Question

Explain how and why the compliance and ethics programs of most companies fall short of addressing global business ethical responsibilities

Answer 1

Explain how and why the compliance and ethics programs of most companies fall short of addressing global business ethical responsibilities.

There are multiple reasons to why ethics and compliance programs of companies fall short in addressing ethical responsibilities. Even if a company has compliance and ethics programs, if the company does not address the situations and the programs themselves, it will fail. What is considered acceptable in the United States may not be acceptable in China or South America, and even if a company complies with local laws and practices it does not guarantee they take ethical responsibility. An example of this is the devastating effect the BP oil spill has had in the Gulf of Mexico. The 2010 Deepwater Horizon rig explosion killed 11 works and set over 200 million gallons of oil into the Gulf. In this situation, the United States had laws and practices in place to prevent a situation like this, but BP engineers made a decision to ignore a pressure test that could have prevented the explosion.

Unfortunately, companies globally lack a basic standard of conduct to follow. A global survey of 6,200 employees from four leading multinational companies based in the U.S., Europe, and Japan indicated that there is a need for basic standards of conduct for global companies to follow. A main factor in program failure is lack of or poor communication. Companies have a duty to clearly state and communicate their expectations to each employee, and the company is responsible to ensure that employees understand the program. Everyone has a responsibility to behave ethically, but if an employee does not fully understand the programs laid out to them, the company is at fault for any unethical behavior made.

            The research study mentioned above indicated that top executives often view their company’s conduct positively where employees view the company with having many employee-related issues. Executives also often lack concern of ethical issues, instead being driven by revenue and profits rather than the right thing to do. There is a lack of data and rigor in assessing and managing business conduct, and so company’s often sacrifice ethical behavior.

Pressure to meet objectives and deadlines, even when unrealistic, is another reason companies fall short in compliance of business ethics. Companies tend to see big scandals when business emerge in developing countries, driving them to set unrealistic goals and them being more willing to sacrifice ethics. An example of this occurrence was the employee suicides at Foxconn in China: they faced unrealistic deadlines for assembling iPhone parts and the pressure was too much