Managing Ethics and Diversity

Chapter 4

UU BB MAN2010 Introduction to Management

 Learning Objectives
• Illustrate how ethics help managers determine the
right way to behave when dealing with different
stakeholder groups
• Explain why managers should behave ethically and
strive to create ethical organizational cultures
• Appreciate the increasing diversity of the workforce
and of the organization environment

LEARNING OBJECTIVES
 LEARNING OBJECTIVES
• Grasp the central role that managers play in the
effective management of diversity
• Understand why the effective management of
diversity is both an ethical and a business imperative
• Understand the two major forms of sexual
harassment and how they can be eliminated
 THE NATURE OF ETHICS

• Ethics: Inner-guiding moral principles, values, and

beliefs that people use to analyze or interpret a
situation and then decide what is the “right” or
appropriate way to behave
• Ethical dilemma: Quandary people find themselves
in when they have to decide if they should act in a
way that might help another person or group even
though doing so might go against their own self-
interest
STAKEHOLDERS AND ETHICS

• Stakeholders: People and groups that supply a

company with its productive resources and so
have a claim on and stake in the company
• Stakeholders can directly benefit or be harmed
by an organizations actions, the ethics of a
company and its managers are important to
them
TYPES OF COMPANY STAKEHOLDERS
Stockholders

•Want to ensure that managers are

behaving ethically and not risking
investors’ capital by engaging in actions
that could hurt the company’s reputation
•Want to maximize their return on
investment
Managers
•Responsible for using a company’s
financial, capital and human resources to
increase its performance
•Have the right to expect a good return or
reward by investing their human capital to
improve a company’s performance
•Difficult decisions challenge managers to
uphold ethical values
 QUESTION
Is it ethical for managers to receive vast amounts of
money from their companies?
A. Yes
B. No
C. Sometimes
D. Never
EMPLOYEES
•Companies can act ethically toward
employees by creating an occupational
structure that fairly and equitably rewards
employees for their contributions
 SUPPLIERS AND DISTRIBUTORS
• Suppliers expect to be paid fairly and promptly for
their inputs
• Distributors expect to receive quality products at
agreed-upon prices
 CUSTOMERS

• Most critical stakeholder group

• Company must work to increase efficiency and
effectiveness in order to create loyal customers and
attract new ones
 COMMUNITY, SOCIETY, AND NATION
• Community - Physical locations like towns or cities or
to social milieus like ethnic neighborhoods in which
companies are located
• Provides a company with the physical and social
infrastructure that allows it to operate
• A company affects the prosperity of a community,
society and a nation
FOUR ETHICAL RULES
 PRACTICAL DECISION MODEL
• Does my decision fall within the accepted values or
standards that typically apply in business activity
today?
• Am I willing to see the decision communicated to all
people and groups affected by it—for example, by
having it reported in newspapers or on television?
• Would the people with whom I have a significant
personal relationship, such as family members,
friends, or even managers in other organizations,
approve of the decision?
 WHY SHOULD MANAGERS BEHAVE
ETHICALLY?
• The relentless pursuit of self-interest can lead to a
collective disaster if individuals start to profit from
being unethical, encouraging other people to act in
the same way
 SOME EFFECTS OF
ETHICAL AND UNETHICAL BEHAVIOUR
 WHY SHOULD MANAGERS BEHAVE
ETHICALLY?

• Trust: Willingness of one person or group to have

faith or confidence in the goodwill of another
person, even though this puts them at risk
• Reputation: Esteem or high repute that individuals
or organizations gain when they behave ethically
 QUESTION
What is confidence and faith in another person’s
goodwill?
A. Reputation
B. Trust
C. Empathy
D. Hope
SOURCES OF AN
ORGANIZATION’S CODE OF ETHICS
 ETHICAL ORGANIZATIONAL
CULTURES
• Managers can ensure that important ethical values
and norms are key features of an organization’s
culture
• Managers become ethical role models whose
behaviour is scrutinized by their subordinates
 ETHICAL ORGANIZATIONAL
CULTURES
• Ethics ombudsman: Ethics officer who monitors an
organization’s practices and procedures to be sure
they are ethical
DIVERSITY OF THE WORKFORCE AND THE ENVIRONMENT

• Diversity: Differences among people in age, gender,

race, ethnicity, religion, sexual orientation,
socioeconomic background, and
capabilities/disabilities
• Managing diversity fairly and justly can improve
organizational effectiveness
 DIVERSITY CONCERNS
• The ethical imperative for equal opportunity
• The continuing bias toward diverse individuals
• Glass ceiling: Metaphor alluding to the invisible
barriers that prevent minorities and women from
being promoted to top corporate positions
QUESTION

What is the metaphorical barrier that prevents

minorities and women from being promoted to top
corporate positions?
A. Gender barrier
B. Gender prejudice
C. Glass ceiling
D. Glass top
SOURCES OF DIVERSITY IN THE WORKPLACE
 WORKFORCE DIVERSITY: AGE

• Aging U.S. population

• By 2030, 20 percent of the population will be over 65
• Federal age discrimination laws
• 1964 Title VII of the Civil Rights Act of 1964
• 1967 Age Discrimination in Employment Act
 WORKFORCE DIVERSITY: GENDER
• Women in the work place
• U.S. workforce is 46.5 % percent female
• Women’s weekly median earnings are $638
compared to $798 for men
• Women hold only 15.4% of corporate officer
positions
• Equal employment opportunity law
• 1963 Equal Pay Act
 WORKFORCE DIVERSITY: RACE AND
ETHNICITY

• Racial and ethnic diversity of the U.S. population is

increasing at an exponential rate
• Emphasizes the importance of effectively managing
diversity
 WORKFORCE DIVERSITY: RELIGION
• Accommodation for religious beliefs
• Scheduling of critical meetings
• Providing flexible time off for holy days
• Posting holy days for different religions on the company
calendar
• Even small accommodations for religious diversity often
enhances employee loyalty
 WORKFORCE DIVERSITY: CAPABILITIES AND DISABILITIES

• Americans with Disabilities Act (ADA) of 1990

prohibits discrimination against persons with
disabilities
• Accommodation towards disability
• Providing reasonable accommodations for
individuals with disabilities
• Promoting a nondiscriminatory workplace
environment
• Educating the organization about disabilities and
AIDS
 WORKFORCE DIVERSITY: SOCIOECONOMIC BACKGROUND

• A combination of social class and income-related

factors
• Requires managers to be sensitive and
responsive to the needs and concerns of those
less privileged
• Concerns
• Widening diversity in income levels
• Single mothers and the “working poor”
• Child and elder care for working parents
 WORKFORCE DIVERSITY: SEXUAL
ORIENTATION
• Fair and equal treatment towards the minority
group of gays and lesbians
• Provision of domestic-partner benefits
 CRITICAL MANAGERIAL ROLES

• Managers have more influence than rank-and-file

employees
• When managers commit to diversity, it legitimizes
diversity management efforts of others
EFFECTIVELY MANAGING DIVERSITY MAKES
GOOD BUSINESS SENSE
• Diverse organizational members can be a source of
competitive advantage when managed efficiently
• Variety of points of view and approaches to
problems and opportunities that diverse employees
provide can improve managerial decision making
 FORMS OF SEXUAL HARASSMENT
• Quid pro quo: Asking or forcing an employee to
perform sexual favours in exchange for some reward
or to avoid negative consequences
• Hostile work environment: Telling lewd jokes,
displaying pornography, making sexually oriented
remarks about someone’s personal appearance, and
other sex-related actions that make the work
environment unpleasant
 STEPS TO ERADICATE SEXUAL HARASSMENT
• Develop and clearly communicate a sexual
harassment policy endorsed by top management
• Use a fair complaint to investigate charges
of sexual harassment
• When it has been determined that sexual
harassment has taken place, take corrective action
as soon as possible
• Provide sexual harassment education and training
to all organizational members, including managers
References
George M.J. (2013) Essential of
Contemporary Management 5th ed. The
Mc Grow Hill Company, USA