Stakeholder Analysis Paper

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WhyGoodPeopleDoBadThings2.ppt

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Quiz #2

Define and explain one of the five barriers to an ethical organization, also known as “ethical breakdowns” experienced by companies.

What is the “new perspective on organizational wrongdoing”? How does it differ from the older perspective?

Moral/Ethical problems in business:

A conflict between financial performance (revenues, costs, & profits) and social performance (obligations to all stakeholders)

Ethical Principles/Perspectives

Profit Maximization/Individualism Approach

Utilitarian Approach

Universalist/Categorical Imperative Approach

Rights/Rule of Law Approach

Justice Approach

Golden Rule Approach

Might = Right Approach

Duty to Care Approach

Organization Ethic Approach

Intuition Approach

Revelation Approach

Hedonistic Approach

Virtue Approach

Ethical Principles

People can compare their anticipated actions and decisions with certain principles or belief sets that they hold to be true; most of us tend to pick and choose which principle to we abide, depending on the situation.

Utilitarianism one day, justice the next…depending on to whom we are speaking or what we are doing

It would take an entire philosophy course to fully explain all the various ethical principles and their respective founding philosophers, and so here is an overly-simplified list of some of the more commonly used principles:

Utilitarianism: * seek the greatest good for the greatest number of people

* does the good in this action outweigh the harm?

* if the consequences are good, the action is good

* focus is on the ends, not the means

Individualism: * an act is moral when it promotes the individual's long term interests

* individual’s long-term interests ultimately lead to greater good

Rights: * all individuals have fundamental rights - claims or entitlements

* take an action or make a decision by vowing to respect the rights of others (free consent, privacy, freedom of conscience, free speech, due process, life & safety)

Justice: * individuals must be given what they are due, what they deserve

* act or make a decision that is fair to others (distributive, procedural, interactional, compensatory)

Golden Rule: * "Do unto others as you would have them do unto you"

* rooted in many religious traditions

Might=Right: * what is ethical is what an individual or company has the power to accomplish

Categorical Imperative (Immanuel Kant):

* take an action only if it can be consistently adopted by everyone else

* an action is morally right only when it can be considered a unversal law (can everyone do it?)

Organization Ethic: * the needs of inidividuals should be subordinated to the greater good of the organization (whatever that may be - business, church, school, state)

* this is the age of the large organization - individuals should take actions conistent with the goals of the organization

Intuition: * follow your gut feeling when making moral decisions

Revelation: * prayer or appeal to higher beings will reveal the right thing to do

Hedonistic: * "If it feels good, do it"

Choice of

Ethical

Perspective

Balancing work & family
Poor internal communications
Poor leadership
Work hours, work load
Technology and constant access
Need to meet sales, profit, or budget goals
Little or no recognition of achievements
Company politics
Personal financial worries
Insufficient resources

Sources of pressure in today's workplace:

Management Pressures

“I am sometimes subject to pressure to compromise personal standards to achieve organizational goals”

All Management Levels: 64% agree
Top Management: 50% agree
Middle Management: 65% agree
Lower Management: 85% agree

Consequences of Pressure

60% of workers feel “substantial” amount of job pressure
57% of workers feel more pressure than 5 years ago
40% of workers feel that pressure has increased in the past year
Nearly half (48% of workers) reported that they had engaged in one or more unethical or illegal activities during the past year, resulting from job pressure

Top five types of unethical or illegal behaviors in response to pressure:

Cutting corners on quality
Covering up incidents
Abusing or lying about sick days
Lying or deceiving customers
Putting inappropriate pressure on others

Percentage of type of observed misconduct at work:

Unsafe working conditions 56%

Deceptive sales practices 56%

Mishandling proprietary/confidential information 50%

Violations of privacy rights 38%

Shipping low-quality or unsafe products 37%

Employment discrimination 36%

Sexual harassment 34%

Altering product quality or safety test results 32%

Antitrust violations or unfair competitive practices 32%

Environmental breaches 31%

The New Perspective on Organizational Wrongdoing

Wrongdoing as a “normal phenomenon”

Treats wrongdoing as prevalent rather than rare
Views wrongful behavior as not much different than rightdoing
Considers wrongdoers to be ordinary people rather than “bad apples”
Assumes the causes arise from a plethora of structures, systems and processes

What gives rise to wrongdoing?

Power structures
Administrative systems
Situational social influence
Accidental wrongdoing and technological systems

Choice of

Ethical

Perspective

“Biases”

individual differences

power structures,

administrative systems,

social influence,

technology =

“ethical breakdowns”

Individual influences on ethical decision-making

https://www.youtube.com/watch?v=2AotV8XNO_I

https://www.washingtonpost.com/posteverything/wp/2016/10/21/how-can-you-tell-if-someone-is-kind-ask-how-rich-they-are/?noredirect=on&utm_term=.a0587e26dd13

Factor	Influence on ethical decision-making
Age and gender	Very mixed evidence leading to unclear associations with ethical decision-making.
National and cultural characteristics	Appear to have a significant effect on ethical beliefs, as well as views of what is deemed an acceptable approach to certain business issues.
Education and employment	Somewhat unclear, although some clear differences in ethical decision-making between those with different educational and professional experience seem to be present.
Psychological factors:
· Cognitive moral development	· Small but significant effect on ethical decision-making.
· Locus of control	· At most a limited effect on decision-making, but can be important in predicting the apportioning of blame/approbation.
Personal Values	Significant influence – some empirical evidence citing positive relationship.
Personal integrity	Significant influence likely, but lack of inclusion in models and empirical tests.
Moral imagination	A new issue for inclusion with considerable explanatory potential.

Situational influences on ethical decision-making

https://www.pbs.org/newshour/economy/why-those-who-feel-they-have-less-give-more

https://www.pbs.org/newshour/economy/does-wealth-breed-narcissism-t

Human Behavior Experiments https://www.youtube.com/watch?v=XVpV73wSyG8

Type of factor	Factor	Influence on ethical decision-making
Issue-related	Moral intensity	Reasonably new factor, but evidence suggests significant effect on ethical decision-making.
	Moral framing	Fairly limited evidence, but existing studies show strong influence on some aspects of the ethical decision-making process, most notably moral awareness.
Context-related	Rewards	Strong evidence of relationship between rewards/punishments and ethical behaviour, although other stages in ethical decision-making have been less investigated.
	Authority	Good general support for a significant influence from immediate superiors and top management on ethical decision-making of subordinates.
	Bureaucracy	Significant influence on ethical decision-making well documented, but actually exposed to only limited empirical research. Hence, specific consequences for ethical decision-making remain contested.
	Work roles	Some influence likely, but lack of empirical evidence to date.
	Organizational culture	Strong overall influence, although implications of relationship between culture and ethical decision-making remain contested.
	National Context	Limited empirical investigation, but some shifts in influence likely.

5 Barriers to an Ethical Organization

Choice of

Ethical

Perspective

“Biases”

individual differences

power structures,

administrative systems,

social influence,

technology =

“ethical breakdowns”

Top Management Leadership

Ethics Programs & Officers

Realistic Objectives

Ethical

Decision

Processes

Codes of Conduct

Ethics Audit

Ethics Training

Whistle-blowing mechanisms

Discipline of Violators

Codes of Conduct

Improving Ethical Climate

Effective Communication

Code of Ethics Topics

Aspirational and expected conduct
Conflicts of interest
Receiving and giving of gifts, gratuities, and entertainment
Protecting company proprietary information
Discrimination
Sexual harassment
Kickbacks
Employee theft
Proper use of company resources

Ethics Check Questions at Work

Is the action legal? RIGHTS
Is the action right and fair? JUSTICE
Does it promote win-win relationships? UTILITARIANISM
Is it appropriate for both short and long term? PROFIT MAXIMIZATION
Does it comply with the firm’s values? ORGANIZATION ETHIC
Would I want everyone to know about this? UNIVERSALISM
How will I feel about myself? INTUITION

Why should business behave ethically?

Fulfills public expectation for business.

Prevents harming others.

Improves business relations and employee productivity.

Reduces penalties under Corporate Sentencing Guidelines.

Protects business from others, including government.

Protects employees from their employers.

Promotes personal morality.

Helps profitability.

Ethical Principles

Utilitarianism one day, justice the next…depending on to whom we are speaking or what we are doing

Utilitarianism: * seek the greatest good for the greatest number of people

* does the good in this action outweigh the harm?

* if the consequences are good, the action is good

* focus is on the ends, not the means

Individualism: * an act is moral when it promotes the individual's long term interests

* individual’s long-term interests ultimately lead to greater good

Rights: * all individuals have fundamental rights - claims or entitlements

* take an action or make a decision by vowing to respect the rights of others (free consent, privacy, freedom of conscience, free speech, due process, life & safety)

Justice: * individuals must be given what they are due, what they deserve

* act or make a decision that is fair to others (distributive, procedural, interactional, compensatory)

Golden Rule: * "Do unto others as you would have them do unto you"

* rooted in many religious traditions

Might=Right: * what is ethical is what an individual or company has the power to accomplish

Categorical Imperative (Immanuel Kant):

* take an action only if it can be consistently adopted by everyone else

* an action is morally right only when it can be considered a unversal law (can everyone do it?)

Organization Ethic: * the needs of inidividuals should be subordinated to the greater good of the organization (whatever that may be - business, church, school, state)

* this is the age of the large organization - individuals should take actions conistent with the goals of the organization

Intuition: * follow your gut feeling when making moral decisions

Revelation: * prayer or appeal to higher beings will reveal the right thing to do

Hedonistic: * "If it feels good, do it"

Factor Influence on ethical decision -making

Age and gender Very mixed evidence leading to unclear associations with ethical decision -making.

National and cultural characteristics

Appear to have a significant effect on ethical beliefs, as well as views o f what is deemed

an acceptable approach to certain business issues.

Education and employment

Somewhat unclear, although some clear differences in ethical decision -making between

those with different educational and professional experience seem to be prese nt.

Psychological factors:

 Cognitive moral development  Small but significant effect on ethical decision -making.

 Locus of control

 At most a limited effect on decision -making, but can be important in predicting the

apportioning of blame/approbation.

Personal Values Significant influence – some empirical evidence citing positive relationship .

Personal integrity Significant influence likely, but lack of inclusion in models and empirical tests .

Moral imagination A new issue for inclusion with considerable explanatory potential.

Type of

factor

Factor Influence on ethical decision -making

Moral intensity

Reasonably new factor, but evidence suggests significant effect on ethical decision -

making.

Issue-related

Moral framing

Fairly limited evidence, but existing studies show str ong influence on some aspects of

the ethical decision-making process, most notably moral awareness.

Rewards

Strong evidence of relationship between rewards/punishments and ethical behaviour,

although other stages in ethical decision -making have been less investigated.

Authority Good general support for a significant influence from immediate superiors and top

management on ethical decision -making of subordinates .

Bureaucracy

Significant influence on ethical decision -making well documented, but actually

exposed to only limited empirical research. Hence, specific consequences for ethical

decision-making remain contested.

Work roles

Some influence likely, but lack of empirical evidence to date .

Organizational

culture

Strong overall influence, although implications of relationship between culture and

ethical decision-making remain contested.

Context-

National Context Limited empirical investigation, but some shifts in influence likely.