Title: Management Conflict and Ethics
Netpanna Yavirach, Asst,prof.,
Department of management, Faculty of Business
Administration, Rajamangala Institute of Technology
In what sense can it be said that an organization can, as a whole, be ethical of
unethical? What characteristics (e.g. structures, policies, powers, responsibilities,
codes, cultures, procedures) would mark out an ethical organization?
Business ethics is an applied ethics. It is the application of our understanding of
what is good and right to do. A discussion of business ethics must begin by providing a
framework of basic principles for understanding what is meant by the terms “good” and
“right”. In popular usage the term “ethics” has a variety of different meanings. One of
the meanings often given to it is: the principles of conduct governing an individual or a
group. We use the term “personal ethics” to refer to the rules by which an individual
lives his or her personal life, and use the term “accounting ethics” to refer to the code
that guides the professional conduct of accountants (Velasquez (1988).,p.11). Ethics is
concerned with the moral judgments involved in moral decisions. Ethics does not study
all normative judgment, only those that are concerned with what is morally right and
wrong, or morally good and bad. When something is judged to be morally right or
wrong, or morally good or bad, the underlying standards on which the judgment is based
are moral standards. Moral standards include both specific moral norms and more
general moral principles. Moral norms are standards of behavior that require, prohibit,
or allow certain specific kinds of behavior. Prohibitions against lying, stealing, injuring,
and so on, are all moral norms. Moral principles are much more general standards that
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are used to evaluate the adequacy of our social policies and institutions as well as of
i n d i v i d u a l
b e h a v i o r .
For profit organization, business ethics is a specialized study of moral right and
wrong. It concentrates on how moral standards apply particularly to business policies,
institutions, and behavior. Business enterprises are the primary economic institutions
through which people in modern societies carry on the tasks of producing and
distributing goods and services. They provide the fundamental structures within which
the members of society combine there scarce resources, land, labor, capital and
technology. They provide the channels through which these goods are distributed in the
form of consumer products, employee salaries, investors’ return, and government taxes.
Mining, manufacturing, retailing, banking, marketing, transporting, insuring,
constructing, and advertising are all different facets of the productive and distributive
p r o c e s s e s o f m o d e r n b u s i n e s s .
When organization operation is harmful to the society in general such as an act
that puts 1,000 people out of work is more harmful than one affecting only 10 people. It
is a great harm to victims of the ethical act. More American agree that it is wrong to
bribe a customs official in Texas than agree it is wrong to bribe a customs official in
Mexico. Sometimes it is probability of harm that the act will actually take place and
will actually cause the harm predicted. For example, selling a gun to a known armed
robber has greater probability of harm than selling a gun to a law-abiding citizen. To
reduce the retirement benefits of current retirees has greater immediate consequences
than reducing the retirement benefits of current employees who are between the ages of
40-50. Sometimes organization close to feel to the victims of the evil such as layoffs in
one’s own work unit hit closer to home than do layoffs in a remote city. The large
effect to the ethical act on the involved people such as unfaithfully commercial for
services and product that effect to customer waste for their benefits. These are the larger
harm for people that consensus to an evil act. Therefore, it is a solution of how
important an ethical issue is. It is an example of good managers to behave more
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ethically when a moral issue is important to them than when it is not. In addition, when
it doing something that break social moral in particular society. On the contrary, when
organization do something that support society and under morals it present ethical
m
a
t
t
e
r
.
structures, Policies, Powers, and Responsibilities
In determining organizational objective, different organizational may have
different objective. Each organizations is distinguished by its structures, policies, power
and responsibilities. However, the organizational grouping that always founds profit
organization, non-profit organization and global organization in current business
e
n
v
i
r
o
n
m
e
n
t
.
1. Non profit organizations represent a major source of management talent and
innovation. Many non profit organizations have been leader in creating a sense of
purpose and mission that motivates employees, encouraging workers to innovate and try
new ideas, using boards and committees drawn from community members, and trimming
long vertical hierarchies (Robbin, 1997). These are closely concerned with ethics
because non profit organization objectives are response to all of people. In contrast,
profit organizations going beyond maximize profit making. While non profit
organization are more social responsibility than profit organization. while, profit
organization managers should be responsibility beyond making profit to include
protecting and improving society’s welfare.
Social responsibility is a relatively new concern with all of organization. Most
businesses understand that their responsibility is making maximize profits to pursue
higher values. On the contrary, corporate social responsibility indicates that business
should have social obligations above and beyond making a profit. The corporate social
responsibility must have an obligation to constituent groups in society other than
stockholders and beyond that prescribed by law or union contract (Jones, 1980). A
central feature of this definition is that an action must be voluntary to qualify as a
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socially responsible action. Corporate behavior should not be judged by the decisions
actually reached, but by the process by which they were reached. Broadly
stated, corporations need to analyze the social consequences of their decisions before
they make them and take steps to minimize the social costs of these decision when
appropriate. The appropriate demand to be made of those who govern large corporations
is that they incorporate into their decision-making process means by which broader
social concerns are given full consideration. This is corporate social responsibility as a
means, not as a set of ends (Jones, 1988).
2. Profit organization provide effectiveness and efficiency operating for more
profit and organizational growth. Decision making is considered to be the most
important task to every manager. However, decision making do not depend on the
mental ability of each manager alone. The factors that effect to the best quality of
decision making may depend on internal and external environment. External
environment refers to competitors, social environment, political environment, economic
environment, technological environment. These factors are elements existing outside the
boundary of the organization that have the potential to affect the organization and
uncertainly.(Daft, 1992). An organizational structure should enable it to effectively
respond to external shifts. Flexible structure can respond to uncertain environment and
a tight structure is most effective in a certain environment (Burns and Stalker, 1961).
The organization also has an internal environment, which includes the elements within
the organization’s boundaries. The internal environment is composed of current
employees, management, and especially corporate culture. Organizational culture
represents the values and understandings that employees share these values are signified
by symbols, stories, heroes, slogans, and ceremonies. Adaptive corporate cultures
concerned about managers care deeply about customers, stockholders, and employees.
They also strongly value people and processes that can create useful change.
Furthermore, managers pay close attention to all the constituencies, especially customers,
and initiate change when needed to serve their legitimate interests.
Both profit organization and non profit organization faced theirs environment that
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closely relationship with business ethics. This is because social responsibility is a
response to flexibility of changing environment and that ethical consideration should
be an important criterion in managerial decision making.
This is because ethics deals with internal values that are a part of corporate culture
and shaped decisions concerning social responsibility with respect to the external
environment. An ethical issue is presented in a situation when the actions of a person or
organization may harm or benefit others (Jones, 1991). Ethical responsibility includes
behaviors that are not necessarily codified into law and may not serve the corporation’s
direct economic interests. In addition, ethical structures represent the various systems,
positions, and programs a company can undertake to implement ethical behavior.
The socioeconomic model point out that many groups in society besides
stockholders have a stake in corporate affairs. For example, creditors, current and
retired employees, customers, suppliers, competitors, all levels of government. The
community, and society in general, these groups have different expectations which occur
often conflicting. Some companies go so far as to conduct a stakeholder audit (Robert
and king, 1989). This growing practice involves systematically identifying all parties
that could possibly be impacted by the company’s performance. According to the
socioeconomic view, business has an obligation to respond to the needs of all
stakeholders while pursuing a profit (Seligman, 1995). All the purpose may be different
and make conflict to the management and make them do unethical matter. The debate
about the role of business has spawned many specific arguments on each side reveals
the principal issues. Business should be more than simply a profit machine, proponents
of social responsibility have offered these arguments:
1. Business is unavoidably involved in social issues. Business is either part of the
solution or part of the problem. There is no doubt that private business shares
responsibility for such societal problems as unemployment, inflation, and
p
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l
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t
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o
n
.
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2. Business has the resources to tackle today’s complex societal problems. With
technical, financial, and managerial resources, the private business sector can play
a decisive role in solving society’s more troublesome problems. Without
society’s support, business could not have built its resource base in the first place.
3. A better society means a better environment for doing business. Business can
enhance its long-run profitability by making an investment in society today.
4. Corporate social action will prevent government intervention. As evidenced by
waves of antitrust, equal employment opportunity, and pollution -control
legislation, government will force business to do what it fails to do voluntarily.
The following arguments have been voiced by those who think business is
a l r e a d y t o o b i g a n d p o w e r f u l .
1. Profit maximization ensures the efficient use of society’s resources. By buying
goods and services, consumers collectively dictate where assets should be
deployed. Social expenditures amount to theft of stockholders’ equity.
2. As an economic institution, business lacks the ability to pursue social goals.
Gross inefficiencies can be expected if managers are forced to divert their
attention from their pursuit of economic goals.
3. B u s i n e s s a l r e a d y h a s e n o u g h p o w e r .
4. Because managers are not elected, they are not directly accountable to the people.
These arguments are based on the assumption that business should stick to
what it does best. Social goals should be handled by other institutions such as the
family, school, religious organizations, or government.
Business is bound by an iron law of responsibility, which states that in long
run, those who do not use power in a way that society considers responsible will tend
to lost it (Davis and Frederick, 1990). This is an important idea to support that
cynicism about business runs deep today, despite a more probusiness political climate
w
o
r
l
d
w
i
d
e
.
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The general ethical principles as following are the guideline for organization
c h a r a c t e r i s t i c . ( K r e i t n e r , 1 9 9 8 )
1. self-interest. “never take any action that is not in the long-term self-interests
of yourself and/or of the organization to which you belong.”
2. Personal virtues. Never take any action that is not honest, open, and truthful
and that you would not be proud to see reported widely in national
n e w s p a p e r a n d o n t e l e v i s i o n . ”
3. Religious injunctions. Never take any action that is not kind and that does
not build a sense of community, a sense of all of us working together for a
c o m m o n l y a c c e p t e d g o a l . ”
4. Government requirements “Never take any action that violates the law, for
the law represents the minimal moral standards of our society.”
5. Utilitarian benefits. “Never take any action that does not result in greater
good than harm for the society of which you are a part.”
6. Universal rules. “Never take any action that you would not be willing to see
others, faced with the same or closely similar situation, also be free to
t
a
k
e
.
”
7. Individual rights “Never take any action that abridges the agreed-upon and
a c c e p t e d r i g h t s o f o t h e r s . ”
8. Economic efficiency. “Always act to maximize profits subject to legal and
market constraints, for maximum profits are the sign of the most efficient
p
r
o
d
u
c
t
i
o
n
.
”
9. Distributive justice. “Never take any action in which the least among us are
h a r m e d
i n
s o m e
w a y . ”
10. Contributive liberty. “Never take any action that will interfere with the right
of all of us for self -development and self -fulfillment.”
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These ethical principles serving as a guide for making important
d e c i s i o n s
i n
b u s i n e s s .
All of organization must be set theirs career ethics. A code of ethics is a
formal statement of the company values concerning ethics and social issues. It
makes employees understand what the company stands for. Codes of ethics
tend to exist into two types; principle based statements and policy-based
statements. Principle-based statements are designed to affect corporate culture,
define fundamental values, and contain general language about company
responsibilities, quality of products, and treatment of employees. General
statement of principle are often called corporate credos. For example,
corporate credos of Johnson & Johnson’s present as following.
We believe out first responsibility is to the doctors, nurses and patients, to
mothers and fathers and all others who use our products and services. In
meeting their needs everything we do must be of high quality. We must
constantly strive to reduce our costs in order to maintain reasonable prices.
Customers’ orders must be serviced promptly and accurately. Our suppliers
and distributors must have an opportunity to make a fair profit. We are
responsible to our employees, the men and women who work with us
throughout the world. Everyone must be considered as an individual. We must
respect their dignity and recognize their merit. They must have a sense of
security in their jobs. Compensation must be fair and adequate, and working
conditions clean, orderly and safe. We must be mindful of ways to help our
employees fulfill their family responsibilities. Employees must feel free to
make suggestions and complaints. There must be equal opportunity for
employment, development and advancement for those qualified. We must
provide competent management, and their actions must be just and ethical. We
are responsible to the communities in which we live and work and to the world
community as well. We must be good citizens support good works and
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charities and bear our fair share of taxes. We must encourage civic
improvements and better health and education. We must maintain in good
order the property we are previlleged to use, protecting the environment and
natural resources. Our final responsibility is to our stockholders. Business
must make a sound profit. We must experiment with new ideas. Research
must be carried on, innovative programs developed and mistakes paid for. New
equipment must be purchased, new facilities provided and new products
launched. Reserves must be created to provide for adverse times. When we
operate according to these principles, The stockholders should realize a fair
r
e
t
u
r
n
.
These are excellence corporate credos that cover all of dimension for
b u s i n e s s
e t h i c s .
How would conflict be prevented or resolved?
Many conflicts may be occurred when manager perceived incompatible
differences resulting in some form of interference or opposition. Whether the
differences are real or not is irrelevant. If people perceive that differences exist
then, a conflict state exists. Although most of us have the ability to response
conflict vary according to the situation, each of us has a preferred style for
handling conflicts (Kilmann and Thomas, 1997). Each conflict can be solved
when manager determine the real cause of each conflict that deal with person,
interest, values, personality, feelings and other factors. There are three kinds
of different conflict cause. These three kinds of conflict are communication
differences, structural differences and personal differences. The resolution
techniques that managers provide to reduce conflict are considered into five
methods. Conflict resolution options are avoidance, accommodation, forcing,
compromise, and collaboration (Thomas, 1976). Sometimes avoidance is the
best solution. Avoidance is the most appropriate when the conflict is trivial,
when emotions are running high and time is needed for the conflicting parties
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to cool down. In addition, avoidance is also appropriate when the potential
disruption from a more assertive action outweighs the benefits of resolution.
The goal of accommodation is to maintain harmony relationships by placing
another’s needs. This option is most viable when the issue under dispute isn’t
that important or when want managers to build up credits for later issues.
Forcing is the suitable when managers want to satisfy their needs by using
formal authority to resolve conflict issue. Forcing works well when manager
need a quick resolution on important issues, when unpopular actions must be
taken, and when commitment by others is not crucial.
Compromise requires each party to give up something of value or
interest. Negotiation is a smooth way for conflict resolution. Compromise can
be an optimum strategy when conflicting parties are about equal in power.
Furthermore, it appropriate when desire to achieve a temporary solution to a
complex issue, and when time pressures demand solution. Finally,
Collaboration is the ultimate win-win solution. All member of the group
concerning conflict seek to satisfy their interests. All parties are open their
mind and discuss to the group with honesty. Understanding and listening
together can make group find the conclusion fit all their need. be find a
solution that advantage to all parties. The situation that practical for using
collaboration methods are limitation of time and, when the issue is too
important to be compromised and all parties seriously want a win-win solution.
Furthermore, the way to prevent or resolve conflict are negotiation skills
and distributive bargaining. Negotiation is a tool for managers to process
bargaining in which two or more people have different preferences. To make
decision which lead to agreement, managers should have negotiation skills.
The negotiation process called distributive bargaining make zero sum
conditions. When one party wins, the other party loses. Sometime this method
make more conflict situation. In contrast, integrative bargaining is a strategy of
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solving problem under the assumption that there is at least one settlement can
create a win-win situation. In general, integrative bargaining is preferable to
distributive bargaining, since it builds long-term relationships and facilitates
working together toward a solution. While distributive bargaining leaves one
party a loser. The condition to success to integrative negotiation method
should be openness with information and frankness between parties, a
sensitivity by each party to the other’s needs, the ability to trust one another,
and a willingness by both parties to maintain flexibility(Thomas, 1992).
Would such a company go beyond the legal minimum to show charity
t o l o c a l c o m m u n i t i e s ?
Company should be follow legal minimum to show charity to local
communication such as social responsibility, support social policies and
legitimate government policies, accustomed to legal, and political environment
systems.
Many companies face a myriad of different laws and regulations in their
countries. They operate in deciding how to deal with the laws and regulations
that present managers with some sticky ethical problems. For instance,
warning and suggestion using label for medicine products, pollution control
standard, decreasing carbonmonoxide effect for motors products, and labormanagement relations obligation. Managers should be making decision by
as s es s i n g wh at i s a g o o d fo r s o ci et y i n t h e l o n g t erm.
The way of corporate actions that provide many codes of ethics are
concern with employee, product safety, product quality, environmental affairs
or civic and community affairs. Many problem obstacle are defined as
relations with government, political, customer, supplier relations and conflicts
of interest. The concept of law is a norm that prescribes what is assumed to be
a proper mode of behavior. It attempts to regulate the behavior of the subjects
according to certain standards established by the society or by official person
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who have responsibility for law and regulation control.
Furthermore, law not only prescribes a certain pattern of behavior but also
requires that the prescribed mode be followed. Managers are bound to obay
the law because it is the official desire of the society. In addition, law includes
a process approved by society for applying coercive sanctions against person
who do not obey and illegal act (Pratak, 1997). There are several factors
determine the effectiveness of a legal system. First, the people in the society
must clearly understand and have knowledge of what the society prescribes as
legal behavior. Without this knowledge one could not expect the law to be
obeyed. Second, the members of any society must agreed that the laws
deserve to be obeyed. Finally, an effective system for punishing illegal
behavior must be place. The government which is duly elected by the people
provides the machinery for an effective legal system. The legislative branch of
the government makes the laws, and the judicial and executive branches
together perform the task of identifying illegal behavior and for applying
sanctions on the lawbreaker. In addition, the function of law is to
communicates individuals in a society their rights and duties of daily activities
with other people in society. To provide a basis for settlement and prevent
conflicts among person, laws helps controlling and preventing undesirable
behavior. Governments use law to create the social and economic welfare of
society such as child labor, social security, workmen’s compensation, minimum
wage, health care, food and drugs etc.
Ho w would accountability/responsibility be asse ssed for
n
e
g
l
i
g
e
n
c
e
?
When organization ignore social responsibility, It may be affect to
positive reputation and organizational image. This may have the greatest
significance for managerial decision making.
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The evidence support the ignorant of manager to business ethic are bribery
and corruption. Bribery is defined as the payment voluntarily offered for the
purpose of inducing a public official to do or to omit to do something in
violation of his or her lawful duty, or to exercise official discretion in favor of
the payor’s request for a contract, concession, or privilege on some basis other
than merit (Pratak, 1998, p412). The phenomenon of bribery exists in
organization that avoid legal system and regulations. Government should set
up intensive punishment to illegal activities. Then, the neglect of
responsibility for business ethic are impact to social benefit and moral. Some
socially responsive companies found that they can manage for the common
good and for profit. Doing good is no longer viewed as incompatible with
earning a profit. These companies have pioneered a way of doing good by
doing well through the use of ethics (Martin, 1994 p.15 -16)
C
o
n
c
l
u
s
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o
n
Ethic is a conception of right and wrong conduct. Ethics tell us when our
behavior is moral and when it is immoral. Ethics deals with fundament human
relationship how we think and behave toward others and how we want them to
think and behave toward others and how we want them to think and behave
toward us. Ethical principles are guides to moral behavior. Many companies
are concerned about issues and many are trying to develop approaches for
improving their ethics. Business have adopted a written code of ethics, which
defines the values and principles that should be used to guide decisions. For
example, in most society lying, stealing, deceiving and harming others are
considered to be unethical and immoral. Honesty keeping promises, helping
others, and respecting the right of others are considered to be ethically and
morally desirable behavior. Such basic rules of behavior are essential for the
preservation and continuation of organized life everywhere.
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