MGMT 2100 Chapter Notes - Chapter 4: Verbal Abuse, Price Fixing, Distributive Justice
Ethics: is the set of moral principles or values that defines right and wrong for a person or group
Ethical Behavior: behavior that conforms to a society’s accepted principles of right and wrong
● ⅓ - ¾ of all employees admit that they have committed unethical behavior in their
workplace
Workplace Deviance: unethical behavior that violates organizational norms about right and
wrong
● Production Deviance: unethical behavior that hurts the quality and quantity of work
produced
○ Leaving early
○ Taking excessive breaks
○ Intentionally working slowly
○ Wasting resources
● Property Deviance: unethical behavior aimed at the organization’s property or products
○ Sabotaging equipment
○ Accepting kickbacks
○ Lying about hours worked
○ Stealing from the company
■ Employee Shrinkage: when employees steal company merchandise
● Political Deviance: using one’s influence to harm others in the company
○ Showing favoritism
○ Gossiping about coworkers
○ Blaming coworkers
○ Competing non-beneficially
● Personal Aggression: hostile or aggressive behavior toward others
○ Sexual harassment
○ Verbal abuse
○ Stealing from coworkers
○ Endangering coworkers
U.S. Sentencing Commission Guidelines
● All organizations characterized as a business (including non-profit) are subject to the
guidelines
● Cover offenses defined by federal laws such as price fixing, fraud, etc.
● Purpose
○ Not just to punish companies after they or their employees break the law but also
to encourage companies to take proactive steps that will discourage or prevent
white-collar crime before it happens
● Compliance Program Steps
1. Establish standards and procedures
2. Assign upper-level managers to be in charge
3. Delegate decision-making authority only to ethical employees
4. Encourage employees to report violations
5. Train employees on standards and procedures
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6. Enforce standards consistently and fairly
7. Improve program after violations
Determining a Company’s Punishment
1. Compute the base fine by determining what level of offense has occurred
a. Varies depending on the kind of crime, the loss incurred by the victims, and how
much planning went into the crime
2. Judge computes a culpability score
a. A way of assessing blame to a company
b. The greater the corporate responsibility in conducting, encouraging, or
sanctioning illegal or unethical activity, the higher the culpability score
c. Company that already has a compliance program and voluntarily reports the
offense to authorities will incur a culpability score of 0.05
3. Multiply the base fine by the culpability score to find the total fine
Ethical Intensity: the degree of concern people have about an ethical issue
6 factors of ethical intensity
● Magnitude of consequences: the total harm or benefit derived from an ethical decision
● Social consensus: agreement on whether behavior is bad or good
● Probability of effect: the chance that something will happen that results in harm to
others
● Temporal Immediacy: the time between an act and the consequences the act produces
● Proximity of effect: the social, psychological, cultural, or physical distance between a
decision maker and those affected by his or her decisions
● Concentration of effect: the total harm or benefit that an act produces on the average
person
○ Eliminating health care coverage for 100 employees has a greater concentration
of effect than reducing the healthcare benefits for 1,000 by 10%
Levels of Moral Development
Preconventional: the first level of moral development, in which people make decisions based
on selfish reasons
● Stage 1: Punishment and Obedience
○ Avoid punishment
● Stage 2: Instrumental Exchange
○ Worry more about doing things that directly advance your wants and needs
Conventional: the second level of moral development, in which people make decisions that
conform to societal expectations (right and wrong are determined by how friends and family
respond to actions)
● Stage 3: Good boy, nice girl
○ Do what everyone else is doing
● Stage 4: Law and Order
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