Informal Organizational Dimensions
In addition to these formal dimensions of
managing social responsibility, there are also informal ones. Leadership, organizational
culture, and how the organization responds to whistle-blowers all help shape and define
people’s perceptions of the organization’s stance on social responsibility.
Leadership practices and organizational culture can go a long way toward defining the
social responsibility stance an organization and its members will adopt.
26
As described
earlier in this chapter, ethical leadership often sets the tone for the entire organization.
For example, Johnson & Johnson executives for years provided a consistent message to
employees that customers, employees, communities where the company did business,
and shareholders were all important—and primarily in that order. Thus, when packages
of poisoned Tylenol showed up on store shelves, Johnson & Johnson employees did not
need to wait for orders from headquarters to know what to do: They immediately pulled
all the packages from shelves before any other customers could buy them.
27
From a dif-
ferent perspective, Walmart has recently been charged with bribing officials in other
countries in order to sidestep local regulations and expedite building permits for new
stores. Investigators allege that top managers, including then-CEO H. Lee Scott, knew
about these practices but did nothing to stop them.
28
Whistle-blowing
is an employee’s disclosure of illegal or unethical conduct by others
within the organization.
29
How an organization responds to this practice often indicates
its values as they relate to social responsibility. Whistle-blowers may have to proceed
through a number of channels to be heard, and they may even get fired for their
efforts.
30
Many organizations, however, welcome their contributions. A person who
observes questionable behavior typically first reports the incident to his or her boss. If
nothing is done, the whistle-blower may then inform higher-level managers or an ethics
committee, if one exists. Eventually, the person may have to go to a regulatory agency or
even the media to be heard. Harry Markopolos, a portfolio manager at Rampart Invest-
ments, spent nine years trying to convince the Securities and Exchange Commission
(SEC) that a money management firm run by Bernard Madoff was falsifying the results
it was reporting to investors. Only when the U.S. economy went into recession in 2008
did the truth about Madoff come out.
31
In response, the SEC announced plans to over-
haul its whistle-blowing system.
32
More recently, Bradley Birkenfeld provided evidence
proving that Swiss banking giant UBS was evading corporate taxes. UBS eventually was
fined $780 million for its transgressions.
33
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