Business ethics 3000 word essay
• What is an organisation?
• Labour is a pseudo-commodity?
The capacity to work cannot be separated from the worker as a human being, and ‘cannot be shoved about, used indiscriminately, or even left unused, without affecting also the human individual who happens to be the bearer of this peculiar commodity’; hence, the ‘commodity description of labor [...] is entirely fictitious’ (Karl Polany, The great Transformation)
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Management of human ‘resources’
· • An ethical problem between rights and duties
· • The term ‘human resource management’ and its implications have been a subject of intense debate in business ethics
· • Humans treated as important and costly resource
· • Consequently, employees are subject to a strict managerial rationale of minimising costs and maximising the efficiency of the ‘resource’
Rhetoric and reality in HRM Based on Legge (1998)
Rhetoric
‘New working patterns’ ‘Flexibility’
‘Empowerment’
‘Training and development’
‘Recognizing the contribution of the individual’
‘Teamworking’
Reality
Part-time instead of full-time jobs Management can do what it wants
Making someone else take the risk and responsibility
Manipulation
Undermining the trade union and collective bargaining
Reducing the individual’s discretion
Employee Rights and Employee Duties
• Central ethical issues in HRM revolve around rights and duties. • Employee rights:
Entitlements of workers with respect to their employer, based on a general understanding of human rights and often codified in employment law.
• Employee duties:
Obligations of workers towards their employer, based on individual contracts and wider employment laws.
Rights of employees as stakeholders of the firm
Employee rights
Right to freedom from discrimination
Right to privacy
Right to due process
Right to participation and association
Right to healthy and safe working conditions
Right to fair wages
Right to freedom of conscience and speech
Right to work
Issues involved
Equal opportunities, Affirmative action, Reverse discrimination, Sexual and racial harassment
Health and drug testing, Work-life balance, Presenteeism, Electronic privacy and data protection
Promotion, Firing, Disciplinary proceedings
Organization of workers in works councils and trade unions, Participation in the company’s decisions
Working conditions, Occupational health and safety Pay, Industrial action, New forms of work
Whistleblowing
Fair treatment in the interview, Non-discriminatory rules for recruitment
Rights of employees as stakeholders of the firm
Employee rights
Right to freedom from discrimination
Right to privacy
Right to due process
Right to participation and association
Right to healthy and safe working conditions
Right to fair wages
Right to freedom of conscience and speech
Right to work
Issues involved
Equal opportunities, Affirmative action, Reverse discrimination, Sexual and racial harassment
Health and drug testing, Work-life balance, Presenteeism, Electronic privacy and data protection
Promotion, Firing, Disciplinary proceedings
Organization of workers in works councils and trade unions, Participation in the company’s decisions
Working conditions, Occupational health and safety Pay, Industrial action, New forms of work
Whistleblowing
Fair treatment in the interview, Non-discriminatory rules for recruitment
Duties of employees as stakeholders of the firm
Employee duties
Duty to comply with labour contract
Duty to comply with the law
Duty to respect the employer’s property
Issues involved
Acceptable level of performance Work quality Loyalty to the firm
Bribery
Working time Unauthorized use of company resources for private purposes Fraud, theft, embezzlement
3 Cases for Diversity
• Social Justice Even if you don’t care, others do The way diversity is handled has repercussions the organization.
• Market Access Goals: increase informational diversity, access social networks,
understand local cultures
Risk: Tokenism • Decision-Making Benefits
Diversity can improve the quality and creativity of decisions
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Diversity and Organizational Performance
Average difference in performance: 26%
3 Challenges of Diversity
• Stereotypes and confirmation bias mean we see what we want to see • Implicit biases make us prejudiced • ‘Stereotype threat’ reduces performance
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Implicit Prejudice: Implicit Association Test
· • Designed to examine which words and concepts are strongly paired in peoples minds Connecting more distant concepts takes more time
· • Computes bias based on reaction times
· • Identifies the strength of cognitive associations, but not beliefs or values
· • https://implicit.harvard.edu/implicit/
Consequences of Implicit Bias
• Implicit bias affects behaviours: Higher implicit pro-white bias associated with to sitting further away
from a black person (Amodio & Devine, 2006)
Higher implicit pro-heterosexual bias associated with less positive behaviour toward a gay man (Dasgupta & Rivera, 2006)
Higher implicit pro-white bias associated with choosing a white work partner over black work partner (Ashburn-Nardo, Knowles, & Monteith, 2001)
Higher implicit pro-white bias associated with preferential hiring of individuals with Swedish sounding names over Arab/Muslim sounding names (Rooth, 2007)
Stereotype Threat
· • Concern that your behavior will confirm a negative stereotype about your group
· • This threat undermines performance
· • Belief in stereotype not necessary; cultural knowledge is enough
· • Occurs when: Negative stereotype is salient Relevant social identity is salient Performance is framed as diagnostic of ability
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Equal opportunities vs. managing diversity
Aspect
Approach
Case argued Whose responsibility
Focus on Perspective
Benefits for employees
Focus of management activity Remedies Monitoring success
Equal opportunities
Reduce discrimination
Operational
Moral and ethical HR/personnel
Groups
Dealing with different needs of different groups
Opportunities improved for disadvantaged groups, primarily through setting targets
Recruitment Changing systems and practices Change processes
Managing diversity
Utilise employee potential to maximum advantage
Strategic
Business case – improved profitability
All managers
Individuals Integrated
Opportunities improved for all employees
Management Changing the culture Business outcomes
Purpose
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Discrimination
· • Discrimination in the business context occurs when employees receive preferential (or less preferential) treatment on grounds that are not directly related to their qualifications and performance in the job
· • Managing diversity prominent feature of contemporary business Extensive legislation
· • Institutional discrimination: discrimination deeply embedded in business (example: the Morgan Stanley case, gender discrimination as meetings were held in strip clubs).
· • General issue: ‘equality of what?’
Gender and employment
· • From 1971 to 2012, the UK female participation rate in employment increased from 56% to over 70%
· • 51% of the UK workforce is now female (van Wanrooy et al. 2013)
· • The average weekly rate for full-time women is £499 as against £546 for men (ONS 2012)
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Reasons for difference in pay
Starting pay is frequently individually negotiated
Length of service
Broadbanding
Lack of equal access to bonus payments
Market allowances not evenly distributed
Different pay structures and negotiating bodies
Job evaluation
As men usually have higher previous earnings this means they can negotiate a higher starting rate
Men generally have longer service and fewer career breaks, and while this may result in greater experience early in a career it is less of a performance-influencing factor as general length of service increases
There is a lack of transparency in such systems and there is a lack of structured progression; managers are likely to have high levels of discretion and may be unaware of biases
There is evidence that appraisal ratings and assessments discriminate unfairly against minority groups
Such allowances are more likely to be given to men
As some jobs are done primarily by women and some primarily by men, direct comparisons are harder to make
Such schemes often perpetuate old values and may be subject to managerial manipulation
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Women in top management positions
Female Directors in FTSE 100 Companies 2000-2014
Female held directorships
(in % of total directorships)
Female executive directors
Female non-executive directors
Companies with 2 women directors
Companies with no women director
2000 2004
69 110
5.80% 9.70% 11 17 60 93
2008 2014
131 231
11.70% 20.70% 17 20 114 211
14 19 39 79 42 31 22 2
Sexual and racial harassment
· • Issues of diversity might be exploited to inflict physical, verbal, or emotional harassment
· • Regulation reluctant Blurred line between harassment on one hand and ‘joking’ on the other Influenced by contextual factors such as character, personality, and national culture
· • Companies increasingly introduced codes of practice and diversity programmes (Crain and Heischmidt 1995)
Equal opportunities and affirmative action
• How should organizations respond to problems of discrimination? • Equal opportunity programme
Generally targeted at ensuring procedural justice is promoted
Affirmative action (AA) programmes: deliberately attempt to target those who might be currently under-represented in the workforce
Recruitment policies Fair job criteria Training programmes for discriminated minorities Promotion to senior positions
Fair job criteria, training programmes and promotion
• The way the job is configured could discriminate e.g. hours of work
• Certain qualifications could exclude e.g. social situations might discourage people from applying
• People may not get promoted Ethnic and racial minorities make up 10% of US boards despite
being 34% of the population In Canada it’s 3.4% of boards despite being 19% of the population
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Reverse discrimination
· • In some cases, people suffer reverse discrimination because AA policies prefer certain minorities
· • Justification for reverse discrimination Retributive justice: past injustices have to be ‘paid for’ Distributive justice: rewards such as job and pay should be allocated fairly among all groups (Beauchamp 1997)
· • Stronger forms of reverse discrimination tend to be illegal in many European countries
Managing Diversity
• Managing Diversity: The notion of diversity is driven by the ethical values of fairness and justice and focused on embracing difference as a potential strength. (Barak, 2013; Kirton and Greene, 2010)
• Enlightened Self-Interest Richer pool of experiences and talent for diverse and open firms. Can make firms more attractive to customers.
Ending the employment contract
• Tension between protecting organisations from feckless employees and protecting employees from capricious or malicious management
• Voluntary departure vs. dismissal • There are four types of dismissal:
Fair dismissal Unfair dismissal Constructive dismissal Wrongful dismissal
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Automatically unfair reasons
· • Dismissal for a reason relating to pregnancy or maternity.
· • Dismissal for a health and safety reason (e.g. refusing to work in unsafe conditions).
· • Dismissal because of a spent conviction.
· • Dismissal for refusing to work on a Sunday (retail and betting workers only).
· • Dismissal for a trade union reason.
· • Dismissal for taking official industrial action (during the first twelve weeks of the action).
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Constructive and wrongful dismissal
• Constructive dismissal Where the employee leaves the organisation voluntarily but
underlying this departure is the employer’s conduct • Wrongful dismissal
Damages for an employee who has been dismissed wrongfully
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Due process and lay-offs
• Ethical considerations in the process of downsizing Right to know well ahead of the actual point of the redundancy that
their job is on the line Compensation packages employees receive when laid off
Employee participation and association
• Recognition that employees might be more than just human resources but should also have a certain degree of influence on their tasks, job environments, and company goals – right to participation
Financial participation – allows employee share in the ownership or income of the corporation
Operational participation can include a number of dimensions:
Delegation Information
Consultation Codetermination
Evolution of trade union membership
Australia Canada Germany Italy Japan Sweden United Kingdom United States
1970 2003
50.2 22.9 31.6 28.4 32.0 22.6 37.0 33.7 35.1 19.7 67.7 78.0 44.8 29.3 23.5 12.4
Absolute change in %
-27.3 -6.5 -9.5 -3.3 -15.4 +10.3 -15.5 -11.1
Based on Visser, 2006: 45
Working conditions
· • Right to healthy and safe working conditions one of the very first ethical concerns for employees
· • Dense network of health, safety and environmental (HSE) regulation
· • Main issue is enforcement and implementation
· • Newly emergent HSE issues relate to changing patterns of work
· • Ethical issues in the context of: Excessive working hours and presenteeism Flexible working patterns
Excessive working hours and presenteeism Excessive work hours
• Thought to impact the employee s overall state of physical and mental health
Presenteeism • phenomenon of being at work when you should be at
home due to illness or even just for rest and recreation (Cooper 1996)
Flexible working patterns
• Another way of saying that management can do what it wants? (Legge, 1998)
• Non-standard work relationships Part-time work, temporary work, self-employment and teleworking
(Stanworth 2000) Less secure legal status for periphery workers Potential for:
Poorer working conditions Increased insecurity Lower pay Exclusion from training and other employment benefits
Fair wages
• The basis for determining fair wages is commonly the expectations placed on the employee and their performance towards goals
Note discussion about excessive compensation for executives after the stock market collapse of 2008
• Problems of performance-related pay (PRP) Risk
salaries and benefits become less secure Representation
individualized bargaining