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| code of moral principles that sets standards of good or bad or right or wrong in one’s conduct. |
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| Provide principles to guide behavior and help people make moral choices among alternatives course of action |
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| what is accepted as right and good, as opposed to bad and wrong in the context of a governing moral code. |
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| Laws, Values and Ethical Behavior |
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| Just because something is legal doesn’t make it ethical. It extends from just legal issues and goes to values – the underlying beliefs and attitudes that help determine individual behavior; broad beliefs about what is appropriate behavior |
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| preferences about desired ends ( family security, happiness, harmony) |
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| preferences regarding the means for accomplishing these ends. (honesty, ambition, courage…) |
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| Ethical behavior delivers the greatest good to the most people. Result oriented point of view that assesses the moral implications of actions in terms of their consequences. |
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| Ethical behavior advances long term self interest. People become self regulating as they pursue long term individual advantages. |
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| Promote honesty and integrity. Lie and cheat to achieve short term goals is not acceptable because everybody will do it and no ones long term goals will be achieved. |
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| Ethical behavior respects and protects fundamental rights. Right of life, liberty, fair treatment…in corporations, ensuring employees are always protected in rights to privacy due process of law, free speech, free consent, health and safety… |
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| Treat people impartially and fair according to legal rules and standards. Is it equitable for everyone effected? In organizations, three ways to achieve this: |
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| degree to which rules and policies are fairly administered |
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| degree to which outcomes are allocated fairly among people and without respect to individual characteristics based on ethnicity, race, gender, age… |
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| degree to which people treat each other with respect and dignity. |
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| “when in Rome do as the Romans do”. Let behavior in other cultures guide our behavior. No right to behave. Ethical behavior is determined by its cultural context. |
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| Suggests ethical standards should be the same all over the world. Companies should not do business that has behavior we consider unethical. |
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| an attempt to impose one’s ethical standards on other cultures |
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| situation that requires a choice regarding a possible course of action that may be beneficial personally or for the organization but its unethical; no clear consensus of what is right or wrong. |
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| In the workplace, may be discrimination, sexual arrestment, conflicts of interest, customer confidence, organizational resources. |
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| Ethical decisions come at random and unexpected times; situation can be ambiguous; pressure can be intense towards one course of action. |
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1) Recognize the ethical dilemma
2) Get facts
3) Identify your options
4) Test each option: is it legal? Is it right? Is it beneficial?
5) Decide what option to follow
6) Double check with the spotlight question “How will I feel if my family finds out about my decision, or if it is reported to the local newspaper?”
7) Take action |
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| caught off guard; sometimes, we don’t even realize the situation presents an ethical dilemma. |
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| indicates the degree to which an issue or situation is recognized to pose important ethical challenges |
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| It is affected by the magnitude, probability and immediacy of harm, the proximity and concentration of the effects and social consensus |
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| A situation will get a more ethical decision if it has potential harm perceived as imminent, great and likely to happen; victims are visible and close by; and there is great agreement on what is right or wrong. |
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| greater the intensity = more aware the decision maker is about ethics issues and the more likely that his or her behavior will be ethical. |
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| PERSONAL FACTORS AND MORAL DEVELOPMENT |
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| Values, family, religion, personal needs, financial needs…all help determine a person’s ethics. Without a strong set of personal ethics, decisions vary from situations. |
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| personal rule or strategy for making ethical decisions, resulting in consistent and confident decisions |
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| Personal values are the foundation, and give priority to honesty, fairness, integrity, self-respect. |
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| Pre-conventional, conventional, post conventional stages. We move step-by-step through them and we grow in maturity and education. |
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| individual is self centered and decisions are usually aiming personal gains. |
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| Limited by punishments, obedience and personal interest |
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| individual is more social centered and decision are based on following social norms, meeting expectations of others and living up to agreed upon obligations |
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| individual is principle centered. Strong ethics framework, decision made consistent to personal principles, no matter the law, conventions or norms. Very few people achieve this. |
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| INTERNAL ENVIRONMENTAL AND ETHICS CULTURE |
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| In the organization, ethics is influenced by: ways and culture of organization; bosses (how he behaves, what he requests, what is rewarded or punished); expectations and reinforcement by peers; group norms; formal policies and statements and rules. |
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| EXTERNAL ENVIRONMENT AND INDUSTRY NORMS |
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| Regarding the external environment of an organization, government laws and regulations, as well as social norms and expectations influence ethical decisions. |
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| EXTERNAL ENVIRONMENT AND INDUSTRY NORMS |
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| The climate of competition in an industry also sets a standard of behavior for those who hope to prosper within it. |
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| Rationalizations For Unethical Behavior (4) |
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1) Convincing yourself that a behavior is not really illegal. Mistaken belief that one’s behavior is acceptable, especially in ambiguous situations. When in doubt about a decision, don’t make it.
2) Convincing yourself that it is for everyone’s best interest. Mistaken belief that because someone may benefit, everybody will. Need to look beyond short-terms implications and look beyond results in general to the ways in which their were obtained. Don’t try to find out how much you can push a situation.
3) Convincing yourself that nobody will ever find out. Mistaken belief that a behavior is really safe. Best deterrent is to make sure everyone knows that wrongdoing will be punished whenever it is discovered.
4) Convincing yourself that the organization will protect you. Mistaken belief in loyalty. Loyalty to organization is not an excuse for misconduct, and should not stand about laws. |
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| exposes the misdeed in organizations in order to preserve ethical standards and protect against wasteful, harmful and illegal acts. |
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| Good intentions and ethical stances.suffer from retaliation, and can even lose their jobs. Whistleblowers Protection Act 1989 offers protection against retaliatory discharge. |
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| Within organization barriers include strict chain of command, strong work group identities that encourage loyalty and self-censorship, and ambiguous priorities that make it hard to distinguish right from wrong. |
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| seeks to help people understand the ethical aspects of decision making and to incorporate incorporate high standards into their daily behavior |
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| College curriculum includes course work on ethics, and seminars on the topic are popular in the corporate world. Training is an ethics development aide, it isn’t guarantee of ethical behavior. Not teaching right from wrong, just focusing on the dilemma and how to deal with them. |
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| formal statement of values and ethical standards |
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| They identify expected behavior, such as avoidance of illegal or improper acts in one’s work and good relationships with customers |
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| It becomes very difficult to police practices according to the code of ethics when a company has many suppliers from different parts of the world. |
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| The code cannot guarantee ethical behavior either by members or by outsiders that the organization does business with. The values of any ethics code rests on the human resources foundations of the organization: honest people and ethical leaders that act as role models. |
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| Managers have the power to shape an organization’s policies and set its moral tone. He needs to act ethically and be an ethical role model: his words must be consistent in communicating ethic expectations throughout the organiza |
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| Managers need to act ethically and expect and support ethical behaviors from others. |
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| choses to behave unethically. Actions for personal gain and intentionally disregards the ethics of the situation |
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| fails to consider the ethics of the behavior, unintentionally. |
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| ethical behavior is a personal goal. Would be at the post conventional level of moral development. |
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| enriched awareness that leads to consistent ethical behavior. Moral managers have ethics mindfulness: they communicate ethical values and serve as role models for ethical behavior. |
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| has a mission to solve pressing social problems. They are driven by social motives. |
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| Pursue innovations that help solve social problems, or at least to make lives better for people who are disadvantaged. |
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| Corporate Social Responsibility |
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| obligation of an organization to serve its own interests and those of society. |
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| Corporate Social Responsibility |
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| Double bottom line: financial performance and social impact. May even be Triple bottom line: economic, social and environmental performance. |
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| directly affected by the behavior of the organization and hold a stake in its performance. (Organizations have the obligation to serve their needs) |
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| Consumers, activists groups, nonprofit orgs, employees and government, are very influential in pushing an organization towards social responsible practice |
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| Irresponsible practices are almost impossible to hide for long. Stakeholders can lobby, campaign and actively pressure organizations to respect and protect everything from human rights to the natural environment |
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| Social Responsibility: CLASSICAL VIEW |
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| Management’s only responsibility is to maximize profits. The principal obligation of managers should be to the owners and shareholders. Narrow view on stakeholders; focus on single bottom line of financial performance |
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| Social Responsibility: CLASSICAL VIEW |
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| Argument against social responsibility include fear that its pursuit will reduce business profits, raise business costs, dilute business purpose, give business too much social power. |
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| Social Responsibility: SOCIOECONOMIC VIEW |
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| Management must be concerned within the broader social welfare and not just with corporate profits. Broad stakeholder perspective and puts the focus on an expanded bottom line that includes not only financial performance but social and environmental responsibilities as well. |
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| Social Responsibility: SOCIOECONOMIC VIEW |
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| add long run profits for business, improve the public image of businesses and help them avoid government regulations |
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| Social Responsibility: CLASSICAL VIEW |
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| Society’s best interest are always served in the long-run by executive who focus on profit maximization of the business. |
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| Social Responsibility: SOCIOECONOMIC VIEW |
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| business usually has a vast social impact because of its resources. They have an ethical obligation to act responsibly in the interest of society at large. |
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| Social Responsibility: SOCIOECONOMIC VIEW |
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| Public and stakeholders are demanding organization include social responsibility to their core values and daily activities. |
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| corporate social responsibility improves financial performance which leads to more CRS in the future. |
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| Social responsibility audit |
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| assesses an organization’s accomplishments in areas of social responsibilities. |
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| CRITERIA FOR EVALUATING SOCIAL PERFORMANCE |
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| compliance, zone of compliance, zone of conviction |
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| acting to avoid adverse consequences – to conviction- acting to create positive impact. |
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| economic responsibility (be profitable); legal responsibility (obey the law). |
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| Ethical Responsibility (do what is right); Discretionary Responsibility (Contribute to community). |
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| Focuses on economic priorities in respect to social responsibility |
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| Social demands lying outsides the organizations perceived self-interests are resisted. If organization is criticized for wrongdoing, it can be expected to deny the claims. Fight social demands |
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| seeks protection by doing the minimum legally required to satisfy expectations |
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| Behavior conforms only to legal requirements, competitive market pressure, and perhaps activist voices. Wrongdoing is likely to be denied. Do the minimum legally necessary. |
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| accepts social responsibility and tries to satisfy economic, legal, and ethical criteria |
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| Behavior is consistent to society’s prevailing norms, values, and expectations, often reflecting the demands of outside pressures. Do the minimal ethically required. |
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| Meet all criteria of social performance plus engaging in discretionary performance |
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| Behavior at this level takes preventive action to avoid adverse social impacts from activities, and takes the lead in identifying and responding to emerging social issues. Take leadership in social initiatives. |
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| oversight of top management by a board of directors. |
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| Issues with this is often raised when talking about business ethic failure |
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| Board will hold management accountable for ethical and socially responsible leadership |
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| Governance can be inadequate and ineffectual. When corporate failure and controversies occur, weak governance gets blamed. Government usually steps up to try to improve for the future. |
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