MAN Ch 4

4 types of ethical manager behavior

1. Displays Honesty and integrity 2. communicates and enforces ethical standards through behavior 3. Is fair in decisions and distribution of rewards 4.shows kindness, compassion, and concern for needs and feelings of others

Greenwashing

A practice in which companies promote their products as environmentally friendly when in truth the brand provides little ecological benefit.

ethical and socially responsible

Companies that are this perform as well as—often even better than—those that are not socially responsible.

What recent events call for a renewed commitment to ethical management.

Confidence in business managers and leaders in all walks of life is at an all-time low. One hot-button ethical issue concerns excessive executive compensation.

What do employees want?

High wages & satisfaction

triple bottom line

Managers in organizations that embrace sustainability measure their success, refers to measuring an organization's social performance, its environmental performance, and its financial performance, Three P's: People, Planet, and Profit

moral rights approach

asserts that human beings have fundamental rights and liberties that cannot be taken away by an individual's decision.Thus, an ethically correct decision is one that best maintains the rights of those affected by it.

Principle-based statements

designed to affect corporate culture in a code of ethics

Unethical managers

seek to serve their own needs and interests at the expense of stakeholders.

policy-based statements

generally outline the procedures to be used in specific ethical situations

Three Domains of Human Action

Domain of Codified Law (Legal Standard) Domain of Ethics (Social Standard) Domain of Free Choice (Personal Standard)

What do customers want?

Inexpensive, high quality products

Why are ethics important for managers?

Managers face many pressures that can sometimes tempt them to engage in unethical behavior. Ethics is about making choices. Most managers encounter ethical dilemmas that are tough to resolve. More than 75% of people agree that corporate America's moral compass is "pointing in the wrong direction" Managers and organizations engage in unethical behavior for any number of reasons including an overemphasis on pleasing shareholder

Corporation's role in protecting human rights and the environment

Need to develop principles of some humane involvement -should step up and be counted - be more than economic profit

postconventional level

Only about 20 percent of adults reach this moral development level and are able to act in an independent, ethical manner regardless of the expectations of others.

Factors that shape a manager's ethical decision making, including levels of moral development.

Personality characteristics, family influence, religious background, and other factors influence a manager's ability to do this One important factor is whether a manager is at a preconventional, conventional, or postconventional level of moral development.

how are ethical organizations created

Practicing ethical leadership Code of Ethics Ethics committee Chief ethics officer ethics hotline ethics training Support for whistle-blowers

Identify important stakeholders for an organization and discuss how managers balance the interests of various stakeholders.

Shareholders, employees, customers, and suppliers are considered primary stakeholders without whom the organization could not survive. Different stakeholders have different interests in the organization and thus different criteria for social responsiveness. Stakeholder mapping provides a systematic way to identify the expectations, needs, importance, and relative power of various stakeholders.

Why is shell at center of royal dutch controversy

Ties to Nigerian Government -oil is economic driver -90% of foreign exchange -govt seen as oppressive One of world's largest corp -Saro-Wiwa cast shell as a villain

Incrementalism

We may start with small, unethical choices how we go down the slippery slope

What do shareholders want?

Wealth

benefit corporations

a for-profit organization that has a stated purpose that includes creating a material that has a positive impact on society; is required to consider the impact of all decisions not only on shareholders but also on employees, the community, and the environment; and voluntarily holds itself to high standards of accountability and transparency. managers can choose to prioritize a social, moral, or environmental goal over financial goals without the risk of being sued by shareholders Companies can also be certified as B Corporations by B Lab, a nonprofit organization that provides a nonlegal framework for meeting high standards of social and environmental performance, public transparency, and legal accountability.

Code of ethics

a formal statement of the organization's values regarding ethics and social issues. Principle based and policy based statements

Ethics committee

a group of executives (and sometimes lower-level employees) charged with overseeing company ethics by ruling on questionable issues and disciplining violators.

Chief ethics officer

a manager who oversees all aspects of ethics and legal compliance.

Ethical dilemma

a situation in which all alternative choices or behaviors have potentially negative consequences. Right and wrong cannot be clearly distinguished. Most involve a conflict between the interests of different groups or between the needs of the individual versus the needs of the organization

Compensatory justice

argues that individuals should be compensated for the cost of their injuries by the party responsible, and individuals should not be held responsible for matters over which they have no control.

Utilitarian approach

espoused by the nineteenth-century philosophers Jeremy Bentham and John Stuart Mill, holds that moral behavior produces the greatest good for the greatest number.

conventional level

conforming to standards of behavior expected by society.

individualism approach

contends that acts are moral when they promote the individual's best long-term interests proponents say, it ultimately leads to behavior toward others that fits standards of behavior that people want toward themselves. However, because it is easily misinterpreted to support immediate self-gain, it is not popular in the highly organized and group-oriented society of today.

Ethical managers

display honesty and integrity, act in a way that communicates and enforces ethical standards, are fair in their decisions and the distribution of rewards, and show kindness and concern for others.

justice approach

holds that moral decisions must be based on standards of equity, fairness, and impartiality. 3 types; Distributive, procedural, and compensatory

Procedural justice

holds that rules should be clearly stated and consistently and impartially enforced.

preconventional level

individuals are concerned with external rewards and punishments and obey authority to avoid detrimental personal consequences.

Triple Bottom Line: People

looks at how socially responsible the organization is in terms of fair labor practices, diversity, supplier relationships, treatment of employees, contributions to the community, and so forth.

Corporate Social Responsibility

management's obligation to make choices and take actions that will contribute to the welfare and interests of society, not just the organization.

TBL: Profit

measures financial performance

TBL: Planet

measures the organization's commitment to environmental sustainability

Stakeholder mapping

provides a systematic way to identify the expectations, needs, importance, and relative power of various stakeholders.

Stakeholders

refers to any group or person within or outside the organization that has some type of investment or interest in the organization's performance.

Philosophy of Sustainability

refers to the ability to generate wealth without compromising environmental responsibility and social stewardship, thus meeting the current and future needs of stakeholders while preserving the environment and society so that future generations can meet their needs as well managers weave environmental and social concerns into every strategic decision so that financial goals are achieved in a way that is socially and environmentally responsible.

Distributive Justice

requires that different treatment of individuals not be based on arbitrary characteristics.

practical approach

sidesteps debates about what is right, good, or just and bases decisions on prevailing standards of the profession and the larger society, taking the interests of all stakeholders into account. a decision would be considered ethical if it is one that would be considered acceptable by the professional community, one that the manager would not hesitate to publicize on the evening news, and one that a person would typically feel comfortable explaining to family and friends.

Green movement

special interest group of particular importance today. a new business imperative and is driven by shifting social attitudes, new governmental policies, climate changes, and information technology

Ethics

the code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong.

Whistle-blowing

the disclosure by employees of unethical, illegitimate, or illegal practices by the organization.

moral agent

the individual who must make an ethical choice in an organization

Different approaches for making ethical decisions

utilitarian individualism moral rights justice practical

conscious capitalism

which has also been referred to as a shared value approach, refers to following organizational policies and practices that both enhance the economic success of a company and advance the economic and social conditions of the communities in which the company operates. means having a higher purpose besides just making money by focusing on employees, customers, suppliers, and the community as well as on shareholders; seeking to bring out the best in people; and fostering trust and respect. Container Store, Whole Foods Market, Costco, Pedigree, Medtronic, and Trader Joe's.