Williams 4e Chapter 04

Ethical and Unethical
Workplace Behavior
Ethics
The set of moral principles or values

that defines right and wrong for a
person or group.
Chapter 4
Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 1
Ethics and the
Nature of Management Jobs
Unethical
Unethical Managerial
Managerial Behavior
Behavior
Authority
Authority and
and Power
Power
Handling
Handling Information
Information
Influencing
Influencing the
the Behavior
Behavior of
of Others
Others
Setting
Setting Goals
Goals
1
Chapter 4
Ethics and the
Nature of Management Jobs
Managers can encourage ethical behaviors by…
 using resources for company business only

 handling information confidentially
 not influencing others to engage in
unethical behavior
 not creating policies that reward employees
for unethical behavior
 setting reasonable goals
1
Chapter 4
Workplace Deviance
Workplace Deviance
Unethical behavior that violates
organizational norms about
right and wrong
 Two dimensions
 Degree of deviance
 Target of deviant behavior
2
Chapter 4
Types of Workplace Deviance
Organizational
Production
Production Property
Property
Deviance
Deviance Deviance
Deviance
Minor Serious
Political
Political Personal
Personal
Deviance
Deviance Aggression
Aggression
Interpersonal
2
Adapted from Exhibit 4.1
Chapter 4
Production Deviance
 Leaving early
 Taking excessive breaks
 Intentionally working slow
 Wasting resources
2
Chapter 4
Property Deviance
 Sabotaging
equipment
 Accepting
kickbacks
 Lying about
hours worked
 Stealing from
company
2
Chapter 4
Political Deviance
 Showing favoritism
 Gossiping about
coworkers
 Blaming coworkers
 Competing nonbeneficially
2
Chapter 4
Personal Aggression
 Sexual harassment
 Verbal abuse
 Stealing from coworkers
 Endangering coworkers
2
Chapter 4
U.S. Sentencing
Commission Guidelines
Companies can be prosecuted and punished

even if management didn’t know about
the unethical behavior.
3
Chapter 4
Who, What, and Why?
 Nearly all businesses are covered
 Punishes a number of offenses
 Encourages businesses to be proactive
3.1
Chapter 4
Partial List of Offenses
Invasion of privacy Money laundering

Price fixing Conflicts of interest
Fraud Embezzlement
Customs violations Dealing in stolen goods
Antitrust violations Copyright infringements
Civil rights violations Extortion
Theft …and more
3.1
Chapter 4
Compliance Program Steps
Steps
Steps in
in determining
determining fine
fine size
size
1.
1. determine
determine the
the base
base fine
fine
2.
2. compute
compute aa culpability
culpability score
score
3.
3. multiply
multiply the
the base
base fine
fine by
by the
the
culpability
culpability score
score
Smaller fines for companies
that are proactive
3.2
Chapter 4
Compliance Program Steps
1. Establish standards and procedures.
2. Assign upper-level managers to be in charge.
Revise if required
3. Delegate decision-making authority only
to ethical employees.
4. Encourage employees to report violations.
5. Train employees on standards and procedures.
6. Enforce standards consistently and fairly.
7. Improve program after violations.

3.2
Chapter 4
Influences on Ethical Decision Making
Ethical
Ethical Intensity
Intensityof
ofDecision
Decision
Ethical
Answers Moral
Moral Development
Development of
of Manager
Manager
Depend
on…
Ethical
Ethical Principles
PrinciplesUsed
Used
4
Chapter 4
Ethical Intensity Depends on…
Magnitude
Magnitude of
of consequences
consequences
Social
Social consensus
consensus
Probability
Probability of
of effect
effect
Temporal
Temporal immediacy
immediacy
Proximity
Proximity of
of effect
effect
Concentration
Concentration of
of effect
effect
4.1
Chapter 4
Moral Development
Kohlberg’s Stages of Moral Development
Preconventional Conventional Postconventional
Societal Internalized
Selfish
Expectations Principles
4.2
Chapter 4
Stages of Moral Development
Preconventional Conventional Postconventional
1. Punishment and 3. Good boy, 5. Social contract

Obedience nice girl
2. Instrumental 4. Law and order 6. Universal

Exchange principle
4.2
Chapter 4
Principles of
Ethical Decision Making
Long-term
Long-term self-interest
self-interest
Personal
Personal virtue
virtue
Religious
Religious injunctions
injunctions
Government
Government requirements
requirements
Utilitarian
Utilitarianbenefits
benefits
Individual
Individual rights
rights
Distributive
Distributivejustice
justice
4.3
Chapter 4
Principles of
Principle of long-term self-interest
Never take any action not in your

organization’s long-term self-interest.
4.3
Chapter 4
Principles of
Principle of Personal Virtue
Never do anything that is not honest, open,

and truthful and that you would not be
glad to see reported in the newspapers
or on TV.
4.3
Chapter 4
Principles of
Principle of Religious Injunctions
Never take any action that is not kind

and that does not build a
sense of community.
4.3
Chapter 4
Principles of
Principle of Government Requirements
Never take any action that violates the law,

for the law represents the minimal
moral standard.
4.3
Chapter 4
Principles of
Principle of Utilitarian Benefit
Never take any action that does not result in

greater good for society.
4.3
Chapter 4
Principles of
Principle of Individual Rights
Never take any action that infringes on

others’ agreed-upon rights.
4.3
Chapter 4
Principles of
Principle of Distributive Justice
Never take any action that harms the

least among us:
the poor, the uneducated,
the unemployed.
4.3
Chapter 4
Practical Steps to
Select
Select and
and hire
hire ethical
ethical employees
employees
Establish
Establish aa Code
Code of
of Ethics
Ethics
Train
Train employees
employees to
to make
make ethical
ethical decisions
decisions
Create
Create an
an ethical
ethical climate
climate
5
Chapter 4
Practical Steps to
Select
Select and
and hire
hire ethical
ethical employees
employees
If you found a wallet containing $50,

would you return it with the money?
 Overt Integrity Tests

 Personality-Based Integrity Tests
5.1
Chapter 4
Doing the Right Thing
IfIf You
You Cheat
Cheat in
in College,
College,
Will
Will You
You Cheat
Cheat inin the
the Workplace?
Workplace?
 College
Collegestudents
studentswho
who cheat
cheatare
arelikely
likely to
tocheat
cheat again.
again.
 70
70percent
percent of
ofstudents
studentsdon’t
don’t see
seecheating
cheatingas
asaaproblem.
problem.
 People
Peoplewho
whocheat
cheat and
and cheat
cheat again
again see
seetheir
their
behavior
behavior as
asnormal.
normal.
 60
60percent
percent of
ofpeople
peoplewho
whocheat
cheat their
their employers
employers
don’t
don’tfeel
feelguilty
guiltyfor
fordoing
doing so.
so.
Chapter 4
What Really Works
Studies show that Integrity Tests…
 Help reduce workplace deviance

 Help hire workers who are better performers
However they have a smaller effect

on assessing theft.
Chapter 4
Ethics Question
 What is?
 What are your personal ethics?
 What are your organization’s ethics?
 What are the ethics of your industry?
 What are society’s ethics?
 What are global ethics?

Chapter 4
Ethics Question
 What ought to be?
 How ought we treat our aging employees?

 How safe ought we make this product?
 How clean an environment should we aim
for?
 How should we treat long-term employees
when downsizing?
Chapter 4
Ethics Question
 How do we get from What is to What ought

to be?
 What is our Motivation?
Chapter 4
Practical Steps to
Establish
Establish aa Code
Code of
of Ethics
Ethics
 Communicate code of ethics to both inside

and outside the company
 Develop ethical standards and procedures

specific to business
Web Link http://www.nortelnetworks.com

5.2
Chapter 4
Ethics Training
Ethics
Ethics Training
Training
 Develops employee awareness of ethics
 Achieves credibility with employees
 Teaches a practical model of ethical

decision making
http://ethics.bellsouth.com
Web Link
5.3 “Ethics Scenarios Game”
Chapter 4
A Basic Model of
1.
1. Identify
Identify the
the problem
problem
2.
2. Identify
Identify the
the constituents
constituents
3.
3. Diagnose
Diagnose the
the situation
situation
4.
4. Analyze
Analyze your
your options
options
5.
5. Make
Make your
your choice
choice
6.
6. Act
Act
5.3
Chapter 4
Ethical Climate
Establishing
Establishing an
an Ethical
Ethical Climate
Climate
Managers:
1. Act ethically
2. Are active in company ethics programs
3. Report potential ethics violations
4. Punish those who violate the code of ethics
Web Link http://www.whistleblowers.org

5.4
Chapter 4
What Is Social Responsibility?
Social Responsibility
A business’s obligation to…

 pursue policies
 make decisions
 take actions that benefit society
Chapter 4
To Whom Are Organizations
Socially Responsible?
Shareholder
Shareholder Maximize
Maximize Profits
Profits
Model
Model
Stakeholder
Stakeholder Satisfy
Satisfy Interests
Interests
Model
Model of
of Multiple
Multiple Stakeholders
Stakeholders
6
Chapter 4
Shareholder Model
Pros
Pros Cons
Cons
 Firm maximizes  Organizations cannot act

shareholder wealth and effectively as moral agents
satisfaction for shareholders
 The company stock  Time, money, and attention

increases in value diverted to social causes
undermine market efficiency
6
Chapter 4
Stakeholder Model
Primary Secondary
Stakeholders: Stakeholders:
Shareholders Media
Employees Special Interest Groups
Customers Trade Associations
Suppliers
Governments
Local Communities
6
Chapter 4
Organization’s Social Responsibilities
Serve a social role Discretionary
Abide by principles
of right and wrong Ethical ?
Obey laws and

regulations Legal
Be profitable Economic
$
7
Chapter 4
Responses to Demands
for Social Responsibility
Accommo-
Accommo-
Reactive
Reactive Defensive
Defensive Proactive
Proactive
dative
dative
Fight all Do only what Be Lead the
the way is required progressive industry
Public
Legal Problem
Withdrawal Relations Bargaining
Approach Solving
Approach
DO DO
NOTHING MUCH
8
Chapter 4
Social Responsibility and
Economic Performance
Can
Can cost
cost aa company
company
Realities of
Social Sometimes
Sometimes itit does
does pay
pay
Responsibility
Does
Does not
not guarantee
guarantee
profitability
profitability
9
Chapter 4

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Ethical and Unethical

The set of moral principles or values

Managers can encourage ethical behaviors by…

 using resources for company business only

Companies can be prosecuted and punished

 Nearly all businesses are covered

 Punishes a number of offenses

 Encourages businesses to be proactive

Invasion of privacy Money laundering

1. Establish standards and procedures.

2. Assign upper-level managers to be in charge.

4. Encourage employees to report violations.

5. Train employees on standards and procedures.

6. Enforce standards consistently and fairly.

7. Improve program after violations.

Kohlberg’s Stages of Moral Development

Preconventional Conventional Postconventional

Preconventional Conventional Postconventional

1. Punishment and 3. Good boy, 5. Social contract

2. Instrumental 4. Law and order 6. Universal

Principle of long-term self-interest

Never take any action not in your

Principle of Personal Virtue

Never do anything that is not honest, open,

Principle of Religious Injunctions

Never take any action that is not kind

Principle of Government Requirements

Never take any action that violates the law,

Principle of Utilitarian Benefit

Never take any action that does not result in

Principle of Individual Rights

Never take any action that infringes on

Principle of Distributive Justice

Never take any action that harms the

If you found a wallet containing $50,

 Overt Integrity Tests

Studies show that Integrity Tests…

 Help reduce workplace deviance

However they have a smaller effect

 What are your personal ethics?

 What are your organization’s ethics?

 What are the ethics of your industry?

 What are society’s ethics?

 What are global ethics?

 What ought to be?

 How ought we treat our aging employees?

 How do we get from What is to What ought

 What is our Motivation?

 Communicate code of ethics to both inside

 Develop ethical standards and procedures

Web Link http://www.nortelnetworks.com

 Develops employee awareness of ethics

 Achieves credibility with employees

 Teaches a practical model of ethical

Web Link http://www.whistleblowers.org

A business’s obligation to…

 Firm maximizes  Organizations cannot act

 The company stock  Time, money, and attention

Serve a social role Discretionary

Obey laws and

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