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BA 385: From Moral Decisions to Moral Organizations
Chapter Seven: Personal and Organizational EthicsPersonal and Organizational Ethics
Introduction to Chapter 7
This chapter focuses on the day-to-day ethical issues that managers face
Many managers have no training in business ethics or ethical decision making
Ethics is vital to business success
Levels at Which Ethical Issues May Be Addressed
PersonalLevel
Situations faced in personal lives
Organizational Level
Workplace situations faced as managers and employees
Levels at Which Ethical Issues May Be Addressed
Societal andGlobal Levels
Local-to-global situationsconfronted indirectly as a management team
IndustryLevel
Situations where a manager or organization might influence business ethics at the industry level
Personal and Managerial Ethics
Conventional approach Chapter Six
Conventional approach Chapter Six
Principles approachPrinciples approach
Ethical tests approachEthical tests approach
ResolvingResolvingEthicalEthical
ConflictsConflicts
ResolvingResolvingEthicalEthical
ConflictsConflicts
Principles Approach to Ethics
Major Principles of Ethics
UtilitarianismRightsJustice
CaringVirtue ethicsServant
LeadershipGolden Rule
Principle of Utilitarianism
Utilitarianism focuses on acts that produce the greatest ratio of good to evil for everyone
Ignores actions that may be inherently wrong
May come into conflict withthe idea of justice
Difficult to formulate satisfactoryrules for decision making
Strengths Weaknesses
Forces thinking about the general welfare and stakeholders
Allows personal decisions to fit into the situation complexities
Example of UtilitarianismDaniel Dennett uses the example of Three Mile Island to explore the limits of utilitarianism for guiding decisions.
Is nuclear power that occurred at this nuclear power plant a good or a bad thing (according to utilitarianism)?
He points out that its long-term effects on nuclear policy would be considered beneficial by many and might outweigh the negative consequences.
His conclusion is that it is still too early (20 years after the event) for utilitarianism to weigh all the evidence and reach a definite conclusion.
Principle of Rights
Principle of Rights focuses on examining and possibly protecting individual moral or legal rights
Principle of Rights
Principle of Justice
Principle of justice involves considering what alternative promotes fair treatment of people
Types of justice
DistributiveCompensatory
ProceduralRawlsian
Each person has an equal right to the most basic liberties comparable with similar liberties for others
Social and economic inequalities are arranged so that they are both: reasonably expected to be to everyone’s
advantage and attached to positions and offices open to all
Rawls’s Principles of Justice
Principle of Caring
Principle of caring focuses on a person as a relational (cooperative) and not as an individual
Based upon Feminist Theory – uses terms such as empathy and trust
Discussions around The Principle of Caring often have to do with dialogue and the importance of conversations between people in ethical gridlock. Can you think of examples where a focus on caring, empathy, trust and conversation might avoid poor ethical decisions in business?
Principle of Virtue Ethics
Virtue ethics focuses on individuals becoming imbued with virtues
Virtue lies as a mean between extremes of excess and deficiency.
These extremes are vices.
Baes upon the philosophy of Aristotle and Plato
Emphasizes CHARACTER over duty or obligation (deontology) or outcomes (consequentialism). Can you think of an example from business ethics where a focus on “being of virtuous character” might lead to better, more ethical decision-making?
Servant Leadership
Servant leadership focuses on serving others first, such as employees, customers, and community
Listening Empathy Healing Persuasion Awareness Foresight Conceptualization Commitment to the
growth of people Stewardship Building community
Servant LeadershipCharacteristics of Servant Leaders
Business Ethics and
LeadershipBridges
The Golden Rule
The Golden Rule focuses on the premise that you should do unto others as you would have them do unto you
The Golden Rule is…
1. accepted by most people
2. easy to understand
3. a win-win philosophy
4. a compass
Ethical Tests Approach
Test of One’s Best SelfTest of One’s Best Self
Test of Making Something PublicTest of Making Something Public
Test of VentilationTest of Ventilation
Test of Common SenseTest of Common Sense
Test of the Purified IdeaTest of the Purified Idea
Gag TestGag Test
Factors Affecting the Morality of Managers
Society’s Moral Climate
Business’s Moral Climate
Industry’s Moral Climate
IndividualOne’s Personal
Situation
IndividualOne’s Personal
Situation
SuperiorsSuperiors
PoliciesPolicies
PeersPeers
Organization’s Moral Climate
Factors Affecting the Organization’s Moral ClimateBehavior of superiorsEthical practices of one’s industry or professionBehavior of one’s peers in the organizationFormal organizational policy (or lack of one)Personal financial need
Questionable Behaviors of Superiors or Peers
Amoral decision makingUnethical acts, behaviors or practicesAcceptance or legality as a standard of behaviorBottom-line mentality, expectations of loyalty and
conformityAbsence of ethical leadershipObjectives that overemphasize profitsInsensitivity toward how subordinates perceive
pressure to meet goalsInadequate formal ethics policies
Improving the Ethical Climate
Top Management Leadership
MoralManagement
Top Management Leadership
MoralManagement
Ethics Programsand Officers
Ethics Programsand Officers
RealisticObjectives
RealisticObjectives
Ethical Decision-Making Processes
Ethical Decision-Making Processes
Codes ofConduct
Codes ofConduct
Chapter 7-27
Board of Director’sOversight
Board of Director’sOversight
Ethics TrainingEthics Training
CorporateTransparency
CorporateTransparency
Whistle-BlowingMechanisms
Whistle-BlowingMechanisms
Ethics AuditsEthics AuditsEffectiveCommunication
EffectiveCommunication
Discipline ofViolators
Discipline ofViolators
Strong Ethical Leadership
TraitsTraits
Mo
ral
Per
son
Mo
ral Man
ager
Ethical LeadershipEthical Leadership
BehaviorsBehaviors
DecisionMaking
DecisionMaking
RoleModeling
RoleModeling
EthicsCommunication
EthicsCommunication
Effective Rewards and Discipline
Effective Rewards and Discipline
Ethical Decision-Making Process
The Ethics Screen
Frequently Addressed Topics
• Conflicts of interest• Protecting
proprietary information
• Receiving gifts• Giving gifts• Discrimination
• Sexual harassment• Kickbacks• General conduct• Employee theft• Proper use of
assets
Codes of Conduct
The 2002 Sarbanes-Oxley Act
Companies are required to protect whistle-blowers without fear of retaliation
It is a crime to alter, destroy, conceal, cover up or falsify documents to prevent its use in a federal government lawsuit
Board of Director Leadership and Oversight
From Moral Decisions to Moral Organizations
Moral DecisionsMoral Decisions
Moral ManagersMoral Managers
Moral OrganizationsMoral Organizations