VOT Task 2
Paradigm Toys Ethics Audit
Conducted by Katie Gardner, Business Manager
After careful review and analysis of the ethics audit performed on Paradigm Toys, I highly
recommend that the company use a combination of legitimate and reward power when it comes to
establishing an ethical climate at Paradigm Toys. Legitimate power is the power received from one’s
formal position of authority, and reward power is the power that comes from being in control of the
rewards that will be issued. In order to have a strong ethical culture, I believe that it is vital for Paradigm
Toys to capitalize on its legitimate power by having support from the company and departmental
executives, directors, and managers. When each manager expects the highest ethical conduct from its
subordinates, and in turn formally and informally exhibits ethical conduct themselves, then this legitimate
power will aid in creating a strong culture of ethics company-wide. Furthermore, it is proposed that we
utilize reward power as a supplement to the legitimate power, and create reward programs that will
incentivize employees to behave ethically, raise concerns, and consider how their actions and decisions
will affect those around them, including the company.
To ensure that both powers operate at their maximum, we will have strict policies in place to
discipline individuals that are found behaving unethically (supporting the legitimate power), and the
rewards systems company-wide will be carefully evaluated and adjusted so that unethical behavior is
never rewarded, and in some cases purely ethical behavior is rewarded (supporting the reward power).
There are several stakeholders that influence Paradigm Toys, and they can be divided into two
groups - (1) primary stakeholders, and (2) secondary stakeholders. Primary stakeholders are those that
will be directly affected by the company and may therefore directly...