OVERVIEW

Although most corporations have developed some aspects of each of the key areas that we have been talking about, a single broad process for avoiding corporate disasters, certainly for most stage one and stage two companies, has remained largely "unmanaged." However, as the outside world begins to exert greater pressures on corporations to behave well through aggressive mass media, pressure groups, legislation, regulation, and litigation progressive companies are realizing just how imperative and strategically important it is that they develop and coordinate these four key areas, in order to avoid foolish and costly ethical or legal blunders.

Of course no company will be able to protect itself against all types of risks. The very nature of decision making and discretion means that organizations will still make catastrophically bad decisions from time to time on discretionary issues regarding such areas as product marketing, advertising, or public relations. However, at the very least, these decisions should be made based on a clear understanding of the issues, on the opinion of important stakeholders, and on the likely repercussions to the organization.

More importantly, corporations can go a long way toward preventing the compliance-based violations that can ruin a reputation and cost the company millions, and that usually come about through unintentional actions or because executives are never made aware of the problems. To do that, a company must identify likely risks before they occur, assess their exposure, and then take logical steps to eliminate the risk and to mitigate damage, a type of decision-making...