How companies encourage ethical behavior

Ø 1) Say whether the problem of a written code of ethics in companies is discussed in this text.

Ø 2) Look through the text and make a supposition which category of readers it will be interesting for. Prove your supposition.

(1) A broad-based effort is under way in corporate America to encourage ethical behavior. Three out of four large companies have adopted a written code of ethics that defines the values and principles that should be used to guide decisions. However, many ethics specialists question the value of these codes. Most take a legalistic approach, spelling out accepted company prac­tices with respect to conflict of interest, confidentiality of information, bribes and kickbacks, political contributions, and handling of corporate assets. Crit­ics argue that many of these codes are designed to protect the company, not to promote ethical behavior. Three-quarters of the codes adopted by the top 200 corporations in America fail even to mention consumer relations, envi­ronmental protection, or product safety.

(2) While a code of ethics is no guarantee of goodness, it can be an important tool in building an ethical orientation if it is backed up by management commitment. According to a study by The Business Roundtable, an influen­tial group of top executives from 200 major corporations, it takes training, education, and follow-up to upgrade corporate morality. At Chemical Bank, for example, ethics are hammered home during a two-day seminar on corpo­rate values where Vice Presidents discuss ethics cases. To be sure that every­one understands the bank’s commitment to its standards; the company dis­misses employees who violate the code of ethics.

(3) Another approach used by some companies is to screen potential employ­ees for honesty before they are hired. The simplest but least scientific way to do this is to ask questions during the interview process that reveal something about the applicant’s values and moral principles. A more formal approach involves the use of written “honesty” tests designed to reveal a candidate’s standards. For example, the test might ask, “If you saw a co-worker stealing, would you turn the person in? ” or “Do you agree or disagree that stealing from an employer is different than stealing from friends? ”

(4) Many businesses are also trying to encourage ethical behavior among employees by setting an example of community involvement. Corporations donate over $1 billion to charity each year, and many executives also do­nate their time to community affairs. At the same time, many corporations have begun to take a stand on moral issues, such as helping to foster the growth of minority-owned businesses or fighting apartheid in South Africa.

(5) However, some observers question whether it is truly desirable to allow corporations, rather than the government, to set social policy. Corporations, after all, are private organizations, not accountable to the public; the govern­ment is composed, at least in part, of elected officials whom the public can remove from office. Some critics also question whether business should not be permitted to emphasize what it does best - make profits - without hav­ing its efforts diluted by the sometimes-conflicting claims of more socially oriented goals.

(6) Although most companies attempt to make ethical decisions, they are also concerned about the costs of their actions. Undertaking many socially re­sponsible activities takes money. How much is a little unclear, because no single source of information exists on business’s expenditures for socially desirable activities. However, there are clues that the total cost is very high, indeed.

Ø 3) Name the paragraphs which give answers to the questions:

a) How are potential employ­ees screened for honesty?

b) Do most ethical codes are written to protect the company or the customer?

c) What is the cost of actions for making ethical decisions?

d) How is ethical behavior among employees encouraged in the company?

e) Are there any training sessions organized to upgrade corporate morality?

f) Who is to set social policy: corporations or the government?

Ø 4) Find professionally-relevant terms in the text. Define them.