CHAPTER 2

MANAGING ETHICS
AND DIVERSITY

©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
 Learning Objectives (1 of 2)
3-1. Illustrate how ethics help managers
determine the right way to behave
when dealing with different
stakeholder groups.
3-2. Explain why managers should behave
ethically and strive to create ethical
organizational cultures.
3-3. Appreciate the increasing diversity of
the workforce and of the
organizational environment.
©McGraw-Hill Education.
 Learning Objectives (2 of 2)
3-4. Grasp the central role that managers
play in the effective management of
diversity.
3-5. Understand why the effective
management of diversity is both an
ethical and a business imperative.
3-6. Understand the two major forms of
sexual harassment and how they can
be eliminated.

©McGraw-Hill Education.
 The Nature of Ethics (1 of 2)
Ethical Dilemma
A type of quandary in which people have to decide if
they should act in a way that might help another
person or group even though doing so might go
against their own self-interest

©McGraw-Hill Education.
 The Nature of Ethics (2 of 2)
Ethics
The inner-guiding
moral principles,
values, and beliefs
that people use to
analyze or interpret a
situation and then
decide what is the
“right” or appropriate
way to behave

©McGraw-Hill Education.
 Stakeholders and Ethics
Stakeholders
The people and groups that supply a
company with its productive resources
and so have a claim on and a stake in the
company

©McGraw-Hill Education.
 Types of Company Stakeholders
Figure 3.1

Jump to Appendix 1 long description.

©McGraw-Hill Education.
 Stockholders
Stockholders want to ensure that managers are
behaving ethically and not risking investors’
capital by engaging in actions that could hurt
the company’s reputation.
They want to maximize their return on
investment.

©McGraw-Hill Education.
 Managers
Managers are responsible for using a company’s
financial capital and human resources to
increase its performance and thus its stock
price.
They have the right to expect a good return or
reward by investing their human capital to
improve a company’s performance.
Frequently managers juggle multiple interests.

©McGraw-Hill Education.
 Employees
Companies can act ethically toward employees
by creating an occupational structure that fairly
and equitably rewards employees for their
contributions.

©McGraw-Hill Education.
 Suppliers and Distributors
Suppliers expect to be paid fairly and promptly
for their inputs.
Distributors expect to receive quality products
at agreed-upon prices.

©McGraw-Hill Education.
 Customers
Customers are the most critical stakeholder.
Company must work to increase efficiency and
effectiveness in order to create loyal customers
and attract new ones.

©McGraw-Hill Education.
 Community, Society, and Nation
Community
Physical locations in which companies are located
• towns or cities
or social milieus,
• ethnic neighborhoods
Community provides a company with the
physical and social infrastructure that allows it
to operate.

©McGraw-Hill Education.
 Four Ethical Rules
Figure 3.2

Jump to Appendix 2 long description.

©McGraw-Hill Education.
 Practical Decision Model
1. Does my decision fall within the acceptable
standards that apply in business today?
2. Am I willing to see the decision
communicated to all people and groups
affected by it?
3. Would the people with whom I have a
significant personal relationship approve of
the decision?

©McGraw-Hill Education.
Why Should Managers Behave Ethically? (1 of 2)
The relentless pursuit of self-interest can lead to
a collective disaster when one or more people
start to profit from being unethical because this
encourages other people to act in the same way.

©McGraw-Hill Education.
 Figure 3.3

Jump to Appendix 3 for the long description.

©McGraw-Hill Education.
Why Should Managers Behave Ethically? (2 of 2)
Trust
Willingness of one person or group to have faith or
confidence in another person’s goodwill, even
though this puts them at risk
Reputation
Esteem or high repute that individuals or
organizations gain when they behave ethically

©McGraw-Hill Education.
 Sources of an Organization’s Code of Ethics

Jump to Appendix 4 for long description.

©McGraw-Hill Education.
 Ethical Organizational Cultures (1 of 2)
Managers can ensure that important ethical
values and norms are a central component
of an organization’s culture.
Managers become ethical role models whose
behavior is scrutinized by their subordinates.

©McGraw-Hill Education.
 Topics for Discussion (3 of 5)
How can managers ensure that they create ethical
organizational cultures? [LO 3-2]

Ethics Ombudsman
An ethics officer who monitors an organization’s
practices and procedures to be sure they are ethical

©McGraw-Hill Education.
 The Increasing Diversity of the Workforce and the Environment
Diversity
Differences among people due to age, gender, race,
ethnicity, religion, sexual orientation, socioeconomic
background, education, experience, physical
appearance, capabilities, disabilities, and any other
characteristic used to distinguish people

©McGraw-Hill Education.
 Diversity Concerns (1 of 2)
There is an ethical imperative for equal
opportunity.
Effectively managing diversity can improve
organizational effectiveness.

There is evidence that diverse individuals

continue to experience unfair treatment in the
workplace as a result of biases, stereotypes, and
overt discrimination.

©McGraw-Hill Education.
 Diversity Concerns (2 of 2)
Glass Ceiling
A metaphor alluding to the invisible barrier that
prevents minorities and women from being
promoted to top corporate positions

©McGraw-Hill Education.
 Sources of Diversity in the Workplace
Figure 3.5

Jump to Appendix 5 long description.

©McGraw-Hill Education.
 Workforce Diversity: Age
Aging Viet Nam Population
• Median age is 32.5.
• The Aging Index 2019 is 48.8%, rising 13.3%
compare with 2009.
The sex ratio increases and reaches balance in
the 45-49 age group.
• The sex ration of Viet Nam is 99,1 male/100
female.
• The ratio of 0-4 (110,3 male/100 female), and in
the age of 45-49 (100,2 male/100 female)
©McGraw-Hill Education.
 Workforce Diversity: Gender
Women in the Workplace
Viet Nam workforce is 70% female.
Women hold only 26.1% of executive officer
positions. But distribute to 50% in group of simple
workers and 66.6% of family workers.
Despite having the same qualifications and job
positions as men, the income of Vietnamese female
workers is always lower. On average, female
workers' income is 10.7% lower than that of men.
Female workers also make up the majority of the
unemployed group.
©McGraw-Hill Education.
 Workforce Diversity: Race and Ethnicity
Ethnicity
Grouping of people based on some shared characteristic
such as national origin
Ethnic Demographics of Viet Nam

©McGraw-Hill Education.
 Workforce Diversity: Religion
Accommodation for Religious Beliefs
• Scheduling of critical meetings
• Providing flexible time off for holy days
• Posting holy days for different religions on the company
calendar

©McGraw-Hill Education.
 Workforce Diversity: Capabilities and Disabilities

Disability Issues
• Providing reasonable accommodations for individuals
with disabilities
• Promoting a nondiscriminatory workplace environment
• Educating the organization about disabilities

©McGraw-Hill Education.
 Workforce Diversity: Socioeconomic Background

Managers need to be sensitive and

responsive to the needs and concerns of
workers who might not be as well off as
others.

©McGraw-Hill Education.
 Workforce Diversity: Sexual Orientation
Sexual Orientation Issues
• Employment and workplace discrimination
• Provision of domestic-partner benefits: These
benefits generally include medical and dental
insurance, but may also include disability and life
insurance, pension benefits, family and
bereavement leave, education and tuition
assistance, relocation and travel expenses, and
inclusion of partners in company events.

©McGraw-Hill Education.
 Topics for Discussion (4 of 5)
Why are gay and lesbian workers and workers who
test positive for HIV sometimes discriminated
against? [LO 3-3]

• Managers have more influence than rank-and-

file employees.
• When managers commit to diversity, their
authority and positions of power and status
influence other members of an organization to
make a similar commitment.

©McGraw-Hill Education.
 Effectively Managing Diversity Makes Good Business Sense

The diversity of organizational members can be

a source of competitive advantage.
The recruiting of diverse employees must be
followed up with ongoing effective
management of diversity to retain those
employees.
Many organizations insist that their suppliers
support diversity.
Effective management of diversity is necessary
to avoid costly lawsuits.
©McGraw-Hill Education.
 Sexual Harassment

©McGraw-Hill Education.
 Forms of Sexual Harassment (1 of 2)
Quid Pro Quo
Asking for or forcing an employee to perform sexual
favors in exchange for receiving some reward or
avoiding negative consequences

©McGraw-Hill Education.
 Forms of Sexual Harassment (2 of 2)

Hostile Work Environment

Telling lewd jokes, displaying pornography,
making sexually oriented remarks about
someone’s personal appearance, and other sex-
related actions that make the work
environment unpleasant

©McGraw-Hill Education.
©McGraw-Hill Education.
 Steps to Eradicate Sexual Harassment (1 of 2)
Develop and clearly communicate a sexual
harassment policy endorsed by top management.
Use a fair complaint procedure to investigate
charges of sexual harassment.
When it has been determined that sexual
harassment has taken place, take corrective
action as soon as possible.
Provide sexual harassment education and training
to all organizational members, including
managers.
©McGraw-Hill Education.
 BE THE MANAGER
Assume that you are a HRM, what will you do
when DM – your bestfriend - is belived to have a
sexual harassment action.
What are you going to do to address this issue
(consider on both ethic and diversity aspect) ?