Discussion 3

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CHAPTER 3 MANAGING ETHICS AND DIVERSITY

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Learning Objectives

1. Illustrate how ethics help managers determine the right way to behave when dealing with different stakeholder groups.

2. Explain why managers should behave ethically and strive to create ethical organizational cultures.

3. Describe the increasing diversity of the workforce and of the organizational environment.

4. Explain the central role that managers play in the effective management of diversity.

5. Understand why effective management of diversity is both an ethical and a business imperative.

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

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The Nature of Ethics 1

Ethical Dilemma:

• A type of quandary in which people have to decide if they should act in a way that might help another person or group even though doing so might go against their own self- interest.

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The Nature of Ethics 2

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.

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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.

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Types of Company Stakeholders

Figure 3.1

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Stockholders

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.

They want to maximize their return on investment.

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Managers

Managers are responsible for using a company’s financial capital and human resources to increase its performance and thus its stock price.

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

Frequently managers juggle multiple interests.

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Topics for Discussion 1

When are ethics and ethical standards especially important in organizations? [LO 3-1]

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Employees

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

Steve Debenport/iStock/Getty Images

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Suppliers 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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Customers

Customers are the 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 Nation

Community:

• Physical locations in which companies are located.

• Towns or cities, or social milieus.

• Ethnic neighborhoods.

Community provides a company with the physical and social infrastructure that allows it to operate.

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Four Ethical Rules

Figure 3.2

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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?

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Why Should Managers Behave Ethically? 1

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.

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Some Effects of Ethical/Unethical Behavior

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Why Should Managers Behave Ethically? 2

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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Sources of an Organization’s Code of Ethics

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Ethical Organizational Cultures 1

Managers can ensure that important ethical values and norms are a central component of an organization’s culture.

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

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Topics for Discussion 2

How can managers ensure that they create ethical organizational cultures? [LO 3-2]

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Ethical Organizational Cultures 2

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 and the Environment

Diversity:

• Differences among people due to age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background, education, experience, physical appearance, capabilities, disabilities, and any other characteristic used to distinguish people.

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Diversity Concerns 1

There is an ethical imperative for equal opportunity.

Effectively managing diversity can improve organizational effectiveness.

There is evidence that diverse individuals continue to experience unfair treatment in the workplace as a result of biases, stereotypes, and overt discrimination.

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Diversity Concerns 2

Glass Ceiling:

• A metaphor alluding to the invisible barrier that prevents minorities and women from being promoted to top corporate positions.

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Sources of Diversity in the Workplace

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Workforce Diversity: Age

Aging U.S. Population:

• Median age is 37.9.

• By 2060, 24% 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: Gender

Women in the Workplace:

• U.S. workforce is 44.6% female.

• Women’s weekly median earnings are $801 compared to $979 for men.

• Women hold only 26.5% of executive officer positions in the 500 largest U.S. companies.

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Workforce Diversity: Race and Ethnicity

Ethnicity:

• Grouping of people based on some shared characteristic such as national origin.

Ethnic Demographics of United States:

• 61.3% white.

• 17.8% Hispanic or Latino.

• 13.3% African American.

• 5.7% Asian.

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Workforce 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 Disabilities

Disability Issues:

• Providing reasonable accommodations for individuals with disabilities.

• Promoting a nondiscriminatory workplace environment.

• Educating the organization about disabilities.

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Topics for Discussion 3

Why might some employees resent workplace accommodations that are dictated by the Americans with Disabilities Act? [LO 3-3]

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Workforce Diversity: Socioeconomic Background

Managers need to be sensitive and responsive to the needs and concerns of workers who might not be as well off as others.

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Workforce Diversity: Sexual Orientation

Sexual Orientation Issues:

• Employment and workplace discrimination.

• Provision of domestic-partner benefits.

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Topics for Discussion 4

Why are gay and lesbian workers and workers who test positive for HIV sometimes discriminated against? [LO 3-3]

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Critical Managerial Roles

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

When managers commit to diversity, their authority and positions of power and status influence other members of an organization to make a similar commitment.

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Effectively Managing Diversity Makes Good Business Sense

The diversity of organizational members can be a source of competitive advantage.

The recruiting of diverse employees must be followed up with ongoing effective management of diversity to retain those employees.

Many organizations insist that their suppliers support diversity.

Effective management of diversity is necessary to avoid costly lawsuits.

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Forms of Sexual Harassment 1

Quid Pro Quo:

• Asking for or forcing an employee to perform sexual favors in exchange for receiving some reward or avoiding negative consequences.

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Forms of Sexual Harassment 2

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 Harassment 1

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

Use a fair complaint procedure to investigate charges of sexual harassment.

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Steps to Eradicate Sexual Harassment 2

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.

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BE THE MANAGER

What are you going to do to address this issue?

Because learning changes everything.®

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