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Running Head: Ethics


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     Who do you know that you consider to be an “ethical person”? Undoubtedly several people come to mind that clearly fit that description. We all have a fairly good idea what “being ethical” means, based on our own experiences, values and beliefs. Yet we still struggle with tough ethical questions in both our paid and volunteer roles that seem to have no easy answer. Ethics is relevant to every major social problem facing the world today and influences daily decisions made by individuals, businesses and nonprofits.
Where is the distinction between individual ethics and the ethics, standards and policies of an organization or profession? These general definitions may be helpful as a start:

  • Values: core beliefs that guide actions
  • Ethics: a particular code of values
  • Collective Standards: particular methods of practice
  • Code of Ethics: formal rules which govern behavior of a group
  • Policies: guidelines for behavior in particular situations

Whereas most of us think of ethics in very personal terms, the word actually assumes a much greater meaning the minute we become part of an organization or established group of people. At that point, individual values are not enough to define what behavior will or will not be acceptable or tolerated. Definitions of right and wrong may vary, even if the group is composed of individuals who all consider themselves to be “ethical.”

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     With a growing consensus that businesses need to be ethical, society turns to educators and consultants to help improve ethical behavior in business. Yet it is not too clear how they can help. Most of us agree that it is wrong to lie, cheat, and steal or to exploit, harass, and irresponsibly break one's word, so we don't need an ethics consultant or ethicist to teach us what we already know. What is needed more is a plan for effecting some change in behavior patterns from unethical patterns to ethical. The problem of influencing and altering unethical behavior can be addressed on the individual level, where success is unlikely unless a host of conditions are met: (1) a change in perception about the desirability of current practices, (2) a moral imagination that offers alternative ways of behaving, and (3) the courage to begin modifying one's behavior one step at a time, i.e., character building. What helps such individual effort enormously is an organization dedicated to providing an environment that makes ethical behavior attractive, led by a person who practices such ethical behavior and has such a character. The two books under review approach business ethics from such an organizational theorist and leadership perspective, while appealing to some form of Aristotelian ethics. Hartman resurrects the Aristotelian emphasis on the social influences on individual ethical behavior and character development, and Kanungo and Mendonca stress the need to develop an ethical character in leaders, which manifests the Platonic/Aristotelian core virtues of prudence, justice, temperance, and fortitude. Such a person will be a spiritual leader who can effect change.

People are interested in other people. Since people are social animals, the good life requires living in a good community. From such a viewpoint, the test of the manager is to arrange matters such that morality and self-interest overlap, at least for intentional agents who are reflective thinkers.

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But what is the nature of the good community where people are better off? It is not just a community that maximizes utility or good, as utilitarians would insist, and even if it were, we are not in any position to designate any one conception of the good as the right one. Nevertheless, some conditions for the good life are "the autonomous exercise of one's powers and enjoyment of one's goods as one wishes," taking into account "the importance of justice and rights." We need a community that fosters liberty within the constraints of justice and rights, but justice and rights based on more than just what one deserves from being efficient and productive. Such a community must result from a freely given agreement, a social contract, but one that cherishes and protects as much liberty as possible while being as productive as possible. These are the central components of John Rawls' notion of a just society, to which I add Hirschman's minimal conditions of an ethical community - exit, voice, and loyalty. Finally, a good community also requires not only good rules but also people of civic virtue. Moral persons are necessary for good organizations, but a good organization helps make people moral.

The organization (through its senior leadership) announces that it has formally adopted a specific position, philosophy or set of beliefs regarding those fundamental values or principles which it wants employees to use as the basis for business decision-making. This statement is couched as integral to the identity of the organization and to be applied without exception, by every decision-making employee.

The organization creates and implements the formal systems, procedures and policies which explicitly define expectations regarding employee behaviors that are needed to guide employees in their day-to-day decision making. Examples of these systems include statements of values, codes of conduct, ethics policies, ombudspersons, ethics oversight committees, ethics surveys, employee "helplines", and other ethics management mechanisms.

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Leaders at all levels of the organization explicitly and implicitly communicate their expectations regarding employee behavior, reinforcing the explicit organizational expectations detailed through the formal systems and structures. This includes the visible use of the ethics systems in their own decision making and the requirement that subordinate employees do likewise.

The organization reinforces its statement of position, philosophy or belief by making adherence to the associated guidelines and policies an integral part of how success is measured and rewarded. Informally, frontline leadership measures and rewards adherence to the stated position of the organization.

The organization embarks on a strategic communications and education campaign to ensure that employees understand the stated position and the behavioral expectations, as well as have familiarity with the systems and structures that have been put in place to facilitate employee fulfillment of those expectations.

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Senior leadership uses critical events in the business to underscore their commitment to the stated position, philosophy or belief. They make their adherence to the position explicit and use the critical event as evidence of how the highest levels of the organization are accountable to the same standards as are imposed throughout the organization.

One of the most critical, yet least controllable, shapers of any organization's ethical culture is employees' perceptions of the motives behind senior management's adoption of the stated position, philosophy or belief, their hidden agendas. Senior management needs to assiduously avoid any decision or action which could reasonable be expected to communicate a self-serving or selfish motive for imposing the previously referenced position, systems or measurements on the employees of the organization.

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