337 ethical issues

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  • Ethical Issues in Management

    Ethical Issues in Management

  • Ethical Issues in ManagementEthical perspectives and moral developmentEthical decision makingSocial responsibility

    Ethical Issues in Management

  • What Are Ethics?The area of philosophy concerned with human behavior in the social contextBased on a consideration of values, rather than facts (although it is necessary to determine the facts)Both individual and shared values importantNot the same as legal considerations (although laws overlap with societys agreed-upon ethical standards)Social and economic factors are not part of ethical decisions (although many ethical decision have social or economic implications)

    Morality vs. legality vs. social/economic forces

    Ethical Issues in Management

  • Ethical Perspectives: UtilitarianJeremy Bentham (1748 1832)Decisions are made on the basis of outcomesMaximize benefits for the greatest numberExample: Oregon & health care

    Ethical Issues in Management

  • Ethical Perspectives: IndividualismAdam Smith (1723-1790)At the most basic level, Whats in it for me?However, theres a long-term equilibrium; the invisible hand

    Ethical Issues in Management

  • Ethical Perspectives: Moral RightsJohn Locke (1632 1704)Respect individuals inherent rights and libertiesNatural rights of mankindThe right of life, liberty, and the pursuit of happinessRights?Free consentPrivacyFreedom of conscienceFree speechDue processLife and safety

    Ethical Issues in Management

  • Immanuel Kant (1724 1804)For Kant, what is right is based on the categorical imperative, which is the notion that every person should act on only those principles that he or she, as a rational person, would prescribe as universal laws to be applied to the whole of humankind.

    Ethical Issues in Management

  • Ethical Perspectives: JusticeDecisions made with equity and impartialityTypes of justiceDistributiveProceduralCompensatory

    Ethical Issues in Management

  • Social Justice PerspectiveValue placed on human dignityWork for the common goodHuman rightsDignity of workSociety judged by treatment of poor and vulnerable

    Ethical Issues in Management

  • Levels of Moral DevelopmentPreconventionalObey to avoid physical punishmentFollow rules if it is in your immediate interestConventionalLive up to what your family and friends expectMaintain order by fulfilling obligationsPrincipledValue others rights regardless of majority opinionFollow self-chosen ethical principles even if they violate the law

    Ethical Issues in Management

  • Ethical Decision MakingCodes of ethicsState basic principlesCan be for a specific organizationMany professions also have an ethical codeCan be very general (credo) or very specificLeadershipManagers by definition are (or should be) role modelsEthical training

    Ethical Issues in Management

  • Components of Ethical TrainingProvide trainees with an understanding of ethical judgment philosophies and guidelines.Provide industry/profession-specific areas of ethical concern.Provide trainees with organizational ethical expectations and rules.Provide trainees with an understanding of their own ethical tendencies.Take a realistic viewelaborate on the difficulties of ethical decision making.Get the trainees to practice and role-play.

    Ethical Issues in Management

  • How is Business Viewed by Society?The Simple Life FolksLarge organizations, by their very existence, are destructive of human valuesWe should adopt a simpler lifestyle, freeing ourselves of the need for large businessesWe are interested in maximizing human potentialRedemption-May-Be-PossibleLarge organizations exploit those without power (especially multinational firms and indigenous peoples)Dont abolish business firms, but major reform is neededCritics from WithinBusinesses have done a lot to earn their bad reputationResponsible business leaders must begin cleaning out the stables

    Ethical Issues in Management

  • Do the Facts Justify Criticism ??

    Of the globes 100 largest economic entities, 51 are corporations; only 49 are countriesThe 300 largest global corporations hold one-quarter of the entire globes productive assets72% of Americans say business has too much power over too many aspects of American life

    Ethical Issues in Management

  • The Top Ten

    Ethical Issues in Management

  • Social ResponsibilitySocial Obligations SchoolMaximize profitsStay within boundaries of lawSocial Reaction SchoolMaximize profits, and at the same time.Ensure the organizations survival by responding to "currently prevailing social norms, values, and performance expectations." Social Responsiveness SchoolCorporations should prevent and solve social problemsCorporations can prevent and solve social problemsThe Friedman view

    Ethical Issues in Management

  • Milton FriedmanThe Social Responsibility of Business is to Increase its Profits

    A corporation is an artificial person thus, unlike a real person, it has no ethical or moral obligations Managers are responsible to owners: That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embedded in ethical custom

    Ethical Issues in Management

  • Freidmans Reasoning, continuedIndividual managers fulfill their private ethical / moral obligations from their personal resourcesIf managers are to spend money on public uses, they must be accountable, just as are politicians. The analogy here is with taxation; by spending money pf public uses, the manger is in effect taxing employees, customers and owners for the benefit of society as a wholeFor Freidman, this is socialist -- using political mechanisms, not market mechanismsthe appropriate way to determine the allocation of scare resources to alternate uses

    Ethical Issues in Management

  • Friedman, FinaleFurther, if business social spending (the specific expenditures) were a good ides (accepted by society), it would be a public responsibility and funded through taxesHowever, an organization may legitimately spend money on what may be perceived as social responsibility, but where there is a benefit to the firm (for example, funding education)Thus, corporations are judged solely by financial performance, as defined by the owners / shareholders

    Ethical Issues in Management

  • The Stakeholder ApproachHow do we solve the problem of the free rider?Organizations and people are bound together in a network of mutual relationshipsStakeholdersThose people or groups essential to an organizations successThose people or groups affected by what an organization doesPeople with a legitimate interestAn organization is obligated (duty) to consider the interests of stakeholders

    Ethical Issues in Management

  • Who Are the Stakeholders?Primary and secondary (how close are they to the organization?)Who?ManagementEmployeesOwnersLocal communitySuppliersCustomers

    Ethical Issues in Management

  • Taking a StandLooking at costsShort term vs. the long termExamples:Doing well by doing good: CostcoPublic relations: Sara LeeEnvironmental cost savingsObligation to just the stockholders or to employees, and society as a whole ??????Management values

    Ethical Issues in Management

  • Levels of Social ObligationProactiveTake social initiativesAccommodatingAccept ethical responsibilityDefensiveDo only what is legally requiredObstructionistFight all the way

    Ethical Issues in Management

  • Values-Based ManagementUsing shared values as a basis for management decision-makingExamplesLevi StraussBody ShopServiceMaster

    Ethical Issues in Management