Managing Managing Ethics and Ethics and DiversityDiversity

Chapter Three

Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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Learning ObjectivesLearning Objectives

LO1 Illustrate how managers use ethics to determine the right or proper way to behave when dealing with different stakeholder groups

LO2 Explain why managers should strive to create ethical organizational cultures

LO3 Appreciate the increasing diversity of the workforce and of the organization environment

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Learning Objectives (cont.)Learning Objectives (cont.)

LO4 Grasp the central role that managers play in the effective management of diversity

LO5 Understand why the effective management of diversity is both an ethical and business imperative

LO6 Understand the two major forms of sexual harassment and how they can be eliminated

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The Nature of EthicsThe 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

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The Nature of EthicsThe 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

– Personal, Social, Professional

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Stakeholders and EthicsStakeholders and Ethics

• Stakeholders – The people and groups that supply a company

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

Types of Company StakeholdersTypes of Company Stakeholders

Figure 3.13-7

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StockholdersStockholders

• 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

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ManagersManagers

• 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

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Discussion Question: ManagersDiscussion Question: Managers

Is it ethical for managers to receive vast amounts of money from their companies?

A. YesB. NoC. SometimesD. Never

Other Peoples Money and Lehman Brothers

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EmployeesEmployees

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

Suppliers and DistributorsSuppliers and Distributors

• Suppliers expect to be paid fairly and promptly for their inputs

• Distributors expect to receive quality products at agreed-upon prices

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CustomersCustomers

• Most critical stakeholder

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

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Community, Society, and NationCommunity, Society, and Nation

• Refers to physical locations like towns or cities or to social milieus like ethnic neighborhoods in which companies are located

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

Ethical Decision MakingEthical Decision Making

Figure 3.2

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Practical Decision ModelPractical 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?

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Why Should Managers Behave EthicallyWhy 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.

Can you think of any Examples?? Management at Enron, Bernard Madoff

Some Effects of Ethical/Unethical

Behavior

Figure 3.33-18

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Question?Question?

What is confidence and faith in another person’s goodwill?

A. ReputationB. TrustC. EmpathyD. Hope

Why Should Managers Behave EthicallyWhy 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

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Ethical Organizational CulturesEthical Organizational Cultures

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

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

http://www.youtube.com/watch?v=vH1qFZW2_OI

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Ethical Organizational CulturesEthical Organizational Cultures

• Ethics Ombudsman – An ethics officer who monitors an organization’s

practices and procedures to be sure they are ethical

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The Increasing Diversity of the Workforce The Increasing Diversity of the Workforce and the Environmentand the Environment

• Diversity– Differences among people in age, gender, race,

ethnicity, religion, sexual orientation, socioeconomic backgroundand capabilities/disabilities

http://www.youtube.com/watch?v=HY5XmSyIJa8

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Diversity ConcernsDiversity Concerns

• The ethical imperative for equal opportunity• Effectively managing diversity can improve

organizational effectiveness• The continuing bias toward diverse individuals

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Question?Question?

What is the metaphorical barrier that prevents minorities and women from being promoted to top corporate positions?

A. Gender BarrierB. Gender PrejudiceC. Glass CeilingD. Glass Top

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Diversity ConcernsDiversity Concerns

• Glass ceiling – A metaphor alluding to the invisible barriers that

prevent minorities and women from being promoted to top corporate positions

Sources of Diversity in the WorkplaceSources of Diversity in the Workplace

Figure 3.6

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Workforce Diversity: Age Workforce Diversity: Age

• Aging U.S. Population– By 2030, 20 percent of the population will be over

65

• Federal Age Discrimination Laws– 1964 Title VII of the Civil Rights Act of 1964– 1967 Age Discrimination in Employment Act

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Workforce Diversity: GenderWorkforce Diversity: Gender

• Women in the Work Place– U.S. workforce is 46.5 % percent female– Women’s weekly median earnings are $572

compared to $714 for men.– Women hold only 16% of corporate officer

positions– http://en.wikipedia.org/wiki/Danica_Patrick

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Workforce Diversity: ReligionWorkforce Diversity: Religion

• Accommodation for Religious Beliefs– Scheduling of critical meetings– Providing flexible time off for holy days– Posting holy days for different religions on the

company calendar

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Workforce Diversity: Capabilities and Workforce Diversity: Capabilities and DisabilitiesDisabilities

• Disability Issues– Providing reasonable accommodations for

individuals with disabilities– Promoting a nondiscriminatory workplace

environment– Educating the organization about disabilities and

AIDS

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Workforce Diversity: Socioeconomic Workforce Diversity: Socioeconomic BackgroundBackground

• Socioeconomic Background Issues– Widening diversity in income levels– Single mothers and the “working poor”– Child and elder care

for working parents

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Workforce Diversity: Sexual OrientationWorkforce Diversity: Sexual Orientation

• Sexual Orientation Issues– Employment and workplace discrimination– Provision of domestic-partner benefits

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Critical Managerial RolesCritical Managerial Roles

• Managers have more influence than rank-and-file employees

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

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Forms of Sexual HarassmentForms of Sexual Harassment

• Quid pro quo– Asking or forcing an employee to perform sexual

favors in exchange for some reward or to avoid negative consequences

– “This for that”

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Forms of Sexual HarassmentForms of Sexual Harassment

• Hostile work environment – Telling lewd jokes, displaying pornography, making

sexually oriented remarks about someone’s personal appearance, and other sex-related actions that make the work environment unpleasant.

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Steps to Eradicate Sexual HarassmentSteps to Eradicate Sexual Harassment

• Develop and clearly communicate a sexual harassment policy endorsed by top management

• Use a fair complaint to investigate charges of sexual harassment

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Steps to Eradicate Sexual HarassmentSteps to Eradicate Sexual Harassment

• When it has been determined that sexual harassment has taken place, take corrective action as soon as possible

• Provide sexual harassment education and training to all organizational members, including managers