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Business Ethics Outline • What is ethics? • Three approaches to resolving ethical conflicts • Making ethical decisions Ethics: What Does It Really Mean? Definitions • Ethics involves a discipline that examines good or bad practices within the context of a moral duty • Moral conduct is behavior that is right or wrong Two Key Branches of Ethics • Descriptive ethics involves describing, characterizing and studying morality – “What is” • Normative ethics involves supplying and justifying moral systems – “What should be” 3 Models of Leadership Ethics 1. Immoral Leadership—A style devoid of ethical principles and active opposition to what is ethical. 2. Moral Leadership—Conforms to high standards of ethical behavior. 3. Amoral Leadership – – Intentional - does not consider ethical factors Unintentional - casual or careless about ethical considerations in business Resolving Ethical Conflicts Three Approaches • Conventional • Principles • Ethical tests Conventional Approach to Ethics • Conventional approach to ethics involves a comparison of a decision or practice to prevailing societal norms – Pitfall: ethical relativism Decision or Practice Prevailing Norms Leadership and Ethics Culture Relativism Descriptive relativism claims that members of different cultures have different moral beliefs. Normative relativism claims that the truth of moral beliefs depends upon particular cultures, such that the belief that cannibalism is right can be true for culture A but false for culture B. Leadership and Ethics Culture Relativism Normative relativism has some rather undesirable implications: – it prohibits us from ever morally condemning another culture’s values and practices; – it suggests that we need look no further that our own culture for moral guidance; – it renders the notions of moral progress and moral reform incoherent. Sources of Ethical Norms Fellow Workers Fellow Workers Family Regions of Country Profession The Individual Conscience Friends The Law Employer Religious Beliefs Society at Large Making Ethical Judgments Behavior or act that has been committed compared with Value judgments and perceptions of the observer Prevailing norms of acceptability Principles Approach to Ethics Principles Approach Anchors decision making on an ethical principle such as: • Utilitarianism • Rights • Justice • Caring • Virtue ethics • Golden Rule Principles Approach to Ethics Principle of Utilitarianism focuses on an act that produces the greatest ratio of good to evil for everyone – Consequentialist theory Principles Approach to Ethics Principle of Rights focuses on examining and possibly protecting individual moral or legal rights Principles Approach to Ethics Principles Approach to Ethics • Principle of justice involves considering what alternative promotes fair treatment of people • Types of justice – Distributive – Compensatory – Procedural Principles Approach to Ethics • Principle of caring focuses on a person as a relational (cooperative) and not as an individual – Feminist theory • Virtue ethics focuses on individuals becoming imbued with virtues – Aristotle and Plato Golden Rule Golden rule focuses on the premise that you should of unto others as you would have them do unto you Ethical Decision-Making Identify decision you are about to make Articulate all dimensions of proposed decision Conventional Approach Standards/Norms -Personal -Organizational -Societal -International Principles Approach Ethical Principles -Justice -Rights -Utilitarianism -Golden Rule Course of action passes ethics screen Engage in course of action Ethical Tests Approach Ethical Tests -Common sense -One’s best self -Public disclosure -Gag test . . . Course of action fails ethics screen Do not engage in course of action Identify new course of action Ethical Decision Models • Utilitarian Model – An ethical decision is one that produces the greatest good for the greatest number of people. • Moral Rights Model – An ethical decision is one that best maintains and protects the fundamental rights and privileges of the people affected by it. • Justice Model – An ethical decision is one that distributes benefits and harms among individuals in a fair, equitable, or impartial way. Ethical Models Justice Utilitarian IDEAL Outcome Moral Rights Steps to Ethical Decision Making What are the consequences of your decision How can the option be implemented Decide which option is most ethical Consider options Think through dilemma; identify all components as objectively as possible. Common Misconduct in Organizations • Misrepresenting hours worked • Employees lying to supervisors • Management lying to employees, customers, vendors or the public • Misuse of organizational assets • Lying on reports/falsifying records • Sexual harassment • Stealing/theft • Accepting or giving bribes or kickbacks • Withholding needed information from employees, customers, vendors or public Common Causes of Unethical Behavior • • • • Pressure Fear Greed Convenience Causes of Unethical Behavior (cont’d) • • • • • • • • Following boss’s directives Meeting overly aggressive business/financial objectives Helping the organization survive Meeting schedule pressures Be a team player (group think) Rationalizing that others do it Resisting competitive threats Advancing own career Ethical Dilemmas Making decisions under stress or dealing with complex issues that have no clear indication of what is right or wrong. There are NO simple ethical dilemmas… all have layers of meaning and effect. Business Ethics Myths • Business ethics is a new fad. • Business ethics – religion vs. management. • Business ethics is obvious – “do good!” • Business ethics is good guys preaching to bad guys. “Whistleblower’s” Reluctance • Didn’t believe action would be taken. • Feared retaliation from mgmt. • Didn’t trust confidentiality. • Feared not being a team player. • Feared retaliation from coworkers. • Didn’t know who to contact. • Nobody cares, why should I? Business Ethics Myths (cont’d) • Ethics can’t be managed. • Being legal = being ethical. • Managing ethics has little practical relevance. Ethical Tips for Organizations • Develop a code of ethics. • Communicate code and bake it into culture top-down. • Treat ethics as a process. • Create open lines of communication. • Set good examples. • Educate employees – frame issues through storytelling. • Value forgiveness. Benefits of Managing Ethics in the Workplace • Improves society. • Maintains a moral course in turbulent times. • Cultivates employee teamwork, productivity, morale and development. • Acts as an insurance policy. Benefits of Managing Ethics in the Workplace (cont’d) • Establishes values for quality management, strategic planning and diversity management. • Promotes strong public image. • It is the RIGHT thing to do! Ethical Tips for Individuals • Establish personal values. • Be aware of ethical events. • Develop critical thinking techniques. • Be reflective. • Make it a priority every day. “The simple step of a simple courageous man is to not take part in the lie, not to support deceit. Let the lie come into the world, even dominate the world, but not through me.” -- Alexander Solzhenitsyn