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    Fundamentals of Organizational Behavior 4e by Andrew J. DuBrin CHAPTER 4

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    Fundamentals of Organizational Behavior 4e by Andrew J. DuBrin CHAPTER 4

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    2K views25 pages

    Attitudes, Values, and Ethics

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    ccitarella
    Fundamentals of Organizational Behavior 4e by Andrew J. DuBrin CHAPTER 4

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    Attitudes, Values, and Ethics For years, Jefferies Group Inc. coveted more brokerage busines with Fidelity Investments, che mutval-fund giant, So in 2002, the midsize securities firm hired Kevin Quinn, an experienced trader with contacts at Fidelity To reel in how business, Quinn said he would need a lor of bait, and ehae i what Jeffries game him, in the form ofa huge $1.5 million anneal expense aceoumt ‘Quinn, who worked in Boston, where Fidelity is based, promptly pur his entertainment budget to work. At his expense, Fidelity employees enjoyed ‘expensive dinners, private air teavel,ritey golf outings, and tickets to premier sports events like she Wimbledon tennis championships, Sure enough, Jeties ‘won more assignments co buy and sell cocks for Fidelity mutual funds In early 2002, Jeflries ranked roughly 50th among securities firms in terms of brokerage commissions received thon Fidelity By early 2005, Jellies bad surged to 15th, Fidelity ateributed the jump to a significant improvement in Jeffries’ rading operations and services, But Jetfies and Fidelity now agree that the enteresining got out of hand. Quinn, who is 39 years old was fired in ‘October 2004 for alleedly abusing his expeme account, according to regul- tory records. He did nor hit his limit, but fom 2002 through 200, he spent ‘more than $1 inion on entertainment and an additional $600,000 on gifs, Fidelity traders enjoyed junkets to resorts such as Bellagio in Las Vey and the ‘reakers in Palm Beach, Fh. They received wine worth thousands of dollars and even fie golf clubs. Jffies has also accused Quinn of fasfying exp paperwork and improperly creating friends and family to fioe ar travel ‘Ss ere wt cman Kam Sana Catan Neng Eni Excess: ty Buses, Ono Fem Emad Lh Oath Wa Sturt hepa 38g 9, Alter reading and studying this chapter and doing the exer ise, You shouts be able to Deseribe the importance of att tudes and amations to beh For in organizations, Desrbe how organizational citcenanp bea cane trbwte tinier or niaiona ecvonsn ® summa wry vos aan eee @ eserves etc! dco mating ear slong wit ar See een © owern0:ne aghtsten vide Describe the impor trnotiong to Dehevior anos, vue, and hes Now Ask Yourself: How high (or low) does a corporate professional go vow rence another company ¢© purchase services from his or ber firm? Aone ots hurt when a brokerage firm spends 81.6 million in several years Fe eet nn customer? Ethical business conduct is one topic presented in this sRapeee spout weudes and emotion, values, and ethics, Understanding these 5° peak GE Behavior helps managers to deal more effectively with people and guide Their own behavior coward high performance ATTITUDES AND EMOTIONS You've got an attitude,” said the supervisor to the store asoci emphasizing the importance of attitude to job performance. For mysterious reasons, the ter evade in colloquial language often connotes 2 negative atitude, More accuracely, saitntGande is 2 predisposition to respond that exerss an influence on a person exsponte ta person, 2 thing, an idea, oF 2 situation. Attitudes are an important Pt ‘Sr bnganizational behavior, because they are linked with perception learning, 9°" Seeeetnd motivation. For example, your acituce toward a coworker influences your perception of how favorably you evalvate his or her work, Also, emotions su 530y per ePiger contribute 0 attuide formation. Fest, we examine the components Of ae ee ad cheit relationship €0 organizational behavior, and then we explain how emotions influence behavior in the workplace, Components of Attitudes “Avtiuades are complex and have three comportents.The cagnitite component refess aa he knowledge oF intellectual beliefs an individeal might have about an object (a aise Mttsonca thing, or a situation). uatket researcher might have accumulated sae inable fctual information about statistics (uch as sarapling procedures) and corsidcrtfoe running data, The researcher might therefore have a positive arstude toward statist “The feelings or affetive component, refers to the emotion connected with an abject ora tsk The market researcher mentioned might basically Hike satisica analy- Gebceause of some pleasant experiences in college associated with statiatics. cee cheoporl component refers to how a person acts. The market researcher night make positive staiements about sastical methods or emphasize them in Bs for her reports The tcounitive, affective, and behavioral aspects of atitudes are incernelated A change in one of te components will set ip motion a change in one oF more of te cnr FF you have more facts about an object oF process (cognitive), you form the Que for a more positive emotional response fo the object (affective) In turn, your Pa ey toward that abject would probably become more favorable, For example, ifyou have considerable information about the contribution of feedback co person al jjerclopment, yoo might have a positive feeling toward feedback. When receiving feedback, therefore, you would act favorably. rar uaues, peapie do not experience the sype of consistency just described: and they fel compelled to seach for consistency. Cognitive dissonance i the su aaa ie hich che pieces of knowledge, information, attcades, and belief held by an ot daieal are contradictory. When & person experiences cognitive dissonance, che Mladonchip boween attitudes and behaviors is altered. People search for ways to wag, ate, aod hie reduce internal confiicts when they experience a clash between the information they receive and their actions or attituces. The same process is used when a person has to resolve two inconsistent sets of information, ‘A typical example of cognitive dissonance on the job might occur when a worker believes that the report she submits to toam members is of high quality; her teammates, however, tell her the report is flawed and requires substantial revi- sions.'To reduce the dissonance, the worker might conveniently ignore the cri cism. Or the worker might reason that she is the resident expert on the topic of the report, and her tcammates are therefore nor qualified to judge the merits of her report. Emotions in the Workplace A traditional viewpoint contends that emotions in the workplace should be mini nized, and decisions should be based on rational analysis, Nevertheless, the impor tance of emotion in influencing job behavior has long been recognized. For exani= ple, customer-contact workers need training to deal with angry customers; and supervisors have been trained how to give emotional support t0 a distressed group, member. Cutrent interest in workplace emotion has surged, as evidenced by the growth of research and writing in this area,” In Chapter 2, we described the importance now attached to having emotional intelligence. An emotion isa fecling—such as anger, fear, joy, or surprise—that un- derlics behavior. Emotions might lead an employee who has just solved a difficult problem to shout “Yes! and punch his or her fist into the air. Unfortunately, intense negative emotion might ceigger an employee to stab another employee with a knife A seudy commissioned by the Department of Homeland Security found that corporate insiders who attack computer systems are typically angry over disciptinary actions, missed promotions, of layolls Similar fo an attitude, an emotion consists of three interacting components: (Q internal physidlogical arousal, (2) expressive behavior in the face or body. and (3) cognitive appraisal” Imagine that a production worker has just been informed that he has won a $50,000 award for a suggestion that will save the company mil- lions of dollars, The worker will experience a surge of physiological arousal, such as an accelerated pulse or an elevated breathing rate, His facial expressions will ‘ost likely communicate joy and surprise. The cognitive appraisal deals with quick thoughts, such as saying to himself, “Now, I will get the respect I deserve,” and “Here's my chance to buy something great for my family and invest a litde money also." Managing Emotion Neal M. Ashkanasy and Catherine S, Daus regatd emotion in the workplace as the new challenge facing managers.* Given that every worker, top executives included, is an organism governed partly by emotion, constructive use should be made of emotion, Two suggestions by Ashkanasy and Daus provide practical starting points in managing emotions well. First, the manager should create a friendly emotional ate by setting a positive example. Managers might serve as 4 model of healthy emotional expression that includes being emotionally perceptive. "Kelly, notice that you are quite anxious about the credit-card processing unit possibly being outsourced. How can I help you with your concerns?”) Warm and sincere expres- sion of positive emotion is usually effective, ss is appropriate expression of negative estan, els, on Ei emotion. The leader might indicate, for example, that he or she is also worried about a downturn in sales that could lead to cutbacks. Another recommendation ig to include a positive atticude as one factor in se~ lecting individuals and teams.A candidate might be eva ‘or her emotional skills demonstrated during a job interview and by checking his or her references. Within the organization, teams might be selected for key astign- ments in part based on their cheerful outlook. Positive attitudes contribute to oninizational health, whereas consistently negative attitudes create an unfavorable work climate A caution to workers about emotional regulation is that anger derived from one set of interactions might be displaced toward others, with the resule being poor coworker relationships,® For example, call-center technician angry with customers or the boss might cake out this anger on other call-center technicians. sed in part based on his Emotional Labor and Dissonance Another aspect of emotional behavior in the workplace receiving recent attention is the problem of faking emotions. Alicia Grandey defines emotional labor as the process of regulating both feelings and expressions to meet organizational goals. Emotional labor involves both surface acting and deep acting. Surfce acting means faking expressions, such as smiling, whereas dep acting involves controlling feelings, such as suppressing anger toward a customer whom you perceive to be uuncivil. Sales workers and customer service representatives carry the biggest emotional labor among all workers because s0 offen they have to take on facial expressions and feel= ings to please customers? notional dissinance isa key aspect of emotional labor and refers to the mismatch between felt and expressed motions. The greater the gap between actual and. expressed feelings, the more frequently workers report feeling emotional exhaus- tion, dissatisfaction with cheir jobs, and cynicism toward customers.’ Imagine mak- ‘nga PowerPoint presentation to top management, and being interrupeed with what you perceive to be foolish questions and ridicule. You want to retaliate, but instead keep smiling and making comments such as “good question, ‘A variation of emotional labor can occur when workers create a fagade in rela~ tion to conforming to corporate values. Fagade creation might include conforming to the dress code despite disliking such attire, expressing agreement with one’s man ager although one thinks the manager is wrong, and going along with a group de- Cision that one thinks is ridiculous, Maintaining a fagade for a long time can lead to emotional distress” ‘An analysis of hundreds of jobs revealed that workers who experience the most emotional labor do not uniformly receive higher financial compensation, ‘One finding was chat occupations with high cognitive demands (such as a psychi- atrist) tend to receive higher wages when emocional labor demands ate high, ‘Another finding was that occupations low in cognitive demands (such as a super- market cashier) wnd to receive low wages when emotional labor demands are high? One implication of emotional labor is that managers need to take into account job characteristics in creating rules for displays of emotion, Rules that conflict with job characteristics may trigger unhealthy levels of tension. For instance, asking cashiers to be overly polite to customers may conflict with a fist work pace, facing a long line of impatient customers may need to decrease displays of courtesy to avoid having customers wait even longer. (It takes more time to be polite and conversational)" roe, los ona Ete Attitudes and Job Satisfaction Another reason attitudes are important in the study of exganizacional behavior is that {hey form the bass for how satisfied poople are with theie jobs.Job satisfaction isthe amount of pleasure or contentment associated with a job, Workers will have high job satisfaction when they have positive auitus rowaed job factors such a the work it self recognition, and opportunity for advancement. According to a 2005 Conference Board survey of 51100 households, about half of US, workers ate satisfied wich their jobs, down from neatly 60% a decade eater. About 14% of the workers sampled said they were very satisfied, down from 18% in 1995,,Phe biggest decline in contentment with the job was among workers earning $25,000 ro $35,000 and among workers between the ages of 35 and 44. The most satisfied workers were those earning $50,000 or more, and those at least 65 years old, Rapid technological changes, ine creasing productivity demands, and changing employee expectations all eancribtced to the dectine in satisfaction, according to the report." Exhibit 4-1 provides a sampling of isues chat induence employce satisfaction A practical view of job satisfaction is tha ie centers on employees having fin on the job. Fur can be anything from doing exciting work to engaging in sports during the lunch break. Companies today are hkely ¢o provide a working envisonment that provides Key satisfying elements such as casual dress, exible working hours, and telecommuting. Managers are concerned about maintaining high levels of job Rank According to Employees Rank Acediding to You wBebdlig Comporsevonpay' ‘ Foeliig safe in tne work environment ‘Job seviriny oy Fexibliyto balance work-itaissues Communicstion between employees: Felationshia with inimediete supervisor. ‘Management recognition of employee icb performace Opportunities to use seilsjabiliies ‘The work tse ¢ |. Overall corporate culture Autonoiiy and independance Catear dsvelopment opporuntes Mearisgfuriess of thejob Variety ofwork 70) Caroor sévancement opportunities Conttitution of work to organization’ businiegs gaale Organizetions commitment protessinial development: ‘lobsspecifi raining! Relationship with coworkers |=!) 7 Networking i i HET ‘Question: Why do'you think mode‘n employees ‘ank-beneft (eg: medical ngurance sad life insuraice aniong the most inioortent ob-saiseetion factors? ‘Suaestion: Moke your civaranknig ofthe 2 factors, What’ngdiferences do you see bbotwee® yourranking andthe nauonal ranking atthe aM? > | Sean Atpted om Panta Boback “Fs We Woes Wan HR Megane. p95, 8 Exhibit 4-1 Te 2004 Job Satta sion Survey Condaced bythe Sac for Hanan Revwaee Management land CNN Bound the str: Lied bn his Ecabt Listed as “Very Important" by 600 Employee aa Variety of Companies Tue Li Shows the Oe ef pore af abe Satiaton Patan Among Enplyces a2 # Gro @ Describe how organina- tionolehizenshipb havior contibutes 10 indvicual and orgeni- ational effectiveness, pate, Vals, ané es satisfiction, including enthusiasm, because of its consequences, which include the following: High productiviey when the work involves contact with people A stronger tendency to achieve custonter loyalty Loyalty to the company Low absentccisin and turnover Less job stress and burnout Beer safety performance Better fe satisfaction, including a better mood at home” ‘The job satisfaction consequence of loyalty is especially important because ic cahances employee retention (Keeping valuable employees). Employee curnover is particuladly expensive and involves costs such as recruitment, selection, training, and Jost productivity while the replacement is tained, Management consultant Diane Arthur observes that if employees feel loyal to a company, they ate likely to be more productive and make an extra effort for the employer. They are also likely to stay ‘with the company: keeping the firm stable and allowing management to concentrate on sales, operations, and earnings, not on hirmg replacement workers." High job satisfaction is correlated with high organizational performance. How: ever, an analysis of 35 companies over 8 years suggests that high organizational performance leads to satisfaction rather than vice versa, According to this reasoning, when a firm excels it makes employees happy. The study in question found that measures of company financial performance were more accurate predictors of employee satisfaction than the reverse. Nevertheless, the study concluded that man= agets should not neglect attempting to satisfy employees and instead just concentrate on organizational performance. For example, a prosperous firm that did not offer good rewards co employees might find that job satisfaction would decrease."* Many of the methods and techniques described in this book, such as empower- ‘ment and modified work schedules, arc aimed at sustaining job satisfaction. Almost any positive management practice, however, might be linked co improving job satisfaction. ORGANIZATIONAL CITIZENSHIP BEHAVIOR A broader consequence of job satisfaction is thar it contributes to organizational zenship behavior (OCB), or the willingness to work for che good of the orga nization even without the promise of a specific reward. Five important components of organizational citizenship behavior are conscientiousness, altruism, civic virtue, courtesy, and sportsmanship. A good organizational citizen would engage in behav- iors such as assisting a person with a computer problem outside his or her team oF department, or picking up a broken bottle on the company lawn, People who are ‘good organizational citizens are likely tw achieve some of che consequences of job savisfaction, including higher customer loyalty, higher productivity, and bettet saiety performance According to George A. Neuman and jill R. Kickul, organizational citizenship bbchavior has received increased theoretical attention as organizations face the chal~ lenge of global competition and the need for contimsous innovation. The good or- ul citizen gocs “above and beyond the call of dary.” or engages in extarle Although OCB is often a consequence of job satisfaction, personality factors are sometimes linked to OCB, Workers may be predisposed to being good, or poor, A study with customer-contact workers supports the petsonality-OCL link. The employce-disposition (or personality) factors of service orientation and empatiy were found to be related to engaging in good citizenship behavior in relation to customers. Four examples of service-oriented OCHs are when a person does the fallowing: Encourages friends and family co use firm’ products and services Follows up in a timely manner to customer sequent and problems Contributes many ideas for customer promotions and cotununication Frequently presents creative solutions fo customer problems Similar to job satisfaction, OCB has been linked to voluntary turnover. A study. conducted in 11 companies in China found that employees rated low in OCB by their supervisors were moze likely co quit chan those who were rated as exhibiting high levels of such behavior.” A concern about the consteuct (similar to a concept) of organizational citizen- ship behavior is that some employees may perceive going beyond their job descrip- tion as part of their job. An employee might chink, for example, “I'm paid a good salary to do whatever it takes to make my company successful, whether or not it is, strictly my job""In a study of master of business administration students and their su= pervisors, four OCB behaviors were gencrally perceived to be in role (part of the job) if workers felt chey were working for a just and fair organization. The four specific behaviors ate as follows; Interpersonal helping (helping coworkers on their job when needed) Individual initiative (communications designed to improve individual and group performance) Personal industry (performing tasks ina way chat goes above and beyond the call of duty) Loyalty boosterism (promoting the organization to outsiders)" ‘One implication of this study is that when workers perceive their organization to be fair and just, chey are more likely to believe that OCB is part of theit job. So the onganization can ficiltate good citizenship behavior by being far and just. Although OCB benefits the organization and will often facilitate career growth, being an exceptional organizational citizen may have negative consequences for the indivicual.A study with 98 couples investigated the impact of one type of organiza tional citizenship behavior—individual initiative—on adverse personal conse- quences. Examples of individual initiative inchide working on weekends, taking work home, and working longer than most others. These types of initiative were rated by spouses or significant others. The results indicated that greater initiative was positively associated with feelings of being overworked, job stress, and conflict between work and family." An implication of this stady is thar managers should discourage good ongmizational citizens fiom going overboard. VALUES Another key factor influencing behavior in organizations is the values and belie of people. A value refers to the importance a person attaches €o something that serves 18a guide to action. Values are also tied in with enduring beficfs that one’s mode of conduct is better than the opposite mode of conduct. One person may highly value ‘quantitative analysis and will leok down on people who present a position without ) Surnmarize why values Storganzational behavior. cure Exhibit 4-2 Value Seonype for Swe Generations of Worker ies, Yes, and Eis Baby Boomers (1946-1964), Uses technology a5, nnocessary tool Appreciates hierarchy ‘Tolerates teams but values independent work ‘Strong career orientation Generation x (1961-1980) Techno-sawy ‘Teamwork very important Dislikes hierarchy Strives for work-lite balance but will work ong on ¥ (1981-2000), Techno-sewy ‘Teamwork veryimportent Distkes hierarchy prefers participation Strives for work-ife balance but will work long hours for now Loyalty to own career and profession hours for now Bellavesin informality, wants to strike itch quickly Uacandidin conversation More loyaty to organization Favors diplomacy Favors old economy Candid in conversation Agpreciatos old and new economy Prefers the new economy Expects @ anus based ‘on performance Bellaves thatissues should be ciscussed formally Would apareciete & signing bonus Believes that focdback can be administered informally Expected & signing bonus before the dot-com erash Bolioves that feedback can be given informally, even onthe tly eure: Several line enn il from Rober Mery “Tha Goring Gen X Bosse” Enpreeu Novena "say. 5 Joone Moan, "Tesshing te Nat Gaara,” Besiress Eaton Fru abvty 00, pe. 6-6 Ais rz, There Nees Bs Geseraton Gap” Gane News Seve, A220: egg Wn “Mies a Mensa Four Season of Erloens” OUMogacino Ont, tering 20, 5 ow: Dsreenertsins sou hich ap bck by borers, Generation Xan Geneon wtb rsa batons ond enue showog sah oereces Understanding generational differences is critical to managing people effectively.” tr For example, the oldest employees in an organization may prefer adhering closely to \ CP ore ear se eee veer er mrt i How Values Are Learned People are not born with a particular set of values. Rather, values aze Tearned in the process of growing up;many values are Iearned by age 4. One important way we ac | ‘quire values is through modeling. Often a person who takes considerable work was reared around people who had a strong work ethic. Models can be parents, teachers, friends, siblings, and even public figures. If we identify with a particular person, che probability is high that we will develap some of his or her major values. ide in ‘ee, Yo, net Communication of attitudes is another major way in which values are learned. ‘The attitudes we hear expressed directly or indirectly help shape our values. If using credit to purchase goods and services was talked about as an undesirable practice among your family and friends, you might hold negative values about installment purchases. ‘Unseared bur implied attitudes may also shape values. If key people in your life showed no enthusiasm when you talked about work accomplishment, you might not place a high value on achieving outstanding results, In contrast, if your family and friends centered heir lives on their careers, you might develop similar values (Or you might rebel against such a value because it interfered with a more relaxed lifestyle.) ‘Many key values are also learned through teligion and thus become the basis for society's morals.A basic example is that al religions emphasize treating other people fairly and kindly. Members of the clergy reach many ethics courses and seminars because it is offen assumed that a religious person has special expertise with con- steuetive values. Clarifying Values ‘The values you develop early in life are direcely related to the kind of person you are now and will be, and the quality of relationships that you form.! Recognizing this, fact has led to exercises designed to help people clarify and understand some of theie ‘own values. Valtie~clorification exercises ask you to compare the relative importance you attach to different objects and activities. The accompanying self-assessment exercise gives you an opportunity to clarify your values, The Mesh between In ual and Organizational Values Under the best of circumstances, the values of employees mesh with those required. of the job and organization. When chis state of congruence exists, job performance is likely to be higher. For example, a person who values workplace democracy is likely to perform better in a firm that gives workers more say in decision making than if he or she worked in one that was more authoritarian. The “Founding Values” of Enterprise Rent-A-Car contain elements found in the value statements of many consumer companies: (Our brand is the most valuable thing we own. Personal honesty and integrity are the foundations of our success. Customer service is our way of life Enterprise is a fund and friendly place, where teamwork rules, We work hard... and reward hard work Great things happen when we listen... to our customers and to each other. ‘We strengthen our communities, one neighborhood at atime, Our doors are open. Enterprise management communicates these values to every employee and job applicant. Management reinforces the message that there is no room at Enterprise for anything less than full adoption of all company vakies.”= Not every busines firm claiming to have such values carties ehem out in prac tice, As a result, problems are created for some employees. When the demands made by the organization or a manager clash with the basic values of the individ- ual, that person suffers from person-role conflict. The employee wants co abey couorens Clarifying Your Values Directions: Rank from 1 t0.21 the importance of the following values to you. The mest important value on Pen tatmeeives a rank of 1, tho least important a rank of 21, Use the space next to the to “Other” blanks to include important values of yours not on the list Helping people lees fortunate than myself Loving and being loved by anather person Having physical intimacy with another Having my own place to live Performing high-quality work Having one or more children Faving an intresting od and career person Cen a sched Rouse, a condominium, Earning an aboveaverage income ; fren aparment Being in good pnvsiet eondion aoe are atonships with coworkere Boing = knowledgeable, informed person | Paving good eat? Eenting a information echnotogy ‘owen my favorite television shows testy, including having up-to-date Parterpating in sports or ther pastimes mgnteehnetogy devices ein Touch Bring nec, cles, and ovsery fraguanty wih wok sesociates, ends Being neve ina professional society tnd tary inmmy Feld Or : Bain» raghous person tne 1. Discuss and compare your ranking of hese values withthe parson next 10 You. Fane erence, acnstea by Your instructor, can arive ata lass average on each of © Fone ee oon your ranking compare ta the ass ranking? What evidence wil You eed before you conclude that a given rank is representative of the clase? al soe hove ony surprises in tho class ranking? Which values dic you think would be the inighest and lowest? Hondo you think average ranks for these values would be influenced by a person's culture? a orders but does not want to perform an act that seems inconsistent with his o# her Values. A situation of this type might occur when an employee is asked to help produce @ product or service that he ot she feels is upsafe or of no value to soci oy, Unfortunately, both safety and value to society are not easy to specify objec ‘ely. Assume that a person is a supervisor in the pet insurance department of an {nourance company. She might suffer from role conflict because she believes that pet insurance policies are a waste of resources. Yet many human resource profes Pnals believe that pet insurance is an ersployee benefit that builds company loy— alty, teduces worties for pet carcrakers, and helps animals. One could argue that ny product or service is of value to society because it creates employment for somebody. Whar constitutes 2 good fit between personal values and organizational values may change at different stages ofa person's carecr because ofa change in values, At be point inva person's career, he or she may think that founding a business is m= portant because the new firm might create employment. At another stage of the Pime person’ career, he or she might believe thae working for the nonprofit sector A starting point in finding a good 6t between individual and organizational values is to identify what type of work would be the most meuningful. Po Bronson writes that people “thrive by focusing on the question of who they really are— and connecting to work that they truly love (and, i 30 doing, unleash ductive and excative power that they never imagined). After identifying your passion in terms of work, you would then seek an employment opportunity that provides such work, For example, a manager might discover that helping young, people learn useful job skills brings her the most professional excitement. She might then seek an opportunity to manage a manufacturing apprenticeship program in her company. ETHICS Our last key fictor for understanding individuals in organizations is ethies, which is the set of the moral choices a person makes based on what he or she ought to do, Ethics is based on an individual’ belie about what is right and wrong or good and bad. Ethics can ako be regarded as the vehicle that converts values into action. You might value a clean environment; the corresponding ethical behavior is nor to place a television set or computer in a landfill. Ethics is a major consideration in studying the actions of managerial workers and the functioning. of organizations. The promi= nent financial seandals in business dnring che frst several years of the new century have intensified recognition of the importance of ethics. We will therefore refer t0 ethics at various places in this book The ethical behavior of organizational members, whether individual contribu- tors (nonmanagers) or managers, exerts a major force on how outsiders and insiders will perceive the firm. If the behavior of one or more organizational members is outrageously unethical, ir may violate the law, thus leading to outside intervention, Furthermore, iftop-fevel management in the company is unethical, the result can be an erosion of employee trust and organizational loyal." Here we approach ethics as it relates to individuals from four perspectives. First wwe look at three somewhat philosophical criteria for making. ethical decisions. Second, we describe major causes of ethical problems. Third, we present an eight- pare guide to ethical decision making, Fourth, we describe the role of orginizations in promoting ethical and socially responsible behavior. Ethical Decision-Making Criteria A standard way of understanding ethical decision making is to understand the philo- sophical basis for making these decisions. When attempting to decide what is right and wrong, people can focus on (1) consequences; (2) duties, obligations, and principles; or (3) integrity Focus on Consequences When attempting to decide what is right and wrong, people sometimes focus on the consequences of their decision or action. According to this criterion, if nobody gets hurt, the decision is ethical. Focusing on consequences is often referred 10 as vtiltarianisy., really counts is the net balance of good consequences over bad. To focus on consequences, the decision maker would have to be aware of all the good and bad consequences of a given decision. A financial vice president might 1¢ decision maker is concerned with the utility of the decision. What caaprens Deceribe three ethical ecision-making ert £8, along wath sever ‘xplanations forthe ‘xletonce of ethical problema. canes fasta, aus, 08 es decide that if all navel-expense reianbursements were delayed by 10 days, the com~ pany could earn $1 million per year nationwide. The earnings would stem from holding on to money longer, thus collecting interest. How would this vice president now how many family arguments and how much job stress would be created by these delayed reimbursements? How many good performers would quit in disgust? Focus on the Rights of Individuals Another approach to making an ethical decision is to examine one’s duties in making the decision.’The theories underlying this approach are referred to as deon- tological, from the Greek word deon (or duty). Deontology also refers to moral philosophies that center on the rights of individuals and che intentions associated with a particular behavior. A fandimental idea of deontology is that equal respect ruse be given to all persons. The deontological approach is based on universal prin~ Ciples such as honesty farrness, justice, and respect for persons and property. Raghts, such as the right to privacy and safety, are the key aspects of deontology. From a deontological perspective, the principles are more important than the consequences. Ifa given decision violates one of these universal principles, itis automatically unethical, even if nobody gers hurt ‘The financial vice president pondering whether to defer payments on travel expenses would not have to spend much time with deontology. She would say to herself, “Delaying these payments may earn the company another $1 million per year, bat itis not honest, far, or just. Furthermore, employees have a right to prompt payment Focus on Integrity (Virtue Ethics) ‘The third criterion for determining the ethics of behavior focuses on the character of the person imolved in the decision or action. Ifthe person in question has good Character and genuine motivation and intentions, he or she will be judged to have bbchaved ethically The criteria for good character will often include the two other ethical criteria, For example, one might judge a person to have good character ithe ‘or she follows the right principles and respects the rights of others. Tiustworthiness has emerged in recent years 28 a virtue of major importance for managers and professional, in part because of ublicized incidents of ex eeutives being untrustworthy: The mame Enron has become almost synonymous ‘vith untrustworthy behavior. Research suggests that trust makes 3 major contribs tion to organizational efectiveness. Two major contributors to trust are consistent behavior and clear communication. Any act of bad management is likely to engen- der distrust. At the top of the list are inconsistent messages from top management and inconsistent standards” ‘The decision maker’ environment, or community, helps define what integrity means. You might have more lenient ethical standards for a person selling you investment derivatives (high-risk investments used co hedge other investment, with their value derived from the existence of ether securities) than you would for a bank vice president who accepted your cash deposit. The virtue ethics of managers and professionals who belong to professional societies may be readily inferred, Business-related professions having codes of cthics include accountants, purchasing managers, and certified financial planners. To the extent that the person abides by the tenets of the code, he or she behaves ethically. An example of such a tenet would be for a plicit about any commissions he or she stands to gain from a client accepting the advice financial planner to be ex- Ethical Question Yes oN Hove you inated numbers in a foracast? 2 8 Hove you taken office supplies home? 53 3 Have you ever inflated your company's salas to win a cient? 19 BI Have you ever put a personal cast an your expense report ar 19 8 ‘company credit card? Have you booked an order that wasn't yet contracted? 6 4 ‘Soares Jnefor Neva “Tha Eis Manon” Ft open, Aves 28» 27. Major Causes of Ethical Problems Individuals, organizations, and society must share some of the blame for che prevalence of unethical behavior in the workplace. Exhibit 4-3 presenes a sampling of unethical behavior in business. Major contributors to unethical behavior are an individual's greed and glutony or the desire to maximize se-gain atthe expense of others, Former Fed eral Reserve Chnirman Alan Greenspan said that “an infectious greed” had contami nated the business community in the late 199s, as one exceutive after another ma- nipulated earnings oF resorted to fraudulent accounting to capitalize on soaring stock prices.” The decision makers at Fidelity in the chapter apenct) who accepted lavish Efs fom a brokerage house might have been experiencing greed and glattony. Another key contributor t0 a person's ethies and morality is his ot her level of moral development. Some workers are morally advanced, while others are morally challenged—a condition that often develops early in life, People progress through three developmental levels in their mora reasoning. At the przonventina lel, a per- son is concerned primarily with receiving external rewards and avoiding punish- ments. A manager at his level of development might falsify earnings statements for the primary purpose of gaining a large bons. [At the conventional eve, people learn to conform to the expectations of good be- havior as defined by key people in their environment, ax well as societal norms. A man agerat this level might be just moral enough to look good, sch as being far with salary Incteases and encouraging, contributions to the United Way campaign. Ac the poston« ventional ler, people are guided by an internalized set of principles based on uanversal abstract principles that may even transcend the laws ofa particular socieny.A manager at the postconventional level of moral behavior would be concerned with doing the most good for the most people, whether or not such behavior brought him or her recognition and fortune. Ifthe manager just described wanted to direct an apprentice ship program, he or she might ao be at the postcorwentional level of moral behavior. Another niajor contributor ro wnethical behavior isan orgenizatonal atmosphere that condones such behavior If leaders at the top of the organieation take imprudent, quasilegal risks, other leaders throughout the firra might be prompted to behave similacly. The ethical violations of the financial services giant, Citi, were atcibured to an aggressive culture that encouraged daring risks, For example, Japanese regula cots accused Citi of numerous instances of unfair transactions in which excessive profits were obtained through unsound means.The megabank admitted to failing to comply with regulacory requitemen Unethical behavior is often triggered by pressure fiom higher management to achieve geal One seudly found that 56% of al workers feel some pres to act unethically or legally.” Another cause of unethical behavior emphasizes the strength of relationships

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