ORGANIZATIONAL BEHAVIOR - What Are Managerial Ethics?

What Are Managerial Ethics?

by Alex Burke, Demand Media

A complex workplace can be transformed into a less-complicated landscape when thought is given to establishing some ground rules. Companies that incorporate a set of managerial ethics or guidelines create a clear path for managers to reference during tough decision-making scenarios. Creating a managerial code of conduct requires some basic information on what ethics are, examples of what might be included and ideas about how to establish managerial ethics in the workplace.

Definition

Ethics are the moral codes that govern behavior of a person or group of people regarding what is right and wrong. These moral codes revolve around established values and principles and may not be the same from culture to culture. Ethics point the way to a particular course of action defining acceptable behaviors and choices. Managerial ethics are a set of standards that dictate the conduct of a manager operating within a workplace.

Boundaries

There are no legal rules or laws that are directed specifically at managers. Instead, an ethics code is assembled by a company to guide its managers. Such a code of conduct typically references shared values, principles and company policies about basic conduct and outlines the duties a manager has to his employees, the company and the company's stakeholders. Although not enforceable by law, managers who consistently ignore certain company ethics may be asked to step down, be moved into another position or fired.

Examples

Managerial ethics usually address two separate areas: principles and policies. Principle-based ethics outline what is considered fair and ethical in the scope of the workplace and might include information about departmental boundaries or use of company equipment. Policy-based managerial ethics refer to conflicts of interest, the right response to gifts from vendors or business partners, or the handling of proprietary information.

Violations

The need to reference managerial ethics arises when a conflict of values is presented. Enron is a perfect example of a violation of managerial ethics. Although it was not illegal for Enron's executive managers to encourage employees to purchase shares of company stock the managers knew would drop in value once Enron's financial trouble was revealed, it was clearly a violation of ethical standards the managers where bound to regarding the treatment and protection of employees. Acting in their own interests, the executives violated basic managerial ethics.

Establishing

Managerial ethics help to guide decision making and regulate internal and external behavior. Ethical dilemmas typically arise from a conflict between an individual or group and the company, division or department as a whole. Companies establishing a set of values and norms that are acknowledged by managers and consistently referenced during the work day have created an ethical platform by which managers can operate and make decisions. Training managers on the specifics of managerial ethics by role play, case study and group discussion may set the stage for ethical behavior.