Ethics: Ancient Greek origins Socrates, Plato and Aristotle Fundamentals of ethics involve truth/virtue Happiness is entwined with virtue (and success): it feels good to do good Flourishing means acting on the truth and therefore with virtue (an active state) ‘know thyself’ − Socrates Unlocking Human Resource Management Chapter 10

Ethics: definitions 1.(used with a singular or plural verb) A system of moral principles: the ethics of a culture 2.The rules of conduct recognised in respect to a particular class of human actions or a particular group, culture, etc.: medical ethics; Christian ethics 3.Moral principles, as of an individual: His ethics forbade betrayal of a confidence Unlocking Human Resource Management Chapter 10

Ethics: definitions 4.(usually used with a singular verb) the branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions Unlocking Human Resource Management Chapter 10

Capitalism An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market An absolute system in that it reproduces its structure through an infinite chain of causal circumstances and events (everything goes in) Unlocking Human Resource Management Chapter 10

Normative ethics: two approaches Absolutist philosophy Eternal universally applicable moral principles Right and wrong are objective qualities that can be rationally determined The philosophy of Emmanuel Kant The outcome to self is unimportant Unlocking Human Resource Management Chapter 10

Normative ethics: two approaches Relativist philosophy If it helps the majority then even the ‘wrong’ could be seen as right Utilitarian approach Morality is context-dependent and subjective Used a lot in international business thinking Unlocking Human Resource Management Chapter 10

What is an ethical issue? Questions that could inspire an ethical debate: 1.Should a manager report an employee to their employer over personal information that has been given in confidence? 2.In what circumstances should a manager withhold information from an employee when that information may have damaging consequences? 3.In what circumstances is whistle-blowing the right action to take? Unlocking Human Resource Management Chapter 10

Ethics: key quotes ‘Ethics is the study of individual and collective moral awareness, judgement, character and conduct’ Winstanley and Woodhall, 2000 ‘Not automatically the main business goal’ Legge, 1995 Unlocking Human Resource Management Chapter 10

An ethical discussion Invites us to consider the consequences of certain actions Invites us to decide if we are comfortable with these consequences Invites us to consider what could be done Who should take responsibility for professional decisions with ethical consequences? Unlocking Human Resource Management Chapter 10

Ethical perspectives In business there are a number of ethical perspectives including: the classical approach the stakeholder approach the corporatist approach Unlocking Human Resource Management Chapter 10

The classical approach The Chicago School of Economics Milton Friedman Friedrick Von Hayek ‘The social responsibility of business is to increase its profits’ Milton Friedman Unlocking Human Resource Management Chapter 10

Stakeholder theory The idea that organisations can enhance the interests of stockholders without damaging interests of wider stakeholders Stakeholders are those groups without whom the organisation would cease to exist It could be considered ethically unjustified to ignore these groups in the achievement of business aims Unlocking Human Resource Management Chapter 10

Corporatist theory Suggests that since the actions of independent businesses can detrimentally affect the larger economy, that the public sector should establish, via licensing, commissions and government policy (specific, monetary and fiscal) bodies that ensure responsible outcomes in business practice Unlocking Human Resource Management Chapter 10

Ethical theories: the moral maze Consequentialism Utilitarianism Happiness for the greatest number The end justifies the means Language of economic utility Non-consequentialism Kantianism What is right for one is right for all Universal moral rules Treat others as you would be treated Unlocking Human Resource Management Chapter 10

Ethics of duty Kant’s three principles of categorical imperative: 1.To act consistently in accordance with universal law 2.To act in such a way as to treat humanity always as an end, never as a means. 3.To act so that your action could be regarded universally as lawgiving Unlocking Human Resource Management Chapter 10

Shaping an ethical workforce From above: company and managers From below: workers’ own self-help organisations (TU or staff association) From without: the state/economic necessity 90% of FTSE 100 companies now have a code of business ethics (Balch, 2005) Only 45% provide training on ethics (Balch, 2005) USA prefers a compliance-based response, so no code Unlocking Human Resource Management Chapter 10

Chartered Institute for Professional Development Clearly defines HR role as a change agent, influencing the top management team, embedding good practice in organisational culture, helping to communicate and implement policies Using learning and development to enable organisations to stand up to scrutiny Unlocking Human Resource Management Chapter 10

Conflicts of interest ‘Organisations that are truly concerned about ethics must first ensure that there are few conflicts of interest present’ Stuart Parkinson, 2004 Unlocking Human Resource Management Chapter 10

Learning summary By the end of this chapter you should: Understand the context for ethical behaviour Be aware of different options in introducing ethical approaches Have a grounding in ethical theories Have knowledge of the barriers to implementation Be aware of business examples Unlocking Human Resource Management Chapter 10