Personal and Organizational Ethics
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7-11
Chapter Seven Objectives
• To understand the different levels at which
business ethics may be addressed
• To appreciate principles of personal ethical
decision-making
• To identify factors affecting an organization’s
moral climate
• Describe actions or strategies to improve ethical
climate
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Chapter Seven Outline
• Levels at which Ethical Issues May
Be Addressed
• Personal and Managerial Ethics
• Managing Organizational Ethics
• From Moral Decisions to Moral
Organizations
• Summary
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Introduction to Chapter Seven
• This chapter focuses on the day-to-day ethical
issues that managers face
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Levels at Which Ethical Issues
May Be Addressed
• Personal level—situations faced in personal
life (income tax, doing kid’s homework, etc.)
• Organizational level—workplace situations
faced as managers and employees (cutting
corners, etc.)
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Levels at Which Ethical Issues
May Be Addressed
• Industrial level—situations confronted as
professionals (the practices of stockbrokers,
accountants, etc.)
• Societal and international levels—local-toglobal situations confronted indirectly as a
management team
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Personal and Managerial Ethics
Resolving Ethical Conflicts
Three Approaches
• Conventional (covered in Chapter 6)
• Principles
• Ethical tests
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Personal and Managerial Ethics
Principles Approach
Anchors decision making
on an ethical principle such as:
• Utilitarianism
• Rights
• Justice
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Caring
Virtue ethics
Servant leadership
Golden Rule
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Personal and Managerial Ethics
Principle of Utilitarianism focuses on an
act that produces the greatest ratio of good
to evil for everyone
– Consequentialist theory
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Personal and Managerial Ethics
Principle of Rights focuses on examining
and possibly protecting individual moral or
legal rights
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Personal and Managerial Ethics
7-11
Personal and Managerial Ethics
• Principle of justice involves considering
what alternative promotes fair treatment of
people
• Types of justice
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–
–
–
Distributive
Compensatory
Procedural
Rawlsian
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Personal and Managerial Ethics
Rawls’ Justice
• Each person has an equal right to the most
basic liberties comparable with similar liberties
for others
• Social and economic inequalities are arranged
so that they are both:
a) reasonably expected to be to everyone’s advantage
and
b) attached to positions and offices open to all people
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Personal and Managerial Ethics
• Principle of caring focuses on a person as a
relational (cooperative) and not as an
individual
– Feminist theory
• Virtue ethics focuses on individuals
becoming imbued with virtues
– Aristotle and Plato
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Personal and Managerial Ethics
Servant leadership focuses on serving
others first such as employees, customers,
community and so on
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Personal and Managerial Ethics
Characteristics of Servant Leaders
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•
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Listening
Empathy
Healing
Persuasion
Awareness
• Foresight
• Conceptualization
• Commitment to the
growth of people
• Stewardship
• Building community
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Personal and Managerial Ethics
Golden rule focuses on the premise that you
should of unto others as you would have
them do unto you
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Personal and Managerial Ethics
Concerns to be Addressed in
Ethical Conflicts
• Obligations
• Ideals
• Effects
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Personal and Managerial Ethics
When Our Obligations, Ideals and
Effects Conflicts
• When two or more moral obligations conflict, use
the stronger one
• When two or more ideals conflict, or when ideals
conflict with obligations, honor the more important
one
• When effects are mixed, choose the action that
produces the greatest good and the least harm
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Personal and Managerial Ethics
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•
•
•
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Ethics Test Approach
Test of common sense
Test of one’s best self
Test of making something public
Test of ventilation
Gag test
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Managing Organizational Ethics
Factors Affecting the Morality of Managers
Society’s Moral Climate
Business’s Moral Climate
Industry’s Moral Climate
Superiors
Policies
Individual
(One’s
personal
situation)
Peers
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Managing Organizational Ethics
Factors Influencing Unethical Behavior
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Behavior of superiors
Ethical practices of one’s industry or profession
Behavior of one’s peers in the organization
Formal organizational policy (or lack of one)
Personal financial need
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Managing Organizational Ethics
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Managing Organizational Ethics
Questionable Behaviors of Superiors or Peers
• Amoral decision making
• Unethical acts, behaviors or practices
• Acceptance or legality as the standard
behavior
• Absence of ethical leadership
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Managing Organizational Ethics
Questionable Behaviors of Superiors or Peers
• Objects and evaluation systems
overemphasizing profits
• Insensitivity toward how subordinates
perceive pressure to meet goals
• Inadequate formal ethics policies
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Improving Ethical Climate
Ethics Programs
& Officers
Realistic
Objectives
Effective
Communication
Top
Management
Leadership
Ethics Audit
Ethics Training
Ethical Decisionmaking Processes
Codes of
Conduct
Discipline of
Violators
Whistle-blowing
Mechanisms
(“Hotlines”)
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Ethical Decision-Making
Identify decision you
are about to make
Articulate all dimensions
of proposed decision
Conventional Approach
Standards/Norms
-Personal
-Organizational
-Societal
-International
Principles Approach
Ethical Principles
-Justice
-Rights
-Utilitarianism
-Golden Rule
Course of action passes
ethics screen
Engage in course of
action
Ethical Tests Approach
Ethical Tests
-Common sense
-One’s best self
-Public disclosure
-Gag test . . .
Course of action fails
ethics screen
Do not engage in course
of action
Identify new course of
action
7-27
Ethics Audits and Self-Assessment
7-28
From Moral Decisions to Moral
Organizations
Moral Decision(s)
Moral Manager(s)
Moral Organization
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Selected Key Terms
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Codes of conduct
Codes of ethics
Compensatory justice
Distributive justice
Ethical tests
Ethical audits
Golden rule
Legal rights
Moral rights
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Principle of caring
Principle of justice
Principle of rights
Principle of utilitarianism
Procedural justice
Rights
Servant leadership
Utilitarianism
Virtue ethics
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