Ethics

What is Ethics? Def: the code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong? Standards driving behavior Codified law: Legal Free Choice: Personal Ethics: Social Ethical dilemma: when alternatives are undesirable because they have potentially harmful consequences. Moral agent: one who must make an ethical choice Free choice is obedience to oneself Ethics is based on social norms Legal says if it is not illegal it must be ethical.

Ethical Question Should products that fail to meet tough FDA standards be exported to other countries where government standards are lower? Benefit the company Can be harmful Could help the majority AIDS or Malaria or Bird Flu.

How do these impact ethics in the workplace? Approaches to Ethics Utilitarian Approach Moral behaviors produce the greatest good for the greatest number. Individualism Approach Acts are moral when they promote the individual’s best long term interests. Moral-Rights Approach Human beings have fundamental rights & liberties that can not be taken away by an individual’s decision. Justice Approach Moral decisions must be based on standards of equity, fairness and impartiality Utlitarian: considers only the people who are directly affected by the decision not those who are indirectly affected. Individualism: by promoting our own long term interests we will consider the interests of others. Do you believe this? Moral Rights: Right of free consent; Right of privacy; Right of freedom of conscience; Right of free speech; Right of due process; Right of life and safety. Justice: closest to codified law How do these impact ethics in the workplace?

Corporate Culture & Ethics Ethical or unethical practices usually reflect the values, attitudes, beliefs and behavior patterns of the organizational culture. Ethics is as much an organizational as a personal issue. Do you believe these statements?

Manager’s Impact on Ethical Choices Personal traits direct a manager’s ethical choices. Stage of moral development: Preconventional Follows rules to avoid punishment; acts in own self interest; obedience for its sake Autocratic leadership Conventional Lives up to expectations of others; fulfills duties & obligations of social system; upholds laws Guiding/encouraging, team oriented leadership Postconventional Follows self-chosen principles of justice & right; aware there are different values & seeks creative solutions; Balances concern for individual with concern for common good. Transforming or servant leadership Personal traits: personal needs, family influence, religious background. Personality characteristics: ego strength, self-confidence, sense of independence. Most managers are in Conventional stage

Organizational Impact on Ethical choices Corporate Culture serves to let employees know what beliefs and behaviors the company supports and those it will not tolerate. Other influences Explicit rules Reward system Extent to which the company cares for its people Selection system Emphasis on legal system Professional standards Leadership Decision processes

Ethics & Global Market Globalization has made ethical issues more complicated. How? Do you think the development of a global standard for ethical business conduct will be effective? Why or why not?

Ethical Responsibility to the Stakeholders Social Responsibility: Obligation of management to make decisions and take actions that will enhance the welfare and interests of society as well as the organization. Can there be conflicts making decisions in satisfying the following stakeholders? How? Employees Shareholders Suppliers Government Environmentalists Local citizens

Measures of Corporate Social Performance Economic Responsibilities: produce the goods & services society wants and maximize profits for owners & shareholders. Legal Responsibilities: Obey the law Ethical Responsibilities: Not necessarily codified as a law and may not directly benefit the company. Discretionary Responsibilities: Voluntary & guided by the organization’s desire to make social contributions not mandated by law, economics or ethics. Question: Is it ethical to start a business that buys repossessed houses or cars with the intent to refurbish and sell?

How to Create an Ethical Organization Ethical Individuals Managers, employees Ethical Leadership Creation of an ethical corporate culture Organizations Structures & Systems Code of ethics Systems & policies the promote & define ethics Training Whistle blowing