ETHICAL CONSIDERATIONS IN

MANAGEMENT

According to Webster’s EncyclopaediaUnabridged Dictionary, ethics is definedas “the discipline dealing with what isgood and bad and with moral duty andobligation”.

Ethics is also defined as a “system ofmoral principles, rules of conduct, it isalso seen as a science that deals withmorals” (Oxford Advance Learner’sDictionary).

Davies and Frederick also define ethics as “the rulesor principles that define right and wrong conducts.Ethics rules embody the idea of morality i.e. notionsof what is morally right and good as well as thosethings considered to be morally wrong and bad.

Examples include lying, stealing, deceiving, harmingothers etc. are generally regarded as immoral andunethical while honesty, keeping promise, helpingothers etc. are accepted as morally right and ethical”.

Ethical rules of conduct generally attempt to provide guidelines of human behaviours that will preserve a society, group or individual.

Business ethics is not any special set of ethicalrules different from ethics in general andapplicable only in business.

It is simply the application of general ethicalrules to management behaviours.

Management decisions and behaviours cantherefore be judged as either being ethical orunethical depending on whether the decisionsand acts promote or threaten the valuestandards of individual or the society in whichthe business operates.

Business Mission/Purpose: - The corporation mission is the purpose or reason for the corporation’s existence. For every business to exist therefore, it has to have a purpose or mission. Examples include: University: Teaching and researchCourts: Interpretation of laws and their application.Business: Product and distribution of goods or services.

Objectives or goals: These refer to the broad, general and enduring statement of purpose, as significant end conditions or configurations the company wishes to reach

e.g. profitability, shareholders wealth maximisation, survival, growth etc.

Standard of behaviour and activity - i.e. ‘the way we do things’. relationship between the organisation and its customers, clients, and community and the way in which these are carried out.

Dealing with staff – This concerns the state of industrial relations at the workplace, and the overall approach and attitudes adopted.

Corporate citizenship – This is concerned with the wider position of the organisation in its community, its markets and its environment.

Leadership qualities – In this context, leadership qualities consist of honesty, openness, trustworthiness, sympathy, empathy and identify.

Procedures: A system of sequential stepsor techniques that describe in detail howa particular task or job is to be done.

Rules: They state in precise terms what isto be done (action) or not done (nonaction) in the same way every time and itpermits little or no individual discretione.g. “No Smoking”.

A new wave of ethics issues relate Product safety Employee health Sexual harassment AIDS in the workplace Smoking Acid rain Waste disposal Foreign business practices Cover-ups Conflict of interest Inappropriate gifts Security of company records etc. These issues have accented the need for strategist to develop a

clear code of business ethics.

Two sources:

Conventional

Islamic

Father J.W. Clark developed certain tentative statements of ethical guides.

They are expected to guide the behaviour and actions of managers.

They are discussed under primary guides and middle norms.

Primary Guides – These are broad and wide. Ethical actions should have as their foundation the

‘backing of the generally accepted institutions ofthe society’. This is especially since it is an integralpart of society.

‘Respect for others’ i.e. honesty in communicationand in business transactions. Accepting personaldignity, rights and privileges of others.

‘Individual integrity’. It is believed that a personwith integrity behaves according to ethicalstandards. These should also be personalresponsibility for one’s own behaviour and actions.

Middle Norms – These are based on primary guides and are more specific.

The first one pertains to executive ‘behaviour in congruence with laws’ established by legitimate civil authority. Laws on the other hand are expressions of society prescribing how citizens should behave.

The recognition that the power and authority of executives are held in the interest of others. The guide pertains to ‘representative authority’. Managers most refrain from actions that are in conflict with the interest they represent.

‘Parity of authority and moral responsibility’.Authority and power without responsibility leadto arbitrary actions. It is unreasonable to holdpeople responsible and accountable for situationswhich they do not have the authority or the powerto change.

‘Private enterprise as an essential and legitimateinstitution’. This is based on the belief that byproviding individual freedom and opportunitiespeople will through private enterprise, contributeto the welfare of the society.

Both the primary guides and middle norms providetheoretical norms to give executives direction inethical decision making.

The Islamic concept of ethics in management is part and parcel of ethical approach to life.

The idea of man being Allah’s Khalifa on earth and accountable to Him in the life hereafter provides the criterion by which a precise style of business behaviour is assessed and categorised as either ethical or unethical.

Some other Islamic concept of business ethics include:

AccountabilityHalal (permissible) and

Haram (prohibited) Justice/fairnessPersonal relationsFriendliness

Ethical codes and behaviour can benefit all constituents of society.

The organisation – The publication of ethical codes and their practice may serve as a sales and public relations device. Again, effective self-regulation may prevent external controls and government actions.

Employees – They can expect that employee relations with the firm will be guarded by ethical considerations. The codes provide guides for managerial and non-managerial behaviour, thus reducing uncertainties.

Customers – They can expect that the business transactions will be conducted in a fair and honest manner which gives them added confidence in dealing with the organisation.

Industry – When firms unite and agree on ethical behaviour, this can raise the level of fair competition and eliminate unethical practices.

Provision of quality goods and services; Effective control and preservation of resources; Research and technological development which

will ultimately lead to increased standard of living; Effective distribution of goods an services; Provision of employment opportunities; Promotion of societal welfare e.g. education,

sports, medical facilities, etc.; Preservation of the rights of others; and Reduction of pollution to the extent that is socially

and technically reasonable.

Thank you for listening