MANAGEMENT ETHICS Moral point of view refers to any particular framework of values, among many possible value frameworks,

s, used to develop internally consistent and logically justified principles and standards of right and wrong. o Acts as a lens that influences how managers view the process of making ethical decisions and how they act in the workplace Managers ethics are influenced by wide variety of factors. Even if they agree on the same basic principles, they may have different interpretations, thus treating others differently

MAINSTREAM
MORAL POINT OF VIEW THREE COMPONENTS OF MORAL POINT OF VIEW o Overarching goals: To maximize productivity, efficiency, profitability and competitiveness o General rationale: Grounded in variation of consequentialist utilitarianism, and asserts that encouraging and rewarding increases in individual material wealth is the best generic way to improve overall societal well-being Consequantialist theory considering the consequences of an action in determining what is ethical Action that results in beneficial outcomes are ETHICAL, while those that dont result in beneficial ones are UNETHICAL Utilitarianism moral philosophy that holds that ethical managers strive to produce the greatest good for the greatest number Consider effect of each alternative on all parties and select the one that benefits the GREATEST number of people Egoism moral philosophy that focuses on the consequences for the individual decision maker; based on the idea of what benefits me the most. Consequentialism has developed and depends on two assumptions What is the greatest good o Where the basis of good is money o The best way to maximize the greatest good is by CREATING individual financial wealth, which people can use according to their own preferences of what constitutes a good life. How to maximize wealth o Embrace and encourage individualism (Adam Smith) o GOOD IS MAXIMIZED ON BEHALF OF THE SHARE HOLDERS (Milton Friedman) o Description of effective or virtuous key practices: Focuses four functions of management on promoting measurable improvements in productivity or profits PROCESS OF MAKING ETHICAL DECISIONS STEP 1: Recognizing ethical issues (define) o Managers moral points of view act as a lens that determine what they see (and what they do not see) as ethical issues and how they respond to those issues E.g. stealing office supplies, not putting an honest days work, accepting bribes, harassing employees, falsifying accounting reports Giving to charity can also be considered an ethical issue, since the money to be donated is the owners

Define the key stakeholders of the issue (Who will be infleuenced) The answers will almost always include organizations owners , managers, co-workers, other employees, customers, suppliers, government, community members, and environment STEP 2: Gathering information and developing alternatives (discover) o Influence what makes something an ethical issue, and how they collect data and what sorts of alternatives are generated o MORE INFORMATION, BETTER DECISIONS Managers should look into: Existing codes of ethics or policies Background information on how issue came to be and its possible causes How other people resolved the issue o BEST DECISIONS made by COMPARING ALTERNATIVES or OPTIONS STEP 3: Wrestling with ethical choices (discern) o Options are weighed against one another and the managers point of view influence which alternative is chosen o Often times, managers feel as if they need to choose among the lesser of two evils (when two stakeholders are to be harmed by the decision) STEP 4: Implementing ethical intentions o Implement ethical decisions through performing four management functions o What is ethical to a manager is CONTRARY to prevailing norms and have negative consequences -> COURAGE (middle ground between fearful inaction and fearless rashness) o WHISTLEBLOWERS organizational insiders who identify unethical behaviour and have the courage to report it, even though doing so may personally cost them promotions, their jobs, and possibly their reputations ETHICAL INFLUENCES ON THE FOUR MANAGEMENT FUNCTIONS PLANNING: GOALS AND RESPONSIBILITY o Emphasizes the organization-specific responsibility (OSR) Ensures that plans serve the financial interests and goals of the organizations owners o The drive to meet goals can detract from ethical behaviour or can even encourage unethical behaviour that harms the organization and other stakeholders o Two of the most important mainstream point of view Managers are ethically obligated to primarily serve the interests of the organizations owners Consistent with utilitarianism perspective, mainstream managers should maximize organizational profits, because this is assumed to be the best way to maximize the greatest good for the greatest number in society ORGANIZATING: STRUCTURES AND SYSTEMS o Managers need to be attentive to precisely reinforce which behaviours their organizations reward systems o Reward system can undermine ethical behaviour or employees o Focuses on creating systems that identify and punish unethical behaviours Deterrent approach based on assumption that misconduct often comes from rational calculations about the likelihood of getting caught and the severity of punishments compared to potential benefits of misconduct o Formal positions within the organizational hierarchy that are devoted to ethics o Managers can provide ethics training

Some argue they have very little effect because individual value systems are established when they are young LEADING: IMPLICIT AND EXPLICIT ACTION o Ethical leadership walk of the leaders o If the primary goal of the leaders is to maximize shareholder wealth, members will begin to act and think the same way o If managers bend rules, so will the members o Ethics is viewed as a TRANSACTION whereby leaders REWARD ethical behaviour and PUNISH unethical behavior CONTROLLING: FORMAL AND INFORMAL o A commonly implemented measure for exerting control is an organizations code of ethics A code of ethics is a formal written statement of an organizations primary values and ethical rules it expects its employees to abide by Should state the values and behaviours that will not be tolerated and the ensuing punishment for such actions o Organizational culture set of informal shared values, norms, standards, and expectations that influence the ways in which individuals, teams, and groups interact with one another and work toward company goals

MULTISTREAM
MORAL POINT OF VIEW THREE COMPONENTS OF MORAL POINT OF VIEW o Overarching goals: To provide meaningful work, operate sustainably, be attentive to internal and external shareholders and facilitate servant leadership o General rationale: Grounded in virtue theory, and asserts that practicing and fostering characters is the best generic way to improve overall societal well-being Virtue theory moral philosophy that focuses on characters and how people practice and facilitate the practice of virtues in community and thereby facilitate happiness Focuses on character if managers and organizational members Avoids legalistic rules Virtues good ways of acting that are noble or have value regardless of the end result or consequences FOUR KEY VIRTUES FOUND IN CONTEXT OF ORGANIZATIONS: Service o Managers should see themselves as serving others, thereby facilitating others to get their work done o Organization serves employees Human Development o Managers view work as a means for people to express themselves and to grow o Not only to achieve rational efficiency, but to assign tasks and design jobs so that people develop capabilities and are given opportunities to express something of who they are and what they are passionate about doing o Consider the growth and development or organizational members Nurturing community o Managers listen to and seek ways to satisfy the interests of all stakeholders o They nurture community by providing opportunities for different stakeholders to hear each others concern Stakeholders understand each other and treat each other with dignity and respect Balance o Promote sustaincentrism (perspective promoting balance between human and ecological concerns in organizational endeavours) o Recognizes the interconnectedness and complexity of relationship between humankind and environment Description of effective or virtuous key practices: Focuses four functions of management on promoting measurable improvements in productivity or profits PROCESS OF MAKING ETHICAL DECISIONS STEP 1: Recognizing ethical issues (define) o Managers consider a broader range of ethical issues o Managers sensitive to issues of employee development, treating everyone with dignity, and empowering people STEP 2: Gathering information and developing alternatives (discover) o Managers invites participation from a wider spectrum of stakeholders

More receptive to stakeholders personal experiences and needs, rather than just paying attention to codified information and documents STEP 3: Wrestling with ethical choices (discern) o Managers welcome the input from stakeholders affected by a decisions, and invite those stakeholders to participate in making the decision o Stakeholders who are involved in gathering information and developing alternatives have the information and capacity to participate in evaluating options and making wise choices Managers see this as the right thing to do, even if decision turns out to be a poor one This option could satisfy more stakeholders STEP 4: Implementing ethical intentions o Not all initiatives have negative effects on an organizations financial performance, because it can also be associated with improved financial performance o Managers are often more open to adapting to new circumstances once decision has been implemented o Decisions are more experimental, such that change readily emerges from their ongoing evaluation by a community of stakeholders ETHICAL INFLUENCES ON THE FOUR MANAGEMENT FUNCTIONS PLANNING: GOALS AND RESPONSIBILITY o According to Kenneth Goodpaster, FOCUSING ON ONE PRIMARY GOAL = TELEOPATHY Teleopathy addiction to unbalanced pursuit of a single purpose or goal Although the goal is achieved, the soul is lost o Consistent with corporate social responsibility Refers to managers obligation to act in ways that protect and improve the welfare of society OVER and ABOVE the owners financial self interests. Acknowledge OSR responsibilities but do not always maximize financial well-being Assess organizations performance through social audit (systematic analysis of effects of an organization to stakeholders and community) Four primary areas in a social audit: Economic responsibility, Legal responsibility, Ethical responsibility, Contribution to broader community ORGANIZATING: STRUCTURES AND SYSTEMS o Focuses on promoting positive behaviour o Training places greater emphasis on positive behaviours and values that should guide behaviour in organization Becomes a self-fulfilling prophecy, whereby what you focus attention on and expect in others influences how people act LEADING: IMPLICIT AND EXPLICIT ACTION o Managers model a servant leadership style that promotes other forms of well-being as coequal with financial well-being o A servant leader is active, purposeful, and self-controlled in working toward others growth, gain, and esteem CONTROLLING: FORMAL AND INFORMAL o Code of conduct include expectations for its stakeholders more balanced in describing both positive behaviours to promote and negative behaviours to avoid o Include activities that promote positive behaviour in organizations calendar

ORGANIZATIONAL CULTURE to influence ethics