Module 3Module 3Ethics and Ethics and Social ResponsibilitySocial Responsibility

Module 3

• How do ethics and ethical behavior play out in the workplace?

• How can we maintain high standards of ethical conduct?

• What should we know about the social responsibilities of organizations?

3.1

Ethics in the workplace

• Ethical behavior is values driven.• What is considered ethical varies among

moral reasoning approaches.• What is considered ethical can vary

across cultures.• Ethical dilemmas arise as tests of personal

ethics and values.• People have tendencies to rationalize

unethical behaviors.

ETHICS IN THE WORKPLACE

Ethical Behavior• Ethics

– A code of moral standards of conduct for what is “good” and “right” as opposed to what is “bad” or “wrong”.

• Ethical Behavior– That which is “right” or “good” in the context of

governing moral code.– Ethical behavior is value driven

ETHICS IN THE WORKPLACE

Values• Values

– Broad beliefs about what is appropriate behavior

• Terminal Values– Preferences about desired end states

• Instrumental Values – Preferences regarding the means to desired

ends

• Moral Reasoning – Reasons for various ethical practices

ETHICS IN THE WORKPLACE

Moral Reasoning

ETHICS IN THE WORKPLACE

Ethics and Culture• Cultural Relativism

– Suggest that there is no one right way to behave; cultural context determines ethical behavior

ETHICS IN THE WORKPLACE

Ethics and CultureExcerpt From Universal Declaration of Human Rights

United Nations• Article 1—All human beings are born free and equal in

dignity and right • Article 18—Everyone has the right to freedom of thought,

conscience, and religion • Article 19—Everyone has the right to freedom of opinion

and expression • Article 23—Everyone has the right to work, to free choice

of employment, to just and favorable conditions of work • Article 26—Everyone has the right to education

ETHICS IN THE WORKPLACE

Ethical Dilemma

• Ethical Dilemma– A situation that, although offering potential

benefits, is unethical.– One of the most common ethical dilemmas

occurs when a company’s culture conflicts with an employee’s personal ethics.

ETHICS IN THE WORKPLACE

Ethical Dilemma• Checklist for dealing with ethical dilemmas

Step 1Recognize the ethical dilemma.

Step 2Get the facts.

Step 3 Identify your options.

Step 4Test each option: Is it legal? Is it right? Is it beneficial?

Step 5Decide which option to follow.

Step 6Ask the “Spotlight Questions”: To double check your decision. “How would I feel if my family found out about my decision?” “How would I feel if the local newspaper printed my decision?”

Step 7Take action

ETHICS IN THE WORKPLACE

Ethics and WorkThe Wall Street Journal reports:

• 36% of workers calling in sick are lying. • 35% keep quiet about co-worker misconduct. • 12% of job resumes contain falsehoods. • Managers are more likely than other workers

to report wrongdoing. • Managers with 0–3 years experience feel most

pressure to violate personal ethics.

ETHICS IN THE WORKPLACE

Rationalizing Unethical Behavior

Four reasons:

3.2

Maintaining high standards• Personal factors moral development

influence ethical conduct.• Training in ethical decision making may

improve ethical conduct.• Protection of whistleblowers may

encourage ethical conduct. • Managers acting as positive role models

can inspire ethical conduct.• Formal codes of ethics set standards for

ethical conduct

MAINTAINING HIGH STANDARDS

Influence on Moral Development

• Ethical Frameworks– Personal rules and strategies for making

ethical decisions• Lawrence Kohlberg

– Three levels of moral development

MAINTAINING HIGH STANDARDS

Ethics Training• Ethics Training

– Seeks to help people understand the ethical aspects of decision making and to incorporate high ethical standards into their daily behavior.

• Code of Ethics– A formal statement of values and ethical

standards.

MAINTAINING HIGH STANDARDS

Ethics Training• Highlight the risk of public exposure of

one’s actions:• “How would I feel if my family found out about my

decision?”• How would I feel if the local newspaper printed my

decision?

MAINTAINING HIGH STANDARDS

Whistleblowing• Whistleblowers

– Persons who expose organizational misdeeds in order to preserve ethical standards and protect against wasteful, harmful, or illegal acts.

– Many whistleblowers were / are fired for their actions.

– State and federal laws now offer some protection.

MAINTAINING HIGH STANDARDS

Management Influence• Management Behavior

– In order to have a positive impact on ethical conduct throughout an organization, those at the top must walk the talk.

MAINTAINING HIGH STANDARDS

Management Influence

MAINTAINING HIGH STANDARDS

Codes of Ethics• Formal codes of ethics set standards for

ethical conduct.– Explain ethical principles– Describe expected behavior

3.3

Social Responsibility• Social responsibility is an organization’s

obligation to best serve society.• Scholars argue cases for and against

corporate social responsibility.• Social business and social

entrepreneurship point the way in social responsibility

• Failures of ethics and social responsibility prompt calls for stronger governance.

SOCIAL RESPONSIBILITY

Social Responsibility is Serving Society

• Stakeholders are the groups that have a direct interest in the success or failure of an organization.

SOCIAL RESPONSIBILITY

Social Responsibility is Serving Society

• Corporate Social Responsibility– The obligation of an organization to serve its own

interest and those of its stakeholders• Triple Bottom Line—how well an organization

performs when measured not only on financial criteria, but also on social and environmental ones. – Is the decision economically sound? – Is the decision socially responsible? – Is the decision environmentally sound?

SOCIAL RESPONSIBILITY

Corporate Social Responsibility

SOCIAL RESPONSIBILITY

Social Responsibility is Serving Society

• Virtuous Circle– Socially responsible actions lead to improved

financial performance.– Organization is more likely to engage in

socially responsible acts in the future.• Example: car manufacturers who produce fuel-

efficient and hybrid cars may see improved financial performance and introduce more fuel efficient models.

SOCIAL RESPONSIBILITY

New Business Models

• Social Business– Business addresses a social problem

• Example: Micro-credit lending– Social Entrepreneurship

• Example: many non-profits fight poverty or illiteracy

SOCIAL RESPONSIBILITY

Governance

• Failures of ethics and social responsibility prompt calls for stronger governance.

• Weak corporate governance can result in more government regulation.

• Moral management builds capacities for self-governance in organizations.

Module 3 Case

• Tom’s of Maine– Where doing business means doing good.