Transcript Ch5 Daft 6th ed

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Ethics
• The code of moral principles and values that
govern the behaviors of a person or group with
respect to what is right or wrong.
Business Ethics
Magazine is an excellent
site for reviewing ethical
issues
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Three Domains of Human Action
Domain of Certified Law
Domain of Ethics
Domain of Free Choice
(Legal Standard)
(Social Standard)
(Personal Standard)
Amount of
Explicit Control
High
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Low
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Ethical Dilemma
• A situation that arises when all alternative choices
or behaviors have been deemed undesirable
• Potentially negative ethical consequences, making
it difficult to distinguish right from wrong.
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Criteria For
Ethical Decision Making
• Most ethical dilemmas involve
 A conflict between needs of the part & whole
 The individual versus the organization
 The organization versus society as a whole
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Ethical Decision Making Approaches
•
•
•
•
Utilitarian Approach
Individualism Approach
Moral-Rights Approach
Justice Approach
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Utilitarian Approach
 Moral behavior produces the greatest good for the
greatest number
 Critics fear a “Big Brother” approach and ask if the
common good is squeezing the life out of the
individual
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Individualism Approach
Acts are moral when they promote the individual's
best long-term interests, which ultimately leads to the
greater good
Individual self-direction paramount
Individualism is believed to lead to honesty &
integrity since that works best in the long run
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Moral-Rights Approach
• Moral decisions are those that best maintain the
rights of those people affected by them.
• An ethical decision is one that avoids interfering
with the fundamental rights of others
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“Moral Rights Issues”
1. The right of free consent
2. The right to privacy
3. The right of freedom of conscience
4. The right of free speech
5. The right to due process
6. The right to life & safety
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Justice Approach
• Moral Decisions must be based on standards of
equity, fairness, and impartiality
Three types of Justice Approaches:
 Distributive Justice
 Procedural Justice
 Compensatory Justice
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Distributive Justice
• Treatment of people should not be based on
arbitrary characteristics
• People should be treated differently in
proportion to the differences among them
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Procedural Justice
• Rules should be clearly stated
• Rules should be consistently and impartially
enforced
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Compensatory Justice
 Individuals should not be held responsible for
matters they have no control over
 Individuals should be compensated for the cost of
their injuries by the party responsible
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Factors Affecting Ethical Choices
• The Manager
• Levels or stages of moral development
 Pre-conventional
 Conventional
 Post-conventional
• The Organization
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Levels of Personal Moral Development
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Social Responsibility
• Organization’s obligation to make choices and take
actions that will contribute to the welfare and
interests of society and organization
• Being a good corporate citizen
 Difficulty in understanding social responsibility
deals with “responsibility to whom?”
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Total Corporate Responsibility
Legal Responsibility
Economic Responsibility
Discretionary
Responsibility
Ethical
Responsibility
SOURCE: Based on Archie B Carroll, “A Three Dimensional Conceptual Model of Corporate Performance,” Academy of Management Review 4 (1979),499; and “The Pyramid of Corporate Social
Responsibility: Toward the Moral Management of Corporate Stakeholders,” Business Horizons 34 (July-August 1991),42.
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Corporate Responses to
Social Demands
High
Proactive
Take social initiatives.
Accommodation
Degree of
Social
Responsibility
Accept ethical responsibility.
Defense
Do only what is legally required.
Obstruction
Low
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Fight all the way.
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Managing Company Ethics Through:
 Ethical individuals; are honest, have integrity, they
strive for a high level of moral development
 Ethical leadership; provides the necessary actions,
are committed to ethical values and helps others to
embody those values
 Organizational structure, embodies a code of ethics,
and methods to implement ethical behavior
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