Ethics in management

Ethics in managementChapter 3

Introduction Transparency and Accountability are the two critical words in the corporate world especially in the areas of functional management. As it is well-known, many of the financial and accounting scams and scandals in our times are occurring more because of its absence. The functional areas in business management are concerned with the practical application of management principles in different fields of day-to-day business activities.

These areas are :-Human resource managementMarketing Finance Information technology and so on.Management includes three Ms for considerations while dealing with managerial solutions. They are:MaterialsMethods andMen

Importance of ethics in the workplaceBelonging to a group, communityCommitment and motivation for the jobPromote a strong public image

Its the right thing to do !4What Are Unethical Business Practices?Surveys have identified the following recurring themes to prominent everyday ethical issues facing businesses and their stakeholders:Managers lying to employeesOffice nepotism and favoritismTaking credit for others workReceiving/offering kickbacksStealing from the companyFiring an employee for whistle-blowingPadding expense accountsDivulging confidential information or trade secretsTerminating employment without sufficient noticeUsing company property/materials for personal use

Where are Unethical Business Practices, in general, done?The most unethical behavior, as per one survey, happens in the following areas:GovernmentSalesLawMediaFinanceMedicineBankingManufacturing

One of the managements most important challenges is to conduct business ethically while achieving high levels of economic performance.The values rooted in the structure of Indian culture are: respect for the individual, cooperation and trust, top quality product/service, work-is-worship, contentment, ethical soundness, self-discipline and self-restraint, customer satisfaction, creativity, sharing, renunciation and detachment. Ethics in management

Management ethics is the ethical treatment of employees, stockholders, owners, and the public by a company. A company, while needing to make a profit, should have good ethics. Employees should be treated well, whether they are employed here or overseas. By being respectful of the environment in the community a company shows good ethics, and good, honest records also show respect to stockholders and owners.

Ethics Management is a managerial tool to enforce integrity of employees through a set of codified rules and regulations and in the grey areas where such codified rules and regulations are absent, the company or the government has to follow reasonable ethical standards or well-founded standards of right and wrong that prescribe what humans ought to do

Types of Management EthicsImmoralRecognize the ethical issues involved and choose to do the wrong thing. MoralRecognize the ethical issues involved and choose to do the right thing.AmoralDo not consider the ethical implications of an action or believe that ethics are irrelevant.Immoral, Amoral, Or Moral ManagementImmoral management means intentionally going against ethical principles of justice and of fair and equitable treatment of other stakeholders.

Amoral management happens when others are treated negligently without concern for the consequences of actions or policies.

Moral management places value on equitable, fair, and just concern of others involved.Factors shaping ethical behaviour at workIndividualEveryones own personal moral philosophyIndividual stage of moral developmentLaws and regulations

OrganizationalThe organisations cultureCo-workers and leadersOpportunities to be ethical or unethicalLaws, requirements and regulations11What Is Organizational Culture?Organizational cultureThe characteristic values, traditions, and behaviors a companys employees share.How is culture is revealed? Ceremonial eventsWritten rules and spoken commandsOffice layoutOrganizational structureDress codesCultural symbols and behaviorsFigureheads12Ethics in HRMHRM contracts with human resource planning and development related activities in an organization. Arguably it is that branch of management where ethics really matter. Since it concerns human issues specially those of compensation, development, industrial relations and health and safety issues. HRM-Related Ethics ActivitiesSelectionFostering the perception of fairness in the processes of recruitment and hiring of people.Formal proceduresInterpersonal treatmentProviding explanationsSelection toolsTwo-way communication TrainingHow to recognize ethical dilemmas.How to use ethical frameworks to resolve problems.How to use HR functions in ethical ways.14HRM-Related Ethics Activities (contd)Performance AppraisalAppraisals that make it clear that the company adheres to high ethical standards by measuring and rewarding employees who follow those standards.Reward and Disciplinary SystemsThe organization swiftly and harshly punishes unethical conduct. Workplace Aggression and ViolenceTaking care that HR actions do not foster perceptions of inequities that translate into dysfunctional behaviors by employees.15ETHICS IN THE WORKPLACEINTRODUCTION

Work Ethics: A group of moral principles, standards of behavior, or set of values regarding proper conduct in the workplace

Importance of workplace ethicsWorkplace ethics ensures positive ambience at the workplace.Employees develop a feeling of loyalty and attachment towards the organization.Organizations need to have fool-proof systems to measure the performance of individuals.Workplace ethics ensures mentoring their employees.Retention management is easy.Employees feel secure about their job and career. It strengthens the bond among employees and most importantly their superiors. Organizations need to stand by their employees even at the times of crisis.Ethical behaviour and corporate social responsibility can bring significant benefits to a business. For example, they may: Attract customers to the firms products, thereby boosting sales and profits, make employees want to stay with the business, reduce labour turnover and therefore increase productivity, Attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees, Attract investors and keep the company's share price high, thereby protecting the business from takeover.

Unethical behaviour or a lack of corporate social responsibility, by comparison, may damage a firms reputation and make it less appealing to stakeholders. Profits could fall as a result.

ETHICS IN THE WORKPLACEBusiness Abuse Any : illegal unethical irresponsible Act done against an Employer

ETHICS IN THE WORKPLACEResults of Business AbuseHigher prices Business FailureFewer JobsUnpleasant Working Conditions

ETHICS IN THE WORKPLACEA. Examples of Business AbuseStealingMerchandiseMoney * Shoplift *Kickback * Conflict of Interest * Unauthorized DiscountsTime

ETHICS IN THE WORKPLACEA. Examples of Business Abuse (Continued)VandalismFalsify RecordsBreak ConfidentialityIgnore Safety RulesMisrepresent Merchandise

ETHICS IN THE WORKPLACEA. Examples of Business Abuse (Continued)Poor Client ServiceIrresponsible BehaviorAddictions * drugs * alcohol * tobacco

ETHICS IN THE WORKPLACEA. Examples of Business Abuse (Continued)Gossip * Causes poor work environment (morale) * Lowers Productivity

ETHICS IN THE WORKPLACE11 Harassment of Co-wks or Clients *Unwelcome sexual advances * Compliance as condition of employment * Interferes with work performance through intimidationEthics in the WorkplaceNBES - Employees observe 5 main types of misconduct

LyingWithholding needed informationAbusive or intimidating behavior towards employeesMisreporting actual time or hours workedDiscrimination

The six most frequent categories for investigations were:

Conflict of interest - 65% Misuse of resources - 64%Sexual harassment/harassment - 50%Gifts and gratuities - 38%Discrimination - 38%Theft - 31%Examples of Unethical Behavior27Ethical issues in HRMDiscrimination issuesIssues surrounding the representation of employees and the democratization of the workplace. Issues affecting the privacy of the employee.Whistle blowing.Issues relating to the fairness of the employment contract and the balance of power between employer and employee.Occupational safety and health. WHISTLEBLOWING

Whistle blowing in its most general form involves calling(public)attention to wrong doing, typically in order to avert harm.Whistle blowing is an attempt by a member or former member of an organization to disclose wrong doing in or by the organization.

Kinds of Whistle blowing:Internal Whistle blowing is made to someone within the organization. Personal Whistle blowing is blowing the whistle on the offender, here the charge is not against the organization or system but against one individual.The impersonal, External Whistle Blowing.

Rarely whistleblower are honored as heroes by their fellow workers, for the following reasons:Those did not blow the whistle guilty of immorality.

They doubt the loyalty of the whistle blowerto the employer.

The whistleblower is perceived as a traitor, as someone who has damage the firm - the working family to which he/she belongs. Morally justifiable whistle-blowing are easier, safer and more efficacious.Because directors share holders and other authorities don't pay much attention to pretty or unproven complaints.