Lecture 2
Managing Ethics and Diversity
S. Chan
Head, Department of Business Administration
http://home.chuhai.hk/~charmaine/
Charmaine@chuhai.edu.hk
3-1
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
3-2
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
3-3
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
3-4
Types of Company Stakeholders
3-5
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
3-6
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
3-7
Employees
Companies can act ethically toward
employees by creating an occupational
structure that fairly and equitably rewards
employees for their contributions
3-8
Suppliers and Distributors
Suppliers expect to
be paid fairly and
promptly for their
inputs
Distributors expect
to receive quality
products at agreedupon prices
3-9
Customers
Most critical
stakeholder
Company must
work to increase
efficiency and
effectiveness in
order to create
loyal customers and
attract new ones
3-10
Community, Society, and Nation
Community
 Refers to physical locations like towns or cities or
to social environment like ethnic neighborhoods
in which companies are located
Provides a company with the physical and
social infrastructure that allows it to operate
3-11
Four Ethical Rules
3-12
Practical Decision Model
1. Does my decision fall within the acceptable
2.
3.
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?
3-13
Some Effects of
Ethical/Unethical
Behavior
3-14
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
3-15
Why should managers
behave ethically?
Trust
 Willingness of one
person or group to
have faith or
confidence in another
person’s goodwill,
even though this puts
them at risk
Reputation
 Esteem or high
repute that
individuals or
organizations gain
when they behave
ethically
3-16
Determinants of Ethics
3-17
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
3-18
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.
3-19
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.
3-20
Diversity Concerns
Glass ceiling
 A metaphor alluding to the invisible barriers that
prevent minorities and women from being
promoted to top corporate positions
3-21
Sources of Diversity in the Workplace
3-22
Critical Managerial Roles
Managers have more influence than rankand-file employees
When managers commit to diversity, it
legitimizes diversity efforts of others
3-23
Critical Managerial Roles
Managerial Roles and the Effective Management of Diversity
Type of Role
Specific Role
Example
Interpersonal
Figurehead
Convey that the effective management of diversity is a valued goal and objective
Leader
Serve as a role model and institute policies and procedures to ensure that diverse
members are treated fairly
Liaison
Enable diverse individuals to coordinate their efforts and cooperate with one another
Monitor
Evaluate the extent to which diverse employees are being treated fairly
Disseminator
Inform employees about diversity policies and initiatives and the intolerance of
discrimination
Spokesperson
Support diversity initiatives in the wider community and speak to diverse groups to
interest them in career opportunities
Entrepreneur
Commit resources to develop new ways to effectively manage diversity and eliminate
biases and discrimination
Disturbance handler
Take quick action to correct inequalities and curtail discriminatory behaviour
Resource allocator
Allocate resources to support and encourage the effective management of diversity
Negotiator
Work with organizations (e.g. suppliers) and groups (e.g. labour unions) to support
and encourage the effective management of diversity
Informational
Decisional
3-24