2015/5/30
Managing
Ethics and
Diversity
Chapter Three
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Learning Objectives
LO3-1 Illustrate how ethics help managers
determine the right way to behave when
dealing with different stakeholder groups
LO3-2 Explain why managers should behave
ethically and strive to create ethical
organizational cultures
LO3-3 Appreciate the increasing diversity of the
workforce and of the organizational
environment
3-2
1
2015/5/30
Learning Objectives (cont.)
LO3-4 Grasp the central role that managers play
in the effective management of diversity
LO3-5 Understand why the effective
management of diversity is both an
ethical and a business imperative
LO3-6 Understand the two major forms of sexual
harassment and how they can be
eliminated
3-3
The Nature of Ethics
Ethical Dilemma
 Quandary people find themselves in when they
have to decide if they should act in a way that
might help another person even though doing so
might go against their own self-interest
3-4
2
2015/5/30
The Nature of Ethics
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
3-5
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
3-6
3
2015/5/30
Types of Company Stakeholders
Figure 3.1
3-7
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
Want to maximize their return on investment
3-8
4
2015/5/30
Managers
Responsible for using a company’s financial
capital and human resources to increase its
performance
Have the right to expect a good return or
reward by investing their human capital to
improve a company’s performance
Frequently juggle multiple interests
3-9
Discussion Question: Managers
Is it ethical for managers to receive vast
amounts of money from their companies?
A. Yes
B. No
C. Sometimes
D. Never
3-10
5
2015/5/30
 This question can be used to discuss basic
compensation, severance packages, “golden
parachutes”, and retirement benefits.
 Students may discuss what level of
compensation is okay (or ethical). Retirement
benefits received at GE by Jack Welch are
appropriate to discuss. Did his success give him
the right to more benefits than a retiring VP? Ask
students if they were the recipient, would they
turn down money/benefits if offered because of
their ethical position.
3-11
Employees
Companies can act ethically toward
employees by creating an occupational
structure that fairly and equitably rewards
employees for their contributions
3-12
6
2015/5/30
Suppliers and Distributors
Suppliers expect to
be paid fairly and
promptly for their
inputs
Distributors expect
to receive quality
products at agreedupon prices
3-13
Customers
Most critical
stakeholder
Company must
work to increase
efficiency and
effectiveness in
order to create
loyal customers and
attract new ones
3-14
7
2015/5/30
Community, Society, and Nation
Community
 Refers to physical locations like towns or cities or
to social milieus like ethnic neighborhoods in
which companies are located
Provides a company with the physical and
social infrastructure that allows it to operate
3-15
Four Ethical Rules
Figure 3.2
3-16
8
2015/5/30
Practical Decision Model
1.
2.
3.
Does my decision fall within the acceptable
standards that apply in business today?
Am I willing to see the decision
communicated to all people and groups
affected by it?
Would the people with whom I have a
significant personal relationship approve of
the decision?
3-17
Why should managers behave ethically?
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
3-18
9
2015/5/30
Figure 3.3
Some Effects of
Ethical/Unethical
Behavior
3-19
Question?
What is confidence and faith in another person’s
goodwill?
A. Reputation
B. Trust
C. Empathy
D. Hope
3-20
10
2015/5/30
Why should managers
behave ethically?
Trust
Reputation
 Willingness of one
person or group to
have faith or
confidence in another
person’s goodwill,
even though this puts
them at risk
 Esteem or high
repute that
individuals or
organizations gain
when they behave
ethically
3-21
Determinants of Ethics
Figure 3.4
3-22
11
2015/5/30
Ethical Organizational Cultures
Managers can ensure that important ethical
values and norms are key features of an
organization’s culture
Managers become ethical role models whose
behavior is scrutinized by their subordinates
3-23
Ethical Organizational Cultures
Ethics Ombudsman
 An ethics officer who monitors an organization’s
practices and procedures to be sure they are
ethical
3-24
12
2015/5/30
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, physical
appearance, capabilities, disabilities, and any
other characteristic used to distinguish people.
3-25
Diversity Concerns
The ethical imperative for equal opportunity
Effectively managing diversity can improve
organizational effectiveness
Evidence that diverse individuals continue to
experience unfair treatment in the workplace
as a result of biases, stereotypes, and overt
discrimination.
3-26
13
2015/5/30
Question?
What is the metaphorical barrier that prevents
minorities and women from being promoted to top
corporate positions?
A. Gender Barrier
B. Gender Prejudice
C. Glass Ceiling
D. Glass Top
3-27
Diversity Concerns
Glass ceiling
 A metaphor alluding to the invisible barriers that
prevent minorities and women from being
promoted to top corporate positions
3-28
14
2015/5/30
Sources of Diversity in the Workplace
Figure 3.5
3-29
Workforce Diversity: Age
Aging U.S. Population
 Median age is 36.9
 By 2030, 20 percent of the population will be over
65
Federal Age Discrimination Laws
 1964 Title VII of the Civil Rights Act of 1964
 1967 Age Discrimination in Employment Act
3-30
15
2015/5/30
Workforce Diversity: Gender
Women in the Work Place
 U.S. workforce is 46.7 % percent female
 Women’s weekly median earnings are $688
compared to $843 for men.
 Women hold only 14.1% of corporate officer
positions
3-31
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
3-32
16
2015/5/30
Workforce Diversity:
Capabilities and Disabilities
Disability Issues
 Providing reasonable accommodations for
individuals with disabilities
 Promoting a nondiscriminatory workplace
environment
 Educating the organization about disabilities
3-33
Workforce Diversity: Socioeconomic
Background
Managers need to be sensitive and
responsive to the needs and concerns of
workers who may be less fortunate than
themselves in terms of income and financial
resources, child care and elder care options,
housing opportunities, and existence of
sources of social and family support
3-34
17
2015/5/30
Workforce Diversity: Sexual
Orientation
Sexual Orientation Issues
 Employment and workplace discrimination
 Provision of domestic-partner benefits
3-35
Critical Managerial Roles
Managers have more influence than rankand-file employees
When managers commit to diversity, it
legitimizes diversity efforts of others
3-36
18
2015/5/30
Forms of Sexual Harassment
Quid pro quo
 Asking for or forcing an employee to perform
sexual favors in exchange for receiving some
reward or avoiding negative consequences.
3-37
Forms of Sexual Harassment
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.
3-38
19
2015/5/30
Steps to Eradicate Sexual Harassment
Develop and clearly communicate a sexual
harassment policy endorsed by top
management
Use a fair complaint to investigate charges
of sexual harassment
3-39
Steps to Eradicate 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
3-40
20
2015/5/30
Video: Hewlett Packard
Why should an investor be concerned with a
potential $40 million severance package for
an exiting CEO?
Should severance clauses in an executive
contact be considered unethical?
3-41
21