Transcript Ethics
Chapter 3 Ethics and Social Responsibility Effective Management, by Williams South-Western College Publishing Copyright © 2002 2 What Would You Do? Should you offer domesticpartner benefits? Whose interests take precedence? What is the ethical thing to do? Effective Management, by Williams South-Western College Publishing Copyright © 2002 3 Learning Objectives Ethics After discussing this section, you should be able to: discuss how the nature of a management job creates the possibility for ethical abuses. identify common kinds of workplace deviance. describe the 1991 U.S. Sentencing Commission Guidelines and how its recommendations now make ethical behavior much more important for businesses. Effective Management, by Williams South-Western College Publishing Copyright © 2002 4 Ethics and the Nature of Management Jobs Ethical behavior follows accepted principles of right and wrong Intentional managerial unethical behaviors company resources for personal use mishandling information encouraging others’ unethical behavior Effective Management, by Williams South-Western College Publishing Copyright © 2002 Ethics and the Nature of Management Jobs (Cont’d.) 5 Unintentional managerial unethical behavior poorly constructed policies unrealistic employee goals Effective Management, by Williams South-Western College Publishing Copyright © 2002 6 U.S. Sentencing Commission Guidelines Companies can be prosecuted and punished even if management didn’t know about the unethical behavior Who, What, and Why Determining Punishment Effective Management, by Williams South-Western College Publishing Copyright © 2002 7 Who, What, and Why Nearly all businesses - profit and nonprofit- are covered Punishes a number of actions Encourages businesses to be proactive on employee crime Effective Management, by Williams South-Western College Publishing Copyright © 2002 8 Determining Punishment Smaller fines for companies that are proactive Steps in determining fine size determine the base fine compute a culpability score multiply the base fine by the culpability score Compliance programs are important Effective Management, by Williams South-Western College Publishing Copyright © 2002 Compliance Program Steps for the 1991 U.S. Sentencing Guidelines 9 Establish standards and procedures to meet the company’s business needs. Put upper-level managers in charge of the compliance program. Don’t delegate decision-making authority to employees who are likely to act illegally or unethically. Use auditing, monitoring, and other methods to encourage employees to report violations. Use company publications and training to inform employees about the company’s compliance standards and procedures. Enforce compliance standards by fairly and consistently disciplining violators. After violations occur, find appropriate ways to improve the compliance program. Effective Management, by Williams Adapted from Table 3.1 South-Western College Publishing Copyright © 2002 10 Learning Objectives Making Ethical Decisions After discussing this section, you should be able to: describe what influences ethical decision making. explain what practical steps managers can take to improve ethical decision making. Effective Management, by Williams South-Western College Publishing Copyright © 2002 Influences on Ethical Decision Making 11 Ethical Intensity of the Decision Moral Development of the Manager Ethical Principles Used to Solve the Problem Effective Management, by Williams South-Western College Publishing Copyright © 2002 12 Ethical Intensity of the Decision Magnitude of consequences Social consensus Probability of effect Temporal immediacy Proximity of effect Concentration of effect Effective Management, by Williams South-Western College Publishing Copyright © 2002 Moral Development of the Manager 13 Preconventional Level Stage 1: Punishment & Obedience Stage2: Instrumental Exchange Conventional Level Stage 3: Good Boy - Nice Girl Stage 4: Law & Order Post Conventional Level Stage 5: Legal Contract Stage 6: Universal Principle Adapted from Table 3.2 Davidson & Worrell, Business & Society 34 (1995): 171-196 Effective Management, by Williams South-Western College Publishing Copyright © 2002 14 Principles of Ethical Decision Making Principle of Longterm Self-interest Principle of Personal Virtue Principle of Religious Injunctions Principle of Government Requirements Principle of Utilitarian Benefits Principle of Individual Rights Principle of Distributive Justice Effective Management, by Williams South-Western College Publishing Copyright © 2002 15 Principle of Long-term Self-interest People should never take any action that is not in their or their organization’s long-term self-interest The key is long-term, not short-term interests Effective Management, by Williams South-Western College Publishing Copyright © 2002 16 Principle of Personal Virtue People should never do anything that is not honest, open, and truthful, and which they would not be glad to see reported in the newspapers or on TV Effective Management, by Williams South-Western College Publishing Copyright © 2002 17 Principle of Religious Injunctions People should never take an action that is unkind or that harms a sense of community, such as the positive feelings that come from working together to accomplish a commonly accepted goal. Effective Management, by Williams South-Western College Publishing Copyright © 2002 18 Principle of Government Requirements The law represents the minimal moral standards of society People should never take any action that violates the law. Effective Management, by Williams South-Western College Publishing Copyright © 2002 19 Principle of Utilitarian Benefits People should never take any action that does not result in greater good for society People should do whatever creates the greatest good for the greatest number Effective Management, by Williams South-Western College Publishing Copyright © 2002 20 Principle of Individual Rights People should never take any action that infringes on others’ agreed-on rights Effective Management, by Williams South-Western College Publishing Copyright © 2002 21 Principle of Distributive Justice People should never take any action that harms the least among us in some way Effective Management, by Williams South-Western College Publishing Copyright © 2002 Practical Steps to Ethical Decision Making 22 Selecting and Hiring Ethical Employees Codes of Ethics Ethics Training Ethical Climate Effective Management, by Williams South-Western College Publishing Copyright © 2002 23 Selecting and Hiring Ethical Employees Increase ethical behaviors by hiring more ethical employees Testing for ethics Overt integrity tests Personality-based integrity tests Effective Management, by Williams South-Western College Publishing Copyright © 2002 24 What Really Works? Workplace Deviance (Counterproductive Behaviors) Overt Integrity Tests & Workplace Deviance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 82% Probability of success Personality-Based Integrity Tests & Workplace Deviance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 68% Effective Management, by Williams South-Western College Publishing Copyright © 2002 25 What Really Works? (Cont’d.) Job Performance Overt Integrity Tests & Job Performance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 69% Personality-Based Integrity Tests & Job Performance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 70% Effective Management, by Williams South-Western College Publishing Copyright © 2002 26 What Really Works? (Cont’d.) Theft Overt Integrity Tests & Job Performance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 57% Effective Management, by Williams South-Western College Publishing Copyright © 2002 27 Codes of Ethics Corporate statements on ethics The relationship between codes and behavior depend on: companies communicating the codes to others both within and outside the company companies developing practical ethical standards and procedures specific to the company’s line of business Effective Management, by Williams South-Western College Publishing Copyright © 2002 28 Ethics Training Develop employee awareness about ethics Achieve credibility with employees Teach employees a practical model of ethical decision making Effective Management, by Williams South-Western College Publishing Copyright © 2002 A Basic Model of Ethical Decision Identify Making Identify the the proble m Make your choice Adapted from Table 3.4 29 constituent s Analyze your options Ac t Diagnose the situation Effective Management, by Williams South-Western College Publishing Copyright © 2002 30 Ethical Climate Effective Management, by Williams South-Western College Publishing Copyright © 2002 31 Learning Objectives Social Responsibility After discussing this section, you should be able to explain: to whom organizations are socially responsible. for what organizations are socially responsible. how organizations can choose to respond to societal demands for social responsibility. whether social responsibility hurts or helps an organization’s economic performance. Effective Management, by Williams South-Western College Publishing Copyright © 2002 Who are Organizations Socially Responsible to? 32 Shareholders managers must satisfy the owners social responsibility is maximizing shareholder wealth Stakeholders persons with a legitimate interest in the company social responsibility is satisfying the interests of multiple stakeholders Effective Management, by Williams South-Western College Publishing Copyright © 2002 33 Shareholders Only - Friedman Managers cannot act effectively as moral agents for shareholders Time, money, and attention diverted to social causes undermine market efficiency Effective Management, by Williams South-Western College Publishing Copyright © 2002 34 Stakeholder View Effective Management, by Williams South-Western College Publishing Copyright © 2002 For What Are Organizations Socially Responsible? 35 Legal Responsibilities Economic Responsibilities Adapted from Figure 3.2 Discretionary Responsibilities Ethical Responsibilities Carroll, Academy of Management Review 4 (1979): 497-505 Effective Management, by Williams South-Western College Publishing Copyright © 2002 36 Responses to Demands for Social Responsibility Reaction Defense Accommodation Proaction Fight all the way Do only what is required Be Progressive Lead the industry Withdrawal Public Legal Bargaining Problem Relations Approach Solving Approach Do Nothing Adapted from Figure 3.3 Do Much Carroll, Academy of Management Review 4 (1979): 497-505 Effective Management, by Williams South-Western College Publishing Copyright © 2002 Social Responsibility and Economic Performance Social responsibility can sometimes cost a company significantly if it chooses to be socially responsible Sometimes it does pay to be socially responsible While socially responsible behavior may be “the right thing to do,” it does not guarantee profitability 37 Effective Management, by Williams South-Western College Publishing Copyright © 2002 38 What Really Happened? Disney offered domestic-partner benefits to same-sex partners They did not offer these benefits to livein partners of unmarried, heterosexual employees Effective Management, by Williams South-Western College Publishing Copyright © 2002