Ethics in management

Chapter 3
Introduction
Transparency and Accountability are the two
critical words in the corporate world especially
in the areas of functional management.
As it is well-known, many of the financial and
accounting scams and scandals in our times are
occurring more because of its absence.
The functional areas in business management
are concerned with the practical application of
management principles in different fields of
day-to-day business activities.

These areas are :-
Human resource management
Marketing
Finance
Information technology and so on.
Management includes three Ms for
considerations while dealing with
managerial solutions. They are:
Materials
Methods and
Men


Importance of ethics in the
workplace
Belonging to a group, community
Commitment and motivation for the job
Promote a strong public image




Its the right thing to do !
What Are Unethical Business Practices?
Surveys have identified the following recurring
themes to prominent everyday ethical issues facing
businesses and their stakeholders:
Managers lying to employees
Office nepotism and favoritism
Taking credit for others work
Receiving/offering kickbacks
Stealing from the company
Firing an employee for whistle-blowing
Padding expense accounts
Divulging confidential information or trade secrets
Terminating employment without sufficient notice
Using company property/materials for personal use

Where are Unethical Business
Practices, in general, done?
The most unethical behavior, as per one survey,
happens in the following areas:
Government
Sales
Law
Media
Finance
Medicine
Banking
Manufacturing


One of the managements most important
challenges is to conduct business ethically
while achieving high levels of economic
performance.
The values rooted in the structure of Indian
culture are: respect for the individual,
cooperation and trust, top quality
product/service, work-is-worship, contentment,
ethical soundness, self-discipline and self-
restraint, customer satisfaction, creativity,
sharing, renunciation and detachment.
Ethics in management
Management ethics is the ethical treatment of employees, stockholders,
owners, and the public by a company. A company, while needing to make a
profit, should have good ethics. Employees should be treated well, whether
they are employed here or overseas. By being respectful of the environment
in the community a company shows good ethics, and good, honest records
also show respect to stockholders and owners.

Ethics Management is a managerial tool to enforce integrity of employees
through a set of codified rules and regulations and in the grey areas where
such codified rules and regulations are absent, the company or the
government has to follow reasonable ethical standards or well-founded
standards of right and wrong that prescribe what humans ought to do

Types of Management Ethics
Immoral
Recognize the ethical issues involved and
choose to do the wrong thing.
Moral
Recognize the ethical issues involved and
choose to do the right thing.
Amoral
Do not consider the ethical implications of an
action or believe that ethics are irrelevant.
Immoral, Amoral, Or Moral
Management

Immoral management means intentionally
going against ethical principles of justice and
of fair and equitable treatment of other
stakeholders.

Amoral management happens when others are
treated negligently without concern for the
consequences of actions or policies.

Moral management places value on equitable,
fair, and just concern of others involved.
Factors shaping ethical behaviour
at work
Individual
Everyones own
personal moral
philosophy
Individual stage of
moral development
Laws and regulations

Organizational
The organisations
culture
Co-workers and
leaders
Opportunities to be
ethical or unethical
Laws, requirements
and regulations
What Is Organizational Culture?
Organizational culture
The characteristic values, traditions, and behaviors a
companys employees share.
How is culture is revealed?
Ceremonial events
Written rules and spoken commands
Office layout
Organizational structure
Dress codes
Cultural symbols and behaviors
Figureheads
Ethics in HRM
HRM contracts with human resource
planning and development related activities
in an organization.
Arguably it is that branch of management
where ethics really matter.
Since it concerns human issues specially
those of compensation, development,
industrial relations and health and safety
issues.
HRM-Related Ethics Activities
Selection
Fostering the perception of fairness in the processes
of recruitment and hiring of people.
+ Formal procedures
+ Interpersonal treatment
+ Providing explanations
+ Selection tools
+ Two-way communication
Training
How to recognize ethical dilemmas.
How to use ethical frameworks to resolve problems.
How to use HR functions in ethical ways.
HRM-Related Ethics Activities (contd)
Performance Appraisal
Appraisals that make it clear that the company
adheres to high ethical standards by measuring and
rewarding employees who follow those standards.
Reward and Disciplinary Systems
The organization swiftly and harshly punishes
unethical conduct.
Workplace Aggression and Violence
Taking care that HR actions do not foster
perceptions of inequities that translate into
dysfunctional behaviors by employees.
ETHICS IN THE WORKPLACE
INTRODUCTION

Work Ethics:
A group of moral principles,
standards of behavior, or set
of values regarding proper
conduct in the workplace

Importance of workplace ethics
Workplace ethics ensures positive ambience at the workplace.
Employees develop a feeling of loyalty and attachment towards
the organization.
Organizations need to have fool-proof systems to measure the
performance of individuals.
Workplace ethics ensures mentoring their employees.
Retention management is easy.
Employees feel secure about their job and career. It strengthens
the bond among employees and most importantly their
superiors.
Organizations need to stand by their employees even at the
times of crisis.
Ethical behaviour and corporate social responsibility can
bring significant benefits to a business.
For example, they may: Attract customers to the firms
products, thereby boosting sales and profits, make
employees want to stay with the business, reduce labour
turnover and therefore increase productivity, Attract more
employees wanting to work for the business, reduce
recruitment costs and enable the company to get the most
talented employees, Attract investors and keep the
company's share price high, thereby protecting the business
from takeover.

Unethical behaviour or a lack of corporate
social responsibility, by comparison, may
damage a firms reputation and make it less
appealing to stakeholders. Profits could fall
as a result.

ETHICS IN THE WORKPLACE
Business Abuse
Any :
illegal
unethical
irresponsible Act done
against an Employer
ETHICS IN THE WORKPLACE
Results of Business
Abuse
Higher prices
Business Failure
Fewer Jobs
Unpleasant Working
Conditions



ETHICS IN THE WORKPLACE
A. Examples of Business
Abuse
Stealing
Merchandise
Money
* Shoplift *Kickback
* Conflict of Interest
* Unauthorized Discounts
Time
ETHICS IN THE WORKPLACE
A. Examples of Business
Abuse (Continued)
gVandalism
@Falsify Records
jBreak Confidentiality
)Ignore Safety Rules
gMisrepresent
Merchandise

ETHICS IN THE WORKPLACE
A. Examples of Business
Abuse (Continued)
_Poor Client Service
gIrresponsible Behavior
_Addictions
* drugs
* alcohol
* tobacco

ETHICS IN THE WORKPLACE
A. Examples of Business
Abuse (Continued)
/Gossip
* Causes poor work
environment (morale)
* Lowers Productivity


ETHICS IN THE WORKPLACE
11 Harassment of Co-wks or
Clients
*Unwelcome sexual
advances
* Compliance as
condition of employment
* Interferes with work
performance through
intimidation
Ethics in the Workplace
NBES - Employees observe 5 main types of misconduct

Lying
Withholding needed information
Abusive or intimidating behavior towards employees
Misreporting actual time or hours worked
Discrimination

The six most frequent categories for investigations were:

Conflict of interest - 65%
Misuse of resources - 64%
Sexual harassment/harassment - 50%
Gifts and gratuities - 38%
Discrimination - 38%
Theft - 31%
Examples of Unethical Behavior
Ethical issues in HRM
Discrimination issues
Issues surrounding the representation of employees and the
democratization of the workplace.
Issues affecting the privacy of the employee.
Whistle blowing.
Issues relating to the fairness of the employment contract
and the balance of power between employer and employee.
Occupational safety and health.
WHISTLEBLOWING

Whistle blowing in its most general form
involves calling(public)attention to wrong
doing, typically in order to avert harm.
Whistle blowing is an attempt by a member or
former member of an organization to disclose
wrong doing in or by the organization.

Kinds of Whistle blowing:
Internal Whistle blowing is made to someone
within the organization.
Personal Whistle blowing is blowing the whistle
on the offender, here the charge is not against the
organization or system but against one individual.
The impersonal, External Whistle Blowing.



Rarely whistleblower are honored as heroes by
their fellow workers, for the following reasons:
Those did not blow the whistle guilty of immorality.

They doubt the loyalty of the whistle blower
to the employer.

The whistleblower is perceived as a traitor, as
someone who has damage the firm - the working
family to which he/she belongs.
Morally justifiable whistle-blowing are
easier, safer and more efficacious.
Because directors share holders and
other authorities don't pay much
attention to pretty or unproven
complaints.