+ Managing Business Ethics Chapter 2 Treviño & Nelson – 6th Edition + Chapter 2 Overview ◼ Ethical Dilemmas ◼ Prescriptive Approaches ◼ Focus on consequences (consequentialist theories) ◼ Focus on duties, obligations, principles (deontological theories) ◼ Focus on integrity (virtue ethics) ◼ Eight steps to making sound ethical decisions ◼ Practical preventive medicine + What is an Ethical Dilemma? ◼ A situation where values are in conflict ◼ ◼ Two or more values you hold dear - or – Personal value conflicts with organizational value Value Value + The Layoff You’re the plant manager in one of ABC Company’s five plants. You’ve worked for the company for 15 years, working your way up from the factory floor after the company sent you to college. Your boss just told you in complete confidence that the company will have to lay off 200 workers. Luckily, your job won’t be affected. But a rumor is circulating in the plant, and one of your workers (an old friend who now works for you) asks the question. “Well, Pat, what’s the word? Is the plant closing? Am I going to lose my job? The closing on our new house is scheduled for next week. I need to know.” What will you say? + Prescriptive Approaches ◼ Focus on consequences (consequentialist theories) on duties, obligations, principles (deontological theories) ◼ Focus ◼ Focus on integrity (virtue ethics) + Focus on Consequences (Consequentialist Theories) Utilitarianism - best known consequentialist theory ◼ Identify alternative actions and consequences to stakeholders ◼ Best decision yields greatest net benefits to society ◼ Worst decision yields greatest net harms to society + Focus on consequences – classic Trolley example A runaway trolley is hurtling down the tracks toward 5 people who will be killed if it proceeds on its present course. You can save these 5 by diverting the trolley onto a different set of tracks, one that has only 1 person on it, but if you do this that person will be killed. Question: Should you turn the trolley to prevent 5 deaths at the cost of 1? + Consequentialist Questions ◼ Can ◼ I indentify all the stakeholders? Immediate, distant? ◼ What are the potential actions I could take? ◼ What are the harms and benefits for stakeholders given potential decisions/actions? ◼ What decision will produce the most benefit (and least harm) for the greatest number of people, and for society at large? Consequentialist Analysis Stakeholder Option 1 - Costs Option 1 Benefits Option 2Costs Option 2 Benefits #1 #2 #3 #4 ….etc. Bottom line = action that produces the greatest good for the greatest number of people, for society overall! + Focus on Consequences (Consequentialist Theories) ◼ Advantages ◼ ◼ Practical Already underlies business thinking ◼ Challenges ◼ ◼ Difficult to evaluate all consequences Rights of minorities can be sacrificed + Focus on Duties, Obligations, Principles (Deontological Theories) ◼ Decisions based upon abstract universal principles: honesty, promise-keeping, fairness, rights, justice, respect ◼ Focus on doing what’s “right” (consistent with these principles) rather than doing what will maximize societal welfare (as in utilitarianism) + Ethical rules (simplified) ◼ Kant’s categorical imperative ◼ “What kind of world would it be if everyone behaved this way?” “Would I want to live in that world?” ◼ Rawls’ veil ◼ “What would decision be if decision makers knew nothing about their identities or status?” ◼ Golden ◼ of ignorance – for deciding what’s fair Rule “Treat others as you would have them treat you” (Assumption is that both parties are ETHICAL! An ethical person wouldn’t expect someone else to be unethical for him/her.) + Deontological Questions ▪ Which values or principles apply? ▪ Which are most important and why? ▪ What are my ethical duties, obligations? ▪ Have I treated others as I would want to be treated? (Golden Rule) ▪ Have I assumed that the other(s) is ethical and responsible? ▪ If everyone behaved this way, would that be acceptable? ▪ Would I want to live in that world? (Kant’s categorical imperative) ▪ What would be a fair action if identities were unknown? (Rawls’ veil of ignorance) + Focus on Duties, Obligations, Principles (Deontological Theories) ◼ Advantages ◼ ◼ Rights approach found in public policy debates (e.g., abortion) Challenges ◼ Determining rule, principle, or right to follow: Golden rule, Kant’s maxim ◼ Deciding which takes precedence ◼ Reconciling deontological and consequentialist approaches when they conflict + Focus on Integrity (Virtue Ethics) ◼ Focus on integrity of moral actor rather than the act ◼ ◼ Considers character, motivations, intentions Character defined by one’s community ◼ Need to identify relevant community ◼ Disclosure rule + Virtue Ethics Questions ▪ What does it mean to be a person of integrity in this situation, profession, etc.? ▪ What ethical community would hold me to the highest ethical standards? ▪Do carefully developed community standards exist? ▪ What would the broader community think if this were disclosed? New York Times test? ▪ What would my “harshest moral critic” expect me to do? ▪ What would my “ethical role model” expect? ▪ What do I want my professional reputation to be? + Virtue Ethics – Management as a Profession ◼ The ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ proposed “Hippocratic Oath” Managers as agents of society – serve public interest, enhance long-term value for society Enterprise well-being over self-interest Obedience to letter/spirit of law and other contracts Behavior of integrity – self and others Accuracy and transparency in reporting outcomes & processes Treat others with respect/fairness re: others, the powerless Knowledge/fact-based decision making Accept responsibility as a professional manager Would this have made a difference in the financial crisis??? + Focus on Integrity (Virtue Ethics) ◼ Advantages ◼ ◼ Can rely upon community standards Challenges ◼ Limited agreement about community standards ◼ Many communities haven’t done this kind of thinking ◼ Community may be wrong + Eight Steps to Sound Ethical Decision Making 1. 2. 3. 4. 5. 6. Gather the facts Define the ethical issues Identify the affected parties Identify the consequences Identify the obligations Consider your character and integrity 7. Think creatively about potential actions 8. Check your gut + Practical Preventive Medicine (When Asked to Make a Snap Decision) ◼ Pay attention to your gut ◼ Ask for time ◼ Find out about organizational policy ◼ Ask manager or peers for advice ◼ Use New York Times test (disclosure rule) + The Cost to Society of Dying in a Pinto (in 1971 dollars) equals… $200,725 The benefit and cost of an $11 safety improvement would have been: benefit = $49.5 million cost = $137 million + Managing Business Ethics Chapter 3 Treviño & Nelson – 6th Edition + Chapter 3 Overview ◼ ◼ Ethical Awareness and Ethical Judgment Individual Differences, Ethical Judgment, and Ethical Behavior ◼ Facilitators to and Barriers to Good Ethical Judgment ◼ Toward Ethical Action ◼ Gioia’s Personal Reflections on the Pinto Fires Case + The Relationship between Ethical Awareness, Judgment, and Action Ethical Awareness Ethical Judgment Ethical Action + Case You’ve just started a new job in the financial services industry. One afternoon, your manager tells you that he has to leave early to attend his son’s softball game, and he asks you to be on the lookout for an important check that his boss wants signed before the end of the day. He tells you to do him a favor— simply sign his name and forward the check to his boss. What might influence whether you see this as an ethical issue or not? + Influences on ethical awareness ◼ If peers agree that something is “wrong” ◼ If ethical language is used ◼ If potential for serious harm is recognized + Individual Differences Influence How We Make Ethical Decisions Individual Differences Ethical Decision-Making Style Cognitive Moral Development Locus of Control Machiavellianism Moral Disengagement Ethical Awareness Ethical Judgment Ethical Actions + Cognitive Moral Development ◼ ◼ ◼ Level I (Preconventional) ◼ Stage 1 – Obedience and Punishment Orientation ◼ Stage 2 – Instrumental Purpose and Exchange Level II (Conventional) ◼ Stage 3 - Interpersonal Accord - Conformity – Mutual Expectations ◼ Stage 4 – System Maintenance - Upholding duties, laws Level III (Postconventional or Principled) ◼ Stage 5 – Social contract and individual rights ◼ Stage 6 - Theoretical stage only + Why is Cognitive Moral Development Important? ◼ ◼ Because most people reason at the conventional level and are looking outside themselves for guidance That makes “leading” on ethics essential + Locus of Control An individual’s perception of how much control he or she exerts over events in life. External Internal + Connection to Ethical Behaivor? ◼ ◼ Internals are more likely to see the connection between their own behavior and outcomes and therefore take responsibility for their behavior. Therefore, internals are more likely to do what they think is right + Machiavellianism ◼ Self interested ◼ Opportunistic ◼ Deceptive ◼ Manipulative + Moral Disengagement ◼ ◼ The tendency for some individuals to deactivate their internal control system in order to feel okay about doing unethical things Eight mechanisms used for doing this ◼ Euphemistic language ◼ Moral justification ◼ Displacement of responsibility ◼ Advantageous comparison ◼ Diffusion of responsibility ◼ Distorting consequences ◼ Dehumanization ◼ Attribution of blame + Moral Disengagement STOP AND THINK “It’s not my responsibility - my boss told me to do it.” “It’s not my responsibility – my team decided this.” “It’s no big deal!” “It’s not as bad as (what someone else) is doing.” “They deserve whatever they get.” “They brought this on themselves.” + Cognitive Barriers to Good Ethical Judgment Faced By All of Us ◼ ◼ Barriers to Fact Gathering ◼ Overconfidence ◼ “Confirmation Trap” Barriers to Consideration of Consequences ◼ Reduced number ◼ Self vs. others ◼ Ignore consequences that affect few ◼ Risk underestimated: illusion of optimism, illusion of control ◼ Consequences over time – escalation of commitment + More Cognitive Barriers ◼ Thoughts about integrity ◼ ◼ Illusion of superiority or illusion of morality Paying attention to gut ◼ Careful! Gut may be wrong + Unconscious Biases ◼ The IAT and race bias ◼ The role of emotions + How it felt to be a recall coordinator… “The recall coordinator’s job was serious business. The scripts associated with it influenced me more than I influenced [it]. Before I went to Ford I would have argued strongly that Ford had an ethical obligation to recall. After I left Ford, I now argue and teach that Ford had an ethical obligation to recall. But, while I was there, I perceived no obligation to recall and I remember no strong ethical overtones to the case whatsoever. It was a very straightforward decision, driven by dominant scripts for the time, place, and context.” Dennis Gioia, former recall coordinator at Ford + Toward Ethical Action ◼ Script Processing ◼ ◼ Cognitive frameworks that guide our thoughts and actions Cost-Benefit Analysis ◼ Too simplistic a way of analyzing ◼ No moral dimension + Case Mary, the director of nursing at a regional blood bank, is concerned about the declining number of blood donors. It’s May, and Mary knows that the approaching summer will mean increased demands for blood and decreased supplies, especially of rare blood types. She is excited, therefore, when a large corporation offers to host a series of blood drives at all of its locations, beginning at corporate headquarters. Soon after Mary and her staff arrive at the corporate site, Mary hears a disturbance. Apparently, a nurse named Peggy was drawing blood from a male donor with a very rare blood type when the donor fondled her breast. Peggy jumped back and began to cry. Joe, a male colleague, sprang to Peggy’s defense and told the donor to leave the premises. To Mary’s horror, the male donor was a senior manager with the corporation. - What is the ethical dilemma in this case? - What values are in conflict? - How should Mary deal with Peggy, Joe, the donor, and representatives of the corporation?
Purchase answer to see full attachment