BA 385: From Moral Decisions to Moral Organizations

Chapter Seven: Personal and Organizational EthicsPersonal and Organizational Ethics

Introduction to Chapter 7

This chapter focuses on the day-to-day ethical issues that managers face

Many managers have no training in business ethics or ethical decision making

Ethics is vital to business success

Levels at Which Ethical Issues May Be Addressed

PersonalLevel

Situations faced in personal lives

Organizational Level

Workplace situations faced as managers and employees

Levels at Which Ethical Issues May Be Addressed

Societal andGlobal Levels

Local-to-global situationsconfronted indirectly as a management team

IndustryLevel

Situations where a manager or organization might influence business ethics at the industry level

Personal and Managerial Ethics

Conventional approach Chapter Six

Conventional approach Chapter Six

Principles approachPrinciples approach

Ethical tests approachEthical tests approach

ResolvingResolvingEthicalEthical

ConflictsConflicts

ResolvingResolvingEthicalEthical

ConflictsConflicts

Principles Approach to Ethics

Major Principles of Ethics

UtilitarianismRightsJustice

CaringVirtue ethicsServant

LeadershipGolden Rule

Principle of Utilitarianism

Utilitarianism focuses on acts that produce the greatest ratio of good to evil for everyone

Ignores actions that may be inherently wrong

May come into conflict withthe idea of justice

Difficult to formulate satisfactoryrules for decision making

Strengths Weaknesses

Forces thinking about the general welfare and stakeholders

Allows personal decisions to fit into the situation complexities

Example of UtilitarianismDaniel Dennett uses the example of Three Mile Island to explore the limits of utilitarianism for guiding decisions.

Is nuclear power that occurred at this nuclear power plant a good or a bad thing (according to utilitarianism)?

He points out that its long-term effects on nuclear policy would be considered beneficial by many and might outweigh the negative consequences.

His conclusion is that it is still too early (20 years after the event) for utilitarianism to weigh all the evidence and reach a definite conclusion.

Principle of Rights

Principle of Rights focuses on examining and possibly protecting individual moral or legal rights

Principle of Rights

Principle of Justice

Principle of justice involves considering what alternative promotes fair treatment of people

Types of justice

DistributiveCompensatory

ProceduralRawlsian

Each person has an equal right to the most basic liberties comparable with similar liberties for others

Social and economic inequalities are arranged so that they are both: reasonably expected to be to everyone’s

advantage and attached to positions and offices open to all

Rawls’s Principles of Justice

Principle of Caring

Principle of caring focuses on a person as a relational (cooperative) and not as an individual

Based upon Feminist Theory – uses terms such as empathy and trust

Discussions around The Principle of Caring often have to do with dialogue and the importance of conversations between people in ethical gridlock. Can you think of examples where a focus on caring, empathy, trust and conversation might avoid poor ethical decisions in business?

Principle of Virtue Ethics

Virtue ethics focuses on individuals becoming imbued with virtues

Virtue lies as a mean between extremes of excess and deficiency.

These extremes are vices.

Baes upon the philosophy of Aristotle and Plato

Emphasizes CHARACTER over duty or obligation (deontology) or outcomes (consequentialism). Can you think of an example from business ethics where a focus on “being of virtuous character” might lead to better, more ethical decision-making?

Servant Leadership

Servant leadership focuses on serving others first, such as employees, customers, and community

Listening Empathy Healing Persuasion Awareness Foresight Conceptualization Commitment to the

growth of people Stewardship Building community

Servant LeadershipCharacteristics of Servant Leaders

Business Ethics and

LeadershipBridges

The Golden Rule

The Golden Rule focuses on the premise that you should do unto others as you would have them do unto you

The Golden Rule is…

1. accepted by most people

2. easy to understand

3. a win-win philosophy

4. a compass

Ethical Tests Approach

Test of One’s Best SelfTest of One’s Best Self

Test of Making Something PublicTest of Making Something Public

Test of VentilationTest of Ventilation

Test of Common SenseTest of Common Sense

Test of the Purified IdeaTest of the Purified Idea

Gag TestGag Test

Factors Affecting the Morality of Managers

Society’s Moral Climate

Business’s Moral Climate

Industry’s Moral Climate

IndividualOne’s Personal

Situation

IndividualOne’s Personal

Situation

SuperiorsSuperiors

PoliciesPolicies

PeersPeers

Organization’s Moral Climate

Factors Affecting the Organization’s Moral ClimateBehavior of superiorsEthical practices of one’s industry or professionBehavior of one’s peers in the organizationFormal organizational policy (or lack of one)Personal financial need

Questionable Behaviors of Superiors or Peers

Amoral decision makingUnethical acts, behaviors or practicesAcceptance or legality as a standard of behaviorBottom-line mentality, expectations of loyalty and

conformityAbsence of ethical leadershipObjectives that overemphasize profitsInsensitivity toward how subordinates perceive

pressure to meet goalsInadequate formal ethics policies

Improving the Ethical Climate

Top Management Leadership

MoralManagement

Top Management Leadership

MoralManagement

Ethics Programsand Officers

Ethics Programsand Officers

RealisticObjectives

RealisticObjectives

Ethical Decision-Making Processes

Ethical Decision-Making Processes

Codes ofConduct

Codes ofConduct

Chapter 7-27

Board of Director’sOversight

Board of Director’sOversight

Ethics TrainingEthics Training

CorporateTransparency

CorporateTransparency

Whistle-BlowingMechanisms

Whistle-BlowingMechanisms

Ethics AuditsEthics AuditsEffectiveCommunication

EffectiveCommunication

Discipline ofViolators

Discipline ofViolators

Strong Ethical Leadership

TraitsTraits

Mo

ral

Per

son

Mo

ral Man

ager

Ethical LeadershipEthical Leadership

BehaviorsBehaviors

DecisionMaking

DecisionMaking

RoleModeling

RoleModeling

EthicsCommunication

EthicsCommunication

Effective Rewards and Discipline

Effective Rewards and Discipline

Ethical Decision-Making Process

The Ethics Screen

Frequently Addressed Topics

• Conflicts of interest• Protecting

proprietary information

• Receiving gifts• Giving gifts• Discrimination

• Sexual harassment• Kickbacks• General conduct• Employee theft• Proper use of

assets

Codes of Conduct

The 2002 Sarbanes-Oxley Act

Companies are required to protect whistle-blowers without fear of retaliation

It is a crime to alter, destroy, conceal, cover up or falsify documents to prevent its use in a federal government lawsuit

Board of Director Leadership and Oversight

From Moral Decisions to Moral Organizations

Moral DecisionsMoral Decisions

Moral ManagersMoral Managers

Moral OrganizationsMoral Organizations