Business Ethics
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Transcript of Business Ethics
Copyright © Houghton Mifflin Company. All rights reserved. 7-1
Chapter 7
Organizational Factors: Structure, Relationships, and Conflicts
Copyright © Houghton Mifflin Company. All rights reserved. 7-2
Key Influences on Ethical Behavior
societycorporate culturesignificant othersstrength of the individual’s personal valuesopportunityexposure to others that behave (un)ethically– informal relationships– formal relationships
Copyright © Houghton Mifflin Company. All rights reserved. 7-3
Responsibility of the Corporation as a Moral Agent
chartered as citizens of a state and nation, therefore have all the rights and responsibilities of individualsresponsible to society for its decisionsassigned to promote business ethics and social responsibility must require compliance with ethical policies representing the interests of all stakeholders
Copyright © Houghton Mifflin Company. All rights reserved. 7-4
Variation in Employee Conduct10%—will take advantage of situations to
further their own personal interests40%—will go along with the work group on
most matters40%—will try to follow company policies
and rules and have a strong grasp of the corporate culture10%—maintain formal standards that focus
on rights, duties and rules
Copyright © Houghton Mifflin Company. All rights reserved. 7-5
Socialization...
the process through which a person learns the values and behavior patterns considered appropriate by an organization or grouphas a significant influence on ethical behaviorethical conflict arises when the values and norms of the individual conflict with those taught through socialization
Copyright © Houghton Mifflin Company. All rights reserved. 7-6
Role-Sets...the total of all role relationships in which an individual is involved because of his or her position in an organization– Role-sets may help predict ethical behavior.– Persons in the same department are socialized
similarly and share the same specialization and knowledge base.
– Members of an organization have more in common with one another than with members of other organizations.
Copyright © Houghton Mifflin Company. All rights reserved. 7-7
Role Stress...
strain, conflict, or disruption that results from a lack of agreement on certain job-related activities– The role that an individual plays in the business,
and the tasks associated with that role, can potentially create conflict that has a direct bearing on ethical decision-making behavior.
Copyright © Houghton Mifflin Company. All rights reserved. 7-8
Differential Association...refers to the idea that people learn ethical or unethical behavior while interacting with others who are part of their role-sets or other intimate personal groups– If interaction is with those who behave unethically,
parallel behavior may be expected.– Superiors have strong influence on the ethics of their
subordinates.– Differential association with peers and opportunity are
better predictors of unethical behavior than is the person’s own ethical belief system.
Copyright © Houghton Mifflin Company. All rights reserved. 7-9
Whistle-Blowing...when unethical or illegal behavior occurs in the organization and individual interpersonal conflict occursexposing an employer’s wrongdoing to outsiders such as the media or government regulatory agenciesprovides an in-house mechanism for employees to voice concerns– usually anonymous
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Questions to Ask Before Blowing the Whistle...
Is this the only method to resolve my concern?Do I have the appropriate documentation or evidence to prove my case?What is my motivation?Am I prepared to deal with the personal and professional repercussions?
• Adapted from: Paula Dwyer and Dan Carney (2002) “Year of the Whistleblower,” Business Week, Dec. 16, p. 108.
Copyright © Houghton Mifflin Company. All rights reserved. 7-11
Organizational Pressures...
Success in organizations is determined through the achievement of organizational goals.Internal organizational pressure stemming from role-set relationships and differential association is a major predictor of unethical behavior.Top management and superiors play crucial roles in developing the environment that influences ethical behavior.
Copyright © Houghton Mifflin Company. All rights reserved. 7-12
Opportunity Creates Ethical Dilemmas...
Opportunity is a set of conditions that limits unfavorable behavior or rewards favorable behavior.– Rewards may be internal (self-worth, enjoyment).– Rewards may be external (raises, promotion).
A person who behaves unethically and is rewarded is likely to continue the behavior; punishment is a more suitable deterrent.
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Opportunity Also Comes from Knowledge...
A person with information, expertise or competitive knowledge has the opportunity to exploit this knowledge.Long-term employment with one company leads to gatekeeping—socializing newer employees regarding culture, tradition, rules, unwritten traditions, etc.Trainers and mentors influence new employees’ behavior.
Copyright © Houghton Mifflin Company. All rights reserved. 7-14
Conflict Resolution...
occurs when it is not clear which goals or values take precedence—those of the organization or a group within the organization– personal-organizational conflict– personal-societal conflict– organizational-societal
conflict
Copyright © Houghton Mifflin Company. All rights reserved. 7-15
Types of Conflict...
person-organizational– occurs when a person’s individual values and
methods for reaching desired goals are different from the organization or work group
person-societal– when an individual’s values deviate from those of
society (society’s values--laws and regulations)organizational-societal– norms and values of business conflict with society
Copyright © Houghton Mifflin Company. All rights reserved. 7-16
Improving Ethical Decision Making in Business...
ethical behavior depends on:– the embedded organizational value system
(corporate culture)– significant others– personal value preferences of the
organization’s groups and individual members