MANAGING FOR ETHICAL CONDUCT Ethical Dimensions of Leadership Virginia Tech MBA Andrew Watson

Agenda Managing for Ethical Conduct Ch. 7: sections interspersed between related activities Robots Zimbardo prison experiments video Break +, 15 minutes altogether 10 mins + 5 to skim some of: Sears case at end of Ch. 7; Handout on lies and kingfisher Animals Lies Sears case Looking ahead

Robots Self-driving vehicles What are the ethical implications? What will be the reaction to a lethal accident involving a self-driving vehicle? Rules for an ethical robot Two “things” on a raft, which can support the weight of only one of them One of the things is a robot With what rules should an “ethical robot” be programmed? Example: if other thing is a human being, then…

Introductory Assumptions Assumptions about managers, stated at start of Ch Want to be ethical 2. Want their subordinates to be ethical 3. Have insights into the unique ethical requirements of job, based on experience Another assumption In business, ethics is about behavior Comments?

A Fundamental Question Should an MBA program include a Business Ethics course? Arguments for Yes? Arguments for No?

Multiple Ethical Selves Example of Ken Lay Created Enron Never flaunted his wealth Contributed to arts, museums, United Way,… Took risks to boost stock Fired accounting firm for being insufficiently creative Fired employees who didn’t make their numbers Gave generously to political candidates Encouraged stock purchase, while he was selling more than buying Advice Be a “whole” person Be aware of what guides others toward ethical work behaviors

Goals and Rewards Goals focus attention on the desired outcome What about the means? So do rewards, such as commission Example: electronic appliance store salesperson Advice to manager Motivate with specific, challenging, achievable goals, with rewards Up to you to think about likely behaviors and consequences Reward ethical behavior Is this feasible, other than in extreme cases?

Discipline Differentiate between fair and unfair punishment Employees do, and managers should To what extent can discipline decisions be delegated? Example: Tom Watson at IBM Other examples? Discipline can have an indirect effect

Guides to Behavior Norms: informal rules of group Roles: Zimbardo prison experiment Described in text We’ll watch one of the many available videosone of the many available videos May offend in multiple ways What aspects of the video are familiar? What aspects are surprising, or shocking? Authority Milgram experiments, recapped in Zimbardo video Note that the above can also guide toward ethical behavior

Diffusion of Responsibility Vertically upwards “We’ll take care of everything” Horizontally Diffusion of responsibility in groups Vertically downwards Division of labor and delegation Psychological distance between decision-makers and potential victims Advice: make individual responsibility salient for self and for others

Lies “Companies Lie. Some Get Away With It.” What would be a better title for the article? What is the author’s point? How convincing is the article? Which prescriptive approach (Ch. 2) does the article reflect? Sears Auto Center case What lies were involved? How could the Auto Centers be better managed? Implications for other Sears businesses?

Looking Ahead Due from you before we meet next week Skim Ch. 8 Web reading Due from me Web reading Grading Standard closing Anything else? Safe home