Managerial Values and Business Ethics

Basic Concepts

What is Ethics?

Related Terms:• Morality: “The standards that an individual or a group

has about what is right and wrong or good and evil”.

• Moral Standards: “The norms about the kinds of actions believed to be morally right and wrong as well as the values placed on the kinds of objects believed to be morally good and morally bad.”

What is Ethics?

“The discipline that examines one’s moral standards or the moral standards of a society.”

What does it mean?

• What is right and what is wrong?

• Do we have right solutions?

• Do we have ‘the’ right solution?

• How to choose one right alternative?

The Process

• Awareness

• Understanding

• Sensitization

• Sustenance

Why Ethics?

• Accelerated rate of change

• Uncertainty

• ‘Here and Now’ approach

• Questionable business practices

Environmental Forces

• Economic

• Technological

• Political

• Governmental/Regulatory/Legal

• Demographic/Social

Why does it matter?

• To save billions of dollars each year

• To build relationships:– Customers– Business Associates– Employees

• To raise capital

Myths About BE

• Ethics is a personal affair; not a public or debatable matter.

• Business and Ethics do not mix.

• It is relative.

• Good business means good ethics.

Can BE be taught?

Teaching…• Provides rationale, logic and ideas;

• Helps people “make sense”;

• Provides intellectual support;

• Enables people to act as alarm systems;

• Enhances conscientiousness and sensitivity;

• Enhances moral reflection;

• Strengthens moral courage;

• Provides moral autonomy;

• Improves the moral/ethical climate of organization.

Types of Issues

BE cover 3 basic types of issues:

1. Systemic Issues

2. Corporate Issues

3. Individual Issues

Kohlberg’s Stages of Moral Development

Level 1: Pre-conventional LevelStage 1: Punishment and Obedience OrientationStage 2: Instrumental and Relative Orientation

Level 2: Conventional LevelStage 3: Interpersonal Concordance OrientationStage 4: Law and Order Orientation

Level 3: Post Conventional LevelStage 5: Social Contract OrientationStage 6: Universal Ethical Principles Orientation

Ethics in Business

Is Ethics or Ethical Behaviour a Cause or an Effect/a Derivative?

What is the relationship between Values and Ethics?

Ethics in Business

Values and Ethics in Business/Management

ForHolistic Competence

Dimensions of Holistic Competence

HC = Values + Skills

Values – Becoming part (relating to ‘Doing right things’)

Skills – Doing part (relating to ‘Doing things right)

Holistic Competence

The Bottomline

‘Skills are to be necessarily applied and filtered through the medium of values. If values are contaminated, perverted then skills in application will emerge as manipulative and corruptive.’

Values

• Contentment• Gratitude• Humility• Forgiveness• Honesty• Transparence etc.

• Greed• Jealousy• Anger• Suspiciousness• Vindictiveness• Vanity etc.

Workplace Unethicality

• Monetary Unethicality

• Behavioural Unethicality

Behavioural Unethicality

‘Actions and decisions springing from envy, egotism, suspiciousness, competitive one-upmanship, deception and the like comprise Behavioural Unethicality’.

Other Dimensions of Workplace Unethicality

• Direct unethicality covers those acts and decisions that are unambiguously wrong and are known by the doers to be so.

• Dilemma unethicality on the other hand, is involved in situations with at least two optional choices, both of which imply adverse consequences.

• ‘Perpetrator-victim’ Dyad.

Ethical Principles/Approaches

The Disclosure Rule

In the full glare of examination by associates, friends, family, newspaper, television, etc. were to focus on your decision, would you remain comfortable with it?

If you think you would, it probably is the right decision.

The Golden Rule

“Do unto others as you would have them do unto you”

It includes not knowingly doing harm to others.

The Intuition Ethic

People are endowed with a kind of moral sense with which they can apprehend right or wrong.

The solution to moral problem lies simply in what you feel or understand to be right in a given situation.

It is relating to what we call the ‘gut feeling’.

The Market Ethic

Selfish actions in the marketplace are virtuous because they contribute to efficient operation of the economy.

People should only ask whether their actions in the market further their financial self-interest.

If so, the actions are ethical.

The Means-Ends Ethic

Worthwhile ends justify efficient means;

That means, when ends are of overriding importance or virtue, unscrupulous means may be employed to reach them.

The Organization Ethic

The will and needs of individuals should be subordinated to the greater good of the organization.

An individual should ask whether actions are consistent with organizational goals and what is good for the organization.

The Revelation Ethic

Through prayer or other appeal to transcendent beings and forces, answers are given to individual minds.

The decision maker prays, meditates or otherwise communes with a superior force or being.

They are then appraised of which actions are just and which are not.

The Utilitarian Ethic

“The greatest good for the greatest number”.

Determine whether the harm in an action is outweighed by the good.

If the action maximizes benefit, then it is the optimum course to take among alternatives that provide less benefit.

The Categorical Imperative

Act only according to that maxim by which you can at the same time “will” that it should become a universal law.

In other words, one should not adopt principles of action unless they can, without inconsistency, be adopted by everyone else.

(Source: Steiner, G. A. and J. F. Steiner, Business, Government, and Society: A Managerial Perspective, 5th Edition, New York: Random House, 1988.)

Categorical Imperative

• “An action is morally right for a person in a certain situation if, and only if, the person’s reason for carrying out the action is a reason that he or she would be willing to have every person act on, in any similar situation.”

• Eg.: Firing an employee because I do not like his race.

(Manuel G Velasquez, p. 79)

Categorical Imperative

Two Criteria

Universalizability: The person’s reasons for acting must be reasons that everyone could act on at least in principle.

Reversibility: The person’s reasons for acting must be reasons that he or she would be willing to have all others use, even as a basis of how they treat him or her.

(p. 79)

Consciousness Ethics

`It is an inside-out approach that engages in the task of fostering a spontaneously felt inspiration for ethical behaviour.’

Purusharthas

Eternal Objectives of Life

– Dharma– Artha– Kama– Moksha

Law of Cause and Effect(Karma Vada)

• A cause at present produces an effect in future

• An effect at present must have had a cause in the past

• Like cause, like effect• Each cause produces its own effect, there

is no mutual cancellation

The Art and Science of Work(Karma Yoga)

• What is work?– It is a sacrifice!

• Why work?– Lokasamgraha – welfare of the world– Chittashuddi

• How to work?– Nishkama karma - Desireless action

“I lift my hands and I shout, But no one listens. From dharma comes wealth and pleasure Why is dharma not practised?” -Vyasa.

To conclude…

‘What is right is right even if no one is doing it. What is wrong is wrong even if everyone is doing it.’

(Unknown Source)