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Ethical and Unethical

Workplace Behavior

Ethics

The set of moral principles or values


that defines right and wrong for a
person or group.

Chapter 4
Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 1
Ethics and the
Nature of Management Jobs

Unethical
Unethical Managerial
Managerial Behavior
Behavior

Authority
Authority and
and Power
Power

Handling
Handling Information
Information

Influencing
Influencing the
the Behavior
Behavior of
of Others
Others

Setting
Setting Goals
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
Production Property
Property
Deviance
Deviance Deviance
Deviance

Minor Serious

Political
Political Personal
Personal
Deviance
Deviance Aggression
Aggression

Interpersonal
2
Adapted from Exhibit 4.1
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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 didn’t know about
the unethical behavior.

3
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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 Money laundering


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

3.1
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Compliance Program Steps

Steps
Steps in
in determining
determining fine
fine size
size
1.
1. determine
determine the
the base
base fine
fine
2.
2. compute
compute aa culpability
culpability score
score
3.
3. multiply
multiply the
the base
base fine
fine by
by the
the
culpability
culpability score
score
Smaller fines for companies
that are proactive

3.2
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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.


3.2
Adapted from Exhibit 4.3
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Influences on Ethical Decision Making

Ethical
Ethical Intensity
Intensityof
ofDecision
Decision

Ethical
Answers Moral
Moral Development
Development of
of Manager
Manager
Depend
on…

Ethical
Ethical Principles
PrinciplesUsed
Used

4
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Ethical Intensity Depends on…

Magnitude
Magnitude of
of consequences
consequences

Social
Social consensus
consensus

Probability
Probability of
of effect
effect

Temporal
Temporal immediacy
immediacy

Proximity
Proximity of
of effect
effect

Concentration
Concentration of
of effect
effect
4.1
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Moral Development

Kohlberg’s Stages of Moral Development

Preconventional Conventional Postconventional

Societal Internalized
Selfish
Expectations Principles

4.2
Adapted from Exhibit 4.4
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Stages of Moral Development

Preconventional Conventional Postconventional

1. Punishment and 3. Good boy, 5. Social contract


Obedience nice girl

2. Instrumental 4. Law and order 6. Universal


Exchange principle

4.2
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Principles of
Ethical Decision Making
Long-term
Long-term self-interest
self-interest
Personal
Personal virtue
virtue
Religious
Religious injunctions
injunctions
Government
Government requirements
requirements
Utilitarian
Utilitarianbenefits
benefits
Individual
Individual rights
rights
Distributive
Distributivejustice
justice
4.3
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Principles of
Ethical Decision Making

Principle of long-term self-interest

Never take any action not in your


organization’s long-term self-interest.

4.3
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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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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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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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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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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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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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Practical Steps to
Ethical Decision Making

Select
Select and
and hire
hire ethical
ethical employees
employees

Establish
Establish aa Code
Code of
of Ethics
Ethics

Train
Train employees
employees to
to make
make ethical
ethical decisions
decisions

Create
Create an
an ethical
ethical climate
climate

5
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Practical Steps to
Ethical Decision Making

Select
Select and
and hire
hire ethical
ethical employees
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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Doing the Right Thing

IfIf You
You Cheat
Cheat in
in College,
College,
Will
Will You
You Cheat
Cheat inin the
the Workplace?
Workplace?
 College
Collegestudents
studentswho
who cheat
cheatare
arelikely
likely to
tocheat
cheat again.
again.

 70
70percent
percent of
ofstudents
studentsdon’t
don’t see
seecheating
cheatingas
asaaproblem.
problem.

 People
Peoplewho
whocheat
cheat and
and cheat
cheat again
again see
seetheir
their
behavior
behavior as
asnormal.
normal.

 60
60percent
percent of
ofpeople
peoplewho
whocheat
cheat their
their employers
employers
don’t
don’tfeel
feelguilty
guiltyfor
fordoing
doing so.
so.

Chapter 4
Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 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.

Chapter 4
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Ethics Question

 What is?

 What are your personal ethics?

 What are your organization’s ethics?

 What are the ethics of your industry?

 What are society’s ethics?

 What are global ethics?


Chapter 4
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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?

Chapter 4
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Ethics Question

 How do we get from What is to What ought


to be?

 What is our Motivation?

Chapter 4
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Practical Steps to
Ethical Decision Making

Establish
Establish aa Code
Code of
of Ethics
Ethics

 Communicate code of ethics to both inside


and outside the company

 Develop ethical standards and procedures


specific to business

Web Link http://www.nortelnetworks.com


5.2
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Ethics Training

Ethics
Ethics Training
Training

 Develops employee awareness of ethics

 Achieves credibility with employees

 Teaches a practical model of ethical


decision making

http://ethics.bellsouth.com
Web Link
5.3 “Ethics Scenarios Game”

Chapter 4
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A Basic Model of
Ethical Decision Making

1.
1. Identify
Identify the
the problem
problem

2.
2. Identify
Identify the
the constituents
constituents

3.
3. Diagnose
Diagnose the
the situation
situation

4.
4. Analyze
Analyze your
your options
options

5.
5. Make
Make your
your choice
choice

6.
6. Act
Act

5.3
Adapted from Exhibit 4.6
Chapter 4
Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 36
Ethical Climate

Establishing
Establishing an
an Ethical
Ethical Climate
Climate

Managers:

1. Act ethically
2. Are active in company ethics programs
3. Report potential ethics violations
4. Punish those who violate the code of ethics

Web Link http://www.whistleblowers.org


5.4
Chapter 4
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What Is Social Responsibility?

Social Responsibility

A business’s obligation to…


 pursue policies
 make decisions
 take actions that benefit society

Chapter 4
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To Whom Are Organizations
Socially Responsible?

Shareholder
Shareholder Maximize
Maximize Profits
Profits
Model
Model

Stakeholder
Stakeholder Satisfy
Satisfy Interests
Interests
Model
Model of
of Multiple
Multiple Stakeholders
Stakeholders

6
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Shareholder Model
Pros
Pros Cons
Cons

 Firm maximizes  Organizations cannot act


shareholder wealth and effectively as moral agents
satisfaction for shareholders

 The company stock  Time, money, and attention


increases in value diverted to social causes
undermine market efficiency

6
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Stakeholder Model

Primary Secondary
Stakeholders: Stakeholders:

Shareholders Media
Employees Special Interest Groups
Customers Trade Associations
Suppliers
Governments
Local Communities

6
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Organization’s Social Responsibilities

Serve a social role Discretionary

Abide by principles
of right and wrong Ethical ?

Obey laws and


regulations Legal

Be profitable Economic
$
7
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Responses to Demands
for Social Responsibility

Accommo-
Accommo-
Reactive
Reactive Defensive
Defensive Proactive
Proactive
dative
dative
Fight all Do only what Be Lead the
the way is required progressive industry

Public
Legal Problem
Withdrawal Relations Bargaining
Approach Solving
Approach

DO DO
NOTHING MUCH

8
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Social Responsibility and
Economic Performance

Can
Can cost
cost aa company
company

Realities of
Social Sometimes
Sometimes itit does
does pay
pay
Responsibility

Does
Does not
not guarantee
guarantee
profitability
profitability

9
Chapter 4
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