Business%20Ethics

1
Business Ethics

• Lecturer Piet Westerhuis

2
Employees and Business Ethics

• Lecture 2

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Overview

• The specific role of employees among the various
  stakeholder groups
• Core ethical topics of employees rights and
  duties
• Ethical issues and problems faced in
  business-employee relations
• The duties of employees and the companys
  involvement in enabling employees to live up to
  their duties
• The notion of corporate citizenship in relation
  to employees
• Basic issues and problems of managing employees
  in the context of globalization
• Explore the notion of corporate citizenship in
  relation to employees
• The implication of sustainability for workplaces
  and for specific working conditions

4
Ethical issues in the firm-employee relation
5
Management of human resources an ethical
problem between rights and duties

• The term human resource management and its
  implications have been a subject of intense
  debate in business ethics
• Humans treated as important and costly resource
• Consequently, employees are subject to a strict
  managerial rationale of minimising costs and
  maximising the efficiency of the resource

6
Rhetoric and reality in HRM
Rhetoric Reality
New working patterns Part-time instead of full-time jobs
Flexibility Management can do what it wants
Empowerment Making someone else take the risk and responsibility
Training and development Manipulation
Recognizing the contribution of the individual Undermining the trade union and collective bargaining
Teamworking Reducing the individuals discretion
Based on Legge (1998)
7
Rights of employees as stakeholders of the firm
8
Duties of employees as stakeholders of the firm
Employee duties Issues involved
Duty to comply with labour contract Acceptable level of performance Work quality Loyalty to the firm
Duty to comply with the law Bribery
Duty to respect the employers property Working time Unauthorized use of company resources for private purposes Fraud, theft, embezzlement
9
Discrimination

• Discrimination in the business context occurs
  when employees receive preferential (or less
  preferential) treatment on grounds that are not
  directly related to their qualifications and
  performance in the job race,age,gender,religion,d
  isability,nationality
• Managing diversity prominent feature of
  contemporary business
• Institutional discrimination discrimination
  deeply embedded in business

10
Women in top management positionsFemale
Directors in FTSE 100 Companies 2000-2008
2000 2004 2008
Female held directorships (in of total directorships) 69 (5.8 ) 110 (9.7 ) 131 (11.7 )
Female executive directors 11 17 17
Female non-executive directors 60 93 114
Companies with 2 women directors 14 19 39
Companies with no women director 42 31 22
Source Singh, V. S. Vinnicombe. 2007 2008
11
Sexual and racial harassment

• Issues of diversity might be exploited to inflict
  physical, verbal, or emotional harassment
• Regulation reluctant
• Blurred line between harassment on one hand and
  joking on the other
• Influenced by contextual factors such as
  character, personality, and national culture
• Companies increasingly introduced codes of
  practice and diversity programmes

12
Equal opportunities and affirmative action

• How should organizations respond to problems of
  discrimination?
• Equal opportunity programme
• Generally targeted at ensuring procedural justice
  is promoted
• Affirmative action (AA) programmes deliberately
  attempt to target those who might be currently
  under-represented in the workforce
• Recruitment policies
• Fair job criteria
• Training programmes for discriminated minorities
• Promotion to senior positions

13
Reverse discrimination

• In some cases, people suffer reverse
  discrimination because AA policies prefer certain
  minorities
• Justification for reverse discrimination
• past injustices have to be paid for
• rewards such as job and pay should be allocated
  fairly among all groups
• Stronger forms of reverse discrimination tend to
  be illegal in many European countries

14
Employee privacy

• Four different types of privacy we may want to
  protect
• Physical privacy
• Social privacy
• Informational privacy
• Psychological privacy

15
Health and drug testing

• Highly contested issue
• Two main issues
• Potential to do harm
• Level of performance
• Despite these criticisms, such tests have
  increasingly come common in the US

16
Electronic privacy and data protection

• Increasingly relevant as technology advances and
  electronic life becomes more important
• Computer as a work tool enables new forms of
  surveillance
• Time and pace of work
• Usage of employee time for private reasons
• E-mail and internet
• Issue of privacy in situations where data are
  saved and processed electronically
• Data protection

17
Due process and lay-offs

• Ethical considerations in the process of
  downsizing
• Right to know well ahead of the actual point of
  the redundancy that their job is on the line
• Compensation packages employees receive when laid
  off

18
Employee participation and association

• Recognition that employees might be more than
  just human resources but should also have a
  certain degree of influence on their tasks, job
  environments, and company goals right to
  participation
• Financial participation allows employee share
  in the ownership or income of the corporation
• Operational participation can include a number of
  dimensions
• Delegation
• Information
• Consultation
• Codetermination

19
Evolution of trade union membership
1970 2003 Absolute change in
Australia 50.2 22.9 -27.3
Canada 31.6 28.4 -6.5
Germany 32.0 22.6 -9.5
Italy 37.0 33.7 -3.3
Japan 35.1 19.7 -15.4
Sweden 67.7 78.0 10.3
United Kingdom 44.8 29.3 -15.5
United States 23.5 12.4 -11.1
Based on Visser, 2006 45
20
Working conditions

• Right to healthy and safe working conditions one
  of the very first ethical concerns for employees
• Dense network of health, safety and environmental
  (HSE) regulation
• Main issue is enforcement and implementation
• Newly emergent HSE issues relate to changing
  patterns of work
• Ethical issues in the context of
• Excessive working hours and presenteeism
• Flexible working patterns

21
Excessive working hours and presenteeism

• Excessive work hours
• Thought to impact the employees overall state of
  physical and mental health
• Presenteeism
• phenomenon of being at work when you should be at
  home due to illness or even just for rest and
  recreation

22
Flexible working patterns

• Another way of saying that management can do what
  it wants?
• Non-standard work relationships
• Part-time work, temporary work, self-employment
  and teleworking
• Less secure legal status for periphery workers
• Potential for
• Poorer working conditions
• Increased insecurity
• Lower pay
• Exclusion from training and other employment
  benefits

23
Fair wages

• The basis for determining fair wages is commonly
  the expectations placed on the employee and their
  performance towards goals
• Note discussion about excessive compensation for
  executives after the stock market collapse of
  2008
• Problems of performance-related pay (PRP)
• Risk
• salaries and benefits become less secure
• Representation
• individualized bargaining

24
Freedom of conscience and freedom of speech in
the workplace

• Normally guaranteed by governments
• Situations in business where freedom of speech
  might face certain restrictions
• Speaking about confidential matters related to
  the firms RD, marketing or accounting plans
• Usually unproblematic, since most rational
  employees would find it in their own best
  interests to comply with company policy
• Some cases where those restrictions could be
  regarded as a restriction of employees rights
• Whistleblowing can involve considerable risk

25
The right to work

• Fundamental entitlement of human beings
  established in the Declaration of Human Rights
• The right to work in a business context cannot
  mean that every individual has a right to be
  employed
• The right to work should result in every
  individual facing the same equal conditions in
  exerting this right

26
Employing people worldwide

• The ethical challenges of globalization

27
National culture and moral values

• Different cultures will view employee rights and
  responsibilities differently
• This means that managers dealing with employees
  overseas need to first understand the cultural
  basis of morality in that country
• Raises the question of whether it is fair to
  treat people differently on the basis of where
  they live
• Relativism vs. absolutism
• Absolutism ethical principle must be applicable
  everywhere
• Relativism view of ethics must always be
  relative to the historical, social and cultural
  context

28
The race to the bottom

• Many critics argue that MNCs play a role in
  changing standards in countries
• Globalisation allows corporations to have broad
  range of choice of location
• Developing countries compete to attract foreign
  investment
• Large investors tend to choose country with most
  preferable conditions
• Lowest level of regulation and social provision
  for employee
• Leads to race to the bottom in environmental
  and social standards
• Argument that MNEs have a duty to promote
  minimally just social political institutions
  where they operate if these do not exist, because
  of duty to avoid harm

29
Migrant labour and illegal immigration

• Growing mobility of workers is a recent
  phenomenon of globalization
• Typically north-south, can also be in other
  regions (e.g. UAE)
• Workers can also be attracted to particular
  industries in areas where there is no local
  labour (e.g. mining)
• Numerous ethical issues here. Examples
• Migrant labour often leads to questionable social
  phenomena (e.g. drug use)
• Migrants are often from poor countries willing
  to accept pay working conditions normally
  unacceptable in host country
• Migrant workers are often in a country illegally
  (but a record of employment may later be the
  basis for legal residency)

30
The corporate citizen and employee relations
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The corporate citizen and employee relations in a
global context

• Anglo-American and European models differences
• Continental Europe takes interest of employees
  into account to a greater degree than the
  Anglo-American model
• Co-determination
• In developing countries
• Level of regulation (or at least enforcement) is
  often poor, though employee protection often
  strengthens over time (e.g. Chinas 2008 Labour
  Contract Law)
• Corporate actions therefore often voluntary good
  citizenship
• Ruggies framework for responsibility in human
  rights
• Protect (states duty to prevent abuses)
• Respect (firms duty to respect human rights)
• Remedy (general duty to create systems to remedy
  abuses)

32
Towards sustainable employment
33
Re-humanized workplaces

• Alienation of the individual work in the era of
  industrialised mass production
• Brought tremendous efficiencies and material
  wealth, but have also created the prospect of a
  dehumanised and deskilled workplace
• Attempts to re-humanize the workplace
• empowering the employee
• job enlargement
• job enrichment
• Success of such schemes contested
• Suggested that humanized approach might be more
  appropriate and effective in some cultures (e.g.
  Scandinavia) than others

34
Wider employment

• Large numbers of unemployed people becomes the
  norm in many countries due to mechanisation
• This threatens
• Right to work
• Social fabric of particular communities
• New technologies herald the end of work?
  (Rifkin 1995)
• From sustainability perspective ensure that what
  work exists is shared out more equitably

35
Green jobs

• Green jobs are
• In industries making environmentally-friendly
  products
• Workplace organization of labour is also more
  environmentally sustainable
• Gained attention in late 2000s part of broader
  debate on restructuring economies to be more
  sustainable
• Examples of specific measures
• Car-pooling
• Paperless office
• Video-conferencing rather than business travel
• Home-based teleworking
• Potential benefits are social, economic and
  ecological

36
Summary

• Discussed the specific stake that employees hold
  in their organizations
• Discovered how deep the involvement of
  corporations with employees rights can be
• Corporate responsibility for protection and
  facilitation of these rights is particularly
  complex and contestable when their operations
  become more globalized
• Considered corporate citizenship and employee
  relations in different contexts