Ethics and Corp Responsibility Final

5) Decision making processes

How do leaders and groups make decisions? Is ethics is apart of this discussion? Should identify the harm to stakeholders when proposing new ideas. Decision making processes relate to our understanding of unethical behavior in the work place because it is relatively easy to alter decision making processes to support the decisions that a manager has already made, so if a manager or authority figure has made an unethical decision the decision making process can easily be altered to support whatever decision. To have a better chance at ethical decisions, you want to design decision making processes before hard times and in good financial times.

1) Illusion of superiority/ illusion of morality

The illusion of superiority- Just because someone is an authority figure does not mean that they are correct or making the right ethical decision. listen to your gut! The illusion of morality is when an individual loses sight of their personal moral principles, and believes that the groups morality overrides any individual sense of right or wrong. Movie Examples:

Weak culture

several strong subcultures the subgroup norm is more influential than the overarching norms tough to consistently direct behavior. Could also be a good thing too can provide diverse thought and ideas

Barriers to Fact Gathering 1) Overconfidence

1) The overconfidence bias is when an individual does not seek out additional information because they are sure of themselves and will not look any further- this does not reflect reality Movie example:

4) Philosophical Approaches & tools used - Deontological Approach

- The Deontological Approach focuses on duties, obligations, and universal principles of value such as honesty, respect, promise-keeping, fairness, loyalty, rights, justice etc. The acts themselves are inherently good or bad regardless of the consequences. Aim to do what is right= what is consistent with the moral principles. Kant's Categorical Imperative - what kindof world would it be if everyone behaved this way? Is this the type of world that I wish to live in? You want to follow the actions of the world in which you would wish to live in. Rawl's Veil of Ignorance- what would decisions be if the decision maker knew nothing about the identity of status - don't know their social ranking, gender, skin color, profession. There would be no bias and the individuals would be granted basic liberties and equality of opportunity. Golden Rule- treat others how you would like to be treated. If you want to receive ethical behavior then you should give ethical behavior Challenges: Sometimes moral principles/ values contradict each other: it can be hard to determine which values take precedence other the other. For examples, do we look at the perspective of the mother or the fetus, maybe we value both the value of human life and stability for a child. The deontological approach can have horrible consequences. For example, during World War 2, when the Nazis asked the German people if they were hiding Jews in their home.One following this approach may stick to the universal principle of honesty and tell the Nazis the location of the Jews- which could result in the mass murder of a group of people. Again: valuing a human life or honesty, which takes precedence? Advantages: focus on the rights of stakeholders and society

4) Performance Management Systems

- formal process of articulating the employee goals, performance metrics, an compensation structure that rewards individuals - this is important because people pay attention to what is measured, rewarded, and disciplined. So if employees who are unethical are disciplined this would promote an ethical culture

Cognitive Barriers to good ethical judgement

1) Barriers to Fact Gathering ****ing Get Over Claudia ****ing- fact Get- Gathering Over- Overconfidence Claudia- Confirmation Trap 2) Consideration of Consequences R S I I E I rise I- ignore consequences that affect few R- Reduced Number I- Illusion of optimism S- self vs. others E- escalation of commitment

2) Confirmation Trap

2) The confirmation trap is when individuals generally accept the facts that confirm their own case and then reject the facts that are inconsistent with their case Movie example:

Organizational Culture

A body of learned beliefs, traditions, and guides of behavior shared among st members of a group. organizational culture expresses shared assumptions, values, and beliefs

Paying attention to gut

Careful! gut may be wrong! Movie Examples:

- Consequentialist Approach

Focus on the consequences. To determine whether or not something is right or wrong, we are going to look at the consequences/ results of the decision. Identify stakeholders- any person/ group with a stake in the issue. Identify the costs and benefits of each actions Identify all alternative actions that could be taken in the situation Utilitarianism - Choose the action that will produce the most benefit and least harm for the greatest number of people and for society at large. What is the greatest happiness for the greatest number of people- that yields the greatest net benefit. WHAT DECISION WILL PRODUCE THE MOST BENEFIT AND THE LEAST AMOUNT OF HARM FOR THE GREATEST NUMBER OF PEOPLE? Advantages: practical because it already underlies business thinking. This is a cost- benefit analysis Disadvantages-it is difficult to identify every consequence for every stakeholder, and be able to forsee the costs and benefits of a future time ( not a crystal ball ). It is difficult to have all the facts especially with something that is predictive. Difficult to weigh the costs to stakeholders, something that is going to directly affect you may be given more weight and emphasis than something that will affect another person, may gloss over the cost. The rights of a minority group may be sacrificed to the benefit of the majority. The cost to the minority group could be more dangerous/ severe.

- Virtue Ethics

Focus on the integrity of the moral actor, the person's character, not on the act itself. What is important is that the individual had the intention/ motivation to do the right thing. Character is defined by one's community. Relevant Moral Community- the community that holds you to the highest ethical standards Disclosure rule- How would I feel if my behavior appeared on the front page of the New York Times? Look to highest moral critic- ask yourself what would they do in this situation, ask yourself what your ethical role model would expect. Challenges in Virtue Ethics: although you can look to the community about community standards, this doesn't mean that there will be agreement and even if there is, this doesn't guarantee that the community is right Advantages to Virtue Ethics: you can rely on community standards for guidance.

Formal Systems:

Formal System AKA POOP DVS 1) P- Policies and Codes 2) O-Organizational authority structure 3) O- Orientation and training programs 4) P- Performance management systems 5) D - Decision making process 6) V-Value statement/ mission statement 7) S- selection system

7) Selection Systems

Formal system in place for recruiting and hiring new employees. it is important to hire people who fit the culture, and can avoid ethical problems by hiring the right people. Want to ask ethics related interview questions, situational and behavioral questions, and personality testing.

6) Mission and Value statement

Mission statement- a short description of what the organization does Value statement - tells how do we do what we do ? This codifies essential corporate behavior and displays what is important to the organization Formal statement about guiding beliefs. Aim is to guide employee behavior. The words are not as important as if they are put into action.You will want to ask current employees if the value and mission statements are actually carried out, want to make sure the behavior is reflected in the daily behaviors of people and that people are held accountable

1) Policies and Codes

Policies - the rules of the organization, organizations are required to define and communicate their policies Even though organizations must define their policies, employees rarely read their manual thoroughly. Guidelines: communicate relevant rules to people who need them, prioritize policy, make the policies understandable, make the policies come to life. Codes of Conduct: set the ground rules for ethical conduct in the organization Guidelines: focus on values that should guide decision making rather than making a list of behaviors that are acceptable/ not acceptable Codes of conduct and formal ethics policies more detailed than the value and mission statement. Guides behavior in many SPECIFIC situations. Living documents that should be revised when needed This applies to our understanding of unethical behavior because when ethical policies and codes of conduct are given to employees, they are less likely to engage in unethical behavior, more likely to seek advice about ethical issues, and more likely to report rule violation. Ex. would be the honor code at Universities- universities who are aware of the honor codes and the punishments of breaking the rules are less likely to engage in unethical behaviors less than schools who are not aware of the honor code.

Machiavellianism

Self interested, opportunistic, deceptive, manipulative. Movie Example:

2) Self Vs. Others

The Self Vs. Others barrier happens when an individual is more likely to see the consequences that affect him/ herself, but are less likely to see that consequences that will affect others and even identify all the stakeholders- any person with an interest in the issue

2) Organizational Authority Structure

The organizational authority structure is the hierarchy/ division of labor. AKA the chain of command and authority. Many organizations are now removing bureaucracies in favor of a flat and open structure. This applies to our understanding of unethical behavior because the problem with bureaucracies is that people tend to obey authority figures no matter what they are ordered to do- have unquestionable obedience even if that order is something unethical. Want to have structures to report problems- are they clear? fair? are there multiple avenues to report a problem or only one? are you anonymous when you report a problem?

1) Ethical Decision Making Process Textbook definition of ethics Definition of ethics as it related in business Bad Apple?

The principles, norms, and standards of conduct governing an individual or group This definition focuses on conduct- the employer should establish work-related conduct over customer treatment, employee behavior, conflicts, and expectations. Conduct is INFLUENCED by authority and environment- most people are not guided by a strict moral compass, they are looking towards their environment to determine how to behave. Behavior that is consistent with the principles, norms, and standards of business practice that has been AGREED UPON BY SOCIETY. People do have predispositions; however, good apples can be influences by bad barrels ( rotten culture ) conduct helps cultivate culture, so if there is unethical conduct, you may have a rotten culture. Decisions aren't always clear and life experiences don't prepare you for the complex business decisions life will pose Moral judgement is a product of one's experiences and this can be seen because adults continue to develop moral judgement well into their 30's. Ethics is about behavior, not looking at ethics as a philosophy. Behavior can be taught, and influenced by conducts. Being a good person is not enough, and having a good moral compass is not enough for the challenges and decisions that life will pose. Most people function at the conventional level, they are looking up and around for confirmation from others. Movie Example: Talk about someone who was a stage 3 interpersonal accord - want to modify your behavior in order to conform with others. examples of the characters conforming to what their boss said was ok. Office scene of boss.

Moral disengagement

The tendency for someone to deactivate their internal control system in order to feel ok about doing something unethical Movie Example:

Strong culture

The values, assumptions, and beliefs are widely shared. There is a common and clear direction for day to day behavior. All of the cultural systems both formal and informal are in alignment. Point behavior in the same directions

2) Relationship between ethics and the law

There is a gray overlap area between the ethics and the law- what is ethical & legal? What is unethical and illegal? what is unethical but legal? and what is ethical but illegal? Movie Examples Legal but unethical- The company selling all of the stocks as many as they could before the stocks were worthless is an example of something that is legal but unethical Illegal but ethical-

4) Illusion of Optimism

This barrier to considering consequences causes an individual to be overly positive about a result therefore underestimating the risk involved. For example: we are going to open our new business and make millions of dollars, people are going to invest a crazy amount of money. Movie Example:

5) Escalation of Commitment

This is a barrier to considering consequences since it is difficult to see the level of commitment to something at face value especially if the individual has put a lot of time, money, and energy into something. Additionally, that person does not want to hear or think about the problems because they have already invested a certain level of commitment. Example: an old car. You have already put so much money and effort trying to fix it up that you get sucked into a cycle of putting more time, energy, and money into this same item. Movie Example:

3) Ignore consequences that affect few

This is a barrier to considering consequences that says that there are so few people that this will affect, and the number is so minimal that the consequence won't matter. Example could be that there are two groups: one group of athletes and one group of theater students. Because there are only 4 students in the theater class, and over 80 kids on the football team, it is ok to ignore the consequences of the small group because there's so little of them. When in reality this could be as harmful or even more harmful than the consequence to the larger group. Say the school doesn't give the theater department funding because there's so little people and this would completely shut down the department and cause the teachers to lose their jobs. Whereas maybe if the school didn't give the larger group, the athletes money than they would just have less money to upgrade their spirit wear sweatshirts. Just because there are few to a group, doesn't mean that the consequence will be minimal as well. Movie Example:

There are eight steps to making sound, ethical decisions. One of those is to practice preventative medicine when asked to make a snap decision

This is important because everything in this movie transpires in less than 24 hours. The components of preventative medicine include: 1) pay attention to your gut 2) Ask for time 3) Find out about organizational policies 4) Ask manager or peers for advice 5) use the New York Times test ( disclosure rule ) movie example: 2 men outside : have you told your son yet?

3) Orientation and Training Programs

Training helps with socialization- how employees are brought into an organization's culture, the socialization is enforced through ongoing training- the training includes ethics. Communicates the organization's principles. The continued ethics and compliance training happen annually. Orientation and training contribute to our understanding of unethical work place behavior because an individual may go through the socialization and training at an organization that incorporates ethics and puts a large emphasis on ethical practices, but those training and annual compliance trainings to reemphasize ethics do not necessarily mean they are incorporated into the every day behaviors of the job. For example, a sales associate may have had an orientation and training program that included ethics. He or she may have come into their new job thinking this was not just going to be a window display and actually implement this training on the daily, but the workers don't use the training and only care about reaching their sales quotas in order to get ahead.