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Ethics in Contemporary Management

Management ethics is not a separate branch of ethics. Managers face different applications from those faced by other people, for example, in advertising, recruitment, international trade and indus­trial safety, but the moral questions they face are fundamentally the same. They have to decide what is right according to a set of principles.

Most managers recognise that they wrestle with ethical dilemmas. Dilemmas arise because the interests of different parties are in conflict. One finds that benefiting one party cannot be achieved without disadvantaging another.

An example of questionable ethics is that of the Manville Corporation, which suppressed evidence for decades that proved that asbestos inhalation was killing their employees. A New Jersey court eventually ruled «that Manville had made conscious, cold-blooded business decisions to take no protective or remedial action, in flagrant disregard of the rights of others». The court required the company to put aside 80 percent of its equity into a trust for compensation to the many individuals who have filed lawsuits.

In addition to examples of unethical corporate behaviour by numerous senior managers, any one individual within an organization can act unethically. For example, consider the following situations. You are a purchasing agent and are offered a case of fine wine by one of the suppliers with whom you do business. Would you accept it? You see some of your coworkers making long-distance personal calls from their office. Should you do the same? You consider taking home office supplies for personal use. Should you do so? These examples are just a few of the ethical dilemmas that any one individual may encounter at work. It should be stressed that the specific examples are not against the law, but would be considered by many to be wrong actions. Unethical actions by individuals in clear violation of the law would include falsifying documents that are sent to regulatory agencies, embezzlement of funds, racial discrimination, and asking sexual favours in the workplace. Actions that violate laws pertaining to pollution, product safety, and safe working conditions would also be consid­ered unethical.

A further difficulty for managers, as for other people such as doctors and lawyers who take on responsibilities that affect others, is that they are acting as agents for the organization. They are carrying out organizational rules and decisions that may have personal implications that they have to resolve. The following case illustrates how it happens.

You are in charge of a section of an office. In your spare time, you play in a band, both relaxing and earning good money. Heavier work responsibilities have meant you have had to gradually reduce your band commitments. At the year end, your manager tells you that you are a valued, vital member of the team who performs well above average but there is to be no pay rise because of a government freeze. In recognition of your efforts, however, the manager offers to help you spend more time with the band by “looking the other way” if you want to leave early on Fridays to travel to out of town concerts.

At first sight, this situation would pose little difficulty for many people. They may say that leaving early breaks the contract of employment, the manager should not make this offer and, therefore, you should not accept it. Others would appeal to the moral implications of the contract of employment, a fair day’s work for a fair day’s pay, and suggest that the manager is simply correcting the harm done by not giving a salary increase. Yet others would argue against the unfairness of granting a specific exception for one employee when all should be treated even-handedly. There is no single principle. Some appeal to equity, others to strict rule adherence. Generalising, we can suggest that using a single principle is rarely satisfactory.

Corporate social responsibility and the ethics of managers meet at several points. The organization is the means by which stakeholders, both internal and external, achieve their aims. Their influence is reconciled by managers’ interpretation of the validity of those aims and the pressures that the stakeholders are able to resist. Clearly, managers’ individual ethics play their part in this process.