CHAPTER 12: Ethics

Question 1

Ethics

Answer 1

Code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong

Question 2

3 Ethical Principles/Decision Criteria

Answer 2

Utilitarian
Rights
Justice

Question 3

Utilitarian Principle

Answer 3

• Behavior is ethical if it delivers the greatest good to the greatest number of people
• Focuses on outcomes; ends justify the means
• NOTE: Requires proper assessment of the stakeholders of a decision

Question 4

Rights Principle

Answer 4

• Behavior is ethical if it respects the fundamental rights shared by all human beings
• Charter of Rights and Freedoms, free speech, due process, privacy, life and safety, etc.

Question 5

Justice Principle

Answer 5

• Behavior is ethical if it is fair and impartial in its treatment of people
• Impose and enforce rules fairly
• Can be informed by Equity Theory
• Question to ask: “Is a group being systematically disadvantaged?”
• Does the group receive fewer outcomes?
• Does the group have the same opportunity to provide inputs?

Question 6

Ethical decision steps (using the 3 decision criteria):

Answer 6

• Perform an initial ethical assessment of a decision
• Is an ethical concern identified?
• If so, then search for an alternative decision/solution

Question 7

Advantages and Disadvantages - Utilitarian Principle

Answer 7

• Promotes efficiency, productivity
• Ignores rights of some individuals
• Difficult to apply to values that cannot be easily quantified (e.g., health, life, employment)

Question 8

Advantages and Disadvantages - Rights Principle

Answer 8

• Protects individuals from injury consistent with freedom and privacy
• Creates overly legalistic environment
• Hinders productivity and efficiency

Question 9

Advantages and Disadvantages - Justice Principle

Answer 9

• Protects interests of under-represented and less powerful
• Encourages sense of entitlement
• Difficult to agree on the definition of “fairness”
• Reduces risk-taking, innovation and productivity

Question 10

Common ethical themes across professions

Answer 10

Honest communication
Fair treatment
Special consideration
Fair competition
Responsibility to the organization
Corporate social
Respect for law

Question 11

Causes of Unethical Behaviour

Answer 11

Bounded ethicality – When people unknowingly violate their ethical standards.
People fail to recognize conflicts of interest or favoritism (e.g., hiring biases).
Ethical lapses often start small and escalate (“slippery slope”).

Question 12

Factors influencing ethical decision-making

Answer 12

o People tend to be more ethical in the morning (“morning morality effect”).
o Psychological exhaustion increases unethical choices.
o Workplace reminders (e.g., family photos) can improve ethical behavior.

Question 13

Personality causes for unethical behaviour

Answer 13

Need for power, Machiavellianism (part of the dark triad of personality), Risk taking, Moral identity

Question 14

Situtational causes for unethical behaviour

Answer 14

• Gain (e.g., anticipation of reward or lack of punishment)
• Role conflict
• Competition/Scarce Resources (e.g. price fixing)
• Pressures to conform
• Social modeling
• Anonymity/Lack of accountability
• Organization/Industry Culture
• Extreme performance pressure
• Bottom line mentality (focusing solely on financial indicators) can lead to ethical shortcuts and abusive supervision.

Question 15

Whistle-blowing

Answer 15

• Whistle-blowing involves reporting unethical practices within an organization.
• Whistle-blowers often face retaliation, making external watchdogs crucial.
• Most organizations lack clear channels for whistle-blowers, relying on vague open-door policies

Question 16

Strategies to Make Better Ethical Decisions

Answer 16

• Identify the impact on people
• Stakeholders
• What is the potential for harm?
• Costs and benefits
• Organizational systems
• How does the organization usually do business?
• What policies/procedures help? Norms, laws, ethical codes, etc.
• Choices
• What other alternatives are available?
• What are the risks of behaving ethically (or unethically)?

Question 17

Signaling Theory

Answer 17

• Applies when there is information asymmetry between sender and receiver
• High cost (honest) signals communicate fitness (and survivability)
• Ethical initiatives signal the fitness of the organization
• Actions signal the ethical nature of the leaders and the business

Question 18

Ethical Leadership

Answer 18

demonstrating normatively appropriate behaviors through actions and relationships.
* Positively related to: Subordinate ethical behavior, job satisfaction, organizational commitment, organizational voice (i.e., suggestions for positive change), trust in leader, job performance
* Negatively related to: Subordinate work stress, deviance, turnover

Question 19

Corporate Social Responsibility (CSR)

Answer 19

management’s obligation to make choices and take action so that the org contributes to the welfare and interest of all organizational stakeholders

Question 20

Sources of Ethical Values in Organizations

Answer 20

• Personal Ethics
• Role of leaders (Role model, “Linking-pin”)
• Organizational Culture
• Organizational Systems
• External Stakeholders

Question 21

Formal Structure and Systems

Answer 21

Assigning ethics committee or ethics officer

Disclosure Mechanisms: Visibly reward ethical acts and punish unethical ones

Code of Ethics: Used by an increasing number of organizations
Training programs