Personal and Organizational Ethics

1. Search the Web Nortel has posted its ethics policies on the Internet. To read it, navigate your web browser to: http://www.nortelnetworks.com Personal and Organizational Ethics 7 1

2. 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 2

3. 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

4. Introduction to Chapter Seven • This chapter focuses on the day-to-day ethical issues that managers face

5. 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.)

6. 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-to-global situations confronted indirectly as a management team

7. Personal and Managerial Ethics Resolving Ethical Conflicts Three Approaches • Conventional (covered in Chapter 6) • Principles • Ethical tests

8. Utilitarianism Rights Justice Caring Virtue ethics Servant leadership Golden Rule Personal and Managerial Ethics Principles Approach Anchors decision making on an ethical principle such as:

9. Personal and Managerial Ethics Principle of Utilitarianism focuses on an act that produces the greatest ratio of good to evil for everyone • Consequentialist theory

10. Personal and Managerial Ethics Principle of Rights focuses on examining and possibly protecting individual moral or legal rights

11. Personal and Managerial Ethics

12. Personal and Managerial Ethics • Principle of justice involves considering what alternative promotes fair treatment of people • Types of justice • Distributive • Compensatory • Procedural • Rawlsian

13. 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: • reasonably expected to be to everyone’s advantage and • attached to positions and offices open to all people

14. 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

15. Personal and Managerial Ethics Servant leadership focuses on serving others first such as employees, customers, community and so on

16. Listening Empathy Healing Persuasion Awareness Foresight Conceptualization Commitment to the growth of people Stewardship Building community Personal and Managerial Ethics Characteristics of Servant Leaders

17. Personal and Managerial Ethics Golden rule focuses on the premise that you should of unto others as you would have them do unto you

18. Personal and Managerial Ethics Concerns to be Addressed in Ethical Conflicts • Obligations • Ideals • Effects

19. 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

20. Personal and Managerial Ethics Ethics Test Approach • Test of common sense • Test of one’s best self • Test of making something public • Test of ventilation • Gag test

21. Society’s Moral Climate Business’s Moral Climate Industry’s Moral Climate Superiors Policies Individual(One’s personal situation) Peers Managing Organizational Ethics Factors Affecting the Morality of Managers

22. Managing Organizational Ethics Factors Influencing Unethical Behavior • 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

23. Managing Organizational Ethics 6-23

24. Managing Organizational Ethics • Amoral decision making • Unethical acts, behaviors or practices • Acceptance or legality as the standard behavior • Absence of ethical leadership Questionable Behaviors of Superiors or Peers

25. 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

26. Improving Ethical Climate Ethics Programs & Officers Effective Communication Ethics Audit Realistic Objectives TopManagementLeadership Ethics Training Ethical Decision-making Processes Codes of Conduct Codes of Conduct Discipline of Violators Whistle-blowing Mechanisms (“Hotlines”)

27. Identify decision you are about to make Articulateall dimensions of proposed decision Conventional ApproachStandards/Norms-Personal-Organizational-Societal-International Principles ApproachEthical Principles-Justice-Rights-Utilitarianism-Golden Rule Ethical Tests ApproachEthical Tests-Common sense-One’s best self-Public disclosure-Gag test . . . Course of action fails ethics screen Course of action passes ethics screen Do not engage in course of action Engage in course of action Identify new course of action Ethical Decision-Making

28. Ethics Audits and Self-Assessment

29. From Moral Decisions to Moral Organizations Moral Decision(s) Moral Manager(s) Moral Organization

30. Codes of conduct Codes of ethics Compensatory justice Distributive justice Ethical tests Ethical audits Golden rule Legal rights Moral rights Principle of caring Principle of justice Principle of rights Principle of utilitarianism Procedural justice Rights Servant leadership Utilitarianism Virtue ethics Selected Key Terms