3-1

Lecture 2

Managing Ethics and Diversity

S. ChanHead, Department of Business Administration

http://home.chuhai.hk/~charmaine/Charmaine@chuhai.edu.hk

3-2

The Nature of Ethics

Ethical Dilemma Quandary people find themselves in when they

have to decide if they should act in a way that might help another person even though doing so might go against their own self-interest

3-3

The Nature of Ethics

Ethics The inner-guiding

moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the “right” or appropriate way to behave

3-4

Stakeholders and Ethics

Stakeholders The people and groups that supply a company

with its productive resources and so have a claim on and a stake in the company

3-5

Types of Company Stakeholders

3-6

Stockholders

Want to ensure that managers are behaving ethically and not risking investors’ capital by engaging in actions that could hurt the company’s reputation

Want to maximize their return on investment

3-7

Managers

Responsible for using a company’s financial capital and human resources to increase its performance

Have the right to expect a good return or reward by investing their human capital to improve a company’s performance

Frequently juggle multiple interests

3-8

Employees

Companies can act ethically toward employees by creating an occupational structure that fairly and equitably rewards employees for their contributions

3-9

Suppliers and Distributors

Suppliers expect to be paid fairly and promptly for their inputs

Distributors expect to receive quality products at agreed-upon prices

3-10

Customers

Most critical stakeholder

Company must work to increase efficiency and effectiveness in order to create loyal customers and attract new ones

3-11

Community, Society, and Nation

Community Refers to physical locations like towns or cities or

to social environment like ethnic neighborhoods in which companies are located

Provides a company with the physical and social infrastructure that allows it to operate

3-12

Four Ethical Rules

3-13

Practical Decision Model

1. Does my decision fall within the acceptable standards that apply in business today?

2. Am I willing to see the decision communicated to all people and groups affected by it?

3. Would the people with whom I have a significant personal relationship approve of the decision?

3-14

Some Effects of Ethical/Unethical

Behavior

3-15

Why should managers behave ethically?

The relentless pursuit of self-interest can lead to a collective disaster when one or more people start to profit from being unethical because this encourages other people to act in the same way

3-16

Why should managers behave ethically?

Trust Willingness of one

person or group to have faith or confidence in another person’s goodwill, even though this puts them at risk

Reputation Esteem or high

repute that individuals or organizations gain when they behave ethically

3-17

Determinants of Ethics

3-18

Ethical Organizational Cultures

Managers can ensure that important ethical values and norms are key features of an organization’s culture

Managers become ethical role models whose behavior is scrutinized by their subordinates

3-19

The Increasing Diversity of the Workforce and the Environment

Diversity Differences among people due to age, gender,

race, ethnicity, religion, sexual orientation, socioeconomic background, education, physical appearance, capabilities, disabilities, and any other characteristic used to distinguish people.

3-20

Diversity Concerns

The ethical imperative for equal opportunityEffectively managing diversity can improve

organizational effectivenessEvidence that diverse individuals continue to

experience unfair treatment in the workplace as a result of biases, stereotypes, and overt discrimination.

3-21

Diversity Concerns

Glass ceiling A metaphor alluding to the invisible barriers that

prevent minorities and women from being promoted to top corporate positions

3-22

Sources of Diversity in the Workplace

3-23

Critical Managerial Roles

Managers have more influence than rank-and-file employees

When managers commit to diversity, it legitimizes diversity efforts of others

3-24

Critical Managerial Roles

Managerial Roles and the Effective Management of DiversityType of Role Specific Role Example

Interpersonal Figurehead Convey that the effective management of diversity is a valued goal and objective

Leader Serve as a role model and institute policies and procedures to ensure that diverse members are treated fairly

Liaison Enable diverse individuals to coordinate their efforts and cooperate with one another

Informational Monitor Evaluate the extent to which diverse employees are being treated fairly

Disseminator Inform employees about diversity policies and initiatives and the intolerance of discrimination

Spokesperson Support diversity initiatives in the wider community and speak to diverse groups to interest them in career opportunities

Decisional Entrepreneur Commit resources to develop new ways to effectively manage diversity and eliminate biases and discrimination

Disturbance handler Take quick action to correct inequalities and curtail discriminatory behaviour

Resource allocator Allocate resources to support and encourage the effective management of diversity

Negotiator Work with organizations (e.g. suppliers) and groups (e.g. labour unions) to support and encourage the effective management of diversity