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58 Cards in this Set
- Front
- Back
What is managerial ethics? |
The code of moral principles and values that governs the behaviour of a person or a group with respect to what is right or wrong |
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Human behaviour falls into which three domains? |
1. Domain of codified law (legal standard) 2. Domain of ethics (social standard) 3. Domain of free choice (personal standard) |
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Domain of codified law |
- Values and standards are written into the legal system and enforceable in the courts - Lawmakers rule that people must behave in a certain way (eg. paying tax, getting a licence) - Obedience to laws prescribed by legal system |
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Domain of ethics |
- No specific laws but standards of conduct based on shared principles and values about moral conduct - Obedience is to unenforceable norms and standards about which the individual or organisation is aware. |
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Domain of free choice |
- At the opposite end of the scale - Relates to behaviour that the law has no say and that an individual has complete freedom - Obedience is to oneself - E.g individuals choice of religion or a companies choice of number of products to produce |
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Ethical dilemma |
A situation that arises when all alternative choices or behaviour have been deemed undesirable because of potentially negative ethical consequences, making it difficult to distinguish right from wrong. |
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Moral agent |
An individual who must make an ethical choice in an organisation |
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Normative approach |
When norms and values guide decision making |
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What are the normative ethics approaches relevant to management? |
1. Utilitarian approach 2. Individualism approach 3. Moral rights approach 4. Justice approach |
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Utilitarian approach |
The ethical concept that moral behaviour produces the greatest good for the greatest number (pacific dunlop closing Ansell's Australian manufacturing plants and relocating to Thailand and Malaysia) |
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Individualism approach |
The ethical concept that acts are moral when they promote the individual's best long-term interests, which ultimately leads to the greater good - Not always immediate gain - "treat others how you want to be treated" |
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Moral rights approach |
The ethical concept that moral decisions are those that best maintain the rights of those people affected by them. - People have rights and liberties that cant be taken away (right to free consent, privacy, freedom of conscience, free speech, due process, life and safety) |
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Justice approach |
The ethical concept that moral decisions must be based on standards of equity, fairness and impartiality (distributive justice, procedural justice and compensatory justice) |
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Distributive justice |
The concept that different treatment of people should not be based on arbitrary characteristics (male/female salaries) |
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Procedural justice |
The concept that rules should be clearly stated and consistently and impartially enforced. |
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Compensatory justice |
The concept that individuals should be compensated for the cost of their injuries by the party responsible responsible and also that individuals should not be held responsible for matters over which they have no control. |
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Factors that affecting ethical choice |
- Values, attitudes, beliefs, and behavioural patterns of the organisational culture -Rules and policies, reward systems, selection, legal and professional standards, leadership. |
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Three levels of personal moral development (model) |
Level 1: Pre-conventional Level 2: Conventional Level 3: Post-conventional |
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Pre-conventional level |
- Individuals concerned with external rewards and punishments - Obey authority to avoid detrimental personal consequences - Leadership style: autocratic/coercive - Employee behaviour: Task accomplishment |
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Conventional level |
- People learn to conform to the expectations of good behaviour as defined by colleagues, family, friends and society. - Meet social and interpersonal obligations - Leadership style: Guiding/encouraging, team oriented - Employee behaviour: Work group collaboration |
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Post-conventional level |
- Individuals are guided by an internal set of values and standards / will disobey rules or laws that violate these principles - Internal values > expectations of others - Leadership style: Transforming/ servant relationship - Employee behaviour: Empowered employees/full particpation |
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What are the trends of managers and moral development? |
- Majority operate at level 2 - Only 20% of adults reach level 3 -Managers at level 3 make ethical decisions regardless of organisational consequences |
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Corporate social responsibility |
The obligation of organisation management to make decisions and take actions that will enhance the welfare and interests of society as well as the organisation. E.g: James Hardie and employee exposure to asbestos (attempts to restructure and limit payouts) |
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Organisational stakeholders |
Any group within or outside the organisation that has a stake in the organisations performance |
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Socially responsible investment |
Involves investing in companies which, in the judgement of the investor, do not harm people or the environment through their activities |
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The bottom of the pyramid (BOP) |
Corporations can both alleviate social problems and make a profit by selling goods and services to the worlds poorest people (unilever selling lifebouy soap in India to prevent the spread of disease) |
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The natural environment |
Organisations are marketing in an effort to woo environmentally conscience consumers. E.g: 3M and Baxter are developing less polluting products and helping customers establish their own environmental programs |
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What is the highest level of 'green' |
When organisations take an activist approach (actively searching for ways to conserve the Earth's resources) - Sustainability and Sustainable development |
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Sustainability |
Economic development that generates wealth and meets the needs of the current generation while saving the environment so future generations can meet their needs as well |
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Criteria of corporate social performance |
Economic responsibility (be profitable) > Legal responsibility (obey the law) > Ethical responsibility (do what is right, avoid harm) > Discretionary responsibility (contribute to the community and quality of life) |
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Economic responsibilities |
- The business institution is the basic economic unit of society - Responsibility is to produce the goods and services that society wants and maximise profits for its owners and shareholders - Carried in the extreme is it is called profit-maximising view |
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Legal responsibilities |
- Defines what society deems as important with respect to appropriate corporate behaviour - Business' expected to fulfil economic goals within legal framework |
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Ethical responsibilities |
Behaviour not necessarily codified into law and may not serve the organisation's direct economic interest |
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Discretionary responsibilities |
Organisational responsibility that is voluntary and guided by the organisations desire to make social contributions not mandated by economics, law or ethics. |
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Corporate actions towards social demands |
Degree of social responsibility Low: Obstruction, Defence, Accommodation, Proaction: High.
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Obstructive responses |
A response to social demands in which the organisation denies responsibility, claims that evidence of misconduct is misleading or distorted, and attempts to obstruct investigation (once called stonewalling) |
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Defensive responses |
A response to social demands in which the organisation admits to some errors of commission or omission, but it does not act obstructively (these things happen but they are nobodies fault |
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Accommodative responses |
A response to social demands in which the organisation accepts - often under pressure - social responsibility for it's actions to comply with the public interest |
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Proactive responses |
A response to social demands in which the organisation seeks to learn what is in its constituencies' interest and to respond without pressure from them (printing missing kids on milk cartons) |
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Managing organisations ethics and social responsibility |
- Leadership by example - Codes of ethics - Ethical structures - Supporting whistle-blowers |
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Leadership by example |
Leaders make a commitment to ethical values and help others throughout the organisation to embody and reflect those values |
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Codes of Ethics |
A formal statement of the organisation's values regarding ethics and social issues (principle based statements and policy based statements) |
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Principle based statements |
Designed to affect organisational culture Define fundamental values, organisational responsibilities, quality of products and treatment of employees. |
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Policy based statements |
Outline procedures to be used in specific ethical situations (includes marketing practice, conflicts of interest, observance of laws, proprietary interest, political gifts and equal opportunities) |
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Ethical structures |
Represent the various systems, positions and programs an organisation can undertake to implement ethical behaviour (ethics committee, chief ethics officer, ethics training) |
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Ethics committee |
A group of executives assigned to oversee the organisation's ethics by ruling on questionable issues and disciplining violators |
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Chief ethics officer |
A company executive who oversees ethics and legal compliance |
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Ethics training |
Training programs to help employees deal with ethical questions and values |
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Whistle blowing |
Disclosure by an employee illegal, immoral or illegitimate practices by the organisation
- most contact outside organisations |
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Does good citizenship decrease financial performance? |
Studies indicate that the use of resources for ethics and social responsibility does not hurt a company
- Organisational integrity = brighter future for business and society |
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Sustainable development |
Economic development that generates wealth and meets the needs of current population while preserving the environment fir the needs of future generations |
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The why of sustainable development |
- To deliver a complete strategy that satisfies a variety of stakeholders at a higher level - Breadth of vision - Stakeholder empowerment - Being progessive |
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Breadth of vision |
Viewing the business in its broadest context and appreciating the needs, rights and interests of an extended array of stakeholders |
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Stakeholder empowerment |
Describe's business' active and consistent efforts to build, lengthen and strengthen relationships with their stakeholders. |
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Being progressive |
Share a commitment to progress through models such as excellence, best practice and high performance. |
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The what of sustainable development |
- Stakeholder support: shareholders, debt holders, employees, suppliers, customers and regulators - Efficiency: - Market edge |
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Efficiency |
The sustainable development practices that makes a direct or indirect contribution to the company's financial performance |
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Market edge |
The practices that contribute to the company's market opportunities in terms of new markets, market share and profit opportunity. |