Ethics for Managers

Philosophical Foundations and Business Realities

Joseph Gilbert

• Éditeur: Routledge
• Année: 2016
• ISBN:
  9781317419358
• Édition: 2
• Sujet: Business
• Sous-sujet: Business Ethics

Ethics for Managers introduces students to the philosophical underpinnings of business ethics and translates this theory into practical terms, demonstrating the moral implications of the decisions managers make. This edition features new material on global ethics, the financial downturn, and ethical sustainability.

New, student-friendly features include:

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• Learning objectives at the beginning of each chapter, which provide a roadmap to what is covered and how to use it.

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• Cases that demonstrate real-world scenarios, allowing readers to grapple with real moral ambiguity.

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• Discussion questions at the end of each chapter, which challenge students to see different moral perspectives and to practice good decision-making.

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• A new chapter on international business ethics.

Students of business ethics courses will find this compact, well-organized text a useful tool to understand ethics in the digital age.

1 Introduction

DOI: 10.4324/9781315687841-1

Managers are people who are paid to oversee the work of others.¹ In this role, they often make decisions that impact other people. This book is intended to help managers reflect on the impacts of their decisions, and to help them in making such decisions ethically. In this book, I broadly define a manager as anyone who is responsible for work done by others, whether that person is a supervisor of bank tellers or an executive vice president who is responsible for overseeing several vice presidents.

The word “ethics” is often used loosely, and it is not hard to find discussions of medical ethics (cloning), business ethics (predatory lending), legal ethics (tort reform), professional ethics (accounting), and various other kinds of ethics. Actually, ethics has been recognized as a branch of philosophy for many centuries. The earliest writings on ethics that we still have available to us in the Western tradition of philosophy come from Plato and Aristotle, and are nearly 2,500 years old. Ethical issues have concerned thinkers and writers ever since, and we will briefly examine some of the answers they have provided and have argued about in their efforts to understand the good life for humans. In Part I of this book, we will explore the meaning of ethics, and in Part II, its application to the task of management.

There have been managers for thousands of years, but not nearly as many as there are now. In the Western world, the only large organizations until the eighteenth century were churches and armies.² For most of human history, people have worked at home, for themselves or for their families, and essentially without bosses or managers. This is still true for a significant number of all humans alive today. Our concern in this book, however, is with those who work in organizations with structured authority. If you visit your local bookstore and go to the section covering business, you will find shelves full of books on leadership. You will find books telling you how to be a good manager in one minute, or how to learn what MBAs know in a matter of hours. You will find books on investing, on selling, and on starting new businesses. One area of management on which you will find almost nothing is on how to be an ethical manager.

Goals of This Book

Ethics can be defined as the study of interpersonal or social values, and the rules of conduct that derive from them. By the time an individual becomes a manager, he or she has a sense of moral right and wrong. (In this book, the terms “ethical” and “moral” are used interchangeably.)³ We will examine the sources of this sense, and how it is shaped and changed by various influences. Nonetheless, the point of this book is not to instill a previously missing sense of ethics, or to critique an individual's existing sense of ethics with an eye to making it right where it is now wrong. Only two tasks will be attempted in this book. The first is to make clear the ethical implications of actions taken by managers. The second is to provide some time-tested ways of thinking about ethical issues when they arise, and especially when it is not clear to the individual manager what the “ethically right” answer is.⁴

This book is intended for managers and managers-to-be who want to do what is morally right, and who are open to thinking about such issues. It might also prove useful to others who have input into or are affected by the decisions of managers.⁵ If I were to say to a CEO, “Look, you have two choices. You can report your annual results honestly and show that your company had a loss, or you can cook the books, tell big fat felonious lies, and show a profit—which will it be?” and the CEO were to reply, “Can I have a minute to think about it?”, this book is not for that CEO. Such a CEO will almost certainly not be deterred by ethical considerations.

However, if a manager came to me and said, “I have to lay off ten people who work for my division, and I feel terrible about it. It makes me feel guilty. Am I doing the right thing?”, then this book can help.⁶ This manager recognizes that the act of laying off employees has ethical implications, but is having a hard time sorting out the morality of the action. In the chapters that follow, we will consider three basic approaches to ethics. These are utilitarianism, rights and duties, and fairness and justice. They are based on the writings of philosophers who have thought long and hard about the moral implications of our interactions with others. Hopefully, these three approaches to ethics can help the manager to think more clearly about the issues involved in layoffs, and in particular about the issues involved in the actions that he is about to take.

This book is not for readers who want an introduction to business ethics in general. There are many such books available.⁷ In these books, there is often a minimal discussion of philosophy and of ethics as such, and extensive discussion of topics relevant to managerial ethics as well as more general topics in business ethics. Among the topics often included in business ethics textbooks are the morality of Western capitalism as a system, the role of the corporation in society, and corporate governance. While these topics are important and interesting to many managers, the scope of this book is more narrow. Its purpose is to assist managers to make thoughtful, ethical decisions in their work lives.

The Tasks of Managers

Managers are people who have a certain role to play at work. They also play other roles in life. They are parents, spouses, friends, volunteers, dreamers, doers, and much more. Most people, in whatever position or role they find themselves, want to do what is right and to succeed. They want to feel good about themselves, to take pride in their accomplishments, and to work or play well with others. They want people to think well of them, especially people they know well and whose opinions they value. Managers bring with them to their work experience, values, attitudes, and desires.

Many employees think of managers or bosses with suspicion and distrust. “They” are out to get “us.” Griping about bosses is a time-honored tradition. People join labor unions and pay dues to them not because they are pleased with and confident in their managers, but because they view managers with fear and distrust. When a company does well, there is a tendency to praise management. During the 1990s, there was a cult of the CEO-hero. Jack Welch at General Electric and Louis Gerstner at IBM were widely described as almost mythical superheroes. Unfortunately, Dennis Kozlowski at Tyco, Kenneth Lay at Enron, and Bernie Ebbers at WorldCom were similarly described. Early in the next decade, when things went bad at some of these companies, management was blamed and vilified in ways normally reserved for mass murderers. More recently, executives of large financial institutions have been described in very unflattering terms in books, articles, and Congressional hearings and reports.⁸

MBA programs train people to be masters in the administration of business. This often, but not always, means that these programs train people to be managers. I have taught MBA students for the last twenty-five years, and I like to think that I have been doing a good and honorable thing, not creating monsters. Enrollment in MBA programs and Executive MBA programs has grown substantially during the last two decades. In addition to rapid growth in U.S. enrollment, there have been numerous programs initiated in Western European countries, and some increase in programs in other parts of the world. Clearly, many individuals are willing to spend substantial resources, in time and in money, to become managers or to improve their skills as managers. Other business people carry out the duties of managers without the benefit of formal training for their jobs. There are also many people who play the role of manager in the public sector. Governors and mayors, police chiefs and fire chiefs, school principals and hospital administrators all are paid to oversee the work of others. Like their counterparts in the private sector, these people also play multiple roles in life, and want to do well and be well thought of.

In the following chapters, the discussion of managerial ethics pertains to all those individuals whose primary job is overseeing the work of others, whether in the private or the public sector. This includes supervisors who directly oversee workers, mid-level managers who oversee lower-level managers, and top executives who (among other tasks) oversee the work of lower-ranking executives or managers. There are managers of accounting, marketing, production, and customer service. There are managers in manufacturing firms, service firms, and public agencies. What they all have in common is the task of overseeing and directing the work of others.

Among the tasks that all managers have in common are selection of employees, training of newly assigned employees, motivating employees, assessing, reporting and rewarding the performance of employees, assignment and distribution of tasks among subordinates, budgeting and monitoring expenditures, and reporting and coordinating results with other managers at various levels. In carrying out these tasks, managers make decisions that have direct and indirect impacts on employees, other managers, customers, and investors. In some circumstances, managers are limited in making decisions. For instance, managers whose employees belong to a union and are covered by a negotiated labor–management agreement are limited in the way they can reward employees by the terms of the contract.

This book examines issues relating to ethical decision-making for managers. Decisions also have other components, which we will consider peripherally, if at all. A manager's decision can be technically correct, meaning that it involves the optimal application of technology to the matter at hand. It can be economically correct, meaning that it achieves desired financial results. It can be socially correct, meaning that it meets the approval of society at large or of some interest group or groups within society. It can be legally correct, meaning that it conforms with current applicable laws and regulations. We will examine in the following chapters what it means for a decision to be ethically correct. This is the main focus of the book.

Outline of Book: Part I—Ethical Theory

In Part I of this book, philosophy and ethics are explored. Many books on business ethics devote only a brief introductory chapter to philosophy, then proceed to analysis of particular issues and cases. The whole first part of this book, consisting of five chapters, covers philosophy in general and ethics in particular. Since this book does not assume any background in philosophy, it is important to provide enough depth to help the reader understand what philosophy is, and how ethics fits as one branch within the larger discipline of philosophy. Three different approaches to ethics will be explained, since the history of philosophy contains a number of different theories of ethics that cannot simply be reduced to one common theory. Part II then takes up the application of ethical theory to specific topic areas of interest and relevance to managers.

The second chapter of the book discusses the nature of philosophy, which is a discipline or field of study like physics or sociology or history. It has its assumptions, its rules, and its common topics and areas of disagreement. The discussion in the first part of this book does not assume that the reader has had any previous course work in philosophy. Many college students take a philosophy course as undergraduates. This is frequently either a survey course that skims lightly across the surface of deep waters, or a course in logic, which some would argue is only marginally within the realm of philosophy (while others, particularly some twentieth-century philosophers, would argue that it is the totality of philosophy). The approach taken here is to recognize that, while all thinking adults sometimes philosophize, they are often unaware that they are doing so, and will find it useful to consider the major rules and topics of philosophy. The next step is to situate ethics within the broader realm of philosophy, of which it is a part. This chapter includes a discussion of the relations between philosophy and religion.

The third chapter takes up the specific discussion of ethics. As part of this discussion, the relation between ethics and law will be addressed in some detail. Many business people tend instinctively to equate law with ethics (our actions were fully justified; we did not break any laws). As we will see, there are close ties between law and ethics, but there are sound reasons for maintaining that they are not and cannot be identical.

The remainder of the first part will be taken up with somewhat detailed discussions of three basic approaches to ethics. Different authors cite different schools of ethics, but certainly three of the most common are utilitarianism, rights and duties, and fairness and justice. A chapter is dedicated to each of these approaches, with brief discussions of the major philosophical figures most identified with each of the three approaches. While there are some common elements among them, each has a different emphasis and asks different questions in trying to determine whether an act is ethical. When all three approaches reach the same conclusion, the degree of ethical certainty about that conclusion is high. When the three approaches do not lead to the same conclusion, there is obviously less certainty. The detailed discussion of each approach will suggest which might trump the others in a case of disagreement. However, philosophy is not like physics in the sense that there is not always (or even often) one right answer in philosophy. Life is much more complicated than textbooks, and thinking people who are trying hard to do the right thing can honestly differ as to what that right thing is. As stated above, the purpose of this book is to identify the moral implications of actions, and to provide some tools for thinking through difficult moral questions. It is not to provide the one right answer.

This last statement often troubles managers.⁹ They are in the business of making decisions, of finding answers. They try to find the right answer, or at least the best available one. Further, managers sometimes expect that ethics or morality, whether it is based in religion or in philosophy, should tell them what to do and what not to do. As we will see at several points in the course of this book, it is easy enough to get agreement on general principles (e.g., treat others with respect) but much harder to get agreements on specific applications (e.g., listen calmly and courteously to this employee who is telling you that you don't know what you are doing).

Outline of Book: Part II—Applied Business Ethics

Part II of the book takes up specific areas of application in business where moral questions often arise, and shows how analysis using each of the three approaches to ethics helps to sort out relevant issues and arrive at conclusions about the morality of actions. The areas of application discussed in these chapters have been chosen because they present issues and questions that managers must deal with in the course of their jobs. These issues include employment, performance appraisal and compensation, privacy, terminations, financial reporting, and international ethics. The list of topics is certainly not all-inclusive; rather, it is illustrative of the kinds of moral questions that managers face, and how the three approaches to ethics can be helpful in thinking through specific situations.

Chapter 7 deals with employment situations which involve a number of issues that most managers deal with on a somewhat regular basis. To the extent that a manager, at whatever level, influences or makes the decision about who gets a job and who does not, that manager is exercising control over a valuable resource that each applicant wants to obtain (the job). The outcome of the decision has real consequences both for the applicant who gets the job and for those who do not. The outcome of the decision also has consequences for the manager and for the new employee's fellow workers.

Laws and regulations, company policies or civil service rules, and the manager's personal preferences all play a part in shaping the employment decision. In this chapter, we also examine the relations between law and ethics with regard to issues of affirmative action. Another issue that arises under employment situations involves promotions. While this involves similar considerations to those in the employment decision, there are some additional considerations when a promotion of a current employee is involved.

The evaluation and compensation of current employees is one of the duties of managers. In Chapter 8, we will consider the rights and duties of managers when they evaluate the work of their subordinates. We will also discuss the importance and moral basis for tr...