1. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Managing Ethics and Diversity Chapter Three

2. 3-2 Learning Objectives LO3-1 Illustrate how ethics help managers determine the right way to behave when dealing with different stakeholder groups LO3-2 Explain why managers should behave ethically and strive to create ethical organizational cultures LO3-3 Appreciate the increasing diversity of the workforce and of the organizational environment

3. 3-3 Learning Objectives (cont.) LO3-4 Grasp the central role that managers play in the effective management of diversity LO3-5 Understand why the effective management of diversity is both an ethical and a business imperative LO3-6 Understand the two major forms of sexual harassment and how they can be eliminated

4. 3-4 The Nature of Ethics  Ethical Dilemma  Quandary people find themselves in when they have to decide if they should act in a way that might help another person even though doing so might go against their own self-interest

5. 3-5 The Nature of Ethics  Ethics  The inner-guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the “right” or appropriate way to behave

6. 3-6 Stakeholders and Ethics  Stakeholders  The people and groups that supply a company with its productive resources and so have a claim on and a stake in the company

7. 3-7 Types of Company Stakeholders Figure 3.1

8. 3-8 Stockholders  Want to ensure that managers are behaving ethically and not risking investors’ capital by engaging in actions that could hurt the company’s reputation  Want to maximize their return on investment

9. 3-9 Managers  Responsible for using a company’s financial capital and human resources to increase its performance  Have the right to expect a good return or reward by investing their human capital to improve a company’s performance  Frequently juggle multiple interests

10. 3-10 Discussion Question: Managers Is it ethical for managers to receive vast amounts of money from their companies? A. Yes B. No C. Sometimes D. Never

11. 3-11 Employees  Companies can act ethically toward employees by creating an occupational structure that fairly and equitably rewards employees for their contributions

12. 3-12 Suppliers and Distributors  Suppliers expect to be paid fairly and promptly for their inputs  Distributors expect to receive quality products at agreed- upon prices

13. 3-13 Customers  Most critical stakeholder  Company must work to increase efficiency and effectiveness in order to create loyal customers and attract new ones

14. 3-14 Community, Society, and Nation  Community  Refers to physical locations like towns or cities or to social milieus like ethnic neighborhoods in which companies are located  Provides a company with the physical and social infrastructure that allows it to operate

15. 3-15 Four Ethical Rules Figure 3.2

16. 3-16 Practical Decision Model 1. Does my decision fall within the acceptable standards that apply in business today? 2. Am I willing to see the decision communicated to all people and groups affected by it? 3. Would the people with whom I have a significant personal relationship approve of the decision?

17. 3-17 Why should managers behave ethically? The relentless pursuit of self-interest can lead to a collective disaster when one or more people start to profit from being unethical because this encourages other people to act in the same way

18. 3-18 Some Effects of Ethical/Unethical Behavior Figure 3.3

19. 3-19 Question? What is confidence and faith in another person’s goodwill? A. Reputation B. Trust C. Empathy D. Hope

20. 3-20 Why should managers behave ethically?  Trust  Willingness of one person or group to have faith or confidence in another person’s goodwill, even though this puts them at risk  Reputation  Esteem or high repute that individuals or organizations gain when they behave ethically

21. 3-21 Determinants of Ethics Figure 3.4

22. 3-22 Ethical Organizational Cultures  Managers can ensure that important ethical values and norms are key features of an organization’s culture  Managers become ethical role models whose behavior is scrutinized by their subordinates

23. 3-23 Ethical Organizational Cultures  Ethics Ombudsman  An ethics officer who monitors an organization’s practices and procedures to be sure they are ethical

24. 3-24 The Increasing Diversity of the Workforce and the Environment  Diversity  Differences among people due to age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background, education, physical appearance, capabilities, disabilities, and any other characteristic used to distinguish people.

25. 3-25 Diversity Concerns  The ethical imperative for equal opportunity  Effectively managing diversity can improve organizational effectiveness  Evidence that diverse individuals continue to experience unfair treatment in the workplace as a result of biases, stereotypes, and overt discrimination.

26. 3-26 Question? What is the metaphorical barrier that prevents minorities and women from being promoted to top corporate positions? A. Gender Barrier B. Gender Prejudice C. Glass Ceiling D. Glass Top

27. 3-27 Diversity Concerns  Glass ceiling  A metaphor alluding to the invisible barriers that prevent minorities and women from being promoted to top corporate positions

28. 3-28 Sources of Diversity in the Workplace Figure 3.5

29. 3-29 Workforce Diversity: Age  Aging U.S. Population  Median age is 36.9  By 2030, 20 percent of the population will be over 65  Federal Age Discrimination Laws  1964Title VII of the Civil Rights Act of 1964  1967Age Discrimination in Employment Act

30. 3-30 Workforce Diversity: Gender  Women in the Work Place  U.S. workforce is 46.7 % percent female  Women’s weekly median earnings are $688 compared to $843 for men.  Women hold only 14.1% of corporate officer positions

31. 3-31 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

32. 3-32 Workforce Diversity: Capabilities and Disabilities  Disability Issues  Providing reasonable accommodations for individuals with disabilities  Promoting a nondiscriminatory workplace environment  Educating the organization about disabilities

33. 3-33 Workforce Diversity: Socioeconomic Background  Managers need to be sensitive and responsive to the needs and concerns of workers who may be less fortunate than themselves in terms of income and financial resources, child care and elder care options, housing opportunities, and existence of sources of social and family support

34. 3-34 Workforce Diversity: Sexual Orientation  Sexual Orientation Issues  Employment and workplace discrimination  Provision of domestic-partner benefits

35. 3-35 Critical Managerial Roles  Managers have more influence than rank- and-file employees  When managers commit to diversity, it legitimizes diversity efforts of others

36. 3-36 Forms of Sexual Harassment  Quid pro quo  Asking for or forcing an employee to perform sexual favors in exchange for receiving some reward or avoiding negative consequences.

37. 3-37 Forms of Sexual Harassment  Hostile work environment  Telling lewd jokes, displaying pornography, making sexually oriented remarks about someone’s personal appearance, and other sex-related actions that make the work environment unpleasant.

38. 3-38 Steps to Eradicate Sexual Harassment  Develop and clearly communicate a sexual harassment policy endorsed by top management  Use a fair complaint to investigate charges of sexual harassment

39. 3-39 Steps to Eradicate Sexual Harassment  When it has been determined that sexual harassment has taken place, take corrective action as soon as possible  Provide sexual harassment education and training to all organizational members, including managers

40. 3-40 Video: Hewlett Packard  Why should an investor be concerned with a potential $40 million severance package for an exiting CEO?  Should severance clauses in an executive contact be considered unethical?