Organisational Ethics Essay Example

conscious of their potential . .

. and their obligation as professionals to make a positive contribution to society? He stated that business schools should be held partly responsible for the cadre of managers more focused on short-term games to beat the market rather than building lasting value for shareholders and society (Schmalensee 2003). This introductory chapter provides an overview of the organizational ethical decision making process. It begins with a discussion of how ethical decisions are made and then offers a framework for understanding organizational ethics that is consistent with research, best practices, and regulatory developments.

Using this framework, the chapter then discusses how ethical decisions are made in the context of an organization and poses some illustrative ethical issues that need to be addressed in organizational ethics. Defining Organizational Ethics Ethics has been termed the study and philosophy of human conduct, with an emphasis on the determination of right and wrong.

For managers, ethics in the workplace refers to rules (standards, principles) governing the conduct of organization members. Most definitions of ethics relate rules to what is right or wrong in specific situations.

For present purposes, and in simple terms, organizational ethics refers to generally accepted standards that guide behavior in business and other organizational contexts (LeClair, Ferrell, and Fraedrich 1998). 1 One difference between an ordinary decision and an ethical one is that accepted rules may not apply and the decision maker must weigh values in a situation that he or she may not have faced before.

Another difference is the amount of emphasis placed on a person’s values when making an ethical decision.

Whether a specific behavior is judged right or

wrong, ethical or unethical, is often determined by the mass media, interest groups, the legal system, and individuals’ personal morals. While these groups are not necessarily “right,” their judgments influence society’s acceptance or rejection of an organization and its activities. Consequently, values and judgments play a critical role in ethical decision making, and society may institutionalize them through legislation and social sanctions or approval.

Individual vs. Organization Most people would agree that high ethical standards require both organizations and individuals to conform to sound moral principles.

However, special factors must be considered when applying ethics to business organizations. First, to survive, businesses must obviously make a profit. Second, businesses must balance their desire for profits against the needs and desires of society. Maintaining this balance often requires compromises or tradeoffs.

To address these unique aspects of organizational ethics, society has developed rules—both explicit (legal) and implicit—to guide owners, managers, and employees in their efforts to earn profits in ways that do not harm individuals or society as a whole.

Addressing organizational ethics must acknowledge its existence in a complex system that includes many stakeholders that cooperate, provide resources, often demand changes to encourage or discourage certain ethical conduct, and frequently question the balancing of business and social interests.

Unfortunately, the ethical standards learned at home, in school, through religion, and in the community are not always adequate preparation for ethical pressures found in the workplace. Organizational practices and policies often create pressures, opportunities, and incentives that may sway employees to make unethical decisions. We have all seen news articles describing some “decent, hard-working family person” who engaged in illegal or unethical activities. The Wall Street

Journal (Pullman 2003) reported that Betty Vinson, a midlevel accountant for WorldCom, Inc.

was asked by her superiors to make false accounting entries. Ms. Vinson balked a number of times but then caved in to management and made illegal entries to bolster WorldCom’s profits. At the end of 18 months she had helped falsify at least $3.

7 billion in profits. When an employee’s livelihood is on the line, it is difficult to say “no” to a powerful boss. At the time this chapter was written, Ms. Vinson was awaiting sentencing on conspiracy and securities fraud and preparing her 12 year old daughter for the possibility that she will be incarcerated. Importance of Understanding Organization Ethics

Understanding organizational ethics is important in developing ethical leadership.

An individual’s personal values and moral philosophies are but one factor in decision-making processes involving potential legal and ethical problems. True, moral rules can be related to a variety of situations in life, and some people do not distinguish everyday ethical issues from those that occur on the job. Of concern, however, is the application of rules in a work environment. Just being a good person and