1 week 8 mgt 424 – senior seminar in management topics mgt 424 – senior seminar in management...
TRANSCRIPT
1
Week 8
MGT 424 – Senior Seminar in ManagementTopics
MGT 424 – Senior Seminar in ManagementTopics
Ethics andSocialResponsibility
2
What Would You Do?
Gap has received negative news coverage regarding sweatshop labor exploitation
Retailers rely on foreign factories to keep their prices low
How do you decide whose interests take precedence? Is Gap responsible for poor treatment of workers?
What would you do?
Gap, Inc. Headquarters
Protest groups are calling for boycotts; Gap is losing $$
3
Ethical and Unethical Workplace Behavior
Ethics
The set of moral principles or values that defines right and wrong for a person or group.
4
What Is Ethical and Unethical Workplace Behavior?
After reading these sections, you should be able to:
1. discuss how the nature of management jobs creates the possibility for ethical abuses.
2. identity common kinds of workplace deviance.
3. describe the U.S. Sentencing Commission Guidelines for Organizations and explain how they both encourage ethical behavior and punish unethical behavior by businesses.
5
Ethics and the Nature of Management Jobs
Unethical Managerial BehaviorUnethical Managerial Behavior
Authority and PowerAuthority and Power
Handling InformationHandling Information
Influencing the Behavior of OthersInfluencing the Behavior of Others
Setting GoalsSetting Goals
11
6
Ethics and the Nature of Management Jobs
Managers can encourage ethical behaviors by…
using resources for company business only
handling information confidentially
not influencing others to engage in unethical behavior
not creating policies that reward employees for unethical behavior
setting reasonable goals
11
7
Workplace Deviance
22
Workplace Deviance
Unethical behavior that violates organizational norms about right and wrong
Two dimensions Degree of deviance Target of deviant behavior
8
Types of Workplace Deviance
22Adapted from Exhibit 4.1
Production Deviance
Production Deviance
Property DevianceProperty Deviance
Political DeviancePolitical Deviance
Personal AggressionPersonal
Aggression
Minor Serious
Organizational
Interpersonal
9
Production Deviance
Leaving early Taking excessive breaks Intentionally working slow Wasting resources
22
10
Property Deviance
Sabotaging equipment
Accepting kickbacks
Lying about hours worked
Stealing from company
22
11
Political Deviance
Showing favoritism Gossiping about
coworkers Blaming coworkers Competing nonbeneficially
22
12
Personal Aggression
Sexual harassment Verbal abuse Stealing from coworkers Endangering coworkers
22
13
U.S. Sentencing Commission Guidelines
Companies can be prosecuted and punished even if management didn’t know about
the unethical behavior.
33
14
Who, What, and Why?
Nearly all businesses are covered
Punishes a number of offenses
Encourages businesses to be proactive
3.13.1
15
Partial List of Offenses
3.13.1
Invasion of privacy
Price fixing
Fraud
Customs violations
Antitrust violations
Civil rights violations
Theft
Money laundering
Conflicts of interest
Embezzlement
Dealing in stolen goods
Copyright infringements
Extortion
…and more
16
Steps in determining fine size
1. determine the base fine
2. compute a culpability score
3. multiply the base fine by the culpability score
Steps in determining fine size
1. determine the base fine
2. compute a culpability score
3. multiply the base fine by the culpability score
Compliance Program Steps
Smaller fines for companies that are
proactive
3.23.2
17
Compliance Program Steps
Adapted from Exhibit 4.3
1. Establish standards and procedures.
7. Improve program after violations.
6. Enforce standards consistently and fairly.
5. Train employees on standards and procedures.
3. Delegate decision-making authority only to ethical employees.
4. Encourage employees to report violations.
2. Assign upper-level managers to be in charge.
3.23.2
Revise if required
18
How Do You Make Ethical Decisions?
After reading the next two sections, you should be able to:
4. describe what influences ethical decision making.
5. explain what practical steps managers can take to improve ethical decision making.
19
Influences on Ethical Decision Making
EthicalEthicalAnswersAnswersDepend Depend
on…on…
EthicalEthicalAnswersAnswersDepend Depend
on…on…
Ethical Intensity of DecisionEthical Intensity of Decision
Moral Development of ManagerMoral Development of Manager
Ethical Principles UsedEthical Principles Used
44
20
Ethical Intensity Depends on…
Concentration of effectConcentration of effect
Magnitude of consequencesMagnitude of consequences
Social consensusSocial consensus
Probability of effectProbability of effect
Proximity of effectProximity of effect
Temporal immediacyTemporal immediacy
4.14.1
21
Biz Flix: Emperor’s Club
Take Two Video
Click
What is Bell’s level of morality? Explain.
How typical do you think this conflict is in business? In daily life?
44
22
Moral Development
4.24.2Adapted from Exhibit 4.4
Societal Societal ExpectationsExpectationsSelfishSelfish InternalizedInternalized
PrinciplesPrinciples
PreconventionalPreconventionalPreconventionalPreconventional ConventionalConventionalConventionalConventional PostconventionalPostconventionalPostconventionalPostconventional
Kohlberg’s Stages of Moral Development
23
Stages of Moral Development
PreconventionalPreconventionalPreconventionalPreconventional
1. Punishment andObedience
2. InstrumentalExchange
1. Punishment andObedience
2. InstrumentalExchange
ConventionalConventionalConventionalConventional
3. Good boy, nice girl
4. Law and order
3. Good boy, nice girl
4. Law and order
PostconventionalPostconventionalPostconventionalPostconventional
5. Social contract
6. Universalprinciple
5. Social contract
6. Universalprinciple
4.24.2
24
Principles of Ethical Decision Making
Long-term self-interestLong-term self-interest
Personal virtuePersonal virtue
Religious injunctionsReligious injunctions
Government requirementsGovernment requirements
Utilitarian benefitsUtilitarian benefits
Individual rightsIndividual rights
Distributive justiceDistributive justice4.34.3
25
Principle of long-term self-interestPrinciple of long-term self-interest
Never take any action not in your organization’s long-term self-interest.
Never take any action not in your organization’s long-term self-interest.
4.34.3
Principles of Ethical Decision Making
26
Principles of Ethical Decision Making
Principle of Personal VirtuePrinciple of Personal Virtue
Never do anything that is not honest, open, and truthful and that you would not beglad to see reported in the newspapers
or on TV.
Never do anything that is not honest, open, and truthful and that you would not beglad to see reported in the newspapers
or on TV.
4.34.3
27
Principles of Ethical Decision Making
Principle of Religious InjunctionsPrinciple of Religious Injunctions
Never take any action that is not kindand that does not build a
sense of community.
Never take any action that is not kindand that does not build a
sense of community.
4.34.3
28
Principles of Ethical Decision Making
Principle of Government RequirementsPrinciple of Government Requirements
Never take any action that violates the law,for the law represents the minimal
moral standard.
Never take any action that violates the law,for the law represents the minimal
moral standard.
4.34.3
29
Principles of Ethical Decision Making
Principle of Utilitarian BenefitPrinciple of Utilitarian Benefit
Never take any action that does not result ingreater good for society.
Never take any action that does not result ingreater good for society.
4.34.3
30
Principles of Ethical Decision Making
Principle of Individual RightsPrinciple of Individual Rights
Never take any action that infringes on others’ agreed-upon rights.
Never take any action that infringes on others’ agreed-upon rights.
4.34.3
31
Principles of Ethical Decision Making
Principle of Distributive JusticePrinciple of Distributive Justice
Never take any action that harms the least among us:
the poor, the uneducated,the unemployed.
Never take any action that harms the least among us:
the poor, the uneducated,the unemployed.
4.34.3
32
Practical Steps to Ethical Decision Making
Select and hire ethical employeesSelect and hire ethical employees
Establish a Code of EthicsEstablish a Code of Ethics
Train employees to make ethical decisionsTrain employees to make ethical decisions
Create an ethical climateCreate an ethical climate
55
33
Practical Steps to Ethical Decision Making
Overt Integrity Tests Personality-Based Integrity Tests
Select and hire ethical employeesSelect and hire ethical employees
If you found a wallet containing $50, would you return it with the money?
5.15.1
34
Doing the Right Thing
If You Cheat in College, Will You Cheat in the Workplace?
College students who cheat are likely to cheat again.
70 percent of students don’t see cheating as a problem.
People who cheat and cheat again see their behavior as normal.
60 percent of people who cheat their employers don’t feel guilty for doing so.
If You Cheat in College, Will You Cheat in the Workplace?
College students who cheat are likely to cheat again.
70 percent of students don’t see cheating as a problem.
People who cheat and cheat again see their behavior as normal.
60 percent of people who cheat their employers don’t feel guilty for doing so.
35
What Really Works
Studies show that Integrity Tests…
Help reduce workplace deviance Help hire workers who are better performers
Studies show that Integrity Tests…
Help reduce workplace deviance Help hire workers who are better performers
However they have a smaller effect on assessing theft.
36
What Really Works (continued)
Overt Integrity Tests & Workplace Deviance10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success 82%
Workplace Deviance (Counterproductive Behaviors)
Personality-Based Integrity Tests & Workplace Deviance10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success 68%
37
What Really Works (continued)
Overt Integrity Tests & Job Performance10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success 69%
Job Performance
Personality-Based Integrity Tests & Job Performance10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success 70%
38
What Really Works (continued)
Overt Integrity Tests & Theft10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success 57%
Theft
39
Practical Steps to Ethical Decision Making
Establish a Code of EthicsEstablish a Code of Ethics
Communicate code of ethics to both inside and outside the company
Develop ethical standards and proceduresspecific to business
5.25.2http://www.nortelnetworks.comWeb Link
40
Ethics Training
Ethics TrainingEthics Training
Develops employee awareness of ethics
Achieves credibility with employees
Teaches a practical model of ethical decision making
5.35.3http://ethics.bellsouth.com“Ethics Scenarios Game”
Web Link
41
Ethics Training
Tower Records
Lockheed
Boeing
Bell South
U.S. Dept. of Justice
3M
City of Philadelphia
And more require employees to take ethics training
42
A Basic Model of Ethical Decision Making
1. Identify the problem1. Identify the problem
2. Identify the constituents2. Identify the constituents
3. Diagnose the situation3. Diagnose the situation
4. Analyze your options 4. Analyze your options
5. Make your choice5. Make your choice
6. Act6. Act
Adapted from Exhibit 4.6
5.35.3
43
Ethical Climate
Managers:
1. Act ethically
2. Are active in company ethics programs
3. Report potential ethics violations
4. Punish those who violate the code of ethics
Establishing an Ethical ClimateEstablishing an Ethical Climate
5.45.4http://www.whistleblowers.orgWeb Link
44
What Is Social Responsibility?
After reading these sections, you should be able to explain:
6. to whom organizations are socially responsible.
7. for what organizations are socially responsible.
8. how organizations can choose to respond to societal demands for social responsibility.
9. whether social responsibility hurts or helps an organization’s economic performance.
45
What Is Social Responsibility?
Social Responsibility
A business’s obligation to… pursue policies make decisions take actions that benefit society
46
What Is Social Responsibility?
Recall from Chapter 3 that PETA and Procter & Gamble have an ongoing disagreement about what is socially responsible.
47
To Whom Are Organizations Socially Responsible?
StakeholderModel
StakeholderModel
Satisfy Interests of Multiple Stakeholders
Satisfy Interests of Multiple Stakeholders
ShareholderModel
ShareholderModel Maximize ProfitsMaximize Profits
66
48
ProsPros
Shareholder Model
Firm maximizes shareholder wealth and satisfaction
The company stock increases in value
66
ConsCons
Organizations cannot act effectively as moral agents for shareholders
Time, money, and attention diverted to social causes undermine market efficiency
49
Stakeholder Model
Primary Stakeholders:
ShareholdersEmployeesCustomersSuppliers
GovernmentsLocal Communities
Primary Stakeholders:
ShareholdersEmployeesCustomersSuppliers
GovernmentsLocal Communities
Secondary Stakeholders:
MediaSpecial Interest Groups
Trade Associations
Secondary Stakeholders:
MediaSpecial Interest Groups
Trade Associations
66
50
Organization’s Social Responsibilities
Abide by principlesAbide by principlesof right and wrongof right and wrong
Obey laws andObey laws andregulationsregulations
EthicalEthical
LegalLegal
EconomicEconomic
DiscretionaryDiscretionary
Be profitableBe profitable
Serve a social roleServe a social role
77
$
?
51
Responses to Demands for Social Responsibility
88
ReactiveReactive DefensiveDefensive Accommo-dative
Accommo-dative ProactiveProactive
Fight all the way
DO NOTHING
DO MUCH
Withdrawal
Do only what is required
Legal Approach
BargainingProblemSolving
PublicRelationsApproach
Beprogressive
Lead theindustry
52
Social Responsibility and Economic Performance
Realities ofSocial
Responsibility
Can cost a companyCan cost a company
Sometimes it does paySometimes it does pay
Does not guarantee profitability
Does not guarantee profitability
99