Ethics Exam1 study guide.docx

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Department
Human Resource Management
Course Code
37:533:321
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stephenjohn

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Ethics Exam #1 Study Guide- October 2nd st  21 Century Risks o Reputational Risk  Good citizen  Sustainable organization  Concern for “Triple Bottom Line”  Economic  Environment  Social Responsibility  Risk o Two Important Meanings of Risk  A situation is riskier than another when  There is greater expected loss o Ex. Young male drivers are riskier than middle-aged drivers  There is greater variance (less predictability) of outcomes o Ex. A bio-tech stock is riskier than a utility stock  Kohlbergs o 6 Levels Definitions  Preconventional Level  Stage 1: “Bad” behavior is that which is punished.  Stage 2: “Good” behavior is that which is concretely rewarded.  Conventional Level  Stage 3: “Good” behavior is that which is approved by others; “bad” behavior is that which is disapproved by others.  Stage 4: “Good” behavior conforms to standards set by social institutions; transgressions lead to feelings of guilt or dishonor.  Postconventional Level  Stage 5: “Good” behavior conforms to community standards set through democratic participation; concern with maintaining self-respect and the respect of equals.  Stage 6: “Good” behavior is a matter of individual conscience based on responsibly chosen commitments to ethical principles.  Leadership o Values:  Constructs representing generalized behaviors or states of affairs that are considered by the individual to be important.  They play a fairly central role in one’s overall psychological makeup  They can affect behavior is a variety of situations  Individuals in the same work unit can have considerably different values  We can only make inferences about people’s values based on their behavior. o Differences in Values?  Pervasive influences of broad forces at a particular time tend to create common value systems  This may contribute to misunderstandings and tension between older leaders and younger followers  Each generation is molded by distinctive experiences at their critical developmental periods.  Generational Differences  Generation gap in basic values  Gen Xers impact leadership: o Define leadership as removing obstacles and giving followers what they need o Believe leaders have to “earn their stripes” rather than advance by seniority o Moral Reasoning  An important consideration is how one thinks about value-laden issues or ethical dilemmas.  Moral reasoning: process leaders use to make decisions about ethical and unethical behaviors.  Manner by which leaders solve moral problems.  Value differences often result in different judgments regarding ethical and unethical behavior.  Kohlberg offers that although the development of moral reasoning is invariant, not all individuals actually achieve the highest stages. o Ends-based thinking  Do what’s best for the greatest number of people.  Also known as utilitarianism o Authentic Leadership  Founded in Greek philosophical notion of “to thine own self be true”  Strong ethical convictions that guide behavior  Not so much avoiding doing what is “wrong” as much as trying to do what is “right”  Has gained momentum recently because of beliefs that  Enhancing self-awareness can help people in organizations find more meaning and connection at work  Promoting transparency and openness in relationships builds trust and commitment  Fostering more inclusive structures and practices can help build more positive ethical climates o In-group favoritism  Doing acts of kindness and favors for those who are like us o Ethical dilemmas often involve a choice between two “rights” rather than right and wrong. o Process focus- how goals are achieved is as important as achievement Issues: Issue 1: Can Capitalism Lead to Human Happiness?  Smith o How free markets impact prices  “As a natural result of free competition in a free market, quality will improve and prices will decline without limit, thereby raising the real standard of living of every buyer. To protect themselves in competition, sellers will be forced to innovate, discover new products and new markets, thereby raising the real wealth of the society as a whole. Products improve without limit, wealth increases without limit, and society prospers.” (pg. 2)  Marx/Engels o Impact of capitalism on how long workers live and in what conditions  “For the most efficient factory will be the one that hires its workers at lowest cost, and if all industry is accomplished by essentially unskilled labor, and every worker can therefore be replaced by any other, there is no reason to pay any worker beyond the subsistence wage.” (pg.2) Issues 2: Is Risk the Best Theory for Capitalism?  Johanson and Kwak o Impact of too much risk  Consequences can harmful for many, not just the risk taker  “nothing ventured, nothing gained”  Higher returns entail higher risk  “Investors were willing to lend money cheaply, and businesses were one of the major beneficiaries” (pg. 30)  “More companies will end up in bankruptcy as opposed to being rolled up in larger companies’ consolidation strategies.” (pg. 30)  Risk= innovation  Eichengreen o Impact of less risk  4:15 Report- summarizing how much firm would lose if tomorrow turned out to be a bad day.  Value at Risk: “reducing risk to a single number encouraged the belief that it could be mastered.” (pg. 33)  “This encouraged the misplaced belief that the same central-bank policies that had reduced the
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