Chapter 4

Ethics in organisations
 Business without ethics
• Shareholder value dominance: This leads to business
people being primarily concerned with making a profit,
at the expense of ethical considerations.
• Motives of ethical neutrality: Facts, profits and losses,
and products and services, are simply easier to
measure and evaluate.
• Amoral managers: They have a lack balance in their
pursuit of organisational goals, which undermines
organisational wholeness or integrity. They are often
unaware of the ethical implications of decisions.
• Amoral beliefs and business language: War-like
words used in business circles provide leaders with
focus and goal-oriented direction, but may also
lead to myopia and short-termism, catalysing an
exclusion of other legitimate stakeholder interests
(besides those of shareholders).
• Impact on stakeholders: The interests of
employees, customers, suppliers and other
stakeholders can easily be neglected unless those
interests coincide with shareholder value.
 Ethical dimension of
an organisation
• The relational nature of business:
– Business, and life in organisations, can never be
solely based on cold, legalistic rules or policy
requirements. This is because organisations consist
people.
– As human beings, we operate as part of human
systems which contain ethical standards that are
required to create harmony, mitigate conflict, ensur
fairness and evoke trust. Ethical standards give form
and direction to human activity.
• The cooperative nature of work: Ethics is the
foundation of teamwork. Organisations have
divisions, departments, sections and teams which
are designed to function in specific ways. Groups
such as these cannot function without norms.
• Trust: Building relationships that rest on strong
ethical foundations creates sustained trust. If one
party makes a mistake, understanding will be more
likely in this context.
• Commitment and quality of work:
– People who feel that they are respected, who recei
recognition for good work, and who sense that thei
creative contributions are appreciated, tend to wor
with greater dedication and are much more likely to
utilise their potential for the benefit of the business
– Ethical organisations are characterised by the respe
they show to all their stakeholders.