A. Ethics are moral principles about what is right or wrong. They help people to choose a course of action, especially when facing an ethical dilemma.
B. Making Ethical Decisions.
1. Society passes laws based on the ethics of the majority, both of which change over time. Without absolute standards, ethical choices are needed.
II. Ethics and Stakeholders
A. Stakeholders are those with an interest or claim in the organization
1. Stockholders want to maximize returns, and many are concerned about the social impact of the business and having transparent accountability.
2. Managers want to be rewarded for the human capital they invest, and their compensation, along with many other decisions, requires them to juggle conflicting interests of different stakeholders.
3. Employees expect equitable rewards consistent with performance.
4. Suppliers expect fair payment and distributors expect agreements to be upheld. Contract terms, and regulations, can involve ethical issues.
5. Customers are protected by many laws that are often broken.
6. Community, Society, and Nation are also affected by company decisions
B. An ethical decision is one acceptable to stakeholders, and an unethical decision is one preferably hidden from others as it benefits one at the expense of society or other stakeholders.
1. Can use three sets of principles to analyze effects of decisions:
a. Utilitarian - greatest good for the greatest number
b. Moral rights – best protects individual rights
c. Justice - distribute benefits and harm fairly and equitably
2. A practical guide is to answer three questions:
a. Is it within accepted values and standards?
b. Am I willing to see it in the newspaper or on television?
c. Would people significant to me approve of it?
C. Codes of ethics are formal standards and rights, based on beliefs about right or wrong, that are used to help guide appropriate decisions. Derived from:
1. Societal ethics - standards that govern issues such as fairness, justice, poverty, and the rights of the individual, based on a society's laws, customs, and practices, unwritten attitudes, values, and norms of interaction.
a. Ethics vary among societies. Bribery is standard in many poor countries, but is unethical in Canada.
2. Professional Ethics govern how doctors, lawyers, accountants, and other professions should behave. They often become internalized and followed automatically.
3. Individual Ethics - personal values and attitudes influenced by family, peers, and an individual's personality and experience.
D. Ethical behaviour is emphasized by incorporating ethical values and norms into the organizational culture
1. Managers must be role models of ethical values and standards
2. Can appoint ethics ombudsman to monitor ethical practices & procedures
E. Regular training helps employees learn ethical values, but is not widespread
III. Social Responsibility - a manager's duty or obligation to make decisions that promote the well-being of stakeholders and society as a whole
A. Approaches to Social Responsibility by Traditional Businesses
1. Obstructionist approach - disregard for social responsibility; might act illegally or unethically
2. Defensive approach - minimal commitment to social responsibility; follow the law only
3. Accommodative approach - moderate commitment to social responsibility; may do more than law requires if asked
4. Proactive approach - strong commitment to social responsibility; go beyond the law and promote interests of stakeholders
B. Why Be Socially Responsible?
1. many advantages to socially responsible behaviour, including better reputation, improved quality of life, sustainability
2. social audits allow analysis of both private and social effects of decisions
IV. Diversity in Canada - differences among people (could be age, gender, race, religion, sexual orientation, socio-economic status, ability, position, seniority, etc.)
A. The Ethical Need to Manage Diversity Effectively
1. Distributive justice –distribute positive outcomes in a fair way based on meaningful contributions.
2. Procedural justice –use fair procedures to distribute outcomes.
B. Effectively Managing Diversity Makes Good Business Sense
1. a variety of viewpoints improves decision making
2. diverse members relate to diverse issues of employees, customers & suppliers
3. consumer and civil rights organizations are demanding that companies think about diversity issues
C. Increasing Diversity Awareness
1. awareness programs strive to increase awareness of people's attitudes and of differing perspectives with goals such as:
a. providing accurate information about diversity
b. uncovering personal biases and stereotypes
c. improving understanding of others who are different
2. films, role-plays, discussions or outside consultants can be used
D. The Importance of Top-Management Commitment to Diversity
1. spread the message that diversity can be a source of competitive advantage, deal effectively with diverse employees, and be willing to commit organizational resources to managing diversity
2. must be role models not just financiers
3. the main reasons for managing diversity are to:
a. improve productivity and remain competitive,
b. form better work relationships among employees,
c. enhance social responsibility
d. address legal concerns.
V. Harassment in the Workplace – is both illegal and unethical
Workplace harassment is behaviour directed toward an employee that is offensive/unwelcome
A. Forms of Sexual Harassment
1. Quid pro quo – a harasser asks or forces an employee to perform sexual favours to keep a job, receive a promotion or a raise, or avoid dismissal.
2. Hostile work environment – the organization creates or allows an intimidating, hostile, or offensive work environment based on sex.
B. Steps Managers Can Take to Eradicate Sexual Harassment
1. Develop and clearly communicate a sexual harassment policy endorsed by top management
2. Use a fair complaint procedure to investigate charges
3. Take corrective actions quickly
4. Provide education and training to organizational members
