Table Of Content
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MANAGING BUSINESS ETHICS
Straight Talk About How To Do It Right
FifthEdition
LINDA KLEBE TREVIN˜ O
DistinguishedProfessorofOrganizationalBehaviorandEthics
SmealCollegeofBusiness
ThePennsylvaniaStateUniversity
KATHERINE A. NELSON
Lecturer
FoxSchoolofBusiness
TempleUniversity
JOHNWILEY&SONS,INC.
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LibraryofCongressCataloging-in-PublicationData
Trevin˜o,LindaKlebe.
Managingbusinessethics:straighttalkabouthowtodoitright/LindaKlebeTrevin˜o,Katherine
A.Nelson.–5thed.
p. cm.
Includesindex.
ISBN978-0-470-34394-4(pbk.)
1. Businessethics. 2. Businessethics–Casestudies. I. Nelson,KatherineA. II. Title.
HF5387.T7342010
174.4–dc22
0
2010020659
PrintedintheUnitedStatesofAmerica
10 9 8 7 6 5 4 3 2 1
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BRIEF CONTENTS
SECTIONI INTRODUCTION
CHAPTER1 INTRODUCINGSTRAIGHTTALKABOUTMANAGING
BUSINESSETHICS:WHEREWE’REGOINGANDWHY 2
SECTIONII ETHICSANDTHEINDIVIDUAL
CHAPTER2 DECIDINGWHAT’SRIGHT:
APRESCRIPTIVEAPPROACH 38
CHAPTER3 DECIDINGWHAT’SRIGHT:
APSYCHOLOGICALAPPROACH 71
CHAPTER4 ADDRESSINGINDIVIDUALS’
COMMONETHICALPROBLEMS 111
SECTIONIII MANAGINGETHICSINTHEORGANIZATION
CHAPTER5 ETHICSASORGANIZATIONALCULTURE 150
CHAPTER6 MANAGINGETHICSANDLEGALCOMPLIANCE 207
CHAPTER7 MANAGINGFORETHICALCONDUCT 255
CHAPTER8 ETHICALPROBLEMSOFMANAGERS 292
SECTIONIV ORGANIZATIONALETHICSANDSOCIALRESPONSIBILITY
CHAPTER9 CORPORATESOCIALRESPONSIBILITY 322
CHAPTER10 ETHICALPROBLEMSOFORGANIZATIONS 354
CHAPTER11 MANAGINGFORETHICSANDSOCIALRESPONSIBILITY
INAGLOBALBUSINESSENVIRONMENT 399
INDEX 449
iii
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CONTENTS
PREFACE XIII
SECTIONI
INTRODUCTION
CHAPTER1 INTRODUCINGSTRAIGHTTALKABOUTMANAGING
BUSINESSETHICS:WHEREWE’REGOINGANDWHY 2
Introduction 2
TheFinancialDisasterof2008 4
BorrowingWasCheap 4
RealEstateBecametheInvestmentofChoice 5
MortgageOriginatorsPeddled‘‘LiarLoans’’ 5
BanksSecuritizedthePoisonandSpreadItAround 6
ThoseWhoWereSupposedtoProtectUsDidn’t 7
MovingBeyondCynicism 9
CanBusinessEthicsBeTaught 13
Aren’tBadApplestheCauseofEthicalProblemsinOrganizations? 13
Shouldn’tEmployeesAlreadyKnowtheDifferencebetweenRightandWrong? 15
Aren’tAdults’EthicsFullyFormedandUnchangeable? 16
ThisBookisaboutManagingEthicsinBusiness 19
EthicsandtheLaw 20
WhyBeEthical?WhyBother?WhoCares? 21
IndividualsCareaboutEthics:TheMotivationtobeEthical 21
EmployeesCareaboutEthicsEmployeeAttractionandCommitment 23
ManagersCareaboutEthics 23
ExecutiveLeadersCareaboutEthics 24
IndustriesCareaboutEthics 26
SocietyCaresaboutEthics:BusinessandSocialResponsibility 27
TheImportanceofTrust 27
TheImportanceofValues 29
HowtheBookisStructured 30
Conclusion 32
DiscussionQuestions 32
v
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vi CONTENTS
Exercise:YourCynicismQuotient 33
Notes 34
SECTIONII
ETHICS AND THE INDIVIDUAL
CHAPTER2 DECIDINGWHAT’SRIGHT:
APRESCRIPTIVEAPPROACH 38
Introduction 38
EthicalDilemmas 38
PrescriptiveApproachestoEthicalDecisionMakinginBusiness 39
FocusonConsequences(ConsequentialistTheories) 40
FocusonDuties,Obligations,andPrinciples(DeontologicalTheories) 42
FocusonIntegrity(VirtueEthics) 46
EightStepstoSoundEthicalDecisionMakinginBusiness 52
StepOne:GathertheFacts 52
StepTwo:DefinetheEthicalIssues 52
StepThree:IdentifytheAffectedParties(theStakeholders) 53
StepFour:IdentifytheConsequences 54
StepFive:IdentifytheObligations 56
StepSix:ConsiderYourCharacterandIntegrity 56
StepSeven:ThinkCreativelyaboutPotentialActions 57
StepEight:CheckYourGut 58
PracticalPreventiveMedicine 58
DoingYourHomework 58
WhenYou’reAskedtoMakeaSnapDecision 59
Conclusion 61
DiscussionQuestions 62
Exercise:ClarifyingYourValues 63
Case:PintoFires 64
Notes 69
CHAPTER3 DECIDINGWHAT’SRIGHT:
APSYCHOLOGICALAPPROACH 71
Introduction 71
EthicalAwarenessandEthicalJudgment 71
IndividualDifferences,EthicalJudgment,andEthicalBehavior 75
EthicalDecision-MakingStyle 76
CognitiveMoralDevelopment 77
LocusofControl 84
Machiavellianism 85
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CONTENTS vii
MoralDisengagement 86
FacilitatorsofandBarrierstoGoodEthicalJudgment 88
ThinkingaboutFactGathering 88
ThinkingaboutConsequences 89
ThinkingaboutIntegrity 91
ThinkingaboutYourGut 93
UnconsciousBiases 94
EmotionsinEthicalDecisionMaking 95
TowardEthicalAction 97
RevisitingthePintoFiresCase:ScriptProcessingandCost-BenefitAnalysis 102
Cost-BenefitAnalysis 103
Conclusion 105
Exercise:UnderstandingCognitiveMoralDevelopment 105
DiscussionQuestions 106
Notes 107
CHAPTER4 ADDRESSINGINDIVIDUALS’COMMON
ETHICALPROBLEMS 111
Introduction 111
IdentifyingYourValues—andVoicingThem 112
PeopleIssues 114
Discrimination 115
Harassment,SexualandOtherwise 119
ConflictsofInterest 122
WhatIsIt? 123
HowWeCanThinkaboutThisIssue 125
WhyIsItanEthicalProblem? 126
Costs 126
CustomerConfidenceIssues 127
WhatIsIt? 127
HowWeCanThinkaboutThisIssue 131
WhyIsItanEthicalProblem? 131
Costs 131
UseofCorporateResources 132
WhatIsIt? 132
HowWeCanThinkaboutThisIssue 136
WhyIsItanEthicalProblem? 136
Costs 136
WhenAllElseFails:BlowingtheWhistle 137
WhenDoYouBlowtheWhistle? 139
HowtoBlowtheWhistle 140
Conclusion 145
DiscussionQuestions 145
Notes 147
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SECTIONIII
MANAGING ETHICS IN THE ORGANIZATION
CHAPTER5 ETHICSASORGANIZATIONALCULTURE 150
Introduction 150
OrganizationalEthicsasCulture 151
WhatIsCulture? 151
StrongversusWeakCultures 151
HowCultureInfluencesBehavior:SocializationandInternalization 152
EthicalCulture:AMultisystemFramework 153
AlignmentofEthicalCultureSystems 154
EthicalLeadership 156
ExecutiveLeadersCreateCulture 156
LeadersMaintainorChangeOrganizationalCulture 157
OtherFormalCulturalSystems 166
SelectionSystems 166
ValuesandMissionStatements 168
PoliciesandCodes 169
OrientationandTrainingPrograms 171
PerformanceManagementSystems 172
OrganizationalAuthorityStructure 175
Decision-MakingProcesses 178
InformalCulturalSystems 180
RoleModelsandHeroes 180
Norms:‘‘TheWayWeDoThingsaroundHere’’ 182
Rituals 182
MythsandStories 183
Language 185
OrganizationalClimates:Fairness,Benevolence,Self-Interest,Principles 187
DevelopingandChangingtheEthicalCulture 188
HowanEthicalCultureCanBecomeanUnethicalCulture 189
BecomingaMoreEthicalCulture 190
ACulturalApproachtoChangingOrganizationalEthics 192
AuditoftheEthicalCulture 193
ACulturalSystemsView 193
ALong-TermView 194
AssumptionsaboutPeople 194
Diagnosis:TheEthicalCultureAudit 194
EthicalCultureChangeIntervention 196
TheEthicsofManagingOrganizationalEthics 198
Conclusion 198
DiscussionQuestions 198
