Ethical Considerations in

Management Philosophy
Juvelyn Ladesma- Hayag
Presentor
Sub-topics
• Overview of Management Ethics
• Reasons why Sound Ethics is critical in Management
• Ethical issues Managers face
• Ethical Issues CEO’s face
• Three (3) models of Management Morality
Management or Managerial Ethics
- deals with the situations managers face in
their work lives that are imbued with ethical
content.
- a component of corporate social
responsibility (CSR)
1. be profitable,
2. obey the law
3. engage in ethical practices
4. be philanthropic, or be a good corporate
citizen
Why should managers be ethical?
- to maintain their legitimacy as agents in society.

- (in a moral philosophy perspective), it is the right

thing to do.
Reasons why Sound Ethics is critical in Management
Rushworth Kidder (1997)

 Shared values build trust.

 Confidence in such rewards builds loyalty.

 Companies are as good as their people.

 Consumers care about values.

 Shareholders also care about values.

 Ethical leadership forestalls oppressive regulation.

 Effective partnerships depend on common values.

 Ethics is a form of insurance.

CATEGORIES OF JUSTIFICATION

1. Society and stakeholders expect managers to do what is

right, fair and just.

2. It is in organizations' and managers' best interests to be

ethical.
 Ethical Issues Managers face
Ethical issue is a problem, situation or
opportunity requiring an individual or
organization to choose among several
actions that must be evaluated as right or
wrong, ethical or unethical (Ferreil and
Fraedrich).
The Conference Board, the following constitute
ethical issues for managers:
 employee conflicts of interest,
 inappropriate gifts,
 sexual harassment,
 unauthorized payments,
 affirmative action,
 employee privacy, and
 environmental issues
Ethical Issues CEO’s face
In this same report, CEOs reported specific topics which
constituted ethical issues for them, which were categorized as
follows:

 Equity

 Rights

 Honesty

 Exercise of Corporate Power

 Models of Management
Morality (Carroll 1987)
 Immoral Management
 Moral Management
 Amoral Management
Immoral Management
 a style that is devoid of ethical principles or precepts
 management’s goals are purely selfish or focused only on profitability and organizational
success
 Immoral management regards the law or legal standards as impediments it must overcome
to accomplish what it wants.
 operating strategy of immoral management is to exploit opportunities for organizational or
personal gain.

Example: taking kickbacks from suppliers, embezzling corporate funds, exaggerating

earnings, and providing prostitutes to customers.
Moral Management
 conforms to high standards of ethical behavior and professional standards of conduct.
 aspires to succeed but only within the confines of sound ethical precepts -
 would not pursue profits at the expense of the law and sound ethics.
 Embraces “integrity strategy”, which is characterized by a conception of ethics as the driving force
of an organization.
Example: Merck and Co. the pharmaceutical firm, invested millions of dollars to develop a treatment for
river blindness, a third world disease affecting almost 18 million people. Seeing that no government or
aid organization was agreeing to buy the drug, Merck and Co. pledged to supply the drug free forever.
 Amoral Management
Two kinds of Amoral Managers
1. Unintentional - neither immoral nor moral but are not sensitive to or
aware of the fact that their everyday business decisions may have
deleterious effects on other stakeholders.
2. Intentional – managers simply believe that ethical considerations are
for private lives, not for business.
Amoral Management
.
Example: Requiring high school diplomas as screening devices for many jobs. It
later become apparent the minority groups were adversely impacted by this
policy and therefore, was unintentionally unfair to many of them who otherwise
would have qualified for the job.
Example: liquor, beer and cigarette industries - Though it is legal to sell their
products, they did not anticipate that their products would create serious moral
issues: alcoholism, drunk driving deaths, lung cancer, deteriorating health, and
offensive secondary smoke.
 Key Takeaway
Ethics form a cornerstone of effective and
sustainable management practices. It builds
trust and reputation, improves employee
morale and motivation and contributes to
long-term sustainability of the organization.
 Thank you!
References:
Carroll A. (2007). Ethics in Management.
Berenbeim. R. E. 1987 : Corporate
Ethics. N'ew York: The Conference
Board.