Ethical Climate

Organizational ethical climate refers to the moral atmosphere of the work environment and the level of ethics practiced within a company. Instrumental, caring, law and order, rules, and independence are the five types of climates that can exist in an organization. Incivility, harassment, aggression, and discrimination can all produce an unethical and hostile work environment, which can create dissatisfied employees, while a positive ethical environment can make employees more productive and even happier.

Instrumental

Instrumental ethical climate means managing via ethical egotism. make selfish decisions weather benefit either the company or even personally. This type of ethical climate has the highest amount of immoral and unethical business behavior due to self-interest being the driving factor in decision-making. Instrumental often ignore the needs of others

Caring

Caring climates emphasize concern or care for others. This include concerned about employees' well-being and offers support in career development and other opportunities. This second type of ethical climate is based on excellent leadership, fairness, and goodness. Employees can thrive in this ethical type of environment as there is usually excellent communication between subordinates and superiors. One negative to a caring climate is that rules can be overlooked to help out employees or friends.

Law and Order

A law and order climate is when precise codes of conduct are followed. This type of climate relies on the laws from outside sources, like actual state or federal laws. Conservative types of companies usually cultivate this type of ethical climate because they fear legal ramifications if they do not follow numerous codes. This type of climate can tend to ignore employee issues and only be concerned about specific codes.

Rules

The next type is very similar to law and order. The rules type of ethical climate is concerned with following rules, procedures, and policies established by the organization. In comparison to the laws climate, which depends on actual outside real laws, a rules climate relies on internal professional codes or policies. Employees and managers understand that varying from the rules could cost them their job. This can stifle creativity and can also ignore legitimate issues that employees may face. In addition, problems might not be solved because certain individuals are afraid to bend the rules even slightly.

Independence

The last type of ethical climate is the polar opposite of a rules climate. Which An ethical climate that promotes independence gives employees wide latitude to make decisions. This can cause great success because employees are able to think outside the box for problem-solving, especially if they are given the skills and information needed. Bend rules often.

Criteria for Ethical Decision Making

Managers faced with tough ethical choices often benefit from a normative strategy based on norms and values to guide their decision making. Normative ethics is based on norms and values. Six approaches are relevant for managers in making ethical decisions.

A. Utilitarian Approach 

1. The utilitarian approach holds that moral behavior produces the greatest good for the greatest number. The decision maker is expected to consider the effect of each decision alternative on all parties and select the one that will optimize satisfaction for the greatest number of people.

B. Individualism Approach

1. The individualism approach contends that acts are moral when they promote the individual’s best long-term interests. Individualism is believed to lead to honesty and integrity because that works best in the long run. Because individualism is easily is interpreted to support immediate self-gain, it is not popular in the highly organized and group-oriented society of today.

C. Moral Rights Approach

1. The moral-rights approach asserts that human beings have fundamental rights that cannot be taken away by an individual’s decision. An ethically correct decision is one that best maintains the rights of those people affected by it. To make ethical decisions, managers need to avoid interfering with the fundamental rights of others, such as the right to privacy, the right of free consent, or the right to freedom of speech.

D. Justice Approach

1. The justice approach holds that moral decisions must be based on standards of equity, fairness, and impartiality. Three types of justice are of concern to managers.

a. Distributive justice requires that different treatment of people not be based on arbitrary characteristics. Men and women should not receive different salaries if they are performing the same job; however, people who differ in a substantive way can be treated differently.

b. Procedural justice requires that rules be administered fairly. Rules should be clearly stated and be consistently and impartially enforced.

c. Compensatory justice argues that the party responsible should compensate individuals for the cost of their injuries. Individuals should not be held responsible for matters over which they have no control.

E. Virtue Ethics Approach

1. The virtue ethics approach says that moral behavior stems from personal virtues. If a manager develops good character traits, such as compassion, generosity, or courage, and learns to overcome negative traits such as greed or anger, he or she will make ethical decisions naturally as a result of being a virtuous person. According to virtue ethics, managers can develop not only their ability to do the right thing, but also their motivation to do right rather than wrong.

F. Practical Approach

1. The practical approach sidesteps debates about what is right, good, or just and bases decisions on prevailing standards of the profession and the larger society, taking the interests of all stakeholders into account. A decision would be considered ethical if it is one that would be considered acceptable by the professional community, one the manager would not hesitate to publish on the evening news, and one that a person would typically feel comfortable explaining to family and friends.

Code of Ethics

Code of ethics are voluntary statements that commit organizations, industries, or professions to specific beliefs, values, and actions and/or that set out appropriate ethical behavior for employees.

There are four main type of ethical codes:-

1. Organizational or corporate codes of ethics- these are specific to a single organization. Basically these codes seek to identify and encourage ethical behaviour at the level of the individual organization.
2. Professional Codes of Ethics – Traditional professional groups such as doctors, lawyers and accountant have their own guidelines for their members. However this is increasingly common for other professions such as marketing or engineers to have their own conduct.
3. Industry Code of Ethics- particular industries also sometimes have their own codes of ethics. For example, in 2005 the electronic industry released its code of conduct to ensure the working environment is safe to work, workers are treated with respect and dignity and the manufacturing process are environmentally responsible. This code was developed by a number companies together including Dell, Hewlett, IBM.
4. Programme or Group codes of ethics:- This are code of ethics established by certain programmers, or other sub-grouping of organization participating in specific programmers. For example the usage of a certain label or trademark.

Strengths & Weaknesses of the Three Ethical Approaches to Managerial Behaviour

1. Utilitarian Approach.

Strengths

• Encourages efficiency and productivity.

• Consistent with profit maximization; is easiest for managers to understand.

• Encourages looking beyond the individual to assess impact of decision on all who might be affected.

Weaknesses

• Virtually impossible to quantify all the important variables.

• Can result in bias allocation of resources, particularly when some who are affected lack representation or voice.

• Can result in ignoring rights of some whoa are affected, to achieve utilitarian outcomes.

2. Moral Rights Approach

Strengths

• Protects the individual from injury; consistent with rights to freedom and privacy

• Consistent with accepted standards of social behaviour, independent of outcomes.

Weaknesses

• Can imply individualistic selfish behaviour, if misinterpreted may result in anarchy.

• Can foster personal liberties that may create obstacles to productivity and efficiency.

3. Justice Approach

Strengths

• Attempts to allocate resources and costs fairly

• Is the democratic approach

• Protects the interest of those affected who may be underrepresented or lack power

Weaknesses

• Can encourage a sense of entitlement that reduces risk, innovation and productivity.

• Can result in reducing rights of some in order to accommodate rules of justice.

Professional Ethics Introduction

THE MEANING OF ETHICS

• Ethics have been generally defined as the principles of morally acceptable conduct of individuals.

• Ethics can generally be defined as an individual’s personal belief about right and wrong behaviour.

• Merriam Webster defines ethics as “ the embodiment of those values that the person or organization feels are important….., and spell our proper conduct and appropriate action. ..”

• The importance of ethics is that for the well-being of the individual officers and directors, as well as the employees.

THE MEANING OF PROFESSIONAL ETHICS

• Professional ethics designates the moral value that a group trained people develop to control their performance of a task or their resources.

• People internalize the rule and values of their professional culture just as they do those of their society.

• The reflexivity adhere professional rules and values when deciding how to behave.

• Some organization have many groups of professional employees – nurses, lawyers, researches, doctors and accountants – whose behaviour is governed by professional ethics.

• Professional ethics helps shape the organization’s culture and determine the values its members use in their dealings with other stakeholders.

• Most professional groups are allowed to enforce the ethical standards of their profession.