U2 Obj 1C Management Theories And Practices

Front 1

Ethical Challenges Managers Face

Back 1

Situation or circumstances often create ethical pressures rather than character flaws. The main reasons:

Unrealistic business objectives/deadlines.

Desire to further one’s career.

Desire to protect one’s livelihood.

Unethical management can be a barrier to fulfilling your own personal code of ethics.

Front 2

Sarbanes-Oxley Act (2002)

Back 2

Requires companies to write a code of ethics. The purpose is to “define a code of ethics as a codification of standards that is reasonably necessary to deter wrongdoing and to promote honest and ethical conduct,” Includes conflicts of interest, compliance with laws, and accountability to adhere to the code.

Some companies go a step further and articulate a set of values that drive their code of conduct.

Front 3

Importance of Ethics in Management

Back 3

Leaders set the moral tone. We watch leaders for appropriate actions and behavior.

Decisions managers make indicate their ethics. If the company cares about safety but does not not buy protective gear, it is not behaving in line with its code. Or Managers exhibit unsafe behavior or disregard employees unsafe actions.

Without integrity, there can be no trust. Leadership is based on trust. Ethics drive effectiveness because employees know they can do the right thing decisively and with confidence.

Ethical behavior earns the trust of customers and suppliers and the public’s good will. Ethical managers and ethical businesses tend to be more trusted and better treated. They suffer less resentment, inefficiency, litigation, and government interference. If top management makes shady decisions, people will emulate the questionable behavior, not the code of ethics.

Promote ethical behaviors by offering seminars on ethics, having an ethics hotline via which employees can anonymously raise issues, and having an ombudsman office or ethics committee to investigate issues.

Front 4

Integrating Ethics into Managerial Decision Making

Back 4

Ethics implies making a choice between decision-making rules. Ex. choosing between cheapest (decision rule 1) or highest quality (decision rule 2).

Ethics also implies deciding on a course of action when no clear decision rule is available. Ethical dilemmas occur when choices are incompatible and when one course of action seems to better serve your self-interest but appears to violate a moral principle. You should follow an ethical decision-making process.

Front 5

Steps in an Ethical Decision-Making Process

Back 5

Ask - Is what you are asked to do illegal or unethical? Who might be harmed?

Identify the stakeholders and consider the situation from their point of view. For example, consider the point of view of the company’s employees, top management, stockholders, customers, suppliers, and community.

Consider the alternatives you have available to you and how they affect the stakeholders: -consequences

-duties, rights, and principles

-implications for personal integrity and character

How does the action make you feel about yourself? How would you feel if your actions were reported tomorrow in the Wall Street Journal (or your daily newspaper)? How would you explain your actions to your mother or to your 10-year-old child?

Make a decision. This might involve going to your boss or to a neutral third party (such as an ombudsman or ethics committee). Know your values and your limits. If the company does nothing to rectify the situation, do you want to continue working for the company?

Monitor outcomes. How did the decision work out? How did it turn out for all concerned? If you had it to do over again, what would you do differently?

Front 6

Key Takeaway

Back 6

Management involves making decision that often have an ethical component. Beyond personal ethics or a moral code, managers face making decisions that reflect the company as a whole, affecting its future success and vitality. Ethics means following the law and acting in accordance with basic values.