BA 385: From Moral Decisions to Moral Organizations Personal and Organizational Ethics Chapter Seven: Personal and Organizational Ethics

Introduction to Chapter 7 This chapter focuses on the day-to-day ethical issues that managers face Many managers have no training in business ethics or ethical decision making Ethics is vital to business success

Levels at Which Ethical Issues May Be Addressed Personal Level Situations faced in personal lives Organizational Level Workplace situations faced asmanagers and employees

Levels at Which Ethical Issues May Be Addressed Societal and Global Levels Local-to-global situationsconfronted indirectly as amanagement team Industry Level Situations where a manager ororganization might influence business ethics at the industry level

Personal and Managerial Ethics Conventional approach Chapter Six Conventional approach Chapter Six Principles approach Ethical tests approach Resolving Ethical Conflicts

Principles Approach to Ethics Major Principles of Ethics Utilitarianism Rights Justice Caring Virtue ethics Servant Leadership Golden Rule

Principle of Utilitarianism Utilitarianism focuses on acts that produce the greatest ratio of good to evil for everyone  Ignores actions that may be inherently wrong  May come into conflict with the idea of justice  Difficult to formulate satisfactory rules for decision making StrengthsWeaknesses  Forces thinking about the general welfare and stakeholders  Allows personal decisions to fit into the situation complexities

Example of Utilitarianism Daniel DennettDaniel Dennett uses the example of Three Mile Island to explore the limits of utilitarianism for guiding decisions.Three Mile Island Is nuclear power that occurred at this nuclear power plant a good or a bad thing (according to utilitarianism)? He points out that its long- term effects on nuclear policy would be considered beneficial by many and might outweigh the negative consequences. His conclusion is that it is still too early (20 years after the event) for utilitarianism to weigh all the evidence and reach a definite conclusion.

Principle of Rights Principle of Rights focuses on examining and possibly protecting individual moral or legal rights

Principle of Rights

Principle of Justice Principle of justice involves considering what alternative promotes fair treatment of people Types of justice Distributive Compensatory Procedural Rawlsian

Each person has an equal right to the most basic liberties comparable 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 Rawls’s Principles of Justice

Principle of Caring Principle of caring focuses on a person as a relational (cooperative) and not as an individual Based upon Feminist Theory – uses terms such as empathy and trust Discussions around The Principle of Caring often have to do with dialogue and the importance of conversations between people in ethical gridlock. Can you think of examples where a focus on caring, empathy, trust and conversation might avoid poor ethical decisions in business?

Principle of Virtue Ethics  Virtue ethics focuses on individuals becoming imbued with virtues  Virtue lies as a mean between extremes of excess and deficiency.  These extremes are vices.  Baes upon the philosophy of Aristotle and Plato Emphasizes CHARACTER over duty or obligation (deontology) or outcomes (consequentialism). Can you think of an example from business ethics where a focus on “being of virtuous character” might lead to better, more ethical decision-making?

Servant Leadership Servant leadership focuses on serving others first, such as employees, customers, and community

Listening Empathy Healing Persuasion Awareness Foresight Conceptualization Commitment to the growth of people Stewardship Building community Servant Leadership Characteristics of Servant Leaders Business Ethics and Leadership Bridges

The Golden Rule The Golden Rule focuses on the premise that you should do unto others as you would have them do unto you The Golden Rule is… 1. accepted by most people 2. easy to understand 3. a win-win philosophy 4. a compass

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 Gag Test

Factors Affecting the Morality of Managers Society’s Moral Climate Business’s Moral Climate Industry’s Moral Climate Individual One’s Personal Situation Superiors Policies Peers Organization’s Moral Climate

Factors Affecting the Organization’s Moral Climate Behavior of superiors Ethical practices of one’s industry or profession Behavior of one’s peers in the organization Formal organizational policy (or lack of one) Personal financial need

Questionable Behaviors of Superiors or Peers Amoral decision making Unethical acts, behaviors or practices Acceptance or legality as a standard of behavior Bottom-line mentality, expectations of loyalty and conformity Absence of ethical leadership Objectives that overemphasize profits Insensitivity toward how subordinates perceive pressure to meet goals Inadequate formal ethics policies

Improving the Ethical Climate Top Management Leadership Moral Management Ethics Programs and Officers Realistic Objectives Ethical Decision- Making Processes Codes of Conduct Chapter 7-27 Board of Director’s Oversight Ethics Training Corporate Transparency Whistle-Blowing Mechanisms Ethics Audits Effective Communication Discipline of Violators Discipline of Violators

Strong Ethical Leadership Traits Moral Person Moral Manager Ethical Leadership Behaviors Decision Making Role Modeling Role Modeling Ethics Communication Effective Rewards and Discipline

Ethical Decision-Making Process The Ethics Screen

Frequently Addressed Topics Conflicts of interest Protecting proprietary information Receiving gifts Giving gifts Discrimination Sexual harassment Kickbacks General conduct Employee theft Proper use of assets Codes of Conduct

The 2002 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 its use in a federal government lawsuit Board of Director Leadership and Oversight

From Moral Decisions to Moral Organizations Moral Decisions Moral Managers Moral Organizations