Management and Organizational Ethics

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Managerial and Organizational Ethics

•conflicts of interest
•sexual harassment
•discrimination
•inappropriate gifts to corporate personnel
•unauthorized payments
•customer dealings
•evaluation of personnel
•compromise of personal standards
•Managers often have no experience or training in business ethics or ethical decision making to tackle these issues

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Sexual harassment

The “unwanted sexual behaviours that make a person feel uncomfortable, threatened
or scared”- ReachOut.com

Can be within workplaces, at school, in public and even within your own homes

Examples of sexual harassment include unwelcome touching, remarks or jokes,

intrusive questions, and unwanted invitations to go on dates or have sex.–
HumanRights.gov.au

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
In Asia

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
In USA

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Hollywood sexual
harassment

USA today most women who reported the

situation felt the workplace situation
remained the same, only 28% stated the
workplace improved
Stay silent in fear of damaging their
reputation, the professional backlash and
retaliation
These actors and actresses felt vulnerable
and believed it was necessary in order to
get the career advances they each desired.

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Harvey
Weinstein

-Hollywood movie producer

(Best known for his works in Lord of
the rings, Pulp fiction)
-Over 3 decades of sexual
misconduct allegations
-Currently facing trials for accused
rape and sexual assault
-Over 80 women have stepped
forward since 2017 accusing
Harvey of sexual harassment,
assault and rape

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Discussion

Sexual harassment continues to plague Indian

workplaces.
What can be done to prevent sexual
harassment?

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Questions tackled
1.How do you keep your own managerial ethics focused in such
a way that you avoid immorality?
2.What principles, concepts, or guidelines are available to help
you to be ethical?
3.What specific strategies, approaches, or best practices might
be emphasized to bring about an ethical culture in companies
and organizations?
4.How is “behavioral ethics” affecting decision making?

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Management Ethics Models
Immoral management
Moral management
Amoral management

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Immoral Managers’ Characteristics
These managers intentionally do wrong.
These managers are self-centered and self-absorbed.
They care only about themselves or the organization’s
profits or success.
They actively oppose what is right, fair, or just. They
exhibit no concern for stakeholders.
These are the “bad guys.”
An ethics course probably would not help them.

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Moral managers’ characteristics
•These managers conform to a high level of ethical or right behavior (moral rectitude).
•They conform to a high level of personal and professional standards.
•Ethical leadership is commonplace—they search out where people may be hurt.
•Their goal is to succeed but only within the confines of sound ethical precepts
(honesty, fairness, due process).
•High integrity is displayed in thinking, speaking, and doing.
•These managers embrace the letter and spirit of the law. Law is seen as a minimal
ethical level. They prefer to operate above legal mandates.
•They possess an acute moral sense and moral maturity.
•Moral managers are the “good guys.”

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Characteristics of amoral managers
• Intentional and unintentional? Biases?
Intentionally Amoral Managers
• These managers don’t think ethics and business should “mix.”
• Business and ethics are seen as existing in separate spheres. Ethics is seen as too “Sunday
schoolish” and not applicable to business.
• These managers are a vanishing breed. There are few managers like this left in the world.
Unintentionally Amoral Managers
• These managers forget to consider the ethical dimension of decision making and practice.
• They just don’t “think ethically.”
• They may lack ethical perception or awareness; they have no “ethics buds” that help them sense
the ethical dimension.
• They may be well-intentioned but morally casual or careless; may be morally unconscious.
• Their ethical gears, if they exist, are in neutral.

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
• Studying business ethics will help you:
– Identify ethical issues when they arise
– Recognize approaches for resolving ethical issues
– Cope with conflicts between your own personal values and those of the organization
in which you work
– Gain knowledge to make more ethical business decisions

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Different levels
Personal (bad apple theory)
Organizational (bad barrel theory)
Industry, Societal, Global (bad orchards theory)

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Personal-level
•Should I cheat on my income tax return by overinflating my
charitable contributions?
•Should I tell the professor I need this course to graduate this
semester when I really
don’t?
•Should I download music from the Internet although I realize it
is someone else’s intellectual property?
•Should I connect to Netflix using a friend’s logon information
rather than paying for my own account?

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Managerial and Organizational Level
Managerial- and organizational-level issues carry consequences for an individual’s
status in the organization, for the company’s reputation and success in the community,
and also for the kind of ethical culture that will prevail on a day-to-day basis at the
workplace.
1.Should I set high performance goals for my work team to benefit the organization,
even though I know it may cause them to cut corners to achieve such goals?
2.Should I over-report the actual time I worked on this project, hoping to get overtime
pay or additional recognition?
3.Should I authorize a subordinate team member to sidestep company policy so that
we can close the deal and be rewarded by month’s end?
4.Should I misrepresent the warranty time on some product I’m selling in order to get
the sale?

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Managerial Ethics

•Managerial ethics - making decisions that have ethical

implications or consequences
•Conflict of interest - the individuals have to choose between
their interests and the interests of someone else or some other
group (their organization, other stakeholders)

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Industry, Societal, Global (bad orchards theory)
What can we do to save India from corruption?

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Ethical tests approach
•Test of common sense (If the proposed course of action violates your “common sense,” don’t do it. If it doesn’t
pass the “smell” test, don’t do it)
•Test of one’s best self (If the proposed course of action is not consistent with your perception of yourself at your
“best,” don’t engage in it)
•Test of making something public (If you would not be comfortable with people knowing you did something, don’t
do it. Don’t take a course of action if you think your grandma might disapprove)
•Test of ventilation (Expose your proposed course of action to others’ opinions. Don’t keep your ethical dilemma to
yourself. Get a second opinion)
•Test of purified idea (Don’t think that others in authority such as an accountant, a lawyer, or a boss can “purify”
your proposed action by saying they think it is okay. It still may be wrong. You will still be held responsible)
•Test of the Big Four (Don’t compromise your action or decision by tempting behaviors, such as greed, speed,
laziness, or haziness)

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Behavioral Ethics

•Conformity bias: a tendency people have to take their cues for ethical behavior from their peers rather than
exercising their own independent ethical judgment.
•Overconfidence bias: a tendency for people to be more confident of their own moral character or behavior than
they have objective reason to be.
•Self-serving bias: the propensity people have to process information in a way that serves to support their
preexisting beliefs and their perceived self-interest.
•Framing: refers to the fact that people’s ethical judgments are affected by how a question or issue is posed
(framed) – ethical vs. business
•Incrementalism: a predisposition toward the slippery slope.
•Role morality: a tendency some people have to use different ethical standards as
they move through different roles in life
• Moral equilibrium: the penchant for people to keep an ethical scoreboard in their heads

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Global issues

•Child Labor: No use or support of child labor.

•Forced or Compulsory Labor: No use of forced or compulsory labor.
•Health and Safety: Provide a safe and healthy work environment; prevent potential occupational accidents.
•Freedom of Association and Right to Collective Bargaining: Respect the right to form and join trade unions and
bargain collectively.
• Discrimination: No discrimination in hiring, remuneration, access to training, promotion, termination, or retirement
based on many different factors.
• Discipline: No corporal punishment, mental or physical coercion, or verbal abuse. No harsh or inhumane treatment
is allowed.
• Working Hours: Comply with the applicable law but, in any event, no more than 48 hours per week with at least one
day off for every seven-day period; voluntary overtime paid at a premium rate and not to exceed 12 hours per week
on a regular basis.
• Remuneration: Respect right of personnel to living wage; all workers paid at least the minimum wage; wages
sufficient to meet basic needs and provide discretionary income.

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Discussion Activity 1

Millennials and Generation Z highly value authenticity and transparency from

businesses and have become influential consumer groups, seeking products
that align with their values. These generations let business ethics and CSR
issues guide not only product purchase decisions but also employer choices.

Do you seek products that align with your values?

O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.