1. Archie B. Carroll Ann K. Buchholtz
Business & Society Ethics, Sustainability, and Stakeholder Management Eighth Edition
Archie B. Carroll
Ann K. Buchholtz
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2. Chapter 8 Personal and Organizational Ethics
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Learning Outcomes
Understand the different levels at which business ethics may be addressed.
Differentiate between consequence-based and duty-based principles of ethics.
Enumerate and discuss principles of personal ethical decision making and ethical tests for screening ethical decisions.
Identify the factors affecting an organization’s ethical culture and provide examples.
Describe and explain actions, strategies, or “best practices” to improve an organization’s ethical climate.
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Chapter Outline
Ethics Issues Arise at Different Levels
Personal and Managerial Ethics
Managing Organizational Ethics
From Moral Decisions to Moral Organizations
Summary
Key Terms
Discussion Questions
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5. Levels at Which Ethical Issues May be Addressed
Personal level
Situations faced in our personal lives outside the context of our employment.
Organizational level
Workplace situations faced by managers and employees.
Industry or profession level
A manager or organization might experience business ethics issues at the industry or professional level.
Societal and global levels
Managers acting in concert through their companies and industries can bring about constructive changes.
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6. Personal and Managerial Ethics
There are three major approaches to ethical decision making
Conventional Approach
Discussed in chapter 7.
Principles Approach
Managers desire to make decisions based on more than is provided by the conventional approach to ethics.
A principle of business ethics is an ethical concept, guideline, or rule that assists you in taking the ethical course.
Ethical Tests Approach
Discussed later in this chapter.
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7. Types of Ethical Principles or Theories
Teleological theories
Focus on consequences or results.
Deontological theories
Focus on duties.
Aretaic theories
Focus on virtue.
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Utilitarianism
A teleological principle that focuses on acts that produce the greatest good for the greatest number.
Strengths
Weaknesses
Forces thinking about the general welfare of stakeholders
Ignores actions that may be inherently wrong
Allows personal decisions to fit into situational complexities
May conflict with the notion of justice
Difficult to formulate satisfactory rules for decision making
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9. Kant’s Categorical Imperative
A duty-based, deontological, principle.
Formulations:
Act only on rules that you would be willing to see everyone follow.
Act to treat humanity in every case as an end and never as a means.
Every rational being is able to regard oneself as a maker of universal law. We do not need an external authority to determine the nature of the moral law.
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Principle of Rights
Moral rights
Rights that we ought to have based on moral reasoning.
Principle of rights
Focuses on examining and possibly protecting individual moral or legal rights.
A negative right is the right to be left alone.
A positive right is the right to something.
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Principle of Justice
Involves considering what alternative promotes fair treatment of people.
Types of justice
Distributive
Compensatory
Procedural
Rawlsian
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Ethical Due Process
Process fairness
Have employees been given input into the decision process?
Do employees believe the decisions were made and implemented in an appropriate manner?
Do managers provide explanations when asked? Do they treat others respectfully? Do they listen to comments being made?
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13. Rawls’s Principles of Justice
Each person has an equal right to the most basic liberties compatible with similar liberties for others.
Social and economic inequalities are arranged so that they are both:
Reasonably expected to be to everyone’s advantage, and
Attached to positions and offices open to all.
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14. Ethic of Care and Virtue Ethics
Ethic of care/Principle of caring
Traditional ethics focus too much on the individual self.
Views the individual as relational, not individualistic– similar to stakeholder theory.
Virtue ethics
Focuses on individuals becoming imbued with virtues.
Based on Aristotle and Plato.
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Servant Leadership
Servant leadership
Based on the moral principle of serving others first, such as employees, customers, and community.
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The Golden Rule
Do unto others as you would have them do unto you.
The Golden Rule is:
Accepted by most people.
Easy to understand.
A win-win philosophy.
A compass when you need direction.
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17. A Sketch of Ethical Principles
The Categorical Imperative
The Means-Ends Ethic
The Conventionalist Ethic
The Might-Equals-Right Ethic
The Disclosure Rule
The Organization Ethic
The Golden Rule
The Hedonistic Ethic
The Professional Ethic
The Intuition Ethic
The Proportionality Principle
The Market Ethic
The Revelation Ethic
The Utilitarian Ethic
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18. Ethical Tests Approach
Test of One’s Best Self
Test of Making Something Public
Test of Ventilation
Test of Common Sense
Test of the Purified Idea
Big Four (greed, speed, laziness, or haziness)
Gag Test
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19. Improving Organizational Ethical Culture
Most organizations are a mix of compliance and emphasizing values like ethics.
Concerns about the compliance orientation
Could undermine the ways of thinking or habits of mind that are needed in ethics thinking.
Can squeeze out ethics.
Managers many not consider tougher issues that a more ethics-focused approach might require.
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20. Effective Communication of Ethics
Requires
Written and verbal communication
Candor
Fidelity
Confidentiality
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21. Features of Ethics Programs
Written standards of conduct
Ethics training
Mechanisms to seek ethics advice or information
Methods for reporting misconduct anonymously
Disciplinary measures for employees who violate ethical standards
Inclusion of ethical conduct in the evaluation of employee performance
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Ethics Officers
Are in charge of implementing ethics initiatives in the organization.
The position may be created in response to the Federal Sentencing Guidelines, which reduces penalties to those companies with ethics programs.
Problem with diminishing organizational status.
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23. Is it legal? Is it balanced? How will it make me feel about myself?
Ethics Screen
Is it legal?
Is it balanced?
How will it make me feel about myself?
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Ethics Quick Test
Is the action legal?
Does it comply with our values?
If you do it, will you feel bad?
How will it look in the newspaper?
If you know it’s wrong, don’t do it.
If you’re not sure, ask.
Keep asking until you get an answer.
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Codes of Conduct
A way of establishing standards of behavior and communicating them to managers and employees.
The single most important element of an ethics and compliance program.
A fairly recent phenomenon.
Codes of conduct positively affect corporate culture.
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26. Ethics Hotlines and Whistle Blowing
Employees must have outlets to anonymously report questionable behaviors.
Hotlines are the most common way to report corporate fraud.
Can be telephone, web, or -based.
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27. Purposes of Ethics Training
Learn the fundamentals of business ethics.
Learn to solve ethical dilemmas.
Learn to identify causes of unethical behavior.
Learn about common managerial ethical issues.
Learn whistle-blowing criteria and risks.
Learn to develop a code of ethics and execute an internal ethical audit.
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28. Ethics Audits and Risk Assessments
Intended to carefully review such ethics initiatives as ethics programs, codes of conduct, hotlines, and ethics training programs.
Sustainability Audit
Helps to identify sustainability issues within an organization.
Fraud Risk Assessment
Review processes that identify and monitor conditions that may pertain to the company’s exposure to compliance/misconduct risk and to review methods for dealing with concerns.
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29. Corporate Transparency
A quality, characteristic, or state in which activities, processes, practices, and decisions that take place in companies become open or visible to the outside world.
The degree to which an organization:
Provides public access to information.
Accepts responsibility for its actions.
Makes decisions more openly.
Establishes incentives for leaders to uphold standards.
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30. Board of Director Leadership and Oversight
Leadership and oversight of ethical initiatives by boards is not a given.
The Sarbanes-Oxley Act
Companies are required to protect whistle- blowers without fear of retaliation.
It is a crime to alter, destroy, conceal, cover up, or falsify documents to prevent their use in a federal government lawsuit.
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Key Terms
Aretaic theories/principles
Categorical imperative
Codes of conduct
Codes of ethics
Compensatory justice
Compliance orientation
Corporate transparency
Deontological theories/principles
Distributive justice
Ethical due process
Ethics orientation
Ethical tests
Ethic of care
Ethics audits
Ethics officer
Ethics programs
Golden Rule
Legal rights
Moral rights
Negative rights
Opacity
Positive rights
Principle of justice
Principle of rights
Principle of utilitarianism
Procedural justice
Process fairness
Rights
Risk assessments
Servant leadership
Sustainability audit
Teleological theories/principles
Transparency
Utilitarianism
Virtue ethics
© 2012 South-Western, a part of Cengage Learning