(locus of control) believe that they control the events in their lives by their own effort and skill, viewing themselves as masters of their destinies and trusting in their capacity to influence their environment. // you have the power – you control where you go based on your talents, abilities, and effort

a set of values, beliefs, goals, norms, and ways of solving problems that members (employees) of an organization share. // if the culture is ethical employees are more likely to behave ethically; The corporate culture (and therefore ethical culture) of an organization are significantly influenced by Significant Others- managers, subordinates, peers who have influence in a work group

the conditions in an organization that limit or permit ethical or unethical behavior.  It results from conditions that either provide rewards, whether internal or external, or fail to erect barriers against unethical behavior.  An example of a condition that fails to erect barriers against unethical behaviors is a company policy that does not punish employees who accept large gifts from clients.  The absence of punishment essentially provides an opportunity for unethical behavior because it allows individuals to engage in such behavior without fear of consequences.  // What behavior is rewarded? (carrots) What barriers are erected to prevent unethical behavior? What punishment, if any, is meted out? (sticks) (No punishment = no crime) What checks (or reviews) are in the decision-making process? // Opportunity relates to individuals’ immediate job context – where they work, whom they work with, the nature of the work, etc… // Opportunity also comes from knowledge: People with knowledge of procedures, confidential information, or the competition can exploit this knowledge; People with knowledge become “gatekeepers” – they socialize new workers and pass down the unwritten rules and procedures (ethical or unethical); Opportunity can be reduced or eliminated through: Formal codes, Policies, Rules (when they are enforced!)

the ability or authority to guide and direct others toward achievement of a goal. It has a significant impact on ethical decision making because leaders have the power to motivate others and enforce the organization’s rules and policies as well as their own viewpoints.  // Manager’s provide the example for what a firm’s culture should be….How do corporate leaders demonstrate that they understand the importance of doing business ethically? But recent studies show that less than half (47%) of employees in large companies believe that their senior leadership is highly ethical…….Assess the firm’s values and existing programs (where are we?) Gain commitments from top managers (who’s with me?) Publish and post codes of ethics (what are the “rules”?) Provide training (Do we understand one another? Ensure consistent implementation (No one is above the law) Assess and revise (Repeat) This needs to be a proactive process// Leadership starts at the very top of the chain and goes down throughout the organization….leaders need knowledge, experience, and transparency

 attempt to create employee satisfaction through negotiating, or “bartering,” for desired behaviors or levels of performance.  They focus on ensuring that required conduct and procedures are implemented.  // best suited for situations that require rapid change

strives to raise employees’ level of commitment and to foster trust and motivation.  They communicate a sense of mission, stimulate new ways of thinking, and enhance as well as generate new learning experiences.  They consider employee needs and aspirations in conjunction with organizational needs.  They also build commitment and respect for values that provide agreement on how to deal with ethical issues.  // best suited for firms that have higher levels of ethical commitment b/c they promote behavior through a shared vision and learning experience

4 factors: ethical issue-intensity, individual factors, organizational factors, and opportunity.  All of these interrelated factors influence the evaluations of and intentions behind the decisions that produce ethical or unethical behavior. // The goal of this framework is to provide you with insights and knowledge about how typical ethical decisions are made in business organizations; By using this framework you will be better prepared to analyze critical ethical dilemmas and provide ethical leadership

 Gender- In many aspects there is no difference between men and women BUT when differences are found women seems to be more sensitive to ethical scenarios and less tolerant of unethical scenarios // Education: The more education one has, the better he/she TENDS TO BE at ethical decision-making; the type of education is irrelevant; this does not guarantee people will act ethically; work experience seems to play a larger role—business people are exposed to more ethically challenging situations // Nationality: relationship between a person and the country in which he/she is born; Research shows that nationality effects ethical decision-making – nationality may effect ethical sensitivity to a specific issue; i.e. Americans may perceive ethical gender issues differently than a country where women are not considered equals; it is NOT that one country is more ethical than another // Locus of Control – how you perceive yourself in relation to power; External control – you have no power – the river takes you where the river wants; Internal control – you have the power – you control where you go based on your talents, abilities, and effort; While research is not definitive – people who are externals behave more ethically than internals; Other studies suggest just the opposite; Internals act more ethically because there is a cause and effect between their decisions and outcomes – they feel more responsible for the outcomes – therefore behave more ethically // Age – we can no longer say “the older, the wiser” – no conclusive evidence

demands instantaneous obedience and focuses on achievement, initiative, and self-control.  Although this style can be very effective during times of crisis or during a turnaround, it otherwise creates a negative climate for organizational performance. Example: Rudy during 9/11

values people, their emotions, and their needs and relies on friendship and trust to promote flexibility, innovation, and risk taking. Example: Joe Torre

relies on participation and teamwork to reach collaborative decisions.  This style focuses on communication and creates a positive climate for achieving results. Example: Eisenhower

builds a positive climate by developing skills to foster long-term success, delegates responsibility, and is skillful in issuing challenging assignments. Example: Peter Drucker

1)    Ethical leaders have strong personal character: How do we do this in a business setting? Focus on developing ethical reasoning (process) rather than teaching people to be “moral” (based on beliefs –   which may vary due to a diverse workforce)

2)   Ethical leaders have a passion to do it right: People with this quality recognize the importance of ethical behavior and a willingness to face these issues (Ex: Harry Kraemer – Baxter International – 53 dialysis deaths)

3)   Ethical leaders are proactive: They anticipate, plan,  and act in advance to prevent problems before they occur

4)   Ethical leaders consider stakeholders’ interests: They consider all stakeholders not just the one who          affect the bottom line. They monitor situations, communicate and cooperate

5)   Ethical leaders are role models for the organization’s values: they “talk the talk” and “walk the walk”

6)   Ethical leaders are transparent and actively involved in organizational decision making: transparency is the free flow of ideas and sharing of info; transformational leaders are collaborative which leads to transparency

7) Ethical leaders are competent managers who take a holistic view of the firm’s ethical culture: analyzing the entire organization not just individual areas or groups; you have to see the “big picture” of how ethics affects your entire enterprise/business

the specific principles or rules that people use to decide what is right and wrong

moral philosophy that places special value on ideas and ideals as products of the mind, in comparison with the world’s view. The term refers to efforts to account for all objects in nature and experience and assign to such representations a higher order of existence.  Studies have shown a positive correlation between idealistic thinking and ethical decision making. // Reality is dependent on the mind rather than independent of it. Aiming for perfection

the view that an external world exists independent of our perception of it. Realists work under the assumption that humankind is not inherently benevolent and kind but instead is inherently self-centered and competitive. Each person is always ultimately guided by his or her own self-interest. // focus is self-interest, Reality exists independent of our perception of it. Aiming for what is reasonable achievable

“crimes of the suite”; creates victims by establishing trust and responsibility.  WCC are often considered to be different than crimes of the street.  Deceptive pricing, unnecessary repairs, and credit card fraud are the three victim categories with the highest percentages.  Senior citizens and other disadvantages consumers fall prey to WCC perpetrators. // an individual or group committing an illegal act in relation to his/her employment, who is highly educated (college), in a position of power, trust, respectability and responsibility, within a profit/nonprofit business or government organization and who abuses the trust and authority normally associated with the position for personal and/or organizational gains.

·         Nonviolent

·         Committed for financial gain

·         It is committed within business context or an individual’s occupation

·         It can be committed by an individual or by an organization

·         It may involve individuals who are highly educated , well-respected, or in positions of trust/power

only one thing is intrinsically good; often exemplified by hedonism—that one’s pleasure is the ultimate good or that the moral end, or goodness, is the greatest balance of pleasure over pain

two or more things are intrinsically good, e.g. knowledge, fitness, experience

based on the evaluation of the outcomes or results of the business relationship.  If some employees feel that they are paid less than their coworkers for the same work, then they have concerns about distributive justice.  Distributive justice is difficult to develop when one member of the business exchange intends to take advantage of the relationship.  Evaluated: benefits derived, equity in rewards

based on evaluating the communication processes used in the business relationship.  Evaluated: accuracy of information, truthfulness, respect, and courtesy in the process

defines right or acceptable behavior in terms of its consequences for the individual.  Egoists believe that they should make decisions that maximize their own self-interest, which is defined differently by each individual.  Depending on the egoist, self-interest may be construed as physical well-being, power, pleasure, fame, a satisfying career, a good family life, wealth, or something else.  In an ethical decision-making situation, an egoist will probably choose the alternative that contributes most to his or her self-interest.  The egoist’s creed can be generally stated as “do the act that promotes the greatest good for oneself.”

focus on the rights of individuals and on the intentions associated with a particular behavior rather than on its consequences. Acts are ethical or unethical regardless of their consequences.  Truth is fixed. Fundamental to deontology is that equal respect must be given to all persons.  Unlike utilitarians, deontologists argue that there are some things that we should not do, even to maximize utility.  For example, it would be considered wrong to kill an innocent person no matter how much greater social utility might result from doing so.  Certain behaviors are inherently right, and the determination of this rightness focuses on the individual actor, not society.  Individuals have certain absolute rights. 

·         Freedom of conscience

·         Freedom of consent

·         Freedom of privacy

·         Freedom of speech

·         Due process

Golden rule. Costs don’t matter if you need to fix something.

here, decision making authority is concentrated in the hands of top-level managers, and little authority is delegated to lower levels. Responsibility, both internal and external, rests with top-level managers. The structure is suited to organizations that make high-risk decisions and whose lower-level managers are not highly skilled in decision making. These organizations are extremely bureaucratic, and the division of labor is very well defined. It stresses formal rules, policies, and procedures, backed up with elaborate control systems. This structure can lead to unethical acts due to the top-down approach, the distance between employee and decision maker, and because there is very little upward communication. Another issue that can arise is blame shifting or scapegoating. They tend to be more ethical than decentralized, but it may be harder to uproot when it is encountered. Employees may follow the letter of the law and not the spirit of the law (No bribes vs. donation to kid’s school); Specialization and the division of labor may lead to lack of connectedness (you look at how your decision effects only you, not other departments).

an assembly of individuals that has an organized structure accepted explicitly by the group. Two types are work groups and committees. Committees operate on an ongoing basis and its decisions are legitimized because of majority rule. They take longer to reach decisions and are more conservative. Lack of individual responsibility here. Work groups are used to subdivide duties within specific functional areas of a company. Examples: one work group might be responsible for interior design elements of a car while another work group is responsible for dashboard instruments. Teams bring together several different areas of an organization for a single project (example: create a new product); Ethical conflicts may arise since members of the team come from different areas of the organization.

two or more individuals with a common interest but without an explicit organizational structure. Often composed of people from the same department; they share an interest which may or may not be relevant to the goals of the organization; these groups create the corporate “grapevine”; while the “grapevine” may not always be accurate mangers can use it to reinforce acceptable values and beliefs; employees talk to one another and find out what the rules really are.

a company’s history and unwritten rules are a part of its culture. Some cultures are so strong that to outsiders they come to represent the character of the entire organization—e.g. Levi Strauss, Ben & Jerry, and Hershey Foods are all casual organizations with strong ethical cultures, whereas Lockheed Martin, Procter & Gamble, and Texas Instruments are perceived as more formal, ethical ones. Corporate culture is often expressed informally—through comments, working late, and participation in extracurricular activities. It can even be expressed through gestures, looks, labels, promotions, programs, and legends (the legend of Bill Brasky).

a.    APPLIES TO THE GOVERNMENT/GOVERNMENTAL ENTITIES: Employer” includes an agent of an employer, the state or any agency or instrumentality of the state, and any municipal corporation, county, township, school district, or other political subdivision or any agency or instrumentality thereof.

b.    REQUIRES THAT EMPLOYEE REPORT TO EMPLOYER FIRST, BEFORE GOING “OUTSIDE” OF THE ORGANIZATION: If an employee becomes aware…of a violation of any state or federal statute or any ordinance or regulation… and the employee reasonably believes that the violation is a criminal offense that is likely to cause an imminent risk of physical harm to persons or a hazard to public health or safety, a felony, or an improper solicitation for a contribution, the employee orally shall notify the employee’s supervisor or other responsible officer…of the violation and subsequently shall file…a written report. If the employer does not correct the violation or make a reasonable and good faith effort to correct the violation within twenty-four hours…the employee may file a written report with the prosecuting authority…  & An employee shall make a reasonable and good faith effort to determine the accuracy of any information reported under division (A)(1) or (2) of this section. If the employee who makes a report under either division fails to make such an effort, the employee may be subject to disciplinary action by the employee’s employer

c.    EMPLOYEE MUST SUE EMPLOYER FOR LOSS DUE TO RETALIATION: If an employer takes any disciplinary or retaliatory action against an employee as a result of the employee’s having filed a report under division (A) of this section, the employee may bring a civil action for…reinstatement of the employee to the same position that the employee held at the time of the disciplinary or retaliatory action and at the same site of employment or to a comparable position at that site, the payment of back wages, full reinstatement of fringe benefits and seniority rights, or any combination of these remedies. The court also may award the prevailing party all or a portion of the costs of litigation

as businesspeople move into middle management and beyond, higher-order needs tend to become more important. Needs or goals may change as a person progresses through the company. After basic needs such as food, working conditions (existence needs), and survival are satisfied, relatedness needs and growth needs become important. Relatedness needs are satisfied by social and interpersonal relationships, and growth needs are satisfied by creative or productive activities.

Basic needs = survival

Job/ job security

Food

 Shelter

Relatedness needs = social and interpersonal relationships

With coworkers

With management

Growth needs = creative and/or productive activities

Promotions

New responsibilities

New projects

CENTRALIZED ORGANIZATION:

—  Employees may follow the letter of the law and not the spirit of the law (No bribes vs. donation to kid’s school)

—  Unethical activity may go undetected due to lack of upward communication.

—   Specialization and the division of labor may lead to lack of connectedness (you look at how your decision effects only you, not other departments)

DECENTRALIZED ORAGANIZATION:

—  May not respond quickly to new policies and procedures established by top management

—  Individual profit centers may deviate from organizational objectives

—  May look no further than the local community for their ethical standards (NIMBY)

Committees- a formal group of individuals assigned a specific task

·         Committees meet on an ongoing basis

·         Their decisions are legitimized b/c of majority rule

·         They generally take longer to make decisions and their decisions tend to be more conservative

·         Members of the group may not be willing to take responsibility for group decisions

Work Groups-subdivide duties within specific functional areas of a company

·   Examples: one work group might be responsible for interior design elements of a car while another work group is responsible for dashboard instruments

—   Teams- bring together several different areas of an organization for a single project (example: create a new product)

Ethical conflicts may arise since members of the team come from different areas of the organization

·   Significant differences exist in the values and philosophies that influence how the individuals that comprise organizations make ethical decisions

·   People interpret situations differently and therefore will vary in their response to the same ethical issue

·         10% follow own values

·         40% always try to follow company policy

·         40% go along with work group

·         10% take advantage of situations based on cost/benefit analysis

The actual % is irrelevant, what is important is that a large percentage of a work group will either take advantage of a situation or go along with the work group – therefore it is vital that organizations provide communication and control mechanisms to maintain an ethical culture

corporate factors have a greater influence; sometimes an employee’s own personal ethical standards conflict with what is expected of him or her as a member of an organization and its corporate culture.  This is especially true given than an organization’s ethical decisions are often resolved by committees, formal groups, and informal groups rather than by individuals.  When such ethical conflict is severe, the individual may have to decide whether to leave the organization.