BA 310 Mod 8 Ch 6 Strategic Planning Corporate Culture and Corporate Compliance Objectives Explain the concept of strategic planning with respect to ethics Explain the ethics life cycle Explain ethical strategic decision making from a global perspective 1 2 3 4 Discuss ethical crisis and disaster recovery 5 Define corporate culture 6 7 Describe the process for embedding values and positive ethics in an organization 8 Explain the difference between corruption embezzlement extortion and bribery 9 Describe the various forms of corruption Explain how ethical values can be changed 1 Ethics and Strategic Planning strategic planning process in which future courses of action are developed to achieve the firm s short and long term goals 5 Questions to ask before making a final decision Is it my responsibility Why is this bothering me What is the ethical concern What do others think Am I being true to myself 2 The Ethical Cycle mirror test the decision maker s ability to look in the mirror after decisions have been made and state that he or she made the right choice Companies should take into account their code of ethics when developing their strategic plan Companies should always keep core values in mind Moral Problem Statement identification of the moral problem developed based on the responses to 3 conditions a clear statement of what the moral problem is an identification of who is affected by the resolution of the moral problem and the moral issue of the problem Problem Analysis Identify 3 factors Which stakeholders are affected by the problem and how does it affect their interests What are the moral values that need to be considered to analyze the problem What are the relevant facts related to the moral problem Options for Action generate potential alternative options to resolve the problem Ethical Judgement evaluation of the different options Reflections the outcomes from the ethical judgement stage are further evaluated so a definitive course of action can be determined 3 Strategical Ethical Decision Making Using Strategic Ethical Decisions to Build Character The ethical cycle helps employees understand who they are from an ethical perspective A defining moment is when a decision maker has a choice between two plausible and acceptable strategic options Who am I Who are we Who is the company Linking Strategic Planning to Ethics Constance Bagley well known ethics professor at Yale University developed an ethical decision tree to help guide strategic planning Is the proposed action legal Does the proposed action maximize shareholder value If so it the action ethical An ethical crisis occurs when an event that was not part of the normal course of action takes place Ethical Decision Making from a Global Perspective 4 How to Address Ethical Crisis and Disaster Recovery and has an impact on the firm Crisis Typology Dimensions Center of Gravity whether issues are internal or external Frequency of the issues classified as normal or abnormal 1 BA 310 Mod 8 Ch 6 Strategic Planning Corporate Culture and Corporate Compliance 5 Corporate Culture corporate culture the shared values and beliefs of employees within any given organization Based on norms and patterns of behavior Can be seen heard or felt Must have strong ethical focus to ensure that unethical activities do not take place in the workplace Does the culture support either ethical or unethical behaviors A corporate culture of ethical behavior must Come from top levels of management Be reinforced Three levels of Corporate Culture Artifacts factors that are seen and heard within a firm Shared Values based on what groups within the firm learn about what is acceptable or not Basic Assumptions the agree starting point for decision making within the firm How Managers Can Change A Corporate Culture Two types of mechanisms Primary Embedding Mechanisms What leaders pay attention to measure and control The reaction of a leader to a critical incident or crisis What is observed to be the leader s criteria of allocating resources What is observed to be the leader s criteria for the allocation of rewards and statue The observation of the leader s behavior as a role model decisions What is observed to be the leader s criteria for promotion retirement and excommunication of his or her subordinates the recruitment selection Secondary Articulation and Reinforcement Mechanisms The design and structure of the organization The systems and procedures of the organization The rites and rituals of the organization The design of the firm s buildings facades and the physical space within the buildings The stories that are told to the employees about important events and people The formal statements developed by the firm to represent the firm s philosophy creeds and charters Unfreezing of the individuals existing beliefs Moving top management needs to ensure that what is considered acceptable and unacceptable is Refreezing top managers must reinforce their commitment to support strong ethical behavior clear Formalizing a Culture of Ethics Culture should include three basic components Define your philosophy and corporate values in a mission statement Develop guidelines for employees Establish a formal channel for employees to report violations Evaluation of Corporate Culture Deloitte Touche Cultural Assessment of a Firm Do rank and file employees understand the tone set by senior management Do you know that your organization s culture encourages ethical behavior at all levels Can employees throughout your organization describe the company s code of ethics Do employees in all areas of your organization ask questions and express concerns Do your employees believe that the mechanisms are in place to allow them to voice opinions without fear or retribution Creating a Climate of Integrity Suggestions Set an example from top management Set realistic goals Provide training Distinguish between compliance and ethics 2 6 How to Change Ethical Values 3 Stage Model of Change BA 310 Mod 8 Ch 6 Strategic Planning Corporate Culture and Corporate Compliance 7 Ethics and Corporate Compliance Deloitte Touche 5 Step Process to embed positive ethics and values Conduct risk cultural assessment Review current compliance program Review ethical policies and procedures Review and revise the communication training and implementation phases of program Develop an ongoing assessment of the program Factors that affect fraud within an organization Financial condition of an organization