Discuss the social media topic Exhibit 5.3 (pg. 138) in our text and discuss the current status and the ethical issues surrounding social media and employee obligations.  Be sure to include at least two recent events that have happened either locally or nationally.

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who were otherwise successful are disciplined. This sends a powerful message that ethical
behavior truly is valued at GE.37

Danger Signs Maintaining consistent ethical behavior by all employees is an ongo-
ing challenge. What are some danger signs that an organization may be allowing or even
encouraging unethical behavior? Exhibit 5.4 lists many factors that could create a climate
conducive to unethical behavior.38

Regardless of your employer’s ethical climate, you are responsible for the decisions you
make. It’s been said that your reputation is your most precious asset. Here’s a suggestion:
when making decisions, explicitly consider their impact on your personal reputation.

You can have strong personal character, but if you “manage” ethics only by benign neglect,
you won’t develop a reputation as an ethical leader. Here’s another suggestion, if you want
to take ethics to the next level: Set a goal for yourself to be seen by others as both a moral
person and as a moral manager—someone who influences others to behave ethically. When
you are both personally moral and a moral manager, you will truly be an ethical leader.39

Corporate Ethical Standards To create a culture that encourages ethical behavior,
managers must be more than ethical people. They also should lead others to behave ethi-
cally.40 At General Electric, longtime (now former) chief executive Jeffrey Immelt demon-
strated his concern for ethical leadership by beginning
and ending each annual meeting with a statement of
the company’s integrity principles, emphasizing that
“GE’s business success is built on our reputation with
all stakeholders for lawful and ethical behavior.”41

OshKosh provides questions for employees to ask themselves when facing ethical deci-
sions: “Are my actions legal?” “Am I being fair, honest and ethical?” “Will I sleep soundly
tonight?” and “What would I tell my child to do?” The implication: if you wouldn’t want a
decision highlighted in the media, then don’t do it.42 This “light of day” or “sunshine” ethi-
cal framework can be a powerful influence.

Such fear of exposure compels people more strongly in some cultures than in others. In some
Asian countries, anxiety about losing face often makes executives resign immediately if they are
caught in ethical transgressions or if their companies are embarrassed by revelations in the media.
By contrast, in the United States, exposed executives might respond with indignation, intransi-
gence, pleading the Fifth Amendment, stonewalling, and mounting an everyone-else-does-it self-
defense, or by not admitting wrongdoing and giving no sign that resignation ever crossed their
minds. Partly because of legal tradition, the attitude often is never explain, never apologize, don’t
admit the mistake, and do not resign, even if the entire world knows exactly what happened.43

Ethics Codes The Sarbanes-Oxley Act required public companies periodically to dis-
close whether they have adopted a code of ethics for senior financial officers—and if not,
why not. Often such statements are just for show, but when implemented well, they can
change a company’s ethical climate for the better and truly encourage ethical behavior.
Executives say they pay most attention to their company’s code of ethics when they feel that

ethical leader

One who is both a moral
person and a moral manager
influencing others to behave
ethically.

1. Excessive emphasis on short-term revenues over longer-term considerations.

2. Failure to establish a written code of ethics.

3. A desire for simple, quick-fix solutions to ethical problems.

4. An unwillingness to take an ethical stand that imposes financial costs.

5. Consideration of ethics solely as a legal issue or a public relations tool.

6. Lack of clear procedures for handling ethical problems.

7. Responding to the demands of shareholders at the expense of other constituencies.

EXHIBIT 5.4
Seven Danger Signs of
Unethical Behavior at Your
Organization

Fear of exposure compels people more

strongly in some cultures than in others.

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The Digital World
While corporate ethics programs work hard to ensure
that employees are behaving ethically, some companies
use technology to enforce compliance and limit their lia-
bility if a violation occurs. Most companies have a policy
that computers, cell phones, and Internet access provided
by the company come with the company’s legal right to
access any content.

Goldman Sachs’ compliance department monitors
all e-mails and social media with an algorithm that looks
for key words, which, when flagged, receive additional
scrutiny to determine if there is an issue. Employees
sign a document stating that they are aware e-mails are
reviewed.

Examples of words and phrases monitored are “worst
investment,” “I trusted you,” and many types of profan-
ity. While the original list of words and phrases was pro-
duced in 2008, in 2016 news agencies started publishing
words and phrases used by the algorithm that had been
obtained from an anonymous inside source.

Digital monitoring tools can affect employee online
behavior by their power to catch transgressors, and also
by the ease with which stakeholders can post proof online
of behavior they think the public should know about.
These provide a level of transparency not previously pos-
sible, while creating additional ethics challenges. What
are your reactions to this?

stakeholders (customers, investors, lenders, and suppliers) try to influence them to do so,
to promote a positive image.44

Most ethics codes address subjects such as employee conduct, community and environ-
ment, shareholders, customers, suppliers and contractors, political activity, and technology.
The nonprofit Ethics Resource Center conducts research and assists companies interested
in establishing a corporate code of ethics.45

Ethics codes must be carefully written and tailored to individual companies’ philoso-
phies. Exhibit 5.5 reprints the Commitments section of The Hershey Company’s code of
ethics.

To make an ethics code effective, do the following: (1) involve those who have to live
with it in writing the statement; (2) focus on real-life situations that employees can relate
to; (3) keep it short and simple, so it is easy to understand and remember; (4) write about
values and shared beliefs that are important and that people can really believe in; and (5) set
the tone at the top, having executives talk about and live up to the statement.46

When reality differs from the statement—as when a motto says people are our most pre-
cious asset or a product is the finest in the world, but in fact people are treated poorly or
product quality is weak—the statement becomes a joke to employees rather than a guiding
light.

Ethics Programs Corporate ethics programs commonly include formal ethics codes
that articulate the company’s expectations: ethics committees that develop policies, evalu-
ate actions, and investigate violations; ethics communication systems that give employees
a means of reporting problems or getting guidance; ethics officers or ombudspersons who
investigate allegations and provide education; ethics training programs; and disciplinary
processes for addressing unethical behavior.47

Ethics programs can range from compliance-based to integrity-based.48 Compliance-
based ethics programs are designed by corporate counsel to prevent, detect, and punish legal
violations. Program elements include establishing and communicating legal standards and
procedures, assigning high-level managers to oversee compliance, auditing and monitoring
compliance, reporting criminal misconduct, punishing wrongdoers, and taking steps to pre-
vent offenses in the future.

Such programs can reduce illegal behavior and help a company stay out of court. But as a
former chair of the Securities and Exchange Commission said, “It is not an adequate ethical
standard to aspire to get through the day without being indicted.”

Integrity-based ethics programs go beyond the mere avoidance of illegality; they are con-
cerned with the law but also with instilling in people a personal responsibility for ethical

compliance-based ethics
programs

Company mechanisms
typically designed by
corporate counsel to
prevent, detect, and punish
legal violations.

integrity-based ethics
programs

Company mechanisms
designed to instill in people
a personal responsibility for
ethical behavior.

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