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Fairness and Honesty

4/1/15

Many people felt Toyota was not honest about its accelerator problem – a problem
leading to a massive recall and a public relations nightmare
A later investigation by the National Highway Traffic Safety Administration blamed
most of the crashes on driver error
It can be difficult to recognize specific ethical issues and people often need years of
experience to accurately recognize and react to ethical situations
Are there any potential legal restrictions or violations that could result from the
action?
Does your company have a specific code of ethics or policy on the action?
Is this activity customary in your industry?
Would this activity be accepted by your co-workers?
How does this activity fit with your own beliefs and values?
Improving Ethical Behavior in Business
Three factors that influence business ethics
Individual Standards and values – Many employees use different ethical standards
at work than they do at home
+ Managers and Co-workers influence – The activities set and examples set by
managers and co-workers are critical in gaining consistent ethical compliance
+ opportunity codes and compliance – if a company fails to provide good examples
and direction, confusion and conflict will develop
= ethical/unethical choices in business
Employers must have established ethics policies if employees are to determine what
conduct is acceptable
Code of ethics
Formalized rules and standards that describe what a company expects of its
employees
Whistleblowing
The act of an employee exposing an employer’s wrongdoing to outsiders, such as the
media or government regulatory agencies

The nature of social responsibility
Corporate citizenship – the extent to which businesses meet the legal, ethical,
economic, and voluntary responsibilities placed on them by their stakeholders
 Involves action and measurement of how deeply the firm embraces the
corporate citizenship philosophy

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Then follows through by implementing citizenship initiatives

The company’s responsibilities to owners and stockholders –
 Maintaining proper accounting procedures
 Providing investors with relevant information
 Protecting owner’s rights and investments
Company’s responsibilities to employees
 Provide a safe workplace and pay them adequately
 Provide equal opportunities for all employees
 Keep them informed of what is happening in the company
 Listen to their grievances and treat them fairly
Company’s responsibility to consumers
 Provide them with satisfying, safe products
 Respect their rights as consumers
John F

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