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Chapter 2Managerial Ethics

Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. 2

Society’s Expectations from Organizations and Managers Managers regularly make decisions

about issues with a social dimension In competitive environment,

organizations cannot afford to be seen as socially irresponsible

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Demonstrating Social Responsibility Social responsibility Social obligation Social responsiveness

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Relationship Between Social Responsibility and Economic Performance Research studies show positive

relationship General public perception that

companies who behave in a socially responsible way have better business performance

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Managers Becoming More Socially Responsible It is the collective behaviour and actions

of managers that make a company socially responsible

Managers who make the right decisions are described as being or behaving ethically

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Managerial Ethics

Ethics Rules and principles that define right

and wrong conduct Three Views of Ethics

Utilitarian view - ethical decisions are made on the basis of their outcomes or consequences

(continued)

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Managerial Ethics (continued)

Three Views of Ethics (continued) Rights view - respects and protects

individual liberties and privileges Theory of justice view - managers

impose and enforce rules fairly and impartially

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Values Basic convictions about what is right

and wrong Influence ethical behaviour Values are developed in early years

Organizational Factors That Affect Ethical And Unethical Behaviour

ModeratorsEthical/Unethical

Behaviour

OrganizationalCulture

StructuralVariables

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Managers Improving Ethical Behaviour

Hire individuals with high ethical standards

Establish codes of ethics and decision rules

Lead by example

(continued)

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Managers Improving Ethical Behaviour (continued)

Delineate job goals and performance review mechanisms

Provide ethics training Conduct social audits Provide support to individuals facing

ethical dilemmas

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Code of Ethics Formal statement of an organization’s

primary values and ethical rules it expects employees to follow

Usually written Must state in detail acceptable

behaviours and actions