Ethics Management

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3

The Nature of Ethics in Modern Business

LEARNING OUTCOMES
By the end of this topic, you should be able to: 1. 2. 3. 4. Explain some of the ethical problems in management; Elaborate on the five characteristics of ethical problems in management; Explain the three methods for analysing ethical problems in management; and Discuss ethics from the Islamic perspective.



INTRODUCTION

In this topic, we shall examine the various ways through which organisations attempt to strike a balance between economic and social performance when faced with an ethical dilemma.

3.1

ETHICAL PROBLEMS AS MANAGERIAL PROBLEMS

Ethical problems are managerial problems because they represent a conflict between an organisationÊs economic performance and its social performance. There should be a „right‰ or „proper‰ balance between economic performance and social performance. Thus, the managementÊs dilemma is to strike a balance between economic and social performances. Let us examine the factors that enter

TOPIC 3 THE NATURE OF ETHICS IN MODERN BUSINESS



33

into that balance and consider various theoretical structures that may be of assistance to management in finding solutions.

3.2

CHARACTERISTICS OF ETHICAL PROBLEMS IN MANAGEMENT

According to Hosmer (1991), there are five characteristics of ethical problems in management as presented in Figure 3.1.

Figure 3.1: Five characteristics of ethical problems in management

Sections 3.2.1- 3.2.5 are taken from the book, „The Ethics of Management‰ by LaRue Tone Hosmer (1991). Let us look at each characteristic in the following sections.

34 

TOPIC 3 THE NATURE OF ETHICS IN MODERN BUSINESS

3.2.1

Most Ethical Decisions Have Extended Consequences

Do you realise that the results of managerial decisions and actions do not stop with first-level consequences? Rather, they extend throughout the society, and that extension constitutes the essence of the ethical argument. The

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