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Chapter 3

Total Quality and Ethics

Ethics Defined
 The term ethics is associated with
many definitions like trust, integrity
and values figure in human lives.
 But among all, ethics is best defined
as the study of morality.
 Morality refers to the values and
norms that are accepted and
practiced by the society as a whole.
 Ethics produces guidelines for human
conduct that translate morality into
everyday behavior.
 Ethical behavior is the behavior within the
limits prescribed by morality.
 The concept of trust, responsibility and
integrity are part of the value system of
total quality.
 Ethical questions often fall into a gray
area between the two extremes of clearly
right and clearly wrong
Guidelines for Determining Ethical

 The concepts of legal and ethical must be

distinguished to determine the guidelines
for ethical behavior.
 The reason is that a behavior that is legal
will not necessarily become ethical, vice
 David L. Goetsch introduced
Tests of Ethical Behavior with the
assumption that the behavior is legal.
Tests of Ethical Behavior
 Morning-After Test
How will you feel about this behavior tomorrow
 Front-page Test
How would you like to see this behavior written up on
the front page of your hometown newspaper?
 Mirror Test
How will you feel about this behavior when you look in
the mirror?
 Role Reversal Test
How would you feel about being on the receiving end of
this behavior?
 Common Sense Test
What does everyday common sense say about this
 Blanchard and Peale suggest a test
to determine the ethical choice in a
given situation. T
 They also describe
The Five P's of Ethical Power.
The Five P's of Ethical Power
 Purpose. Individuals see themselves as ethical
people who let their conscience be their guide and in
all cases want to feel good about themselves.

Pride. Individuals apply internal guidelines and
have sufficient self-esteem to make decisions that
may not be popular with others.

Patience. Individuals believe right will prevail in the
long run, and they are willing to wait when

Persistence. Individuals are willing to stay with an
ethical course of action once it has been chosen and
see it through to a positive conclusion.

Perspective. Individuals take the time to reflect
and are guided by their own internal barometers
when making ethical decisions.
 Trevino suggests that three personality measures
can influence a person's ethical behavior; ego
strength, machiavellianism and locus of
 Ego strength: In Freud’s psychoanalytic theory
of personality, ego strength is the ability of the
ego to effectively deal with the demands of the id,
the superego, and reality. Those with little ego
strength may feel torn between these competing
demands, while those with too much ego strength
can become too unyielding and rigid. Ego strength
helps us maintain emotional stability and cope
with internal and external stress.
 Machiavellianism : is the term
that some social and personality
psychologists use to describe a
person's tendency to deceive and
manipulate others for personal gain.
 The concept is named after
Renaissance diplomat and writer
Niccolo Machiavelli
 Locus of control : The locus of control
can either be internal (meaning you
believe that you control yourself and your
life) or external (meaning you believe that
your environment, some higher power or
other people control your decisions and
your life).
 It was developed by Rotter in 1954 as an
important aspect of personality.
 Prebel and Miesing suggest that
certain social factors like gender,
role differences, religion, age, work
experience, etc can also influence
ethical behavior in organizations.
Trust and Total Quality
 Trust is an essential element in total
quality. There are various elements of
total quality that depend on trust. These
elements include:
 Communication
 Interpersonal relations
 Conflict management and problem solving
 Teamwork
 Employee involvement and empowerment
 Customer focus
Values and Total Quality
 Values are also important in total quality.
Total quality will be achieved if values are
included in the production process.
 For example, an organization that values
quality will only produce quality products
and services.
 Furthermore, individual employees and
organizations as a whole will most
willingly apply their knowledge and skills
to what they value, what they believe in
and what they feel is important.
Integrity and Total Quality
 Integrity that combines honesty and dependability
will lead to ethical behavior.
 People with integrity are assets to organization.
According to Peter Drucker, integrity can be
achieved by observing the part of the Greek
physician's Hippocratic oath that reads primum
non nocere, or above all, do not knowingly do
 This rule applies to employees and the
organization as a whole.
 Managers who follow this rule will keep the best
interest of their organization and employees in
mind when making decisions and in all aspects of
their jobs.
The Hippocratic Oath
 The Hippocratic Oath is an oath traditionally
taken by physicians pertaining to the ethical
practice of medicine.
 It is widely believed that the oath was written by
Hippocrates, the father of medicine, in the 4th
century BC, or by one of his students.
 Based on the Hippocratic oath, according to Peter
Drucker, every professional can only try to do
what is the best for his client regardless if he is a
doctor, lawyer or manager.
 But the client can have full confidence in him that
he will definitely not do any harm to the client.
Case study 1
 Wai Manufacturing has guaranteed Ryan Products that it will
deliver the complete order of small machines by the 10th of
the month, a Friday. Ryan had already extended its deadline
once. This time, it insists, the date must be met. Tim Vinson,
head of quality control, had been confident the deadline
would be met. But on the 8th he learns that a new
component of the machines is in short supply. He thinks of
several options:
 1) Approve breaking up and regrinding the remaining supply
of the old component that was being replaced. This could
probably be accomplished in time, but the speed at which it
would have to be done raises concerns about impurities in
the process.
 2) Approve using the old component in place of the new one.
The product would still function well, and it would be unlikely
that Ryan would ever detect the difference. Although Ryan
would not be getting exactly what it ordered, the product
would meet minimal safety and durability standards.
 3) Discuss the problem with the design engineer and see
what he suggests.
 Which of these options would you recommend? Can you
think of any other options that might be preferable?
Case Study 2
John Budinski, quality control engineer at Clarke Engineering,
has a problem. Clarke contracted with USAWAY to supply a
product subject to the requirement that all parts are made in
the United States. Although the original design clearly
specifies that all parts must satisfy this requirement, one of
Clarke's suppliers failed to note that one of the components
has two special bolts that are made only in another country.
There is not time to design a new bolt if the terms of the
contract are to be met. USAWAY is a major customer, and not
meeting the deadline can be expected to have unfortunate
consequences for Clarke.
John realizes that the chances of USAWAY discovering the
problem on their own is slim. The bolts in question are not
visible on the surface of the product. Furthermore, it is highly
unlikely that those who work on repairs will notice that the
bolts are foreign made. In any case, Clarke is under contract
to do the repairs. Meanwhile, it can work on a bolt design so
that it will be ready with USA bolts when, and if, replacements
are needed.
What should John do?
Case Study 3
XYZ orders 5000 custom made parts from ABC for one of
its products. When the order is originally made ABC
indicates it will charge $75 per part. This cost is based in
part on the cost of materials. After the agreement is
completed, but before production of the part begins, ABC
engineer Christine Carsten determines that a much less
expensive metal alloy can be used while only slightly
compromising the integrity of the part. Using the less
expensive alloy would cut ABC's costs by $18 a part.
Christine brings this to the attention of ABC's Vernon
Waller, who authorized the sales agreement with XYZ.
Vernon asks, "How would anyone know the difference?"
Christine replies, "Probably no one would unless they were
looking for a difference and did a fair amount of testing.
In most cases the performance will be virtually the same
-- although some parts might not last quite as long."
Vernon says, "Great, Christine, you've just made a bundle
for ABC." Puzzled, Christine replies, "But shouldn't you tell
XYZ about the change?" "Why?" Vernon asks, "The basic
idea is to satisfy the customer with good quality parts,
and you've just said we will. So what's the problem?"
The problem, Christine thinks to herself, is that the
customer isn't getting what was promised. Further, even if
XYZ would be satisfied with the different part, shouldn't it
be given the opportunity to decide if it finds the change
acceptable -- and to benefit from lowered cost?
Should Christine share her further thoughts with Vernon,
or should she simply drop the matter?