Q1: Four most important concepts in Chapter 10
Conflict of interest in public corporation: The conflict of interest is an essential and concept in corporations due to the many temptations of unethical maneuvers top management can play in an organization at the cost of its investors and employees. It is relevant to me because it allows me to be watchful on the potential situations in my future wherein conflict of interest may arise and allow me to make ethical choices.
CEO compensation:
The CEO compensation is one point of conflict of interest as most companies attach higher compensation with larger company sizes under management, a natural incentive to push for larger empires through acquisitions and mergers at the expense of the investors. It is relevant to me as it challenges me to adopt a personal value of staying in the ethical limits with regards to my future motives leading a growing business to manage with no compensation put into the picture other than the benefits to the shareholders.
Stages of moral development: Understanding the six stages of moral development allows the evaluators of ethics to perceive the level of ethical development an organization is in and appreciate the potentials and limitations of their current ethical/unethical. It is relevant to me as it allows me to closely evaluate my stage of moral development, and be closely aware on the unethical potentials of this stage as well as my hopes of future movement to higher stages.
Decision biases: The concept of decision biases puts into reality check the presumption that decision making is always rational particularly among top decision makers in corporations. It is relevant to me because it puts me on the ground in not presuming I will have the information I need available to me when decisions had to be made in the future, and learn to see potential errors coming from decision biases like these.
Q1: Top three most unethical organizations in the United States
Fairly evaluating all organizations in the United States for their ethical or unethical ranking would require equipment and people not within my disposal (ranking them based on inadequate information is in itself unethical, which I cannot indulge myself to do). Consequently, I resorted to the ethical index of Covalence, a non-profit organization monitoring corporations around the world for their ethical behaviors. The Huffington Post reported in 2010 the 12 least ethical companies in the world as ranked by Covalence (Kiser, 2010). Among the United States companies ranked in the top three include Monsanto (St. Louis, Missouri), Halliburton Company (Delaware), and Chevron (San Ramon, California).
Monsanto: Covalence ranked the agriculture giant Monsanto last in its ethical index due to its worldwide leadership in the production of genetically engineered seeds and its frequent suits against small farmer for patent infringement.
Halliburton Company: Covalence ranked this oil and gas company #2 least unethical in the United States due myriad accusations of unfairly procuring billions of dollars in government contracts for oil repair in Iraq after the 2003 invasion. This company had been famously associated with former Vice President Dick Cheney.
Chevron: Covalence ranked this oil and gas giant #3 least unethical in the United States due to accusations of tax evasion and environmental infractions in several countries around the world. The most controversial was an episode in 1998 in Nigeria wherein two demonstrated killed shot at by soldiers protecting Chevron after the protesters took hostages as part of its demonstration against the company.
Q2: Most unethical non-profit organization
Feed the Children: The American Institute of Philanthropy (2009) handed the Christian relief group Feed the Children its Most Outrageous Charity Award in 2009 for “outrageous behavior over the past ten 10 years,” which included spending less on program services (21 to 23 percent of cash budget) and more on fund raising efforts (63 to 65 percent), or about 54 percent (roughly $125 million) spent on television and radio, direct mail, and direct mail postage.
Q3: Top three most ethical companies
The ethics think tank Ethisphere listed 23 companies that had made the list in all eight years since the inception of the World’s Most Ethical (WME) Companies in 2006. Of these companies, the most renowned worldwide are American Express (New York, New York), General Electric (Fairfield, Connecticut), and Starbucks (Seattle, Washington). Scoring is based on ethics and compliance program (35%), corporate citizenship and responsibility (20%), culture of ethics (20%), governance (15%), and leadership, innovation and reputation (10%).
American Express Company: Although American Express (2013) settled with regulators on certain marketing and billing practices, which cannot be considered ethical issues but incongruence with new regulatory guidelines. It has built a corporate culture based on ethics, particularly on integrity, good citizenship, and personal accountability (Gerard, 2010).
General Electric Company: Experts, like Robert Hurley (2013), consider General Electric as a high-trust organization that “worked over years to create an intense accountability and performance culture that tends to reduce the lying and deception.”
Starbucks Coffee Company: Starbucks has no outstanding legal proceedings (Starbucks, 2013). In 2009, it switched to Fairtrade coffee in its England and Ireland operations to help more than 100,000 coffee farmers and communities (Allen, 2009).
References
Allen, T (2009, September 29). Starbucks: The marketing of ethics. Trading Visions. Retrieved
American Express (2013). Annual Report 2013. New York, NY: American Express Company;
114. Retrieved from: http://ir.americanexpress.com/FinancialDocs.aspx?iid=102700
American Institute of Philanthropy. (2009, December). The most outrageous charity in America,
Larry Jones’ Feed the Children. Charitywatch.org. Retrieved (on 8 November 2014) from: http://www.charitywatch.org/articles/feedchildren.html#Outrageous
Gerard, J (2010, April 29). Best practices: Building an ethical corporate culture at American
Express. Retrieved from: http://i-sight.com/ethics/best-practices-ethical-corporate-culture-american-express/
Hurley, R (2013, September 26). A lesson from JPMorgan Chase on accountability, fear and the
trustworthy organization. Ethics and Society. Retrieved from: http://ethicsandsociety.org/2013/09/26/a-lesson-from-jpmorgan-chase-on-accountability-fear-and-the-trustworthy-organization/#more-445
Kiser, G. (2011, May 25). The 12 least ethical companies in the world: Covalence’s ranking.
Huffington Post.com. Retrieved (on 8 November 2014) from: http://www.huffingtonpost.com/2010/01/28/the-least-ethical-compani_n_440073.html
Starbucks (2013). Fiscal 2013 Annual Report. Seattle, WA: Starbucks Coffee Company; 100.
Retrieved from: http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-reportsAnnual
The Saylor Foundation (2014). Chapter 10: Leading an ethical organization: Corporate
governance, corporate ethics, and social responsibility. [Attached]
InvestorPlace Staff. (2012, March 21). Most ethical companies 2012 – 100+ co.’s with a
conscience. Investorplace.com. Retrieved (8 November 2014) from: http://investorplace.com/2012/03/ethispheremost-ethical-companies-2012-list/#.VF7SE2e0Qng
