Personal and

Organizational Ethics

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7-1
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Chapter Seven
Objectives
To understand the different levels at which
business ethics may be addressed
To appreciate principles of personal ethical
decision-making
To identify factors affecting an
organizations moral climate
Describe actions or strategies to improve
ethical climate

7-2
2

Chapter Seven Outline

Levels at which Ethical Issues
May Be Addressed
Personal and Managerial Ethics
Managing Organizational Ethics
From Moral Decisions to Moral
Organizations
Summary

7-3

Introduction to Chapter
Seven
This chapter focuses on the day-today ethical issues that managers
face

7-4

Levels at Which Ethical

Issues May Be Addressed
Personal levelsituations faced in
personal life (income tax, doing
kids homework, etc.)
Organizational levelworkplace
situations faced as managers and
employees (cutting corners, etc.)
7-5

Levels at Which Ethical

Issues May Be Addressed
Industrial levelsituations
confronted as professionals (the
practices of stockbrokers, accountants,
etc.)
Societal and international levels
local-to-global situations confronted
indirectly as a management team
7-6

Personal and Managerial

Ethics
Resolving Ethical Conflicts
Three Approaches
Conventional (covered in Chapter
6)
Principles
Ethical tests
7-7

Personal and Managerial

Ethics
Principles
Approach
Anchors decision

making
on an ethical principle
Caring
Utilitarianism
such as:
Virtue ethics
Rights
Servant leadership
Justice
Golden Rule
7-8

Personal and Managerial

Ethics
Principle of Utilitarianism focuses
on an act that produces the greatest
ratio of good to evil for everyone
Consequentialist theory

7-9

Personal and Managerial

Ethics
Principle of Rights focuses on
examining and possibly protecting
individual moral or legal rights

710

Personal and Managerial

Ethics

711

Personal and Managerial

Ethics
Principle of justice involves
considering what alternative
promotes fair treatment of people
Types of justice

Distributive
Compensatory
Procedural
Rawlsian
712

Personal and Managerial

Ethics
Rawls Justice
Each person has an equal right to the
most basic liberties comparable with
similar liberties for others
Social and economic inequalities are
arranged so that they are both:
a) reasonably expected to be to everyones
advantage and
b) attached to positions and offices open to
all people
713

Personal and Managerial

Ethics
Principle of caring focuses on a
person as a relational (cooperative)
and not as an individual
Feminist theory

Virtue ethics focuses on individuals

becoming imbued with virtues
Aristotle and Plato

714

Personal and Managerial

Ethics
Servant leadership focuses on
serving others first such as
employees, customers, community
and so on

715

Personal and Managerial

Ethics

Characteristics of Servant Lea

Listening
Empathy
Healing
Persuasion
Awareness

Foresight
Conceptualization
Commitment to the
growth of people
Stewardship
Building community
716

Personal and Managerial

Ethics
Golden rule focuses on the
premise that you should of unto
others as you would have them do
unto you

717

Personal and Managerial

Ethics
Concerns to be Addressed
in Ethical Conflicts
Obligations
Ideals
Effects

718

Personal and Managerial

Ethics
When Our Obligations, Ideals
and Effects Conflicts
When two or more moral obligations
conflict, use the stronger one
When two or more ideals conflict, or when
ideals conflict with obligations, honor the
more important one
When effects are mixed, choose the action
that produces the greatest good and the
least harm
719

Personal and Managerial

Ethics
Ethics Test Approach
Test of common sense
Test of ones best self
Test of making something public
Test of ventilation
Gag test
720

Managing Organizational
Ethics
Factors Affecting the Morality of
Managers
Societys Moral Climate
Businesss Moral Climate
Industrys Moral Climate

Superiors
Superiors
Policies
Policies

Individual
Individual
(Ones
(Ones
personal
personal
situation)
situation)

Peers
Peers

721

Managing Organizational
Ethics
Factors Influencing Unethical
Behavior
Behavior of superiors
Ethical practices of ones industry or
profession
Behavior of ones peers in the organization
Formal organizational policy (or lack of
one)
Personal financial need
722

Managing Organizational
Ethics

6-23

723

Managing Organizational
Ethics

Questionable Behaviors of Superiors

Amoral decision making
Unethical acts, behaviors or
practices
Acceptance or legality as the
standard behavior
Absence of ethical leadership
724

Managing Organizational
Ethics

Questionable Behaviors of Superiors

Objects and evaluation systems
overemphasizing profits
Insensitivity toward how
subordinates perceive pressure to
meet goals
Inadequate formal ethics policies
725

Improving Ethical Climate

Ethics Programs
& Officers

Realistic
Objectives

Effective
Communication

Top
Management
Leadership

Ethics Audit

Ethics Training

Ethical Decisionmaking Processes

Codes of
Conduct

Discipline of
Violators

Whistle-blowing
Mechanisms
(Hotlines)

726

Ethical Decision-Making
Identify decision you
are about to make

Articulate all dimensions

of proposed decision
Conventional Approach
Standards/Norms
-Personal
-Organizational
-Societal
-International

Principles Approach
Ethical Principles
-Justice
-Rights
-Utilitarianism
-Golden Rule

Course of action passes

ethics screen

Engage in course of
action

Ethical Tests Approach

Ethical Tests
-Common sense
-Ones best self
-Public disclosure
-Gag test . . .
Course of action fails
ethics screen

Do not engage in course

of action
Identify new course of
action

727

Ethics Audits and SelfAssessment

728

From Moral Decisions to

Moral Organizations
Moral Decision(s)

Moral Manager(s)

Moral Organization
729

Selected Key Terms

Codes of conduct
Codes of ethics
Compensatory justice
Distributive justice
Ethical tests
Ethical audits
Golden rule
Legal rights
Moral rights

Principle of caring
Principle of justice
Principle of rights
Principle of
utilitarianism
Procedural justice
Rights
Servant leadership
Utilitarianism
Virtue ethics
730