MSETM 5110 – Ethics for Practicing Engineers Recap of Session 1

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MSETM 5110 – Ethics for Practicing Engineers

Recap of Session 1

Setting the Stage

• Scope of Seminar—Awareness, Strategies and Techniques

• Course Materials and Assignments

• Fundamental Underpinnings—Values and Guiding Principles

• What Constitutes Ethical Behavior? What Does Ethical Behavior “Look Like?”

• Technology, Globalization, and Competition

• A Framework for Ethical Behavior and Integrity

• Codes of Conduct and Expected Behavior

• Examples of Companies and CEO’s in the News

• Ethics as a Corporate Responsibility

• Ethics as a Personal Responsibility

• The Four Categories of Corporate Values

• Next Step in Our Ethics “Journey”

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Due Date

Assignment “0” - Personal Profile 8/28/02

Assignment 1 - Read HBR Articles:1. George Iwaki and Oscar Hauptman, Final Voyage of the Challenger.

HBR Product Number 9691037 (11/28/90).

2. Linda Trevino, Gary Weaver, David Gibson, and Barbara Ley Toffler, Managing Ethics and Legal Compliance: What Works and What Hurts. HBR Product Number CMR146 (11/01/99).

3. Lynn Paine, Managing for Organizational Integrity. HBR Product Number 942207 (03/01/94).

Assignment 2 - TBA

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Purpose

Connectivity

Relevancy

Application

Science: “what is”

Engineering: “creating what has never been”

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MSETM 5110 – Ethics for Practicing Engineers The Journey

Leadership(Mission/Values)

Management(Operating Principles)

Business Model(Structure)

Culture for Excellence(Energy/Innovation)

Right Metrics(Stakeholder Value)

Sustained Success (Performance Measures)

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Attributes of a Successful Company

• Vision/Mission/Values

• Alignment Around Values

• People Systems Around Values

• Organize for Success

• Effective Integration and Communication

• Clarity of Responsibility and Accountability

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Our Virtual Walk in the Woods

or

Moral Compass

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“If you don’t know where you’re going, any road will get you there.”

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What’s Happened Since September 11?

• Re-Examined Our Values• Confronted Terrorism – Military and Homeland Defense• Defined Threats

– Chemical/Biological /Agricultural– Cyber– Weapons of Mass Destruction (WMD)

• Development and Deployment of Innovative/Next Generation Science and Technology– Sensor, Imaging, Surveillance– Energy Policy and Alternatives– Multidisciplinary Approach (Broad Cross Section of All

Engineering Areas, Behavioral Scientists, Politicians, Economists, Military, and Business Leaders)

• Enron Happened

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Three Priorities for the United States

• Economic Security

• Homeland Security

• Win the War on Terrorism

President Bush

Portland, OR

August 22, 2002

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The Four Disciplines of a Healthy Organization

• Build and Maintain a Cohesive Leadership Team• Create Organizational Clarity• Over-Communicate Organizational Strategy• Reinforce Organizational Clarity Through Human

Systems

Source: Patrick Lencioni, “The Four Obsessions of an Extraordinary Executive.”

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MSETM 5110 - Ethics for Practicing Engineers

Are There Dueling Agendas?

• Competitive vs. Ethical Conduct

• Flexibility/Adaptability vs. Sound Business Practice

• Binary vs. Degrees of ("Bend But Don't Break")

• Rules/Policy/Practice/Guidelines/"Generally Accepted"

• Company Values vs. Personal Value System • Mergers and Acquisitions and Cultural Integration

• Defining Right vs. Expedient

• Responsibility/Accountability

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What Effective Ethics Programs Accomplish*• Detect Unethical/Illegal Behavior• Create Awareness of Ethical/Legal Issues That Arise at

Work• Assist With Finding Ethics/Compliance Advise Within

the Company• Delivering Bad News to Management• Ensuring That Ethics/Legal Compliance Are Reported

in the Organization• Enhance Better Decision Making in the Company• Promote Employee Commitment to the Organization

*Trevino, et al., Managing Ethics and Legal Compliance: What Works and What Hurts, HBR

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What Works and What Hurts in Ethics/Compliance Management: Prescriptions for Action*

• Tap the Trenches --Employee Perceptions Matter • Build A Solid Ethical Culture • Create a Values-Based Program That Incorporates

Accountability and Cares for Stakeholders • Focus on Formal Program Follow-Through • Answers to Practical Questions About Effective

Ethics/Compliance Management -Who Should Manage Ethics/Compliance Programs? -How About Off-the-Shelf Ethics/Compliance Programs?

• Who Should Conduct Training? • Who Should Answer Telephone Reporting Lines? • What Do the Study Results Imply for Public Policy?


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What Influences Ethics/Compliance Program Effectiveness?*

• Program Orientation -Compliance-Based Approach -Values-Based Approach

• Formal and Informal Ethics/Compliance Program Characteristics -Formal Program Characteristics Are Relatively Unimportant -Program Follow-Through Is Essential

• Ethical Culture in the Organization -Executive and Supervisory Leadership

-Fair Treatment of Employees -Ethics in Discussions and Decisions -Reward Systems that Support Ethical Conduct -Organizational Focus -Summary of Ethical Findings


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So, What’s at Stake?

“By supporting ethically sound behavior, managers can strengthen the relationships and reputations their companies depend on.”

Paine, Managing for Organizational Integrity.

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Goal: Each employee/member of the organization acts with integrity to define the operating culture of the organization. This assumes, and is dependent upon, each individual's fundamental value system, attitude, beliefs, language, and behavior patterns. And, it assumes that the organization has clearly defined its values and has a formal program to foster the desired behavior and to manage compliance.

_____________________________________________________________

• Are there rogue individuals?

• Are there rogue individuals at all levels of the organization?

• Are there lapses in ethics focus--awareness, expectations, and compliance?

• Are there tangible and intangible costs of unethical behavior?

-Stakeholder expectations

-Lost business

-Legal costs

-Detraction from mission/strategy/business focus

-The potential multiplying effect of a "bad" employee

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The Hallmarks Of An Effective Integrity Strategy*

• The guiding values and commitments make sense and are clearly communicated.

• Company leaders are personally committed, credible, and willing to take action on the values they espouse.

• The espoused values are integrated into the normal channels of management decision making and are reflected in the organization's critical activities.

• The company's system and structures support and reinforce its values.

• Managers throughout the company have the decision-making skills, knowledge, and competencies needed to make ethically sound decisions on a day-to-day basis.

*Paine, Managing for Organizational Integrity.

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Federal Sentencing Guidelines

Factors Used in Determining Fines:• Situations beyond the CEO's control, e.g.,

existence of a prior record of similar misconduct;

• Reporting and accepting responsibility for the crime;

• Cooperating with authorities;

• Effective program in place to prevent and detect unlawful behavior.

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What Constitutes Ethical Behavior?

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Ethics: (1) the discipline dealing with what is good and bad and with moral duty and obligation; (2a) a set of moral principles or values; (2b) a theory or system of moral values; (2c) the principles of conduct governing an individual or a group; (2d) a guiding philosophy.

Ethical: (1) of or relating to ethics; (2) involving or expressing moral approval or disapproval; (3) conforming to accepted professional standards of conduct.

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“Do the Right Thing”

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MSETM 5110 - Ethics for Practicing EngineersPersonal “Mini Survey”

1. My company acts ethically and with integrity:a. consistentlyb. occasionallyc. rarely or not evident

2. My company promotes acting with integrity:a. stronglyb. somewhatc. not evident

3. I act with honesty and integrity:a. consistentlyb. most of the timec. occasionally

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MSETM 5110 - Ethics for Practicing EngineersPersonal “Mini Survey” (cont’d.)

4. Place your company on the following continuum:

Lowest Integrity Average Integrity Highest Integrity 0 5 10_________________________________________________________

5. Place yourself on the following continuum:

Lowest Integrity Average Integrity Highest Integrity 0 5 10_________________________________________________________

6. Your comfort level with your company’s behavior and commitment to ethical behavior:

a. very comfortableb. somewhat comfortablec. uncomfortable

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MSETM 5110 - Ethics for Practicing EngineersPersonal “Mini Survey” (cont’d.)

7. Your comfort level with your own behavior:a. very comfortableb. somewhat comfortablec. uncomfortable

8. I am familiar with my company’s values statement:a. yesb. no

9. I am familiar with my company’s strategic/business plan:a. yesb. no

10. There is clear linkage/integration of values and strategic/business plan:a. yesb. no

MSETM 5110 – Ethics for Practicing Engineers Recap of Session 1

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