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GENERAL MANAGEMENT
CHECK POINT 20: MANAGERIAL ETHICS

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1. what are managerial ethics?
2. government regulations
3. industry ethical codes
4. individual characteristics
5. organizational framework
6. Organizational Culture
7. social pressures
8. common excuses used by unscrupulous managers
9. how to improve ethical standards of employees?
10. small business example
the business ethics test
11. for serious business owners only
12. the latest information online
 

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GENERAL MANAGEMENT
CHECK POINT 20: MANAGERIAL ETHICS

Please Select Any Topic In Check Point 20 Below And Click.

1. what are managerial ethics?
2. government regulations
3. industry ethical codes
4. individual characteristics
5. organizational framework
6. Organizational Culture
7. social pressures
8. common excuses used by unscrupulous managers
9. how to improve ethical standards of employees?
10. small business example
the business ethics test
11. for serious business owners only
12. the latest information online
 

DO I NEED TO KNOW THIS CHECK POINT?

 

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HOW CAN YOU BENEFIT FROM CHECK POINT 20?

 
The main purpose of this check point is to provide you and your management team with detailed information about Managerial Ethics and how to apply this information to maximize your company's performance.
 
In this check point you will learn:
 
• What are managerial ethics?
• About six basic factors which may influence ethical behavior.
• About the influence of government regulations on ethical behavior.
• About the influence of industry ethical codes on ethical behavior.
• About the influence of individual characteristics on ethical behavior.
• About a company culture.
• About the influence of social pressures on ethical behavior.
• About common excuses used by unscrupulous managers.
• How to improve ethical standards of employees.
• How to complete the business ethics test... and much more.
 

LEAN MANAGEMENT GUIDELINES FOR CHECK POINT 20

 
You and your management team should become familiar with the basic Lean Management principles, guidelines, and tools provided in this program and apply them appropriately to the content of this check point.
 
You and your team should adhere to basic lean management guidelines on a continuous basis:
 
Treat your customers as the most important part of your business.
Provide your customers with the best possible value of products and services.
Meet your customers' requirements with a positive energy on a timely basis.
Provide your customers with consistent and reliable after-sales service.
Treat your customers, employees, suppliers, and business associates with genuine respect.
Identify your company's operational weaknesses, non-value-added activities, and waste.
•. Implement the process of continuous improvements on organization-wide basis.
Eliminate or minimize your company's non-value-added activities and waste.
Streamline your company's operational processes and maximize overall flow efficiency.
Reduce your company's operational costs in all areas of business activities.
Maximize the quality at the source of all operational processes and activities.
Ensure regular evaluation of your employees' performance and required level of knowledge.
Implement fair compensation of your employees based on their overall performance.
Motivate your partners and employees to adhere to high ethical standards of behavior.
Maximize safety for your customers, employees, suppliers, and business associates.
Provide opportunities for a continuous professional growth of partners and employees.
Pay attention to "how" positive results are achieved and constantly try to improve them.
Cultivate long-term relationships with your customers, suppliers, employees, and business associates.

1. WHAT ARE MANAGERIAL ETHICS?

MANAGERIAL ETHICS

Business owners and managers must adopt and maintain high personal and business ethics and share these positive values with all employees, customers, and suppliers to ensure the most successful performance of their organization.

The issue of Managerial Ethics and ethical behavior has become increasingly important in recent years. Ethics commonly refers to the rules or principles that define right and wrong conduct. It is often complicated, however, to determine "what is right" and "what is wrong", since such determination depends upon the specific standards acceptable to society. Moreover, managerial ethics are influenced by several factors illustrated next.

 

Government
Regulations

 

  Industry
Ethical Codes

 

 Social
Pressures

   

FACTORS INFLUENCING ETHICAL OR UNETHICAL BEHAVIOR

   

Organizational
Framework

 

Organizational
Culture

 

 Individuals'
Characteristics

 

All elements of managerial ethics discussed in this program boil down to one powerful concept, discussed very eloquently by Guy Kawasaki at Stanford University and this concept is called:

Be A Mensch!

 

ADDITIONAL INFORMATION ONLINE

Introduction To Ethics By Squisher Busada.
Teaching Business Ethics By R. Edward Freeman, Darden MBA.
HR Management: Ethics And Fairness By Alysa Lambert, IUS Southeast.
Why Should Business Owners Be Concerned About Ethics By Michael Josephson.
Business Ethics And Social Responsibility By Matt Alanis, Alanis Business Academy.

2. GOVERNMENT REGULATIONS

GOVERNMENT REGULATIONS

Government Regulations certainly play an important role in molding the ethics of all law-abiding people. Moreover, there is a variety of laws specifically regulating behavior in the business sector. Equal employment opportunity laws, for example, prohibit discrimination of employees or applicants on the basis of race, color, religion, gender, or national origin. 

Other laws prohibit use of certain materials in various manufacturing processes, such as lead or asbestos, or define deceptive advertising as illegal. Many laws clearly specify the boundaries of what is allowed and what is prohibited in business, thus leaving potential violators with the risk of paying substantial fines or being penalized in other ways.

 

ADDITIONAL INFORMATION ONLINE

Government Regulations By Milton Friedman.
Business And Government Regulations By Lance Schneier.
Do Government Regulations Actually Help Big Business By Tim Carney.
Government Regulations A Burden To Small Business Growth By Dan Danner.
Compliance Based Rules Mentality Vs. Values Based Ethical Culture By M. Josephson.

3. INDUSTRY ETHICAL CODES

INDUSTRY ETHICAL CODES

Industry Ethical Codes exist in many business sectors. These codes are usually developed by various trading and professional associations, such as Direct Marketing Association, National Wholesale Hardware Association, or American Electric Association. Each association develops its own set of codes of conduct which clarify a broad range of ethical issues. These codes apply to companies that belong to a particular association on an industry-wide basis. 

Business owners, managers, and other employees are expected, therefore, to observe specific codes of behavior and to convey these codes to others.

You may also find useful suggestions for Writing Code Of Ethics For Your Business, developed by Joel Saltzman.

 

ADDITIONAL INFORMATION ONLINE

Creating Code of Ethics By Irexdc.
Ethics In Today's Insurance Industry By Marvin Kelly.
Ontario Association Of Architects Code Of Ethics By RCD Digital Media.
A Code Of Ethics Within The Solid Waste Removal Industry By Nick Rossi.
Injecting Ethics Into The Industry By James W. Wagner, Emory University.
 

CODE ETHICS STATEMENTS ONLINE

All Business Codes Of Conduct.
Manufacturing Code Of Ethics.
The Business Week Code Of Journalistic Ethics.
Code Of Ethics By American Staffing Association.
Statement Of Ethics By American Marketing Association.

4. INDIVIDUAL CHARACTERISTICS

INDIVIDUAL CHARACTERISTICS

Individual Characteristics of every person play a dominant role in ethical or unethical behavior. 

Each person starts to develop a set of values from the early stage of his or her life. The value development process is strongly influenced by parents, teachers, friends, and society. Once the person matures, he or she learns to distinguish between "right" and "wrong" and subsequently adopts a set of values. These values, however, may differ from one individual to another, depending on the influence of the above mentioned factors.

If you would like to learn more about Principles Of Ethics and Ethical Behavior, you are invited to watch this fabulous video:

What Will Matter? By Michael Josephson

and visit Josephson Institute Of Ethics online.

 

ADDITIONAL INFORMATION ONLINE

Six Pillars Of Character By Michael Josephson.
What Is Ethical Leadership By Jane A Van Buren, Building Capacity.
Living An Ethical Life On Living Smart By Patricia Grass And Daryl Koehn.
Moral Intelligence On Living Smart By Patricia Grass And John Bradshaw.
Ethical Business Without Personal Values Is Just PR, By Michael Henderson.

5. ORGANIZATIONAL FRAMEWORK

ORGANIZATIONAL FRAMEWORK

Organizational Framework is another important factor that influences ethical or unethical behavior.

Members of a particular organization are expected to behave in the manner prescribed by that organization. This process is regulated by various rules, job descriptions, and written codes of behavior stipulated by management. All employees, therefore, must be committed to act within and outside an organization in accordance with such rules, to perform their duties as prescribed by a job description, and obey other written codes of behavior. 

Moreover, a clear organizational structure provides employees with additional guidance in the workplace. It helps to determine lines of authority, responsibility, and accountability in the context of ethical behavior within the organization.

 

ADDITIONAL INFORMATION ONLINE

Sample Code Of Ethics By Xcelus.
Social Responsibility, Ethics And Morals By Mike Knudstrup.
Ethics In The Workplace By Debra Shapiro, Smith Business School.
Ethics Made Simple - Workplace Ethics Training Video By Training ABC.
Business Ethics: Ethical Behavior By Rick Shreve, Tuck School Of Business.

6. ORGANIZATIONAL CULTURE

ORGANIZATIONAL CULTURE

Organizational Culture also contributes to developing and maintaining sound managerial ethics.Organizational culture refers to the character of the organization and is comprised of its unique values, traditions, and attitudes. It is developed throughout the company's existence and embodies the values, mentality, views, and aspirations of its owners.

A renowned business author Stephen P Robbins suggests:

"A culture that is likely to shape high ethical standards is one that is high in risk tolerance, direction, and conflict tolerance. Managers in such a culture will be encouraged to be aggressive and innovative, will have clear objectives and performance expectations to guide them, and will feel free to openly challenge demands or expectations they consider to be unrealistic or personally distasteful." 

According to Robbins:

"A strong culture will exert more influence on managers than a weak one. Therefore, if the culture is strong and supports high ethical standards, it should have a very powerful and positive influence on a manager's ethical behavior. In a weak culture, managers are more likely to rely on subculture norms as behavioral guide. Thus work groups and departmental standards will strongly influence ethical behavior in organizations that have weak overall cultures."(49)

 

ADDITIONAL INFORMATION ONLINE

Values And Business Ethics By Michael Josephson.
Creating An Ethical Culture By Michael Josephson.
Corporate Culture Apple Example By Learn And Transform.
Why Workplace Culture Matters? Humor At Work By Michael Kerr.
Life At Google: Inside Google's Lair - How Google Employees Work.

7. SOCIAL PRESSURE

SOCIAL PRESSURE

Social Pressure often influences ethical or unethical behavior. 

Since the modern society emphasizes the pursuit of money and its purchasing power, some people conveniently forget about "right" and "wrong". There is strong evidence in today's business world to suggest that greed is becoming an important factor in managerial ethics. Unfortunately, this factor also applies to some small and medium-sized business owners.

Several experts conducted studies and examined the attitudes of business people and managers toward ethical behavior. They reached several conclusions outlined below. (50)

ATTITUDES OF MANAGERS TOWARD ETHICAL BEHAVIOR

1.

Many business owners and managers consider themselves honest people. However, when it comes to business, they are sometimes prepared to "cut corners" to meet their business objectives.

2.

Business owners and managers who have a clearly defined personal code of behavior are likely to match their actions to improved ethical behavior in the business environment.

3.

Business owners and managers are aware of overall social responsibilities of business in the society. However, they often underestimate the importance of high ethical standards.

4.

Business owners and managers may differ substantially in their views about specific business practices. This, in turn, may result in a broad range of interpretations and attitudes toward ethical behavior.

5.

Many business owners and managers believe that "economics" and "ethics" do not really mix, and this often results in poor ethical behavior in many industries.

6.

Most business owners and managers are prepared to adhere to a specific "code of behavior" in a particular industry, provided that such a code is enforced on a continuous basis.

7.

Many business owners and managers realize that they carry the important responsibility of initiating and maintaining an improved ethical behavior within their organizations.

 

ADDITIONAL INFORMATION ONLINE

Social Pressure By Lori Palatnik.
Use Social Pressure To Succeed By Cir Realty.
Challenge Social Pressure By Sasha Daygame Tips.
Social Pressure Catapult Charisma Matrix By Barron Cruz.
Social Pressure Falsifies Memory By Micah Edelson, Weitzman Institute.

8. COMMON EXCUSES USED BY UNSCRUPULOUS MANAGERS

EXCUSES, EXCUSES, EXCUSES...

Several experts studied and identified typical Excuses frequently used by unscrupulous business owners, managers and their subordinates. These excuses provide good indication why some people adopt poor ethical standards in business and what can be done to reduce unethical practices. (51)

COMMON EXCUSES USED BY UNSCRUPULOUS MANAGERS

"It Is Not Really Illegal Or Immoral."

Not everything is "black" and "white" in life and, particularly, in business. Since there are so many "gray" areas, it is up to the individual business owner or manager and their subordinates to identify what is really "right" or "wrong", using their individual standards of acceptable ethical behavior and common sense. It is important to remember that ultimately every person is answerable to "the person in the mirror" and to his or her own conscience.

"Since Nobody Knows About It Now, It Is OK"

Many business owners and managers often face a situation, whereby their specific actions may not be noticed for a certain period of time and, instead, may become apparent much later. It is important to remember, however, that being in business is a long-term journey and sooner or later unethical behavior will be discovered.

"This Is Not In My Personal Interests."

Sometimes managers may be aware of a certain course of action, which will be in the best interests of their organizations, however, it may not be in their own best interests. In this instance, managers should always remember, that it is important to do the right thing, even if this means "not to be the prime beneficiary at any cost".

"This Is Not In My Company's Interests"

Sometimes business owners and managers may be aware of a certain course of action, which may not be totally in the interests of their organization. However, if this is the only course of action which is based on decency and fairness, it should be adopted no matter what. Otherwise, this may lead to further erosion of ethical behavior of all concerned parties.

"This Is In My Company's Interests, Although I Am Personally Against It"

Managers and other employees often experience conflicts between personal values and professional goals. For example, a sales manager may be expected to "grease" (offer bribe) someone to secure new contracts. Sometimes it may be effective, but it is definitely immoral. It is important to remember that significant unethical behavior usually starts in a very insignificant fashion.

"Since My Action Helps My Company,  I Can Do It"

Some business owners and managers justify bribery, "kickbacks" (paying back for "favors"), cost duplication, product substitution, mishandling employees, shortchanging  customers, and other ethical and moral abuses as an essential part of doing business. While many managers are expected to remain loyal to their organizations, there can be no justification for unethical behavior, and there is no substitute for decency.

 

THE ULTIMATE COST OF EXCUSES

There were several prominent companies in the US and other countries, that were considered very successful and at times, invincible, in terms of their powerful status and business performance. Some of these companies, unfortunately, ceased to exist due to their management's inability to be honest and behave in a prudent and decent way. Such unfortunate behavior, often driven by pure greed, caused top managers in these companies to choose the "slippery slope" and end up as scandalous headlines published by major news media throughout the world. Some examples of these type of companies are presented below:

25 Biggest Corporate Scandals Ever By List25.
List Of Corporate Collapses And Scandals By Wikipedia.
Enron The Smartest Guys In The Room By Faith At Work.
11 Most Scandalous Business Events Of 2013 By Fortune.
The 10 Biggest Corporate Scandals In Modern History By Inside Monkey.

Note:

Do not allow yourself or your managers to suffer from a disease, called "chronic excuses". This disease, also known as "excusitis", will definitely cause a negative impact on your company's short- and long-term performance and the "bottom line".

 

ADDITIONAL INFORMATION ONLINE

The Office Ethics By Erica Lepla.
Baylor Business - Unethical Situations.
What Is Unethical Behavior? By Ethical Literacy.
Rationalizations In Business By Michael Josephson.
5 Examples Of Unethical Behavior By Ethical Practice.

9. HOW TO IMPROVE ETHICAL STANDARDS OF EMPLOYEES?

ETHICAL STANDARDS

Business owners and managers should take various actions to improve their own Ethical Standards and those of their employees. These actions may include a number of essential steps outlined below.

 

STEPS FOR IMPROVING ETHICAL STANDARDS OF EMPLOYEES

1.

Formulate clear policies, rules, and codes of conduct which encourage ethical behavior of all employees.

2.

Maintain high managerial ethics in order to set example for subordinates.

3.

Define tangible objectives without making unrealistic demands on employees.

4.

Initiate ethical programs for all employees.

5.

Maintain comprehensive performance appraisal of employees including   evaluation of ethical standards.

6.

Assume responsibility for disciplining wrongdoers.

7.

Develop a mechanism that encourages employees to observe (not to spy!) and report the wrongdoing of their co-workers.

8.

Conduct independent social audits by outside consultants.

 

MANAGEMENT'S RESPONSIBILITY IN
 IMPROVING ETHICAL STANDARDS OF EMPLOYEES

Improvement of Ethical Standards within an organization cannot happen overnight. It is important, however, that business owners and managers pay serious attention to this issue and invest time and effort in upgrading ethical performance of employees. Although lengthy, this process should be started as soon as possible.

You are also invited to read these useful articles, published by GlobalPost online:

How To Improve Professional Ethics By Clayton Browne.
How To Improve Ethics In The Workplace By Ralph Heibutzki.
 

ADDITIONAL INFORMATION ONLINE

How To Improve Your Work Ethics By Kevin Topliffe.
Workplace Ethics Scenarios By Du Pont Sustainable Sol.
Engaging Employees With Building An Ethical Culture By Andrew Leigh.
Ways To Improve An Organizations Ethical Climate By Audra Bianca, Chron.
Improving The Quality Of Work And Life, Work Ethics, Corporate Soul By John Izzo.

10. SMALL BUSINESS EXAMPLE
THE BUSINESS  ETHICS TEST

THE BUSINESS  ETHICS TEST

Instruction: Evaluate each of the statements below.
Statement
Strongly
Agree
Enter 3
Agree
Enter 2
Disagree
Enter 1
Strongly
Disagree
Enter 0

If I need to bribe somebody to get the contract, I will!

       

If I can avoid payment for a legitimate service rendered by a supplier, I will!

       

If I can substitute one product with a cheaper one without clients' knowledge, I will!

       

If I need to use an informant, who is  employed by my competitor, about my competitor, I will!

       

If I need to convince my employees to work overtime for free, I will!

       

If I need to convince a government agent that I did nothing illegal, when I know I did, I will!

       

If I need to alter figures in the cash book to reduce taxes, I will!

       

If I need to give promises to my employees, knowing in advance, that they will not materialize, I will!

       

If I can get cash from one of my clients without telling my partner, I will!

       

If I can make more money by doing something illegal, I will!

       

Total Per Column

       

Total Score

 
 
Test Results:

If your score is: 0

You can do business in the Vatican!

If your score is: 1-10

You get a gold medal for decency!

If your score is: 11-12

You get a silver medal for decency!

If your score is: 13-14

You get a bronze medal for decency!

If your score is: 15-16

You get a plastic medal for decency!

If your score is: 17-18

You get a paper medal for decency!

If your score is: 19-20

You know exactly who you are!

If your score is: 21-22

Start praying for yourself!

If your score is: 23-30

We will pray for you!

 

ADDITIONAL INFORMATION ONLINE

Business Ethics Test By Quizlet.
World's Most Ethical Companies 2011 By Ethisphere.
Morality Values And Ethics Test Quiz By Values Test Quiz.
Does Being Ethical Pay? By R. Trudel And J. Cotte, The Wall Street Journal.
Corporate Social Responsibility By Thomas Beschorner, University Of St. Gallen.

11. FOR SERIOUS BUSINESS OWNERS ONLY

ARE YOU SERIOUS ABOUT YOUR BUSINESS TODAY?

Reprinted with permission.

12. THE LATEST INFORMATION ONLINE

 

LESSON FOR TODAY:
The Measure Of Life Is Not In Length, But Honesty!

John Lilly

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