1. Managing Ethics and Diversity
Chapter 3
Managing Ethics and Diversity
PowerPoint Presentation by Charlie Cook © Copyright The McGraw-Hill Companies, Inc., All rights reserved.

2. Learning Objectives After studying the chapter, you should be able to:
Illustrate how ethics help managers determine the right or proper way to behave when dealing with different stakeholder groups.
Explain why managers should strive to create ethical organizational cultures.
Appreciate the increasing diversity of the workforce and of the organization environment.
Grasp the central role that managers play in the effective management of diversity.
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3. Learning Objectives After studying the chapter, you should be able to:
Understand why the effective management of diversity is both an ethical and a business imperative.
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4. Ethics and Stakeholders
Organizational Stakeholders
Shareholders, employees, customers, suppliers, and others who have an interest, claim, or stake in an organization and in what it does.
Each group of stakeholders wants a different outcome and managers must work to satisfy as many as possible.
Managers have the responsibility to decide which goals an organization should pursue to most benefit stakeholders—decisions that benefit some stakeholder groups at the expense of others.
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5. Ethics and Stakeholders (cont’d)
Moral principles or beliefs about what is right or wrong.
Ethics guide managers in their dealings with stakeholders and others when the best course of action is unclear.
Managers often experience an ethical dilemma in choosing between the conflicting interests of stakeholders.
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6. Ethical Decision Models
Utilitarian Model
An ethical decision is one that produces the greatest good for the greatest number of people.
Moral Rights Model
An ethical decision is one that best maintains and protects the fundamental rights and privileges of the people affected by it.
Justice Model
An ethical decision is one that distributes benefits and harms among stakeholders in a fair, equitable, or impartial way.
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7. Practical Guide to Ethical Decisions
Does the manager’s decision fall within usual and accepted standards?
Is the manager willing to personally and openly communicate the decision to all affected stakeholders?
Does the manager believe that his friends would approve?
If the answer is “Yes” to all of the above, the decision is probably an ethical decision.
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8. Ethical versus Unethical Decisions
A decision that is reasonable or typical stakeholders would find acceptable because it aids stakeholders, the organization, or society.
Unethical Decision
A decision that a manager would prefer to disguise or hide from other people because it enables the company or a particular individual to gain at the expense of society or other stakeholders.
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9. Which Behaviors are Ethical?
A key ethical issue is how to disperse harm and benefits among stakeholders.
If a firm has been very profitable for two years, who should receive the profits? Employees, managers and stockholders all will want a share.
Should the firm keep the cash for future slowdowns? What is the ethical decision?
What about the reverse, when firms must layoff workers?
If stockholders are the legal owners of the firm, shouldn’t they alone decide these questions?
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10. Ethical Decisions and Dilemmas
Other issues managers must consider.
Should a firm withhold payment to suppliers as long as possible to benefit the firm?
This will harm its supplier who is a stakeholder.
Should a firm provide severance pay to its laid off workers?
This will decrease the owners’ (the stockholders’) return.
Should goods be bought from overseas firms that employ children?
If they aren’t bought, the children might not earn enough money to eat.
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11. Why Behave Ethically?
Managers should behave ethically to avoid harming others.
Managers are responsible for protecting and nurturing resources of the firm.
Reputation
The esteem or high repute that individuals or organizations gain when they behave ethically.
Unethical managers run the risk for loss of reputation.
This is a valuable asset to any manager; reputation is critical to long-term management success.
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12. Sources of An Organization’s Code of Ethics
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Figure 3.1

13. Sources of Ethics Societal Ethics
Standards that govern how members of a society are to deal with each other on ethical issues.
Based on values and standards found in society’s legal rules, norm, and mores.
Codified in the form of laws and societal customs.
Ethical norms dictate how people should behave.
Societal Ethics Vary Among Societies.
Strong beliefs in one country may differ elsewhere.
Payment of bribes, an illegal act in the U. S., is an accepted business practice in many countries.
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14. Sources of Ethics Professional ethics Individual ethics
Standards that govern how members of a profession are to make decision when the way they should behave is not clear-cut.
Physicians and lawyers have professional associations that enforce these.
Individual ethics
Personal standards that govern how individuals are to interact with other people.
Influenced by family, upbringing in general, and life experiences
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15. Ethical Organizational Cultures
Components of an Ethical Culture
Ethical values and norms are a central component of the organizational culture.
A code of ethics guides decisions when ethical decisions arise.
Managers serve as ethical role models.
Ethics Ombudsman
An ethics officer who monitors an organization’s practices and procedures to ensure they are ethical.
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16. Johnson & Johnson Credo
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Source: Johnson & Johnson Annual Report.
Figure 3.2

17. The Increasing Diversity of the Workforce and the Environment
Differences among people in age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background, and capabilities/disabilities.
Diversity Concerns and Issues
The ethical imperative for equal opportunity
The illegality of unfair treatment
Diversity’s positive effect on organizational performance
The continuing bias toward diverse individuals
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18. Sources of Diversity in the Workplace
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Figure 3.3

19. Workforce Diversity Glass Ceiling
A metaphor alluding to the invisible barriers that prevents minorities and women from being promoted to top corporate positions.
2008: Projected New Entrants in the U.S. Labor Force
Source: Bureau of Labor Statistics, Projections from Current Population Survey, 1988–1998.
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Figure 3.4

20. Workforce Diversity: Age
Aging U.S. Population
Median age in the United States is 35.3 years, up 2.5 years from 1990.
The age group cohort has grown rapidly and now contains 37.7 million persons.
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21. Federal Anti-Discrimination Laws
Major Equal Employment Opportunity Laws Affecting Human Resources Management
Federal Anti-Discrimination Laws
1963 Equal Pay Act
1964 Title VII of the Civil Rights Act
1967 Age Discrimination in Employment Act
1978 Pregnancy Discrimination Act
1990 Americans with Disabilities Act
1991 Civil Rights Act
1993 Family and Medical Leave Act
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22. Workforce Diversity: Gender
Women in the Work Place
U.S. workforce is 46% percent female.
Women’s median earnings are less than two-thirds of the median earnings of men.
Women hold 49% of managerial positions, but only 12% of corporate officer positions.
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23. Workforce Diversity: Race and Ethnicity
1998 to 2008 Growth Rates for the U.S. Working Population
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24. Workforce Diversity: Religion
Accommodation for Religious Beliefs
Scheduling of critical meetings.
Providing flexible time off for holy days.
Posting holy days for different religions on the company calendar.
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25. Capabilities and Disabilities
Disability Issues
Providing reasonable accommodations for individuals with disabilities.
Promoting a nondiscriminatory workplace environment.
Educating the organization about disabilities and AIDS.
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26. Socioeconomic Background
Socioeconomic Background Issues
Widening diversity in income levels
Single mothers and the “working poor”
Child and elder care for working parents
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27. Workforce Diversity: Sexual Orientation
Sexual Orientation Issues
Employment and workplace discrimination
Provision of domestic-partner benefits
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28. The Effective Management of Diversity
Critical Managerial Roles
Interpersonal
Figurehead
Leader
Liaison
Informational
Monitor
Disseminator
Spokesperson
Decisional
Entrepreneur
Disturbance Handler
Resource Allocator
Negotiator
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29. Effectively Managing Diversity Makes Good Business Sense
What a Diversity of Employees Provides:
A variety of points of view and approaches to problems and opportunities that improves managerial decision making.
A wider range of creative ideas.
Better attuned to the needs of diverse customers.
Increased retention of valued organizational members.
Helps in avoiding costly lawsuits and negative publicity affecting the firm’s image and reputation.
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