copyright © 2013 pearson education, inc., publishing as prentice hall2-1 managing behavior in...

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 2-1

Managing Behavior In Organizations

Sixth Edition

Jerald Greenberg

Organizational Justice, Ethics, and Corporate Social Responsibility

Chapter Two

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall2-32-3

Learning Objectives

• IDENTIFY the different forms of organizational justice

• DESCRIBE the relationships between perceived managerial controls and the form of justice monitoring that occurs

• EXPLAIN what is meant by ethical behavior and why organizations should be concerned about ethics

• DESCRIBE the individual and situational factors responsible for unethical behavior in organizations and methods for minimizing such behavior

• COMPARE ethical relativism and ethical imperialism as orientations to ethics in the international arena

• EXPLAIN what is meant by corporate social responsibility and the nature of the relationship between responsible behavior and financial profitability

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall2-4


Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall

Three Good Reasons Why You Should Care About . . . Justice, Ethics, CSR

1. Treating employees unfairly adversely affects work attitudes and behaviors.

2. The public is growing increasingly intolerant of unethical corporate behavior, but managers can take steps to promote ethical behavior in organizations.

3. Consumers and investors tend to support socially responsible companies, enhancing the companies’ financial performance.




Organizational Justice

• Organizational justice - the study of people’s perceptions of fairness in organizations




Forms of Organizational Justice

1. Distributive justice - the form of organizational justice that focuses on people’s beliefs that they have received fair amounts of valued work-related outcomes

2. Procedural justice - people’s perceptions of the fairness of the procedures used to determine the outcomes they receive Fair process effect

3. Interactional justice consists of Interpersonal justice - people’s perceptions of the fairness

of the manner in which they are treated by other people Informational justice - people’s perceptions of the fairness

of the information used as the basis for making a decision




Assessing Fairness…

• Fairness monitoring - the practice of gathering and processing information in an effort to figure out how fairly people are treated in their organizations




Assessing Fairness…

Managerial controls - the processes that managers use to communicate and monitor the performance of their subordinates to ensure that they are behaving as expectedMarket controlsBureaucratic controlsClan controls

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 2-9Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 2-9Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall

Promoting Organizational Justice

• Pay workers what they deserve• Offer workers a voice• Openly follow fair procedures• Explain decisions thoroughly in a manner

demonstrating dignity and respect• Train workers to be fair




Ethical Behavior in Organizations

• Surveys show that today, managers are • more likely to keep their promises• less likely to engage in misconduct• less likely to feel pressure to be unethical• believe that more attention is paid to

practicing honesty and respect for others




Ethical Behavior in Organizations

• Different orientations:• The prescriptive orientation - approach

favored by philosophers• What is ethical?

• The descriptive orientation - approach favored by social scientists • How do people try to be ethical?• How do people respond to unethical behavior?




Prescriptive Approach to Ethics

• Utilitarianism - an action is considered ethical to the extent that it maximizes happiness among stakeholders

• Natural rights approach - all people are entitled to rights for life, liberty, and property




Descriptive Approach to Ethics

• Moral values - people’s fundamental beliefs about what is right or wrong, good, or bad

• Ethics - standards of conduct that guide people’s decisions and behavior




Why Ethics Matters

• Good ethics is good business• Improved financial performance• Reduced operating costs• Enhanced corporate reputation• Increased ability to attract and retain

employees




Why Ethics Matters

• Legal regulations• Federal Sentencing Guidelines for

Organizations - provides guidelines for federal judges to follow when imposing penalties on organizations

• Sarbanes-Oxley Act - holds senior company officials personally accountable for their companies’ accounting practices and reports




Reasons for Unethical Behavior

• Individual differences in cognitive moral development• Situational determinants of unethical behavior

• Some managerial values undermine integrity.• Bottom line mentality - financial success is the only value

to be considered• Exploitative mentality - use people in a way that promotes

stereotypes and undermines empathy and compassion• Madison Avenue mentality - anything is right if the public

can be made to see it as right• Organizations may encourage behavior that violates ethical

standards.• Stonewalling• Counternorms

• Workers emulate the unethical behavior of their superiors.




Kohlberg’s Theory of Moral Development

Level One: Preconventional Level: What’s right is whatever avoids getting punished

Level Two: Conventional Level: What’s right is whatever fulfills obligations to society

Level Three: Postconventional Level: What’s right is determined by universal moral principle

(e.g. human rights)




Ethical Norms and Counternorms

Ethical Norms vs. Organizational Countermorms

Be open and honest vs. Be secretive deceitful

Follow the rules at all costs vs. Do whatever it takes to get the job done

Be cost-effective vs. Use it or lose it

Take Responsibility vs. Pass the buck

Be a team player vs. Take credit for your own actions: grandstand




Corporate Ethics Programs

• Corporate ethics program - formal, systematic mechanisms designed to promote ethics by creating organizational cultures that both make people sensitive to potentially unethical behaviors and discourage them from engaging in them

• Components• A code of ethics• Ethics training• Ethics audits• An ethics committee• An ethics officer• A mechanism for communicating ethical standards




Conducting an Ethics AuditA thorough ethics audit can reveal a great deal about a company’s commitment to ethics and the extent to which its

efforts to foster ethical behavior are effective. However, to recognize these benefits, it is crucial to conduct an ethics audit in an appropriate manner. The following guidelines will help.

1. Ensure that top executives, such as the CEO, are committed to the ethics audit and appoint a committee to guide it.

2. Create a diverse team of employees to write questions regarding the company’s ethical performance. These should focus on existing practices (e.g. codes of ethics) as well as prevailing norms about company practices (e.g. billing clients for services not actually performed).

3. Carefully analyze official documents, such as ethical mission statements and codes of ethics, to see how clear and thorough they are.

4. Ask people questions about why they think various unethical behaviors have occurred.

5. Compare your company’s ethical practices to those of other companies in the same industry.

6. Write a formal report summarizing these findings and present it to all concerned parties.




Ethics in the International Arena

Two approaches:– Ethical relativism - adopt the ethics of

whatever country in which one does business

– Ethical imperialism - do everywhere what is considered right at home




Guiding Principles of Global Ethics

Show respect for core human values Demonstrate sensitivity to local traditions Recognize that context matters when

distinguishing between right and wrong




Corporate Social Responsibility

Organizations have four fundamental responsibilities known as the pyramid of corporate social responsibility.

1. Economic

2. Legal

3. Ethical

4. Philanthropic


2-24

Copyright © 2013 Pearson Education, Inc., publishing as Prentice HallCopyright © 2013 Pearson Education, Inc., publishing as Prentice Hall


Philanthropic Responsibilities- Contributing to and helping society at large

Ethical Responsibilities- Doing what is right and good for everyone

Legal Responsibilities- Following the laws of society

Financial Responsibilities- Making a profit for stockholders





Corporate social responsibility - business practices that adhere to ethical values that comply with legal requirements, demonstrate respect for individuals, and promote the betterment of the community at large and the environment





Forms of corporate social responsibility: Helping the community by making charitable

contributions Promoting environmental sustainability Socially responsible investing Promoting the welfare of employees




The Virtuous Circle

Companies make money because they are highly socially responsible (i.e. they do well by doing good)

↓

Companies can afford to be very socially responsible because they have made a lot of money (i.e. they do good by doing well)

copyright © 2013 pearson education, inc., publishing as prentice hall2-1 managing behavior in...

Documents

pearson education

form of justice

prentice hall2

interactional justice

distributive justice

form of organizational

responsible behavior

fairness fairness monitoring