Chapter 7: The Role of Values and Ethics at Work PDF

Because learning changes everything. ® Chapter 7 The Role of Values and Ethics at Work © 2020 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior wri...

Because learning changes everything. ® Chapter 7 The Role of Values and Ethics at Work © 2020 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.  Learning Objectives Understand why leadership by values is important Understand the role of courage in character formation Describe the values that guide you in moral dilemmas Know the role of the leader in setting the moral tone and ethical climate of the workplace © McGraw-Hill Education 2  Values and the Organization Values A “social glue” for an organization Can provide guidance for members who function as independent decision makers Must reflect daily practice and long-term commitments Can mask hypocrisy – if written values are contrary to daily operations, cynicism will prevail among both customers and employees Leaders who want to manage through values must put their good intentions into concrete, observable actions. © McGraw-Hill Education 3  Values and the Organization, 2 How can an organization know it needs to clarify or reinforce its values? Members lack understanding about how they should behave as they attempt to meet goals Different individuals and groups have different value systems Top leaders send mixed messages about what is important Day-to-day life is disorganized Members complain about the organization Organization has values but does not practice them © McGraw-Hill Education 4  Values in the American Workplace Honesty in all dealings, as a foundation for all other values Respect for others, as shown by consideration for their beliefs and needs Service to others, guided by the principle of doing for others as you would have them do for you Excellence in all work performed, reflected the Greek ideal of excellence as a virtue, and resulting in both public admiration and personal pride Integrity, having the courage to act and live by one’s convictions, thus providing strength in moral dilemmas © McGraw-Hill Education 5  Values and the Importance of Courage When character is defined: What people say is important What people do is more important What people sacrifice is the most important Character is based on a value system that is known, cherished, stated, and lived habitually. Caring to the point of personal sacrifice is the pinnacle of living by one’s values. © McGraw-Hill Education 6  Values and the Importance of Courage, 2 Unlike other virtues, Courage is the foundation that underlies and gives reality to all other values and virtues Leadership situations often are filled by ambiguity, uncertainty, and danger – leaders must show courage and act despite these factors Courage of conviction – staying the course when things get tough – describe the character of great leaders in difficult times © McGraw-Hill Education 7  Traditional Definitions of Good Good and right have been defined in Western culture in terms of: Power Personal integrity Natural simplicity God’s will Pleasure Greatest good for the greatest number Pragmatism Duty and right action © McGraw-Hill Education 8  Power Niccolo Machiavelli believed: If life is a struggle for survival and human beings are fundamentally selfish and greedy, the best individuals are those who become masters of manipulative relations Flattery, deceit, and even murder may be necessary to win and retain power Ends justify means and might makes right © McGraw-Hill Education 9  Personal Integrity Friedrich Nietzsche, the champion of individualism, believed: Human resoluteness, born of independent judgment, is the highest good Individuals should be independent in thought and strong in conviction The best humans exhibit moral virtue, such as wisdom, justice, courage, and other ideals, regardless of loss or gain © McGraw-Hill Education 10  Natural Simplicity Frenchman Jean-Jacques Rousseau believed: Nature in essence is good, so human beings too are naturally good To achieve the highest good, one must strive to be purely natural Corruption comes only with civilization Children should be raised in a state of simplicity © McGraw-Hill Education 11  God’s Will Nearly 3 billion adherents of various religions define ethical good as “the will of God” The Prophet Muhammad decreed the five pillars of Islamic Faith © McGraw-Hill Education 12  Pleasure Aristippus, a Greek philosopher, believed that: Pleasure, broadly interpreted as physical enjoyment and avoidance of pain, is the highest state of goodness Definite pleasure of the moment should not be postponed for uncertain pleasure in the future © McGraw-Hill Education 13  Utilitarianism What is best is that which brings the greatest good for the greatest number A moral philosophy that reflects the official ethics of both American democracy and Marxist communism When we weigh the consequences of moral behavior by considering the best interests of everyone involved, we are being ethical according to utilitarian ideals © McGraw-Hill Education 14  Pragmatism What is true must be based on evidence Philosophical beliefs should be evaluated in terms of the role they play in solving life’s practical problems That which is good is that which works © McGraw-Hill Education 15  Duty and Right Action Immanuel Kant believed: People must choose the obligations that become their duty People must be responsible for their own actions Person with character will choose duty to conscience and will not succumb to base desires Acts from a good motive and a sense of duty are good regardless of the consequences © McGraw-Hill Education 16  Honesty as a Leadership Value Honesty is the most important leadership value – it is the single most important ingredient in the leader-follower relationship The effective leader holds truth as a central, foundational value Character begins with truth “In matters of style, swim with the currents; in matters of principle, stand like a rock. Character is what you are. It is different than reputation which is from other people. True character is in you.” – Thomas Jefferson © McGraw-Hill Education 17  Full Swing Values Full-swing values is used to assess the strength of one’s values In ethical dilemmas, a values “home run” is the result only when one completes a full swing A “full swing” is compromised of five points: 1. Know one’s values 2. Cherish one’s values 3. Declare one’s values 4. Act on one’s values 5. Act habitually on one’s values © McGraw-Hill Education 18  Full Swing Values, 2 Evaluate your own values – freedom, love, justice… Are your values “full swing”, or would you hesitate? © McGraw-Hill Education 19  Leadership and Values Given power without accountability, an individual may do terrible deeds that are harmful to others Culture shapes a leader’s values, which influences their actions The leader sets the moral tone of an organization – most especially with their actions © McGraw-Hill Education 20  Leadership and Values, 2 A leader’s pressure to increase performance can be healthy for an organization Too much pressure can be harmful if it encourages illegal or unethical behavior Trust is the bedrock of organizational survival and growth over the long term “Lose money for the firm, and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless.” – Warren Buffet © McGraw-Hill Education 21  Leadership and Values, 3 People will find it difficult to forgive immoral or non- principled leaders Leaders set the moral tone of an organization through what they say and do Leaders who are honest, unselfish, and dedicated help the group succeed © McGraw-Hill Education 22  Instrumental Values of Caring Leaders Honesty Consideration Responsibility Persistence Excellence Commitment © McGraw-Hill Education 23  Instrumental Values of Caring Leaders, 2 The caring leader focuses on service to four groups of people: Customers Anticipating their needs and providing state-of-the-art products Employees Providing a healthy work environment Shareholders Maintaining a strong growth rate and return on investment Community Exemplifying the highest standard of ethical behavior and contribuintg to the well- being of society © McGraw-Hill Education 24  Personal Values Culture influences personal values Socializing and modeling behavior result in people placing higher importance on some values over others Different societies and cultures can have different value systems What traits does American society value? Are they the same for men and women? Do they reflect your personal values? © McGraw-Hill Education 25  Organizational Ethics The best work rules: Reflect the ethical ideas of ownership Are reviewed periodically Are few in number Are clearly stated Are communicated to employees Apply equally to all employees © McGraw-Hill Education 26  Organizational Ethics, 2 A comprehensive code of ethics for an organization includes guidelines in each of the following areas: Government relations How does the organization pay its taxes and obey national and international law? Employee relations How does the organization deal with employee welfare and grievances? Business relations How does the organization deal with suppliers and competitors? © McGraw-Hill Education 27  Organizational Ethics, 3 Production What are the standards of quality for the organization’s products and services? Consumer relations How does the organization price and advertise its products and services? Community and environmental relations What are the effects of the organization on its social and physical environment? © McGraw-Hill Education 28  Organizational Ethics, 4 A code of ethics is a formal standard on beliefs about what is right and wrong in dealing with stakeholders The key characteristics of an ethical organization are: Trying to satisfy all constituents Dedication to high and broad purposes Committed to learning Remaining current and responsive to change Trying to be the best at whatever they do © McGraw-Hill Education 29  Organizational Ethics, 5 Organizations are increasingly creating a ethics ombudsman to monitor ethical practices and procedures The ethics ombudsman is responsible for: Communicating ethical standards Designing systems to monitor employee’s adherence to the standards Teaching managers and employees how to respond to ethical dilemmas © McGraw-Hill Education 30  Organizational Ethics, 6 Rotary International teaches leaders to test their actions against four basic questions: Is it the truth? Is it fair to all concerned? Will it build goodwill and better relationships? Will it be beneficial to all concerned? © McGraw-Hill Education 31  Why is Ethics at Work Important to Leaders? Lynn Sharp Paine cites a variety of motives from different executives on why ethics is important: High ethical standards and business success are positively related Ethical commitment as a basis for building customer trust Reputation for integrity helps attract and keep the best employees Being a role model for society Avoiding conflict with the law © McGraw-Hill Education 32  Why is Ethics at Work Important to Leaders?, 2 There are real social and economic costs of ethical misconduct: Loss of customers and sales Increased turnover and loss of good employees Demoralized and cynical managers and workers Loss of ownership equity High operating costs Legal expenses and possible fines, penalties, and settlement costs High funding costs Loss of public trust and goodwill Loss of financial viability and ultimate failure of the enterprise © McGraw-Hill Education 33  Why is Ethics at Work Important to Leaders?, 3 Leaders who believe ethics are based on principled leadership: Adhere to high standards of moral reasoning Value ideals such as truth, trust, and respect Rarely discuss risk prevention and public opinion Behave with responsibility and do what is right because it is right Employees take pride in this kind of a company and engage in discretionary behavior beyond the defined requirements of the job © McGraw-Hill Education 34  Business Ethics across Cultures Different countries have different standards of ethical conduct There are two primary paths of business ethics across cultures: 1. Adopting a global standard of ethical practice 2. Follow local practices Applying “situation” ethics is the fastest way to destroy a global organization To survive globally, organizations must follow the same standards of business conduct across the globe on a continual basis © McGraw-Hill Education 35  Ethical Climates of Organizations Ethical climate refers to the moral standards that have been consistently communicated, embraced, and enforced – especially by leaders in both word and conduct Organizations generally reflect one of three ethical climates: Profit-maximizing Trusteeship Quality-of-life management © McGraw-Hill Education 36  Ethical Climates of Organizations, 2 Different ethical climates influence moral judgments and result in different experiences What type of organization do you respect? What type of organization do you have? What can you do to influence the ethics of your organization? © McGraw-Hill Education 37  Ethical Climates of Organizations, 3 Profit-maximizing, trusteeship, and quality-of-life management correspond with Kohlberg’s levels of morality I, II, and III Profit-maximizing Reflects preconventional morality: Level 1 Focuses on self-gain and avoidance of punishment Trusteeship Reflects conventional morality: Level 2 Conforms to the expectations of others and to satisfy higher authorities © McGraw-Hill Education 38  Ethical Climates of Organizations, 4 Quality-of-life management Reflects post-conventional morality: Level 3 To do what is right over self-interest and the influence of others Ethical conduct is based on the highest moral principles © McGraw-Hill Education 39  Ethical Climates of Organizations, 5 73% of American full-time employees say they have observed ethical misconduct at work Few organizations have a comprehensive ethics program that includes training, violation reporting procedures, and discipline for violations 43% include ethics in performance reviews 23% have a comprehensive ethics and compliance program © McGraw-Hill Education 40  Ethical Climates of Organizations, 6 Danger signs that an organization may be allowing or encouraging ethical behavior: Failure to establish a written code of ethics Failure to include ethical conduct as part of performance appraisal Unwillingness to take an ethical stand that may impose financial cost Consideration of ethics solely as a legal issue or public relations tool Lack of clear procedures for handling ethical problems Condoning unethical leadership practices © McGraw-Hill Education 41  Ethical Climates of Organizations, 7 To maintain an ethical work environment: Leaders at all levels must be selected and reward for their performance in meeting both integrity and business standards Leaders must be held accountable and disciplined for ethical violations Leaders must model and reinforce values, establishing the moral tone and ethical climate © McGraw-Hill Education 42  End of Main Content Because learning changes everything. ® www.mheducation.com © 2020 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.