Organizational manger and ethical behavior Introduction

Business ethics is neither a new nor unfamiliar phenomenon. In-deed, philosophy regarding the relationship between business and morality has been underway since ancient times (Freeman, 1991:3). According to Malan and Smit (2001:1) a shared vision of political stability, economic progress and personal safety for all in South unethical behavior is of specific concern within the financial sector. The problematic situation regarding business ethics particularly in the financial sector is emphasized in current literature, as there have been various ethical scandals in prominent companies in the past ten years it is important to focus on factors which may have an influence on ethical behavior individual factors such as locus of control may influence employees decisions to behave ethically or unethically at work. There are mixed opinions regarding the factors that determine ethical behavior in organizations. However, one continuous theme is that managers are the most significant element of an organizations ethical culture and consequent member behavior. The category ethics and integrity was one of the 22 skill sets suggested as required for excellent job performance (including leadership, decision-making, initiative, information gathering, planning, interpersonal effectiveness, etc.). Ethics codes are as old as antiquity. Religious traditions and civic cultures have codes as their foundations. The last few years show a growing interest in the development and promotion of ethical leadership in organizations. Ethical leadership is thought to be uniquely important because of the impact leaders may have on the conduct of (others in) the organization and ultimately on organizational performance. Despite its relevance empirically based knowledge about ethical leadership is limited. Only few studies to date have tested the proposed link between ethical leadership and effectiveness Moreover, little is known about the

potential role of personal characteristics of ethical leaders, such as the leader's personality and upbringing relationship between ethical leadership and a set of individual attributes that fall under the more general category of leader social responsibility (moral legal standard of conduct, internal obligation, concern for others, concern about consequences, and self-judgment), a relationship that has not been tested to date more comprehensive inquiry with ethical concern at the center is necessary to make further progress on understanding the complexity of employee monitoring. Ethics belongs to philosophy because it studies human behavior from a certain moral aspect. The focus of ethics is the community, and moral good is seen as the universal welfare of the community. Since ethics and morality mean the same in etymological and semantic terms, they are often used as synonyms. Morality, as a social norm of human behavior, is a group of unwritten rules and customs governing interpersonal relationships. One of the characteristics of morality is its autonomy because moral norms are valid in themselves (the subject adopts them independently, and not under pressure from others). It is based on the principles that determine how a person should behave. Morality is the goal that we should strive towards. Since morality is a system of values, it serves to decide what is good and what is not, i.e. to differentiate between good and bad actions. Morality is very similar to law, but in contrast to law, it does not involve any political or economic sanctions. Morality relies on the awareness of the individual and society. An individual has a moral feeling when he hears "the voice of conscience" The two traditional issues involved with ethics: 1. Ethical Relativism are there universal values that apply to everyone or is everything relative to individual, country, company etc.
a) Relates to cultural relativism. This presumes that different

peoples reason about morality varies by culture, education and religious traditions.
b) Arguments for ER are:

i. ii.

Empirical evidence of cultural relativism. There is no viable universal standard that can be applied to everyone. Arguments against ER are:
1) Just because finding universals is hard that does not

c)

imply that ER is correct. 2) Just because a particular issues is not resolved does not imply that it is, in principle, not ever resolvable. 3) Taking ER to its full extent means that you cant justify any moral judgments at all. The Foreign Corrupt Practices Act (1977) attempted to legislate that what we say is moral is how we should behave. This Act was driven by the issue that you are being inconsistent with yourself if you say something is immoral yet do it anyway just because you are in a foreign country.
d) a)

A vigorous defender of truth telling is Kant. TT is an essential feature of right communication (Lectures on Ethics). His reasoning is:

We all want others to follow this when speaking to us. All societies depend on mutual bonds of honesty and truthfulness to enforce their continued existence. iii) Lying thwarts the discovery of new truths. Knowledge growth is required for the advancement of a society. b) Counter agreements to this are:
i) ii) i) ii)

Everyone understands the game of inflating claims (not lying) in advertising etc. so it is all right. You cant ever know the perfect truth around a product/service because perfect information is not available people cant know if a company is lying or bluffing.

Ethical behavior
The word ethics is derived from the Greek word ethos, which means character (Duska, 2005:27).Towards an understanding of business ethics, Trevino and Nelson (2007:16) define business ethics as the study of behavior within a business context which is consistent with the principles, norms and standards of business practices as agreed with the community.

Review of the Literature

Enron, Tyco, WorldCom, Global Crossing, Quest, Arthur Anderson dominated the headlines much of the fall of 2002. Collectively, they have focused media attention on the ethics of organizations and the business world at large. One of the results of that avalanche of media attention is what Kelly (2005) calls a massive ethics revolution underway, with companies falling all over themselves to hire ethics officers, announce ethics codes, set up whistleblower hotlines, and launch ethics training. Corporations have made ethics and ethical behavior one of their top issues over 92% (Murphy, 2003); 73% have four written ethics statements Corporate Credo, Code of Ethics, Values Statement and Internet Privacy Statements. In addition, many devote valuable employee time to training their employees in ethical reasoning and ethical behavior. On another front, many business schools have altered their ethics curricula by increasing the number of courses available that address ethics, ethical decision-making, and social responsibility and have made them requirements rather than electives. However, there is widespread agreement that just a code of ethics is not enough to assure ethical corporate behavior. As Gellerman (2005) points out for all practical purposes, they (codes of ethics) are forgotten after a few months simply for lack of emphasis. In addition, he goes on to say even though studying

ethics undoubtedly gives the individual an intellectual grasp of ethical principles...That such an understanding will beget ethical behavior on-the-job is at best dubious. Anand, Ashforth, and Sashi (2004) believe that adopting codes of ethics is a positive development, it is not sufficient. They note that Enron had a well-developed code of ethics. Wotruba(2001) notes that the impact of written codes on managerial behavior and attitudes is still neither clearly documented nor explained. Kelly (2005) suggests that Rules are for Moral infants, principles are for moral adults. Kitson (2008) finds that the effectiveness of corporate codes of ethics is dependent on the day-to-day behavior of managers. Managers know they should emphasize ethics. The one consistent finding in ethics literature and research is that the organizations leaders must take an active role and must be vigilant regarding ethical/unethical practices and behaviors. Maintenance of organizational ethics and integrity is assumed to be among the behavioral skills of manager. However, there is very limited and mixed empirical support for this assumption. The role of manager is undoubtedly a complex one. They are caught between avoiding the sanctions of the authorities and the displeasure of the stock market they are thus constantly pushed toward the fuzzy, indistinct line that separates barely acceptable practices from those that are intolerable (Gellerman, 2005) Boards of Directors are supposed to be the protectors of society against managerial chicanery, but they have been overly acquiescent and (in too many cases) insufficiently inquisitive about what is really going on in the companies that they supposedly govern. Even though managers have known for over a decade that corporate ethics is a strategic management issue and should therefore be considered in every facet of business (Shelley, 2007), managers still find it hard to fit it in their daily tasks. Jose and Thibodaux (2010) found that managers understand that ethics are good for the bottom line, and they believe that the implicit forms of ethics (leadership, corporate culture, management support) are more effective that explicit forms of ethics (codes of ethics, ethics committees, ethic officers). It is still not high on the mangers check list (to do list). In fact, many ethics researchers believe that organizations set up situations/cultures that encourage unethical

behavior on the part of their employees. For example, Gerber, an ethics consultant, (2005) suggests that Most unethical behavior is not done for personal gain, its done to meet performance goals for a ethics consultant (Gerber cited by Kelly). Fisher (2000) suggests that employees facing certain situations (to which they have moral objections) do not act on those objections because they feel pressured by their own sense of loyalty or by managerial coercion into accepting organizational acts of which they disapprove. Gellerman (2005) says that unethical behavior is, to a large extent, situational. It is not the result of an inadequate understanding of ethics or of faulty lines within ones character, but of being in the wrong place at the right time. Carroll and Scherer (2003) suggest, when looking for whom to blame for fraud and corruption, much of the blame needs to be placed on the greed and dishonesty of many senior managers. Anand, Ashforth, and Joshi (2004) believe that organizations use rationalization (I would not report it because of my loyalty to my boss) and socialization (admission to an attractive social cocoon/teams) as key processes that abet the infiltration and sustenance of corruption in organizations Newcomers entering corrupt units are induced to accept and practice the ongoing unethical acts and their associated rationalizations. Gandossy and Kantar (2002) suggest that because most of the attention in leadership today is primarily focused on the positive side of corporate life strategies for getting results through people, the organizational value of giving people more responsibility and accountability, and the virtue of trusting people to do the right thing.managers and leaders are writing off instances of wrongdoing as aberrations and not assigning any relevance to them. They suggest This is a mistake. Lamb (2009) believes that ethics will only be implemented effectively throughout an organization only if it is given priority by the CEO. The questions that drive this research are Where does vigilance in the pursuit of ethics fit in a typical managers day?; What behavioral priority would mangers assign to ethics?; Where would they rank it in their list of required managerial skills? This Study attempts to answer these questions by sampling managers with different job functions, experience, educational level, managerial level, and gender, working in varying sized companies

in different industries to make comparisons. These ve elements (morallegal standard of conduct, internal obligation, concern for others, concern about consequences, and self-judgment) are seen as the facets constituting social responsibility and reect some of the different connotations of responsibility that are emphasized by several theorists, all involving the control of behavior by internal mechanisms (Winter, 2012a). For example, responsibility as an obligation or dependability implies that a person means it, feels an inner obligation to do what is known to be right, is dependable and can be counted upon. Responsibility also has the connotation of showing self control and developing awareness of the consequences of one's actions, illustrated in the image of a parent urging their child to show a little responsibility. Next, responsibility is used in reference to acknowledging or owning one's actions, as in being responsible for something, and nally, responsibility also has the connotation of altruism or prosaically motivation, being responsible for someone else (e.g., Blasi, 1983; Hoffman, 1982; Sartre, 1947). The coding methodology permits unobtrusive measurement of these elements of social responsibility in diverse texts, such as presidential speeches (e.g., Spangler & House, 1991; Winter, 1987), interview responses of political leaders (e.g., Winter, 1980), transcribed interviews with managers (e.g., De Hoogh et al., 2005), and written vision statements of CEOs (e.g., Kirkpatrick, Wofford, & Baum, 2002). Barenboim (1987, in Winter, 1991) found that mothers scoring high on social responsibility were more likely to consider their children's views when making decisions about custody and living arrangements. These mothers were also less likely to report using verbal aggression in conict situations. Furthermore, longitudinal research shows positive relations between a high concern for responsibility and adaptation to career and family roles (Winter, 2009, in Winter, 2007). In line with the literature, we propose that leaders' social responsibility (morallegal standard of conduct, internal obligation, concern for others, concern about consequences, and self-judgment) may be related to ethical leadership. Ethical leaders are expected to do what is morally right through an inner obligation (Kanungo & Mendoca, 1996). Thus, they are expected to have a high internal obligation as well as high moral standards.

Further, they engage in virtuous acts or behaviors that benet others (Kanungo, 2001). This implies they will have a high concern for others. In addition, ethical leaders refrain from evil acts or behaviors that harm others (Brown et al., 2005). Thus, it seems likely that they will score high on self-judgment as well as on concern about negative consequences. In line with this, Kanungo (2001) argues that an internalized norm of responsibility (or social responsibility) forms the basis of the moral altruism motive and consequently the moral foundation of ethical leadership. In contrast, despotic leaders are described as having little regard for others and not concerned with behaving in social constructive ways. Thus, they are not expected to feel a strong inner obligation to do the right thing and will likely score low on moral standards. Further, they are likely to be more insensitive to followers needs, and thus will likely score low on concern for others. In addition, they are exploitative and self-absorbing, which implies that they are likely to be low on self-judgment and to have relatively little concern about the consequences of their behavior.

Objectives
1) Mangers decisions should reflect the ethical issues

regarding to employee
2) To establish an ethical relationship between Mangers

and Employee

Methodology
Sample and procedure Questionnaires Data Gathering Data Analysis