Ethical IQ Test

1.
You are a newly hired junior executive in a large manufacturing firm. The
business conference you have been attending on behalf of your firm for the last
two days in over. You had planned to fly home, but a couple of friends you’ve
made at the conference are driving back by car and have invited you to ride
with them. It would be a five-hour drive instead of a two-hour flight, but they
would drop you at your doorstep. It would be stimulating to ride back with your
new friends and it might benefit the company. You reason that the additional
travel time would be out of your pocket, so to speak, not the firm’s. You decide
to drive back with you new colleagues. You toss Rs. 100 into the refueling kitty
during the midpoint pit stop.

Q. Would you cash in the return flight

ticket and keep the money? NO Depends YES
 Ethical IQ Test

2.
You have a strict code of ethics in your office regarding employee
appropriation of office supplies. The most competent and longest-
tenured secretary is caught by you, the secretary’s boss, taking
typewriter ribbons and erasure tapes home in a briefcase. There is
a rule against this as well as a clearly established procedure for
providing employees with supplies if they do company’s work at
home. The code requires you to fire the secretary on the spot

Q. Would you make an exception for

this loyal worker? NO Depends YES
 Ethical IQ Test

3.

A friend at work asks whether you’d like a take-home

copy of an expensive computer software program. You

know it is protected by copyright.

Q. Would you let your friend make a

copy for you? NO Depends YES
 Ethical IQ Test

4.
You are the senior vice president for public relations in a
large multinational corporation. One of your long-time
friends in the marketing department confides to you that
the boss is subtly suggesting that sales representatives
give misleading information to prospective clients about a
particular product. Your friend is very upset about it and
wants your advice.

Q. Would you encourage your friend

to follow the boss’s suggestion? NO Depends YES
 Ethical IQ Test

5.
You are a marketing professional in a medium – sized midwestern
city. Three months ago you set up your own company. Your first
big client wants to promote throughout your region a passive
exercise machine. The home office in Texas claims the device is
“scientifically proven to take off pounds easily and quickly”. The
manufacturing firm does not have a national reputation and despite
your repeated requests, has been unable to provide you with any
scientific proof of its claims.

Q. Would you continue serving this

firm as a client without the
NO Depends YES
scientific proof?
 Ethical IQ Test

6.
You are the Director of research and development in your firm. The
Personnel Officer has found two candidates for a vacant position in
new product testing in your department. The better qualified
candidate with more potential for promotion and future contribution
to the organization appears to be rather cold and aloof and will
likely clash with your personality. The less qualified candidate is
your personal choice,even though the company will not be as well
served.

Q. Would you choose the less

qualified candidate? NO Depends YES
 Ethical IQ Test

7.
You are the Product Manager for one of your firm’s largest
dollar volume brands. You know that your product will soon
be challenged by an improved version from a strong, well-
financed competitor. One of your vendors offer to provide you
with a confidential copy of the competitors strategic
marketing plan. No price for the copy is mentioned.

Q. Would you utilize this vital

information to help your brand? NO Depends YES
 Ethical IQ Test
8.
You have recently accepted the top marketing position at a new
company. One of your first assignments is to approve an all expenses-
paid trip for the senior purchasing officer of one of your largest client
firms. The four-day seminar in the Caribbean, sponsored solely by your
company, would include first-class airline tickets for client and spouse,
a three-day cruise following the seminar, plus a $ 500 honorarium. You
know that this particular company does not have a written conflict-of-
interest policy. You also know that your new boss is very eager to have
this purchasing officer of the seminar.

Q. Would you authorize the

expenditure for this client? NO Depends YES
 Ethical IQ Test
9.
You serve as an outside member on the audit committee of the board
of directors of a major pharmaceutical company that markets new
drugs through practicing physicians. You have secretly learnt that your
research department has developed an abortion pill that appears to be
100 percent safe and effective. However, it has been repeatedly
rumored that your Chief Executive Officer will not let this product be
brought to market because of deep religious convictions. Millions of
dollars of potential revenue and profits will be lost.

Q. Would you let this secret decision

of your CEO go unchallenged? NO Depends YES
 Ethical IQ Test

10.
You happen to overhear a couple of engineers in your company
discussing a radically new product that your colleagues in upper
management are anxious to see hit the market on schedule. You
accidentally learn that the engineers are also quite concerned about
some design flaws that could be harmful to product users, although
the probabilities are very remote.

Q. Since you are not directly

responsible for his product,
would you completely ignore
NO Depends YES
their comments?
 Total up the number of times you circled each
No. Depends, or yes in the space provided.
Take the highest number in only one of the
three categories, multiply it by 100, and then
divide by 5.

This is your ethical IQ

Average is 100 perfect score is 200.

What the categories mean:

Purist
A high number in No
- Kind of a person who always acts ethically

-Confidence in your intrinsic sense of

-what is good and true
 You are first to cry out against
unfairness or injustice
 You would not authorize the
lavish Expenses for Caribbean
Seminar
 You would ‘ blow the whistle” on
the ethically timed engineers
 You would not let the secret decision
of the CEO go unchallenged regarding
the abortion pill

 As a purist, you bring ethical

stability and high standards to the
groups of which you are an integral
part.
Expedient:

A high number in the Yes

-Willing to breakrules if they seem silly
-You believe you are doing right and your
right is short term consequences
-Some may call you as ‘self centered’.
-Purists will call you ‘greedy’ ambitions
 You may ignore the rules in
respect of Q2
 the secretary - code of ethics are
for others
 As an expedient manager you may
in reply to Q7. ask a copy of
software
 As an expedient person your response
will reflect your age, your ambition,
the competitive intensity. You ethical
contribution to groups and
organisations is excitement and
enthusiasm
 You tend to be a loner
 You are economically motivated,
probably rich but lonely
 You are capable of risky ethical
decision some of which could be
disastrous.
Pragmatist

-A high number of ‘depends’

-- likely to feel conscience ridden
frequently
-You may appear to the ethically
insecure since people judge by actions
and you are passive
 In Q4 you would take a long time
to answer as senior VP PR about
misleading clients

 You may answer Q6 on hiring the

person on think though
 You response to Q3 regarding
software think through on a no of
factors
 As a ‘depends’ person in the group
thoughtfully reasoned temperate
ethical leadership

 You can bring extremes to center-

you are less vocal –serve as ethical
CATALYST
 Ethical Algorithm

Ethical decision become more complicated

for respondents higher up the corporate
ladder
As you move up the corporate ladder the
ethical side also expands

1. As greater number of constituents will be

affected by your decisions

2. Your decisions will have increased visibility

throughout the company.
3. Your decisions are more likely to have a
permanent effect on employees,
company policy and community

4. Doing the ‘right thing’ will depend more

on whose perspective you take

5. One or more constituents likely to

disagree strongly with whatever decision
you take.
Sound ethical decision making in today’s
business environment requires a lucid
and vigorous instrument. The ethical
algorithm is such a tool

Four critical dimensions of corporate action

• Goals
• Methods
• Motives
• Consequences
How the Ethical Algorithm works

Goals : What do you want to achieve?

Methods : How will you pursue the goals?

Motives : What personal needs drive you to

achieve?

Consequences: What results can you anticipate?

A career decision:
Goal : Get Rich

Method : Rob banks

Motive : Financial security

Consequences : make crores – retire early

If you had an ethical side

Method : Would be unacceptable

Consequences : Caught, a prison term

If you get caught

motives surface:
- Kleptomaniac
- Feed starving family
- Play Robinhood
- Unrepentant thief
Motives make a big difference

• Hardest to unravel

• Rooted in childhood training culturally

conditioned shaped and sustained by
beliefs.
You can expand the algorithm

Goals :
1. Do you have multiple goals ?
- business goals
- an ethical goal

Softer side hard side

- Jobs - market share
- Social benefits - profits
2. Are your goals compatible?

- Achieve both?
- Might you have to sacrifice or reduce
profits to meet ethical goals?
- Parker Bros - Surrendered the
business goal
- J&J
3. Which constituents get top priority?
Whom you feel accountable?
- Stock holders customers
- Employees employee
- Management government

Business side ethical side

 Business goals are fairly routine
ethical change with situation
 You can view ethical
consideration as a constraint –
Your mission statement does not
have an overtone of ethics
We are not suggesting that such companies
are not law abiding. They enter the arena
when they tend to start practices which are
unacceptable
– price rigging

- EF Hutton Kite Flying

What impact will your anticipated
consequences have on your constituents?

Put yourself in the shoes of each of your

constituents in the GOALS go down the list and
imagine consequences of each one of the
constituents

Are there any exogenous factors ?

Uncontrollable unpredictable
Murphy’s law “What can go wrong- Will”
Making money? Or doing right things

What is best for your employer?

What is best for your own career?

What is best for the customer?

Business Ethics are built on Personal Ethics

no real separation:
Business Ethics are based on fairness

Does each transaction take place on a

“level playing field”
Business Ethics require :
Integrity

Wholeness
Reliability’
Consistency
Treat with respect
Honesty Keep promises
Commitment
Business Ethics requires :

Truth telling

Advertising

Products

Promises
Business Ethics require dependability

- you may be new

- unstable

- going out of business

Business Ethics require a Business Plan

- an image of itself

- a vision of the future

Clearer the goal the stronger is the commitment

Business Ethics apply internally and externally

- Conference room

- negotiations in good faith

- Keep promises

Meet obligations to staff employers Vendors

 Business Ethics require a profit

How we would live in the future is out of how

we live in the present means and also end.
Business Ethics are values based

Ideals
Aspirations

Clarity must on intent

 Business Ethics comes from the Boss

- Sets the tone

Either lead the way or communicate whether

cutting corners, dis-respect or deception
 Five Basic Assumptions

1. Business Ethics is a process :

means – ends
- little bit wrong: ?

2. Human behaviour is caused

Why do business leaders behave the way they
do?

Personal values leadership

styles
3.Actions have consequences:
even unseen or delayed
e.g: ASBESTOS
TYLENOL
4.What is perceived as ethical depend upon
the viewpoint of the constituent?
5. The need for good ethics

promote - permit
Democracy and free enterprise
Foster:
 10 Myths about Business Ethics

1. Myth: Business ethics is more a matter of religion

than management.

“Altering people’s values or souls isn’t the aim of an

organizational ethics program – managing values and
conflict among them is..?

2. Myth: Our employees are ethical so we don’t need

attention to business ethics.

When the topic of business ethics comes up, people are

quick to speak of the Golden Rule, honesty and courtesy.
 10 Myths about Business Ethics

3. Myth: Business ethics is a discipline best led by

philosophers, academics and theologians.

Business ethics is a management discipline with a

programmatic approach that includes several practical
tools.

4. Myth: Business ethics is superfluous –it only asserts

the obvious: “do good!”

If an organization is struggling around continuing

occasions of deceit in the workplace
 10 Myths about Business Ethics

5. Myth: Business ethics is a matter of the good guys

preaching to the bad guys

Stress or confusion are not excuses for ethical actions –

they are reasons.

6. Myth: Business ethics in the new policeperson on the

block.

Business ethics was written about even 2,000 years ago-

at least since Cicero wrote Business ethics has got more
attention recently because of the social responsibility
1960s.
 10 Myths about Business Ethics

7. Myth: Ethical can’t be managed

Strategic priorities (profit maximization,expanding market

share, cutting cost, etc.) are still skeptical about business
ethics, believing you can’t manage values in an
organization

8. Myth: Business ethics and social responsibility are the

same thing

Social responsibility movement is one aspect of the

overall discipline of business ethics
 10 Myths about Business Ethics

9. Myth: Our organization is not in trouble with the law,

so we’re ethical.
Withhold information from superiors, fudge on budgets,
constantly complain about others, etc. “The boil the frog”
phenomena

10. Myth: Managing ethics in the workplace has little

practical relevance

Values management is also highly important in other

Management and strategic planning.