You are on page 1of 23

Managerial

Ethics



Managerial Ethics
Ethics Defined
Principles, values, and beliefs that define what is right
and wrong decisions and behavior.
Many decisions that managers make require them to
consider both the process and whos affected by the
result.
Exhibit - Factors That Determine Ethical and Unethical
Behavior
Factors That Affect Employee Ethics
Moral Development
Measure of independence from outside
influences.
Levels of Individual Moral Development
Preconventional level
Conventional level
Principled level
Levels of Individual Moral Development
a) Preconventional level
A persons choice between right and wrong is
based on personal consequences from outside
sources, such as physical punishment & rewards.
b) Conventional level
Ethical decisions rely on maintaining standards
and living up to the expectations of others.
c) Principled level
Individuals define moral values apart from the
authority of the groups to which they belong or
society in general.

Exhibit Stages of Moral Development
Stage of moral development interacts with:

Individual characteristics
The organizations structural design
The organizations culture
The intensity of the ethical issue

Factors That Affect Employee Ethics
Individual Characteristics
Values
Basic convictions about what is right or wrong.
Employees in the same organization often posses very
different values.
Personality
Ego strength - A personality measure of the strength of a
persons convictions
People with high ego strength are likely to resist impulses to
act unethically and instead follow their convictions.
Individuals with high ego strength are more consistent in their
judgments and actions than those with low ego strength.

Factors That Affect Employee Ethics
Locus of Control
A personality attribute that measures the degree to which people
believe they control their own life.
Internal locus: believe they control their own destinies.
They are more likely to take responsibility for consequences and
rely on their own internal standard of right and wrong to guide their
behavior.
External locus: the belief that what happens to you is due to luck
or chance.
They are less likely to take personal responsibility for the
consequences of their behavior and more likely to rely on the
external forces.

Factors That Affect Employee Ethics
Structural Variables
Organizational characteristics and mechanisms that guide and
influence individual ethics:
Those structure that minimize ambiguity and uncertainty with
formal rules and regulations and those that continuously remind
employees of what is ethical are more likely to encourage ethical
behavior.
Organizations goals: use to guide and motivate employees.
People who dont reach set goals are more likely to engage in
unethical behavior.
Performance appraisal systems: outcome
Reward allocation systems
Behaviors (ethical) of managers

Factors That Affect Employee Ethics
Organizations Culture
Organizations culture consists of the shared organizational
values
An organizations values are reflected in the decisions and
actions of its employee
Values-Based Management: many organizations use
A form of management in which organizations values guide
employees in the way they do their job.
The Purposes of Shared Values
Guiding managerial decisions
Shaping employee behavior
Building team spirit

Factors That Affect Employee Ethics

A culture that is strong and support
high ethical standards has a very
powerful and positive influence on the
decision to act ethically or unethically.

Factors That Affect Employee Ethics
Issue intensity
How important an ethical issue is to an individual.
The greater the number of people harmed, the more
agreement that the action is wrong; the greater the
likelihood that the action will cause harm, the more
immediately that the consequences of the action will be
felt, and closer the person feels to the victim and the more
concentrated the effect of the action on the victim, the
greater the issue intensity or importance.
When an ethical issue is important, employees are more
likely to behave ethically.



Exhibit - Determinants of Issue Intensity
How Managers Can Improve Ethical
Behavior in An Organization
1. Hire individuals with high ethical standards.
2. Establish codes of ethics and decision rules.
3. Lead by example.
4. Set realistic job goals and include ethics in
performance appraisals.
5. Provide ethics training.
6. Conduct independent social audits.
7. Provide support for individuals facing ethical
dilemmas.
Exhibit - Codes of Ethics
Cluster 1. Be a Dependable Organizational Citizen
1. Comply with safety, health, and security regulations.
2. Demonstrate courtesy, respect, honesty, and fairness.
3. Illegal drugs and alcohol at work are prohibited.
4. Manage personal finances well.
5. Exhibit good attendance and punctuality.
6. Follow directives of supervisors.
7. Do not use abusive language.
8. Dress in business attire.
9. Firearms at work are prohibited.
Cluster 2. Do Not Do Anything Unlawful or Improper That
Will Harm the Organization
1. Conduct business in compliance with all laws.
2. Payments for unlawful purposes are prohibited.
3. Bribes are prohibited.
4. Avoid outside activities that impair duties.
5. Maintain confidentiality of records.
6. Comply with all antitrust and trade regulations.
7. Comply with all accounting rules and controls.
8. Do not use company property for personal benefit.
9. Employees are personally accountable for company funds.
10. Do not propagate false or misleading information.
11. Make decisions without regard for personal gain.
Cluster 3. Be Good to Customers
1. Convey true claims in product advertisements.
2. Perform assigned duties to the best of your ability.
3. Provide products and services of the highest quality.
Effective Use of a Code of Ethics
Develop a code of ethics as a guide in handling
ethical dilemmas in decision making.
Communicate the code regularly to all
employees.
Have all levels of management continually
reaffirm the importance of the ethics code and
the organizations commitment to the code.
Publicly reprimand and consistently discipline
those who break the code.
The Value of Ethics Training
Can make a difference in ethical behaviors.
Increases employee awareness of ethical issues
in business decisions.
Clarifies and reinforces the organizations
standards of conduct.
Helps employees become more confident that
they will have the organizations support when
taking unpopular but ethically correct stances.
Exhibit - Being an Ethical Leader
Be a good role model by being ethical and honest.
Tell the truth always.
Dont hide or manipulate information
Be willing to admit your failures.
Share your personal values by regularly
communicating them to employees.
Stress the organizations or teams important shared
values.
Use the reward system to hold everyone accountable
to the values.
Provide support for individuals facing ethical
dilemmas.

Employees who face ethical dilemmas need
protective mechanisms so they can do what is
right without fear of reprimand.
May designate ethical counselor for employees
facing a ethical dilemma
Advisors also might advocate the ethically right
alternatives
Some organizations may appoint ethics
officers
Managing Ethical Lapses and Social
Irresponsibility

Provide ethical leadership
Protect employees who raise ethical issues
(whistle-blowers)
Awareness of Social Issues
Social Entrepreneurs
Are individuals or organizations who seek out
opportunities to improve society by using practical,
innovative, and sustainable approaches.
Want to make the world a better place and have a
driving passion to make that happen.
Businesses Promoting Positive
Social Change
Corporate Philanthropy
Campaigns
Donations
Funding own foundations
Employee Volunteering Efforts
Team volunteering
Individual volunteering during work hours

You might also like