Page 234 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes Individualism Approach

According to this approach, acts are moral when they promote the individual’s best long-term
interests, which ultimately lead to the greater good.

Moral – Rights Approach

According to this approach, the fundamental rights and liberties should be respected in all
decisions. Thus, an ethically correct decision is one that best maintains the rights of those people
affected by it. Six moral rights should be considered during decision-making:
1. Right of free consent

2. Right of privacy
3. Right of freedom of conscience
4. Right of free speech
5. Right to due process

6. Right to life and safety
To make ethical decisions, managers need to avoid interfering with the rights of others.

Justice Approach

According to this approach, moral decisions must be based on equity, fairness and impartiality.
Four types of justices are of concern to managers:

1. Distributive justice requires that individuals should not be treated differently on the basis
of race, sex, religion or national origin. Individuals who are similar should be treated
similarly. Thus, men and women should not receive different salaries if they are performing
the same job.
2. Procedural justice requires that rules be administered fairly. Rules should be clearly
stated and be consistently and impartially administered.
3. Compensatory justice requires that individuals should be compensated for the cost of
their injuries by the party responsible. Moreover, individuals should not be held
responsible for matters over which they have no control.
4. Natural duty principle: This principle reflects a duty to help others who are in need or
danger; duty not to cause unnecessary suffering; and the duty to comply with the just rules
of an institution.

12.4.3 Building an Ethical Organisation

A firm must have several key elements before it can become a highly ethical organisation. These
elements must be constantly reinforced in order for the firm to be successful:

Role Models

For good or bad, leaders are role models in their organisation. The values as well as the character
of leaders become transparent to an organisation’s employees through their behaviour. Leaders
must take responsibility for ethical lapses within the organisation, which enhances the loyalty
and commitment of employees through the organisation.

228 LOVELY PROFESSIONAL UNIVERSITY