Ethics and Diversity Management

Learning Objectives

• Ethics help managers determine the right way to behave in interactions with stakeholders.
• Ethical behavior by managers promotes ethical organizational cultures.
• Workforce and organizational environments are increasingly diverse.
• Managers play a key role in effective diversity management.
• Effective diversity management is both ethical and crucial for business success.
• Two main types of sexual harassment are described and how to eliminate them.

The Nature of Ethics

• Ethical Dilemma: A situation where individuals must choose an action that benefits others, even if it conflicts with self-interest.
• Ethics: Internal moral principles, values, and beliefs that guide individuals' decision-making.

Ethics and the Law

• Society can lobby for laws that regulate or prohibit certain behaviors.
• Groups with the most widespread support can pass laws reflecting their interests.
• Laws and ethics are not static; beliefs can change over time, impacting standards and laws (e.g., interracial marriage, marijuana use).

Stakeholders and Ethics

• Stakeholders: Individuals or groups who supply resources to a company and have a claim on it.
• Employees: Companies should demonstrate ethical behavior towards employees by creating fair compensation structures.
• Suppliers/Distributors: Suppliers anticipate timely payments, and distributors expect quality products at agreed prices.
• Customers: Customers are vital; companies should focus on increasing efficiency and effectiveness to gain loyal customers and attract new ones.
• Stockholders: Want to ensure ethical management to prevent reputational damage and optimize their returns.
• Managers: Responsible for using resources to increase company performance and stock prices. Managers face competing interests.

Four Ethical Rules

• Utilitarian Rule: Create the maximum benefit for the largest group of individuals.
• Justice Rule: Distribute benefits and burdens fairly.
• Moral Rights Rule: Protect the fundamental rights of people affected.
• Practical Rule: Behave ethically in a way acceptable to others.

Why Should Managers Behave Ethically?

• Trustworthiness builds on the willingness to have confidence in another individual or group.
• A positive reputation enhances the esteem and standing of individuals or organizations.

Sources of an Organization's Code of Ethics

• Societal ethics, professional ethics, and individual ethics influence organizational codes.

Ethical Organizational Cultures

• Managers play a critical role in establishing ethical values and norms.
• Managers act as ethical role models, and their actions impact their teams.
• Ethics officers oversee and monitor practices and procedures to ensure ethical conduct.

The Increasing Diversity of the Workforce and the Environment

• Diversity refers to differences among people due to age, gender, race, ethnicity, religion, sexual orientation, etc.
• Diversity concerns include: ethical demand for equal opportunity, improving organizational effectiveness through diversity management, and the experience of unfair treatment for minority groups.
• A "glass ceiling" is an invisible barrier to advancement for minorities and women.

Sources of Diversity in the Workplace

• Many characteristics, including physical appearance, experience, education, socioeconomic background, religion, sexual orientation, and capabilities/disabilities, contribute to diversity.

Effectively Managing Diversity Makes Good Business Sense

• Organizational diversity can produce a competitive advantage.
• Companies must manage diversity effectively to retain diverse employees.
• Supplier support for diversity can be beneficial, as can avoid legal issues.

Forms of Sexual Harassment

• Quid Pro Quo: Exchange of sexual favors for job benefits or avoiding repercussions.
• Hostile Work Environment: Actions or behavior that creates a hostile or offensive work environment based on sex.

Steps to Eradicate Sexual Harassment

• Clearly communicate a sexual harassment policy supported by top management.
• Develop fair complaint procedures.
• Implement corrective actions when needed.
• Educate all members on sexual harassment and best practices.