++

Managing Business EthicsChapter 7

Treviño & Nelson – 5th Edition

++Chapter 7 Overview

Introduction

In Business, Ethics Is about Behavior

Our Multiple Ethical Selves

Rewards and Discipline

“Everyone’s Doing It”

People Fulfill Assigned Roles

People Do What They’re Told

Responsibility Is Diffused in Organizations

Conclusion

++Underlying Assumptions

Managers want to be ethical

Managers want their subordinates to be ethical

Based on their experience, managers will have insight into the unique ethical requirements of the job

++Advice: Ethical Behavior

Think of ethics in behavioral terms – what behavior are you looking for?

Specify the behavior you want and explain why

Create a work environment that supports that behavior

++Multiple Ethical Selves

Ken Lay

Dennis Levine

Practical Advice: Analyze yourself Observe your subordinates Identify what influences them

Ken LayKen Lay

++Reward systems What gets rewarded, gets done!

People will go the extra mile to achieve goals set by management

Goals combined with rewards can encourage unethical behavior

++Reward systems

What gets rewarded, gets done!

Practical Advice: Think about what kind of behavior and

attitudes are being rewarded explicitly and implicitly

Think about goals, likely behavior, unintended consequences

Ethical Pygmalion effect – expectations of high standards and ethical behavior

++ Recognize the Power of Indirect Rewards and Punishments

Social learning theory Tailhook example

Rewarding ethical behavior Difficult in the short term Easier over the long term

++Punishment

Critical part of a manager’s job

Must be administered fairly Fits the crime Consistent with what others have

received Employee has input Conducted in private Explanation that ties punishment

to misconduct

Recognize punishment’s indirect effects Thomas J. Watson, Jr. IBM example

++Discipline

Practical advice for managers:

Adults differentiate between fair and unfair discipline

Punishment is expected if rules are broken

Discipline fairly

Be concerned about observers and implicit messages

++People Follow Group Norms

Rationalizing unethical behavior

Pressure to go along

Practical advice for managers Be aware of group norms Consider whether the reward system implicitly rewards

misconduct

Slade Company example

++ Deindividuation – People Fulfill Assigned Roles

Cagney & Lacey example

Research: Zimbardo Prison experiment

Roles at work Conflicting roles can lead to unethical behavior Roles can support ethical behavior

Practical advice for managers Roles influence behavior Analyze roles and role conflicts Determine whether jobs need to be altered

++People Do What They’re Told

Research: the “shocking” Milgram experiment

Obedience to authority at work

Practical advice for managers Recognize the power managers hold as

legitimate authority figures Use this power to set high ethical standards

++ Diffused Responsibility

“Don’t worry – we’re taking care of everything” Workers encouraged to turn over responsibility to

those in higher levels

Diffusion of responsibility in groups Bystander research Groupthink and “illusion or morality” Ensure that alternative views are aired

Divide responsibility Specialization “Fragmentation of conscience”

Create psychological distance

++Diffused Responsibility

Practical advice for managers: Make responsibility a relevant issue and reinforce Appoint devil’s advocate or multiple advocates in

groups Spell out accountability associated with specific

positions

++ Walk the talk

Talk about the ethical implications of decisions

Make it clear you don’t want to be protected from bad news

Provide guidance on ethical decision making

Weave ethical goals into performance management

Reward ethical conduct; discipline unethical conduct

Demand accountability

Be aware of the standards I am setting

How would people describe me?

++Case

You’ve recently been promoted into the position of marketing manager in the communications division of your company. Your new job involves managing a staff and creating the publications and marketing materials for insurance sales professionals in three regions. You have met the directors of the three regional sales forces before, and now you ask each one for a meeting to discuss in depth how your team can best meet their needs. Two of the sales directors were very cordial, and each explained what the technical demands of their areas are and how your department can best meet their needs. However, during your meeting with Bill—the sales director of the third region and one of your firm’s biggest moneymakers—he lays down the law. He says that his area is the largest of the three regions, and it produces significantly more revenue for your company than the other two regions combined. “You and your people need to know that when I say, ‘Jump,’” he says, “they need to ask, ‘How high?’” In return, he says, he’ll recommend you and your people for every award the company has to offer. In addition, he says he’ll personally give you a monetary bonus, based on your team’s performance, at the end of the year. Although you have never heard of a manager giving someone a bonus out of his own pocket, you suspect that your company would frown on such a practice.