Management Lecture Week 11:12 PDF

Preview

Summary

Notes...

Description

Management Lecture Week 11/12 Ethics: The code of moral principles and values that governs the behaviour of a person or a group with respect to what is right or wrong

Domain of Codified Law Legal Standard

Domain of Ethics Social Standard

Domain of Free Choice Personal Standard

Ethical behaviour is accepted as ‘right’ or ‘good’ or ‘proper’ in the context of a governing moral code. If an act is legal, some will proceed with it confidently, while others might believe that the ethical test goes beyond legality. This is a matter of personal values. Values are broad beliefs about what is or is not appropriate behaviour Ethical Dilemma A situation that arises when all alternative choices or behaviours have been deemed undesirable because of potentially negative ethical consequences, making it difficult to distinguish right from wrong Example of unethical behaviour

Ethical decisions exist at many levels 1. Societal 2. Organisational 3. Professional 4. Individual

Individual: a personal code of conduct when dealing with others Professional: standards that outline appropriate conduct in a given profession Organisational: values and principles chosen by an organisation that guide behaviour of people within and/or what stakeholders expect of the organisation Societal: Principles and standards that guide members of society in their day-to-day behaviour with one another What happens when these levels are misaligned? Whistleblowing “The disclosure by organization members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to persons or organizations that may be able to effect action” Alternative Views There are numerous philosophical and psychological viewpoints that influence our approach to ethics These broad philosophical approaches are drawn upon to create guides for decision making based on norms and values- normative strategy The current global context presents mangers with increasingly complex ethical situations- a situation that demands a diverse view of contemporary cultural ethical approaches Utilitarian: • Moral behaviour produces the greatest good for the greatest number. • Simple economic costs and benefits to help make decisions. Individualism: • Acts are moral when they promote the individual’s best long-term interests, which ultimately leads to greater good • Often perceived as gratifying immediate self-interest but also promotes reciprocal standards of behaviour Moral rights: • Moral decisions are those that best maintain the rights of those people affected by them

•

People have fundamental rights and liberties that cannot be taken away e.g. freedom of speech

Justice: • Moral decisions must be based on standards of equity, fairness and impartiality • Concepts of; distributive, procedural and compensatory justice Practical Approach • Linking discipline, bridging theory and practice • Emphasises institutional context of ethical choices • Importance of political nature of ethical decision making- who should decide? Decisions based on prevailing standards of the profession and larger society, taking the interests of all stakeholders into account. Side-steps the question of right, good or just. Factors Several factors influence a manager’s ethical behaviour

Ethics: Power, Influence & Persuasion Managers need to be aware of the power, influence and persuasive power they can have in an organisation Ethical influence and persuasion are most effective when based on personal gain (win-win) Manipulation is the greatest ethical danger in the exercise of influence Ethical problems can be reduced or eliminated by managers: • Aligning company policies or standards • Enforcing those policies or standards • Including ethical performance in appraisals • Ensuring that power is given to those with moral and ethical capacity • Act as models of ethical behaviour

Corporate Social Responsibility The obligation of organisation management to make decisions and take actions that will enhance the welfare and interests of society as well as the organisation CSR strategies

Stakeholders Individuals and groups that have a stake in the org’s performance These can be internal or external and can require careful balancing of sometimes competing stakeholder needs Stakeholder mapping provides a systematic way to identify the expectations, needs, importance and relative power of various stakeholders This can help to identify and prioritise key stakeholder needs related to specific issues

Sustainability Sustainability: Economic development that generates wealth and meets the needs of the current population while preserving the environment for the needs of future generations More than 90% of the world’s largest companies issue sustainability reports Approx 9,700 companies have committed to the UN Global Compact which asks companies to align strategies and operations with universal principles to advance societal goals Triple Bottom Line Profit, People, Planet True adoption has been slow with some research suggesting most, if not all commercial organisations actually contribute to unsustainability Ethical Organisations Various ways managers can create an ethical climate include: • Ethical leadership • Codes of ethics

• Ethical structures Supporting whistle-blowers Paying attention to ethical matters makes business sense • People prefer to work for sustainable companies • Customers also prefer to buy from organisations that are seen to be ethical No one single formula connecting sustainable practices to business success. BUT sustainable practices DO create business advantage and innovation Successful companies • Review, recognise & acknowledge sustainability as an integral part of strategy and culture • Canvass for sustainable development • Analyse the potential for sustainable development practices to contribute to strategic business requirements • Choose, develop & implement their unique set of practices • Measure, adapt, review & extend sustainable practices within an evolving business environment, strategy, culture & business practice set CSR & Employee Engagement • Attracting and retaining employees • Important to Gen Y • Increased engagement, commitment and motivation through CSR initiatives • Positive impact on company culture • Connection with employers • New skills and training through skills based projects e.g. Cisco’s Network Academies ‘Doing well and doing good are inextricably linked’

Elements within both the external and internal environments can impact upon both the organisation and society. Organisations are simply one of a set of institutions embedded in broader social structures There is a dynamic relationship between internal and external, which is mediated by and through stakeholders acting in a variety of capacities. Stakeholders are the individuals, groups & institutions directly affected by an organisation’s performance- the specific environment The specific environment includes the environmental elements of direct day-to-day consequence to an organisation

There is a dynamic relationship between the internal and external environments

There is a dynamic relationship between the internal and external environments as seen in the following models

This distinctive and dynamic relationship between the external and internal environment is interpreted through various organisational dimensions – strategy, structure, and culture. It is how these relationships find expression that impacts upon organisational performance. A key point in the overall debate is that is difficult, if not impossible, to separate the two – external and internal environments. The key dimensions- so, what are we talking about i.e., how do we define the key variables? Environment (both external and internal) has two dimensions (depending upon the assumptions one is using) First, it has an objective existence and is anything that has the potential to impact upon the organisation Second, it is subjective where the environment is socially constructed (e.g., where the dominant coalition ‘selects’ those aspects of the environment they believe are important) External environment reflects an open systems view of organisations Includes all elements existing outside the boundary of the organisation, especially those that have potential to affect the organisation. Two components:

GENERAL Environment

TASK Environment

Environmental uncertainty Managers know what goal they wish to achieve, but info about alternatives and future events is incomplete. Strategies for coping with uncertainty Adapt the organisation to changes in the environment Influence the environment to make it more compatible with organisational needs. • Some companies shape the environment to their needs: • Advertising and public relations • Political activity Trade associations

Organisational Culture Can be analysed on two levels

Visible Levels

Corporate Culture Culture is a complex phenomenon referring to the shared knowledge, beliefs, values, behaviours and ways of thinking among members of the organisations Key to creating a competitive edge but can also have negative influences which compound as culture is passed to new members Organisations can be viewed as ‘mini societies’ and thus broader societal culture can be reflected and reproduced with an org, with all the variations found in broader society. Represents the totality of everyday knowledge that people use habitually to make sense of the world around them, through patterns of shared meanings and understandings passed down through language, symbols, and artefacts

As a Product- embodies accumulated wisdom from those who came before us. As a Process- constantly renewed/re-created as newcomers learn the old ways and eventually become teachers themselves” Culture is a form of ‘common sense’- an outcome of social processes at work in a particular setting (of course, what amounts to ‘common sense’ is very much a socially constructed idea) Culture expresses goals through values and beliefs and guides activity through shared assumptions and group norms. It is important the culture is skilfully managed by leaders in the pursuit of organisational goals. In this way, Culture and Leadership are inextricably linked with Leaders as shapers of shared meaning Given its importance, the ability to measure culture can be key to organisational success

Organisational Culture exists whether management is aware of it or not. Proactively monitoring and influencing culture to support the pursuit of organisational goals can prevent a toxic culture emerging Just as you can have a toxic decision making process so to can you have a toxic culture. McKinsey & Co (2014) claim a healthy organisation is based upon the ability of managers - to align around a clear vision, strategy, and culture - to execute with excellence; and - to renew the organization’s focus over time by responding to market trends. Overcoming culture

4 ‘recipes’ or batches of management practices were associated with healthy organisations and sustained success Companies strongly aligned with any of these four organizational recipes were five times more likely to be healthy and to deliver strong, sustained performance than companies with mixed (or random) recipes. Each of the four clusters reflects a distinct underlying approach to managing, including core beliefs about value creation and what drives organizational success. Each can be described by the specific set of management practices prioritized by companies that follow it… Healthy Organisations Talented, high-potential leaders al all org levels who are given autonomy to deliver results and held accountable for doing so. Open, trusting culture typical of highly decentralized organizations or new businesses Resolve of strong leaders, effectively multiplied by their peers across the organization, is essential to create something from nothing. Use career opportunities as a leadership-development practice. Role modelling and real experience are more important than passing along sage lessons. Tend to have a strong external orientation toward customers, competitors, business partners, regulators, and the community. Strive to be product innovators, shape market trends, and build solid, innovative brands to stay ahead Both responds to demand and develop products that help shape it e.g. Apple Have a shared vision and the strategic clarity to explore the right market opportunities Have strong financial management to provide individual accountability and ensure that responses to market trends are in fact profitable. Execution Edge Stress continuous improvement on the front line, raising quality and productivity constantly while eliminating waste and inefficiency.

Place a heavy emphasis on sharing knowledge across employees and sites—not just to foster innovation, but, paradoxically, to also drive standardisation. Knowledge sharing to manage need for networkwide consistency and bottom-up encouragement of employees, ensuring the best ideas get disseminated across the org Found frequently among successful professional-services firms, professional sports teams, and entertainment businesses. Emphasise competitive advantage through a high-quality talent and knowledge base. Focuses on creating the right mix of financial and nonfinancial incentives to acquire the best talent, motivating and giving them opportunities. Talent and knowledge-core organisations succeed thanks to highly skilled individual performers....