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COMMUNICATION AND ETHICS IN ORGANIZATIONS Lecture 9a Decision-Making and Ethics Ethics: “a practice … by which we may reach conclusions concerning the rightness or wrongness of voluntary acts related to our [goal] last end” (AR) Some that believe that ethics and economics cannot be reconciled. Success in business requires greed, deceit and unfeeling ruthlessness… Advancement … can come only from unsavory actions...a truly good person cannot succeed in business” Decision-Making and Ethics Others, however: Business Ethics: “The study of how personal moral norms apply to the activities and goals of commercial enterprise. It is not a separate moral standard, but the study of how the business context poses its own unique problems for the moral person to act as an agent of this system” THE CHALLENGER DISASTER January 1985, engineer Roger Boisjoly of Morton Thiokol, a contractor to NASA, suspected trouble. Begins tests: Do low temperatures negatively affect the ability of the booster rocket’s O-rings to seal? March 1985, the tests confirmed danger. June 1985, post-flight inspection of shuttle launch revealed erosion of both primary and backup seals Erosion that was close to being severe enough to cause an explosion. THE CHALLENGER DISASTER Talked with his immediate supervisor. Wrote a memo to the vice president of engineering, discussing it first with his immediate supervisor. Boisjoly and others came up with recommendations that included studying ways of improving the O-rings. Got a team to study problem. Day before the Challenger launch, the overnight temperature to be eighteen degrees, much lower than the fifty-three degree minimum recommended by Morton Thiokol Boisjoly and other O-ring team recommended not to launch. Bob Lund, engineering vice president and Joe Kilminster, recommended against the launch after having met with Boisjoly and the O-ring team. THE CHALLENGER DISASTER Video Case Study THE CHALLENGER DISASTER THE CHALLENGER LAUNCH 73 SECONDS LATER THE CHALLENGER DISASTER INVESTIGATION Morton Thiokol’s top managers reversed their recommendation not to launch under pressure from NASA, their customer. NASA itself was under great pressure from the White House to deliver a successful launch. Earlier in the year, the President had made a public commitment to have the space shuttle fly on a regular basis and he was upset by the number of delays and scrubbed launches. INVESTIGATION CONCLUSION Ensuing investigation concluded…engineers at Morton Thiokol were aware of the problem and warned against launching, but organizational and management problems prevented their warning from reaching NASA. COMMUNICATION AND ETHICS IN ORGANIZATIONS Lecture 9b ETHICAL PROBLEMS IN ORGANIZATIONS FREE SPEECH KOHLBERG’S STAGES OF MORAL GROWTH PRECONVENTIONAL STAGES 2. NAIVE EGOIST - INSTRUMENTAL 1. PUNISHMENT - OBEDIENCE KOHLBERG’S STAGES OF MORAL GROWTH Level One - Stages One and Two Punishment and Obedience Child can respond to rules and social expectations in terms of “good” - “bad” Rules enforced for outside Followed in terms of pain and pleasure resulting from actions Self-interest is child’s concern Little awareness of others’ needs and desires Naively Egoistic and Instrumental Recognizes others’ needs; defers to get what he/she wants “Right” is a fair exchange satisfying individual KOHLBERG’S STAGES OF MORAL GROWTH 4. LAW AND ORDER CONVENTIONAL STAGES PRECONVENTIONAL STAGES 3. INTERPERSONAL CONCORDANCEDOING WHAT’S EXPECTED 2. NAIVE EGOIST - INSTRUMENTAL 1. PUNISHMENT - OBEDIENCE KOHLBERG’S STAGES OF MORAL GROWTH Level Two - Stages Three and Four Responsiveness to one’s family, peers, nation is “right” thing Regardless of consequences loyalty is highest value Subordinating individual needs to group Interpersonal Concordance “Good boy-Good Girl” principle Good behavior is doing what’s expected - feeling loyalty, affection trust Law and Order Orientation Doing one’s duty, obey authority; maintain social order Fulfilling contracts; obligations and following rules defined as good for society Recognizes differences between individual and society society first KOHLBERG’S STAGES OF MORAL GROWTH 6. UNIVERSAL ETHICAL PRINCIPLES PRINCIPLED STAGES 5. SOCIAL CONTRACT 4. LAW AND ORDER CONVENTIONAL 3. INTERPERSONAL CONCORDANCESTAGES DOING WHAT’S EXPECTED PRECONVENTIONAL STAGES 2. NAIVE EGOIST - INSTRUMENTAL 1. PUNISHMENT - OBEDIENCE KOHLBERG’S STAGES OF MORAL GROWTH Stage 5 Social Contract Realize others hold a variety of conflicting views Use fair ways to reach agreement - consensus, contract, due process Social views and values are relative Agreement is vital but certain “higher values” must always be upheld Stage 6 Universal Ethical Principles Right action means following self-chosen principles: comprehensive, universal, consistent Not codes of specific behaviors (like 10 Commandments) but universal moral principles - justice, equality of human rights, respect for human dignity Uses these principles to evaluate all other rules MORAL AND COGNITIVE DEVELOPMENT IN ADULTHOOD DEVELOPMENT STAGE COGNITIVE STYLE INTERPERSONAL STYLE 3. CONCORDANCE SIMPLICITY, STEREOTYPES 4. LAW AND ORDER GENERALIZED PERCEPTIONS ASSERTION 5. SOCIAL CONTRACT COMPLEX PATTERNS MUTUALITY 6. UNIVERSAL PRINCIPLES SEES CONTRADICTIONS AND PARADOXES LOYALTY, CONFORMITY EMPATHY, GROWTH RELATIONSHIPS The Loss Ethical Focus and the Ability to Talk About It Enron Rapid shift from pipelines to deal-making produced enormous growth -- for a while In the process, Enron lost a sense of core identity and values (“lots of smart people, but no wise people”) But also corrupt, manipulative leaders - lots of strategic control talk Use of positive values to deceive No room to talk about contradictions Raising concerns - personal weakness or disloyalty The Loss Ethical Focus and the Ability to Talk About It Aggressive culture. Brutal system inside the company in which each employee was graded on their performance. And the bottom ten percent were supposed to be fired. “Rank and Yank” Hostile, Warrior Culture Everybody would battle each other inside of the company so they could go outside into the marketplace and defeat the competition by any means.