Chapter 8 Unethical Behavior in Organization and Human Nature

7/21/2019 Chapter 8 Unethical Behavior in Organization and Human Nature

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CHAPTER 8:Unethical Behavior

in Organization

and Human Nature


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Focu o! the Cha"ter:

#night on human nature $ail% occurrence unethical &ehavior

Cot aociated 'ith unethical &ehavior

Com"etitive advantage o! ethical organization

(i) tage o! moral develo"ment

*h% good "eo"le occaionall% &ehave unethicall%


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#ntroduction +anager mut manage their organization, ethicalenvironment- $ue to im"er!ection in human nature andina""ro"riate management control %tem. man%organization are ethicall% challenged-

There!ore. managing ethic i eential !or ever%organization- Cot o! unethical &ehavior at 'or/ can &eu&tantial-

A""ro"riatel% managing ethic "rovide ethicalorganization 'ith man% com"etitive advantage- $e"itethee com"etitive advantage. ho'ever. unethical&ehavior continue to occur &ecaue ever% "eron imorall% im"er!ect-

Thu di0erent theorie o! human nature and the i)tage o! moral develo"ment e)"lore 'h% good "eo"le


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Unethical Behavior at *or/Peo"le are una'are that ever% deciion made during ada% ha ethical cone1uence-

All deciion are initiated &% motive and and reult incone1uence- *ere our motive good or &ad. 'here thecone1uence good or &ad2

Unli/e &reathing and &lin/ing 'hich are automatic.human &eing "oe !ree 'ill and can chooe to &ehaveethicall% or unethicall% in a "articular ituation- Even i! thedeciion ma/er &elieve he or he i &eing ethical.omeone harmed &% the action ma% thin/ other'ie-

Ever% organization i con!ronted 'ith ethical andunethical &ehavior- (ome em"lo%ee are unure a&out&eing ethical at 'or/ and !ail to learn !rom unethical"redeceor-


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T%"e o! Ethical +iconduct +otl% O&erved in Organization:

Com"an% reource a&ue

A&uive or intimidating &ehavior to'ard em"lo%ee

3%ing to em"lo%ee

Email or internet a&ue

Con4ict o! interet

$icrimination3%ing to ta/eholder

Em"lo%ee &ene5t violation

Em"lo%ee "rivac% &reach

#m"ro"er hiring "ractice

Fali!%ing time or e)"ene


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6Unethical Behavior at *or/ Ever% "ro!eion and indutr% e)"erience ethical"ro&lem- For e)am"le in the accounting "ro!eion.unethical activitie among the auditor include !ali!%ingreim&urement or time re"ort. 'or/ing lo'l% 'ithoutconcern !or &udget limit. and conve% con5dential or"rivate in!ormation- Another e)am"le i "u&lic relation andale "ro!eion 'here em"lo%ee e)"erience "reure tomire"reent the truth- The common unethical iueinclude ma/e unrealitic "romie on ale call and l%inga&out com"an%, "roduct and ervice-

Common ethical iue in O(H "ro!eion2

$i0erent level o! em"lo%ee i alo con!ronted 'ithethical iue- For e)am"le unethical dicriminator%"ractice &aed on gender and over re"ort revenue toma)imize "ro5t and im"re invetor- +iddle7levelmanager ometime 'rote !raudulent internal re"ort and


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Cot Aociated 'ith Unethical Behavior

+anager o!ten underetimate the cot aociated 'ithunethical &ehavior- The mot direct cot i lot o!&uine- #t ta/e onl% one unethical &ehavior !or anorganization to loe a /e% cutomer and &een ued &%them- Cot aociated 'ith unethical &ehavior includelegal cot. the!t. recruitment and turnover cot.monitoring cot. re"utation cot. and a&uive treatmentcot-

3egal cot 3a'uit are one o! the mot eail%1uanti5a&le cot aociated 'ith unethical &ehavior- Anorganization can !ace la'uit &% other organization or their

em"lo%ee- For e)am"le. man% em"lo%ment civil rightcae 'ere &ring in court and a to&acco com"an% 'aued to "a% damage to a mo/er d%ing o! lung cancer-

Em"lo%ee the!t The!t re"reent a cot directl% incurred&% organization !or hiring untrut'orth% em"lo%ee-Em"lo%ee can teal mone%. "roduct. or time- Fore)am"le. the &igget ource o! retail indutr% the!t iem"lo%ee. not cutomer- #n addition. the!t can occur at all


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6 Cot Aociated 'ith Unethical Behavior

+onitoring cot7 Organization incur monitoring cot'hen the% em"lo%. or do &uine 'ith unethicalindividual- Once an em"lo%ee ha lied. he or he need to&e more cloel% monitored until trut i retored- Anunethical organization alo !ace additional monitoring

cot !rom increaed crutin% and re1uet &% client- Fore)am"le the o'ner do not trut the contractor- The lac/o! trut reult in additional cot o! ne' la%er o! rule andregulation to "revent unethical &ehavior-

Re"utation cot7 An organization, re"utation i one o!the mot im"ortant aet- Em"lo%ee. cutomer. and

invetor conider organizational re"utation 'hen ma/ingem"lo%ment and "urchae deciion- Reearcher re"orttrong correlation &et'een Occu"ational Health and (a!et%Adminitration violation and decline in organizationalre"utation-

A&uive treatment cot Em"lo%ee managed &% ana&uive &o re"ond in a variet% o! 'a% that reult in

additional cot to organizational o"eration- (ome


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6 Cot Aociated 'ith Unethical Behavior

Recruitment and turnover cot Unethical organizationcannot &e truted- Unethical organization incur greatercot recruiting and the% mut "rovide ome "remium too0et their ethical e9ciencie- #t 'ill alo reult in reducelo%alt% among cutomer. u""lier. and invetor-

Com"etitive Advantage o! Ethical


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Com"etitive Advantage o! EthicalOrganization

*herea unethical &ehavior ha a negative im"act onorganizational o"eration. ethical &ehavior can have aver% "oitive im"act on an organization- A gro'ing amounto! reearch !ound ethical "er!ormance can contri&ute to

5nancial "er!ormance- Ho' much ethic enhance 5nancial "er!ormancede"end on a 'ide range o! iue and the lin/ &et'eenethic and 5nancial "er!ormance i multi!aceted-

Organization that are ethical a&le to attract high

1ualit% em"lo%ee. have higher level o! em"lo%ee

ati!action. and greater em"lo%ee commitment toorganization-

Ethical organization alo lead the "otential cutomer toconitentl% chooe the ethical organization over unethicalorganization- The% 'illing to "a% a "remium "rice !or"roduct and ervice u""lied &% an ethical com"an%-

Organization


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Organization

An ethical organization attract alo attract high 1ualit%u""lier and ha high level o! u""lier ati!action and1ualit%- Potential u""lier 'ill ell to the ethicalorganization !air "rice and &ecome a "artner-

For invetor. the% 'ill &ecome attracted to ethicalorganization- *hich lead to high level o! invetorati!action and lo%alt%- #nvetor are dra'n to organizationthat ado"t &et "ractice in cor"orate governance uch a5nancial tran"arenc%-

Ethical organization honetl% communicate 'ithta/eholder and "a% their !air hare or ta)e- #n return.

ethical organization earn re"ect o! and gain acce tocommunit% leader and government o9cial-


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Human Nature +anaging ethic entail undertanding human nature-Human nature re!er to the moral. "%chological and ocialcharacteritic o! human &eing- For e)am"le. "eo"le 'illthin/ that can other "eo"le &e truted and 'h% human&eing are morall% im"er!ect-

Philoo"her theorized that individual are &orn 'ith oulconiting o! mind. emotion. and deire that !ormindividual, inner eence- The oul i "ure and inle at&irth and ee/ "er!ect goodne- E-g- Children are &orngood and then learn the immoral &ehavior !rom morall%corru"t adult-

Other "hiloo"her vie' that individual are &ornmorall% neutral- The% &elieve "eo"le tore moral rule and/no'ledge &aed on li!e e)"erience- #n!ant are &orn 'ithmoral ca"acitie &ut their moral "rinci"le i ha"e &%culture. "arent and e)"erience-


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(tage o! +oral $evelo"mentEver%one ha the "otential to &e /ind or cruel to other-Children and adult !rom man% culture !ormed moral

udgment in re"one to erie o! ethical dilemma-

Baed on reearch. "attern emerged in term o! ho'

"eo"le reaoned through the ethical dilemma- Peo"lee1uentiall% "rogre through a continuum o! i) tage o!moral develo"ment- The i) tage are u&divided intothree level: Preconventional. Conventional.Potconventional-

Preconventional At thi tage. the individual i not"erceived a &eing "art o! &road communit% 'ith rule andregulation- #ntead the right thing to do i that 'hichgenerate "eronal "leaure and avoid "ain- Thu. moral

reaoning i &aed on 'hat &ene5t the individual- Onl%m% interet e)it and matter- +oral determination i &aedon m% o'n need and 'ant-


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6 (tage o! +oral $evelo"ment

Conventional At thi tage. ocietal role andagreement matter a great deal to the individual- The rightthing to do i to &e a good role model and maintain

ocietal order- Thu. moral reaoning i &aed on a""l%ingocial role or grou" mem&erhi"- The interet o! other"eo"le mut &e conidered-

Potconventional 7 At thi tage the individual e)"loreinto the "rinci"le that govern ocietal role and order- The

right thing to do i to a&ide &% a&tract univeral ethical"rinci"le uch a utice !or ever%one- Thu. moralreaoning i &aed on a&tract "rinci"le that all humanit%hould !ollo'-


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*h% $o ;ood Peo"le Behave Unethicall%

Ethic 'ould &e ea% to manage i! it 'ere im"l% amatter o! detecting and dimiing evil "eo"le-

Ho'ever. good "eo"le occaionall% ma/e ethicalmita/e. 'hich at time can &e ver% cotl% !or an

organization- There are !our general reaon 'h% good "eo"leoccaionall% &ehave unethicall%:

Unintended unethical &ehavior Unintended unethical&ehavior could reult !rom inu9cient /no'ledge.ituational am&iguit% or mialigned management %tem-

Chooing &et'een com"eting value (ometime.ethical dilemma arie and the deciion ma/er mutchooe &et'een t'o com"eting value. &oth o! 'hich aremorall% a""ro"riate- U"et "eron ma% claim that thedeciion ma/er ha &ehaved unethicall% even though thedeciion ma/er &elieved he or he ha made ethicaldeciion-


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6*h% $o ;ood Peo"le Behave Unethicall%

#ntentional Unethical Behavior 7 Peo"le "rovide a 'iderange o! reaon !or &ehaving unethicall%- Common reaoni to avoid "unihment and receive "raie- (ome good"eo"le alo attri&ute their occaional unethical &ehavioron an organizational culture that either encourage ortolerate them- Then. ome good "eo"le &ehave unethicall%a a reult o! !eeling "reured to do o- 3atl%. a good"eron ma% &ehave unethicall% &ecaue the end goal i oeential that the end uti!% the mean-

Failure to re"ort unethical &ehavior (ometime. good

"eo"le remain ilent a&out unethical activitie at 'or/-The to" reaon !or not in!orming a manager a&out

unethical &ehavior 'ere !ear o! &eing la&eled or vie'negativel% &% other. !ear o! damaging relationhi". and!ear o! retaliation-

A concluion. organization are com"le) human


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7 EN$ OF CHAPTER 87

Chapter 8 Unethical Behavior in Organization and Human Nature

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