1. Personal and Organizational Ethics
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2. Chapter Seven Objectives
• To understand the different levels at which
business ethics may be addressed
• To appreciate principles of personal ethical
decision-making
• To identify factors affecting an organization’s
moral climate
• Describe actions or strategies to improve ethical
climate
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3. Chapter Seven Outline
• Levels at which Ethical Issues May
Be Addressed
• Personal and Managerial Ethics
• Managing Organizational Ethics
• From Moral Decisions to Moral
Organizations
• Summary
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4. Introduction to Chapter Seven
• This chapter focuses on the day-to-day ethical
issues that managers face
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5. Levels at Which Ethical Issues
May Be Addressed
• Personal level—situations faced in personal
life (income tax, doing kid’s homework, etc.)
• Organizational level—workplace situations
faced as managers and employees (cutting
corners, etc.)
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6. Levels at Which Ethical Issues
May Be Addressed
• Industrial level—situations confronted as
professionals (the practices of stockbrokers,
accountants, etc.)
• Societal and international levels—local-to-
global situations confronted indirectly as a
management team
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7. Personal and Managerial Ethics
Resolving Ethical Conflicts
Three Approaches
• Conventional (covered in Chapter 6)
• Principles
• Ethical tests
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8. Personal and Managerial Ethics
Principles Approach
Anchors decision making
on an ethical principle such as:
• Utilitarianism • Caring
• Rights • Virtue ethics
• Justice • Servant leadership
• Golden Rule
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9. Personal and Managerial Ethics
Principle of Utilitarianism focuses on an
act that produces the greatest ratio of good to
evil for everyone
– Consequentialist theory
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10. Personal and Managerial Ethics
Principle of Rights focuses on examining
and possibly protecting individual moral or
legal rights
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11. Personal and Managerial Ethics
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12. Personal and Managerial Ethics
• Principle of justice involves considering
what alternative promotes fair treatment of
people
• Types of justice
– Distributive
– Compensatory
– Procedural
– Rawlsian
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13. Personal and Managerial Ethics
Rawls’ Justice
• Each person has an equal right to the most
basic liberties comparable with similar liberties
for others
• Social and economic inequalities are arranged
so that they are both:
a) reasonably expected to be to everyone’s advantage
and
b) attached to positions and offices open to all people
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14. Personal and Managerial Ethics
• Principle of caring focuses on a person as a
relational (cooperative) and not as an
individual
– Feminist theory
• Virtue ethics focuses on individuals
becoming imbued with virtues
– Aristotle and Plato
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15. Personal and Managerial Ethics
Servant leadership focuses on serving
others first such as employees, customers,
community and so on
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16. Personal and Managerial Ethics
Characteristics of Servant Leaders
• • Foresight
Listening
• • Conceptualization
Empathy
• • Commitment to the
Healing
growth of people
• Persuasion
• Stewardship
• Awareness
• Building community
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17. Personal and Managerial Ethics
Golden rule focuses on the premise that you
should of unto others as you would have
them do unto you
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18. Personal and Managerial Ethics
Concerns to be Addressed in
Ethical Conflicts
• Obligations
• Ideals
• Effects
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19. Personal and Managerial Ethics
When Our Obligations, Ideals and
Effects Conflicts
• When two or more moral obligations conflict, use
the stronger one
• When two or more ideals conflict, or when ideals
conflict with obligations, honor the more important
one
• When effects are mixed, choose the action that
produces the greatest good and the least harm
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20. Personal and Managerial Ethics
Ethics Test Approach
• Test of common sense
• Test of one’s best self
• Test of making something public
• Test of ventilation
• Gag test
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21. Managing Organizational Ethics
Factors Affecting the Morality of Managers
Society’s Moral Climate
Business’s Moral Climate
Industry’s Moral Climate
Superiors
Superiors
Policies
Policies
Individual
Individual
(One’s Peers
Peers
(One’s
personal
personal
situation)
situation)
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22. Managing Organizational Ethics
Factors Influencing Unethical Behavior
• Behavior of superiors
• Ethical practices of one’s industry or profession
• Behavior of one’s peers in the organization
• Formal organizational policy (or lack of one)
• Personal financial need
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23. Managing Organizational Ethics
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24. Managing Organizational Ethics
Questionable Behaviors of Superiors or Peers
• Amoral decision making
• Unethical acts, behaviors or practices
• Acceptance or legality as the standard
behavior
• Absence of ethical leadership
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25. Managing Organizational Ethics
Questionable Behaviors of Superiors or Peers
• Objects and evaluation systems
overemphasizing profits
• Insensitivity toward how subordinates
perceive pressure to meet goals
• Inadequate formal ethics policies
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26. Improving Ethical Climate
Ethics Programs Effective
Ethics Audit
& Officers Communication
Realistic
Objectives
Top
Management Ethics Training
Leadership
Ethical Decision-
making Processes
Codes of Discipline of Whistle-blowing
Conduct Violators Mechanisms
(“Hotlines”)
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27. Ethical Decision-Making
Identify decision you
are about to make
Articulate all dimensions
of proposed decision
Conventional Approach Principles Approach Ethical Tests Approach
Standards/Norms Ethical Principles Ethical Tests
-Personal -Justice -Common sense
-Organizational -Rights -One’s best self
-Societal -Utilitarianism -Public disclosure
-International -Golden Rule -Gag test . . .
Course of action fails
Course of action passes ethics screen
ethics screen
Do not engage in course
Engage in course of of action
action
Identify new course of
action
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28. Ethics Audits and Self-Assessment
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29. From Moral Decisions to Moral
Organizations
Moral Decision(s)
Moral Manager(s)
Moral Organization
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30. Selected Key Terms
• Codes of conduct • Principle of caring
• Codes of ethics • Principle of justice
• Compensatory justice • Principle of rights
• Distributive justice • Principle of utilitarianism
• Ethical tests • Procedural justice
• Ethical audits • Rights
• Golden rule • Servant leadership
• Legal rights • Utilitarianism
• Moral rights • Virtue ethics
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