1.

An important dimension in the issue of

corporate responsibility is the issue of:
The rightness or wrongness of the
decision or of an act
Or whether a decision or an act is
what ought to be done or decided
upon or not.
2. When we hear about unscrupulous
behaviors, like the financial wrong
doing at Enron, WorldCom and many
others:
We may confirm the belief that
business has no ethics, though not
true
That managers will always face
ethical issues and dilemmas.
3. Such issue may take the form of for
example whether; among others:
It is ethical for a sales
representative to bribe a
purchasing agent as inducement to
buy.
4. As managers plan, organize, lead and
control they must consider ethical
dimensions of their decisions and
actuations.
5. The term ethics refer to the principles,
values and beliefs that define what is
right or wrong behavior.
1. The place of the person in the Six
Stages of three levels of Moral
Development (Kohlberg, 1976)
Pre-conventional Level: at this level
the persons choice of what is right
or wrong is based on personal
consequences involved, such as
physical punishment, reward,
favours.
 Conventional Level: moral values
reside in maintaining expected
standards and living up to
expectation of others.
 Principle Level: individual makes
a clear effort to define moral
principles regardless of authority
or society where they belong.
2. Individual Characteristics of:
Ego-strength: a personality
measure of the strength of
his/her conviction. Person with
high ego strength would be more
consistent in moral judgments
and actions.
 Locus of control: a personality
that reflects the degree to which
people believe they control their
own fate.
External locus of control people
believing that what happens to
them is due to fate or luck, is less
likely to take responsibility for the
consequences of their behavior.
 Internal locus people take such
responsibility as they have their
own internal standards of right or
wrong.
3. Structural Variables:
Work designs that minimize
work ambiguity or uncertainty
through formal rules.
Use of goals
 Performance appraisal systems
depending on focus on outcomes
vs. process.
Rewards: the more rewards
depend on specific outcome the
more possibility of compromising
ethical standards.
4. Organizational Culture:
Most likely to shape high ethical
standards is one that is high in
risk tolerance, control and
conflict tolerance.
 That is strong, influences
employee behavior than weak
ones. Example: high ethical
standards which are highly
observed have power to influence
people to behave ethically.
5. Issue Intensity
1. Employee selection that hire individuals
with high standards, looking into:
Levels of moral development
Personal values
Ego strength
Locus of control
2. Code of Ethics, a popular choice of
reducing ambiguity as it defines shared
values, such as honesty, responsibility
and caring
3. Top management leadership by:
Being role models in upholding
shared values.
Setting cultural tone by reward and
punishment practices.
4. Job goals and performance appraisals

5. Ethics Training

6. Independent Social Audits is a way to

evaluate decision and management
practices in terms of codes of ethics.
7. Formal Protective Mechanism by
provision of:
Ethics officer
Special appeal process that
employees could use to raise
ethical issue
1. Putting own interest ahead of
organization (22%)
2. Abusive Behavior (21%)

3. Lying to employees (20%)

4. Misreporting hours worked (17%)

5. Internet abuse (16%)

6. Safety violations (15%)

7. Lying to stakeholders (14%)

8. Discrimination (13%)

9. Stealing (11%)

10. Sexual harassment (10%)

11. Low quality goods and services (10%)

12. Improper hiring practice

13. Environmental violation (7%)

14. Misuse of confidential information (6%)

15. Alteration of documents (5%)

16. Bribes (4%)

17. Using competitors inside information (4%)

1. Ethical leadership

2. Protection for those who report

wrongdoing

3. Social entrepreneurship