Goals:

• Justify the need for ethical management
• identify the role of leaders in increasing ethical behavior

Key Terms:

• ethical business practices
• core values

Ethical Management  

• Importance of Ethical Behavior 
• Would you copy a paper from the Internet and turn it in as your own work?
• Would you cheat on a test to ensure a higher grade?
• Is it okay for an employee to call in sick to justify a day off from work.
• Is it okay for an employee to take office supplies from the company for use at home?
• Is it okay for the person working at Wendy’s to give food to his friends for free?
• Each of these situations describes an ethical decision you and others may face in your personal life and in business.
• Everyone does not have the same belief about what is ethical .
• It is important for businesses and those who work in business to develop agreement on behaviors that are acceptable and what is unacceptable.
• What is Ethical Behavior?
• Ethics – the principles of conduct governing an individual or group.
• Ethical Business Practices  ensure that the highest standards of conduct are observed in a company’s relationships with everyone who is part of the business or is affected by the business’ activities.
• Involves executives and managers
• The actions of every employee
• Ethical behavior is made up of   
• 1 – the actions of individuals
• 2 – the results of those actions
• When considering whether a behavior is ethical or not, both the actions taken and the results of those actions should be considered.
• Ethical behavior meets several standards
  • It is legal
  • It is consistent with company values and policies
  • It does not harm some while benefitting others
  • If the actions and results were published, it will not embarrass the company
• Ethical Management
• Managers are responsible for the success or failure of a business. Success or failure is not just determined by results such as profit or loss. It is also determined by the actions and activities of the business. Are the actions legal, honest, and ethical? Are people in the company treated fairly? Does the work of the company improve communities and countries in which it operates? Does the company work to protect the environment and conserve natural resources?  Besides leadership, managers also provide oversight on employees to make sure their actions are honest, responsible, and ethical.
• Increasing Ethical Behavior Through Leadership – Most people want to do what is right. When they are under pressure or facing a major problem, some people act unethically. Unethical behavior ends up hurting the business and its relationships with customers and the community. Leaders must take actions to prevent unethical behavior.
• Preparing the Organization
• It is easier for employees to make the wrong decisions when they do not view ethics as important. It is the manager’s duty to create an environment in which all employees are expected to act ethically.
• Employees must know that they will be supported when they make the right decision
• Leaders also should make it clear that unethical behavior is unacceptable and will be punished if it occurs.
• Managers can take several steps to develop an ethical environment
• Most organizations have a mission statement.  A mission statement describes the reason a business exists and what it wants to accomplish.
• To make ethical behavior a part of the company’s mission, many business develop a statement of core values.  Core values are the important principles that will guide decisions and actions in a company.
• The staffing function offers another chance for managers to emphasize the importance of ethical behavior.
  • The company’s commitment to ethical behavior must be stressed when each new employee is hired
  • In employment interviews, each prospective employee should be questioned about ethics and asked to describe how they would handle problems involving ethical behavior
  • New employee training should include information about the company’s commitment to ethics and values
• Dat-to-day operations of the business, managers and supervisors should often stress the importance of ethics.
• Ethical behavior should be a part of employee evaluations and promotions
• Be quick to identify and correct ethical problems if they occur.
• Modeling Ethical Behavior – the most important action leaders can take to emphasize the importance of ethical behavior in an organization is to always act ethically.
• Actions speak louder than words
• If the employees read the core values of a company and do not see managers living up to those values, it will be clear to the employees that ethics are not that important.
• On the other hand, if employees see their manager taking actions that demonstrate the company’s values, they will be encouraged to act ethically as well.
• When managers treat each employee respectfully, it demonstrates that everyone is valued in the organization. 
• When a manager rejects a decision that is illegal or would damage the reputation of the company even though it would be profitable, employees learn that ethical behavior is a basic value of the organization.
• Being an ethical role model inspires others to do the same.

Assignments:

After reading the “23 Traits of a Good Leader” (see link below), in a Word document, answer the following questions:

1.List five traits a person must have before you will follow their leadership.