MGMT 371: Ethics and Culture What are ethics and why do we care about them? What influences ethical behavior? Are ethics culturally bound? What’s the difference between ethics and morals? Do morals vary by gender? What are the Magnificent Seven? Can they be taught? How can we promote an ethical climate?

Ethical Behavior acting in ways consistent with one’s personal values and the commonly held values of the organization and society 19

Values Instrumental – values that represent the acceptable behaviors to be used in achieving some end state. Terminal – values that represent the goals to be achieved, or the end states of existence 15

WHAT INFLUENCES ETHICAL BEHAVIOR? Internal External MORAL INTELLIGENCE “Mental capacity to determine how human principles should be applied to our values, goals, actions” Moral compass

A Model of Ethical Behavior in the Workplace Cultural Influences Family Education Religion Media/entertainment Individual - Personality - Values - Moral principles - History of reinforcement - Gender Role Expectations Organizational Influences Ethical codes Organizational culture Role models Perceived pressure for results Rewards/punishment system Ethical behavior Political/Legal/ Economic Influences

Ethics and the Individual Ethical decision making requires three qualities of individuals Competence to identify ethical issues and evaluate the consequences of alternate actions. Self-confidence to seek out different opinions and decide what is right. Willingness to make decisions when there is no unambiguous solution.

Do Moral Principles Vary by Gender? Men and Women tend to view moral problems and situations differently Men: Justice Perspective based on the ideal of reciprocal rights and driven by rules and regulations Women: Care Perspective involves compassion and an ideal of attention and response to need

Do We All View Ethics the Same Way? 4 CONTRASTING ETHICAL ORIENTATIONS: Consequentialists Intentionalists Absolutists Relativists

Ethical Theories [Rule-Based Theory] [Consequential Theory] an ethical theory that emphasizes the character of the act itself rather than its effects [Consequential Theory] an ethical theory that emphasizes the consequences or results of behavior [Character Theory] an ethical theory that emphasizes the character, personal virtues, and integrity of the individual

THE MAGNIFICENT SEVEN Dignity of human life Autonomy Honesty Loyalty Fairness Humaneness Common good

Organizational Justice Distributive Justice – fairness of the outcomes that individuals receive in an organization Procedural Justice – fairness by which the outcomes are allocated in an organization

Individual and Organizational Responsibility Whistle-Blower – an employee who informs authorities of the wrongdoing of his or her company or coworkers Public Hero or Vile Wretch? Social Responsibility – the obligation of an organization to behave ethically

How to create/improve the ethical climate of an organization: Model ethical behavior Screen pre-hire Code of ethics that is enforced Ethics training Reinforce ethical behavior Have people and/or systems that deal with ethics

How to make ethical decisions: Transparency: Are you comfortable with making the decision public? Effect: Have you considered all potential harmful/wrong effects? Fairness: Would EVERYONE consider the decision fair? www.businessballs.com

The Four Way Test Is it the TRUTH? Is it FAIR to all concerned? Will it build GOODWILL and better friendships? Will it be BENEFICIAL to all concerned?

How are we doing? Nat’l. Bus. Ethics Survey Results (2005) Written codes up 19% since 1994 Ethics training up 32% Vehicle for ethics advice, info up 15% since 2000 Vehicle for reporting up 7% since 2003 Discipline for violation of stds. Up 4% since 2003 Part of employee eval. Down 7% since 2003

How are we doing? Nat’l. Bus. Ethics Survey Results (2005) Outcomes: Little change in observed misconduct 2005: 52% ees observed 1; 36% observed 2 or more Willingness to report declined 2005: 55% reported; 2003: 65% reported Little change in pressure to compromise stds. 2005: 10% feel pressure always or fairly often

How are we doing? Nat’l. Bus. Ethics Survey Results (2005) Formal programs are better Culture matters! Top mgmt modeling is huge Co-worker influence matters When employees perceive others are held accountable, overall satisfaction increases 32% Birth of the ethics industry!