Managerial Ethics & Organizational Concepts Prof Karen Hanen Mgt 360

Ethics Moral code of principles. Set standards of “good” or “bad” or “right” or “wrong” in one’s conduct. Ethical behavior What is accepted as good and right in the context of the governing moral code. Laws and values as influences on ethical behavior: Legal behavior is not necessarily ethical behavior. Personal values help determine individual ethical behavior. Values - underlying beliefs and attitudes that help influence individual behavior Terminal values - preferences about desired ends Instrumental values – preferences regarding the means to desired ends Copyright ©2015 John Wiley & Sons, Inc.

Figure 3.1: Four views of ethical behavior Copyright ©2015 John Wiley & Sons, Inc.

Ethics Four alternative ethical views Utilitarian - Delivers the greatest good to the most people Individualism - Advances long-term self-interests assuming society is just, then society’s interest and one’s self-interest are the same or mutually beneficial over the long-term Moral rights - Respects and protects the fundamental rights of all people Justice - Fair and impartial treatment of people according to legal rules and standards Procedural justice – policies and rules fairly applied Distributive justice – fair distribution of outcomes Interactional justice – people treated with dignity and respect Commutative justice – fairness in exchanges or interactions w/ all involved Copyright ©2015 John Wiley & Sons, Inc.

Figure 3.2 The extremes of cultural relativism and ethical imperialism in international business ethics. Source: Developed from Thomas Donaldson, “Values in Tension: Ethics Away from Home,” Harvard Business Review, vol. 74 (September–October 1996), pp. 48–62. Copyright ©2015 John Wiley & Sons, Inc.

Ethics in the Workplace Ethical dilemmas occur when choices, although having potential for personal and/or organizational benefit, may be considered unethical. Ethical dilemmas common examples include: Discrimination Sexual harassment Conflicts of interest Product safety Use of organizational resources Copyright ©2015 John Wiley & Sons, Inc.

Checklist for ethical dilemmas Copyright ©2015 John Wiley & Sons, Inc.

Ethics in the Workplace Influences on Ethical Decision Making Ethical framework Provides personal rules or strategies for ethical decision making Includes personal values Honesty Courage Fairness Integrity Self-respect Copyright ©2015 John Wiley & Sons, Inc.

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 1-9 Standards for Making Ethical Decision Front Page Test Golden Rule Test Dignity and Liberty Test Equal Treatment Test Personal Gain Test Congruence Test Procedural Justice Test Cost-Benefit Test Good Night’s Sleep Test 9

Situational Context and Ethics Intensity Ethics intensity or issue intensity the extent to which situations are perceived to pose important ethics challenges Organization Setting The work and social settings of organizations have a strong influence on the ethics of members External Environment, Government Regulation, and Industry Norms Laws reflect social values and define appropriate behavior; regulations help governments monitor these behaviors and keep them within acceptable limits Copyright ©2015 John Wiley & Sons, Inc.

Ethics in the Workplace External environment Government laws and regulations (Sarbanes/Oxley Act of 2002) Societal norms and values Competitive climate in an industry Copyright ©2015 John Wiley & Sons, Inc.

Ethics in the Workplace Rationalizations for unethical behavior People often rationalize ethical transgressions with after-the-fact justifications: Behavior is not really illegal.Behavior is really in everyone’s best interests.Nobody will ever find out.The organization will “protect” you. Copyright ©2015 John Wiley & Sons, Inc.

Maintaining High Ethical Standards Moral Management Managers behave in one of three ways Copyright ©2015 John Wiley & Sons, Inc.

Maintaining High Ethical Standards Areas often covered by codes of ethics: Organizational citizenshipIllegal or improper actsCustomer/coworkers relationshipsBribes and kickbacksPolitical contributionsHonesty of books or recordsConfidentiality of corporate information Copyright ©2015 John Wiley & Sons, Inc.

Maintaining High Ethical Standards Whistleblowers Expose misdeeds of others to: Preserve ethical standards Protect against wasteful, harmful, or illegal acts Laws protecting whistleblowers vary Copyright ©2015 John Wiley & Sons, Inc.

Let’s Talk About Organizations Organization A collection of people working together to achieve a common purpose Organizations provide useful goods and/or services that return value to society and satisfy customer needs Organizational performance “Value creation” is a very important notion for organizations Value is created when an organization’s operations adds value to the original cost of resource inputs When value creation occurs: Businesses earn a profit Nonprofit organizations add wealth to society

Figure 1.1 Organizations as open systems interact with their environment

Figure 2.4 Organizations as complex networks of interacting subsystems Copyright ©2015 John Wiley & Sons, Inc.

Organizations Organizational performance Productivity An overall measure of the quantity and quality of work performance with resource utilization taken into account Performance effectiveness An output measure of task or goal accomplishment Performance efficiency An input measure of the resource costs associated with goal accomplishment

Figure 1.2 Productivity and the dimensions of organizational performance

Figure 1.4 The organization viewed as an upside-down pyramid

Focus on valuing human capital & ethical responsibililtyDemise of “command-and-control”Emphasis on teamworkPreeminence of technologyImportance of networkingNew workforce expectationsPriorities on sustainability Organizations Workplace changes that provide a context for studying management

Managers Accountability Today Corporate Governance Board of directors hold top management responsible for organizational performance Financial performance Ethical performance Sustainability

And, What Should Managers Expect? long hours intense pace fragmented and varied tasks many communication media filled with interpersonal relationships

Next Class – Feb 15 Complete OQ 1 & 2 this week, due this Friday, Feb 12, 11:55pm Complete your 3 rd OA this week before 11:30am next class on Feb 15 Read CH 15, pgs 345 (top)-350 AND see OA #3 for continued reading Post General Questions on Moodle or me – Have a great week!!