This paper focuses on ethics and the role of managers in an ethical organization. The paper begins by explaining briefly what ethics entails, and why it is important to behave ethically. It will then explain about ethical leadership and why not all managers are leaders. The next section will describe in-depth about managers in their organizations and why they should practice ethics. What follows is the role of managers in an ethical organization. This section will describe how managers behave ethically, how they ensure everyone reporting to them behave ethically, and how they act as representatives of their organizations to external stakeholders. The next section will be about managers and development of an ethical culture in the organization. The last section is about examples of the main ethical issues managers face and how they should handle them.
Key words
Ethical leadership
Business ethics
Ethical Organization
Ethical manager
Ethical Culture
Introduction
Every organization has a management that establishes goals, purpose, and mission, and various ways to accomplish the same. The main objectives include ensuring that revenue stay ahead of the costs (profitability), productivity (equipment maintenance and employee training), and keeping customers happy and satisfied (customer service). Others include seeking competitive advantages over competitors, growth, developing business partnership (marketing) and minimizing employees’ turnover. However, it is a challenge for organizations to achieve or maintain these objectives. This statement does not mean the objectives are unachievable. The best way that leaders and managers of different levels management can comfortably attain these objectives is through ethical leadership.
What is ethics?
Different people understand ethics differently. The most accepted definition and meaning of ethics is to know, understand and do what is legally considered right (Rawls, 1971). Ethics represents the moral standards that managers and other staff rely on to make and implement decisions. Behaving ethically in the management is an integral part of a successful organization. Wise managers act respectful, and they treat their employees ethically. Ethical behavior improves the workplace atmosphere, motivates the employees, and improves the public image of the company.
Ethical leadership
It is said not all managers are leaders. Every staff member would follow the directions of their manager because they have to do so. However, the same staff members would follow the laid down guidelines and directions for their leader voluntarily or willingly since they trust his/her vision. Ethical leadership involves a combination of a person’s character traits and features acquired through leading experience. An ethical leader has to be both a moral person, and a moral leader. Being a moral person means the leader should have a combination of character traits such as honesty, trustworthiness, and integrity. Integrity involves unbroken completeness, moral soundness, and a strong adherence to ethical codes of conduct (Trevino, Hartman & Brown, 2000). These features direct the leader’s values and beliefs that eventually impact his or her decisions.
Since ethics involves doing what is right, a moral person who can make a good and ethical leader has to be open and able to reason well when in a dilemma despite difficulties. He/she should also and be concerned about his/her followers. This person is people-oriented and treats his/her followers well during decision-making and implementation process since he/she is much aware of the impacts these decisions have to each person. In addition, an ethical leader motivates and teaches his/her followers about the importance of keeping the interests and needs of their customers and other stakeholders ahead of their own. This action involves engaging all people involved in an emotional and intellectual commitment, thus making them feel equally important in the organization.
There are some situations that a manager faces difficult situations where he/she has to consider all factors before making a final decision. Ethical leaders ensure they are fair and objective to all, stick to their core values, follow ethical decision-making rules, and their final decisions demonstrate concern and welfare of the whole society. These leaders serve as role models, communicate openly, and manage and treat everything and everyone morally and without favoritism. The point is that a person should first demonstrate the traits of a moral person before becoming an ethical leader.
Some people try to demonstrate ethical leadership in their workplace, but in their personal lives, they act unethically. According to studies, these people do not qualify as ethical leaders since it is not very long that they will expose their true colors in the workplace.
Why should Managers Practice Ethics?
Everyone would propose that leaders and managers to be ethical, although what is ethical to one person might be very different to another. Business ethics is essential in managing a sustainable business due to the many severe consequences that may result from decision mad without ethics. Managers end up making misguided, misinformed, and wrong decisions as a result of poor ethics.
Ethical leadership and management create a good climate within the organization. Employees work together and feel more secure if they are sure that the power is shared correctly, and not abused, and they have the power to do their job. They are also happy that the organization operates ethically in the community. Nothing motivates employees like the feeling of being dealt with straightforwardly and respectively. In connection with this point, ethical leadership brings respect and credibility, both for the managers and the organization. It only requires managers to establish themselves as ethical leaders using the above character traits for the individuals within and without the organization to respect them and the organization.
Ethical leadership and management model ethical behavior in both the organization and the community. Every leader would want his/her organization and everyone attached to it behave ethically. The right way for him/her to achieve this desire is first to behave ethically since leaders are role models. Ethically reputable organizations and leaders can provide a model to the community and other organizations. In addition, ethical leadership builds trust. People will follow the directions of an ethical leader since they trust his/her choices, decisions, and implementations. It is through this trust and reputation that other organizations would be willing to collaborate and work with the organization.
Leaders should ensure they establish business ethics in their companies. Business ethics companies can attract and keep customers, employees, and investors. “Knowing that the company they deal with has stated their morals and made a promise to work in an ethical and responsible manner allows investors peace of mind that their money is being used in a way that aligns with their own moral standing” (Joseph n. p, 2013). In addition, customers are also happy to work with a company that sources its labor and materials in a responsible and ethical way.
A company that practices ethics will also experience risks associated with fines for poor behavior. It is less likely for a company to go contrary to laws concerning the required behavior such as environmental practice policies or laws around payments to corrupt regimes. Put in mind that reputation is among the strongest and most valuable asset for every organization. Building a good reputation takes time but may break overnight (Joseph, 2013).
Manager’s role in an ethical Organization
The ethical conduct of the employees in an organization depends on how the manager implements his/her roles. It is the responsibility of managers to ensure that everyone who reports to them behaves ethically. The easiest way to ensure and maintain ethical conduct is by making sure that every employee is aware of the organization’s ethical code. The employees should also be free to ask questions to clarify their understanding (Manager Role, 2014). Managers also monitor the employees’ behavior in accordance with the appropriate behavior expectations of the organization. Without monitoring, managers cannot know whether the employees are behaving ethically or whether the organization’s plan is working accordingly or it needs some adjustments. They then have to control any behavior that is going centrally to their will. They do this task by comparing the actual conduct and behavior and the expected conduct. They have to respond as quickly as possible to minimize chances of any impact of suspected ethical violation. One of the main aims of every organization is to increase profit margin. Although some people say that maintaining ethic does not contribute to any profit increment, business ethic is very crucial since poor ethic can have a long-run detrimental effect on the managers’ bottom line. It is the reason managers have to available and reachable all the time to be consulted and help the employees who face ethical dilemmas.
It is an obvious responsibility of managers to uphold ethical standards through their actions and decision. Another managerial role for an ethical manager is a fiduciary duty (Manager Role, 2014). This manager has a legal responsibility for managing another person’s money. A manager may have fiduciary duties because he/she is vested with discretionary powers and responsibilities to manage a company like a limited liability company, and the members expect the manager to act in their interest. The primary fiduciary duties of this manager are the duties of care and loyalty. The duty of care expects the manager to act the way a prudent person would act in similar circumstances. The duty of loyalty expects the manager to serve the best interests of his/her business and avoid conflicts of interests.
Since managers are the representatives of their organizations, they have a role in interacting with external stakeholders such as government officials, suppliers, customers, and community representatives. During this encounters, it is the responsibility of the managers to explain the plan of actions or decisions in terms of ethical considerations. It is the interest of the stakeholders to hear how a particular manager and his/her organization took ethics into account. It is the duty of the manager in those cases to speak on behalf of the organization.
How do managers develop an Ethical Culture in the Organization?
- Introduction
Culture in an organization is the behavior of employees and everyone involved and how all these people attach to this behavior. It includes vision of the organization, systems, assumptions, beliefs, values, norms, and habits (Ravasi & Schultz, 2006). ). The main importance of organization culture as an internal factor is to unite employees of different demographics. Since the definition and meaning of culture are now clear, ethical culture in an organization comprises of the elements and aspects of the organization that influence its members’ ethical conduct (Kaptein, 2008). One role of managers is to develop a culture of good business in the organization. It involves the formation of a set of moral guidelines and expectation employees, and any other member can follow during the decision-making process and taking actions.
Every day organizations face new competitions from other organizations in their industry. To develop and implement an ethical approach in a competitive environment involves a number of steps.
- Determination of the ethical approach
The first step involves determining the minimum level that the ethical business approach should aim to achieve. It involves defining the goals and determining the effective course of action needed to achieve these goals. A wise manager does not work alone, but coordinate with other levels of leadership and management in the organization. These activities form part of the basis on which the organization will grow and develop from that moment and into the future. Through this basis, the manager can now build a set of ethical standards to follow when making the organization decisions. He also has to measure the effects that his/her ethical standards will have to different levels of management and to the whole organization before the implementation.
- Strategy development
In this step, the manager develops a set of key strategies to use in the implementation of the defined and determines ethical standards. It involves a clear and effective communication between the manager and the employees about the expectations and ensuring that every employee knows and understands their responsibilities in the process of meeting the expectations. It should state the primary values of the organization and the ethical rules all employees should follow. Since the organization may have different levels of management, making it a challenging to pass this information to all members, the management has to develop a communication system available and accessible to all. The main one is the establishment of a standard email for all to use. In addition, the organization can offer ethics training such as setting up seminars and workshops. The training should reinforce the organization’s standards of conduct, aiming at clarifying the practices that are permissible and that are not.
- Monitoring
For the implemented ethical approach to work accordingly, the manager has to develop methods of monitoring compliance with the standards. The primary strategy is through encouraging effective communication and discussion about ethical dilemmas between the employees themselves and the manager. In addition, the manager should aim at bringing and building a culture where everyone is free to communicate issues involving the ethical behavior of both the employees and the organization. Effective communication is essential as it help everyone involved to better understand each other and enable them build trust and respect and resolve differences. It can help communicate difficult messages without destroying trust or creating conflict and improve the relationship at workplace by deepening connections and improving decision-making, teamwork, and problem-solving. In addition, the manager and the organization can provide formal mechanisms for the employees to report unethical behavior or discuss ethical dilemmas without the fear of reprimand. This action may involve the creation of ombudsmen, ethical officers, or ethical counselors (Robbins & Judge, 2009). The managers can utilize all these monitoring techniques to guide his/her employees and the organization in the right direction.
- Controlling
In this concept, controlling does not mean dictating or manipulating the employees. It means the establishment of performance standards, the comparison between the actual performance and the standards, and providing a corrective course of action. The manager has to aim at changing the employees’ attitude from focusing on making short-term profits to focusing on sustainable objectives. The manager has to make his/her employees aware of the organization sustainable issues and affects their attitudes and decisions in terms of ethical compliance have on the organization success.
Although employees have the desire and capacity to be ethical, their desires to succeed can be very high that they end up sacrificing their conduct of ethics to accomplish success. Managers have to prevent these attempts from becoming an issue by controlling and monitoring how employees meet their targets through emphasizing on their compliance with the ethical code of conduct.
- Leading by example
It is a common phenomenon for the employees to look at the behavior of their manager as a model of what is considered as an acceptable behavior in the workplace (Robbins & Judge, 2009). It is unprofessional for a manager to instruct his/her employees to behave ethically while he is behaving otherwise. How one presents him/herself matters. Employees do not need much control and monitoring to act responsibly and ethically if their manager first acts this way.
Ethical Issues managers face and how to handle them
Managers face dilemmas and difficult situations each day when making and implementing decisions. Although management decisions involve ethical considerations, there are times that ethical decision-making arise, requiring leaders and managers to choose between two or more equally bad choices. Sometimes, managers have to consider multiple conflicting ethical considerations. This situation requires the manager to think thoroughly about the consequences and ethical implications of his/her final consideration. It becomes a challenge to make all the involved parties benefit or get satisfied. In such situations, the manager has to consider the following questions: Would the final decision respect the involved parties’ right and duties? Who will the decision affect and to what extent will they be affected? To what extent will the affected parties be benefited or harmed (Utilitarianism)? How do the final decisions square with the canons of justice? What are the impacts of this decision on the network of relationships (ethic and care)? These questions revolve around the principles of reasoning to for managers to solve difficult situations (Cavanagh, Moberg & Velasquez, 1981).
One of the ethical issues that managers face all the time is conflict of interest. This issue occurs when there are multiple interests, were a manager may lower some consideration due to dilemmas posed by these interests. The manager would find himself corrupting the actions in regard of another. These issues mainly happen during job offering. A manager interviewing job applicants may find himself in a conflict of interest if his/her child or a close relative applies the job. In this ethical dilemma, the manager may end up offering the position to his/her relative even if this parson does not qualify for the position. The manager’s obligations toward offering the job to a relative could compromise his/her managerial responsibility to hire the right candidate for the position. It presents a complex situation where the manager’s ethical and moral obligations to various candidates contradict each other, making it a challenge to come to a conclusion.
There are some ethical issues that face the human resource management. These issues are associated with management, hiring, and dismissal of people for any reason. An ethical approach requires the manager to be upfront with the job applicants and the positions available. Every manager should ensure that job advertisement states the nature of the job, position, job tasks, timeframes, expectations, hours, and the salary. This action protects the applicants, the manager, and anyone involved in the organization from having unrealistic expectations or miscommunication about the nature of the job that need filling.
Employee’s dismissal is another ethical issue that needs consideration. An employee may be underperforming, which may make the manager decide to suck him/her. Before this decision, an ethical manager should take time to think logically and ethically whether dismissal is the best choice or other considerations such as a temporary leave, job sharing or further training. In most countries, employees are free to form labor unions that aim at safeguarding their interests. These Unions help workers to collectively meet and discuss or negotiate with management over the issues that are affecting them in the workplace including dismissal. They ensure workers are treated equally, fairly and without discrimination. They may protect workers against unjust dismissal through collective bargaining agreements. Instead of harassing, threatening, or intimidating employees when they try to form unions, an ethical manager usually encourages them.
Another ethical issue is data manipulation. This issue has been one of the biggest problems in most organizations. This action involves deception by knowledgeable perpetrators such as auditors and top executives through the use of schemes such as intentional omissions and altering of supporting documents. This action may make the organization, investors, and existing shareholders to make wrong investment decisions. This action is irresponsible, unfair, and against the law. Managers in an ethical organization should abstain from this act, and instead prevent it through creation of a culture to prevent financial fraud and encouraging examination of financial statements by an outside party once per year.
References
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Joseph, L. (2013). Importance of Business Ethics and Corporate Social Responsibility. Retrieved 03 Dec. 2014
Kaptein, S.P. (2008). Developing and testing a measure for the ethical culture of organizations: the corporate ethical virtues model. Journal of Organizational Behavior, 29(7), 923-947.
Managers Role in Ethical Conduct.” Boundless Management. Boundless, 18 Nov. 2014. Retrieved 04 Dec. 2014
Rawls, J. (1971). A Theory of Justice. Belknap Press of Harvard University Press. 28, 55-75.
Ravasi, D., Schultz, M. (2006). Responding to organizational identity threats: Exploring the role of organizational culture. Academy of Management Journal, 49(3), 433–45
Robbins, S.P., & Judge, T.A. (2009). Organizational behavior. Upper Saddle River, NJ: Pearson Education, Inc.
Trevino, L. K., Hartman, L. P., & Brown, M. (2000). Moral person and moral managers: How executives develop a reputation for ethical leadership. California Management Review, 42(4), 128–142.
