Ethics in the Workplace

Ethics refer to the principles by which people distinguish what is morally right.

Some believe that profitability should be the overriding concern of business.

Others believe that organizations and their employees have an obligation to behave ethically, even if doing so cuts into short-term economic advantages.

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Benefits of Ethical Behavior

A reputation as an ethical vendor makes customers want to do business with you.

Ethical behavior is part of a range of behaviors that ensure an organization’s long-term health and success.Some investors go out of their way to select companies

with a good track record of ethical behavior.Ethical behavior can improve the organization’s

relation with the community, which tends to attract customers and top-notch employees.

Ethical behavior tends to reduce public pressure for government regulation.

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Costs of Ethical Behavior

Organizations whose employees are unethical may lose respect, customers, and qualified employees.

Unethical behavior can cause the downfall of a company.

Unethical behavior can have personal consequences such as suspension, demotion, job loss, or jail time.

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Highlights of the National Business Ethics Survey

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Challenges to Ethical Behavior

With greater responsibilities, supervisors and other managers in restructured or downsized organizations cannot monitor employee’s day-to-day behavior.

Some employees are afraid of being ethical when doing so conflicts with other goals.

Companies that single-mindedly focus on sales or profits can create an environment in which employees feel as if they have to bend the rules.

Some organizations create a climate in which employees fear they need to be unethical to save the company’s future or to be treated as a team player.

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Top Five Sources of Pressure to Compromise Ethical Standards

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Differing Measure of Ethical Behavior

Ethical standards can vary from culture to culture.

If an organization does business in a country where corruption is expected, employees can have more difficulty meeting high standards.

Gift giving in the workplace can have different meanings from one culture to another.

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Guidelines for Gift Giving in a Multinational Environment

Avoid gifts and cards of a religious nature.Make it clear that you intend the gift as a gift

and not a bribe.Be aware of food preferences.If you give liquor, consider the source.Consider the implications of luck in numbers.Know the meanings of everyday objects.Know how to give and receive.

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Important Dimensions of Ethical Behavior by Supervisors

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Ethical Behavior of Supervisors

LoyaltyExpected loyalty to the organization,

managers, and subordinates can result in conflict and ethical dilemmas

FairnessEmployees expect to be treated

evenhandedlySupervisors should avoid nepotism

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Ethical Behavior of Supervisors (continued)

HonestyGive credit where credit is dueYour dishonest behavior encourages

employee dishonestyBe honest about what the organization can

offer employees

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Making Ethical Decisions

Involve others in the processDiscussing the ethical implications can expose

additional consequences and provide additional options

Employees respond when supervisors and higher-level managers:Model ethical behaviorInclude ethical standards in performance

discussions and rewards

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Supervising Unethical Employees

When a supervisor suspects unethical behavior, he or she needs to take prompt action.

The supervisor needs to be sure that unethical behavior is actually occurring.

When analyzing unethical employee behavior, consider whether you have created a climate for ethical behavior in your department.

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Steps to Take When an Employee is Suspected of Unethical Behavior

1. Gather and record evidence.

2. Confront the employee with the evidence.

3. Follow the organization’s disciplinary procedure.

4. Look for and correct the conditions that led to the problem.

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The Law and Whistle-Blowers

Whistle-blowers are protected by federal laws, the laws of several states, and some recent court decisions. Examples:Federal laws protect employees who make complaints

pertaining to violations of anti-discrimination laws, environmental laws, and occupational health and safety standards.

The Sarbanes-Oxley act forbids employers from retaliating against an employee who reports possible accounting, auditing, or reporting misdeeds that deceive investors.

Under a Civil War-era law, whistle-blowers who report on companies that are cheating the government can receive up to 30 percent of whatever money the company ultimately pays as a penalty for the fraud.

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Treatment of Whistle-Blowers

Whistle-blowers often suffer from going public with their complaints.

Today many organizations are protecting ethics-minded employees and themselves with hotlines that make it easier to report and resolve ethical disputes within the organization.

Supervisors should:Discourage reports of wrongdoing when they are

motivated by pettiness or retaliation.Investigate complaints quickly and report what will be

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