Organizational ethics programs are a combination of tools, policies, and procedures aimed at controlling or guiding the behavior of organizational members around matters of ethics. What is considered a matter of ethics can vary between programs and industry sectors. However, common elements would include such things as corruption, gifts and bribery, lobbying and hiring policy, actions that could cause reputational damage, equal opportunity and diversity, harassment, personal use of business property, and conflict of interest. While ethics programs may have a number of different elements, most commonly, they consist of: written standards or codes of conduct, ethics training for managers and employees, ethics advice lines or offices, and a system for anonymous reporting a misconduct. Some corporations have had elements of an ethics program for many years. The pharmaceutical giant Johnson and Johnson, is often given as an example. Robert Wood Johnson, chairman of the company developed a Johnson and Johnson ethical credo, in 1943. Though the credo has undergone a number of revisions and additions since 1943, the most important respects remains the same today as it was then. The credo is publicly displayed in reception rooms and conference rooms at over 800 Johnson and Johnson buildings around the world. It stipulates the corporations responsibilities to doctors, nurses, patients and parents, to suppliers and distributors, to employees and their families, to the wider community, to the environment, to stockholders, and to the longevity of the company itself. In contrast to a narrow wealth maximizing mission and the negative human and environmental consequences such a focus can engender, the credo states that Johnson and Johnson will abide by wider responsibilities. Constantly striving to reduce costs to customers, providing employees with a sense of job security, fair compensation, an employment that helps them meet their family responsibilities, encouraging civic improvements such as better health and education, paying their fair share of taxes, and protecting the environment and natural resources. Most business corporations cannot claim this kind of longevity for their ethics codes or wider programs. In fact, ethics programs really only started to become widespread in the Anglo-Saxon business world from the 1980's. Neoliberal deregulation of business, and the markets in the US and the UK, gave rise to a series of scandals and disasters. A certain corporations took rather too much advantage of the new found freedom from regulatory oversight. To offset the crisis of business legitimacy that ensued, to push back on calls for a stronger government regulation, and to seek to better control their employees and managers behavior, many corporations embarked on a strategy of developing their own self-regulated codes of ethics. What started as a strategic decision by some corporations to develop ethical codes and programs, became standard corporate strategy in the US by virtue of the government's Federal Sentencing Guidelines for organizations. Under these guidelines, businesses had an effective ethics program, who are eligible for a reduction in value of fines imposed by the US government in cases of harm caused by the corporation, a reduction of up to 95%. So, we can see demonstrated here a major bottom-line financial strategic reason to implement organizational ethics programs. It's a strategy that cannot only dramatically reduce fines in the event of a breach of law, a potential that was sporadic saving of many millions of dollars. It also significantly reduces ongoing insurance costs that are paid by the corporation to cover their public, environmental, and employee liabilities. Research into the formulation and implementation of organizational ethics programs, has highlighted different ways that they'd been implemented and different effects stemming from this. One of the distinctions made, is between values-based and compliance-based programs. Values-based programs are those that seek to define general organization of ethical values or aspirations, and encourage employees to identify with these. This has been found to be the most effective way of encouraging ethical behavior by employees. Compliance-based programs in contrast, focus on detecting and punishing violations of the code or law. This punitive focus has been found to encourage minimal rule-following behavior, and even the loss of ethical competence by employees and managers. A final significant finding I wish to highlight from the academic research, relates to organizational members belief in the genuineness or otherwise, of top management's commitment to the ethics program. Where members of an organization felt that ethics programs were put in place mainly as a strategy to protect top management from blame for ethical or legal violations, then the ethics program could actually harm organizational members own reported commitments to ethical behavior. This is a finding that is worth reflecting upon, and that we seem to have evidence here, that being too strategic in the implementation of ethical programs is actually a bad strategy for increasing ethical responsibility.
