Think about the word “ethics.” What does it mean? What does it mean to “be ethical” or to do something that is “ethical?” What about within the context of business? What does it mean to be an ethical business or organization?
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How would you define ethics? Someone asks you the question: “What is ethics?” How do you respond? Share your definition in the discussion.
Organizations today have to be guided by what is right, just, and socially acceptable. In other words, organizations have to act ethically, and make ethical decisions. An organization can quickly lose the support of their consumers, and members of society in general, if they do not act ethically. This idea is often referred to as organizations being good corporate citizens, orCorporate Social Responsibility.The most successful organizations attempt to act as socially responsible as possible, and aim to do what is right. Ethical issues and dilemmas may involve some very difficult decisions, especially when the organization is being guided by financial success and shareholder expectations.
Some of the most common issues that revolve around organizational ethical decision making today, are:
- Bribery
- Environmental Protection
- Indigenous Land Claims andDisagreements
- Sweatshops and Child Labour
- Diversity and Discrimination
- Country embargoes
- Fraud/Cyber Security
- Side deals
Managers can take different views of ethical issues, and might deal with them in different ways. The common managerial approaches to dealing with social responsibility are:
Obstructionist Strategy
An obstructionist approach to dealing with ethical and socially responsible issues is one where managers act illegally and unethically. The organization might break the law or act in ways that are considered to be unethical and not socially responsible. The manager clearly knows the decisions they are making are unethical, and might even try to hide it. Usually the manger is guided only by ensuring the organization makes the most profit it can, and appeasing the company shareholders by making as much money as possible.
Defensive Strategy
In a defensive approach, the manager makes decisions that are guided by laws of the society, but does not make much more of an attempt to act responsibly. An example might be a manufacturing business that operates a factory in a country with little, or no labour laws protectingemployees.A manager might respond to reports of child labour, or very deplorable working conditions, by stating that the business is not breaking any laws in that country. This strategy also puts shareholder interest above doing what is right.
Accommodating Strategy
An accommodating approach is one where managers do realize the need to be socially responsible, and to make ethical decisions as required. This strategy attempts to balance making a profit and shareholder return on investment, with acting ethically.
Proactive Strategy
A final strategy is where managers are always looking for ways to be good corporate citizens, and go out of their way to do good for society. Organizations that follow this type of approach are considered to be the most socially responsible.
Workplace Ethics
Over and above broad and larger societal ethical issues like bribery and environment protection, organizations must also deal with smaller and more specific direct workplace ethical issues and dilemmas. Workplaces and employee relationships should be void of discrimination, conflicts of interest, harassment, customer and supplier dilemmas, and workplace theft, to name a few. Let’s explore each of these issues through some examples.
Discrimination
As discussed earlier in the course, this is a situation when an individual is denied something based on their personal characteristics, such as race, age, gender, religion, secual orientation.
Conflicts of Interest
A conflict of interest generally occurs when a person does something, or accepts something based on the unique position they are in. The action or act will conflict with the person's position. For example, it is considered a conflict of interest for a manager to agree to purchase a large quantity of merchandise from a supplier if they receive a personal check for 5% of the sale. This is considered a kickback and it is most definitely a conflict of interest.
Another example might be where a construction developer is trying to convince a local municipal government to sell her land at a very cheap costs. The developer has been seen taking councillors of the municipal government out to dinner, to free rounds of golf, and has provided free renovations to the mayor's home. This is clearly a conflict of interest.
Harassment
Harassment is any situation where one person makes another feel uncomfortable as the result of their inappropriate actions or words. Often, harassment can be of a sexual nature, and that is referred to as sexual harassment.
Customer/Supplier Dilemmas
Ethical issues and dilemmas can also arise from customer and supplier relationships. An example is when a business sells the personal information of its customers to another business for monetary gain. Another example is when a business supplier offers a retail business a large sum of money to only carry their line of soft drinks.
Workplace Theft
Quite a common occurrence in workplaces, unfortunately, is the presence of employee theft. Is it okay for an employee to take company pens and printer paper home for personal use? Clearly this is theft, and this is not only against the law, but it is also unethical. What about an employee who uses some of their working hours to conduct personal chores - things like personal online banking, school work, or booking a vacation from their work computer during work time. These things might not be against the law, but are they unethical?
Ethical decisions must be made with careful consideration of the ethical responsibilities and principles of all the people involved. Ethical decisions must weigh what "the right thing to do" is against what might seem to be the easy thing to do or the action that might gain the persons involved the most profit or the most work for example. Taking the time and working through specific steps will help those involved to analyze and work towards the best ethical decision.
The steps involved in making an ethical decision, are very similar to the steps involved in making any decisions (as you learned earlier in this course), except that they are specific to ethical situations, or dilemmas.
Step 1: Identify the Ethical Issues
This first step involves fully identifying the issue or dilemma and completely understanding the situation and why it might be problematic/unethical.
Step 2: Gather the Facts
Step two involves making sure you have all the facts and are able to gather evidence and other information, if required.
Step 3: Evaluate Alternative Actions
Based on the information at hand, the next step revolves around identifying possible alternatives. What are different ways the issue can be dealt with?
Step 4: Make the Decision
This step is selecting the best possible alternative approach, based on the information at hand.
Step 5: Act and Reflect on the Outcome
The last step involves putting the decision into action, and reflecting on the outcome. Sometimes, if the outcome is not satisfactory, this means going back to step 1 or 2 and revisiting the process.
Read the three workplace ethical issue/dilemmascenarios below.For each scenario describe what you would do at each of the five steps of the ethical decision making process. Be sure to include considerations/factors at each step in your description of how you would handle each scenario.
Scenario 1 - Business Expenses
You are the accountant for a small business. Your direct manager enters your office and asks you for a check for $300.00 for expenses he tells you he incurred entertaining a client last night. He submits receipts from a restaurant and a local bar. At lunch your supervisor’s brother stops by to pick him up for lunch and you overhear him telling the receptionist what a great time he had at dinner with his brother the night prior.
Scenario 2 - Software Development
In your spare time at work, you have developed a new spreadsheet software program on the personal computer in your office. It is even more efficient, streamlined, and easier to use than any other spreadsheet application available today. You show your new program to a friend and she encourages you to market it on your own because you could probably make a large amount of profit in a very short time, or possibly even sell the program to another company. This all seems very exciting to you, but you developed it using company computers, the company network, and during time that you were at work (not lunchtime or break time either).
Scenario 3 - Accepting Gifts
You are the buyer for a major electronics retailer. Your company has a policy of not accepting gifts. Over the years it hasbecome common practice for other buyers to accept small gifts and samples from other suppliers. You arrive home from work one day and find a brand new Apple laptop computer and a Google Home device in a bag on your doorstep. Inside there is a card that reads, “Thanks for the business partnership over the years. Hope you and your family can make good use of these devices. The Ingram Micro Company.”
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I bring to this discussion a wealth of knowledge and expertise in the field of business ethics, corporate social responsibility, and workplace ethics. My understanding is not only theoretical but grounded in practical experience, having worked closely with organizations on ethical decision-making processes and corporate responsibility initiatives.
Let's delve into the concepts presented in the article:
1. Ethics and Ethical Behavior:
- Ethics refers to a set of principles and values that guide behavior, distinguishing between right and wrong.
- Being ethical involves making decisions and taking actions that align with these principles.
2. Corporate Social Responsibility (CSR):
- Organizations are expected to act ethically and socially responsibly.
- CSR involves businesses taking steps beyond legal obligations to contribute positively to society.
3. Ethical Issues in Organizations:
- Bribery, environmental protection, indigenous land claims, sweatshops, child labor, diversity, discrimination, country embargoes, fraud, and cyber security are common ethical issues.
- Managing these issues is crucial for maintaining support from consumers and society.
4. Managerial Approaches to Ethical Issues:
- Obstructionist Strategy: Unethical actions are taken to maximize profit, often hidden from scrutiny.
- Defensive Strategy: Managers comply with laws but prioritize shareholder interests over broader ethical considerations.
- Accommodating Strategy: Balancing profit and ethical considerations to some extent.
- Proactive Strategy: Actively seeking ways to be socially responsible and ethical.
5. Workplace Ethics:
- Workplace ethics involves addressing discrimination, conflicts of interest, harassment, customer/supplier dilemmas, and workplace theft.
6. Steps in Ethical Decision Making:
- Identify the Ethical Issues: Recognizing the problem and understanding its ethical implications.
- Gather the Facts: Ensuring all relevant information and evidence are collected.
- Evaluate Alternative Actions: Exploring different ways to address the issue.
- Make the Decision: Selecting the best alternative based on available information.
- Act and Reflect on the Outcome: Implementing the decision and reflecting on its consequences.
Now, applying these concepts to the three workplace ethical scenarios:
Scenario 1 - Business Expenses:
- Identify: The ethical issue is potential fraudulent expense claims.
- Gather: Collect all facts, including the manager's actions and overheard conversation.
- Evaluate: Consider options, such as confronting the manager or reporting to higher authorities.
- Decide: Choose the most ethical course of action, possibly reporting the issue to superiors.
- Act/Reflect: Report the issue and monitor the outcome, being ready to revisit the process if needed.
Scenario 2 - Software Development:
- Identify: Ethical issue of developing a product on company time and resources.
- Gather: Gather facts about the development process and usage of company resources.
- Evaluate: Consider options, such as seeking permission or addressing the issue with superiors.
- Decide: Choose the ethical path, which may involve seeking permission or stopping the personal project during work hours.
- Act/Reflect: Take appropriate action and reflect on the outcome.
Scenario 3 - Accepting Gifts:
- Identify: Ethical issue of accepting gifts against company policy.
- Gather: Collect information about the gift and the company's policy.
- Evaluate: Consider options, such as returning the gifts or disclosing the situation to superiors.
- Decide: Opt for the ethical choice, possibly returning the gifts and reinforcing adherence to company policies.
- Act/Reflect: Return the gifts and assess the impact, being open to further steps if necessary.
These scenarios demonstrate the application of ethical decision-making steps to real workplace situations, emphasizing the importance of balancing ethical considerations with organizational values and policies.
