BUS608: Ethical and Strategic Management

A critical function of organizational management is empowering a positive sense of values and ethos at the individual level.

Learning Objectives

Understand the interaction between individual ethics and organizational management

Key Takeaways

Key Points

• An important aspect of organizational strategy and management is empowering a strong sense of ethics at the individual level.
• Organizations should internally develop a code of conduct and/or ethics statement, provide ethics training, appoint ethics officers, and ensure there is an anonymous way to report ethical problems.
• Providing intrinsic and extrinsic sources of motivation for individual employees to behave ethically reinforces positive ethical behavior.
• Hiring and developing employees who have a strong sense of individual professionalism will ensure best practices are achieved from an ethical point of view.
  

Key Terms

• extrinsic: Outside of; not belong to the thing itself.
• Intrinsic: An aspect possessed by character; internal.

The Importance of Ethics

Ethical behavior, be it at the organizational, professional or individual level, is a direct representation of the principles and values that govern the individual and the organization they represent. Organizations create an internal culture, which is reflected externally as organizational values. These values impact the relationships within the organization, productivity, reputation, employee morale and retention, legalities, and the broader community in which they operate.

As a result, most organizations generate a statement of organizational values and codes of conduct for all employees to understand and adhere to. Motivating and reinforcing positive behavior while creating an environment that avoids unethical behavior is a critical responsibility of both managers and employees.

How To Empower Ethics

Structure

At the individual level, organizations must focus on developing and empowering each employee to understand and adhere to ethical standards. There are four basic elements organizations can build to empower individual ethics:

• A written code of ethical standards (ethical code)
• Training for management and employees (ethical training)
• Advice and consulting on a situation to situation basis (ethics officers)
• A confidential and easily accessible system of reporting (ethical reporting)
  

Equipping organizations with these four components can alleviate much of the burden on the individual, and enable each employee to learn what is appropriate (and what isn't).

Motivation

As with most facets of management, there is also a critical motivational component to individual ethics. Intrinsic and extrinsic motivations can reinforce positive behavior and/or eliminate negative behavior in the workplace.

Whistleblowing, for example, is a practice that gets quite a bit of both positive and negative media attention. Whistleblowers are individuals who identify unethical practices in organizations and report the behavior to management or the authorities. A whistleblower who behaves honestly, reporting a problem accurately, should be rewarded for their bravery and honesty, as opposed to punished and ostracized. If an employee is blowing the whistle, it is likely that the organization itself has failed to empower and positively reinforce honest and ethical discussions internally.

Another example is rewarding employees for admitting mistakes. An employee who makes a mistake on the assembly line, and accidentally produces a batch of defective goods, could react in a number of ways. If the organization punishes employees for mistakes, the employee is quite likely to be motivated to keep quiet and not mention it to avoid punishment. However, if the organizational is ethical and clever, they will empower employees to take responsibility for their mistakes and even reward them for coming forward, apologizing, and ensuring that no consumer receives a defective product. It seems at first counter-intuitive to reward an employee for a mistake, but ultimately it provides the best outcome for everyone.

Professionalism

Finally, some aspects of individual ethics are rooted in the individual. Attaining a strong sense of professionalism, and recognizing the ethical implications of certain professional decisions, is a key component of education, individual reflection, and experience. For some professions it is even more critical and relevant than others.

Journalists, for example, could easily attain higher notoriety for making up false stories about celebrities to gain traffic to their news website. But an ethical journalist recognizes the repercussions of slander for the individual being discussed, and maintains an honest ethical code of reporting only what they know to be true (and not what they speculate). Psychologists will maintain patient privacy, understanding the repercussions of leaking personal information about their patients.

There are many potential examples, but the primary point is that professionals understand the their field deeply, including the repercussions of making ethical mistakes.

Triple Bottom Line: Balancing ethics with proper business practices at the individual and organizational level can result in a triple bottom line: economic, social, and environmental value.

Source: Lumen Learning, https://www.coursehero.com/study-guides/boundless-business/business-ethics/
This work is licensed under a Creative Commons Attribution 4.0 License.