Reference no: EM133176824

CASE STUDY

The State of Ethics at IBM

One advantage IBM has in meeting its standards for trust is that it is part of a relatively trusted industry. In the Edelman Trust Barometer, an annual survey of public attitudes towards a variety of institutions, people from around the world rated the technology industry as the industry they most often trust to do what is right - mainly because they see a tech company as able to benefit society. People are, however, concerned about data security and privacy.

IBM is addressing these issues. It has a set of policies aimed at building trust, including a policy for business conduct and ethics and a policy for protecting data privacy. The ethics policy states, 'It is IBM policy to conduct itself ethically and lawfully in all matters and to maintain IBM's high standards of business integrity.' It puts employees on notice that there are consequences for unethical conduct. IBM's policies call for fairness, equity, a commitment to quality and compliance with laws, including employment and anti-corruption laws. Its data privacy laws call for employees to collect only relevant personal information, keep it as accurate as possible and take measures to keep it secure among other requirements.

Compliance with ethical standards is most likely when managers and employees at all levels are committed to the standards. An outcome of such practice was a statement of three values:

1. Dedication to every client's success.

2. Innovation that matters, for our company and the world.

3. Trust and personal responsibility in all relationships.

These statements appear on the company's website, where any employee or concerned citizen can be reminded of what IBM is striving to achieve. 

Even with a formal statement and consequences for behaviour, maintaining ethical conduct is a challenge, especially for a global company, because employees encounter differences in standards and practices in other countries. IBM was charged by the Securities and Exchange Commission (SEC) with bribing government officials in South Korea and China over more than 10 years. In its settlement, IBM must file monthly reports with the SEC to demonstrate its effort to avoid future violations of the Foreign Corrupt Practices Act. Living up to its own code of ethics will require continued vigilance at IBM.

Source: Bateman, T.S and Snell, S.A (2015). Management: Leading and Collaborating in a Competitive World (11^th Ed), McGraw-Hill. pp167.

Question: 

Evaluate how the ethical decision-making process takes place. Support your evaluation with relevant examples.