Law 483 managerial ethics

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Managerial Ethics

LEARNING OUTCOME

Define social responsibility and ethicsList at least six main arguments for at least four main arguments againts businesses being socially responsible.Explain the importance of demonstrating social responsibility in today business world

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Learning Objectives ( continued)

•Describes the concern people have about business ethics•Explain the relationship between social responsibility and managerial ethics•Identify the seven factors that influence ethical behaviour•Describe ways an organization can improve ethical behaviour

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Society’s Expectation from Organizations and Manager

Managers regularly make decisions about issues with a social dimension

In competitive environment, organizations cannot afford to be seen as socially irresponsible

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Arguments Supporting Businesses Being Socially Responsible

Public expectationsLong-run profitsEthical obligationPublic image Better environment Balance of responsibility and powerShareholder interestsPossession of resourcesSuperiority of prevention over cures

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Arguments Againts Businesses Being Socially Responsible

Violation of profit maximization Dilution of purposeCostsToo much powerLack of skills Lack of accountabilityLack of broad public support

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Demonstrating Social Responsibility

Social responsibility

Social obligation

Social responsiveness

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Relationship Between Social Responsibility and Economic Performance

Research studies show positive relationship

General public perception that companies who behave in a socially responsible way have better business performance

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Managers Becoming More Socially Responsible

• It is the collective behaviour and actions of managers that make a company socially responsible

• Managers who make the right decisions are described as being or behaving ethically

Robbins et al., Fundamentals of Management, 4th Canadia Edition ©2005 Pearson Education Canada, Inc.

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Managerial Ethics

• Ethics - Rules and principles that define right and

wrong conduct• Three Views of Ethics - Utilirian view – ethical decisions are made on

the basis of their outcomes or consequences

(continued)


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Managerial Ethics (continued)

• Three Views of Ethics (continued) - Right view – respects and protects individual

liberties and privileges• Theory of injustice view – managers impose

and enforce rules fairly and impartially


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Moral Development

• Is a measure of an individual’s independence as his/her moral judgment becomes less and less dependent on outside influences

• Stages start with making a choice between right and wrong based on personal consequences

(continued)

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Moral Development (continued)

• As development evolves, moral judgment is less dependent on outside factors

• Individuals with highly-developed moral development can make clear distinctions to define moral principles separate from any authority

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Values

• Basic convictions about what is right and wrong

• Influence ethical behaviour• Values are developed in early years

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Organizational Factors That Affect Ethical And Unethical Behaviour

FOM 2.15

Organizational Culture

Structural Variables

ModeratorsEthical/Unethical

Behaviour


Determinants Of Issue Intensity (Exhibit 2.3)

Issue Intensity

Consensus of Wrong Probability of

Harm

Immediacy of Consequences

Greatness of Harm

Concentration of Effect Proximity

to Victims

How likely is it that this action will cause harm?

How much agreement is there that this action is wrong?How many people will

be harmed?ed?

How concentrated is the effect of the action on the victims?

How close are the potential victims?

Will harm be felt immediately?

Source : Management, Seventh Canadian Edition, by Stephen P. Robbins, Mary Coulter, and Robbin Stuart-Kotze, page 113. Copyright 2003. Reprinted by permission of Pearson Education Canada Inc.Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Businesses Improving Ethical Behaviour

• Strong emphasis on corporate governance• Companies refocusing efforts on business ethics• New legislation to hold boards of directors more accountable

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc. 17

Managers Improving Ethical Behaviour

• Hire individuals with high ethical standards• Establish codes of ethics and decision rules• Lead by example

(continued)Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc. 18

Managers Improving Ethical Behaviour (continued)

• Delineate job goals and performance review mechanisms• Provide ethics training• Conduct social audits• Provide support to individuals facing ethical dilemmas


Code of Ethics• Formal statement of an organization’s primary values and ethical rules it expects employees to follow• Usually written• Must state in detail acceptable behaviours and actions


Management Responsibility Relating to Codes of Ethics

• If possible, develop codes with active involvement of everyone in the organization• All levels of management must support and continually reaffirm the importance• Consistently discipline those who break the code• Set an example by behaviour and action


Concluding Remarks

• More and more organizations are appearing in newspaper headlines about ethical conduct• Survey of employees shows workplace pressures are leading to more people considering acting unethically• Concerns about social responsibility are growing


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Law 483 managerial ethics