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Ethics In Management – A Primer

MANAGERIAL ETHICS – A Primer

By

VIKRAM KARVE

Honesty and Loyalty may be often deeply ingrained in the make-up of simple and humble people than in men of high position. A man who was taking bribes when he was a constable does not turn honest when he becomes the Chief of Police. The only thing that changes is the size of the bribe. Weakness of character and inability to withstand temptation remain with the man no matter how high he climbs.

ETHICS and HUMAN RESOURCE MANAGEMENT

It is often stated that the most important resource of any organization is the Human Resource. This article addresses the relevance of ethics in Human Resource Management and discusses various ethical and motivational aspects, including ethical values and ethical decision-making.

Ethics is an integral and vital aspect of Human Resource Management since most of our actions and decisions have ethical manifestations with consequential ramifications in the HR domain.

There is a general belief that ethics is concerned only with financial propriety.

Whilst this aspect certainly involves ethics, ethical management is all encompassing concerning each and every facet of your professional and personal life.

There is a story, probably apocryphal, which illustrates this aspect.

There was a cyclonic storm and millions of fish were washed ashore and were struggling for life on the beach. A man came to the beach and patiently began to pick up the fish, one by one, and throw them back into the sea. An amused passerby asked him what difference it would make, to which the man pointed to the fish in his hand and said, “Ask this fish?”

Thus, we see that seemingly routine decisions, which at the organizational level do not appear to have major ethical magnitude, have large ethical significance at the individual level.

The purpose of this article is to give you a basic understanding of the fundamental concept of ethics, to have you reflect upon the relationship between your ethical values and your behaviour as an HR Manager and to show you how to develop a personalized approach to deal with ethical dilemmas.

Even though only a very small fraction of the employees may indulge in unethical behaviour, it has serious ramifications on the organization as a whole and affects a large number of people who are stakeholders.

Many of us do not even know whether certain of our actions and decisions have ethical implications or not and the consequences thereof.

DEFFINITON and PURPOSE OF ETHICS

What is ethics and what does it deal with?

(a) Ethics is that set of behavioural standards that relate to a set of principles, values and ideals for human conduct. Ethics may be defined as ‘the standards of conduct which indicate how one should behave on moral duties and obligations’.

(b) Ethics deals with two aspects: the first involves one’s ability to distinguish right from wrong, good from evil and propriety from impropriety; the second involves the commitment to do what is good, right and proper.

CORE ETHICAL VALUES

Values are core beliefs, which guide or motivate attitudes and behaviour. They are the established ideals of life that members of a given society regard as desirable.

Ethical Values are directly related to our beliefs concerning what is right, good and proper. They impose moral obligations and are concerned with our sense of moral duty. The 10 core ethical values are:-

(i) Honesty

(ii) Integrity

(iii) Promise keeping

(iv) Loyalty

(v) Fairness

(vi) Concern and Caring for others

(vii) Respect for others

(viii) Responsible Citizenship

(ix) Pursuit of excellence

(x) Accountability

What are your care ethical values?

With how many of the above do they coincide?

Or, do you have other unique ethical values?

Before you can develop an approach to ethical decision making, you should invest some time and effort and attain a solid understanding of your own core ethical values.

ETHICAL DECISION MAKING

ETHICAL PERSPECTIVES OF DECISIONS

There is an ethical dimension to every decision that can be evaluated in terms of its adherence to the previously discussed core ethical values. Thus any of your decisions, which affect other persons, have ethical implications, and virtually all of your important decisions reflect your sensitivity and commitment to ethics.

In summary, as you perform your job in your workplace, what are the ethical dimensions as you deal with your superiors, peers, subordinates and others connected with your work?

Different stakeholders have different ethical perspectives.

Take the case of organizational romance. Whereas, some organizations feel that there is nothing ethically wrong and may even encourage organizational romance and marriage among colleagues by giving various perks and incentives like dating allowance, some other organizations may prohibit or discourage organizational romance. Of course, sexual harassment would be universally considered unethical.

THE PROCESS OF ETHICAL DECISION MAKING.

Ethical decision-making involves the process by which a person evaluates and chooses among alternatives in a manner consistent with his or her core ethical values or principles. Thus when you make an ethical personal or professional decision you: (a) Perceive and eliminate unethical options, and then, (b) Select the best from several competing ethical alternatives by using soft skill management tools like the CATWOE model.

Ethical decision-making requires more than a belief in the importance of ethics. It also requires sensitivity to perceive the ethical implications of your decisions; the ability to evaluate complex ambiguous and incomplete facts and the skill to implement ethical decision making without jeopardizing your career.

Ethical decision-making requires three things; ethical commitment, ethical consciousness and ethical competence.

ETHICAL COMMITMENT

Ethical Commitment is the strong desire to act ethically, to do the right thing, especially when ethics imposes financial, social or psychological costs. Regardless of profession, nearly all people believe they are and should be ethical. While most are not satisfied with the ethical quality of the society as a whole, they believe their profession is more ethical than others and they are at least as ethical as those in their profession.

Unfortunately our behaviours do not consistently conform to our self-images and moral ambitions. As a result, a large number of decent people who are committed to ethical values regularly compromise these values, often because they lack the strength to follow their conscience. Both in your professional and personal life, you will be confronted with a continuous stream of stream of situations in which your ethical commitment will be constantly tested.

ETHICAL CONSCIOUNESS

While weakness of will explains a great deal of improper conduct, a much greater problem arises from our failure to perceive the ethical implications of our conduct. Many of us simply fall to apply our moral convictions to our daily behaviour.

Some of us do not always see ethical issues that are likely to trouble others. Sometimes perfectly legal conduct often appears to be ethically improper or inappropriate.

ETHICAL COMPETENCE

Being ethically conscious and being committed to act ethically is not always enough. In complex situations, which are frequently faced by most of us involved in Human Resource Management, the following reasoning and problem solving skills are also necessary:

Evaluation – The ability to collect and evaluate relevant facts and to know when to stop and how to make prudent decisions based on incomplete and ambiguous facts.

Creativity – The capacity to develop alternative means of accomplishing goals in ways which avoid or minimize ethical problems.

Prediction – The ability to foresee potential consequences of conduct and assess the likelihood or risk that person will be helped or harmed by an act.

THE STAKEHOLDER CONCEPT

A person concerned with being ethical has a moral obligation to consider the ethical implications of all of his or her decision upon others.

Each entity, person, group, institution or constituency that is likely to be affected by the decision is a “stakeholder” with a moral claim on the decision maker. The stakeholder concept provides a systematic way of perceiving and sorting out the various interests involved in our ethical decision making.

The stakeholder concept reinforces our obligation to make all reasonable efforts to foresee possible consequences and take reasonable steps to avoid unjustified harm to innocent stakeholders – an ethical decision maker would never inadvertently cause harm.

A MODEL FOR ETHICAL DECISION MAKING

Three is a need to develop a model of ethical decision making that avoids the shortcomings of the traditional approaches such as the Golden Rule (do unto others as you would have them do unto you) and categorical ethical imperatives (higher truths impose absolute moral obligations which must be obeyed regardless of the consequences).

This model can be practically applied to common problems found in competitive and stressful management situations. The three steps to the ethical decision making model includes:-

(a) All decisions must take into account and reflect a concern for the interest and well-being of all stakeholders.

(b) Ethical values and principles always take precedence over non-ethical values and principles.

(c)  It is ethically proper to violate on ethical principle only when it is clearly necessary to advance another true ethical principle which according to the decision make’s conscience, will produce the greatest balance of good in the long run.

STAGES OF MORAL DEVELOPMENT

The extent to which we use the this approach to ethical decision making to guide our behaviours in management situations will very from person to person. Kohlberg offers a handy framework for delineating the stage each of us has reached with respect to personal moral development.

Stage 1. Physical consequences determine moral behaviour. At this stage of personal moral development, the individual’s ethical behaviour is driven by the decision to avoid punishment or by deference to power. Punishment is an automatic response of physical retaliation. The immediate physical consequences of an action determine its goodness or badness. Such moral behaviour is seen in cadets at service training academics where physics punishment techniques are prevalent with a view to inculcate the attributes of obedience and deference to power.

Stage 2. Individual needs dictate moral behaviour. At this stage, a person’s needs are the person’s primary concern. The right action consists of what instrumentally satisfies your own needs. People are valued in terms of their utility. Example: “I will help him because he may help me in return – you scratch my back, I will scratch yours.”

Stage 3. Approval of others determines moral behaviour. This stage is characterized by decision where the approval of others determines the person’s behaviour. Good behaviour is that which pleases or helps others within the group. The good person satisfies family, friends and associates. “Everybody is doing it, so it must be okay.” One earns approval by being conventionally “respectable” and “nice.” Sin is a breach of the expectations of the social order – “log kya kahenge?”

Stage 4. Compliance with authority and upholding social order are a person’s primary ethical concerns. “Doing one’s duty” is the primary concern. Consistency and precedence must be maintained. Example: “I comply with my superior’s instructions because it is wrong to disobey a senior officer,” Authority is seldom questioned. “Even if I feel that something may be unethical, I will unquestioningly obey all orders and comply with everything my boss says because I believe that the boss is always right.”

Stage 5. Tolerance for rational dissent and acceptance of rule by the majority becomes the primary ethical concern. Example: “Although I disagree with her views. I will uphold her right to have them.” The right action tends to be defined in terms of general individual rights, and in terms of standards that have been critically examined and agreed upon by the whole society. The freedom of the individual should be limited by society only when it infringes upon someone else’s freedom.

Stage 6. What is right is viewed as a matter of individual conscience, free choice and personal responsibility for the consequences. Example: “There is no external threat that can force me to make a decision that I consider morally wrong.” An individual who reaches this stage acts out of universal ethical principles.

Moral development is in no way correlated with intellectual development or your position in the hierarchy or factors like rank/seniority/status/success. In the words of Alexander Orlov: “Honesty and Loyalty may be often more deeply ingrained in the make-up of simple and humble people than in men of high position. A man who was taking bribes when he was a constable does not turn honest when he becomes the Chief of Police; the only thing that changes in the size of the bribe. Weakness of character and inability to withstand temptation remains with the man no matter how high he climbs.” Ethical traits accompany a man to the highest rungs of his career.

If the environment is not conducive, a person can intellectually reach stage 6 but deliberately remain morally at stage 4 as he may find that he has to sacrifice too much to reach stage 6. This can be particularly seen in most hierarchical organizations  where most smart employees make an outward preference of being at stage 3 or 4 (Conformance and Compliance) to avoid jeopardizing their careers even if internally they have achieved higher ethical states. This Dr. Jekyll and Mr. Hyde schizophrenic moral approach is at the heart of many ethical dilemmas people encounter in their professional lives and results in stress due to ethical confusion.

Whenever two individuals at different stages of moral development interact with each other both of them try to force/maneuver the other into their own appreciation of the ethical situation, thus leading to conflict. In a formal hierarchical setup the players in the chain may not be at the similar stage of moral development thereby leading to dissonance in the system.

Where the ethical susceptibility is high, morally strong people (less vulnerable) should be appointed and conversely, in such jobs where ethical susceptibility is low, weakness persons can be appointed.

What is your stage of personal moral development?

Be honest with yourself and recall the decisions you made in recent ethical situations.

The six stages are valuable landmarks as they tell you approximately where you are and what changes you will have to make in your behaviours and decisions to move to a higher level of moral development.

The ultimate goal is to engage in ethical decision making at stage 6. However, the level that you do reach will depend on your ethical commitment, your ethical consciousness and your ethical competence.

FIVE TYPES OF EMPLOYEES

The stages of moral development manifest in five types of employees in organizations. Sheep are employees who do not play an active role in the organization and are passive followers who simply comply with any order or directive given to them. Yes Men are active followers (Sycophants) who readily carry out orders uncritically; they support the bosses’ egos but their extreme obedience can sometimes be dangerous if the orders are unethical or violate laws. Alienated followers are the critics of the organization who point out negative aspects but refuse to actively improve the system. Effective followers play an active role in the organization but are not Yes Men; they critically assess and respectfully challenge organizational authority and propose constructive alternative. Effective followers can play a vital role in enhancing organizational performance through their wisdom. Survivors are followers who get by the work minimal investment and risk exposure in the work environment. With the advent of reengineering, restructuring and downsizing survivors become better at keeping their jobs than doing their jobs well by carefully cultivating multiple images in order to appear to b e the king of follower the current leader wants.

What type of employee are you?

Where do you fit in?

Do you remain one type or change from situation to situation like a chameleon?

What about your colleagues?

It may be interesting to develop linkages between the above types and stages of moral development.

ETHICAL SUSCEPTIBILITY and VULNERABILITY

Ethical Susceptibility is the inability to avoid ethical dilemmas. It is environment dependent (on external factors). Ethical Vulnerability is your inability to withstand succumbing in the given ethical dilemmas /situations. It is dependent on your internal stage of moral development in the given ethical situation. Whereas being in an ethical dilemma is not in your control, to act in a proper and ethical manner in the prevailing situation is certainly in you control. Ethical vulnerability is the ease with which a man be ethically compromised, especially in an ethically poor climate. Where the ethical susceptibility is high, morally strong people (less vulnerable) should be appointed and conversely, in such jobs where ethical susceptibility is low, weaker persons can be appointed.

In the context of organizations, it would be revealing to reflect on the prevailing HR practices and try to aim to facilitate and encourage all employees to achieve at least stage 4 of the moral development grid in order to enable them to be effective flowers. HR practices of the Adam Smith style which use fear and a sense of insecurity as motivators are akin to treating employees like slaves and will lead to proliferation of sheep type of employees. Over emphasis on disciplinary action, threats of sacking, firing and transfer are examples of motivators which attempt to cow down an employee into stage 1. Over-reliance on Motivation as motivator corresponds to stage 2 and this may become a standard operating practice to motivate and facilitate yes-man as will stage 3 motivation techniques, Unless one has achieved the ultimate stage of moral development (conscience and free will) each of us un in a state of moral flux and workplace environment and personal circumstances may force a man to fluctuate between stages of moral development (conscience and free will) each of us in a state of moral flux and Workplace environment and personal circumstances may force a man to fluctuate between stages of moral development depending on the situation and he may tend to practice what is called situational-ethics like the survivor type of employee.

A proactive, fair and transparent HR System will reduce the need for situational-ethics. It is for the top management to decide which type of employee you want for which job and tailor HR practices accordingly. Mismatches can be dangerous. In a nutshell, we have to focus on reducing ethical vulnerability in ethically susceptible jobs thereby facilitating ethical conduct and gradually extend ethical HR initiatives throughout the organization with a view to achieving consonance in ethical perspectives of all stakeholders.

ETHICAL DILEMMAS

Magnitude is the extent the organization will perceive an ethical dilemma.

Significance is the extent the affected individual will perceive on ethical dilemma. Examples of ethical dilemmas in the four ethical dilemma domains are:-

• Domain 1 (Low significance high magnitude) Organizational romance, petty corruption
• Domain 2 (How significance high magnitude) Sexual harassment, grand corruption, Firm Shutting Down
• Domain 3 (Low significance low magnitude) Minor infractions like slight deviation from dress code
• Domain 4 (High significance low magnitude) Transfer

Any time one human being intervenes in the life of another human being directly or indirectly, on ethical situation arises. Ethical situations are frequently charged with emotions. Any attempt to apply quantities, systematic, impersonal, objective or logical decision making techniques may not yield desired result and are not advisable.

CODES OF CONDUCT

Ethics is more than a set of rules what to say and what to do, or of what to avoid and what to overlook. It involves judgments that only those facing those decisions can make. Therefore, ethical management has to mean more than simply laws prohibiting certain actions. It must be a spirit, an imbued code of conduct, an ethos. There must be a climate in which everyone understands that some conduct is correct and other conduct is clearly unacceptable. For example, reflect upon the code of conduct (Cadet Honor Code) followed at West Point: “A cadet will not lie, cheat, steal, or tolerate those who do”

As a person who is responsible for fulfilling trust and as a person who is fundamentally good and ethical, it is your duty to make your ethical decisions at the highest possible stage of moral development. Once the majority of us operate at the highest stage of moral development, the frequency of unethical acts will be close to zero which will result in total mutual trust and confidence which is sine qua non for harmonious Human Resource Management.

VIKRAM KARVE

Copyright © Vikram Karve 2010

Vikram Karve has asserted his right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this work.

http://www.linkedin.com/in/karve

vikramkarve@sify.com

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