Chapter 4 Business Ethics: The Power of Doing the Right Thing

What Is Ethics?

EthicsMoral principles that define what is right and wrong. is moral principles—it is a system that defines right and wrong and provides a guiding philosophy for every decision you make. The Josephson Institute of Ethics describes ethical behavior well: “Ethics is about how we meet the challenge of doing the right thing when that will cost more than we want to pay. There are two aspects to ethics: The first involves the ability to discern right from wrong, good from evil, and propriety from impropriety. The second involves the commitment to do what is right, good, and proper. Ethics entails action; it is not just a topic to mull or debate.”John C. Maxwell, There’s No Such Thing As “Business” Ethics (New York: Center Street, 2003), 23–24. Is it right? Is it fair? Is it equitable? Is it honest? Is it good for people? These are all questions of ethics.Manual Velasquez, Claire Andre, Thomas Shanks, and Michael J. Meyer, “What Is Ethics?” Santa Clara University, http://www.scu.edu/ethics/practicing/decision/whatisethics.html (accessed August 31, 2009). Ethics is doing the right thing, even if it is difficult or is not to your advantage.[citation redacted per publisher request]. Carly Fiorina, former CEO of Hewlett-Packard, discusses the importance and impact of ethics on business.

Personal Ethics: Your Behavior Defines You

Ethics comes into play in the decisions you make every day. Have you ever received too much money back when you paid for something in a store, didn’t get charged for something you ordered at a restaurant, or called in sick to work when you just wanted a day off?College Confidential, http://talk.collegeconfidential.com/california-institute-technology/427749-ethical-dilemma-question.html (accessed August 31, 2009). Each of these is an ethical dilemmaA situation in which options are presented which may be right or wrong.. You make your decision about which path to take based on your personal ethics; your actions reflect your own moral beliefs and moral conduct.Manual Velasquez, Claire Andre, Thomas Shanks, and Michael J. Meyer, “What Is Ethics?” Santa Clara University, http://www.scu.edu/ethics/practicing/decision/whatisethics.html (accessed August 31, 2009). Your ethics are developed as a result of your family, church, school, community, and other influences that help shape your personal beliefs—that which you believe to be right versus wrong.Manual Velasquez, Claire Andre, Thomas Shanks, and Michael J. Meyer, “Ethics and Virtue,” Santa Clara University, http://www.scu.edu/ethics/practicing/decision/ethicsandvirtue.html (accessed August 29, 2009). A good starting point for your personal ethics is the golden rule: “Do unto others as you would have them do unto you.” That is, treat people the way that you would like to be treated. You would like people to be honest with you, so be honest with others.

Your strong sense of personal ethics can help guide you in your decisions. You might be surprised to find yourself with an ethical dilemma about something that is second nature to you. For example, imagine that you’re taking a class (required for your major) that has an assignment of a twenty-page paper and you’ve been so busy with your classes, internship, and volunteer work that you really haven’t had the time to get started. You know you shouldn’t have waited so long and you’re really worried because the paper is due in only two days and you’ve never written a paper this long before. Now you have to decide what to do. You could knuckle down, go to the library, and visit the campus Writing Center, but you really don’t have the time to do all that and still write the entire twenty pages. You’ve heard about some people who have successfully bought papers from this one Web site. You’ve never done it before, but you are really desperate and out of time. “If I only do it this one time,” you think, “I’ll never do it again.”

But compromising your ethics even just once is a slippery slope. The idea is that one thing leads naturally to allowing another until you find yourself sliding rapidly downhill. Ethics is all about the art of navigating the slippery slope: you have to draw a line for yourself, decide what you will and won’t do—and then stick to it. If you don’t have a strong set of ethics, you have nothing to use as a guidepost when you are in a situation that challenges you morally. A highly developed set of personal ethics should guide your actions. The only way to develop a strong sense of ethics is to do what you believe in, to take actions consistent with your principles time and time again.

So if you buy the paper and get caught, you will not only fail the class, but you may also find yourself expelled from school. If you’re tempted to consider buying a paper, take a minute to read your school’s academic dishonesty policy, as it is most likely very clear about what is right and wrong in situations like this.

Even if you get away with using a paper that is not your own for now, it’s always possible that you’ll be found out and humiliated even decades after the fact. Southern Illinois University (SIU) had three high-ranking officials—a university president and two chancellors—revealed as plagiarists in a two-year period.Margaret Soltan, “Southern Illinois University an Official Laughingstock,” Inside Higher Ed, August 30, 2007, http://www.insidehighered.com/blogs/university_diaries/southern_illinois_university_an_official_laughingstock (accessed February 18, 2010). Even more embarrassing, the committee formed to investigate the charges of plagiarism against Chancellor Walter Wendler developed a new plagiarism policy whose parts were plagiarized—specifically, it copied its academic dishonesty policy from Indiana University without citing that source.Wendy Weinhold, “SIU Accused of Copying Plagiarism Policy,” Daily Egyptian, January 29, 2009, http://web2.collegepublisher.com/se/daily-egyptian/siu-accused-of-copying-plagiarism-policy-1.1318397 (accessed February 18, 2010). SIU was made a laughingstock, and its reputation has suffered considerably. Academic dishonesty is not a gamble worth taking; though many students are tempted at some point, those who give in usually regret it.

Business Ethics: What Makes a Company Ethical?

Ethics apply to businesses as well personal behavior. Business ethicsThe application of ethical behavior by a business or in a business environment. is the application of ethical behavior by a business or in a business environment. An ethical business not only abides by laws and appropriate regulations, it operates honestly, competes fairly, provides a reasonable environment for its employees, and creates partnerships with customers, vendors, and investors. In other words, it keeps the best interest of all stakeholdersAll parties that have a stake in an organization including employees, customers, investors, the community, and others. at the forefront of all decisions.[citation redacted per publisher request].

An ethical organization operates honestly and with fairness. Some characteristics of an ethical company include the following:

• Respect and fair treatment of employees, customers, investors, vendors, community, and all who have a stake in and come in contact with the organization
• Honest communication to all stakeholders internally and externally
• Integrity in all dealings with all stakeholders
• High standards for personal accountability and ethical behavior
• Clear communication of internal and external policies to appropriate stakeholders[citation redacted per publisher request].

Corporate Social Responsibility

You may choose to shop at companies because of their business practices. For example, you might like The Body Shop because of its commitment to selling products that do not use animals for testing. This is a case of ethical behavior that is socially responsible. In fact, corporate social responsibility (CSR)Company actions that balance the interests of all stakeholders. is when companies operate in a way that balances the interests of all stakeholders including employees, customers, investors, vendors, the community, society, and any other parties that have a stake in the company. While corporate social responsibility may seem easy, it’s not always as easy as it looks. Keep in mind that in order to be socially responsible a company has to balance the social, economic, and environmental dimensions, which means generating a profit for investors while serving the best interest of all parties that have a stake in the operations of the company. When companies measure the impact of their performance along the three dimensions of social, economic, and environmental impact, it is called the triple bottom lineMeasurement of company performance along three dimensions—social, economic, and environmental.. To learn more about McDonald’s social responsibility, watch the following video.

There are many companies that make a commitment to social responsibility and the triple bottom line.

Understanding Values

Ethics are defined by moral principles; they are actions that are viewed by society as “right,” “just,” or “responsible.”BNET Editorial, “Understanding Your Values,” BNET, http://www.bnet.com/2410-13070_23-55147.html?tag=content;col1 (accessed August 29, 2009 ValuesGuiding principles and beliefs that are important to you and define how you live your life. define what is important to you: they are your guiding principles and beliefs, they define how you live your life, and they inform your ethics. While certain values might be important to you, they may not be important to your best friends or even every member of your family. While family, friends, and your environment have a significant influence, you develop your own set of values. Consider the list below, which includes some examples of values:BNET Editorial, “Understanding Your Values,” BNET, http://www.bnet.com/2410-13070_23-55147.html?tag=content;col1 (accessed August 29, 2009).

• Honesty
• Open communication
• Teamwork
• Integrity
• Prestige
• Security
• Helping others
• Loyalty
• Social responsibility
• Impact on society
• Creativity
• Achievement
• Global focus
• Religion

Values provide your personal compass and your direction in life. When something is not in line with your values, you feel unhappy and dissatisfied.BNET Editorial, “Understanding Your Values,” BNET, http://www.bnet.com/2410-13070_23-55147.html?tag=content;col1 (accessed August 29, 2009). Many people feel passionately about their values and want to have their environment align with their values. Examples of this are evident during political elections when people take sides on issues such as education, health care, and other social issues that reflect personal values.

You might be surprised to learn that your values are not set in stone. Your personal values will evolve and may even change drastically based on your experiences.BNET Editorial, “Understanding Your Values,” BNET, http://www.bnet.com/2410-13070_23-55147.html?tag=content;col1 (accessed August 29, 2009). For example, Nikki Tsongas, wife of the late Senator Paul Tsongas from Massachusetts, got involved in public service after the death of her husband. She is now a congresswoman from the fifth district of Massachusetts.“Niki Tsongas: Long Bio,” http://tsongas.house.gov/index.cfm?sectionid=54&sectiontree=2,54 (accessed September 1, 2009). She may have never considered serving in public office, but the death of her husband had a dramatic impact on her values.

You have a set of values that inform your ethics, which in turn inform your decision making. No one can tell you what your values are; that’s something you’ll have to decide for yourself. John C. Maxwell, in his book There’s No Such Thing as “Business” Ethics, lists the values that he lives by, such as “put your family ahead of your work (having a strong and stable family creates a launching pad for many other successes during a career and provides a contented landing place at the end of it)”John C. Maxwell, There’s No Such Thing as “Business” Ethics (New York: Center Street, 2003), 102–3. and “take responsibility for your actions (if you desire to be trusted by others and you want to achieve much, you must take responsibility for your actions).”John C. Maxwell, There’s No Such Thing as “Business” Ethics (New York: Center Street, 2003), 93–94. If you are looking for a comprehensive list of values, check out HumanityQuest.com, which lists more than five hundred different values.

Values of Organizations

Just like people, organizations have values, too. Values are “proven, enduring guidelines for human conduct” according to Stephen Covey in his book Principles.Thomas E. Ambler, “The Strategic Value of Values,” Center for Simplified Strategic Planning, http://www.cssp.com/CD0402/ValuesAndStrategy/default.php (accessed August 29, 2009). Many companies choose their values and communicate them to employees, customers, and vendors on the company Web site and other company communications. For example, Whole Foods includes the following values, among others: “selling the highest quality natural and organic products available” and “caring about communities and their environment.” You can see their entire values statement on their Web site.

Levi Strauss & Co. identifies four key values for their company: empathy, originality, integrity, and courage. Their values statement is also included on their Web site.

Microsoft includes integrity, honesty, personal excellence, passion for technology, and commitment to customers as part of their values statement on their Web site.

Company values and personal values are important because your values motivate you to work.BNET Editorial “Understanding Your Values,” BNET, http://www.bnet.com/2410-13070_23-55147.html?tag=content;col1 (accessed August 29, 2009). You will enjoy and excel at your job if you choose a company whose values you share. For example, if the environment is one of your values, it’s best to choose a company that includes a commitment to the environment as part of their values statement. Chances are you won’t be happy working at a company that doesn’t put a priority on the environment.

Mission Statements: Personal and Corporate Guidelines

Ethics and values are major concepts. If you have developed personal ethics and values, you might be wondering how they come together to help provide a roadmap for your life and your career. That’s the purpose of your mission statement; it becomes your roadmap for your decisions, choices, and behavior. You learned about creating your personal mission statement in the Selling U section of Chapter 1 "The Power to Get What You Want in Life". Mission statements such as “To gain experience in the public accounting field toward earning my CPA designation” and “To master the leading Web development tools and become a best-in-class Web developer” may sound simple, but each takes time, thought, and insight to create.“Develop Your Personal Career Mission Statement,” CollegeGrad.com, http://www.collegegrad.com/book/Job-Search-Prep/Develop-a-Personal-Career-Mission-Statement (accessed September 1, 2009). You may want to review the Selling U section in Chapter 1 "The Power to Get What You Want in Life" if you haven’t already created your personal mission statement.

Just as your personal mission statement is a blueprint for how you make decisions in life, companies also use a mission statement to define their direction, make operating decisions, and communicate to employees, vendors, shareholders, and other stakeholders. In fact, most companies have a formal, written mission that they include on their Web site. A mission statement is different than an advertising slogan or motto. It is based on the company’s ethics and values and provides a broad direction as to what the company stands for. For example, Harley-Davidson’s mission statement is below and can be found on their Web site.

FedEx expresses their mission statement a little differently as shown below and includes their mission statement along with their values on their Web site.

The mission statement of the insurance company Aflac is short and to the point as shown below. It can also be found on their Web site.

Many companies, like Google, put their mission statement or philosophy online—others use a printed manual. The mission statement is made available for the following reasons: employees can use it to aid them in ethical business decision making, investors can evaluate the company’s ethics before making a decision about becoming involved with it, and customers can choose whom they will do business with based on their ethics and purpose. In addition to their mission statement (which you may remember from Chapter 1 "The Power to Get What You Want in Life": “Google’s mission is to organize the world’s information and make it universally accessible and useful”Google, “Corporate Information: Company Overview,” http://www.google.com/corporate (accessed September 1, 2009).), Google’s Web site gives their philosophy—ten guiding principles, ten “things Google has found to be true,” which are values that reflect how the company conducts business:

1. Focus on the user and all else will follow.
2. It’s best to do one thing really, really well.
3. Fast is better than slow.
4. Democracy on the Web works.
5. You don’t need to be at your desk to need an answer.
6. You can make money without doing evil.
7. There’s always more information out there.
8. The need for information crosses all borders.
9. You can be serious without a suit.
10. Great just isn’t good enough.Google, “Corporate Information: Our Philosophy,” http://www.google.com/intl/en/corporate/tenthings.html (accessed September 1, 2009).

These ten things are the principles that Google uses to make decisions as a company; this list, with accompanying explanations, details why they do things the way that they do. It is both practical and concerned with ethics—the idea that “great just isn’t good enough” is part of their values, a declaration that Google wants to do the best that it can in every endeavor—it means that they will not take shortcuts, but will constantly strive to be more ethical, efficient, and user-friendly.

Character and Its Influence on Selling

As you have probably figured out, ethics, values, and missions are all very personal. Together they guide you in the way you behave at home, school, work, or out with your friends. Your characterFeatures and beliefs that define a person. is what sets you apart; it includes the features and beliefs that define you. It’s no surprise that the word has it origin in the Latin word character, which means mark or distinctive quality and from the Greek charaktr, which means to scratch.“Character,” Merriam-Webster Online Dictionary, http://mw1.merriam-webster.com/dictionary/character (accessed September 1, 2009). The Josephson Institute defines character as being composed of six core ethical values:

1. Trustworthiness
2. Respect
3. Responsibility
4. Fairness
5. Caring
6. CitizenshipJosephson Institute, “The Six Pillars of Character,” Josephson Institute, http://charactercounts.org/sixpillars.html (accessed September 1, 2009).

This is a comprehensive description of character. Consider how you perceive other people; it’s their character that defines who they are. Can you depend on him? Is she fair? Does he respect you? Just as these ethical pillars define other peoples’ character, they also define your character to other people. Customers ask the same questions about you: Can I trust her? Will he give me fair pricing? Is she honest? Does he care about the best interest of my business?

The Power of Your Reputation

In November of 2008, Tomb Raider: Underworld was released for multiple gaming systems. Knowing how important a game’s reputation can be for sales, public relations firm Barrington Harvey—in an attempt to massage the Metacritic score, a less-than-ethical move—asked reviewers to hold their scores until after the first weekend of the game’s release. “That’s right. We’re trying to manage the review scores at the request of Eidos.” When asked why, a spokesperson for Barrington Harvey explained, “Just that we’re trying to get the Metacritic rating to be high, and the brand manager in the United States that’s handling all of Tomb Raider has asked that we just manage the scores before the game is out, really, just to ensure that we don’t put people off buying the game, basically.”Mike Fahey, “Eidos Trying to Fix Tomb Raider: Underworld Metacritic Scores,” Kotaku, November 21, 2008, http://kotaku.com/5095674/eidos-trying-to-fix-tomb-raider-underworld-metacritic-scores (accessed September 1, 2009). Eidos, the company that published the game, tried to take an ethical shortcut—they wanted to be sure that the game’s reputation could not precede it—but paid for that decision with a great deal of negative publicity that adversely impacted their reputation.

Your overall character as judged by other people is your reputationOverall character as judged by other people..“Reputation,” Merriam-Webster Online Dictionary, http://www.merriam-webster.com/dictionary/reputation (accessed September 1, 2009). Consider some celebrities who have had unethical acts negatively impact their reputation: Tiger Woods, known as one of golf’s greats has been reduced to tabloid fodder since the news of his extramarital affairs; Michael Phelps, the only person to ever win eight gold medals in a single Olympic Games, has become the poster boy for marijuana use. Both had stellar reputations and were considered role models. Now both are working to gain back the trust of the public. Reputation isn’t limited to the wealthy or powerful. In high school, you knew that Sharon was a brain and Timothy was the sensitive, poetic type. You may never have had a conversation with either one of them, but you knew their reputations. Meanwhile, you avoided classes with Mrs. Avar because she had a reputation as a hard grader. Your reactions to many of the people in your day-to-day life are affected by their reputations.

When you work in sales, you are selling yourself; you will have greater success with customers if you are someone they want to “buy.” When customers buy from you, they are investing in your reputation. George Ludwig, author of Power Selling, explains that “you’ve got to live out your identity consistently in every facet of your life and make sure prospective clients bump into that identity everywhere they turn.”Renee Houston Zemanski, “The Power of Your Reputation,” Selling Power, http://www.sellingpower.com/article/display.asp?aid=SP1900197 (accessed August 29, 2009). In other words, every action you take affects your reputation. If you fail to follow up, forget details, or even if you are consistently late for meetings, you may become known as unreliable. On the other hand, if you consistently deliver what you promise, you will be known as reliable; if you always meet your deadlines, you will have a reputation for punctuality.

You’re Only as Good as Your Word

Unfortunately, not everyone in sales is ethical or honest. David Chittock, president of Incentra, Inc., discusses one encounter in which a customer shared her view of salespeople: “The prospect’s body language told me she wasn’t just uncomfortable—she was downright hostile to me. Finally, she shared this sentiment out loud: ‘I have to be honest with you. I think that all salespeople are liars, and I don’t trust any of them, and I don’t trust you.’” He goes on to explain that “many (if not all) of our prospects, view salespeople with suspicion, assuming that in attempting to make a sale, we will be self-serving, manipulative, and possibly even untruthful.”David Chittock, “Outside the Box: A Question of Integrity,” Manage Smarter, May 28, 2009, http://www.presentations.com/msg/search/article_display.jsp?vnu_content_id=1003977677 (accessed February 18, 2010). Chittock and his employees overcome that suspicion by making promises to their customers and then keeping them—sure, it sounds simple, but too many salespeople are willing to promise their customers the moon in order to close the deal.

Dr. Pat Lynch conducted a study that was published in the Journal of Business Ethics in which he asked more than seven hundred businesspeople and graduate business students to rank their values in the workplace; these included competency, work ethic, overcoming adversity, seniority, and promise keeping. Lynch found that keeping promises was that the bottom of people’s lists, whatever their gender, supervisory experience, or religious background.John C. Maxwell, There’s No Such Thing as “Business” Ethics (New York: Center Street, 2003), 121 Honesty is a way to stand out and to build your reputation.

If you are committed to finding win-win-win solutions for your customers, you need to be honest with them and with yourself. Figure out what you can realistically guarantee, make the promise, and then keep it. Jack Welch, in his book Winning, declares that “too many people—too often—instinctively don’t express themselves with frankness. They don’t communicate straightforwardly or put forth ideas looking to stimulate real debate. But when you’ve got candor, everything just operates faster and better.”John C. Maxwell, There’s No Such Thing as “Business” Ethics (New York: Center Street, 2003). If circumstances change and you realize that you will be unable to keep your promise, immediately communicate with the customer; explain what has happened, offer a new solution, and apologize. While that can make for an awkward conversation, in the long run, that kind of honesty and openness will help you to build strong business relationships.

Where the Rubber Meets the Road: Facing Challenges

Imagine that you are the buyer for Chez Food, a popular pan-European restaurant on the West Coast. You have good relationships with your suppliers, especially your produce guy, a genial fellow who owns his own business. As the holidays approach, Ray, your produce guy, approaches you with a gift. He tells you that he really appreciates both your business and your friendship, and he hands you two tickets to a Caribbean cruise. The company policy is clear: you aren’t supposed to accept gifts from suppliers, but, you argue to yourself, what could be the harm? After all, you were planning to keep buying from Ray before he offered you the tickets; it’s not as though he’s asking you for anything, anyway. What will you do? Your ethical obligation, of course, is to refuse the tickets—politely. Your relationship with Ray is important, but doing the right thing—and keeping your job—is important too.

At some point in your selling career—in fact, probably at many points—you will be faced with a situation that challenges your ethics. At these times, it is best to follow your code of ethics and the company’s code of ethics; when in doubt, don’t make an exception. If you’re having trouble finding the motivation to refuse a gift or accurately detail your résumé, remember that you will very like be found out—and when you’re found out, you will be very lucky not to lose your job. Is the case of wine from a supplier worth losing your job over? But more important, when you fail an ethical challenge, you trade in your integrity. If you are tempted to inflate your expense report by fifty dollars, ask yourself, “Is my integrity worth more than fifty dollars?” The answer, of course, is that your integrity is worth more than any amount of money—and once gone, it cannot be bought back. Ken Lay, former CEO of Enron, was a man with a great reputation and an oil portrait displayed at his alma mater; once his crimes were discovered, however, his name was forever associated with a willingness to break the law and exploit his own employees.“Ken Lay’s Final Act,” New York Times, July 6, 2006, http://www.nytimes.com/2006/07/06/opinion/06thurs4.html (accessed September 1, 2009).

Sir Michael Rake, chairman of KPMG International, says in Leading by Example, “Enron had an enormously laudable charter of values in corporate social responsibility, but actually it was almost a smokescreen for abuse…In investigations we’ve done into companies and individuals where things have gone wrong…have crossed from white, to gray, to black. Most of them have to operate in the gray a lot of the time…because of the aggressiveness with which the targets are set of the way in which their achievement of those targets is rewarded, intelligent, honest people suddenly think that this act is OK: because within that environment it seems to be OK. It isn’t OK; they’ve actually done something which is illegal or amoral.”Sir Michael Rake, “Setting the Right Tone at the Top,” Leading by Example (Cambridge, MA: Harvard Business School Press, 2007), 9–11.

Finding yourself in a corrupt corporate culture is not reason enough to violate your own code of ethics or break the law. If you find yourself in a situation where you feel pressured to do something unethical (or even illegal), talk to your supervisor about it. If you don’t feel that you can talk to your supervisor—or your supervisor is part of the problem—talk to someone in the human resources department. Give the company a chance to resolve the situation; if they are not aware of it, they can’t make it right.

If you’re wondering about how the role of human resources works in a situation like this, it might be helpful to think about an analogy: When you were in high school and you went out with your friends, your mother, at some point or another (or perhaps every Friday night!), must have given you a talk that went something like this: “I want you to have a good time with your friends—but if anything happens, just call us and we’ll come pick you up and we won’t be mad. If there’s drinking at the party, or if someone has drugs, just call us if you need to, OK?” While you probably won’t be calling your mom when an ethical problem arises at work (much as you might secretly like to), you can call the human resources department. Human resources departments oversee hiring, promotions, and performance reviews, but they also deal with employee relations and can provide confidential counseling to workers. It is important for a company’s success that employee goals align with corporate goals; when this is the case, the corporate culture is considered “successful.”David Towers, “An Investigation into Whether Organisational Culture Is Directly Linked to Motivation and Performance through Looking at Google Inc.,” extended essay, The University of Birmingham, The Birmingham Business School, 2005–6, http://www.towers.fr/essays/culture%20performance%20and%20motivation %20review%20and%20the%20google%20case%20study%20success.pdf (accessed September 1, 2009). If your supervisor is involved in the wrongdoing, the human resources department can be an excellent resource for you.

Employee Handbooks: Your Practical, Professional How-To

Every company has a highly specific code of ethics governing the actions of its employees. This manual, the employee handbook (sometimes called the code of ethics or code of conduct or other similar name), outlines the company’s policies concerning gift giving, nondisclosure of company information, and other areas of behavior. Starbucks’ code of ethics, Business Ethics and Compliance: Standards of Business Conduct, for example, explains when employees may and may not accept gifts: “You may not encourage or solicit meals or entertainment from anyone with whom Starbucks does business or from anyone who desires to do business with Starbucks. Giving or accepting valuable gifts or entertainment might be construed as an improper attempt to influence the relationship.”Starbucks, Business Ethics and Compliance: Standards of Business Conduct, http://assets.starbucks.com/assets/sobc-fy09-eng.pdf (accessed September 1, 2009). An employee handbook will also include the company’s sexual harassment and nondiscrimination policies, an explanation of procedures including breaks and scheduling principles, a list of benefits for part- and full-time employees, a breakdown of disciplinary policies and grounds for dismissal, as well as rules concerning phone, fax, mail, Internet use, and the permissible use of company vehicles. The handbook will additionally contain information like the history and goals of the company.

Figure 4.3

Starbucks communicates its expectations in terms of ethics in this handbook called Business Ethics and Compliance: Standards of Business Conduct.Starbucks, Business Ethics and Compliance: Standards of Business Conduct, http://assets.starbucks.com/assets/sobc-fy09-eng.pdf (accessed September 1, 2009).

While all employee handbooks are slightly different, all include the guidelines and policies that define ethical behavior in that company or organization. You can review several different companies’ policies at the Web sites below:

What Company Policies Say and What They Mean

Whatever company you end up working for will have its own policies with which you will need to familiarize yourself. But most companies include the same basic issues that are frequently encountered in sales: conflicts of interest, bribes, and noncompete clauses. The specifics of these policies will vary from company to company, but this section will give you a good idea of what to expect, the meaning of key terms you will encounter, and some sample policies to study.

A conflict of interestA situation in which a person in a position of power may benefit personally from his actions or influence. is “a situation in which a person, such as a public official, an employee, or a professional, has a private or personal interest sufficient to appear to influence the objective exercise of his or her official duties.”Michael McDonald, “Ethics and Conflict of Interest,” University of British Columbia Centre for Applied Ethics, http://web.archive.org/web/20071103060225/http://www.ethics.ubc.ca/people/mcdonald/conflict.htm (accessed September 1, 2009). There are four types of conflicts of interest that you may encounter in your career: family interests, gifts, private use of employer property, and moonlighting.

Family interestsA situation in which a relative has influence over the hiring of a family member. create a conflict when a relative of yours is either someone from whom you might purchase goods or services for your employer or when you have influence over the potential hiring of a family member of yours. It’s best to avoid these types of situations as it can be difficult to make an objective decision.

GiftsSomething received without compensation or exchange. create a conflict of interest when they are given to you by someone with whom you do business. Gifts are frequently given at the holidays and may include something small like a case of wine or something more extravagant like a trip.

private use of employer propertyUsing an employer’s property—cars, software, staplers, and so on—for nonbusiness purposes. can be anything from stealing pens to using your work computer to work on editing your vacation pictures to driving the company car on a weekend getaway and then reporting the mileage on a corporate expense report.

MoonlightingHolding a second job. is holding down a second job. While that might not sound insidious at first, if you work two jobs in the same field, it is almost inevitable that you will run into ethical problems. Who gets your best ideas? Where does most of your energy go? And if you have inside knowledge of two different corporations, working not to let that information influence you will be terribly difficult.

A bribeMoney or favor given or promised in order to influence the judgment or conduct of a person in a position of trust; something that serves to induce or influence., according to Merriam-Webster, is “money or favor given or promised in order to influence the judgment or conduct of a person in a position of trust; something that serves to induce or influence.”“Bribe,” Merriam-Webster Online Dictionary, http://www.merriam-webster.com/dictionary/bribe (accessed September 1, 2009). Soliciting, accepting, offering, or giving a bribe is illegal—even if your offer is refused, you are committing a crime. Bribery can take place in many different venues. Pharmaceutical companies attempt to persuade doctors to prescribe their products by buying them meals and giving them pens and other trinkets as well as trips to medical conventions. Business gifts are considered a form of bribery when they are given by someone who could benefit from having influence on a decision maker. For example, if you are the buyer of electronics at Wal-Mart, you are not able to accept any gifts from vendors or prospective vendors as it might appear to influence your buying decisions for the chain.

A noncompete agreementA contract that prevents you from taking a job with a competitor after you’ve quit or been fired. (sometimes called a covenant not to compete, or CNC) prevents an employee from entering into competition with the employer once his job has ended—in other words, it prevents you from taking a job with a competitor after you’ve quit or been fired. A noncompete agreement may also prevent former employees from starting their own businesses in the same field. The reasoning behind the CNC is the fear that a former executive could take his insider knowledge and trade secretsSomething (as a formula) which has economic value to a business because it is not generally known or easily discoverable by observation and for which efforts have been made to maintain secrecy.—as well as his contacts—with him to a new position. No employer wants to expose its strategy to its competitors. Noncompete agreements are generally upheld by the courts as long as they contain reasonable limits as to the time period and geographical space—that is, for example, that you may not compete in the state for two years after your termination. Noncompete agreements are not legal in California, although there are still measures in place in that state to protect trade secrets.“California Non-compete Agreements,” Lawzilla, http://lawzilla.com/content/noncompete.shtml (accessed September 2, 2009). Not every job will ask you to sign a noncompete agreement, and if you haven’t signed one, then there are no restrictions on your future employment. This is one reason it’s so important to read and understand anything you sign. However, even if you don’t sign a noncompete agreement, you may be asked to sign a nondisclosure agreement (or confidentiality agreement)A contract that protects the secrecy of information that is exchanged. or your company may have a nondisclosure or confidentiality policy that requires you to protect your former employer’s trade secrets; you may not exploit that information in future employment.Gene Quinn, “What Is a Confidentiality Agreement?” IPWatchdog, http://www.ipwatchdog.com/2008/01/03/what-is-confidentiality-agreement/id=31 (accessed September 2, 2009). A trade secret is “any kind of information that allows you to make money because it is not known.”“What Is a Trade Secret and How Is It Different from a Patent or Copyright?” HowStuffWorks, April 30, 2001, http://www.howstuffworks.com/question625.htm# (accessed February 14, 2010). For example, Coca-Cola’s signature formula is a trade secret, as is the recipe for Kentucky Fried Chicken. Information about the internal workings of a company that could only plausibly be gained by working for that company is usually a trade secret.

If you find yourself between jobs and worry about the legality of finding another (having signed a noncompete agreement with your previous employer), bear in mind that noncompete agreements are most likely to be enforceable if your new job is strikingly similar to your old job. If you go from the sales department at Target to the advertising department of Kmart, you are probably (legally) in the clear.Russell Beck, “Noncompete Agreements That Don’t Mean What They Say,” Journal of New England Technology, September 5, 2008, http://www.masshightech.com/stories/2008/09/01/focus4-Noncompete-agreements-that-dont-mean-what-they-say.html (accessed February 14, 2010). Your new job is different enough that you are unlikely to be seen by the court as exploiting your knowledge of Target’s sales practices. Remember that this is only a concern if you have signed a noncompete agreement previously; while noncompete clauses are common, they are not universal.

What Is Whistle-Blowing?

Jeffrey Wigand, former head of research and development for Brown & Williamson Tobacco Corporation (the third-largest tobacco company in the United States), is one of the most famous whistle-blowersOne who publicly exposes the misconduct of a company or organization. in America. He says of himself, “The word whistle-blower suggests that you’re a tattletale or that you’re somehow disloyal. But I wasn’t disloyal in the least bit. People were dying. I was loyal to a higher order of ethical responsibility.”Chuck Salter, “Jeffrey Wigand: The Whistle-Blower,” Fast Company, December 19, 2007, http://www.fastcompany.com/articles/2002/05/wigand.html (accessed February 14, 2010). Wigand’s testimony against the tobacco industry, his claims that executives at Brown & Williamson knew that cigarettes were addictive, lied about it under oath, and destroyed documents related to that fact, led directly to the lawsuit brought by forty state attorneys general against tobacco companies.

Whistle-blowing, the act of publicly exposing the misconduct of a company or organization, is a courageous act. Wigand’s reputation was destroyed by a punitive smear campaign conducted by the industry he spoke out against, and the stress resulting from that and the trial destroyed his marriage. Brown & Williamson filed a lawsuit against him for revealing confidential company information (the suit was dismissed as a condition of the $368 billion settlement against the tobacco industry).Jeffrey Wigand, “Biography,” http://www.jeffreywigand.com/bio.php (accessed September 2, 2009). But Wigand blew the whistle in order to save thousands of lives. The true story was made into a blockbuster movie in 1999 called The Insider.

Another famous whistle-blower is Erin Brockovich, whose story was also brought to life on the big screen in the movie of the same name.

Of course, whistle-blowing exists on a less grand scale. If you know which of your classmates stole the answer key to an exam and you tell the professor, you have blown the whistle. Whistle-blowing doesn’t always involve risking your life, and it doesn’t always involve bringing a corporation to its knees. At its heart, it is action taken to reveal wrongdoings in hopes of seeing justice done.

Only limited protection existed for whistle-blowers until recently; today, the best protection they have (unless they work for the federal government) is the Sarbanes-Oxley Act of 2002, mentioned earlier, which states that “whoever knowingly, with the intent to retaliate, takes any action harmful to any person, including interference with the lawful employment or livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any federal offense, shall be fined under this title, imprisoned not more than ten years, or both.”Cornell University Law School, “Retaliating against a Witness, Victim, or Informant,” http://www.law.cornell.edu/uscode/18/1513.html#e (accessed September 2, 2009). It’s important to bear in mind that you have no obligation to blow the whistle; you can simply refuse to take part in any unethical or illegal activity. If you know that crimes are being committed at your place of business, you have to decide for yourself what form that refusal will take: you may simply not commit any crimes yourself, you may try to persuade others to behave ethically, or you may feel that you must resign your position. It will depend on your situation and your personal code of ethics.

Ethics and the Law

The ever-changing landscape of technology has created new opportunities to test ethics; spammers, scam artists, and identity thieves have created the need to clearly define legal, and in some cases, ethical behavior online. An increasing number of cases of fraud committed via social networking sites have taken place. There have been cases of people who create Twitter profiles in the names of other, real people. News anchor Keith Olbermann and Tony La Russa, manager of the St. Louis Cardinals, have both been victims of such hoaxes.Danielle Citron, “Twitter Fraud,” Concurring Opinions, June 10, 2009, http://www.concurringopinions.com/archives/2009/06/twitter-fraud.html (accessed September 2, 2009). If tempted to such behavior yourself, remember: you are what you tweet. Your reputation will be affected by all the things that you do—make sure that you’re making yourself look good.

Culture and Ethics

When you are working in a different country, or with professionals from other cultures, there may be different ideas as to what is appropriate and ethical. The Japanese, for example, have a culture of corporate gift giving; kosai hi (literally “expense for friendly relations”)Boye Lafayette de Mente, Japan’s Cultural Code Words (North Clarendon, VT: Tuttle Publishing, 2004), 225. refers to the Japanese business practice of maintaining large expense accounts used for entertaining clients and nurturing other professional relationships. This money is, for example, often used to buy golf club memberships as gifts for people with whom Japanese businessmen and women have valuable working relationships. When you come face-to-face with these different customs, it is important not to be insulting, but you also cannot ignore your company’s policies. “When in Rome” will only carry you so far.

A good rule of thumb is this: if you wouldn’t be comfortable telling your boss about it, or if you’d be embarrassed to tell your mom about it, don’t do it. If you’re working for a company that does business in more than one country, odds are they will have a liaison from each country that can help you to navigate the intricacies of cultural difference. In Middle Eastern countries, there is a custom of baksheesh, a word that encompasses everything from tipping to alms for a beggar to out-and-out bribery. If you are working in the Middle East, there may be an expectation that you will help to grease the wheels; your supervisor should be able to brief you on company policy in such situations.S. E. Smith, “What Is Baksheesh?” wiseGEEK, http://www.wisegeek.com/what-is-baksheesh.htm (accessed February 14, 2010).

One excellent example of the ethical struggles unique to international business can be found in Michael Crichton’s book Rising Sun, which deals with the clash of Japanese and American business practices. At one point, two police officers are discussing how often they are offered gifts by the Japanese: “Giving gifts to ensure that you will be seen favorably is something the Japanese do by instinct. And it’s not so different from what we do, when we invite the boss over for dinner. Goodwill is goodwill. But we don’t invite the boss over for dinner when we’re up for a promotion. The proper thing to do is to invite the boss early in the relationship, when nothing is at stake. Then it’s just goodwill. The same with the Japanese. They believe you should give the gift early, because then it is not a bribe. It is a gift. A way of making a relationship with you before there is any pressure on the relationship.”Michael Crichton, Rising Sun (New York: Ballantine Books, 1992), 136. When you need to decline a gift yourself, apologize and explain that company guidelines prohibit your acceptance of the gift. You should then promptly report the gift to your supervisor.

Selling Yourself versus Stretching the Truth about Your Background and Experience

When you create your résumé, you are selling yourself to potential employers; where do you draw the line between putting your best foot forward and stretching the truth past the breaking point? The difference between “attended Pacific Coast Baptist College” and “received degrees in theology and psychology from Pacific Coast Baptist College” can be the difference between a successful tenure and an embarrassing resignation, as former RadioShack CEO David Edmondson discovered in 2006.Associated Press, “RadioShack CEO Resigns amid Resume Questions,” USA Today, February 20, 2006, http://www.usatoday.com/money/industries/retail/2006-02-20-radioshack-ceo_x.htm (accessed February 14, 2010). Edmondson, by claiming that he had earned degrees he had not (and, in one case, a degree not even offered by the college), set the stage for the embarrassing scandal that cost him his job. It can be tempting to gamble on the likelihood that an employer won’t do a background check—but even if you get away with a fib once or twice, it’s not something you should bet on for your entire career. Social networking will out you. The Internet has led to professional networks that are incredibly far reaching; your boss may have a connection on LinkedIn to a manager at the company you pretend to have interned for. And, of course, lying on your résumé is unethical; you should sell yourself, not an exaggerated version of yourself.

Your experiences as a waitress, cashier, retail store salesperson, babysitter, or any other part-time or summer job can be very valuable on your résumé. Being able to demonstrate that you can multitask under pressure, resolve problems quickly to customers’ satisfaction, be responsible, or increase sales are the types of skills that prospective employers are looking for from entry-level employees. Use your experience to tell a story about what makes you different and delivers value to your prospective employer. For example, if you want to pursue a career in finance, your experience handling money and balancing the cash drawer at the end of the day is important to highlight on your résumé. It’s also a good idea to put your most important and relevant internships or jobs first on your résumé rather than adhering to the traditional chronological order. Since you are just beginning your career, your most important jobs can be listed first. When you gain more experience, it’s better to use the chronological format. The bottom line is that you have a brand story to tell on your résumé; no matter what your background, you don’t need to stretch the truth.

Prospective employers want to see evidence that you are hardworking and have done things to distinguish yourself by holding part-time jobs, completing internships, participating in professional organizations, performing community service, and gaining other experiences. But one thing to remember about entry-level positions in virtually every industry is that none of the hiring companies expects you to come in and do the job from day one. The company will train you to do the job it wants done. That doesn’t mean that you won’t be asked to “jump in” and do things, because you will. But companies don’t expect you to have skills and experience that you will have after a few years of working. So use your résumé to sell yourself in an honest but compelling way.

Asking References to Speak about Your Personal Brand

ReferencesPeople who will speak on your behalf about your experience, skills, and character., simply put, are people you can rely on to speak on your behalf; they come in two flavors, personal and professional. Personal referencesFamily or friends who will speak on your behalf about your character and work ethic. are people like aunts or family friends—professional referencesManagers, supervisors, professors, mentors, and other professionals who can speak on your behalf about your character, experience, skills, quality of your work, and work ethic. are by far the more important and are usually supervisors, professors, or managers. While some prospective employers may accept personal references, you should have at least three professional references available if a prospective employer asks for them.

You might be wondering what employers do when they receive your references. This video is helpful to understand exactly what an employer may ask one of your references.

When choosing references, be sure that the people you have in mind have good things to say about you. It’s a good idea to keep in touch with your former boss from your internship or summer job. People with whom you have had a good working relationship can be excellent references. It’s always best to contact someone whom you would like to be a reference in person or on the phone. That way you will be able to let them know exactly how much you respect her, and it will give you an opportunity to cement your professional relationship. If she shows any kind of hesitation, you may not want to use her as a reference.

When you speak to a prospective reference, be professional and be specific. Here’s an example of a conversation you might have with a professor whom you are asking to be a reference. If you are asking a professor, it’s best to make an appointment or stop by his office.

Once you know whom you’d like for your references, ask them. This is not a situation in which you want to surprise people. Instead, talk with each person; you should personally speak with each person, preferably in person or by phone as opposed to by e-mail. (By all means, avoid the group e-mail requesting references.) Explain what the job is that you are applying for and ask for her permission to list her as a reference. Always personally thank each of your references, even if you don’t get the job. Express your gratitude—preferably in a handwritten note, but you must at least send an e-mail and let them know how things turned out. Don’t feel as if you let down your references if you didn’t get the job. Each of your references was in your situation at one point in time, and she didn’t get an offer from every job interview. Stay positive and keep in touch with your references. They will appreciate it, and you will keep your professional network strong.

If your potential employer wants references, he or she will ask for them; you should have them already prepared, but they should not be listed on your résumé.

You’ve Got the Power: Tips for Your Job Search

Reference Checks

When you are asked to provide references, you will need to provide for each reference: full name, mailing address, phone number, e-mail address, employer, job title, e-mail address, and relationship to you. Have the information collected in a professional document (see Figure 4.4 "Sample References"). Remember to get someone’s permission before listing him or her as a reference every time; the fact that your internship supervisor was willing to be a reference two years ago doesn’t mean that you can take his assent for granted in the future. Your references are chosen to be advocates for you—in return for their generosity of spirit, do them the courtesy of asking whether they are still willing to speak well of you.

Figure 4.4 Sample References

Letters of Recommendation

As you go through classes and internships, collect letters of recommendationLetter written by a professional (supervisor, manager, professor, or other professional) to testify to the skills and characteristics of a job candidate. for your portfolio; such letters demonstrate that people think highly of you. When you finish a class in which you did well, ask your professor for a letter of recommendation. When you finish an internship, ask your supervisor. Not only will these letters demonstrate your credibility, they will help to build your confidence. It’s a good idea to ask each of your references to write a letter of recommendation for you. That way you can bring the letters to your interview to demonstrate the support you have from professionals. This video gives you more insight into using letter of recommendation in addition to your list of references.

Don’t hesitate to reread your letters after you’ve had a career setback. If you’re going to effectively sell yourself, you need to believe in your personal brand. A reminder that Dr. Messimer thinks that you’re awesome could be just the pick-me-up you need in order to dust yourself off and reenter the job market with aplomb.