1. Managing Business Ethics
Chapter 7
Treviño & Nelson – 5th Edition

2. Chapter 7 Overview Introduction In Business, Ethics Is about Behavior
Our Multiple Ethical Selves
Rewards and Discipline
“Everyone’s Doing It”
People Fulfill Assigned Roles
People Do What They’re Told
Responsibility Is Diffused in Organizations
Conclusion

3. Underlying Assumptions
Managers want to be ethical
Managers want their subordinates to be ethical
Based on their experience, managers will have insight into the unique ethical requirements of the job

4. Advice: Ethical Behavior
Think of ethics in behavioral terms – what behavior are you looking for?
Specify the behavior you want and explain why
Create a work environment that supports that behavior

5. Multiple Ethical Selves
Ken Lay
Dennis Levine
Practical Advice:
Analyze yourself
Observe your subordinates
Identify what influences them
Ken Lay

6. Reward systems What gets rewarded, gets done!
People will go the extra mile to achieve goals set by management
Goals combined with rewards can encourage unethical behavior

7. Reward systems What gets rewarded, gets done! Practical Advice:
Think about what kind of behavior and attitudes are being rewarded explicitly and implicitly
Think about goals, likely behavior, unintended consequences
Ethical Pygmalion effect – expectations of high standards and ethical behavior

8. Recognize the Power of Indirect Rewards and Punishments
Social learning theory
Tailhook example
Rewarding ethical behavior
Difficult in the short term
Easier over the long term

9. Punishment Critical part of a manager’s job
Must be administered fairly
Fits the crime
Consistent with what others have received
Employee has input
Conducted in private
Explanation that ties punishment to misconduct
Recognize punishment’s indirect effects
Thomas J. Watson, Jr. IBM example

10. Discipline Practical advice for managers:
Adults differentiate between fair and unfair discipline
Punishment is expected if rules are broken
Discipline fairly
Be concerned about observers and implicit messages

11. People Follow Group Norms
Rationalizing unethical behavior
Pressure to go along
Practical advice for managers
Be aware of group norms
Consider whether the reward system implicitly rewards misconduct
Slade Company example

12. Deindividuation – People Fulfill Assigned Roles
Cagney & Lacey example
Research: Zimbardo Prison experiment
Roles at work
Conflicting roles can lead to unethical behavior
Roles can support ethical behavior
Practical advice for managers
Roles influence behavior
Analyze roles and role conflicts
Determine whether jobs need to be altered

13. People Do What They’re Told
Research: the “shocking” Milgram experiment
Obedience to authority at work
Practical advice for managers
Recognize the power managers hold as legitimate authority figures
Use this power to set high
ethical standards

14. Diffused Responsibility
“Don’t worry – we’re taking care of everything”
Workers encouraged to turn over responsibility to those in higher levels
Diffusion of responsibility in groups
Bystander research
Groupthink and “illusion or morality”
Ensure that alternative views are aired
Divide responsibility
Specialization
“Fragmentation of conscience”
Create psychological distance

15. Diffused Responsibility
Practical advice for managers:
Make responsibility a relevant issue and reinforce
Appoint devil’s advocate or multiple advocates in groups
Spell out accountability associated with specific positions

16. Walk the talk Talk about the ethical implications of decisions
Make it clear you don’t want to be protected from bad news
Provide guidance on ethical decision making
Weave ethical goals into performance management
Reward ethical conduct; discipline unethical conduct
Demand accountability
Be aware of the standards I am setting
How would people describe me?

17. Case
You’ve recently been promoted into the position of marketing manager in the communications division of your company. Your new job involves managing a staff and creating the publications and marketing materials for insurance sales professionals in three regions. You have met the directors of the three regional sales forces before, and now you ask each one for a meeting to discuss in depth how your team can best meet their needs. Two of the sales directors were very cordial, and each explained what the technical demands of their areas are and how your department can best meet their needs. However, during your meeting with Bill—the sales director of the third region and one of your firm’s biggest moneymakers—he lays down the law. He says that his area is the largest of the three regions, and it produces significantly more revenue for your company than the other two regions combined. “You and your people need to know that when I say, ‘Jump,’” he says, “they need to ask, ‘How high?’” In return, he says, he’ll recommend you and your people for every award the company has to offer. In addition, he says he’ll personally give you a monetary bonus, based on your team’s performance, at the end of the year. Although you have never heard of a manager giving someone a bonus out of his own pocket, you suspect that your company would frown on such a practice.