B MGT 341 Lecture Notes - Lecture 17: Whistleblower, Performance Appraisal
Making Ethical Decisions
Ethical Decisions for the Organization in General
• A key ethical issue is how to disperse harm and benefits among stakeholders.
o If a firm is very profitable for two years, who should receive the profits? Employees,
managers and stockholders all want a share.
Establishing an Ethical Climate
• Managers act ethically
• Managers are active in the ethics program
• Create an effective reporting system
• Punish violators fairly and consistently
Methods for Managing for Ethical Behavior
• Codes of ethics
o Written statements describing prohibited behavior
o Can base the code on theories of ethics
o Can come from industry associations, professional associations, or individual
organizations
o Prohibited behaviors: kickbacks, illegal political payments, inappropriate gifts
• Policy guidelines
o Written and available to all employees
o Areas covered: ethical responsibilities of the organization, employee rights,
quality of the work environment
o Makes an organization's culture more ethical if policies are accepted, followed,
and enforced
• Decision procedures
o Specify composition of a decision–making group and scope of decision–making
information
o Encourage using more information about a decision's ethical effects
• Ethical performance standards
o Become part of the organization's performance appraisal process
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