Managerial Ethics

What is Ethics? Criteria for Ethical Decision Making Social Responsibility Corporate Actions Toward Social Demands Code of Ethics

Ethics
The code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong. Lies between the domains of codified law and free choice Based on shared principles and values Disagreements and dilemmas about proper behavior often occur.

Three Domains of Human Action

Domain of Codified Law
(Legal Standard)

Domain of Ethics
(Social Standard)

Domain of Free Choice

(Personal Standard)

Amount of Explicit Control High Low

Ethical Dilemma
A situation that arises when all alternative choices or behaviors have been deemed undesirable because of potentially negative ethical consequences, making it difficult to distinguish right from wrong.

Criteria for Ethical Decision Making

Utilitarian Approach Individualism Approach Moral-Rights Approach Justice Approach

Utilitarian Approach
Moral behaviors produce the greatest good for the greatest number.

Individualism Approach
Acts are moral when they promote the individual's best long-term interests.

Moral-Rights Approach
Human beings have fundamental rights that cannot be taken away by an individual's decision. 1. Free consent 2. Privacy 3. Conscience 4. Free speech 5. Due process 6. Life and safety.

Justice Approach
Standards of equity, fairness, and impartiality. Distributive Justice Procedural Justice Compensatory Justice

Social Responsibility
Management's obligation to make choices and take actions that will contribute to the welfare and interests of society as well as to the welfare and interests of the organization Being a good corporate citizen. 4 criteria: economic, legal, ethical, discretionary.

Economic Responsibilities Be Profitable

Legal Responsibilities Obey the Law

Ethical Responsibilities Do What is Right

Discretionary Responsibilities Contribute to Quality of Life

Corporate Actions Toward Social Demands

Obstructive Defensive Accommodative Proactive

Obstructive Fight All the Way

Defensive Do Only What is Legally Required

Accommodative Accept Ethical Responsibility

Proactive Take Social Initiatives

Code of Ethics
A formal statement of the company's values concerning ethics and social issues.