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misperceptions about our values. It is equally imperative that we all learn from this. Full compliance with both the letter-and spirit-of our policies is imperative. Anything less is unacceptable."

Over time, Alcoa's tenacious focus on safety has paid off. In 2012, Alcoa's lost workday rate .was 0.036. (This number represents the number of injuries and illnesses resulting in one or more days away from work per 100 full-time workers.) In the 12-month period end- ing December 31, 2011,

o 47.8 percent of Alcoa's 242locations worldwide had zero recordable injuries. o 79.2 percent of Alcoa's 242locations worldwide had zero lost workdays. o 99.9 percent of Alcoa employees had zero lost workdays.

Alcoa was rapidly closing the gap between its safety record and that of DuPont, which had long been the benchmark for safety among American industrial companies. This achievement was especially significant since Alcoa had completed several substantial ac- -quisitions during this time in many countries whose safety regulations had not yet matured to the level of those in the United States.

Sources: Quotations by Paul O'Neill are from his July 3. 1996, memo to all Alcoa business unit presidents and subsequently distribut€d to all Alcoa managers. The new Alcoa values are from an internal company memo from Klaus Kleinfeld, Alcoa's CEO, to his employees on July 2, 2012, and is used with permission. This case was developed with the assistance of long-time Alcoa employee Perry Minnis, formerly the Global Director of Ethics, Compliance, and Advisory Services at Alcoa before his retirement from the company.

1. How would you classify Alcoa's ethical work climate? Which ethical criterion, as shown in Figure 5.1, was used by the company: egoism (self-centered), benevolence (concern for others), or principles (integrity approach)? Or, using Professor Paine's two distinct ethics approaches, as discussed in this chapter, was Alcoa's approach more compliance or integrity? :;

2. What role did top management commitment play in developing the ethical work climate and organizational performance seen at Alcoa? What other ethical safeguards are men- tioned in the case to support the company's efforts at developing a strong ethical culture?

3. Was O'Neill justified in terminating the manager for his lack of reporting the workplace accidents, even though no serious harm resulted from the workplace incident?

4. Can Alcoa's "values in practice" be adopted by other organizations as a universal set of ethical standards leading to ethical employee behavior?

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bribery, 105 corporate culture, 91 employee ethics training, 103 ethical climate, 92 ethi<;s and compliance officer, 101

www.TheCRO.com ~.dii.org

www.theecoa.org www.ethicaledge.com ethisphere.com www.ethics.org/resources www.globalethics.org www.saiglobal.com

' www.business-ethics.org www.corporatecompliance.org www.transparency.org www.nw3c.org

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ethics audit, 103 ethics policies or codes, 100 ethics reporting mechanisms, 102 laws, 109

U.S. Foreign Corrupt Practices Act, 107 white-collar crime, 109

CR: Corporate Responsibility Magazine Defense Industry Initiative on Business Ethics and Conduct Ethics & Compliance Officers Association Ethics and Policy Integration Centre Ethisphere Institute Ethics Resource Center Institute for Global Ethics SAIG~b~ ~

International Business Ethics Institute Society of Corporate Compliance and Ethics- Transparency International National White Collar Crime Center

Discussion Case: Alcoa's Core Values in Practice Alcoa began under the name of the Pittsburgh Reduction Company in 1888, changing its name to the Aluminum Company of America (Alcoa) in 1907. The company was originally founded on a $20,000 investment to capitalize on Charles Martin Hall's invention to smelt bauxite ore into the metal known as aluminum. Within a few years, Alcoa had developed into a model of large-scale vertical integration with control over all the inputs to aluminum production.

Since its inception, Alcoa has had a very strong values-based culture. Employees learned early in their careers that every decision they made and everything they did must be aligned with the company's values. In 1985, Fred Fetterolf, then president, decided the company needed to document the values that all employees must live by: Integrity; Envi- ronment, Health, and Safety; Customer; Accountability; Excellence; People; and Profita- bility. (In 2012, Alcoa slightly revised its core values-Integrity; Environmental, Health and Safey; Excellence; Respect; and Innovation.)

In the 1990s Alcoa's CEO, Paul O'Neill, communicated his unswerving belief in the importance of health and safety-one of the company's core values. As is the case with many large organizations, Alcoa had implemented a global ethics and compliance pro- gram, and the focus on health and safety was interwoven through the company's program. The Alcoa program included all the basic elements specified in the U.S. Federal Sentenc- ing Guidelines and Sarbanes-Oxley Act. Alcoa had an ethics and compliance officer who