1-OB OVERVIEW.ppt

© 2008The McGraw-Hill Companies, Inc. All rights reserved.

RENI ROSARIMM UGM

Reni RosariReni Rosari

WELCOME TO Organizational Behavior

Class

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.RENI ROSARI

PEOPLE IS THE ONE MOST IMPORTANT INGREDIENT OF ORGANIZATIONS

How people behave on the job is, in fact,closely associated with innovations in technology and profitability.


Awal sejarah teori manajemen (mulai dari Frederick Taylor, Henry L.Gantt, Frank Gilbert dan yang lainnya) - berbagai macam konsep, pendekatan, metode dan teknik manajemen dikembangkan untuk memecahkan berbagai masalah spesifik yang dihadapi manajemen pada saat itu, yaitu bagaimana melakukan suatu pekerjaan secara lebih efisien.Dalam perkembangannya, adanya perubahan teknologi secara dramatik, terutama teknologi digital dan internet, globalisasi, dan penurunan daya prediksi model-model perencanaan strategik, memunculkan kebutuhan berbagai pendekatan manajemen baru.. …Sumber keunggulan kompetitif menjadi bukan lagi pada produktivitas dan efisiensi, perilaku disiplin dan kepatuhan, tetapi lebih penting pada inovasi, imaginasi dan passion atau komitmen.

Kebutuhan Inovasi Manajemen


Manajemen yang seperti apa?

Manajemen yang mampu menciptakan organisasi yang lebih adaptif, inovatif dan menjadi tempat kerja yang menimbulkan gairah (meningkatkan komitmen, perilaku prososial atau kewargaan organisasional, dan emotional attachment).


“The talents of our people are greatly underestimated and their skill are underutilized.

Our biggest task is to fundamentally redesign our relationship with our employees.

The objective is to build a place where people have freedom to be creative, where they feel a sense of

accomplishment – a place that brings out the best in everybody”.

Jack Welch (CEO of General Electric)


Percy Barnevick (CEO of Asia Brown Boveri)

“There is a tremendous unused potential in our people. Our organizations ensure they only use 5 to 10 percent

of their abilities at work. Outside of work they engage the other 90 to 95 percent

to run their households, lead a Boy Scout troop, or build a summer home.

We have to learn how to recognize and employ that untapped ability that each individual brings to work

everyday”.


The Value of Management

19,4

8

0

24

68

10

1214

1618

20

% inc in stockprice

Hi Morale

Low/ModMorale

"The success of an organization is dependent upon the competence of senior management and the morale*) of the workforce,“ ~ David Sirota, founder Sirota Research.

Source: Study Sees Link Between Morale and Stock Price, HR Executive Online, March 6, 2006

*) morale – an employee’s attitude toward his or her job, employer, and colleagues


e.g. Michelle Peluso (TRAVELOCITY)


e.g. Michelle Peluso (TRAVELOCITY)

Travelocity is an online travel agency. It was created in 1996.

As one of the pioneers of web-based disintermediation, Travelocity.com was the first website that allowed consumers themselves not only to access Sabre's fare and schedule information, but also to reserve, book, and purchase tickets without the help of a travel agent or broker. In addition to airfares, the site also permits consumers to book hotel rooms, rental cars, cruises and packaged vacations.

Under Peluso’s leadership, Travelocity has developed and launched a merchant hotel business, dynamic packaging functionality, and a private-label (ASP) distribution network, the Travelocity Partner Network.


Michelle Peluso (President and Chief Executive Officer Travelocity)• She trusts, empowers, and listens to her company’s

people

“At a 5,000 person global organization, I simply can’t know everyone personally. But I can apply my dad’s techniques in a scaled-up way that lets me know as many people as possible, that encourages managers to do the same, and that makes our employees generally feel that this is a place where someone’s looking out for them”.


Her father’s example provided a profound lesson:

“If you treat your employees as unique individuals, they’ll be loyal to you and they’ll perform – and your business will perform, too”.

“People aren’t your “greatest asset” – they’re your only asset”

“PEOPLE-CENTERED” ORGANIZATION


“PEOPLE-CENTERED” ORGANIZATION(Jeffrey Pfeffer - Stanford University)

Companies that stress continuous improvement and being way better than the competition

but also make people feel comfortable.


“PEOPLE ARE YOUR MOST IMPORTANT ASSEST”

OR

THE RIGHT-HAPPY PEOPLE ARE YOUR MOST IMPORTANT ASSETS


Seven people-centered practices

Based on research evidence from companies (both in US and Germany) shows the following seven people-centered practices to be strongly associated with much higher profits and significantly lower employee turnover:

1. Job security (to eliminate fear of layoffs)2. Careful hiring (emphasizing a good fit with the company culture)3. Power to the people (via decentralization and self managed teams)4. Generous pay for performance5. Lots of training6. Less emphasis on status (to build a “we” feeling)7. Trust building (through the sharing of critical information)

Importantly, these factors are a package deal, meaning they need to be installed in a coordinated and systematic manner – not in bits and pieces


According to Pfeffer:

only 12% of today’s organizations have the systematic approaches and persistence to qualify as true people centered organizations, thus giving them a competitive advantage.


James McNerney (CEO of aircraft maker Boeing)

“ I start with people’s growth, my own growth included. I don’t start with the company’s strategy or products.

I start with people’s growth because I believe that if the people who are running and participating in a

company grow, then company’s growth will in many respects take care of itself”.


Gary Kelly (CEO of Southwest Airlines)

“We’ve never had a layoff. We’ve never had a pay cut. And we’re going to strive mightily, especially this year (2009), to avoid them once again. I worry about that everyday. And I don’t worry about much, but I worry

about that.


A recent study of 318 companies led to this conclusion:

“Three-fourths of 4,172 workers who have kept their jobs say their productivity has dropped since their organizations let people go”


People-Centered Examples

Yvon Chouinard, Pentagonia Inc.• “Trust, empower, and listen to the employees”

Herb Kelleher, Southwest Airlines• “Respect people for who they are, not for what their titles are.”

Clayton Christensen, Harvard Business School• “You can learn from anyone.”

George Zimmer, Men’s Wearhouse• Happy employees attract loyal customers.• Every 5 years full time employees receive a three-week paid

sabbatical on top of their regular vacations

Jim Sinegal, Costco• Good starting pay, 94% health care costs


“You came first for the coffee, but you came back for our people”

~ Starbucks


“Companies have no choice but to try to engage not only the body but the mind and soul of every employee”

(Ulrich, 1997).

Pada saat sekarang ini sumber keunggulan kompetitif bukan lagi hanya produktivitas dan efisiensi, perilaku

disiplin dan kepatuhan, tetapi yang lebih penting adalah inovasi, imajinasi dan komitmen

(Hamel, 2007).


Your Experience

Do you feel that you have worked in a people-centered workplace?• A=Yes, B=No

If yes, what people-centered characteristics did the workplace have?

If no, what were the workplace characteristics that did not make it people-centered?


A key fact:

No matter how good a company’s product may be, there can be no company without people

From the founder to the loyal employees, it’s all about people.

“People problems” can bring an organization down very rapidly.

PEOPLE are a critical element in the effective functioning – indeed, the basic existence – of organizations


Each of us needs to accept the challenge to do better, whatever our role (s) in society –

employer/entrepreneur, employee, manager, stockholder, student, teacher, voter, elected official,

social/political activist.

Toward that end, the mission of this course isto help increase the number of people centered and

ethically managed organizations around the world to improve the general quality of life


RENI ROSARIMM UGM

WELCOME TO THE WORLD OF OB


RENI ROSARIMM UGM

Organizational Behavior: The Quest for People-Centered

Organizations and Ethical Conduct

1


Ch. 1 Learning Objectives

1. Define the term organizational behavior and contrast McGregor's Theory X and Y assumptions about employees

2. Identify the four principles of total quality management3. Define the term e-business and specify OB-related issues raised

by e-leadership4. Contrast human and social capital and explain why we need to

build both5. Define management and identify managerial skills of effective

managers6. Characterize 21st century managers7. Describe Carroll’s global corporate social responsibility pyramid,

and give an overview of the model of individual ethical behavior8. Identify four of the seven general ethical principles, and explain

how to improve an organization’s ethical climate9. Describe the sources of organizational behavior research

evidence


What is Organizational Behavior?

An interdisciplinary field dedicated to better understanding and managing people at work

mempelajari sisi manusia dari manajemen

Management: process of working with and through others to achieve organizational objectives efficiently and ethically


MANAGEMENT

getting things done with other people and God


Why Study Organizational Behavior?

To interact more effectively with others in organizations

You will learn more about yourself, how to interact effectively with others, and how to thrive (not just survive) in organizations.

Edward E. Lawler III – created the “virtuous career spiral” how OB related skills point you toward career success increased skills and performance can lead to better jobs and higher rewards.


I’m a finance major, why do I need to know this?

“soft” People skills complement technical skills

OB is a horizontal discipline cutting across virtually every job category, business function, and professional specialty.

Anyone who plans to make a living in a large or small, public or private, organization needs to study OB.


WHAT IS THE FIELD OF OB ALL ABOUT?

OB Applies the Scientific Method to Practical Managerial Problem

• Pengetahuan PO berdasarkan pada ilmu perilaku (behavioral science)

bidang ilmu seperti psikologi dan sosiologi yang menggali pengetahuan tentang perilaku manusia dan masyarakat melalui penggunaan metode ilmiah

• PO menggali dan mengembangan pengetahuan dasar dengan menggunakan pendekatan empiris, dan berdasar pada penelitian (riset)

a theory research practice strategy


Learning About OB Through A Combination of Theory, Research, and Practice

Research

Practice

Theory Most completeinformation for

betterunderstandingand managingorganizational

behavior


Learning about OB

Three Approaches:• Theory – ideas about what happens and why

• Research – testing theoretical ideas

• Practice – learning from what has and has not worked

All three provide valuable information for understanding and managing organizational behavior


Five Sources of OB Research Insights

Laboratory study• Manipulation and measurement of variables in contrived

situationsField study • Examination of variables in real-life settings

Sample survey • Questionnaire responses from a sample of people

Case Studies • In-depth analysis of single individual, group, or organization

Meta-analysis• Pools the results of many studies through statistical

procedure


Test Your Knowledge

Information from which of the following is LEAST likely to be generalizable to other settings.

A. Meta-analysis

B. Sample surveys

C. Case-study

Why?



OB Focuses on Three Levels of Analysis – Individuals, Groups, and Organizations

Untuk memahami secara menyeluruh perilaku di dalam organisasi, kita harus mempertimbangkan tiga tingkat analisis: proses yang terjadi di dalam individu, kelompok, dan organisasi

Proses Individual – unit analisis adalah individual orang (misal, sikap yang terkait dengan kerja)

Proses Kelompok – unit analisis adalah kelompok (misal, team kerja)

Proses Organisasi – unit analisis adalah organisasi (misal, desain organisasional)


Three Perspectives on Effectiveness

Individual effectiveness

Group effectiveness

Organizational effectiveness

the task performance of

specific employees or member of the organization

the sum of the contribution of all

its members more than the sum

of individual contribution

(synergy)

consist of individuals and

group effectiveness

more than the sum of individual

and group effectiveness


Three Perspectives on Effectiveness


Group effectiveness


Causes Effectiveness

Causes

Ability

Skill

Knowledge

Attitude

Motivation

Stress

Causes

Cohesiveness

Leadership

Structure

Status

Roles

Norms

Causes

Environment

Technology

Strategic choices

Structure

Processes

Culture


The Nature of Managerial Work

Management’s contribution to effectiveness

Management performs the functions of:

Planning

Organizing

Leading

Controlling

To coordinate the behavior of:

Individuals

Groups

Organizations

To attain:


Group effectiveness


Feedback


The Contingency Approaches to Management

Using management tools and techniques in a situationally appropriate manner; avoiding the one best-way mentality


21st Century Managers

After conducting a Galup Organization survey of 80,000 managers and doing follow up studies of the top performers, Marcus Buckingham came up to this conclusion:

“I’ve found that while there are as many styles of management as there are managers, there is one quality that sets truly great managers apart from the rest: They discover what is unique about each person and then capitalize on it. Average managers play checkers, while great managers play chess.


21st Century Managers (cont.)The difference?In checkers, all the pieces are uniform and move in the

same way, they are interchangeable. You need to plan and coordinate their movements, certainly, but they all move at the same pace, on parallel paths.

In chess, each type of piece moves in a different way, and you can’t play if you don’t know how each piece moves. More important, you won’t win if you don’t think carefully about how you move the pieces.

Great managers know and value the unique abilities and even the eccentricities of their employees, and they learn how best to integrate them into a coordinated plan of attack”


Evolution of 21st-Century Managers

Primary Role Past Managers Future Managers

Cultural Orientation Monocultural, monolingual

Multicultural, multi-lingual

Source of influence Formal authority Technical knowledge and interpersonal skill

View of people Potential problem Primary resource; human capital

Decision-making style

Limited input for individual decisions

Broad-based input for joint decisions

Ethical considerations

Afterthought Forethought


Skills Exhibited by an Effective Manager(based on research over 20 years by Clark Wilson and others)

1. Clarifies goals and objectives for everyone involved

2. Encourages participation, upward communication, and suggestion

3. Plans and organizes for orderly work flow

4. Has technical and administrative expertise to answer organization-related questions.

5. Facilitates work through team building, training, coaching, and support

6. Provides feedback honestly and constructively

7. Keeps things moving by relying on schedules, deadlines, and helpful reminders

8. Controls details without being overbearing

9. Applies reasonable pressure for goal accomplishment

10. Empowers and delegates key duties to others while maintaining goal clarity and commitment

11. Recognizes good performance with reward and positive reinforcement


The Wilson managerial skills research yield four useful lessons:

1. Dealing effectively with people is what management is all about.

2. Managers with high skills mastery tend to have better subunit performance and employee morale than managers with low skills mastery

3. Effective female and male managers do not have significantly different skills profiles

4. At all career stages, derailed managers (those who failed to achieve their potential) tended to be the ones who overestimated their skill mastery (rated themselves higher than their employees did).

This prompted the following conclusion from the researcher: "when selecting individuals for promotion to managerial positions, those who are arrogant, aloof, insensitive, and defensive should be avoided”.



OB is Multidisciplinary in nature• Beberapa induk disiplin ilmu yang sangat penting adalah psikologi,

sosiologi, anthropologi, ilmu politik, ekonomi, ilmu manajemen

DISIPLIN ILMU TOPIK OB YANG RELEVAN

Psikologi

Sosiologi

Antropologi

Ilmu Politik

Ekonomi

Ilmu manajemen

Persepsi dan pembelajaran; kepribadian; emosi dan stress; sikap; motivasi; pengambilan keputusan; kreativitas

Dinamika kelompok; sosialisasi; komunikasi

Budaya organisasi; kepemimpinan

Konflik antar personal; kekuasaan organisasional

Pengambilan keputusan, negosiasi, kekuasaan organisasional

Teknologi, kualitas dan perubahan organisasional



OB Seeks to Improve Organizational Effectiveness and the Quality of Life at Work• OB scientists are interested in learning exactly what

conditions will lead people to behave most positively – that is, what makes work both productive for organization and enjoyable for the people working in them

• Theory X vs Theory Y:

the traditional, Theory X orientation toward people is far more negativistic than the more contemporary, Theory Y approach, which is widely accepted today.


Theory X

(traditional approach)

Theory Y

(modern approach)

Orientasi terhadap orangKetidakpercayaan

Penerimaan, mendorong

sumberdaya manusia lebih baik

Asumsi terhadap orangPada dasarnya

malas

Butuh untuk berprestasi dan

bertanggungjawab

Minat dalam bekerja

Rendah (tidak berminat)

Tinggi (sangat berminat)

Kondisi dimana orang akan bekerja kerasBekerja ketika

dipaksa

Bekerja ketika dilatih dan dihargai secara

tepat


PERILAKU ORGANISASIONAL DAN BIDANG TERKAIT

TE

OR

ET

IKA

L

MAKRO MIKRO

TE

RA

PA

N

TEORI ORGANISASI (Organization Theory)

PERILAKU ORGANISASIONAL

(Organizational Behavior)

PENGEMBANGAN ORGANISASI (Organization Development)

MANAJEMEN SUMBERDAYA MANUSIA

(Human Resource Management)

TINGKAT ANALISISSumber: Luthans (1995:15)


A Historical Perspective of OB

The Human Relations Movement

The Quality Movement

The E-Business Revolution

The Age of Human and Social Capital


The Human Relations Movement

Inspired by legalization of union-management collective bargaining in the US (1935), management began looking for new ways of handling employees

Hawthorne Studies

• Supportive management

Mayo and Follett

• “Pull” don’t “push” – telling managers to motivate job performance instead of merely demanding it.

McGregor’s Theory YTheory Y – MGregor’s modern and positive assumption about employees being responsible and creative


McGregor’s Theory Y

Theory X• Most people dislike

work and want to avoid it

• People require close direction

• People want to avoid responsibility and have little ambition

Theory Y• Work is a natural activity• People can be self-

directed if they are committed to the objective

• Rewards help commitment

• Most employees accept and seek responsibility

• Employees have imagination, ingenuity and creativity


New Assumptions about Human Nature

Human relationist believed in the axiom, “A satisfied employee is a hardworking employee”.

Subsequent research – shows the satisfaction – performance linkage to be more complex than originally thought.


The Quality Movement

Total Quality Management (TQM)• An organizational culture dedicated to training,

continuous improvement, and customer satisfaction

Employee-driven, customer-focused

Basic Principles• Do it right the first time to eliminate costly rework

• Listen to and learn from customers and employees

• Make continuous improvement an everyday matter

• Build teamwork, trust, and mutual respect


The Quality Movement (cont.)

The Deming Legacy Quality – “good management”How employees should be treated. Regarding the human side of

quality improvement, Deming called for the following:

Formal training in statistical process control techniques and teamwork

Helpful leadership, rather than order giving and punishment

Elimination of fear so employees will feel free to ask questions

Emphasis on continuous process improvements rather than on numerical quotas

Teamwork

Elimination of barriers to good workmanship


One of the Deming’s most enduring lessons: 85-15 rule

Specifically, when things go wrong, there is roughly an 85% chance the system (including management, machinery, and rules) is at fault. Only about 15% of the time is the individual employee at fault.


The Quality Movement (cont.)

People is the key factor in organizational success

TQM providing a practical context for managing people

When people are managed according to TQM principles, more of them are likely to get the employment opportunities and high-quality good and services they demand


The Internet and E-Business Revolution

E-Business – running the entire business via the internet

Implications for organizational behavior and leaders?• More and faster communication with others

• More potential for damage by unethical leaders

• Enables the existence of networks that go across traditional organizational boundaries


The Internet and E-Business Revolution

Making wise hiring and job assignment decisions, nurturing productive relationship, and building trust are more important than ever in the age of e-leadership.



Knowledge workers, those who add value by using their brains rater than the sweat off their backs, are more important than ever in today’s global economy.

A team of human resource management authors recently offered this perspective:“We’re living in a time when new economic paradigm – characterized by speed, innovation, short cycle times, quality, and customer satisfaction – is highlighting the importance of intangible assets, such as brand recognition, knowledge, innovation, and particularly human capital”.



Human Capital the productive potential of an individual’s knowledge and actions

Social Capital productive potential resulting from strong relationships, goodwill, trust, and cooperative effort


The Strategic Importance and Dimensions of Human and Social Capital

Strategic assumption: People, individually and collectively are the key to organizational success

Individual human capital

• intelligence./abilities/knowledge

• Visions/dreams/aspiration

• Technical and social skills

• Confidence/self esteem

• Initiative/entrepreneurship

• Adaptability/flexibility

• Readiness to learn

• Creativity

• Enthusiasm

• Motivation/commitment

• Persistence

• Ethical standards/courage

• Honesty

• Emotional maturity

Social capital

• Shared vision/goals

• Shared values

• Trust

• Mutual respects/goodwill

• Friendship/support groups

• Mentoring/positive role modeling

• Participation/empowerment

• Connections/sources

• Networks/affiliations

• Cooperation/collaboration

• Teamwork

• Camaraderie

• Assertive (rather than aggressive) communication

• Functional (rather than dysfunctional0 conflict

• Win-win negotiations

• Philanthropy/volunteering

Organizational learning

(shared knowledge)


Pengembangan Modal ManusiaPengembangan Modal Manusia

Kualitas Pribadi

Kualitas Interaksi

PRIBADI BIJAK

DIPERCAYA&

DITERIMA


Manjadi Manajer handal, langka dan mahal


The Ethics Challenge

The highly publicized criminal acts of executives and corporate officers around the world.

A nationalwide survey of 581 human resource professionals revealed that 62% of the respondents occasionally observed unethical behavior at their companies.

Experts estimates the US companies loose about $600 million a year from unethical and criminal behavior.


Why Does Ethical Behavior Matter in Organization?

because behaving ethically is the right thing to do.

Robert D. Hass (former chairman of Levi Strauss & Co.):“A company’s values – what it stands for, what its people believe in

– are crucial to its competitive success”.

1. Over the long run, being ethical is profitable

2. Being ethical satisfies many of today’s legal regulations


Evidence suggested that profitability is enhanced by a reputation for honesty and corporate citizenship. Ethics can also impact the quality of people who apply to work in an organization.

A recent online survey of 1,020 individuals indicates that 83% rated a company’s record of business ethics as “very important” when deciding to accept a job over. Only 2% rated it as “unimportant”.


Ethics

Study of moral issues and choices

It is considered with right vs wrong, good vs bad, and the many shades of gray in supposedly black-and-white issues.

Managers are challenged to have more imagination and the courage to do the right thing to make the world a better place.


Moral Values Versus Ethics

Moral Values

(fundamental beliefs about

what is good or bad, right or

wrong)

e.g. it is wrong to harm another

person

Ethics

(standards of conduct in

keeping with one’s moral

values)

e.g. I should not steal

Decision

(plan for behaving in an ethical fashion)

e.g. I decide not to steal money even though I

need the money

Behavior

(action taken following from the decision made)

e.g. I do not steal

• Religious background, beliefs, training

• Level of cognitive moral development

• Clearly articulated ethical standards

• Training in recognizing and applying ethical standards

• Organizational and group norms

• Culture of the organization

• Observations of leaders’ behavior

• Work attitudes and motives

• External stressors


Moral Values Versus Ethics

Moral values (moral): people’s fundamental beliefs regarding what is right or wrong, good or bad

Ethics: standards of conduct that guide people’s decisions and behavior

Moral values (which reside within an individual) provide the basis for ethics (which are standards of behavior that an be regulated by organizations). Ethical standards influence both decisions and behavior in the workplace, which also are affected by a host of other variables identifies throughout this course.


A Model of Ethical Behavior in the Workplace

• Political/legal• Industry culture• National culture• Environment

Individual• Personality• Values• Moral principles• History of reinforcement• Gender

Ethical behavior

Rol

eEx

pect

atio

ns

External Organizational Influences

• Ethical codes• Organizational culture• Organizational size• Structure• Perceived pressure for

results• Corporate strategy

• Internal Organizational Influences

• Age• Length of Service• Military service• Homogeneity/heterogeneity

• Neutralizing/enhancing factors• TMTeam characteristics


Test Your KnowledgeTrue (A) or False (B)?1. The longer a TMT member works for an organization

the more immune they are to internal or external pressures.

2. TMT’s with military experience are more likely to succumb to pressures when making ethical decisions.

3. The more heterogeneous the TMT the less likely influencers will lead to unethical behavior.


For Discussion: Your Opinion

Which statement best represents your opinion?

A.Companies primary goal should be to maximize profits

B.Companies have an obligation to the societies in which they operate, even if profits suffer


Beyond Ethics: Corporate Social Responsibility

Corporate Social Responsibility (CSR):

business practices that adhere to ethical values that comply with legal requirements, that demonstrate respect for individuals, and that promote the betterment of the community at large and the environment

CSR involves operating a business in a manner that meets or exceeds the ethical, legal, and public expectations that society has of business.


Carroll’s Global 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.


Carroll’s Global Corporate Social Responsibility Pyramid

This model is very timely because it effectively triangulates three major trends: (1) economic globalization, (2) expanding CSR expectation, and (3) the call for improved business ethics.

Make a profit consistent with expectations for international business

Obey the law of host countries as well as international law

Be ethical in its practices, taking host country and global standards into consideration

Be a good corporate citizen, especially as defined by the host country’s expectation


The extremes of cultural relativism and ethical imperialism

Cultural relativism Ethical imperialism

No culture’s ethics are superior. The values and practices of the local setting determine what is right and wrong

When in Rome, do as the Romans do

Certain absolute thrust apply everywhere. Universal values

transcend cultures in determining what is right or wrong

Don’t do anything you wouldn’t do at home


Thomas Donaldson’s suggestions (business ethicist) on how corporations can respect the core or universal values

How multinationals can respect universal values

Respect for Human DignityCreate a culture valuing employees, customers, and suppliersKeep a safe workplaceProduce safe products and services

Respect for Basic RightsProtect rights of employees, customers, and communitiesAvoid any threats to safety, health, education, living standards

Be Good CitizensSupport social institutions, economic, and educational systemsWork with governments and institutions to protect environment


General Moral PrinciplesDignity of human life

Autonomy

Honesty

Loyalty

Fairness

Humaneness

The common good


The Virtuous Circle

Virtuous circle

the tendency for companies that are successful financially to invest in social causes because they can afford to do so (i.e. the “do good by doing well”) and for socially responsible companies to perform well financially (i.e. they “do well by doing good”)

The Virtuous Circle

It has been suggested that socially responsible companies perform well financially because they are supported by customers and investors. As a result, they become wealthier, making it easier for them to become even more philantropic.


The Virtuous Circle

Being socially responsible helps

companies make money

“Doing well by doing good”

Rich companies can afford to be more

socially responsible

“Doing good by doing well”

The Virtuous Circle


Improving On-the-Job Ethics

Behave ethically yourself

Screen potential employees

Develop a Meaningful Code of Ethics• What constitutes a

meaningful code of ethics?


Improving On-the-Job Ethics

Provide ethics training

Reinforce ethical behavior

Create positions, units, and other structural mechanisms to deal with ethics

Eliminate need for whistle-blowing


Roadmap for This Course

1-OB OVERVIEW.ppt

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