Managing Ethics and Social Responsibility Chapter 4 PDF

Managing Ethics and Social Responsibility CHAPTER 4 chapter4 Introduction Managers frequently face complex ethical situations in which it is difficult to determine what is right. Many managers have no training in ethics or ethical decision making. Mora...

Managing Ethics and Social Responsibility CHAPTER 4 chapter4 Introduction Managers frequently face complex ethical situations in which it is difficult to determine what is right. Many managers have no training in ethics or ethical decision making. Moral lapses and financial scandals has made ethical and courageous behavior an important trait for today’s managers 2 chapter4 What is Ethics The code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong.  Ethics tells us whether our behavior is moral or immoral  Ethics aims to answer the question, “What should I do?” It’s a process of reflection in which people’s decisions are shaped by their values, principles and purpose 3 chapter4 Ethics and Law Although often used interchangeably, 'legal' and 'ethical' are not the same thing. Law is defined as legal requirements, which are written down and enforced by courts. On the other hand, ethics is defined as moral guidelines that govern our behaviors. The law cannot codify all ethical requirements. It just sets the minimum standards necessary (exp: environmental regulations, minimum wage...) Ethical people (companies) go beyond the laws. Sometimes obeying the law would require us to act against our ethics 4 chapter4 Ethics and Law Human behaviors falls into three categories: codified law, free choice and ethics. 1) Codified law: in which standards are written into the legal system and enforceable in the courts. 2) Free Choice: pertains to behaviors about which the law has no say and for which you enjoy complete freedom. 3) Between these domains lies the domain of Ethics which has no specific laws, but it does have standards of conduct 5 based on shared values about moral conduct chapter4 Ethics and Law Ethics fall between law and free choice 6 chapter4 Sources of Ethics Notions of right and wrong come from many sources: -Religious beliefs Create a concept of ethics, morality, and socially -Family background acceptable behavior in each -Education person. -Community/ Acts as a moral neighborhood compass to guide an individual when ethical -Media influences dilemmas arise 7 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. chapter4 Ethical Relativism Ethical issues can be complex. People may hold divergent views about right/wrong The meaning given to ethics would be relative to time, place, circumstance, and the person/s involved There would be no universal ethical standards on which people around the globe could agree 8  Why Business Should chapter4 Be Ethical To improve company image and reputation: there is a growing societal concern for ethical behavior (exp: boycotting unethical firms products ) To improve business performance: ethical companies are more profitable in the long run To comply with legal requirements 4) To prevent or minimize harm to the general public and other stakeholders: not harming society with toxic waste, protecting business from unethical employees and unethical competitors 9  Unethical chapter4 Organizational Behaviors Bribery Discrimination and Harassment.... Misusing company assets Employing child labor Illegally using copyrighted materials. Non-Office Related Work Unfair treatment of custmers or employees… The Violation of ethical practices may lead to: Fines / Jail / License Revoked /Termination of employment…  Globalization and chapter4 Ethics Globalization makes ethical issues more complex Bribes are common practice in many countries https://www.transparency.org/en/cpi/2021 11  Main Sources of chapter4 Ethical Problems in Business 1) Competitive pressure: squeezed by hard competition, some managers may cut the corners. 2) The pressure of achieving results: the desire to get a promotion or close a deal, the the fear of failure or the fear of losing his job may cause ethical misconduct. 3) Cross-cultural contradictions: different cultures may have different or contradictory ethical standards 4) Conflicts of interest: occurs when an individual's personal interests could compromise his judgment. For example, an employee who has a friendship with a supplier and allows that supplier to go around the 12 bidding process. chapter4 Ethical Dilemmas An ethical dilemma arises in a situation concerning right or wrong when values are in conflict. There are often complex situations with no clear-cut resolution, and without a right or wrong answer Most ethical dilemmas involve a conflict between the needs of the part and the whole: the individual versus the organization or the organization versus society as a whole. For example, should products that fail to meet tough local standards be exported to other countries where standards are lower, benefiting the company but being potentially harmful to world citizens? 13  Ethical Dilemma Example chapter4 You see a runaway trolley moving toward 5 tied-up people lying on the tracks. You are standing next to a lever that controls a switch. If you pull the lever, the trolley will be redirected onto a side track, and the 5 people on the main track will be saved. However, there is a single person lying on the side track. You have two options only: Do nothing and allow the trolley to kill the five people on the main track. Pull the lever, diverting the trolley onto the side track where it will kill one person. Which is the more ethical option? 14  Ethical Decision- chapter4 Making Managers and employees are the moral agents who must make ethical choices. They need a set of guidelines that will shape their thinking and help them make informed decisions. Company leaders are the ones who should develop these ethical guidelines or standards that managers and employees in their company will be required to adhere to. These guidelines help them identify and analyze the nature of an ethical problem, and decide which course of action is likely to produce an ethical result. 15 chapter4 Ethical Standards Utilitarian approach Moral Rights Approach Justice Approach Virtues Approach 16  The utilitarian chapter4 approach Ethical actions are those that produce the greatest benefits and the least harm. The ethical action is the one that provides the greatest good for the greatest number of people. The focus here is on the consequences of the action. The ends justifies the means. It is ok to do a little bit of harm if the result is a lot of good to many people. 17  The moral rights chapter4 approach This approach has its roots in the philosophy of Immanuel Kant What makes human beings different from mere things is that people have the ability to choose freely what they will do with their lives, and they have a moral right to have these choices respected. Many related rights are thought to exist such as rights to truth, to privacy, to life, to free consent, etc. In deciding whether an action is ethical or no, we must ask, Does the action respect the moral rights of everyone? It doesn’t matter how much good your action would generate, as long as you are violating one human right. 18 chapter4 The virtues approach A virtue approach requires people to base their ethical decisions on universal virtues such as honesty, tolerance, fidelity, integrity, and many others A person who has developed virtues will be naturally disposed to act in ways consistent with moral principles. The virtuous person is the ethical person. In dealing with an ethical problem using the virtue approach, we might ask, What kind of person should I be? What is ethical is what develops virtues in ourselves and our communities 19 chapter4 The justice approach The justice approach has its roots in the work of Aristotle.” The basic moral question in this approach is: How fair is an action? Does it treat everyone in the same way, or does it show favoritism and discrimination? We should treat people the same unless there are relevant differences between them. In a company, everyone should be treated equally regardless of their position or influence. Thus, men and women should not receive different salaries if they are performing the same job. However, people who differ in job skills or responsibilities can be treated differently in proportion to the differences in skills or responsibility among them. 20  How can ethical behavior chapter4 be improved in the workplace? 1. Code of ethics 2. Ethics training 3. Zero tolerance approach 4. Inquiry and reporting mechanisms 5. Inclusion of ethics in employees performance evaluation 6. Leadership commitment 21  How can ethical behavior chapter4 be improved in the workplace? 1. Code of Ethics: Formal document that establish clear expectations for all employees. Provides guidelines and resources (such as FAQs) on how to handle common ethical dilemmas. 2. Ethics training: to make sure all employees understand company values, policies and codes of conduct (addressing possible ethical dilemmas by working on a list of specific scenarios that employees might face) 3. Adopt a zero-tolerance approach: disciplinary measures against employees who violate ethical standards 22  How can ethical behavior chapter4 be improved in the workplace? 4. Inquiry and reporting mechanisms Specify methods to seek ethics advice or information Define ways of reporting anonymously ethical misconduct without fear of retaliation (Whistle-Blowing) 23  How can ethical behavior be chapter4improved in the workplace? 6. Performance evaluation systems and related compensation and promotion decisions should reward employees ethical behavior. 7. Strong Ethical Leadership Leaders set the tone for ethics in the workplace. Ensure that leaders lead by example. Weak ethical leadership may result in a “They’re breaking the rules, so I can, too,” mentalities  Ethics and Corporate chapter4 Social Responsibility (CSR) CSR refers to companies integrate social and environmental concerns in their business operations and taking actions aimed at benefiting the society such as:  Reducing carbon footprint and water pollution.  Increasing reliance on renewable energy, sustainable resources, and recycled or partially recycled materials  Giving a portion of profits to support charities or worthy causes.  Etc. 25  Ethics and Social chapter4 Responsibility To be socially responsible, a company must do more than act legally and ethically. CSR is not always a legal necessity, increasingly it is an obligation. Studies have found that both investors and consumers are more likely to support and purchase from a company that fosters a social cause, such as engaging in environmentally friendly activities. 26