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CHAPTER 3 • Integrative Managerial Issues 93
• The National Football League finally admitted recently in federal court documents that it
“expects nearly a third of retired players to develop long-term cognitive problems” and that
players may see the problems happening at noticeably younger ages. 29

You might be wondering about the connection among these three unrelated stories. When you
read about these decisions, behaviors, and outcomes, you might be tempted to conclude that
businesses just aren’t ethical. Although that isn’t the case, managers do face ethical issues, as
the above examples show.
Ethics commonly refers to a set of rules or principles that defines right and wrong
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conduct. Right or wrong behavior, though, may at times be difficult to determine. Most recog-
nize that something illegal is also unethical. But what about questionable “legal” areas or strict
organizational policies? For instance, what if you managed an employee who worked all week-
end on a rush project and you told him to take off two days sometime later and mark it down as
“sick days” because your company had a clear policy that overtime would not be compensated
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for any reason? Would that be wrong? As a manager, how will you handle such situations?
In What Ways Can Ethics Be Viewed?

To better understand what’s involved with managerial ethics, we need to first look at three
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different perspectives on how managers make ethical decisions. The utilitarian view of
ethics says that ethical decisions are made solely on the basis of their outcomes or conse-
quences. The goal of utilitarianism is to provide the greatest good for the greatest number.
In the rights view of ethics, individuals are concerned with respecting and protecting
individual liberties and privileges such as the right of free consent, the right to privacy, the
right of free speech, and so forth. Making ethical decisions under this view is fairly simple
because the goal is to avoid interfering with the rights of others who might be affected by
the decision. Finally, under the theory of justice view of ethics, an individual imposes and
enforces rules fairly and impartially. For instance, a manager would be using the theory of
justice perspective by deciding to pay individuals who are similar in their levels of skills,
performance, or responsibility the same and not base that decision on arbitrary differences
such as gender, personality, or personal favorites. The goal of this approach is to be equi-
table, fair, and impartial in making decisions.

Whether a manager (or any employee, for that
matter) acts ethically or unethically will depend
on several factors.

These factors include an individual’s morality, values, personality, and experiences; the
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organization’s culture; and the ethical issue being faced. People who lack a strong moral
sense are much less likely to do the wrong things if they are constrained by rules, policies,
job descriptions, or strong cultural norms that discourage such behaviors. For example, sup-
pose that someone in your class stole the final exam and is selling a copy for $50. You need to
do well on the exam or risk failing the course. You suspect that some classmates have bought ethics
copies, which could affect any results because your professor grades on a curve. Do you buy a A set of rules or principles that defines right and
copy because you fear that without it you’ll be disadvantaged, do you refuse to buy a copy and wrong conduct
try your best, or do you report your knowledge to your instructor? This example of the stolen utilitarian view of ethics
final exam illustrates how ambiguity over what is ethical can be a problem for managers. View that says ethical decisions are made solely on
the basis of their outcomes or consequences
How Can Managers Encourage Ethical Behavior? rights view of ethics
View that says ethical decisions are made in order
At a Senate hearing exploring the accusations that Wall Street firm Goldman Sachs deceived to respect and protect individual liberties and
its clients during the housing-market meltdown, Arizona senator John McCain said, “I don’t privileges
know if Goldman has done anything illegal, but there’s no doubt their behavior was theory of justice view
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unethical.” You have to wonder what the firm’s managers were thinking or doing while of ethics
such ethically questionable decisions and actions were occurring. It’s pretty obvious that they View that says ethical decisions are made in order
weren’t encouraging ethical behaviors! to enforce rules fairly and impartially