Breaking the definition of business ethics into individual ethics and organizational ethics helps provide an optimal definition. As an individual one must be able to look at him and be comfortable with their conscience. Further an individual must have self-esteem and self-confidence to do take the right action. Remaining patient allows a person to look at the long-term results of his actions and avoid being too focused on the short-term consequences. Ethical rules have no value if they are not practiced consistently. Taking time to reflect before acting also allows one to consider appropriate behavior.
From an organizational level the same principles should apply. The organization must develop do's and don'ts initiated by the managers at the highest levels. Employees need to feel positive as individuals and feel positive about the organization. Each worker must continue to hold to his values and realize that consistent long-term application of values leads to success. The application of values means putting your values into action, not just to develop values on paper and fail to use them. To effectively act everyone in the organization must take time to consider how he or she got to where they are, where they want to go, and how to get there.
An example of implementing business ethics from the top of the organization is the events that occurred at NYNEX Corporation. After the breakup of the telephone company, AT&T, into smaller regional companies, NYNEX was founded. The telecommunications industry went through tremendous changes after the breakup. With the top officials occupied with figuring out the company's place in this new environment, it was easy for ethics practices to be overlooked. Too cozy a relationship between NYNEX employees and a major equipment supplier highlighted the depth of the ethics problem. NYNEX upper management reacted to the situation and created an ethics committee and an office to enforce conduct. The committee stated the purpose of NYNEX's ethics policy as consist support from senior management, practicing ethics in day-to-day operations, and working to gain employee trust. To achieve these goals NYNEX would clarify its definition of ethics, educate company employees in ethical behavior, provide a way for employees to report ethics issues, continue dialogue with employees, and apply ethical standards through the entire company. An ethics office was created for each business unit and the people populating the offices were trained in various categories of ethics. NYNEX sought feedback from its managers and employees to determine where NYNEX stood ethically at the moment. NYNEX went further and notified their vendors about NYNEX's ethics policies. NYNEX stated its values as:
Quality -- satisfying each customer through sustained excellent performance.
Ethics -- living up to the letter and spirit of the law, and our highest expectations for ourselves.
Caring for the individual -- treating individuals as we wish to be treated: with respect for their rights and ideas, and compassion for their needs." (Driscoll, et. al. 47)
The experience of Northrop Corporation provides an example of how a company is willing to overlook clear signs of ethics problems because a division has shown excellent profits even though the profits were made because of unethical practices. Corporate headquarters located on the East Coast and a division on the West Coast created a geographic separation that enabled the division to operate independently. It was too easy for the officers at headquarters to fail in their oversight responsibilities. The West Coast division did so well financially that the people at headquarters could justify their lack of enforcement of ethics policies. Testing for an advanced jet plane guidance system had not been done correctly. The test results had been inaccurately reported to meet the requirements of the contract. The managers at headquarters had ignored the warning signs, but they were willing to let the division continue its unethical ways because the division was profitable. However the long-term reputation of the company was sacrificed in the interest of short-term profits.
A different type of ethics issue arose at Dow Corning. The issue revolved around the company's silicone breast implants. Dow Corning had an ethics policy, but failed to implement the policy in its operations. Internal disagreement among its scientists as to the safety of the implants should have delayed the introduction of the implants to the market. The implants were a profitable product, so as with Northrop it was easier to minimize ethical questions. Dow Corning compounded the problem by pursuing a course of action proposed by its lawyers. Fighting lawsuits brought against it by implant patients showed how Dow Corning refused to confront a substantial ethics issue. Dow Corning's lawyers even sought to seal rulings from the first lawsuit that Dow Corning lost. Even though the implants represented a small fraction of Dow Corning's revenues, Dow Corning's failure to address the concerns of its own scientists and its customers resulted in Dow Corning eventually declaring bankruptcy.
These three examples show clearly how focus on short-term profits at the expense of long-term ethical behavior can cost much more than the profits gained. The long-term result can even be declaration of bankruptcy. The other key point derived from these examples is a failure to put ethics into action. The operations of remote divisions and a quickly changing business environment cannot be used as excuses for ethics failures. Good ethics definitely help cost containment and although it is harder to quantify, good ethics also lead to stronger relationships with customers and indirectly more revenue.
2. The McDonald's Corporation, like any corporation, had several ways to approach a problem like that created by the publication and distribution of a leaflet criticizing McDonald's corporate policies and corporate approach. A company could ignore the problem or a company could cooperate with the protesters or a company could confront the situation. McDonald's chose to confront the group, London Greenpeace, and eventually sued several members of Greenpeace to court. McDonald's approach resulted in the longest trial, civil or criminal, in English legal history. McDonald's failed to achieve its primary goals enabling the protesters to continue doing what they had been doing before the trial. Cooperating with the protesters and working to resolve the protesters' concerns would have been a better way to deal with the situation.
To begin the discussion of why McDonald's should have used a different tactic, it is necessary to review the results of McDonald's actual actions. McDonald's did start by making an agreement with the "Veggies" food cooperative that was distributing a leaflet similar to Greenpeace's. However as the sentiment grew against McDonald's, the corporation challenged its opponents. McDonald's published a leaflet presenting its perspective of the issues. McDonald's focused its most aggressive efforts against Greenpeace by infiltrating that organization with private investigators hired by McDonald's. Even this tactic failed as one of the spies later testified that Greenpeace was not doing anything wrong. Eventually McDonald's forced several of the protesters to apologize, but McDonald's had to take two of them to court. McDonald's assumed that the cost of a trial and McDonald's access to superior legal help would force these other two to quit. These assumptions were clearly wrong as a fund to support the Greenpeace members raised enough money to allow the members to stand trial for years. McDonald's lawyers were able to get many legal rulings in McDonald's favor, but the Appeals Court overturned key rulings. To combat the protesters, McDonald's published another leaflet writing that the protesters were liars.
As the trial continued, negative feelings toward McDonald's became stronger. Realizing that they may win the trial, but suffer severe publicity problems, McDonald's attempted to settle the case with the defendants. The trial had progressed so far that the defendants had no intention of stopping. Newspaper articles, a documentary film, and a book were written or in the process of being written during the trial. All of these documented the case and showed McDonald's in a negative way. The judge ruled that the defendants had proven that McDonald's corporate policies and advertising were wrong in many areas. However, the defendants had libeled McDonald's. This did not stop Greenpeace from distributing the leaflets. Support the defendants' views had grown to most of Europe and North America and forced the resignation of the top McDonald's official.
Given the results of McDonald's approach, what should McDonald's have done differently to resolve the Greenpeace situation? Cooperate with Greenpeace to answer the concerns of the protesters. To address the issue of the unhealthy food sold at McDonald's, add more healthy items to the menu. The addition of salads and other low fat items would be a positive step. Modify the advertising to emphasize the healthier meals and minimize the emphasis on the high calorie, unhealthy foods. All advertisements should present the benefits of a balanced diet including both the healthy items and the other food items. Find ways to improve the methods of preparing food to minimize the negative effects of the least healthy food.
Change the tone of the advertisements directed toward children. Balance the advertisements so that the advertisements…