Business Ethics (lesson 4)
o understand the institutionalization of business ethics, it is important to understand the voluntary and legally mandated dimensions of organizational practices. In addition, there are core practices, sometimes called best practices most responsible firms—those trying to achieve acceptable conduct—embrace and implement. The effective organizational practice of business ethics requires all three dimensions (legal, voluntary, and core practices) be integrated into an ethics and compliance program. This integration creates an ethical culture that effectively manages the risks of misconduct. Institutionalization relates to legal and societal forces that provide both rewards and punishment to organizations based on stakeholder evaluations of specific conduct. Institutionalization in business ethics relates to established laws, customs, and expected organizational programs considered normative in establishing a reputation. This means deviations from expected conduct are often considered ethical issues and are therefore a concern to stakeholders. Institutions provide requirements, structure, and societal expectations that reward and sanction ethical decision making.
Reference: FERRELL, FRAEDRICH, AND FERRELL (2013). BUSINESS ETHICS (10th ed.). Stamford, CT: Cengage Learning.
Read the Case Study entitled “Whole Foods Strives to Be an Ethical Corporate Citizen” on page 525 of the text and the following articles:
Whole Foods and the Triumph of Customer Capitalism
Why Shoppers Are Abandoning the Grocer
Create a presentation answering following questions:
1. How has a commitment to corporate values contributed to Whole Foods’ success?
2. Describe how Whole Foods’ adoption of a stakeholder orientation has influenced the way it operates.
3. What are some ways that Whole Foods might have neglected certain stakeholders in the past?