Social Performance of a Pured Company - Assignment Example

? Pured® is a beverage company which manufactures and distributes bottled mineral water and packaged fruit juice as products. It is a medium-sized public limited company launched in 2009, with 68% public ownership and 32% private capital of its total worth. The company has 190 employees (165 contracted employees and 25 project-based employees) working in three cities. Because Pured is a beverage company specializing in bottled mineral water and packaged fruit juices, the ethical codes of conduct of other companies who manufacture and distribute bottled mineral water and packaged fruit juice will be examined and critiqued. In this case the following companies will be examined: Snapple, which distributes and manufactures fruit juices and teas; Nestle, whose subsidiary, Perrier, is a brand of mineral water; and Dole, who manufactures and distributes various fruit juices. The Federal Sentencing Guidelines specifically state that organizations are to follow and implement a program that addresses compliance with ethics programs (Federal Sentencing Guidelines §8B2.1). Specifically, this section is concerned with ensuring that all organizations not only have an effective ethical Code of Conduct, which specifically addresses that organizations must use due diligence to prevent and detect criminal conduct and promote an effective organizational culture that encourages ethical conduct and law compliance, but that these organizations are effective with ensuring that employees are aware of the organizational Code and follow it. This paper will explain who Pured will not only implement an effective program but that its employees are aware of the Code of Conduct and will follow it. Introduction Pured® is a beverage company which manufactures and distributes bottled mineral water and packaged fruit juice as products. It is a medium-sized public limited company launched in 2009, with 68% public ownership and 32% private capital of its total worth. The company has 190 employees (165 contracted employees and 25 project-based employees) working in three cities. Because Pured is a beverage company specializing in bottled mineral water and packaged fruit juices, the ethical codes of conduct of other companies who manufacture and distribute bottled mineral water and packaged fruit juice will be examined and critiqued. In this case the following companies will be examined: Snapple, which distributes and manufactures fruit juices and teas; Nestle, whose subsidiary, Perrier, is a brand of mineral water; and Dole, who manufactures and distributes various fruit juices. Snapple Dr. Pepper and Snapple are a part of the Dr. Pepper Snapple Group, Inc., and their Code of Business Conduct and Ethics is available at investor.drpeppersnapple.com. They have specific tenets regarding conflicts of interest, political contributions, confidential information, integrity and fair dealing, employment of family, and theft or misuse of assets. Since Dr. Pepper and Snapple is a large organization, the Guidelines Manual states that they shall devote more formal operations and greater resources in meeting the guideline requirements (Federal Sentencing Guidelines). The guidelines also state that the company must set up standards and procedures to prevent and detect criminal conduct; that the company must not knowingly hire somebody who has engaged in illegal activities or has previously broken compliance with ethics programs; that the company shall communicate the ethics policies periodically; that the ethics program shall be enforced consistently; and that if there is criminal conduct, the organization shall take step to appropriately respond (Federal Sentencing Guidelines). In the case of Dr. Pepper/Snapple, there is very little in the Code of Business Conduct and Ethics page that would suggest that they are conforming with the Federal Guidelines. They do not address criminal conduct, except to say that the employees of the firm must follow all laws, rules and regulations. They do not outline what steps they will take if there is a violation of the rules, and they do not indicate what will happen if an employee is caught violating the law. They also do not address the fact that they will take reasonable efforts to ensure compliance and to ensure that they are not hiring a law breaker or somebody who has violated an ethics program before. Moreover, there is not an indication of how they promote and enforce their ethics program in their corporation. Nestle Nestle does a better job of complying with the guidelines than does Dr. Pepper/Snapple. Specifically, unlike Dr. Pepper/Snapple, Nestle addresses criminal conduct, specifically addressing insider trading, fraud, and bribery and corruption. They helpfully define each of these terms, as well as what the employees duties are to avoid each of these offenses. They also state that they reserve the right to monitor employees, including the employees’ e-mails, data and files. They also indicate that non-compliance with any of these Codes of Conduct might result in criminal charges. Furthermore, they ate that their employees are required to report any actions or practices which might violate their internal Code and/or the Law. What is missing is information about how the Code of Conduct is disseminated to the employees. What is also missing is information about their hiring practices, specifically, what steps are taken to ensure that a person who has engaged in illegal activities or conduct inconsistent with an ethics program is not hired by this company. Also, it does not address how often they assess the risk of criminal conduct (Nestle Code of Business Conduct). That said, since they specifically addressed criminal conduct in their Code, they are doing better than Snapple, who does not address criminal conduct. Dole Dole does an even better job than Nestle in addressing specific criminal concerns. They begin by generically stating that all employees must comply with all governmental laws, rules and regulations and that if there is any question about whether something is illegal, the employee should consult the appropriate personnel, which is listed on the back page of the Code. They also specifically address that the employees are to abide by anti-slavery and anti-human trafficking laws, antitrust/competition laws, embargo and anti-terrorist laws, anti-corruption laws, fraud laws, insider trading laws and laws regarding bribery. They also specify actions that they will take if an employee violates their Code or the applicable laws. Code violations will result in termination. There must be prompt reporting of anybody not abiding by their Code or the laws. Dole also briefly explains the anti-trust competition laws and insider trading laws. That said, while Dole does a good job of explaining what laws are specifically to be observed, and delineates the penalties for breaking these codes and laws, as well as specifies that it will not do business with suppliers who engage in child labor or trafficking, it suffers from some of the same faults that Nestle does. Specifically, it does not address that it will not hire people who have broken the law, it does not specify how often and the procedures for ensuring that their ethics codes and laws are followed, and it does not specify how often they will assess risks (Dole Code of Conduct). Analyzing Ethical Challenges and Creating a Code of Conduct One of the challenges that Pured might face is that there need to be promotion of an organizational culture which encourages ethical conduct. This would mean that ethical conduct must permeate throughout the organization, to where everybody knows exactly what they are and are not supposed to be doing, and everybody is aware of the laws. However, since the company is relatively small – only 190 employees working in three cities – it would be less challenging to institute this culture than in a larger company. The Code of Conduct for Pured will go as follows: 1) All employees must abide by all relevant laws, including, but not limited to: anti-trust laws, fraud laws, bribery laws, insider trading laws, and anti-trafficking laws. 2) All new employees must attend a 2 hour seminar upon employment which explains each of these laws. Moreover, each employee is required to review a brochure which explains these laws in detail, and explains what would be considered to be violations of each of these laws. 3) All current employees must attend a mandatory 2 hour seminar every six months which detail the laws and what would be considered violations of each of these laws. 4) All current employees must pass a 1 one examination on these laws, which will be given one week after each seminar. This examination is not open book or open notes, so the laws and violation of these laws must be memorized by each employee. If an employee fails this exam, he or she is put on probation until the next time a seminar is held for the employee, and if the employee fails again, the employee shall be terminated. 5) All employees shall report any other employees who are violating the Codes of Conduct and/or governmental laws, rules or regulations. 6) The company shall engage in risk management procedures, every six months, which assess the risks of criminal conduct and will formulate steps to implement to ensure that these risks are minimized. 7) The company shall do extensive background checks, and will not hire anybody who has engaged in illegal activities or has engaged in unethical conduct in the past. Influence of the Guidelines on the Ethics Programs The Federal Guidelines governing compliance and ethics programs for organizations, which is §8B1.4 of the Federal Sentencing Guidelines, is what forms the basis for the ethics program which will be adopted by Pured. Specifically, these guidelines are focused on ensuring that organizations have a specified program in place which ensures compliance with laws, rules, regulations and codes of conduct. Each of the guidelines put in place above address each of the relevant parts of the Federal Sentencing Guidelines. Anticipated Challenges and Setbacks The most obvious challenge would be that employees will not be willing to complete a one hour examination regarding the ethics rules and regulations, as well as the governmental laws, rules and regulations. This is probably something that many of the employees are not used to, and, perhaps they feel that attending these seminars is enough. However, the employees must be actively engaged with these rules, laws and regulations, which means that they must know them, and giving them an examination on them is the best way to ensure that they do know them. The best way to overcome this objection is to explain to the employees why it is necessary. Moreover, the employees must know that they must pass the examination, in two tries, to keep their jobs, which is incentive for them to pass. Beyond this, there should be some kind of reward system for employees who get every question correct, such as, perhaps, these employees may take an extra vacation day or perhaps would be granted a small bonus. This would incentivize the employees to not only pass, but do well on the exam. How Will the Codes of Conduct Remain Relevant? The Codes of Conduct will remain relevant because they will be under review, once a year. That way, if there is something that needs to be properly addressed, the Codes can reflect this. A good example of this would be if there is a particular problem with Internet usage by employees. Guidelines specifying what is and is not proper with regards to employee Internet usage can then the formulated, addressing the specific problem and giving specific solutions and interventions. Cultural forces may also be reflected in the changing Codes of Conduct, as issues such as multi-cultural sensitivity may be addressed through the Code, as necessary. Changing political forces will mean changing regulations and rules, and the Code needs to be updated whenever a new rule or regulation is put into place, and employees must undergo a seminar when this occurs. Changing economic forces may be addressed through the Code, as there might be issues regarding anti-trust which specifically cause economic damage to the Pured, and, if there are repeated violations of this, the company may address this in a special seminar as well. Bibliography Federal Sentencing Guidelines. Available at: www.ussc.gov/guidelines Nestle Code of Business Conduct. Available at: http://www.nestle.com/Common/NestleDocuments/Documents/Library/Documents/Corporate_Governance/Code_of_Business_Conduct_EN.pdf Dr. Pepper Snapple Group, Inc. “Code of Business Conduct and Ethics.” Available at: http://investor.drpeppersnapple.com/documentdisplay.cfm?DocumentID=5431 Dole Food Company, Inc. “Code of Conduct.” Available at: http://investors.dole.com/phoenix.zhtml?c=231558&p=irol-govConduct Read More