CR301E-B Business Ethics - Fall 2024 PDF

CR301E-B Business Ethics 3 ECTS Credits – 24 Hours Fall 2024 Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Learning objectives Analyze the nature of business ethics Understand the importance of moral reasoning and decision-maki...

CR301E-B Business Ethics 3 ECTS Credits – 24 Hours Fall 2024 Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Learning objectives Analyze the nature of business ethics Understand the importance of moral reasoning and decision-making in business ethics Discuss the foundations and structure of moral reasoning Define the concept of moral responsibility of corporations Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics & Business Defining Ethics There are various definitions of the term « Ethics », one of them is: “the principles of conduct governing an individual or a group” * “ Ethics is the study of morality” *“Ethic,” Webster’s Third New International Dictionary, Unabridged (Springfield, MA: Merriam- Webster Inc., 1986), p. 780. Similar definitions can be found in any recent dictionary. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics & Business Ethics versus Moral Ethics investigate into morality; morality is the subject matter that ethics investigates. What is “morality”? Morality can be defined as: «the standards that an individual or a group has about what is right and what is wrong » Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics & Business Defining morality – Moral Standards Moral standards include the norms we have about actions we believe are morally right and wrong. Where do moral standards come from? At a very early stage (family, friends, societal environment (school, TV, music etc.)  Moral norms or moral standards are « general rules » about actions. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics & Business Defining morality – Moral Standards What distinguishes Group1 and Group 2 norms? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics & Business Defining morality – What are Standards? Moral versus Nonmoral standards Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics & Business Defining morality – Moral & Nonmonral Standards Berkley Professor in Psychology Elliot Tureil researches found out that: o We can distinguish moral from nonmoral standards very early in our lives (from the age of 3) o We tend to think that moral norms are more serious than nonmoral norms o The ability to distinguish moral from nonmoral standards is inner and universal  What is the difference between moral and nonmoral norms Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics & Business Defining morality – Moral Standards Nonmoral Standards Nonmoral standards and norms include standards of etiquette by which we judge people’s manners as good or bad.  They are ‘rules of behavior’ set by various forms of authority ( parents teachers etc.)  They are the « Law » that determines what is legally the right or wrong way to act. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics & Business Defining morality – Moral Standards Six Characteristics of Moral Standards 1. Moral Standards deal with serious matters 2. Moral Standards are preferred to other values 3. Moral Standards are independent of authority 4. Moral Standards are universal 5. Moral Standards are determined impartially 6. Moral Standards are associated special emotions and vocabulary Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics & Business Defining morality – Moral Standards Are moral standards fixed? Moral standards are not fixed, they can be evaluated and revised as we go though our lives Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics & Business Ethics as a discipline ‘Ethics is the discipline that examines your moral standards or the moral standards of a society’ So you start to engage with ethics when you confront your moral standards: oWhat do they imply for the situations in which I find myself? oDo these standards really make sense? oWhy should I continue to in believe in them? oAre there implications reasonable in this situation? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics & Business Ethics as a discipline “It is the process of examining the moral standards you or your society (or other societies) holds in order to determine whether these standards are reasonable or unreasonable and how they apply to the concrete situations and issues you face.” Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Lawson and Vandivier’s Case Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Lawson and Vandivier’s Case The ultimate aim of ethics is to develop a body of moral standards that you feel are reasonable for you to hold. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Defining Business Ethics What is Ethics applied to business or “Business Ethics”? “Business ethics is a specialized study of moral right and wrong that focuses on moral standards in business institutions, organizations, and activities.” “Business ethics is a study of moral standards and how these apply to the social systems and organizations through which modern societies produce and distribute goods and services, and to the activities of the people who work within these organizations.” Are all the issues faced within a company of the same nature? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Lawson and Vandivier’s Case So what happened after Searle Lawson and Kermit Vandivier turned in their report and the U.S. Air Force put the BFGoodrich brakes on planes flown by their test pilots? Lawson was sent as BFGoodrich’s representative to Edwards Air Force Base in California where the test flights took place. There, he watched as the brakes caused several near crashes when the pilots tried to land the planes. In one case, he saw an airplane go skidding down the runway when the pilot’s braking produced so much heat in the brake that its parts fused together and the wheels locked up. Surprisingly, none of the pilots were killed. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Types of Issues Covered by Business Ethics Busines Ethics distinguish between three differend kind of issues: Systemic Corporate Individual Issues Issues Issues Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Lawson and Vandivier’s Case Conclusion o When Lawson returned home, both he and Vandivier quit and notified the FBI of what had been going on. This was their way of dealing with the individual issues their actions had raised. o A few days later, BFGoodrich announced that it was replacing the small brake with a larger five-disk brake at no extra charge to the U.S. government. In this way the company’s managers tried to deal with the corporate issues the brake incident had created. o About a year later, Lawson and Vandivier came before the U.S. Congress and testified about their experiences at BFGoodrich.  Shortly thereafter, the U.S. Department of Defense changed the way it let companies test equipment, making fraudulent reports less likely. These changes were responses to a key systemic issue that becameHouda obvious once the truth came out. EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Applying Moral Concepts to Organizations Discussion Should corporations be viewed as moral agents or are humans alone moral agents? “Employees of Arthur Andersen, an accounting firm, were caught shredding documents potentially proving that its accountants helped Enron hide its fraud by using several accounting tricks.” Who should be charged? The employees or Arthur Andersen as a corporation? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Do Companies Act as A Moral Agent or do they Act as Machines? Three views apply : 1- Corporations organizations have moral duties and are morally responsible in a primary sense. 2- Corporations have no ethical qualities, they act as machines, and only humans have ethical qualities and are the sole carriers of the moral duties. 3- Human individuals are the primary carriers of the moral duties the company is the secondary carrier of the moral duties in a derivative sense. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Business Ethics in a nutshell It is the study of : oHow our moral standards apply to business oHow reasonable or unreasonable the moral standards we have absorbed from society are oThe implications that our moral standards have for business activities Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Globalization & Business Ethics Globalization is to a large extent driven by multinational corporations: o Beneficial aspects:  Jobs  Skills & specialization  Income & decrease in poverty  Technology, Etc. o Detrimental aspects:  Rising inequality  Cultural losses,  “race to the bottom”  Introduction of inappropriate technologies into developing countries Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Globalization & Business Ethics Differences and Questions Multinationals entering foreign markets or locals working for multinational corporations face multiple questions:  Legal aspects  Governmental aspects  Levels of development  Cultural understandings  Practices Etc. Globalization raises questions about whether managers in foreign countries should follow local standards or their home standards? Should multinationals adapt their standards to the local ones or not? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Globalization & Business Ethics Major theories Ethical relativism theory An ethical standard is relative to what a particular culture or society accepts or believes Integrative Social Contracts Theory (ISCT) Makes the distinction between Hypernoms and Microsocial norms. o Hypernorms apply to all societies. o Microsocial norms differ from one society to the another Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethical Relativism theory Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Integrative Social theory Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Major theories on the Foundations of Moral Reasoning Kohlberg’s Stages of Moral Development Psychologist Lawrence Kohlberg, identitfied six identifiable stages in the development of a person’s ability to deal with moral issues: Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Major theories on the Foundations of Moral Reasoning Gilligan’s Theory Gilligan claimed that there are “male” and “female” approaches to morality:  Males tend to deal with moral issues in terms of impersonal, impartial, and abstract moral principles (Kohlberg’s postconventional thinking) Gilligan’s Theory of Female Moral Development: o Morality is primarily a matter of caring and responsibility. o Moral development for women is a progress toward better ways of caring and being responsible. 3 stages of Female Moral Development 1- Conventional stage of caring only for oneself 2- Conventional stage of caring for others to the neglect of oneself 3- Postconventional stage of achieving a balance between caring for others and caring for oneself Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Foundations of Moral Reasoning Discussion Reasoning processes are driven by, and suffused with, emotions and feelings. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 The Structure of Moral Reasoning Defining Moral Reasnoning «Moral reasoning refers to the reasoning process by which human behaviors, institutions, or policies are judged to be in accordance with or in violation of moral standards” Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 The Structure of Moral Reasoning Moral reasoning always involves three components: Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Evaluating Moral Reasoning Criteria for evaluating Moral Reasoning: oLogic oAccuracy, Relevance, Completeness of evidence and information oConsistency (moral standards) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethical Principles in Business Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Learning Objectives Foundations of moral decision-making in business Examine the foundations of moral decision-making in business Relate virtue ethics to moral decision-making in business Differentiate unconscious and conscious moral decision-making processes and implications Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making There are five kinds of approaches to moral judgments: 1. Utilitarianism / Consequentialist approach Does the decision maximize the good and minimize the bad for everyone? 2. Rights Does the decision respect people’s rights? 3. Justice  Is the decision just and fair? 4. Ethic of care  Does the decision express caring? 5. Ethics of virtues as an alternative  Does the decision flow from virtue and not from vice? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Utilitarianism, definition Utilitarianism is a general term for the view that actions and policies should be evaluated on the basis of the benefits and costs they produce for everyone in society who is affected by those actions or policies. “the greatest good for the greatest number.” (Jeremy Bentham (1748–1832)) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Utilitarianism: Social Costs & Benefits Analysis Lauwrence Summers’ Waste Management Memo Should Companies Dump Their Wastes in Poor Countries? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Utilitarianism, definition Utilitarianism is a general term for the view that actions and policies should be evaluated on the basis of the benefits and costs they produce for everyone in society who is affected by those actions or policies. “the greatest good for the greatest number.” (Jeremy Bentham (1748–1832)) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Common Misconceptions about the Utalitarian Approach oIs the right action one whose benefits outweigh its costs? oDoes the right action produce the most utility for the person performing it? oDo we consider only direct and immediate consequences? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Primary Benefits of the Utalitarian Approach oAdvocates policies that provide the greatest benefits (utilities) oImpartially considers everyone’s interests oExplains why some activities are right and some are wrong Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Challenges of the Utilitarian Approach oUtility is subjective which makes comparison difficult oSome benefits and costs are difficult / impossible to measure (health, life) oBenefits & Costs can be unclear oNot all goods are commensurable (intrinsic goods, instrumental goods) oIt is unable to deal with moral issues related to rights and those related to justice Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ford Pinto Group presentation Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Rights & Duties: a rights-based approach to BE Definition of a « right » « a right is an individual’s entitlement to something” (United States Department of Justice) Moral rights or Human rights, are based on moral norms and principles that specify that all human beings are permitted or empowered to do something or are entitled to have something done for them. They are different fom legal rights, as they are thought to be universal, they are rights all human beings have to an equal extent by virtue of being human beings. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Rights & Duties: a rights-based approach to BE Characteristics of Moral rights versus Legal rights: Moral or human rights:  Based on moral norms  Entitlements granted to all people universally, simply by being human.  Rights can be violated even if "no one is hurt.“  Rights are associated with duties that others have toward the individual holding the right. Group  They grant individuals autonomy and equality in pursuing their own interests freely. Individual  They serve as a foundation for justifying actions and requesting protection or assistance from others.  Unlike utilitarian standards that aim for the overall benefit of society, rights focus on safeguarding the interests of the individual. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Rights & Duties: a rights-based approach to BE Legal rights: Derived from a legal system. Applicable only to individuals within the jurisdiction of that legal system. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Rights & Duties: a rights-based approach to BE Contractual Rights and Duties o Formed through specific agreements and apply only to the parties involved. o Depend on publicly accepted rules defining what constitutes an agreement and the obligations it creates. (Human & Legal rights) o Form the basis for special rights and duties that come with accepting a specific position or role within an institution or organization. Contractual rights or special rights require the following conditions:  All parties understand what they are agreeing to  There is no misrepresentation of facts  There is no duress or coercion involved  The agreement does not involve committing an immoral act Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Rights & Duties: a rights-based approach to BE Negative & Positive Moral rights Negative rights Defined by the duties of others not to interfere with certain activities of the rights holder. Example: The right to privacy requires others, including employers, not to invade an individual’s private affairs. Positive rights Go beyond imposing non-interference duties; they also require others (such as society or the government) to provide the right holder with what is necessary to fulfill the right.  Example: the right to work, education, healthcare, and social security, which all require active support when individuals cannot secure them on their own. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Rights & Duties: a rights-based approach to BE Kantian Rights Immanual Kant’s Categorical Imperative to define « Rights » According to Kant, interests become rights and determine Moral right and wrong if they meet the following criteria: - Univseralizability - Reversibility - Freedom and Rational living Kant’s theory on Moral rights in short: all individuals should be equally free to pursue interests that help them live freely and rationally Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Rights & Duties: a rights-based approach to BE The Libertarian definition of Rights Philosopher & Harvard Professor Robert Nozick claims that: “the only basic right that every individual possesses is the negative right to be free from the coercion of other human beings” - Private property - Freedom of contract - Free markets - Elimination of social welfare programs Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Justice and Fairness as ethical principles While "justice" and "fairness" are often used interchangeably, justice typically refers to more serious issues, and some believe fairness is a more fundamental concept. The literature distinguishes three types of justice: o Distributive Justice Fair distribution of benefits and burdens o Retributive Justice Fair punishment o Compensatory Justice  Fair compensation Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Justice and Fairness as ethical principles Principles of Distributive Justice Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Justice and Fairness as ethical principles Distributive Justice and Egalitarianism Core Pinciple : Egalitarians argue that no relevant differences among people justify unequal treatment. Basis of Equality (all humans are fundamentally equal) Distribution Formula (all benefits and all burdens should be distributed equally among all individuals) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Justice and Fairness as ethical principles Distributive Justice and Capitalist Justice Core Principle: Benefits should be distributed in proportion to each individual's contribution. Paying based on contribution can lead to a competitive atmosphere where cooperation and sharing of resources and information are reduced, and status differences arise.  Individualistic vs. Collectivist Cultures Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Justice and Fairness as ethical principles Distributive Justice and Socialism Core principle: "From each according to his ability, to each according to his needs.“ oWork Distribution oBenefit Distribution oFamily Model Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Justice and Fairness as ethical principles Distributive Justice and Libertarianism Core belief: Justice is determined freely by individuals. Justice is achieved when benefits and burdens are distributed based on individual choices, either by creating, exchanging, or giving away what they own. Opposition to enforced redistribution (taxation for welfare i.e) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Justice and Fairness as ethical principles Distributive Justice and Justice as Fairness (John Rawls) Core principle: justice should be determined by first establishing a fair method for choosing principles, which then guide the distribution of benefits and burdens. Rawls’s two principles: oEqual basic liberties  Each person should have an equal right to the most extensive basic liberties compatible with similar liberties for others. oSocial and economic inequalities (difference principle) These should be arranged so that: a. They benefit the least-advantaged persons the most. b. They are attached to positions open to all, under fair equality of opportunity. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Justice and Fairness as ethical principles Retributive Justice Core principle: retributive justice is concerned with the fairness of blaming. Conditions for just/fair punishment: oKnowledge oChoice oCertainty (clear evidence of wrongdoing) oConsistency (The same penlaty applied to the same infraction for all individuals) oProportionality (the punishment should match the severity of the wrongdoing) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Justice and Fairness as ethical principles Compensatory Justice Core principle: restore the victim to the same level of well-being they would have had if the wrongdoing had not occurred. Challenges of compensatory justice: oMeasuring losses Some damages are difficult to quantify, i.e harm to reputation. oIrreparable losses  Certain losses, like the loss of life or sight, cannot be fully compensated. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Ethic of Care An Ethic of Care focuses on compassion, concern, love, friendship, kindness etc. as central virtues. It is based on two Moral Demands: 1. The importance of recognizing that individuals exist within a network of relationships. The ethical responisbility is to preserve and nurture these specific relationships 2. The ethical obligation to provide special care to those with whom we establish relationships. Understanding and responding their specific needs, values, desires and well-being from their own point of view. Prioritizing those who are vulnerable and reliant on our care Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Ethic of Care: the notion of Relationships Concrete Relationships in an Ethic of Care are considered as: oBeyond individual relationships: they shoud not be limited to individual or group relationships, but also consider broader networks with communities. oCommunitarian Ethic: An Ethic of Care values the preservation of communities and their relationships. The focus is on the the community rather that on isolated individuals. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Ethic of Care: forms of caring In the context of an Ethic of Care it is important to distinguish three different forms of caring: o Caring for someone Involves deep, personal care focused on a person’s well-being, supporting the person’s growth and independence. o Caring about something  Directed towards objects or ideas, withouth personal and emotional connection. o Caring after someone  Involves looking after a person’s needs with detachment and objectivity, i.e by bureaucratic institutions.  Which one is the caring demanded by an ethic of care? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Limits of an Ethic of Care o Impartiality Traditional ethical theories advocate for impartiality, suggesting that special relationships should not influence moral decisions, while an Ethic of Care favors special relationships. An ethic of care can degenerate into favoritism oDemands of Caring can conflict with demands of Justice oNo fixed rule for Conflict Resolution Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Integrating Utility, Rights, Justice and Caring Moral reasoning should integrate all four considerations (even though one may be more relevant in specific situations)  This strategy ensures a comprehensive assessment Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making In short Moral judgments and decisions should be based on : oMaximizing the overall benefit of our actions (utility) oRespecting individual moral rights oEnsuring a just / fair distribution of benefits and burdens oShowing care for those we have direct relationships with Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Approaches to Moral Decision-Making Virtue Ethics as an Alternative to Moral Principles Core principle: Virtue ethics focus on the virtues and character of a moral person rather than specific actions. oAristotle’s Theory: Virtues are habits that help one live rationally and achieve happiness. oModern View (Pincoffs): Virtues enable effective responses to life's typical situations.  Contrary to the four previous approaches, virtue ethics is not an action-based approach but focuses on being a good person. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Case Study: Testing Drugs in the Developing World 1 - Several critics of the drug companies have claimed that the companies’ practice of testing drugs on poor people in developing countries violates principles of justice. Why would they say this? Which principles of justice would be involved? 2 - Some critics of the drug companies have argued that the doctors that have agreed to participate in the drug trails have violated the requirements of the ethic of care.  Explain why these critics are right or why they are wrong. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Discussion Are our moral decisions conscious or unconscious? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Unconscious and Conscious Moral Decisions Conscious Moral Decision-Making Conscious Moral Decision- Making involves deliberate, reflective reasoning about ethical principles (e.g., utilitarianism, rights, justice, caring, virtue).  It requires gathering information, analyzing situations, and weighing consequences.  It is typically used in complex or novel moral dilemmas where careful thought is needed. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Unconscious and Conscious Moral Decisions Unconscious Moral Decision-Making Unconscious Moral Decision-Making involves automatic, quick, and intuitive processes that occur without deliberate thought (unconsciously). It is based on ingrained habits, social norms, emotions, and past experiences. Which Moral Decision-Making process is predominant in everyday ethical decisions?  Unconscious Moral Decision-Making is predominant in everyday ethical decisions and habitual behaviors. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Unconscious and Conscious Moral Decisions Rationality and Effectiveness Questions arise about the rationality of unconscious processes since they bypass conscious and logical reasoning. The reliance on unconscious processes could imply that our moral life is potentially grounded on nonrational foundations. Understanding both processes is crucial. Understanding conscious reasoning helps structuring moral decision- making frameworks to align unconscious behaviors with ethical principles. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Unconscious and Conscious Moral Decisions Scott Reynolds’ X-System and C-System X-system  Unconscious processes that rely on "prototypes" (schemas) for automatic moral decisions. C-system  Conscious reasoning processes that engage in deliberate moral decision-making. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Unconscious and Conscious Moral Decisions Scott Reynolds’ X-System and C-System The X-System : Automatic Moral Decisions oPrototypes: General memories of situations, emotions, behaviors, moral norms, etc.  Prototypes are adaptable and updated with new experiences oThe brain matches new situations with stored prototypes to determine what is the appropriate behavior. oAutomatic, unconscious process saves cognitive resources. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Unconscious and Conscious Moral Decisions Scott Reynolds’ X-System and C-System The C-System : Conscious Moral Decisions Conscious Moral Reasoning is activated when : oNew or unusual situations are encountered oDeliberate moral decisions are needed  Gathering information, applying moral principles, choosing through options Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Unconscious and Conscious Moral Decisions Discussion Is unconscious prototype- based reasoning legitimate?  Yes, prototype-based reasoning is an automated function, yet it is a rational process. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Unconscious and Conscious Moral Decisions Origins of Moral Prototypes Not all moral prototypes emerge from conscious moral reasoning. Literature states there are three primary sources of moral protoypes (schemes) : o Conscious moral reasoning o Cultural influences o Intuition Intuition-Based Moral Beliefs which are formed without reasoning or cultural influence. It is a strong and deeply-held moral belief with no clear logical justification According to researcher Marc Hauser, people accept moral principles based on intuition Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Summary Let’s do it together Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 The Business System: Government & Markets Learning Objectives Impact of Globalization on Business System John Locke’s Theory of Natural Rights and Free Markets Adam Smith’s Utilitarian View of Free Markets Comparative Advantage and Free Trade Marxist Views on Free Trade and Workers Mixed Economy and Redefinitions of Property Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Globalization and the Business System There are challenges and ethical arguments surrounding free markets and free trade systems: Challenges: o Companies / industries wiped out due to global competition o Job loss due to relocations in lower-wage countries o Accusations of trade manipulation Ethical arguments against free trade: Unfair competition, Pollution, Labor exploitation Ethical arguments for free trade:  Government restrictions that harm Property rights,Freedom , Fairness Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Introduction to Economic Systems “How societies provide goods/services to survive and flourish” Production: What, how, and who produces goods/services Distribution: Who gets goods/services and how much Economic systems use Traditions, Commands, Markets Most economies today blend all three elements i.g., The United-States are o market-oriented, but influenced by traditions and government commands o Also rely on government-owned/controlled businesses (e.g., Amtrak, U.S. Postal Service) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Pure Systems Pure Market Economy No government intervention, leading to possible unethical outcomes (e.g., slavery, child labor) Command Systems even strict ones like the former Soviet Union, include market elements (e.g., black markets) There is a long-standing debate on whether economies should be "free of government intrusions" (free markets) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Command System vs. Free Market The debate relies on four key ideological questions related to: Human nature Social institutions How society actually functions Values to protect Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Karl Marx’s Argument for Command System Marx's Argument against free markets  Without government control, free markets promote injustice Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Three major schools of thoughts for Free Market John Locke Locke's Moral Rights Argument: Free markets as a basis for moral rights Adam Smith Smith's Utilitarian Argument: Free markets maximize societal welfare David Ricardo  David Ricardo's Utilitarian Principles: Building comparative advantage to reach economic efficiency, which aligns with the utilitarian goal of maximizing the greatest good for the greatest number of people. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 John Locke’s theory of natural rights & free markets John Locke's Theory: Human beings have natural rights: liberty and private property State of nature: everyone is free and equal, following moral principles given by God Rights to ownership: each person owns their body, labor, and what they produce Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 John Locke’s theory of natural rights & free markets The Role of Government according to John Locke: oA government is formed to protect natural rights that are insecure in the state of nature oGovernment power should be limited to protect liberty and property  His view is used to justify Free Markets with limited governments that allow voluntary exchange and protect natural rights of liberty and private property Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Adam Smith’s Utilitarian view of free markets Adam Smith’s Theory o Invisible hand: Pursuing self-interest leads to public welfare oMarket competition drives businesses to lower prices, conserve resources, and meet consumer demands oGovernment intervention disrupts the self-regulating effect of competition Other similar utilitarian views:  Ludwig von Mises and Friedrich Hayek: Government cannot match market efficiency  the market is more efficient than government  Thomas Aquinas: Private ownership motivates individuals to care for and improve resources Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Free Market & Commodification Debate Discussion The concept of “commodification” refers to treating something as a commodity, something that can be bought, sold, or traded in a market. Should everything be treated as a commodity ?  Class discussion Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Critiques of Smith’s Utilitarian Argument Keynes & Lange John Maynard Keynes highlights moral defects in Smith’s utilitarian view: o Competitive markets foster selfishness, materialism, and competitiveness. o Human beings are naturally inclined to care for others (e.g., family), but market systems replace this natural virtue with self-interest.  Raise of individualistic societies o Societies based on competitive markets are seen as morally flawed because they encourage negative character traits. Oskar Lange counterarguments to Smith’s theory: o a central planning board could efficiently allocate resources o Large-scale central planning largely failed (communist nations), but is efficient when used as a component within market-based systems (French, Ductch, Swedish examples) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 The Mixed Economy Free Markets, Free Trade and Private Property The collapse of communist regimes suggests capitalism’s victory … however … growth in interventionist economies (e.g., Singapore, China) shows that government involvement (command system) is crucial.  Are free markets the unique path to prosperity? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 The Mixed Economy The mixed economy can be seen as a middle path between command and pure free markets systems: The Mixed Economy combines free markets and private property with government regulation. The Mixed Economy aims to balance the strengths of capitalism with interventions to address its weaknesses. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 The role of Government in a Mixed Economy Addressing inequality by transferring wealth through taxes and welfare systems Worker Protection through laws (labor laws) on minimum wages, safety and preventing exploitation Regulation of firms Controlling monopolies (regulated, nationalized, or outlawed) Putting in place regulatory agencies to supervise firms Monetary and fiscal policies to maintain full employment & stability Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Property Ownership Lockean vs. Socialist views Intellectual Property has a non-exclusive nature (i.e software, inventions, genetic codes, digital images etc.) Two major views on property ownership: 1 – Lockean View which emphasizes the right to own property privately 2- Socialist View which focuses on collective ownership for communal benefit  The current systems tends to lean towards a Lockean / utilitarian model. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics in the Market Place Learning Objectives APPLY ETHICS TO MARKET CONDITIONS TO ACHIEVE ETHICAL ETHICAL IMPLICATIONS OF COMPETITION PERFECT COMPETITION OLIGOPOLISTIC AND MONOPOLISTIC COMPETITION Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics in the Market Place Applying Ethics to Market Competition Three types of economic models Perfect Competition Oligopoly Pure monopoly Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethical weaknesses of Monopolies They violate capitalist justice by charging more for products than producer knows they are worth. (unethical price fixing) They violate utilitarianism by causing shortages and misallocating resources  Not effectively using resources to create the greatest good for the greatest number of people They violate negative rights by: o forcing other companies to stay out of the market, o by letting monopolists force buyers to purchase goods they do not want, and o by letting monopolists make price and quantity decisions that consumers are forced to accept. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Unethical Practices in Oligopoly Markets o Price-fixing o Manipulation of supply o Market allocation o Bid rigging o Exclusive dealing arrangements o Tying arrangements o Retail price maintenance agreements o Predatory price discrimination Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment A historical perspective Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Existing growth & development models are based on the logic that resources are infinite, leading to ecosystems being damaged or destroyed. Though these models create “value”, they - on the other side of the coin - generate hidden unsupported costs: EXTERNALITIES “Externalities refers to situations when the effect of production or consumption of goods and services imposes costs or benefits on others which are not reflected in the prices charged for the goods and services being provided » (OECD) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Major types of air pollution o Greenhouse gases: carbon dioxide, methane, nitrous Oxide o Ozone depleting gases: chlorofluorocarbons o Acid rain gases: sulfur oxides o Airborne toxics: benzene, formaldehyde, toluene, trichloroethylene, and 329 others o Common air pollutants: carbon monoxide, sulfur oxides, nitrogen oxides, airborne lead, ozone, particulates. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Major types of water pollution oOrganic wastes: human sewage, animal wastes, bacteria, oil oInorganic pollutants: salt brines, acids, phosphates, heavy metals, asbestos, PCBs, radioactive chemicals Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Major types of land pollution oToxic substances: acids, heavy metals, solvents, pesticides, herbicides, and phenols oSolid wastes: residential garbage, industrial wastes, agricultural wastes, and mining wastes oNuclear wastes: high-level (cesium, strontium, plutonium), transuranic (diluted high-level wastes), and low-level (contaminated reactor equipment, uranium mine tailings) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Depletion of nonrenewable resources oSpecies extinction and habitat loss oFossil fuel depletion Natural resources are being depleted at peaked rate https://www.theworldcounts.com/stories/depletion-of-natural-resources https://www.overshootday.org/newsroom/past-earth-overshoot-days/ Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Depletion of nonrenewable resources oThis year, Earth Overshoot Day fell on August 1. “Earth Overshoot Day marks the date when humanity has used all the biological resources that Earth regenerates during the entire year.” oSince August 1, we are debtors of the Earth, and the debt burden we are accumulating since 1971 is larger every year. oDespite the implication of countries and policy makers, the achievement of sustainable development goals remains challenging.. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Conservation vs. Sustainability oConservation: Ethical obligation, leaving the world no worse for future generations (Rawls, care ethics).  Arguments against attributing Rights to Future Generations: Future generations do not now exist and may never exist. If future generations have rights, then the present must be sacrificed for the future. Because we do not know what interests future generations will have, we cannot say what rights they have (Kantian definition of rights) oSustainability: Balancing environmental, social, and economic needs without harming future generations. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment A practical framework for Making Development More Sustainable: Sustainomics o The abstract definitions of SD, the multiplicity of stakeholders with conflicting interests and the absence of a discipline or framework that focuses explicitly on SD, ad to the challenge of achieving SD Goals. o To address these challenges to achieve SD, Mohan Munasinghe described a practical approach based on « Making Development More Sustainable (MDMS): Sustainomics Sustainomics is “a transdisciplinary, integrative, comprehensive, balanced, heuristic and practical framework for “Making Development More Sustainable” One of the 3 tools designed for sustainomics which is applicable to Business, is the SD Triangle or Three E’s of Sustainable Development Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Introduction Sustainable Development (SD) Most quoted definitions “A development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (Bruntland Commission Report, 1987) « Sustainability is based on a simple principle: Everything that we need for our survival and well-being depends, either directly or indirectly, on our natural environment. To pursue sustainability is to create and maintain the conditions under which humans and nature can exist in productive harmony to support present and future generations. » (United States Environmental Protection Agency) “Sustainable development involves a process of deep and profound change in the political, social, economic, institutional, and technological order, including redefinition of relations between developing and more developed countries.” (Maurice Strong, 1992) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Introduction Sustainable Development (SD) SD implies a holistic framework in which society (including businesses) aims for socially inclusive and environmentally sustainable economic growth. This SD Triangle framework is frequently referred to as: the Triple Bottom Line (TBL) It used to gauge the success of a particular development program or project. The economic pillar focuses on Economic improving human welfare, primarily Profit through increases in the consumption of goods and services. The environmental pillar is geared towards the protection of the integrity and resilience of ecological Environment Equity The social pillar emphasizes the systems. People enrichment of human relationships Planet and achievement of individual and group aspirations. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Introduction Sustainable Development (SD) Economic Consistent & profitable growth Profit Costs savings, Maximize profits Increase competitiveness Expand markets, Shareholder return Etc. Energy efficiency & conservation Waste management & Natural Environment resources stewardship Planet Biodiversity management Etc. Human rights Equal opportunities & Collaborative leadership Equity Health & Education People Community Non-violent conflict resolution Etc. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Introduction Sustainable Development (SD) SD implies a HOLISTIC and SYSTEMIC framework that requires a BALANCED and INTEGRATED analysis from three main perspectives it considers (3 E’s). Eco-Efficiency Economic Socio-Economic / CSR “VIABLE” Profit “FAIR” Environment Equity Planet People Socio-Environmental “LIVEABLE” Sustainability Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and Corporate Social Responsibility (CSR) Caroll’s Pyramid of CSR The idea of Corporate Social Responsibility (CSR) has been a topic of discussion since the 1950s. Carroll’s pyramid suggests that organizations have to fulfill responsibility at four levels (PELE) Source: The CSR Journal Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Major ethical approaches to pollution There are 4 major ethical approaches to pollution: oEcological ethics oHuman rights (William Blackstone’s Environmental Rights) oMarket correction (considering pollution as an external cost) oSocial causes (addressing hierarchy, ecofeminism) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Ecological Ethics – Historical perspective Environmental concerns date back centuries. o9th -13th century, Arab thhinkers discussed air & water pollution and its impact on human health (Al Kindi, Al Razi, Ibn Sina, Al Jazzar) oKing Edward banned sea coal due to air pollution in London Most of the early environmental concerns are viewed as anthropocentric: oAristotle: Nature made for the sake of man” oThomas Aquinas: Nonhumans are “ordered to man’s use” Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Ecological Ethics – The anthropocentric perspective The anthropocentric view is one according to which nature is valuable only because it serves human interests. It views nature as a resource for human use, which can lead to its overexploitation and degradation. On the other side, anthropocentrism can motivate people who hold this view to avoid environmental damage because it negatively impacts human well- being. Anthropocentrism fails to recognize nature’s intrinsic value, the value independent of its utility to humans. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Ecological Ethics’s 8 statements Ecological ethics recognize intrinsic value in nonhuman nature, independent of human utility 1. Both human and nonhuman life are valuable in themselves. 2. Biodiversity is essential and must be protected 3. Humans have no right to reduce the richness and diversity except to satisfy vital needs 4. Sustainable human population is necessary for flourishing nonhuman life (population decrease) 5. Current human impact on the environment is excessive and worsening. 6. Policy changes are needed to reshape economic, technological, and ideological systems. 7. Shift focus from material growth to life quality. 8. There’s a moral obligation to support and implement these changes. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Environment Consumer Responsibility oPopulation growth increases air and water pollution oRapid growth in urban centers and high population densities concentrates and worsens air and water pollution oCommercial and industrial enterprises are the major contributors to pollution-related ethical issues Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Case study & Discussion Electric vehicles have been widely promoted as a solution to reduce air pollution and combat climate change. They are viewed as a cleaner alternative to traditional cars which are a primary source of air pollution, contributing to greenhouse gas emissions and global warming. Are electric cars a sustainable solution, or do they only represent a short- term fix ? Justify your answer  What alternative solutions are there to address this ecological issue? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee Learning objectives 1. Describe the rational model of the business organization and understand its structure and the obligations of employee and employer 1. Analyze the political model of the organization through the concepts of power, rights, and justice. 2. Explain informal relationships in organizations from an ethical perspective 3. Introducing the ethical characteristics of the caring organization Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization What is an organization? Definition: An organization is the planned coordination of the activities of a number of people for the achievement of some common, explicit purpose or goal, through division of labor and function, and through a hierarchy of authority and responsibility. (E.H Schein) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization Simplified organization chart Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization Information flow Information rises from the bottom of the organization to the top Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization Simplified organization chart The fundamental ethical responsibilities arising from these "rational" aspects of the organization center on two mutual moral obligations: 1. The obligations of the employee to the employer 2. The obligations of the employer to the employee Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization The Employee’s Obligation to the employer Conflicts of interest in business occur when an employee: 1. Is performing a task or exercising personal judgment on behalf of the employer; 2. Has a personal interest that gives them an incentive to act in a way that benefits that interest; and 3. Has a duty to carry out the task or exercise judgment in a manner that serves the employer's interests. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization The Employee’s Obligation to the employer Conflicts of interest are not limited to financial incentives They can also arise from personal or emotional relationships. Objective vs. Subjective conflicts  Objective conflicts of interest: Based on financial relationships.  Subjective conflicts of interest: Based on emotional ties or other non-financial relationships. Actual vs. Potential conflicts:  Actual conflicts of interest: Occur when an employee has a task that can be influenced by their personal interest.  Potential conflicts of interest: Occur when an employee has a personal interest that could influence future tasks, but they haven’t been assigned those tasks yet. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization The Employee’s Obligation to the employer The Apparent Conflict of Interest Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization Common employees unethical behaviors Commercial bribes and gifts Employee theft Theft of information  Ethical application (Moving to a Competitor) Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization The Employer’s Obligations to the Employee Two main ethical issues are related to this obligation: 1. the fairness of wages, a special problem in developing nations 2. the fairness of employee working conditions Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization The Employer’s Obligations to the Employee Factors determining fair wages: - Going wage in the industry and the area - Company’s capabilities - Nature of the job - Minimum wage laws - Relation to other salaries - Fairness of wage negotiations - Local cost of living Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization The Employer’s Obligations to the Employee Case study : Beyonce’s Gym Clothes 1-. In your judgment, are the wages paid to the young women who make Beyoncé’s line of clothing just wages? 2- The article suggests the wages are just. Discuss this at the light of the factors determining fair wages. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Rational Organization The Employer’s Obligations to the Employee An Employer is morally responsible for bad working conditions When it knows about the conditions When it can and should improve them When it is not prevented from changing them Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Political Organization Rational vs. Political Models of Organizations The rational model views organizations as structured, goal-oriented entities focused on efficiency and productivity. However, this model often fails to capture the complexities and conflicts that arise within large organizations. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Political Organization The Political Model of Organizations The political model recognizes that organizations are influenced by competing power coalitions. It highlights informal channels of influence and the reality that goals are set by dominant coalitions, not just through formal authority.  Power relationships override formal authority  Communication occurs through non-formal channels  Goal emerge through bargaining among dominant coalitions Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Political Organization The Political Model of Organizations Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Political Organization The Political Model of Organizations In this view, power is a central reality.  Power is the ability to influence others without being influenced undesirably.  Power dynamics drive efficiency, productivity, and most importantly it drives organizational behavior Ethical issues in organizations center around how power is acquired and exercised. Key questions include:  the moral limits on the power of managers over subordinates and  the power dynamics between employees Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Political Organization The Similarity Argument Observers argue that corporate management resembles a government in key elements. This argument forms the basis for advocating Employee Rights akin to civil rights. A government is characterized by four features: 1. Centralized decision-making by officials. 2. Authority to enforce decisions on citizens. 3. Control over the distribution of social resources, benefits, and burdens. 4. Monopoly on power over subordinates. Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Political Organization The Similarity Argument Large corporations share the previous four features: 1. Centralized authority: top managers have significant decision-making power. 2. Legal power over employees: Managers can hire, fire, demote, and promote. 3. Distribution of resources: Decisions affect income, status, and freedom of employees. 4. Monopoly on power: Legal frameworks and economic leverage give corporations significant control.  If corporations as seen as similar to governments, should employee rights parallel civil rights? Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024 Ethics and the Employee The Political Organization The Similarity Argument & Employee Rights Supporters of employee rights highlight three main points: 1. Dispersed ownership: Corporate assets are held by many stockholders, weakening the link between managers and owners. 2. Non-Union Workers’ rights: Most workers are not unionized and have moral rights that are not always respected. 3. Job changes vs. Citizenship: Switching jobs can be as disruptive as changing citizenship, particularly for specialized employees  Employee Rights should be protected similarly to Civil Rights Houda EL MERNISSI - UIR Rabat Business School- IPM3 FALL 2024