Professional Documents
Culture Documents
Organizational Ethics
and the Law
McGraw-Hill/Irwin
Corporate culture
A blend of ideas, customs, traditional practices, company
values, and shared meanings that help define normal
behavior for everyone who works in a company
Ethical climate
The unspoken understanding among employees of what is
and is not acceptable behavior
Multiple climates (or subclimates) can exist within one
organization
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Figure 5.1
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Accounting Ethics
- Financial records should be audited by certified
professional accounting firm. Accountants faced with
conflicts of interest where loyalty or obligation to company
(the client) may be divided or in conflict with self interest
(the accounting firm) and the interest of others.
Financial Ethics
- Finance department is responsible for managing the
firms assets and for raising capital issuing stock and
bonds. Recession happened due to violation of ethical
conduct by backdating stock options.
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Figure 5.2
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2. Integrity-based approach
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Ethics Audits
Formal study of deviations from company ethical standards
Management must report on corrective action to be taken in
response to found deviations
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Other initiatives
Chinas National Corruption Prevention Bureau
International Labour Organization and the United Nations have
attempted to develop an international code of conduct for multinational
corporations
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