Impact of Legislation and Training on Ethics and Organizational Behavior

Stephens (2016) highlighted the importance of right policy creation and enforcement by stating the example of 2010 case where Department of Justice decided not to prosecute Morgan Stanley after an employee violated the Foreign Corrupt Practices Act (FCPA). DOJ determined from their investigation that Morgan Stanley trained their employees on internal policies, the FCPA and other anti-corruption laws frequently, and the employee acted on his own. Just reading or signing or acknowledging the policy by employees is not enough, instead regular and risk based tracking of policy relevance and conformance is required with repeated trainings.

Some of the key steps in policy training by Stephens (2016) are:

1. Regular education of employees

2. Reminders of compliance trainings

3. Actions when policies are violated

4. Transparency by explaining the steps taken and why

5. Re-education of employees with the change in policy (Stephens, 2016)

General practice is the acknowledgement by employees at the time of joining company, which sets up a benchmark of company’s standards (Feigenbaum, 2019). Another good practice of human resource managers is to setup the code of ethics with examples, scenarios and illustrations pertaining to company’s line of business to better understand what company wants of them. Instead of paper based code, full fledge training of ethics engrave importance of policy with long lasting impact. Follow up exam of ethical training further reinforces the concept upon employees. Enforcement is shared to all by informing the details of violations and actions taken by company (Feigenbaum, 2019). Pope (2015) cited the example of Enron’s organizational code of conduct spanning over 84 pages, but later bankrupted due to fraud and accounting malpractices.

General Motors covered up a fatal design defect since 2001 through 2014 to avoid recall, Penn State covered up child abuse for years with complete disregard of safety and welfare of Sandusky’s child victims and so on (Pope, 2015). These organizations violate basic ethical standards and betrayed the trust of public. Pope (2015) determined that encouragement to speak up in the event of ethical violation, overcoming concerns of whistle blowers, and responding with fairness are key factors in successful enforcement of organizational ethical policies.

References

Pope, K. (2015). Steps to strengthen ethics in organizations: research findings, ethics placebos, and what works. Journal of Trauma and Dissociation, 16(2), 139 – 152.

Feignbaum, E. (2019). How would an organizational code of ethics help ensure ethical business behavior. Retrieved from https://smallbusiness.chron.com/would-organizational-code-ethics-ensure-ethical-business-behavior-2730.html

Stephens, R. (2016). 5 ways training on your compliance policies can protect your organization. Retrieved from https://www.navexglobal.com/blog/article/5-ways-training-your-compliance-policies-can-protect-your-organization/