corporate responsibility is the issue of: The rightness or wrongness of the decision or of an act Or whether a decision or an act is what ought to be done or decided upon or not. 2. When we hear about unscrupulous behaviors, like the financial wrong doing at Enron, WorldCom and many others: We may confirm the belief that business has no ethics, though not true That managers will always face ethical issues and dilemmas. 3. Such issue may take the form of for example whether; among others: It is ethical for a sales representative to bribe a purchasing agent as inducement to buy. 4. As managers plan, organize, lead and control they must consider ethical dimensions of their decisions and actuations. 5. The term ethics refer to the principles, values and beliefs that define what is right or wrong behavior. 1. The place of the person in the Six Stages of three levels of Moral Development (Kohlberg, 1976) Pre-conventional Level: at this level the persons choice of what is right or wrong is based on personal consequences involved, such as physical punishment, reward, favours. Conventional Level: moral values reside in maintaining expected standards and living up to expectation of others. Principle Level: individual makes a clear effort to define moral principles regardless of authority or society where they belong. 2. Individual Characteristics of: Ego-strength: a personality measure of the strength of his/her conviction. Person with high ego strength would be more consistent in moral judgments and actions. Locus of control: a personality that reflects the degree to which people believe they control their own fate. External locus of control people believing that what happens to them is due to fate or luck, is less likely to take responsibility for the consequences of their behavior. Internal locus people take such responsibility as they have their own internal standards of right or wrong. 3. Structural Variables: Work designs that minimize work ambiguity or uncertainty through formal rules. Use of goals Performance appraisal systems depending on focus on outcomes vs. process. Rewards: the more rewards depend on specific outcome the more possibility of compromising ethical standards. 4. Organizational Culture: Most likely to shape high ethical standards is one that is high in risk tolerance, control and conflict tolerance. That is strong, influences employee behavior than weak ones. Example: high ethical standards which are highly observed have power to influence people to behave ethically. 5. Issue Intensity 1. Employee selection that hire individuals with high standards, looking into: Levels of moral development Personal values Ego strength Locus of control 2. Code of Ethics, a popular choice of reducing ambiguity as it defines shared values, such as honesty, responsibility and caring 3. Top management leadership by: Being role models in upholding shared values. Setting cultural tone by reward and punishment practices. 4. Job goals and performance appraisals
5. Ethics Training
6. Independent Social Audits is a way to
evaluate decision and management practices in terms of codes of ethics. 7. Formal Protective Mechanism by provision of: Ethics officer Special appeal process that employees could use to raise ethical issue 1. Putting own interest ahead of organization (22%) 2. Abusive Behavior (21%)