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Chapter 12

Chapter 12 Pt 2 Textbook.docx

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Wilfrid Laurier University
Ping Zhang

Chapter 12 Pt. 2: Ethics Ethics: Systematic thinking about the moral consequences of decisions Stakeholders: People inside or outside of an organization who have the potential to be affected by organizational decisions Themes and Examples of Associated Ethical Behaviour 1. Honest Communication – evaluate subordinates candidly; advertise and label honestly 2. Fair Treatment – pay equitably, don’t give preference to suppliers with political connections 3. Special Consideration – “fair treatment” can be modified for helping out long-time employees, helping out the disabled, or giving business to a loyal but troubled supplier 4. Fair Competition – avoid bribes and kickbacks to obtain business, don’t fix prices with competitors 5. Responsibility to Organization – act for the good of the whole organization; not for self interest - avoid waste and inefficiency 6. Corporate Social Responsibility – don’t pollute, think about community impact of plant closures - show concern for employee health and safety 7. Respect for Law – legally avoid taxes, but don’t evade them; don’t bribe government inspectors Causes of Unethical Behaviour 1. Gain - the anticipation of healthy reinforcement for following an unethical course of action, especially if no punishment is expected, should promote unethical decisions - ex. insider trading, compensation systems designed around very high bonuses 2. Role Conflict - many ethical dilemmas are actually forms of role conflict that get resolved unethically - ex. engineers who in their professional role opposed the fatal launch of the space shuttle Challenger due to cold weather were pressured to put on their bureaucratic “hats” and agree to the launch 3. Competition - stiff competition for scarce resources can stimulate unethical behaviour - ex. price fixing and monopoly violations - however if no competition occurs, there is a strong temptation for unethical decisions to be made 4. Personality - cynical people and those with external locus of control are less ethical as well as those with a high need for personal power and people with strong economic values - should look at personality of the actor when unethical behaviour is looked at 5. Organizational and Industry - studies have shown that there are considerable differences in ethical values across organizations, and these differences involved factors such as consideration for employees, respect for the law, and respect for organizational rules as well as differences across groups within the organizations - the presence of role models helps shape the culture and if the models are rewarded for unethical behaviour, rather than punished, unethical cult
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