Ethics
Ethics
Ethics
Ethics
Ethics
A code of moral standards of conduct for what is good and right as opposed to what is bad or wrong.
Ethical Behavior
That which is right or good in the context of governing moral code. Ethical behavior is value driven
Ethics
MODULE GUIDE 4.1
Ethical behavior is values driven. What is considered ethical varies among moral reasoning approaches. What is considered ethical can vary across cultures. Ethical dilemmas arise as tests of personal ethics and values. People have tendencies to rationalize unethical behaviors.
ETHICS
Values
Values
Broad beliefs about what is appropriate behavior
Terminal Values
Preferences about desired end states
Instrumental Values
Preferences regarding the means to desired ends
ETHICS
Moral Reasoning
Moral Reasoning
Reasons for various ethical practices
ETHICS
ETHICS
Some Companies code of conduct based upon the principle of ethical relativism assume that local morality is an adequate guide for ethical behavior
ETHICS
Ethical Dilemma
Ethical Dilemma
A situation that, although offering potential benefits, is unethical. One of the most common ethical dilemmas occurs when a companys culture conflicts with an employees personal ethics.
A good society is one that treats individuals fairly and protects their rights. This requires:
Efficient, non-corrupt government and business A clean, non-toxic environment
A good individual has the qualities that promote stable, long-lasting relationships, families, and communities.
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Exhibit 5.7
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Source: Based on L. Kohlberg, Moral Stages and Moralization: The Cognitive-Development Approach, in T. Lickona (ed.). Moral Development and Behavior: Theory, Research, and Social Issues (New York: Holt, Rinehart & Winston, 1976), pp. 3435.
Exhibit 5.8
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Individual Characteristics
Personality Variables
Ego strength
A personality measure of the strength of a persons convictions
Locus of Control
A personality attribute that measures the degree to which people believe they control their own life. Internal locus: the belief that you control your destiny. External locus: the belief that what happens to you is due to luck or chance.
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Structural Variables
Organizational characteristics and mechanisms that guide and influence individual ethics:
Performance appraisal systems Reward allocation systems
Good structural design minimizes ambiguity and uncertainty and fosters ethical behavior.
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Exhibit 5.9
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Ethical Leadership
Managers must provide a good role model by:
Being ethical and honest at all times.
Telling the truth; dont hide or manipulate information. Admitting failure and not trying to cover it up.
Communicating shared ethical values to employees through symbols, stories, and slogans.
Rewarding employees who behave ethically and punish those who do not. Protecting employees (whistleblowers) who bring to light unethical behaviors or raise ethical issues.
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This cartoon implies the importance of shifting from the ethics of scandal to the ethics of strategy Ethics is simply the proper way to conduct business and, despite what the cartoon says, a responsible business is risk-free.
ORGANIZATIONAL ETHICS
MANAGEMENT TIPS
Checklist for dealing with ethical dilemmas
Step 1. Recognize the ethical dilemma. Step 2. Get the facts. Step 3. Identify your options. Step 4. Test each option: Is it legal? Is it right? Is it beneficial? Step 5. Decide which option to follow. Step 6. Ask the Spotlight Questions: To double check your decision.
How would I feel if my family found out about my decision? How would I feel if the local newspaper printed my decision?
ETHICS
Organizational Ethics
MODULE GUIDE 4.2
Personal and contextual factors influence ethical conduct Training in ethical decision making may improve ethical conduct Protection of whistleblowers may encourage ethical conduct Managers acting as positive role models may motivate others toward ethical conduct Formal codes of ethics set standards for ethical conduct
ORGANIZATIONAL ETHICS
Ethics Training
Ethics Training
Seeks to help people understand the ethical aspects of decision making and to incorporate high ethical standards into their daily behavior.
Code of Ethics
A formal statement of values and ethical standards
ORGANIZATIONAL ETHICS
Ethics Training
Spotlight Questions
Highlight the risk of public exposure of ones actions:
How would I feel if my family found out about my decision? How would I feel if the local newspaper printed my decision?
ORGANIZATIONAL ETHICS
Whistleblowers
Whistleblowers
Persons who expose organizational misdeeds in order to preserve ethical standards and protect against wasteful, harmful, or illegal acts. Many whistleblowers were / are fired for their actions. State and federal laws now offer some protection
Whistleblowers
Expose misdeeds of others to:
Preserve ethical standards Protect against wasteful, harmful, or illegal acts
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Barriers to whistleblowing include: Strict chain of command Strong work group identities Ambiguous priorities Organizational methods for overcoming
whistleblowing barriers:
Ethics staff units who serve as ethics advocates Moral quality circles
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ORGANIZATIONAL ETHICS
Managers
Management Behavior
In order to have a positive impact on ethical conduct throughout an organization, those at the top must walk the talk.
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Cultural universalism
Behavior unacceptable in ones home environment should not be acceptable anywhere else. Considered by some to be ethical imperialism
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Figure 2.2 The extremes of cultural relativism and ethical imperialism in international business ethics.
Source: Developed from Thomas Donaldson, Values in Tension: Ethics Away from Home, Harvard Business Review, vol. 74 (September-October 1996), pp. 48-62.
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Create culture that values employees, customers, and suppliers. Keep a safe workplace. Produce safe products and services.
Respect for basic rights Protect rights of employees, customers, and communities.
Avoid anything that threatening safety, health, education, and living standards. Support social institutions, including economic and educational systems. Work with local government and institutions to protect environment.
Be good citizens
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potential for personal and/or organizational benefit, may be considered unethical. Ethical dilemmas include:
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yourself that:
Behavior is not really illegal. Behavior is really in everyones best interests. Nobody will ever find out. The organization will protect you.
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personal needs.
The organization
Supervisory behavior, peer group norms and behavior, and
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Figure 2.3 Factors influencing ethical managerial behavior the person, organization, and environment.
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Ethics training: Structured programs that help participants to understand ethical aspects of decision making. Helps people incorporate high ethical standards into daily life. Helps people deal with ethical issues under pressure.
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others.
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Codes of ethics:
Formal statement of an organizations values and ethical principles regarding how to behave in situations susceptible to the creation of ethical dilemmas.
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Ethics mindfulness
Enriched ethical awareness that affects behavior
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Immoral manager
Amoral manager
Considers it important to
Be a steward of ethical behavior Demonstrate ethical leadership
Does not factor ethical considerations into own actions since business activity lies outside sphere of moral judgment Views ethics as inappropriate for tough, competitive business world Concept of right and wrong is lawyer-driven (what can we get by with without running afoul of the law)
Ethical Values
Ethical commitments / Corporate Responsibility - to whom we have responsibilities - ways of working - relationships with stakeholders
Governance Core business strategy Goals, Policies & Codes
Business Behaviour
the way we do business
CSR policy/department
sustainability
Ethics programme
Environmental programmes
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Philanthropic programmes
Social programmes
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Data protection
Governance Procurement/ Supply chain Money laundering Child, sweatshop labour Advertising and sales practices
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Facilitation payments
Personal values
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Corporate values
Well, maybe just this once. No one will ever know. It doesnt matter how it gets done as long as it gets done. It sounds too good to be true. Everyone does it. Dont worry, its part of the culture. Shred that document. We can hide it. No one will get hurt. Whats in it for me? There are already enough competitors in this market. This will destroy the competition. We didnt have this conversation. I dont want to know.
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Transparency:
Do I mind others knowing what I have decided?
Effect:
Who does my decision affect or hurt?
Fairness:
Would my decision be considered fair by those affected?
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Public perceptions
Board of Company
Legislation
Employee concerns
Standards of Conduct
It is important that all employees should know what standards of conduct are expected of them. We regard it as good practice for boards of directors to draw up codes of ethics or statements of business practice and to publish them both internally and externally
1992 The Committee on the Financial Aspects of Corporate Governance (The Cadbury Committee)
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Personal reputations, legal standing, companys public name are at risk Much is at stake for companies and individuals in facing ethical dilemmas