Managerial Ethics


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Managerial Ethics

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  • Managerial Ethics

    1. 1. Chapter 2 Managerial Ethics FOM 2.1
    2. 2. Learning Outcomes <ul><li>Define social responsibility and ethics </li></ul><ul><li>List at least six main arguments for at at least four main arguments against businesses being socially responsible </li></ul><ul><li>Explain the importance of demonstrating social responsibility in today’s business world </li></ul><ul><li>(continued) </li></ul>FOM 2-
    3. 3. Learning Objectives (continued) <ul><li>Describe the concerns people have about business ethics </li></ul><ul><li>Explain the relationship between social responsibility and managerial ethics </li></ul><ul><li>Identify the seven factors that influence ethical behaviour </li></ul><ul><li>Describe ways an organization can improve ethical behaviour </li></ul>FOM 2-
    4. 4. Society’s Expectations from Organizations and Managers <ul><li>Managers regularly make decisions about issues with a social dimension </li></ul><ul><li>In competitive environment, organizations cannot afford to be seen as socially irresponsible </li></ul>FOM 2-
    5. 5. Arguments Supporting Businesses Being Socially Responsible <ul><li>Public expectations </li></ul><ul><li>Long-run profits </li></ul><ul><li>Ethical obligation </li></ul><ul><li>Public image </li></ul><ul><li>Better environment </li></ul><ul><li>Discouragement of further government regulation </li></ul><ul><li>Balance of responsibility and power </li></ul><ul><li>Shareholder interests </li></ul><ul><li>Possession of resources </li></ul><ul><li>Superiority of prevention over cures </li></ul>FOM 2-
    6. 6. Arguments Against Businesses Being Socially Responsible <ul><li>Violation of profit maximization </li></ul><ul><li>Dilution of purpose </li></ul><ul><li>Costs </li></ul><ul><li>Too much power </li></ul><ul><li>Lack of skills </li></ul><ul><li>Lack of accountability </li></ul><ul><li>Lack of broad public support </li></ul>FOM 2-
    7. 7. Demonstrating Social Responsibility <ul><li>Social responsibility </li></ul><ul><li>Social obligation </li></ul><ul><li>Social responsiveness </li></ul>FOM 2-
    8. 8. Relationship Between Social Responsibility and Economic Performance <ul><li>Research studies show positive relationship </li></ul><ul><li>General public perception that companies who behave in a socially responsible way have better business performance </li></ul>FOM 2-
    9. 9. Managers Becoming More Socially Responsible <ul><li>It is the collective behaviour and actions of managers that make a company socially responsible </li></ul><ul><li>Managers who make the right decisions are described as being or behaving ethically </li></ul>FOM 2-
    10. 10. Managerial Ethics <ul><li>Ethics </li></ul><ul><ul><li>Rules and principles that define right and wrong conduct </li></ul></ul><ul><li>Three Views of Ethics </li></ul><ul><ul><li>Utilitarian view - ethical decisions are made on the basis of their outcomes or consequences </li></ul></ul><ul><li> (continued) </li></ul>FOM 2-
    11. 11. Managerial Ethics (continued) <ul><li>Three Views of Ethics (continued) </li></ul><ul><ul><li>Rights view - respects and protects individual liberties and privileges </li></ul></ul><ul><ul><li>Theory of justice view - managers impose and enforce rules fairly and impartially </li></ul></ul>FOM 2-
    12. 12. Moral Development <ul><li>Is a measure of an individual’s independence as his/her moral judgment becomes less and less dependent on outside influences </li></ul><ul><li>Stages start with making a choice between right and wrong based on personal consequences (continued) </li></ul>FOM 2-
    13. 13. Moral Development (continued) <ul><li>As development evolves, moral judgment is less dependent on outside factors </li></ul><ul><li>Individuals with highly-developed moral development can make clear distinctions to define moral principles separate from any authority </li></ul>FOM 2-
    14. 14. Values <ul><li>Basic convictions about what is right and wrong </li></ul><ul><li>Influence ethical behaviour </li></ul><ul><li>Values are developed in early years </li></ul>FOM 2-
    15. 15. Organizational Factors That Affect Ethical And Unethical Behaviour Moderators Organizational Culture Structural Variables Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. 03 Pearson Education Canada Inc. FOM 2.15 Ethical/Unethical Behaviour
    16. 16. Determinants Of Issue Intensity (Exhibit 2.3) FOM 2.16 Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. ation Canada Inc. Source: Management, Seventh Canadian Edition, by Stephen P. Robbins, Mary Coulter, and Robin Stuart-Kotze, page 113. Copyright © 2003. Reprinted by permission of Pearson Education Canada Inc.
    17. 17. Businesses Improving Ethical Behaviour <ul><li>Strong emphasis on corporate governance </li></ul><ul><li>Companies refocusing efforts on business ethics </li></ul><ul><li>New legislation to hold boards of directors more accountable </li></ul>FOM 2-
    18. 18. Managers Improving Ethical Behaviour <ul><li>Hire individuals with high ethical standards </li></ul><ul><li>Establish codes of ethics and decision rules </li></ul><ul><li>Lead by example </li></ul><ul><li> (continued) </li></ul>FOM 2-
    19. 19. Managers Improving Ethical Behaviour (continued) <ul><li>Delineate job goals and performance review mechanisms </li></ul><ul><li>Provide ethics training </li></ul><ul><li>Conduct social audits </li></ul><ul><li>Provide support to individuals facing ethical dilemmas </li></ul>FOM 2-
    20. 20. Code of Ethics <ul><li>Formal statement of an organization’s primary values and ethical rules it expects employees to follow </li></ul><ul><li>Usually written </li></ul><ul><li>Must state in detail acceptable behaviours and actions </li></ul>FOM 2-
    21. 21. Management Responsibility Relating to Codes of Ethics <ul><li>If possible, develop codes with active involvement of everyone in the organization </li></ul><ul><li>All levels of management must support and continually reaffirm the importance </li></ul><ul><li>Consistently discipline those who break the code </li></ul><ul><li>Set an example by behaviour and action </li></ul>FOM 2-
    22. 22. Concluding Remarks <ul><li>More and more organizations are appearing in newspaper headlines about ethical conduct </li></ul><ul><li>Survey of employees shows workplace pressures are leading to more people considering acting unethically </li></ul><ul><li>Concerns about social responsibility are growing </li></ul>FOM 2-