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ChapterThree:PhilosophicalEthicsandBusinessCopyright?2021McGraw-HillEducation.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGraw-HillEducation.ChapterObjectives1Afterreadingthischapter,youwillbeableto:Explaintheethicalframeworkofutilitarianism.Describehowutilitarianthinkingunderlieseconomicandbusinessdecisionmaking.Explainhowthefreemarketisthoughttoservetheutilitariangoalofmaximizingtheoverallgood.Explainsomechallengestoutilitariandecisionmaking.Explaintheprinciple-based,orrights-based,frameworkofethics.ChapterObjectives2Explaintheconceptofhumanrightsandhowtheyarerelevanttobusiness.Distinguishmoralrightsfromlegalrights.Explainseveralchallengestoprinciple-basedethics.Describeandexplainvirtue-basedframeworkforthinkingaboutethicalcharacter.PhilosophicalEthicsandBusiness1Theunexaminedlifeisnotworthliving.Socrates,Apology,Plato’sAccountoftheTrialofSocrates(TranslatedbyBenjaminJowett)EthicalFrameworks1Anethicalframeworkisnothingmorethananattempttoprovideasystematicanswertothefundamentalethicalquestion.Howshouldhumanbeingslivetheirlives?Ethicsattemptstoanswerthequestionofhowweshouldlive,butitalsogivesreasonstosupporttheanswers.EthicalFrameworks2Anyonecanofferprescriptionsforwhatyoushoulddoandhowyoushouldact,butaphilosophicalandreasonedethicsmustanswerthe"why?"questionaswell."Why"mattersbecausewithoutofferingreasons,oneisgivinganopinion."Why"mattersbecausesuperficialagreementcanmaskunderlyingdisagreement.Manypeopleattempttoanswer“why”inreligiousterms,butreligionsdifferfromculturetoculture.Philosophicalethicsprovidesjustificationsapplicabletoallpeopleregardlessoftheirreligiousstartingpoints.EthicalFrameworksEthicsisnotcomprisedofasingleprincipleorframework.Ethicalframeworksthathaveproveninfluentialinthedevelopmentofbusinessethicsandthathaveapracticalrelevanceinevaluatingethicalissuesinmodernbusiness.Utilitarianismisanethicaltraditionthatdirectsustodecidebasedonoverallconsequencesofouracts.Theprinciple-basedframeworkdirectsustoactonthebasisofmoralprinciplessuchasrespectinghumanrights.Virtueethicstellsustoconsiderthemoralcharacterofindividualsandhowvariouscharactertraitscancontributeto,orobstruct,ahappyandmeaningfulhumanlife.PhilosophicalEthicsandBusiness2It’sbettertohangoutwithpeoplebetterthanyou.Pickoutassociateswhosebehaviorisbetterthanyoursandyou’lldriftinthatdirection.

WarrenBuffettUtilitarianism:EthicalConsequences1Utilitarianism’sfundamentalinsightisthatoutcomesmatter,andsoweshoulddecidewhattodobyconsideringtheconsequencesofouractions.Inthatsense,utilitarianismhasbeencalledaconsequentialist

approachtoethicsandsocialpolicy.Weshouldactinwaysthatproducebetterconsequencesthanthealternatives.Whatismeantbybetterconsequences?Betterconsequencesarethosethatpromotehumanwell-being:thehappiness,health,dignity,integrity,freedom,andrespectofallthepeopleaffected.Utilitarianism:EthicalConsequences2Utilitarianismiscommonlyidentifiedwiththeruleofproducing"thegreatestgoodforthegreatestnumber."Theemphasisonproducingthegreatestgoodforthegreatestnumbermakesutilitarianismasocialphilosophythatopposespoliciesthataimtobenefitonlyasmallsocial,economic,orpoliticalminority.Utilitarianstendtobeverypragmaticthinkers,andnoactiseverabsolutelyrightorwronginallcasesineverysituation.Utilitarianreasoningusuallyacknowledgessomesupportforcompetingavailablealternatives.Utilitarianpositionisthathappinessistheultimategood,theonlythingthatisandcanbevaluedforitsownsake.UtilitarianismandBusinessThefreemarketisdecidedlyutilitarian.So,utilitarianismhasastrongimpactonbusinessandbusinessethics.Howtoachievethegoalofmaximizingtheoverallgood?Twoanswersproveespeciallyrelevantinbusinessandbusinessethics.SomeutilitariansagreewithAdamSmith,claimingthatfreeandcompetitivemarketsarethebestmeansforattainingthegoal.Policyexpertsinpredictinghumanactionarefamiliarwiththespecificsofhowsocietyworks,andtheythereforeareinapositiontodeterminewhichpolicywillmaximizetheoverallgood.Thedisputebetweenthe"market"andthe"administrative"versionsofutilitarianismcharacterizemanydisputesinbusinessethics.Egoismisalsoaconsequentialisttheory,butitfocusesexclusivelyonthehappinessoftheindividualmakingthedecision.ChallengestoUtilitarianEthics1Problemsconcerntheneedtocount,measure,compare,andquantifyconsequences.Utilitariansdeterminebothethicalandunethicalactsbytheirconsequences—sotheendjustifiesthemeans.Thisseemstodenyoneoftheearliestethicalprinciplesthattheenddoenotalwaysjustifythemeans.Wehavecertaindutiesorresponsibilitiesthatweoughttoobeyevenwhendoingsodoesnotproduceanetincreaseinoverallhappiness.ChallengestoUtilitarianEthics2Utilitarianreasonscontributestoethicaldecisionbyrequiringthatweconsidertheconsequencesofouractions.Importanttorememberthatutilitarianreasoningdoesnotexhausttherangeofethicalconcerns.Responsibleethicaldecisionmakingalsoinvolvesduties,principles,andpersonalintegrity.AnEthicsofPrinciplesandRights1Somedecisionsshouldbeamatterofprinciple,notconsequences—theendsdonotalwaysjustifythemeans.Whichprinciplesshouldbefollowed?Whendoesaprincipleoutweighproducinggoodconsequences?Theethicalframeworkthatwillprovecrucialforbusinessethicsbeginswiththeinsightthatweshouldmakesomeethicaldecisionsasamatterofprincipleratherthanconsequences.Principlesareethicalrulesthatputvaluesintoaction.Principlescreateethicaldutiesthatbindustoactordecideincertainways.AnEthicsofPrinciplesandRights2Whatprinciplesorrulesshouldguideourdecisions?Legalrules.Organizationalrules.Role-basedrules.Professionalrules.Ethicaldutiesshouldbecategoricalimperativesratherthanhypothetical.Acategoricalimperativeisanoverridingprincipleofethics.AnEthicsofPrinciplesandRights3Hypotheticalduties.Couldincludeaprofessionalcodeofconductthatbindsyouonlyifyouinthatprofession.Categoricalduties.Donotcontainan"if"clause.Ishouldormustobeyafundamentethicalrulenomatterwhat.HumanRightsandDuties1Arethereanyfundamentalor"categorical"duties?ImmanuelKantbelievedweallhaveadutytotreateachpersonasanendinthemselvesandneveronlyasmeanstoourownends.Personsmustneverbetreatedasmeretools.TheU.S.DeclarationofIndependencespeaksof"inalienablerights"thatcannotbetakenawaybygovernment.Human,ormoralrightsiscentraltoprinciple-basedethics.Theinherentdignityofeachindividualmeansthatwecannotdowhateverwechoosetoanotherperson.HumanRightsandDuties2Humanrightsprotectindividualdignity.Rightsimplythatsomeactsandsomedecisionsare"off-limits."Ourmoraldutyistorespectthehumanrightsofothers.Humansaresaidtohaveafundamentalhumanrightofautonomy,or"self-rule."HumanRightsandSocialJustice1Tworightsemergedasfundamentalcomponentsofsocialjustice—libertyandequality.Morefundamentalandpersistentthanlegalrightscreatedbygovernmentsandcommunities.Theyareparticularlyfundamentaltotheoriesofsocialjusticeuponwhichdemocraticsocietiesandcapitalisteconomieshavebeenbuilt.Crucialtoanunderstandingofbusinessethics.HumanRightsandSocialJustice2LibertarianHere,individuallibertyisthecentralelementofjustice.Ajustsocietyisoneinwhichindividualsarefreefromgovernmentintrusionaslongastheyarenotharmingothers.Ethicalbusinesspursuesprofitwithinthelaw.Unethicalbusinesseswouldincludefraud,deception,andanticompetitivebehavior.EgalitarianHere,equalityisthecentralelementofjustice.Socialistegalitariantheoriesargueforequaldistributionofbasicgoodsandservices.Othertheoriesarguethatequalopportunityiscrucial.Supportsgreatergovernmentalresponsibilityintheeconomytoguaranteeequalityofopportunityoutcomes.HumanRightsandLegalRights1Whatisthedifferencebetweenhumanrightsandlegalrights?Usingemployeerightsasanexample,therearethreekindsofemployeerightscommoninbusiness.First,therearethoselegalrightsgrantedtoemployeesonthebasisoflegislationorjudicialrulings.Minimumwageandequalopportunityaresomeexamples.Second,employeeshaverightstothosegoodsthattheyareentitledtoonthebasisofcontractualagreementswiththeemployer.Healthcare,pension,andpaidholidaysareexamples.Finally,employeeshaverightsgroundedinmoralentitlementstowhichemployeeshaveaclaimindependentlyofanyparticularlegalorcontractualfactors.Examplesincludetherightnottobebullied,rightnottobeliedto,andtherightnottobesexuallyharassed.HumanRightsandLegalRights2Legalrightsplacecertainissuesoutsidetherealmoftheemploymentcontract.Suchlegalrightssetthebasiclegalframeworkwithinwhichbusinessoperates.Humanrightslieoutsidethebargainingthatoccursbetweenemployersandemployees.ChallengestoanEthicsofRightsandDutiesTherearetwobigchallengestothisethicaltradition.Thereisdisagreementaboutwhatrightstrulyarebasichumanrights.Itisunclearhowtoapplythisapproachtopracticalsituations,especiallyincaseswhererightsappeartoconflict.Criticschargethatunlessthereisaspecificpersonorinstitutionthathasadutytoprovidethegoodsidentifiedas“rights,”talkofrightsamountstolittlemorethanawishlistofthingsthatpeoplewant.PhilosophicalEthicsandBusinessAbusinessthatmakesnothingbutmoney,isapoortypeofbusiness.

HenryFordVirtueEthics:IntegrityandCharacter1Virtueethicsseeksafullanddetaileddescriptionofthosecharactertraitsthatconstituteagoodandfullhumanlife.Virtuesarethosecharactertraitsthatwouldconstitutepartsofagoodandmeaningfulhumanlife.Thebestplacetoseetheethicsofvirtueisinthegoalofeverygoodparentwhohopestoraisehappyanddecentchildren.Tounderstandhowvirtueethicsdiffersfromutilitarianandprinciple-basedframeworks,consideregoism.Thereisagapbetweenself-interestandaltruism.Ethicsrequiresustoactforthewell-beingofothersattimes,somethingegoismclaimsisnotpossible.VirtueEthics:IntegrityandCharacter2Anethicsofvirtueshiftsthefocusfromquestionsofwhatapersonshoulddo,toafocusonwhothatpersonis.Aperson’scharacterisnotindependentofthatperson’sidentity.Character:Thosedispositions,relationships,attitudes,values,andbeliefsthatpopularlymightbecalleda"personality."Thisshiftchangesthenatureofjustificationinethics.Ethicalcontroversiesofteninvolveaconflictbetweenself-interestandethicalvalues.Howmuchweactforthewell-beingofothersdependsonourcharacter.VirtueEthics:IntegrityandCharacter3Virtueethicsrecognizesthathumanbeingsactaccordingtowhotheyare,accordingtotheircharacter.Giventhatcharacterplaysakeyroleinourbehaviorandgiventhatourcharactercanbeshapedbycontrollablefactors,virtueethicsseekstounderstandhowthosetraitsareformedandwhichtraitsareconducivetoandwhichonesundermineameaningful,worthwhile,andsatisfyinglife.Virtueethicsofferusamorefullytexturedunderstandingoflifewithinbusiness.Virtueethicsremindsustoexaminehowcharactertraitsareformedandconditioned.Manyindividualmoraldilemmasarisewhentensionbetweenwhoweseektobeandthetypeofpersonbusinessexpectsustobe.VirtueEthics:IntegrityandCharacter4Virtueethicsshouldleadustoaskquestionsaboutthechoiceswemakeandhowthosechoicesaffectourcharacter.First,notethateachdecisionyoumakehasasubtlebutmeaningfulimpactonsubsequentdecisions.Thissuggestsareciprocalrelationshipbetweencharacterandaction.Ourcharacteraffectshowweact,buthowweactendsupaffectingourcharacter. Thesecondwayinwhichourchoicesaffectcharacteristhroughthepeoplewechoosetoassociatewithandtheorganizationswechoosetobecomepartof.Thishasimportantimplicationsforthecompanieswechoosetoworkfor.Theorganizationalculturethatwebecomepartofwillinevitablychangewhoweare,sochoosecarefully.Decision-MakingModelforBusinessEthicsRevisited1Thischapterintroducedthreehistoricallyandphilosophicallyethicalframeworks.Understandingthephilosophicalbasisofethicsenablesyouto:Becomemoreawareofethicalissues.Betterabletorecognizethesignificanceofyourdecisions.Morelikelytomakebetterinformedandmorereasonabledecisions.Articulatelyexplainyourselfwhenaskedaboutadecision.Decision-MakingModelforBusinessEthicsRevisited2Ethicaltheoriesalsoprovidewaystodevelopthedecision-makingmodelintroducedinchapter2.Thesetheoriesprovidesystematicandsophisticatedwaystothinkandreasonaboutethicalquestions.Thedecision-makingmodelnowhasethicaltheoriesintegratedintoanexplicitdecisionprocedure.Decision-MakingProcessRevisited1Determinethefacts.Identifytheethicalissuesinvolved.Identifystakeholders.Considertheavailablealternatives.Decision-MakingProcessRevisited2Compareandweighthealternatives.Consequences.Duties,rights,andprinciples.Implicationsforpersonalintegrityandcharacter.Makeadecision.Monitorandlearn.ChapterFour:

TheCorporateCulture—ImpactandImplicationsCopyright?2021McGraw-HillEducation.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGraw-HillEducation.ChapterObjectives1Afterreadingthischapter,youwillbeableto:Definecorporateculture.Explainhowcorporatecultureimpactsethicaldecisionmaking.Discussthedifferencesbetweenacompliance-basedcultureandavalues-basedculture.Discusstheroleofcorporateleadershipinestablishingtheculture.Explainthedifferencebetweeneffectiveleadersandethicalleaders.ChapterObjectives2Discusstheroleofmissionstatementsandcodesincreatinganethicalcorporateculture.Explainhowvariousreportingmechanismssuchasethicshotlinesandombudspersonscanhelpintegrateethicswithinafirm.Discusstheroleofassessing,monitoring,andauditingthecultureandethicsprogram.Explainhowculturecanbeenforcedviagovernmentalregulation.EthicsandCorporateCulture1Cultureeatsstrategyforbreakfast.PeterDruckerWhatisCorporateCulture?1Theethicaldecision-makingmodelemphasizestheindividualresponsibilityforthedecisionsmade.Butpersonaldecisionmakingdoesnotexistinavacuum.Decisionmakingwithinafirmisinfluenced,limited,shaped,and,sometimes,determinedbythecorporatecultureofthefirm.Thischapterexploressomeofthemajorissuessurroundingthedevelopment,influence,andmanagementofacorporateculture.Italsoexplorestheroleofbusinessleadersincreating,enhancing,andpreservingculturesthatsupportethicalbehavior.WhatisCorporateCulture?2Eveninthisageofdecentralizedcorporations,thereremainsasenseofcultureinorganizations.Thisisespeciallytrueinsmalllocalfirms,butjustastrueofmajorglobalcorporations.Culture:Asharedpatternofbeliefs,expectations,andmeaningsthatinfluencesandguidesthethinkingandbehaviorsofthemembersofaparticulargroup.Figure4.1Whilecultureshapesthepeoplewhoaremembersoftheorganization,itisalsoshapedbythepeoplewhomakeupthatorganization.WhatisCorporateCulture?3GeertHofstedeorganizednationalculturesintosix“dimensions”:Powerdistanceindex:Thedistancebetweenindividualsatdifferentlevelsofahierarchy(moreequal=lowpowerdistance).Individualismversuscollectivism:Thedegreetowhichpeopleprefertoactindividuallyoringroups.Uncertaintyavoidance:Theextenttowhichpeoplearecomfortablewithuncertainty,ambiguity,change,andrisks.WhatisCorporateCulture?4Timeandorderorientation:Ahighlong-termorientation(LTO)iscomfortablewithcommitments,traditions,rewards.AlowLTOindicatesthatchangemayoccurmorerapidly.Masculinityversusfemininity:Lowmasculinityindicatesgreaterequality,strongerrelationships,service,andsolidaritywhilehighmasculinitysuggestsassertivenessandcompetition.Indulgentversusrestrained:Theextenttowhichpeopletrytocontroltheirdesiresandimpulses.Hofstede’sNationalCultureCategoriesSupporterssay:Hevalidatedhiscountryscoresacrossover400measures.Hisresultshavebeenreplicatedmanytimes.Criticssay:Hisdivisionsarebasedongeneralizations,stereotypes.Nationalculturesdonotexplainalldifferences.Hisworkfocusedinasingleperiodoftimeandplace.HisperspectiveisbiasedbyhisWesternviews.Onlyalimitednumberofcountrieswereincluded.WhatisCorporateCulture?5Justastherearenationalcultures,businessesalsohaveunspoken,yetinfluentialstandardsandexpectations.Ifyoujoinafirmwithaculturethatsupportsvalues,youareuncomfortablewith—therewillbeconflicts.Nocultureisstatic—cultureschange;butmodifyingcultureisabitlikemovinganiceberg.Theicebergisalwaysmoving,andifignored,theicebergwillcontinuetofloatalongonthecurrent.Strongleaders—fromwithinoratthetop—canhaveasignificantimpactonaculture.WhatisCorporateCulture?6Afirm'sculturecanbeitssustainingvalue:Offeringdirectionandstabilityduringchallengingtimes,Oritcanpreventafirmfromrespondingtochallengesincreativeandtimelyways.Thestabilityacultureprovidescanbeabenefitatonetimeandabarriertosuccessatanothertime.Somecorporateculturesaredefinedfromthetop-down,othersaredevelopedbytheemployeesthemselves.WhatisCorporateCulture?Definingthespecificculturewithinanorganizationisnotaneasytaskbecauseitispartiallybasedoneachemployee’sperceptionoftheculture.Perceptionmayactuallyimpactthecultureinacircularway.Inaddition,cultureispresentinandcanbedeterminedbyexploringanyofthefollowing,amongothers:Tempoofwork.Theorganization’sapproachtohumor.Methodsofproblemsolving.Thecompetitiveenvironment.Incentives.Individualautonomy.Hierarchicalstructure.Figure4.2Evenwiththislistofculturalelements,itcanbedifficultforindividualsinafirmtoidentifythespecificcharacteristicsoftheculturewithinwhichtheywork.UsedbypermissionofNancyMarguliesEthicsandCorporateCulture2Ifyouareluckyenoughtobesomeone’semployer,thenyouhaveamoralobligationtomakesurepeopledolookforwardtocomingtoworkinthemorning.

JohnMackey,CEOandco-founder,WholeFoodsMarketCultureandEthics1Howdoesthenotionofcultureconnectwithethics?Whatroledoescorporatecultureplayinbusinessethics?Insituationswherethelawprovidesanincompleteanswerforethicaldecisionmaking,thebusinesscultureislikelytobethedeterminingfactorinthedecision.Ethicalbusinessesmustfindwaystoencourage,toshape,andtoallowethicallyresponsibledecisions.CultureandEthics2Thecultivationofhabits,includingethicalvirtue,isgreatlyshapedbythecultureinwhichonelives.Wherewegetourhabitsandcharacterisall-important.Wecanchoosetodevelopsomehabits.Habitsareshapedbyeducationandtraining—byculture.Intentionallyornot,businessesprovideanenvironmentinwhichhabitsareformedandvirtues,orvices,arecreated.Theeffectofworkplacecultureondecisionmakingcannotbeoveremphasized.CultureandEthics3Ifattendedto,astrongethicalculturecandeterstakeholderdamageandimprovebottom-linesustainability.Ifignored,theculturecoulddestroylong-termsustainabilityinbothfinancialperformanceandemployeeretention.Responsibilityforcreatingandsustainingethicalcorporateculturesrestsonbusinessleaders.Whiletruethatindividualscanshapeanorganization,itisequallytruethatorganizationsshapeindividuals.Thepersonyoubecome,yourattitudes,values,expectations,mindset,andhabits,willbesignificantlydeterminedbythecultureoftheorganizationinwhichyouwork.ComplianceandValues-BasedCulturesAdistinctionarosebetweendifferenttypesofcorporatecultures:Somefirmswereclassifiedascompliance-basedcultures(thetraditionalapproach)whileotherswereconsideredtobeintegrity-basedorvalues-basedcultures.Values-basedcultures:AcorporatecultureinwhichconformitytoastatementofvaluesandprinciplesratherthansimpleobediencetolawsandregulationsistheprevailingmodelforethicalbehaviorTable4.1:TheEvolutionofComplianceProgramsintoValues-BasedProgramsTraditionalProgressive(EffectivePractices)Auditfocus BusinessfocusTransaction-basedProcess-basedFinancialaccountfocusCustomerfocusComplianceobjectiveRiskidentification,processimprovementobjectivePoliciesandproceduresfocusRiskmanagementfocusMultiyearauditcoverageContinualrisk-reassessmentcoveragePolicyadherenceChangefacilitatorBudgetedcostcenterAccountabilityforperformanceimprovementresultsCareerauditorsOpportunitiesforothermanagementpositionsMethodology:Focusonpolicies,transactions,andcompliance Methodology:Focusongoals,strategies,andriskmanagementprocesses ComplianceandValues-BasedCultures1Compliance-basedcultureemphasizesadherencetorulesastheprimaryresponsibilityofethics.Avalues-basedculturereinforcesasetofvaluesratherthanrules.Acompliancecultureisonlyasstrongandpreciseastherules.Whenrulesdon’tapply,avalues-basedculturereliesonthepersonalintegrityofitsworkforce.ComplianceandValues-BasedCultures2Compliance-orientedgoalsmayincludemeetinglegalandregulatoryrequirements,minimizingrisksoflitigationandindictment,andimprovingaccountabilitymechanisms.Thegoalsofamoreevolvedandinclusiveethicsprogrammayentail:Maintainingbrandandreputation.Recruitingandretainingdesirableworkers.Unifyingafirm’sglobaloperation.Creatingabetterworkingenvironment.Doingtherightthingaswellasdoingthingsright.EthicsandCorporateCulture3Icametosee,inmytimeatIBM,thatcultureisn’tjustoneaspectofthegame,itisthegame.Intheend,anorganizationisnothingmorethanthecollectivecapacityofitspeopletocreatevalue.LouisGerstner,pastchairmanandCEO,IBMEthicalLeadershipandCorporateCulture1Corporateleadershiphasaprimaryresponsibilitytostewardcorporateculture.Stakeholdersareguidedbythe"toneatthetop";theremustbeaconsistenttonethroughoutthefirm.One2013studyfoundthatseniorleadersaremorelikelythanlower-levelemployeestobreaktherulesand60percentofreportedmisconductisattributedtomanagers.Ifleadershipactsunethically,stakeholdersreceivethemessagethistypeofbehaviorisacceptable.Alternatively,ifaleaderactsethicallyaboveanyotherconsideration,stakeholdersareguidedbythatrolemodel.EthicalLeadershipandCorporateCulture2Beyondpersonalbehavior,leadershipsetsthetonethroughothermechanisms."Budgetingisallaboutvalue"isalong-standingmanagementcredo.Whenethicsofficerswerefirstintroducedintheearly1990s,theextentofthefinancialsupporttheyreceivedindicatedtheirrelevanceandinfluence.Creatingasharedcompanycultureisakeyresponsibilityofitsleaders,iftheywishtoprioritizeethicsintheirrespectivecompanies.Leadersshouldbeperceivedaspeople-oriented,aswellasengaginginvisibleethicalaction.Executiveswhoare"quietlyethical"withinthetopmanagementteam,arenotperceivedasethicalleadersbythedistantemployees.Theimpactofethicalleadershipissignificant.EffectiveLeadershipandEthical,EffectiveLeadership3Howdotheeffectiveleaderandtheethical,effectiveleaderdiffer?Noteveryeffectiveleaderisanethicalleader.Onekeydifferenceisthemeansusedtomotivateothersandachieveone'sgoals.SomeofthediscussionsonleadershipsuggestthatethicalleadershipisdeterminedbythemethodsusedinleadingTransformativeortransactionalleadersemploymethodsthatempowersubordinatestotaketheinitiativeandtosolveproblemsforthemselves.EffectiveLeadershipandEthical,EffectiveLeadership2Ethicallyappropriatemethodsofleadershiparecentraltobecominganethicalleader.Theotherelementinvolvestheendorobjectivetowardwhichtheleaderleads.Inthebusinesscontext,productivity,efficiency,andprofitabilityareminimalgoalsforsustainability.Beyondthegoalofprofitability,othersociallyresponsiblegoalsmightbenecessarybeforemakingaconclusionthataleaderisfullyethical.BuildingaValues-BasedCorporateCulture1Cultureisbuiltandmaintainedthroughleadership,integration,assessment,andmonitoring.Oneofthekeymanifestationsofethicalleadershipisthecommunicationofvaluesfortheorganization.Butdocodesmakeadifference?Beforeimpactingtheculturethroughacodeofconductorstatementofvalues,afirmmustdetermineitsmission.Thecodehasthepotentialtobothenhancereputationandprovideguidanceforinternaldecisionmaking.Thuscreatingabuilt-inriskmanagementsystem.BuildingaValues-BasedCorporateCulture2Themissionshouldbeinspiring.Establishingthecoretenets(especiallythroughaparticipatoryprocess),laysdownthelawforallfuturedecisions.Themissionstatementorcorporatecredoarticulatesthefundamentalprinciplesthatshouldguidealldecisions,withoutabridgment.Fromauniversalistperspective,manydecisionsmightbemadewiththeendinmind,butnoneshouldeverbreachtheunderlyingmissionasanultimatedictate.DevelopingtheMissionandCode1Criticalto

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