Morality & Rationality in Morality & Rationality in OrganizationsOrganizations

PGDMPGDM

Organization CultureOrganization Culture

Forms basis of rules, procedures and protocol of Forms basis of rules, procedures and protocol of psychological and behavioral guidespsychological and behavioral guidesThree main elementsThree main elements Basic values, attitudes and beliefs of the Basic values, attitudes and beliefs of the

organizationorganization Organizational goals, policies, structures and Organizational goals, policies, structures and

strategies which are shaped by these basic strategies which are shaped by these basic values, attitudes and beliefsvalues, attitudes and beliefs

Organizational way of doing things Organizational way of doing things

Organizational ValuesOrganizational ValuesFound in mission statements, code of ethics Found in mission statements, code of ethics State what organization stands for and describe the State what organization stands for and describe the ethical perspective of organization leadersethical perspective of organization leadersDesired Values of a Business Organization Desired Values of a Business Organization FairnessFairness HarmonyHarmony CooperationCooperation Continuous improvementContinuous improvement CourtesyCourtesy HumilityHumility AdjustmentAdjustment GratitudeGratitude AssimilationAssimilation

Types of OrganizationTypes of Organization

Holistic

ManipulativeExploitativeExploitative

Balanced

Economic concernLow High

High

Ethical

Concern

Corporate Code of EthicsCorporate Code of Ethics

Ethical codes are statements of Ethical codes are statements of norms and beliefs of an norms and beliefs of an organization and ways in which organization and ways in which organizational leaders want others organizational leaders want others to thinkto think

Need to formulate Codes Of EthicsNeed to formulate Codes Of Ethics

Shaping Ethical BehaviorShaping Ethical BehaviorSelf-RegulationSelf-RegulationImproving Self ImageImproving Self ImageTo provide Inner StrengthTo provide Inner StrengthAvoid conflict of InterestAvoid conflict of InterestTo be socially responsibleTo be socially responsibleComply with law and govt. guidelinesComply with law and govt. guidelinesEstablish better corporate CultureEstablish better corporate CultureSafeguard Propriety informationSafeguard Propriety informationAvoid Insider Trading Avoid Insider Trading

Implementing Code of EthicsImplementing Code of Ethics

Management Involvement and SupervisionManagement Involvement and SupervisionConstant consciousness of these codesConstant consciousness of these codesStressing code values during TrainingStressing code values during TrainingRecognition for conduct exemplifying desired values and Recognition for conduct exemplifying desired values and standardsstandardsOmbudsmen or other designated persons assigned for Ombudsmen or other designated persons assigned for this purposethis purposePeriodic auditing to assure compliancePeriodic auditing to assure complianceWell defined and fair enforcement proceduresWell defined and fair enforcement proceduresThorough concentration on high risk jobs in terms of Thorough concentration on high risk jobs in terms of violation of code values and standardsviolation of code values and standards

Critical Elements in Critical Elements in ImplementationImplementation

ClarityClarityCommitment of Top ManagementCommitment of Top ManagementQuality PolicyQuality PolicyCustomer CareCustomer CareBuilding SystemsBuilding SystemsCommunicationCommunicationHuman Resource PoliciesHuman Resource PoliciesEmployee TrainingEmployee Training Ethics WorkshopsEthics Workshops

Ethics workshopsEthics workshops

An overview of company’s code of ethicsAn overview of company’s code of ethics

Discussion of several case that illustrate the Discussion of several case that illustrate the codecode

Discussion of some cases that involve dilemmas Discussion of some cases that involve dilemmas not covered by codenot covered by code

Explanation of any assistance that company Explanation of any assistance that company provides when faced with a dilemmaprovides when faced with a dilemma

Discussion of factors that employees believe Discussion of factors that employees believe impede ethical behavior in their departmentsimpede ethical behavior in their departments

Stages of Ethical Consciousness in Stages of Ethical Consciousness in BusinessBusiness

First StageFirst Stage Law of Jungle: business Decisions are driven by “might is Law of Jungle: business Decisions are driven by “might is

right”right” Business ills are common at this stage Business ills are common at this stage

Second StageSecond Stage Anything for Profit: believe “anything goes as long as one Anything for Profit: believe “anything goes as long as one

does not get caught by the law”does not get caught by the law” Bribery to government, tax evasion etc are commonBribery to government, tax evasion etc are common

Third StageThird Stage Profit maximizing in short term: Believe that “good business Profit maximizing in short term: Believe that “good business

is good ethics”- to maximize profits within constraints of lawis good ethics”- to maximize profits within constraints of law

Stages of Ethical Consciousness in Stages of Ethical Consciousness in BusinessBusiness

Fourth StageFourth Stage Profit maximizing in Long term: Shift in focus from Profit maximizing in Long term: Shift in focus from

business to ethics- “sound ethics is good business” in business to ethics- “sound ethics is good business” in long run. Here firms create post of ethics officer to long run. Here firms create post of ethics officer to supervise ethical aspect of businesssupervise ethical aspect of business

Fifth StageFifth Stage Stakeholder concept- Companies concentrate on Stakeholder concept- Companies concentrate on

social and economic missionsocial and economic mission Focus on philanthropyFocus on philanthropy Focus is to create mutual relationships between Focus is to create mutual relationships between

companies and societycompanies and society

Stages of Ethical Consciousness in Stages of Ethical Consciousness in BusinessBusiness

Sixth StageSixth Stage Corporate Citizenship: Higher level of ethical Corporate Citizenship: Higher level of ethical

consciousness consciousness Belief that business can be healthy only if society Belief that business can be healthy only if society

around it is healthy and no other institution including around it is healthy and no other institution including government has resources to bring this government has resources to bring this transformation except Business Organizationstransformation except Business Organizations

Entrepreneurs seek to achieve social objectives such Entrepreneurs seek to achieve social objectives such as promoting community health, employing as promoting community health, employing handicapped people, etchandicapped people, etc