HOFAM vak Organisatie & Management les 11

Ethics

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The code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong.

Three Domains of Human Action

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D om ain of E th ics(Socia l S tandard)

D om ain of Free C hoice(Personal S tandard)

D om ain of C odified Law(Legal S tandard)

Am ount o f Explic it C ontro lHigh Low

Ethical Dilemma

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A situation that arises when all alternative choices or

behaviors are deemed undesirable because of potentially

negative consequences, making it difficult to distinguish

right from wrong

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Criteria For Ethical Decision MakingMost ethical dilemmas involve

Conflict between needs of the part & whole- Individual versus the organization - Organization versus society as a whole

Managers benefit from a normative strategy to guide their decision making - norms and values

Ethical Decision Making Approaches

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Utilitarian Approach

Individualism Approach

Moral-Rights Approach

Justice Approach

Utilitarian Approach

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● Moral behavior produces the greatest good for the greatest number

● Example – recent trend among companies to monitor employee use of the Internet

Individualism Approach

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● Acts are moral when they promote the individual's best long-term interests, which ultimately leads to the greater good

● Individual self-direction paramount

● Individualism is believed to lead to honesty & integrity since that works best in the long run

● However, top executives from WorldCom, Enron, Tyco demonstrate flaws of approach

Moral-Rights Approach

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− Moral decisions are those that best maintain the rights of those people affected by them.

− An ethical decision is one that avoids interfering with the fundamental rights of others.

Justice Approach

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− Moral decisions must be based on standards of equity, fairness and impartiality.

− Three types of justice are of concern to managers:

• Distributive justice

• Procedural justice

• Compensatory justice

Corporate Social Responsibility

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− Organization’s obligation to make decisions and take actions that will enhance the welfare and interests of society and organization

− Being a good corporate citizen

− Difficulty in understanding – issues can be ambiguous with respect to right and wrong

Organizational Stakeholders

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− Any group within or outside the organization that has a stake in the organization’s performance

− Each stakeholder • Has a different criterion of responsiveness • Has a different interest in the company

− Monsanto

Criteria of Corporate Social Responsibility

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DiscretionaryResponsibility

C ontribute to thecom m unity; be a good

corporate citizen.

Ethical ResponsibilityBe eth ica l. D o w hat is right. Avoid harm .

Legal ResponsibilityO bey the law.

Econom ic ResponsibilityBe profitab le.

The Ethical Organization

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Het vier-instrumentenmodel van managementcontrol

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Waarnem ing en beoordeling van het verloop van de activ ite iten en

beoordeling van het resultaat gericht op b ijsturing

Leiderschap

3e instrum ent(le id ing geven; beslissingen

overdragen; taken opdragen;m otiveren)

Regels voortaakgedrag

Conditionering(begrenzing) vanhet taakgedrag

Voorspelbaarheidvan het taakgedrag

Kader van doelste llingen,strategiebepaling en p lannen

1e instrum ent

Kader van organisatiestructuur

P rocesbeheersings-procedure

4e instrum ent

M edewerkers Activite itenin een proces

Doel/resultaat

Manager

2e instrum ent

Organizational Control

− The systematic process through which managers regulate organizational activities to make them consistent with expectations established in

● Plans

● Targets

● Standards of performance

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Organizational Control

− To effectively control an organization, managers need to decide

− What information is essential

− How will they obtain that information

− How they can and should respond to it

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