Beruflich Dokumente
Kultur Dokumente
EMBA Semester 1
Table of Contents
Abstract...................................................................................................................... 2
Introduction to Ethics................................................................................................. 2
Ethical Behavior................................................................................................... 2
Unethical Behaviors............................................................................................. 3
What is an Unethical Behavior?.................................................................................. 3
2.1 False Communications................................................................................... 3
2.2 Collusion......................................................................................................... 4
2.3 Gifts and Kickbacks........................................................................................ 4
2.4 Conflict of Interest.......................................................................................... 4
2.5 Unethical practices in the Health Care Sector................................................4
2.6 Insider Trading................................................................................................ 5
2.7 Discrimination and Harassment.....................................................................5
2.8 Wrong Doing.................................................................................................. 5
Why People Behave Unethically...........................................................................6
Causes of Unethical Behaviors.............................................................................6
TERMS IN AND TYPES OF ETHICAL THEORY................................................................7
TELEOLOGICAL..................................................................................................... 7
CONSEQUENTIALIST............................................................................................. 7
DEONTOLOGICAL.................................................................................................. 8
RELATIVISM/SUBJECTIVISM................................................................................... 9
VIRTUE BASED THEORIES................................................................................... 10
Managing Ethics at Workplace:.................................................................................11
Values Drive Behavior........................................................................................ 11
Putting Virtuous Values into Practice..................................................................12
Behavioral Standards and Codes of Conduct: The Safety Net............................13
The Ethical Behavior Formula.............................................................................13
The Benefits & Importance of Ethics in the Workplace.............................................15
Asset Protection................................................................................................. 15
Productivity and Teamwork................................................................................ 15
Public Image....................................................................................................... 15
Decision-Making................................................................................................. 15
Abstract
The media bombards us with accounts of unethical behaviors in organizations which
reveal social issues that demand our attention. These behaviors are from individuals
with no moral character and have raised a lot of concerns about business ethics.
This paper examines the unethical behaviors, their causes, and the strategies for
reducing their occurrence.
Introduction to Ethics
Ethics is the study of morality. It is the value that is worth pursuing in life. It is
honorable
behavior. Ethics is relative. What is honorable in one society may not be honorable
in another. It depends on several factors: world views, descriptive values and moral
values. It is a function of the environment. What one salesperson may consider
being an unethical marketing behavior, another salesperson may perceive it as an
aggressive marketing strategy.
Ethical Behavior
Ethics can be illustrated with the popular story of a millionaire who built an Olympic
size
swimming pool for his evening enjoyment. He filled the pool with many crocodiles of
different types and sizes. His own idea of enjoyment is to watch these crocodiles
swim every evening. At the completion of the construction of the swimming pool, he
invited all the elites of the city to its dedication. As people were eating and drinking,
an announcement was made by the host, over the public address system, that if
any young man was bold enough to swim across the swimming pool, he would be
given one of two things: a real estate that worths $1 million or his only beautiful
daughter in marriage. Before he finished his announcement, a young man jumped
into the swimming pool, to the surprise of everyone, swam across the pool and got
out without a single bruise on his body. The millionaire ran to him, gave him a big
hug and asked him what he would like to receive out of the two. The young man
said he did not want any of them and that
the only thing he wanted was, he wanted to know the bastard who pushed him into
the swimming pool. That is ethics. The young man told the truth. He did not want
any of the two rewards promised by the millionaire because he did not, on his own,
jump into the pool. He was pushed by an unknown person. The millionaire too
behaved honorably. He did not believe anyone could jump into the swimming pool
to swim across. Since somebody did, he was still willing to stand by his words. He
did not say he was not willing to give his only daughter in marriage to a stranger.
Unethical Behavior
The media feeds us with information of unethical behaviors in our environment
revealing the unethical social issues that demand our attention. The newspaper
accounts of unethical behaviors in business have raised concerns about business
ethics which have led to studies on their causes in organizations (Carroll, 1978, 4).
These unethical behaviors are from unsavory individuals that have no moral
character. In 1961, the survey conducted by Reverend Raymond C. Baumhard S. J.,
showed that there was a very high concern about ethical behaviors. That concern is
higher today.
False Communications
False communications fall into various categories. They include falsification of
auditors or controllers report or any form of manipulation that does not tell the
whole truth. These include cheating on tax returns or inappropriate depreciation
schedule and wrong expenses (Brennan Jr., Valtz, Shallenberger & Stanton, 1961,
164). Feeding the public with wrong report of the organizations business
performance to make the organization look good is another common practice. In
2001, Enron gave wrong information about their loss because Ken Lay, the CEO of
Enron, was advised by some trusted Enron executives to report only $1.2 billion of
the $7 billion in losses because it was felt that the amount could be explained
reasonably without doing more damage to the falling stock price of the company
(Collins, 2007, 3). Similar to this was the case of Manville Corporation. The top
Collusion
Collusion, especially with competitors, to fix prices, is an unfair business practice
today. This could be considered stealing from customers. However, there are
differences of opinion on whether or not price fixing is stealing from customers
(Brennan Jr., Valtz, Shallenberger & Stanton, 1961, 174).
Conflict of Interest
Conflict of interest occurs when ones private interest interferes or appears to
interfere in any way with the interest of the organization. According to Sliglitz, it can
be argued that there is no conflict of interest because, based on Adam Smiths view,
the individuals, when pursuing their own self-interest are actually pursuing the
general interest of society (Sliglitz, 2003, 2). Some examples of conflicts of interest
are:
diverting from the organization for personal benefit, a business opportunity,
using the organizations assets for personal benefit,
accepting any valuable thing from the organizations customers or suppliers, and
having a financial interest in an organizations competitor.
patients to boost income. The third is doing surgery at surgical centers instead of
the hospital so that the doctors do not have to pull call at any hospital (Weber,
2003,6).
Insider Trading
Insider trading is an unethical behavior which occurs when a person who has access
to
confidential information uses or shares the information for securities trading
purposes or any other purpose except the conduct of regular company business.
The confidential information of the company are not to be used for achieving
personal gain neither are they to be disseminated directly or indirectly, to friends,
family members and other outsiders who may in turn trade on or misuse the
information.
Wrong Doing
A large number of people, including top management, are involved in wrong doing
both in the public and in the private sectors. The managers of E.E. Hutton, for
example, were found guilty of 2000 mail and wire fraud. Similarly, the supervisors of
a defense contractor were accused of falsifying time cards (Gellerman, 1986, 85).
(AMA) and (HRI), (MacDo, 2006, 1), revealed that the ignorance that the acts are
unethical and not knowing the seriousness of the consequences when caught, are
causes of unethical behaviors.
Competition for scarce resources, power or position can cause individuals to engage
in
unethical behaviors. Hosmer emphasized that an attempt to improve their
corporate competitive positions made managers to take immoral actions (Hosmer,
1987, 439). Bazerman and Banaji felt that the cause of the unethical behaviors in
organizations is the presence of a few bad apples among organizational actors
(Bazerman & Banaji, 2004, 111). The primary cause of unethical behaviors can be
traced to lack of maintaining the type of consistent leadership that is necessary for
running an ethical organization. This exposes the employees to opportunities that
make them engage in unethical behaviors.
1. Consequences are difficult to predict. Your actions may have good intentions and
a high probability of causing good results. But, if something happens and the
consequences are actually bad, then your action was morally wrong. Also, as the
situation involves more people and alternatives, it becomes more difficult to
determine which action would produce the best consequences. How can we ever
know that we actually chose the best alternative. There is no opportunity for
comparison of actual cases, just similar ones.
2. "Does the end always justify the means?" A consequentialist theory would justify
many actions that we normally would consider wrong, if it turned out that the
consequences were good.
3. This theory undermines trust in others and intimate relationships since we can
never be sure that the consequences might not justify a betrayal of trust and in
many of these theories, each individual is treated the same regardless of one's
relationship. So, for example, ones duty to prevent pain to a stray cat would be
equal to ones duty to prevent pain to ones own cat.
DEONTOLOGICAL - This type of theory claims that there are features within the
actions themselves which determine whether or not they are right. These features
define the extent to which the actions conform with recognized moral duties. For
example, driving while drunk violates the duty to above all do no harm. The duties
derive from various sources, such as religion, biology, psychology, metaphysics,
culture, language, etc. Depending on the deontological theory, these duties may be
absolute (no exceptions), prima facie (can only be overridden by a more important
duty), or conditional (only hold under specified circumstances).
Deontological theories do not consider consequences to be important when
determining whether or not an action is ethical. It doesnt matter if the drunk driver
made it home safely. Driving drunk was still wrong because the intention to drive
drunk was wrong (or to drink alcohol when one knows one needs to drive).
Immanuel Kant's ethical theory is deontological. He claims that actions are only
morally right when they are done out of duty. He sees moral duties as unchanging
laws for human conduct. He believes that morality is derived from the ability to
think rationally, which enables beings to be free. If one is not free, then one cannot
be held responsible. Thus only free individuals are moral agents and all free
individuals are capable of acting out of reason. Kants moral theory is largely
focused on protecting and promoting the free action of rational beings. Three
formulations of his categorical imperative are derived from this moral foundation:
(Kant)
Always act out of duty, in accordance with a good will (I.e. One does the right thing
because one recognizes that it is the right thing to do, not because it pleases you to
do it or will promote good consequences.)
Always act as if the maxim of thy action were to become by thy will a Universal Law
of Nature (i.e. Are you willing to allow any other rational being to act on the same
reasoning you used to justify your action?)
Act as to treat the capacity for rationality, whether in thine own person or in that of
any other, in every case as an end withal, never as a means only. (i.e. Never treat a
rational being as a mere means to an end.)
Benefits
1. Right and wrong actions are easily determined by considering one's duties. In
some cases, these are explicitly spelled out (i.e. religion). However, the use of
judgement is usually necessary to determine which duties apply and how.
2. Unlike utilitarianism, the end does not justify the means. Deontological theories
provide a sound basis for inalienable rights and inherent value.
3. Since duties do not change, there is a greater sense of security/predictability in
the accepted behavior of others. Right and wrong dont vary with the
consequences, although there may be a various according to circumstances (i.e. in
the case of conflicting duties).
4. Good motives are valued, even if the outcome wasnt what you expected..
Problems
1. There is no agreement on a single standard for morality.
2. Ignoring consequences can cause pain and suffering.
3. The imposition of a specific moral belief system on others has been a cause of
significant harm throughout history. Some deontological theories are not equipped
to respect diverse beliefs. However there are some deontological theories that
incorporate respect for the beliefs of others. There are even some religious-based
theories which, while espousing one true way also respect diverse beliefs amongst
individuals (i.e. Buddhist ethics).
actions. Deontological theories focus on acting in accordance with moral duties and
obligations. Virtue based theories focus on the character of the person. According to
virtue based theories, ethics is about what sort of person one should strive to
become. The qualities that one should develop in oneself are called virtues (ex.
honesty, fairness, kindness, faithfulness, generosity, prudence, integrity, bravery,
etc.).
One should act in ways that develop these virtuous qualities within oneself. For
example, Aristotle claimed that in order to become an honest person, one should
tell the truth. (Aristotle) Eventually it becomes a habit. Along, the way one learns how to
tell the truth appropriately, without being brutally honest all of the time or lying
whenever it is easier to do so. There are many virtues that one ought to develop
through practice over ones lifetime. Becoming virtuous is excelling at all of the
virtues that make a good human being, health care professional, etc. It is a learning
process that continues throughout your life.
Benefits
1. This type of theory recognizes that individuals and circumstances are unique. For
example, the virtue of compassion may be expressed by two people in two different
ways. Similarly, running into a burning building may be courageous action for a fire
professional but foolhardy for an untrained individual with no protective equipment.
2. Virtue ethics allows each individual to use his/her own judgement when making
difficult moral decisions, yet recognizes certain common goals.
3. Mistakes are expected and recognized as learning opportunities.
Problems
1. Some argue that too much is left to individual judgement, thus opening the door
to bias and prejudice.
2. Similarly, virtues can be interpreted very differently. For example, consider the
many ways that fairness may be interpreted.
3. Virtue ethics depends on modeling for some of the education. However, one may
choose a poor role-model and therefore develop a false sense of virtue.
how values relate to effective managerial leadership. A review of this body of work
leaves us with the clear picture that values are a key component of effective
managerial leadership.
Value
Attitude
Experience promotes wisdom that
Wisdom
and
helps convert information
to
Knowledge
knowledge.
Self-Control
Ethical Behavior
Using knowledge to solve problems
ethically and to do what is right.
Self-control
means
effectively Putting personal motivations aside and
managing reactions to challenging acting with objectivity by doing what is
situations and temptations.
right.
considered it a key task of top management. Selecting people who share your
virtuous values is critical to building an ethical culture and long-term business
success.
Third, new personnel need to be socialized into the organization so as to advance
virtuous values. As an executive, I regularly attended new employee orientations to
espouse the organizations values. As a way of promoting and influencing ethical
behavior, it is very powerful for new employees to hear managerial leaders espouse
core virtuous values and to see those values affirmed through the actions of others
in the organization.
Fourth, accountability and follow-up are critical in putting virtuous values into
practice. Systems and procedures can remind people of commitments and help
connect words or promises with deeds. In organizations with behavioral integrity,
words and deeds count. When virtuous values are driving behavior, the alignment of
words and deeds serves to advance the creation of an ethical work culture.
Finally, managerial leaders can positively impact the practice of ethical behavior by
fairly allocating organizational resources and linking them appropriately. All
managerial leaders have five key resources to manage: people, money, capital
assets, information, and time. Allocation of these resources and the process
managers use to accomplish such distribution can create perceptions of equity and
fairness, or inequity and unfairness. Managerial leaders who value justice and
fairness are more likely to deal the cards fairly thereby modeling ethical behavior
than are those who do not.
First, it is the right thing to do. Employees and external stakeholders alike
want and deserve to be treated ethically. Taken to the extreme, a culture allowing
unethical behavior can breed all manner of damaging and even criminal activity.
Asset Protection
A strong ethical culture within your business is important in safeguarding your
assets. Employees who abide by your workplace ethics would be able to protect and
respect your businesss assets. For example, they would avoid making personal long
distance calls using the businesss lines. Workers can only respect company
property when you treat them with respect and dignity, which makes them feel
proud to be working for your business. Ensure that your workers perform in an
environment with integrity and strong ethics. It increases employee pride and
discourages them from stealing supplies or equipment.
Public Image
You earn a lot of respect and cultivate a strong image in the public domain when
you make ethical choices. For instance, you can fulfill your corporate social
responsibility by reducing waste discharge from your business. The public would
consider your business to be operating with honor and integrity while valuing
people over profits. Building a strong public image through ethical conduct also
earns you more clients. Customers would develop trust in you and do business with
your organization.
Decision-Making
Ethical conduct in the workplace encourages a culture of making decisions based on
ethics. It also enhances accountability and transparency when undertaking any
business decisions. During turbulent times, a strong ethical culture guides you in
managing such conflicts by making the right moves. It can help you to introduce
change successfully in your organization, which can be a challenge. Ethical conduct
within the business sensitizes you and your staff on how to act consistently even in
difficult times.
Conclusion
Today, there is a tremendous loss of confidence in corporate conduct and there is an
urgent need to work towards restoring it. Although ethics education seem to
produce limited evidence of changing behaviors, the commitment of management
to monitor annual ethics education for all employees will produce the desired
favorable results. There should be clear communication to the employees of what
are honorable and expected behaviors in the organization. They must maintain and
stand firm on a clear cut policy that ethical methods are the only way of doing
business.
References:
Aristotle. The Nicomachean Ethics, Welldon, J. trans. Prometheus Books (Buffalo, NY:
1987).
Hosmer, LaRue J. (1987), The Institutionalization of Unethical Behavior. The
Journal of Business Ethics, 439 447.
Weber, David O. (2005). Unethical Business Practices in U.S. Health Care Alarm
Physician Leaders. Special Report: Ethical Debates/Ethical Breaches
McShulskis, Elaine (July, 1997). Job stress can prompt unethical behavior, HR
Magazine. 22-24.
National Defense University. (1986). Strategic Leadership and Decision Making.
//www.au.af.mil/au/awc/awcgate/ndu/strat-ldr-dm/comt.html. 1-10.
Stiglitz, J.E. (2003) Ethics, market and Government Failure, and Globalization.