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Ethics Values In Organizational Psychology

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Question:

Discuss About The Ethics Values In Organizational Psychology?

 

Answer:

Introduction

The managerial ethics is considered as the principles or the rules that are dictated by the senior management of the organization (Guiso, Sapienza &Zingales, 2015). The guidelines are helpful in the control of the lower manager’s decision so that they can face any inherent conflict of ethical values in the organization. The managerial ethics are considered as the set of standards that managers use for complex decision-making cases (Guiso, Sapienza &Zingales, 2015). The ethics are considered as the moral codes that underline the behavior of the persons regarding the right act or the wrong act (Fleischman et al., 2017). The moral codes are concerned with the established principles and usually varies from organization to organization. The managerial ethics are concerned with the actions manual that the managers of the organizations can refer to.

Coles Supermarkets, Australia, was founded in the year 1914 is one of the reputed chains in the retail and supermarket industry(Coles.com.au, 2017). The company has over 800 supermarkets spreading all over Australian market. Coles Supermarket has recently been in news as it is accused of involving in child labor (Coles.com.au, 2017).  The operating income of the company is A$ 1.9 billion in the year 2016 (Coles.com.au, 2017). The Australian supermarket has been accused of selling foods supplied by a Thai company, which involves child labor inprawn peeling activities. Coles has faced an ethical dilemma regarding the involvement of children in the factory processes. The company has also faced dilemma of using forced labor in their manufacturing process(Coles.com.au, 2017). This essay would focus on the theoretical concepts of managerial ethics in examining the particular ethical dilemma of the firm. Two theories would be used to explain managerial ethical decision making such as utilitarianism theory and deontology theory. The concluding part would reflect on the effect of the leaders on the ethical decision-making activities of the organization.

 

Discussion

The findings of Ford and Richardson (2013) reveals that ethics plays an important role in the decision making process of the companies. It is important to prevent oneself from engaging in unethical decision making practices. As argued by Morris and McDonald (2013), it is important to draw a line of distinction between the morals and ethics within the decision making process. The term morale is more appropriately used in the context of decision making in personal life (Ford & Richardson, 2013). On the other hand, the ethical decision making is usually reserved for the purpose of group decision making, which is often relevant to the organizational context. The organizations expect their members to behave in the ethically right manner so that there is no damage to the goodwill of the firm (Ford & Richardson, 2013). The organizational managers tend to achieve the right motivation, but there is sometimes right action and sometimes there is the presence of wrong actions.

It is important to incorporate ethics in the process of decision making so that the organization doesn’t have the liability of engaging in unethical business practices. As commented by Crane and Matten (2016), for making ethical business decisions, it is important to place core values in the core functioning of the organization. These core values would help in providing the goals and requirements which would be used for making appropriate decision making (Ford & Richardson, 2013). This focused decision can lead to changes in the decision criteria which expands the entire length and breadth of the business network (which is being denoted by the blue tabs in the following figure)-

The additional business related decisions such as business mission, code of conduct and others which would enhance the compliance criteria of making all decisions in the organizations.

As commented by Epstein and Buhovac (2014), it is imperative for the organizations to consider the various ethical practices which would help the organizational managers to act in a better way (Ford & Richardson, 2013). The managers of Coles Supermarkets strives to engage in ethical decision making practices by keeping in mind the following ethical components-

  • Promotion of good and reduction of harm- The company strives to adopt strategies that benefit the maximum number of people and causes harm to the minimum number of people (Kahane et al., 2015). However, there are instances when the company is bound to take certain decisions in which there is non-benefit of all the concerned stakeholders.
  • Compliance- The compliance component is concerned with the company’s values as well as code of ethics (Miller, 2016). The organizational members are bound to abide by the same and there would be escalation if there are any deviations. The organizational actions should fulfill the legal requirements and this should be done in a regular manner.
  • Promotion of trust- The actions of the employees should be honest and should foster trust and faith among the internal as well as external stakeholders (Ford & Richardson, 2013). There should be sufficient promotion of goodwill among the audience so that there is sufficient goodwill of the organization (Eyal, 2014). Coles Supermarket knows how to accept their own mistakes when there is an issue concerning the ethical aspects of their behaviors.
  • Preservation of right- Coles always keeps in mind that there should be ethical conduct of the business practices. The company checks whether a particular business option is feasible to them in terms of the ethical aspect (Ford & Richardson, 2013). The negative impact of the particular chosen option is also determined, which would have an impact on the organizational rights.

As opined by Pullen and Rhodes (2015), the utilitarianism is considered as one of the most popular normative ethical theory that is concerned with the measurement of right and wrong to the different outcomes that would be produced based on choosing of particular actions. This approach to ethics is considered with the assessment of the company’s action in terms of its consequences and net outcomes. In this approach, the net costs as well costs to all the company stakeholders are being assessed at the individual level(Pullen & Rhodes, 2015). In this ethical dilemma, the supermarket was involved in the child laborpractices which indicate that this step was beneficial for the internal stakeholders of the company (Pullen & Rhodes, 2015). The child labor was involved in the prawn peeling activity, which ensured that the supermarket was able to make huge profit by selling prawn food materials in their store. This was due to the fact that the involving children implies that the organization would be having cheap labor and hence there would be more profits. This notion was well supported by the management of Coles since the company aimed to increase its profits considerably over few years.

The utilitarianism theory focuses on the fact that the utility is considered as the overall pleasure which is derived from an action, which is not inclusive of the sufferings of any entity which is involved in the action (Salloch et al., 2015). The theory is concerned with giving greatest happiness to the highest number of people. In this scenario, the measure was in favor of most of the stakeholders related with the company except the children themselves (Pullen & Rhodes, 2015). This was due to the fact that this measure was involved in increasing the profit of the organization, which is the end motive of most of the private sector organizations. This is the reason that the stakeholders supported the decisions of the company and also went ahead in selling items that had child labor in the manufacturing process.

 


The basis of the utilitarianism theory rests on thefact it is important to derive equality of all the persons involved with the decision and it is important to have equal consideration of all the interests (Fryer, 2016). The ethical dilemma of Coles can be solely attributed to this principle. They were aware of the fact that the decision to involve children would not be well appreciated by the child care NGO’s and the children themselves(Pullen & Rhodes, 2015). There were also possibilities of harassments by the news agencies if they reveal the fact that the reputed supermarket involves forced labor in their business operations. The utilitarianism theory also does not focus on the discrimination of the individuals and tries to focus on the viewpoints of each stakeholder.

As opined by Pullen and Rhodes (2015), the utilitarianism approach is concerned in terms of the outcomes and the consequences. This is concerned with the overall benefits as well as overall costs to all the stakeholders at the personal level. This theory aims to achieve the highest good and all the interest of the entity should be fulfilled or considered equally when decision making activity needs to be done. It is also important to understand the actual consequences of this approach on the decision making approach of the firm. The utilitarianism method is considered as a practical and straight forward method in deciding the correct moral action of an individual in a particular situation. It is also imperative to foresee all the benefits as well as harms, which are related with the selection of particular actions. The each course of action has different impact on the various subjects involved and hence it is important to consider the benefit of all the stakeholders involved when making a business decisions.

As commented by Broad (2014), the deontology theory of ethics is one of the normative ethical position that throws light on the judgement of an action’s morality by some fixed rules. There is often the rise of a moral obligation which may arise from any internal or external source(Pullen & Rhodes, 2015). This may include some religious law, cultural values, personal values, and others. As argued by Hunt (2016), this theory holds the fact that there is morally obligatory nature of some acts which are independent of the probable effects on human welfare. One of the greatest philosopher, Kant, opined that nothing is good apart from the good will. He defined “good will” as the will of acting in accordance with the moral law and respect for that particular law, which arises out of moral obligations (Vitell & Hunt, 2015). The moral law is often considered as the categorical imperative which has the foundation in the human reason(Vitell & Hunt, 2015). This theory places importance on “good in itself” which is concerned with the things that are considered to be good such as pleasure, perseverance, intelligence and others.

The ethical dilemma of Coles can be attributed to their moral obligation of doing something good to the society and especially for the children. The deontological theory instructs the individuals to work in such a way that it gives utmost importance to humanity, which is being violated by Coles Supermarket (Baynes, 2013). The decision to include the child labor may include benefits to the company but they do not serve the wider purpose of humanity(Vitell & Hunt, 2015). The contractarian deontological theories focus on the fact that morally wrong acts are the ones that are forbidden by principles, which are governed by the social contract principles. The theory of deontology theory has impacted Coles as the company failed to take a morally right decision. 

The making of good ethical decisions is important for making trained sensitivity and it is important the considerations that would impact the course of action of the companies(Vitell & Hunt, 2015). The deontology theory has a sub-section known as patient centered deontology, in which there is emphasis on the people’s rights as it is believed that the people have their own rights on the labor, body and the talents (Surprenant, 2015). As opined by Hale (2016), this theory are rights based and there are versions of this theory that are considered as

 


“agent neutral” as they give rise to the moral agents(Lefkowitz, 2017). This theory is based on the rights of the people and this right is being used to provide goof consequences without the consent of that person(Vitell & Hunt, 2015). This point of view of deontological theories focuses on the use of other’s labor, body or talent and this does not use the consent of the other person(Lefkowitz, 2017). This version of the theory believes on the fact that if the act is morally justifiable one, then it is morally irrelevant if anyone performs the act with the intention of having any bad consequences(Vitell & Hunt, 2015). When there is the assessment of the risk conduct, then any potential good consequences should be discounted. The ethical decision making must be made on the basis of the deontological principles.

The Kantian philosophy or the deontological theory has an important role to play in the decision-making process of the managers (Vitell & Hunt, 2015). The autonomy is considered as one of the most important parameters of the ethical decision making, which is being supported by the Kantian philosophy (Malpas, 2014). The aspect of autonomy is important in the process of ethical decision making since this principle frees the concerned decision-maker of the various personal desire’s subjective concerns. Luft (2015) argues that autonomy is concerned with the freedom of making adequate decision based on the morally right actions in a universal framework, rather than the “self-interested” concerns(Vitell & Hunt, 2015). The ethical model of the Kantian philosophy would take into account the decision-making activity in a universal sense moral conduct and places least interest to the self-interested concerns. The ethical model questions the leaders about their own style of decision-making activity(Vitell & Hunt, 2015). It instructs the leaders to give less importance to greed, self-interest and selfish motives by posing various questions. There are various kinds of questions done to the decision-makers such as “Can I rule out monetary influence, political influence and self-interest”(Lefkowitz, 2017)?

The ethical decision makers following the categorical imperative should consider the fact that the ethical decision is universal in nature and it applies in a consistent way across all cultures, time and other societal norms(Hoffman, Frederick&Schwartz, 2014). This principle also focuses on the aspect of “reversibility” where there is the process of role reversal(Lefkowitz, 2017). The decision maker should try to place themselves in the place of his followers and try to understand their opinions.

The managerial decision making is also dependent on the ethical consideration triangle which deals with the intention, duty and the respect for others (Lefkowitz, 2017). The duty component is associated with the doing the right things in the right possible way. The leaders of Coles often struggle to incorporate the right decisions in the organizations and should have a good intention (Vitell & Hunt, 2015). The managers are often in a dilemma whether they are proceeding with the morally good will or not. It is important to have good intentions while making decision-making in the organizations. The dignity and the respect to others are being maintained when a good ethical manger engages in decision making in the organization(Vitell & Hunt, 2015). The public, stakeholders, society and the organizations are always in a need to make good decisions that would have a positive effect on the organizations. They would not be able to work in a manner that is disrespectful to the organizations and to the society at large.

The deontological theory also places importance on the back and forth communication (Kehoe, 2015). The communication process would comprise of the various modes of interaction with all the major stakeholders of the firm. It is important to open all the channels of communication to the major stakeholder’s groups. Their individual inputs should be considered well for the decision-making activity of the managers in Coles Supermarkets(Kehoe, 2015). Their input would lead to more equitable as well as mutually satisfied decision, which can be achieved through the non-symmetrical methods(Kehoe, 2015). The information, which is gained from the ongoing communication with the multiple stakeholders would play an important role in the decision-making process. Coles have a wide network of the stakeholders and hence the company takes extra initiative in communicating with all the major stakeholders.

The ethical decision making also takes into account the mutually beneficial solutions (Trevino & Nelson, 2016). The ethical decision-making model allows the leaders of Coles to gain adequate information about specific issue from a source, which is present outside the organization. They use the derived information to make decisions for their departments(Kehoe, 2015). There are sufficient collaboration and dialogue that often lead to mutually beneficial solutions.

 

Conclusion

I personally feel that the leaders should always make ethical decisions for their organizations. There would be many instances in the organizations, during which the managers or the leaders would have to choose between one ethical option and one unethical option. I think that they should adopt more transparency in the decision-making process and they should open all channels of communications. They should engage in choosing morally right alternatives when they have to make critical decisions for the organizations. There should be the inclusion of moral conduct organically in each and every layer of the organization. I feel that the leaders should view everyone as respect, dignity and with trust. The managers would interact with variety of people in day to day life such as team members, customers and others. The leaders must be able to create a unique organizational culture in Coles or any other organization in which the people would treat each other in a mutually benefitting manner and this would be reflected in their work performances as well. Coles Supermarkets should not have engaged in involving child labor in their organizations. This step could have replaced by recruiting adult workers in their workforce. This would have meant a higher labor charges for the organization, but then the company would have been proud to announce that they have followed ethical code of conduct.

 

References

Baynes, K. (2013). Critical theory. Blackwell Publishing Ltd.

Broad, C. D. (2014). Five types of ethical theory (Vol. 2). Routledge.

Coles Supermarkets. (2017). Coles.com.au. Retrieved 2 October 2017, from https://www.coles.com.au

Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.

Eyal, N. (2014). Using informed consent to save trust. Journal of medical ethics, 40(7), 437-444.

Fleischman, G. M., Johnson, E. N., Valentine, S., & Walker, K. B. (2017). Ethics versus Outcomes: Managerial Responses to Incentive-Driven and Goal-Induced Employee Behavior.

Ford, R. C., & Richardson, W. D. (2013). Ethical decision making: A review of the empirical literature. In Citation classics from the Journal of Business Ethics (pp. 19-44). Springer Netherlands.

Fryer, M. (2016). A role for ethics theory in speculative business ethics teaching. Journal of Business Ethics, 138(1), 79-90.

Guiso, L., Sapienza, P., &Zingales, L. (2015). The value of corporate culture. Journal of Financial Economics, 117(1), 60-76.

Hale, B. (2016). Rights, Rules, and Respect for Nature. The Oxford Handbook of Environmental Ethics, 211.

Hoffman, W. M., Frederick, R. E., & Schwartz, M. S. (Eds.). (2014). Business ethics: Readings and cases in corporate morality. John Wiley & Sons.

Hunt, S. D. (2016). Personal moral codes and the Hunt-Vitell theory of ethics. Business Ethics: New Challenges for Business Schools and Corporate Leaders: New Challenges for Business Schools and Corporate Leaders, 18.

Kahane, G., Everett, J. A., Earp, B. D., Farias, M., & Savulescu, J. (2015). ‘Utilitarian’judgments in sacrificial moral dilemmas do not reflect impartial concern for the greater good. Cognition, 134, 193-209.

Kehoe, W. J. (2015). Marketing Ethics: Theory and Pedagogy. In Proceedings of the 1982 Academy of Marketing Science (AMS) Annual Conference (pp. 261-264). Springer, Cham.

Lefkowitz, J. (2017). Ethics and values in industrial-organizational psychology. Taylor & Francis.

Luft, S. (2015). The neo-Kantian reader.

Malpas, J. (2014). Self, other, thing: Triangulation and topography in post-Kantian philosophy. Philosophy Today.

Miller, A. G. (Ed.). (2016). The social psychology of good and evil. Guilford Publications.

Morris, S. A., & McDonald, R. A. (2013). The role of moral intensity in moral judgments: An empirical investigation. In Citation Classics from the Journal of Business Ethics (pp. 463-479). Springer Netherlands.

Pullen, A., & Rhodes, C. (2015). Ethics, embodiment and organizations. Organization, 22(2), 159-165.

Salloch, S., Wäscher, S., Vollmann, J., &Schildmann, J. (2015). The normative background of empirical-ethical research: first steps towards a transparent and reasoned approach in the selection of an ethical theory. BMC medical ethics, 16(1), 20.

Surprenant, C. W. (2015). PHIL 3094.

Trevino, L. K., & Nelson, K. A. (2016). Managing business ethics: Straight talk about how to do it right. John Wiley & Sons.

Vitell, S. J., & Hunt, S. D. (2015). The general theory of marketing ethics: the consumer ethics and intentions issues. Handbook on ethics and marketing, 15-37.

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