Why good managers make bad ethical decisions?

Business Ethics Defined as written and unwritten codes of principles and values that govern decisions and actions within a company. Business ethics can be used to describe the actions of individuals within an organization, as well as the organization as a whole. The organizations culture sets standards for determining the difference between good and bad decision making and behaviour.

Importance of Ethical Business Decisions

Company who wish to thrive long-term must adopt sound ethical decision-making practices. Company who behave in a socially responsible manner are much more likely to enjoy ultimate success than those whose actions are motivated solely by profits. Company knowing the difference between right and wrong and choosing what is right is the foundation for ethical decision making.

Doing the right thing often leads to the greatest financial, social, and personal rewards in the long run.

Factors Impacting Business Ethics Corporate culture Existence and application of a written code of ethics

 Formal and informal policies and rules Norms for acceptable behavior Financial reward system System for recognizing accomplishment Company attitude toward employees How employees are selected for promotions Hiring practices Applications of legal behavior Degree to which professionalism is emphasized The companys decision making processes Behaviors and attitudes of the organizations leaders etc

What makes an individual, A Good Manager? To choose a field thoughtfully To be a good mediocre To create productive environment To define success To be a good communicator To transfer the skills To build morale To solve the challenges To be sound mind

 To be a risk taker & solve r at times

Why good managers make bad ethical decisions? Generally accepted principles of right and wrong governing the conduct of individuals Our personal ethical code exerts a profound influence on the way we behave as businesspeople The first step to establishing a strong sense of business ethics is for a society to emphasize strong personal ethics Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics Several studies of unethical behavior in business have concluded that businesspeople sometimes do not realize they are behaving unethically primarily because they simple fail to ask. Is this decision or action ethical? Often the result of applying straight-forward business calculus to a decision without considering important ethical issues The climate in some businesses does not encourage people to think through the ethical consequences of business decisions Result of an organizational culture that deemphasizes business ethics, reducing all decisions to be purely economic Corporate culture refers to any set of values, norms, rituals, formal rules, and physical artefacts that exists in a company.

 Pressure from the parent company to meet unrealistic goals that can only be attained by cutting corners or acting in an unethical manner This often results in managers will violating their own personal ethics and engage in unethical behavior An organizational culture with values that reinforce ethical behavior is an essential ethical component Companies having an ideal blend of Morality & Profitability are visionary companies with strong ideology (ideals) Ideology set of basic precepts or beliefs or values that are subscribed to Core Ideology exists in these companies not just as words but as a vital shaping force Combining both Genius of the AND ideology AND profits These companies do pursue profits or long term shareholder wealth but they also pursue meaningful ideals of serving humanity.

Managerial Teasers

You are in-charge of cash expenses Your supervisor comes and asks you for a cheque of 3000 Rs towards expenses he incurred entertaining a client last night. At lunch your supervisors girlfriend stops by to pick him up for lunch and you overhear her telling the receptionist what a great time she had at dinner with your supervisor the night before What do you do?

You are the HR manager in your company Your company has a firm policy regarding cases of theft of company property. Used company equipment is sold in a bid each month. You see a valued employee who is 5 months away from retirement, slip an electric drill and put it in his car. What do you do?

You are the buyer for a retail clothing store. Your store has a policy of not accepting gifts. However, over the years, salesmen have offered and other employees have accepted lunch, theater and sporting event tickets. You arrive home from office one evening and find a new LCD and DVD player at your doorstep with a note that says A personal gift for long lasting friendship The xyz Clothing Company What do you do?

 You are a bank teller working for the bank for the past 6 months, one of the other tellers at the bank who has become a good friend tells you that her daughter is extremely ill and has to be operated at an expense of 9 lakh rupees. Some days later you ask about her daughters health and she tells you that her daughter is just fine now. She then confides in you and says she took the money from a dormant account at the bank to pay for the operation. She assures you she has started paying it back and will return the entire amount into the account in some time. What do you do?