MODULE NINE

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MODULE NINE

• ETHICS AND THE ADMINISTRATIVE WORKER

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Coverage to date

• Principles of Management
• Trends in administrative management
• Personal and career development
• Staffing the admin section
• Legal Obligations

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Still to come

• Ethics and the admin worker (11 May)
• Specific administrative tasks (18 May)
• The admin budget (25 May)
• Revision (01 June)

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Defining Ethics

• A systematic attempt to make sense of our
  individual and social moral experience, in such a
  way as to determine the rules that ought to
  govern human conduct, the values worth pursuing,
  and the characters traits deserving development
  in life
• (Richard De George, 1995, p19)
• Ethics is the systematic thinking about the moral
  consequences of decisions
• (Odgers Keeling, 2000, p229)

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Why a module on ethics?

• Because business enterprises are only components
  of a larger social system and depend upon that
  system for support (in the form of human
  resources, customers, public policies, legal
  protection, and the like), their goals and
  activities must have legitimacy in the larger
  system. ..Unless an institution can successfully
  legitimate itself, its continued existence, at
  least in present form, becomes problematic.

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Defining business ethics

• Business ethics comprises principles and
  standards that guide behaviour in the world of
  business
• Ferrell, Fraedrich and Ferrell (2002, p6)
• Whether a specific required behaviour is right or
  wrong, ethical or unethical, is often determined
  by stakeholders such as
• investors
• Customers
• Interest groups
• Employees
• The legal system
• The community
• These groups are not necessarily right but
  their judgments influence societys acceptance or
  rejection of a business and its activities
• Ferrell, Fraedrich and Ferrell (2002, p6)

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Ethics v social responsibility

• Social responsibility represents a businesss
  obligation toward society. Social responsibility
  incorporates
• Economic responsibilities
• To produce goods and services needed and wanted
  by society at a price that can perpetuate
  business and satisfy obligations to investors
• Legal responsibilities
• To obey the law and be responsible for employees
  obeying local, state and federal laws
• Ethical responsibilities
• Behaviours and activities expected of business by
  society but not codified in law
• Philanthropic responsibilities
• To give back to society
• Ferrell, Fraedrich and Ferrell (2002, p6-7)

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Role of business ethics in performance
Customer and Employee Trust
Employee Commitment
Ethical Climate
Profits
Ethical Climate
Ethical Climate
Ferrell, Fraedrich and Ferrell (2002, p15)
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Evidence of declining ethical standards

• Insider trading of stocks and bonds
• Bribery
• Falsification of documents
• Deceptive advertising
• Defective products
• Employee theft

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Incidence of unethical behaviour
Observed Misconduct by Organisational Size
Fewer than 500 employees
500 or more employees
Yes 27
Yes 37
No 73
No 63
HAVE YOU OBSERVED MISCONDUCT IN THE WORKPLACE
Source Ethics Resource Centre, 2000 National
Business Ethics Survey How Employees Perceive
Ethics at Work, p29
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Food for thought

• Regardless of what an individual or a business
  organisation believes about a particular
  behaviour, if society judges it to be unethical
  or wrong, whether correctly or not, that judgment
  directly affects the organisations ability to
  achieve its business goals.

Ferrell, Fraedrich and Ferrell (2002, p15)
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Business ethics an oxymoron?

• ..concerned with the conflict between the profit
  motive of owners and the different values of
  other stakeholders in a business organisation
• (McKenna, 1999, p139)

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Business ethics?

• Despite the codes of ethics, the ethics programs,
  and the special departments corporations dont
  make the ultimate decisions about ethics.
  Ethical choices are made by individuals

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Growing ethical awareness
Technological change
Increasing need for managers to deal with ethical
issues
Globalisation
Competitive forces
Unprecedented scrutiny by external authorities
Cost of unethical behaviour
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Ethics at USQ

• For an overview of the approach to ethics at the
  University of Southern Queensland visit the
  following URL
• http//www.usq.edu.au/resources/c1.pdf
• This site also contains links to a number of
  other useful ethics sites
• Including an excellent essay entitled Ethics
  Coulds, shoulds and oughts

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Some useful websites

• Journal of Business Ethics (an excellent site
  with contents of journal available online)
• Australian Business Ethics Network

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Business issues and ethics

• Product quality
• product safety standards
• pricing and fair trade practices
• Truth in advertising
• Protection of rights of minority shareholders
• Transparency and consistency in financial
  reporting

• Health and safety standards in the workplace
• usage of computers and network systems
• environmental issues
• security of company records
• privacy
• sexual harassment
• Nepotism
• Equal employment opportunity

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Basis of ethical decisions in business

• Six behavioural and moral standards
• Honest communication
• Fair treatment
• Corporate social responsibility
• Fair competition
• Responsibility to the organisation
• Respect for the law

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Models for studying ethical systems

• Three approaches to study of ethics
• Standards model
• world of organisations has its own distinctive
  ethical norms
• Politics model
• the organisation moderates the influence of
  societys values and norms on its management
• Virtue model
• Business ethics results from the nature of an
  individual which is consistent across social
  settings

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Standards model for studying ethics (Shaw, 1996)

• Standards model opposes the view that the world
  of organisations has its own distinctive ethical
  norms that are different from those of everyday
  morality
• (Shaw, 1996, p 4)
• Assumes that organisational members are able to
  make moral judgments which involve both emotional
  elements
• (the desire to behave morally) and
• cognitive (an understanding of what it means to
  be moral) elements
• (McKenna, 1999, p 148)

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Kolhbergs Stages of Cognitive Moral Development
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5 bases of deciding right and wrong within the
standards model (1)

• Eternal Law
• Do unto others as you would have them do unto you
• Kants Categorical Imperative
• The moral rule is reversible ie the persons
  reasons for acting must be reasons that he/she
  would be willing to have all other persons use as
  a basis for how they treat him/her
• The person performing the action does not use
  others merely as a means for advancing his/her
  own interest but also respects and develops their
  capacity to choose freely for themselves
• Benthams Utilarianism
• Everyone should act to generate the greatest
  benefit for the largest number of people
• By investigating utility for each possible action
  we choose the action which provides the greatest
  good for the greatest number

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5 bases of deciding right and wrong within the
standards model (2)

• Nozicks Personal Liberty
• Everyone has a basic right to be free eg free
  speech etc
• No individual will infringe the right to liberty
  of any other person
• Rawls Distributive Justice
• Each person has an equal right to the most
  extensive basic liberties compatible with similar
  liberties for all
• Social and economic inequalities are arranged so
  that they are
• to the greatest benefit of the least advantaged
  persons
• Attached to offices and positions open to all
  under conditions of equality of opportunity

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The politics model (Powers and Vogel, 1980) for
studying ethics

• The organisation is seen as moderating the
  influence of societys values and norms on its
  management
• Eg medicine, law, journalism the profession
  becomes the moderator using a professional code
  of ethics to provide a clear explication of
  societys values and norms across the profession
  irrespective of the specific organisation in
  which each member is employed
• Organisation is seen to moderate the nature of
  values and activities of management through
• organisational culture (strong consonant values
  or weak conflicting values)
• corporate internal decision system

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The politics model (cont)

• Impact of organisational culture
• If culture is strong (consonant values) employees
  are likely to comply or leave
• If culture is weak (conflicting or contending
  values) employees with contending values are
  easily influenced and employees with conflicting
  values will fight for their ideals
• Impact of corporate internal decision making
  system (CID)
• In highly bureaucratic organisations a large
  number of persons are synthesised into a
  corporate decision and system may override the
  attempts of any one or a number of individuals to
  follow moral/ethical principles in respect to the
  corporate decision

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The virtue model of studying ethics

• Views organisational ethics as resulting from the
  nature of an individual which is consistent
  across social settings, including that of the
  organisation
• Success in business equates with respect
  ieearning respect is a virtue

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Managing ethics v ethical management

• McKennas two approaches to managing
  organisational ethics
• Managing ethics (heteronomy)
• Ethical management (autonomy)

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Managing ethics

• Based on standards and politics model
• Organisational members should be taught to
  recognise the difference between right and wrong
  and be given guidelines or codes against which
  their behaviour can be assessed and controlled
• (McKenna, 1999, p158)

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Ethical Management

• Based on the virtue model
• Moral behaviour in organisations derives from the
  virtues of the individuals who are occupied, or
  practise, in that organisation
• (McKenna, 1999, p 159)
• McKenna proposed that the ethics of management is
  more important than the management of ethics
  because it is impossible to manage ethics without
  ethical management

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Odgers and Keelings ethical principles for admin
staff (1)
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Odgers and Keelings ethical principles for admin
staff (2)
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Office Resources and ethics
Percentage of employees who use office resources
for personal business
Ferrell, Fraedrich and Ferrell (2002, p43)
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Establishing an ethical workplace (Odgers and
Keeling, 2000, p 31 adapted from an
operationalised list of ethical principles
provided by the Josephson Ethics Institute)
ETHICAL REASONING Employees provided with common
language and courses of action to take when faced
with ethical dilemmas
ETHICAL AWARENESS Ability of employees to
recognise ethical problems when they occur
ETHICAL BUSINESS ENVIRONMENT
ETHICAL ACTION Structures and approaches are
established to enable employees to freely discuss
and resolve ethical issues
ETHICAL LEADERSHIP Leadership is applicable to
all levels of organisation and can be achieved to
allow everyone to be a moral leader
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Ethical leadership (Odgers, 1997)

• Odgers proposes that four (4) essential and
  practical considerations describe ethical leaders
• Followers choose leaders
• A loyal constituency is won when people,
  consciously or unconsciously, judge the leader to
  be capable of solving their problems and meeting
  their reeds
• Leaders are forward looking
• People are more willing to follow those who are
  passionate about their convictions, positive
  about the future, and enthusiastic about life and
  work
• True leaders serve and support
• Supportive leaders understand that they are to
  help, coach, and create learning not to control
  .. leaders consolidate and build their power by
  empowering others
• Leaders are honest
• The only way to be certain that someone is honest
  is to observe how he or she behaves

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Code of Ethics

• Examples
• GOLDEN RULE Do unto others as you would have
  them do unto you
• ROTARY INTERNATIONALS 4-WAY TEST FOR CODE OF
  ETHICS
• Is it the truth?
• Is it fair to all concerned?
• Will it build goodwill and better friendship?
• Will it be beneficial to all concerned?

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Some more interesting web sites

• st james ethics centre
• Australian Business Ethics Network

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Case Studies

• Group task each group allocated a case study to
  read and respond to questions.