2. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-1 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics BA 385 - Business Environment Week 3 ~ Part 2

3. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-2 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Agenda Chapter 7 - Personal & Organizational Ethics Case Discussion

4. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-3 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics 1 Personal and Organizational Ethics Search the Web Nortel has posted its ethics policies on the Internet. To read it, navigate your web browser to: http://www.nortelnetworks.comhttp://www.nortelnetworks.com The day-to-day ethical issues that managers face making decisions between various conflicting interests.

5. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-4 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Levels at Which Ethical Issues May Be Addressed Personal level—situations faced in personal life Organizational level—workplace situations faced as managers and employees Industrial level—situations confronted as professionals Societal and international levels—local-to-global situations confronted indirectly as a management team

6. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-5 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Resolving Ethical Conflicts: Three Approaches Conventional (covered in Chapter 6) Principles (primary focus ch 7) Ethical tests

7. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-6 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Principles Approach Utilitarianism Rights Justice Caring Virtue ethics Servant leadership Golden Rule Rather than using gut instinct, it anchors decision making on an ethical principle such as:

8. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-7 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Focuses on an act that produces the greatest ratio of good to evil for everyone –Consequentialist theory –Pros/cons? Principle of Utilitarianism

9. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-8 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Focuses on examining and possibly protecting individual moral or legal rights –Cannont be overridden by utility –Too many rights claimed diminishes usefulness Principle of Rights

10. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-9 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Rights Claimed

11. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-10 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Involves considering what alternative promotes fair treatment of people Types of justice –Distributive –Compensatory –Procedural –Rawlsian Principle of Justice

12. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-11 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Each person has an equal right to the most basic liberties comparable with similar liberties for others Social and economic inequalities are arranged so that they are both: a)reasonably expected to be to everyone’s advantage and b)attached to positions and offices open to all people Rawls’ Justice

13. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-12 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Focuses on a person as a relational (cooperative) and not as an individual –Feminist theory –Oppose focus on self and cognitive thought processes Virtue ethics focuses on individuals becoming imbued with virtues –Aristotle and Plato –Focused on person, not action Principle of Caring

14. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-13 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Focuses on serving others first such as employees, customers, community and so on –The great leader is seen as servant first –Then aspires to lead –Not seeking power as goal alone Servant Leadership

15. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-14 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Listening Empathy Healing Persuasion Awareness Foresight Conceptualization Commitment to the growth of people Stewardship Building community 10 Characteristics of Servant Leaders

16. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-15 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Focuses on the premise that you should do unto others as you would have them do unto you. The Golden Rule

17. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-16 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Strength of obligations Importance of ideals held Fewest harmful effects or concequences Reconciling Ethical Conflicts

18. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-17 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Ethics Test Approach Test of common sense Test of one’s best self Test of making something public Test of ventilation Test of the purified idea Gag test

19. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-18 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Managing Organizational Ethics Superiors Policies Peers Individual (One’s personal situation) Society’s Moral Climate Business’s Moral Climate Industry’s Moral Climate Factors Affecting the Morality of Managers

20. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-19 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Factors Influencing Unethical Behavior Behavior of superiors Ethical practices of one’s industry or profession Behavior of one’s peers in the organization Formal organizational policy (or lack of one) Personal financial need

21. Study Results 6-23

22. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-21 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Amoral decision making Unethical acts, behaviors or practices Acceptance or legality as the standard behavior Absence of ethical leadership Objects and evaluation systems overemphasizing profits Insensitivity toward how subordinates perceive pressure to meet goals Inadequate formal ethics policies Questionable Behaviors of Superiors or Peers

23. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-22 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Improving Ethical Climate Top Management Leadership Ethics Programs & Officers Realistic Objectives Ethical Decision- making Processes Codes of Conduct Ethics Audit Ethics Training Whistle-blowing Mechanisms (“Hotlines ”) Discipline of Violators Effective Communication Codes of Conduct

24. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-23 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Ethical Decision-Making Steps Identify decision you are about to make Articulate all dimensions of proposed decision Conventional Approach Standards/Norms -Personal -Organizational -Societal -International Principles Approach Ethical Principles -Justice -Rights -Utilitarianism -Golden Rule Ethical Tests Approach Ethical Tests -Common sense -One’s best self -Public disclosure -Gag test... Course of action passes ethics screen Engage in course of action Course of action fails ethics screen Do not engage in course of action Identify new course of action

25. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-24 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics Ethics Audits and Self-Assessment

26. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-25 BA 385 - Business Environment Chapter 7 Personal and Organizational Ethics From Moral Decisions to Moral Organizations Moral Decision(s) Moral Manager(s) Moral Organization