Ethical Issues and In search of the Moral Manager 1.

Ethical Issues Ethics is the study of morals and systems of morality, or princiles of conduct. The study of ethics is concerned with the right or wrong and the shoulds and should nots of human decisions and actions, but we must make the difference between all questions of right and wrong that are or are not ethical issues. The ethical, or moral, frame of reference is concerned with human behavior in society and with the relationship, duties and obligations between people, groups, and organizations. It is concerned with human consequences associated with decisions and actions. An ethical perspective requires that you extend consideration beyond your own self-interest (or that of your company) to consider the interests of a wider community of people, including employees, customers, suppliers, the general public or even foreign governments. The separation of strategic or operating decisions and ethical decisions is artificial because problems in the reals world do not come with neat labels attached: here is a finance problem; here is a marketing problem; and now, an ethical problem. Managers may categorize the issues by functional area or break up a complex problem into components such as those mentioned. Usually policy issues and decisions are multifaceted and simultaneously may have financial, marketing and production components. The decision-making tools for this type of situation probably would be missing. Business schools, traditionnally, have not emphasized the teaching of ethics as rigorously as they have the teaching of finance or marketing for example. Business students and managers generally have not been trained to think about ethical issues as they have been trained in the frameworks and techniques for functional areas of specialization. Some examples of ethical issues may be present in many areas of operations: the type of products produces; marketing and advertising practices; business conduct in countries where physical security is a consideration; hiring and promotion practices in countries where discrimination and racism exist; requests for payments to secure contracts or sales; and payments to prevent damage to plants and equipment or injury to employees. Such an example may be the one of the US government who tries to open up markets in Southeast Asia for cigarette manufacturers. Should US promote the cigarette markets in other countries if they spend money to combat smoking in their own country? One side argues that US is exporting death and disease to the developing world and the other side counters that cigarettes are manufactured and sold in countries such as Thailand. But what about the Us governments attempt to try to change Thai laws that restrict or ban cigarette advertising? Is this acceptable or is it going too far? One of the first things managers often do when they encounter an ethical problem is avoid it through the proces of rationalization. They may focus on some other aspect of

the problem. They may transform the ethical problem into some other type of problem- a legal or accounting problem, for instance. Compliance with laws and professional regulations is probably a minimum requirement for responsible managers. Another kind of avoidance behavior is to see the problem as only one small piece of a larger puzzle and to assume that someone higher up in the organization must be looking after any unusual aspects, such as ethical considerations. Rationalizing ones behavior by transforming an ethical problem into another type of problem, or assuming responsibility for only one specific, technical component of the issue, or claiming it is someone elses problem gives one the feeling of being absolved from culpability by putting the burden of responsibility elsewhere. Who is responsible for ensuring ethical behavior? Corporations have a responsibility to make it clear to their employees what sort of behavoir is expected. This means that executives in headquarters have a responsibility, not just for their own behavior, but also for providing guidance to subordinates. A number of companies Have corporate codes to do just this. The question always arises as to the distinction between legal and ethical behavior. The fact is that not all laws are moral. Henderson has provided a useful way to think about the relationship between ethical and legal behavior. There are a number of 4 ways: ethical and legal, legal but unethical, ethical but illegal, illegal and unethical. 2. In search of Moral Manager

There are three major types of more or less ethical management: immoral, amoral and moral. a) The immoral management If immoral and unethical are synonynous, then immoral management is not only devoid of ethical principles or percepts but also positively and actively opposed to what is ethical. Management decisions, behavior, or actions do not accord with ethical principles. The immoral managements motives are clearly selfish and it cares only about the companys gains, it is greed and chooses between right and wrong, to do wrong. Immoral management does not care about others claims to be treated fairly or justly. Immoral management regards legal standards as barriers to be overcome in accomplishing what it wants. Immoral managers will do what they can to circumvent the law. The operating strategy of immoral management is focused on exploiting opportunities for corporate or personal gain.

A clear case of immoral management is that of the Brown & Root, Inc., which had been building a nuclear power plant for Texas Utilities who fired a quality control inspector in 1982. It fired another 2 other inspectors the next year. Evidence gathered by te government suggests that the employees may have been doing their job too well. The inspectors claim that they were discharged after resisting orders from management to overlook flaws in the plant. The Nuclear Regulatory Commission is now conducting inquiries into the case of dozens of inspectors who maintain that managers pressured them to ignore defects because repairs might delay construction, causing added costs and delays. This is a clear case of immoral management. Executive decisions or orders are self-centered, actively opposed to what is right, focused on organizational success at whatever the cost, and cutting corners where it is useful. Such concerns as safety or fairness are disregarded.

b) Moral management Moral management is the exact opposite of the immoral management. Moral management strives to be ethical in its focus on ethical norms, professional standards of conduct, motives, goals, orientation toward the law and general operating system. Moral management aspires to succed, but only within the confines of sound ethical percepts: fairness, justice and due process. Managements motives may be termed as fairness, justice or unselfish. Management pursues its objectives while simoultaneously requiring and desiring profitability, legality and morality. Moral management lives by sound ethical standards, seeking out only those economic opportunities that can be pursued within the confines of ethical behavior.When an ethical issue arises, the company takes a leadership position and asks if that action, decision or behavior is fair to them and all parties involved. An exemple of fairness and that of moral management is that of companies in toy industry who has adopted strict standards for flammability, toxicity, safety and durability. For instance, the safety testing process at Hasbro-Bradley, Inc., eliminates nearly 2000 toy concepts in one year before the comapany chose the 100 toys it planned to produce. Toys also undergo psychological testing as companies attempt to screen out toys that might have a lasting negative emotional impact on children. This is a case of moral management.

c) Amoral management In some respects amoral management seems to be a hybrid between the other two. Although conceptually positioned between the moral and immoral management, it is different in kind. The amoral management has 2 types: intentional and unintentional. Intentional moral managers do not factor ethical considerations into their decision making, actions, or behavior. These managers are neither moral nor immoral; they simply think that different rules of the game apply in business than in other realms of life. Unintentional amoral managers do not think about business activity in ethical terms either, but for a different reason. These managers are simply morally casual, careless, or inattentive to the fact that their decision and actions may have negative or deleterious effects on others. These managers lack ethical perception and moral awareness. They may be well intentioned, but they are either too insensitive or egocentric to consider the impacts of their behavior on others. Amoral management pursues profitability as its goal, but it does not attend to moral issues that may be intertwined with that pursuit and does not bridle managers with excessive ethical structure. It permits free reign within the unspoken but understood tenets of the free enterprise. Some exemples of amoral management are: When police departments stipulated that candidates must be least 5 ft 10 in and weigh 180 pounds to qualify, the decision was amoral. No consideration was given that women-and men of some ethinic groups- do not, on average, attain that height and weight. When companies decided to use scantily clad young women to advertise autos, mens cologne, and other such products, they did not think of the degrading and demeaning characterization that eventually would come from their ethically neutral decision. Powers and Vogel argue that there are six major elements or capacities that are essential in making moral judgements: Moral imagination refers to the ability to perceive that a web of competing economic relationships is, at the same time, q web of moral or ethical relationships; Moral identification and ordering means being able to discern the relevance or non-relevance of moral factors that are introduced into a decision-making situation; Moral evaluation; Tolerance of moral disagreement and ambiguity; Integration of managerial and moral competence; A sense of moral obligation.

These characterizations of moral, immoral and amoral management should provide a useful basis for managerial self-analysis.