Ethics in Organizations Flashcards
Ethics
- Code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong
- Ethical values set standards as to what is good or bad in conduct and decision making
- Most ethical dilemmas involve conflict of the needs of the part and the whole.
Ethical behaviour -
honest communication, fair treatment, special consdieration, fair competition, responsibility to organization, corporate soical responsibility, respect for law
3 Ethical Principels/ Decison Criteria
- Utilitarian
- rights
- justice
Utilitarian
- Behavior is ethical if it delivers the greatest good to the greatest number of people
- Focuses on outcomes; ends justify the means
Rights
- Behavior is ethical if it respects the fundamental rights shared by all human beings
- e.g., Charter of Rights and Freedoms, free speech, due process, privacy, life and safety, etc.
Justice
- Behavior is ethical if it is fair and impartial in its treatment of people
- Impose and enforce rules fairly (procedural justice)
- Equity
Advantages and Disadvantages
Utilitarian
- Promotes efficiency, productivity
- Ignores rights of some individuals
- Difficult to apply to values that cannot be easily quantified (e.g., health, life, employment)
Advantages and Disadvantages
Rights
- Protects individuals from injury consistent with freedom and privacy
- Creates overly legalistic environment
- Hinders productivity and efficiency
Advantages and Disadvantages
Justice
- Protects interests of under-represented and less powerful
- Encourages sense of entitlement
- Difficult to agree on the definition of “fairness”
- Reduces risk-taking, innovation and productivity
Causes of Unethical Behaviour
- bounded ethically
- bottom line mentality
- whistle - blowing
Bounded ethically
- the psychological process by which people come to engage in behaviour that violates their own ethical standards
- Can be personability, gain, extreme performance pressure, role conflict, strong organizatonal identification, competition, organizational and industry culture
Bottom line mentality -
a narrow focus on organizatioanl economic indicators such as profits or stock price to the exclusion of espoud or organizational values and fair procedures
Whistle-blowing
disclosure of illegetiate practices by a current or former organizational that may be able to take action to correc these practices
Ethical Behaviours (themes)
Ethics are particularly apparent when managers must make decisions related to:
- honest communication
- fair treatment
- fair competition
- responsibility to organization
- corporate social responsibility
- respect for the law
Honest communication
evaluate employees candidly, advertise honestly, etc.
Fair treatment
-pay equitably, do not use people as scape-goats
Special consideration
- help the disabled, long-term employees, etc.
Fair competition
e.g., avoid bribes and kickbacks, do not fix prices, etc.
Responsibility to organization
act for the good of the org, not out of self-interest, etc.
Corporate social responsibility
do not pollute, think about community impact, etc.
Respect for the Law
do not bribe others, follow labor/taxation laws.
Causes of Unethical Behaviours
lecture
- “bad apple” - personality causes
- “bad barrel” - situatonal causes
“Bad Apple”
- Need for power, Machiavellianism, Risk taking, Moral identity
- personaility causes
“Bad Barrel”
- Situational causes
Gain (e.g., anticipation of reward or lack of punishment)
Role conflict (remember Challenger engineers?)
Competition/Scarce Resources
Pressures to conform
Social modeling
Anonymity/Lack of accountability
Organization/Industry Culture
Signaling Theory
- Evolutionary theory
- Applies when there is information asymmetry between sender and receiver
- High cost (honest) signals communicate fitness (and survivability)
- Ethical initiatives signal the fitness of the organization
- Actions signal the ethical nature of the leaders and the business
Ethical/Unethical Beahviours Send Signals
Leadership that demonstrates normatively appropriate behaviors through actions and relationships. Ethical leaders promote ethical conduct through communication, reinforcement, and decision-making.
Ethical/Unethical Beahviours Send Signals
Positively related to:
Subordinate ethical behavior, job satisfaction, organizational commitment, organizational voice (i.e., suggestions for positive change), trust in leader, job performance
Ethical/Unethical Beahviours Send Signals
Negatively related to:
Subordinate work stress, deviance, turnover
Corporate Social Responsibility (CSR)
Refers to management’s obligation to make choices and take action so that the org contributes to the welfare and interest of all organizational stakeholders
CSR Seen to relate to:
- respect for the environment
- relationship between the business and society
- sustainable economic development
- fair treatment of employees, suppliers, customers, communitites
- adhering to ethcial values
How do Employees Respond to CSR
- Employee perceived CSR of their organization
- Evaluation of an organization’s social performance
- Captures perceptions of met responsibilities toward employees, consumers, government, the public, and environment
CSR Positively related to:
Organizational trust, organizational identification, work engagement, organizational commitment, job satisfaction, job performance, citizenship behaviors
CSR Negatively related to:
Turnover intentions, organizational deviance
Sources of Ethical Values in Orgs
- personal ethics - role of leaders
- org culture - embed ethical values
- org systems - employee selection, prescene of ethics codes
- external stakeholders - reward/value ethical behaviour
Formal Structure
Assigning ethics committee or ethics officer
Disclosure Mechanisms
- Visibly reward ethical acts and punish unethical ones
- Provide protective mechanisms so that employees are able to discuss ethical dilemmas and report behavior against the code of ethics
Code of Ethics
Used by an increasing number of organizations
Not enough to have a policy, must also be followed
Training programs
- formal structure
