Ethics (PDF)

3.1 ETHICS ETHICS= the moral code of principles that sets standards of good and bad, right and wrong, in one's conduct. Influenced by family, friends, local culture, religion, education, experiences. ETHICAL BEHAVIOUR= good or right behaviour in the context of a governing moral code. Laws and values...

3.1 ETHICS ETHICS= the moral code of principles that sets standards of good and bad, right and wrong, in one's conduct. Influenced by family, friends, local culture, religion, education, experiences. ETHICAL BEHAVIOUR= good or right behaviour in the context of a governing moral code. Laws and values as influences on ethical behaviour: If something is legal it doesn't mean it's ethical; slavery. For most people, they find something to be unethical when it violates their personal beliefs or values; the underlying beliefs and attitudes that help influence individual behaviour. Terminal values: preferences about desired ends, such as the goals one strives to achieve in life. Self-respect, family security, freedom, and happiness. Instrumental values: preferences regarding the means for accomplishing those ends. Honesty, ambition, imagination, and self-discipline. Alternative views of ethics: There are 4 views of ethical behaviours: Utilitarian Consider ethical behaviour to be that which delivers the greatest good to the greatest number of people. Managers use profits, efficiency, and other performance criteria to judge what is best for the most people. Individualism Based on the belief that one's primary commitment should be to advance long-term self-interests. Society will be better off if people try to maximize their self-interests. Supposed to promote honest and integrity- but not everybody has that capacity. Moral rights Respects and protects the fundamental rights of people. Locke and Jefferson; the rights of all people to life, liberty, and fair treatment. Todays rights: All humans are born free and equal in dignity and rights Everyone has the right to life, liberty, and security of person No one shall be held in slavery or servitude. No one shall be subjected to torture or to cruel, inhuman, or degrading treatment or punishment. All are equal before the law and are entitled without any discrimination to equal protection of the law. Justice view Behaviour is ethical when people are treated impartially, according to legal rules and standards. 4 dimensions of the justice view: Procedural: the degree to which policies and rules are fairly applied to all individuals. Distributive justice= degree to which outcomes such as rewards and vacation time are distributed fairly across all employees- in respect to ethnicity, gender, age etc. Intersectional justice= the degree to which people treat one another with dignity and respect. Commutative justice= the fairness of exchanges or transactions Do all parties have access to relevant information? Cultural issues in ethical behaviour: Cultural relativism: there is no one right way to behave and ethical behavior is always determined by its cultural context. The use of child labour in another country is acceptable if the people from the local culture agree with the law and customs. Moral Absolutism: the belief that if a behaviour or practice is not ethical in ones home environment, it is not acceptable anywhere else. Holds that ethical standards are universal. Critics of moral absolutism hold that it is a form of ETHICAL IMPERIALISM: an attempt to impose one's cultures ethical standards on others. However, hypernorms are something that should be respected in all cultures: human dignity, basic rights, and good citizenship. 3.2 ETHICS IN THE WORKPLACE Ethical dilemmas: A situation that requires a decision regarding possible course of action that, although offering the potential for personal or organizational benefit, may be unethical. A situation where there is no clear consensus for right and wrong. Examples of ethical dilemmas: Discrimination: not hiring someone that wears a headscarf because it might scare off conservative customers. Sexual harassment: you are asked to confront a coworker who is making your friend feel uncomfortable, but then he says he was just joking. Conflicts of interest Product safety: purchasing lower quality material to make more money for the company, even though it may harm customers Organizational resources: your wife asking if she can use your work computer on the weekends. Checklist for dealing with ethical dilemmas: Recognize the ethical dilemma. Get the facts and identify your options. Test each option: Is it legal? Is that right? Whom does it affect? Who benefits? Who gets hurt? Decide which option to follow. Double-check your ethics by asking these spotlight questions “How will I feel if my family finds out about my decision?” “How will I feel about this if my decision is reported in the local newspaper or posted on the Internet?” “What would the person I admire most for their character and ethical judgement say about my decision?” Take action. Influences on ethical decision-making: There are different influences on moral behaviour: Personal: moral development Values, family, religion, and personal needs Ethical framework: a set of personal rules or strategies for ethical decision-making that allows people to act more consistently and confidently. Kohlberg and his three stages of moral development: In which people at different levels have different ethical approaches Preconventional: limited to issues of punishment, obedience, and self-interest. Decisions formed on personal gains; Morally self-centered. Likely to follow social norms, meet the expectations of group memberships, and to live up to agreed-on role obligations to avoid harm or punishment. Conventional Act coincidentally with peers, others Follow rules to help society run smoothly Post-conventional: Principle-centered with a strong ethical framework. Situational context and ethics Intensity Ethics/issue intensity: the extent to which situations are perceived to pose important ethics challenges Caught off guard and struggling to respond morally. Ethics intensity rises when a situation is deemed to have potential harm. Organization setting The way top managers act and what they request has a strong impact. External environment, government regulation, and industry norms Laws and regulations can encourage ethical behaviour but can't guarantee it. Climate of competition in an industry also sets the standard for what may be considered ethical or unethical behaviour. Rationalizations for unethical behaviour: Saying “it's not really illegal” “No one will ever know about it” “The organization will stand behind me” Moral muteness: occurs when employees, managers, or senior leaders turn a blind eye to questionable activity occurring in the organization even though it may violate their own moral code. Six Pillars of Character Although these pillars of character are not definitive, they do represent guideposts for ethical living. They consist of: Trustworthiness: honesty, integrity, reliability in keeping promises, loyalty Respect: civility, courtesy and decency, dignity, tolerance, and acceptance Responsibility: accountability, pursuit of excellence, self-restraint Fairness: commitment to process, impartiality, equity Caring: concern for others, benevolence, altruism Citizenship: knowing the law, being informed, volunteering35 3.3 MAINTAINING HIGH ETHICAL STANDARDS Archie carrols and his three types of managers: Immoral Choose to behave unethically: personal gain, and disregarding ethical implications of their choice or the situation. Amoral Unintentionally or unknowingly disregard ethical concerns. Moral Pursue ethical actions as a behavioral goal. Ethics training: One way to instill ethical behaviour in an organization. Establishing structured programs to help members understand the ethical aspects of decision-making. Other common ethics training topics include ways to deal with conflicts of interest, gifts, client relationships, and bribery. Limits: it is not a guarantee for ethical behaviour. Codes of Ethical Conduct They are formal statements of an organization's values and ethical principles that set expectations for behaviour. Typically address organization citizenship, illegal or improper acts, and relationships with coworkers and customers. Whistleblower protection Being a whistleblower means exposing misconduct in and by an organization in hopes of preserving ethical standards and preventing further wasteful, harmful, or illegal acts. Typical barriers to whistleblowing within an organization include a strict chain of command that makes it hard to bypass immediate supervisors, strong work group identities that encourage loyalty and self-censorship, and ambiguous priorities that make it hard to distinguish right from wrong 3.4 SOCIAL RESPONSIBILITY Stakeholders= persons, groups, and other organizations directly affected by the behaviour of the organization and that hold a stake in its performance. Stakeholder interests often clash: one way to deal with this is to assess the power of the stakeholder The capacity of the stakeholder to positively or negatively affect the operations of the organization the legitimacy of demand The extent to which the stakeholders demand is perceived as valid and the extent to which the demand comes from a party with a legitimate stake in the organization and the urgency of the issue The extent to which an issue requires immediate action. Social responsibility, sustainability, and the triple bottom line: Corporate social responsibility= defined as the obligation of an organization to act in ways that serve the interests of multiple stakeholders including society at large. Stewardship= Something managers must continually exercise in order to do the right thing Taking personal responsibility to act in ways that always respect and protect the interests of the full range of organizational stakeholders. SUSTAINABILITY= pillar of stewardship Acting in ways to help ensure a better quality of life for ppl now and generations to come. GOOD= clean energy, recycling, water observation, waste avoidance. BAD= wasteful and harmful actions. Today's notion of stewardship gives attention to the triple bottom line: economic, social, and environmental performance. Also called the triple p of organizational performance: Profit- decision economically sound? People- respect and dignity? Planet- good for the environment? Perspectives on corporate social responsibility Classical view: Management's responsibility is to maximize profits Primary focus to owners and shareholders. Society's interests are served in the long run by the executives focused on maximizing profits. Socio-economic view: Managers should explicitly focus on the organization's effect on the broader social welfare and not just corporate profits. Emphasis on the triple bottom line. Pursuit of CSR will enhance long-run profits, improve public image, and make organizations more attractive places to work. Shared value view: Economic progress for the firm and social progress for the broader community are fundamentally interconnected. Purpose to create shared value Focus of creating a virtuous circle in which investments in CSR lead to improved financial performance. Evaluating Corporate social performance: Social responsibility audits; issue formal reports on their social performance. When these audits are taken they can be scored on a range: Compliance- acting to avoid consequences Focus on being profitable and obeying the law Conviction- acting to create a positive impact. Focusing on doing what is right and contributing to the broader community Commitment to social responsibility can range as well: Obstructionist strategy= focuses mainly on economic priorities and self-interests: cigarette manufacturers. Defensive strategy: do minimum that's legally required. Accommodative strategy- do the minimum that's ethically required. Oil spill engaging in appropriate cleanup activities but not interested in preventing future spills Proactive strategy- take leadership in social initiatives Firm investing in technologies and alternative energy sources. Corporate Knights: An organization dedicated to clean capitalism. Composed of two sustainable businesses: 1. An award-winning magazine that produces rankings and financial products ratings based on CS performance 2. A research division. Corporate governance: An active oversight of management decisions and company actions by board of directors ENRON -​ Pressured its accounting firm to approve their malpractices. -​ People were paying too much for their share of the firm -​ Public outraged when learning about this scandal: betrayal of trust  -​ Shattered confidence in corporate governance -​ Once valued at 70 billion dollars, and then filed for bankruptcy. Everyone's assets were sold to other companies. Discussion: examples of ethical or unethical business practices ​ Reddit:ethical: promoting free speech ​ Gulf of Mexico Oil spill: prioritizing cutting cost over good practice. ETHICS: ​ Codes for judging our behaviour: standards for good and bad, right and wrong in our conduct. ​ ENRON: violated the ethical principle of lying or doing harm to others. They misrepresented their companies financial position by tricking people into thinking they were doing better than they actually were. LAWS: ​ Laws and ethics are not the same thing: ○​ There can be unethical laws ○​ If a law is ethical or unethical is open to interpretation. ​ Pro-choice or Pro-life. ​ A body of rules made by the government that's enforced by other government agencies. ​ Sometimes laws are either ahead or behind legalizing ethical things. ​ ENRON ○​ Also broke the law on top of being unethical. ​ When it lied to investors, it was breaking the law PERSONAL VALUES: ​ Morality are personal principles or right and wrong and ethics are communal values. ​ PV= underlying beliefs and values of what is right and wrong: honesty, respect ○​ Can be shaped by family, religion. ​ People fall back on personal values when they are faced with ethical dilemmas (where there is no clear right and wrong answer) ​ People who have strong personal values make more consistent ethical choices. DISCUSSION: Ethics around cheating on exams: If accidentally given the answer to exam questions beforehand ​ University community standards: academic integrity standard. A community code we can point to for ethical guidance. ​ Broader community standards: not cheating for the purpose of future career ​ Legal principles: an answer key obtained through breaking the law: hacking, copyright. ○​ Break of contract: we agree to those standards when applying to the school ​ Personal beliefs: family or religion based, etc. FOUR THEORIES OF ETHICS: -​ Give us a principle based approach for approaching any question 1.​ UTILITARIAN a.​ Something is ethical if it produces the greatest good for the greatest number of people b.​ Drug manufacturers: trying to balance how they release their drugs: how much testing they do. Lives can be saved by adding more and more testing. If you test too much, life can be lost if you're preventing the drug from being released by doing too much testing i.​ So the ethically right things to do would be to do the amount of testing that would save the most lives. c.​ DRAWBACKS: relies on an assertion of future outcome that are hard to predict 2.​ INDIVIDUALISM a.​ Capitalistic argument: by advancing your own long-term self interest, you will in turn grow the society and it will be better off for all. b.​ Drug: will choose the level of testing that will make the most economic profit in the long run. Will result in killing more people. i.​ Reality is that by killing less people it will be better off in the long-run. c.​ DRAWBACK: relies on the idea that humans are always rational; but this isnt always the case. 3.​ MORAL RIGHTS VIEW a.​ Points to things like human rights: free-speech. b.​ Drug: respect individual choices of consumers. Tell consumers the risk of releasing the drug, but give them the choice and autonomy to buy the drug or not. c.​ DRAWBACKS: encourage self-interested behavior that might undermine other community values. 4.​ JUSTICE VIEW a.​ Something is ethically good if its fair in how it treats people i.​ 1. Procedural: have policies and rules been equally applied? 1.​ Have all the drugs been tested equally. ii.​ Distributive: idea that we should treat everyone the same regardless of individual characteristics. 1.​ Drug: giving everyone equal access to the drug regardless of identity iii.​ Interactional: giving everyone with dignity and respect iv.​ Commutative: fairness of exchange or transaction of everyone involved 1.​ Companies should be fair in the exchange and not gouge people. b.​ DRAWBACKS: raises the question of which type of justice is more important, and how do we even define justice?  ​ A pluralistic approach to ethical dilemmas is best. ACTIVITY: The clean water or Air Dilemma ​ Option A: shut down factory A to prioritize the health of those affected by emissions, even if it means fewer people have access to clean water ​ Option B: Continue operating both factories, accepting the environmental and health consequences, but ensuring broader access to clean water. CULTURAL RELATIVISM: ​ No cultures ethics are superior ​ Issue when it comes to ethically managing a company globally: different nations have different conceptions of right and wrong. ​ Cultural relativism takes differences seriously: there is no right way to behave. What is ethical is always determined by its cultural context. CULTURAL ABSOLUTISM: ​ Suggests that certain ethical standards apply universally. Bad behaviour here is bad behaviour there. ​ Critiques: this is a form of cultural imperialism: it's not that your values are universal, North Americans are just preferring their own ethical standards. Middle approach: -​ Developed by thomas donaldson -​ There are certain ethical standards that should transcend national boundaries: -​ Human rights. EXAMPLE: Child labour ​ In the west, working children are associated with historical injustices. ​ Donaldson approach: yes we should protect these children from dying but we should also respect their roles in communities. ETHICAL DILEMMAS IN THE WORKPLACE: where we can use and apply our ethical codes and theories. 1.​ Discrimination 2.​ Sexual harassment 3.​ Conflicts of interest a.​ Own interests conflicted with ones of an employer. 4.​ Product safety 5.​ Use of organizational resources DEALING WITH ETHICAL DILEMMAS: 1.​ Recognize the ethical dilemma 2.​ Get the facts and identify your options 3.​ Test each option 4.​ Decide which option to follow 5.​ Ask spotlight question 6.​ Take action ACTIVITY: -​ You learn that a competitor has made an important scientific discovery. It will substantially reduce, but not eliminate, your profits for about a year. There is a possibility of hiring one of the competitor's employees who knows the details of the discovery. 1.​ N 2.​ Options: don't or do hire them. 3.​ Test: hire them and get the info= probably illegal because the guy had probably signed a confidentiality agreement. ETHICAL TRAINING AND ETHICAL CODES OF CONDUCTS: -​ Code that lays out the types of behaviour that you want your employees to engage in or refrain to engage in. WHISTLEBLOWERS: -​ Exposes ethical misdeeds of others in an organization -​ They do that to preserve ethical standards. Barriers to being a whistleblower: 1.​ Personal barriers​ a.​ Fear that reports are not going to be kept confidential 2.​ Organizational a.​ Strict chain of command (pyramid type) where you can't go above your direct boss can make it difficult. b.​ In organizations that encourage loyalty and self-censorship. 3.​ Legal a.​ You yourself can face legal consequences. TIPS FOR WHISTLEBLOWERS: -​ Don't assume protections will actually protection -​ Talk to a lawyer and understand your rights and legal risks. -​ Do not talk to the media first -​ Keep accurate records to document your case, keep copies outside of your office -​ Do not act in anticipation of a big financial windfall if you end up being fired. CORPORATE SOCIAL RESPONSIBILITY ​ An obligation to serve both its own interests and its stakeholders interests. Stakeholders: people, groups, or organizations directly affected by the decisions the organization makes. -​ Employees -​ Suppliers -​ Customers -​ Competitors -​ Indigenous people: they are more than stakeholders. They have more profound rights than stakeholders. ENRON: -​ Customers and energy consumers who depended on enron for their energy -​ Banks and other financial institutions never saw most of their money again -​ Suppliers: loss massive amounts of customers PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY 1.​ Classical a.​ A thin idea of CSR b.​ Only responsibility is to maximize profits. 2.​ Socio-economic a.​ Takes the stakeholder perspective seriously b.​ Managers should also be concerned with broader social welfare. You might choose to make a little less profit for your company if it means paying workers more 3.​ Shared Value a.​ Being socially responsible doesn't mean you're sacrificing profits. Business and social goals are a virtuous circle where you must focus on both b.​ You can find economic value by pursuing practices that advance social well-being. Can go hand-in-hand. CSR STRATEGIES (4) 1.​ Obstructionist a.​ Deny claims and fund counter research when faced with evidence of environmental harm b.​ Might not even fulfill legal obligation 2.​ Defensive a.​ Classical approach in practice b.​ Doing the minimum that's legally required 3.​ Accommodative a.​ Not only you should do what's legal, you should do the bare minimum of what's ethically required 4.​ Proactive a.​ Tries to be a leader in social initiatives, and meeting a high level of performance in economic, legal, and performance spheres