Ethics_in_Work

Business Ethics and Social Responsibility What is Ethic' Ethic question: What is the right think to do now in this situation' Many people believe that they have to do a choice between being: • Happy • Virtuous And who choose happiness won’t be virtuous and vice-versa. And then they have to do a 2nd choice: • Public me • Private me For example, I may choose to be good for my friends and family (private me). But at work I will do what I have to do to be successful (public). This separation is the way that helps many people to live a life that is not virtuous, and they excuse this actions saying that the world out there is a jungle and they must protect themselves. But this is already a choice. It’s not the ethical question. The ethical question is how are you going to respond to the jungle' Are you going to act as a predator or you are going to act correctly, in a civilized manner. You have a choice. It is true that you don’t control the world you are living, but you control the way you act in that world. But how can we answer the ethic question' There are several people that try to answer this question. One of them was S. Thomas Aquinas. Why choosing this theory': • First one to create a fully philosophy system. • Influential system in catholic church • It’s the most simple philosophy system in the world Theory of S. Thomas Aquinas Fundamentals: The purpose of these system is to decide about human actions. For S. Thomas Aquinas there are only 2 type of acts: • Good acts • Bad acts Also the human acts can be: • Internal actions: It’s related with the thinking of the person • External action: It’s also related with an action of the body. But this doesn’t mean that when we drink water we are doing something good or wrong. Therefore he divided: • Acts of man: done by me because I have a body • Human acts: Result from thinking Everything that results from a deliberate act is good or bad. Everything we want is good, because nobody desires bad things. There is a good reason for everything that I do. So, if everything is good, where is Evil' We do Evil when by loving a good, we destroy a greater good. Example: Al-Qaeda desires to humiliate EUA and they think it’s good, but Americans consider they destroy a greater good by killing more than 3million people. So there are several goods, the important is that we make it possible to prevail the better good. But if there are better goods than others, what is the better good' How can we know that' First you need to know the rules of the game: What is the meaning of life', What is a good people'... If you are catholic, for example, you already know some orientations about what is good or bad, you know better the rules of the game. For S. Thomas Aquinas everything comes from God, and goes to God, so He has a participation of everything. Human beings are made as an image of God. If you don’t do hierarchy between all the goods in your life, you’ll not be able to make decisions properly. Example: consider that doing a course in Católica is the same that seeing a movie, so you’ll be sit in cinema every day. God is the perfect good. Seeing God is perfect happiness. What is will': After determining what is good and bad, we have to understand that you are only responsible for what you decide. Human will: a voluntary act is what determines human act. 1. Interior decision 2. Action Internal actions of the will (decision Object of interior action of the will ( end Here what matters is if it’s voluntary act or involuntary act, and not if it’s good or bad. Limits to the will in the action: • Violence: You can’t force anyone to do something, like violence. You can force my hand to punch you but my mind can’t be forced, so it’s an involuntary act. • Fear: What is done out of fear id essentially voluntary, because its principles is within. • Concupiscence: Concupiscence is a voluntary act because you’re drunk because you want, due to your love by “wine”. • Ignorance: Suponha-se que alguém está a caçar, vê algo a mexer e dispara. Descobre depois que afinal matou uma pessoa. o “Concomitantly”: it’s non-voluntary (I didn’t know but if I did, I would have done it anyway o “Consequently” (you put yourself in an ignorance situation; you’re doing it voluntarily) Example: I shot near school but I didn’t know there are children there. I thought it was a thief. However I put myself in that situation. o “Antecedently”: I didn’t know that it was a person, I couldn’t predict it and I didn’t want it to happen. In this situation it is an involuntary act. Virtues: Good person is someone that does good things every day. A good person isn’t someone who does a good action but someone that has a good life. The center of the system of St. Thomas is the concept of virtuous. You’re not good by being virtuous but for doing good things. Example: a horse has the virtue of running well. The virtuous has 2 faces: • Excess • Defect Example: To be brave you need to balance. You can not have afraid of everything, but you can not also face risks without thinking. How can we be virtuous' • Sometimes is natural • Other times it is not but you can control it if you want. Example: There are people who born with the virtuous of playing piano, and there is other who doesn’t. But even if you didn’t born with that gift if you make an effort and practice you can become better that the one who did. My life is determined by what I do, and not for virtuous. If I had never been in risk, I can’t say I’m courageous. Theological Virtues • Faith (believe in God) • Hope (hope in God) • Charity (love God) These are the virtuous that related me with God. Intellectual Virtues 1. In speculative intellect: ▪ Intelligence (in the axioms): virtue that allows you to understand the problems ▪ Science (in the deductions): virtue that help you to infer and deduce the problem and conclusions. ▪ Wisdom (in the relation to God): understand the meaning of things 2. In practical intellect: ▪ Art (in production): capabilities of doing things, in producing things. Example: playing football, talking in public, the horse that runs fast is virtuous in art. ▪ Prudence (in acting): having good common sense. Understanding how the things are done. This is crucial for ethic. Each of these virtues is divided in several fields, such as: Science is divided in Medicine and Physics, for example. Moral Virtues 1. In rational appetite (will) ▪ Justice (operations, relations): virtuous que me relaciona comigo e com os outros 2. In sensorial appetite ▪ Temperance (pleasures and pains, concupiscible): rational attitude towards the pleasure: that relates me with pleasures ▪ Fortitude (hard pleasures and pains, passions, irascible): virtue of bravery and patience are included here: that relates me with fears. Virtue and Prudence Moral virtue: what do you want to do Intellectual virtue (prudence): means used to do well Imagine a person that wants to do good actions but is so clumsy that ends up on doing bad. It has moral virtue but no intellectual virtue. So to be good, it’s not enough to want to be good, you have to do it in a correct way. You also must want to do a good action. But if had happen something externally that prevent you from doing it, you are not responsible. Ethical decisions: The ethical decision has in mind 2 systems: • Natural Law: If you follow the law, you’re a good, otherwise you’re bad. Natural Law is a law that I have in my bones because I’m a human being. You should be good and avoid evil. By being human, I search knowledge, educate children, etc., and that is good, so the opposite is bad. When there is a law and I broke it, I’m proving the existence of the law, because if there isn’t law, I couldn’t have broken it. • Conscience: the one that apply for the natural law to this specific situation. The judgment of conscience consists simply in knowledge, whereas the judgment of free choice consists in the application of knowledge to the inclination of the will. Example: found a wallet with identification of the owner Law. You can’t still the others goods. Conscience: you shouldn’t take the wallet for you But even do… Free choice: I’ll take the wallet. |Laws |Conscience | |It’s evident and not arbitrary |It’s arbitrary | |It’s extern to the person, and therefore it may be difficult to|The conscience of some people may say things that are strange | |apply in specific situations | | Sometimes what the laws and that Conscience say collide. Example: The Nazis excuse their actions saying that the law obligates them to kill innocent people. But they should have look to their conscience! On the other hand, Bin Laden said that their conscience said that he had to kill the Americans. But the law states that he can’t kill people! S. Thomas de Aquino tries to find a balance between both. There is clear a natural law, either because it exists, either because you know it, its part of your culture. Example: If a person sees a baby crying in the middle of the street, it will take it from the middle of street and probably take it to a hospital or police station. Who didn’t do it, was breaking the rule. But there is also the conscience that consists in applying the law to different situations. The conscience will depend of me. When the law didn’t tell me exactly what I should do, the conscience will help me in these situations. For S. Thomas the conscience is taking in account the law and applying it to specific situations. But sometimes the conscience of some people is inverted. How it can know how to be good: Domestic your conscience “oblige” conscience to tell us what we want to hear. Practical Syllogism Temperance: It doesn’t drink alcohol Intemperance: It drinks too much Continence: I want to be good but I have to control myself because I want to be bad too; so, the judgment of reason prevails. Otherwise, in incontinence is the movement of concupiscence that prevails. Continence vs. Incontinence I can control myself I can’t control myself; I want to be good but I am week Ethics is only about things that you can control. Therefore continent mans are not virtuous because they are divided. Good Deeds A human action has goodness in four points: ▪ As an action that derives from its genus ▪ According to its species ▪ From its circumstances ▪ From its end. A good action should have everything good in it. Evil results from any single defect, but good from the complete cause. Precepts Negative: I shouldn’t do that Positive: I should do that That’s true but I should do that only if it’s good. Ethic and the Firm Some people believe that the Social Responsibility is a cosmetic, companies just do it because: • They need to transmit a good image of the company • It enables them to reduce costs. Example: hotels Firms & Ethics: an oxymoron' Problems: ▪ Economical issues ▪ Technological issues: the more the perceived justice, the higher will be the innovation and creativity of the groups ▪ Ethical issues: have an impact on Strategy Market has an ethics and without ethics, the market doesn’t work. Ethics is necessary!!! There is an ethical necessity to have the market working even in Mafia, so Business Ethic it is not an oxymoron. Friedman’s perspective Social responsibility of a firm is doing profit. • There is no sense of talking about moral in firms because only individuals have moral responsibility. CSR doesn’t make any sense. • The only responsibility of managers is acting in interest of stakeholders. • Governments are the entities that should create structures to help people, and social issues should be analyzed only by this entity. Just respect the law Your only moral obligation. Carr’s perspective Doing business is like playing poker, and we can do bluff and everybody know that bluffing is part of the rules. Therefore, bluffing doesn’t reflect the morality of the bluffer. Stakeholder is everyone who is influenced, direct or indirectly, by a firm and its activities. Company should have some ethical boundaries, because if companies don’t have boundaries the consequences could be the ones shown in photo where it is a child playing in garbage near a lake full of polluted water. Stakeholders ▪ The first Industrial Revolution: employees exploitation ▪ “Atmosphere of hostility to capitalism” ▪ Evident consequences of business activities to the environment and human life ▪ Multinational companies affect our life. Historical Overview It’s not only a paradigm of the Catholic tradition that gain as an end per se isn’t sufficient to ethically justify the existence of business in societies. The idea of profit is associated with non-ethical issues WRONG, because according to Ethics, profit is a neutral term. We can talk about Business Ethics because the society is concerned about the service. This line has increased because the concerns of customers increased also. For example, in 1950s, having children doing shoes is ok and is cheap, but now with the pressures of customers, companies need to pay fair wages and respect human rights. Being ethical is not EASY! You can be: __wrong for deficiency Ok Wrong for excess The Gap is important because of: • Help you to positioned the company • Social Entrepreneurship Some companies don’t care about ethic because: • Don’t understand the importance of being ethic. The company always act in a certain way, so it is difficult to change this habits. • Are more worried with short term objectives There are four institutional tools to analyze an ethical issue: ▪ Laws Ethical and law are partially overlapped. However sometimes something that is illegal, may be ethical. Example: - In the 2nd world war it was forbidden to help Jews. - Doctor that goes against the privacy law to save other people from HIV. And, on the other hand, some things may be legal, but unethical: - Offshore So managers should look to the law. And if they feel: - That they are doing something wrong - And have that intuition They should apply the business ethic, and don’t do it. ▪ Codes of conduct The law can help you on several situations or give a long answer in one side or another, but it’s too generic. So, there are codes of conduct. These give you some guidelines. Codes of conduct help decision making by providing ethical norms. The problem is to define exact rules for a multitude of situations, and the risk is that codes of conduct would be too generic… ▪ Consultants o There is a market for ethics labels o Supposed-to-be ethical consultants ✓ Commission ✓ Projects ✓ Certifications Nowadays, there are certifications to show which the companies that are ethical. But these are good indications' Who analyze and evaluate companies is ethical and impartial' o A comment: firms don’t need a “guru” to know what’s wrong and right in their organization. ▪ CSR Reports CSR Reports: companies do these reports in a way that “bad manners” or “bad jobs” are transformed in “wonderful jobs” which are really good to all the community and ethical. Individual Conscience: all the tools aren’t useful if we don’t use our mind to analyze the situation. How can we leverage conscience to make ethical decisions' Ethical theories help to conceptualize problems and make decisions. Is ethics in business profitable' “vexata question”, which means controversial issue. In the short term, non ethical behavior could pay, but in the long term, ethical behavior provides stability, customer, and social trust, which affect positively sales and operations. In the long term, employees that work in a company that is perceived as ethical are happier, more productive, and less inclined to change work (positive impact on internal stability, efficiency and productivity). Everybody have to be, at least, a little bit ethical because all of us have ethical expectations and if that person, who is ethical, knows that a company’s behaviors aren’t proper, so that person could do a boycott, as happened with Nike, for example. These four institutional tools aren’t sufficient… we need ethical theories to distinguish between good and bad. Conclusions 1st: There is arguments in favor and against SR 2nd: The world isn’t a jungle, and being good is good… there is a payback in the long term. There isn’t apparent difference between robbers and honest people!!!!! 3rd: there is a strong connection between risk and lack of ethic. Case Study: the Bhopal Disaster The case is about an American multinational that placed a plant in India, Bhopal. A plant is a joint venture with Indian government and Indian investors. They used the security rules of India, which means, NOTHING!!!! This is a situation where Ethics and Law don’t overlap. The American company had 2 options: • Adopt the American limits, that were not obligatory in India, but that guarantee more safety • Adopt only the Indian limits, that were mandatory The company choose the 1st option, following the law, but not the business ethic. This shows: • It was taking higher risks. • It was being unfair. As it was protecting more the life of their American employees, than the Indian employees. • The Indian Government was certainly not aware of the risks the company represent Ethical issues: ▪ Ethical vs. Law: less security to increase short-term profits ▪ Role of the government: government here is almost inexistent ▪ Position of the CEO When there are differences in law, there are always ethical issues. Questions of competition Competition has a key role in contemporary economy, since it is present between employees, firms, regions, nations, and continents. The focus is always: being the FIRST! So, can we find a “code of conduct” to behave properly' Marshall’s Economy Chivalry: Chivalry is a virtue. When there is a market with several competitors and if we give them the same conditions, the virtue ethics is the most efficient to regulate competition. Instead of speaking about rules, we should consider virtues that should guide individual conduct: moderation, charity, piety, etc. If there are agents in the market that behaves according to chivalry, so we know that the market works more efficiently. So, it is true that the competition is high and that we have to win, but the important is how we will compete in order to win. If everyone plays fair the market will be more efficient. Market Manipulation: Monopoly: leads to higher prices, lower amounts of product sold Oligopoly: few actors playing the offer lead to trials of collusion; but, theory of games demonstrated that cartels are instable. The ethical question is if I am a monopolist what am I going to do' A monopolist that acts well is better than a company in a perfect competition that acts well, because a monopolist has much more power, than a company that acts in a perfect competition market. Higher power brings higher responsibility. When the companies don’t have other options they don’t face ethical questions. Why do we support the competition' Because that provides more products to the society, comparing with monopoly. Competition is acknowledged as the optimal market structure, and it induces creativity. As firms can’t control the price, they lose “market power”… Anti-trust laws Try to avoid market manipulations International Trading: There isn’t so many rules in the international competition therefore it is easy not to be ethical. However even though, it is not impossible the development of a system where everyone is unethical. There need to be some trust in each other, in order that the systems work. Sometimes it may seem that this doesn’t exist, but the true is that there is an ethic that influences all the world and that allow that things work. Professional Deontology Following deontological rules don’t guarantee an ethical behavior, because Ethics is more than Deontology. Breaking deontological rules in general leads to unethical behavior but following deontological rules doesn’t guarantee ethical behavior!!! To avoid this “issue” should be created a third party that works as an intermediary between, for example, medical doctors and customers. But there is another problem. The only ones who know if a doctor is acting well, are the other doctors, who doesn’t understand medicine doesn’t know. So they are their own judges. They determine what they can and cannot do, and promote themselves. Many times the power given by this situation, lead to the fact that they protect themselves. Intellectual Property Patents, which give to the companies a temporary monopolistic rent in support of innovation efforts, don’t make any sense when they affect people’s lives, such as a medical company does a patent to protect a treatment that will save millions of people in Africa. There are several problems associated with this issue: • Abuses • Product that can affect the health of people • When the author is available to give the product for free but there is a third part that invokes the validity of I.P. rules. Conclusions • Market per se doesn’t guarantee ethicality • It’s based on individual behavior and courage • It’s necessary to be part of a community • Any market structure has advantages and disadvantages; what’s important is how people behave in a market. Production and Prices What are you doing' IMPORTANT QUESTION! The meaning is not in the things you do but how you do it. 1st Problem: copies of products You’re almost good or almost bad, so you’re in the grey area. Example: if you buy a Rolex’s copy by $1 it’s ok because it’s a copy, but if you go to a store and buy a Rolex by several dollars but you realize that the watch is a copy, it’s bad. Judicial question is very different from the Ethical question. The victim always knows what is wrong, so to understand if I’m doing the good/bad thing, I should put myself in victims’ shoes. Some products, such as cigarette or condom, are or aren’t political correct, and not have ethical questions. The image that people have from the products change overtime. For example, 30 years ago condom is something private that nobody talks about, but nowadays is a product essential to our health and people talk about it with any problems. There are other products, that although they are good, in certain situations they may be bad. Look for example to the powder milk of Nestlé. It was seen as being healthier than the mother’s milk, therefore in the 3rd world mother’s start giving this milk to child. However as the mothers used polluted water, and sometimes didn’t use the recommended powder milk, this milk was affecting the babies health. But is the company responsible, by the improper use of the product' • If I directly influence the action, I am responsible. In this case the company was aware of what was happening in the 3rd world, and the possible consequences, and didn’t do anything to avoid it. • If I don’t influence, any how, the action of the client, I’m not responsible. See other example: Imagine that you write a book about chemistry, that will help the terrorists to make bombs' You should look to the consequences of your actions, and balance the consequences that it will bring. You are responsible for the book, if you were expecting that it would be taken advantage by terrorists. If not, its ethical to write the book. It’s the some think with teaching an Islamic to pilot a plane. Teaching is good, it is only not good to teach him, if you know that he as the intention to use this lessons to do something bad. Only if you had a direct influence you will be responsible. Precautionary Principle This questions are even higher when you are innovating. Many times when you create a new product you are not sure about the negative consequences that it will take. In this situation you should balance between innovating and being cautions with your innovation. Just Price Principle Do I really want to find the just price' There are several fixed costs that should be present in the price. In the price should be included everything needed to the price be fair and just. Relations with competitors You should play fair. Relations with suppliers Treating suppliers as partners is crucial because they are important to the company’s goals since they could help to achieve them. (JIT is forcing suppliers to have lot of stocks in order to satisfy company’s needs when they order.) Corporate Responsibility Definition of Corporate responsibility: • “Corporate social responsibility is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on: • Customers • Suppliers • Employees • Shareholders • Communities • And other stakeholders, as well as the environment. • Corporate Responsibility is the obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large.” (Wikipedia, 2008) CSR Levels – Carroll’s four-part model of corporate social responsibility However this model has limitations: • Descriptive capabilities • Normative capabilities Freeman’s Argument Stakeholders theory Stakeholders theory Note that different stakeholders have different expectations. Example: universities: • Customers/students ( They hope to learn, but at the same time have high grades on the exams • Community ( Hope that the university is demanding • Investors ( Higher fews ( Higher revenues It is then crucial to identify different perceptions from different stakeholders. And in sourcing for a solution companies should try to open a dialog between all stakeholders in order to find the better solution for all. Limits of the stakeholders theory • Lack of normative, justificatory ethical theory • Problem of stakeholders identity • Problem with ethical priorities Exercise: A sawmill plans to clear-cut old-growth forests to boost shareholder profits in Oregon. Unemployed loggers and truckers will benefit from new jobs. Towns will gain tax revenues from the new spending. But, tourist trade will suffer from destruction of scenic vistassuffer vistas. Moreover, Indians will lose salmon runs to polluted streams. 1st question: Why are the primary stakeholders and why' • Shareholders ( As they are directed affected by the situation. The decision will affect their returns. The degree of impact is high. • Unemployed ( The result of the decision will determine if they have a job or not. • Indians ( If their main food comes from the salmon 2nd question: Why are the secondary stakeholders and why' • Indians ( If salmon is not really important in their food consumption. • Tourists ( They go to somewhere else 3rd question: What are the ethical expectations of PS and SS' • Shareholders ( Build the plant • Unemployed ( Build the plant • Indians ( Not build the plant • Tourists ( Don’t build the plant 4th question: As a manager there is a way to match profit maximization with ethical expectations' Can you draw a managerial/policy solution' Stakeholders engagement/dialogue. As it allows managers to understand stockholder’s expectations. We do not have several examples where stakeholder dialogue worked effectively. We will briefly look at the cases: - Shell (unsuccessful case) - Redfin (A combination of transparency and stakeholder dialogue) Shell: At the beginning of 2000 Shell decided to conduct a stakeholders engagementprogram online. Why was it a disaster' • SHELL was not ready to answer all questions • SHELL was interested in gathering information • It was interested to wash its public image Redfin: Redfin is the industry’s first brokerage for residential real state. Customer search for homes on their website, arrange tours with Redfin and when they have found a home they like, draft an offer online. WHY IS REDFIN WINNING' • It works in a more ethical way • ‘ More ethical’ commissions • More transparent • Customers see themselves involved: everything is on the web ! • Customers can easily understand the ethical issues of business • Customer know they can modify the business CSR Worldwide Initiatives • UN Global Compact ( only make-up ‘ The Global Compact is a framework for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, the environment and anti-corruption . As the world's largest, global corporate citizenship initiative, the Global Compact is first and foremost corporate foremost concerned with exhibiting and building the social legitimacy of business and markets’ The Global Compact is a purely voluntary initiative with two objectives: 1. Mainstream 10 principles around the world 2. Catalyze actions in support of broader UN goals, such as the Millennium Development Goals (MDGs) • European Alliance for Corporate Social Responsibility –make-up The European Alliance on CSR is a business-lead initiative to promote CSR, launched in 2006 with strong political backing from the European Commission. The Alliance is a political umbrella for CSR initiatives by large companies, small and medium-sized enterprises, and their stakeholders. It consists primarily of a series of “laboratories”: groups of enterprises and other stakeholders addressing specific aspects of CSR in a practical and action-oriented way. • Anti-Racket movement in Sicily Ethical Issues pf information for managers Information Ethics & Media Ethics cover a variety of ethical issues: • Privacy • Digital Divide • Information reliability • Security • Transparency Newspapers manipulate the information that is shown to the public. Despite people show interest in knowing more about foreign countries, newspapers continue to distort the information. Managers should also be careful with the data they receive and the sources where they come from. Ethical Issues: o No information (if you want information, you can’t get it) o Wrong information o Manipulation of people through the information o “Right to know, right to choose” If people don’t have the right to know, they don’t have the right to choose. Digital divide “Digital divide refers to gap between individuals, households, businesses and geographic areas at different socio-economic levels with regard both to their opportunities to access information and communication technologies (ICT) and to their use of the Internet for a variety of activities.” OECD There is a big part of the population in developed countries that do not have access at Internet, aren’t connected to the web. Privacy Distinguishes between public and private life, which is a controversial issue in current political philosophy Idiosyncratic ( the US legislation is different from the UK legislation. The extreme of non privacy is Panopticon. Privacy VS security We can not have total privacy in order to guarantee security A government has the right to have enough information that allows him to protect society. But what is the limit between privacy and security' There isn’t. The only guideline is prudence/good sense. Prudential right tries to guarantee that the interests of the stakeholders are being met ( stakeholders engagement Evolution of privacy: Phase 1. The privacy baseline (1945-1960): • Limited development of IT • Trust for Government treat of personal information • There was substantial intrusion into personal & organizational privacy Phase 2. Privacy Development 1980-1989 (U. S.): • People become more worried with having some privacy • Improvements of ICT but no fundamental change in privacy rules • There is a dichotomy between political attention & legislation activity: • • No attention of public option • • Several legislative attempts to regulate, for example: – Privacy Protection Act (1980) – Cable Communication Policy Act (1984) – Electronic Communication Act (1986). • While US were committed to a “ fair information practice”, several European countries developed National Data Protection Phase 3. Era of Privacy Development 1990-today (U.S): • Privacy become a major societal concern • 5 technologies caused debates: – Internet – Wireless communication devises – Human Genome Projec– Project – Data mining software based on large warehouse applications – Spread of encryption Europe was interested to support information & good exchanges • Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data. Concluding: • They have an impact on internal and external decision making • They affect not only communication, mkt., and finance but also operations! • Firms have an important role in resolving these ethical issues with a proactive approach • Although they are generally perceived as disentangled from Business Ethics… Exercise: A junior project manager is working on a re-engineering project of the supply chain of a large multi-national company. • An important objective of the project is the implementation of a radio frequency system in all warehouses of the company. • “Each employee will be guided by the radio-frequency system to pick up the right amount of the right product from the right box placed in the right place….” Asserted pompously the director of the IT department pompously department. • But, the labour union organizes a strike because employees believe that the radio-frequency system violates their fundamental right of privacy. “They will have the possibility to control our location every single second…even how much time we spend to go to the bathroom” was pointed out by an employee … 1st Reframe the problem: There are 2 options: • Implement the radio frequency ( full transparency ( I control all the employees • Don’t implement ( Full privacy ( The company doesn’t have any information about individual level, only have aggregate information. | |Primary/secondary |Assumptions |Expectations | | |stakeholders | | | |Warehouse employees |Primary |They will the person that will be immediately controlled/ |Full-privacy | | | |Privacy rights are values affecting day to day of their | | | | |professional life. | | |Logistic Managers |Primary |Is directed affected by the decision as they are the ones who|Full transparency | | | |will control, and by understanding which are the most | | |Or | |profitable employees they can have a better performance and | | | | |earn more money. | | | |Secondary |If it won’t change their everyday life and it won’t influence| | | | |its salary | | |Shareholders |Primary |Having full transparency increases effectiveness and will |Full transparency | | | |have a direct impact on the money they earn from dividends | | |or | | | | | |Secondary |Logistics improvement will not affect shares value | | |Other company employee |Secondary |The police can in the future affect electronic controls of |Full Privacy | | | |all employees | | Personnel Questions Processes and Attitudes A company in order to be fair should have some equilibrium. How' - Structure should be balanced - Fair distribution of responsibilities, working load, retributions, etc. - Procedures that allow adjustments of the organizational equilibrium - Support processes for less capable people Developing a trustful and confident organizational climate is a necessary condition to combine efficiency and ethicality. A comfortable environment is necessary to maintain good psychological conditions of employees. Usually, HRM forgets the main element: the human being and his/her needs. Hiring Ethical issues: o Doing an internship of a year and gaining 100€/year SLAVERY CONDITIONS just for having something in the curriculum o Hiring someone just because he/she has the support of someone with power and with an important position o Offering low wages and a lot of dreams o Exploiting information asymmetries: the work is much complex and demanding of what is explained during the hiring process. Group Dynamics Organizational culture can do a clear difference in the life of several people. Having a group controlling a small group of people who do the real work, it won’t work. If the company discovers that you’re good, you’ll have the majority of work to do and also the problems that this situation brings. Salaries, Promotions & Gifts Salaries should respect the productivity of the individual, his contribution to the firm, etc. Promotions should respect people progress and contribution, but they are driven by political reasons, what is really unfair since the consequence will be that you won’t work but just do politics. Gifts: Golden Parachutes: You are rewarding the person for going away! Executive Education and training Supporting employees to acquire background isn’t per se a problem, but: o It can be leveraged for other purposes o It can be used to slow career progress o “Brain Drain”: for example, when you do an MBA in Harvard paid by your company and, in the end, other company invites you to work with them and you quit the company that paid you the MBA. The ethical issue is quitting the company that invested in you just after you’re finished. Golden Slavery By working several hours, company is paying your life. “Blowing the whistle” Whistle-blowing is one of the most controversial issues discussed in business ethics and CSR. It creates a break between who denounces a fraud or unethical behavior and the group of people that commit it. Whistleblowers should be protected because they can avoid the persistence of frauds, but the risk is to lose the job. Conclusions • Ethical Expectations have tangible impact on organizational behavior • The higher the perceived ethicality the higher the trust • The higher the trust, the higher innovation and efficiency • The higher the perceived ethically, the higher employees fidelity Exercise: Nike Problema: Construir fábricas com condições mínimas de higiene ou de trabalho, ou manter os custos muito baixos. | |Primary/secondary |Assumptions |Expectations | | |stakeholders | | | |Pessoas que trabalham nas Sweatshops – |Primary |The people working there are directed affected by the|Transformar a sweatshop num | |fábricas sem quaisquer condições | |sweatshops. |local com melhores condições. | |Familiares desses empregados |Primary |O rendimento que os trabalhadores trazem serve para |Melhores condições | | | |sustentar a família | | |Nike’s employees |Secundário |Não são afectados directamente pela decisão dado não |Melhores condições | | | |estarem nessas fábricas | | |Consumidores |Primário |Consumidores pressionaram a NIKE a tal ponto que |Melhores condições | | | |deixaram de comprar os seus produtos. Houve portanto | | | | |uma alteração nos hábitos dos consumidores | | |Accionistas |Primário |Quanto mais baixos forem os custos maiores serão os |Redução de Custos | | | |lucros e portanto maior serão os dividendos | | |Responsável da NIKE pelos fornecimentos de|Primário |Assumindo que ele receberá um bónus ou um salário |Redução de custos | |produtos | |mais alto por conseguir que a NIKE tenha custos de | | | | |produção muito baixos | | |Governo Americano |Primário |Se a empresa tem lucros mais altos, a taxa de imposto|Redução de custos | | | |vai incidir sobre uma base mais elevado pelo que o | | | | |Estado vai receber mais impostos | | |Activistas pelos direitos humanos |Primário |Vão tomar acções para combater a exploração nestes |Melhores condições | | | |países. | | |Governo de Taiwan |primário | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [pic][pic] ----------------------- Society’s Expectations of Business Ethics Expected and actual levels of Business Ethics Ethical Problem Actual Business Ethics Ethical Problem 2010s 1950s Time Ethical expectations of stakeholders