Organizational Behavior

COURSE:BGB2033 CORPORATE SOCIAL POLICY

FACULTY: FACULTY OF BUSINESS ADMINISTRATION

BGB2033: CORPORATE SOCIAL POLICY

Course Leader: Shaharudin Yunus

COURSE NOTES

TOPIC 1: Fundamentals of Values, Ethics and Morality

LEARNING OBJECTIVES

At the end of this chapter, you will be able to:

• Define values

• List the sources of value

• Identify the roles of values in decision-making

• Identify the definition of ethics

• Identify the nature of ethical reasoning

• Identify the concept of ethical standards and judgement

• Define morality

• Identify the various phases of Kohlberg’s theory of moral development

• Identify the differences between ethics and morality

• Identify the similarities between ethics and morality

• Identify the basic unification of ethics, values and morality

1.1 NATURE OF VALUES

1.1.1 Definition

A small company has just employed Rizal as a marketing executive. As a fresh graduate, Rizal

feels enthusiastic about the job and is determined to be a good worker. On the first day of work,

new employees were briefed on how work is done. At that point, Rizal realized that some of the

company’s marketing strategies somewhat deceived the customers. This is just one example of

ethical issues in business that we will look at in this course.

Values, ethics, and morality are three concepts used in discussing ‘Business Ethics and Values’.

We will see how they should be applied in businesses. However, in this section, we will discuss

values first.

Values are defined as fundamental principles or enduring beliefs about the most desirable

conditions and purposes of human life. Values determine our actions and behavior, and they

enable us to understand why people act the way they do. In simpler terms, values are normally

what we want to have or to be associated with in life.

However, values are actually hard to define in specific terms because they rely highly upon one‘s

interests, culture, societal norms and upbringing. In other words, what may be positive values to a

person may not be so good to the next person.

For example, in secular societies, even the wearing of scarves is considered undesirable or of

negative value because it is associated with religious restraint.

Values mold the personality of individuals and influence their actions. Values differ from one

person to another depending on beliefs, interests and the environment in which the person is

brought up.

COURSE:BGB2033 CORPORATE SOCIAL POLICY

FACULTY: FACULTY OF BUSINESS ADMINISTRATION

1.1.2 Sources

We have learned that different people have different values. Still, there are some values that are

agreed by most, if not all, people. This is due to the fact that those values come from the same

sources. Values may come from:

• upbringing

• religion

• social norms

• experiences.

Upbringing

Most parents set rules for their children. Although the rules may not be written, family members

are expected to obey them. Usually, the check and balance for these rules are done through

punishment and reward. For instance, if you are caught lying, you will probably be scolded,

spanked, grounded and you may not even get your pocket money. Contrarily, you will be

rewarded by telling the truth, either with praises, hugs or gifts. Gradually, all these rules become

norms in your lives regardless of the presence of your parents.

Religion

Religion is also a source of values. All religions have moral instructions and promote values to

their believers. Muslims, for example, believe in life after death and the Day of Judgement, where

each individual is accountable for his or her actions in this world. As such the value of truthfulness

is one among the moral values that will be evaluated in terms of the salvation of the Muslims.

It is very important to note that religion is not only about formal system of individual worship but it

also teaches social relationships. A good example is the mandate that says “What you do not

want done to yourself, do not do to others” by Confucianism. This saying also exists in other

religions but phrased in slightly different wordings.

Social Norms

The environment in which we live also influences our values. For instance, due to the increasing

role of private property, individual rights and the impersonal nature of the market economy,

Westerners have become an open community, where they practice free speech and defend

individual rights to express ideas, practice their creed, and at the same time, be tolerant of the

rights of others.

On the contrary, Easterners are more reserved in their communication and attitude, and have a

comparatively more conservative lifestyle; sometimes to the point of being intolerant of diversity.

Experiences

Experiences are yet another important source of values. As we grow older, we meet more people

and we learn new things, and therefore, we enhance and widen our understanding of life.

Knowledge gained through reading and other modes also molds our values. Thus, we will and

should continue to obtain as much exposure as we can such that the experiences enable a

critical look at the values we are used to, whether local or foreign.

In a nutshell, values come from various sources and some of our values may change while others

are reinforced as we grow older, and as we gain more knowledge through our experiences and

exposure to other social norms. But moral values remain moral values as long as we are aware of

their role in achieving the ultimate goals or telos of our existence. Only the manifestation of the

norms representing the values may be altered.

COURSE:BGB2033 CORPORATE SOCIAL POLICY

FACULTY: FACULTY OF BUSINESS ADMINISTRATION

1.1.3 Roles

“Life is all about choices. It’s your choice how you live your life.”

Everyday we have to make choices. We choose how to react to situations and how to deal with

people around us. In so doing, we need values to guide us in making decisions.

For each individual, consciously or otherwise:

• values are the principles of life

• values determine his or her interests

• values influence and restrict his or her

• attitude and behavior

• values determine his or her needs

• choices and expectations in life

• values guide his or her judgment of right and wrong.

People get personal satisfaction or fulfillment when they act or perform activities that are in line

with their values. For example, those whose values include caring for others tend to have

meaningful lives, when they are able to do good deeds and contribute to helping the poor.

Take another simple example. A company has two candidates for promotion. The first person

really wants the post so he or she goes bad-mouthing the other candidate to ensure the post is

his or hers. This person succeeds due to unfair means and even if he or she doesn’t subscribe to

the values of fairness, he or she will not be willing to be treated unfairly by others. Invariably, the

person will feel the pang of conscience and perhaps will not be at ease for the rest of his or her

life because he or she has done something that is unethical and of negative value.

In any organization or community, people have become more conscious of the values in decision–

making processes. Commonly, in successful organizations, the leaders are known to have

initiated the inculcation of shared values and inspire the followers towards the virtue of excellence

through their unwavering belief in the organization’s core values or core purpose. Core values are

values that define who we are and what is meaningful to our existence. Core purpose is our

reason for being or the mission of our existence that will make the journey worthwhile. Implicit in

these values and purposes is the concept of human well functioning and happiness.

Leadership that is ethical is associated with morally upright character. A person with integrity

usually qualifies as good leaders as the moral values are so ingrained in him or her that he or she

lives in accordance with the values even when he or she has to strategize worldly affairs. The

effectiveness in leading others is strengthened by the role model that is presented to others in

terms of acceptable and unacceptable values. Rewards and punishments and the codes of

conduct are well discussed and accepted under such leadership. As such, it is important to all in

the organization that they correctly determine who become leaders as leaders are not only

accountable for ensuring that work is done properly and timely but they also have to be guided by

ethical values and a keen sense of purpose.

Values guide people in justifying the rights and wrongs. Successful organizations are

organizations that are driven by values and that can make ethical decisions by honoring

commonly shared values of the society they are in while not harming people in the process of

playing their role towards promoting well being and prosperity.

COURSE:BGB2033 CORPORATE SOCIAL POLICY

FACULTY: FACULTY OF BUSINESS ADMINISTRATION

1.2 NATURE OF ETHICS

1.2.1 Definition

Nowadays, people from all walks of life and professionals in all types of disciplines including

business, politics, education, and medicine allude to the role of ethics in achieving excellence.

Ethics has become the central issue in human activities. In this topic, we will look at the definition

of ethics.

Originally, ethics came from the Greek word ethos, which means customs or the fabric of values

that makes a society what it is. It also means the distinguishing character, moral nature, or the

beliefs that guide a person, group, or institution. According to Solomon (1984), ethics means

“distinguishing disposition, character or attitude of a specific people, culture or group.”

De George (1999) provides another definition of ethics, which is ethics as “a systematic attempt

to make sense of our individual and social moral experience in such a way as to determine the

rules that ought to govern human conduct, the values worth pursuing and the character traits

deserving development in life”.

So, ethics is actually the study of the moral content of people’s behavior against moral principles.

In addition to reflecting on the nature of right and wrong or good and bad, ethics as a discipline

also helps explain the reasons behind each judgment we make, and in the process, makes us

aware of the principles and standards that give meaning to our lives. In other words, one of the

objectives of ethical awareness is to be constantly in touch with our values and also make logical

decisions that conform to our strongly held values. Engaging in ethical discourse can also expose

students to the viewpoints and values of those we have to deal with in our capacity as social

beings.