Managerial & Organizational Ethics
Characteristics of strong ethical culture
- communicating ethics as a priority - setting a good example of ethical conduct - keeping commitments - providing information as to what is going on - support following the organization's standards
A typical set of goals for ethics training
-Learn the fundamentals of business ethics -Learn to solve ethical dilemmas -Learn to identify causes of unethical behavior -Learn about common managerial ethical issues -Learn whistle-blowing criteria and risks -Learn to develop a code of ethics and execute an internal ethical audit
Weaknesses of Utilitarianism
-fails to respect individual rights -places the same value on everyone's business -focuses on outcomes not motives
Weaknesses of the Principles of Rights
-individual's rights may conflict
Weaknesses of Deontology
-not concerned with consequences -most struggle to follow rules strictly
The foundation for a manager's reputation as an ethical leader
1. Being a moral person 2. Being a moral manager
What corporate codes typically address
1. Employment practices 2. Employee, client, and vendor info 3. Public info/ communications 4. Conflicts of interest 5. Relationships 6. Ethical management practices
The 2 major ethical officer organizations
1. Ethics and Compliance Initiative (ECI) 2. The Society of Corporate Compliance and Ethics (SCCE)
The five major Blindspots
1. Ill-conceived goals 2. Motivated blindness 3. Indirect blindness 4. The Slippery slope 5. Overcoming values
The five major barriers to ethical decision making
1. Ill-conceived goals 2. Motivated blindness 3. Indirect blindness 4. The Slippery slope 5. Overcoming values
The four groups of Bias
1. Implicit predjudice 2. In Group Favoritism 3. Conflict of Interest 4. Over-claiming Credit
Phillip Lewis's sequence of ethical decision making
1. Look at the problem from the position of others affected by the decision 2. Try to determine what virtuous response is expected 3. Ask "How it would feel for the decision to be disclosed to the public" and "Whether the decision is sonsitent with organizational goals 4. Act in a way that's right, just, and good for the organization
The three main characteristics of transparency
1. Openness 2. Ongoing communication 3. Accountability
Major principles of ethics
1. Principles of ethics 2. Deontology 3. Principles of Rights 4. Principles of Justice 5. Virtue Ethics 6. The Golden Rule
The two categories of ethics principles
1. Teleological 2. Deontological
The major ethical tests that businesses can use
1. Test of Common Sense (Smell Test) 2. Test of One's Best Self 3. Test of Making Something Public (Disclosure Rule) 4. Test of Ventilation 5. Test of the Big Four
The different levels at which ethical dilemmas and pressures may occur
1. The individual or personal level 2. The managerial and organizational level 3. The industry level 4. The societal level 5. The global level
The 3 driving questions of managing organizational ethics
1. What factors contribute to ethical or unethical behavior in the organization 2. What actions, strategies, or best practices might the management use to improve the organizations' ethical climate 3. What psychological and organizational processes come into play when ethical decision making is pursued
The two methods of dealing with competing rights
1. eliminating the conflict by reframing it 2. deciding what is "more right"
Pressure is placed on subordinates and/or other organizational members to achieve results often requiring that they comprise their ethics
A major consequence of the behavior of superiors
The exemption of the CEO and other top-level managers
A major limitation of business ethics training
Whistle blowing
A mechanism within an organization in which employees can report violations of ethical culture
The Golden Rule
Brings the idea of self-perceived fairness into business deliberations
How to improve the Ethical culture of a business
Creating an ethical organizational culture or climate in which ethical behavior, values and policies are displayed and promoted
How management can instill an ethical culture
Disciplining violators of an organization's accepted ethical norms and standards
Virtue Ethics
Focuses on the question "What sort of person should I be or become"
Having a "Veil of Ignorance" of societal classifications
How Rawr believes the principles of justice can create the best society possible
The use of ethics and compliance programs and officers
One of the most important strategies in creating an ethical workplace culture
It preserves the basic values that have become embedded in our moral beliefs
Positive of Rawl's Principle of Justice
Aretaic principles
Principles focused on "goodness", "excellence" or "virtue"
Deontological principles
Principles focused on duties
Teleological principles
Principles focused on the consequences or results of the actions they produce
The ethical test approach to decision making
Questions used for ethical guidance with a more practical r hands-on orientation that doesn't require in-depth moral thinking
The ethics check
Questions whether a decision is: (1) Legal, (2) Balanced, and (3) How it will make you feel about yourself
Personal-level ethical challenges
Situations that we face in our personal lives that are generally outside the context of our employment but may have implications for our jobs
Rawl's principle of justice
States that each person has an equal right to the most extensive basic liberties and social and economic inequalities are arrenged to be to everyone's advantage
1. The continuous presence of ethical leadership 2. The existence of a set of core ethical values 3. A formal ethics program
The 3 key elements for an ethical organizational culture to develop
1. The principles approach 2. The conventional approach 3. The ethical tests approach
The 3 main approaches to managerial ethical decision making
1. Trustworthiness 2. Respect 3. Responsibility 4. Fairness 5. Caring 6. Citizenship
The 6 pillars of character promotes under virtue ethics
Utilitarianism
The main teleological principle that recommends taking the action that results in the greatest good for the greatest amount of people
The moral manager
The manager who consistently rewards ethical conduct and disciplines unethical conduct at all levels in the organization
The use of codes of ethics and conduct
The most formal way in which top management fulfills their responsibility for establishing standards of behavior and effectively communicating those standards to all managers and employees in the organization
Best practices
Those approaches, programs, policies, or guidelines that experience has shown produce the most effective results
Where the manager has the greatest impact
Through what they do personally or as a member of the management team
When the situation is not a clear "right vs wrong" competing rights may arise
Weakness of the principle of rights
-It ignores actions that may be inherently wrong -It may come into conflict with the principles of justice or rights -Ignores the distribution of good
Weaknesses of Utilitarianism
1. It's accepted by most 2. It's easy to understand 3. It's a win-win philosophy 4. It Acts as a moral compass
Why The Golden rule should be accepted
The Ethics Quick Test
a brief set of questions used to make ethical decision in business including: 1. Is the action legal 2. Does it comply with our values 3. If you do it, will you feel bad 4. How would it look in the newspaper 5. If you know it's wrong, don't do it 6. If you aren't sure, ask 7. Keep asking until you get an answer
Kant's categorical imperative
a duty based principle of ethics that states that a person should act only on rules that they'd be willing to see everyone else follow
Corporate transparency
a quality, characteristic, or state in which activities, processes, practices, and decisions of a company become open or visible to the outside world
a negative right
a right to be left alone and to think and act free from the coercion of others
Virtue Ethics
a school of thought that focuses on the individual becoming imbued with virtues -Emphasizes being as apposed to doing
Test of Ventilation
a test of exposing you proposed action to others to get their thoughts on it before acting
The principles approach
an approach based to ethical decision making based on the idea that employees and managers desire to anchor their decisions and actions on a more solid foundation
Servant leadership
an approach to ethical leadership and decision making based on the moral principle of serving others first
a principle of business ethics
an ethical concept, guideline, or rule that, if applied when you are faced with an ethical decision, will assist you in taking the ethical course of action
Compliance versus Ethics orientation
an important factor in the ethical culture of an organization
Test of Purified Idea
asks "Am I thinking this idea or decision is right just because someone with higher authority or knowledge says it's right?"
Test of Making Something Public (Disclosure rule)
asks "How would I feel if others knew I was doing this" -addresses the issue of whether your decision can withstand public disclosure and scrutiny
Test of One's Best Self
asks "Is this action or decision compatible with my concept of myself at my best?" -addresses the notion of esteem with which we hold ourselves and what we want to be known as
The Test Of Common Sense (The Smell Test)
asks "does the action I am getting ready to take really make sense?" -takes into account the practical consequences of an action
Utilitarianism
based on bringing the greatest good to the greatest number of people (cost-benefit analysis) -expresses morality from the group view
Compensatory justice
compensating someone for a past injustice
Business ethics training
considered to be one of the most important best practices in improving organizational ethics
an ethics screen
consists of several select standards against which the proposed course of action is to be compared
Blindspots
failing to notice the behavior of others
Procedural justice
fair decision-making procedures, practices, or agreements
Virtue Ethics
focuses on the individual acquiring certain virtues like honesty, fairness, truthfulness, trustworthiness, benevolence, respect, and non-malfeasence
Utilitarianism
forces the decision maker to think about the general welfare as well as think in stakeholder terms
Overvaluing Outcomes
giving a pass to unethical behavior if the outcome is good
Behavior of one's peers
has a large influence on unethical behavior and shows that people do pay attention to what their peers are doing and expecting
Behavioral ethics
helps to understand at a deeper level many of the behavioral processes that research has shown are taking place in people and organizations
Indirect Blindness
holding others less accountable for unethical behavior when it's carried out through third parties
moral rights
important rights that people ought to have based on moral reasonings
Managerial or organizational level ethical challenges
issues similar to personal challenges that we face in the role of managers or employees, but that carry consequences for an individual, for the company, and for the ethical culture of the business
The principle of rights
maintains that people have both moral and legal rights that should be honored and respected -expresses morality from the POV of the individual
Managerial ethicals
making decisions which have ethical implications or consequences
The basic idea behind the principles approach
managers may improve the wisdom of their ethical decision making if they factor in their proposed actions, decisions, behaviors, and practice a consideration of certain principles of ethics
Ethics audits
mechanisms or approaches by which a company may assess or evaluate its ethical climate or programs -are intended to carefully review ethics initiatives
Bounded ethicality
occurs when managers and employees find that even when they aspire to behave ethically it's difficult due to a variety of organizational pressures and psychological tendencies that intervene
Motivated Blindness
overlooking unethical behavior of other when it's in our interest to remain ignorant
Test of The Big Four
questions whether your ethical behavior has fallen victim to the Greed, Speed, Laziness, or Haziness -These four factors represent temptations that may lead to unethical behavior
legal rights
rights that some governing authority have formalized as rights
Ill-conceived goals
setting goals and incentives to promote a desired behavior but that encourage a negative on
An ethics and compliance officer
someone in charge of implementing the array of ethics and compliance initiatives in an organization
The principle of justice
states that people have both moral and legal rights that should be honored and respected -also known as the "fairness principle"
Deontology
states that the best decisions are those motivated by a sense of duty, not by the result of the decision -one must operate under categorical imperatives
Rawl's Principles of Justice
states that the right decision involves being ignorant of our status in life
The Golden Rule
states that you should "Do unto others as you would have them do unto you" -Also known as ethics of reciprocity
Distributive justice
the distribution of benefits and burdens in societies and organizations
Framing
the fact that people's ethical judgements are affected by how a question or issue is posed
The Slippery Slope
the inability to detect unethical behavior of others because it develops gradually (Incrementalism)
Moral equilibrium
the penchant for people to keep an ethical scoreboard in their heads and use this information when making future decisions
Incrementalism
the predisposition towards the slippery slope
Behavior of superiors
the primary influence on unethical behavior
Institutionalizing ethics
the process by which managers strive to improve upon the organization's ethical culture
Self-serving bias
the propensity people have to process information in a way that serves to support their preexisting beliefs and their perceived self interest
Fraud risk assessments
the review processes designed to identify and monitor conditions and events that may have some bearing on the company's exposure to compliance/misconduct risk
a positive right
the right to something
Organizational ethical culture
the shared values, beliefs, behaviors, and ways of doing things in the organization
Behavioral ethics
the study of systematic and predictable ways in which individuals make ethical decisions and judge the ethical decisions of others that are at odds with intuition
Role morality
the tendency some people have to use different ethical standards as they move through different roles in life
Overconfidence bias
the tendency to be more confident of ones own moral character or behavior that one has objective reason to
Conflict of Interest
the tendency to be partial because of a tension between self-interest and professional or public interest
Implicit predjudice
the tendency to have unconscious stereotypes associated with other individuals
Over-claiming credit
the tendency to overrate our individual contribution to groups leading to unfair judgement of others
In Group Favoritism
the tendency to show favor to those individuals that are like ourselves in terms of race, religion, employer, etc. -contributes to a lack of diversity within the business world
Conformity bias
the tendency to take cues for ethical behavior from peers rather than taking your own ethical judgement
The goal of managers
to create moral decision, moral manager, and ultimately, moral organizations while recognizing that what we frequently observe in business is the achievement of moral standing at only one of these levels
Ethics
unwritten rules we have developed for our interactions with one another -generally accepted standards of conduct
a conflict of interest
when an individual has to choose between his/her own interests and the interests of someone else or some other group
