MANAGEMENT COMMUNICATION - Pearson Learning Solutions

Chapter 3 ● Communication Ethics 71early 1980s. In each of these periods, companies tended to be reactive, blaming “a few badapples,” dismissing values as “not central to what we do,” or ignoring opportunities to improve. 37The current wave of disapproval began in 2001 with the bursting of the dot-com bubble,the ensuing bear market and financial scandals involving Enron, WorldCom, Tyco, and others.This time, according to a recent survey, the response appears to be different. More and morecompanies are looking inward to see what has gone wrong and looking outward for answers.They are questioning the quality of their management systems and their ability to inculcateand reinforce values that benefit the firm, their stakeholders, and the wider world. And theyare showing little patience with executives who place their businesses at risk by crossing theline from prudent to unethical behavior.In their survey of 365 companies in 30 nations and five regions around the world, consultingfirm Booz Allen Hamilton and the Aspen Institute found that ethical behavior is a core componentof company activities. Of the 89 percent of companies that have a written corporate valuesstatement, 90 percent specify ethical conduct as a principle. Further, some 81 percent believe theirmanagement practices encourage ethical behavior among staff employees. The study found thatethics-related language in formal statements not only sets corporate expectations for employeebehavior, it also serves as a shield in an increasingly complex legal and regulatory environment. 38000200010270582216HOW ETHICAL STATEMENTS CAN HELP While the presence of an ethical statement willnot automatically ensure ethical behavior on the part of corporate employees, such documentscertainly can raise ethical awareness, create an atmosphere in which ethical behavioris expected and rewarded, and promote a companywide dialogue about the value of ethicalbehavior.In 1982, seven people died in the United States after taking Tylenol capsules that hadbeen poisoned with cyanide. Investigators eventually determined that some unknown personhad tampered with the capsules after they had been placed on store shelves for sale. Evenbefore Johnson & Johnson, which manufactures the product, had obtained all the informationon the cause of the tragedy, and even before legal liability had been evaluated, the companyassumed moral liability for it, immediately recalling 31 million bottles of Tylenol with amarket value of $100 million. The company set up a toll-free help line to answer questionsfrom the general public. 39 Johnson & Johnson chairman and CEO James Burke opened up thecompany’s meetings to the news media and offered a reward of $100,000 to anyone able tosupply information leading to the arrest of the culprit. According to Lipovetsky, “There is nodoubt as to the ethical orientation of the operation. It was nonetheless a triumph of communicationwhich managed to dramatize the firm’s responsible action.” 40The Tylenol crisis highlights the importance of personal ethical commitment of topmanagement in a special way. In these periods of extreme tension, while managers may wish todo the right thing, it’s not always immediately clear what the right thing to do is. Johnson &Johnson employees had worked with their credo, a broadly phrased statement of company ethics,since 1947. In the words of one Johnson & Johnson official during the crisis, “What we are doinghere is not specifically mentioned in the Credo, but it is definitely generated by the Credo.” 41Johnson & Johnson’s Jim Burke had no hesitation in assuming direct responsibility forand control over the true spirit of the credo. As Laura Nash reports, “Jim Burke has oftenstated that the guidance of the Credo played the most important role in management’s decisionmaking during the crisis.” 42 If anyone doubted that Burke and his president, David Collins, didthe right thing, the proof is that 11 weeks after the start of the crisis, the Tylenol brand hadrecovered 80 percent of its initial market share and within two years had recovered all of it. 43Management Communication: A Case-Analysis Approach, Fourth Edition, by James S. O'Rourke, IV. Published by Prentice Hall. Copyright © 2010 by Pearson Education, Inc.