CODE TO WORD: ETHICS IN THE WORKPLACE

Florida Gulf Coast UniversityHudson Rogers

Fall 2003

THINGS THAT MAKE YOU GO Umm!

• The only social responsibility of business is to increase profits (Freidman 1976).

GENERAL PERCEPTION OF BUSINESS ETHICS?

• BUSINESS: - Nasty! Chaotic! Self-Interested! Cut-Throat! Bad!

• ETHICS: Nice! Controlled! Altruistic! Moral! Good!

• Business ethics - an oxymoron?

THE NOTION OF ETHICS• How can ethical decisions be distinguished

from other decisions in business?• Ethics has to do with right and wrong.• Ethics concerned with situations that may

result in actual or potential harm to individuals or groups - Focus on human good & welfare.

BUSINESS ETHICS

• BUSINESS ETHICS: Application of moral reasoning to business decision-making.

• Business ethics - right and wrong in a business setting. Three levels of ethical problems identifiable:

• Individual, Systemic (society/world), Corporate (organizational).

Ethics and the Workplace

• Ethics in the workplace entails any and all acts that have moral/ethical consequences or implications.

• Business decisions influenced by ethics.• Without ethics there is only the law. But

law is not a sufficient criteria for judging behavior. There are behaviors that may be legal but are unethical.

A SCENARIO WORTH CONSIDERING

• Assume that your firm is going under and you know about it. Now assume that someone offers to purchase a $1m worth of products that also require servicing into the future.

• Question: Would you take the order?

Workplace Ethics

• Workplace ethics involve such gray areas as dealings with peers, superiors, subordinates, quality of work, worker & product safety, lying (social, peace keeping, protective, trust keeping) truth in advertising, use of company property, padding expense accounts, whistle blowing, selling harmful or questionable products, handling toxic materials, environmentalism.

Workplace Ethics

• A large number of firms seek to address workplace ethics by means of:

• Codes of Conduct• Policies and Procedures• However, these are related more towards what

is in place on paper (easy - punishment related) rather than towards the development of mature moral reasoning and stressing ethical judgement (culture).

THE CHALLENGE

• Achieving moral maturity by developing the ability to make sound ethical judgements and a developed habit of doing so.

DEVELOPING MORAL REASONING

• We are each defined by our preferences hence individual value system makes it difficult if not impossible to discuss issues that face us as a society.

• Moral ideals cannot be achieved based on individualistic norms. To develop moral ideals we must first have shared values. Firms must create cultures that facilitate shared values and moral reasoning.

Moral Reasoning - Ways of Viewing Ethical Decisions

• Absolutist - right and wrong clearly & unambiguously defined universally & in all situations (Thou shall not kill! Things seen as Black and White)

• Relativist - group, individual, culture decides. Everything is a shade of gray.

• Situational - ethics depends upon the situation (different from relative ethics). What is ethical determined by a moving line.

Moral Judgment

• Kohlberg asserts that moral judgment is the single most important factor in moral behavior.

• Moral maturity cannot be attained without moral reasoning - making intelligent judgments on the rightness and wrongness of moral issues.

• How do we develop moral reasoning?

KOHLBERG’S THREE STAGE MODEL

Levels Perspective Justification

Pre-Conventional

Child Like Authority – pain, punishment, reward, pleasure

Conventional Group, Adolescent

Role conformity laws, norms,

Post Conventional

Universal Rational justified moral principles

ETHICAL NORMS FOR BUSINESS DECISIONS

• UTILITARIANISM - Maximizing satisfaction/greatest good for the greatest number or least harm to the fewest.

• Utilitarianism provides a standard by which we judge which actions are right or wrong, good or bad.

UTILITARIANISM

• An act is Good if it results in the greatest happiness for the greatest number or if it results in the least unhappiness for the least number.

UTILITARIANISM

• Identify the Alternative courses of action• Determine the costs and benefits for each

stakeholder• Select the Best alternative - greatest

benefit or least cost• Make the best alternative a universal rule

or policy.

UTILITARIANISM

• How should we define benefits and harm so that they can be measured?

• Who decides?

• What happens when benefits collide with the rights of others or leads to unfair outcomes?

RIGHTS & DUTIES

• Rights - what’s needed to live a life that expresses value.

• Rights - justifiable claim, entitlement or protection against collective goals (Liberty Rights & Welfare Rights)

• No action should violate fundamental human rights

• Duty/Obligation - that which you must do.

JUSTICE

• Justice - Fair distribution of Benefits & Burdens

• Which is the fair distribution standard? In giving raise which measure should we use - equality, effort, need, accomplishment, position, contribution?

JUSTICE STANDARD

• Fair Distribution follows three principles:• Equal Liberty - maximum liberty

compatible with liberty of others• Difference Principle - inequities ethical if

benefit least advantaged• Equal Opportunity Principle - benefits

equally open to all.

CARING PRINCIPLE

• As members of a society we are responsible for well-being of others.

• Caring increases with the level of dependency involved.

• In making business decisions, trust, teamwork, relationships and communication seen as important norms.

ROTARY’S FOUR-WAY TEST

• Is it the truth• (Rights)• IS it FAIR to all concerned?• (JUSTICE)

ROTARY’S FOUR-WAY TEST

• Will it build GOODWILL and Better FRIENDSHIPS

• (Caring)• Will it be BENEFICIAL to all

concerned?• (Utilitarianism)

RECONCILING THE DIFFERENCES?

• How do you reconcile the conflict created from a pluralistic approach involving the various ethical theories?

• Ethics in the workplace is the search for a more harmonious existence.

• Only attainable through decision making process that focuses on morally mature reasoning aimed at improving ethical judgement.

Seven-Step Process of Making Ethical Decisions

• 1. What are the Facts• 2. What are the Ethical Issues• 3. What are the Alternatives?• 4. Who are the Stakeholders?• 5. What are the Ethics of the Alternatives?• 6. What are the Practical Constraints?• 7. What Actions Should we Take?

RULES OF ETHICAL THINKING

• 1. Consider the well-being of others.• 2. Think as a member of a community.• 3. Obey but do not depend only on the law.• 4. View self and firm as part of society.• 5. Obey moral rules in all situations.• 6. Think objectively• 7. Ask, “What kind of person would do such a

thing.”• 8. Respect other customs but keep your ethics.

Impediments to Applying Ethical Logic

• 1. Denial of Responsibility - I HAD NO CHOICE!

• 2. Denial of Injury - NO ONE GOT HURT!

• 3. Denial of Victim - HE HAD IT COMING!

• 4. Condemning the Condemners - THEY DO NOT HAVE THE RIGHT TO TALK!

• 5. Appeal to Higher Loyalties - WE DID IT FOR GOD AND COUNTRY!

CLIMBING THE MOUNTAIN

• Ethics in the workplace provides better quality of life, greater long-term profitability and less stress.

• ETHICAL BUSINESS IS GOOD BUSINESS.