Sessions 7&8. Organizational Ethics CORPORATE MANAGEMENT in ACTION Sessions 7&8. Organizational Ethics CORPORATE MANAGEMENT IN ACTION - CMA

CORPORATE MANAGEMENT IN ACTION - CMA Sessions 7 & 8. Organizational Ethics Chapter Objectives Define Ethics in Organizations Describe the importance of Ethics to business Identify the role of Ethics in decision making Study the effects of ethical behavior on business activities Characterize “ethical” managers CORPORATE MANAGEMENT IN ACTION - CMA

CORPORATE MANAGEMENT IN ACTION - CMA ETHICS: Definition Ethical Behavior: To do what is RIGHT. Ethics: The moral principles or values that generally govern the conduct of an individual. Code of Ethics A company’s written standards of ethical behavior that are designed to guide managers and employees in making the decisions and choices that they face everyday. CORPORATE MANAGEMENT IN ACTION - CMA

CORPORATE MANAGEMENT IN ACTION - CMA Ethics vs. Morals Ethics Morals The moral principles or values that generally govern the conduct of an individual. The rules which people develop as a result of cultural values and norms. CORPORATE MANAGEMENT IN ACTION - CMA

CORPORATE MANAGEMENT IN ACTION - CMA Ethics vs. Morals Ethical Development Levels More Mature Selfish Preconventional Morality Conventional Postconventional CORPORATE MANAGEMENT IN ACTION - CMA

Ethics: Importance to Business CORPORATE MANAGEMENT IN ACTION - CMA Organizational code of Ethics: States Corporate Leaders’ dominant values and beliefs, which constitute the foundation of Organizational Culture. Defines moral IDENTITY of the organization, inside and outside the firm. Sets the moral tone within the work environment. Provides a permanent and stable set of work guidelines: differentiating right from wrong actions. Creates a medium for professional socializing: specialized knowledge and corporate beliefs. CORPORATE MANAGEMENT IN ACTION - CMA

Role of Ethics in Decision Making CORPORATE MANAGEMENT IN ACTION - CMA Ethical Decision Criteria i. Utilitarianism Seeking the best state for the greatest number. ii. Rights Respecting and protecting basic rights of individuals. iii. Justice Imposing and enforcing rules fairly and impartially. CORPORATE MANAGEMENT IN ACTION - CMA

Role of Ethics in Decision Making CORPORATE MANAGEMENT IN ACTION - CMA provide an instructional and motivational basis for training employees regarding ethical guidelines and for integrating ethics into operational policies, procedures, problem solving, and decision making. CORPORATE MANAGEMENT IN ACTION - CMA

CORPORATE MANAGEMENT IN ACTION - CMA Impact of Ethics on Business Functions High Organizational Ethical Standards: Induce an environment of “right” dealing internally. Result in “right” dealing with external bodies (clients, agencies, authorities, …) Lead to satisfied and loyal client base. Reduce aggressiveness. Limit organizational politics. Improve risk tolerance capabilities. CORPORATE MANAGEMENT IN ACTION - CMA

CORPORATE MANAGEMENT IN ACTION - CMA Characteristics of Ethical Managers Ethical Manager: Characterized by Being a visible role model Communicating ethical expectations Providing ethical training Rewarding ethical acts and punishing unethical ones Providing protective mechanisms for employees CORPORATE MANAGEMENT IN ACTION - CMA