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Ferrell7e Student Ch05


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  • 1.
    • O.C. Ferrell
      • University of New Mexico
    • John Fraedrich
      • University of Wyoming
    • Linda Ferrell
      • University of New Mexico
    Business Ethics Ethical Decision Making and Cases, Seventh Edition For in-class note taking, choose Handouts or Notes Pages from the print options, with three slides per page.
  • 2. Chapter 5 Ethical Decision Making and Ethical Leadership
  • 3. The Ethical Decision Making Process
    • The first step is to recognize than an ethical issue requires a choice among several actions that various stakeholders inside or outside the firm will ultimately evaluate as right or wrong.
  • 4. Ethical Issue Intensity
    • This is defined as the perceived relevance or importance of an ethical issue to the individual, work group, and/or organization.
    • Positive or negative incentives can affect the perceived importance of an ethical issue.
    • Employees need education regarding potential problem areas.
  • 5. Individual Factors
    • How people resolve ethical issues in their daily lives is often based on values and principles learned through family socialization.
    • Individual factors include:
      • Gender
      • Education
      • Work experience
      • Nationality
      • Age
      • Locus of control
  • 6. Organizational Factors
    • Corporate culture: a set of values, beliefs, goals, norms and ways to solve problems that members (employees) of an organization share.
    • Some corporate cultures support and reward unethical behavior.
    • Ethical climate is a component of corporate culture.
  • 7. Ethical Climate
    • Defined as the character or decision processes used to determine whether actions are ethical or unethical
    • Consists of corporate codes of ethics, top management actions, ethical policies, coworker influence, and the opportunity for unethical behavior
  • 8. Significant Others
    • The work group, which includes people such as peers, managers, and subordinates
    • Have more influence on daily decisions
    • than any other factor
  • 9. Opportunity
    • Relates to permitting ethical or unethical behavior
    • Rewards and punishment play a key role
    • Can be eliminated by establishing formal codes, policies, and rules that are enforced
  • 10. The Role of Leadership in Corporate Culture
    • Leadership is the ability or authority to guide and direct others toward achievement of a goal
    • Leaders are key to influencing an organization’s corporate culture and ethical posture
  • 11. Leadership Styles
    • Coercive leaders
    • Authoritative leaders
    • Affiliative leaders
    • Democratic leaders
    • Pacesetting leaders
    • Coaching leaders
  • 12. Leadership
    • The most successful leaders do not rely on one style of leadership but alternate their technique based on the characteristics of the situation.
  • 13. Types of Leaders
    • Transactional
    • Transformational
    • Transformational ethical
      • Best suited for organizations that have higher levels of ethical commitment among employees and strong stakeholder support for an ethical culture
  • 14. Habits of Strong Ethical Leaders
    • Ethical leaders have a strong personal character.
    • Ethical leaders have a passion to do right.
    • Ethical leaders are proactive.
    • Ethical leaders consider stakeholders’ interests.
    • Ethical leaders are role models for the organization’s values.
    • Ethical leaders are transparent and actively involved in organizational decision-making.
    • Ethical leaders are competent managers who take a holistic view of the firm’s ethical culture.