Global business ethics lesson 06

53 Ethics at Work Place UNIT UNIT III 54 Global Business Ethics 55 Ethics at Work Place LESSON ETHICS AT WORK PLACE CONTENTS 6.0 Aims and Objectives 6.1 Introduction 6.2 Individual in the Organisation 6.3 Ethics in Human Resource Management (HRM) 6.4 6.3.1 Privacy Issues 6.3.2 Value of Privacy 6.3.3 Privacy in Socialization 6.3.4 Privacy is of such Sufficient Value that it Ought to be Protected Parenting and Socialization 6.4.1 Education 6.4.2 Religion 6.4.3 Secondary Influences 6.5 Psychological Expectancy Model 6.6 Personal Characteristics 6.7 Ethical Implications of Variation in HRM Practices 6.8 Let us Sum up 6.9 Lesson End Activity 6.10 Keywords 6.11 Questions for Discussion 6.12 Suggested Readings 6.0 AIMS AND OBJECTIVES After studying this lesson, you should be able to understand: z The ethics at workplace z The ethics in Human Resource Management z The parenting and socialisation z The psychological expectancy model z The ethical implications of variation in HRM practices 6.1 INTRODUCTION Rules of business vary from place to place and appropriate preparation on the political economical and social fronts can enable a company to enjoy a relatively easier entry 56 Global Business Ethics into new markets A business entities strengthen can be estimated by its ability to sustain competitive pressures, build a strong base and adopt its systems to the changes in the external environment The current trend at the work place shows that the employees are mobile in the true sense and they look for flexible work environment, where work with fun is an accepted mode of life 6.2 INDIVIDUAL IN THE ORGANISATION The ethics survey conducted at work placed in UK recently revealed the following: z Mathew Weait in one of his articles mentioned that two out of three employees say they lie to their boss at some time or another Many managers say they know this and they accept it Unethical behaviour from pilfering pens and surfing the net while at work to outright fraud - remains endemic even in the British work place It runs from the board room to the shop floor z Most managers have a fundamentally ethical approach to business, a majority is aware of dishonest conduct in the work place but accept it as inevitable They simply cost it into operations and don't blow the whistle on offenders z More than two in three (including six out often board directors) say that everyone lies to the boss on occasion, and less that half consider the people at the top of their organisations to be strong ethical role models z Nearly one in ten board directors say it is acceptable to massage their profit figures as long as no money is stolen z The most ethical person is likely to be a male director who is over 40 and has a financial role in the public sector z The least ethical person is likely to be a female manager, under 40, who sales or marketing role in a service industry company z 35% of men said that once they knew about a fraud they reported it For women the figure was only 25% z Why would you not blow the whistle? has a Alienate myself from my Men Women Colleagues 21% 26% None of my business 49% 40% Jeopardise my job 13% 18% Everybody's doing it 30% 42% 5% 5% It is fair game Source: www.managementtoday.com Some people had other reasons Similar but competitive labour markets insure the workers against unknown hazards (with suitable health insurance programmes) Collect information on the health hazards that accompany a given job and make all such information available to workers 6.3 ETHICS IN HUMAN RESOURCE MANAGEMENT (HRM) 6.3.1 Privacy Issues The dictionary meaning of privacy is freedom from intrusion or public attention Though privacy is a relatively recent concept – public concern is clearly increasing, primarily in response to privacy invading technologies The problems facing employees, consumers and internet uses are similar, so also the solutions There is greater agreement found in the ends than on the means Even the ends are in dispute Americans always feel that they value privacy Yet, they give up a great deal for convenience and material gain The technologies that threaten privacy have brought us many benefits Finding the right means, is a great challenge to business firms which must meet employee and consumer expectations as they utilise new technologies More than many business ethics problems, protecting privacy require a coordinated solution involving many parties A solution is to be found The focus of businesses will remain on developing and implementing private policies 6.3.2 Value of Privacy We value privacy as so high and it ought to be protected as a right We desire to have a sphere of our life in which others not possess certain information about us The arguments developed by philosophers and legal theorists fall into two categories: z Utilitarian argument that appeal to consequences z Kantian argument that link privacy to being a person or having respect for persons The utilitarians say that great harm is done to individuals when inaccurate or incomplete information collected by an employer is used on the basis for making important personnel decisions Definition Definition of privacy is elusive The difficulty is due to diverse nature of the many different situations in which- claims of a right of privacy are made Warren and Brandeis hold that privacy is the right to be let alone The aim of privacy laws, they thought, should be to protect 'The privacy of private life' from unwanted possibility arid their proposals all deal with reacts on the publication of information about the private lives of individuals Brandeis said later on that the right of privacy is 'the right to be let alone the most comprehensive of rights and the right most valued by civilized men Justice Williams J Brennan expressed the view regarding the birth control case, is that: If the right to privacy means anything, it is the right of the individual, married, or single, to be free from unwarranted government invasion into matters so fundamentally affecting a person as the decision whether to bear or beget a child Many critics say that the phrase 'to be let alone' is broad Individuals have a right 'to be let alone' in matters of religions and politics Workers have no right to be free of supervision Legal restrictions on religious practices, such as snake handling or on political activities (making of political contributions) not involve violations of privacy Alan F Westin has defined privacy as 'It is the claim of Individuals to determine for themselves when, how, and to what extent information about them is communicated to others.' Here it is expressed in terms of control over information about ourselves This definition is too broad and too narrow 57 Ethics at Work Place 58 Global Business Ethics Richard B Parker observes that not every loss or gain of control over information about ourselves is a gain or loss of privacy W.A Parent defines privacy as 'the condition of not having undocumented personal knowledge about one possessed by others.' This definition of privacy holds that a person is in a state of privacy when certain facts about that person are not known by others As per W.A Parent 'personal knowledge' means that it does not mean all information about ourselves but only those facts which most individuals in a given society at any given time not want widely known Definition is to be restricted to undocumented personal information, because some facts that individuals commonly seek to conceal are a matter of public record and can be known without prying into their private lives There is no loss of privacy when an easily observable fact like persons curly moustache is known to others, even though the person is sometimes sensitive about it and prefers that others not comment on it The harm from such practices is more likely to occur and to be repeated when employees are unable to examine their files and challenge the information A drawback is that it rests on an unproved assumption that could turn out to be false The argument considers only the possible harmful consequences of privacy invasions Some people argue that privacy is of value because of the role it plays in developing and maintaining a healthy sense of personal identity Two Kantain themes: z Autonomy z Respect for persons Stanley Benn notes that utilitarian arguments for a right of privacy are not able to show what is morally wrong when a person is secretly observed without any actual harm being done But respect of persons will sustain an objection even to secret watching which may no actual harm at all Invading a person’s privacy violates the principle of respect for persons and prevents a person from making a rational choice as an autonomous being Hyman Gross argues that what is morally objectionable about being observed unawares through a hidden camera or having personnel information in a data bank is that a person loses control over how he or she appears to others Jeffrey H Reiman objects that it is too strong to assert that all instances of watching a person unawares result undeceiving a person and depriving that person of a free choice 6.3.3 Privacy in Socialization Many philosophers suggest that the key to a more satisfactory theory of privacy can be constructed by understanding the way in which individuals are socialized in our culture Privacy is an essential part of the complex social practice by means of which the social group recognizes-and communications to the individual that his existence is his own To be a person, an individual must recognize not just his actual capacity to shape his destiny by his choices He must also recognize that he has an exclusive moral right to shape his destiny Both utilitarian and Kantian arguments point to a key insight; privacy is important in some way to dignity and well being 59 Ethics at Work Place Information Issues Access (That employees have) Kind (that is collected) Means (used to gain) Use (to which it is put) Steps (taken to ensure the completeness & accuracy) Disclosure (to persons outside the company) The persons (within a company who have access) Source: business Ethics, C.S.V Murthy Figure 6.1: Information Issues 6.3.4 Privacy is of such Sufficient Value that it Ought to be Protected The task of justifying a right of privacy consists not only in demonstrating the value of privacy but also in determining which intrusions into our private lives is justified and which are not? Consider the issues that must be addressed in developing the case for a right of privacy in employee records and in formulating a company privacy protection plan for these records The notion of a justifying purpose plays a critical role in determining the exact scope of the right of privacy in employment Is there any way in which the notion of a justifying purpose can be clarified so that disagreements can be resolved? One possibility is to specify the conditions necessary for a business to conduct normal operations Primary and secondary influences on values and behaviours constitute the third element in the model Source: Business Ethics, C.S.V Murthy Figure 6.2: A Model of Culture and Ethical Behaviour among Managers 60 Global Business Ethics Check Your Progress What you understand by privacy in socialization? …………………………………………………………………………………… …………………………………………………………………………………… 6.4 PARENTING AND SOCIALIZATION In India, children are looked after by their parents till they could independently manage themselves in life In Japan, children are strapped on to the bodies of their mothers and sleep with them until the age of or 7, which strengthens the sense of dependency Such parenting practices are consistent with the emphasis on harmony On the contrary, American children are slowly encouraged to explore the world about them as early in life as possible This strengthens either a group-oriented style of ethical decision making as in the case of Japan or individualistic style as in the case of USA 6.4.1 Education It is another important primary influence on values and behaviors Tutoring of year old is quite common Children are separated into different types of schools at the end of fourth or fifth grade in Germany Similar things are found in other European countries after 8th grade Rich people can afford to hire tutors to help their children pass the rigorous tests required for admission to good schools that lead to a good degree from the university and a prosperous life USA punishes more of its managers for unethical acts as compared to all the other developed countries combined The reason can be partly attributed to the more open educational system that exists 6.4.2 Religion Some of the major religions, particularly Catholicism and Confucianism tends to have an anti business bias, thereby making major business activity in and off itself immoral and unethical According to them, a price should be 'just' to cover only the costs of labour and materials Their approach was anti-ethical to charging interest, which is a major foundation stone of modern economic life Two religious theories, the Confucian ethic and the Protestant ethic are related to radically different managerial and ethical behaviors Even Islam is against charging the interest 6.4.3 Secondary Influences The secondary influences on values and behaviors that are not as direct as the primary influences include the laws, organizational cultures and human resources management systems; they still exert a powerful influence 6.5 PSYCHOLOGICAL EXPECTANCY MODEL It is necessary to understand the usefulness of the psychological expectancy model for examining the critical variables in all choice situations, including ethical decision making In this model, choices are asserted to be the result of the individual expectations about achieving a goal or outcome and the degree of desirability associated with it, considering all of its consequences and their meaning for the individual decision maker The consequences are a function of individual factors and environmental factors Management controls and surveillance procedures might make an action impossible and therefore, in that situation, the action would be avoided If the action is possible because of some opportunity and the individual has the capability of doing it, the next calculation is whether the pluses and minuses of an unethical act may include the possibility of making money, the individual shame etc Whether management control or surveillance exist Employee tends to be unethical Based on Individual or Environmental Factors Yes Action Avoided No Employee calculates Possibility of making money How much? Social Reward + Is’t Worth? No Individual shame experienced by doing soothing unethical Punishment given by one’s peers Probability of getting caught and paying a penalty Yes Proceed Source: Business Ethics, C.S.V Murthy Figure 6.3: Psychological Expectancy Model From this expectancy model that a particular reaction to an ethical situation in which an individual finds himself will be affected by: z A wide variety of individual z A wide variety of group z A wide variety of work environment z A wide variety of societal factors The above includes personality, values, needs, beliefs, laws, HRM practices, organization culture, professional group standards, and social cultural expectations There are various HRM policies in the areas of recruitment, training, performance evaluation and reward systems that exert a powerful influence on ethical practices Example: Sears, Roebuck and Correctly, changed its policy of paying its employees in auto services on a commission basis, because some of them deliberately charged customers for services that were never rendered IBM had a no-lay off policy until recently and it supposedly led to a more conservative approach to decision making and by extension, what was acceptable or ethical behaviour Many large Japanese organisations guarantee life time employment to a core set of managers and employees, and although this has led to an increase in feelings of company loyalty It has also been accompanied by conservative decision making and the treating of some employees performing approximately the same jobs in radically different ways Salary of an employee who has been granted life term employment may be twice to that of his short term counter part 61 Ethics at Work Place 62 Global Business Ethics HRM systems are part of the management function of organizing They include all those practices used in creating the human organization such as: z Hiring and training of employees z Influencing employee behaviors through the organizations performance appraisal and compensation programmers z Establishing rules about job behaviour through disciplinary and collective bargaining systems Many of these systems also have the function of retaining such employees, after they are hired, because such employees represent an organisations human capital and frequently its distinctive competence needed to carry out its corporate and business strategies The human resource system of a company constitutes an essential part of the organisations control system The organization has a set of targeted behaviour that it needs and desires; through selection, training and behaviour - influencing programs, it attempts to ensure that they occur The HRM practices can affect ethical behaviour in a number of ways They not only communicate a society's and an organization’s beliefs and values but also may provide direct incentives and pressures to override personal values In terms of representing societal values, there is employment law of the nation first, which in large measure may reflect aspects of that nation’s culture All nations regulate the employment condition for their citizens These regulations may be laws and even such things as tax code regulations Employment laws may not only reflect cultural factors but also simplify the state of maturity of an economy As a nation matures and prospers, more rights and privileges are given to employees in that society; other groups (consumers and environmentalists) may also gain increased power The scenario provides some support for a developmental theory of ethics, which holds that as a society starts to solve some of its most fundamental problems of insecurity and scarcity, increased concerns with justice and equity emerge HRM practices mirror various other normative pressures in a society as what is appropriate or inappropriate Example Institutional theory tells us that existing practices in other organisations in a society have to be considered while planning and managing on HRM program because these become the norm in the minds of employees with respect to what should be Institutional pressures or forces may reflect national culture as well HRM practices of a nation like Taiwan or Korea can be significantly different from US because of cultural differences; so also Japan's with USA's The business strategies of the firm and its distinctive situation are also important in structuring HRM systems used for managers or Executive Human Resource Management (EHRM) systems This helps in determining the nature of HRM systems that help managers in carrying out their roles There is a clear distinction drawn between manager’s employees and managers in the area of HRM systems and practices in all or most countries In terms of legal requirements of HRM systems also, they differ HRM Practices tightly controlled by central government for a number of years - there has been a loosening of such control now In the past, workers in China were assigned to companies by the government irrespective of the company's needs Government decides on the rate of pay (by comparing description of jobs to national sets of wage grades) Managers have to negotiate all decisions with trade union representatives and also with office of internal security (the ruling communist party in the company) Many Chinese companies are overstaffed Expensive for them in providing extensive training plus housing plus health and medical care plus other benefits Retired at 60 years of age Superiors sit with subordinates periodically, discuss their performance weaknesses Recently experiments with profit based company bonus systems are carried out Vast economic changes occurring and HRM systems are changing privately owned firms, joint ventures and cooperatives are becoming increasingly important These newer types of firms use non-traditional type of HRM systems 6.6 PERSONAL CHARACTERISTICS z Personal ethical standards or values with respect to that particular action z Risk taking propensities z Importance of or need for money z Or the rewards in the situation z Need for social acceptance Note: Varies from individual to individual Varies on an average or model basis from one culture to another Check your Progress Fill in the blanks: is freedom from intrusion or public attention Weight given by the individual will depend on system of a company also affects how managers behave towards their employees 6.7 ETHICAL IMPLICATIONS OF VARIATION IN HRM PRACTICES These are due to: z The type of people, the organization hires, Carelessness of hiring who trust is worthy: dishonest people very ambitious, achievement oriented, wealth oriented They may achieve high level performance but also a greater incidence of unethical behaviour Content of training is important z What behaviors the performance appraisal and compensation systems encourage? Example: Results at all costs, irrespective of the means used to achieve them? Extremely high compensation levels sometimes provide a very strong enticement to achieve results by unethical means z Punishments (lack of promotions, layoffs) might also create conditions under which people behave unethically z Is the performance of employees are actually discussed by supervisors? Little monitoring of behaviour - greater tending for ethical problems to occur z Collective bargaining or employee governance system of a company also affects how managers behave towards their employees If the organization views its employees or their unions as enemies, there is higher likelihood of non-trust and mistreatment Employees judge their HRM system as ethical or unethical These assessments are made on the basis of degree to which such HRM system correspond to culturally determined norms of procedural justice 63 Ethics at Work Place 64 Global Business Ethics 6.8 LET US SUM UP HRM systems vary from country to country HRM systems for managers are different from those for ordinary level of worker HRM practices in plant locations in other countries cannot be the same as such practices create problems and strain relations with the local population both within such overseas subsidiaries and outside them The utilitarian say that great harm is done to individuals when inaccurate or incomplete information collected by an employer is used on the basis for making important personnel decisions 6.9 LESSON END ACTIVITY Define ethical approach towards business and role of individuals in organization 6.10 KEYWORDS Privacy: Freedom from intrusion or public attention Parenting: Rearing of kids Socialisation: Social nurturing of children 6.11 QUESTIONS FOR DISCUSSION Define ethics at work place “The individual will be weighed on the personal characteristics” Comment on this statement Elucidate ethics in HR with examples Describe the ethical implications of business Check Your Progress: Model Answers CYP Many philosophers suggest that the key to a more satisfactory theory of privacy can be constructed by understanding the way in which individuals are socialized in our culture Privacy is an essential part of the complex social practice by means of which the social group recognizes-and communications to the individual that his existence is his own To be a person, an individual must recognize not just his actual capacity to shape his destiny by his choices He must also recognize that he has an exclusive moral right to shape his destiny CYP Privacy Personal characteristics Employee governance 6.12 SUGGESTED READINGS Manuel G Velasquez, Business Ethics Laura P Hart Man, Business Ethics John R Boat Right, Ethics in Conduct of Business William A Wines, Ethics Law and Business  ... SUGGESTED READINGS Manuel G Velasquez, Business Ethics Laura P Hart Man, Business Ethics John R Boat Right, Ethics in Conduct of Business William A Wines, Ethics Law and Business ...54 Global Business Ethics 55 Ethics at Work Place LESSON ETHICS AT WORK PLACE CONTENTS 6.0 Aims and Objectives 6.1 Introduction 6.2 Individual in the Organisation 6.3 Ethics in Human... information about ourselves This definition is too broad and too narrow 57 Ethics at Work Place 58 Global Business Ethics Richard B Parker observes that not every loss or gain of control over