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

2. 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

3. 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

4. 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

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

6. 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

7. 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

8. 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

9. 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

10. 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