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Transcript of Ethics.ppt (bus1301). u Essence of Ethics u Morally Questionable Acts u Dynamic Relationships that...
ethics.ppt (bus1301)
ethics.ppt (bus1301)
Essence of Ethics Morally Questionable Acts
Dynamic Relationships that Affect Ethical Decision Making
Factors Affecting Ethical Decisions Norms and Counter-norms
Managing Ethics
ethics.ppt (bus1301)
TEXACO TEXACO -- racial discrimination $176 M
MERCURY FINANCEMERCURY FINANCE - - overstating profit $ 2.2 B
ADMADM - - price fixing $100 M
GENETECHGENETECH - - tying personal loan to business deal CEO loses job
BANKER’S TRUSTBANKER’S TRUST - - deliberately misled or deceived customers Damaged
image
W.R. GRACEW.R. GRACE - - sexual harassment CEO loses job
BAUSCH & LOMBBAUSCH & LOMB - - manipulation of accounting data earnings fell 54%
ethics.ppt (bus1301)
1. Responsibility to address corporate issues (58% Execs)
2. Corp. leaders’ responsibility is to the greatest good (52% Execs; 35% MBAs)
3. Switch brands (76% consumers)
4. Skepticism about ‘cause’ related marketing (58% consumers; 21% today)
5. Do not buy (75% consumers)
58% execs
52% execs
35% MBAs
76% consumers
58% consumers21% today
75% consumers
ethics.ppt (bus1301)
1. Social responsibility is important (26% investors)
2. Company image (84% employees)
3. Innovative workplace practices associated with productivity
4. Employee ownership leads to productivity (60% companies)
5. Business has too much power (71 %)
6. Corporate role is more than to make a profit (95%)
1. 26% investors
2. 84% employees
4. 60% companies
5. 71%
6. 95%
ethics.ppt (bus1301)
- Corporate layoffs - theft
- Wall Street sins - selling products that do not meet specs.
- Pentagon fraud
- age discrimination - retaliation against employees who exposed
unsafe/illegal practices
- price fixing
- use of banned chemicals
- power in the market place
* Who is responsible? “Captain of the ship?”
* Does profitability excuse questionable behavior?
Profit at Any Cost
ethics.ppt (bus1301)
Codes do not produce ethical behavior.
Our ethics tend to flow from our core values.
People have intrinsic worth.
ethics.ppt (bus1301)
Conflicts of interest lead to ethical problems
Individual behavior is strongly influenced by incentive
Self-regulation and standard setting organizations fall short
ethics.ppt (bus1301)
Get support by CEO for support of key stakeholders
Get stakeholders participation Expand words/ phrases into expectations Establish feedback mechanism Assure implementation/ monitoring of
results Reward employees who perform and
deliver on values
ethics.ppt (bus1301)
Non-job failures:– Cheating on your expense accounts– Stealing supplies– Sandbagging
Job failures:– Superficial performance appraisal– Not confronting expense account– Cheaters– Falsely praising poor performers– Denial of training opportunities– Undermine management
ethics.ppt (bus1301)
Job distortions:– Bribery– Manipulation of suppliers/buyers– Differential pricing– Falsifying information
Job “creation”:– Bending policies for certain customers– Bending policies for salespeople– Caught violating rules– Arranging for promotions
ethics.ppt (bus1301)
FACTORS AFFECTING ETHICAL DECISIONS
UNCERTAINTY OF
INPUTS
CENTRALITY OF
WORKFLOW
SUBSTITUTABILITYOF
ACTIVITIESPREVENTIVE
ROUTINIZATION
COPINGROUTINIZATION
POWER
CONTROL OFETHICAL
CONTINGENCIES
BEHAVIOR
ethics.ppt (bus1301)
A General Framework of the Ethical Decision-Making Process
ETHICAL SITUATION
CHARACTERISTICS OF THE DECISION MAKER
SIGNIFICANT INFLUENCES
OUTCOMESDECISION
ethics.ppt (bus1301)
Individual Characteristics of the Decision Maker that Influence the Ethical Decision-Making Process
ETHICAL SITUATION
CHARACTERISTICS OF THE DECISION MAKER
SIGNIFICANT INFLUENCES
OUTCOMESDECISION
* Achievement motivation * Knowledge* Need for affiliation * Experience* Ego strength * Risk taking* Locus of control * Machiavellianism
ethics.ppt (bus1301)
Outcomes that Result from the Ethical Decision-Making Process
ETHICAL SITUATION
CHARACTERISTICS OF THE DECISION MAKER
SIGNIFICANT INFLUENCES
OUTCOMESDECISION
* Performance * Feedback* Rewards * Promotions* Satisfaction * Learning
ethics.ppt (bus1301)
Significant Influences on the Ethical Decision-Making Process
ETHICAL SITUATION
CHARACTERISTICS OF THE DECISION MAKER
SIGNIFICANT INFLUENCES
OUTCOMESDECISION
* The organization * Technology* Work * Significant others; customers,* The law peers, immediate supervisor,* Economics top managers, family, friends,* Professionalism other “opinion leaders”
ethics.ppt (bus1301)
Elements of the Ethical Situation
ETHICAL SITUATION
CHARACTERISTICS OF THE DECISION MAKER
SIGNIFICANT INFLUENCES
OUTCOMESDECISION
* Opportunity
* Ethical decision history
* Moral intensity of the situation
Elements of the Ethical Decision-Making Process
Characteristics of Decision Makers
Significant Influences
Outcomes
PERCEIVED ETHICAL PROBLEM
PERCEIVED ALTERNATIVES,
PRODUCT, PRICE, PROMOTION,
DISTRIBUTION INFO
PERCEIVED CONSQUENCES
ELEMENTS OF THE DECISION
Information acquiredInformation processed
Ethical decision historyExpectationsSent and received rolesEthics norms (personal & those of others)
Information acquiredInformation processed
Probability of consequencesDesirability of consequences
JUDGMENT
DECISIONEthical
Situation
ethics.ppt (bus1301)
ORGANIZATION A
ORGANIZATION B
ethics.ppt (bus1301)
NORMS LT relationships with customers Objectivity Openness Candor Honesty Flexibility/Adaptability Cost-effectiveness Taking responsibility Customer Service Develop younger salespeople Team effort Consensus Loyalty
COUNTERNORMS Sandbagging
Emotional Involvement Secrecy Stonewalling Lying Dogmatism Padding expenses Passing the buck Sales force Look out for “Number 1” Individual goals first Taking unfair credit Criticize the company
ethics.ppt (bus1301)
The OLD Ethic FavorsWorkSavingsResponsibilityCompetitionSex rolesSacrificeEquality - InequalityWealth accumulationAbsolutionRisk assumptionEfficiency/ProductivityThrift/Investment
The NEW Ethic FavorsLeisureDebtRightsProtectionUnisexismSelf-interestEqualityWealth redistributionSituationalismRisk aversionQuality of lifeConsumerism
ethics.ppt (bus1301)
Diagnose the reward system
Analyze rules and procedures
Training and education
Develop investigative structures
ethics.ppt (bus1301)
Leaders exhibit moral courage by being willing to make personal sacrifices
Leaders should not become to preoccupied with pleasing constituents
Leaders focus on needs of others - they have a commitment to serve
Business as usual may be evidence of a leadership failure
ethics.ppt (bus1301)
Determination and a winning personality equal success
Employees rarely complain Employees take their cues from
management Top management actions are more
important than codes of ethics Employees wrestle with the short-run
vs. long-run
CEO’SCEO’S Set the Tone for How to HandleSet the Tone for How to Handle Questions ofQuestions of EthicsEthics
(HymowitzHymowitz)
ethics.ppt (bus1301)
THE ESSENCE OF ETHICS I(Article by Williams)
Codes of ethics do not necessarily lead to ethical behavior.
The core values we profess are not necessarily those by which we live.
There is a place for compassion in leadership.
Bureaucracy can come in conflict with ethics. Managers who vent their frustration on
subordinates (who can do little about it) are not acting ethically.
ethics.ppt (bus1301)
THE ESSENCE OF ETHICS II(Article by Williams)
Study the ethics of organizations which have reputations for being ethical.
Build ethics into organization policies and practices.
Make sure quality and service and integrity permeate the entire organization.
Develop high expectations of all members of your organization.
ethics.ppt (bus1301)
THE ESSENCE OF ETHICS II (Article by Williams)
Create an organizational culture that
encourages...… open and honest communication
continual learning personal development
respect for people
ethics.ppt (bus1301)
Background Slides
You will be Responsible for this Material!
ethics.ppt (bus1301)
Company Threats to Ethical Behavior
A firm that… routinely ignores or violates internal codes of ethicsalways looks for simple solutions to ethical problems and
is satisfied with “quick fixes”unwilling to take an ethical stand when there is financial
cost to the decisioncreates an internal environment that either encourages
unethical behavior or discourages ethical behaviorusually sends its ethical problems to the legal department looks at ethics solely as a public relations tool to enhance
its image
ethics.ppt (bus1301)
Company Threats to Ethical Behavior
A firm that… treats its employees differently from its customers is unfair or arbitrary in its performance appraisal standardshas no procedures or policies for handling ethical
problemsprovides no mechanisms for internal whistle-blowing lacks clear lines of communication within the organization is sensitive only to the needs of shareholdersencourages its employees to leave their personal ethical
values at the door
ethics.ppt (bus1301)
FIVE WARNING SIGNS OF ETHICAL COLLAPSE (Jennings article)
surround yourself with subordinates who are young, inexperienced, enthralled with power and deep in debt
send a clear message that you expect results at any cost
be certain the CEO is tyrannical and prone to anger
when an employee’s public statements bring criticism to the company, cut the employee loose
when an ethical lapse is discovered, never admit anything. Conceal, spin and gloss.
ethics.ppt (bus1301)
Do College Honor Codes Make Moral Sense Do College Honor Codes Make Moral Sense on Today’s Campus?on Today’s Campus?
(Brownfield)(Brownfield)
Information on College Students 70% have cheated on a test at least once 87% have cheated on some type of written work 49% have collaborated with others on an assignment 52% have copied from someone 87% business majors have cheated at least once
Conclusion: grade > learning short-run > long-run
chaos > standards negligence > integrity
laziness > diligence
ethics.ppt (bus1301)
Is an Honor Code a reasonable ideal for
Today’s students??? Today, we have a… Questionable moral climate, Lack of strong, value-based up-bringing, and Celebration of negative role models
Do College Honor Codes Make Moral Sense Do College Honor Codes Make Moral Sense on Today’s Campus?on Today’s Campus?
(Brownfield)(Brownfield)
ethics.ppt (bus1301)
Can we arrive at consistency in global ethics standards?– Companies are identified by their corruption– Who will want to partner with such
companies?
ethics.ppt (bus1301)
PR vs. Performance
Real transformations require a change in core values, attitudes, relationships, leadership with experience for change
Sound organizations provide freedom to act, but also have some controls
A culture built around “star players” cannot foster teamwork
ethics.ppt (bus1301)
Chapter #5 - Conducting Business Ethically and Responsible
Companies must be committed to ethics Codes Ethics Programs Ethics Orientation
Social Responsibility Not the same as
ethics Related to ethics
Company Responsibilities Customers Employees Investors Others
ethics.ppt (bus1301)
Chapter #5 - Conducting Business Ethically and Responsible
Can businesses that conduct themselves in an ethical way be profitable?
How can ethical behavior be encouraged?
What do short-term and long-term thinking have to do with ethics?
ethics.ppt (bus1301)
You Will be Responsible for this Material on the TEST
ethics.ppt (bus1301)
ACTIONS ADVANTAGES DISADVANTAGES
Alternative Courses of Action Available in Ethical Situations
NOT THINK ABOUT IT
GO ALONG & GET ALONG
PROTEST
Avoids the danger of getting into a zero-sum game with colleagues
Same as “not think about it”
Individual feels good about making effort to stop unethical behavior
The risk of going in the wrong direction
Same as “not to think about it” Individuals slowly conform… maybe to the wrong direction
Organization disregards protest & punishes protester
ethics.ppt (bus1301)
ACTIONS ADVANTAGES DISADVANTAGES
Alternative Courses of Action Available in Ethical Situations
CONSCIENTIOUSLY OBJECT
LEAVE
Makes clear statement that one person feels that action is unethical
Person feels good about self for making effort to stop unethical behavior
Signals that organization will lose good people if unethical behavior continuesPerson who leaves may join a competitor, feels better because he/she did not cooperate with unethical behavior
Few organizations recognize individual rights to object
May hurt chances for rewards and advancement
Most people are replaceable and if replacement cooperates with unethical behavior, what is gained?
ethics.ppt (bus1301)
ACTIONS ADVANTAGES DISADVANTAGES
Alternative Courses of Action Available in Ethical Situations
SECRETLY BLOW THE WHISTLE
PUBLICLY BLOW THE WHISTLE
SECRETLY THREATEN TO BLOW THE WHISTLE
Can be very effectiveIf whistle-blower remains secret, retaliation cannot occur
Can be effectiveWhistle-blower may be treated as a hero by many
Can be very effectiveWhen it works, organization is not hurt by bad publicity
- Feelings of cowardice - Creation of atmosphere of mistrust - What will whistle-blower do if confronted by firm - tell the truth or lie?
- Organization may attack the whistle-blower - It is difficult to interact with those one is criticizing - It may be difficult to work with those who hold a grudge
- Does not permit dialogue between upper&lower managers - Might prevent injured consumers or clients from receiving remedies
ethics.ppt (bus1301)
ACTIONS ADVANTAGES DISADVANTAGES
Alternative Courses of Action Available in Ethical Situations
SABOTAGE
NEGOTIATE
Can be effective
Identity of saboteur might be protected
Individual action may lead to small-group consensus that will be more effective than individual action
Win-win solutions are possible
Sabotage is not dialogue
Retaliation might occur against the saboteur or against others
Innocent people may be fired
Does not work well in situations that are zero-sum, lose-win, in nature
Individual who perceives ethical problem may not know how to negotiate, my lose “cool”
SELECTED PRINCIPLES OF ETHICAL CONDUCT
KANT’S CATEGORICAL IMPERATIVE: Act in a way that you believe is right and just for any other person in a similar situation.
CARR’S CONVENTIONALIST ETHIC: Bluff and take advantage of all legal opportunities and widespread practices and customs
THE DISCLOSURE RULE: Ask how it would feel to see the thinking and details of the decision disclosed to a wide audience
THE GOLDEN RULE: Look at the problem from the position of another party affected by the decision and try to determine what response the other person would expect as the most virtuous
SELECTED PRINCIPLES OF ETHICAL CONDUCT
THE HEDONISTIC ETHIC: Do whatever you find to be in your own self-interest
MOORE’S INTUITION ETHIC: Go with your “gut” feeling or what you understand to be right in a given situation
SMITH’S MARKET ETHIC: Take selfish actions and be motivated by personal gains in business dealings
MACHIAVELLI’S MEANS-END ETHIC: Ask whether some overall good justifies any moral transgression
NIETZSCHE/MARX MIGHT-EQUALS-RIGHT ETHIC: Seize what advantage you are strong enough to use without respect to ordinary social conventions and laws
SELECTED PRINCIPLES OF ETHICAL CONDUCT
THE ORGANIZATION ETHIC: Ask whether actions are consistent with organizational goals and do what is good for the organization
GARRETT’S PRINCIPLE OF PROPORTIONALITY: Do whatever you will if there is a proportional reason for doing so
THE PROTESTANT ETHIC: Do only that which can be explained before a committee of your peers
THE REVELATION ETHIC: Pray, mediate, or otherwise commune with a superior force or being
BENTHAM / MILL’S UTILITARIAN ETHIC: Determine whether the harm in an action is outweighed by the good
MORAL TYPES DESCRIPTORS Hedontist
Profit- maximizer
Socialite
1. Make physical pleasures the supreme goal in their lives.
KEY QUESTION: Which course of action will yield the greatest pleasure?
2. Goal of making as much money as possible KEY QUESTION: which course of action will make
the most money? All their feelings and associations can be melted
down to dollars
3. A social butterfly, a party animal KEY QUESTION: Which course of action will help
me best get along with the group? If you want to know what this person thinks, find
out who spoke to him or her most recently
MORAL TYPES DESCRIPTORS4. Life centers around power and glory. KEY QUESTION: Which course of action will increase
my power and glory? These people have enormous egos, boundless
ambitions, and undertake reckless actions.
5. Spiritual values predominate KEY QUESTION: which course of action will help me
become a better person? These people have new insights, reform old ways,
initiate new ways of thinking, strike out on new paths
6. A technician POSITIVES: Creative, knowledgeable, independent,
self-reliant, hardworking NEGATIVES: Sadistic, forceful, manipulative, non-
trustworthy
Politician
Self-actualizer
Craftsman
MORAL TYPES DESCRIPTORS
7. Main goal in life to belong to an organization POSITIVES: Service oriented, loyal,
responsible, humble, sensitive to the needs of others, dependable, pleasant, trustworthy
NEGATIVES: Fear, worry, dependency, lacking vision, risk aversive, low drive, indecisive, change resistant
8. Dominant goal in life to gain prestige, glory, fame
POSITIVES: Inventive, flexible, change oriented, competitive, team player, independent, risk taker, impartial, high energy, idealistic
NEGATIVES: Lack of conviction, rebellious, manipulative, lack of intimacy, lonely
Company person
Gamesman
ethics.ppt (bus1301)
PERSONAL MORAL DEVELOPMENT
1. Physical consequences determine moral behavior. Avoidance of punishment and deference to power are typical of this stage
2. Individual pleasure needs are the primary concern and dictate attitudes toward behavior
ORGANIZATIONAL MORAL DEVELOPMENT
1. Social Darwinism - Fear of extinction and the urgency of financial survival dictate moral conduct. The direct use of force is the acceptable norm.
2. Machiavellianism - Organizational gain guides actions. Successfully attaining goals justifies the use of any effective means, including individual manipulation
Models of Personal and Organizational Moral Development
PERSONAL MORAL ORGANIZATIONAL MORAL
DEVELOPMENT DEVELOPMENT
ethics.ppt (bus1301)
PERSONAL MORAL DEVELOPMENT
3. The approval of others determines behavior. The good person is one who satisfies family, friends, associates.
4. Compliance with authority, upholding of the social order, and “doing one’s duty” are primary concerns
ORGANIZATIONAL MORAL DEVELOPMENT
3. Cultural conformity - A tradition of standard operating procedures and caring groups. Peer professional pressure to adhere to social norms dictates what is the right and wrong behavior
Allegiance to authority- Directions from legal authority determine moral standards. Right and wrong are based on the decisions of those with legitimate hierarchical power
Models of Personal and Organizational Moral Development
PERSONAL MORAL ORGANIZATIONAL MORAL DEVELOPMENT DEVELOPMENT
ethics.ppt (bus1301)
ORGANIZATIONAL MORAL DEVELOPMENT
5. Democratic participation - Participation in decision-making reliance on majority rule become organizational moral standards. Participative management becomes institutionalized
Organizational integrity- Justice and individual rights are the moral ideals. Balanced
judgment between competing interests shapes organizational character which, in turn, determines the validity of the behavior
PERSONAL MORAL DEVELOPMENT
5. Tolerance for rational dissent and acceptance of majority rule become primary ethical concerns
6. What is right and good is a matter of individual conscience and responsibly chosen commitment. Morality is based on principled personal convictions
Models of Personal and Organizational Moral Development
PERSONAL MORAL ORGANIZATIONAL MORAL DEVELOPMENT DEVELOPMENT