Ethics Learning Module

Copyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

The Ethics Challenge

• Corporate officers are now subject to high accountability standards and harsh penalties under the Sarbanes-Oxley Act of 2002

• Experts have estimated that U.S. companies lose about $600 billion a year from unethical and criminal behavior

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Ethics

• Ethics - Study of moral issues- Concerned with right versus wrong- Many shades of gray

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Corporate Social Responsibility Pyramid

Source: Carroll, A. B. “Managing Ethically with Global Stakeholders: A present and future challenge, Academy of Management Executive, May 2004, p. 116. Figure A-1

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Corporate Social Responsibility

• Corporate social responsibility - corporations are expected to go above and

beyond following the law and making a profit

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A Model of Ethical Behavior in the Workplace

Figure A-2

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Internal Organizational Influences

• Positive relationship between organizational size and unethical behavior

• Larger firms more likely to behave illegally• Managers more likely to behave unethically in decentralized organizations

• Tendency among middle and lower-level managers to act unethically in the face of perceived pressure for results

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Neutralizing/Enhancing Factors

• Top Management Team (TMT) - consists of the CEO and his or her direct reports.

• Prior military experience favorably influences the ethical behavior of executives

• Organizations are encouraged to increase the diversity of its TMT if they want to reduce the chances of unethical decision making

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A Decision Tree for Ethical Decisions

Figure A-3

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Do Moral Principles Vary by Gender?

• Males perceived moral problems in terms of a justice perspective

- Based on the ideal of reciprocal rights and driven by rules and regulations

• Women relied on a care perspective

- Involves compassion and an ideal of attention and response to need

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General Moral Principles

• There are no absolute ethical answers for decision makers

• Goal for managers should be to rely on moral principles so decisions are principled, appropriate, and defensible

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The Magnificent Seven: General

MoralPrinciples for

Managers

Table A-1

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How to Improve the Organization’s Ethical Climate

• Behave ethically yourself• Screen potential employees• Develop a meaningful code of ethics• Provide ethics training

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How to Improve the Organization’s Ethical Climate (cont.)

• Reinforce ethical behavior• Create positions, units, and other structural mechanisms to deal with ethics

• Create a climate in which whistle-blowing becomes unnecessary

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