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Title: Business%20Ethics

Business Ethics
  • Lecturer Piet Westerhuis

Employees and Business Ethics
  • Lecture 2

  • The specific role of employees among the various
    stakeholder groups
  • Core ethical topics of employees rights and
  • Ethical issues and problems faced in
    business-employee relations
  • The duties of employees and the companys
    involvement in enabling employees to live up to
    their duties
  • The notion of corporate citizenship in relation
    to employees
  • Basic issues and problems of managing employees
    in the context of globalization
  • Explore the notion of corporate citizenship in
    relation to employees
  • The implication of sustainability for workplaces
    and for specific working conditions

Ethical issues in the firm-employee relation
Management of human resources an ethical
problem between rights and duties
  • The term human resource management and its
    implications have been a subject of intense
    debate in business ethics
  • Humans treated as important and costly resource
  • Consequently, employees are subject to a strict
    managerial rationale of minimising costs and
    maximising the efficiency of the resource

Rhetoric and reality in HRM
Rhetoric Reality
New working patterns Part-time instead of full-time jobs
Flexibility Management can do what it wants
Empowerment Making someone else take the risk and responsibility
Training and development Manipulation
Recognizing the contribution of the individual Undermining the trade union and collective bargaining
Teamworking Reducing the individuals discretion
Based on Legge (1998)
Rights of employees as stakeholders of the firm
Duties of employees as stakeholders of the firm
Employee duties Issues involved
Duty to comply with labour contract Acceptable level of performance Work quality Loyalty to the firm
Duty to comply with the law Bribery
Duty to respect the employers property Working time Unauthorized use of company resources for private purposes Fraud, theft, embezzlement
  • Discrimination in the business context occurs
    when employees receive preferential (or less
    preferential) treatment on grounds that are not
    directly related to their qualifications and
    performance in the job race,age,gender,religion,d
  • Managing diversity prominent feature of
    contemporary business
  • Institutional discrimination discrimination
    deeply embedded in business

Women in top management positionsFemale
Directors in FTSE 100 Companies 2000-2008
2000 2004 2008
Female held directorships (in of total directorships) 69 (5.8 ) 110 (9.7 ) 131 (11.7 )
Female executive directors 11 17 17
Female non-executive directors 60 93 114
Companies with 2 women directors 14 19 39
Companies with no women director 42 31 22
Source Singh, V. S. Vinnicombe. 2007 2008
Sexual and racial harassment
  • Issues of diversity might be exploited to inflict
    physical, verbal, or emotional harassment
  • Regulation reluctant
  • Blurred line between harassment on one hand and
    joking on the other
  • Influenced by contextual factors such as
    character, personality, and national culture
  • Companies increasingly introduced codes of
    practice and diversity programmes

Equal opportunities and affirmative action
  • How should organizations respond to problems of
  • Equal opportunity programme
  • Generally targeted at ensuring procedural justice
    is promoted
  • Affirmative action (AA) programmes deliberately
    attempt to target those who might be currently
    under-represented in the workforce
  • Recruitment policies
  • Fair job criteria
  • Training programmes for discriminated minorities
  • Promotion to senior positions

Reverse discrimination
  • In some cases, people suffer reverse
    discrimination because AA policies prefer certain
  • Justification for reverse discrimination
  • past injustices have to be paid for
  • rewards such as job and pay should be allocated
    fairly among all groups
  • Stronger forms of reverse discrimination tend to
    be illegal in many European countries

Employee privacy
  • Four different types of privacy we may want to
  • Physical privacy
  • Social privacy
  • Informational privacy
  • Psychological privacy

Health and drug testing
  • Highly contested issue
  • Two main issues
  • Potential to do harm
  • Level of performance
  • Despite these criticisms, such tests have
    increasingly come common in the US

Electronic privacy and data protection
  • Increasingly relevant as technology advances and
    electronic life becomes more important
  • Computer as a work tool enables new forms of
  • Time and pace of work
  • Usage of employee time for private reasons
  • E-mail and internet
  • Issue of privacy in situations where data are
    saved and processed electronically
  • Data protection

Due process and lay-offs
  • Ethical considerations in the process of
  • Right to know well ahead of the actual point of
    the redundancy that their job is on the line
  • Compensation packages employees receive when laid

Employee participation and association
  • Recognition that employees might be more than
    just human resources but should also have a
    certain degree of influence on their tasks, job
    environments, and company goals right to
  • Financial participation allows employee share
    in the ownership or income of the corporation
  • Operational participation can include a number of
  • Delegation
  • Information
  • Consultation
  • Codetermination

Evolution of trade union membership
1970 2003 Absolute change in
Australia 50.2 22.9 -27.3
Canada 31.6 28.4 -6.5
Germany 32.0 22.6 -9.5
Italy 37.0 33.7 -3.3
Japan 35.1 19.7 -15.4
Sweden 67.7 78.0 10.3
United Kingdom 44.8 29.3 -15.5
United States 23.5 12.4 -11.1
Based on Visser, 2006 45
Working conditions
  • Right to healthy and safe working conditions one
    of the very first ethical concerns for employees
  • Dense network of health, safety and environmental
    (HSE) regulation
  • Main issue is enforcement and implementation
  • Newly emergent HSE issues relate to changing
    patterns of work
  • Ethical issues in the context of
  • Excessive working hours and presenteeism
  • Flexible working patterns

Excessive working hours and presenteeism
  • Excessive work hours
  • Thought to impact the employees overall state of
    physical and mental health
  • Presenteeism
  • phenomenon of being at work when you should be at
    home due to illness or even just for rest and

Flexible working patterns
  • Another way of saying that management can do what
    it wants?
  • Non-standard work relationships
  • Part-time work, temporary work, self-employment
    and teleworking
  • Less secure legal status for periphery workers
  • Potential for
  • Poorer working conditions
  • Increased insecurity
  • Lower pay
  • Exclusion from training and other employment

Fair wages
  • The basis for determining fair wages is commonly
    the expectations placed on the employee and their
    performance towards goals
  • Note discussion about excessive compensation for
    executives after the stock market collapse of
  • Problems of performance-related pay (PRP)
  • Risk
  • salaries and benefits become less secure
  • Representation
  • individualized bargaining

Freedom of conscience and freedom of speech in
the workplace
  • Normally guaranteed by governments
  • Situations in business where freedom of speech
    might face certain restrictions
  • Speaking about confidential matters related to
    the firms RD, marketing or accounting plans
  • Usually unproblematic, since most rational
    employees would find it in their own best
    interests to comply with company policy
  • Some cases where those restrictions could be
    regarded as a restriction of employees rights
  • Whistleblowing can involve considerable risk

The right to work
  • Fundamental entitlement of human beings
    established in the Declaration of Human Rights
  • The right to work in a business context cannot
    mean that every individual has a right to be
  • The right to work should result in every
    individual facing the same equal conditions in
    exerting this right

Employing people worldwide
  • The ethical challenges of globalization

National culture and moral values
  • Different cultures will view employee rights and
    responsibilities differently
  • This means that managers dealing with employees
    overseas need to first understand the cultural
    basis of morality in that country
  • Raises the question of whether it is fair to
    treat people differently on the basis of where
    they live
  • Relativism vs. absolutism
  • Absolutism ethical principle must be applicable
  • Relativism view of ethics must always be
    relative to the historical, social and cultural

The race to the bottom
  • Many critics argue that MNCs play a role in
    changing standards in countries
  • Globalisation allows corporations to have broad
    range of choice of location
  • Developing countries compete to attract foreign
  • Large investors tend to choose country with most
    preferable conditions
  • Lowest level of regulation and social provision
    for employee
  • Leads to race to the bottom in environmental
    and social standards
  • Argument that MNEs have a duty to promote
    minimally just social political institutions
    where they operate if these do not exist, because
    of duty to avoid harm

Migrant labour and illegal immigration
  • Growing mobility of workers is a recent
    phenomenon of globalization
  • Typically north-south, can also be in other
    regions (e.g. UAE)
  • Workers can also be attracted to particular
    industries in areas where there is no local
    labour (e.g. mining)
  • Numerous ethical issues here. Examples
  • Migrant labour often leads to questionable social
    phenomena (e.g. drug use)
  • Migrants are often from poor countries willing
    to accept pay working conditions normally
    unacceptable in host country
  • Migrant workers are often in a country illegally
    (but a record of employment may later be the
    basis for legal residency)

The corporate citizen and employee relations
The corporate citizen and employee relations in a
global context
  • Anglo-American and European models differences
  • Continental Europe takes interest of employees
    into account to a greater degree than the
    Anglo-American model
  • Co-determination
  • In developing countries
  • Level of regulation (or at least enforcement) is
    often poor, though employee protection often
    strengthens over time (e.g. Chinas 2008 Labour
    Contract Law)
  • Corporate actions therefore often voluntary good
  • Ruggies framework for responsibility in human
  • Protect (states duty to prevent abuses)
  • Respect (firms duty to respect human rights)
  • Remedy (general duty to create systems to remedy

Towards sustainable employment
Re-humanized workplaces
  • Alienation of the individual work in the era of
    industrialised mass production
  • Brought tremendous efficiencies and material
    wealth, but have also created the prospect of a
    dehumanised and deskilled workplace
  • Attempts to re-humanize the workplace
  • empowering the employee
  • job enlargement
  • job enrichment
  • Success of such schemes contested
  • Suggested that humanized approach might be more
    appropriate and effective in some cultures (e.g.
    Scandinavia) than others

Wider employment
  • Large numbers of unemployed people becomes the
    norm in many countries due to mechanisation
  • This threatens
  • Right to work
  • Social fabric of particular communities
  • New technologies herald the end of work?
    (Rifkin 1995)
  • From sustainability perspective ensure that what
    work exists is shared out more equitably

Green jobs
  • Green jobs are
  • In industries making environmentally-friendly
  • Workplace organization of labour is also more
    environmentally sustainable
  • Gained attention in late 2000s part of broader
    debate on restructuring economies to be more
  • Examples of specific measures
  • Car-pooling
  • Paperless office
  • Video-conferencing rather than business travel
  • Home-based teleworking
  • Potential benefits are social, economic and

  • Discussed the specific stake that employees hold
    in their organizations
  • Discovered how deep the involvement of
    corporations with employees rights can be
  • Corporate responsibility for protection and
    facilitation of these rights is particularly
    complex and contestable when their operations
    become more globalized
  • Considered corporate citizenship and employee
    relations in different contexts
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