Chapter 8: Trust, Justice and Ethics

Question 1

Why should companies care about ethical issues?

Answer 1

Reputation: prominence of an organization’s brand in the minds of the public and perceived quality of its goods and services

Question 2

What is reputation dependent on?

Answer 2

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

Question 3

What is trust dependent on?

Answer 3

Justice: perceived fairness of an authority’s decision making
Ethics: degree to which behaviours of an authority are in accordance with generally accepted norms

Question 4

In what 3 sources can trust be rooted?

Answer 4

1. Disposition based trust
2. Cognition based trust
3. Affect-based trust

Question 5

Disposition-based trust

Answer 5

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

Question 6

Cognition-based trust

Answer 6

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

Question 7

What are the 3 components on which we should gauge an authority’s trustworthiness on?

Answer 7

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

Question 8

Affect-based trust

Answer 8

Trust based on feelings toward the authority - emotional

- we like the person in question and have fondness for them

Question 9

What are the steps in the “build-up of trust”?

Answer 9

1. Trust propensity
2. Cognition-based
3. Then sometimes affect-based

Question 10

Justice

Answer 10

Perceived fairness of an authority’s decision-making

4 dimensions of justice:

1. Distributive
2. Procedural
3. Interpersonal
4. Informational

Question 11

Distributive Justice

Answer 11

Perceived fairness of decision-making OUTCOMES

- gauged by asking whether decision outcomes such as pay, promotions allocated using proper norms

Question 12

3 norms of distributive justice

Answer 12

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)

Question 13

Procedural Justice

Answer 13

Perceived fairness of decision making PROCESS

Question 14

6 rules of procedural justice

Answer 14

1. Voice: chance to expresss opinions during decision-making
2. Correctability: chance to request an appeal
3. Consistency: procedures consistent across people and time
4. Bias suppression: procedures are neutral and unbiased
5. Representativeness: procedures consider needs of all groups
6. Accuracy: procedures are based on accurate info

Question 15

Distributive vs. Procedural Justice

Answer 15

• 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

Question 16

Interpersonal Justice

Answer 16

Perceived fairness of treatment received by employees from authorities

Question 17

When is interpersonal justice fostered?

Answer 17

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

Question 18

Informational Justice

Answer 18

Perceived fairness of communication provided by employees from authorities

Question 19

2 rules of informational justice

Answer 19

1. Justification: authorities explain procedures and outcomes in a comprehensive manner
2. Truthfulness: communication from authorities are honest and candid

Question 20

Example of interpersonal and informational justice

Answer 20

• 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

Question 21

Ethics

Answer 21

Degree to which behaviours of an authority are in accordance with generally accepted moral norms

Question 22

What are the 2 threads to business ethics?

Answer 22

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

Question 23

Unethical behaviour

Answer 23

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)

Question 24

Merely Ethical

Answer 24

Behaviour that adheres to some minimally accepted standard of morality
E.g. Obeying laws and complying with formal rules and contracts

Question 25

Especially Ethical

Answer 25

Behaviours that exceed some minimally accepted standard of morality
E.g. charitable giving or whistleblowing
- employees risk potential retaliation by other members of org

Question 26

4 component model of ethical decision-making

Answer 26

1. Moral Awareness
2. Moral Judgement
3. Moral Intent
4. Ethical Behaviour

Question 27

Moral Awareness

Answer 27

Recognition by an authority that a moral issue exists in a situation

Question 28

What is moral awareness dependent on?

Answer 28

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

Question 29

Moral Judgement

Answer 29

Process people use to determine whether a particular course of action is ethical or unethical

Question 30

What influences moral judgement?

Answer 30

Cognitive moral development: people’s movement through several stages of moral development, each more mature and sophisticated than prior one

Question 31

What are the 3 stages of cognitive moral development?

Answer 31

1. Preconventional - little kids acting or behaving certain way for their own sake
2. Conventional - right vs wrong in reference to one’s family and society
3. Principled - right vs wrong in reference to established moral principles

Question 32

Moral Principles

Answer 32

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

Question 33

Moral Intent

Answer 33

An authority’s degree of commitment to the moral course of action

Question 34

Moral Identity

Answer 34

Degree to which person self-identifies as a moral person

Question 35

Affect of trust on job performance?

Affect of trust on organizational commitment?

Answer 35

Job performance:
- moderate (+)
- employees willing to be vulnerable to authorities have higher TP
Organizational Commitment:
- strong (+)
- vulnerability means higher levels of AC and NC

Question 36

What steps can organizations take to become more trustworthy?

Answer 36

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