1. Chapter 10. Meeting the Ethical Challenges of Diversity
 Promoting Diversity in the Organization
 Greater cultural diversity is one product of globalization.
 Non-Whites account for most of the population growth in
the United States.
 Women are participating in the labor force at historically
high rates, no longer dropping out after marriage.
 Diversity expert Taylor Cox concludes that managing
diversity is the core of modern organizational leadership.
© 2015 SAGE Publications, Inc.

2. Promoting Diversity in the Organization
 Researchers and organizational leaders have
discovered that there are many benefits to a diverse
workforce.
 Diverse organizations are more innovative
 Diverse organizations have lower absentee and turnover
rates
 They attract higher-quality employees
 They improve their public image and gain market share
© 2015 SAGE Publications, Inc.

3. Promoting Diversity in the Organization
 There are barriers to fostering diversity:
 Prejudice: the prejudgment of out-group members based on
prior experiences and beliefs; negative prejudgments can be
dangerous because they produce discriminatory behavior
 Stereotyping: is the process of classifying group members
according to their perceived similarities while overlooking
their individual differences
 Ethnocentrism: is the tendency to see the world from our
cultural group’s point of view
© 2015 SAGE Publications, Inc.

4. Promoting Diversity in the Organization
 Organizations (often unconsciously) erect barriers to
diversity through routine practices like the following:
 1. Inaccessible facilities that make it hard for people with
disabilities to enter workplaces, movie theaters, churches, and
other buildings;
 2. Long work weeks and evening and weekend hours, which
increase stress for working mothers;
 3. An emphasis on self-promotion, which makes people from
cultures such as Japan that value modesty uncomfortable;
 4. Informal networks that exclude minorities, women, individuals
with disabilities, and others from information and contacts for
promotion
© 2015 SAGE Publications, Inc.

5. Promoting Diversity in the Organization
 We can reduce our levels of negative prejudice,
stereotyping, and ethnocentrism by committing
ourselves to the following:
 Mindfulness
 Dignity and Integrity
 Moral Inclusion
 Cosmopolitanism
© 2015 SAGE Publications, Inc.

6. Leadership Ethics at the Movies:
The Motorcycle Diaries
 Discussion Questions:
 What character traits and attitudes equipped Ernesto
and Alberto to deal with a variety of cultures and
people?
 What are key moments or turning points that mark
the friends’ growing recognition of injustice and
suffering?
 Can you think of other leaders who were shaped by
their travel experiences and encounters with
different cultures?
© 2015 SAGE Publications, Inc.

7. Mastering the Ethical Challenges of
Leadership in a Global Society
 The Dark Side of Globalization
 Critics of globalization note that global capitalism
encourages greed rather than concern for others.
 They believe ethical and spiritual values have been
overshadowed by the profit motive.
 As leaders, we need to give serious consideration to the
dark side of the global society in order to help prevent
ethical abuse.
© 2015 SAGE Publications, Inc.

8. The Dark Side of Globalization
 The Global Shadow of Power
 The Global Shadow of Privilege
 The Global Shadow of Mismanaged Information
 The Global Shadow of Inconsistency
 The Global Shadow of Misplaced and Broken
Loyalties
 The Global Shadow of Irresponsibility
© 2015 SAGE Publications, Inc.

9. Focus on Follower Ethics
 Anthropologist Mikel
Hogan identifies 14
personal competencies that
are essential for ethical
(mindful, respectful,
inclusive) and effective
communication with
people of other cultural
backgrounds.
 1. Be nonjudgmental
 2. Be flexible
 3. Be resourceful
 4. Personalize
observations
 5. Pay attention to
thoughts and feelings
 6 & 7. Listen
attentively/observe
carefully
 8. Assume complexity
 9. Tolerate the stress of
uncertainty
 10. Have patience
 11. Manage personal
biases
 12. Keep a sense of humor
 13. Show respect
 14. Show empathy
© 2015 SAGE Publications, Inc.

10. The Dark Side of Globalization
 In order to cast light instead of shadow, global
leaders must do the following:
 1. Take reasonable efforts to prevent followers’ misdeeds.
 2. Acknowledge and address ethical problems wherever
they occur.
 3. Shoulder responsibility for the consequences of their
directives.
 4. Admit their duties to followers.
 5. Hold themselves to the same standards as followers.
© 2015 SAGE Publications, Inc.

11. Leadership and Ethical Diversity
 Ethical issues discussed in the following context:
 Bribery
 False Information
 Intellectual Property Rights
 Gender Equality
© 2015 SAGE Publications, Inc.

12. Cultural Differences and Ethical Values
 Defining Culture
 Cultures are comprehensive, incorporating both the
visible (architecture, physical objects, nonverbal
behavior) and the invisible (thoughts, attitudes, values).
 Elements of culture:
 Created
 Learned
 Shared
 Dynamic
© 2015 SAGE Publications, Inc.

13. Programmed Value Patterns
 According to Geert Hofstede of the Netherlands,
important values are “programmed” into members of
every culture.
 4 value orientations from Hofstede’s study:
 Power Distance
 Individualism Versus Collectivism
 Masculinity Versus Femininity
 Uncertainty Avoidance
© 2015 SAGE Publications, Inc.

14. Project GLOBE
 Project GLOBE (Global Leadership and Organizational Behavior
Effectiveness) is an international effort involving 170 researchers
who have gathered data from more than 17,000 managers in 62
countries.
 The researchers hope to better equip global managers by
identifying the relationship between cultural values and effective
leadership behaviors.
 They extend Hofstede’s list by including the following:
 In-Group Collectivism
 Assertiveness
 Future Orientation
 Performance Orientation
 Humane Orientation
© 2015 SAGE Publications, Inc.

15. Focus on Follower Ethics: Across Cultures
 Ireland and U.S. study
 Respondents in both countries gave equal ratings to (1)
altruism (being compassionate and generous), (2) collective
(team oriented) motivation that inspires subordinates to work
toward shared goals and to put the needs of the team first, and
(3) encouragement that empowers followers do develop self-
confidence and self-sufficiency.
 Germany and U.S. study
 They found that character/integrity, collective motivation, and
encouragement were strongly endorsed by managers in each
nation while altruism was rated as less important.
© 2015 SAGE Publications, Inc.

16. Psychological Systems
 University of Virginia moral psychologist Jonathan Haidt
and others believe that to understand ethical diversity we
first need to understand the psychological systems or
foundations of morality.
 Haidt identifies five foundations for our moral intuitions:
 Harm/care
 Fairness/reciprocity
 In-group/loyalty
 Authority/respect
 Purity/sanctity
© 2015 SAGE Publications, Inc.

17. Standing on Moral Common Ground
 Cross-cultural research suggests that there might be
moral commonalties when making ethical decisions.
 Research into the neurological basis of moral judgments
is in the initial stages but suggests that, when it comes to
ethics, there might some cultural unity to go along with
cultural diversity.
 4 Approaches to Universal Ethics:
 Universal Declaration of Human Rights
 Global Ethic
 Global Business Standards Codex
 Caux Principles
© 2015 SAGE Publications, Inc.

18. The United Nations Universal
Declaration of Human Rights
 Following World War II, a conflict fought in large
part to protect human freedoms, the United Nations
adopted a list of basic human rights.
 Rights protect the inherent dignity of every person
regardless of race, ethnic background, place of
residence, age, income, physical ability or social
status.
 More recently the UN launched the Global Compact
to encourage multinational corporations to honor
human rights, labor rights and the environment
while, at the same time, fighting corruption.
© 2015 SAGE Publications, Inc.

19. A Global Ethic
 Ethical directives or imperatives:
 Commitment to a culture of nonviolence and respect for
all life
 Commitment to a culture of solidarity and a just
economic order (do not steal, deal fairly and honestly
with others)
 Commitment to a culture of tolerance and truthfulness
 Commitment to a culture of equal rights and partnership
between men and women (avoid immorality; respect and
love members of both genders)
© 2015 SAGE Publications, Inc.

20. The Global Business Standards Codex
 Harvard business professor Lynn Paine and her
colleagues argue that world-class corporations base their
codes of ethics on a set of eight universal, overarching
ethical principles.
 1. Fiduciary principle
 2. Property principle
 3. Reliability principle
 4. Transparency principle
 5. Dignity principle
 6. Fairness principle
 7. Citizenship principle
 8. Responsiveness principle
© 2015 SAGE Publications, Inc.

21. The Caux Principles
 The Caux Round Table is made up of business executives
from the United States, Japan, and Europe who meet
every year in Caux, Switzerland.
 Their principles:
 Principle 1. The responsibilities of corporations: Beyond
shareholders toward stakeholders
 Principle 2. The economic and social impact of corporations:
Toward innovation, justice, and world community
 Principle 3. Corporate behavior: Beyond the letter of law
toward a spirit of trust
© 2015 SAGE Publications, Inc.

22. The Caux Principles
 Principles (cont’d)
 Principle 4. Respect for rules: Beyond trade friction toward
cooperation
 Principle 5. Support for multilateral trade: Beyond isolation
toward world community
 Principle 6. Respect for the environment: Beyond protection
toward enhancement
 Principle 7. Avoidance of illicit operations: Beyond profit
toward peace
© 2015 SAGE Publications, Inc.

23. Making Ethical Choices in Culturally Diverse Settings
 The Integrative Social Contracts Theory (ISCT) provides
one set of guidelines for balancing respect for ethical
diversity with adherence to universal ethical standards.
 ISCT is based on the idea of social contracts—agreements
that spell out the duties of institutions, communities, and
societies.
 2 kinds of contracts:
 Macrosocial
 Microsocial
© 2015 SAGE Publications, Inc.

24. Making Ethical Choices in Culturally Diverse Settings
 To make decisions following ISCT guidelines, follow
these steps:
 1. Identify all relevant stakeholders or communities.
 2. Determine whether these communities are legitimate (do
they allow voice and exit by members?).
 3. Identify authentic norms (those that are widely known
and shared).
 4. Determine whether the norms are legitimate (do not
conflict with hypernorms).
 5. Resolve any conflicts between legitimate norms. (If both
sets of norms do not conflict with universal standards, go
with the option that is dominant—the one accepted by the
larger community.)
© 2015 SAGE Publications, Inc.

25. Making Ethical Choices in Culturally Diverse Settings
 University of Louisiana professors J. Brooke
Hamilton, Stephen Knouse, and Vanessa Hill (HKH)
offer another set of guidelines for making choices in
ethically diverse contexts.
 They provide six questions specifically designed to
help managers at multinational enterprises (MNEs)
make moral choices when corporate values conflict
with business practices in the host country.
© 2015 SAGE Publications, Inc.

26. HKH 6 Questions
 1. What is the Questionable Practice (QP) in this situation?
 2. Does the QP violate any laws that are enforced?
 3. Is the QP simply a cultural difference, or is it also a potential
ethics problem?
 4. Does the QP violate the firm’s core values or code of conduct,
an industry-wide or international code to which the firm
subscribes, or a firmly established hypernorm?
 5. Does the firm have leverage (something of value to offer) in
the host country that allows the firm to follow its own practices
rather than the QP?
 6. Will market practices in the host country improve if the firm
follows its own practices rather than the QP in the host country
marketplace?
© 2015 SAGE Publications, Inc.

27. Case Study: A Hundred Million “Missing Women”
 Discussion Questions:
 What cultural values contribute to discrimination against
women in India?
 What steps should Indian political leaders take to reduce the
number of “missing women?”
 Should non-profit organizations and other governments
intervene to try to improve the country’s treatment of women?
If so, what steps should they take?
 Do multinational companies operating in India have an ethical
responsibility to improve the status of Indian women?
 How could applying the UN Declaration of Human Rights or
the Global Ethic improve the standing of women in India?
© 2015 SAGE Publications, Inc.

28. Case Study: Google
 Discussion Questions:
 Google initially argued that filtering Internet content is less
damaging than not being in the Chinese market. Do you agree?
 Why do you think Google has gotten more criticism for
operating in China than other US high tech firms?
 Use the steps of Integrative Social Contracts Theory or the
HTK decision-making process to determine whether Google
and other American high-tech firms should participate in the
Great Firewall of China. What do you conclude?
 Should the U.S. government prevent U.S. technology
companies from working with repressive regimes in China and
elsewhere?
© 2015 SAGE Publications, Inc.