Managerial Ethics

What is Ethics?
Criteria for Ethical Decision Making
Social Responsibility
Corporate Actions Toward Social
Demands
Code of Ethics

Ethics
The code of moral principles and values that
govern the behaviors of a person or group
with respect to what is right or wrong.
Lies between the domains of codified law
and free choice
Based on shared principles and values
Disagreements and dilemmas about proper
behavior often occur.

Three Domains of Human

Action
Domain of
Codified Law

Domain of
Ethics

Domain of
Free Choice

(Legal Standard)

(Social Standard)

(Personal Standard)

Amount of
High

Explicit Control

Low

Ethical Dilemma
A situation that arises when all
alternative choices or behaviors have
been deemed undesirable because of
potentially negative ethical
consequences, making it difficult to
distinguish right from wrong.

Criteria for Ethical

Decision Making
Utilitarian Approach
Individualism Approach
Moral-Rights Approach
Justice Approach

Utilitarian Approach
Moral behaviors produce the greatest
good for the greatest number.

Individualism Approach
Acts are moral when they promote
the individual's best long-term
interests.

Moral-Rights Approach
Human beings have fundamental
rights that cannot be taken away by
an individual's decision.
1. Free consent
2. Privacy
3. Conscience
4. Free speech
5. Due process
6. Life and safety.

Justice Approach
Standards of equity, fairness, and
impartiality.
Distributive Justice
Procedural Justice
Compensatory Justice

Social Responsibility
Management's obligation to make
choices and take actions that will
contribute to the welfare and interests
of society as well as to the welfare and
interests of the organization
Being a good corporate citizen.
4 criteria: economic, legal, ethical,
discretionary.

Economic Responsibilities
Be Profitable

Legal Responsibilities
Obey the Law

Ethical Responsibilities
Do What is Right

Contribute to Quality of
Life

Corporate Actions Toward

Social Demands
Obstructive
Defensive
Accommodative
Proactive

Obstructive
Fight All the Way

Do Only What is Legally

Required

Accept Ethical
Responsibility

Proactive
Take Social Initiatives

Code of Ethics
A formal statement of the company's
values concerning ethics and social
issues.