Ethics building a capable organization: Strategic Management

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Ethics Building a Capable Organization Aashiek Cheriyan

Transcript of Ethics building a capable organization: Strategic Management

Page 1: Ethics building a capable organization: Strategic Management

Ethics Building a Capable Organization

Aashiek Cheriyan

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What do you mean by Business Ethics???

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3 Categories of management morality

Moral ManagerImmoral Manager

Amoral Manager

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Drivers of Unethical Behavior

• Obsessive pursuit of personal gain, wealth and other selfish interest.

• Heavy pressures on company managers to meet earnings targets.

• Company cultures that put the bottom line ahead of ethical behavior.

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Ensuring a Strong Commitment to Business Ethics in Multinational Companies

• Three schools of thought about the extent to which ethical standards apply across countries and cultures exist:

– Ethical Universalism

– Ethical Relativism

– Integrative Social Contracts Theory

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Concept of Ethical Universalism

• According to the school of ethical universalism . . .

– Same standards of what is right and what is wrong are universal and transcend most cultures, societies, and religions

– Universal agreement on basic moral standards allows a multinational company to develop a code of ethics that is applied evenly across its worldwide operations

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Examples of UniversalEthical Principles or Norms

• Honesty• Trustworthiness• Respecting the rights of

others• Practicing the Golden

Rule• Avoiding unnecessary

harm to– Workers– Users of a company’s

product or service

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Concept of Ethical Relativism

• According to the school of ethical relativism . . .

– What is ethical or unethical must be judged in light of local moral standards and can vary from one country to another

• Companies a code of conduct based upon the principle of ethical relativism assume that local morality is an adequate guide for ethical behavior

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Drawbacks of Ethical Relativism

• The ethical relativism rule of “when in Rome, do as the Romans do” presents problems

– It is ethically dangerous for company personnel to assume that local ethical standards are an adequate guide to ethical behavior

– What if local standards condone kickbacks and bribery?

– What if local standards blink at environmental degradation?

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Integrative Social Contracts Theory

• According to the integrative social contracts theory,the ethical standards a company should try to uphold are governed by both

1. A limited number of universal ethical principles that put ethical boundaries on actions and behavior in all situations

and

2. The circumstances of local cultures, traditions, and valuesthat further prescribe what constitutes ethically permissible behavior and what does not.

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The Three Components of Building a Capable Organization

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References

• Strategic management – An Integrated Approach by Charles W. Hill and Gareth R. Jones

• Crafting & Executing Strategy – Concepts & Cases – Mc Graw hill Publications

• Business Policy and Strategic Management – Lawrence R. Jawch& William Gluek.

• Business Policy & Strategic Management – P. Subba Rao

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