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ETHICAL ISSUES IN
ORGANIZATIONAL BEHAVIOR
Ethics: The study of Moral
Philosophy
• Centuries of examining the basic question of how people should live
  their lives

• Some specific questions

• Some of he essence of ethics and moral philosophy is its reflective
  quality – sitting back and looking at the way things are customarily done
  and asking what is the way they ought to be done. Socrates’ questions:
  “What we are talking about is how one should live” (as reported by
  Plato)

• Ethical absolutism and ethical relativism. Only you can decide

• Remember the Golden Rule: “Do unto others as you would have them
  do unto you”
Ethical behavior is
behavior judges as
good, right, just
honorable, or failing to
meet an obligation. The
judgment of behavior as
ethical or unethical is
based on
principles, rules, or guides
that come from an ethics
theory, character traits, or
social values. Some ethics
scholars have argued that
doing business ethically is
simply good business.
Moral
Philosophy
Moral Philosophy
Moral philosophy, or morality, refers to the concept of
human ethics used within three contexts:
1. individual conscience
2. systems of principles and judgments shared within a
culture or community
3. codes of behavior or conduct morality.
Since a single persons moral and ethical judgments are
affected by that persons environment (e.g. how one was
raised and what one was taught), personal morality
distinguishes and defines intentions, motivations or
actions as right or wrong. Thus, various individuals may
disagree about a certain moral or ethic, even if they
share many of the same morals and ethics. In
contraposition, individuals may agree about a certain
moral or ethic even if they subscribe to different moral
codes.
Everyone has their own moral philosophy and their own
morals. Philosophers probably want to keep this in mind
when engaging in philosophy of ethics and philosophy of
morality.
Ethical Values
(Ethics)
Ethics is the philosophical study of morality
and moral values. Ethics deals with the
analysis and employment of ideas such as
good, evil, right, wrong, and responsibility.
Ethics is divided into three primary areas:
    Meta-Ethics - Meta-ethics is the study
     of the concept of ethics itself. Meta-
     ethics is employed when philosophers
     seeks to comprehend the nature of
     ethical attitudes, statements, and
     judgments, as well as ethical
     properties.
    Normative Ethics - Normative ethics is
     the study of how to determine ethical
     values.
    Applied Ethics - Applied ethics is the
     study of the use of ethical values.
Ethical Values of Societies and
                Individuals
• Ethical values of societies
   – Variations and similarities among societies
   – Functions of societal ethical values
   – Dynamics of societal ethical values
• Ethical values of individuals
   – Built from societal-level values
   – Learned from family, including religious training,
     peers, education, and life experiences
   – Dynamics of individual ethical values
   – Levels of moral judgment
Ethical
Theories
Ethical Theories - Utilitarianism
• Utilitarianism - the proper course of action is the one that
  maximizes the overall “happiness.” It is the “happiness principle.”


Utilitarianism asks a person to examine the effects of his actions to
decide whether these actions are morally correct under utilitarian
guidelines. An actions morally right if its total net benefits exceeds
the total net benefit for any other action.


Utilitarianism has been accused of looking only at the results of
actions, and disregarding the desires or intentions that motivate
them. Intentions seem somehow important: it seems undesirable to
call an action intended to cause harm but that inadvertently causes
good "overall good".
Ethical Theories - Right/Relativism
• Relativism - right and wrong are determined by what
  my society believes
      Moral relativism may be descriptive, meta-ethical,
      or normative.
      Meta-ethical position: the truth or falsity of moral
      judgments is not objective, “It’s moral to me,
      because I believe it is.”
• An actions morally right if its total net benefits
  exceeds the total net benefit for any other action. A
  right is a person’s just claim or entitlement. The right
  can focus on what that person does or on the action
  of other people toward him.
Ethical Theories - Justice
• Justice - determines just actions to be those
  that emerge from the correct use of principles
  that have been agreed to under conditions that
  are fair.
• Justice-based ethics theories use a comparative
  process, which looks at the balance of benefits
  and burdens among members of a group or
  resulting from the application of laws, rules, and
  policies.
Ethical Theories – Egoism
• Egoism - a descriptive theory which states
  that people always act to maximize their self-
  interest (normative ethical positions).

• Egoism focuses on a person’s self-
  interests, but can also include the interests of
  others.
Ethical Theories – Applied Ethics
• Applied ethics is a discipline of philosophy that
  attempts to apply ethical theory to real-life situations.
   – Applied ethics is used in some aspects of determining
     public policy and by those that face difficult decisions.
     Questions that are typically addressed by applied ethics
     include:
          – “What are human rights and how do we determine them?”
            “Do individuals have the right of self determination?” OR on
            a more personal level, one may ask, “Is lying always wrong?”,
            “If not, when is it permissible?”
Managing for
Ethical Behavior
Modern managers are feeling
increasing pressure to promote
ethical behavior in their
organizations, causing them to
look for ways of managing for
ethical behavior. Managers can
follow three steps to manage for
ethical behavior in their
organizations:

1.   Understand the composition
     of the present ethical
     culture of their
     organizations.
2.   Improve that ethical culture.
3.   Sustain ethical behavior so
     that it becomes embedded
     in their organizations.
Managing for Ethical Behavior
o Want to change an organization’s culture
  organization. Decisions are not made by the
  organizations, they are made by the people in
  them, who are guided by their personal ethical
  values and their perception of the organization
  culture’s ethical values that such matters.
o Code of ethics – what is it in your organization, is
  it up to date and matches all aspects of business
  (internal, external, local, and international)
Managing for Ethical Behavior -
             continued
o Policies – based upon the ethical theories;
  specify what the organization wants to include in
  decision-making processes, increases the
  information used to include information tied to
  the ethical implications of the decision:
  o Employees’ right of dissent (whistle blowing)
  o Guidelines for employee privacy
  o Environmental effects
o Procedures – includes information for members
  of decision-making groups
Managing for Ethical Behavior -
             continued
o Standards of ethical performance – what are
  they, what does it include?
o Ethics training and education – does it exist?
  If so, does it need to be updated/revised? If
  not, what is needed to get started?
o Reinforcing ethical behavior –
  rewards, motivation, standards of behavior
o Peer reporting (whistle blowing) - protocol
International
Aspects of
Ethics
International Aspects of Ethics
• Interest in ethics in different countries
• Legal views
      • Convention on Combating Bribery of Foreign Public
        Officials in International Business Transactions (OECD)
      • Foreign Corrupt Practices Act (FCPA)
• Ethical views
      • Cultural relativism- the principle that an individual’s human
        beliefs and activities are understood by others I terms of
        the individual’s own culture.
      • Ethical realism- to see moral truth as grounded in the
        nature of things rather than in subjective and variable
        human reactions to things.
Important
Terms
act utilitarianism
Form of utilitarianism that asks a person to assess the effects of all actions according to their
greatest net benefit to all affected.

Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions (OECD Convention)
Twenty-nine members and five nonmembers of the Organization for Economic Cooperation
and Development signed an ethics treaty. The treaty has strong sanctions for bribery. The
signatories represented economies in the major world regions.

Conventional
One of three stages of moral development in the ethic of justice theory; attributed mainly to
men; characterizes most adolescents and adults. Features a growing awareness of the
expectations important to other people and the internalization of the moral norms of the
person's group or society.

cultural relativism
An approach to international ethics that considers differences in ethical values among
cultures and takes a normative ethical view based on the premise that each society's
predominant ethical values decide what is right and wrong.

difference principle
Societies will have inequalities, but must help the disadvantaged (sick, disabled, etc.).
egoism
Ethical system that has two forms: individual (individuals judge their actions only by the
effects on their own interests) and universal (individuals include others' interests when
assessing the effects of their actions).

ethic of care
A theory of stages of moral development of individuals; attributed mainly to women. Three
stages of moral development: self-focused (concerned with survival); focus on others
(considers feelings, emotions, and situation); reflective understanding of caring for others
(focus on others but has a balanced view of self in moral decisions).

ethic of justice
A theory of stages of moral development of individuals; attributed mainly to men. Three
stages of moral development: preconventional (self-centered, obeys rules to avoid
punishment); conventional (growing social awareness and less focused on self-interest);
principled (behavior guided by freely chosen moral principles).

ethical absolutism
Holds that an ethical system applies to all people, everywhere, and always; based on an
authority such as a religion, custom, or written code.
ethical behavior
Behavior judged as good, just, right, and honorable based on principles, rules, or guides from a
specific ethics theory, character traits, or social values; may vary from person to person or
country to country.

ethical realism
Holds that morality does not apply to international activities, behavior, and transactions.

ethical relativism
Holds that ethical behavior is based on personal feelings or opinions and is whatever a person
or society says is ethical; rejects the view that moral judgments have objective validity.

focus on others
One of three stages of moral development in the ethic of care theory; attributed mainly to
women. Consider actions moral that take into account other people involved in the situation;
focus on feelings, emotions, and the unique qualities of the situation in which the act
happens.

focus on self
One of three stages of moral development in the ethic of care theory; attributed mainly to
women. Features a strong focus on self with the intent of ensuring survival; women often
engage in self-criticism for being selfish.
Foreign Corrupt Practices Act (FCPA)
A U.S. statute enacted in 1977 that prohibits a company from using bribes to get business in
another country or prevent the restriction of its business; allows small payments that are
part of the ordinary course of doing business in another country.

individual ethical egoist
Judges a person's actions based only on their effects on self-interests. Because this form of
egoism never considers other people's interests, moral philosophers usually reject it as a
defensible basis of ethics.

“It's good business”
The assumption that doing business ethically is beneficial for organizations, especially in the
long term.

justice
An approach to ethics that uses a comparative process that looks at the balance of benefits
and burdens that are distributed among group members or that result from applying laws,
rules, and policies.

legal right
A person's just claims or entitlements defined by the legal system.
moral right
A person's just claims or entitlements that exist because of ethical standards.

negative rights
A person's duty not to interfere with another person's rights.

objectively ethical
A person acts according to a rule or law.

positive rights
A person's duty to help others freely pursue an interest to which they have a right.

preconventional
One of three stages of moral development in the ethic of justice theory; attributed mainly to
men. In the early period of this stage, the person is self-centered, does not consider anyone
else's viewpoint, and obeys rules because they are backed by authority. In the later period of
this stage, the person becomes aware of the interests of others and the conflicts that arise
among multiple interests.

principle of equal liberty
Each person's basic liberties must equal those of others. Those liberties must also be
protected from attack by others.
principle of fair equality of opportunity
Everyone must have the same chance to gain the best positions offered by society.

principled
One of three stages of moral development in the ethic of justice theory; attributed mainly to
men. Features the development of moral principles that guide the behavior of those who
reach this stage.

reflective understanding of caring for others
One of three stages of moral development in the ethic of care theory; attributed mainly to
women. Features a strong focus on caring for others as the basis of moral action and a
balanced view of the self in moral decisions.

rights
A person's just claims or entitlements; can be legal (defined by the legal system) or moral
(universal rights that exist because of ethical standards).

rule utilitarianism
Form of utilitarianism in which a person assesses actions according to a set of rules designed
to yield the greatest net benefit to all affected.
stages of moral development
Stages in which people shift from an individual understanding of morality to a societal one
and then to a universal view. Some persons do not progress through all three stages, and
the stages may differ for men and women.

subjectively ethical
A person believes he or she acted ethically.

theory of distributive justice
Theory proposed by John Rawls that is based on three principles: equal liberty for all
persons, difference (society should care for its most needy while using its resources as
efficiently as possible), and fair equality and opportunity for all.

unethical behavior
Behavior judged as wrong, unjust, dishonorable, or failing to meet an obligation.
universal ethical egoism
Universal ethical egoism, although controversial, can include the interests of others when
assessing one's actions. Asks a person to weigh the effects of his or her actions on his or
her interests with the assessment based on pursuing pleasure and avoiding pain.


utilitarianism
An approach to ethics that asks people to examine the effects of an action to decide
whether its total net benefits exceed the total net benefits of any other action.
Summary
• Ethical behavior – behavior judged as good, just, right,
  and honorable based on principles, rules, or guides
  from a specific ethics theory, character traits, or social
  values; varies from person to person and country to
  country
• Moral right – a person’s just claims or entitlements
  that exist because of ethical standards.
• Know your organization’s Code of Ethics
• Ethical decision-making is affected by:
   –   Law
   –   Morality
   –   Values
   –   Professional codes

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Ethical issues in organizational behavior

  • 2. Ethics: The study of Moral Philosophy • Centuries of examining the basic question of how people should live their lives • Some specific questions • Some of he essence of ethics and moral philosophy is its reflective quality – sitting back and looking at the way things are customarily done and asking what is the way they ought to be done. Socrates’ questions: “What we are talking about is how one should live” (as reported by Plato) • Ethical absolutism and ethical relativism. Only you can decide • Remember the Golden Rule: “Do unto others as you would have them do unto you”
  • 3. Ethical behavior is behavior judges as good, right, just honorable, or failing to meet an obligation. The judgment of behavior as ethical or unethical is based on principles, rules, or guides that come from an ethics theory, character traits, or social values. Some ethics scholars have argued that doing business ethically is simply good business.
  • 5. Moral Philosophy Moral philosophy, or morality, refers to the concept of human ethics used within three contexts: 1. individual conscience 2. systems of principles and judgments shared within a culture or community 3. codes of behavior or conduct morality. Since a single persons moral and ethical judgments are affected by that persons environment (e.g. how one was raised and what one was taught), personal morality distinguishes and defines intentions, motivations or actions as right or wrong. Thus, various individuals may disagree about a certain moral or ethic, even if they share many of the same morals and ethics. In contraposition, individuals may agree about a certain moral or ethic even if they subscribe to different moral codes. Everyone has their own moral philosophy and their own morals. Philosophers probably want to keep this in mind when engaging in philosophy of ethics and philosophy of morality.
  • 7. Ethics is the philosophical study of morality and moral values. Ethics deals with the analysis and employment of ideas such as good, evil, right, wrong, and responsibility. Ethics is divided into three primary areas:  Meta-Ethics - Meta-ethics is the study of the concept of ethics itself. Meta- ethics is employed when philosophers seeks to comprehend the nature of ethical attitudes, statements, and judgments, as well as ethical properties.  Normative Ethics - Normative ethics is the study of how to determine ethical values.  Applied Ethics - Applied ethics is the study of the use of ethical values.
  • 8. Ethical Values of Societies and Individuals • Ethical values of societies – Variations and similarities among societies – Functions of societal ethical values – Dynamics of societal ethical values • Ethical values of individuals – Built from societal-level values – Learned from family, including religious training, peers, education, and life experiences – Dynamics of individual ethical values – Levels of moral judgment
  • 10. Ethical Theories - Utilitarianism • Utilitarianism - the proper course of action is the one that maximizes the overall “happiness.” It is the “happiness principle.” Utilitarianism asks a person to examine the effects of his actions to decide whether these actions are morally correct under utilitarian guidelines. An actions morally right if its total net benefits exceeds the total net benefit for any other action. Utilitarianism has been accused of looking only at the results of actions, and disregarding the desires or intentions that motivate them. Intentions seem somehow important: it seems undesirable to call an action intended to cause harm but that inadvertently causes good "overall good".
  • 11. Ethical Theories - Right/Relativism • Relativism - right and wrong are determined by what my society believes Moral relativism may be descriptive, meta-ethical, or normative. Meta-ethical position: the truth or falsity of moral judgments is not objective, “It’s moral to me, because I believe it is.” • An actions morally right if its total net benefits exceeds the total net benefit for any other action. A right is a person’s just claim or entitlement. The right can focus on what that person does or on the action of other people toward him.
  • 12. Ethical Theories - Justice • Justice - determines just actions to be those that emerge from the correct use of principles that have been agreed to under conditions that are fair. • Justice-based ethics theories use a comparative process, which looks at the balance of benefits and burdens among members of a group or resulting from the application of laws, rules, and policies.
  • 13. Ethical Theories – Egoism • Egoism - a descriptive theory which states that people always act to maximize their self- interest (normative ethical positions). • Egoism focuses on a person’s self- interests, but can also include the interests of others.
  • 14. Ethical Theories – Applied Ethics • Applied ethics is a discipline of philosophy that attempts to apply ethical theory to real-life situations. – Applied ethics is used in some aspects of determining public policy and by those that face difficult decisions. Questions that are typically addressed by applied ethics include: – “What are human rights and how do we determine them?” “Do individuals have the right of self determination?” OR on a more personal level, one may ask, “Is lying always wrong?”, “If not, when is it permissible?”
  • 16. Modern managers are feeling increasing pressure to promote ethical behavior in their organizations, causing them to look for ways of managing for ethical behavior. Managers can follow three steps to manage for ethical behavior in their organizations: 1. Understand the composition of the present ethical culture of their organizations. 2. Improve that ethical culture. 3. Sustain ethical behavior so that it becomes embedded in their organizations.
  • 17. Managing for Ethical Behavior o Want to change an organization’s culture organization. Decisions are not made by the organizations, they are made by the people in them, who are guided by their personal ethical values and their perception of the organization culture’s ethical values that such matters. o Code of ethics – what is it in your organization, is it up to date and matches all aspects of business (internal, external, local, and international)
  • 18. Managing for Ethical Behavior - continued o Policies – based upon the ethical theories; specify what the organization wants to include in decision-making processes, increases the information used to include information tied to the ethical implications of the decision: o Employees’ right of dissent (whistle blowing) o Guidelines for employee privacy o Environmental effects o Procedures – includes information for members of decision-making groups
  • 19. Managing for Ethical Behavior - continued o Standards of ethical performance – what are they, what does it include? o Ethics training and education – does it exist? If so, does it need to be updated/revised? If not, what is needed to get started? o Reinforcing ethical behavior – rewards, motivation, standards of behavior o Peer reporting (whistle blowing) - protocol
  • 21. International Aspects of Ethics • Interest in ethics in different countries • Legal views • Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD) • Foreign Corrupt Practices Act (FCPA) • Ethical views • Cultural relativism- the principle that an individual’s human beliefs and activities are understood by others I terms of the individual’s own culture. • Ethical realism- to see moral truth as grounded in the nature of things rather than in subjective and variable human reactions to things.
  • 23. act utilitarianism Form of utilitarianism that asks a person to assess the effects of all actions according to their greatest net benefit to all affected. Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention) Twenty-nine members and five nonmembers of the Organization for Economic Cooperation and Development signed an ethics treaty. The treaty has strong sanctions for bribery. The signatories represented economies in the major world regions. Conventional One of three stages of moral development in the ethic of justice theory; attributed mainly to men; characterizes most adolescents and adults. Features a growing awareness of the expectations important to other people and the internalization of the moral norms of the person's group or society. cultural relativism An approach to international ethics that considers differences in ethical values among cultures and takes a normative ethical view based on the premise that each society's predominant ethical values decide what is right and wrong. difference principle Societies will have inequalities, but must help the disadvantaged (sick, disabled, etc.).
  • 24. egoism Ethical system that has two forms: individual (individuals judge their actions only by the effects on their own interests) and universal (individuals include others' interests when assessing the effects of their actions). ethic of care A theory of stages of moral development of individuals; attributed mainly to women. Three stages of moral development: self-focused (concerned with survival); focus on others (considers feelings, emotions, and situation); reflective understanding of caring for others (focus on others but has a balanced view of self in moral decisions). ethic of justice A theory of stages of moral development of individuals; attributed mainly to men. Three stages of moral development: preconventional (self-centered, obeys rules to avoid punishment); conventional (growing social awareness and less focused on self-interest); principled (behavior guided by freely chosen moral principles). ethical absolutism Holds that an ethical system applies to all people, everywhere, and always; based on an authority such as a religion, custom, or written code.
  • 25. ethical behavior Behavior judged as good, just, right, and honorable based on principles, rules, or guides from a specific ethics theory, character traits, or social values; may vary from person to person or country to country. ethical realism Holds that morality does not apply to international activities, behavior, and transactions. ethical relativism Holds that ethical behavior is based on personal feelings or opinions and is whatever a person or society says is ethical; rejects the view that moral judgments have objective validity. focus on others One of three stages of moral development in the ethic of care theory; attributed mainly to women. Consider actions moral that take into account other people involved in the situation; focus on feelings, emotions, and the unique qualities of the situation in which the act happens. focus on self One of three stages of moral development in the ethic of care theory; attributed mainly to women. Features a strong focus on self with the intent of ensuring survival; women often engage in self-criticism for being selfish.
  • 26. Foreign Corrupt Practices Act (FCPA) A U.S. statute enacted in 1977 that prohibits a company from using bribes to get business in another country or prevent the restriction of its business; allows small payments that are part of the ordinary course of doing business in another country. individual ethical egoist Judges a person's actions based only on their effects on self-interests. Because this form of egoism never considers other people's interests, moral philosophers usually reject it as a defensible basis of ethics. “It's good business” The assumption that doing business ethically is beneficial for organizations, especially in the long term. justice An approach to ethics that uses a comparative process that looks at the balance of benefits and burdens that are distributed among group members or that result from applying laws, rules, and policies. legal right A person's just claims or entitlements defined by the legal system.
  • 27. moral right A person's just claims or entitlements that exist because of ethical standards. negative rights A person's duty not to interfere with another person's rights. objectively ethical A person acts according to a rule or law. positive rights A person's duty to help others freely pursue an interest to which they have a right. preconventional One of three stages of moral development in the ethic of justice theory; attributed mainly to men. In the early period of this stage, the person is self-centered, does not consider anyone else's viewpoint, and obeys rules because they are backed by authority. In the later period of this stage, the person becomes aware of the interests of others and the conflicts that arise among multiple interests. principle of equal liberty Each person's basic liberties must equal those of others. Those liberties must also be protected from attack by others.
  • 28. principle of fair equality of opportunity Everyone must have the same chance to gain the best positions offered by society. principled One of three stages of moral development in the ethic of justice theory; attributed mainly to men. Features the development of moral principles that guide the behavior of those who reach this stage. reflective understanding of caring for others One of three stages of moral development in the ethic of care theory; attributed mainly to women. Features a strong focus on caring for others as the basis of moral action and a balanced view of the self in moral decisions. rights A person's just claims or entitlements; can be legal (defined by the legal system) or moral (universal rights that exist because of ethical standards). rule utilitarianism Form of utilitarianism in which a person assesses actions according to a set of rules designed to yield the greatest net benefit to all affected.
  • 29. stages of moral development Stages in which people shift from an individual understanding of morality to a societal one and then to a universal view. Some persons do not progress through all three stages, and the stages may differ for men and women. subjectively ethical A person believes he or she acted ethically. theory of distributive justice Theory proposed by John Rawls that is based on three principles: equal liberty for all persons, difference (society should care for its most needy while using its resources as efficiently as possible), and fair equality and opportunity for all. unethical behavior Behavior judged as wrong, unjust, dishonorable, or failing to meet an obligation.
  • 30. universal ethical egoism Universal ethical egoism, although controversial, can include the interests of others when assessing one's actions. Asks a person to weigh the effects of his or her actions on his or her interests with the assessment based on pursuing pleasure and avoiding pain. utilitarianism An approach to ethics that asks people to examine the effects of an action to decide whether its total net benefits exceed the total net benefits of any other action.
  • 31. Summary • Ethical behavior – behavior judged as good, just, right, and honorable based on principles, rules, or guides from a specific ethics theory, character traits, or social values; varies from person to person and country to country • Moral right – a person’s just claims or entitlements that exist because of ethical standards. • Know your organization’s Code of Ethics • Ethical decision-making is affected by: – Law – Morality – Values – Professional codes

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