Organizational justice, ethics

and corporate social responsibility

 Vocabulary:
 perceptions - ‫تصورات‬
 perceived - ‫محسوس‬
 Multi-foci - ‫متعدد البؤر‬
 Conceptualization - ‫تصور‬
 Fairness – ‫عدل‬
 Work assignments – ‫تعيينات‬
 Ethics – ‫أخالق‬
 Morals- ‫قيم‬
 Enacted – ‫أصدر‬
 Reforms – ‫اصالحات‬
 Cognitive – ‫ادراكي‬
 Obedience – ‫طاعة‬
 Exploitative – ‫استغاللي‬
 Dubious – ‫مشبوه‬
 Emulate – ‫يقتدي بـ‬
 Audit - ‫تدقيق‬
 Restitution – ‫تعويض أو رد الشيء الى مالكه‬
 Fines – ‫غرامات‬
 Philanthropic – ‫ محسن‬-‫ خير‬- ‫رؤوف‬
Organizational justice (Fairness matters):
To study of people's perceptions of fairness in organizations we should keep Two points in mind:
o How justice is perceived?
o To whom or what are judgments focused?

Multi-foci approach to justice: A conceptualization of organizational justice recognizing that

people take into account both individuals and larger units when assessing fairness.

Forms of Organizational Justice and Their Effects:

Organizational justice takes the four different forms and each of these forms of justice has been found
to have different effects in organizations.

• Distributive justice
• Procedural justice
• Interpersonal justice
• Informational justice
1- Distributive justice: people's beliefs that they have received fair amounts of valued work-related
outcomes (e.g., pay, , etc.).

2- Procedural justice: People's perceptions of the fairness of the procedures used to determine
the outcomes they receive.

3- Interpersonal justice: People's perceptions of the fairness of the manner in which they are
treated by others (typically, authority figures).

4- Informational justice: People's perceptions of the fairness of the information used as the basis for
making a decision.

Group-value explanation of organizational justice: The idea that people believe they are an
important part of the organization when an organizational official takes the time to explain
thoroughly to them the rationale behind a decision.
 Procedural Justice Criteria
Criterion
Voice in the making of decisions
Consistency in applying rules
Accuracy in use of information
Description
Perceptions of procedural justice
are enhanced to the extent that
people are given a say in the
decisions affecting them.
To be fair, the rules used as the
basis for making a decision about
one person must be applied
equally to making a decision
about someone else.
Fair decisions must be based on
information that is accurate.
Example
Workers are given an opportunity
to explain their feelings about their
own work to a supervisor who is
evaluating their performance.
A professor must use the same
exact standards in evaluating the
term papers of each student in
the class.
A manager calculating the
amount of overtime pay a worker
is to receive must add the
numbers accurately.
 Procedural Justice Criteria
Criterion Description
Opportunity to be heard Fair procedures are ones in which
people have a readily available
opportunity to correct any mistakes
that have been made.
Safeguards against bias A person making a decision must not
have any opportunity to bias the
results.
Example
Litigants have an opportunity to
have a judge’s decision
reconsidered in the event that an
error was made in legal
proceedings. (See also the instant
replay rule used by the NFL as
described in the Preview Case.)
Lottery drawings are held in such a
manner that each number is
selected in a completely random,
unbiased fashion.
Distributive and Procedural Justice Interaction
 Strategies for Promoting Organizational Justice

 Pay workers what they deserve

 Follow open and fair procedures
 Offer workers a voice
o Meet regularly and invite input (something that is put in such as advice, opinion, comment)
o Conduct employee surveys
o Keep an “open door policy”
o Use suggestion system

 Explain decisions thoroughly in a manner demonstrating dignity and respect

 Train workers to be fair

o Organizational citizenship behaviors

 Fair Process Effect

Fair process effect: The tendency for people to better accept outcomes into which they have had
some input in determining than when they have no such involvement.
 Ethical Behavior in Organizations

Moral Values Versus Ethics

As summarized here, moral values (which reside within an individual) provide the basis for ethics (which are
standards of behavior that can be regulated by organizations). Ethical standards influence both decisions and
behavior in the workplace, which also are affected by a host of other variables.
Ethical Versus Legal: Not Always Identical
It's important for today's business leaders to recognize that just because they might be able to "get
away with" something that's legal doesn't mean that they should do it if it happens to be unethical.

Bad Ethics Is Bad Business

 Ethics Enforcement Policies
 Federal sentencing guidelines

 Sarbanes-Oxley act

 Limited acceptance of entertainment and gifts by employees

 Increased accurate company performance documentation standards

Federal Sentencing Guidelines: Guidelines for federal judges to follow when imposing penalties on
organizations (e.g., restitution, fines, etc.) found guilty of breaking federal laws.

Sarbanes-Oxley Act (SOX): A law enacted to guard against future accounting scandals (such as
occurred at Enron), by initiating reforms in the standards by which public companies report
accounting data.
 Why Do Some People Behave Unethically, at Least Sometimes-and What Can Be Done About It?

Kohlberg's theory of cognitive moral development: The theory based on the idea that people
develop over the years in their capacity to understand what is right and wrong.

This theory distinguishes among the three major levels of cognitive moral development
According to the theory, people at different levels define what is wrong in different ways, which
are limited by their capacity for moral reasoning.

Cognitive moral development: Differences among people in the capacity to engage in the kind
of reasoning that enables them to make moral judgments.
Preconventional level of moral reasoning: The level at which people (e.g., young children and
some adults) haven't yet developed the capacity to assume the perspective of others, leading
them to interpret what is right solely with respect to themselves.

Conventional level of moral reasoning: The level attained by most people, in which they judge right
and wrong in terms of what is good for others and society as a whole.

Postconventional level of moral reasoning: The level at which people judge what is right and wrong
not solely in terms of their interpersonal and societal obligations, but in terms of complex
philosophical principles of duty, justice, and rights.
 Situational Determinants of Unethical Behavior

 Managerial values sometimes discourage ethical behavior:

o bottom-line mentality:
The belief that an organization's financial success is the only thing that matters.

o Exploitative mentality:
The belief that one's own immediate interests are more important than concern for others.

o Madison Avenue mentality:

A way of viewing the world according to which people are more concerned about how things
appear to others than how they really are that is, the appearance of doing the right thing matters
more than the actual behavior.

 Subordinates emulate managers’ unethical behavior

ORGANIZATIONS SOMETIMES ENCOURAGE BEHAVIOR THAT VIOLATES ETHICAL STANDARDS.

Stonewalling The practice of willingly hiding relevant information by being secretive and deceitful,
which occurs when organizations punish individuals who are open and honest and reward those
who go along with unethical behavior.

Counter-norms Practices that are accepted within an organization despite the fact that they
are contrary to the prevailing ethical standards of society at large.
 Ethical Norms Versus Organizational Counter-norms
Counter-norms
Ethical Norms of Society in the Organization

Be open and honest Openness and honesty? Be secretive and deceitful

Always follow rules Following the rules? Break rules if necessary

to get ahead

Be efficient, cost-effective Use of resources Use it or lose it

Assume responsibility even Taking responsibility? Pass the buck to others if it helps
for negative actions you look better

Be a team player; share Working with others? Grandstand, take credit for your
credit with others own positive actions
 Using Corporate Ethics Programs to Promote Ethical Behavior

Corporate ethics programs: Formal, systematic efforts designed to promote ethics by making
people sensitive to potentially unethical behavior and discouraging them from engaging in
unethical acts.

Code of ethics: A document describing what an organization stands for and the general rules of
conduct expected of employees (e.g., to avoid conflicts of interest, to be honest, and so on).

Ethics audit: The practice of assessing an organization's ethical practices by actively investigating
and documenting incidents of dubious ethical value, discussing them in an open and honest
fashion, and developing a concrete plan to avoid such actions in the future.
Ethics committee: A group composed of senior-level managers from various areas of an
organization who assist an organization's CEO in making ethical decisions by developing and
evaluating company-wide ethics policies.

Ethics officer: A high-ranking organizational official (e.g., the general counsel or vice president of
ethics) who is expected to provide strategies for ensuring ethical conduct throughout an
organization.

Ethics hotlines: (ethics helplines) Special telephone lines that employees can call to ask
questions about ethical behavior and to report anonymously any ethical misdeeds they may
have observed.
Corporate Ethics Programs Effectiveness
 Ethics in the International Arena
Ethical Relativism and Ethical Imperialism: Two Extreme Positions

Ethical relativism: The belief that no culture's ethics are better than any other's and that there
are no internationally acceptable standards of right and wrong (the opposite of ethical
imperialism).

Ethical imperialism: The belief that the ethical standards of one's own country should be
imposed when doing business in other countries (the opposite of ethical relativism).
 Global Ethics Guiding Principles

 Show respect for core human values

 Demonstrate sensitivity to local traditions

 Recognize that context matters

 Beyond Ethics: Corporate Social Responsibility

Pyramid of corporate social responsibility: The term used to describe an organization's four
most basic forms of responsibility, in order from economic responsibility, to legal responsi-
bility, to ethical responsibility, to philanthropic (i.e , charitable) responsibility.

Corporate social responsibility: Business practices that adhere to ethical values that
comply with legal requirements, that demonstrate respect for individuals, and that promote
the betterment of the community at large and the environment.
 Corporate Social Responsibility

The Pyramid of Corporate Social Responsibility

To be socially responsible, companies must meet the four different types of responsibilities identified
here. The most basic responsibilities, financial, are shown at the bottom because organizations would
go out of business if they failed to meet their financial responsibilities.
 Forms of Socially Responsible Behavior
- Helping the community by making charitable contributions
- Preserving the environment
- Socially responsible investing
- Promoting the welfare of employees

Profitability and Social Responsibility: The Virtuous Circle

virtuous circle:
The tendency for companies that are successful financially to invest in social causes because
they can afford to do so (i.e., they "do good by doing well") and for socially responsible
companies to perform well financially (i.e., they "do well by doing good").
The Virtuous Circle
It has been suggested that socially responsible companies perform well financially because they are
supported by customers and investors. As a result, they become wealthier, making it easier for them
to become even more philanthropic. This is known as the virtuous
circle.