Download - Business Ethics

Copyright © Houghton Mifflin Company. All rights reserved. 7-1

Chapter 7

Organizational Factors: Structure, Relationships, and Conflicts


Key Influences on Ethical Behavior

societycorporate culturesignificant othersstrength of the individual’s personal valuesopportunityexposure to others that behave (un)ethically– informal relationships– formal relationships


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


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


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


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.


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.


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.


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


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.


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.


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.


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.


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


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


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