Chapter 8: Trust, Justice and Ethics Flashcards
Why should companies care about ethical issues?
Reputation: prominence of an organization’s brand in the minds of the public and perceived quality of its goods and services
What is reputation dependent on?
Trust: willingness to be vulnerable to an authority because of positive expectations about the authority’s actions and intentions
- trust is reflective of someone’s willingness to take a risk
What is trust dependent on?
Justice: perceived fairness of an authority’s decision making
Ethics: degree to which behaviours of an authority are in accordance with generally accepted norms
In what 3 sources can trust be rooted?
- Disposition based trust
- Cognition based trust
- Affect-based trust
Disposition-based trust
Trust rooted in one’s personality as opposed to careful assessment of trustee’s trustworthiness
- trust in trustor
Trust propensity: general expectation that words, promises and statements of individuals and groups can be relied upon/ “blind trust”
High TP: fooled into trusting those that aren’t worthy
Low TP: penalized for not trusting someone deserving
Cognition-based trust
Trust rooted in a rational assessment of the authority’s trustworthiness
Trustworthiness: characteristics or attributes of a person that inspire trust, including perceptions of ability, integrity and benevolence - driven by one’s track record
What are the 3 components on which we should gauge an authority’s trustworthiness on?
Ability: skills, competencies, expertise of authority
Benevolence: belief that the authority wants to do good for the trustor
Integrity: perception that authority adheres to a set of value and principles trustor finds acceptable
Affect-based trust
Trust based on feelings toward the authority - emotional
- we like the person in question and have fondness for them
What are the steps in the “build-up of trust”?
- Trust propensity
- Cognition-based
- Then sometimes affect-based
Justice
Perceived fairness of an authority’s decision-making
4 dimensions of justice:
- Distributive
- Procedural
- Interpersonal
- Informational
Distributive Justice
Perceived fairness of decision-making OUTCOMES
- gauged by asking whether decision outcomes such as pay, promotions allocated using proper norms
3 norms of distributive justice
Equity: more outcomes for inputs
Equality: equal chance of outcomes
- team based setting
Need: more outcomes for those who need them most
- concern with personal welfare of an individual (new member)
Procedural Justice
Perceived fairness of decision making PROCESS
6 rules of procedural justice
- Voice: chance to expresss opinions during decision-making
- Correctability: chance to request an appeal
- Consistency: procedures consistent across people and time
- Bias suppression: procedures are neutral and unbiased
- Representativeness: procedures consider needs of all groups
- Accuracy: procedures are based on accurate info
Distributive vs. Procedural Justice
- combine to influence employee reactions
- when outcomes are bad procedural justice becomes more important
- PJ is strong predictor of satisfaction with supervision, overall job satisfaction and organizational commitment
Interpersonal Justice
Perceived fairness of treatment received by employees from authorities
When is interpersonal justice fostered?
Respect: treat in a dignified and sincere manner
Propriety: refrain from making inappropriate remarks
Abusive supervision: sustained display of hostile verbal and nonverbal behaviours, excluding physical contact, by a supervisor
- created by interpersonally unjust actions
Informational Justice
Perceived fairness of communication provided by employees from authorities
2 rules of informational justice
- Justification: authorities explain procedures and outcomes in a comprehensive manner
- Truthfulness: communication from authorities are honest and candid
Example of interpersonal and informational justice
- study in 3 manufacturing plants
- company forced to cut wages by 15% in 2 of 3 plants
- one plant received longer, more sincere explanation while other received a short, impersonal explanation
- during the pay cut, theft increased to greater extent for plant with short, impersonal explanation
Ethics
Degree to which behaviours of an authority are in accordance with generally accepted moral norms
What are the 2 threads to business ethics?
Prescriptive: how people ought to act using codes and principles - dominant in ethics
Descriptive: how people tend to act based on individual and situational characteristics
- dominant in psychology
Unethical behaviour
Behaviour that clearly violates accepted norms of morality
Can be directed at:
- employees
- customers
- financiers (has to do w financial info: misusing confidential info, falsifying)
- society as a whole (environmental)
Merely Ethical
Behaviour that adheres to some minimally accepted standard of morality
E.g. Obeying laws and complying with formal rules and contracts
Especially Ethical
Behaviours that exceed some minimally accepted standard of morality
E.g. charitable giving or whistleblowing
- employees risk potential retaliation by other members of org
4 component model of ethical decision-making
- Moral Awareness
- Moral Judgement
- Moral Intent
- Ethical Behaviour
Moral Awareness
Recognition by an authority that a moral issue exists in a situation
What is moral awareness dependent on?
Moral intensity: degree to which issue has ethical urgency
Moral attentiveness: degree to which people perceive and consider issue of morality during their experiences
- people pay attention to stimuli that are significant, vivid and recognizable
Moral Judgement
Process people use to determine whether a particular course of action is ethical or unethical
What influences moral judgement?
Cognitive moral development: people’s movement through several stages of moral development, each more mature and sophisticated than prior one
What are the 3 stages of cognitive moral development?
- Preconventional - little kids acting or behaving certain way for their own sake
- Conventional - right vs wrong in reference to one’s family and society
- Principled - right vs wrong in reference to established moral principles
Moral Principles
Prescriptive guides for making moral judgements
2 types:
1. Consequentialist: judge morality of an action according to its goals, aims or outcomes
2. Non-consequentialist: judge morality of an action solely on its intrinsic desirablity
Moral Intent
An authority’s degree of commitment to the moral course of action
Moral Identity
Degree to which person self-identifies as a moral person
Affect of trust on job performance?
Affect of trust on organizational commitment?
Job performance:
- moderate (+)
- employees willing to be vulnerable to authorities have higher TP
Organizational Commitment:
- strong (+)
- vulnerability means higher levels of AC and NC
What steps can organizations take to become more trustworthy?
Corporate social responsibility: perspective that acknowledges the responsibility of a business encompasses the economic, legal, ethical and citizenship expectations of society
- company obligations do not end with profit maximization
- citizenship component may also involve efforts geared toward environmental sustainability
