JANE DIAZ

MR. PAJO

BS-IM

ITETHICS

BOOKREVIEW #7

BUSINESS ETHICS: ETHICAL DECISION MAKING AND CASE

3RD Edition by: Ferrell and Fraedrich

HF5387

Chapter VI – HOW THE ORGANIZATION INFLUENCES ETHICAL DECISION MAKING

“Decisions are to some extent legitimizes because of agreement or majority rule.”

In a centralized organization, decision making authority is concentrated in the

hands of top managers, and little authority is delegated to lower levels of the

organization. Ethical issues associated with centralized organizations relate to

scapegoat and lack of upward communication. In a decentralized organization, decision

making authority is delegated as far down chain of command as possible. Research has

shown that centralized organizations tend to be more ethical in their behavior than

decentralized organizations because centralized organizations enforced more rigid

control such as code of ethics and corporate policies on ethical practices. However, this

does not hold true if the centralized organization is inherently corrupt.

Organizations are much than structures in which we work. Although they are not

alive, we attribute human characteristics to them. When times are good, we say the

company is well; when times are not so good, we may try to save the company.

Understandably, people have feelings toward the place that provides them with income

and benefits, challenge satisfaction, self esteem and often lifelong friendships.

Although many organizations have financial, problem-solving, personnel or social

responsibility committees, only a very few organizations have committees devoted

exclusively to ethics. An ethics committee might raise ethical concerns, resolve ethical

dilemmas in the organization, and create or update the company’s code of ethics. Ethics

committees can be misused if they are established for the purpose of legitimizing

management’s ethical standards on some issue. In such cases ethics committees may

be quickly assembled for political purposes, to make a decision on some event that has

occurred within the company.

It is also possible for ethics committee members to fail o understand their role or

function. If members of ethics committees attempt to apply their own personal ethics to

complex business issues, resolving ethical issues may be difficult. Since most people

differs their personal ethical perspectives, the committee may experience conflicts. Even

if the committee members reach a consensus, they may enforce their personnel beliefs

rather than the organization’s standards on certain ethical issues.

Chapter VIII – THE ROLEOF OPPURTUNITY ANS CONFLICT

“The relationships in a business are based on trust and responsible behavior.”

Research has found that employees' perceptions of fairness are equally or more

important than other factors in terms of their influence on ethics-related outcomes. Fair

treatment is so important because employees who perceive unfair treatment will

rebalance the scales of justice by harming the organization. Employees who perceive

fair treatment, on the other hand, will reciprocate by going above and beyond the call of

duty to help management .To ensure that employees feel they are treated fairly, it is

important to design HR systems and interventions with perceived fairness as a key goal,

with an emphasis on procedural and interaction fairness. Employees' perceptions of fair

treatment should be monitored regularly via employee surveys, and changes should be

made based upon the results.

It is also important for HR managers to work with the ethics/compliance office to

follow up on employees' ethics concerns because a large percentage of reported

concerns are fairness and therefore HR system-related. Most employees equate ethics

and fairness; for them, there is no bright line between the ethics and HR offices. Ethical

leadership is vital to creating an ethical workforce. It is a myth that employees are fully

formed moral agents who can 'lead themselves' when it comes to ethics. Research

indicates that most employees look outside themselves to significant others for guidance

in ethical dilemma situations. If this leadership and guidance is not provided by the

leader of the organization, employees will seek it elsewhere, most likely from their peers.

Conflicts occurs when there is a question as to which goals or values take precedence in

a situation, those of the individual, the organization, or society. Personal organization

conflict arises when an individual’s philosophies or methods for reaching a desired goal

differ from those of the organization.

Chapter IV – SOCIAL RESPONSIBILITY

“Business ethics and social responsibility are thus closely linked.”

Self image is constructed by us over time under the eyes of others in the context

of group or cultural norms that we accept or reject. In shame we feel like hiding or

avoiding. A normal or situational sense of shame is a kind of moral compass to help us

monitor the ethics of our behavior. The feeling of shame need not be an all or nothing

matter. We may experience degrees of shame, because persons are not perfect and in

order to be a healthy emotion, shame should not persist indefinitely or be universalized

by us to make us ashamed of all our behavior. A closer look at the sample results

reveals that there are also similarities between company policies across these industries

in Europe and the U.S. All but two of the companies analyzed have publicized codes of

conduct and conflict of interest guidelines in place for employees to read and sign.

Companies on both sides of the Atlantic have room for improvement in CSR as

only a third of the businesses take CSR seriously enough to make it a corporate

objective. The slowest to adopt CSR policies is the aerospace and defense industry.

Technology companies show the greatest commitment to CSR in both Europe and the

U.S. A 2003 survey by Globes scan Inc., shows that the general public agrees

technology companies are leading other industries in CSR efforts. Corporate

responsibility refers to fulfilling the responsibilities or obligations that a company has

toward its stakeholders. When examining a particular corporate practice, like profit

versus environmental protection, corporate responsibility can help distinguish between a

stakeholder expectation and a corporate obligation.