Welcome to the presentation on ethics management. Managing responsibility, practicing sustainability, responsibility and ethics. The purpose of this session is to provide you a broad overview. A map of the theory and practice of ethics management. With this overview, you will then be able to delve deeper into topics that are relevant for you. Where are we? In week one, we had introduced responsible management as a management centered on sustainability, responsibility, and ethics. We have then begun to explore these three topics together. You have then been working on the topic of sustainability management with Frank in week two, and responsibility management with Sally in week three. In this fourth week, we are deep diving into the last of these three topics, of this trinity of responsible management, if you want so, into the topic of ethics. Just in a moment I would like you to pause the video. To take a piece of paper and a pen and to just write down your answers to the following questions. Please pause the video now. Welcome back. I'm sure answering these questions has given you a good idea on how complex the topic of ethics and management can really be. The concepts in this presentation are designed to get to deeper answers to these questions. However, if you wanted to make it simple, what is ethics in management all about? So in a nutshell, ethics in general is about doing the right thing but what does it actually mean to do the right thing? Doing the right thing may mean so many different things for different people. There are a number of topics in relationships to ethics that people disagree upon. For instance, some people say ethics is all about making the right decision, and this decision should be based on some moral reasoning. Others rather focus on the behavioral aspects of why people do or don't do what they know is right. Some people believe in an ethics dominated by western values and western moral philosophies. By philosophers such as Aristotle, Immanuel Kant and Jeremy Bentham. Others then again, believe in an international ethics perspective where other philosophies such as East Asian Confucianism or the African Ubuntu, are the basis of right and wrong. Some people, particularly in the business ethics context think it's all about what business does wrong, and keeping business managers from doing wrong. While others consider business as a potential force for good. Some people believe that, with just enough thinking, you can arrive at just one, just one absolute truth about what is right. While others say there may be certain different rights for different people and different contexts. Now, it's time to look at elements of the ethics management process. Typically, when we manage ethics, it begins with a problem of right or wrong, or good or bad. However, it might also begin with an opportunity to do good. There may be certain behaviors that are deemed good or bad. And we might have a number of distinct management tools that may help us to mitigate the problem by influencing the behavior. Ethical performance then depends on two things, basically, on people making the right decisions and showing the right behaviors. This then affects the ethics on three related layers. The ethics of the individual or a group of people, of the whole organization, and of the whole system which the organization is a part of. If we think for instance about the global financial crisis in 2007, you may realize how it is rooted in an ethics management problem. The problem is related to the individual bank manager's decision to engage in the unethical behavior. Selling mortgages to people who couldn't pay them in the long run. This low ethical performance of the group of bank managers had catastrophic ripple effects. Many people saw and still see banks and the whole financial system as unethical. The Occupy Wall Street movement was born. Ethics management is about understanding ethical and unethical decisions and behaviors. It is about tackling them through ethics management tools. It's about helping people to do the right things. There are three main areas in business ethics that can help us to succeed in ethics management. The first area, normative ethics, gives us frameworks to help make unethical decisions. It helps us think about ethical problems and deciding what we consider right or wrong. The second one is called descriptive or behavioral ethics. It helps us to understand why people do or don't do the right thing. It does so by analyzing people's personal characteristics and their context. The third area is actually called ethics management itself. It builds up on decision for this right, and knowing why people act on it or not. Ethics management then applies management tools to help people doing the right things. If you want to know more about these three areas, please pause now and have a look at this slide. This slide illustrates with greater detail about what function each area fulfills, which domain of business ethics it corresponds to. And what academic discipline it is grounded in, pause now to have a better look at it. Let's focus now on area one, normative ethics. Normative ethics provides us with decision making frameworks for finding out what right or wrong is in a given situation. Some situations often present a moral dilemma. So what are mainstreams of normative ethics? And what is the logic behind them? What may help us to orient our decisions? There are a multitude of ethical decision making frameworks. But most of them can be subsumed under one of the following three. The area of virtue ethics asks the question, are you virtuous? This question aims to look at decisions and behaviors in the larger context of a person as a whole over time. When answering this question, you would look at how a person's actions display virtues and values. Such as respect, responsibility or transparency. A right behavior then is the one that shows consistence with a particular person's virtuous nature with their good life, if you want so. The second area, which is called the anthology, judges actions based on higher principles as criteria for good decisions. Probably the most known principle is the categorical imperative, also called the golden rule of reciprocity. Using the categorical imperative, once you treat others as one would like others to treat one's self. You would judge every action based on this principle of reciprocity. The third area then, called consequentialism, consists of ethical decision making rules that judge how good a decision is based on the anticipated outcome of the decision. An example is the Greatest Happiness Principle, which suggests to take the course of action that is most likely to create the greatest happiness possible for all involved. Please pause now to familiarize yourself with some of the concepts main philosophers and criticisms of these major normative ethical theories. Welcome back. The different approaches to right and wrong embodied in these ethical decision making frameworks can help us to get a more complete picture of the whole ethical implications of a decision, or also of a behavior. Many of us, rather make decisions based on one type of argument. Please pause the presentation a moment to read through the orienting questions typically asked in each framework. Which of these questions are closest to how you decide about right or wrong? Which one is the one most different to how you make these decisions? Pause now to have a look at the orienting questions. Welcome back again. We will now delve into the second main area of business ethics. It's called behavioral ethics, also called descriptive ethics. In descriptive ethics, the focus is on understanding the process and factors that lead to good or bad behaviors. Why is it, actually, people act or don't act upon ethical issues? Why do people do the things they do, good or bad? Our ethical decisions and actions may be understood through four main components. First, we have to be aware that something actually is an ethical issue. Think about a consumer who does not know about the often exploit of labor conditions. The low cost clothing production has. This person might not consider buying an excessively cheap t-shirt an ethical issue. Once something is defined as an ethical issue, we'll make a decision about right or wrong. Such a decision may be informed by many, many different factors. This could be your personal values or also questions similar to the ethical decision making questions we asked earlier. Different people in different contexts may get to different confusions about right or wrong about good or bad. The third element then is all motivation. Even if I know for myself what is right or wrong, I might not be motivated to do the right thing. Maybe the right is not in my personal interest. Or it might be more inconvenient than doing what I know is wrong. The last and most visible element of the ethical decision making behavior process is the behavior itself. If you want to familiarize yourself more with the process of ethical decision and behavior, please pause now. As you will probably have realized by now, doing the right thing or things is not only a matter of yourself, but it also involves your environment. So this is why behavioral ethics considers both. Our individual factors, such as our ability to make ethical judgments and values, but also situational influences, such as external awards and sanctions, influential role models, also the culture of the organization we are part of. We have now arrived at the third and last area of business ethics. The area of ethics management built up on both, normative ethics and behavioral ethics. So in order to manage ethics, we have to both make a decision on what we consider right. And understand also why people including ourselves do the right or wrong things. If we have achieved both, we can start thinking about what kinds of ethics management tools you want to apply in order to help people doing the right things. There are a variety of different ethics management tools. Examples are many, for instance, there are codes of ethics that outline what the right things to do is, for instance, for an organization or also for a professional group. Another typical instrument in an ethics hotline where people can actually bring up potential ethical issues. So each of these different tools will be most suited to different types of ethical problems. For instance, human rights issues or issues of nondiscrimination on corruption, we require different mixes of tools. But it is not only the subject area and issue is grounded in, but also how the issue relates to us human beings making decisions and our behavior. So what might actually be different situations? We'll look at four different types. The first situation, which is also the one that we have talked most about so far, is a genuine ethical dilemma. Here, for someone motivated to do the right thing, finding out what the right thing actually is, is very tricky. In such a situation, ethics management tools may be applied to help with the decision making process. For instance, you might have an ethics hotline where people can call and ask for advice. However, someone might actually not be very motivated to even try to find out what the right thing is, which is our second situation. We call this more laxity. In this case, additionally to the decision problem, we have a motivation problem. So some companies try to solve this by rewarding divide behaviors and sanctioning the wrong ones. In the third case, whether right things well defined and easily understood. People might still not be motivated to do the right thing. Here, you might run into a distinct motivation problem, called a compliance problem. Very often, these problems strongly monitored and misbehavior is sometimes even legally sanctioned. The fourth and last, and probably most uncritical situation is where it is clearly understood what the right thing is, and people are equally motivated to follow up on it. A non-problem problem, if you want so. Most of the times in these cases, no managerial intervention is necessary. So in summary, ethics management and the tools applied in ethics management have to correspond to these types of ethical issues encountered. Going full circle now, we have seen how ethics is about doing the right thing or rather right things. Ethics management requires making a decision on what the right thing is, and understanding why people do it and don't do it, and applying management tools to help people doing the right thing. If you want to delve deeper into the topic you can look up some of the central themes and ethics management in this world cloud. The contents covered in this presentation are further described in chapter 5 of the book, Principles of Responsible Management.
