When you see top managers like those formerly at Enron, World com,
Tyco International and Imclone being greedy and using financial manipulations,
lying and group pressure to deceive others, you may conclude that corporate
America has no ethics. Although that is by no
means true, what is true is that managers – at all levels in all areas in
all sizes and in all kinds of organizations – will face ethical issues and
dilemmas. For instance, is it ethical for a sales representative to offer a
bribe to a purchasing agent as an inducement to buy ?
Would it make any
difference if the bribe to a purchasing agent came out of the sales rep’s
commission ? is it ethical for someone to use a company car for private use / How about using personal phone calls ?
how would you handle these situations ? As managers plan, organize lead and
control they must consider ethical dimensions.
What do we mean by ethics ? the term ethics refers to rules and
principles that define right and wrong
conduct. In this section we examine the ethical dimensions of managerial
decisions. In this section we examine the ethical dimensions of managerial
decisions. Many decisions that managers make require them to consider who may
be affected – in terms of the result as well as the process. To better
understand the complicated issues involved in managerial ethics, we will look
at four different views of ethics and the factors that influence a person’s
ethics and offer some suggestions for what organizations can do to improve the
ethical behavior of employees.
FOUR VIEWS OF ETHICS
The four perspectives on ethics include the utilitarian view,
rights view , theory of justice view, and integrative social contracts theory.
The utilitarian view of ethics says that ethical decisions are made solely on
the basis of their outcomes or consequences. Utilitarian theory uses a
quantitative method for making ethical decisions by looking at how to provide
the greatest good for the greatest number. Following the utilitarian view, a
manger might conclude that laying off 20 percent of the workforce in her plant
is justified because it will increase the plant’s profitability improve job security
for the remaining 80 percent and be in the best interests of stockholders.
Utilitarianism encourages efficiency and productivity and is consistent with
the goal of profit maximization, however it can result in biased allocations of
resources, especially when some of those affected by the decision lack
representation or a voice in the decision. Utilitarianism can also result in
the rights of some stake holders being ignored.
Another ethical perspective is the rights view of ethics, which is
concerned with respecting and protecting individual liberties and privileges
such as the rights to privacy, freedom of conscience, free speech, life and
safety and due process. This would include, for example protecting the free
speech rights of employees who report legal violations by their employers. The
positive side of the rights perspective is that is pro efficiency by creating a
work climate that’s more concerned with protecting individuals rights that with getting the job done.
The next view is the theory of justice view of ethics. Under this
approach managers impost and enforce rules fairly and impartially and do so by
following all legal rules and regulations. A manger using the theory of justice
perspective would decide to provide the same rate of pay to individuals who are
similar in their levels of skills, performance or responsibility and not base
that decision on arbitrary differences such as gender, personality race or
personal favorites. Using standards of justice also has pluses and minuses. It
protects the interests of those stakeholders who may be underrepresented or
lack power, but it can encourage a sense of entitlement who may be
underrepresented or lack power, but it can encourage a sense of entitlement
that might make employees reduce risk – taking, innovation and
productivity.
The final ethics perspective the integrative social contracts
theory proposes that ethical decisions be based on existing ethical norms in
industries and communities in order to determine what constitutes right or
wrong. This view of ethics is based on the integration of two “contracts” the
general social contract that allows businesses to operate and defines the
acceptable ground rules and a more specific contract among members of a
community that addresses acceptable ways of behaving. For instance in deciding
what wage to pay workers in a new factory in Ciudad Juarez, Mexico managers
following the integrative social contracts theory would base the decision in
existing wage levels in the community. Although this theory focuses on looking
at existing practices the problem is that some of these practices may be
unethical.
FACTORS THAT AFFECT EMPLOYEE ETHICS:
Whether a person acts ethically or unethically when faced with an
ethical dilemma is the result of complex interactions between the stage of
moral development and several moderating variables including individual
characteristics, the organization’s structural design, the organizations
culture and the intensity of the ethical issue.
