with a broad range of social projects or individual recipients to fund. GlobalGiving links donors to specific projects. Review GlobalGiving’s website at www.globalgiving.com.

Ensures that 85-90 percent of the tax-deductable donation is put to use by the recipient organization within sixty days.

Donors are provided quarterly updates from the recipient organization about the project’s progress.

Offers donors a satisfaction guarantee of up to $10,000. Kiva is a person-to-person microloan lending website that links donors to developing nation entrepreneurs unable to obtain loans from regular banking institutions. Review Kiva’s website at www.kiva.org.

Technically, this is not a donation because the money is being loaned to the recipient with the intent of repayment.

The donor browses entrepreneur profiles, selects one, and sends the money to Kiva, which then deposits the money with a nearby microfinance institution.

The entrepreneur pays interest to the microfinance institution managing the loan. The microfinance institution also offers the entrepreneur training and other assistance. After the entrepreneur pays back the loan, the donor can reissue another loan to the

entrepreneur, lend the money to a different entrepreneur, or withdraw the funds. In less than three years of operation, Kiva has disbursed $39 million in loans to 55,515

individuals through 88 microfinance institutions. The average loan was $477 and 78 percent of the recipients were female.

Activity: Have students do and discuss the following:

Browse the United Way of Dane County website (www.unitedwaydanecounty.org). Choose one volunteer activity and educate class about the website.

Browse the American Institute of Philanthropy (AIP) (www.charitywatch.org) and Charity Navigator (www.charitynavigator.org) websites. You are responsible for managing a $500 donation. Who would you give it to? Educate class about the website.

Browse the GlobalGiving (www.globalgiving.com) and Kiva (www.kiva.org) websites. You are responsible for managing a $500 donation. Who would you give it to? Educate class about the website.

http://www.kiva.org/

http://www.globalgiving.com/

http://www.kiva.org/

http://www.unitedwaydanecounty.org/

http://www.charitywatch.org/

http://www.charitynavigator.org/

http://www.globalgiving.com/

158

PROACTIVE GIVING AND STRAT E GIC PH ILANT HROPY Companies should set aside some of their community giving resources for strategic partnerships with nonprofit organizations aligned with the company’s mission. The strategic partnership could be based on:

what community organizations would benefit the most by aligning with the company, or

what community organization would benefit the company the most Exhibit 12.1 provides questions managers should ask to help them determine which community organizations can benefit the most by being aligned with the company.

G O T O PA G E 273 A ND R E V I E W E X H IB I T 12.1, “Exhibit 12.1: Community organizations that benefit the most from a strategic partnership.” Exhibit 12.2 provides questions managers should ask to help them determine which community organizations can contribute the most to the company achieving its strategic goals.

G O T O PA G ES 274-275 A ND R E V I E W E X H IBI T 12.2, “Exhibit 12.1: Community organizations that benefit the company the most.” The ideal partnership is an equal partnership, one that benefits the company and the community organization. Strategic partnership objectives must be transparent, fair, and realistic, and communication two-way. H O M E W O R K DU E (A) [one paragraph in total]: Based on the questions in Exhibit 12.1 (p. 273) and Exhibit 12.2 (p. 274-275), which

159

community organization would be an ideal strategic philanthropic partner for your employer. Why? T E AM BUILDING AND PROJE CT MANAG E M E NT TRAINING OPPORTUNITI ES Managers should use community involvement as an opportunity for:

team building

leadership training

teaching project management COMMUNITY INVOLVE M E NT MANAG E M E NT PROC ESS The process for authentic engagement between the company and community closely parallels the “Managing Environmental Change” process that appears in Exhibit 11.3. Exhibit 12.3 expands on that model.

G O T O PA G ES 277-278 A ND R E V I E W E X H IBI T 12.3, “Exhibit 12.3: Community involvement management process.” COMMUNITY REPUTATION ASSESSM E NT The Council on Foundations has created a Corporate Philanthropy Index (CPI) for companies to assess their reputation within the community. The three-item survey, measured on a 5-point Likert scale [1=Strong Disagree, 2=Disagree, 3=Neutral, 4=Agree, and 5=Strongly Agree], should be sent to multiple stakeholders or administered at a focus group meeting.


160

Community Reputation Assessment The three-item survey, measured on a 5-point Likert scale [1=Strong Disagree, 2=Disagree, 3=Neutral, 4=Agree, and 5=Strongly Agree], should be sent to multiple stakeholders or administered at a focus group meeting.

1. Compared to other companies, (Company Name) does its fair share to help the community and society.

2. Overall, (Company Name) is the kind of company that helps the community and society by contributing things like time, volunteers, money, and sponsorships of nonprofit events and causes.

3. (Company Name) really seems to care about giving and making contributions to help the community and society.

SOCIAL PER F ORMANC E REPORTING The Global Reporting Initiative (GRI) discussed in Chapter 11 offers a standardized framework for broad-based community impact reporting in addition to environmental performance. The top three indicators used to measure performance in each of the five areas appear in Exhibit 12.4.

G O T O PA G ES 280-281 A ND R E V I E W E X H IBI T 12.4, “Exhibit 12.4: Top three indicators for five community impact topics.”

161

L AST C L ASS

Class Outline

Summary – Path to designing ethical organizations Class Participation Grade Aristotle Purpose Happiness work and nonwork Personal Mission Questions Values Guiding Principles

The Path to C reating O rganizations of H igh Integrity

1) Recognize that all human beings are morally imperfect (Chapter 1).

2) Recognize that economic systems evolve in response to unethical behaviors and outcomes (Chapter 2).

3) Hire ethical job candidates (Chapter 3).

4) Clarify ethical expectations with effective Codes of Ethics and Conduct (Chapter 4).

5) Apply a systematic ethics decision-making framework when issues arise (Chapter 5).

6) Provide ethics training on an annual basis (Chapter 6).

7) Respect employee diversity (Chapter 7).

8) Administer an internal reporting system for ethical issues (Chapter 8).

9) Serve as an ethical role model (Chapter 9).

10) Establish work goals that generate ethical behaviors (Chapter 9).

11) Design and conduct performance appraisals that encourage ethical behaviors (Chapter 9).

12) Empower ethical employees through participatory management and sharing financial improvements with all employees (Chapter 10).

13) Manage environmental performance (Chapter 11).

14) Develop effective community outreach programs (Chapter 12).

162

15) Assess the implementation of best practices and make changes as needed (Chapter 13).

The Purpose of L ife -- A RIST O T L E Review the four factors that contribute to individual and organizational happiness.

The Purpose of L ife Aristotle reasoned that happiness is a function of four factors:

1) Health – For the most part, healthy people are happier than sick people: Are you in good health?

2) Wealth – For the most part, wealthy people are happier than poor people: Are you earning an adequate salary?

3) Intellectual Virtue – For the most part, educated people are happier than

uneducated people: Are you continually learning new things? 4) Moral Virtue – For the most part, moral people are happier than immoral people: Are

you continually doing good deeds?

Activity: Have students discuss the following: Evaluate the following four factors that contribute to individual happiness using a 5-point Likert scale [1=Strong Disagree, 2=Disagree, 3=Neutral, 4=Agree, and 5=Strongly Agree]. What is your score? What are your strengths and weaknesses? How can you transform a weakness into a strength?

1) I am in good health. 2) I am earning an adequate salary. 3) I am continually learning new things. 4) I am continually doing good deeds.

Activity: Have students discuss the following: Evaluate the following four factors that contribute to organizational happiness using a 5-point Likert scale [1=Strong Disagree, 2=Disagree, 3=Neutral, 4=Agree, and 5=Strongly Agree]. What is your organization’s score? What are its strengths and weaknesses? How can the organization transform a weakness into a strength?

1) Our employees have good health. 2) Our employees earn an adequate salary. 3) Our employees are continually learning new things. 4) Our employees continually do good deeds.

163

Purpose of L ife Paper Response to Injustice

Share in small groups Personal Mission Part II.4. Is there a common theme in your answers to what made you happy at those three periods of your life? What is it? Part II 5. Is there a common theme in your answers to your ideal professional goals at those three periods of your life? What is it? Part II 6. Given your character attributes (Answer in Part I), and your answers to the last two questions, outline a plan that will help you move in the direction of accomplishing your ideal professional goals over the next 5 years, and how you can experience happiness during the process. F inal Questions I still wonder what the professor really thinks about X. X= ???? F IN A L SE T O F V A L U ES:

1) TRANSPARENCY – Decisions are visible, nothing hidden. 2) FAIRNESS – Process and outcomes are considered fair by all stakeholders.

3) TWO-WAY COMMUNICATION – The input of affected people is gathered,

considered, and feedback provided.

4) ACCOUNTABILITY – Specific people are held responsible for processes and outcomes.

SPIRITUAL PRINCIPLES

164

MIND : BODY SPIRITUAL : PHYSICAL 1) The World Needs Our Help

Kid growing up reading newspapers and watching television news 2) Listen to the Sounds of the Street

Drummer in Greenwich Village 3) Heaven on Earth is a State of Mind

Montclair State – Willowbrook Meditation

4) This is Purgatory – The Choice to Do Good or Bad is Mine

Why am I not as good as I should be? – This is purgatory 5) Heaven on Earth is a Society to Be Built with Others

Grand Union utopian store Missionary Business Ethics

6) God Will Only Give Me Problems I Can Manage – Even Death

Cancer Cancer as a Blessing, a Wake-Up Call

[Do you know why life is finite, ending with death? We all need deadlines to get things done!]

7) Heaven on Earth is Experienced through Interpersonal Relationships

In addition to being a state of mind and a mission to be worked on, what also matters a lot are your every-day relationships

8) These are My Bonus Days – I should have died August 1996.

Free, Liberated and Fearless 9) So How to Make Life Worthwhile?

FACULTY LECTURES - Denis Collinsdcollins.faculty.edgewood.edu/BuisnessEthics...Sensitize yourself to...

Documents

Transcript of FACULTY LECTURES - Denis Collinsdcollins.faculty.edgewood.edu/BuisnessEthics...Sensitize yourself to...