2What is Ethics?Def: the code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong?Standards driving behaviorCodified law: LegalFree Choice: PersonalEthics: SocialEthical dilemma: when alternatives are undesirable because they have potentially harmful consequences.Moral agent: one who must make an ethical choiceFree choice is obedience to oneselfEthics is based on social normsLegal says if it is not illegal it must be ethical.
3Ethical QuestionShould products that fail to meet tough FDA standards be exported to other countries where government standards are lower?Benefit the companyCan be harmfulCould help the majorityAIDS or Malaria or Bird Flu.
4How do these impact ethics in the workplace? Approaches to EthicsUtilitarian ApproachMoral behaviors produce the greatest good for the greatest number.Individualism ApproachActs are moral when they promote the individual’s best long term interests.Moral-Rights ApproachHuman beings have fundamental rights & liberties that can not be taken away by an individual’s decision.Justice ApproachMoral decisions must be based on standards of equity, fairness and impartialityUtlitarian: considers only the people who are directly affected by the decision not those who are indirectly affected.Individualism: by promoting our own long term interests we will consider the interests of others.Do you believe this?Moral Rights:Right of free consent; Right of privacy; Right of freedom of conscience; Right of free speech; Right of due process; Right of life and safety.Justice: closest to codified lawHow do these impact ethics in the workplace?
5Corporate Culture & Ethics Ethical or unethical practices usually reflect the values, attitudes, beliefs and behavior patterns of the organizational culture.Ethics is as much an organizational as a personal issue.Do you believe these statements?
6Manager’s Impact on Ethical Choices Personal traits direct a manager’s ethical choices.Stage of moral development:PreconventionalFollows rules to avoid punishment; acts in own self interest; obedience for its sakeAutocratic leadershipConventionalLives up to expectations of others; fulfills duties & obligations of social system; upholds lawsGuiding/encouraging, team oriented leadershipPostconventionalFollows self-chosen principles of justice & right; aware there are different values & seeks creative solutions; Balances concern for individual with concern for common good.Transforming or servant leadershipPersonal traits: personal needs, family influence, religious background.Personality characteristics: ego strength, self-confidence, sense of independence.Most managers are in Conventional stage
7Organizational Impact on Ethical choices Corporate Culture serves to let employees know what beliefs and behaviors the company supports and those it will not tolerate.Other influencesExplicit rulesReward systemExtent to which the company cares for its peopleSelection systemEmphasis on legal systemProfessional standardsLeadershipDecision processes
8Ethics & Global MarketGlobalization has made ethical issues more complicated. How?Do you think the development of a global standard for ethical business conduct will be effective?Why or why not?
9Ethical Responsibility to the Stakeholders Social Responsibility:Obligation of management to make decisions and take actions that will enhance the welfare and interests of society as well as the organization.Can there be conflicts making decisions in satisfying the following stakeholders? How?EmployeesShareholdersSuppliersGovernmentEnvironmentalistsLocal citizens
10Measures of Corporate Social Performance Economic Responsibilities: produce the goods & services society wants and maximize profits for owners & shareholders.Legal Responsibilities: Obey the lawEthical Responsibilities: Not necessarily codified as a law and may not directly benefit the company.Discretionary Responsibilities: Voluntary & guided by the organization’s desire to make social contributions not mandated by law, economics or ethics.Question: Is it ethical to start a business that buys repossessed houses or cars with the intent to refurbish and sell?
11How to Create an Ethical Organization Ethical IndividualsManagers, employeesEthical LeadershipCreation of an ethical corporate cultureOrganizations Structures & SystemsCode of ethicsSystems & policies the promote & define ethicsTrainingWhistle blowing