chapter 4 - ethics
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“We need a Nobel Prize in business, awarded to organisations that demonstrate how business effectiveness results directly from ethical behavior. A society that is not built on ethics – fairness, freedom, and mature hearts and minds cannot survive for long.”
Peter Koestenbaum, 2002
CHAPTER FOURETHICS
Presented by
Avalene Connelly
Supervisory Training Programme 2009
TURBULENT TIMES Over the last decade, ethical scandals in
business have been on the rise:EnronWorldComTycoAnd locallyHCUClicoUDECOTTUTT
OTHER ETHICAL ISSUES An employee decides not to confront his manager on a company
issue because his performance appraisal is due
A relative of the CEO’s serious disciplinary offence is hushed up, while for the same misconduct, the Industrial Relations Manager institutes an immediate disciplinary enquiry in the case of other staff
An interviewee covers up being fired from a previous job while filling out an application form
Conducting personal business during company time without authorisation
Taking credit for a co-worker’s hard work on a project
DEFINE THE TERM ETHICS
ETHICS DEFINED:
The code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong.
INFLUENCES Upbringing (parental, societal,
educational) Media Religion Age Personal experience External pressure Self-interest Political and legal framework
GUIDELINES FOR DETERMINING ETHICAL BEHAVIOR Morning-after test Front-page test Mirror test Role-reversal test Common sense test
ETHICAL DECISION MAKING APPROACHES Utilitarian Approach
Individualism Approach
Moral-Rights Approach
Justice Approach
UTILITARIAN OR BEST RATIO APPROACH
Focus on decisions that optimize the satisfaction for the greatest number of people
INDIVIDUALISM APPROACH
Acts promote the individual's best long-term interests, which ultimately leads to the greater good
MORAL-RIGHTS APPROACH
1. The right of free consent1. The right of free consent
2. The right to privacy2. The right to privacy
3. The right of freedom of conscience3. The right of freedom of conscience4. The right of free speech4. The right of free speech
5. The right to due process5. The right to due process
6. The right to life and safety6. The right to life and safety
JUSTICE APPROACHThree types of Justice Approaches:Distributive JusticeProcedural JusticeCompensatory Justice
BLACK AND WHITE APPROACH Right is right and wrong is wrong
EXERCISERaldian Jemmott faces an ethical dilemna. A corporate buy-
out and restructuring strategy at Coffee Express Limited is going to eliminate three of the ten employees in the Operations department which he supervises.
He has worked with these three employees for years and even knows their spouses and children. On a personal level he considers these workers friends rather than subordinates.
He would like to warn his employees about the upcoming restructuring, but the Managing Director, Mr. Hayden Mitchell, has forbidden “early announcements” under any circumstances. According to Mr. Mitchell, a leak to the press could undermine the buyout that is causing the restructuring. If this “leak” happens, the company’s survival might be in question.
Should Mr. Jemmott forewarn his employees or not???
This is his ethical dilemna.
THE ORGANISATION’S ROLE IN ETHICS Corporate culture provides a framework
of beliefs and behaviors the company supports…or will not tolerate
Values adopted within the organization are highly important
THE ETHICAL ORGANISATIONThe Three Pillars of an Ethical
Organization
CREATING AN ETHICAL ENVIRONMENT Establish policies and procedures that ensure that all
employees are treated ethically. Enforce the policies. Ensure that employees have access to an objective
grievance procedure Health and safety measures are implemented to protect
employees Promotion practices must be fair and objective Appraisal system must reward employees for ethical
behaviour All employees must be protected from harassment based
on age, race, sex, sexual orientation or other reasons Hiring practices must be fair and impartial A Code of Ethics has to be established for the
organisation. How employees are to treat one another How employees are to treat customers and stockholders
EXTERNAL REGULATIONS Sarbanes-Oxley Act (SOX)
Requires CEOs and CFOs to sign statements making them personally responsible for the accuracy of the quarterly financial statements
Knowingly misrepresenting the financials opens them up to punishments including fines and jail time
Protection for whistleblowers Other external regulations include
regulations related to: Minimum wage Overtime compensation Discrimination Health and Safety Privacy
COSTS OF ETHICAL VIOLATIONS Unethical business environments can:
Demotivate individualsMake good employees leave the companyAttract unethical employeesLead to the lack of trust by the employees
for the companyLoss of jobs and company integrity
ETHICAL ADVICE Whenever you are required to make a
difficult decision, especially one that is ethically challenging, select an option that you would be comfortable describing to the nation on the evening news
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