Answer to Question 1
Answer: An organization's structural design can influence whether employees behave ethically. Those structures that minimize ambiguity and uncertainty with formal rules and regulations and those that continuously remind employees of what is ethical are more likely to encourage ethical behavior. Other structural variables that influence ethical choices include goals, performance appraisal systems, and reward allocation procedures.
Although many organizations use goals to guide and motivate employees, those goals can create some unexpected problems. One study found that people who do not reach set goals are more likely to engage in unethical behavior, even if they do or do not have economic incentives to do so.
An organization's performance appraisal system also can influence ethical behavior. Some systems focus exclusively on outcomes, while others evaluate means as well as ends. When employees are evaluated only on outcomes, they may be pressured to do whatever is necessary to look good on the outcomes, and not be concerned with how they got those results.
Closely related to the organization's appraisal system is how rewards are allocated. The more that rewards or punishment depend on specific goal outcomes, the more employees are pressured to do whatever they must to reach those goals, perhaps to the point of compromising their ethical standards.
Answer to Question 2
Answer: The Global Compact is a document created by the United Nations outlining principles for doing business globally in the areas of human rights, labor, the environment, and anticorruption. It serves as a guide to being ethical in international business.
The 10 principles outlined in it are:
Human Rights:
Principle 1: Support and respect the protection of international human rights within their sphere of influence.
Principle 2: Make sure business corporations are not complicit in human rights abuses.
Labor Standards:
Principle 3: Freedom of association and the effective recognition of the right to collective bargaining.
Principle 4: The elimination of all forms of forced and compulsory labor.
Principle 5: The effective abolition of child labor.
Principle 6: The elimination of discrimination in respect to employment and occupation.
Environment:
Principle 7: Support a precautionary approach to environmental challenges.
Principle 8: Undertake initiatives to promote greater environmental responsibility.
Principle 9: Encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption:
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
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