Ethics and Management

Presented par Birame GUEYE

Paris, 2021
 Birame GUEYE
• MBA John Molson School of Business at Concordia University,
Montréal, Canada

• Engineer Information Systems Architecture

• Former Managing Director France and Southern Europe

of American and German Technologies companies

• Founder and President of Adval Plus, consulting, training,

management, strategy and digital transformation

• Associate Professor engineering and business schools

 Agenda
• Introduction
• The VUCA World
• Ethics in Management
• The 5 P’s of Ethical Management
(Blanchard & Peele)
• Enterprise code of ethics
VUCA World
Volatile
Uncertain "the new
normal”
Complex
Ambiguous
 Where did VUCA come from?

US Military started using this term in

late 90s for the post-Cold War world

Reflects a fast-paced,
increasingly unstable and
rapidly changing world
To deal with a
changing
battlescape

Business leaders face a similar,

challenging,
dynamic
landscape
Volatile

Unstable
Hard to predict

Be prepared
Match investment to risk
Uncertain

The inability to know everything,the lack

of predictability and likelihood of
“surprise” events
Complexity
 Ambiguity
The haziness of reality, the potential for misreads, and
the mixed meanings of conditions; cause-and-effect
confusion.
ENGINEERS IN CANADA OFTEN HOLD A SMALL FINGER RING ON THE DOMINANT
HAND. THIS STEEL RING IS DELIVERED AT THE END OF THEIR STUDIES. IT HAS
SYMBOLIZED SINCE 1925 THE COMMITMENT TAKEN BY YOUNG GRADUATES ALWAYS
HAVE A PROFESSIONAL AND ETHICAL BEHAVIOR.
IT IS ALSO A SYMBOL OF PRIDE AND HUMILITY.

The ring is a symbol of the engineer's

pride in his profession and a reminder
of the solemn commitment he made
humbly and voluntarily and which
requires him to behave professionally
according to very high standards.

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 Definition

It is research and exploration on the norms

and principles that guide human action and
which we refer to when making an ethical
decision in the face of a conflict of values.
 What I
WANT
to do

Ethics

What I What I
CAN to MUST
do do
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Ethics in Management
 Ethics: What Does It Really Mean?

• Derived from Greek word ‘Ethicos’ meaning

Character or Manners

• Science of character of a person expressed as

right or wrong conduct or action.

• Set of moral principles prescribing code, explains

what is good and right, or bad and wrong.
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 Definitions (Oxford English Dictionary)

◼ Ethics: Greek word ethos, referring to

character and individual behavior

◼ Ethics: The science of morals

◼ Morals: Concerned with character, or right

and wrong, or goodness and badness
 Ethics:
What Does It Really Mean?

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 Ethics, Morals and Values

https://www.youtube.com/watch?v=SCjYaatMJuY

https://ethicsunwrapped.utexas.edu/glossary/morals
https://www.youtube.com/watch?v=ZwFyASop8nc
Sales returns

20
 Objective of Ethics
• Studies human behavior and makes
evaluative assessment about them as moral
or immoral
• Establishes moral standards and norms of
behavior
• Makes judgment upon human behavior
based on these standards and norms
• Prescribes moral behavior and makes
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recommendations about how to or how not
to behave
 Moral Values

• Moral values are the standards of

good and evil, which govern an
individual’s behavior and choices.
OR
• Values are the criteria for determining
good and bad, fair and unfair, just and
unjust. 22
 Types of “Values”
• Universal Values:
It has the same value or worth for all, or almost all
people.
Eg, Sanctity of human life, Peace, and human dignity.

• Instrumental Values:
These are values that can be used to get something else.

Examples of these would include Progress (which allows

leisure time), Freedom (Through which we can get
dignity and/or self actualization), and Knowledge (which
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helps us to get economic prosperity, and progress).
 Types of “Values”
• Intrinsic Values: ( opposite to instrumental value)
Something has intrinsic worth simply because of what it is, and not
necessarily what it will lead to.

For example: beauty, artistic expression and happiness. We value

them because they are an important aspect of life.

• Prerequisite Values:
These are values that are necessary before you can get to some
bigger goal.

Examples of this type of value include safety (which is needed before

people can even think about having anything else), Justice (which is24
needed before we can move onto equality), or the common good
(which must be honored if we can ever get to a state of peace).
 Other many sources of Values

Regions of
Fellow Workers Fellow Workers
Country

Family Profession
The Individual
Conscience
Friends Employer

The Law Religious

Society at Large
Beliefs
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 What is Business dilemma?

A business dilemma exists when an

organizational decision maker faces a
choice between two or more options that
impact on:
 Organizational profitability and
competitiveness and its
 Stakeholders.
 Corporate Dilemma over Ethics
People in business come across several ethical
problems that leads to ethical dilemmas.
For e.g.
 They feel that there is lack of clear linkage
between business ethics and financial success;
 They are not clear as to how much they should
invest in the business ethics system;
 They are unclear about the right balance between
the business ethics and the investment required
for the same.
 Sources of ethical Problem
Failure of Personal Character:
People whose personal values are not
desirable embezzle fund, steal supplies
from the companies, paid expense
amount, takes unjustified leaves, shirk
obligation to fellow workers, take bribes
for favourable supplies, use inside
information for their personal interest.
 Conflict of Personal Values
and Organizational goal

The company use methods to

pursue the goals unacceptable to
the managers.
 Personal Beliefs vs.
Organizational Practices
Ethical dilemmas in organization arise
when they employ multicultural and
multi religious employees. Several
organizations are accused of racial
discrimination and gender bias in the
workplace and paying fines of billions
of dollars or opting for out of the court
settlements.
 Production and sale of hazardous
but popular products
Where is the ethical burden lie, when
business sells product known to be
actually or potentially harmful to the
society?
Is the principle of Caveat Emptor in
merchantile law adapted suitably?
Should individual rights and free choice
override social cause?
 Why should business act ethically?

There are numerous reasons why business should act

ethically:
• To protect the stakeholders interest.
• To prevent harm to the general public.
• To build trust to key stakeholders.
• To protect themselves from abuse and unethical
employees and competitors.
• To protect their own employees and create an
environment in which workers can act in ways
consistent with their values.
What makes Ethical Dilemmas so important
and critical ??

33
 Dilemma !!!
Case 1:
▪ A large corporation has taken over, a
smaller one through the common practice
of merger. In merging, it is found that
some positions are duplicated in the
other ……..

▪ Is it right to fire or demote the managers

holding those duplicate positions ?
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 Dilemma !!!
Case 2:
• A paper company can generate power and
reduce its energy cost by building a large
dam on land that it owns.

• But the dam will block a river that

fishermen have used for years

• Is it fair to ruin opportunities for others?

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 Dilemma !!!
Case 3:
•A manufacturer that has grown rapidly in an
expanding market was helped greatly during that
growth by wholesale distributors that introduced
its products to retail stores. Now the market has
become large enough to make direct distribution
from the factory to the store in truckloads lots
much less expensive.

•Is it proper to change distribution channels ??

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Ethical Problems as managerial
dilemmas

Economic Social
Performance Performance

37
•Ethical problems represent a conflict between an
organization’s economic performance (revenue,
cost) and its social performance(obligation to
person within and outside the organization)

•The nature of these obligations include

• protecting loyal employees
• maintaining competitive markets
• producing useful and safe products and
services.
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 Maintaining
competition
Protecting Producing
Loyal safe
Employees products

OBLIGATIONS
in a business

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 Example
•The design engineer who finds ways to
sharply reduce material cost is more likely to
be promoted than the design engineer who
places product quality and consumer safety
above cost considerations.

•There is a “right”, “just” , or proper balance

between economic performance and social
performance.
40
How to resolve Ethical
dilemma ?

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 How to resolve ethical dilemma?

Two basic approaches are used in resolving ethical

dilemmas: Deontological and Teleological
 How to resolve ethical dilemma?
Deontological (Action oriented approach)

• An ethical standard consistent with the fact that it

is performed by a rational and free person.
• These are the rights of the human being and
reflect the characteristic and defining feature of
our nature.
• These fundamental rights are inherent in our
nature and universally recognized.
 How to resolve ethical dilemma?
Teleological ( result oriented) Ethics:

• The moral character depends on simple,

practical matter of the extent to which actions
actually helps or hurt people.
• Actions that produces more benefits than harm
are “right” and those ; that don’t are “wrong”.
 How to resolve ethical dilemma?
Centre for Business and Ethics offers a brief
“Three step Strategy”, in both Deontological
and “Teleological "approaches converge:

• Step1: Analyze the consequences.

• Step2: Analyze the actions
• Step3:Make a decision.
 Characteristics of ethical
problems……. in management
1.Ethical questions can have many alternatives,
each with different economic and social
consequence,
2.some with unknown probabilities of occurrence,
3.Most ethical decisions have extended
consequences. Results extend throughout
societies
4.Decisions of managers have an impact upon
others- both within the organization and within
the society.
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There are multiple alternatives, mixed outcomes, uncertain
occurrences, and personal implications that complicate the decision
process

Personal
Implications
Uncertain
Occurrences

Multiple
alternatives

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 The 5 P’s of Ethical Management
(Blanchard & Peele)

◼ Purpose – your personal vision

◼ Pride – your sense of satisfaction
◼ Patience – sometimes it’s a long road
◼ Persistence – standing your ground
◼ Perspective – be focused and clear

“There is no pillow as soft

as a clear conscience.”
- French Proverb
 Is it Legal? (Blanchard & Peele)
◼ Violation of criminal laws?
◼ Violation of civil laws?
◼ Violation of company policy?
◼ Appearance of being improper or immoral?
◼ Will it harm or embarrass the customers or
company?

“Reputation is character minus what you’ve been caught doing.”

– Michael Iapoce,
A Funny Thing Happened on the Way to the Boardroom
 Is it Balanced? (Blanchard & Peele)

◼ Is it fair to all parties concerned?

◼ Fair short-term & long-term?
◼ Is it fair to the competition?
◼ Would it cause customers to view the
industry negatively?

“The reputation of a thousand years

may be determined by the conduct of one hour.”
- Japanese Proverb
 Is it Right? (Blanchard & Peele)
◼ How will it make you feel about yourself?
◼ Will you be proud of yourself after making
this decision?
◼ How would you feel if your decision made the
front page?

“The time is always right to do the right thing.”

- Dr. Martin Luther King, Jr.
 The Ethics Check (Blanchard & Peele)

◼ Is it legal?
◼ Is it balanced?
◼ How will it make you feel about yourself?

“It’s not hard to make a decision

when you know what your values are.”
- Roy Disney
 At the End of the Day (Blanchard & Peele)
◼ How do you feel about yourself?
◼ How do others feel about you?
◼ Did what you do match what you said?
◼ Did what you do match what you feel?
◼ Did what you do match what other
people believe is right or good?

“Live in such a way that you would not be ashamed

to sell your parrot to the town gossip.”
- Will Rogers
 Issac Asimov:

“Never let your sense of morals

prevent you from doing
what is right.”
 Author Unknown:

“My goal in life is to be

as good of a person
as my dog already thinks I am.”
 Business Ethics
Managing business ethics:
Code of ethics
 What is business ethics management?

Business ethics management is the

direct attempt to formally or
informally manage ethical issues or
problems through specific policies,
practices and programs
 Typical components of business
ethics management
▪ Mission or values statements
▪ Codes of ethics
▪ Reporting/advice channels
▪ Ethics managers, officers and committees
▪ Ethics consultants
▪ Ethics education and training
▪ Stakeholder consultation, dialogue and
partnership programmes
▪ Auditing, accounting and reporting
 Evolution of business ethics
management (BEM)
▪ Take-up of different components increasing
▪ Change in emphasis concerning the
purpose of business ethics management
▪ Previously primarily focused on managing
employee behaviour
▪ Increasing attention to management of
broader social responsibilities
 Setting standards of ethical
behaviour

Designing and implementing

codes of ethics
 Codes of ethics
Codes of ethics are voluntary statements that
commit organizations, industries, or professions
to specific beliefs, values, and actions and/or set
out appropriate ethical behaviour for employees

▪ Four main types of ethical codes

▪ Organisational or corporate codes of ethics
▪ Professional codes of ethics
▪ Industry codes of ethics
▪ Programme or group codes of ethics
 Prevalence of codes and ethics

▪ Increasingly prevalent
▪ Substantial rise in usage during 1990s
▪ 2/3 of large European firms have some
kind of formal ethical code whilst almost all
large US firms have a code of ethics
▪ Less prevalent in Europe
 Content of codes and ethics
▪ Codes of ethics typically attempt to do one or both
of the following:
▪ Define principles or standards that the
organization, profession or industry believes in or
wants to uphold;
Generalized codes -----
▪ Set out practical guidelines for employee
behaviour, either generally or in specific
situations (such as accepting gifts, treating
customers etc.)
 Content of codes and ethics (cont.)
▪ Generalized code of Unilever
All Unilever employees are expected to avoid
personal activities and financial interests which
could conflict with their responsibilities.
▪ Specific codes of Unilever
To define financial interest they have specific
codes for bribery, gift etc.
▪ Transparency International have specific codes
only whereas bureaucratic organizations have
general codes.
 Critical views on ethical codes

▪ Generalised statements of obligation

(Hosmer 1987)
▪ ‘Suppress’ individual moral instincts
and emotions in order to ensure
bureaucratic conformity and
consistency
 Global codes of ethics
Can organizations devise one set of principles for all countries
in which they operate?
▪ Cross-cultural issues most commonly addressed are:
▪ Gifts (hospitality and bribes)
▪ Conflicts of interest
▪ Insider dealing
▪ Equal opportunities and discrimination
▪ Protection of the environment
▪ MNEs should be guided by 3 principles (
▪ Respect of core human values
▪ Respect for local traditions
▪ Belief that context matters when deciding right and wrong
 Importance of code of ethics

• Specific guideline for particular situation

or problem
• Demonstrate organization's concern
internally and externally
• Generate economic efficiency
• Codes can complement other ethical
management activities
 Factors to be considered for
developing COE
• Type of content
• Compliance with relevant Law
• Provisions regarding exposing wrongdoing
• Provisions regarding the problem to be solved,
e.g. procurement policy
• Encompass accountability mechanism
• Specific provision for punishment
• Cross-cultural issues
• Highlight relationship with the particular
stakeholder involved
 Special Thanks to…

▪ Ken Blanchard & Norman Vincent Peale, co-authors

of The Power of Ethical Management
▪ Stephen Covey, author of The 7 Habits of Highly
Effective People
▪ John Mangrich, presenter at the University La Verne
(Ethics - 01/23/02)
▪ Leonard Pellicer, author of Caring Enough to Lead
▪ Manuel Velasquez, author of Business Ethics:
Concepts and Cases
▪ Danah Zohar and Ian Marshall, co-authors of SQ -
Spiritual Intelligence