Ethics in Management

Dr. Madhuri Malhotra

LIBA
Recap: Ethics, Morals and Values

https://www.youtube.com/watch?v=SCjYaatMJuY

https://ethicsunwrapped.utexas.edu/glossary/morals

https://www.youtube.com/watch?v=ZwFyASop8nc Sales returns

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What makes Ethical Dilemmas so important
and critical ??

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Nature of Ethics in Management
• Ethical issues occur frequently in management
• They extend far beyond the commonly discussed
problems of bribery, collusion, and theft.
• Examples ->

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Dilemma !!!
Case 1:
A large corporation has taken over, a smaller one through the
common practice of merger. In merging, it is found that some
positions are duplicated in the other ……..

Is it right to fire or demote the managers holding those duplicate

positions ?

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Case 2:
• A paper company can generate power and reduce its energy cost by
building a large dam on land that it owns.
• But the dam will block a river that fishermen have used for years
• Is it fair to ruin opportunities for others?

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Case 3:
• A manufacturer that has grown rapidly in an expanding market was
helped greatly during that growth by wholesale distributors that
introduced its products to retail stores. Now the market has become
large enough to make direct distribution from the factory to the store
in truckloads lots much less expensive.
• Is it proper to change distribution channels ??

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 What makes ethical dilemmas so Critical

• Judgement towards people

• Personal belief systems are different

• Morals differ

• Involves Emotions

• It involves many stakeholders

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 Ethical Problems as
managerial dilemmas

Economic Social
Performance Performance

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1. Ethical problems represent a conflict between an
organization’s economic performance (revenue, cost) and its
social performance(obligation to person within and outside
the organization)

2. The nature of these obligations include

1. protecting loyal employees
2. maintaining competitive markets
3. producing useful and safe products and services.

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 Maintaining
competition
Protecting Producing
Loyal safe
Employees products

OBLIGATIONS in a
business

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 Example

• The deign engineer who finds ways to sharply reduce material cost is
more likely to be promoted than the design engineer who places
product quality and consumer safety above cost considerations.
• There is a “right”, “just” , or proper balance between economic
performance and social performance.

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Characteristics of Ethical
Issues in Business

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Characteristics of ethical problems……. in
management
1. Ethical questions can have many alternatives, each with different economic
and social consequence,
2. some with unknown probabilities of occurrence,
3. Most ethical decisions have extended consequences. Results extend throughout
societies
4. Decisions of managers have an impact upon others- both within the
organization and within the society.
For eg:
1. BRIBES -----------------------------change governmental processes
2. Pollution affects -----------------environmental health

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There are multiple alternatives, mixed outcomes, uncertain
occurrences, and personal implications that complicate the
decision process

Personal
Implications
Uncertain
Occurrences

Multiple
alternatives

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