Ethics in Management

Most ethical dilemmas involve a conflict between the needs of the part and the whole - the individual versus the organization or the organization versus society as a whole. Managers faced with these kinds of tough ethical choices often benefit from a normative strategy - one based on norms and values—to guide their decision making. Normative ethics uses several approaches to describe values for guiding ethical decision making. The utilitarian approach is a method of ethical decision making saying that the ethical choice is the one that produces the greatest good for the greatest number.The individualism approach is a decision-making approach suggesting that actions are ethical when they promote the individual’s best long-term interests, because with everyone pursuing self-interest, the greater good is served. The moral-rights approach holds that ethical decisions are those that best maintain the fundamental rights of the people affected by them. The justice approach says that ethical decisions must be based on standards of equity, fairness, and impartiality.Three types of justice are of concern to managers. Distributive justice requires that different treatment of individuals not be based on arbitrary characteristics. Procedural justice holds that rules should be clearly stated and consistently and impartially enforced. Compensatory justice argues that individuals should be compensated for the cost of their injuries by the party responsible, and individuals should not be held responsible for matters over which they have no control. The practical approach is a decision-making approach that sidesteps debates about what is right, good, or just, and bases decisions on the prevailing standards of the profession and the larger society. Managers can use various approaches based on norms and values to help them make ethical decisions. Ethics is the code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong. Ethics can be more clearly understood when compared with behaviors governed by law and by free choice. Managers carry a tremendous responsibility for setting the ethical climate in an organization and can act as role models for ethical behavior.