Transcript Values-Based Leadership

Values-Based
Leadership: Doing
the Right Thing
Chapter 21 Values-Based Leadership
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Business Ethics
The fundamental moral values and
behavioral standards that form the
foundation for the people of an
organization as they make decisions
and interact with stakeholders.
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Key Stakeholders
External Stakeholders
Customers
Special
Interest
Groups
Unions
Internal Stakeholders
Employee
s
Creditors
Investors
Board of
Director
s
Management
Government
General Public
Suppliers
Three Levels of Ethical
Standards
The law
 Organizational policies and procedures
 The moral stance employees take
when faced with decisions not
governed by formal rules
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Ethical Philosophies

Consequentialists – judge the value of
an act based on its effect on others.
 Deontologists – judge the value of an
act based on its logical consistency
and its ability to become a universal
standard.
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Ethical Philosophies

Objectivists – moral values can
objectively true – independent of
subjective feelings.
 Relativists – Right and wrong must be
defined within the context of moral
norms and mores.
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Three Levels of Moral
Development
Level 3: Post-conventional (Principled)
Level 2: Conventional
Level 1: Pre-conventional
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An Ethical Framework
Step 1. Recognize the ethical dimensions
involved in the dilemma or decision.
Step 2. Identify the key stakeholders
involved and determine how the decision
will affect them.
Step 3. Generate alternative choices and
distinguish between ethical and unethical
responses.
Step 4. Choose the “best” ethical response
and implement it.
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Three Styles of
Management
Immoral management - driving force is
greed.
 Amoral management - does not
consider ethical impact on others.
 Moral management - sees the law as a
minimum standard of behavior.
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The Benefits of Moral
Management
1.
2.
3.
4.
Earning a profit does not conflict with
maintaining high ethical standards.
Avoid the damage to a company’s reputation
that results from unethical behavior.
Dealing with diverse stakeholders is easier
with a solid ethical foundation.
Attracting and retaining quality workers is
easier.
A company’s ethical philosophy determines its
ability to provide value for its customers.
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Why Ethical Lapses
Occur
The “bad apple”
 The “bad barrel”
 Moral blindness
 Competitive pressures
 Opportunity pressures
 Globalization of business
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Establishing Ethical
Standards
The utilitarian principle
 Kant's categorical imperative
 The professional ethic
 The Golden Rule
 The television test
 The family test
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Maintaining Ethical
Standards
Create a company credo
 Develop a code of ethics
 Enforce the code fairly and
consistently
 Conduct ethics training
 Hire the right people

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Maintaining Ethical
Standards
Perform periodic ethical audits
 Establish high standards of
behavior...not just rules
 Set an impeccable ethical example
 Create a culture that emphasizes
two-way communication
 Involve employees in establishing
ethical standards

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Maintaining Ethical
Standards
Set an impeccable ethical example
at all times.
 Create a culture that emphasizes
two-way communication.
 Involve employees in establishing
ethical standards.

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Social Responsibility
Social responsibility - the awareness by a
company’s managers of the social
environmental, political, human, and
financial consequences its actions produce.
Studies: Companies that incorporate social
responsibility into their competitive
strategies outperform those that fail to do
so.
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Business has a Social
Responsibility to...
The environment
 Employees
 Customers
 Investors
 The community

Responsibility to the
Environment
The “Three R’s”:
 Reduce the amount of materials used
in your company.
 Reuse whatever you can.
 Recycle the materials that you must
dispose of.
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Responsibility to
Employees

Diversity
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SPLENDID Approach to
Diversity

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Study
Plan
Lead
Encourage
Notice
Discussion
Inclusion
Dedication
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Managing Diversity
Assess your company’s diversity
needs.
 Learn to recognize your own biases
and stereotypes.
 Avoid making invalid assumptions.
 Push for diversity in your
management team.

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Managing Diversity
Concentrate on communication.
 Make diversity a core value in the
organization.
 Continue to adjust your company to
your workers.

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Responsibility to
Employees
Diversity
 Drug testing
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A Drug Prevention Program
Should Include . . .
A written substance abuse policy.
 Training supervisors to detect drugusing workers.
 A drug testing program, when
necessary.
 An employee assistance program
(EAP).
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Responsibility to
Employees
Diversity
 Drug testing
 AIDS
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An AIDS Policy
Should Address . .
Employment
 Discrimination
 Employee benefits
 Confidentiality
 Education
 “Reasonable accommodations”
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Responsibility to
Employees
Diversity
 Drug testing
 AIDS
 Sexual harassment
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Sexual Harassment
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Any unwelcome sexual advance, request
for sexual favors, or other verbal or
physical sexual conduct made explicitly or
implicitly as a condition of employment.
85% of sexual harassment cases are filed
by women.
Harassment an take several forms.
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Behavior Leading to Sexual
Harassment Charges
 Quid
Pro Quo (“something for
something”) harassment
 Hostile environment
 Harassment by nonemployees
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Number of Sexual Harassment Charges Filed
16,000
Number of Charges Filed
14,000
12,000
10,000
8,000
6,000
4,000
2,000
1992
1993
1994
1995
1996
1997
1998
Year
Source: Equal Employment Opportunity Commission, 2004
1999
2000
2001
2002
2003
Preventing Sexual
Harassment
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Education
Policy
Procedure
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Listen without judging.
Investigate complaints promptly.
Interview parties involved and witnesses.
Maintain confidentiality.
Follow company policy.
Document the investigation.
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Responsibility to
Employees
Diversity
 Drug testing
 AIDS
 Sexual harassment
 Privacy
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Responsibility to
Customers
Right
 Right
 Right
 Right
 Right
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to
to
to
to
to
safety
know
be heard
education
choice
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