ETIKA 3 Corporate Ethics [Compatibility Mode].
Corporate Ethics
Presented By:
Ratna Candra Sari
email: [email protected]
[email protected]
Business Ethics: What Does It
Really Mean?
Definitions
Ethics involves a discipline that examines
good or bad practices within the context of a
moral duty
Moral conduct is behavior that is right or
wrong
Business ethics include practices and
behaviors that are good or bad
[email protected]
Business Ethics: What Does It Really
Mean?
Business Ethics:Today vs. Earlier Period
Society’s
Expectations
of Business
Ethics
Ethical
Problem
Actual
Business
Ethics
Ethical Problem
1950s
Time
[email protected]
Early 2000s
Why ethical problems occur in business
Reason
Personal gain
and selfish
interest
Competitive
pressures on
profits
Business goals
versus personal
values
Cross-cultural
contradictions
Nature of
ethical
problem
Selfish interest
versus others'
interests
Firm's interest
versus others'
interests
Typical
approach
Egoistical
mentality
Bottom-line
mentality
Boss's interests Authoritarian
versus
mentality
subordinates’
values
Company's
Ethnocentric
interests versus
mentality
diverse cultural
traditions and
values
[email protected]
Attitude
"I want it!"
"W e have to
beat the
others at all
costs!"
"Do as I say,
or else!"
"Foreigners
have a funny
notion of
what's right
and wrong."
Why should business be ethical?
• Fulfill public expectation for business.
• Prevent harming others.
• Seek profitability.
• Improve business relations and employee productivity.
• Reduce penalties.
• Protect business from others.
• Protect employees from their employers.
• Promote personal morality.
[email protected]
Factors Influencing Ethical Behavior
Have an
ethical day!
Leadership
Corporate
Culture
Strategy and Performance
[email protected]
Individual
Characteristics
Sources of Ethical Norms
Fellow Workers
Fellow Workers
Family
Regions of
Country
Profession
The Individual
Conscience
Friends
The Law
Employer
Religious
Beliefs
[email protected]
Society at Large
Figure 1-2
Relations between a business firm and its
primary stakeholders
Employees
(Unions)
Wholesalers
(Retailers)
Distribute
products
Buy
products
Customers
Stockholders
Sell
labor
Business
firm
(Managers)
Sell
materials
[email protected]
Invest
capital
Lend
money
Suppliers
Creditors
Figure 1-3
Relations between a business firm and some of
its other (secondary) stakeholders
The
General
Public
Business
Support
Groups
Local
Communities
Positive,
negative
opinion
Advice,
research
Media
Jobs,
environment
Regulation,
taxes
Business
Firm
Image,
publicity
Federal,
State
and Local
Governments
(Managers)
Social
demands
[email protected]
Foreign
Friendly, Governments
hostile
Social
Activist
Groups
Developing Moral Judgment
[email protected]
6-22
A g e g ro u p
D ev elo p m en t sta g e a n d
B a sis o f eth ics
Stages of
moral
development
m a jo r eth ics referen t
rea soand
n in g
M atu re ad u lth o od S ta gethical
e 6 U n iv ersalreasoning
p rin cip les:
P rin cip le-centered
Ju stice, fairn ess, u n iv ersal
reaso n in g
h u m an rig h ts
M atu re ad u lth o od S ta g e 5 M o ral beliefs ab o v e
an d b ey o n d sp ecific so cial
cu sto m : H u m an rig h ts, so cial
co n tract, b ro ad co n stitu tio nal
p rin cip les
A d u lth o o d
S ta g e 4 S o ciety at larg e:
C u sto m s, trad itio n s, law s
E arly ad u lth o o d ,
ad o lescen ce
A d o lescen ce,
y o u th
C h ild h o o d
S ta g e 3 S o cial g ro u p s: F rien d s,
sch o o l, co w o rk ers, fam ily
P rin cip le-centered
reaso n in g
S o ciety -an d -law
cen tered reaso n in g
G ro u p -cen tered
reaso n in g
S ta g e 2 R ew ard seek in g :
S elf-in terest, o w n n eed s,
recip rocity
E g o -cen tered
reaso n in g
S ta g e 1 P u n ishm en t av o id an ce:
P u n ish m en t av o id an ce,
o b ed ience to p ow er
E g o -cen tered
reaso n in g
[email protected]
Source: Adapted from Lawrence Kohlberg, The Philosophy of Moral Development (New York: Harper & Row, 1981).
Elements of Moral Judgment
Amoral Managers
Moral Managers
Moral Imagination
Moral Identification
Moral Evaluation
Tolerance of Moral Disagreement
and Ambiguity
Integration of Managerial and Moral
Competence
A Senses of Moral Obligation
[email protected]
The components of ethical climates
Focus of ethical concern
Ethical criteria
Individual Company
person
Egoism
(self-centered
approach)
Benevolence
(concern-forothers approach)
Principle
(integrity
approach)
Selfinterest
Company
interest
Society
Economic
efficiency
Friendship Team
interest
Social
responsibility
Personal
morality
Laws and
professional
codes
Company
rules and
procedures
Source: Adapted from Bart Victor and John B. Cullen, “The Organizational Bases of Ethical Work Climates,”
[email protected]
Administrative Sciences Quarterly 33(1988), p. 104.
How to Build in Ethics
TOP MANAGEMENT COMMITMENT
MISSION STATEMENT
ETHICS CODE
POLICIES/PROCEDURES
TRAINING
WHISTLE-BLOWER’S HOTLINE
ETHICS OFFICER
INDEPENDENT AUDIT
DISCIPLINARY ACTION
[email protected]
Codes of Conduct
Must provide clear direction about ethical
behavior when temptation to behave
unethically is strongest.
But, also must leave room for a manager to use
his or her judgment in situations requiring
cultural sensitivity.
Intl. managers who are not prepared to grapple
with moral ambiguity and tension should pack
their bags and come home
[email protected]
How to support ethical decision
making in the organization?
culture, values & programs
compliance & leadership
recognition of the role of co-workers &
managers
balancing stakeholder interests
management of situational pressures
rewards beyond short-term performance
[email protected]
Creating an Ethical Corporate
Culture
Core values are not specific enough to guide managers through
actual ethical dilemnas.
Managers should be guided by precise statements that spell out
the behavior and operating practices that the company
demands.
90% of all Fortune 500 companies have codes of conduct.
70% have statements of vision and values.
In Europe and the Far East, the percentages are lower but are
rising rapidly.
[email protected]
Business Ethics: It Begins with
Leadership
As Leaders, we must do a better job at creating
and sustaining organizational cultures that
support ethical behavior….
[email protected]
Guidelines for Ethical Leadership
Treat corporte values and formal standards of
conduct as absolutes.
Design and implement conditions of
engagement for suppliers afnd customers.
Allow forwign business units to help
forlmulate ethical standards and interpret
ethical issues.
In host countries, support efforts to decrease
institutional corruptions.
Exercise moral imagination.
[email protected]
Two approaches to ethics programs
and their effectiveness
Compliance-based programs
• Rooted in avoiding legal sanctions.
• Companies will establish rules and guidelines for employees to follow.
• Emphasizes threat of detection and punishment.
• Assumes employees are driven by self-interest.
• Research evidence shows that employees do care about moral
correctness of their actions.
Sources: Lynn Sharp Paine, “Managing for Organizational Integrity,” Harvard Business Review, March/April 1994, pp. 106-117
and Gary Weaver and Linda Klebe Trevino, “Compliance and Values Oriented Ethics Programs: Influences on
[email protected]
Employees’ Attitudes and Behavior,” Business Ethics Quarterly, 9(1999), pp. 315-335.
Two approaches to ethics programs
and their effectiveness
Integrity-based ethics programs
• Combine a concern for the law with an emphasis on employee
responsibility for ethical conduct.
• Establish a climate of self-governance for employees based on
general principles as guidelines.
• Employees told to act with integrity and conduct business dealings
in an environment of honesty and fairness.
• Employees are thought of as social beings, concerned for the
well-being of others.
• Researchers found that these programs fostered lower
observed unethical conduct.
Sources: Lynn Sharp Paine, “Managing for Organizational Integrity,” Harvard Business Review, March/April 1994, pp. 106-117
and Gary Weaver and Linda Klebe Trevino, “Compliance and Values Oriented Ethics Programs: Influences on
[email protected]
Employees’ Attitudes and Behavior,” Business Ethics Quarterly, 9(1999), pp. 315-335.
kARkter : pola perilaku yang bersifat
individual, keadaan moral seseorang.
Tahap: moral knowing (penget moral), moral
feeling (perasaan moral) dan moral action
[email protected]
Presented By:
Ratna Candra Sari
email: [email protected]
[email protected]
Business Ethics: What Does It
Really Mean?
Definitions
Ethics involves a discipline that examines
good or bad practices within the context of a
moral duty
Moral conduct is behavior that is right or
wrong
Business ethics include practices and
behaviors that are good or bad
[email protected]
Business Ethics: What Does It Really
Mean?
Business Ethics:Today vs. Earlier Period
Society’s
Expectations
of Business
Ethics
Ethical
Problem
Actual
Business
Ethics
Ethical Problem
1950s
Time
[email protected]
Early 2000s
Why ethical problems occur in business
Reason
Personal gain
and selfish
interest
Competitive
pressures on
profits
Business goals
versus personal
values
Cross-cultural
contradictions
Nature of
ethical
problem
Selfish interest
versus others'
interests
Firm's interest
versus others'
interests
Typical
approach
Egoistical
mentality
Bottom-line
mentality
Boss's interests Authoritarian
versus
mentality
subordinates’
values
Company's
Ethnocentric
interests versus
mentality
diverse cultural
traditions and
values
[email protected]
Attitude
"I want it!"
"W e have to
beat the
others at all
costs!"
"Do as I say,
or else!"
"Foreigners
have a funny
notion of
what's right
and wrong."
Why should business be ethical?
• Fulfill public expectation for business.
• Prevent harming others.
• Seek profitability.
• Improve business relations and employee productivity.
• Reduce penalties.
• Protect business from others.
• Protect employees from their employers.
• Promote personal morality.
[email protected]
Factors Influencing Ethical Behavior
Have an
ethical day!
Leadership
Corporate
Culture
Strategy and Performance
[email protected]
Individual
Characteristics
Sources of Ethical Norms
Fellow Workers
Fellow Workers
Family
Regions of
Country
Profession
The Individual
Conscience
Friends
The Law
Employer
Religious
Beliefs
[email protected]
Society at Large
Figure 1-2
Relations between a business firm and its
primary stakeholders
Employees
(Unions)
Wholesalers
(Retailers)
Distribute
products
Buy
products
Customers
Stockholders
Sell
labor
Business
firm
(Managers)
Sell
materials
[email protected]
Invest
capital
Lend
money
Suppliers
Creditors
Figure 1-3
Relations between a business firm and some of
its other (secondary) stakeholders
The
General
Public
Business
Support
Groups
Local
Communities
Positive,
negative
opinion
Advice,
research
Media
Jobs,
environment
Regulation,
taxes
Business
Firm
Image,
publicity
Federal,
State
and Local
Governments
(Managers)
Social
demands
[email protected]
Foreign
Friendly, Governments
hostile
Social
Activist
Groups
Developing Moral Judgment
[email protected]
6-22
A g e g ro u p
D ev elo p m en t sta g e a n d
B a sis o f eth ics
Stages of
moral
development
m a jo r eth ics referen t
rea soand
n in g
M atu re ad u lth o od S ta gethical
e 6 U n iv ersalreasoning
p rin cip les:
P rin cip le-centered
Ju stice, fairn ess, u n iv ersal
reaso n in g
h u m an rig h ts
M atu re ad u lth o od S ta g e 5 M o ral beliefs ab o v e
an d b ey o n d sp ecific so cial
cu sto m : H u m an rig h ts, so cial
co n tract, b ro ad co n stitu tio nal
p rin cip les
A d u lth o o d
S ta g e 4 S o ciety at larg e:
C u sto m s, trad itio n s, law s
E arly ad u lth o o d ,
ad o lescen ce
A d o lescen ce,
y o u th
C h ild h o o d
S ta g e 3 S o cial g ro u p s: F rien d s,
sch o o l, co w o rk ers, fam ily
P rin cip le-centered
reaso n in g
S o ciety -an d -law
cen tered reaso n in g
G ro u p -cen tered
reaso n in g
S ta g e 2 R ew ard seek in g :
S elf-in terest, o w n n eed s,
recip rocity
E g o -cen tered
reaso n in g
S ta g e 1 P u n ishm en t av o id an ce:
P u n ish m en t av o id an ce,
o b ed ience to p ow er
E g o -cen tered
reaso n in g
[email protected]
Source: Adapted from Lawrence Kohlberg, The Philosophy of Moral Development (New York: Harper & Row, 1981).
Elements of Moral Judgment
Amoral Managers
Moral Managers
Moral Imagination
Moral Identification
Moral Evaluation
Tolerance of Moral Disagreement
and Ambiguity
Integration of Managerial and Moral
Competence
A Senses of Moral Obligation
[email protected]
The components of ethical climates
Focus of ethical concern
Ethical criteria
Individual Company
person
Egoism
(self-centered
approach)
Benevolence
(concern-forothers approach)
Principle
(integrity
approach)
Selfinterest
Company
interest
Society
Economic
efficiency
Friendship Team
interest
Social
responsibility
Personal
morality
Laws and
professional
codes
Company
rules and
procedures
Source: Adapted from Bart Victor and John B. Cullen, “The Organizational Bases of Ethical Work Climates,”
[email protected]
Administrative Sciences Quarterly 33(1988), p. 104.
How to Build in Ethics
TOP MANAGEMENT COMMITMENT
MISSION STATEMENT
ETHICS CODE
POLICIES/PROCEDURES
TRAINING
WHISTLE-BLOWER’S HOTLINE
ETHICS OFFICER
INDEPENDENT AUDIT
DISCIPLINARY ACTION
[email protected]
Codes of Conduct
Must provide clear direction about ethical
behavior when temptation to behave
unethically is strongest.
But, also must leave room for a manager to use
his or her judgment in situations requiring
cultural sensitivity.
Intl. managers who are not prepared to grapple
with moral ambiguity and tension should pack
their bags and come home
[email protected]
How to support ethical decision
making in the organization?
culture, values & programs
compliance & leadership
recognition of the role of co-workers &
managers
balancing stakeholder interests
management of situational pressures
rewards beyond short-term performance
[email protected]
Creating an Ethical Corporate
Culture
Core values are not specific enough to guide managers through
actual ethical dilemnas.
Managers should be guided by precise statements that spell out
the behavior and operating practices that the company
demands.
90% of all Fortune 500 companies have codes of conduct.
70% have statements of vision and values.
In Europe and the Far East, the percentages are lower but are
rising rapidly.
[email protected]
Business Ethics: It Begins with
Leadership
As Leaders, we must do a better job at creating
and sustaining organizational cultures that
support ethical behavior….
[email protected]
Guidelines for Ethical Leadership
Treat corporte values and formal standards of
conduct as absolutes.
Design and implement conditions of
engagement for suppliers afnd customers.
Allow forwign business units to help
forlmulate ethical standards and interpret
ethical issues.
In host countries, support efforts to decrease
institutional corruptions.
Exercise moral imagination.
[email protected]
Two approaches to ethics programs
and their effectiveness
Compliance-based programs
• Rooted in avoiding legal sanctions.
• Companies will establish rules and guidelines for employees to follow.
• Emphasizes threat of detection and punishment.
• Assumes employees are driven by self-interest.
• Research evidence shows that employees do care about moral
correctness of their actions.
Sources: Lynn Sharp Paine, “Managing for Organizational Integrity,” Harvard Business Review, March/April 1994, pp. 106-117
and Gary Weaver and Linda Klebe Trevino, “Compliance and Values Oriented Ethics Programs: Influences on
[email protected]
Employees’ Attitudes and Behavior,” Business Ethics Quarterly, 9(1999), pp. 315-335.
Two approaches to ethics programs
and their effectiveness
Integrity-based ethics programs
• Combine a concern for the law with an emphasis on employee
responsibility for ethical conduct.
• Establish a climate of self-governance for employees based on
general principles as guidelines.
• Employees told to act with integrity and conduct business dealings
in an environment of honesty and fairness.
• Employees are thought of as social beings, concerned for the
well-being of others.
• Researchers found that these programs fostered lower
observed unethical conduct.
Sources: Lynn Sharp Paine, “Managing for Organizational Integrity,” Harvard Business Review, March/April 1994, pp. 106-117
and Gary Weaver and Linda Klebe Trevino, “Compliance and Values Oriented Ethics Programs: Influences on
[email protected]
Employees’ Attitudes and Behavior,” Business Ethics Quarterly, 9(1999), pp. 315-335.
kARkter : pola perilaku yang bersifat
individual, keadaan moral seseorang.
Tahap: moral knowing (penget moral), moral
feeling (perasaan moral) dan moral action
[email protected]