ETHICAL ISSUES IN

ORGANIZATIONAL
BEHAVIOR

Ethics: The study of Moral

Philosophy
Centuries of examining the basic question of how people should live
their lives
Some specific questions
Some of he essence of ethics and moral philosophy is its reflective
quality sitting back and looking at the way things are customarily
done and asking what is the way they ought to be done. Socrates
questions: What we are talking about is how one should live (as
reported by Plato)
Ethical absolutism and ethical relativism. Only you can decide
Remember the Golden Rule: Do unto others as you would have them
do unto you

Ethical behavior is
behavior judges as
good, right, just
honorable, or failing to
meet an obligation. The
judgment of behavior as
ethical or unethical is
based on principles,
rules, or guides that
come from an ethics
theory, character traits,
or social values. Some
ethics scholars have
argued that doing
business ethically is
simply good business.

Moral
Philosophy

Moral Philosophy
Moral philosophy, or morality, refers to the concept
of human ethics used within three contexts:
1. individual conscience
2. systems of principles and judgments shared within a
culture or community
3.codes of behavior or conduct morality.
Since a single persons moral and ethical judgments are
affected by that persons environment (e.g. how one was
raised and what one was taught), personal morality
distinguishes and defines intentions, motivations or
actions as right or wrong. Thus, various individuals may
disagree about a certain moral or ethic, even if they
share many of the same morals and ethics. In
contraposition, individuals may agree about a certain
moral or ethic even if they subscribe to different moral
codes.
Everyone has their own moral philosophy and their own
morals. Philosophers probably want to keep this in mind
when engaging in philosophy of ethics and philosophy
of morality.

Ethical
Ethical
Values
Values
(Ethics)
(Ethics)

Ethics is the philosophical study of morality

and moral values. Ethics deals with the
analysis and employment of ideas such as
good, evil, right, wrong, and responsibility.
Ethics is divided into three primary areas:
Meta-Ethics - Meta-ethics is the study of
the concept of ethics itself. Meta-ethics is
employed when philosophers seeks to
comprehend the nature of ethical
attitudes, statements, and judgments, as
well as ethical properties.
Normative Ethics - Normative ethics is
the study of how to determine ethical
values.
Applied Ethics - Applied ethics is the
study of the use of ethical values.

Ethical Values of Societies and

Individuals
Ethical values of societies
Variations and similarities among societies
Functions of societal ethical values
Dynamics of societal ethical values

Ethical values of individuals

Built from societal-level values
Learned from family, including religious
training, peers, education, and life experiences
Dynamics of individual ethical values
Levels of moral judgment

Ethical
Theories

Ethical Theories Utilitarianism

Utilitarianism - the proper course of action is the one that
maximizes the overall happiness. It is the happiness
principle.

Utilitarianism asks a person to examine the effects of his actions

to decide whether these actions are morally correct under
utilitarian guidelines. An actions morally right if its total net
benefits exceeds the total net benefit for any other action.

Utilitarianism has been accused of looking only at the results of

actions, and disregarding the desires or intentions that motivate
them. Intentions seem somehow important: it seems undesirable
to call an action intended to cause harm but that inadvertently
causes good "overall good".

Ethical Theories - Right/Relativism

Relativism - right and wrong are determined by
what my society believes
Moral relativism may be descriptive, metaethical, or normative.
Meta-ethical position: the truth or falsity of
moral judgments is not objective, Its moral to
me, because I believe it is.
An actions morally right if its total net benefits
exceeds the total net benefit for any other
action. A right is a persons just claim or
entitlement. The right can focus on what that
person does or on the action of other people
toward him.

Ethical Theories - Justice

Justice - determines just actions to be those
that emerge from the correct use of
principles that have been agreed to under
conditions that are fair.
Justice-based ethics theories use a
comparative process, which looks at the
balance of benefits and burdens among
members of a group or resulting from the
application of laws, rules, and policies.

Ethical Theories Egoism

Egoism - a descriptive theory which states
that people always act to maximize their
self-interest (normative ethical positions).
Egoism focuses on a persons selfinterests, but can also include the
interests of others.

Ethical Theories Applied

Ethics
Applied ethics is a discipline of philosophy that
attempts to apply ethical theory to real-life
situations.
Applied ethics is used in some aspects of determining
public policy and by those that face difficult decisions.
Questions that are typically addressed by applied
ethics include:
What are human rights and how do we determine them?
Do individuals have the right of self determination? OR
on a more personal level, one may ask, Is lying always
wrong?, If not, when is it permissible?

Managing for
Ethical
Behavior

Modern managers are feeling increasing pressure

to promote ethical behavior in their
organizations, causing them to look for ways of
managing for ethical behavior. Managers can
follow three steps to manage for ethical behavior
in their organizations:
1.
2.
3.

Understand the composition of the present

ethical culture of their organizations.
Improve that ethical culture.
Sustain ethical behavior so that it
becomes embedded in their organizations.

Managing for Ethical

Behavior
o Want to change an organizations culture
organization. Decisions are not made by the
organizations, they are made by the people in
them, who are guided by their personal ethical
values and their perception of the organization
cultures ethical values that such matters.
o Code of ethics what is it in your organization,
is it up to date and matches all aspects of
business (internal, external, local, and
international)

Managing for Ethical Behavior continued

o Policies based upon the ethical theories;
specify what the organization wants to include
in decision-making processes, increases the
information used to include information tied to
the ethical implications of the decision:
o Employees right of dissent (whistle blowing)
o Guidelines for employee privacy
o Environmental effects

o Procedures includes information for members

of decision-making groups

Managing for Ethical Behavior continued

o Standards of ethical performance what
are they, what does it include?
o Ethics training and education does it
exist? If so, does it need to be
updated/revised? If not, what is needed
to get started?
o Reinforcing ethical behavior rewards,
motivation, standards of behavior
o Peer reporting (whistle blowing) - protocol

Internation
al Aspects
of Ethics

International Aspects of
Ethics
Interest in ethics in different countries
Legal views
Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions (OECD)
Foreign Corrupt Practices Act (FCPA)

Ethical views
Cultural relativism- the principle that an individuals
human beliefs and activities are understood by others I
terms of the individuals own culture.
Ethical realism- to see moral truth as grounded in the
nature of things rather than in subjective and variable
human reactions to things.

Importan
t Terms

act utilitarianism
Form of utilitarianism that asks a person to assess the effects of all
actions according to their greatest net benefit to all affected.
Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions (OECD Convention)
Twenty-nine members and five nonmembers of the Organization for
Economic Cooperation and Development signed an ethics treaty. The
treaty has strong sanctions for bribery. The signatories represented
economies in the major world regions.
Conventional
One of three stages of moral development in the ethic of justice theory;
attributed mainly to men; characterizes most adolescents and adults.
Features a growing awareness of the expectations important to other
people and the internalization of the moral norms of the person's group or
society.
cultural relativism
An approach to international ethics that considers differences in ethical
values among cultures and takes a normative ethical view based on the
premise that each society's predominant ethical values decide what is
right and wrong.

egoism
Ethical system that has two forms: individual (individuals judge their
actions only by the effects on their own interests) and universal (individuals
include others' interests when assessing the effects of their actions).
ethic of care
A theory of stages of moral development of individuals; attributed mainly
to women. Three stages of moral development: self-focused (concerned
with survival); focus on others (considers feelings, emotions, and situation);
reflective understanding of caring for others (focus on others but has a
balanced view of self in moral decisions).
ethic of justice
A theory of stages of moral development of individuals; attributed mainly
to men. Three stages of moral development: preconventional (selfcentered, obeys rules to avoid punishment); conventional (growing social
awareness and less focused on self-interest); principled (behavior guided by
freely chosen moral principles).
ethical absolutism
Holds that an ethical system applies to all people, everywhere, and always;
based on an authority such as a religion, custom, or written code.

ethical behavior
Behavior judged as good, just, right, and honorable based on principles,
rules, or guides from a specific ethics theory, character traits, or social
values; may vary from person to person or country to country.
ethical realism
Holds that morality does not apply to international activities, behavior, and
transactions.
ethical relativism
Holds that ethical behavior is based on personal feelings or opinions and is
whatever a person or society says is ethical; rejects the view that moral
judgments have objective validity.
focus on others
One of three stages of moral development in the ethic of care theory;
attributed mainly to women. Consider actions moral that take into account
other people involved in the situation; focus on feelings, emotions, and the
unique qualities of the situation in which the act happens.
focus on self
One of three stages of moral development in the ethic of care theory;
attributed mainly to women. Features a strong focus on self with the intent
of ensuring survival; women often engage in self-criticism for being selfish.

Foreign Corrupt Practices Act (FCPA)

A U.S. statute enacted in 1977 that prohibits a company from using bribes
to get business in another country or prevent the restriction of its
business; allows small payments that are part of the ordinary course of
doing business in another country.
individual ethical egoist
Judges a person's actions based only on their effects on self-interests.
Because this form of egoism never considers other people's interests,
moral philosophers usually reject it as a defensible basis of ethics.
It's good business
The assumption that doing business ethically is beneficial for
organizations, especially in the long term.
justice
An approach to ethics that uses a comparative process that looks at the
balance of benefits and burdens that are distributed among group
members or that result from applying laws, rules, and policies.
legal right
A person's just claims or entitlements defined by the legal system.

moral right
A person's just claims or entitlements that exist because of ethical
standards.
negative rights
A person's duty not to interfere with another person's rights.
objectively ethical
A person acts according to a rule or law.
positive rights
A person's duty to help others freely pursue an interest to which they have
a right.
preconventional
One of three stages of moral development in the ethic of justice theory;
attributed mainly to men. In the early period of this stage, the person is
self-centered, does not consider anyone else's viewpoint, and obeys rules
because they are backed by authority. In the later period of this stage, the
person becomes aware of the interests of others and the conflicts that arise
among multiple interests.
principle of equal liberty
Each person's basic liberties must equal those of others. Those liberties

principle of fair equality of opportunity

Everyone must have the same chance to gain the best positions offered by
society.
principled
One of three stages of moral development in the ethic of justice theory;
attributed mainly to men. Features the development of moral principles
that guide the behavior of those who reach this stage.
reflective understanding of caring for others
One of three stages of moral development in the ethic of care theory;
attributed mainly to women. Features a strong focus on caring for others
as the basis of moral action and a balanced view of the self in moral
decisions.
rights
A person's just claims or entitlements; can be legal (defined by the legal
system) or moral (universal rights that exist because of ethical standards).
rule utilitarianism
Form of utilitarianism in which a person assesses actions according to a set
of rules designed to yield the greatest net benefit to all affected.

stages of moral development

Stages in which people shift from an individual understanding of morality
to a societal one and then to a universal view. Some persons do not
progress through all three stages, and the stages may differ for men and
women.
subjectively ethical
A person believes he or she acted ethically.
theory of distributive justice
Theory proposed by John Rawls that is based on three principles: equal
liberty for all persons, difference (society should care for its most needy
while using its resources as efficiently as possible), and fair equality and
opportunity for all.
unethical behavior
Behavior judged as wrong, unjust, dishonorable, or failing to meet an
obligation.

universal ethical egoism

Universal ethical egoism, although controversial, can include the
interests of others when assessing one's actions. Asks a person to
weigh the effects of his or her actions on his or her interests with the
assessment based on pursuing pleasure and avoiding pain.
utilitarianism
An approach to ethics that asks people to examine the effects of an
action to decide whether its total net benefits exceed the total net
benefits of any other action.

Summary
Ethical behavior behavior judged as good, just,
right, and honorable based on principles, rules, or
guides from a specific ethics theory, character
traits, or social values; varies from person to
person and country to country
Moral right a persons just claims or entitlements
that exist because of ethical standards.
Know your organizations Code of Ethics
Ethical decision-making is affected by:
Law
Morality
Values
Professional codes