Chap13 business ethics_powerpoint

BUILDING TRUST WITH ETHICS

CHAPTER 13

Business Ethics 1Chapter 13

LEARNING OBJECTIVES

Business Ethics Chapter 13 2

At the end of this chapter students will be able to discuss and illustrate the:1. Reasons why trust has become an issue of

concern in business2. Nature of trust and why businesses need trust3. Distinction between trust and trustworthiness 4. Relationship between trust and ethics5. Role that ethics can play in the cultivation of trust

within organizations.

INTRODUCTION


We only really become aware of trust as an issue when it is abused.

A state of distrust is a disturbing condition that can threaten existing relationships and practices. a lot has been written about trust in recent years. this seems to indicate that all sorts of relationships of trust are being challenged in our society

THE LOSS OF TRUST IN BUSINESS


A number of factors have served to undermine trust in businessi. globalization the absence of shared histories,

values, and experiences has meant that some of the traditional sources of trust have disappeared

ii. less job security: this has been caused by various factors

iii. flatter company structures: flatter organizations with fewer layers of authority and flexible job descriptions have become common

WHY BUSINESS NEEDS TRUST

Distrust is expensive: the price of distrust for business lies in the cost of the control mechanisms that have to be introduced

Trust facilitates co-operation: new forms of work that have emerged in the global economy pose new challenges to organizations in terms of trust

Trust unlocks knowledge: the ability of an organization to attract and retain people with expert knowledge has become vital for its success.

Trust promotes loyalty: when someone honours your trust you feel loyalty to that person and their goals.


WHAT IS TRUST? Defined as the optimistic attitude displayed by a person pursuing a goal in taking

the risk of relying on another person in order to attain that goal Trust is a social phenomenon:

it presupposes more than one actor and is closely tied up with relationships we have with people who influence us

Trust is a process: trust is not a single event. trust is based on a history of interaction

Trust can be weak or strong: trust can either be tentative or it can be enduring.

Trust is always a risk: in trusting another person is placing myself at the mercy of another. for this

reason trust always represents a risk to the trustor Trust varies from person to person:

it depends on our feelings of optimism or pessimism about others.


The Concept of Trust in IslamTrust: A basis for human relations

Human relations must be based on trust, especially when it comes to the vital issues related to life and to people's economic, social, and financial welfare


The Concept of Trust in IslamUpholding trust is a virtue

believers as ones who uphold their trusts and covenants, including the public and private trusts, as well as the covenants they undertake in all the issues related to their public and private lives

Allah wants people to live the deep sense of trust. He wants people to have regard for one another according to conduct and not outer appearance


TRUST VERSUS TRUSWORTHINESS

Trust is an actionWhere trust is an action taken by a trustor,

trustworthiness is a characteristic of a trusteePeople who display characteristics such as

openness, competency, integrity, and benevolence are judged to be more trustworthy than those who lack these qualities.

This suggests that trustworthiness can be developed and enhanced.


PERSONAL AND IMPERSONAL TRUST

Impersonal trust refers to trust in institutions or social practices

Personal trust: Relationships between persons Uni-directional trust:

There is an asymmetry of power. One person is the trustor and relies upon the other person who is the trustee.

The trustee has power over the trustor in the sense that the trustee is in a position to harm the interests of the trustor, whilst the interests of the trustee are not at stake.


PERSONAL AND IMPERSONAL TRUST

Impersonal trust refers to trust in institutions or social practices

Personal trust: Relationships between personsBi-directional trust

Refers to trust-relations where two parties have to trust each other. Each party relies upon the other to attain their goals


THE ETHICAL DIMENSION OF TRUST Trust and Ethics always go hand-in-hand. To make sense of the morality of trust, it is useful to

distinguish between the internal morality and the external morality of trust.The internal morality of trust: lies in the moral nature of

the interaction between the trustor and the trustee. Here, to honour trust, the trustee must respond positively to the goals that the trustor has entrusted in her or him.

The external morality of trust: The external morality of trust refers to the impact of a trusting relationship on people outside that relationship


THE ROLE OF ETHICS IN BUILDING TRUST

i. Openness: refers to how freely managers make information available to their subordinates

ii. Competence: refers to the knowledge and skills needed by managers to influence the domain for which they are responsible


THE ROLE OF ETHICS IN BUILDING TRUST

iii. Integrity: we regard a person as someone with integrity when the person consistently acts in an ethical manner

iv. Benevolence: benevolence is demonstrated in actively doing what is good for others

v. Reputation: a person’s reputation consists of the perceptions that others accumulate over time of him or her. a reputation is thus developed through a history of interactions


ORGANISATIONAL FACTORS THAT ENHANCE TRUSTWORTHINESS

Communication strategiesProcedural transparencyPersonality and management stylePeople managementEmployee assistance programs (EAPs)

CONCLUSION

Ethical behaviour can contribute to the level of trust in an organization and can open it up to the benefits associated with such trust. It is crucial, though, that trust and ethical behaviour should not be regarded as mere managerial tools


Chap13 business ethics_powerpoint

Business

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