Chapter 4: Managing Ethics and Social Responsibility

Ethical Individuals

- act with integrity - behave honestly - inspire trust - treat people right - play fair - have high level of moral development

Ethical Leadership

- be a role model - uphold ethical values in the organization - communicate about ethical and values - reward ethical behavior - swiftly discipline unethical behavior

Organizations Structures and Systems

- corporate culture - code of ethics - ethics committee - chief ethics officer - ethics training - whistle-blowing mechanisms

Human Behavior Falls into three categories

1. Domain of Codified Law (legal standard) 2. Domain of Ethics (social standard) 3. Domain of Free Choice (personal standard)

Socialization processes include

1. co-optation 2. incrementalism 3. compromise

Individualism Approach

1. ethical dilemmas are resolved by choosing the alternative which produces the best long-term advantages for the individual 2. believe to lead to honesty and integrity (closest to domain of free choice)

Moral Rights Approach

1. ethical dilemmas are resolved by making decisions which maintain and protect the fundamental rights and privileges of people affected by the decision 2. positive in that it protects individuals

Utilitarian Approach

1. ethical dilemmas are resolved by making decisions which result in the greatest good for the greatest number 2. decisions are based on outcomes or consequences

a decision is ethical (practical approach) if the manager can answer yes to three questions:

1. is my decision within accepted values and standards of business today? 2. are you willing to communicate the decision to all groups? 3. would people I am close to approve of the decision?

Three Levels of Personal Moral Development

1. preconventional = follows rules to avoid punishment 2. conventional = lives up to expectations of others 3. postconventional = follows self-chosen principles of justice and right

Ethical decision making in organizations is shaped by:

1. the manager's values 2. the company's values

Moral Rights Considerations

1. the right of free consent 2. the right to privacy 3. the right of freedom of conscience 4. the right of free speech 5. the right to due process 6. the right to life and safety

Compromise

Newcomers "back into" unethical acts in an effort to resolve organizational dilemmas or role conflicts

Incrementalism

Newcomers "back into" unethical acts in an effort to resolve organizational dilemmas or role conflicts

The Unethical Organization

Unethical organization cultures use rationalization mechanisms and socialization of newcomers to perpetuate unethical acts

chief ethics officer

a company executive who oversees all aspects of ethics and legal compliance

Ethical Dilemma

a conflict between needs of the part and whole 1. the individual vs the organization 2. the organization vs society as a whole

Code of Ethics

a formal statement of the company's values concerning ethics and social issues

ethical committee

a group of executives appointed to oversee company ethics - judiciary branch (academic honesty committee)

Organizational Stakeholders

any group within or outside the organization that has a stake in the organization's performance

Compensatory justice

argues that individuals should be compensated for the cost of their injuries by the party responsible 1. if harm is done, the injured party should be made whole

ethical responsibility

be ethical, do what is right, and avoid harm

economic responsibility

be profitable

The Company's Values

company culture lets people know what behaviors the company supports and those actions considered "unethical" the norms and values of your organization will have great influences on ethical behavior

Discretionary Responsibility

contribute to the community; be a good corporate citizen

Justice Approach

ethical dilemmas are resolved by basing decisions on standards of equity, fairness, and impartiality

Practical Approach

ethical dilemmas are resolved by making decisions based on whether the typical person in society would think it is acceptable

one important way to facilitate these mechanisms is through the use of

euphemistic language, which is the practice of describing unethical acts using inoffensive terms or code words

Metaphor of the ledger

good works have earned a credit to offset unethical acts

ethics training programs

help employees deal with ethical questions and translate the values stated in a code of ethics into everyday behavior

Denial of Responsibility

individual perceives that they have no other choice than to participate in unethical acts

Denial of Victim

individual's ague that the injured party deserved whenever happened

Appeal to Higher Loyalties

individuals argue that ethics must be ignored to fulfill more important goals

Social Weighting

individuals diminish the importance of unethical acts by either 1) condemning the critic or 2) making selective social comparisons

How is that individuals can commit unethical acts which contradict their own stated values of ethics?

individuals engage in self-deception or "rationalizing tactics" which allow them to describe their actions in a way which do not appear to be unethical to themselves

Denial of Injury

no one is harmed by the individual's acts so they are not really unethical

legal responsibility

obey the law

Corporate Social Responsibility

perspective maintains that firms have obligations to society as a whole, not just owners and shareholders

Procedural justice

requires hat rules be administered fairly

Distributive justice

requires that different treatment of people not be based on arbitrary characteristics 1. people who are similar should be treated the same 2. if treated differently, should be related to organizational goals

Co-optation

rewards are used to soften attitudes unethical behaviors

What is Ethics?

the code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong (about making decisions)

Factors Affecting Ethical Choices in Organizations

the practices of a business reflect its values, attitudes, beliefs and behavior patterns

Ethical Structures

various systems, positions, and programs undertaken to implement ethical behavior