Ethics in management

Management ethics is the ethical treatment of employees, stockholders, owners and the public by a company. A company, while needing to make a profit, should have good ethics. Employees should be treated well, whether they are employed here or overseas. By being respectful of the environment in the community a company shows good ethics, and good, honest records also show respect to stockholders and owners.

Ethics and ethical behavior are the essential parts of healthy management. From a management perspective, behaving ethically is an integral part of long-term career success. Wide access to information and more business opportunities than in the past makes ethics a need in modern business world.

Reasons to behave ethically

From the point of view of the internal customer, ethical behaviour improves the atmosphere at work and helps motivate the employees, sets a good example to the employees, and evokes a sense of pride for the company and improves its image in the eyes of the employees. From the point of view of external customer, ethical behaviour improves the public image of the company and adds to the overall development of ethical behaviour in the organization.

Ethical behavior calls for an atmosphere in which it can be performed. It also necessitates an awareness about the basics of ethical behavior.Eventually it leads to cultural and behavioral enrichment among internal staff of the organization.

The four levels of organizational ethics

Social disregard': the company shows carelessness for the consequences of its actions.
Social obligation: the company does not wish to extend its activity any further than just meeting its legal responsibilities.
Social responsiveness: the company adjusts its policies according to the social conditions, demands and pressures.
Social responsibility: the company decides to concentrate on its long-term goals for the benefit of society in general. An example is ISO 26000 Social Responsibility launched 2010.

Ethical decision-making

When making a decision in management the following criteria of ethical decision-making should be considered:

Legality - will the decision somehow affect the legal status?
Fairness - how will the decision affect those involved in it?
Effectiveness - will the decision achieve the aim for which it is being taken?

Any decision that is not legal, not fair and not effective should not be taken. It is only a YES response to all three questions that allows decision makers to take the next step. A NO response to any of the three questions ends the matter. This is supported by the GO/NO-GO Decision Model (Ayande A.B Prosper, 2011). Further criteria to consider are:

Self-respect - does the decision-maker feel good about the decision and its consequences?
Long-term effects - how do the predicted long-term effects relate to the above parameters?

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