To effectively manage human resources, a number of key tasks must be carried out. These tasks encompass recruiting and selecting appropriate candidates, offering orientation for new hires, efficiently handling payroll and benefits, documenting performance reviews and disciplinary actions, establishing a career development program, and coordinating final paperwork and exit interviews. By accomplishing these tasks, the HR department can provide valuable insights to the organization’s strategic plan.
The belief is that by hiring the right people initially, many other issues can be prevented in the future. Supporters of ethical business behavior suggest that HR should play a central role in any corporate code of ethics. Although HR professionals should not be the only ones responsible for creating the code, it is crucial for them to guarantee its representation of the entire organization. They must also give priority to ethics within the organization, which involves integrating an ethics element into leadership selection and development procedures. HR has the responsibility of implementing suitable programs and policies as well as staying informed about ethics matters.
The finance function of an organization can be divided into three key areas: financial transactions, accounting, and auditing. Financial transactions involve the management of money flow within the organization. The accounting function is responsible for documenting and tracking all financial transactions, both incoming and outgoing funds, while ensuring proper balance in the accounts. The auditing function verifies the accuracy of an organization’s financial statements or “books” through certification by an independent third-party professional.
Existing ND potential investors will decide to invest in an organization’s shares. Additionally, I have observed three instances of unethical behavior at the company I currently work for or previously worked for. These include taking credit for someone else’s work, calling in sick to prioritize personal leisure activities, and intentionally sabotaging the work of others. Such deliberate deception damages trust, undermines individuals’ rights, and compromises their security.
In the workplace, conflict and retaliation occur, leading to decreased productivity. A violation of conscience arises when my sales manager threatens to terminate you unless I can sell 50 expensive yet subpar products in the next month. To retain my job, I am forced to compromise my principles and suggest that your customers purchase these overpriced inferior products. This unethical behavior from my boss not only compels me to engage in wrongdoing but also puts at risk our valuable customers and the achievement of our sales targets.
My boss did not fulfill his promise of granting me an additional day off after I successfully finished a critical project by a specific deadline. Despite my request for the promised day off, my boss refused, claiming that there were still pending tasks. 3. Philip Kettle suggests that professional marketers should approach their work with the same level of uncertainty as nuclear scientists involved in constructing atomic bombs. Is this argument reasonable? What are the reasons supporting or disputing its validity? While I understand the intention behind this statement, it appears somewhat exaggerated.
The suggestion is that although individuals may not have the same level of mixed feelings as those involved in developing nuclear weapons, they may still experience some. This assertion is grounded on the belief that marketing has adverse effects on people, which holds partial truth. Firstly, marketing can result in individuals wasting their money by persuading them to purchase things they wouldn’t have desired without exposure to marketing strategies. Moreover, it can prompt people to buy items they will never utilize. Secondly, marketing can be detrimental by convincing individuals to acquire products that are actually harmful to their well-being.
The comparison between marketing and nuclear weapons is an extreme exaggeration. While nuclear weapons are deadly, marketing can have both positive and negative effects. Unlike nuclear weapons, marketing can be used without causing harm. However, there are instances where marketing can cause some degree of harm.
“Creative bookkeeping techniques” refer to methods used to manipulate financial records. Here are three examples:
1. Inflating sales figures to create the illusion of profitability.
2. Underreporting expenses to reduce tax liability.
3. Shifting profits to offshore accounts to avoid taxation.
Creative accounting, or competitive bookkeeping, is the act of adjusting financial data in a way that is technically legal and adheres to accounting standards, but goes against the spirit of transparency and does not provide a truly accurate representation of a company’s records. One common objective of creative bookkeeping is to inflate revenue figures. Moreover, certain companies may decrease reported income during strong years in order to present smoother outcomes. Additionally, liabilities and assets may be manipulated, either to comply with restrictions like debt covenants or to hide issues.
The methods of creative bookkeeping, including off balance sheet funding, over-optimistic income recognition, and the use of overstated non-recurring products, are typically used. Another term, “window dressing,” is also used to refer to similar practices, but it is a broader term that can apply to other areas as well. In CSS, it is commonly used to describe the adjustment of financial commitment collection efficiency statistics. In the context of accounting, “window dressing” is more likely to imply illegal or false methods compared to “creative accounting,” although it does not necessarily have to. The techniques of creative bookkeeping change over time.
The methods for bookkeeping change as the requirements change. Certain changes in bookkeeping requirements aim to prevent certain methods of altering records. This means that those who engage in creative bookkeeping need to find new ways of doing things. At the same time, other well-intentioned changes in bookkeeping requirements open up new opportunities for creative bookkeeping (the use of reasonTABLE value is a great example of this). Many creative bookkeeping methods alter the main statistics shown in the financial reports, but their presence is evident elsewhere, typically in the footnotes to the records.
One key strategy in the market is to persistently focus on creative accounting, as it can have a significant impact on stakeholders. One specific aspect of creative accounting, known as “Earnings management,” involves manipulating financial statements and transactions to either deceive stakeholders or influence contractual outcomes based on reported accounting figures. This manipulative practice has been previously overlooked in notices, making it crucial for market participants to be cautious.
Earnings control typically involves manipulating earnings, profits, or income per share results through deceptive accounting techniques. Aggressive income control is considered fraudulent and differs from reporting errors. When management desires to present a specific level of income or adhere to a particular pattern, they exploit loopholes in financial reporting regulations to manipulate the numbers as much as possible in order to achieve their desired objective or meet forecasts by financial analysts.
When enhancements deviate from acceptable accounting practices, they can be considered fraudulent economic reporting. The reasons behind engaging in such behavior include industry expectations, personal gain, and maintaining one’s status in the industry. Adhering to appropriate accounting methods is typically a matter of personal integrity.
The potential for aggressive income management increases when a company is facing a downturn in business. Managing earnings is currently seen as an important issue in accounting practice. However, it can be challenging to accept that there isn’t a single “correct” income figure, and legitimate business practices may result in undesirable financial reporting.
While it is relatively easy for auditors to identify errors, sophisticated fraud involving income manipulation can remain hidden. Even if management asserts that the financial statements have been prepared properly, this does not provide protection if they have already engaged in deliberate deception and fraud. Auditors must distinguish between fraud and errors by assessing the intention behind them.
If faced with unethical business practices at a company, I would choose to leave.When faced with a decision, there are various factors to take into account, such as the severity and frequency of unethical practices, potential legal consequences, impact on personal and professional reputation, and availability of alternative job opportunities. The process of making a decision should involve the following steps: 1) Identify any ethical implications. 2) Gather all relevant information. 3) Consult existing guidelines for potential solutions. 4) Consider all influencing factors. 5) Seek advice from a trusted colleague since input from others can be beneficial given the complex nature of ethical decision-making influenced by our own perceptions and values. 6) Evaluate the rights, responsibilities, and vulnerability of those affected parties including institutions and potentially even the public. 7) Generate alternative choices. 8) Assess the outcomes associated with each option. 9) Make a decision.10 Implement the chosen course of action.
In accounting decisions specifically, accountants often consider their company’s financial objectives and adhere to accepted accounting principles (GAP). The application of GAP can pose ethical dilemmas as accountants must exercise judgment in recording business transactions.GAP is not rigid rules but rather evolving objectives and conventions that govern how financial statements are prepared and presented.
The lack of a clearly defined ethical framework poses challenges for GAP. The most commonly reported ethical issues include client requests to alter tax returns and commit tax fraud, conflicts of interest and independence, client requests to alter financial statements, personal-professional problems, and fee problems. Spas in the accounting profession believe that there are opportunities to engage in unethical behavior. However, when top management (partners) reprimands such behavior, the perceived ethical problems decrease among Spas.
Instructions: Please complete the “Internet Exercise” on page 58 of Business Ethics Now. Follow these steps:
- Go to the U.S. Government recall Web site BMW.Recalls.Gob.
- Choose a product recall event from the past three years.
- Answer the following questions regarding this recall:
- Identify evidence of an ethical transgression in this product recall.
- Apart from recalling the product, explain other actions taken by the company to address the situation.
- Propose steps that should have been taken by the company to restore their reputation.
Both the American Marketing Association (AMA) and the American Institute of Certified Public Accountants (CPA) have their own respective websites. The AMA has a “Professional Code of Conduct” while the CPA has a “Statement of Ethics.” The question arises whether the terminology used makes a difference or not. Furthermore, it is important to compare and contrast the components of each approach. Considering that the AMA offers certification as a “Professional Certified Marketer,” it is worth exploring if promoting a professional code of conduct like the CPA would benefit the organization or not. Additionally, there are child safety seat recalls by Grace Children’s Products, Inc. (Grace), which involve various models spanning from 2006 to 2014.
The issue with the harness buckle is its difficulty to unlatch. On occasions, it becomes stuck in the closed position and fails to open when the release button is pressed. This could create challenges in removing your child from the restraint, potentially increasing their vulnerability to injury during urgent situations such as vehicle crashes, fires, or emergencies that require swift exit from the car. To address this problem, Grace is providing a complimentary replacement buckle featuring an improved design.
A child safety seat is designed to protect the child, but this recall warns that it may be challenging to remove the child from the restraint, increasing the risk of injury in case of a vehicle crash, fire, or other emergency that requires a quick exit from the vehicle.
That is an ethical transgression. B. Grace is offering a free replacement buckle with a new design to registered owners. Owners will start being notified in early April 2014. C. In addition to recalling and replacing the faulty products, Grace should also publicly demonstrate improved processes and controls to prevent future defects and restore their reputation. D. There is not much practical difference between them.
The purpose of both is to ensure ethical professional practices among their members. The code of conduct defines the standard procedures to be adhered to when working within professional boundaries. On the other hand, the statement of ethics outlines the ethical behaviors specific to an organization or profession. In the marketing profession, ethical challenges are more apparent than a lack of standards. Therefore, the statement of ethics is more relevant. Please review Issue 5 from Taking Sides: Clashing Views in Business Ethics and Society and share your viewpoint.
Why? Explain. Reference at least two outside resources that further support the viewpoint you side with. Issue 5: Can Ethics Codes Build “True” Corporate Ethics? Side with Yes, When it comes to corporate ethics, negative incidents indicate progress. The Ethics Resource Centers 2009 National Business Ethics Survey shows a decline in on-the-job misconduct, an increase in whistle-blowing activities, and the strengthening of ethical organizational cultures. However, despite these positive trends, it is important for human resource managers to engage in ethics-related audits.
Recent developments like the Sardines-Solely Act have focused on setting the tone for ethics in organizations. This act emphasizes the importance of “tone at the top” and requires publicly traded companies to disclose whether they have a code of ethics to prevent wrongdoing. In addition, the Federal Acquisition Regulation and the Federal Sentencing Guidelines play a significant role in shaping organizations’ ethics policies and practices. They require or provide incentives for businesses of all sizes to adopt codes of conduct, train their employees on these codes, and establish effective audit and reporting systems.
HER managers play a vital role in shaping corporate ethical codes, policies, and procedures, as well as effectively communicating and teaching this information to the workforce. In several companies, the top HER manager serves as the de facto chief ethics and compliance officer or collaborates with that person to oversee ethics and compliance programs. An HER manager is often considered one of the most important ethical role models within the organization, second only to the chief executive officer. Employees closely observe the behavior and actions of HER managers, and they should continue to do so.
HER managers are considered exemplars of ethical behavior, according to Marjorie Doyle, the principal of ethics consulting firm Marjorie Doyle & Associates in Lundeberg, PA and a member of the Advisory Board of Directors for the Society of Corporate Compliance and Ethics. She emphasizes that HER managers who serve as ethical role models frequently take on key responsibilities in conducting ethics-related audits. As a former chief corporate ethics and compliance officer, Doyle highlights her extensive experience working with HER managers to promote ethical conduct. HER managers are committed to ensuring that individuals adhere to proper ethical standards.
According to Doyle, ethics audits are important for managing the annual performance review process and operating the communications network in a company. These tasks are crucial for conducting ethics audits as they help determine whether certain behaviors are ethical enough. Ethics audits lay the groundwork for ensuring that an organization’s code of conduct, policies, and procedures are followed and that prohibited behavior is avoided. Neglecting ethics audits can lead to severe risks.
After its ethics-related implosion, Enron gained a reputation for the inconsistency between the values statements displayed in conference rooms and the behavior exhibited by employees on trading floors. Furthermore, companies that neglect ethics audits face potential immediate issues. These drawbacks can extend to other parties involved such as customers, suppliers, and community members. According to Crane, the risk of losing business arises if an organization’s lack of ethical practices becomes known. Performing an ethics audit necessitates both teamwork and a precise definition of what constitutes ethical behavior.
Although many larger companies have a chief ethics and compliance officer, this individual is not solely accountable for the behavior of every employee. Therefore, Anabolic Construction Co., based in Conway, Ark., has established an ethics committee comprised of top executives from legal, finance, HR, and operations departments. Andrea Woods, the company’s vice president and corporate counsel, emphasizes the importance of having a diverse set of skills and ensuring representation from all geographical areas within the committee. Anabolic Construction Co. is a private company with approximately 850 employees.
The ethics committee of Anabolic Construction is in charge of overseeing and investigating calls and e-mails regarding ethics hotlist. The hotlist system is managed by a third-party provider, which improves objectivity and independence according to Woods. The committee performs ethics audits as a part of the annual internal audit process. Furthermore, spot ethics audits are conducted by a divisional controller, an HER employee, and Woods based on the committee’s recommendation.
The frequency Woods describes for annual audits on all ethics-related areas and spot ethics audits in response to risk assessments aligns with recommendations from ethics consultants. Crane notes that depending on company size and auditing resources, some companies may only audit their entire ethics programs once every two years. However, if a major organizational alignment occurs, more frequent ethics audits may be necessary.
The decision of corporate leaders to seek assistance from outside parties for ethics audits depends on the nature and scale of the issues. According to Crane, if the matter is crucial to the company, an external perspective and impartial judgment from a third party can be beneficial. If the audit is conducted internally and external stakeholders are closely observing, it becomes challenging to proclaim that the company has audited its ethics internally and everything is fine. This may be seen as the fox guarding the henhouse. Regardless of how ethics audits are integrated into internal audit processes or carried out in response to changing risk profiles, or handled by an external auditor, the key question is what standards are being used for the audit. Mark Snyder, a senior knowledge leader at LEARN, a company assisting businesses in developing ethical corporate cultures, emphasizes the need to differentiate between two commonly grouped areas in corporate America: ethics and compliance. Ethics pertains to the vague territory of behavior while compliance pertains to adherence to legal regulations.
Although a company can be completely compliant, it is still possible for them to partake in unethical activities. This distinction may appear straightforward when presented in written form, but it becomes complicated when considering the complexities of the global business environment. Compliance audits focus on comparing internal behaviors to external regulations, while ethical audits assess internal behaviors against internal guidelines found in corporate codes of conduct and ethics-related policies and procedures. It is important to note that some compliance issues may arise due to ethical breaches, while others may be a result of process or operational flaws. This is why many business leaders conduct ethical audits alongside financial or operational audits.
The code should be translated into specific guidance within policies and procedures. According to Doyle, it is not necessary to begin with a large number of rules, but there should be something specific to audit against. For instance, it is important to clearly define what constitutes an ethical violation related to bribery or conflict of interest in policies and procedures. Doyle recommends being descriptive in these guidelines. Additionally, managers and employees should establish performance goals that are related to ethics and compliance. This way, employees can be evaluated based on those objectives.
According to Doyle, having more specific ethics-related policies and procedures enables the establishment of performance objectives and metrics related to ethics. These metrics play a crucial role in conducting more tangible ethics audits.
