Ethical and Unethical Workplace Behavior

Ethics The set of moral principles or values that defines right and wrong for a person or group.

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Ethics and the Nature of Management Jobs

Unethical Managerial Behavior

Authority and Power Handling Information

Influencing the Behavior of Others

Setting Goals
1
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Ethics and the Nature of Management Jobs

Managers can encourage ethical behaviors by
using resources for company business only handling information confidentially

not influencing others to engage in unethical behavior

not creating policies that reward employees for unethical behavior setting reasonable goals 1
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Workplace Deviance

Workplace Deviance
Unethical behavior that violates organizational norms about right and wrong

Two dimensions
Degree of deviance Target of deviant behavior

2
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Types of Workplace Deviance

Organizational

Production Deviance

Property Deviance

Minor

Serious

Political Deviance
Interpersonal

Personal Aggression

2
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Production Deviance

Leaving early Taking excessive breaks Intentionally working slow Wasting resources

2
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Property Deviance

Sabotaging equipment Accepting kickbacks Lying about hours worked Stealing from company

2
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Political Deviance

Showing favoritism Gossiping about coworkers Blaming coworkers Competing nonbeneficially

2
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Personal Aggression

Sexual harassment Verbal abuse Stealing from coworkers Endangering coworkers

2
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U.S. Sentencing Commission Guidelines

Companies can be prosecuted and punished even if management didnt know about the unethical behavior.

3
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10

Who, What, and Why?

Nearly all businesses are covered Punishes a number of offenses Encourages businesses to be proactive

3.1
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Partial List of Offenses

Invasion of privacy Price fixing Fraud Customs violations Antitrust violations Civil rights violations Theft Money laundering Conflicts of interest Embezzlement Dealing in stolen goods Copyright infringements Extortion and more

3.1
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12

Compliance Program Steps

Steps in determining fine size

1. determine the base fine 2. compute a culpability score

3. multiply the base fine by the culpability score

Smaller fines for companies that are proactive
3.2
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13

Compliance Program Steps

1. Establish standards and procedures. 2. Assign upper-level managers to be in charge.
Revise if required

3. Delegate decision-making authority only to ethical employees.

4. Encourage employees to report violations.

5. Train employees on standards and procedures.

6. Enforce standards consistently and fairly.

7. Improve program after violations.
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3.2

14

Influences on Ethical Decision Making

Ethical Intensity of Decision Ethical Answers Depend on

Moral Development of Manager

Ethical Principles Used

4
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15

Ethical Intensity Depends on

Magnitude of consequences

Social consensus
Probability of effect Temporal immediacy Proximity of effect Concentration of effect 4.1
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16

Moral Development
Kohlbergs Stages of Moral Development

Preconventional

Conventional
Societal Expectations

Postconventional
Internalized Principles

Selfish

4.2
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17

Stages of Moral Development

Preconventional Conventional Postconventional

1. Punishment and 3. Good boy, Obedience nice girl

5. Social contract

2. Instrumental Exchange

4. Law and order

6. Universal principle

4.2
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18

Principles of Ethical Decision Making

Long-term self-interest Personal virtue Religious injunctions Government requirements Utilitarian benefits Individual rights Distributive justice
4.3
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19

Principles of Ethical Decision Making

Principle of long-term self-interest

Never take any action not in your organizations long-term self-interest.

4.3
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20

Principles of Ethical Decision Making

Principle of Personal Virtue
Never do anything that is not honest, open, and truthful and that you would not be glad to see reported in the newspapers or on TV.

4.3
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21

Principles of Ethical Decision Making

Principle of Religious Injunctions
Never take any action that is not kind and that does not build a sense of community.

4.3
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22

Principles of Ethical Decision Making

Principle of Government Requirements
Never take any action that violates the law, for the law represents the minimal moral standard.

4.3
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23

Principles of Ethical Decision Making

Principle of Utilitarian Benefit

Never take any action that does not result in greater good for society.

4.3
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24

Principles of Ethical Decision Making

Principle of Individual Rights

Never take any action that infringes on others agreed-upon rights.

4.3
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25

Principles of Ethical Decision Making

Principle of Distributive Justice
Never take any action that harms the least among us: the poor, the uneducated, the unemployed.

4.3
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26

Practical Steps to Ethical Decision Making

Select and hire ethical employees

Establish a Code of Ethics

Train employees to make ethical decisions

Create an ethical climate

5
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27

Practical Steps to Ethical Decision Making

Select and hire ethical employees
If you found a wallet containing $50, would you return it with the money?

Overt Integrity Tests Personality-Based Integrity Tests

5.1
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28

Doing the Right Thing

If You Cheat in College, Will You Cheat in the Workplace?
College students who cheat are likely to cheat again. 70 percent of students dont see cheating as a problem. People who cheat and cheat again see their behavior as normal. 60 percent of people who cheat their employers dont feel guilty for doing so.

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29

What Really Works

Studies show that Integrity Tests Help reduce workplace deviance Help hire workers who are better performers

However they have a smaller effect on assessing theft.

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30

Ethics Question

What is?

What are your personal ethics? What are your organizations ethics? What are the ethics of your industry?

What are societys ethics?

What are global ethics?
31

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Ethics Question

What ought to be?

How ought we treat our aging employees? How safe ought we make this product? How clean an environment should we aim for? How should we treat long-term employees when downsizing?

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32

Ethics Question

How do we get from What is to What ought to be? What is our Motivation?

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33

Practical Steps to Ethical Decision Making

Establish a Code of Ethics

Communicate code of ethics to both inside and outside the company Develop ethical standards and procedures specific to business

5.2

Web Link

http://www.nortelnetworks.com

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34

Ethics Training
Ethics Training

Develops employee awareness of ethics

Achieves credibility with employees

Teaches a practical model of ethical decision making

5.3

Web Link

http://ethics.bellsouth.com Ethics Scenarios Game

35

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A Basic Model of Ethical Decision Making

1. Identify the problem 2. Identify the constituents

3. Diagnose the situation

4. Analyze your options 5. Make your choice 6. Act 5.3
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36

Ethical Climate
Establishing an Ethical Climate
Managers:

1. 2. 3. 4.

Act ethically Are active in company ethics programs Report potential ethics violations Punish those who violate the code of ethics

5.4

Web Link

http://www.whistleblowers.org

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37

What Is Social Responsibility?

Social Responsibility A businesss obligation to pursue policies make decisions take actions that benefit society

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38

To Whom Are Organizations Socially Responsible?

Shareholder Model

Maximize Profits

Stakeholder Model

Satisfy Interests of Multiple Stakeholders

6
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39

Shareholder Model
Pros
Cons

Firm maximizes shareholder wealth and satisfaction The company stock increases in value

Organizations cannot act effectively as moral agents for shareholders

Time, money, and attention diverted to social causes undermine market efficiency

6
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40

Stakeholder Model
Primary Stakeholders:
Shareholders Employees Customers Suppliers Governments Local Communities

Secondary Stakeholders:
Media Special Interest Groups Trade Associations

6
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41

Organizations Social Responsibilities

Serve a social role Abide by principles of right and wrong Obey laws and regulations Be profitable
7
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Discretionary

Ethical

Legal Economic

$
42

Responses to Demands for Social Responsibility

Accommodative
Be progressive

Reactive
Fight all the way

Defensive
Do only what is required Public Relations Approach

Proactive
Lead the industry

Withdrawal

Legal Approach

Bargaining

Problem Solving

DO NOTHING

DO MUCH

8
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43

Social Responsibility and Economic Performance

Can cost a company

Realities of Social Responsibility

Sometimes it does pay Does not guarantee profitability

9
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44