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Ethics Learning Module
Copyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
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The Ethics Challenge
• Corporate officers are now subject to high accountability standards and harsh penalties under the Sarbanes-Oxley Act of 2002
• Experts have estimated that U.S. companies lose about $600 billion a year from unethical and criminal behavior
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Ethics
• Ethics - Study of moral issues- Concerned with right versus wrong- Many shades of gray
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Corporate Social Responsibility Pyramid
Source: Carroll, A. B. “Managing Ethically with Global Stakeholders: A present and future challenge, Academy of Management Executive, May 2004, p. 116. Figure A-1
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Corporate Social Responsibility
• Corporate social responsibility - corporations are expected to go above and
beyond following the law and making a profit
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A Model of Ethical Behavior in the Workplace
Figure A-2
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Internal Organizational Influences
• Positive relationship between organizational size and unethical behavior
• Larger firms more likely to behave illegally• Managers more likely to behave unethically in decentralized organizations
• Tendency among middle and lower-level managers to act unethically in the face of perceived pressure for results
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Neutralizing/Enhancing Factors
• Top Management Team (TMT) - consists of the CEO and his or her direct reports.
• Prior military experience favorably influences the ethical behavior of executives
• Organizations are encouraged to increase the diversity of its TMT if they want to reduce the chances of unethical decision making
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A Decision Tree for Ethical Decisions
Figure A-3
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Do Moral Principles Vary by Gender?
• Males perceived moral problems in terms of a justice perspective
- Based on the ideal of reciprocal rights and driven by rules and regulations
• Women relied on a care perspective
- Involves compassion and an ideal of attention and response to need
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General Moral Principles
• There are no absolute ethical answers for decision makers
• Goal for managers should be to rely on moral principles so decisions are principled, appropriate, and defensible
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The Magnificent Seven: General
MoralPrinciples for
Managers
Table A-1
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How to Improve the Organization’s Ethical Climate
• Behave ethically yourself• Screen potential employees• Develop a meaningful code of ethics• Provide ethics training
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How to Improve the Organization’s Ethical Climate (cont.)
• Reinforce ethical behavior• Create positions, units, and other structural mechanisms to deal with ethics
• Create a climate in which whistle-blowing becomes unnecessary
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