Ethical Culture Audit Project

By Morgan Bronson and Jordan Smith

Morgan and Jordan conducted the interview with Keith Harris. Morgan’s boyfriend works at Tyson Foods and Mr. Harris is his director.

Dr. Kish-Gephart
MGMT 4243
December 2, 2014

Section A
John Tyson founded Tyson foods in 1935. As of 2014, there are 115,000 employees. Tyson is headquartered in Springdale, AR. Tyson is one of the key leaders in the meat industry, including chicken, beef, and pork. It supplies chicken to a lot of fast food restaurants. For example, McDonald’s, Burger King, Kentucky Fried Chicken, Taco Bell, and Wendy’s. It also supplies Wal-Mart, Kroger, and IGA with frozen and fresh meat. Tyson had $34.4 billion in sales for year 2013. $5.7 billion of those sales were international. There are 106 food-processing plants. Of which there are 57 chicken plants, 13 beef plants, 9 pork plants, and 27 prepared food plants. These plants make 41,000,000 pounds of meat a week. 90,000 of their employees work in the plants in the United States. Tyson has plants in India, Brazil, China, and Mexico. They export to over 130 countries. Tyson Foods is becoming a widely recognized company. Tyson Foods’ code of conduct was last updated in 2013. They also have a supplier code of conduct. We interviewed Keith Harris on October 31, 2014 at 2:30 PM over the phone. The interview lasted approximately 21 minutes. He is the director of IS delivery services. He’s been with Tyson foods for 16 and half years. He doesn’t have a college degree. He did complete some college but didn’t graduate. His phone number is 479-290-1601. His email address is keith.harris@tyson.com.

Section B 1. Formal Systems:
For our examination of the formal systems of Tyson, we looked at the company structure, their hiring practices, orientation and training, codes and policies, and their performance management system. The details are as follows:

2.1 Structure
Ethical issues can be raised through management teams and an accessible ethic hotlines. In an interview with current CEO Donnie Tyson he explained the structure of Tyson as

"We view our company a lot more like peach tree than a pyramid," he notes, borrowing the analogy for Tyson's organizational structure from a favorite management tome, Orbiting the Giant Hairball: A Corporate Fool's Guide to Surviving with Grace. "My job is down at the root structure, where the trunk intersects with the ground. My job, like the root structure, is to funnel the resources and provide the structure and the stability that the organization needs to allow the people -- the peaches on our tree, the fruit on our tree -- to actually be engaged in our process. They become the star of the show." (Clancy).

This is indicative of a top-down structure that believes employees should see the types of behavior the company is looking for being modeled by the C-level executives down to floor level employees. By using themselves, they are working to enshrine the idea that their commonly repeated company motto of “Doing What’s Right.”

2.2 Hiring:
In the hiring process situational questions are asked because it gives an idea of what kind of ethics an employee might have. A common question posed to potential hires is “When was a time you disagreed with management and how did you respond to it?” This is asked because conflict resolution is necessary to be successful but also because there is a need to know if the potential employee is comfortable disagreeing with a superior when they do not feel ethically comfortable of what is being asked. According to manager, their personal values don’t always determine whether or not they would be a good hire. This is because in this business section, ethics and morality do not have as big of a role in some of the other departments. However, for operational purposes Tyson has been accused of hiring illegal immigrants and has had charges brought against them, they were subsequently fined. Such charges were said to indicate a cultural issue. (Barboza) This sends a conflicting issue to employees that ethics matters but not in every case.

1.3 Orientation and training:
Tyson refers to its orientation training as “onboarding.” This process does involve ethics training involving presentations and classes. There is a buddy system in place to hold employees accountable and teach them how the company works as well as how to do their jobs more effectively.

“Every Team Member, and the board, receives annual ethics training to ensure the Code of Conduct is understood and followed. The training conveys why it is important to do the right thing and explains our ethics culture. It encompasses sessions for hourly and management Team Members. We customize the training material and delivery for different segments of our workforce, review it annually, and update it as needed.” (Tyson).

Through training and the important of “Doing What’s Right,” Tyson has worked to underscore the value of ethical business.

1.4 Codes/policies
There is a published company code of ethics. For understanding how to remain in compliance with the code, the company advises:

Our Code attempts to address the most common legal and ethical issues you may encounter; however it’s impossible to address every business situation in one document. When deciding whether an action is ethical and in compliance with our Code, ask yourself the following questions:
• Does my action align with our Core Values?
• Do I feel like I’m Doing What’s Right?
• Is it consistent with the way I would want to be treated?
• How would it look if my decision is published in the newspaper?
• Is it legal?

In addition to those questions, the company also advises that since they are a global business that, “When differences exist between the Code and local law or customs, you should apply whichever sets the highest standard.” (Tyson) They are sending the message to employees that personal integrity and ethics need to be considered at all times but also that the law must be obeyed.

1.5 Performance Management System
There is an annual review process. The review stresses that it is not just what you do but how you get it done. While they do not have a specific ethics assessment, integrity is part of the annual teams review process. Disciplinary action determined by type of infraction but ethical situations like clear cut stealing or gifts outside of guidelines are dealt with severely. The review process reinforces the idea that acting with integrity is “Doing What’s Right.” 1 Informal Systems

2.1 Norms: For this business section, they use license counts for software to ensure that employees are using software for work purposes and not home use. The code of conduct states their cultural tenets as:

* We care about each other. * We do what we say we are going to do. * We say it in the room. * We know our business and deliver results. * We are passionate about taking care of our customers and consumers. * We anticipate, embrace, and thrive on change. * We run it like we own it. * We work hard and have fun as a TEAM.

2.2 Rituals
Many of the rituals described involve charity actions such as United Way fundraising, Children’s house, and Secret Santa programs for employees to help family’s with financial difficulties purchase gifts for children. This is in alignment with Tyson as a faith based company.

2.3 Role models
Keith Harris wants people to do things the “right way” even if it is difficult. Donnie Smith is seen as a role model. Donnie Smith believes in service leadership. (Souza). And servant leadership can best be described by its creator, Robert Greenleaf as “A servant-leader focuses primarily on the growth and well-being of people and the communities to which they belong. While traditional leadership generally involves the accumulation and exercise of power by one at the “top of the pyramid,” servant leadership is different. The servant-leader shares power, puts the needs of others first and helps people develop and perform as highly as possible.” (Greenleaf).

2.4 Stories Don Tyson was a very accessible person and expressed genuine interest in employees and created a culture where everything starts at the top and trickles down, according to Keith Harris. Donnie Smith also has that same type of personality.

Section C

3. Report

Based on our research, there seems to be in congruency in their ethical culture. It appears to be functioning at a high level for employees in that employees are expected to follow the code of conduct and have a constant remind of “Doing What’s Right.” However, as we have pointed out, there has been some high level charges of corruption when it comes to things like bribery, animal cruelty, and immigration issues. It can be argued these are isolated incidents but it seems to point to a more relative sense of ethical behavior. That it applies to some employees but not to others. There have been steps made to curb illegal immigrant workers (Arkansas Business). Yet, in regards to their bribery scandal it appears that they were reassigned and then subsequently left. (Stewart). In our conversation with a manager, he discussed severe repercussions for major ethical breaches. This is alarming in that it appears that some employees are above consequence for their actions. They have made great strides in reducing cases of animal cruelty when brought up, however. (NBC). For a highly visible company like Tyson that controls much of the meat product in the U.S, it is imperative that they get out in front of those type of allegations so they can mitigate possible negative backlash. What follows then from here is an assessment of what they have gotten right since we have addressed weaknesses in their ethical culture. Under the leadership of Donnie Smith, Tyson has a reputation for being a religious company and with his faith based leadership comes certain expectations about what the company ought to do and how its employees ought to behave. After being found guilty of offering bribes to former Secretary of Agriculture Mike Epsy, Tyson created an Ethics Office and a code of conduct. (Copeland). Since the creation of the Ethics Office and a code of conduct, Tyson has constantly stressed the importance of “Doing What’s Right.” This a common refrain from Keith Harris and from employees under him. Donnie Smith’s philosophy of servant leadership has also heavily influence the corporate norms and myths about the company. Their commitment to growing employees both through skill and ethics training has even effected the type of language that they use. As previously mentioned, the phrase “Doing What’s Right” has become deeply ingrained in the way that employees think and are expected to act. From our findings, it seems apparent that Tyson has a rule-based or principled climate. Because food production is a highly regulated industry, they have to follow the rules laid out by the legal institutions that govern their business in whatever region they are doing business. Concerns about food safety and unethical treatment of their animals could and have hurt their bottom line so it is imperative that they do whatever they can to risk volatility in their business operations. Now, as we have previously mentioned there does seem to be issues with their cultural alignment. Specifically that their formal and informal systems promote ethical behavior but do not always seem to punish those offenses as evidenced by the reassignment of offenders in their bribery scandal instead of outright termination. (Stewart). We recommend several initiatives to strengthen their ethical culture. First, we recommend strengthening their Ethics office to be more effective in dealing with high level violations. Accusations of bribery and corruption should be thoroughly investigated and dealt with swiftly. Rather than the revolving door that seems to occupy the executive level of any large corporation, termination should be the first action taken if allegations of misconduct are proven true. In addition, executive contracts should be written in such a way that if gross misconduct leads to termination then bonuses should not be paid. If the company culture continues to allow the golden parachute to exist, then the repercussions of highly unethical behavior are mitigated. Second, we recommend strengthening ties with governmental organizations dedicated to preventing undocumented immigrants, such as their new partnership with ICE, from being ferried into the country to work for low wages on farms and in their processing facilities. We also recommend working with undocumented workers that are already present to help provide them with a path to citizenship. If there is no longer an incentive to use low wage undocumented workers, we believe the practice would cease or at the very least become so difficult to use that there is little to no value in doing so. Third, we recommend more transparency in working with their suppliers and more cooperation with animal rights groups that advocate for the rights of animals. While is a fact of life that for meat production to exist there must be killing, we believe that Tyson can work with these organizations to limit unnecessary cruelty while enhancing their reputation in an atmosphere where there are ever increasing demands on more ethical, humane, and sustainably sourced meat products.

Works Cited
"UPDATE: Tyson Foods Joins ICE Program to Curb Hiring Illegal Workers." Arkansas Business. 11 Jan. 2011. Web. 2 Dec. 2014. <http://www.arkansasbusiness.com/article/35313/update-tyson-foods-joins-ice-program-to-curb-hiring-illegal-workers>.
"Tyson Foods, Inc. Code of Conduct." Code of Conduct. 1 Oct. 2013. Web. 2 Dec. 2014. <http://ir.tyson.com/files/doc_downloads/Governance Documents/Tyson-Code-of-conduct-Oct-13.pdf>.
Barboza, David. "Tyson Foods Indicted in Plan To Smuggle Illegal Workers." The New York Times. 20 Dec. 2001. Web. 2 Dec. 2014. <http://www.nytimes.com/2001/12/20/us/tyson-foods-indicted-in-plan-to-smuggle-illegal-workers.html>.
Clancy, Heather. "Turnaround Artist | Donnie Smith, CEO, Tyson Foods." Smart Planet. 8 Apr. 2013. Web. 2 Dec. 2014. <http://www.smartplanet.com/blog/business-brains/turnaround-artist-donnie-smith-ceo-tyson-foods/>.
Copeland, Dr. John D. "THE TYSON STORY: BUILDING AN EFFECTIVE ETHICS AND COMPLIANCE PROGRAM." Drake Journal of Agricultural Law 5.Winter (2000): 306-53. Web. 2 Dec. 2014. <http://students.law.drake.edu/aglawjournal/docs/agVol05No2-Copeland.pdf>.
Greenleaf, Robert K. "What Is Servant Leadership?" Robert K. Greenleaf Center for Servant Leadership. Web. 2 Dec. 2014. <https://greenleaf.org/what-is-servant-leadership/>.
Stewart, James B. "Bribery, but Nobody Was Charged." The New York Times. 24 June 2011. Web. 2 Dec. 2014. <http://www.nytimes.com/2011/06/25/business/25stewart.html?pagewanted=all>.
NBC. "Tyson Foods Changes Pig Care Policies after NBC Shows Undercover Video." NBC News. NBC, 10 Jan. 2014. Web. 2 Dec. 2014. <http://investigations.nbcnews.com/_news/2014/01/10/22245308-tyson-foods-changes-pig-care-policies-after-nbc-shows-undercover-video>.
Souza, Kim. "Tyson Foods CEO Shares Views on Leadership, 'trust' in the Workplace." The City Wire. 9 Oct. 2014. Web. 2 Dec. 2014. <http://www.thecitywire.com/node/35057#.VH30OIvF_84>.